<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
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
</TABLE>
FRESH CHOICE, INC.
-------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
----------------------------------------------------------
(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:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
FRESH CHOICE, INC.
April 6, 2000
Dear Stockholder:
This year's Annual Meeting of Stockholders will be held on Thursday,
May 18, 2000 at 2:00 p.m. Pacific Daylight Time at the Santa Clara Convention
Center, 5001 Great America Parkway, Santa Clara, California. You are cordially
invited to attend.
The Notice of Annual Meeting of Stockholders and a Proxy Statement, which
describe the formal business to be conducted at the meeting, follow this letter.
After reading the Proxy Statement, please promptly mark, sign, and return
the enclosed proxy in the postage-prepaid envelope to ensure that your shares
will be represented. Your shares cannot be voted unless you date, sign, and
return the enclosed proxy or attend the annual meeting in person. Regardless of
the number of shares you own, your careful consideration of, and voting upon,
the matters before our stockholders are important.
A copy of the Company's Annual Report is also enclosed.
The Board of Directors and Management look forward to seeing you at the
annual meeting.
Very truly yours,
/s/ EVERETT F. JEFFERSON
Everett F. Jefferson
President and Chief Executive Officer
<PAGE>
[LOGO]
FRESH CHOICE, INC.
2901 TASMAN DRIVE, SUITE 109
SANTA CLARA, CA 95054
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 18, 2000
Dear Stockholder:
You are invited to attend the Annual Meeting of the Stockholders of Fresh
Choice, Inc. (the "Company"), which will be held on Thursday, May 18, 2000, at
2:00 p.m. Pacific Daylight Time at the Santa Clara Convention Center,
5001 Great America Parkway, Santa Clara, California:
1. To elect two (2) Class II directors to hold office for a three-year term
and until their respective successors are elected and qualified.
2. To consider and vote upon a proposal to ratify the appointment of
Deloitte & Touche LLP as the Company's independent accountants for the
fiscal year ending December 31, 2000.
3. To transact such other business as may properly come before the meeting.
Stockholders of record at the close of business on March 27, 2000 are
entitled to notice of and to vote at this meeting and any adjournments thereof.
For ten (10) days prior to the meeting, a complete list of the stockholders
entitled to vote at the meeting will be available for examination by any
stockholder for any purpose relating to the meeting during ordinary business
hours at the principal office of the Company.
By order of the Board of Directors,
/s/ JOAN M. MILLER
JOAN M. MILLER
SECRETARY
Santa Clara, California
April 6, 2000
IMPORTANT: PLEASE FILL IN, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY CARD
IN THE ACCOMPANYING POSTAGE PREPAID ENVELOPE TO ENSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY CHOOSE TO VOTE IN
PERSON EVEN IF YOU HAVE PREVIOUSLY SENT IN YOUR PROXY CARD.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
GENERAL INFORMATION......................................... 1
ELECTION OF DIRECTORS....................................... 5
EXECUTIVE COMPENSATION AND OTHER MATTERS.................... 8
Compensation of Directors................................. 10
Change in Control and Severance Arrangements.............. 11
Compensation Committee Interlocks and Insider
Participation........................................... 12
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION..... 12
Deductibility of Executive Compensation................... 13
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE........ 14
COMPARISON OF STOCKHOLDER RETURN............................ 15
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS...... 16
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL
MEETING................................................... 16
TRANSACTION OF OTHER BUSINESS............................... 16
</TABLE>
i
<PAGE>
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
FRESH CHOICE, INC. 2901
TASMAN DRIVE, SUITE 109
SANTA CLARA, CALIFORNIA 95054
The accompanying proxy is solicited by the Board of Directors of Fresh
Choice, Inc., a Delaware corporation (the "Company"), for use at the Annual
Meeting of Stockholders to be held May 18, 2000, and any adjournment thereof for
the purposes set forth in the accompanying Notice of Annual Meeting. The date of
this Proxy Statement is April 6, 2000, the approximate date on which this Proxy
Statement and the accompanying form of proxy were first sent or given to
stockholders.
GENERAL INFORMATION
ANNUAL REPORT. An annual report for the fiscal year ended December 26,
1999, is enclosed with this Proxy Statement.
VOTING SECURITIES. Only stockholders of record as of the close of business
on March 27, 2000, will be entitled to vote at the meeting and any adjournment
thereof. As of that date, there were 5,762,444 shares of Common Stock of the
Company, par value $.001 per share, issued and outstanding. Stockholders may
vote in person or by proxy. Each holder of shares of Common Stock is entitled to
one (1) vote for each share of stock held on the proposals presented in this
Proxy Statement. The Company's bylaws provide that a majority of all of the
shares of the stock entitled to vote, whether present in person or represented
by proxy, shall constitute a quorum for the transaction of business at the
meeting.
SOLICITATION OF PROXIES. The cost of soliciting proxies will be borne by
the Company. In addition to soliciting stockholders by mail through its regular
employees, the Company will request banks, and brokers, and other custodians,
nominees and fiduciaries, to solicit their customers who have stock of the
Company registered in the names of such persons and will reimburse them for
their reasonable, out-of-pocket costs. The Company may use the services of its
officers, directors, and others to solicit proxies, personally or by telephone,
without additional compensation.
