<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>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
BEEBA'S CREATIONS, 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 Rules 0-11(c)(1)(ii), or 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
BEEBA'S CREATIONS, INC.
9220 Activity Road
San Diego, California 92126
_____________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 20, 1995
Notice is hereby given that the annual meeting of the Shareholders of
Beeba's Creations, Inc. (the "Company") will be held at One America Plaza, 600
West Broadway, Suite 2600, San Diego, California, at 4:30 p.m. on December 20,
1995, for the following purposes:
1. To elect a board of five Directors.
2. To approve an amendment to the Company's Articles of
Incorporation to change the Company's name to "NITCHES, Inc."
3. To approve an amendment to the Executive Option Plan to (i)
allow Directors to participate in the Plan, (ii) to increase the number of
options to purchase Common Stock which may be granted under the Plan by adding
options to purchase 50,000 shares of Common Stock, and (iii) restrict the
exercise price of options granted under the Plan to not less than the market
price of the Company's Common Stock on the date of grant.
4. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent certified public accountants for the fiscal year ended
August 31, 1996.
5. To transact such other business as may properly be brought
before the meeting or any adjournments thereof.
November 10, 1995 is the record date for the determination of
shareholders entitled to notice of, and to vote at, the meeting and any
adjournment thereof.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND IN PERSON, YOU ARE URGED TO FILL IN
THE ENCLOSED PROXY AND TO SIGN AND FORWARD IT IN THE ENCLOSED BUSINESS REPLY
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING IN ORDER THAT THE
PRESENCE OF A QUORUM MAY BE ASSURED. ANY SHAREHOLDER WHO SIGNS AND SENDS IN A
PROXY MAY REVOKE IT BY EXECUTING A NEW PROXY WITH A LATER DATE, BY WRITTEN
NOTICE OF REVOCATION TO THE SECRETARY OF THE COMPANY AT ANY TIME BEFORE IT IS
VOTED, OR BY ATTENDANCE AT THE MEETING AND VOTING IN PERSON.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES OF STOCK
THAT YOU HOLD. YOUR COOPERATION IN PROMPTLY RETURNING YOUR PROXY WILL HELP
LIMIT EXPENSES INCIDENT TO PROXY SOLICITATION.
By Order of the Board of Directors
November 13, 1995 Linda K. Maskovich, Secretary
<PAGE> 3
BEEBA'S CREATIONS, INC.
9220 Activity Road
San Diego, California 92126
_____________________________
PROXY STATEMENT
_____________________________
This proxy statement is solicited by and is forwarded in connection
with solicitation of proxies by the Board of Directors of Beeba's Creations,
Inc. for the annual meeting of shareholders to be held on Wednesday, December
20, 1995. Only shareholders of record at the close of business on November 10,
1995 are entitled to notice of, and to vote at, the meeting. Proxies and proxy
statements were first given to shareholders on approximately November 13, 1995.
The number of outstanding Common Shares entitled to be voted at the meeting is
1,210,295.
The expense of soliciting proxies and the cost of preparing,
assembling and mailing material in connection with the solicitation of proxies
will be paid by the Company. Approximately three employees of the Company may
solicit proxies by telegraph, telephone and personal interviews.
The Company's Annual Report on Form 10-K for the year ended August 31,
1995 is being sent, simultaneously herewith, to each shareholder of record.
The Annual Report on Form 10-K is not incorporated in this Proxy Statement and
is not to be considered a part of the proxy soliciting material.
The Company's management knows of no matter to be brought before the
meeting other than those matters mentioned herein. If, however, any other
matters properly come before the meeting, it is intended that the proxies will
be voted in accordance with the judgment of the person or persons voting such
proxies.
PROPOSALS OF SHAREHOLDERS
For proposals of shareholders to be included at the 1996 annual
meeting of shareholders, anticipated to be held in January, 1997, such
proposals must be received by the Company not later than August 15, 1996. The
acceptance of such proposals is subject to Securities and Exchange Commission
guidelines.
VOTING
Each shareholder of record is entitled to one vote for each share held
on all matters to come before the meeting, except that shareholders may have
cumulative voting rights with respect to the election of Directors. All
proxies which are returned will be counted by the Inspector of Elections in
determining the presence of a quorum and on each issue to be voted on. An
abstention from voting or a broker non-vote is not counted in the voting
process under California law. The proxy process does not permit shareholders
to cumulate votes. No shareholder can cumulate votes unless the candidate or
candidates' names for which such votes are to be cast have been placed in
nomination prior to voting and a shareholder has given notice of the
shareholder's intention to cumulate the shareholder's votes at the meeting and
prior to the voting. If any shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination. Management
does not, at this time, intend to give notice of cumulative voting or to
cumulate the votes it may hold pursuant to the proxies solicited herein unless
the required notice by a shareholder is given in proper format at the meeting,
in which instance management intends to cumulatively vote all of the proxies
held by it in favor of the nominees for office as set forth herein. In the
event cumulative voting shall be utilized, each shareholder may give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of shares voted, to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder wishes. The candidates receiving the
highest number of votes of the shares entitled to be voted for them, up to the
number
<PAGE> 4
of directors to be elected by such shares, are elected. Only shareholders of
record at the close of business on November 10, 1995 are entitled to notice of,
and to vote at, the meeting. Shareholders may revoke any proxy before it is
voted by attendance at the meeting and voting in person, by executing a new
proxy with a later date, or by giving written notice of revocation to the
Secretary of the Company.
