SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[ ] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FOOD TECHNOLOGY SERVICE, INC.
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined.):
(4) Proposed maximum aggregate value of transaction:
(5)Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
502 Prairie Mine Road
Mulberry, FL 33860
--------------------------
Preliminary
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 19, 1997
--------------------------
To The Shareholders of Food Technology Service, Inc.:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders of
Food Technology Service, Inc., a Florida corporation (the "Company"), will be
held at the Ramada Inn located at 2011 N. Wheeler Street, Plant City, Florida
on Thursday, June 19, 1997, at 10:00 a.m., local time, to act on the following
matters:
1. To elect six (6) directors as members of the Board of Directors of
the Company to serve until the next annual meeting of Shareholders
and until their respective successors shall be duly elected and
qualified;
2. To consider and vote upon a proposal to amend the Company's
Articles of Incorporation to increase the Company's authorized
Common Stock, par value $.01 per share, from 10,000,000 to
20,000,000 shares;
3. To ratify the appointment of John J. Faircloth, C.P.A. as the
Company's independent auditor for 1997; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at 5:00 p.m., Eastern Standard Time, on May
16, 1997, are entitled to receive notice of, and to vote at, the Annual
Meeting. Each shareholder, even though he or she may presently intend to
attend the Annual Meeting, is requested to execute and date the enclosed proxy
card and to return it without delay in the enclosed postage-paid envelope.
Any shareholder present at the Annual Meeting may withdraw his or her proxy
and vote in person on each matter brought before the meeting.
By Order of the Board of Directors
/s/ E. W. (Pete) Ellis
----------------------
President
Mulberry, Florida
May 23, 1997
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
502 Prairie Mine Road
Mulberry, FL 33860
--------------------------
Preliminary
PROXY STATEMENT
1997 ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 19, 1997
--------------------------
GENERAL INFORMATION
This proxy statement is furnished to the holders ("Shareholders") of the
common shares, par value $.01 per share ("Common Shares"), of Food Technology
Service, Inc., a Florida corporation (the "Company"), in connection with the
solicitation by the Company's Board of Directors of proxies for use at the
1997 Annual Meeting of Shareholders to be held on Thursday, June 19, 1997, at
10:00 a.m., and at any adjournment thereof. The Annual Meeting will be held
at the Ramada Inn located at 2011 N. Wheeler Street, Plant City, Florida.
At the Annual Meeting, Shareholders will be asked to consider and vote on
the election of six (6) directors to serve as members of the Board of
Directors of the Company, to consider and vote on a proposal to approve an
amendment to the Company's Articles of Incorporation to increase the Company's
authorized shares of Common Stock from 10,000,000 to 20,000,000 (the
"Amendment") and to ratify the appointment of Faircloth & Associates, P. A. as
the Company's independent auditors for 1997. All properly executed proxies
received prior to or at the Annual Meeting will be voted in accordance with
the instructions indicated on such proxies, if any. If no instructions are
indicated with respect to any shares for which properly executed proxies have
been received, such proxies will be voted FOR the election of the nominees for
directors, FOR approval of the Amendment, and FOR the ratification of
John J. Faircloth, C P. A. as its auditor.
Any Shareholder giving a proxy may revoke it at any time before it is
voted by duly executing and submitting a subsequently dated proxy, by
delivering a subsequently dated written notice of revocation to the Company
which is received at or before the Annual Meeting or by voting in person at the
Annual Meeting (although attendance at the Annual Meeting will not, in and of
itself, constitute a revocation of the proxy). Any written notice revoking a
proxy should be sent to the Secretary of the Company at the Company's
principal executive offices, located at the address set forth above.
This Proxy Statement and the enclosed form of proxy are first being sent
to Shareholders, together with the Notice of Annual Meeting, on or about
May 23, 1997. A copy of the Company's Annual Report to Shareholders for the
year ended December 31, 1996 ("1996 Annual Report"), including financial
statements, accompany this Proxy Statement, but is not part of the proxy
solicitation materials.
Shareholders are requested to complete, date, and sign the accompanying
form of proxy and return it promptly in the envelope provided with these
materials. No postage is necessary if the proxy is mailed in the United
States in the accompanying envelope.
