<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 (s)240.14a-11(c) or (s)240.14a-12
Seventh Generation, Inc.
_______________________________________________________________________
(Name of Registrant as Specified In Its Charter)
_______________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] 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 now it was
determined):
_______________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________
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:
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2) Form, Schedule or Registration Statement No:
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4) Date Filed:
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<PAGE>
SEVENTH GENERATION, INC.
ONE MILL STREET, BOX A26
BURLINGTON, VT 05401-1530
April 10, 1997
Dear Stockholder,
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
of SEVENTH GENERATION, INC. (the "Company") to be held at 11:00 a.m. on Monday,
May 5, 1997 at the Company's offices located at One Mill Street, Burlington,
Vermont.
At the Annual Meeting, five persons will be elected to the Board of
Directors. Such other business will be transacted as may properly come before
the Annual Meeting.
We hope you will be able to attend the Annual Meeting. Whether you plan to
attend the Annual Meeting or not, it is important that your shares are
represented. Therefore, you are urged promptly to complete, sign, date
and return the enclosed proxy card in accordance with the instructions set
forth on the card. This will ensure your proper representation at the Annual
Meeting.
Sincerely,
/s/Jeffrey A. Hollender
Jeffrey A. Hollender
President and Chief
Executive Officer
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY PROMPTLY.
<PAGE>
SEVENTH GENERATION, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held Monday, May 5, 1997
To the Stockholders of Seventh Generation, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
SEVENTH GENERATION, INC., a Vermont corporation (the "Company"), will be
held on Monday, May 5, 1997, at 11:00 a.m, at the Company's offices located
at One Mill Street, Burlington, Vermont for the following purposes:
1. To elect five members to the Board of Directors to hold office until
the next annual meeting of Stockholders and until their successors are
duly elected and qualified.
2. To transact such other business as may be properly brought before the
Annual Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on March 14, 1997
as the record date for the determination of Stockholders entitled to notice
of and to vote at the Annual Meeting and at any adjournments thereof.
All Stockholders are cordially invited to attend the Annual Meeting.
Whether you plan to attend the Annual Meeting or not, you are requested to
complete, sign, date and return the enclosed proxy card as soon as possible
in accordance with the instructions on the proxy card. A pre-addressed,
postage prepaid return envelope is enclosed for your convenience.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Anita B. Lavoie
Anita B. Lavoie
SECRETARY
April 10, 1997
<PAGE>
SEVENTH GENERATION, INC.
ONE MILL STREET, BOX A26
BURLINGTON, VT 05401-1530
(802) 658-3773
_______________________________
PROXY STATEMENT
_______________________________
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of SEVENTH GENERATION, INC. (the "Company"), a
Vermont corporation, of proxies, in the accompanying form, to be used at the
Annual Meeting of Stockholders to be held at the Company's offices located at
One Mill Street, Burlington, Vermont on Monday, May 5, 1997, at 11:00 a.m., and
any adjournments thereof (the "Meeting").
Where the Stockholder specifies a choice on the proxy as to how his or
her shares are to be voted, the shares will be voted accordingly. If no choice
is specified, the shares will be voted FOR the election of the five nominees
for director named herein. Any proxy given pursuant to this solicitation may
be revoked by the person giving it at any time before its use by delivering to
the Company a written notice of revocation or a duly executed proxy bearing a
later date. Any Stockholder who has executed a proxy but is present at the
Meeting, and who wishes to vote in person, may do so by revoking his or her
proxy as described in the preceding sentence. Shares represented by valid
proxies in the form enclosed, received in time for use at the Meeting and not
revoked at or prior to the Meeting, will be voted at the Meeting. The
presence, in person or by proxy, of the holders of a majority of the out-
standing shares of the Company's common stock, par value $.000333 per share
("Common Stock"), is necessary to constitute a quorum at the Meeting.
The affirmative vote of a plurality of the shares of Common Stock voted
affirmatively or negatively at the Meeting is required with respect to the
election of directors.
The close of business on March 14, 1997 has been fixed as the record
date for determining the Stockholders entitled to notice of and to vote at
the Meeting. As of the close of business on March 14, 1997, the Company had
2,428,791 shares of Common Stock outstanding and entitled to vote. Holders
of Common Stock are entitled to one vote per share on all matters to be voted
on by Stockholders.
