<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
/X/ Preliminary Information Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
/ / Definitive Information Statement
VESTRO NATURAL FOODS INC.
- --------------------------------------------------------------------------------
(Name of Registrant As Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
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4) Date Filed:
------------------------------------------------------------------------
<PAGE>
VESTRO NATURAL FOODS INC.
1065 E. Walnut Street
Carson, CA 90746
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 20, 1996
----------------
To the Shareholders:
You are cordially invited to attend the Annual Meeting of
Shareholders of Vestro Natural Foods Inc. (the "Company") which will be
held at 1065 E. Walnut Street, Carson, California 90746 on Thursday, June 20,
1996 at 10:00 A.M. (Pacific Coast Time) for the following purposes:
(1) To elect directors;
(2) To consider and act upon a proposed amendment to the Company's
1988 Stock Option Plan increasing the number of shares of Common
Stock available for issuance under the Plan from 150,000 to
300,000;
(3) To ratify and approve the grant of non-qualified options to
purchase an aggregate of 160,000 Shares of Common Stock to non-
employee Directors; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 1, 1996
as the record date for shareholders entitled to notice of and to vote at the
meeting. The share transfer books will not be closed.
By order of the Board of Directors,
Stephen Schorr
Secretary
May 1, 1996
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
<PAGE>
INFORMATION STATEMENT
For the Annual Meeting to be held on June 20, 1996.
This Information Statement is furnished in connection with the
Annual Meeting of Shareholders of Vestro Natural Foods Inc. (the "Company")
to be held at 10:00 A.M. (Pacific Coast Time) on Thursday, June 20, 1996 at
1065 E. Walnut Street, Carson, California 90746 or at any adjournment thereof
with respect to the matters referred to in the accompanying notice. This
Information Statement is to be mailed to shareholders on or about May 10,
1996.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
VOTING SECURITIES AND RECORD DATE
Only holders of record of the Company's Common Stock, $.01 par value, at
the close of business on May 1, 1996 will be entitled to notice of and to vote
at the meeting. On the record date, there were issued and outstanding 5,950,588
shares of Common Stock. Each outstanding share of Common Stock is entitled to
one vote.
See SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, for
information as to the holdings of persons owning in excess of 5% of the Common
Stock as well as the holdings of Management.
MATTERS TO BE ACTED UPON
(1) The election of nine directors to hold office until the next Annual
Meeting of Shareholders and until their respective successors are duly
elected and qualified;
(2) To consider and act upon a proposed amendment to the Company's 1988
Stock Option Plan increasing the number of shares of Common Stock
available for issuance under the Plan from 150,000 to 300,000;
(3) To ratify and approve the grant of non-qualified options to purchase
an aggregate of 160,000 Shares of Common Stock to non-employee
Directors; and
(4) To transact such other business as may properly come before the
meeting or any adjournment thereof.
<PAGE>
ELECTION OF DIRECTORS
Nine directors are to be elected to serve until the next Annual Meeting of
Shareholders and until their successors are elected and qualified.
The following table sets forth the name of each nominee for director of the
Company, his age, position and office with the Company and period he has served
as a director:
<TABLE>
<CAPTION>
POSITION AND OFFICE DIRECTOR
NAME AGE WITH COMPANY SINCE
- ------------------- ----- ------------------------- --------
<S> <C> <C> <C>
Robert J. Cresci 52 Chairman of the Board 1990
Allan Dalfen 53 Director 1992
Anthony J. Harnett 51 Director 1994
B. Allen Lay 61 President and Chief
Executive Officer
and Director 1987
Stephen P. Monticelli 41 Director 1994
Jay J. Miller 63 Director 1966
F. Noel Perry 43 Director 1995
Henry W. Poett, III 57 Director 1987
Donald R. Stroben 65 Director 1987
</TABLE>
Robert J. Cresci has been a Managing Director of Pecks Management Partners
Ltd., an investment management firm, since September 1990. Mr. Cresci currently
serves on the boards of Bridgeport Machines, Inc., Serv-Tech, Inc., EIS
International, Inc., Sepracor, Inc., Olympic Financial, Ltd., GeoWaste, Inc.,
Hitox, Inc., Natures Elements, Inc., Garnet Resources Corporation, HarCor
Energy, Inc., Meris Laboratories, Inc. and several private companies.