<PAGE>
VOTING SECURITIES
The Board of Directors has fixed 5:00 p.m., Eastern Standard Time, on
May 16, 1997, as the record date (the "Record Date") for the determination of
Shareholders of record entitled to receive notice of and to vote at, the
Annual Meeting or any adjournment thereof. On May 16, 1997, there were
approximately 5,750,284 issued and outstanding Common Shares of the Company,
constituting the only class of stock outstanding. The presence of a majority
of the outstanding Common Shares as of the Record Date, in person or
represented by proxy, will constitute a quorum at the Annual Meeting.
PROPOSAL I
ELECTION OF DIRECTORS
The Company's By-laws provide that the number of directors shall be not
less than one nor more than fifteen. The number of directors may be fixed
from time to time by the shareholders at any annual or special meeting. The
Board of Directors proposes that the shareholders set at nine (9) the number
of directors to serve for the current year, although only six (6) will be
elected. The Board proposes that the Company retain three vacancies so that
in the course of the year, if the Board determines that additional members
would benefit the Company, the Board will have the authority to appoint
additional members. The Board presently does not plan to appoint any
directors in addition to the six nominees proposed below.
The Board of Directors has nominated six persons, all of whom are
currently directors, to stand for election at the Annual Meeting. Each
nominee has agreed to seek re-election as directors of the Company to hold
office until the 1998 Annual Meeting of Shareholders and their successors have
been duly elected and qualified.
It is intended that the proxies received from Shareholders, unless
contrary instructions are given therein, will be voted FOR the election of the
six nominees named below, each of whom has consented to being named herein and
have indicated their intention to serve if elected. If any nominee for any
reason should become unavailable for election or if a vacancy should occur
before the election, it is intended that the shares represented by the proxies
will be voted for such other person as the Company's Board of Directors shall
designate to replace such nominee. The Board of Directors has no reason to
believe that any of the nominees will not be available or prove unable to
serve if elected.
Nominees for Director
The age of each nominee, his positions and offices with the Company, his
term of office as a director, his business experience during the past five
years or more, and additional biographical data is set forth below.
Gordon H. Shirah II, age 61, was a director of the Company since its
inception in 1985 through July 1993. In July 1996, he was reelected as a
Director and Board Chairman. From 1968 until his retirement in 1995, he
worked as a Certified Public Accountant with Bella Hermida & Co.
<PAGE>
E. W. (Pete) Ellis, age 55, has been President, Chief Executive Officer
and Director since December 1996. He has been in the food business for the
past 33 years, ten years of which were spent with Oscar Mayer & Co., and
fifteen years with ConAgra. He was employed in sales and marketing with both
companies. He was President and owner of Ellis, Harris, and Associates, Inc.,
a food brokerage company, from 1986 to 1988.
Frank M. Fraser, age 61, served as a director of the Company from May
1992 through September 1993. He was reelected as a director in July 1996. He
is presently Vice President of Market Development at MDS Nordion, Inc.
("Nordion"). In June 1964, Mr. Fraser joined Atomic Energy of Canada Limited
(now Nordion) as a project engineer. He is a Director of the Canadian
Irradiation Centre Laval, Quebec. He is also the Canadian delegate to the
International Consultative Group on Food Irradiation and has Chaired the
International Meeting on Radiation Processing.
Geoff Marott, age 47, is the President and Chief Executive Officer of
Marcre Sales Corporation, a sales and marketing company primarily focusing on
proprietary items for national restaurant accounts. Mr. Marott formed Marcre
Sales in 1984 after serving as President of Filet Of Chicken since 1980. He
is an owner of Braselton Poultry, a further processing plant. He is also
currently serving as Chairman of the Board of American Century Bank in
Stockbridge, Georgia.
Paul O'Neill, age 58, served as a director of the Company from August
1992 through September 1993. He was reelected as a director in July 1996. He
is currently retired. From January 1985 to March 1992, Mr. O'Neill was
President, Chief Executive Officer and a director of Nordion and its
predecessor company Atomic Energy of Canada Limited. He was Executive Vice
President and Chief Financial Officer of Atomic Energy of Canada Limited from
September 1978 until January 1985.