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company. In
addition, the Company will reimburse brokerage firms and other persons
representing beneficial owners of Common Stock of the Company for their
expenses in forwarding proxy material to such beneficial owners. Solicitation
of proxies by mail may be supplemented by telephone, telegram, telex and
personal solicitation by the directors, officers or employees of the Company,
who will not be compensated for any such solicitation.
This Proxy Statement and the accompanying proxy are being mailed on or
about April 10, 1997 to all Stockholders entitled to notice of and to vote at
the Meeting.
The Annual Report to Stockholders for the fiscal year ended December
31, 1996 is being mailed to the Stockholders with this Proxy Statement, but
does not constitute a part hereof.
SHARE OWNERSHIP
The following table sets forth certain information as of February 14,
1997 concerning the ownership of Common Stock by each Stockholder known by the
Company to be the beneficial owner of more than 5% of its outstanding shares
of Common Stock, each current member of the Board of Directors, the executive
officers named in the Summary Compensation Table on Page 6 hereof, and all
current Directors and executive officers as a group.
Shares Beneficially Owned
(1)
Name and Address* Number Percent
Jeffrey A. Hollender (2)
1 Mill St., Box A26
Burlington, VT 05401-1530 334,568 12.68%
Sheila Hollender (3)
1 Mill St., Box A26
Burlington, VT 05401-1530 334,568 12.68%
Arthur Gray, Jr. (4) 105,912 4.29%
Peter Graham (5)
540 Madison Avenue, 10th Floor
New York, NY 10022 147,944 6.02%
Joshua Sapan (6) 35,146 1.43%
Jeffrey Phillips (7) 74,000 2.96%
All executive officers and directors
as a group (6 persons) (8) 697,570 24.86%
* Addresses are given for beneficial owners of more than 5% of the
outstanding Common Stock only.
(1) The number of shares of Common Stock issued and outstanding on
February 14, 1997 was 2,428,791. Beneficial ownership is determined in
accordance with rules of the Securities and Exchange Commission and generally
includes voting or investment power with respect to securities. Shares of
Common Stock subject to options, warrants and convertible debentures which
are or become exercisable or convertible within 60 days are deemed outstanding
for computing the percentage of the person holding such options, warrants or
convertible debentures, but are not deemed outstanding for computing the
percentage of any other person. Except as otherwise noted in the footnotes,
the persons named in the table have sole voting and investment power with
respect to all shares beneficially owned by them.
(2) Includes 125,444 shares of Common Stock owned by Mr. Hollender and
209,124 shares of Common Stock that Mr. Hollender may acquire upon the
exercise of options which are or become exercisable within 60 days. Excludes
18,776 shares of Common Stock owned, or which may be acquired upon the
exercise of warrants and options by various relatives of Mr. Hollender, of
which Mr. Hollender disclaims beneficial ownership. Sheila Hollender is the
spouse of Jeffrey Hollender.
(3) Represents the shares referred to in note (2) above owned by Jeffrey
A. Hollender, spouse of Sheila Hollender, of which Ms. Hollender disclaims
beneficial ownership.
(4) Includes 63,199 shares of Common Stock owned by Mr. Gray and 35,000
shares of Common Stock that Mr. Gray may acquire upon the exercise of options
which are or become exercisable within 60 days. Also includes 3,963 shares
of Common Stock owned by the Lerner Gray Foundation and 3,750 shares of
Common Stock which the Lerner Gray Foundation may acquire upon the exercise
of warrants which are or become exercisable within 60 days. Mr. Gray is the
President of the Lerner Gray Foundation. Excludes 2,772 shares of Common
Stock owned by Mr. Gray's daughter, of which Mr. Gray disclaims beneficial
ownership.
(5) Includes 118,944 shares of Common Stock owned by Mr. Graham and
29,000 shares of Common Stock that Mr. Graham may acquire upon the exercise
of options or warrants which are or become exercisable within 60 days.
(6) Includes 8,573 shares of Common Stock owned by Mr. Sapan and
26,573 shares of Common Stock that Mr. Sapan may acquire upon the exercise of
options or warrants which are or become exercisable within 60 days.
(7) Includes 74,000 shares of Common Stock that Mr. Phillips may acquire
upon the exercise of options which are or become exercisable within 60 days.
Excludes options to purchase 12,000 shares which are not exercisable within
60 days.
