<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. _______)
X Filed by the Registrant
___ Filed by a Party other than the Registrant
Check the appropriate box:
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 Section 240.14a-11(c) or
Section 240.14a-12
GALAXY FOODS COMPANY, a Delaware corporation
(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 approximate box)
X No fee required.
___ Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and O-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 O-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:
<PAGE> 2
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 O-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<PAGE> 3
GALAXY FOODS COMPANY
2441 Viscount Row
Orlando, Florida 32809
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, FEBRUARY 11, 1999
To the Shareholders:
The Special Meeting of Shareholders of Galaxy Foods Company (the
"Company") will be held Thursday, February 11, 1999 at 10:00 a.m.
at the offices of the Company in Orlando, Florida for the
following purposes:
1. To consider and vote upon a proposal by the Board of
Directors to effect a one-for-seven reverse stock split of the
Company's common stock, par value $0.01 per share.
2. To transact such other business as may properly come before
the meeting and any adjournment thereof.
Shareholders of record at the close of business on January 7,
1999 will be entitled to vote at the meeting or any adjournment
thereof.
By Order of the Board of Directors
/s/Cynthia L. Hunter
Cynthia L. Hunter
Corporate Secretary
Orlando, Florida
January 5, 1999
SHAREHOLDERS ARE REQUESTED TO SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED STAMPED ENVELOPE BY RETURN MAIL. IF YOU
ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
<PAGE>4
GALAXY FOODS COMPANY
2441 Viscount Row
Orlando, Florida 32809
January 5, 1999
PROXY STATEMENT FOR THE SPECIAL MEETING OF SHAREHOLDERS to be
held Thursday, February 11, 1999
Proxies in the form enclosed with this proxy statement are
solicited by the Board of Directors of Galaxy Foods Company (the
"Company"), a Delaware corporation, for the use at the Special
Meeting of Shareholders to be held Thursday, February 11, 1999 at
10:00 a.m. at the offices of the Company in
Orlando, Florida.
Only shareholders of record as of January 7, 1999 will be
entitled to vote at the meeting and any adjournment thereof. As
of January 5, 1999, 64,217,051 shares of Common Stock, par value
$.01 per share, of the Company were issued
and outstanding. Each share of Common Stock outstanding as of
the record date will be entitled to one vote, and shareholders
may vote in person or by proxy. Execution of a proxy will not, in
any way, affect a shareholders' right to
revoke it by written notice to the Secretary of the Company at
any time before it is exercised or by delivering a later executed
proxy to the Secretary of the Company at any time before the
original proxy is exercised.
Where a choice has been specified on the proxy with respect to
the matters to be voted thereunder, the shares represented by the
proxy will be voted in accordance with the specification, and
will be voted FOR if no specification is
indicated.
The Board of Directors knows of no other matter to be presented
at the meeting. If any other matter should be presented at the
meeting upon which a vote might be taken, shares represented by
all proxies received by the Board of Directors will be voted with
respect thereto in accordance with the judgment of the persons
named as attorneys in the proxies. This proxy statement and the
form of proxy were first mailed to shareholders on or about
____________, 1999.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, to the knowledge of Management,
each person of entry who is the beneficial owner of more than 5%
of the 64,217,051 shares of the Company's Common Stock, $.01 par
value ("Common Stock"), outstanding as of January 5, 1999, the
number of shares owned by each such person and the percentage of
the outstanding shares represented thereby.
<PAGE> 5
Amount and
Name and Address Nature of Percent
of Beneficial Owner Beneficial Ownership(1) of Class(2)
Angelo S. Morini
2441 Viscount Row
Orlando, Florida 32809 25,120,199 (3) 38.1%
Cede & Co.
Box #20
Bowling Green Station
New York, New York 35,525,107 (4) 53.8%
(1) The inclusion herein of any shares deemed beneficially owned
does not constitute an admission of beneficial ownership of these
shares.
(2) The total number of shares outstanding assuming the exercise
of all currently exercisable and vested options and warrants held
by all executive officers, current directors, and holders of 5%
or more of the Company's issued and outstanding Common Stock is
68,525,940 shares. Does not assume the exercise of any other
options or warrants.