The shares represented by proxies which are returned properly signed
will be voted in accordance with the shareholders' directions. If the proxy
card is signed and returned without direction as to how they are to be voted,
the shares will be voted as recommended by the Board of Directors.
ELECTION OF THE DIRECTORS OF THE COMPANY AND
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
OFFICERS OF THE COMPANY
The Directors of the Company are elected annually and hold office
until the next annual meeting of shareholders and until their successors shall
have been elected and shall have qualified. In the event any nominee is unable
to or declines to serve as Director at the time of the annual meeting, the
proxy will be voted for a substitute selected by the Board of Directors.
Management has no reason to believe, at this time, that the persons named will
be unable, or will decline, to serve if elected.
During fiscal year 1995 the Board held 8 meetings. The Company has
standing Audit and Compensation Committees. The Company does not have a
Nominating Committee. The Audit Committee, which oversees the financial
affairs of the Company and meets with the independent auditors, consists of Mr.
Henderson and Mr. Price. The Audit Committee did not meet during fiscal 1995.
The Compensation Committee, which sets executive compensation and bonuses and
authorizes the issuance of stock options, consists of Mr. Waney, Mr. Henderson
and Mr. Price and met during fiscal 1995 on three occasions. During fiscal
1995, all directors attended at least 75% of the meetings of the Board and the
Board Committee of which they were members. All directors who are not also
employees of the Company receive $12,000 annually, plus $1,000 for attendance
at each Board of Directors and Committee meeting and reimbursement of
reasonable expenses. The $1,000 fee is not paid for attendance at a Committee
meeting that is held on the same day the Board of Directors meets.
Directors and executive officers are elected annually. The following
table sets forth certain information with respect to the Directors, all of whom
are also nominees, and executive officers of the Company.
The Board recommends that the shareholders vote "FOR" all five
nominees listed below.
DIRECTORS AND NOMINEES
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Arjun C. Waney 55 Chairman of the Board of Directors
Steven P. Wyandt 51 Director, President and Chief Executive Officer
Luther A. Henderson 75 Director
William L. Hoese 58 Director
Eugene B. Price II 53 Director
</TABLE>
2
<PAGE> 5
EXECUTIVE OFFICER
<TABLE>
<S> <C> <C>
Thomas P. Baumann 44 Vice President, Chief Financial Officer and Assistant
Secretary
</TABLE>
Mr. Waney has been a director of the Company since 1973. From 1973
until October 1987, when he was elected Chairman of the Company's Board of
Directors, Mr. Waney was the President of the Company. From October, 1991 to
November, 1993, Mr. Waney was also a director of Body Drama, Inc., which, at
the time, was a publicly held majority-owned subsidiary of the Company.
Mr. Wyandt was elected as a director in 1989. He has been President
of the Company since 1987. Mr. Wyandt is also a director and Chairman of Body
Drama, Inc., a wholly-owned subsidiary of the Company.
Mr. Henderson has been a director of the Company since 1981. Since
prior to 1980, he has been President of Pirvest, Inc., which is engaged in
private investing. Since 1990, he has been Chairman of Medical Ventures, Inc.,
which owns and operates medical resonance imaging equipment centers. He is
also a director of Ridgewood Properties, Inc., which owns and operates mobile
home parks, and The Leather Factory which sells leather furniture.
Mr. Hoese has been a director since 1995. Since November 1994, he has
been Vice President and General Counsel of American Tool Companies, Inc., a
privately-held manufacturer of hand tools and power tool accessories. For 28
years prior to 1994, Mr. Hoese was a partner with Luce, Forward, Hamilton &
Scripps, counsel to the Company.
Mr. Price has been a director of the Company since 1973. From 1973
until he retired in May 1987, Mr. Price was a Vice President of the Company
with primary responsibilities in sales and administration. He is currently
President of Trinidad Tees, an importer of cotton clothing.
Mr. Baumann has been Vice President and Chief Financial Officer of the
Company since 1985 and Assistant Secretary since 1987.
COMPENSATION AND BENEFITS
The compensation and benefits program of the Company is designed to
attract, retain and motivate employees to operate and manage the Company for
the best interests of its constituents.
Executive compensation is designed to provide incentives for those
senior members of management who bear responsibility for the Company's goals
and achievements. The compensation philosophy is based on a base salary, with
opportunity for significant bonuses to reward outstanding performance, and a
stock option program.
EXECUTIVE OFFICER COMPENSATION
The following tables and notes show the compensation provided to the
Chief Executive Officer and the other most highly compensated executive
officers, who served as such at the end of fiscal 1995 and whose annual
compensation exceeds $100,000.
3
<PAGE> 6
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------- ------------------------- --------
Securities
Other Restricted Underlying
Annual Stock Options/ LTIP
Name/Title Salary Bonus Comp.(2) Awards SARs Payouts All Other
Year $(1) $ $ $ #(3) $ Comp.
------------------------ ------ ------ ------- --------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Arjun C. Waney
Chairman 250,000 -- -- -- -- -- --
1995 -- -- -- -- -- -- --
1994 104,170 -- -- -- -- -- --
1993
Steven P. Wyandt
Chief Executive Officer
and President
1995 168,173 -- 1,500 -- -- -- --
1994 185,147 -- 4,854 -- -- -- --
1993 187,438 -- 26,625 -- -- -- --
Thomas P. Baumann
Chief Financial Officer
1995 120,100 24,000 -- -- -- -- --
1994 133,551 -- -- -- -- -- --
1993 127,672 -- 11,000 -- -- -- --
</TABLE>
___________
(1) Includes the Company's matching contributions to the Retirement
Savings Plan during the year.