Sam R. Whitney, age 73, a founder of the Company, was Chairman of the
Board and Chief Executive Officer of the Company from its inception in 1985
until December, 1996, when, because of recurring medical problems, he retired
as Chairman of the Board and Chief Executive Officer. He remains active in
the Company as a director. For over 25 years prior to 1985, Mr. Whitney was
involved in the transportation of Florida agriculture, fertilizer and
phosphate products. He was also involved in the construction and operation of
pipelines for Florida agriculture and industry. Mr. Whitney is currently and
has been since 1973 Chairman of the Board of Trans-Phos., Inc., a motor
transportation carrier. From 1982 through 1986 Mr. Whitney was Chairman of
the Board of Tampa Pipeline Company, which transported aviation fuel to Tampa
International Airport.
There is no family relationship between any of the Company's directors,
nominees to serve as directors, or executive officers. Except with respect to
Messrs. O'Neill and Fraser, who are appointees of Nordion, (See, "Certain
Relationships and Related Transactions"), there are no arrangements between
any director or director nominee of the Company and any other person pursuant
to which he was, or will be, selected as director.
Section 16(a) Beneficial Ownership Reporting Compliance
Each of the following directors failed to file, on a timely basis, with
the Securities and Exchange Commission pursuant to Section 16(a) of the
Securities Exchange Act of 1934, as amended, initial ownership reports on Form
3 : Frank M. Fraser and Paul O'Neill.
<PAGE>
Director Meetings and Committees
During 1996, the Board of Directors of the Company held a total of three
(3) meetings. Each of the directors attended all of the meetings held with
the exception of Mr. Shirah and Mr. O'Neill, each of whom attended two (2)
meetings. The Company has an audit committee consisting of Mr. Shirah and Mr.
O'Neill. The audit committee did not meet in 1996.
The Board of Directors recommend a vote FOR
the election of all 6 nominees.
--------------------------
COMPENSATION OF EXECUTIVE OFFICERS
The following tables set forth certain information relating to the
compensation earned by the Chief Executive Officer of the Company for the
years indicated.
Summary Compensation Table
Long-Term
Compensation
------------
Awards
------
Securities
Annual Compensation Restricted Underlying
-------------------
Year Salary($) Stock Options(#)
---- ------------------- ---------- -----------
E.W. (Pete) Ellis
President and
Chief Executive Officer(1)...1996 $2,692 10,000 shs 100,000 shs
Sam W. Whitney
President and
Chief Executive Officer (2) 1996 -0- --- ---
..............................1995 -0- --- 30,000
..............................1994 -0- --- ---
___________
<FN1>
(1) Mr. Ellis was appointed President and Chief Executive Officer on December
9, 1996. His compensation is set at $70,000 per year and he is eligible
for a bonus for the year ending December 31, 1997, upon the
attainment of certain sales targets. On November 11, 1996, the Company
agreed to issue Mr. Ellis 10,000 shares of Common Stock in connection
with his employment and granted to him options to purchase 100,000
shares of Common Stock. Such shares were issued subsequent to December
31, 1996. The options are exercisable for the purchase of 20,000 shares
per year in each of the first five years of his employment at an exercise
price of $1.00 per share, the fair market value of the Company's Common
Stock on the date of grant. The option terminates December 9, 2006.
<FN2>
(2) Mr. Whitney resigned as President and Chief Executive Officer on December
9, 1996. From the Company's inception until December 1996, Mr. Whitney
served full-time, without compensation, as the Chief Executive Officer
of the Company.
<PAGE>
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants(1) For Option Term(2)
------------------------------------------ --------------------
% of
Number of Total
Securities Options
Underlying Granted to Exercise
Options Employees Price Expiration
Name Granted (#) in Year ($/Share) Date 5%($) 10%($)
- ---- ----------- ------- --------- ---- ----- ------
E.W. (Pete) Ellis 100,000 100.0 1.00 12/6/02 28,000 65,000
<FN1>
(1) The option was granted at an exercise price equal to the fair market
value of the Company's Common Stock on the date of grant. Options are
exercisable 20% per year for each of the first five years from the
date of grant and terminate ten years from the date of grant.
<FN2>
(2) The assumed annual rates of appreciation of 5% and 10% would result
in the price of the Company's stock increasing to $1.28 and $1.65,
respectively.