VOTING OF PROXIES. All valid proxies received prior to the meeting will be
voted. All shares represented by a proxy will be voted, and where a stockholder
specifies by means of the proxy a choice with respect to any matter to be acted
upon, the shares will be voted in accordance with the specification so made. If
no choice is indicated on the proxy, the shares will be voted in favor of the
proposal. A stockholder giving a proxy has the power to revoke his or her proxy,
at any time prior to the time it is voted, by delivering to the Secretary of the
Company a written instrument revoking the proxy or a duly-executed proxy with a
later date, or by attending the meeting and voting in person.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following
tables set forth certain information, as of February 29, 2000, with respect to
the beneficial ownership of the Company's Common Stock by (i) all persons known
by the Company to be the beneficial owners of more than 5% of the outstanding
Common Stock of the Company; (ii) each director and director-nominee of the
Company; (iii) the Chief Executive Officer and the four other most
highly-compensated executive officers of the
1
<PAGE>
Company whose salary and incentive compensation for the fiscal year ended
December 26, 1999 exceeded $100,000; and (iv) all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
OWNED(1)
-----------------------
NUMBER OF PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNERS SHARES OF CLASS
- ------------------------------------- ---------- ----------
<S> <C> <C>
Crescent Real Estate Equities Limited Partnership........... 1,684,306(2) 22.6%
777 Main Street,
Suite 2100 Fort Worth, TX 76102
Bay Area Micro-Cap Fund, LP................................. 1,404,900(3) 24.4
1151 Bay Laurel Drive
Menlo Park, CA 94025
T. Rowe Price Associates, Inc............................... 540,000(4) 9.4
100 East Pratt Street
Baltimore, MD 21202
Rosewood Venture Capital, Inc............................... 507,431 8.8
4 Embarcadero Center, Suite 1580
San Francisco, CA 94111-4166
Richard E. Rainwater........................................ 496,400(5) 8.6
777 Main Street, Suite 2700
Fort Worth, TX 76102
Dimensional Fund Advisors Inc............................... 331,900(6) 5.8
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Charles A. Lynch............................................ 38,160(7)
Everett F. Jefferson........................................ 159,476(8) 2.7
Carl R. Hays................................................ 25,167(9) *
Vern O. Curtis.............................................. 13,646(10) *
Charles L. Boppell.......................................... 4,602(11) *
Barry E. Krantz............................................. 9,602(12) *
David E. Pertl.............................................. 46,533(13) *
Tim G. O'Shea............................................... 17,763(14) *
Joan M. Miller.............................................. 19,438(15) *
Tina E. Freedman............................................ 22,485(16) *
Executive officers and directors as a group (11 persons).... 364,004(17) 6.0
</TABLE>
- ------------------------
* Less than 1%
1 Except as indicated in the footnotes to this table, the persons named in the
table have sole voting and dispositive power with respect to all shares of
Common Stock shown as beneficially owned by them, subject to community
property laws, where applicable. Percentage ownership is based on 5,762,444
shares of Common Stock outstanding on February 29, 2000.
2 Includes (i) 1,187,906 shares of Series B Non-Voting Participating
Convertible Preferred Stock ("Series B Preferred Stock") and (ii) 496,400
shares subject to an option to purchase the Common Stock presently owned by
Mr. Richard E. Rainwater. Does not include (i) 1,187,906 shares of Series A
2
<PAGE>
Voting Participating Convertible Preferred Stock ("Series A Preferred
Stock") that may be acquired at any time upon conversion of Series B
Preferred Stock, because Series B Preferred Stock is included. After
conversion of any shares of Series B Preferred Stock into Series A Voting
Participating Convertible Preferred Stock (the "Series A Preferred Stock"),
the holders of Series A Preferred Stock have the right to elect a majority
of the Board.
3 Based on a Schedule 13D/A filed with the Securities and Exchange Commission
(the "SEC") on December 22, 1999 and upon Form 4's filed with the SEC for
December 1999 and February 2000, includes (i) 1,278,100 shares owned by Bay
Area Micro-Cap Fund, LP (the "Fund") of which Bay Area Micro-Cap Management
Company, LLC is the general partner (the "General Partner"); (ii) 15,400
owned by Gregory F. Wilbur, managing member of the General Partners
("Mr. Wilbur"); (iii) 19,000 shares owned by Peter L. Holland, a member of
the General Partner ("Mr. P.L. Holland"); (iv) 8,000 shares owned by William
A. Smart III, a member of the General Partner ("Mr. Smart"); (v) 28,000
shares owned by Smart & Holland Value Fund, L.P. ("Smart & Holland Value"),
of which Mr. Smart is a partner; and (vi) 56,400 shares owned by Smart &
Holland Investment Fund, L.P. ("Smart & Holland Investment"). The 1,278,100
shares owned by the Fund can be voted and disposed of by Mr. Wilbur, as
managing member of the General Partner, acting alone, or by Mr. Smart and
Mr. P.L. Holland, as managing members of the General Partner, acting
together. Each of Messrs. Wilbur, P.L. Holland and Smart have sole voting
and disposition power with respect to the 15,400, 19,000 and 8,000 shares,
respectively, that each owns individually. The 28,000 shares owned by
Smart & Holland Value can be voted and disposed of by Mr. P.L. Holland. The
56,400 shares owned by Smart & Holland Investment can be voted and disposed
of by Mr. Smart and Mr. P.L. Holland acting together.
4 Based on a Schedule 13G/A filed with the SEC on February 2, 2000, these
securities are owned by various individual and institutional investors
including T. Rowe Price Small-Cap Value Fund, Inc. (which owns 540,000
shares, representing 9.4% of the shares outstanding), which T. Rowe Price
Associates, Inc. ("Price Associates") serves as investment adviser with
power to direct investments and/or sole power to vote the securities. For
purposes of the reporting requirement of the Securities Exchange Act of
1934, Price Associates is deemed to be a beneficial owner of such
securities; however, Price Associates expressly disclaims that it is, in
fact, the beneficial owner of such securities.
5 Does not include shares of preferred stock of the Company held by Crescent
Real Estate Equities Limited Partnership. Mr. Rainwater is the Chairman of
the Board of, and holds a significant equity interest in, Crescent Real
Estate Equities Company, a real estate investment trust which holds an
approximate 88.8% limited partnership interest and indirectly holds a 1%
general partnership interest in Crescent Real Estate Equities Limited
Partnership.
6 Based on a Schedule 13G filed with the SEC on February 2, 2000, Dimensional
Fund Advisors Inc. has sole voting power and sole dispositive power of all
331,900 shares. All of such shares are owned by advisory clients of
Dimensional Fund Advisors Inc.
7 Includes 31,321 shares subject to stock options exercisable within sixty
days of February 29, 2000.
8 Includes (i) 115,330 shares subject to stock options exercisable within
sixty days of February 29, 2000 and (ii) 8,500 shares held in an Individual
Retirement Account
9 Includes 21,513 shares subject to stock options exercisable within sixty
days of February 29, 2000.
10 Includes 11,646 shares subject to stock options exercisable within sixty
days of February 29, 2000.
11 Includes 4,602 shares subject to stock options exercisable within sixty days
of February 29, 2000.
