SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
GROW BIZ INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
[LOGO]
GROW BIZ(R)
INTERNATIONAL
-----------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 26, 1999
-----------------------------
TO THE SHAREHOLDERS OF GROW BIZ INTERNATIONAL, INC.
Notice is hereby given to the holders of the shares of Common Stock of
Grow Biz International, Inc. that the Annual Meeting of Shareholders of the
Company will be held at the Company's corporate offices, 4200 Dahlberg Drive,
Minneapolis, Minnesota on Wednesday, May 26, 1999 at 4:00 p.m. Central Daylight
Time, to consider and act upon the following matters:
1. To set the number of members of the Board of Directors at six.
2. To elect six directors to serve for a term of one year.
3. To ratify the appointment of Arthur Andersen LLP as independent
auditors for the current fiscal year.
4. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Shareholders of record at the close of business on April 28, 1999 will
be entitled to vote at the meeting and adjournments of the meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. EVEN IF YOU DO NOT
PLAN TO ATTEND THE MEETING, WE URGE YOU TO SIGN, DATE AND RETURN THE PROXY AT
ONCE IN THE ENCLOSED ENVELOPE.
By the Order of the Board of Directors
/s/ Gaylen L. Knack
Gaylen L. Knack
Secretary
Dated May 5, 1999
<PAGE>
GROW BIZ INTERNATIONAL, INC.
4200 DAHLBERG DRIVE
MINNEAPOLIS, MINNESOTA 55422-4837
ANNUAL MEETING OF SHAREHOLDERS
MAY 26, 1999
PROXY STATEMENT
GENERAL
The Annual Meeting of Shareholders of Grow Biz International, Inc.
("Company") will be held on Wednesday, May 26, 1999, at 4:00 p.m., Central
Daylight Time, at the Company's corporate offices, 4200 Dahlberg Drive,
Minneapolis, Minnesota, for the purposes set forth in the Notice of Annual
Meeting of Shareholders.
The enclosed proxy is solicited by the Board of Directors of the
Company. Such solicitation is being made by mail and may also be made by
directors, officers and regular employees of the Company personally or by
telephone. Any proxy given pursuant to such solicitation may be revoked by the
shareholder at any time prior to the voting thereof by so notifying the Company
in writing at the above address, attention: Corporate Secretary, or by appearing
in person at the meeting. Shares represented by proxies will be voted as
specified in such proxies, and if no choice is specified, will be voted in favor
of (1) setting the number of members of the Board of Directors at six, (2) the
Board of Directors' nominees named in this proxy statement and (3) the
appointment of Arthur Andersen LLP as independent auditors for the current
fiscal year.
Common stock, no par value per share ("Common Stock"), of which there
were 5,158,128 shares outstanding on the record date, constitutes the only class
of outstanding voting securities issued by the Company. Each shareholder will be
entitled to cast one vote in person or by proxy for each share of Common Stock
held by the shareholder. Only shareholders of record at the close of business on
April 28, 1999, will be entitled to vote at the meeting.
The affirmative vote of the majority of shares present in person, or
represented by proxy, at this Annual Meeting of Shareholders is required to set
the number of directors, elect each director and to approve Arthur Andersen LLP
as independent auditors for the current fiscal year. A quorum is achieved when
51% of the outstanding shares are present in person or by proxy. Shares voted as
abstentions on any matter (or a "withhold authority" vote as to directors) will
be counted as present and entitled to vote for purposes of determining a quorum
and for purposes of calculating the vote with respect to such matter, but will
not be deemed to have been voted in favor of such matter. If a broker submits a
"non-vote" proxy, indicating that the broker does not have discretionary
authority to vote certain shares on a particular matter, those shares will be
counted as present for purposes of determining a quorum, but will not be
considered present and entitled to vote for purposes of calculating the vote
with respect to such matter.
All of the expenses involved in preparing, assembling and mailing this
proxy statement and the material enclosed herewith will be paid by the Company.
