<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Sunbelt Nursery Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Sunbelt Nursery Group, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
SUNBELT NURSERY GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 12, 1997
To the Stockholders:
The Annual Meeting of the Stockholders of Sunbelt Nursery Group, Inc. (the
"Company") will be held at the offices of the Company at 32382 Del Obispo St.,
San Juan Capistrano, CA 92675-4029, on Friday, December 12, 1997 at 8:30 a.m.
local time for the following purposes:
1. To elect three directors to serve until the 1998 Annual Meeting of
Stockholders or until their successors are elected and qualified.
2. To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
By resolution of the Board of Directors, only stockholders of record as of
the close of business on November 21, 1997 are entitled to notice of, and to
vote at, the Annual Meeting. The transfer books will not be closed. The
Company's Annual Report to Stockholders for the year ended June 29, 1997,
including the Company's consolidated financial statements, is being mailed
herewith to all stockholders entitled to vote at the Annual Meeting. The
Annual Report does not constitute a part of the proxy solicitation material.
By Order of the Board of Directors
/s/ Timothy R. Duoos
_____________________________________
TIMOTHY R. DUOOS
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
San Juan Capistrano, California
November 4, 1997
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING. WHETHER OR
NOT YOU EXPECT TO ATTEND IN PERSON, PLEASE SIGN AND DATE THE ENCLOSED PROXY
AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
<PAGE>
SUNBELT NURSERY GROUP, INC.
32382 DEL OBISPO ST.
SAN JUAN CAPISTRANO, CALIFORNIA 92675-4029
(714) 248-3811
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 12, 1997
SOLICITATION AND REVOCABILITY OF PROXY
The accompanying Proxy is solicited by the Board of Directors of Sunbelt
Nursery Group, Inc. (the "Company") for use at the Annual Meeting of
Stockholders to be held on December 12, 1997 or at any adjournment(s) thereof
(the "Annual Meeting"). Giving the Proxy will not in any way affect a
stockholder's right to attend the Annual Meeting and to vote in person. A
Proxy may be revoked at any time before it is exercised by notification in
writing to the Secretary at the office of the Company prior to or at the
Annual Meeting, by the attendance and voting by a stockholder at the Annual
Meeting or by the execution and delivery to the Company of a proxy dated
subsequent to a prior proxy.
A Proxy in the accompanying form which is properly signed, dated, returned
and not revoked will be voted in accordance with the instructions contained
therein. Each stockholder has three choices on each matter to be voted upon at
the Annual Meeting. For the election of directors, by checking the appropriate
box on the proxy card a stockholder may: (i) vote FOR all of the director
nominees as a group; (ii) withhold authority to vote for all director nominees
as a group; or (iii) vote FOR all director nominees as a group except those
nominees identified on the appropriate line. Concerning the other items
presented on the proxy card, by checking the appropriate box a stockholder
may: (i) vote FOR the item; (ii) vote AGAINST the item; or (iii) ABSTAIN from
voting on the item. Abstentions and broker non-votes will be counted as
present or represented at the Annual Meeting for purposes of determining
whether a quorum exists. Proxies including broker non-votes with respect to
any matter brought to a vote will not be counted as shares voted on the
particular matter as to which the broker non-vote is indicated. Therefore,
broker non-votes will have no effect when determining whether the requisite
vote has been obtained to pass a particular matter. However, proxies
indicating "abstain" or "withhold authority" with respect to any matter
brought to a vote will be counted as shares voted on the particular matter as
to which the abstention or withhold authority is indicated and will have the
effect of voting against the matter. A "broker non-vote" occurs if a broker or
other party acting as a nominee for the beneficial owner of the Common Stock
does not have discretionary authority and has not received instructions with
respect to a particular matter.
UNLESS AUTHORITY TO VOTE FOR THE ELECTION OF DIRECTORS (OR FOR ANY ONE OR
MORE NOMINEES) IS WITHHELD, PROXIES WILL BE VOTED FOR THE SLATE OF THREE
DIRECTORS PROPOSED BY THE BOARD OF DIRECTORS. Discretionary authority is
provided in the Proxy as to any matters not specifically referred to therein.