(8) Includes an aggregate of 320,123 shares of Common Stock owned by
directors and executive officers and an aggregate of 377,447 shares of
Common Stock which directors and executive officers may acquire upon the
exercise of options and warrants which are or become exercisable within 60
days. Excludes options and warrants to purchase 12,000 shares which are not
exercisable within 60 days. See notes (2), (3), (4), (5), (6), and (7).
MANAGEMENT
Directors
The Company's Articles of Incorporation and Restated By-Laws provide
for the Company's business to be managed by or under the direction of the
Board of Directors. Under the Company's Articles of Incorporation and Restated
By-Laws, the number of directors is fixed from time to time by the Board of
Directors, which number may not be less than three nor more than twelve, and
directors serve in office until the next annual meeting of Stockholders and
until their successors have been elected and qualified.
Pursuant to the Company's Articles of Incorporation and Restated
By-Laws, the Board of Directors has voted (i) to fix the size of the Board
of Directors at five and (ii) to nominate Arthur Gray, Jr., Jeffrey Hollender,
Sheila Hollender, Peter Graham, and Joshua Sapan for election at the Meeting
to serve until the next annual meeting of Stockholders and until their
respective successors have been elected and qualified.
The names of the Company's current directors and certain information
about them are set forth below:
Name Age Position with the Company
Arthur Gray, Jr. 74 Chairman of the Board
Jeffrey A. Hollender 42 President, Chief Executive Officer and
Director
Sheila Hollender 42 Director
Joshua Sapan 46 Director
Peter Graham 42 Director
Arthur Gray, Jr. has served as a Director of the Company since June
1989 and as Chairman of the Board since August 1993. Since July 1993, Mr.
Gray has been a Managing Director of Cowen Asset Management, a subsidiary of
Cowen & Company. Prior to joining Cowen Asset Management, from 1984 to 1993
Mr. Gray was President and Chief Executive Officer of Dreyfus Personal
Management, Inc., a division of Dreyfus, Inc.. Mr Gray is also a Director of
Genelabs Technologies, Inc., a publicly traded company, and the National
Museum of Natural History. Mr Gray has also served as a Director and
Co-Chairman of the Finance Committee of the American Arbitration Association.
Jeffrey A. Hollender has served as the Chief Executive Officer and a
Director of the Company since March 1989 and President of the Company since
June 1992. He served as Chairman of the Board from March 1989 to August 1993.
Prior to joining the Company, Mr. Hollender was a management consultant with
the Briar Patch Group, a consulting firm he founded in 1987. From 1979 to 1987,
he was President and Chief Executive Officer of Warner Audio Publishing, a
division of Warner Communications, and its predecessor, Network for Learning,
Inc. Mr. Hollender is the author of How to Make the World a Better Place and
serves on the Board of Directors of the Vermont Businesses for Social
Responsibility.
Sheila Hollender has served as a Director of the Company since June
1993. Ms. Hollender has been a partner of the law firm Rudd, Rosenberg &
Hollender since 1990, was a partner of the law firm Bell, Kalnick, Sassawer,
Klee, Green & Rudd from 1988 to 1990, and was a partner of the law firm Rosen,
Rudd, Kera, Graubard & Hollender from 1986 to 1988. Ms. Hollender currently
is employed as a commissioned salesperson for the Company. Sheila Hollender
is the spouse of Jeffrey Hollender.
Joshua Sapan has served as a Director of the Company since April 1989.
In 1995, Mr. Sapan was named CEO of Rainbow Programming Holdings, Inc., which
operates a portfolio of cable television networks owned by Cablevision, NBC
and TCI. They include American Movie Classics, Bravo, The Independent Film
Channel, MuchMusic USA, SPORTSCHANNEL Regional Network, Prime Network, NewSport
and News 12. In July 1993, Mr. Sapan was named Rainbow President and COO,
after joining the company in 1987 as President of Rainbow's entertainment
division. Previously, he was Senior Vice President of Marketing for Showtime
Entertainment.
Peter Graham has served as a Director of the Company since December
1993. He is President and a Director of Ladenburg, Thalmann Group, Inc., a
New York investment banking firm. Mr. Graham joined Ladenburg, Thalmann &
Co., Inc. ("Ladenburg"), a subsidiary of Ladenburg, Thalmann Group, Inc. in
1976, and has served on Ladenburg's Board of Directors since 1982. He also
serves as a Director of the following public companies: Rudy's Restaurant
Group, Inc., Suspensions and Parts Industries, Ltd., and Regency Equities
Corporation.