Allan Dalfen was President and Chief Executive Officer of the Company from
February, 1993 to January, 1995. From 1979 to 1992, Mr. Dalfen was President
and Chief Executive Officer of Weider Health and Fitness, a manufacturer of
health and fitness equipment, sports nutrition products and fitness
publications.
Anthony J. Harnett was the owner of Bread & Circus, a leading natural
products retailer, from 1975 through 1992. He currently serves as Chairman of
Harnett's , a homeopathic retail pharmacy. He is also Chairman of Hawkins
Associates Inc. and its subsidiary, Hawkins Transport. Hawkins is a major
supplier of organic and commercial produce to the natural foods industry.
2
<PAGE>
B. Allen Lay was elected by the Board of Directors as President and Chief
Executive Officer on January 12, 1995. Mr. Lay has served as a General Partner
of Southern California Ventures, a venture capital firm, since May, 1983. He is
a director of PairGain Technologies, Physical Optics Corp., Kofax Imaging ViaSat
Inc. and Medclone Inc. Mr. Lay was Chairman and Chief Executive Officer of
Meridian Data Inc. from July, 1993 to December, 1994.
Jay J. Miller has been a practicing attorney in the State of New York for
more than thirty years. Mr. Miller is a director of Total-Tel USA
Communications, Inc. a long distance telephone service provider, and Edison
Control Corporation, a manufacturer of electronic fault locating devices for the
power utility industry. He is also a director of Gulf Resources Pacific
Limited, a New Zealand real estate company.
Stephen P. Monticelli is a private equity investor. From 1991 to 1995 he
was a partner and Managing Director of Baccharis Capital, Inc., a venture
capital and buyout firm located in Menlo Park, California. From 1987 to 1991,
Mr. Monticelli was a Principal in the Private Ventures group of The Fremont
Group (formerly known as Bechtel Investments, Inc.), a private family investment
firm. Prior to 1987, he was a management consultant with Marakon Associates and
a Certified Public Accountant with Deloitte and Touche.
F. Noel Perry is the founder and a Managing Director of Baccharis Capital,
Inc., a private venture capital partnership which concentrates its interests in
the natural and organic food area. Mr. Perry currently serves on the board of
several private companies and served on the board of Earth's Best before its
recent sale.
Henry W. Poett, III was President and Chief Executive Officer of the
Company from April, 1992 to January, 1993. Previously he was Executive Vice
President-Operations and Chief Operating Officer of the Company from May, 1990
to March, 1992. Mr. Poett is currently a partner in Dalton Partners, a
management services company. Mr. Poett was an independent management consultant
from 1989 to 1990. He served as President and Chief Operating Officer of
Transcisco Industries Inc. from 1987 to 1988. From 1984 to 1987, he was Chief
Executive Officer of Wilsey Foods, Inc., a packager, marketer and distributor of
food products. He is a director of Biovation Inc., Wilsey Bennett Company, and
Armanino Foods.
Donald R. Stroben was Chairman of the Board of the Company from January,
1987 to January, 1993. He has served as a Managing General Partner of
Princeton/Montrose Partners, a venture capital firm, since December 1981.
Mr. Stroben currently serves as a director of Etz Lavud Ltd. (ASE) and
several private companies Mr. Stroben is also past Chairman of the Board of
Laura Scudder's, Inc., a snack food manufacturer.
During 1995, the Board held five meetings. Each director attended at least
75% of the meetings held. Where formal action has otherwise been required, the
Board has acted by unanimous written consent as permitted under applicable
corporate law and the Company's By-Laws. The Company's
3
<PAGE>
Board of Directors currently has an Audit Committee consisting of
Messrs. Stroben and Poett and a Compensation Committee consisting of Messrs.
Miller and Cresci. The Board currently has no Nominating Committee.
APPROVAL OF AMENDMENT TO 1988 STOCK OPTION PLAN
Shareholders are being asked to approve an Amendment to the 1988 Stock
Option Plan of the Company (the "Plan") to increase the aggregate number of
shares available for issuance under the Plan from 150,000 to 300,000 shares.
The Company's Board of Directors approved the Amendment to the Plan, subject to
shareholder approval, on April 23, 1996.
Although the Board of Directors may at any time amend, suspend or terminate
the 1988 Plan, no action of the Board of Directors may increase the aggregate
maximum number of shares issuable under the 1988 Plan without the vote of the
holders of the Company's Common Stock. The amendment, suspension or termination
of the 1988 Plan will not, without the consent of the optionees involved, alter,
amend or impair any rights or obligations under any options theretofore granted.
