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SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
| | Preliminary Information Statement | | Confidential, for Use of the
Commission Only (as permitted by
Rule 14c-5(d)(2))
|X| Definitive Information Statement
Market America, Inc.
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(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
| | Fee computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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| | Fee paid previously with preliminary materials.
| | Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing:
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
- MARKET AMERICA, INC. -
To the Shareholders of Market America, Inc.:
Notice is hereby given that the annual meeting of the shareholders of
Market America, Inc., will be held at the Embassy Suites Hotel, 204 Centreport
Drive, Greensboro, North Carolina, on September 30, 1997, at 10:00 a.m. for the
following purposes:
(1) To re-elect existing directors; and
(2) To transact such other business as may properly come
before the meeting.
The determination of shareholders entitled to notice of and to vote at
the meeting was made as of the close of business on August 10, 1997, which is
the record date fixed by the Board of Directors for such purpose.
By order of the Board of Directors,
\s\ Loren Ashley Ridinger
--------------------------
Loren Ashley Ridinger
Secretary
Dated: August 28, 1997
<PAGE>
MARKET AMERICA, INC.
7605-A Business Park Drive
Greensboro, N.C. 27409
August 28, 1997
INFORMATION STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 30, 1997
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
This Information Statement is being furnished by the management of
Market America, Inc. (the "Company") in connection with the annual meeting of
shareholders of the Company to be held on September 30, 1997, at 10:00 a.m., at
the Embassy Suites Hotel, 204 Centreport Drive, Greensboro, North Carolina. The
meeting is being held for the purposes of electing directors and transacting
such other business as may lawfully come before the meeting.
As of August 10, 1997, the record date for determining the shareholders
entitled to notice of and to vote at the meeting, there were 19,950,000 shares
of the Company's Common Stock outstanding and entitled to be voted. A majority
of such shares will constitute a quorum for the transaction of business at the
meeting. Abstentions by shareholders represented at the meeting will be counted
as present for determining the presence of a quorum.
Each share will have one vote at the annual meeting. Those persons who
receive the highest number of votes will be elected as directors. Except as
otherwise required by law, all other matters will be approved if the votes cast
favoring the action exceed the votes cast opposing the action. Abstentions will
be excluded entirely from the vote, and will have no effect on the outcome.
Since the Company's management is not soliciting proxies for the meeting, there
will be no returns of proxies from brokers holding shares in street name without
instructions for voting. Therefore, such "broker non-votes" will have no effect
on any shareholder vote.
Annual Report and Form 10-K
A copy of the Annual Report to Shareholders of the Company for the
fiscal year ended April 30, 1997 is being sent with this Information Statement
to all shareholders of record on the record date for the annual meeting.
Additional copies are available from the Company on request. A copy of the most
recent annual report of the Company filed with the U.S. Securities and Exchange
Commission on Form 10-K may be obtained from the Company by any shareholder on
written request. Direct your request to: Corporate Secretary, Market America,
Inc., 7605-A Business Park Drive, Greensboro, NC 27409.
<PAGE>
Election of Directors
The members of the Company's Board of Directors elected at the annual
meeting will serve until the next annual meeting or until their successors are
elected and qualified. Listed below are the persons nominated for election to
the Board of Directors by management.
Nominees for Membership on Board of Directors
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned
------------------
Name and Background Director Since No. Shares Percentage
- ------------------- -------------- ---------- ----------
<S> <C> <C> <C>
James H. Ridinger, 44, is Chairman of the Board of Directors 1992 13,945,100* 69.90%
and CEO of the Company. He founded the Company in 1992 and
has been associated with the Company since then. Before
1992, Mr. Ridinger was a consultant to the Direct Sales
Industry.
Loren A. Ridinger, 29, is a Director and Vice President of 1993 101,400** 0.51%
Administration of the Company. She has held that position
since 1992. Before 1992, Ms. Ridinger was active in
administration of several direct sales companies. She is the
wife of James H. Ridinger, the Chairman of the Board of
Directors and CEO of the Company.
Dennis J. Franks, 44, is a Director and Executive Vice 1994 184,000 0.92%
President of the Company. He has served as a consultant to
the Company since 1992, and has been a direct sales and
marketing consultant since 1989.