12 Includes 4,602 shares subject to stock options exercisable within sixty days
of February 29, 2000.
3
<PAGE>
13 Includes (i) 24,748 shares subject to stock options exercisable within sixty
days of February 29, 2000, (ii) 7,000 shares held in an Individual
Retirement Account and (iii) 14,785 shares held by David E. Pertl and Judy
A. Pertl Trustees FBO The Pertl Family Trust.
14 Includes 14,765 shares subject to stock options exercisable within sixty
days of February 29, 2000.
15 Includes 14,640 shares subject to stock options exercisable within sixty
days of February 29, 2000.
16 Includes 14,657 shares subject to stock options exercisable within sixty
days of February 29, 2000.
17 Includes an aggregate of 264,956 shares subject to stock options held by all
executive officers and directors as a group exercisable within sixty days of
February 29, 2000.
<TABLE>
<CAPTION>
SHARES OF PREFERRED STOCK OWNED(1)
-----------------------------------------------
SERIES A SERIES B
---------------------- ----------------------
NUMBER OF PERCENTAGE NUMBER OF PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNERS SHARES OF CLASS SHARES OF CLASS
- ------------------------------------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Crescent Real Estate Equities Limited
Partnership...................................... 1,187,906(2) 100% 1,187,906(3) 100%
777 Main Street, Suite 2100
Fort Worth, TX 76102
</TABLE>
- ------------------------
1 No shares of Preferred Stock except those listed in the table below are
outstanding or may become outstanding within 60 days of February 29, 2000,
and no one listed in the table above covering the Company's Common Stock has
any rights to beneficially acquire such Preferred Stock.
2 Represents 1,187,906 shares of Series B Preferred Stock that may be
converted into Series A Preferred Stock at any time at the option of the
holder. Series A Preferred Stock may be converted into Common Stock at any
time at the option of the holder. After conversion of any shares of
Series B Preferred Stock into Series A Voting Participating Convertible
Preferred Stock (the "Series A Preferred Stock"), the holders of Series A
Preferred Stock have the right to elect a majority of the Board.
3 Series B Preferred Stock is non-voting, but may be converted into Series A
Preferred Stock or Common Stock at any time at the option of the holder. See
also footnote 2 above.
4
<PAGE>
ELECTION OF DIRECTORS
The Company has a classified Board of Directors consisting of two Class I
directors (Vern O. Curtis and Charles L. Boppell), two Class II directors (Carl
R. Hays and Charles A. Lynch), and two Class III directors (Everett F. Jefferson
and Barry E. Krantz), who will serve until the Annual Meetings of Stockholders
to be held in 2002, 2000 and 2001, respectively, and until their respective
successors are duly elected and qualified. At each Annual Meeting of
Stockholders, directors are elected for a full term of three (3) years to
succeed those directors whose terms expire on the Annual Meeting dates.
Management's nominees for election at the Annual Meeting of Stockholders to
Class II of the Board of Directors are Carl R. Hayes and Charles A. Lynch. If
elected, the nominees will serve as directors until the Company's Annual Meeting
of Stockholders in 2003, and until their successors are elected and qualified.
If either nominee declines to serve or becomes unavailable for any reason, or if
a vacancy occurs before the election (although management knows of no reason to
anticipate that this will occur), the proxies may be voted for such substitute
nominees as management may designate.
If a quorum is present and voting, the two (2) nominees for Class II
director receiving the highest number of votes will be elected as Class II
directors. Abstentions and shares held by brokers that are present but not
voted, because the brokers were prohibited from exercising discretionary
authority (i.e., "broker non-votes"), will be counted as present for purposes of
determining whether a quorum is present.
The table below sets forth for the current directors, including the
Class II nominees to be elected at this meeting, certain information with
respect to age and background:
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY DIRECTOR SINCE
- -------------------------------- -------- -------------------------------- --------------
<S> <C> <C> <C>
CLASS I DIRECTORS WHOSE TERMS
EXPIRE AT THE 2002 ANNUAL
MEETING OF STOCKHOLDERS:
Vern O. Curtis.................. 65 Director 1996
Charles L. Boppell.............. 58 Director 1998
CLASS II DIRECTORS WHOSE TERMS
EXPIRE AT THE 2000 ANNUAL
MEETING OF STOCKHOLDERS:
Carl R. Hays.................... 61 Director 1989
Charles A. Lynch................ 72 Chairman of the Board of the 1989
Company since March 1995;
Director
CLASS III DIRECTORS WHOSE TERMS
EXPIRE AT THE 2001 ANNUAL
MEETING OF STOCKHOLDERS:
Barry E. Krantz................. 55 Director 1998
Everett F. Jefferson............ 61 President and Chief Executive 1997
Officer of the Company and
Director
</TABLE>
Mr. Curtis has served as a director of the Company since April 1996. Since
June 1991, Mr. Curtis has been self-employed as an investor. Mr. Curtis devoted
three years between June 1992 and June 1995 to full-time service for the Church
of Jesus Christ of Latter-day Saints. From August 1988 to June 1991, Mr. Curtis
was Dean of the School of Business and Economics of Chapman College, a liberal
arts college in Orange, California. From 1968 to January 1987, Mr. Curtis served
in various executive positions with
5
<PAGE>
Denny's, Inc., a diversified restaurant company of over 1,900 units, including
serving as President and Chief Executive Officer from 1980 to 1987 and Chairman
of the Board from 1985 to 1987. He currently serves on the Board of Directors of
PIMCO Mutual Funds, a group of mutual funds that primarily manages fixed income
securities; PIMCO Commercial Mortgage Security Trust, Inc., a closed-end fund
specializing in investment in commercial mortgage backed securities; and PS
Business Parks, Inc., a real estate investment trust company.
Mr. Boppell has served as a director of the Company since March 1998.
Mr. Boppell has served as the President and CEO of Sizzler International Inc.