(3) Includes options to acquire 1,091,500 shares of the
Company's Common Stock. These options include an option issued
on October 1, 1991 to acquire 91,500 shares of the Company's
stock at $3.575 per share. The original exercise
price of this option was reduced by the Board of Directors to
$.50 per share on August 31, 1993. On October 1, 1996, the term
to exercise this option was extended to October 1, 2001. On July
1, 1997, Mr. Morini was granted an option to acquire 1,000,000
shares of the Company's Common Stock at an exercise price of
$0.75 per share under the terms of his employment agreement,
which option expires on July 1, 2002. The closing bid price of
the Company's stock on the inter-dealer quotation system operated
by Nasdaq, Inc. (the "NASDAQ System") on June 30, 1997 was $0.75.
Also includes 5,000 shares owned by Mr. Morini that are held in a
nominee name and 2,000 shares held in joint tenancy. The
remaining 24,021,699 shares beneficially owned by Mr. Morini are
owned of record by Morini Investments Limited Partnership, a
Delaware limited partnership, of which Mr. Morini is the sole
limited partner holding a 99% ownership interest in such
partnership. The general partner of Morini Investments Limited
Partnership is Morini Investments, LLC, a Delaware limited
liability company, of which Mr. Morini is the sole member.
Morini Investments, LLC holds a 1% ownership interest in Morini
Investments Limited Partnership.
(4) Cede & Co. is a share depository used by shareholders to
hold stock in street name. Does not include 5,000 shares
beneficially owned by Angelo S. Morini and held by Cede & Co. in
street name.
<PAGE> 6
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of January 5, 1999, the number
of shares owned directly, indirectly and beneficially by each
executive officer and each director and director-nominee of the
Company, and by all executive officers and directors as a group:
Amount and
Name and Address Nature of Percent of
of Beneficial Owner Beneficial Ownership(1) Class(2)
Angelo S. Morini
Galaxy Foods Company
2441 Viscount Row
Orlando, Florida 32809 25,120,199 (3) 38.1%
Earl G. Tyree
240 North Line Drive
Apopka, Florida 32703 22,000 (4) *
Douglas A. Walsh
607 Tamiami Trail
Ruskin, Florida 33570 22,667 (5) *
Marshall K. Luther
Galaxy Foods Company
2441 Viscount Row
Orlando, Florida 32809 127,333 (6) *
Cynthia L. Hunter
Galaxy Foods Company
2441 Viscount Row
Orlando, Florida 32809 32,000 (7) *
All executive officers and
directors as a group 25,374,199 38.4%
* Less than 1%
(1) The inclusion herein of any shares deemed beneficially owned
does not constitute an admission of beneficial ownership of these
shares.
(2) The total number of shares outstanding assuming the exercise
of all currently exercisable and vested options and warrants held
by all executive officers, directors, and holders of 5% or more
of the Company's issued and outstanding Common Stock is 68,525,940 shares.
Does not assume the exercise of any other options or warrants.
(3) Includes options to acquire 1,091,500 shares of the Company's
Common Stock. These options include an option issued on October
1, 1991 to acquire 91,500 shares of the Company's stock at $3.575
per share. The original exercise
price of this option was reduced by the Board of Directors to
$.50 per share on August 31, 1993. On October 1, 1996, the term
to exercise this option was extended to October 1, 2001 on
October 1, 1996. On July 1, 1997, Mr. Morini was granted an
option to acquire 1,000,000 shares of the Company's Common Stock
at an exercise price of $0.75 per share under the terms of his
employment agreement, which option expires on July 1, 2002. The
closing bid price of the Company's stock as quoted on the NASDAQ
System on June 30, 1997 was $0.75. Also includes 5,000 shares
owned by Mr. Morini that are held in a nominee name and 2,000
shares held in joint tenancy. The remaining 24,021,699 shares
beneficially owned by Mr. Morini are owned of record by Morini
Investments Limited Partnership, a Delaware limited partnership,
of which Mr. Morini is the sole limited partner holding a 99%
ownership interest in such partnership. The general partner of
Morini Investments Limited Partnership is Morini Investments,
LLC, a Delaware limited liability company, of which Mr. Morini is
the sole member. Morini Investments, LLC holds a 1% ownership
interest in Morini Investments Limited Partnership.