(2) Consists entirely of the Company's matching contributions to the
Employee Stock Purchase Plan during the year.
(3) There were no options granted in the last three fiscal years and no
options were repriced in the last fiscal year.
4
<PAGE> 7
AGGREGATED OPTION SAR/EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES "IN THE MONEY"
UNDERLYING UNEXERCISED OPTIONS/SARS AT FISCAL
SHARES OPTIONS/SARS AT FISCAL YEAR-END(1)
ACQUIRED ON VALUE YEAR-END $
EXERCISE REALIZED ______________________ ______________________
NAME #(2) $(3)
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------- ---------- ---------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
Steven P. Wyandt -- -- 59,850/-- 0/--
Thomas P. Baumann -- -- 38,150/-- 0/--
</TABLE>
________________
(1) All options granted at 100% of Fair Market Value. Optionees may
satisfy the exercise price by submitting currently owned shares,
in-the-money options and/or cash.
(2) Fair Market Value of underlying security at exercise minus exercise
price.
(3) Calculated based upon the August 31, 1995 Fair Market Value share
price of $6.50 less the share price to be paid upon exercise.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is responsible for setting base
compensation, awarding bonuses and setting the number and terms of options for
the executive officers. A majority of the Committee members are not eligible
to participate in any of the Company's compensation programs.
Compensation Committee Interlocks and Insider Participation. The
Committee consists of Arjun C. Waney, Luther A. Henderson and Eugene B. Price
II. Mr. Waney is currently the Chairman of the Company and is eligible to
receive a salary and bonus. He was, until 1989, President of the Company. Mr.
Henderson was Chairman of the Company from 1981 until 1989, but did not receive
a salary for such service. Mr. Price was, until 1987, a Vice President of the
Company.
Discussion. The Company's compensation structure is designed with the
fundamental philosophy of providing executives with an interest in both the
Company's short and long term profitability. The Company's executive officer
compensation program consists of a base salary component, a component providing
the potential for an annual bonus based on overall Company performance, and a
component providing the opportunity to earn stock options based on overall
Company performance or individual performance that focus executive officers on
building shareholder value through meeting longer-term financial and strategic
goals.
The Committee establishes base salaries for executive officers at a
modest level which it believes are sufficient to attract and retain such
executives. Bonuses, which can be a significant component of overall
compensation, have been awarded in light of an executive's specific
accomplishments for the year or significant participation in an extraordinary
corporate transaction which has produced value to the Company. Bonuses have
not traditionally been awarded in relation to any pre-set financial performance
targets. In May, 1995, the Company entered into Employment Agreements with its
key executive officers which do provide for a formula bonus based exclusively
upon achieving specified levels of pretax income. The Employment
5
<PAGE> 8
Agreements are discussed in more detail below. The Company's stock option
awards are designed to compliment the annual incentive program, by providing an
interest in long-term profitability. In past years, option grants have been
most frequently awarded at the inception of employment as an inducement to
attract key employees.
Because of the Company's relatively disappointing performance in
fiscal 1994, no bonuses were paid to executive officers, and certain executive
officers took a voluntary base salary cut beginning in the 1994 fiscal year.
Since the Company continued to experience disappointing performance for fiscal
1995, the Committee determined not to grant options to any executive officer.
The Committee did award a bonus to Mr. Baumann in fiscal 1995 in recognition of
his extraordinary efforts in connection with the disposition of the Company's
junior, girls and maternity product lines.
Compensation Committee. Arjun C. Waney, Luther A. Henderson, Eugene B. Price
II.
Employment Agreements
The Company has entered into Employment Agreements with Mr. Arjun C.
Waney, Mr. Steven P. Wyandt and Mr. Thomas P. Baumann, effective as of May 9,
1995. The Agreements for each are substantially similar in form. Pursuant to
the Agreements, Mr. Waney will serve as Chairman of the Company, Mr. Wyandt
will serve as President of the Company, and Mr. Baumann will serve as Chief
Financial Officer of the Company. The Agreements provide for a base annual
salary of $250,000, $180,000 and $120,000, respectively for each of Messrs.
Waney, Wyandt and Baumann, or a higher amount as the Board of Directors may
determine.
In addition to base salary, each executive officer is entitled to a
bonus under certain conditions. For fiscal year 1995, bonuses shall be paid in
the discretion of the Board of Directors. For fiscal year 1996, the bonus will
be paid in an amount not less than 9.09%, 6.55% and 4.36% of the excess of the
pretax book income of the Company (exclusive of the bonus) over $1,500,000,
respectively, for each of Messrs. Waney, Wyandt and Baumann. The same formula
applies for the bonuses for fiscal years ending 1997 and 1998, however,
$1,800,000 is substituted for $1,500,000.
The Agreements expire on August 31, 1998. In the event that the Company
liquidates prior to August 31, 1996, each executive will receive any salary
remaining through the end of the term of the Employment Agreement and in
the event that a liquidation occurs after August 31, 1996, the executives will
receive an additional one year salary. In the event the executives are
terminated without cause, the executives will receive the salary remaining
through the end of the term of the Employment Agreement, a pro rata portion of
his bonus and continuation of certain employee benefits.