("Sizzler") since March 1999. Prior to his employment with Sizzler, Mr. Boppell
served as the President and CEO of La Salsa Holding Co. ("La Salsa") from
November 1993 to March 1999. Mr. Boppell also served as President and CEO of
Godfather Pizza from 1984 to 1985. In 1989, while serving as a Director of
Hudson's Grill America, Inc., Mr. Boppell was chosen to serve as CEO during that
company's reorganization. Mr. Boppell was with Taco Bell from 1981 to 1984
serving as Vice President of Operations, and then as President. At Pizza Hut, a
division of PepsiCo, Mr. Boppell served from 1977 to 1981 as Western Division
Vice President and later advanced to become the Senior Vice President of
Operations. From 1965 to 1977, Mr. Boppell held various positions with Saga
Corporation, a contract food services company, including College Account
Manager, Regional Vice President Sales, District Manager and Vice President
General Manager of Saga Food Systems. Mr. Boppell currently serves as a Director
of New Focus and Sizzler, and is the owner of Ventura Toyota. Mr. Boppell serves
as Chairman of the Board for his ALMA MATER, Whitworth College in Spokane,
Washington.
Mr. Hays has served as a Director of the Company since March 1989. Mr. Hays
is currently a franchisee of Outback Steakhouse in Northern California. From
November 1989 to January 1993, Mr. Hays was the Chief Operating Officer of Al
Copeland Enterprises, the parent company of Popeye's Famous Fried Chicken and
Church's Fried Chicken.
Mr. Lynch has served as Chairman of the Board since March 1995, and has
served as a Director of the Company since April 1989. Mr. Lynch was an executive
officer of the Company from March 1995 until he resigned as an executive officer
in March 1998. Mr. Lynch also served as the Chief Executive Officer of the
Company from May 1995 to November 1995. Mr. Lynch served as Chairman and Chief
Executive Officer of La Salsa from February 1999 until June 1999 and as Chairman
of the Board of Regent Pacific Management Corporation from July 1998 until
October 1999. Since October 1999, Mr. Lynch has been the Chairman of Market
Value Partners Company, an investment firm, which position he also held from
July 1989 to March 1995. From March 1998 to June 1998, Mr. Lynch served as
Chairman and Chief Executive Officer of Arrowhead Mills, Inc. From July 1988 to
June 1989, he was the President and Chief Executive Officer of Levolor
Corporation, a manufacturer of window coverings. From September 1986 to
June 1988, he was the Chairman and Chief Executive Officer of DHL
Airways, Inc., a provider of express courier service. From 1978 to 1986,
Mr. Lynch was the Chairman of the Board and Chief Executive Officer of Saga
Corporation, a diversified restaurant and food services company. Mr. Lynch is
also a Director of Pacific Mutual Holding Company, SRI International, Age
Wave, Inc., Shari's Management Corporation and Spectrum Organic Products, Inc.,
and is a director for a number of Internet start-up companies.
Mr. Krantz has served as a director of the Company since March 1998. From
August 1995 to the present, Mr. Krantz has been self-employed serving on the
Board of Directors of and/or consulting with several of the major restaurant
chains in the United States and internationally. Mr. Krantz has spent more than
20 years in various executive positions within the foodservice industry. From
January 1994 to August 1995, Mr. Krantz served as President and Chief Operating
Officer of Family Restaurants, Inc., a $1.2 billion company which owned and
operated the El Torito, Chi-Chi's, Reuben's, Charley Brown's, Coco's, Carrows
and jojos chains. From March 1993 to January 1994, Mr. Krantz served as the
Chief Operating Officer for Restaurant Enterprises Group, and served as
President of its Family Restaurant Division from January 1989 to January 1994.
From January 1979 to January 1987, Mr. Krantz was the Senior Vice President of
Marketing and Concept Development for Denny's Restaurants. Mr. Krantz
6
<PAGE>
received a Bachelor of Arts degree from the University of Pennsylvania and a
Masters in Business Administration from the Stanford University Graduate School
of Business. Before starting a career in the foodservice industry, Mr. Krantz
held a variety of product management positions at General Foods Corporation and
senior account management positions at several major advertising agencies.
Mr. Krantz is also a Director of Sizzler International, Inc. and Tam
Restaurants, Inc.
Mr. Jefferson was elected President and Chief Executive Officer and a
Director of the Company in February 1997. From June 1996 to February 1997
Mr. Jefferson was an independent consultant. From June 1993 to June 1996,
Mr. Jefferson was President and Chief Executive Officer of Cucina
Holdings, Inc., the operator of Java City coffee and bakery. From March 1990 to
June 1993, he was an independent consultant and independent restaurant operator.
From May 1987 to March 1990, Mr. Jefferson served as President and Chief
Executive Officer of Skipper's, Inc. From May 1986 to April 1987, Mr. Jefferson
served as President of Kings Table, Inc. Earlier in his career, Mr. Jefferson
was with Pizza Hut, Inc. for five (5) years, including three years as Senior
Vice President of operations, and was with Saga Corporation for ten (10) years,
including two years as Regional Director of the Southeast and Caribbean.
During the fiscal year ended December 26, 1999, the Board held six
(6) meetings. No director attended fewer than 100% of such meetings of the Board
during the period that he served as a director of the Company.
The Company does not have a standing Nominating Committee, but does have an
Audit and Finance Committee and a Compensation Committee.
The Audit and Finance Committee's function is to review, with the Company's
independent auditors and management, the results of the examination of the
Company's financial statements by the independent auditors and the independent
auditors' opinion. The Audit and Finance Committee also approves all
professional services performed by the independent auditors, recommends the
retention of the independent auditors to the Board, subject to ratification by
the stockholders, and periodically reviews the Company's accounting policies and
internal accounting and financial controls. The Audit and Finance Committee at
the beginning of fiscal 1999 consisted of four non-employee directors of the
Company, Messrs. Boppell, Curtis, Hays and Krantz. The Audit and Finance
Committee held two (2) meetings during the fiscal year ended December 26, 1999.
The Compensation Committee's function is to review and recommend executive
compensation, including officer salary levels, incentive compensation programs,
and stock option grants. The Compensation Committee of the Board of Directors at
the beginning of fiscal 1999 consisted of four non-employee directors of the
Company, Messrs. Boppell, Curtis, Hays and Krantz. The Compensation Committee
held two (2) meetings during the fiscal year ended December 26, 1999. For
additional information concerning the Compensation Committee, see "COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES
LISTED ABOVE.