Committees of the Board of Directors and Meetings
Meeting Attendance. During the fiscal year ended December 31, 1996,
there were three meetings of the Board of Directors. All directors attended
all of the meetings held of the Board and of Committees of the Board on which
they served during 1996.
Audit Committee. The Audit Committee, which met twice in fiscal
1996, currently has two members, Arthur Gray, Jr. and Peter Graham. The
Audit Committee reviews the engagement of the Company's independent
accountants, reviews annual financial statements, considers matters relating
to accounting policy and internal controls and reviews the scope of annual
audits.
Compensation Committee. The Compensation Committee, which met three
times in fiscal 1996, currently has two members, Arthur Gray, Jr. and Peter
Graham. The Compensation Committee reviews, approves and makes recommendations
on the Company's compensation policies, practices and procedures to ensure that
legal and fiduciary responsibilities of the Board of Directors are carried out
and that such policies, practices and procedures contribute to the success of
the Company. The Compensation Committee also administers the Company's 1993 and
1994 Employee, Director and Consultant Stock Option Plans and the 1990 Stock
Option Plan.
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee has two members, Arthur Gray, Jr. and Peter Graham.
None of the members of the Compensation Committee are employed by the Company.
The Board of Directors does not have a standing nominating committee.
Compensation of Directors
Pursuant to the 1993 Employee, Director and Consultant Stock Option
Plan (the "Plan"), each non-employee director is automatically granted, on
an annual basis, options to purchase 1,500 shares of Common Stock at exercise
prices equal to the fair market value of the Common Stock on the date of grant.
Expenses incurred in attending Board of Directors meetings and committee
meetings are reimbursed by the Company.
Executive Officers
The name of, and certain information regarding, the executive officer
of the Company who is not also a director, is set forth below.
Name Age Position
Jeffrey Phillips 45 Executive Vice President, Marketing & Sales
Jeffrey Phillips has served as Executive Vice President of Marketing
and Sales of the Company since February 1996, and Vice President of Marketing
and Sales since February 1994. Prior to joining the Company, from 1986 through
February 1994, Mr. Phillips served as Vice President of Marketing for Webster
Industries, a Division of Chelsea Industries, Inc., a manufacturer of consumer
household products.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following Summary Compensation Table sets forth summary information
as to compensation received by the Company's Chief Executive Officer and the
other most highly compensated person who was serving as an executive officer
of the Company as of December 31, 1996 (collectively, the "Named Executive
Officers') for services rendered to the Company in all capacities during the
three fiscal years ended December 31, 1996. No other executive officer of
the Company earned more than $100,000 for the year ended December 31, 1996.
Long Term
Compensation
Securities
Annual Underlying All Other
Compensation $ Options/SARs(#) Compensation $
Name and Principal Fiscal
Position Year Salary $ Bonus $
Jeffrey A. Hollender (1) 1996 $135,000 $25,000 0 / 120,000 $6,571
President and Chief 1995 $125,000 $25,000 $5,226
Executive Officer 1994 $125,000 $5,226
Jeffrey M. Phillips (2) 1996 $107,500 $20,000 50,000 / 30,000 $6,000
Vice President, 1995 $100,000 $15,000
Sales & Marketing 1994 $100,000 36,000
(1) The amounts of All Other Compensation for Jeffrey Hollender during
the last three fiscal years consist of insurance premiums paid by the Company
with respect to term life insurance for the benefit of Mr. Hollender and the
cost of leasing an automobile for Mr. Hollender's use.
(2) The amount of All Other Compensation for Mr. Phillips consists of
an automobile allowance.
Option/SAR Grants in Last Fiscal Year
Number of
Securities % of Total
Underlying Options / SARs Exercise
Options / Granted to or Base
SARs Employees in Price Expiration
Name Granted(#)(1)(2) Fiscal Year ($/Sh) (3) Date
Jeffrey Hollender 0 / 120,000 0 / 45.3%
Jeffrey Phillips 50,000 / 30,000 77.5% / 11.3% $0.515 January 2, 2006
(1) The options were granted pursuant to the Company's 1994
Employee, Director and Consultant Stock Option Plan (the "1994 Plan").