Management is not aware of any other matters which are likely to be brought
before the Annual Meeting. However, if any such matters properly come before
the Annual Meeting, it is understood that the persons named in the Proxy will
be fully authorized to vote thereon in accordance with his or their judgment
and discretion. A list of stockholders entitled to vote at the Annual Meeting
will be available for inspection by any stockholder for any purpose germane to
the Annual Meeting during ordinary business hours for a period of ten days
prior to the Annual Meeting at the principal office of the Company, 32382 Del
Obispo St., San Juan Capistrano, CA 92675-4029 and at the Annual Meeting.
The cost of soliciting Proxies has been, or will be, paid by the Company. In
addition to the solicitation of Proxies by use of the mails, certain officers
and regular employees (who will receive no compensation therefor in addition
to their regular salaries) may be used to solicit Proxies personally and by
telephone. In addition, banks, brokers and other custodians, nominees and
fiduciaries will be requested to forward copies of the Proxy solicitation
material to their principals and to request authority for the execution of
Proxies. The Company will
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reimburse such persons for their expenses in so doing. No outside proxy
solicitation firm has been selected or employed with respect to the Annual
Meeting as of the date of this Proxy Statement.
RECORD DATE AND VOTING SECURITIES
The Board of Directors has fixed the close of business on November 21, 1997
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting. As of the record date for the Annual
Meeting, there were outstanding 8,500,000 shares of the Company's common stock,
$.0l par value per share (the "Common Stock"), the only class entitled to vote
at the Annual Meeting. Each holder of Common Stock is entitled to one vote for
each share held by such person.
PRINCIPAL STOCKHOLDERS AND STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to the shares of
Common Stock owned of record and beneficially by (i) all persons who own of
record or are known by the Company to beneficially own more than 5% of the
outstanding shares of the Company's Common Stock, (ii) each director of the
Company and each executive officer named in the Summary Compensation Table, and
(iii) all directors and present executive officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
------------------------------------ ------------ --------
<S> <C> <C>
Timothy R. Duoos..................................... 3,200,500(2) 37.7%
6412 Lyndale Avenue South
Richfield, Minnesota 55423
Rodney P. Burwell.................................... 1,234,300(3)(4) 14.5%
7901 Xerxes Ave. So., Suite 201
Minneapolis, MN 55431
Rudy Boschwitz....................................... 100,000(3) 1.2%
Richard R. Dwyer..................................... 70,000(5)(6) *
All present executive officers and directors as a
group (4 persons)................................... 4,604,800 54.2%
</TABLE>
- --------
* Less than one percent (1%)
(I) Shares are deemed to be "beneficially owned" by a person if such person,
directly or indirectly, has or shares (i) the voting power thereof,
including the power to vote or to direct the voting of such shares, or (ii)
the investment power with respect thereto, including the power to dispose
or direct the disposition of such shares. In addition, a person is deemed
to beneficially own any shares of which such person has the right to
acquire beneficial ownership within 60 days. Except as otherwise stated,
each person has sole voting and investment control with respect to the
shares listed, and the information set forth with respect to the ownership
of the Common Stock of the persons named in the table is as of September 1,
1997.
(2) Mr. Duoos has pledged 3,200,000 shares to secure the Company's obligations
under its loan agreement with a commercial bank providing for a revolving
line of credit. See "Change in Control" immediately below.
(3) Includes 50,000 shares that may be acquired upon exercise of certain non-
qualified stock options.
(4) Includes 1,000,000 shares owned by Healthy American Products, Inc., a
corporation in which Mr. Burwell is the majority shareholder and an officer
and a director. Includes 46,000 shares owned by trusts for the benefit of
Mr. Burwell's children. Mr. Burwell disclaims beneficial ownership of these
shares owned by such trusts. Also, includes 3,100 shares that may be
acquired upon exercise of certain non-qualified stock options.
(5) Includes 12,000 shares that may be acquired upon exercise of options. Mr.
Dwyer has pledged 58,000 shares to secure the Company's obligations under
its loan agreement with a commercial bank providing for a revolving line of
credit. See "Change in Control" immediately below.
(6) Resigned on October 13, 1997.