7
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information concerning the annual and
long-term compensation of the Chief Executive Officer of the Company and the
four other most highly-compensated executive officers of the Company as of
December 26, 1999, whose total salary and incentive compensation for the fiscal
year ended December 26, 1999 exceeded $100,000 for services in all capacities to
the Company. The following table also sets forth the total salary and incentive
compensation for each of such executive officers for the fiscal years ended
December 27, 1998 and December 28, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
------------------------------------ ------------
SECURITIES
NAME AND PRINCIPAL OTHER UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS ANNUAL OPTIONS COMPENSATION
- ---------------------------- -------- -------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Everett F. Jefferson(3)..... 1999 $287,702 $20,000 $11,338(1) 75,000 $ 549(2)
President and Chief 1998 $296,030 $ 0 $11,216(1) 25,000 $ 729(2)
Executive Officer; 1997 $231,145 $14,000 $ 7,685(1) 220,000 $154,068(4)
Director
David E. Pertl(5)........... 1999 $155,809 $12,000 $11,929(1) 15,000 $ 132(2)
Senior Vice President, 1998 $153,106 $ 0 $11,906(1) 25,000 $ 181(2)
Chief
Financial Officer and 1997 $126,606 $21,000(6) $11,260(7) 240,000 $ 55,649(8)
Treasurer
Tim G. O'Shea............... 1999 $144,897 $12,000 $12,000(1) 15,000 $ 213(2)
Senior Vice President, 1998 $145,832 $ 0 $12,000(1) 13,000 $ 299(2)
Marketing and Assistant 1997 $136,490 $ 9,000(6) $12,000(9) 4,000 $ 288(2)
Secretary
Joan M. Miller.............. 1999 $102,290 $ 9,000 $11,707(1) 15,000 $ 132(2)
Senior Vice President, 1998 $102,956 $ 0 $12,389(1) 9,000 $ 181(2)
Human Resources and 1997 $ 96,211 $ 0 $ 5,000(1) 3,500 $ 166(2)
Corporate Secretary
Tina E. Freedman............ 1999 $ 96,849 $ 9,000 $12,000(1) 15,000 $ 57(2)
Senior Vice President, 1998 $ 97,285 0 $13,000(1) 9,000 $ 181(4)
Product Development & 1997 $ 90,817 0 $ 5,000(1) 5,000 $ 55(4)
Purchasing
</TABLE>
- ------------------------
1 Represents car allowance.
2 Represents Premium Payments.
3 Mr. Jefferson joined the Company in February 1997.
4 Includes $92,688 in relocation expenses paid in fiscal year 1997, $61,000 in
relocation expenses accrued in fiscal year 1997 and paid in fiscal year 1998
and $381 in Premium Payments.
5 Mr. Pertl joined the Company in January 1997.
6 Represents bonus paid pursuant to offer letter.
7 Includes $250 in telephone allowance and $11,010 in car allowance.
8 Includes $55,489 in relocation expenses and $161 in Premium Payments
9 Includes $375 in telephone allowance and $11,625 in car allowance.
8
<PAGE>
The following table provides the specified information concerning grants of
options to purchase the Company's Common Stock made during the year ended
December 26, 1999 to the persons named in the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS IN FISCAL 1999 FOR OPTION TERM(1)
- ------------------------------------------------------------------------------- ---------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE EXPIRATION
NAME GRANTED(2) FISCAL YEAR PRICE(3) DATE 5% 10%
- ------------------------- ---------- ------------ ----------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Everett F. Jefferson..... 24,167 9.09% $2.31 05/20/09 $35,108.53 $88,971.90
25,833 9.71 $2.31 05/20/09 $37,528.80 $95,105.35
12,501 4.70 $1.75 12/01/09 $18,160.79 $34,865.91
12,499 4.70 $1.75 12/01/09 $13,755.97 $34,860.33
David E. Pertl........... 15,000 5.64 $1.75 12/01/09 $16,508.48 $41,835.74
Tim G. O'Shea............ 15,000 5.64 $1.75 12/01/09 $16,508.48 $41,835.74
Joan M. Miller........... 15,000 5.64 $1.75 12/01/09 $16,508.48 $41,835.74
Tina E. Freedman......... 15,000 5.64 $1.75 12/01/09 $16,508.48 $41,835.74
</TABLE>
- ------------------------
1 Potential gains are net of exercise price, but before taxes associated with
exercise. These amounts represent certain assumed rates of appreciation
only, based on the Securities and Exchange Commission rules. Actual gains,
if any, on stock option exercises are dependent on the future performance of
the Common Stock, overall market conditions and the optionholders' continued
employment through the vesting period. The amounts reflected in this table
may not necessarily be achieved.
2 These options vest and become exercisable 25% one year from the date of
grant, and 1/48 per month for each complete calendar month of continuous
employment thereafter. Options granted to Mr. Jefferson on May 21, 1999 vest
and become exercisable 20% one year from the date of grant, and 1/60 per
month for each complete calendar month of continuous employment thereafter.
See also "EXECUTIVE COMPENSATION AND OTHER MATTERS--Change in Control and
Severance Arrangements."
3 All options were granted at market value on the date of grant.
9
<PAGE>
The following table provides the specified information concerning
unexercised options held as of December 26, 1999, by the persons named in the
Summary Compensation Table:
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END VALUES(1)
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT 12/26/99 AT 12/26/99(1),(2)
---------------------------------- ----------------------------------
NAME EXERCISABLE(3) UNEXERCISABLE EXERCISABLE(3) UNEXERCISABLE
- ------------------------------------ -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Everett F. Jefferson................ 105,830 214,170 $ 0(4) $4,680
David E. Pertl...................... 22,049 41,951 $947 $8,103
Tim G. O'Shea....................... 13,415 28,585 $662 $7,075
Joan M. Miller...................... 13,349 24,151 $473 $6,392
Tina E. Freedman.................... 13,582 25,918 $473 $6,392
</TABLE>
- ------------------------
1 Values are net of exercise price. None of the persons named in the Summary
Compensation Table exercised options during fiscal 1999.
2 Based on the 1999 year-end market price per share of $2.062 on December 23,
1999, the last trading date of the Company's fiscal year.
3 Company stock option grants made prior to December 2, 1999 generally vest
over five years and stock option grants made after December 1, 1999
generally vest over four years. All option grants are exercisable only to
the extent vested. See "Option Grants in Last Fiscal Year."