As of March 31, 1996 149,500 shares of Common Stock, were subject to
outstanding options under the Plan and unless amended, as contemplated herein,
only 500 additional shares would be available under the Plan for future option
grants.
All options granted have an exercise price of $1.375 per share. At
March 31, 1996, options to purchase 27,500 shares of Common Stock were
currently exercisable. The expiration dates for all such outstanding options
range from April 19, 1999 (at the earliest) to October 25, 2000 (at the
latest).
During the fiscal year ended December 31, 1995, the Board of Directors of
the Company granted options to purchase 125,500 shares of Common Stock under the
Plan to 16 employees. Options to purchase 32,500 shares were cancelled during
the year due to the resignation of three employees. All of the options vest
over a period of five years, with 25% of each option exercisable at the end of
each year. No options were exercised during the fiscal year ended December 31,
1995.
The Plan provides that options granted thereunder are intended to qualify
as "incentive stock options" within the meaning of Section 422A of the United
States Internal Revenue Code of 1954, as amended (the "Code"), while non-
statutory options may also be granted under the Plan. Incentive stock options
may be granted only to employees of the Company, while non-statutory options may
be granted to non-executive directors, consultants and others as well as to
employees.
The Plan is administered by the Company's Board of Directors or a Committee
of the Board. Under the plan, shares of Common Stock are reserved for issuance
to employees, officers, directors, and consultants of the Company under the
Plan. The Board or a Committee, if appointed, determines which individuals
shall receive options, the time periods during which the
4
<PAGE>
options may be partially or fully exercised, the number of shares that may be
purchased under each option and the option exercise price.
The per share exercise price of the shares subject to an incentive stock
option may not be less than the fair market value of such shares on the date an
option is granted. Options under the Plan must be granted by June 1998 (ten
years from the effective date of the Plan). Incentive stock options granted
under the Plan cannot be exercised later than ten years from the date of grant.
Any options which expire unexercised or terminate upon an employee's
ceasing to be employed by the Company become available once again for issuance
under the Plan. Shares issued upon exercise of an option will be the same as
shares then outstanding.
RATIFICATION AND APPROVAL OF GRANT OF STOCK OPTIONS
TO NON-EMPLOYEE DIRECTORS
Shareholders are being asked to ratify and approve the grant of options to
purchase 20,000 shares of the Company's $.01 par value Common Stock to each of
the non-employee Directors of the Company or an aggregate of 160,000 shares.
These options were not issued under an existing option plan.
On July 26, 1995, the Board of Directors granted to each of the eight non-
employee Directors, subject to shareholder approval, a non-qualified option to
purchase 20,000 shares of Common Stock, $.01 par value, of the Company. The
purpose of the grant was to assist the Company in retaining highly qualified
persons to serve as Directors by affording such persons an opportunity to
acquire a proprietary interest in the Company, thus more closely identifying the
interests of such Directors with those of the shareholders. The principal
features of the options are summarized below.
Each option is exercisable, in whole or in part, at any time or from time
to time, at a price of $1.875 per share, (the fair market value of the Company's
Common Stock on the date of grant) for a period of five years from the date of
grant and vest in three equal installments on each anniversary of the date of
grant, with credit to be given for up to two years of prior service by an option
holder. In other words, as to a non-employee Director who has served in such
capacity for two or more years prior to the grant, two-thirds of the option is
immediately vested and the balance vests one year after grant. The Company may
accelerate the vesting period in whole or in part. Each option terminates upon
termination of the holders directorship or upon his disability; however, an
option holder shall have the right to exercise his option, to the extent
previously vested, for up to the earlier of 180 days (90 days if termination was
for cause) following such termination, or the expiration date of the option. In
the event of the holders death, the option, which is otherwise non-transferable,
shall pass to his heirs or administrators and shall be exercisable, to the
extent previously vested, for up to one year following the holder's death or the
expiration date of the option.
5
<PAGE>
The option has provisions designed to protect the holder from dilution by
reason of recapitalization, stock dividends, stock aplits, mergers or similar
events. No holder of an option shall have any rights as a shareholder of the
Company in respect of shares issuable upon exercise of an option unless the
option is exercised in accordance with its terms and a certificate representing
such shares has been issued and delivered to the holder.