2
<PAGE>
CHANGE IN CONTROL
On October 19, 1994, Timothy R. Duoos purchased 4,200,000 shares of Common
Stock from SNG Acquisition Company, Inc., a wholly-owned subsidiary of General
Host Corporation. Such shares constitute approximately 49.4% of the total
issued and outstanding Common Stock. The purchase price for the shares was
$4,200,000, consisting of cash and the proceeds of a loan in the principal
amount of $1,500,000 from American National Bank and Trust Company, Chicago,
Illinois ("ANB"). In connection with the change in control, on October 31,
1994, the then serving members of the Company's Board of Directors resigned,
and Mr. Duoos and his nominees, Rudy Boschwitz, Rodney P. Burwell and Richard
R. Dwyer, became directors of the Company.
Also, on October 19, 1994, the Company and its subsidiaries entered into a
loan and security agreement with ANB providing for a line of revolving credit
(the "Loan Agreement") which matures in October 1997. As a condition to
obtaining the Loan Agreement, Timothy R. Duoos, the Chairman of the Board and
Chief Executive Officer, and Richard R. Dwyer, the President, agreed to pledge
to ANB 50.1% of the issued and outstanding Common Stock of the Company.
Presently, Mr. Duoos has pledged 3,200,000 shares to ANB pursuant to this
requirement. On October 14, 1994, the Company's Compensation Committee granted
an option to Mr. Dwyer covering 50,000 shares of Common Stock. Under the terms
of the stock option agreement with Mr. Dwyer, the option immediately vested
and became exercisable by Mr. Dwyer at a per share exercise price equal to
$1.94, the fair market per share value of the Common Stock on the date of
grant. Mr. Dwyer has exercised options to purchase 38,000 shares of Common
Stock, which shares have been pledged, along with 20,000 additional shares of
Common Stock owned by Mr. Dwyer, to secure the Company's borrowings under the
Loan Agreement.
ELECTION OF DIRECTORS
(ITEM I)
At the Annual Meeting, three directors are to be elected to hold office
until the next annual meeting of stockholders or until their respective
successors have been elected and qualified. The Company's Bylaws provide that
the number of persons constituting the full Board of Directors of the Company
shall be at least three members and no more than seven numbers. All nominees
are currently directors of the Company. Each nominee has consented to being
named in this Proxy Statement and to serve if elected.
To be elected as a director, each nominee must receive the favorable vote of
a plurality of the shares represented and entitled to be voted at the Annual
Meeting. The persons named in the Proxy, unless otherwise directed therein,
intend to vote such Proxy FOR the election of the nominees named below as
directors for the term beginning with the date of the Annual Meeting and
expiring on the date of the 1998 Annual Meeting of Stockholders, or until
their successors may be duly elected and qualified. If any nominee becomes
unavailable for any reason, the persons named in the Proxy may vote for
substitute nominees selected by the Board. Stockholders may not cumulate their
votes with regard to the election of directors. Additional information
regarding the three nominees for election as directors of the Company is set
forth immediately below.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
NOMINEES LISTED BELOW.
NOMINEES
RUDY BOSCHWITZ, age 66, has served as a director of the Company since
October 31, 1994. Mr. Boschwitz serves as Chairman of the Board of Directors
of Home Valu, Inc., a retailer of home improvement products headquartered in
Minneapolis, Minnesota. Mr. Boschwitz also serves as a member of the Boards of
Directors of Chicago Mercantile Exchange and TCF Bank. Mr. Boschwitz served as
United States Senator from the State of Minnesota from 1978 to 1990.
RODNEY P. BURWELL, age 58, has served as a director of the Company since
October 31, 1994. Mr. Burwell also serves as the Chairman of the Board of
Directors of Xerxes Corporation, a manufacturer of underground storage
containers located in Minneapolis, Minnesota, and has served as its Chief
Executive Officer
3
<PAGE>
since 1969. Mr. Burwell is also a member of the Boards of Directors of
Children's Broadcasting Corporation and Vaughn Communications.