The Company may reimburse banks, brokerage firms and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
material to beneficial owners of stock. This proxy statement and accompanying
form of proxy are first being mailed to shareholders on or about May 5, 1999.
<PAGE>
ELECTION OF DIRECTORS
(Proposals #1 and #2)
At the meeting, the Board of Directors of the Company is to be elected
to hold office until the 2000 Annual Meeting or until successors are elected and
have qualified. The Bylaws of the Company provide that the number of directors
of the Company shall be fixed by the shareholders, subject to increase by the
Board of Directors. Currently, the authorized size of the Board of Directors is
six. The Board recommends that the shareholders set the number of directors at
six and elect the nominees named below. Each nominee is currently a director of
the Company whose current term expires at the 1999 Annual Meeting.
Shares represented by executed proxies will be voted, if authority to
do so is not withheld, for the election of the nominees named below, unless one
or more of such nominees should become unavailable for election, in which event
such share shall be voted for the election of such substitute nominees as the
Board of Directors may propose. Each person nominated has agreed to serve if
elected, and the Company knows of no reason why any of the listed nominees would
be unavailable to serve.
PRINCIPAL OCCUPATION AND BUSINESS DIRECTOR
NAME AND AGE EXPERIENCE FOR PAST FIVE YEARS SINCE
------------ ------------------------------ -----
K. Jeffrey Dahlberg(1) Mr. Dahlberg has served as Chairman of 1990
Age: 45 the Board of Directors of the Company
since January 1990. Mr. Dahlberg served
as President and Chief Executive Officer
of Dahlberg, Inc., a publicly-held
manufacturer and distributor of hearing
aids and franchisor of hearing aid
retail stores, from June 1988 to
December 1992 and as a director of
Dahlberg, Inc. until July 1993. He has
served as Chairman of the Board of
Franchise Business Systems, Inc., a
franchise consulting firm, since July
1988.
Ronald G. Olson Mr. Olson has served as President, Chief 1990
Age: 58 Executive Officer and a Director of the
Company since January 1990. Mr. Olson
has been President and Chief Executive
Officer of Franchise Business Systems,
Inc. since July 1988.
Randel S. Carlock(2) Mr. Carlock has served as a Director of 1993
Age: 50 the Company since September 1993. He
currently serves as a OPUS Professor of
Family Enterprise at the University of
St. Thomas Graduate School of Business,
a position held since 1990. He also
served as Chairman of the Board of Audio
King, Inc., a Minneapolis consumer
electronics company, from March 1990 to
June 1997.
Dennis J. Doyle(1)(3) Mr. Doyle has served as a Director of 1993
Age: 46 the Company since June 1993. Since 1978,
he has served as President and Chief
Executive Officer of Welsh Companies,
Inc., a real estate development and
management firm, and Chairman of the
Board of Welsh Construction Corp. Mr.
Doyle also serves as a director of the
Rottlund Company.
2
<PAGE>
Bruce C. Sanborn(1)(3) Mr. Sanborn has served as a Director of 1993
Age: 46 the Company since June 1993. Since 1990
he has served as Chairman of the Board
for the North Central Life Insurance
Company and Financial Life Companies,
Inc.
Robert C. Pohlad(2) Mr. Pohlad has served as a Director of 1993
Age: 44 the Company since September 1993. Since
1987, he has served as President and a
Director of Pohlad Companies, a
Minneapolis based holding company active
in investments and soft drink
manufacturing and distribution. Mr.
Pohlad also currently serves as a
Director of Mesaba Holdings, Inc., Delta
Beverage Group, Inc. and Pepsi-Cola
Puerto Rico Bottling Company.
- ------------------------
(1) Member of Executive Committee
(2) Member of Audit Committee
(3) Member of Compensation Committee
MEETING OF THE BOARD OF DIRECTORS AND CERTAIN COMMITTEES
The Board of Directors of the Company has standing Executive, Audit
and Compensation Committees which have a current membership as indicated in the
foregoing section. The Board of Directors has no standing Nominating Committee.