Stock Option Plan
The Company has an Incentive and Non-Statutory Stock Option Plan covering
150,000 shares of Common Stock (the "Plan"). There is currently outstanding
five-year options to purchase an aggregate of (i)104,300 shares of Common Stock
of the Company, exercisable at $8.50 and $9.35 per share (granted in 1992) and
(ii) 100,000 shares at $1.00 per share (granted in 1996). The options are
exercisable 60% after one (1) year of continued employment after the date of
grant and 10% in each of the following four years (a year is defined as the
period between Annual Stockholders meetings). ISO's and NQO's granted to an
optionee terminate 90 days after termination of employment or other
relationship, except that ISO's and NQO's terminate the earlier of the
expiration date of the option or one year after termination in the event of
disability, and 180 days in the event of death.
A former officer also holds warrants to purchase 100,000 shares of Common
Stock. Such warrants expire in 1998 and 1999 and are exercisable at $8.25 per ]
share.
The market price of the Company's Common Stock December 31, 1996 was $7/8
per share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company, in September 1990, entered into an agreement with Nordion,
whereby Nordion agreed to supply the Company with all of the equipment
necessary to operate its irradiation facility, including 400,000 curies of
Cobalt 60. The total purchase price for the equipment and cobalt was
approximately $2,400,000, of which $400,000 was paid and the balance of
approximately $2,000,000 was scheduled to become due and payable, without
interest, on September 4, 1994. However, the due date was subsequently
extended and
<PAGE>
recently Nordion agreed to extend the date for repayment of the indebtedness,
and accrued interest to January 4, 1998.
Nordion also assisted the Company in the construction of its facility,
providing the Company, its architects and engineers, with construction
drawings of the irradiation cell, plans and specifications and assisted the
Company in connection with the Company's applying for and obtaining all
necessary licenses and permits for the facility.
On July 1, 1991, MDS Health Group, Inc., a Delaware corporation ("MDS
Health") and then an affiliate of Nordion, loaned the Company $300,000. Such
loan was evidenced by a Debenture due and payable, without interest, on July
1, 1993. The Debenture was convertible into shares of Common Stock at the
conversion rate of $4.50 per share. In connection with the loan, the Company
agreed that in the event MDS Health acquired a controlling interest in
Nordion, it would grant to MDS Health or Nordion the right to convert the
$2,000,000 of indebtedness to Nordion referred to in the preceding paragraph
into Common Stock of the Company at a conversion rate of $4.50 per share. MDS
Health acquired Nordion in November, 1991.
On October 22, 1991 the Company entered into a Reimbursement and
Indemnity Agreement with Nordion whereby Nordion assisted the Company in
obtaining a surety bond in the sum of $600,000. In connection therewith the
Company agreed to reimburse Nordion for any and all liabilities, costs,
damages, attorney fees and other expenses which Nordion may sustain as a
consequence of the Indemnity Agreement from Nordion to the insurer or payments
made by the Bank of Montreal on a letter of credit in the amount of $450,000
furnished by the Bank to the insurer on behalf of Nordion, each in connection
with the issuance of the surety bond.
On December 11, 1991 the Company entered into a further Agreement with
Nordion whereby Nordion agreed to make available to the Company over a period
of time an additional $850,000 for working capital purposes and an additional
$900,000 in the form of additional curies of Cobalt 60 (approximately 600,000
curies). In addition, as part of the Agreement,
(a) The Company reduced the conversion rate of the above mentioned
$2,000,000 of indebtedness to Nordion from $4.50 to $4.05 per share.
(b) The $300,000 debenture payable to MDS Health was assigned by MDS
Health to Nordion and canceled. A new Debenture, in the amount of
$900,000 payable to Nordion was issued (this included the $300,000
prior Debenture payable to MDS Health and $600,000 of the additional
$850,000 that Nordion agreed to lend to the Company). The Debenture
is due and payable September 4, 1994 and was convertible at any time
prior thereto into shares of Common Stock at the conversion rate of
$4.05 per share. In addition, the Debenture is secured by a first
mortgage on the property on which the plant is located.
(c) The Company agreed to pay the $900,000 due Nordion for the additional
600,000 curies of Cobalt 60 on September 4, 1994 without interest.
Such indebtedness is secured by the irradiation equipment and other
personal property and the 1,000,000 curies of cobalt supplied by
Nordion. In addition, the indebtedness was convertible at any time on
or before September 4, 1994 into shares of Common Stock of the
Company at the conversion rate of $4.05 per share.
<PAGE>
(d) The Company granted Nordion the right to designate two members to the
Board of Directors. At Nordion's direction, Messrs. O'Neill and
Fraser are presently serving as directors of the Company and they
and have been nominated for election to the 1997 Board of Directors.