4 None of such shares have value in excess of their exercise price, based on
the December 23, 1999 closing price of $2.062.
COMPENSATION OF DIRECTORS
Each nonemployee director of the Company, except for the Chairman of the
Board, receives $10,000 cash compensation per year, $2,500 of which is payable
at the end of each full quarter of services. Each nonemployee director of the
Company also receives $750 cash compensation for each meeting of the Board of
Directors that he attends. Each nonemployee director who is a member of a
committee of the Board of Directors receives $500 cash compensation for
attendance at each committee meeting. Each nonemployee director serving as a
chairperson of a committee of the Board of Directors receives $1,000 cash
compensation for such service during a fiscal year. The directors of the Company
are reimbursed for expenses incurred in connection with attendance at Board of
Directors or committee meetings. During fiscal year 1999, Charles A. Lynch
received $70,000 cash compensation for services provided as Chairman of the
Board, and a consultant to the Company. During fiscal year 2000, Mr. Lynch will
receive $70,000 for these services.
During fiscal 1993, the Company adopted, and the stockholders approved, an
amendment to the Company's 1988 Stock Option Plan (the "Option Plan") to permit
initial and annual automatic stock option grants ("Director Options") to certain
nonemployee directors. Under the Option Plan, a director receives an initial
automatic grant of 10,000 shares (an amount equal to $100,000 divided by the
fair market value of a share of the Company's common stock on the date of the
option grant, rounded to the nearest whole share, up to a maximum of 10,000
shares) upon joining the Board of Directors. In December 1999, each of the five
eligible nonemployee directors received an annual option grant.
Messrs. Boppell, Curtis, Hays, Krantz and Lynch each received an option to
purchase 3,000 shares of the
10
<PAGE>
Company's common stock (an amount equal to $50,000 divided by the fair market
value of a share of the Company's common stock on the date of the option grant,
rounded to the nearest whole share, up to a maximum of 3,000 shares).
CHANGE IN CONTROL AND SEVERANCE ARRANGEMENTS
On or about January 30, 1997 the Company provided Everett F. Jefferson with
an employment offer letter appointing him President and Chief Executive Officer.
The offer letter provided that if the Company terminates Mr. Jefferson's
employment without cause after the first two years of employment, Mr. Jefferson
would be entitled to severance pay equal to one year's salary at the
then-current rate. "Cause" is defined as (a) the willful and intentional failure
substantially to perform his duties (other than because of physical or mental
incapacity), (b) the commission of an illegal act in connection with his
re-employment, or (c) the commission of any act which falls outside the ordinary
course of his responsibilities and which exposes the Company to a significant
level of undue liability. A determination of "cause" requires the affirmative
vote of at least two-thirds of all members of the Board of Directors. In the
event of a change in control of the Company, Mr. Jefferson's options to purchase
the Company's Common Stock would become immediately vested and exercisable, and
if he were terminated by the acquiring company, he would also be entitled to the
above-described severance payments. Under the terms of the offer letter, "Change
in Control" means an ownership change in which the stockholders of the Company
before such ownership change do not retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the Company.
On or about January 24, 1997, the Company provided David Pertl with an
employment offer letter appointing him Vice President and Chief Financial
Officer. The offer letter provided that if the Company terminates Mr. Pertl's
employment without cause, Mr. Pertl would receive severance pay equal to one
year's salary at the then-current rate. "Without cause" is defined as a layoff,
approved by the President and/or Chairman of the Company, or a separation,
voluntary or involuntary, as a result of a transfer of control. "Transfer of
control" is defined as an ownership change in which the stockholders of the
Company before such ownership change do not retain, directly or indirectly, at
least a majority of the beneficial interest in the voting stock of the Company.
In the event of a change in control of the Company, Mr. Pertl's options to
purchase the Company's Common Stock would become immediately vested and
exercisable, and if he were terminated by the acquiring company, he would also
be entitled to the above-described severance payments.
Beginning July 18, 1996, the Company has entered into Severance Agreements
with each of its senior vice presidents (other than such officers who have other
severance arrangements). These severance agreements provide that in the event of
a layoff or a "Transfer of Control," the executive would be entitled to receive
severance pay of nine months' continued salary. In March 1999, the Company
amended the form of Severance Agreement to provide that severance pay shall be
payable upon a termination without cause in addition to a layoff or a change of
control. Under the terms of these severance agreements, "Transfer of Control"
means an ownership change in which the stockholders of the Company before such
ownership change do not retain, directly or indirectly, at least a majority of
the beneficial interest in the voting stock of the Company.
The Option Plan provides that, with respect to options other than Director
Options, in the event of certain mergers, sale of assets, sale or exchange by
the stockholders of their shares, or a liquidation or dissolution of the
Company, in which the stockholders do not retain at least a majority of the
voting stock of the Company or its successor (a "Transfer of Control"), the
Board of Directors may arrange with the surviving, continuing, successor, or
purchasing corporation, as the case may be (the "Acquiring Corporation"), to
either assume the Company's rights and obligations under stock options
outstanding under the Option Plan (the "Options"), or substitute options for the
Acquiring Corporation's stock for such outstanding Options. Any Options which
are neither assumed or substituted for by the Acquiring
11
<PAGE>
Corporation nor exercised as of the date of the Transfer of Control will
terminate effective as of the date of the Transfer of Control.
All shares subject to Director Options will become 100% vested and
exercisable in the event of a Transfer of Control. Any Director Option not
exercised as of the date of a Transfer of Control or assumed or substituted for
by the Acquiring Corporation will terminate as of such date.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of Mr. Krantz, Mr. Boppell,
Mr. Curtis and Mr. Hays. No interlocking relationships exist between any member
of the Company's Compensation Committee and any member of any other Company's
compensation committee. The Compensation Committee makes recommendations
regarding the Company's employee stock plans and makes decisions concerning
salaries and bonus compensation for executive officers of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors at the beginning of
fiscal 1999 consisted of four non-employee directors of the Company,
Messrs. Boppell, Curtis, Hays and Krantz.