Upon exercise of an option by a non-employee Director, the difference
between the exercise price and the then fair market value of the shares so
issued shall be recognized as ordinary income to the option holder. The Company
shall be entitled to a deduction for the amount so recognized as ordinary
income.
REQUIRED VOTE
FOR ELECTION OF DIRECTORS:
Assuming the presence of a quorum (a majority of the total issued and
outstanding shares of the Company's Common Stock) a favorable vote of the
holders of a plurality of the shares of the Company's Common Stock present and
voting at the meeting for the election of each nominee or in favor of each
proposal is required.
FOR APPROVAL OF AMENDMENT TO 1988 STOCK OPTION PLAN:
Approval of this proposal requires an affirmative vote by the holders of a
majority of the issued and outstanding Common Stock of the Company.
FOR APPROVAL OF GRANT OF STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS
Approval of this proposal requires an affirmative vote by the holders of a
majority of the shares present in person or represented by proxy and entitled to
vote at the meeting, assuming the presence of a quorum.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth information covering the executive officers
of the Company. All officers serve at the pleasure of the Board of Directors.
There are no family relationships among any officers or directors of the
Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------- ----- --------------------------------------
<S> <C> <C>
Robert J. Cresci 52 Chairman of the Board
B. Allen Lay 61 President and Chief Executive Officer
Stephen Schorr 50 Vice President, Finance,
Secretary, Treasurer and Chief
Financial Officer
</TABLE>
6
<PAGE>
Messrs. Cresci and Lay currently serve as directors of the Company. See
ELECTION OF DIRECTORS for employment and background information for these
individuals.
Mr. Schorr joined the Company in July, 1988 as Vice President, Finance.
He is an officer and director of each of the Company's subsidiaries. From
December, 1982 through June, 1988, he held the positions of Vice President,
Finance and Corporate Controller of Linear Corporation, a manufacturer of
electronic components.
SIGNIFICANT EMPLOYEES
Andrew Jacobson (35) has been President of the Company's subsidiaries,
Westbrae Natural Foods, Inc. and Little Bear Organic Foods, Inc. since joining
the Company in November, 1992. From 1985 to 1992, Mr. Jacobson was employed by
Tree of Life Inc., a major national natural products distributor, in several
executive capacities culminating as Director of Sales of Tree of Life West, Sun
Valley and Hayward, CA. Mr. Jacobson is a member of the Board of Directors of
the National Nutritional Foods Association.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation which the Company paid
during the three years ended December 31, 1995 to the Chief Executive Officer
and to its other executive officers.
<TABLE>
<CAPTION>
NAME AND OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS GRANTED COMPENSATION
- ------------------ ---- -------- --------- ------- ------------
<S> <C> <C> <C> <C> <C>
B. Allen Lay, CEO 1995 $115,000 (a)(b) 120,000 (i) $ 5,000(c)
Allan Dalfen, CEO 1994 $120,000 (d) $ 3,120 (e) (f)
1993 $ 75,000 (d) $ 32,220 (e)
Andrew Jacobson, Pres., Westbrae Natural Foods, Inc.
1995 $120,000 $ 15,000 (g)
1994 $120,000 $ 3,120 (e)
1993 $110,000 $ 32,220 (e) 329,875
Stephen Schorr, CFO 1995 $105,000 $ 9,300 (g) 30,000 (i)
1994 $105,000 $ 2,000 20,000 (h)
1993 $ 95,000 $ 9,500
</TABLE>
(a) Represents amounts paid as a consulting fee to SCV Management Company of
which Mr. Lay is a general partner.
(b) Began employment on January 12, 1995.
(c) Consulting fee paid prior to becoming CEO for evaluation of the Company's
operations.
7
<PAGE>
(d) Represents amounts paid as a consulting fee to Dalfen Corporation, of which
Mr. Dalfen is the sole shareholder.
(e) Paid under a management bonus agreement which provided for the payment of
6% of pretax income above $500,000 in a year to Mr. Dalfen and Mr.
Jacobson.
(f) Mr. Dalfen purchased 395,850 shares of Common Stock for $510,025 ($1.29 per
share) - $66,000 in cash and a note for $444,025 bearing interest at 5.75%
per annum under a Stock Purchase Agreement as of July 29, 1993 and a
Severance and Settlement Agreement as of March 1, 1995. The total
difference between the quoted price and the sale price of these shares was
$178,000.