On November 23, 1994, Nordion extended the due date on all indebtedness
as well as accrued interest from September 4, 1994, to January 4, 1996 and in
early 1996, further extended the due date to January 4, 1997. In early 1997,
Nordion again extended the due date to January 4, 1998. At December 31, 1996
such indebtedness amounted to $3,362,229. The indebtedness continues to be
secured by substantially all of the assets of the Company. As part of such
extensions, the conversion rate was reduced from $4.05 to $.80 per share. For
terms of the Agreement, reference is made to Note D of the Notes to Financial
Statements. In addition to the 1 million curies of Cobalt 60, which were
supplied the Company in 1990 and 1991, Nordion, in 1993, stored an additional
2.6 million curies at the Company's facility to help promote the irradiation
of food products. Due to the decline in the level of radioactivity as a result
of decay, there is currently available approximately 1.9 million curies.
Although the additional Cobalt-60 is located on the Company's premises and
available to it for use in processing, title to this Cobalt-60 continues to be
held by Nordion and may be removed by Nordion, in its discretion, at any time.
The agreements with Nordion provide that, until the Company pays its debt
to Nordion in full, the Company may not compete with Nordion's existing
customers in their irradiation of non-food products, unless the Company
obtains Nordion's prior consent. This provision could make it difficult for
the Company to succeed in the event that irradiation of food and related
products is not sufficient to allow the Company to become profitable.
During the year ended December 31, 1996, Nordion, in order for the Company
to continue operations purchased 517,531 shares of the Company's Common Stock
for $414,025 ($.80 per share). In addition, the Company issued to Nordion
833,130 shares of Common Stock in consideration for $336,505 in interest and
$330,000 of principal owed to Nordion. The Company expects that Nordion will
continue to fund the Company's operations for the foreseeable future but there
is no binding commitment to this effect. If Nordion should discontinue funding
the Company's operations, the Company would be faced to obtain funding
elsewhere, which is all likelihood not be possible, or discontinue its options.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's outstanding Common Shares as of May 16,
1997, by (i) each director of the Company, (ii) all directors and executive
officers of the Company as a group, and (iii) each person known to the Company
to own beneficially more than 5% of its outstanding Common Shares. Except as
otherwise indicated, the persons named in the table have sole voting and
investment power with respect to all of the Common Shares owned by them.
Number and Percent
Of Shares
Beneficially Owned
At May 16, 1997
------------------
Name and Address Number Percent
-------------------------------- ------------- --------
MDS Nordion 6,038,445 (1) 59.4
447 March Road-Kanata Ontario
Canada K2K 1X8
Sam R. Whitney 631,000 (2) 6.2
1801 Thonotosassa Road
Plant City, Florida 33566
E. W. (Pete) Ellis 30,000 (3)
Harley W. Everett 8,000 (4) *
Frank M. Fraser (1)
Geoff Marott -0-
Paul O'Neill (1)
Gordon H. Shirah, II 50,000 *
All Directors and Officers 6,757,445 (6) 65.9
as a group (6 persons)
* Less than 1%
(1) Includes 4,202,787 shares of Common Stock which are issuable upon
conversion of $3,362,229 of indebtedness owed Nordion by the Company . See
"Business-Agreements with MDS Nordion" Messrs. Fraser and O'Neill
are designees of Nordion to serve on the Company's Board of Directors.
Messrs. Fraser and O'Neill own less than 1% each of the capital stock of
Nordion. Such persons currently have voting rights to such shares.
Dispositive rights are held by Nordion's Board of Directors. Messrs. Fraser
and O'Neill disclaim beneficial ownership of the Common Stock of the
Company which Nordion owns or has the right to acquire.
(2) Includes 35,000 shares underlying options which are currently exercisable.
<PAGE>
(3) Includes 20,000 shares underlying options which are currently exercisable.
(4) Includes 4,200 shares underlying options which are currently exercisable,
or exercisable within the next sixty (60) days.
(5) Includes shares underlying options which are currently exercisable or
exercisable within the next sixty (60) days, and shares underlying
convertible debt.