6
<PAGE> 9
PERFORMANCE GRAPH
The following graph compares the performance of the Company for the
five-year period ending August 31, 1995 with the performance of the NASDAQ
market index and the average performance of companies consisting of the Dow
Jones Clothing and Fabrics group, which for this year numbered 60 companies,
which group is published by Media General Financial Services. The index
reflects reinvested dividends and is weighted by the sum of the closing price
times the shares outstanding divided by the total shares outstanding for the
group.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
<TABLE>
<CAPTION>
COMPANY FISCAL YEAR ENDING
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Beeba's Creations, Inc. 100 197.41 208.61 143.46 78.33 127.29
Industry Index 100 147.12 176.77 171.10 163.89 163.63
Broad Market 100 113.67 115.60 150.49 164.43 195.65
</TABLE>
ASSUMES $100 INVESTED ON SEP. 1, 1990
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING AUG. 31, 1995
7
<PAGE> 10
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of October 31, 1995, (June 30, 1995
for shares owned in the Retirement Savings Plan and October 31, 1995 for shares
owed in the Employee Stock Purchase Plan) certain information with respect to
the beneficial ownership of Common Stock by (a) each person known by the
Company to be the beneficial owner of more than 5% of its outstanding Common
Stock, (b) each of the Company's directors and (c) all directors and officers
as a group. Except as noted below, to the best of the Company's knowledge,
each of such persons has sole voting and investment power with respect to the
shares beneficially owned.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF
BENEFICIAL OWNER SHARES PERCENT OF CLASS
---------------------- ------ ----------------
<S> <C> <C>
Arjun C. Waney 229,075 18.93%
9220 Activity Road
San Diego, CA 92126
Grace & White, Inc.(1) 168,240 13.90%
515 Madison Avenue, Suite 1700
New York, NY 10022
Luther A. Henderson(2) 85,986 7.10%
5608 Malvey Ave., #104A
Ft. Worth, TX 76107
Steven P. Wyandt 26,335 2.13%
9220 Activity Road
San Diego, CA 92126
Eugene B. Price II 21,782 1.80%
9220 Activity Road
San Diego, CA 92126
All directors and current 371,809 29.95%
officers as a group (7 persons)(3)
</TABLE>
_____________________
(1) The Company has been advised by Grace & White, Inc. that as of October
5, 1995, it owned 168,240 shares of Company common stock as to which
it had sole dispositive power, but had sole voting power on only 8,584
of such shares.
(2) The shares attributed to Mr. Henderson are held in the name of
Pirvest, Inc., a corporation in which Mr. Henderson owns 100% of the
outstanding common stock.
(3) This number includes 31,050 shares as to which certain officers have
the right to acquire beneficial ownership by exercising options which
were granted pursuant to the Plans.
8
<PAGE> 11
CERTAIN TRANSACTIONS
Late in calendar 1995, the Company intends to move its warehouse and
administrative offices to a 30,000 square foot facility owned by Kuma Sport,
Inc., a California corporation. Arjun C. Waney, Chairman of the Company is a
40% shareholder of Kuma Sport, Inc. Mr. Waney has also guaranteed payments on
a SBA loan which encumbers the Kuma Sport, Inc. warehouse. The Company will
pay, on a month-to-month basis, rent of $15,000 to Kuma Sport, Inc., which it
believes is consistent with the fair market rental value of the facility.
Certain employees of Kuma Sport, Inc. will also perform warehouse and
related services for the Company at the new facilities. The Company will
reimburse Kuma Sport, Inc. for such services at cost. The Company believes
that the expenses incurred by Kuma Sport, Inc. are consistent with the costs
typically paid for such services in the industry.
PROPOSAL TO CHANGE THE COMPANY'S NAME TO
"NITCHES, INC."
On August 22, 1995, the Company completed the sale of its junior,
girls and maternity woven and knit tops and bottoms product lines. Among the
assets transferred in that transaction was the right to use the name "Beeba's
Creations, Inc.," and as part of that transfer the Company agreed to submit a
proposal to its shareholders to change its corporate name away from "Beeba's
Creations, Inc." Whether or not the shareholders approve the proposal, the
Company has agreed to permit the buyer of those assets to operate under the
name "Beeba's Creations, Inc."
The Company does not currently use the name "Beeba's Creations, Inc."
in connection with any specific product lines or labels, and does not
anticipate doing so in the future. The Company has used the name solely as its
corporate name, which is reflected on contracts with vendors and suppliers,
purchase orders, including purchase orders and invoices, and on stock market
reports.
The board now proposes to amend Article 1 of the Company's articles of
incorporation to read:
"The name of the corporation shall be NITCHES, Inc."
If this proposal is adopted by the shareholders, the board of
directors will authorize the officers of the Company to file such an amendment
with the California Secretary of State. In addition, notification of the name
change will be filed with the Securities and Exchange Commission and the
National Association of Securities Dealers. The Company has currently
requested a new trading symbol, which will be used upon effectiveness of the
name change, and has reserved the symbol "NICH".
Changing the corporate name will not affect the rights or obligations
of the Company with respect to its existing contractual obligations, nor will
it impact third parties' obligations with respect to the Company. Similarly,
it will not impact the Company's ability to use its current tradename and
trademarks.
Adoption of this proposal requires the affirmative vote of a majority
of the shares voting at the meeting.
The Board of Directors recommends that shareholders vote "FOR" this
proposal.
9
<PAGE> 12
APPROVAL OF AMENDMENTS TO THE
EXECUTIVE OPTION PLAN
This proposal seeks shareholder approval of an amendment to the
Company's Executive Option Plan (the "Executive Plan") to (i) allow Directors
to participate in the Executive Plan, (ii) increase the number of options
which may be granted under the Executive Plan by adding a total of 50,000
options to the Executive Plan, and (iii) restrict the exercise price of options
granted under the Executive Plan to not less than the market price of the
Company's Common Stock on the date of grant. The amended Executive Plan is
attached as Exhibit A.