<PAGE> 7
4) Mr. Tyree, a current member of the Board of Directors, was
granted an option to acquire 15,000 shares of Common Stock on
September 11, 1992 for an exercise price of $2.88 per share.
This option expires on September 11, 2002. The
closing bid price of the Company's Common Stock as reported on
the NASDAQ System on September 10, 1992 was $2.875 per share.
Mr. Tyree was granted an additional option on October 1, 1993 to
acquire 1,000 shares of Common Stock at
an exercise price of $2.125 per share. This option expires on
October 1, 2003. The closing bid price of the Company's Common
Stock as quoted on the NASDAQ System on September 30, 1993 was
$2.00 per share. The exercise price of all of Mr. Tyree's then
existing options was reduced to $2.00 per share on January 31,
1994. The closing bid price of the Company's Common Stock as
quoted on the NASDAQ System on January 28, 1994 was $4.625 per
share. On October 1, 1994, Mr. Tyree was granted an option to
acquire 1,000 shares at an exercise price of $2.75 per share.
The closing bid price of the Company's Common Stock as quoted on
the NASDAQ System on September 30, 1994, was $2.875 per share.
This option expires on October 1, 2004. On October 1, 1995, Mr. Tyree was
granted an option to acquire 1,000 shares at an exercise price of
$0.59 per share. The closing bid price of the Company's Common
Stock as quoted on the NASDAQ System on
September 29, 1995, was $0.59375 per share. This option expires
on October 1, 2005. On October 1, 1996, Mr. Tyree was granted an
option to acquire 2,000 shares at an exercise price of $1.47 per
share which expires on October 1, 2006.
The closing bid price of the Company's Common Stock as quoted on
the NASDAQ System on September 30, 1996 was $1.50 per share. On
October 1, 1997, he was granted an option to acquire 2,000 shares
at an exercise price of $1.1875 per
share which expires on October 1, 2007. The closing bid price of
the Company's Common Stock as quoted on the NASDAQ System on
September 30, 1997 was $1.1875 per share. On October 1, 1998, he
was granted an option to acquire 2,000 shares at an exercise
price of $.4375 per share which expires on October 1, 2008. The
closing bid price of the Company's Common Stock as quoted on the
NASDAQ System on September 30, 1998 was $.4375 per share. All of
Mr. Tyree's options currently are exercisable.
(5) Dr. Walsh, a current member of the Board of Directors, was
granted an option to acquire 15,000 shares of Common Stock on
January 31, 1992 for an exercise price of $3.00 per share. This
option expires on January 31, 2002. The closing bid price of the
Company's Common Stock as quoted on the NASDAQ System on January
30, 1992 was $2.50 per share. Dr. Walsh was granted an
additional option on October 1, 1992 to acquire 667 shares of
Common Stock at an exercise price of $2.875 per share. This
option expires on October 1, 2002. The closing bid price of the
Company's Common Stock as quoted on the NASDAQ System on
September 30, 1992 was $2.625 per share. Dr. Walsh was granted
an additional option on October 1, 1993 to acquire 1,000 shares
of Common Stock at an exercise price of $2.125 per share. This
option expires on October 1, 2003. The closing bid price of the
Company's Common Stock as quoted on the NASDAQ System on
September 30, 1993 was $2.00 per share. The exercise price of
all of Dr. Walsh's then existing options was reduced to $2.00 per
share on January 31, 1994. The closing bid price of the
Company's Common Stock as quoted on the NASDAQ System on January
28, 1994 was $4.625 per share. On October 1, 1994, Dr. Walsh was
granted an option to acquire 1,000 shares at an exercise price of
$2.75 per share. The closing bid price of the Company's Common
Stock as quoted on the NASDAQ System on September 30, 1994, was