PROPOSAL II
APPROVAL OF THE AMENDMENT
TO INCREASE THE NUMBER OF
AUTHORIZED COMMON SHARES
Background and Reasons for Proposed Amendment. The Board of Directors
recommends that the Shareholders approve an amendment (the "Amendment") to the
Articles of Incorporation of the Company (the "Articles of Incorporation"), as
permitted by the Florida Business Corporation Act, to increase the number of
authorized Common Shares from 10,000,000 shares to 20,000,000 shares. The
text of the proposed Amendment is as follows:
RESOLVED, that Article III of the Company's Articles of
Incorporation is hereby amended by deleting it in its entirety
and replacing it with the following:
ARTICLE III
The maximum number of shares of stock that this corporation
is authorized to have outstanding at any one time is 20,000,000 shares
of common stock having a par value of $.01 per share.
The Company currently is authorized by its Articles of Incorporation to
issue 10,000,000 of Common Shares, par value $.01 per share. As of April 4,
1997, 5,750,284 shares were issued and outstanding, 104,300 shares were
reserved for issuance upon exercise of options granted under the Company's
1992 Stock Option Plan, an additional 100,000 Common Shares are reserved for
issuance under the options granted to E. W. (Pete) Ellis (see "Executive
Compensation") and 50,000 shares underlying Warrants granted to a former
officer. In addition, the Company at December 31, 1996, was indebted to
Nordion for $3,362,229, which is convertible into 4,202,787 shares of Common
Stock of the Company. Nordion has agreed that until the Company's Articles of
Incorporation are amended to increase the number of authorized shares it will
not exercise its conversion rights. Shareholders do not have any preemptive
rights to purchase any of the Company's Common Shares.
The Company has no plans, understandings or negotiations underway at this
time for the issuance of any unissued and unreserved Common Shares except for
those shares which could be issued as a result of Nordion converting all or a
portion of the Company's indebtedness. In addition to having shares
available in the event of conversion, the Board of Directors believes that it
is desirable to have a sufficient number of Common Shares available, as the
occasion may arise, for possible future financings and acquisition
transactions, stock dividends or splits, stock issuances pursuant to employee
benefit plans and other proper corporate purposes and accordingly recommends
the proposed increase. Having such additional Shares available for issuance
in the future would give the Company greater flexibility by allowing Shares to
be issued without incurring the delay and expense of a special Shareholders'
meeting.
<PAGE>
Effect of Proposed Amendment. The additional Common Shares, together
with other authorized and unissued Shares, generally would be available for
issuance without any requirement for further shareholder approval, unless
Shareholder action is required by applicable law, the Company's governing
documents or by the rules of the National Association of Securities Dealers,
Inc. or any stock exchange on which the Company's securities may then be
listed.
Although the Board of Directors will authorize the issuance of additional
Common Shares only when it considers doing so to be in the best interests of
Shareholders, the issuance of additional Common Shares may, among other
things, have a dilutive effect on the earnings and equity per Common Share and
on the voting rights of holders of Common Shares. The increase in the
authorized number of Common Shares also could be viewed as having
anti-takeover effects. Although the Board of Directors has no current plans
to do so, Common Shares could be issued in various transactions that would
make a change in control of the Company more difficult or costly and,
therefore, less likely. For example, Common Shares could be privately sold to
purchasers favorable to the Board of Directors in opposing a change in control
or to dilute the stock ownership of a person seeking to obtain control. The
Company is not aware of any effort to accumulate Common Shares or to obtain
control of the Company by a tender offer, proxy contest, or otherwise, and the
Company has no present intention to use the increased authorized Common Shares
for anti-takeover purposes.
Recommendation of the Board of Directors. The proposal to increase the
number of authorized Common Shares will be adopted upon receiving the
affirmative vote of holders of a majority of the Company's outstanding Shares.
Proxies will be voted in accordance with the specifications marked thereon,
and, if no specification is made, will be voted "FOR" the increase in the
number of authorized shares of Common Stock.
Financial Statements. The Company's financial statements contained in the
Annual Report to Shareholders, a copy of which accompanies this Proxy
Statement, are incorporated herein by reference.
The Board of Directors Recommends a vote FOR the Proposal to Amendment
To Increase the Number of Authorized Common Shares.
--------------------------
PROPOSAL III
APPROVAL AND RATIFICATION OF APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANT
The Board of Directors has selected the firm of John J. Faircloth, C.P.A.,
independent public accountant, to be the Company's auditor for the
fiscal year ended December 31, 1997 and recommends that Shareholders vote to
ratify that appointment. John J. Faircloth, C.P.A. has been the Company's
principal accountant since 1991.
