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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 15, 1998, 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 14, 1998, 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, 1998
<PAGE>
MARKET AMERICA, INC.
7605-A Business Park Drive
Greensboro, N.C. 27409
August 28, 1998
INFORMATION STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 15, 1998
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 15, 1998, 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 14, 1998, 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, 1998 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
Name and Background
James H. Ridinger, 48, is Chairman of the Board of Directors and CEO of the
Company. He founded the Company in 1992 and has been a Director and Chief
Executive Officer of the Company since that time.
Loren A. Ridinger, 29, is a Director and Senior Vice President and Secretary of
the Company. She has been a Director of the Company since 1993 and held a number
of executive positions with the Company since it's founding in 1992. Ms.
Ridinger is the wife of James H. Ridinger, the Chairman of the Board of
Directors and CEO of the Company.
Dennis J. Franks, 44, has been a Director of the Company since 1994 and has
served as Executive Vice President of the Company since 1993. He is a former
professional football player and marketing professional for a number of
companies.
Martin L. Weissman, 54, has been a Director of the Company since 1993 and has
served as 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.
During the fiscal year ended April 30, 1998, 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.
2
<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, 1998:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Name and Fiscal Other Annual
Principal Position Year Ended Salary($) Bonus($) Compensation(1)
------------------ ---------- --------- -------- --------------
<S> <C> <C> <C> <C>
James H. Ridinger, Chairman of 4-30-98 365,000 418,312 0
the Board and Chief Executive 4-30-97 365,000 276,610 0
Office 4-30-96 303,182(2) 95,000 0
Loren A. Ridinger, Senior Vice 4-30-98 184,894 10,782 0
President and Secretary 4-30-97 184,894 10,000 0
4-30-96 157,782 30,000 0
Dennis J. Franks, Executive 4-30-98 120,000 35,043 0
Vice President 4-30-97 120,000 30,000 0
4-30-96 0 30,000 90,000(3)
Martin L. Weissman, Executive 4-30-98 146,345 0 0
Vice President 4-30-97 0 0 0
4-30-96 0 30,000 0
</TABLE>
(1) 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. See "Certain Transactions."
(2) 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 1997
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.
(3) Represents consulting fees paid to Dennis Franks Marketing.
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.
3
<PAGE>
Board Compensation Report
The Company's Compensation policy is set by the Board of Directors.
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 1998 was increased to reflect his
contribution to the Company's outstanding financial performance.
Salaries of the Executive Officers are set by the Board of Directors
based on Mr. Ridinger's recommendations.
James H. Ridinger
Loren Ashley Ridinger
Dennis J. Franks
Martin L. Weissman
Dated: August 28, 1998
4
<PAGE>
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 3, 1994 (the first day of public
trading of shares of the Company's common stock) 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>
08/03/94 04/28/95 04/30/96 04/30/97 04/30/98
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Market America, Inc. $100.00 $400.00 $2250.00 $1037.50 $1112.50
Nasdaq Stock Market $100.00 $117.60 $167.60 $177.40 $265.48
(U.S. Companies)
Peer Group $100.00 $108.40 $137.20 $167.30 $184.79
</TABLE>
* Assumes $100.00 invested at the closing price on August 3, 1994 in the stock
of Market America, Inc., the Nasdaq Total Returns Index (U.S. Companies) and
Peer Group companies (weighted by market capitalization). Graph prepared for
Market America, Inc. by The University of Chicago Graduate School of Business,
Center for Research in Security Prices.
5
<PAGE>
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
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., Enesco Group, Inc. (formerly Stanhome, Inc.), Herbalife, Inc.,
Nature's Sunshine Products, Inc., Tupperware Corp. and Usana, Inc. The Company
added Usana, Inc. to the Peer Group in 1998 because Usana, Inc. is a
publicly-traded company with characteristics very similar to those of the
Company. Without Usana, Inc., the Peer Group performance would have been:
08/03/94--$100.00, 04/28/95--$108.38, 04/30/96--$137.28, 04/30/97--$168.25, and
04/30/98--$184.89.
6
<PAGE>
Beneficial Ownership of Shares
The following table sets forth certain information on the beneficial
ownership of shares of the Company's common stock by its directors and executive
officers, by its directors and executive officers as a group, and by any other
person known by the Company to be the beneficial owner of more than five percent
of the outstanding shares of the stock as of August 14, 1998, the record date
for the annual meeting of shareholders. Unless otherwise indicated in the
footnotes, all shares are owned directly, and the person or entity identified as
the beneficial owner has sole voting and investment power.
<TABLE>
<CAPTION>
No. of Shares Percentage of
Beneficially Outstanding
Name of Beneficial Owner/1 Owned Shares/2
-------------------------- ----- --------
<S> <C> <C>
James H. Ridinger 13,945,100/3 69.90%
Loren A. Ridinger 101,450/4 0.51%
Dennis J. Franks 184,000 0.92%
Martin L. Weissman 532,000/5 2.67%
All Directors and Executive Officers
as a Group (four persons) 14,762,550 74.00%
The AAA Plus Trust/6 1,185,700 5.94%
</TABLE>
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1 Table does not show an estimated 939,200 shares (or 4.71% of the outstanding
shares) that may be owned beneficially by Mr. Gilbert A. Zwetsch, 403 W. 25th
Street, Spokane, Washington 99203.
2 Based on 19,950,000 shares issued and outstanding on August 14, 1998, the
record date for the Company's annual meeting of shareholders.
3 Does not include shares owned directly by Loren A. Ridinger, Mr. Ridinger's
wife, which are reported on separately in this table. Also does not include
shares reported in this table as beneficially owned by The AAA Plus Trust and
the shares, discussed in footnote 1 above, which may be owned beneficially by
Mr. Zwetsch. Mr. Ridinger disclaims beneficial ownership of Mrs. Ridinger's
shares, the shares subject to The AAA Plus Trust, and the Zwetsch shares, and
this footnote shall not not be deemed an admission that he is the beneficial
owner of any such shares. Under SEC rules, Mr. Ridinger is deemed to be the
beneficial owner of such shares, for purposes of this disclosure, only if he has
or shares investment or voting power with respect to them. Mr. Ridinger does not
believe that he has or shares investment or voting power with respect to certain
of such shares, and believes that there are substantial questions with respect
to his having or sharing investment or voting power with respect to others. If
Mr. Ridinger were deemed to be the owner of any of these shares, the percentages
of shares beneficially owned by him and by all directors and executive officers
as a group shown in this table would be required to be adjusted accordingly. Mr.
Ridinger's business address is: c/o Market America, Inc., 7605-A Business Park
Drive, Greensboro, NC 27409.
4 Includes only shares owned directly by Mrs. Ridinger, and does not include
shares owned directly by James H. Ridinger, her husband, or other shares that
may be deemed to be owned beneficially by Mr. Ridinger, and through Mr. Ridinger
by Mrs. Ridinger, both of which categories of shares are discussed in footnote 3
above.
5 Does not include 50,000 shares held in the name of Mr. Weissman's
unemancipated son, of which Mr. Weissman disclaims beneficial ownership.
6 The address of The AAA Plus Trust is c/o Codan Trust Company Limited, Trustee,
2 Church Street, Clarendon House, Hamilton, Bermuda HM 11.
7
<PAGE>
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 James H. Ridinger, Loren A. Ridinger and Martin L. Weissman were
late in filing Forms 4 to report various transactions that occurred in 1994 and
1995. Several of the transactions reported by Mr. Weissman in his Form 4
occurred in 1996.
Certain Transactions
All four executive officers and directors of the company own and
operate Business Development Centers as independent contractors and distributors
within the field sales organization of the company. In this capacity, they
perform the typical and usual functions of Field Sales and in return for which
their business development centers earn management commissions under the
company's Management Performance Compensation Plan. For the year ended April 30
1998 these individuals earned management commissions as follows: James H.
Ridinger $644,340.00; Loren A. Ridinger $48,081.50; Dennis J. Franks
$293,831.60; Martin L. Weissman $140,900.00.
During the year ended April 30, 1998, the Company entered into
agreements with two companies owned by Mr. and Mrs. Ridinger, officers and
stockholders of the Company, to lease real estate in Miami, Florida for use by
Company management when conducting business in Florida and for the lease of a
yacht on a per event basis. The yacht is used as an integral part of the direct
sales training, education, and recruitment activities of the Company. Both lease
agreements have 5-year terms with options to renew. The amount of rent expense
incurred for the year ended April 30, 1998 was $165,000 for the yacht and
$87,000 for the real estate. At April 30, 1998, these companies owed the Company
$62,445. Mr. and Mrs. Ridinger were not otherwise indebted to the Company,
either directly or indirectly, at that date.
8