The Executive Committee may exercise all of the powers and authority
of the Board of Directors, except as otherwise provided under the Minnesota
Business Corporation Act. The Executive Committee was formed in December 1993
and held no meetings during fiscal 1998.
The Audit Committee makes recommendations as to the selection of
auditors and their compensation and reviews with the auditors the scope of the
annual audit, matters of internal control and procedure, the audit results and
reports and other general matters relating to the Company's accounts, records,
controls and financial reporting. The Audit Committee was formed in July 1993
and held one meeting during fiscal 1998.
The Compensation Committee reviews and recommends to the Board of
Directors the compensation guidelines for executive officers, other key
employees and nonemployee directors and the composition and levels of
participation in incentive compensation plans. The Compensation Committee
administers the Company's 1992 Stock Option Plan including determining the
participants, the number of shares subject to option and the terms and
conditions of exercise. During fiscal 1998, the Compensation Committee held two
meetings.
During fiscal 1998, the Board of Directors of the Company met seven
times. All directors attended at least 85% of the meetings of the Board of
Directors and committees of the Board of Directors on which they served.
3
<PAGE>
DIRECTOR COMPENSATION
Each nonemployee director of the Company receives $500 for each board
and committee meeting attended. Effective August 23, 1993, Dennis J. Doyle and
Bruce C. Sanborn, the only nonemployee directors at the time, were each granted
an option to purchase 25,000 common shares at an exercise price of $10.00 per
share. Effective September 24, 1993, the Board of Directors adopted the Stock
Option Plan for Nonemployee Directors ("Directors Plan") which provides for an
automatic grant of an option to purchase 25,000 common shares upon the initial
election as a director. Pursuant to this Plan, Randel S. Carlock and Robert C.
Pohlad were each granted an option to purchase 25,000 common shares at an
exercise price of $15.00 per share. Effective November 21, 1995, the options
granted to Messrs. Carlock and Pohlad were canceled and replacement options to
purchase 25,000 common shares each at $10.00 per share, which was above the
market price on the effective date, were granted separate from the Directors
Plan. All options granted to nonemployee directors become exercisable in
increments through 1998, provided that the nonemployee director is still serving
as a director, and expire in 1999.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation earned
or awarded during each of the last three fiscal years to the Company's Chief
Executive Officer and the other four most highly compensated executive officers
serving as executive officers at the end of fiscal 1998 (the "Named Executive
Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION($)
--------------------------------
LONG-TERM
---------
COMPENSATION
------------
FISCAL OTHER ANNUAL OPTION ALL OTHER
------ ------------ ------ ---------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS(#) COMPENSATION
--------------------------- ---- ------ ----- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
K. Jeffrey Dahlberg 1998 200,000 - - - 43,044(1)
Chairman of the Board 1997 240,000 - - - 46,283
1996 220,000 - - - 44,392
Ronald G. Olson 1998 300,000 - - - 42,333(1)
Chief Executive Officer and 1997 260,000 - - - 45,181
President 1996 220,000 - - - 43,505
Ted R. Manley 1998 147,000 - - - 6,993(2)
Executive Vice President of 1997 126,000 90,750 - 10,000 5,610
Operations 1996 115,000 - - 20,000 4,509
Charles V. Kanan 1998 137,500 43,313 - - 7,234(2)
President Play It Again Sports 1997 137,500 - - 5,000 6,239
Division 1996 129,000 - - 20,000 4,904
Brad D. Tait 1998 122,000 10,065 - - 6,151(2)
President It's About Games 1997 116,000 87,000 - 10,000 3,391
Division 1996 80,000 - - 30,000 -
</TABLE>
4
<PAGE>
- ----------------------------
(1) Includes premiums paid in 1998 by the Company for term life insurance
coverage and the present value of the benefit to the executive of the
remainder of the premiums for split dollar life insurance coverage
paid by the Company on behalf of the named executive as follows: Mr.