TIMOTHY R. DUOOS, age 41, has served as the Chairman of the Board of the
Company since October 31, 1994, and Chief Executive Officer of the Company
since November 18, 1994 and its President since October 13, 1997. Mr. Duoos is
also the principal stockholder of Lyndale Garden Center, Inc., a regional
retailer of lawn and garden products, located in Minneapolis, Minnesota, and
has served as the Chairman of the Board of Directors of Lyndale Garden Center,
Inc. since October 1986.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has three standing committees, the Executive
Committee, the Audit Committee and the Compensation Committee.
Executive Committee. The Executive Committee directs and manages the
business affairs of the Company in the intervals between meetings of the Board
of Directors. The Executive Committee is empowered to act in lieu of the Board
of Directors on any matter except those matters for which the Board of
Directors has specifically reserved authority to itself and those matters
specifically reserved to the full Board pursuant to the Delaware General
Corporation Law and the Certificate of Incorporation and Bylaws of the
Company. The Executive Committee presently consists of Messrs. Duoos and
Boschwitz.
Audit Committee. The Audit Committee reviews the professional services and
independence of the Company's certified public accountants, the plan and
results of the Company's internal audits, and the Company's accounts,
procedures and internal controls and recommends the Company's independent
public accountants. The Audit Committee met one time during fiscal year 1997.
The Audit Committee presently consists of Mr. Boschwitz.
Compensation Committee. The Compensation Committee determines matters
regarding the compensation of officers of the Company. The Compensation
Committee met one time during fiscal 1997. The Compensation Committee
presently consists of Messrs. Duoos and Burwell. Mr. Duoos is the President
and Chief Executive Officer of the Company.
MEETINGS OF THE BOARD OF DIRECTORS
During fiscal 1997, the Board of Directors held four meetings. Each
incumbent director attended at least 75% of the aggregate of (i) the total
number of meetings of the Board of Directors held during the period in which
he was a director and (ii) the total number of meetings held by all committees
on which he served (during the period that he served).
COMPENSATION OF DIRECTORS
Directors Fees. Directors of the Company who are not employees of the
Company receive $300 for each Board of Directors or committee meeting
attended, whether by teleconference or in person, plus reasonable expenses
incurred in the performance of their duties.
Stock Options. On March 6, 1995, the Board of Directors approved, and on
November 9, 1995, the stockholders ratified, an amendment to the 1991 Stock
Option Plan suspending the provisions of the 1991 Stock Option Plan applicable
to non-employee directors, and the grant of certain non-qualified stock
options to the then-current non-employee directors. As a result, each of the
Company's non-employee directors received 50,000 shares of the Company's
Common Stock at an exercise price equal to the fair market value of the Common
Stock on the date each was elected to the board of directors. Accordingly,
options to purchase 150,000 shares were issued during fiscal 1996. For each
director, the options will become 50% vested on their first anniversary date,
and the remaining 50% vests on the second anniversary date assuming continuous
service as a member of the
4
<PAGE>
Board of Directors. Once vested, the options may be exercised at any time
during their period of service and for a period of three years following their
resignation from the Board. The options expire ten years from the March 6,
1995 and April 11, 1995 grant dates. The exercise price at the date of grant
approximated fair market value.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
5
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
CURRENT EXECUTIVE OFFICERS
The current executive officers of the Company, their respective ages,
positions held and tenure as officers are as follows:
<TABLE>
<CAPTION>
OFFICER OF
THE COMPANY
NAME AGE POSITION(S) HELD WITH THE COMPANY SINCE
---- --- --------------------------------- -------------
<S> <C> <C> <C>
Timothy R. Duoos........ 41 Chairman of the Board of Directors, President November 1994
and Chief Executive Officer
Chad Ruth............... 32 Senior Vice President--Operations and Secretary October 1997
Thomas R. Hoekstra...... 48 Chief Financial Officer and Assistant Secretary October 1997
</TABLE>
BUSINESS EXPERIENCE
Information concerning the business experience of Mr. Duoos is provided
under the section entitled "Election of Directors."