The Compensation Committee is responsible for setting and administering the
policies governing compensation of the executive officers of the Company,
including cash compensation and stock ownership programs. The goals of the
Company's compensation policy are to attract and retain executive officers who
contribute to the overall success of the Company, by offering compensation which
is competitive in the restaurant industry for companies of the Company's size,
to motivate executives to achieve the Company's business objectives, and to
reward them for their achievements. The Company generally uses salary, incentive
compensation, and stock options to meet these goals.
For fiscal year 1999, salaries were set by the Compensation Committee for
each executive officer, including the Chief Executive Officer, within the range
of salary for similar positions in other companies of similar size in Company's
industry, based on available published surveys, which do not specifically
identify companies, obtained by the Company's Human Resources Department, as
adjusted for the Company's projected revenue levels and regional salary
differences. Salaries were generally targeted at the median of salaries among
comparable companies, although the salaries are also adjusted based on each
officer's experience, tenure, and prior performance. The Chief Executive
Officer's salary for fiscal 1999 was within the fourth quartile of the
applicable range of salaries for chief executive officers in similar-sized
companies in the restaurant industry and within the second quartile of the
applicable range of salaries for chief executive officers in all surveyed
companies in the restaurant industry.
In preparing the performance graph for this Proxy Statement, the Company has
selected the University of Chicago Graduate School of Business Center for
Research in Security Prices Index for Nasdaq Retail Eating and Drinking Places
Stocks ("Nasdaq RE&D") as its peer group. The companies that the Company
included in its stratified salary surveys are not necessarily those included in
the indices, as such companies may not be competitive with the Company for
executive talent or may not be publicly traded on the Nasdaq National Market.
The Company adopted an Officer Incentive Plan for fiscal 1999. The purpose
of the plan was to reward officers of the Company for accomplishments in excess
of the established plan. Only officers of the Company at or above vice-president
level were eligible to participate. The participants were to share twenty-five
percent (25%) of the before-tax earnings above plan based on a predetermined
percentage for each officer. No payments were made under this Plan in 1999;
however, based upon the Company's improved operating performance, the
Compensation Committee approved the payment of discretionary bonuses totaling
$62,000 to officers for 1999. The Company adopted a separate Officer Incentive
Plan for fiscal 2000. The purpose of the new plan is to reward officers of the
Company for accomplishments in
12
<PAGE>
excess of the established plan. Only officers of the Company at or above
vice-president level are eligible to participate. The participants will share in
a pool based upon fifteen percent (15%) of the total participants' salaries as
of December 27, 1999 at plan plus twenty-five percent (25%) of the before-tax
earnings above plan based on a predetermined percentage for each officer. In
addition, the Company has adopted a separate Incentive Plan for fiscal 2000 for
Steve Adkins, the Company's Senior Vice President, Operations. The purpose of
the plan is to reward Mr. Adkins for sales and operating profit based upon the
established plan. Mr. Adkins is eligible to receive a percentage of the Regional
Manager's incentive payments, as well as a predetermined percentage of his
salary based on achievements calculated as a percentage of the established plan.
The Company believes that employee equity ownership provides executive
officers with significant additional motivation to maximize value for the
Company's stockholders. Because the stock options are granted at the prevailing
market price, the stock options will only have value if the Company's stock
price increases over the exercise price. Therefore, the Committee believes that
stock options will serve to align the interests of executive officers closely
with other stockholders because of the direct benefit executive officers receive
through improved stock performance.
In fiscal 1999, the Compensation Committee recommended to the Board of
Directors, and the Board of Directors approved, stock option grants to the
executive officers. Grants in fiscal 1999 were recommended on the basis of the
achievement of clearly defined objectives, and in each case the size of each
grant was based upon the relative seniority and responsibilities of each
executive officer, historical and expected contributions of each executive
officer to the Company, and previous stock option grants.
Options were granted with exercise prices equal to the fair market value per
share of Common Stock on the date of the grant, as determined by the Board of
Directors. In order to encourage executive officers to remain in the Company's
employ, stock option grants prior to December 2, 1999 generally vest over five
(5) years. Options granted after December 1, 1999 vest over a four-year period.
All options granted by the Company are exercisable only to the extent vested.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Effective January 1, 1994, the Internal Revenue Code (the "Code") was
amended to impose a limit under section 162(m) on the amount of compensation
which may be deducted by a publicly-held corporation with respect to the
corporation's chief executive officer and its four other most highly-
compensated officers, set at $1,000,000 per executive per year. Exemptions from
this deductibility limit are provided for certain types of "performance-based
compensation," including compensation related to stock option plans meeting
certain criteria. In order to permit compensation under the Company's 1988 Stock
Option Plan (the "Option Plan") to qualify for this exemption, the Board of
Directors concluded that it would be advisable to establish certain restrictions
on the granting of options under the Option Plan. These restrictions were
approved at the 1994 Annual Meeting of Stockholders. The Compensation Committee
does not believe that other components of the Company's compensation will be
likely in the aggregate to exceed $1,000,000 for any executive officer in any
year in the foreseeable future, and therefore concluded that no further action
with respect to qualifying its executive compensation for deductibility of such
compensation was necessary at this time. The policy of the Committee is to
qualify executive compensation for deductibility under the applicable tax laws
as practicable. In the future, the Committee will continue to evaluate the
advisability of qualifying the deductibility of such compensation.
COMPENSATION COMMITTEE
Barry E. Krantz
Charles L. Boppell
Vern O. Curtis
Carl R. Hays
13
<PAGE>
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who beneficially own more than 10% of
the Company's Common Stock to file reports of ownership with the Securities and
Exchange Commission. These persons are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms that they file.
Based solely on our review of the forms furnished to the Company and written
representations from certain reporting persons, the Company believes that all
filing requirements applicable to the Company's executive officers, directors
and persons who beneficially own more than 10% of the Company's Common Stock
were complied with in fiscal 1999, except that a late Form 5, Annual Statement
of Change in Beneficial Ownership, was filed by each of the following persons
for the number of transactions set forth next to their name:
- Mr. Lynch, one transaction.
- Mr. Jefferson, six transactions.
- Mr. Hays, one transaction.
- Mr. Curtis, one transaction.
- Mr. Boppell, one transaction.
- Mr. Krantz, one transaction.
- Mr. Pertl, three transactions.