The options granted are nonqualified stock options half of which vested at
the date of grant and half of which vest annually in two equal installments
commencing one year from the date of grant. The Options terminate ten years
after the grant date, subject to earlier terminatin in accordance with the
1994 Plan.
(2) The SARs, or incentive units, were granted pursuant to the Company's
Incentive Plan. Each incentive unit entitles the holder to the appreciation
in value of one share of common stock of the Company from the grant date and
vests based upon the attainment of contigent future performance goals
established by the compensation committee of the Board of Directors related
to revenue and operating profits, but no earlier than three (3) years from
the grant of the units, and accelerate in the event of a change of control
of the Company.
(3) The base price of the incentive units is based upon the market value
of the Company's common stock on the grant date of the units.
Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Values
There were no exercises of options or SARs by the Named Executive
Officers during the last fiscal year. The following table indicates the
number of shares covered by both exercisable and unexercisable stock options
and SARs held by the Named Executive Officers as of December 31, 1996. None
of the exercisable or unexercisable options granted to the Named Executive
Officers were "in-the-money" as of December 31, 1996. 150,000 of the SARs
granted to the Named Executive Officers were "in-the-money" as of December
31, 1996, although none of such SARs are exercisable. Options and SARs are
classified as "in-the-money" only if there is a positive spread between the
exercise price of such options or SARs and the fiscal year end value of the
Company's Common Stock. None of the options held by the Named Executive
Officers have exercise prices less than $.50, the average of the bid and ask
price per share of the Company's Common Stock as reported in the NASDAQ OTC
Bulletin Board on December 31, 1996. With respect to the SARs, the average
base price was $0.4375 per unit at the grant date, and the average base
exercise price of the unexercisable SARs would have been $0.50 per unit at
December 31, 1996.
Number of Securities
Underlying Value of
Unexercised Options SARs Unexercised
at Fiscal Year-End (#) In-the-Money
SARs
Name Exercisable/Unexercisable Exercisable/Unexercisable
Jeffrey Hollender 209,124 / 0 0 / 120,000 $7,500
Jeffrey Phillips 74,000 / 12,000 0 / 30,000 $1,875
Employment Contracts, Termination of Employment and Change of Control
Arrangements
The Company entered into a five-year employment agreement with Jeffrey A.
Hollender, effective November 29, 1993, pursuant to which Mr. Hollender serves
as President and Chief Executive Officer. The agreement contains a covenant by
Mr. Hollender not to compete with the Company during his employment and for a
period of two years thereafter. The agreement provides for an annual salary
of $125,000 during the first year, with a cost of living increase in the second
and third years and annual increases thereafter to be determined by the
Compensation Committee based primarily on the performance of the Company.
In the event Mr. Hollender is terminated without cause, the Company has agreed
to pay his salary for the remaining term of the agreement. The Company is the
owner and sole beneficiary of a $1,500,000 term life insurance policy covering
Mr. Hollender.
The Company has entered into a five-year employment agreement with Jeffrey
M. Phillips, effective February 28, 1994, pursuant to which Mr. Phillips serves
as Vice President of Marketing and Sales of the Company. The agreement contains
a covenant by Mr. Phillips not to compete with the Company during his
employment and for a period of two years thereafter. The agreement provides for
an annual salary of $100,000 during the first year with annual increases
thereafter to be determined by the Compensation Committee based on Mr.
Phillips' performance and the performance of the Company. Mr. Phillips is
also entitled to receive a bonus of up to $25,000, payable at the end of each
fiscal year as shall be determined by the Compensation Committee of the Board
of Directors in its sole discretion.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers, and persons who own more than 10% of the
Company's Common Stock, to file with the Securities and Exchange Commission
(the "SEC") initial reports of beneficial ownership and reports of changes
in beneficial ownership of the Common Stock and other equity securities of
the Company. Officers, directors and greater than 10% beneficial owners are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no
other reports were required, during the fiscal year ended December 31, 1996,
all Section 16(a) filing requirements applicable to its officers, directors
and greater than 10% beneficial owners were complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1995 and 1996, Jeffrey A. Hollender, the Chief Executive
Officer of the Company, guaranteed up to $300,000 of the obligations of the
Company to one of its principal suppliers.