Marty Weissman, 54, is a Director and has served as 1993 582,000 2.92%
Executive Vice President of the Company since 1994. Mr.
Weissman was a founder, owner and Executive Vice President
of Howard Carpet Mills of Chatsworth, Georgia.
All Directors and Executive Officers as a Group (four 14,812,500 74.25%
persons)
</TABLE>
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* Does not include shares held by Loren A. Ridinger, Mr. Ridinger's wife and a
director and Executive Vice President of Administration of the Company, as to
which Mr. Ridinger disclaims beneficial interest. See also "Beneficial
Ownership of Shares."
** Does not include shares held by James H. Ridinger, Ms. Ridinger's husband and
the Chairman of the Board and CEO of the Company, as to which Ms. Ridinger
disclaims beneficial interest. See also "Beneficial Ownership of Shares."
During the fiscal year ended April 30, 1997, the Board of Directors
held four meetings. No director attended fewer than 75% of the meetings. The
Board has no standing audit, nominating or compensation committees or committees
performing similar functions. Board members receive no additional compensation
for their service on the Board.
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<PAGE>
Executive Compensation
The following table summarizes the compensation awarded to, earned by
or paid to all executive officers of the Company for services to the Company in
the fiscal year ended April 30, 1997:
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Annual Compensation*
--------------------
Name and Fiscal Other Annual
Principal Position Year Ended Salary($) Bonus($) Compensation
------------------ ---------- --------- -------- ------------
<S> <C> <C> <C> <C>
James H. Ridinger, Chairman of 4-30-97 365,000** 276,610 0
the Board and Chief Executive 4-30-96 303,182** 95,000 0
Officer 4-30-95 5,024 50,000 0
Loren A. Ridinger, Vice 4-30-97 188,894 10,000 0
President of Administration 4-30-96 157,782 30,000 0
4-30-95 5,024 50,000 0
Dennis J. Franks, Executive 4-30-97 120,000 30,000 0
Vice President 4-30-96 0 30,000 90,000
4-30-95 0 0 90,000
Marty Weissman, Executive 4-30-97 0 0 0
Vice President 4-30-96 0 30,000 0
4-30-95 0 0 0
</TABLE>
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* Does not include the value of any perquisites or other personal benefits
because the aggregate amount of any such compensation does not exceed the
lesser of $50,000 or 10% of the total annual salary and bonus shown. Also
does not include commissions on "business volume" (a measure of sales) of
the Company, which each of the named executive officers receives as an
independent distributor of the Company.
** Mr. Ridinger's salary did not increase from fiscal year 1996 to fiscal year
1997. The amount shown as paid to Mr. Ridinger as salary for fiscal year
1996 represents the sum of salary installments paid to him for the portion
of the fiscal year after the Board of Directors approved payment of an
annual salary of $365,000.
None of the executive officers currently has a written employment
agreement. Mr. Ridinger negotiates the base salaries and other compensation of
all of the executive officers named in the table above other than himself. The
Board of Directors determines Mr. Ridinger's compensation.
Board Compensation Report
The Company's Compensation policy is set by the Board of Directors.
The compensation policy of the Company is designed to motivate the
overall success of the Company by:
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<PAGE>
(1) Attracting, retaining and rewarding highly qualified and
productive individuals;
(2) Delivering a significant portion of compensation through
performance-based incentives; and
(3) Directly relating incentive compensation to overall company
and individual performance.
In setting Mr. Ridinger's compensation, the Board of Directors
considered numerous factors, including Mr. Ridinger's unique role as the
pre-eminent personality in the selling of the Company's products, the motivation
of the Company's sales organization and the formulation of sales promotional
programs.
Mr. Ridinger's bonus for fiscal year 1997 was increased to reflect his
contribution to the Company's outstanding financial performance.
James H. Ridinger
Loren Ashley Ridinger
Dennis J. Franks
Marty Weissman
Dated: August 28, 1997
Shareholder Return Performance Graph
Set forth below is a graph comparing the yearly percentage change in
total shareholder return on the Company's common stock with the Total Return
Index for The Nasdaq Stock Market (US Companies) and the total shareholder
return on a designated Peer Group of stocks. The total shareholder return
calculation is for the period commencing August 31, 1994 (the last day of the
month in which the Company's common stock commenced public trading) and includes
the reinvestment of dividends (on securities on which dividends were paid).