Mr. Ruth has spent his entire business career in nursery and garden center
operations. Mr. Ruth joined Wolfe Nursery, a wholly owned subsidiary, in 1985
and served in various capacities for the Company until 1993. In 1993, Mr. Ruth
was recruited by the Dayton-Hudson Company to assist in the development of
their Target Garden Centers in Texas. In 1995, Mr. Ruth returned to the
Company and served in various management positions until his appointment as
Senior Vice President--Operations in October 1997.
Mr. Hoekstra joined the Company in October 1997 as Chief Financial Officer.
From 1994 to March 1997, Mr. Hoekstra was Corporate Controller, Assistant
Secretary and Assistant Treasurer for Barry's Jewelers, Inc. in Monrovia,
California. Prior to his role at Barry's Jewelers, Inc., he spent five years
with Harris Department stores as Controller.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors historically has
established the compensation of the executive officers of the Company. Since
October 31, 1994, the Compensation Committee has consisted of Rodney P.
Burwell, Chairman, and Timothy R. Duoos. Mr. Burwell is not an employee of the
Company. Mr. Duoos is the President and Chief Executive Officer of the
Company.
Compensation of executive officers has historically consisted of salary,
annual bonus and long-term compensation in the form of stock options. The
Company strives to establish levels of compensation that attract, retain and
motivate executives and that are designed to reward strong financial
performance of the Company and enhance stockholder value through awards of
stock-based plans. Compensation of executive officers during the 1997 fiscal
year consists solely of salary. The Company will consider bonus and long-term
compensation plans in the future, depending upon the Company's return to
profitability and improvements in financial condition.
The salary of the Chief Executive Officer and other executive officers for
the past fiscal year was based upon a review of past corporate and individual
performance. In evaluating corporate performance for the 1997 fiscal year,
consideration was given to the Company's losses, factors (such as weather)
that affected the Company's operating results, but were beyond the control of
management, and actions that have been taken that are intended to enable the
Company to achieve improved financial performance in the future. In addition
to corporate performance, consideration was given to individual efforts and
achievements and the level of individual contribution to the overall
performance of the Company. Based on these factors, most specifically the
Company's
6
<PAGE>
financial performance in fiscal 1997, salaries of all executive officers were
maintained during the 1997 fiscal year. Mr. Duoos abstained from the vote
approving his salary as the Company's Chief Executive Officer.
Long-term incentives for the Company's executive officers are provided
through awards under the Stock Option Plan. Awards under the 1991 Stock Option
Plan are designed to increase stockholder value by providing value to
executives only when there is an increase in value to all stockholders.
Specific formulae have not been used for the determination of option grants,
but consideration is given to the number of stock options outstanding at the
time of awards. Due to the Company's financial performance, no stock options
were awarded to the Company's executives in fiscal 1997.
A certain executive officer is eligible for an annual bonus based on the
Company's profitability and performance as a whole. All executive bonuses are
recommended by the Compensation Committee and must be approved by the full
Board of Directors.
Timothy R. Duoos
Rodney P. Burwell, Chairman
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Timothy R. Duoos, the Company's President and Chief Executive Officer,
is also a member of the Compensation Committee of the Board of Directors. In
connection with the Company's loan agreement with American National Bank and
Trust Company, Chicago, Illinois (the "Bank") dated October 1994, Mr. Duoos
agreed to personally guarantee the repayment of all amounts borrowed by the
Company from the Bank pursuant to the Company's revolving line of credit. In
consideration therefore, the Company has agreed to pay Mr. Duoos an annual
loan guarantee fee of $60,000. As of June 29, 1997, the total amount of
indebtedness borrowed by the Company under the line of credit was
approximately $2,700,000.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
7
<PAGE>
COMPANY COMMON STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return on the Common Stock for the period of the Company's last five fiscal
years from January 31, 1992 to June 29, 1997, with the cumulative total return
over the same period of the S&P 500 Index and the S&P Retail-Specialty Index.
As required by applicable rules of the Securities and Exchange Commission, the
graph was prepared assuming (i) that $100 was invested on January 31, 1992 in
each of the Common Stock, the S&P 500 Index and the S&P Retail-Specialty Index
and (ii) all dividends were reinvested on the ex-dividend dates.