ELECTION OF DIRECTORS
(Notice Item 1)
Under the Company's Articles of Incorporation and Restated By-Laws,
the number of directors is fixed from time to time by the Board of Directors,
which number may not be less than three nor more than twelve, and directors
serve in office until the next annual meeting of Stockholders and until their
successors have been elected and qualified.
Pursuant to the Company's Articles of Incorporation and Restated
By-Laws, the Board of Directors has voted: (i) to set the size of the Board
of Directors at five, and (ii) to nominate Arthur Gray, Jr., Jeffrey Hollender,
Sheila Hollender, Joshua Sapan, and Peter Graham for election at the Meeting to
serve until the next annual meeting of Stockholders and until their respective
successors have been elected and qualified.
Unless authority to vote for any of the nominees named above is
withheld, the shares represented by the enclosed proxy will be voted FOR the
election as directors of such nominees. In the event that any nominee shall
become unable or unwilling to serve, the shares represented by the enclosed
proxy will be voted for the election of such other person as the Board of
Directors may recommend in his or her place. The Board has no reason to
believe that any nominee will be unable or unwilling to serve.
A plurality of the shares voted affirmatively or negatively at the
Meeting is required to elect each nominee as a director.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF ARTHUR GRAY, JR.,
JEFFREY A. HOLLENDER, SHEILA HOLLENDER, JOSHUA SAPAN,
AND PETER GRAHAM AS DIRECTORS, AND PROXIES SOLICITED BY THE
BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS
INDICATED OTHERWISE ON THE PROXY.
OTHER MATTERS
The Board of Directors knows of no other business which will be
presented to the Meeting. If any other business is properly brought before
the Meeting, it is intended that proxies in the enclosed form will be voted
in respect thereof in accordance with the judgment of the persons voting the
proxies.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Coopers & Lybrand L.L.P,
independent public accountants, to audit the financial statements of the
Company for the fiscal year ending December 31, 1996. Coopers & Lybrand
L.L.P audited the Company's financial statements for the fiscal year ended
December 31, 1995. The Company does not expect that representatives of
Coopers & Lybrand L.L.P. will be present at the Meeting.
On October 24, 1995, the Audit Committee of the Board of Directors
of Seventh Generation, Inc., a Vermont corporation (the "Company"), approved
a resolution to dismiss KPMG Peat Marwick as independent certified public
accountants of the Company and to engage Coopers & Lybrand L.L.P. to serve
as auditors of the Company for the fiscal year ended December 31, 1995. The
Audit Committee's decision was ratified by the Board of Directors.
During the fiscal years ended December 31, 1994, 1993, 1992 and 1991,
and the interim period subsequent to December 31, 1994, there have been no
disagreements with KPMG Peat Marwick on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure
or any reportable events. KPMG Peat Marwick's report on the Company's
consolidated financial statements for the fiscal years ended December 31,
1994, 1993, 1992 and 1991 contained no adverse opinion or disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope or
accounting principles, except as follows:
KPMG Peat Marwick's auditors report on the consolidated financial
statements of Seventh Generation, Inc. and subsidiary for the years ended
December 31, 1994 and 1993 contained a separate paragraph stating that "the
Company's continuing losses from operations raise substantial doubt about the
entity's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The consolidated
financial statements do not include any adjustment that might result from
the outcome of this uncertainty."
KPMG Peat Marwick has furnished the Company with a letter addressed
to the Securities and Exchange Commission (the "Commission") stating that it
agrees with the foregoing statements of the Company. A copy of KPMG Peat
Marwick's letter to the Commission, dated November 7, 1995, was filed as
Exhibit 16 to the Current Report on Form 8-K filed on November 7, 1995.
STOCKHOLDER PROPOSALS
To be considered for presentation at the Annual Meeting of Stockholders
to be held in 1998, Stockholder proposals must be received, marked for the
attention of: Jeffrey A. Hollender, President and Chief Executive Officer,
Seventh Generation, Inc., One Mill Street, Box A26, Burlington, VT 05401-1530,
no later than December 11, 1997.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU
ARE URGED TO FILL OUT, SIGN, DATE AND RETURN THE ENCLOSED PROXY
AT YOUR EARLIEST CONVENIENCE.
By order of the Board of Directors:
/s/Anita B. Lavoie
Anita B. Lavoie
SECRETARY
April 10, 1997