The Executive Plan was first approved by shareholders in 1991. The
Executive Plan was originally adopted to give the Board of Directors the
flexibility to issue to key executives options to purchase Common Stock of the
Company at a discount from fair market value but in no event less than 50% of
such value on the date of grant. The principal amendments to the terms of the
Executive Plan are the inclusion of directors among those eligible to
participate and the elimination of the ability to issue options at a discount
to fair market value. As of November 1, 1995, the Company had six executives
and directors who could be considered for a grant of such options. None of the
executives and directors are currently participating in the Executive Plan.
Unlike the Company's Incentive Stock Option Plan, there is no Internal
Revenue Code requirement for the approval of the Executive Plan by the
Shareholders. Section 16(b) of the Securities Exchange Act of 1934 ("Exchange
Act") provides that any profit realized by an officer, director or principal
shareholder of a company from the purchase and sale or the sale and purchase in
any six-month period of any class of equity security of such company registered
under the Exchange Act is recoverable by the company. Securities and Exchange
Commission Rule 16b-3 exempts from Section 16(b) certain acquisitions and
dispositions in connection with specified types of employee benefit plans such
as the Executive Plan, which have been approved by the shareholders. As a
condition to the availability of this exemption, any material modification of
eligibility requirements or increase in the number of shares issuable under the
Executive Plan must be approved by the shareholders in a proxy solicitation of
this type.
The Executive Plan is administered by a Committee of the Board.
Assuming the proposal is adopted, the Committee has the authority under the
Executive Plan to designate the executives and now directors eligible to
participate in the Executive Plan, to prescribe the terms of awards, to
interpret the Executive Plan, to determine the amount (which may not be less
than fair market value) and nature of the consideration to be paid upon the
exercise of an option, and to make all other determinations for administering
the Executive Plan. The shares to be issued pursuant to the Executive Plan
will be registered on Form S-8 Registration Statement to be filed with the
Securities and Exchange Commission following approval of shareholders of this
proposal.
The following is a general description, based on existing law, of the
more significant Federal income tax consequences relating to Executive Plan
options.
The Executive Plan is neither qualified under the provisions of
Section 401(a) of the Code, nor subject to any of the provisions of the
Employee Retirement Income Security Act of 1974. An optionee who receives an
Executive Plan option will not recognize taxable income upon the grant of that
option. An optionee will recognize ordinary income upon the exercise of an
Executive Plan option in an amount equal to the excess of the fair market value
of the shares at the time of exercise over the exercise price.
If the sale of the Common Stock could subject the optionee to
liability under Section 16(b) of the Exchange Act, the optionee generally will
recognize ordinary income only on the date that the optionee is no longer
subject to such liability in an amount equal to the fair market value of the
common shares on such date less the option price. Such optionee may,
nevertheless, elect under Section 83 of the Code within 30 days of
10
<PAGE> 13
exercise to recognize ordinary income in the amount by which the fair market
value of such shares on the date of exercise exceeds the option price.
Any gain realized which is attributable to appreciation in the value
of such shares after the exercise date will be considered capital gain rather
than ordinary income. Any loss realized which is attributable to depreciation
in the value of such shares after the exercise date will be considered a
capital loss.
The ordinary income recognized by an employee with respect to the
exercise of an Executive Plan option will be subject to both wage withholding
and employment taxes. An optionee's tax basis in the shares received on
exercise of such an option will be equal to the amount of any cash paid by the
optionee on exercise, plus the amount of ordinary income recognized as a result
of the receipt of such shares. The holding period for such shares would begin
on the date of exercise or, in the case of an individual who would be subject
to Section 16(b) of the Exchange Act liability who does not make a Section 83
election, on the earlier of (i) six months after the exercise, or (ii) the
earliest date on which such person may sell such shares at a profit without
being subject to liability under Section 16(b) of the Exchange Act. The
holding period for shares subject to a Section 83 election would begin just
after the date of exercise. A deduction for Federal income tax purposes will
be allowed to the Company in an amount equal to the ordinary income taxable to
an optionee upon exercise, provided that such amount constitutes an ordinary
and necessary business expense to the Company and is reasonable, and further
provided that the Company satisfied its withholding obligation, if any, with
respect to such income.
Adoption of this proposal requires the affirmative vote of a majority
of the shares voting at the meeting.
The Board recommends that shareholders vote "FOR" approval of the
Executive Plan.
RATIFICATION OF SELECTION OF AUDITORS
Based upon the recommendation of the Audit Committee, the Board of
Directors has authorized the firm of Deloitte & Touche LLP, independent
certified public accountants, to serve as auditors for the fiscal year ended
August 31, 1996. A representative of Deloitte & Touche LLP will be present at
the shareholders' meeting and will have the opportunity to make a statement if
he or she desires to do so. Further, the representative of Deloitte & Touche
LLP will be available to respond to appropriate questions.
The Board of Directors recommends that shareholders vote "FOR" this
proposal.
11
<PAGE> 14
OTHER ITEMS
THE COMPANY, ON WRITTEN REQUEST OF ANY PERSON BEING SOLICITED BY THIS
PROXY STATEMENT, SHALL PROVIDE, WITHOUT CHARGE TO SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K (INCLUDING THE FINANCIAL STATEMENTS AND
THE SCHEDULES THERETO), REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 13a-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, FOR THE COMPANY'S MOST RECENT FISCAL YEAR. WRITTEN REQUESTS SHOULD BE
DIRECTED TO:
BEEBA'S CREATIONS, INC.