[LINE CHART APPEARS HERE]
COMPARISON OF CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
1/31/92 1/31/93 1/30/94 1/29/95 1/28/96 6/30/96 6/29/97
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
SUNBELT NURSERY GROUP 100.00 85.96 45.61 29.82 35.09 28.95 16.67
S&P RETAIL SPECIALTY
INDEX 100.00 113.57 119.17 98.72 78.43 110.02 111.96
S&P 500 INDEX 100.00 110.60 124.85 125.51 174.04 185.31 249.61
</TABLE>
- --------
(1) In August 1996, the Board of Directors approved a change in the Company's
fiscal year end to the Sunday nearest the end of June.
8
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the compensation paid to the
Company's Chief Executive Officer(s) and the other executive officers whose
total cash compensation during fiscal 1997 exceeded $100,000 ("Named Executive
Officers") for services rendered by such persons to the Company and its
subsidiaries in all capacities, during the past three fiscal years.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------- ------------------
NAME AND PRINCIPAL FISCAL OTHER ANNUAL SECURITIES ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION(1) UNDERLYING OPTIONS COMPENSATION
------------------ ------ ------ ----- --------------- ------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
TIMOTHY R. DUOOS........ 1997 120,000 0 -- 0 0
Chairman of the Board
and 1996 110,923 0 -- 0 0
Chief Executive Officer 1995 40,000 0 -- 0 0
RICHARD R. DWYER(2)..... 1997 180,000 0 -- 0 0
President 1996 180,000 0 14,489(3) 0 0
1995 45,962 0 0 50,000 0
</TABLE>
- --------
(1) "Other Annual Compensation" is intended to cover forms of annual
compensation that are not otherwise categorized as salary or bonus, such
as perquisites. Except as otherwise stated, to the present knowledge of
the Company, no Named Executive Officer received "Other Annual
Compensation" in any of the past three fiscal years exceeding the
threshold level for disclosure purposes, being the lesser of either
$50,000 or 10% of the total annual salary and bonus reported for the Named
Executive Officer for such fiscal year.
(2) Mr. Dwyer resigned as President and Secretary of the Company on October
13, 1997.
(3) Represents reimbursement of moving expenses for Mr. Dwyer.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information, with respect to individual grants
under the Company's Stock Option Plan, or otherwise, to the Named Executive
Officers during the last fiscal year.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
ANNUAL
RATES
OF
STOCK
PRICE
APPRECIATION
NUMBER OF PERCENT OF FOR
SECURITIES TOTAL OPTIONS/ EXERCISE OPTION
UNDERLYING SARS GRANTED OF BASE TERM
OPTIONS/SARS TO EMPLOYEES PRICE EXPIRATION ---------------
NAME AND POSITION GRANTED IN FISCAL YEAR ($/SH) DATE 5% 10%
----------------- ------------ -------------- -------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Timothy R. Duoos........ -0- -- -- -- -- --
Richard R. Dwyer........ -0- -- -- -- -- --
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES
The following table provides information with respect to the exercise of
options by the Named Executive Officers during the last fiscal year and the
value of unexercised stock options held as of the end of the fiscal year.
<TABLE>
<CAPTION>
SHARES VALUE($) NUMBER OF SECURITIES VALUE ($) OF UNEXERCISED
ACQUIRED REALIZED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ON UPON OPTIONS AT 6-29-97 AT 6-29-97
NAME EXERCISE EXERCISE EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
---- -------- -------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Timothy R. Duoos........ -0- -0- None -0-
Richard R. Dwyer........ -0- -0- 12,000/-0- N/A
</TABLE>
- --------
(1) Value realized is calculated by determining the difference between the
fair market value of the securities underlying the options and the
exercise price of the options. Because the market price of the Company's
Common Stock on June 29, 1997 was less than the option exercise price,
none of the exercisable options listed herein were "in-the-money."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the 1997 fiscal year, the Company paid approximately $111,000,
representing transportation services, to a travel service company of which Mr.
Duoos is a partial owner.
Lyndale Garden Centers, Inc., ("Lyndale") whose sole shareholder is Mr.