Although submission of this matter to Shareholders is not required by
law, in the event of a negative vote, the Board of Directors will reconsider
its selection. Ratification of the appointment will require that the votes
cast in favor of ratification exceed those votes cast opposing ratification at
a meeting where a quorum is present. John J. Faircloth, C.P.A. is
expected to have a representative at the Annual Meeting who will be available
to respond to appropriate questions from Shareholders attending the meeting.
The Board of Directors Recommends a vote FOR this Proposal.
<PAGE>
SHAREHOLDER PROPOSALS
Eligible Shareholders who wish to present proposals for action at the
1998 Annual Meeting of Shareholders should submit their proposals in writing
to the President of the Company at the address of the Company set forth on the
first page of this Proxy Statement. Proposals must be received by the
President no later than January 2, 1998 for inclusion in next year's proxy
statement and proxy card. A Shareholder is eligible to present proposals if,
at the time he or she submits the proposals, the Shareholder owns at least 1%
or $1,000 in market value of Common Shares and has held such shares for at
least one year, and the Shareholder continues to own such shares through the
date of the 1998 Annual Meeting.
SOLICITATION COSTS
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of the Company. The Company will bear the costs of preparing,
assembling and mailing the Proxy Statement, form of proxy, and the 1996
Annual Report to Shareholders in connection with the Annual Meeting. In
addition to Solicitation by use of mail, employees of the Company may solicit
proxies personally or by telephone or telegraph, but will not receive
additional compensation therefor. Arrangements may be made with banks,
brokerage houses, and other institutional custodians, nominees and fiduciaries
to forward the solicitation materials to beneficial owners and to obtain
authorizations for the execution of proxies. The Company will, upon request,
reimburse those persons and entities for expenses incurred in forwarding proxy
materials to beneficial owners.
ANNUAL REPORT
The Company's 1996 Annual Report for the fiscal year ended December 31,
1996, which includes financial statements, is being mailed to Shareholders
together with the Notice of the 1997 Annual Meeting of Shareholders and Proxy
Statement.
OTHER MATTERS
At the time of preparation of this Proxy Statement, the Board of
Directors of the Company had not been informed of any matters which would be
presented for action at the Annual Meeting other than the proposals
specifically set forth in the Notice of Annual Meeting and referred to
herein. If any other matters are properly presented for action at the Annual
Meeting, it is intended that the persons named in the accompanying proxy card
will vote or refrain from voting in accordance with their best judgment on
such matters after consultation with the Board of Directors.
By Order of the Board of Directors
/s/ E.W. (Pete) Ellis
-----------------------
President
Mulberry, Florida
May 23, 1997
<PAGE>
FOOD TECHNOLOGY SERVICE, INC.
501 Prairie Mine Road
Mulberry, FL 33860
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints E.W. (Pete) Ellis and Gordon H. Shirah
II, as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and vote, as designated below, all the shares of
common stock of Food Technology Service, Inc. held of record by the
undersigned as of May 16, 1997 at the Annual Meeting of Shareholders to be held
on June 19, 1997 or any adjournment thereof.
1. To elect six Directors to hold office until the next Annual Meeting of
Shareholders.
___ FOR all nominees listed below
(except as marked to the contrary below)
___ WITHHOLD AUTHORITY to vote for all nominees
listed below
Gordon H. Shirah, II
Geoff Marott
E.W. (Pete) Ellis
Paul O'Neill
Frank Fraser
Sam R. Whitney
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space
provided.
--------------------------------------------------------------------
2. To amend the Company's Articles of Incorporation to increase the Company's
authorized Common Stock, par value $.01 per share, from 10,000,000 to
20,000,000 shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To ratify the appointment of John J. Faircloth, C.P.A. as the Company's
independent accountant for 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. In their discretion, the holders of this Proxy are authorized to vote upon
such other business as may properly come before the meeting.
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 Proposals 1, 2 and 3.
(Continued, and to be signed on the reverse side)
<PAGE>
Please sign exactly as name appears below. When shares are hold by joint
tenants, both should sign. When signing as attorney, as executor,
administrator or trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
________________________________________________
Signature
________________________________________________
Signature, if held jointly
DATED: _______________, 1997
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