$2.875 per share. This option expires on October 1, 2004. On
October 1, 1995, Dr. Walsh was granted an option to acquire 1,000
shares at an exercise price of $.59 per share. The closing bid
price of the Company's Common Stock as quoted on the NASDAQ
System on September 29, 1995, was $.59375 per share. This option
expires on October 1, 2005. On October 1, 1996, Dr. Walsh was
granted an option to acquire 2,000 shares at an exercise price of
$1.47 per share which expires on October 1, 2006. The closing
bid price of the Company's Common Stock as quoted on the NASDAQ
System on September 30, 1996 was $1.50 per share. On October 1,
1997, he was granted an option to acquire 2,000 shares at an
exercise price of $1.1875 per share which expires on October 1,
2007. The closing bid price of the Company's Common Stock as
quoted on the NASDAQ System on September 30, 1997 was $1.1875 per
share. On October 1, 1998, he was granted an option to acquire
2,000 shares at an exercise price of $.4375 per share which
expires on October 1, 2008. The closing bid price of the
Company's Common Stock as quoted on the NASDAQ System on
September 30, 1998 was $.4375 per share. All of Dr. Walsh's
options currently are exercisable.
<PAGE> 8
(6) Mr. Luther, a current member of the Company's Board of
Directors, holds warrants to acquire 50,000 shares of Common
Stock at a price of $0.6407 per share. These warrants were
granted as compensation for work per the terms of Mr. Luther's
agreement with the Company to serve as Senior Vice President of
Marketing for a term of one year. In addition, Mr. Luther was
granted options to acquire 15,000 shares of the Company's Common
Stock on January 31, 1996, for an exercise price of $.8125 per
share, which option expires on January 31, 2006. On October 1,
1996, Mr. Luther was granted an option to acquire 1,333 shares at
an exercise price of $1.47 per share which expires on October 1,
2006. The
closing bid price of the Company's Common Stock was quoted on the
NASDAQ System on September 30, 1996 was $1.50 per share. On
October 1, 1997, he was granted an option to acquire 2,000 shares
at an exercise price of $1.1875 per share which expires on
October 1, 2007. The closing bid price of the Company's Common
Stock as quoted on the NASDAQ System on September 30, 1997 was
$1.1875 per share. On October 1, 1998, he was granted an option
to acquire 2,000 shares at an exercise price of $.4375 per share
which expires on October 1, 2008. The closing bid price of the
Company's Common Stock as quoted on the NASDAQ System on
September 30, 1998 was $.4375 per share. All of Mr. Luther's
options are currently exercisable. Also includes 59,000 shares
owned by Mr. Luther and held in nominee name.
(7) Includes options to acquire 30,000 shares of the Company's
Common Stock granted to Ms. Hunter pursuant to the Company's 1996
Stock Option Plan. Such options are exercisable at $0.78125 to
$1.00 per share and expire as to 15,000 on June 18, 2007 and as
to 15,000 on October 23, 1997. Of these options, 10,000 are
exercisable. Also includes 2,000 shares owned by Ms. Hunter and
held in
nominee name.
PROPOSAL ONE: TO EFFECT A ONE-FOR-SEVEN REVERSE STOCK SPLIT OF
THE COMPANY'S COMMON STOCK
The Board of Directors of the Company has approved a resolution
to effect a one-for-seven reverse split of the Company's issued
and outstanding shares of Common Stock (the "Reverse Stock
Split"), subject to the approval of the shareholders. If the
Reverse Stock Split is approved by shareholders, the Board of
Directors will determine the date on which the Reverse Stock
Split will become effective. Each share of Common Stock issued
and outstanding immediately prior to that effective date will be
reclassified as and changed into one-seventh of one share of
Common Stock.