Dahlberg - $33,702 and Mr. Olson - $32,594. Also includes 401(k)
Company matching contributions and profit sharing as follows: Mr.
Dahlberg - $9,342 and Mr. Olson - $9,739.
(2) Consists of 401(k) Company matching contributions and profit sharing.
OPTIONS GRANTED DURING FISCAL 1998
No options were granted to the Company's executive officers in 1998.
AGGREGATED OPTION EXERCISES DURING FISCAL 1998 AND FISCAL YEAR-END OPTION VALUES
The following table provides information relating to options
exercised by the Named Executive Officers during fiscal 1998 and the number and
value of options held at fiscal year-end. The Company does not have any
outstanding stock appreciation rights.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE YEAR-END(#) FISCAL YEAR-END($)(1)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------ ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
K. Jeffrey Dahlberg 0 0 0 / 0 0 / 0
Ronald G. Olson 50,000 206,250 15,000 / 0 29,250 / 0
Ted R. Manley 0 0 37,500 / 22,500 124,375 / 80,625
Charles V. Kanan 7,500 33,750 33,750 / 18,750 57,031 / 71,094
Brad D. Tait 0 0 5,000 / 35,000 27,175 / 139,025
</TABLE>
- ----------------------------
(1) Options are "in-the-money" if the fair market value of the underlying
shares at fiscal year end is greater than the exercise price. The
amounts set forth represent the difference between the fair market
value of the common shares on December 26, 1998 and the option
exercise price multiplied by the number of shares subject to the
option.
COMPLIANCE WITH SECTION 16(a)
Section 16(a) of the 1934 Act requires the Company's directors,
executive officers and persons who own more than ten percent of the Common Stock
of the Company to file with the Securities and Exchange Commission
("Commission") initial reports of beneficial ownership and reports of changes in
beneficial ownership of common shares of the Company. Directors, officers and
greater than ten percent shareholders are required by the regulations of the
Commission to furnish the Company with copies of all Section 16(a) reports they
file. The Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 26, 1998, all Form
3, Form 4 and Form 5 filing requirements were met, except a Form 4 was filed
late for K. Jeffrey Dahlberg for the month of January 1998.
COMPENSATION COMMITTEE REPORT
COMPENSATION COMMITTEE CHARTER. The purpose of the Compensation
Committee of the Board of Directors is to oversee compensation of officers, key
employees and nonemployee directors of the Company. The Committee's policy is to
insure that compensation programs contribute directly to the success of the
Company including enhanced share value. The Compensation Committee is comprised
of two members of the Board of Directors, neither of whom is an employee of the
Company.
5
<PAGE>
EXECUTIVE COMPENSATION POLICIES AND PROGRAMS. The Company's executive
compensation programs are designed to attract and retain qualified executives
and to motivate them to maximize shareholder investment by achieving strategic
Company goals. There are three basic components to the Company's executive
compensation program: base pay, annual incentive bonus and long-term,
equity-based incentive compensation in the form of stock options. Each component
is established in light of individual and Company performance, comparable
compensation programs in the Minneapolis/Saint Paul metropolitan area, equity
among employees and cost effectiveness. The initial recommendation with respect
to compensation of all executive officers was made by the Chief Executive
Officer and the Chairman of the Board.
Base Pay. Base pay is designed to be competitive, although
conservative, as compared to salary levels for equivalent positions at
comparable companies in the Minneapolis/Saint Paul metropolitan area.
The executive's actual salary within this competitive framework
depends on the individual's performance, responsibilities, experience,
leadership and potential future contribution.
Annual Incentive Bonus. In addition to base pay, each
executive is eligible to receive an annual cash bonus. For fiscal
1998, the bonus for certain executives was tied directly to the
earnings per share of the Company. The bonus for the other executives
was tied to specific performance criteria which were weighted based on
the importance of such criteria to the specific job. The Committee
believes that it is not in the best interests of the Company to
identify the specific earnings measures. Executives were eligible for
a bonus of up to 100% of their base pay.