Duoos, has a receivable to the Company for $28,000 at June 29, 1997 for travel
expenditures and merchandise purchased from the Company. In addition, the
Company purchased $48,500 in seasonal merchandise from Lyndale during fiscal
1997.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Price Waterhouse LLP as independent
accountants to audit the books, records and accounts of the Company for fiscal
year 1998. Price Waterhouse has served as the Company's independent
accountants since 1984, and is, therefore, familiar with the affairs and
financial procedures of the Company. To the knowledge of management, neither
such firm nor any of its members has any direct or material indirect financial
interest in the Company nor any connection with the Company in any capacity
other than as independent accountants.
Audit and audit related services performed by Price Waterhouse LLP during
the fiscal year ended June 29, 1997 included the audit of the annual financial
statements of the Company.
A representative of Price Waterhouse LLP is expected to be present at the
Annual Meeting to answer appropriate questions and will also have an
opportunity to make a statement should such representative so desire.
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STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
If a stockholder intends to submit a proposal for presentation at the 1998
Annual Meeting, such proposal must be received by the Company at its principal
executive offices on or before July 1, 1998, in order to be considered for
inclusion in the Proxy Statement and Proxy relating to such Meeting.
GENERAL
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors, and persons who beneficially own more than ten percent
(10%) of the Company's Common Stock, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission
and the applicable national stock exchange. Executive officers, directors and
beneficial owners in excess of ten percent (10%) of the Company's Common Stock
are required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company, the Company believes that all Section 16(a) filing requirements
applicable to its executive officers, directors and beneficial owners in
excess of ten percent (10%) were complied with.
FORM 10-K
The Company will furnish without charge to each person whose Proxy is being
solicited, upon request of any such person, a copy of the Annual Report of the
Company on Form 10-K for the fiscal year ended June 29, 1997, as filed with
the Securities and Exchange Commission, including the financial statements and
schedules. Requests for copies of such report should be directed to Mr. Thomas
R. Hoekstra, Chief Financial Officer, 32382 Del Obispo St., San Juan
Capistrano, California 92675-4029.
CHANGE IN FISCAL YEAR-END
In August 1996, the Board of Directors approved a change in the Company's
fiscal year end to the Sunday nearest the end of June.
Please date, sign and return the enclosed Proxy at your earliest convenience
in the enclosed envelope. No postage is required for mailing in the United
States. A prompt return of your Proxy will be appreciated as it will save the
expense of further mailings.
By Order of the Board of Directors
/s/ Timothy R. Duoos
_____________________________________
TIMOTHY R. DUOOS
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
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P R O X Y
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED; IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
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ELECTION OF THE NOMINEES LISTED FOR THE ELECTION OF DIRECTORS.
Dated: ______________________, 1997
___________________________________
Signature
___________________________________
Signature (if jointly held)
IMPORTANT: Signature(s) must
correspond exactly with the
name(s) as they appear on the
stock record book of the Company.
Each joint owner shall sign.
Executors, administrators,
trustees, etc. should give full
title as such.
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE
<PAGE>
P R O X Y
SUNBELT NURSERY GROUP, INC. ANNUAL MEETING - DECEMBER 12, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby appoints TIMOTHY R. DUOOS, proxy (the "Proxy") with full
power of substitution to vote as set forth herein all the shares of the Common
Stock of SUNBELT NURSERY GROUP, INC. (the "Company") that the undersigned would
be entitled to vote if personally present at the Annual Meeting of Stockholders
to be held at 8:30 a.m. local time on Friday, December 12, 1997, at the offices
of the Company at 32382 Del Obispo St., San Juan Capistrano, California 92675-
4029, and at any adjournment(s) or postponement(s) thereof.
1.ELECTION OF DIRECTORS
RUDY BOSCHWITZ, RODNEY P. BURWELL AND TIMOTHY R. DUOOS
[_] VOTE FOR all nominees [_] WITHHOLD AUTHORITY to vote for all
listed above nominees listed above
(except as written to the
contrary below)
TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE, WRITE SUCH
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
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2. In their discretion, the Proxies are authorized to vote as described in the
Proxy Statement upon such other business as may properly come before the
Annual meeting and any adjournment(s) or postponement(s) thereof.
(Continued and to be signed and dated on reverse side)