9220 ACTIVITY ROAD
SAN DIEGO, CALIFORNIA 92126
ATTENTION: THOMAS P. BAUMANN
By Order of the Board of Directors
__________________________________
Linda K. Maskovich, Secretary
San Diego, California
November 13, 1995
12
<PAGE> 15
EXHIBIT A
BEEBA'S CREATIONS, INC.
EXECUTIVE OPTION PLAN
Effective
October 16, 1995
1. Purpose of the Plan. The purpose of this Executive Option
Plan (the "Plan") is to serve as an incentive to, and to encourage stock
ownership by, selected executive employees and Directors of the Board of
Beeba's Creations, Inc., a California corporation or its parent or subsidiary
corporations, (collectively the "Company"), so that they may participate in the
Company's growth and profitability and to induce them to remain in the employ
or serve on the Board of Directors of the Company. The Plan is not intended to
qualify under any relevant section of the Internal Revenue Code.
2. Administration. Subject to the authority of the Company's
Board of Directors, the Plan shall be administered by a Committee appointed by
the Board of Directors (the "Committee"), consisting of at least two
independent directors who shall serve at the pleasure of the Board of Directors
and all of whom shall be disinterested within the meaning of Securities and
Exchange Commission Rule 16b-3 to the extent possible. If no Committee has
been appointed, the Board of Directors shall be the Committee. Subject to the
provisions of the Plan, the Committee shall have sole authority, in its
absolute discretion, to determine which employees or members of the Board of
Directors of the Company shall receive Options for the purchase of shares under
the Plan ("Options"), the time when Options shall be granted, the terms of such
Options (which may differ from one another to the extent not inconsistent with
this Plan), and the number of shares to be subject to Options. Acts by a
majority of the Committee in a meeting at which a quorum is present and
consents in writing by a majority of the members of the Committee shall be
valid acts of the Committee. The Committee shall have authority to do
everything necessary or appropriate to administer the Plan, including, without
limitation, interpreting the provisions of the Plan. All decisions,
determinations and interpretations of the Committee shall be final and binding
on all optionees. No member of the Committee or the Board of Directors shall
be liable for any action or determination made in good faith with respect to
the Plan or any Option granted thereunder.
3. Eligible Participants. All executive employees or members of
the Board of Directors of the Company or any parent or subsidiary corporation
of the Company (including subsidiaries which become such after the adoption of
the Plan) who are selected by the Committee shall be eligible to participate in
the Plan. In determining the executives or Board Member to whom Options are to
be granted and the terms of the Options, the Committee may consider all
relevant factors, including but not limited to, the following: the office or
position of the executive or Board Member and his or her degree of
responsibility for growth and success of the Company; length of service;
remuneration; promotions; and potential performance. No person shall be
granted an Option under the Plan unless, on the date of grant, such person is
an executive employee or member of the Board of Directors of the Company.
4. Stock Subject to the Plan. The stock subject to the Plan
shall be shares of the Company's authorized but unissued or acquired or
reacquired common stock. Subject to the provisions of Sections 5.6, 5.7 and
5.8 of the Plan, the maximum aggregate number of shares for which Options may
be granted and sold under the Plan is 200,000. If any Option granted hereunder
shall expire or terminate for any reason without having been exercised in full,
then unpurchased shares subject thereto shall again be available for purposes
of this Plan.
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<PAGE> 16
5. Terms and Conditions of Options. Any Option granted pursuant
to the Plan shall be evidenced by an agreement in such form as the Committee
shall from time to time determine, which agreement shall comply with and be
subject to the following terms and conditions:
5.1 Number of Shares. Each Option shall state the number
of shares to which it pertains.
5.2 Option Exercise Price. Each Option shall state the
Option exercise price. The Option exercise price shall be determined by the
Committee, but in no event shall the price be less than the stock's fair market
value on the date of the grant.
5.3 Method of Exercise. An Option shall be exercised by
the delivery of both written notice (on a form to be adopted by the Committee)
of exercise to the Company at its principal place of business by the person
entitled to exercise the Option and payment for the shares with respect to
which the Option is exercised. Payment shall be by bank certified or cashier's
check. Until an optionee becomes a shareholder of record, no right to vote or
to receive dividends or any other rights as a shareholder shall exist with
respect to shares notwithstanding the exercise of the Option. No adjustment
shall be made for dividend or other rights as to which the record date precedes
the date the optionee becomes a shareholder of record, except as provided in
Section 5.7. Options may not be exercised as to fractional shares. As soon as
reasonably practicable after receipt by the Company of a notice of exercise,
the Company shall deliver to the optionee at the principal office of the
Company, or at such other appropriate place as may be determined by the
Committee, a certificate or certificates for shares of stock with respect to
which the Option is exercised. Notwithstanding the foregoing, the Company may
postpone delivery of any certificate or certificates after notice of exercise
for such reasonable period as may be required to comply with any applicable
listing requirements of any national or other securities exchange. In the
event an Option shall be exercisable by any person other than the optionee, the
required notice under this section 5.3 shall be accompanied by appropriate
proof of the right of such person to exercise the Option.
5.4 Option Exercise Period. Each Option granted under
the Plan shall be exercisable and shall expire on a date, or in installments,
as fixed by the Committee, and shall contain such other terms as may be
determined by the Committee and as set forth in the stock option agreement.