<PAGE> 9
PRINCIPAL EFFECTS OF REVERSE STOCK SPLIT
The following table illustrates the principal effects of the
proposed Reverse Stock Split based on the Company's
capitalization as of January 5, 1999:
Common Stock Prior to Split After Split
Authorized 85,000,000 85,000,000
Outstanding 64,217,051* 9,173,864**
Available For
Future Issuance 20,728,949* 75,826,136**
* Does not assume exercise of any outstanding options or warrants.
** Assumes that no post-split shares of Common Stock are issued
in lieu of fractional shares.
The Common Stock issued pursuant to the Reverse Stock Split will
be fully paid and nonassessable. The respective relative voting
rights and other rights that accompany the Common Stock will not
be altered by the Reverse Stock Split, and the Common Stock will
continue to have a par value of $0.01 per share. Consummation of
the Reverse Stock Split will not alter the number of authorized
shares of the Company's Common Stock, which will remain at
85,000,000, of which approximately 75,826,136 shares of Common
Stock would constitute authorized but unissued and unreserved
shares.
REASONS FOR THE PROPOSED REVERSE STOCK SPLIT
The Reverse Stock Split is being proposed primarily because the
Common Stock does not currently meet the requirements for
continued listing on the Nasdaq Small-Cap Market. The Nasdaq
Small-Cap Market continued listing standards include a
requirement that the closing bid price for a listed company be at
least $1.00 per share. Failure to meet this requirement for 30
consecutive trading days may result in a company being delisted
from the Nasdaq Small-Cap Market. When the minimum bid price
requirement is not met for 30 consecutive trading days, a company
is delisted unless its closing bid price equals or exceeds $1.00
for at least ten consecutive trading days during a 90-day period
following the notice of non-compliance from The Nasdaq Stock
Market, Inc. ("Nasdaq").
As of July 11, 1998, the closing bid price for the Common Stock
had been less than $1.00 for more than 30 consecutive trading
days. On July 11, 1998, the Company received a notification of
non-compliance from Nasdaq. The notification stated that, in
order to avoid delisting of the Common Stock from the Nasdaq
Small-Cap Market, the bid price for the Common Stock must close
at or above $1.00 per share for at least ten consecutive trading
days before September 11, 1998. The Common Stock failed to meet
this minimum bid price requirement during the 90-day period which
ended September 11, 1998.
<PAGE> 10
On September 11, 1998, the Company filed a request with the
Nasdaq Listing Qualifications Hearing Department for a hearing to
contest the delisting of the Common Stock. The delisting was
stayed pending the hearing. Such hearing took place on November
5, 1998. On December 1, 1998, the Nasdaq Listing Qualifications
Panel granted the Company a conditional listing status for the
Common Stock, but determined that the Common Stock would be
delisted from the Nasdaq Small-Cap Market unless the Company
evidenced on or before February 12, 1999, a closing bid price for
the Common Stock of at least $1.00 for one trading day and,
immediately thereafter, maintained a closing bid of at least
$1.00 for a minimum of ten consecutive trading days, as well as
satisfying all other criteria necessary for continued inclusion
of the Common Stock on the Nasdaq Small-Cap Market.
As a result of the conditional listing status of the Common
Stock, effective December 3, 1998, the trading symbol of the
Common Stock was changed from "GALX" to "GALXC."
Additionally, the Board of Directors believes that the high
number of shares of Common Stock outstanding and its relatively
low per-share market price may adversely effect the trading
market for the Common Stock and its acceptability to certain
institutional investors and other members of the investing
public. While the number of shares outstanding should not, by
itself, affect the marketability of a stock, the type of investor
who acquires such stock or the Company's reputation in the
financial community, the Company believes that, in practice, this
is not necessarily the case, as certain investors view low-priced
as unattractive or, as a matter of policy, are precluded from
purchasing low-priced shares. In addition, certain brokerage
houses, as a matter of policy, will not extend margin credit on
stocks trading at low prices. On the other hand, certain other
investors may be attracted to low-priced stock because of the
greater trading volatility sometimes associated with such
securities.