(g) Bonus paid under an incentive plan covering substantially all employees of
the Company.
(h) Replaced options that expired in 1994.
(i) See Option Grants in Last Fiscal Year table below.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ANNUAL RATES
OF STOCK
OPTIONS % OF TOTAL EXERCISE EXPIRATION APPRECIATION
NAME GRANTED GRANTED PRICE DATE 5% 10%
- ---- --------- ---------- -------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
B. Allen Lay
120,000 30 $1.75 07/26/2000 $58,074 $128,343
Stephen Schorr
30,000 7 $1.375 10/25/2000 $11,408 $ 25,212
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors has structured a compensation package for the
Company's Chief Executive Officer which puts a substantial emphasis on equity-
based compensation over fixed compensation. Mr. Lay's salary of $10,000 per
month ($115,000 in 1995 from January 12, 1995) is low for a firm of the
Company's size and industry. The Board of Directors has supplemented Mr. Lay's
salary with grants of options to purchase 60,000 shares (approximately 1% of the
total outstanding) at the inception of his employment and 60,000 shares at
subsequent six month intervals. To March 31, 1996, Mr. Lay has received options
to purchase 180,000 shares of the Company's Common Stock. Each option is
granted at the then-current market value of the Company's Common Stock.
The current compensation package of the Chief Executive Officer was
designed to closely align his interests with those of the Company's
shareholders.
Board of Directors Compensation Committee
Robert J. Cresci
Jay J. Miller
8
<PAGE>
COMPARISON OF FIVE YEAR TOTAL RETURN
VESTRO NATURAL FOODS & NASDAX INDEX
TOTAL RETURN GRAPH
VESTRO NASDAQ
NATURAL NON FINANCIAL
FOODS STOCKS
1990 100 100
1991 63 161
1992 56 176
1993 66 202
1994 40 193
1995 33 275
9
<PAGE>
STOCK OPTION PLANS
The Company adopted a Stock Option Plan at its May 23, 1988 Annual Meeting.
This plan provides for options to purchase up to 150,000 shares of the Company's
Common Stock to be granted at prices not less than the fair market value on the
date of grant. Both incentive and non-incentive options may be issued under the
1988 Plan. At December 31, 1995, there were 149,500 incentive options
outstanding under the 1988 Plan, of which options to purchase 21,000 shares were
currently exercisable. During the year ended December 31, 1995, options to
purchase 125,500 shares of the Company's Common Stock were granted under this
plan. See APPROVAL OF AMENDMENT TO 1988 STOCK OPTION PLAN.
The Company has granted non-qualified stock options to certain officers,
key employees, and directors of the Company. All non-qualified stock options
were granted at prices representative of the fair market value of the Common
Stock at the dates of grant. All options granted are for a five-year period,
and generally become exercisable, ratably, over three to four years. Options
granted to officers are not exercisable for a period of one year after date of
grant and, thereafter, become exercisable at 25% per year. During 1995, options
to purchase 160,000 shares were granted and no option was exercised.
On each of January 31, 1995, July 26, 1995 and January 30, 1996 non-
qualified options to purchase 60,000 shares of the Company's Common Stock was
issued to Mr. Lay. Each option was granted at the then-current market value and
has a term of five years. Each option is immediately exercisable in full. SEE
EXECUTIVE COMPENSATION
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is certain information concerning persons known by the
Company to own beneficially more than 5% of the shares of Common Stock of the
Company outstanding on March 31, 1996.
<TABLE>
<CAPTION>
NUMBER OF PERCENT
NAME AND ADDRESS BENEFICIALLY OF
OF BENEFICIAL OWNER OWNED SHARES (1) CLASS (1)
- ------------------------- ---------------- ----------
<S> <C> <C>
NAP & Company 983,940 16.5%
Nominee for Delaware State
Employee's Retirement Fund
1 Hopkins Plaza
Baltimore, MD 21203
Baccharis Capital, Inc. 702,814 11.8%
2420 Sand Hill Rd., Suite 100
Menlo Park, CA 94025
Allan Dalfen 602,388 10.1%
467 S. Rodeo Drive
Beverly Hills, CA 90212
10
<PAGE>
Princeton/Montrose Partners 548,016 9.2%
243 No. Highway 101
Solana Beach, CA 92075
Scottish Invest. Trust PLC 527,111 8.9%
6 Albyn Place
Edinburgh, Scotland EH24 NL
Southern Calif. Ventures II 365,345 6.1%
A California Limited Partnership
406 Amapola Avenue, Suite 205
Torrance, CA 90501
Natural Venture Partners I 351,407 5.9%
100 Crescent Rd.
Needham, MA 02194
</TABLE>
The following table sets forth the beneficial share ownership of each
director of the Company, and the number of shares of Common Stock beneficially
owned by all officers and directors as a group as of March 31, 1996:
<TABLE>
<CAPTION>
NUMBER OF PERCENT
NAME AND ADDRESS BENEFICIALLY OF
OF BENEFICIAL OWNER OWNED SHARES (8) CLASS (1)
- ------------------------- ------------------- ----------
<S> <C> <C>
Robert J. Cresci (2) 1,418,962 23.6%
Allan Dalfen 602,388 (7) 10.1%
Anthony J. Harnett (3) 358,074 6.0%
B. Allen Lay (4) 562,916 9.4%
Jay J. Miller 98,478 1.7%
Stephen P. Monticelli 16,667 .3%
F. Noel Perry (5) 702,814 11.8%
Henry W. Poett, III 22,119 .4%
Donald R. Stroben (6) 561,349 9.4%
Officers and directors as a
group (10 persons) 4,362,554 72.9%
</TABLE>
(1) Based upon an aggregate of 5,950,588 shares of Common Stock outstanding and
currently exercisable stock options to purchase an aggregate of 485,425
shares of Common Stock. Each of the above shareholders has
11
<PAGE>
sole voting and sole dispositive power with respect to the shares
beneficially owned.
(2) Mr. Cresci is the investment advisor for Nap & Company, Fuelship & Company
and Northman and Company.
(3) Mr. Harnett is a partner of Natural Venture Partners I.
(4) Mr. Lay is a General Partner of Southern California Ventures II.
(5) Mr. Perry is a Managing Director of Baccharis Capital, Inc.
(6) Mr. Stroben is a Managing General Partner of Princeton/Montrose Partners.
(7) Includes 263,900 shares of the Company's Common Stock purchased in 1993 at
a price of $1.29 per share and 131,950 shares of the Company's Common Stock
purchased in 1995 under a Severance and Settlement Agreement at a price of
$1.29 per share. Mr. Dalfen paid the Company $66,000 for the shares and
executed a note payable to the Company for $444,025. The note is interest
bearing at the rate of 5.75%, due on December 31, 1997 and is secured by
the shares of stock purchased.
(8) Shares include currently exercisable stock options to purchase shares of
Common Stock as follows:
<TABLE>
<S> <C>
Robert J. Cresci 13,333
Allan Dalfen 13,333
Anthony J. Harnett 6,667
B. Allen Lay 180,000
Jay J. Miller 13,333
Stephen P. Monticelli 6,667
Henry W. Poett, III 13,333
Donald R. Stroben 13,333
Officers and directors as a
group (9 persons) 272,499
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Subsidiaries of the Company currently rent warehouse and office space from
a partnership, in which Mr. Poett is a partner, for which they paid rentals of
$196,000 in 1995. The rent paid for such space is believed to be equivalent to
that which would be paid under an arm's length transaction. The lease expires
on September 30, 1997 subject to earlier termination by the lessor or the
Company under certain circumstances.
The Company has used the law office of Mr. Miller for certain legal
services. It is believed that the fees paid for such services are not greater
than those which would have been paid to an unaffiliated party .
12
<PAGE>
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended December 31,
1995 is being mailed to shareholders with this Information Statement. The
Company's audited financial statements and Management's Discussion and Analysis
of Financial Condition and results of operations for the year ended December 31,
1995, are included in the Annual Report. The Company's Form 10-K as filed with
the Securities and Exchange Commission is available upon request.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Any proposals by a shareholder intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Corporation no later than March
31, 1997 and be in compliance with applicable Securities and Exchange Commission
regulations, for inclusion in the Corporation's Information or Proxy Statement
relating to such meeting.
INDEPENDENT PUBLIC ACCOUNTANTS
It is expected that a representative of Price Waterhouse, which serves as
the Company's independent public accountants will be available to respond to
questions raised at the Meeting.
OTHER MATTERS
The Management knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Meeting.
By Order of the Board of Directors,
Stephen Schorr
Secretary
May 1, 1996
13