Long-Term, Equity-Based Incentive Compensation. The
long-term, equity-based compensation program is tied directly to
shareholder return. Under the current program, long-term incentive
compensation consists of stock options that generally do not fully
vest until after four years. Stock options are awarded with an
exercise price equal to the fair market value of the Company's common
shares on the date of grant. Accordingly, the executive is rewarded
only if the shareholders receive the benefit of appreciation in the
price of the Common Stock.
Because long-term options vest over time, the Company
periodically (generally once each year) grants new options to provide
continuing incentives for future performance. The size of the previous
grants and the number of options held are considered by the Stock
Option Committee, but are not entirely determinative of future grants.
Each executive's annual grants are based upon the individual's
performance, responsibilities, experience, leadership and potential
future contribution and any other factors deemed relevant by the
Committee.
Stock options are designed to align the interests of the
Company's executives with those of shareholders by encouraging
executives to enhance the value of the Company and, hence, the price
of the Common Stock and the shareholders' investment. In addition,
through deferred vesting, this component of the compensation system is
designed to create an incentive for the executive to remain with the
Company.
ANNUAL REVIEWS. Each year the Compensation Committee reviews its
executive compensation polices and programs and determines what changes, if any,
are appropriate for the following year. In addition, the Committee reviews the
individual performance of the Chief Executive Officer and the Chairman of the
Board.
6
<PAGE>
CHIEF EXECUTIVE OFFICER. The Chief Executive Officer's compensation is
established by the Compensation Committee based on a subjective consideration of
his performance and the extent to which the Company achieves its strategic and
economic goals established at the beginning of the year and his current level of
compensation in comparison with the level of compensation paid the chief
executive officers of comparable companies in the Minneapolis/Saint Paul
metropolitan area. The Chief Executive Officer is eligible for an annual
incentive bonus tied directly to the earnings of the Company. No bonus was paid
for fiscal 1998. The Compensation Committee also considers the Chief Executive
Officer's level of compensation as it relates to other executive officers of the
Company and to the Company's employees in general.
LIMITS ON DEDUCTIBLE COMPENSATION PAYABLE TO EXECUTIVE OFFICERS. The
Omnibus Reconciliation Act of 1993 added Section 162(m) to the Internal Revenue
Code of 1986, as amended (the "Code") limiting corporate deductions to
$1,000,000 for certain compensation paid the chief executive officer and each of
the four other most highly compensated executives of publicly held companies.
The Company does not believe it will pay "compensation" within the meaning of
Section 162(m) to such executive officers in excess of $1,000,000 in the
foreseeable future. Therefore, the Company does not have a policy at this time
regarding qualifying compensation paid to its executive officers for
deductibility under Section 162(m), but will formulate a policy if compensation
levels ever approach $1,000,000.
The foregoing report is submitted by Dennis J. Doyle and Bruce C.
Sanborn, the members of the Compensation Committee.
COMPENSATION COMMITTEE INTERLOCKS
The Compensation Committee of the Board of Directors consists of two
nonemployee directors, Dennis J. Doyle and Bruce C. Sanborn. Mr. Sanborn is the
Chief Executive Officer of North Central Life Insurance Company and K. Jeffrey
Dahlberg, the Company's Chairman, serves on the Board of North Central Life
Insurance Company.
STOCK PERFORMANCE GRAPH
Shown below is a line graph comparing the yearly dollar change in the
cumulative total shareholder return on the Company's Common Stock as against the
cumulative total return of the NASDAQ Total Return Index and the NASDAQ Retail
Stock Index. The graph and table assume the investment of $100 on August 25,
1993 in the Company's' Common Stock and on July 31, 1993 in the NASDAQ Total
Return Index and the NASDAQ Retail Stock Index.
7
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN SINCE
INITIAL PUBLIC OFFERING
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
7/93 12/93 12/94 12/95 12/96 12/97 12/98
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Grow Biz $ 100 $118.3333 $ 70.8667 $ 64.2000 $ 58.3333 $ 80.4167 $ 86.6667
- ----------------------------------------------------------------------------------------------------------
NASDAQ (US) 100 110.4288 107.9462 152.6839 187.7570 230.2790 324.4750
- ----------------------------------------------------------------------------------------------------------
NASDAQ Retail 100 110.8647 101.0876 111.3423 132.7335 155.9496 189.6252
- ----------------------------------------------------------------------------------------------------------
</TABLE>
APPOINTMENT OF INDEPENDENT AUDITORS
(Proposal #3)
Based on the recommendation of the Audit Committee, the Board of
Directors has voted to retain Arthur Andersen LLP to serve as independent
auditors for the Company for fiscal year 1999 and is submitting its appointment
of such firm to the shareholders for ratification. Arthur Andersen LLP has
served as the Company's independent auditors since 1992. If the appointment is
not ratified, the Board of Directors will reconsider its selection.
Representatives from Arthur Andersen LLP will be present at the meeting, will
have the opportunity to make a statement if they desire and will be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THIS APPOINTMENT.
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of Common Stock
beneficially owned by (i) each person known by the Company to own 5% or more of
the outstanding shares of Common Stock, (ii) each Named Executive Officer, (iii)
each director of the Company and (iv) all directors and executive officers as a
group. All persons named in the table have sole voting and investment power with
respect to all shares of Common Stock owned, unless otherwise noted. The number
of shares listed is as of March 31, 1999 unless otherwise noted.
NUMBER OF SHARES PERCENT OF
BENEFICIALLY OWNED OUTSTANDING SHARES
------------------ ------------------
K. Jeffrey Dahlberg 2,073,225(1) 40.5%
4200 Dahlberg Drive
Golden Valley, MN 55422
Ronald G. Olson 1,362,068(2) 26.6%
4200 Dahlberg Drive
Golden Valley, MN 55422
Sheldon T. Fleck 412,100 8.1%
1400 International Centre
900 Second Avenue South
Minneapolis, MN 55402
Ted R. Manley 45,817(3) 0.9%
Charles V. Kanan 42,237(3) 0.8%
Brad D. Tait 22,500(3) 0.4%
Dennis J. Doyle 40,000(3) 0.8%
Bruce C. Sanborn 35,100(3)(4) 0.7%
Randel S. Carlock 25,000(3) 0.5%
Robert C. Pohlad 25,000(3) 0.5%
All directors and executive officer as 3,748,163(3) 69.3%
a group (12 persons)
- ---------------------------
(1) Includes 279,250 shares held in trust for minor children.
(2) Includes 17,900 shares held by Mr. Olson's adult children and 111,600
shares held in trust for these children and 1,500 shares held by Mr.
Olson's wife. Mr. Olson disclaims beneficial ownership of these
shares.
(3) Includes the following shares which may be acquired within 60 days
through the exercise of stock options: Mr. Manley - 45,000; Mr. Kanan
- 41,250; Mr. Tait - 22,500; Mr. Doyle - 25,000; Mr. Sanborn - 20,000;
Mr. Carlock - 25,000; Mr. Pohlad - 25,000 and all directors and
executive officers as a group - 291,500.
(4) Includes 100 shares held by Mr. Sanborn's son. Mr. Sanborn disclaims
beneficial ownership of these shares.
9
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1998, two Play It Again Sports franchises, a Once Upon A Child
franchise and a Computer Renaissance franchise, owned by relatives of K. Jeffrey
Dahlberg, paid $65,932 in royalties to the Company and purchased $197,914 of
merchandise through the Company's buying group.
In December 1998, the Company sold certain assets of nine
Company-owned retail stores to the former President of Music Go Round, for $2.0
million. In connection with the sale, the Company received a short-term note of
$700,000 paid in January 1999, a $1.0 million note secured by certain assets of
the stores bearing interest of 8% and payable in monthly principal and interest
installments until January 2006 and a $274,500 note payable in eighteen equal
monthly principal installments beginning February 15, 1999. Franchise agreements
were signed for each of the stores in which the buyer will be required to pay
royalties and advertising expenses consistent with other franchisees.
The Company leases from PIAS Holdings, a general partnership owned by
K. Jeffrey Dahlberg and Ronald G. Olson, certain real property which houses a
Company-owned retail store located at 3505 Hennepin Avenue, Minneapolis,
Minnesota. Pursuant to this lease, the Company is obligated to make lease
payments of $5,500 per month through September 2000. During fiscal 1998, the
Company made payments of $66,000 under this lease.
SHAREHOLDER PROPOSALS
Any stockholder proposal intended to be considered for inclusion in
the proxy statement for presentation at the 2000 Annual Meeting must be received
by the Company by January 5, 2000. The proposal must be in accordance with the
provisions of Rule 14a-8 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934. Stockholders who intend to present a
proposal at the 2000 Annual Meeting without including such proposal in the
Company's proxy statement must provide the Company notice of such proposal no
later than March 16, 2000. The Company reserves the right to reject, rule out or
order, or take other appropriate action with respect to any proposal that does
not comply with these and other applicable requirements.
ANNUAL REPORTS
The Company's 1998 Annual Shareholder Report, which includes the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission, is being mailed with this proxy statement to shareholders entitled
to notice of the Annual Meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented at
the meeting. In the event any other business is presented at the meeting, the
persons named in the enclosed proxy will have authority to vote on that business
in accordance with their judgment.
By the Order of the Board of Directors
/s/ Gaylen L. Knack
Gaylen L. Knack
Secretary
10
<PAGE>
GROW BIZ INTERNATIONAL, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 26, 1999
4:00 P.M.
GROW BIZ INTERNATIONAL, INC.
4200 DAHLBERG DRIVE
MINNEAPOLIS, MN 55422
[LOGO]
GROW BIZ(R) 4200 DAHLBERG DRIVE
INTERNATIONAL MINNEAPOLIS, MN 55422 PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON MAY 26, 1999.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify below.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1, 2, AND 3.
By signing the proxy, you revoke all prior proxies and appoint K. Jeffrey
Dahlberg, Ronald G. Olson, and Gaylen L. Knack, and each of them, with full
power of substitution, to vote your shares on the matters shown on the reverse
side and any other matters which may come before the Annual Meeting and all
adjournments.
SEE REVERSE FOR VOTING INSTRUCTIONS.
<PAGE>
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to Grow Biz International, Inc., c/o Shareowner
Services(SM), 4200 Dahlberg Drive, Minneapolis, MN 55422.
[ARROW] PLEASE DETACH HERE [ARROW]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
I. Approving setting the number of members of the Board of Directors at six;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
II. Authority to vote for the election of K. Jeffrey Dahlberg, Ronald G. Olson,
Randel S. Carlock, Dennis J. Doyle, Robert C. Pohlad and Bruce C. Sanborn
as directors of the Company until the 2000 Annual Meeting. You may withhold
authority to vote for a nominee by lining through his name;
[ ] GRANT [ ] WITHHOLD
III. Ratifying the appointment of Arthur Andersen LLP as independent auditors
for the current fiscal year;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. In their discretion, upon such other business as may properly come before
the meeting, all as set out in the Notice of Annual Meeting of Shareholders
and Proxy Statement dated May 5, 1999, receipt of which is hereby
acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box [ ] Indicate changes below:
Date: _____________________________
______________________________________
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Signature(s) in Box
Stockholder must sign exactly as the
name appears at left. When signed as a
corporate officer, executor,
administrator, trustee, guardian, etc.,
please give full title as such. Both
joint tenants must sign.