The Board of Directors believes that it is in the best interests
of the Company and its shareholders to maintain the listing of
the Common Stock on the Nasdaq Small-Cap Market and that the
consummation of the proposed Reverse Stock Split will increase
the price per share of Common Stock to in excess of $1.00. It is
anticipated that, if approved by the Company's shareholders, the
Reverse Stock Split will become effective at the close of
business on February 11, 1999.
In the event that the Reverse Stock Split is not approved by the
Company's shareholders, it is likely that the Common Stock will
be delisted by Nasdaq. If this were to occur, the Common Stock
would be traded on the OTC Bulletin Board and would be subject to
regulations relating to "Penny Stocks" which would immediately
affect the ability of shareholders to resell their stock and the
market value for the Common Stock.
There can be no assurance, even if the Reverse Stock Split is
consummated, that the bid price per share of Common Stock will
increase to in excess of $1.00, or that, if the bid price per
share of Common Stock does increase to in excess of $1.00, that
such bid price will remain at or above $1.00. Accordingly, there
can be no assurance that Nasdaq will not delist the Common Stock
even if the Reverse Stock Split is consummated. Additionally,
there can be no assurance that the Reverse Stock Split will not
adversely impact the market price of, or the trading market for,
the Common Stock.
<PAGE> 11
FUTURE DILUTION; ANTI-TAKEOVER EFFECTS
There may be certain disadvantages suffered by shareholders of
the Company as a result of approval of the Reverse Stock Split.
These disadvantages include a significant increase in possible
dilution to present shareholders' percentage ownership of the
Common Stock because of the additional authorized shares of
Common Stock which would be available for future issuance by the
Company. As illustrated in the table above, present
shareholders, in the aggregate, own approximately 75.61% of
current authorized shares of Common Stock under the Company's
present capital structure, but would own only 10.79% of the
authorized shares of Common Stock under the Company's post-split
capital structure, assuming that the proposed Reverse Stock Split
is consummated.
The proportionate increase in the number of shares of Common
Stock available for future issuance may also have certain anti-
takeover effects. For example, the availability of a large
number of shares of Common Stock for future issuance might allow
the Company's Board of Directors to dilute the percentage share
ownership of persons who might attempt to obtain control over the
Company. Approval of the Reverse Stock Split therefore, may
allow the Board of Directors to frustrate a takeover attempt
which might be favorable to shareholders as a group, and may have
the effect of limiting shareholder participation in these types
of transactions.
While the Reverse Stock Split may have certain anti-takeover
effects, management is not aware of any attempts by third persons
to accumulate a large number of shares of Common Stock and the
Board of Directors is not recommending the Reverse Stock Split in
response to any existing attempts by third parties to obtain
control of the Company.
REGISTRATION
The Board of Directors believes that the consummation of the
Reverse Stock Split and the changes which would result therefrom
will not cause the Company to terminate registration of the
Common Stock under the Securities Exchange Act of 1934, as
amended, or to cease filing reports thereunder, and the Company
does not presently intend to seek, either before or after the
Reverse Stock Split, any change in the Company's status as a
reporting company for federal securities law purposes.
FEDERAL INCOME TAX CONSEQUENCES
The receipt of Common Stock in the Reverse Stock Split should not
result in any taxable gain or loss to shareholders for U.S.
federal income tax purposes. If the Reverse Stock Split is
approved, the U.S. tax basis of Common Stock received as a result
of the Reverse Stock Split will be equal, in the aggregate, to
the basis of the shares exchanged for the Common Stock. For U.S.
federal income tax purposes, the holding period of the shares
immediately prior to the effective date of the Reverse Stock
Split will be included in the holding period of the Common Stock
received as a result of the Reverse Stock Split.
SHAREHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS FOR
MORE DETAILED INFORMATION REGARDING THE EFFECTS OF THE PROPOSED
REVERSE SPLIT ON THEIR INDIVIDUAL TAX STATUS.