5.5 Term of Options. The term of an Option granted to an
employee or Board Member under this plan is to be determined by the Committee
and shall be set forth in the stock option agreement. The Committee may, among
other things, provide for the termination of any Option in the event the
optionee leaves the employ or ceases to be a director of the Company for any
reason. If such a provision is contained in the stock option agreement, then
notwithstanding that provision:
(i) In the event of termination of
employment or service on the Board of Directors of an optionee due to the
optionee's death, the personal representatives of the optionee or any person or
persons to whom the rights of the optionee under such Options pass by will or
by the applicable laws of descent and distribution (collectively
"Representatives") may, at any time within a period of six months after the
death of such optionee, exercise any or all of such Option rights to the extent
such Option rights are exercisable on the date of death of such optionee; and
(ii) In the event termination of optionee's
employment or service on the Board of Directors is due to the disability of the
optionee (within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986), the optionee, or if the optionee thereafter dies, the Representatives
may, at any time within a period of six months after the optionee's termination
of employment or service on the Board of Directors, exercise any or all of such
Option rights to the extent such Option rights are exercisable on the date of
the termination of employment or service on the Board of Directors. The
Committee shall determine whether an authorized leave of absence, absence for
military or governmental service or disability shall
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<PAGE> 17
constitute termination of employment for purposes of this Section 5.5. Such
determination shall be subject to review by the Board of Directors.
5.6 Recapitalization. Subject to any required action by
the Company's shareholders, the number of shares of stock which may be
purchased upon the exercise of each outstanding Option, and the exercise price
per share set forth in such Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of stock of the Company
resulting from any subdivision or consolidation of shares, the payment of a
stock dividend, or any other transaction in which the company increases or
decreases its issued shares but does not receive payment for such shares. Any
fraction of a share subject to an Option that would otherwise result from an
adjustment pursuant to this Section 5.6 shall be rounded downward to the next
full number of shares without other compensation or consideration to the holder
of such Option.
5.7 Mergers or Dissolution. Subject to any required
action by the Company's shareholders, if the Company shall be the surviving
corporation in any merger or consolidation, each outstanding Option shall
pertain to and apply to the securities and other property to which a holder of
the number of shares of the Company's stock subject to the Option would have
been entitled in such merger or consolidation. Unless the obligations under
the Options are assumed by the surviving corporation, a dissolution or
liquidation of the Company or a merger or a consolidation in which the Company
is not the surviving corporation shall cause each outstanding Option to
terminate; provided, however, that if the Company's obligations under the
Option are not assumed by the surviving corporation, each optionee shall have
the right immediately prior to such dissolution or liquidation, or merger or
consolidation in which the Company is not the surviving corporation, to
exercise all Options held by such optionee in whole or in part, whether or not
then exercisable under the terms of the option agreement. If the Company
should be consolidated with, or merged into, any other corporation, or if the
Company should sell or transfer substantially all of its assets, or if any
other similar event affecting shares of stock of the Company should occur, and
if the acquiring corporation assumes the Company's obligations under the
Options granted under this Plan, then each optionee shall be entitled
thereafter to purchase shares of stock and other securities and property in the
kind and amount, and at the price, to which the optionee would have been
entitled had the optionee's Option been exercised prior to such event.
5.8 Adjustments by Committee. To the extent that the
adjustments set forth in Sections 5.6 and 5.7 relate to stock or securities of
the Company, such adjustments shall be made by the Committee. The
determination of the Committee shall be final, binding and conclusive. The
grant of an Option pursuant to the Plan shall not affect in any way the right
or power of the Company to make adjustments, reclassifications, reorganizations
or changes of its capital or business structure or to merge, consolidate,
dissolve, liquidate, or sell or transfer all or any part of its business or
assets.
5.9 Modification, Extension and Renewal of Options.
Subject to the terms and conditions and within the limitations of the Plan, the
Committee may modify, extend or renew outstanding Options granted under the
Plan, or accept the surrender of outstanding Options to the extent not
exercised and authorize the granting of new Options and substitutions therefor.
5.10 Withholding Taxes. Notwithstanding anything else to
the contrary in the Plan or any stock option agreement, the exercise of any
Option shall be conditioned upon payment by such optionee in cash, or other
provisions satisfactory to the Committee for payment by the optionee, to the
Company of all local, state and federal withholding taxes applicable, in the
Company's judgment, to the exercise, or the later disposition of shares
acquired upon exercise, of an Option.
5.11 Reports to Optionees. The Company shall provide
financial and other information regarding the Company to each optionee at least
annually while such optionee's Option is outstanding. Such financial and other
information shall be the information regularly provided by the Company to each
of its
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<PAGE> 18
shareholders, and shall be provided to such optionee when and substantially in
the manner provided to the Company's shareholders.
5.12 Other Provisions. The option agreements authorized
under the Plan shall contain such other provisions, including, without
limitation, restrictions upon the exercise of the Option and sale of stock
acquired upon exercise of the Option, as the Committee and the Board of
Directors shall deem advisable.
6. Non-Assignability of Options. Options granted under the Plan
may not be sold, pledged, assigned or transferred in any manner other than by
will or by the laws of descent and distribution, and may be exercised during
the lifetime of an optionee only by such optionee. For purposes of the Plan,
the term "optionee" shall be deemed to include representatives.
7. Term of Plan. The Plan shall become effective upon its
adoption by the Board of Directors. It shall continue in effect until
terminated pursuant to Section 8. In no event shall Options be granted under
the Plan after its termination.