- Mr. O'Shea, two transactions.
- Ms. Miller, three transactions.
- Ms. Freedman, two transactions.
14
<PAGE>
COMPARISON OF STOCKHOLDER RETURN
Set forth below is a line graph comparing the annual percentage change in
the cumulative total return on the Company's Common Stock with the cumulative
total return of The University of Chicago Graduate School of Business Center for
Research in Security Prices ("CRSP") Index for the Nasdaq Stock Market (U.S.
Companies) ("Nasdaq US") and the CRSP Index for Nasdaq Retail Eating and
Drinking Places Stocks ("Nasdaq RE&D") for the period commencing on
December 26, 1994(1) and ending on December 26, 1999(2).
COMPARISON OF CUMULATIVE TOTAL RETURN FROM DECEMBER 23, 1994 THROUGH
DECEMBER 23, 1999(1)
FRESH CHOICE, INC., CRSP INDEX FOR NASDAQ STOCK MARKET (U.S. COMPANIES) AND CRSP
INDEX FOR NASDAQ RETAIL EATING AND DRINKING PLACES STOCKS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FRESH NASDAQ NASDAQ
<S> <C> <C> <C>
Choice US R&E
12/23/94 $100.00 $100.00 $100.00
12/29/95 $64.10 $143.30 $123.70
12/27/96 $44.90 $176.50 $120.00
12/26/97 $33.30 $207.90 $101.30
12/24/98 $15.70 $300.20 $90.30
12/23/99 $21.20 $539.30 $72.00
</TABLE>
1 Assumes that $100.00 was invested on December 23, 1994 in the Company's
Common Stock at the closing sales price of $9.75 and at the closing sales
price for each index on that date and that all dividends were reinvested. No
dividends have been declared on the Company's Common Stock. Stockholder
returns over the indicated period should not be considered indicative of
future stockholder returns.
2 The last trading days in each of the fiscal years ended December 25, 1994,
December 31, 1995, December 29, 1996, December 28, 1997, December 27, 1998
and December 26, 1999 were December 23, 1994, December 29, 1995,
December 27, 1996, December 26, 1997, December 24, 1998 and December 23,
1999, respectively.
15
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company selected, and by the affirmative vote
of a majority of the votes cast at the Annual Meeting of Stockholders held on
May 20, 1999, the stockholders approved Deloitte & Touche LLP as independent
accountants to audit the financial statements of the Company for the fiscal year
1999. No event described in paragraph (a)(1)(v) of Item 304 of Regulations S-K
has occurred within the Company's fiscal year ended December 26, 1999.
The Board of Directors of the Company has selected Deloitte & Touche LLP as
independent accountants to audit the financial statements of the Company for the
fiscal year ending December 31, 2000. A representative of Deloitte & Touche LLP
is expected to be present at the Annual Meeting with the opportunity to make a
statement if the representative desires to do so, and is expected to be
available to respond to appropriate questions.
The affirmative vote of a majority of the votes cast at the Annual Meeting
of Stockholders, at which a quorum representing a majority of all outstanding
shares of Common Stock of the Company is present and voting, either in person or
by proxy, is required for approval of this proposal. Abstentions and broker
non-votes will each be counted as present for purposes of determining the
presence of a quorum, but will not be counted as having been voted on the
proposal. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANT'S
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented at the next Annual
Meeting of the Stockholders of the Company must be received by the Company at
its offices at 2901 Tasman Drive, Suite 109, Santa Clara, California 95054, no
later than December 6, 2000, and must satisfy the conditions established by the
Securities and Exchange Commission for stockholder proposals in order to be
included in the Company's proxy statement for that meeting.
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting is
as set forth above. If any other matter or matters are properly brought before
the meeting, or any adjournment thereof, it is the intention of the persons
named in the accompanying form of proxy to vote the proxy on such matters in
accordance with their best judgment.
By Order of the Board of Directors
/s/ JOAN M. MILLER
JOAN M. MILLER
SECRETARY
April 6, 2000
16
<PAGE>
FRESH CHOICE, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Everett F. Jefferson with full power of
substitution to represent the undersigned and to vote all the shares of the
stock of Fresh Choice, Inc. (the "Company") which the undersigned is entitled
to vote at the Annual Meeting of Stockholders of the Company to be held at
the Santa Clara Convention Center, 5001 Great America Parkway, Santa Clara,
California, on Thursday, May 18, 2000 at 2:00 p.m. Pacific Daylight Time,
and at any adjournment thereof (1) as hereinafter specified upon the
proposals listed below and as more particularly described in the Company's
Proxy Statement, receipt of which is hereby acknowledged, and (2) in their
discretion upon such other matters as may properly come before the meeting.
The undersigned hereby acknowledges receipt of the Company's 1999 Annual
Report to Stockholders.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
SIGN AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK
MAY BE REPRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, SUCH SHARES SHALL BE VOTED IN FAVOR OF
PROPOSALS 1 and 2.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- FOLD AND DETACH HERE -
<PAGE>
Please mark your votes as indicated in this example. /X/
A VOTE FOR THE FOLLOWING PROPOSALS IS RECOMMENDED BY THE BOARD OF DIRECTORS:
Proposal 1. Election of Class II Directors listed below:
FOR all nominees listed (except as marked to the contrary) / /
WITHHOLD AUTHORITY to vote for all nominees listed / /
(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through that nominee's name in the list below.)
Carl R. Hays Charles A. Lynch
Proposal 2. To ratify the appointment of Deloitte & Touche LLP as the
Company's Independent accountants for the fiscal year ending December 31, 2000
FOR / / AGAINST / / ABSTAIN / /
Signature(s) _______________________________ Date:_________________
Sign exactly as your name(s) appears on your stock certificate. If shares of
stock stand of record in the names of two or more persons or in the name of
husband and wife, whether as joint tenants or otherwise, both or all of such
persons should sign the above Proxy. If shares of stock are held of record by
a corporation, the Proxy should be executed by the President or Vice
President and the Secretary or Assistant Secretary, and the corporate seal
should be affixed thereto. Executors or administrators or other fiduciaries
who execute the above Proxy for a deceased stockholder should give their full
title. Please date the Proxy.
- FOLD AND DETACH HERE -