Comparison of Shareholder Returns Among the Company, Nasdaq
Total Returns Index and Peer Group Companies*
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Aug. 31, 1994 Apr. 30, 1995 Apr. 30, 1996 Apr. 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Market America, Inc. $100.00 $100.00 $562.50 $259.38
Nasdaq Stock Market (U.S. $100.00 $110.88 $158.06 $167.31
Companies)
Peer Group $100.00 $103.28 $130.77 $160.34
</TABLE>
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* Assumes $100.00 invested on August 31, 1994 in the stock of Market America,
Inc., the Nasdaq Total Returns Index (U.S. Companies) and Peer Group companies
(weighted by market capitalization).
The Peer Group of stocks represented in the above graph is made up of
stocks of publicly-traded companies possessing the following characteristics
similar to those of the Company:
o Size, as measured by net sales;
o Similarity in selling methodology;
o Comparative products, including companies engaged in the distribution
of health and nutritional supplements, and skin, hair, or other
personal products;
o Relatively high insider ownership; and/or
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<PAGE>
o Particular emphasis on the talents and visibility of the chief
executive officer.
Companies included in the Peer Group are: Aloette Cosmetics, Inc.,
Amway Asia Pacific Ltd., Amway Japan Ltd., Avon Products, Inc., Beauticontrol
Cosmetics, Inc., Herbalife, Inc., Nature's Sunshine Products, Inc., Stanhome,
Inc. and Tupperware Corp. (from May 20, 1996, the first day of trading in the
shares of Tupperware Corp. upon its spin-off from Premark International, Inc.).
Beneficial Ownership of Shares
The Company is not aware that, as of the record date for the annual
meeting, anyone other than the following may beneficially own more than 5% of
the outstanding shares of its common stock:
Name and Address Amount and Nature* of Percent of
of Beneficial Owner Beneficial Ownership Class
- ------------------- -------------------- -----
James H. Ridinger 13,945,100 shares* 69.90%
Market America, Inc.
7605-A Business Park Drive
Greensboro, North Carolina 27409
The AAA Plus Trust 1,185,700 5.94%
c/o Codan Trust Company Limited, Trustee
2 Church St. Clarendon House
Hamilton, Bermuda HM 11
- ------------
* Does not include 101,400 shares owned by Mr. Ridinger's spouse, as to which
Mr. Ridinger disclaims beneficial ownership. Also does not include 1,185,700
shares as to which Codan Trust Company Limited, Hamilton, Bermuda, exercises
investment and voting control as trustee of The AAA Plus Trust, as to which
Mr. Ridinger disclaims beneficial ownership.
Section 16 (a) Beneficial Ownership Reporting Compliance
To the Company's knowledge, based solely on its review of reports
submitted to it, all SEC Section 16(a) filing requirements, which prescribe that
the Company's executive officers, directors, and 10% shareholders must file
initial reports of ownership and reports of changes in ownership of the
Company's Common Stock with the SEC, were complied with in fiscal year 1997,
except that Marty Weissman should have filed a Form 5 to report an acquisition
of 2,000 shares of the Company's Common Stock in the open market in October 1996
at market prices and his failure to file a Form 4 reporting a gift of 50,000
shares of the Company's Common Stock to each of his two sons in June 1996. James
H. Ridinger may arguably have been required to file reports relating to a family
trust on the grounds that he exercised investment control over the trust. James
H. Ridinger disclaims beneficial ownership of securities in the trust or that he
exercised investment control over the trust.
Certain Transactions
James H. Ridinger, Chairman of the Board and Chief Executive Officer of
the Company, loaned the Company various amounts early in its history. In 1993,
the Company executed a promissory note to Mr. Ridinger to evidence these loans.
The note was due upon demand, bore interest at the rate of 8.0% annually, and
was secured by the Company's furniture, fixtures and equipment. The principal
amount owed by the Company on the note was $292,714 at April 30, 1996, the last
day of the Company's 1996 fiscal year. The Company paid off this note on
February 28, 1997.
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