8. Amendment or Termination of the Plan. The Board of Directors
may amend the Plan from time to time. The Board of Directors may terminate the
Plan at any time. Any such termination shall not affect Options already
granted and such Options shall remain in full force and effect as if the Plan
had not been terminated.
9. Application of Funds. The proceeds received by the Company
from the sale of stock pursuant to Options granted under the Plan shall be used
for general corporate purposes.
10. Securities Law Compliance. The committee may, in its
discretion, cause the Plan, Options issued hereunder and the shares to be
offered pursuant to Options granted hereunder to be registered and/or qualified
in accordance with the applicable regulations under the Securities Act of 1933,
as amended, and the California Corporate Securities Law of 1968, as amended.
If the Company has not so registered and qualified the plan and such Options
and shares, the Company may, as a condition to the exercise of any portion of
an Option, require the employee exercising such Option to represent and warrant
at the time of such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares,
if, in the opinion of counsel for the Company, such a representation is
required under the securities Act of 1933, as amended, or any other applicable
federal or state law, or any regulation or rule of any governmental agency, and
for this purpose may require such other representations as the Company
reasonably may deem to be necessary. Notwithstanding any provision of the Plan
to the contrary, the Company shall not be obligated to grant any Option under
the Plan or to sell or issue any shares pursuant to any option agreement
executed pursuant to the Plan, and no such grant of Option or sale of shares
shall be effective, unless such grant of Option or sale is effectively
registered, qualified or exempt from registration and qualification under all
applicable federal and state securities laws. The Committee shall have the
right to suspend any optionee's ability to exercise any Option granted under
the Plan (or any portion thereof) if, but only if, in the Committee's judgment,
such suspension is necessary or desirable in order to permit grants of options
or sales of the Company's shares under the Plan to qualify for any exemption
from the registration and/or qualification requirements of applicable state and
federal securities laws. Any such suspension of exercisability shall be for
such period or periods as are determined by the Committee. Neither the Company
nor the Committee, nor any officers, directors or members thereof, shall have
any liability with respect to the non-issuance or failure to sell shares as the
result of any suspensions of exercisability imposed pursuant to this section
10.
11. Reservation of Shares and Common Stock. The Company, during
the term of this Plan, shall at all times reserve and keep available an
adequate number of shares of common stock, and shall seek or obtain from any
regulatory body having jurisdiction any requisite authority in order to issue
and sell such
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<PAGE> 19
number of the shares as shall be sufficient to satisfy the requirements of the
Plan. Notwithstanding the foregoing, nothing set forth in the Plan shall be
construed so as to require the Company to register or qualify any transaction
under the Plan or Options issued thereunder with any state or federal
governmental agency.
12. Employment Relationship. Nothing set forth in this Plan or
any Option granted hereunder shall be construed so as to (i) in any way limit
the right of the Company, its parent or subsidiaries to terminate any
optionee's employment or service on the Board of Directors at any time, or (ii)
confer upon any optionee any right to continue in the employ of the Company,
its parent or subsidiaries.
13. Definitions. As used in the Plan, the terms "parent" and
"subsidiary" shall have the meaning ascribed to them in Section 424 of the
Internal Revenue Code of 1986.
IN WITNESS WHEREOF, the Plan has been adopted by the Board of
Directors of the Company on August 22, 1991 and amended by the Board of
Directors of the Company on October 16, 1995.
BEEBA'S CREATIONS, INC.
By:___________________________
Steven P. Wyandt, President
A-5
<PAGE> 20
BEEBA'S CREATIONS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, DECEMBER 20, 1995
The undersigned hereby appoints Steven P. Wyandt his and/or her proxy with
full power of substitution, to vote all of the stock of Beeba's Creations, Inc.
the undersigned would be entitled to vote at the Annual Meeting of Shareholders
of Beeba's Creations, Inc. to be held at 4:30 p.m. Pacific Standard Time, on
Wednesday, December 20, 1995, or at any adjournment thereof, at One America
Plaza, 600 West Broadway, Suite 2600, San Diego, California.
The undersigned instructs that the shares of the undersigned be voted as
follows:
<TABLE>
<S> <C> <C>
1. Election of Directors. / / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote
(except as marked to the contrary for all nominees listed below.
below).
</TABLE>
Arjun C. Waney, Steven P. Wyandt, Luther A. Henderson,
William L. Hoese, Eugene B. Price II
(Instructions: To withhold authority for an individual nominee, write the
nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. Approval of amendment to Articles of Incorporation to change the Company's
name to "Nitches, Inc."
/ / FOR / / AGAINST / / ABSTAIN
3. Approval of amendments to Executive Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
4. Ratification of the Selection of Deloitte & Touche LLP as Auditors for
Fiscal Year 1995.
/ / FOR / / AGAINST / / ABSTAIN
5. The undersigned confers upon the proxy discretion to act upon all other
matters that may properly be brought before the annual meeting or any
adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN,
BUT IF NO CONTRARY DIRECTION IS MADE IT WILL BE VOTED FOR PROPOSALS 1 THROUGH 4.
(Please sign and date on reverse side)
(Continued from other side)
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders and Proxy Statement, dated November 13, 1995.
Dated: _____________________, 199__
-----------------------------------
SIGNATURE OF SHAREHOLDER
-----------------------------------
SIGNATURE OF SHAREHOLDER
NOTE: Please sign, date and return
in the enclosed business reply
envelope. Signatures must
correspond with the name(s) shown
on the attached label. Each joint
owner should sign; executors,
administrators, trustees, and other
persons signing in representative
capacity should give full titles.
2