<PAGE> 12
EXCHANGE OF CERTIFICATES
As soon as is practicable following the effective date of the
Reverse Stock Split, shareholders will be notified and requested
to surrender their current certificates to the Company's stock
transfer agent in exchange for the issuance of new certificates
reflecting the Reverse Stock Split. Commencing on the effective
date of the Reverse Stock Split, each certificate representing
pre-Reverse Stock Split shares of Common Stock will be deemed for
all purposes to evidence ownership of post-Reverse Stock Split
shares of Common Stock. No fractional shares of Common Stock
will be issued, and, in lieu thereof, assuming approval by the
shareholders of the Reverse Stock Split, a whole share will be
issued to any shareholders entitled to a fraction of a share of
Common Stock.
DETERMINATION BY BOARD TO ABANDON REVERSE STOCK SPLIT
In accordance with Delaware law and notwithstanding approval of
the proposal by shareholders, at any time prior to the effective
date of the Reverse Stock Split, the Board of Directors may, in
its sole discretion, abandon the proposal without any further
action by shareholders.
REQUISITE VOTE
Assuming the presence of a quorum, the affirmative vote of the
holders of a majority of the voting power of the outstanding
shares of Common Stock is necessary for approval of the Reverse
Stock Split.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE APPROVAL OF THE PROPOSAL TO EFFECT THE REVERSE STOCK SPLIT.
OTHER BUSINESS
The Board of Directors knows of no business that will be
presented for consideration at the meeting other than stated
above. If any other business should come before the meeting,
votes may be cast pursuant to proxies in respect to any such
business in the best judgment of the person or persons acting
under the proxies.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Company.
In addition to soliciting shareholders by mail of by its regular
employees, the Company may request banks and brokers to solicit
their customers who have stock of the Company registered in the
name of a nominee and, if so, will reimburse such banks and
brokers for their reasonable out-of-pocket costs. Solicitation
by officers and employees of the Company, none of whom will
receive additional
compensation therefor, may also be made of some shareholders in
person or by mail, telephone or telegraph, following the original
solicitation.
SHAREHOLDER PROPOSALS
It is anticipated that the Company's next annual meeting of
shareholders will be held in October 1999, and proposals of
shareholders intended for inclusion in the proxy statement will
be furnished to all shareholders entitled to vote at
the next annual meeting of the Company, and must be received at
the Company's principal executive offices at 2441 Viscount Row,
Orlando, Florida 32809, no later than July 13, 1999. It is
suggested that proponents submit their proposals by Certified
Mail-Return Receipt Requested. Notice of shareholder proposals
outside the processes of Rule 14a-8 of the Securities Exchange
Act of 1934, as amended, (for proposals submitted for inclusion
in proxy statement and form of proxy) for the next annual meeting
of shareholders must be received at the Company's principal
executive offices no later than September 28, 1999.
<PAGE> 13
GALAXY FOODS COMPANY
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
THURSDAY, FEBRUARY 11, 1999
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Angelo S. Morini with full power
of substitution, the proxies of the undersigned to vote all
shares of Common Stock of Galaxy Foods Company (the "Company")
which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the Company to be held on Thursday, February
11, 1999, at 10:00 a.m., local time, at the offices of the
Company located at Orlando Central Park, 2441 Viscount Row,
Orlando, Florida, and at any adjournments or postponements
thereof, with the same force and effect as the undersigned might
or could do if personally present thereof.
1. PROPOSAL TO EFFECT A ONE-FOR-SEVEN REVERSE STOCK SPLIT OF THE
COMPANY'S COMMON STOCK, PAR VALUE $0.01 PER SHARE. (THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR)
[ ] FOR [ ] AGAINST
[ ] ABSTAIN
2. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING AND ANY ADJOURNMENT THEREOF
The Board of Directors knows of no business that will be
presented for consideration at the meeting other than stated
above. If any other business should come before the meeting,
votes may be cast pursuant to proxies in respect to any such
business in the best judgment of the person or persons acting
under the proxies.
Signature:
_________________________________
Signature:
_________________________________
Date:
_________________________________
This Proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction
is made, this proxy will be voted FOR proposal 1. If signing as
an attorney, executor, trustee or guardian, please give your full
title as such. If stock is held jointly, each owner should sign.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE
