SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ] Preliminary Proxy Statement
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(as permitted by Rule 14-a-6(e)(2))
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (s) 240.14a-11(c) or (S) 240.14a.12
The Vermont Teddy Bear Co., Inc.
(Name of Registrant as Specified In Its Charter)
The Vermont Teddy Bear Co., Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[x] No fee required
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(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
(4) is calculated and state how it was determined):
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and date of its filing.
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: ______
Schedule 14A, File No.: ______
(3) Filing Party:
(4) Date Filed:
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The Vermont Teddy Bear Co., Inc.
Notice of 1999 Annual Meeting of Shareholders
And
Proxy Statement
<PAGE>
The Vermont Teddy Bear Co., Inc.
Notice of Annual Meeting of Stockholders
The Annual Meeting of the Stockholders of The Vermont Teddy Bear Co.,
Inc. will be held at 10:00 a.m. EST on Thursday, December 2, 1999, at the
Company's retail/manufacturing facility, 6655 Shelburne Road, Route Seven,
Shelburne, Vermont, for the following purposes:
1. To have Common shareholders elect six (6) individuals to the
Company's Board of Directors for the ensuing year.
2. To have Series C Preferred shareholders elect two (2) individuals
to the Company's Board of Directors for the ensuing year.
3. To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for the 2000 fiscal year.
4. To transact such other business that may properly come before the
meeting or adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Spencer C. Putnam
Spencer C. Putnam, Secretary
Shelburne, Vermont
September 30, 1999
<PAGE>
The Vermont Teddy Bear Co., Inc.
6655 Shelburne Road
Post Office Box 965
Shelburne, Vermont 05482
September 30, 1999
Proxy Statement
Annual Meeting of Stockholders
To Be Held December 2, 1999
This proxy statement is furnished to the stockholders of The Vermont
Teddy Bear Co., Inc. (the "Company"), a New York corporation, in connection
with the Annual Meeting of Stockholders of the Company to be held at 10:00 a.m.
on Thursday, December 2, 1999, at the Company's retail/manufacturing facility
located at 6655 Shelburne Road, Route Seven, Shelburne, Vermont.
The enclosed proxy card is furnished by the Company. This proxy is being
solicited by the Company's Board of Directors for use at the Annual Meeting or
at any adjournment thereof. A proxy duly executed and returned by a stockholder
will be voted as directed by the proxy, and, if no choice is specified, the
proxy will be voted in accordance with the recommendations of the Board of
Directors contained herein. As to other matters, if any, to be voted upon, the
persons named in the proxy will take such action as the Board of Directors may
deem advisable.
All expenses of soliciting proxies are being borne by the Company. It is
expected that solicitations will be made primarily by mail, but regular
employees or representatives of the Company may also solicit proxies by
telephone or other communication methods and arrange for nominees, custodians
and fiduciaries to forward proxies and proxy material to their principals at the
Company's expense.
A proxy may be revoked at any time before it is exercised by notifying
the Company's Secretary in writing at the address set forth above or by
attending the Annual Meeting and voting the shares covered by the proxy in
person.
It is expected that this Proxy Statement will be mailed on or about
October 31, 1999, to stockholders of record on October 18, 1999.
<PAGE>
Voting Securities and Principal Holders Thereof
The Board of Directors has fixed the close of business on October 18,
1999, as the record date for the determination of Stockholders entitled to
receive notice of and to vote at the Annual Meeting. Each share of the
Company's Common Stock outstanding on the record date is entitled to one vote on
all matters, except for the election of Series C Preferred directors, and each
share of the Company's Series C Preferred stock outstanding on the record date
is entitle to one vote on those matters on which Series C stockholders vote as a
class, and 9,523 votes on all matters on which Common Stockholders vote as a
class.
The following table presents information, as of September 30, 1999, about
all classes of the Company's stock owned by the directors and executive officers
of the Company:
Number of Percentage
Name and Address Title of Shares of Class
of Beneficial Owner Class Owned Outstanding
Jason Bacon Common 70,840(1) 1.1
RR #1, Box 78
New Haven, VT 05472
Robert Hamilton Common -(2) -
5010 Arden Avenue
Edina, MN 55424
Barbara Johnson Common -(3) -
97 Valley Road
Larchmont, NY 10538
Fred Marks Common 575,5003(4) 9.1
c/o The Vermont Teddy Bear Co., Inc.
6655 Shelburne Road, P.O. Box 965
Shelburne, VT 05482
Spencer C. Putnam Common 99,500(5) 1.6
c/o The Vermont Teddy Bear Co., Inc.
6655 Shelburne Road, P.O. Box 965
Shelburne, VT 05482
Elisabeth B. Robert Common 29,200(6) 0.5
c/o The Vermont Teddy Bear Co., Inc.
6655 Shelburne Road, P.O. Box 965
Shelburne, VT 05482
T. Nathanael Shepherd Preferred C 56.8(7) 89.7
c/o The Shepherd Group LLC
636 Great Road
Stow, MA 01775
Thomas R. Shepherd Preferred C 63.3(8) 100.0
c/o The Shepherd Group LLC
636 Great Road
Stow, MA 01775
Directors and Officers as a Group Common 775,040 12.3
Preferred C 63.3 100.0
(1) This figure includes 500 shares held of record by Mr.
Bacon's wife, as to which beneficial ownership is
disclaimed. The figure does not include options granted under the
Company's Non-Employee Director Stock Option Plan to Mr.
Bacon to purchase 15,500 shares of the Company's Common
Stock, which have fully vested.
(2) This figure does not include options granted under the Company's
Non-Employee Director Stock Option Plan to Mr. Hamilton to purchase
500 shares of the Company's Common Stock, which have fully vested.
(3) This figure does not include options granted under the Company's
Non-Employee Director Stock Option Plan to Ms. Johnson to purchase
2,833 shares of the Company's Common Stock, which have fully vested.
(4) This figure includes 500 shares held of record by Mr.
Marks' wife, as to which beneficial ownership is disclaimed.
(5) This figure includes 30,000 shares held of record by Mr.
Putnam's children. This figure also includes 4,500 shares
held of record by Mr. Putnam's wife, as to which beneficial
ownership is disclaimed. This figure does not include
options granted under the Company's Incentive Stock Option
Plan to Mr. Putnam to purchase 82,832 shares of the
Company's Common Stock, of which 64,082 shares have vested.
(6) This figure includes 2,000 shares held of record by Ms.
Robert's minor children. This figure does not include
options granted under the Company's Incentive Stock Option
Plan to Ms. Robert to purchase 680,510 shares of the
Company's Common Stock, of which 574,260 shares have vested.
(7) Mr. Shepherd's beneficial ownership consists of (i) 1.3
shares of Series C Preferred, convertible into 11,885 shares
of Common Stock, and warrants to purchase 9,917 shares of
Common Stock directly and beneficially owned by Mr.
Shepherd; (ii) .14 shares of Series C Preferred,
convertible into 1,286 shares of Common Stock, and warrants
to purchase 1,041 shares of Common Stock directly and
beneficially owned by The Shepherd Group LLC, of which Mr.
Shepherd is the President; (iii) 12.97 shares of Series C
Preferred, convertible into 123,504 shares of Common Stock,
and warrants to purchase 103,058 shares of Common Stock
beneficially owned by The Shepherd Venture Fund I, of which
The Shepherd Group LLC is its sole general partner; and (iv)
41.6 shares of Series C Preferred, convertible into 396,157
shares of Common Stock, and warrants to purchase 330,579
shares of Common Stock beneficially owned collectively by
other investors in the Company's Series C Preferred (the
"Investors") for which The Shepherd Group LLC has been
appointed as irrevocable proxy. Mr. Shepherd, as President
of The Shepherd Group LLC, has the right to vote all of the
shares in clauses (ii) through (iv) in connection with any
matter requiring a vote of the stockholders of the Company.
Mr. Shepherd disclaims beneficial ownership of the shares
held by the Investors.
(8) Mr. Shepherd's beneficial ownership consists of (i) 6.5
shares of Series C Preferred, convertible into 61,404 shares
of Common Stock, and warrants to purchase 51,273 shares of
Common Stock directly and beneficially owned by Mr.
Shepherd; (ii) .14 shares of Series C Preferred,
convertible into 1,286 shares of Common Stock, and warrants
to purchase 1,041 shares of Common Stock directly and
beneficially owned by The Shepherd Group LLC, of which Mr.
Shepherd is the Chairman; (iii) 12.97 shares of Series C
Preferred, convertible into 123,504 shares of Common Stock,
and warrants to purchase 103,058 shares of Common Stock
beneficially owned by The Shepherd Venture Fund I, of which
The Shepherd Group LLC is its sole general partner; (iv) 41.6
shares of Series C Preferred, convertible into 396,157
shares of Common Stock, and warrants to purchase 330,579
shares of Common Stock beneficially owned collectively by
the Investors for which The Shepherd Group LLC has been
appointed as irrevocable proxy; and (v) 1.24 shares of Series
C Preferred, convertible into 11,885 shares of Common Stock,
and warrants to purchase 9,917 shares of Common Stock
directly and beneficially owned by Mr. T. Nathanael Shepherd
for which The Shepherd Group LLC has the authority to vote.
Mr. Shepherd, as Chairman of The Shepherd Group LLC, has
the right to vote all of the shares in clauses (ii) through
(v) in connection with any matter requiring a vote of the
stockholders of the Company. Mr. Shepherd disclaims
beneficial ownership of the shares held by the Investors.
<PAGE>
The following table presents information, as of September 30, 1999, about all
classes of the Company's stock owned by those persons known by the Company to
own beneficially five percent or more of the shares of any voting class of
the Company's stock outstanding, other than the directors and officers listed
in the prior table:
Number of Percentage
Name and Address Title of Shares of Class
of Beneficial Owner Class Owned(9) Outstanding
Malcolm Candlish Preferred C 3.17 5.0
465 Wall's Way
Osprey, FL 34229
Edwin Kozlowski Preferred C 4.22 6.7
General Nutrition Companies
300 6th Avenue, 14th Floor
Pittsburgh, PA 15222
David Lucas Preferred C 7.91 12.5
Bonita Bay Executive Center
3451 Bonita Bay Boulevard, Suite 202
Bonita Springs, FL 34132
Joan Martin Common 1,840,975 29.1
34 Woodbury Hill Preferred A 90.0 100.0
Woodbury, CT 06798
Lyman Orton Common 326,712 5.2
857 The Boulevard
Steamboat Springs, CO 80477
Ronald Rossetti Preferred C 4.22 6.7
Riverside Capital Partners
39 Brighton Avenue
Allston, MA 02134
William Watts Preferred C 3.17 5.0
General Nutrition Companies
300 6th Avenue, 14th Floor
Pittsburgh, PA 15222
(9) Each of the listed holders of Series C Preferred listed here (the
"Investors") has appointed The Shepherd Group LLC as his, or her, or its
irrevocable proxy to act for and vote on behalf of him, her, or it with
respect to the Series C Preferred Stock and Warrants in connection with any
matter requiring a vote of the stockholders of the Company. Mr. T. Nathaneal
Shepherd and Mr. Thomas Shepherd are considered to be the beneficial owners
of the Series C Stock and Warrants held by the Investors, although they
disclaim beneficial ownership.
<PAGE>
As of June 30, 1999, the Directors and Executive Officers of the Company were
as follows:
Name Age Office
Jason Bacon 65 Director
R. Patrick Burns 55 Director
Barbara Johnson 47 Director
Fred Marks 71 Director and Chairman of the Board
Spencer C. Putnam 53 Director, Vice President, and Secretary
Elisabeth B. Robert 44 Director, President, Treasurer, Chief
Executive Officer and Chief Financial
Officer
On March 11, 1999 Joan Martin retired from the Board of Directors, after
eight years of service for personal reasons.
On July 8, 1999, R. Patrick Burns submitted a letter of resignation to
the Board of Directors of the Company, which was accepted by the Board. Mr.
Burns' resignation was for personal reasons.
All of the Company's directors hold office until the 2000 Annual Meeting
of Stockholders and until their successors are elected and qualified. The
Board of Directors has an Audit Committee, on which Mr. Bacon, Ms. Robert, and
Mr. T. Nathanael Shepherd serve; a Compensation and Option Committee, on which
Mr. Bacon, Ms. Johnson and Mr. Thomas Shepherd serve; and an Executive
Committee, on which Mr. Marks, Ms. Robert, and Mr. Thomas Shepherd serve.
Meetings of the Board of Directors and Its Committees
The Board of Directors held five meetings during the fiscal year ended
June 30, 1999, and took all other action by unanimous consent in lieu of actual
meetings. During the fiscal year ended June 30, 1999, there was one meeting of
the Compensation and Option Committee that took all other action by unanimous
consent in lieu of actual meetings, and one meeting of the Audit Committee.
During the fiscal year ended June 30, 1999, all directors attended at least 75%
of the meetings of the Board of Directors and the meetings held by Committees of
the Board on which they served.
Compensation of Directors and Executive Officers
At the 1996 Annual Meeting of Stockholders, an amendment to the Bylaws
authorizing the Company to compensate members of its Board of Directors was
approved. Also at the 1996 Annual Meeting of Stockholders, the Non-Employee
Directors Stock Option Plan (the "Plan") was approved by stockholders. Pursuant
to the Plan, as amended on January 22, 1998, each participating director
receives an option to purchase 2,000 shares of the Common Stock of the Company
as an annual retainer. In addition to the annual retainer options, each
participating director receives an option to purchase up to 1,500 shares of
Common Stock per quarter for actual attendance at each regular or special
meeting of the Board of Directors. All options have an exercise price equal to
the fair market value of the Common Stock on the date of grant, vest
immediately, and are exercisable for a period of ten years. The Chairman of the
Board of Directors also receives compensation of $5,000 per calendar quarter,
and all outside Directors are also reimbursed up to $1,000 per meeting for their
expenses of attendance.
Summary Compensation Table
Other Under- Other
Fiscal Compen- lying Compen-
Name and Principal Year Salary sation Options sation
Elisabeth B. Robert, 1999 $120,000 $5,080 275,000 $ 56,434
Chief Executive Officer 1998 $109,770 $5,524 100,000 $ 5,000(2)
and Chief Financial 1997 $ 98,077 $5,600 305,510(1) $ -
Officer
Spencer C. Putnam, 1999 $ 85,839 $3,240 20,000 $ 18,811
Vice President 1998 $ 80,116 $3,108 15,000 $ -
1997 $ 85,885 $2,941 40,332(1) $ -
(1) Figure reflects re-pricing of stock options granted in 1996 as well as new
issuances in 1997.
(2) Includes cash compensation in lieu of stock options granted as part of Ms.
Robert's employment agreement with the Company.
As of June 11, 1999 the Company and Ms. Robert signed an agreement
amending her employment agreement dated as of November 9, 1998. Under this
amendment, Ms. Robert is entitled to receive i) additional options to purchase
50,000 shares of Common Stock at an exercise price of $3.19 being at least fair
market value on the date of grant with 25,000 shares vesting when the Company's
closing stock price averages $6.00 for a thirty day period, and 25,000 shares
vesting when the Company's closing stock price averages $9.00 for a thirty day
period, except that the options will fully vest seven years after issuance,
independent of the stock price, if Ms. Robert is still employed with the
Company; and ii) an additional cash bonus equal to $50,000 in fiscal 2000 so
long as the Company's pre-tax profit is at least $3,000,000 and an additional
cash bonus equal to $50,000 in fiscal 2001 so long as the Company's pre-tax
profit is at least $4,000,000.
Ms. Robert's current employment as Chief Executive Officer is governed by
an agreement with the Company dated as of November 9, 1998. The agreement
provides for her continued employment as President and Chief Executive Officer
of the Company through October 22, 2001. Under this new agreement, Ms. Robert
is entitled to receive: i) A base salary of $120,000, increasing to $135,000 on
October 23, 1999, and to $150,000 on October 23, 2000; ii) an annual cash bonus
equal to three percent of the Company's pre-tax profit, so long as the Company's
pre-tax profit is at least $100,000; iii) options to purchase 225,000 shares of
Common stock at an exercise price of $1.00 per share, being above the fair
market value on the date of grant, with 75,000 shares vesting when the Company's
closing stock price averages $2.00 for a three-month period, 75,000 shares
vesting when the Company's closing stock price averages $3.00 for a three-month
period, and 75,000 shares vesting when the Company's closing stock price
averages $4.00 for a three-month period, except that the options will fully vest
seven years after issuance, independent of stock price, if Ms. Robert is still
employed by the Company; iv) any benefits generally available to the officers of
the Company from time to time, including, without limitation, a $30,000 life
insurance policy, and a company car of Ms. Robert's choice. The agreement
prohibits Ms. Robert from directly or indirectly engaging in any business that
competes with the Company, during the course of her employment agreement and for
a period of eighteen months thereafter. Ms. Robert's prior agreement for her
employment as Treasurer and Chief Financial Officer of the Company was cancelled
upon the signing of this new agreement, though Ms. Robert continues to serve as
Treasurer and Chief Financial Officer of the Company.
Stock Options
The following table sets forth the options granted to Ms. Robert and Mr.
Putnam during the fiscal year ended June 30, 1999:
Option Grants in Last Fiscal Year
Percent of
Number of Total Options
Securities Granted to
Underlying Employees in Base Price Expiration
Name Options Granted Fiscal Year ($ per Share) Date
Elisabeth B. Robert 225,000 $1.00 11/14/2009
50,000 62.5% $3.19 06/11/2009
Spencer C. Putnam 20,000 4.6% $1.00 10/29/2009
Interests in Certain Transactions
On October 10, 1997, R. Patrick Burns resigned as President, thus
terminating his employment agreement with the Company, and entered into a
consulting agreement with the Company, which began on November 1, 1997 and
continues through October 31, 1999. In accordance with this agreement, the
Company pays fees of $75,000 per year to Mr. Burns, payable monthly, and also
forgave amounts due the Company from Mr. Burns totaling $116,818.
On December 31, 1996, the Company entered into a consulting agreement with
Venture Management Group, Inc. Fred Marks, Chairman of the Company's Board of
Directors, is President of Venture Management Group, Inc. The terms of this
agreement commenced on January 1, 1997 and will terminate on December 31, 2006,
unless earlier terminated in accordance with the agreement. In consideration of
the consulting services to be provided, the Company will pay fees of $65,000 per
year, payable monthly, plus expenses and disbursements reasonably incurred in
the performance of services under the agreement. In the event that the Company
defaults in its obligations under this agreement, or if a change in control of
the Company occurs during the term of the agreement, Venture Management Group,
Inc. may, at its sole option, declare the entire compensation under this
contract to be immediately due and payable.
Delinquent Filings
Under federal securities laws, the Company's directors, certain of its
officers and any persons holding more than 10% of the Company's Common Stock
are required to report their ownership thereof and any changes in that ownership
to the Securities and Exchange Commission. Specific due dates for these reports
have been established, and the Company is required to report in this proxy
statement any failure to file by these dates during the fiscal year ended June
30, 1999. To the knowledge of the Company, all of these filing requirements
have been satisfied by the Company's directors, officers, and its 10%
shareholders, except as follows: 1) Jason Bacon was required to file a Form 4 on
August 10, 1998 with respect to 1,500 options granted on July 14, 1999. 2)
Spencer C. Putnam was required to file Form 4 on August 10, 1998 with respect to
the transfer of 10,000 shares on July 17, 1998. 3) Jason Bacon was required to
file Form 4 on November 10, 1999 with respect to the following purchases a)
5,000 shares on October 2, 1998; b) 5,000 shares on October 19, 1998. 4) Jason
Bacon was required to file Form 4 on December 10, 1998 with respect to 1,500
options granted on November 3, 1998. 5) Spencer C. Putnam was required to file
Form 4 on January 10, 1999 with respect to the transfer of 10,000 shares on
December 31, 1998. 6) Jason Bacon was required to file Form 4 on February 10,
1999 with respect to 2,000 options granted on January 12, 1999. 7) Jason Bacon
was required to file Form 4 on March 10, 1999 with respect to the following a)
1,500 options granted February 23, 1999; b) 24,999 shares resulting from the
conversion of Series B preferred stock. 8) Barbara Johnson was required to file
Form 3 on May 3, 1999 with respect to the 1,333 options granted on April 23,
1999. 9) Jason Bacon was required to file Form 4 on June 10, 1999 with respect
to 1,500 options granted on May 28, 1999. 10) Barbara Johnson was required to
file Form 4 on June 10, 1999 with respect to 1,500 options granted on May 28,
1999.
All of these transactions were subsequently filed on a Form 5.
ITEM 1. Proposal to have Common Stockholders Elect Directors
Pursuant to the Company's Bylaws and Certificate of Incorporation, the
Board of Directors is authorized to establish, from time to time, the number of
directors, with a maximum of nine directors, and has established a Board of
eight (8) Directors to be elected at the 1999 Annual Meeting for terms of one
year each and until their successors are elected and qualified. Six (6)
directors are to be elected by the Common Stockholders, and two (2) directors
are to be elected by the Series C Preferred Stockholders.
It is the intention of the persons named in the accompanying form of proxy
to vote for the nominees named below. In the event that, because of death or
unforeseen disability, any of the nominees designated below is unavailable for
election, the persons named in the accompanying form of proxy reserve the right
to vote such proxy for such other person or persons as may be nominated by the
Board of Directors to fill such vacancies so as to provide a full board.
Election of directors requires a plurality vote. Six (6) nominees for
directors are listed below with brief statements of their principal occupations
and other pertinent information. As indicated below, all of the nominees are
currently serving on the Company's Board of Directors. Also indicated below is
the number of shares of the Company's various classes of stock owned
beneficially by each of the nominees as of September 30, 1999.
Director Nominees
Jason Bacon became a director of the Company in 1997. Mr. Bacon is
presently a consultant to non-profit organizations and a private investor,
focusing on real estate and securities with international perspective. Before
that, Mr. Bacon served as a Managing Director at Kidder, Peabody & Company,
where he developed institutional equity sales and a related trading and
advisory business. Shares owned: 70,840 Common (1.1%)
Robert Hamilton became a director of the Company in 1999. Mr. Hamilton
currently serves as CEO of Core Data LLC specializing in predicitive modeling
and customer profiling and GivingCounts.com, a new non-profit giving Channel on
the internet. Previously, Mr. Hamilton has founded and been CEO of several
companies, including Core Group, Inc., a national marketing consulting firm
serving Fortune 500 clients, and Telnet, Inc. a customer service center.
Shares owned: -
Barbara Johnson became a director of the Company in 1999. Ms. Johnson
presently serves as President and CEO of Streetmail.com, a local e-mail service
based in New York City and Williamstown, MA. Previously, Ms. Johnson was Chief
Operating Officer of Yoyodyne Inc., an internet direct marketing company that
was sold to Yahoo! in 1998. She was at Time Warner's American Lawyer Media for
12 years before that, the last six years as President of the company. Shares
owned: -
Fred Marks became a director of the Company in 1987 and has served as its
Chairman of the Board since 1989. Mr. Marks is also Chairman of the Board of two
other privately held companies: Selectech, Ltd., a manufacturer of remote
controls for computers and televisions; and Contaq Technologies, a manufacturer
of ultra-sonic instruments. He devotes only a part of his time to the business
of the Company. Shares owned: 575,500 Common (9.1%)
Spencer C. Putnam joined the Company as its Vice President in June of
1987, and has been a director and Secretary of its Board since 1989. Before
joining the Company, Mr. Putnam was the Director of the Cooperative Education
Program at the University of Vermont from 1980 to 1987. Mr. Putnam recently
announced that he will resign as Vice President and Secretary of the Company
effective October 31, 1999, but will continue as a director subject to re-
election at the 1999 Annual Meeting. Shares owned: 99,500 Common (1.6%)
Elisabeth B. Robert joined the Company as its Chief Financial Officer in
September 1995, and was appointed a director of the Company on January 22, 1996,
and Treasurer of the Company on April 22, 1996. On October 10, 1997, the Board
of Directors appointed Ms. Robert to the office of President and Chief Executive
Officer of the Company. Before joining the Company, Ms. Robert was the Chief
Financial Officer, Executive Vice-President, and Founding Partner of AirMouse
Remote Controls, a manufacturing firm specializing in remote control devices.
Prior to holding that position, Ms. Robert was an independent management
consultant, as well as Director of Gas Supply for Vermont Gas Systems, Inc.
Shares owned: 29,200 Common (0.5%)
Voting Information
The Board of Directors recommends a vote FOR approval of the nominees
named above to serve as directors of the Company for the ensuing year and until
their successors are elected and qualified. The affirmative vote of a plurality
of the shares of the Company's Common Stock entitled to vote at the Annual
Meeting of Shareholders is required for the election of directors. Appointed
proxies will vote shares FOR election of all the directors enumerated above
unless instructed otherwise in the proxy. Abstentions and broker non-votes will
have the same effect as votes against election.
ITEM 2. Proposal to have Series C Preferred Stockholders Elect Directors
Pursuant to the Company's Bylaws and Certificate of Incorporation, the
Board of Directors is authorized to establish, from time to time, the number of
directors, with a maximum of nine directors, and has established a Board of
eight (8) Directors to be elected at the 1999 Annual Meeting for terms of one
year each and until their successors are elected and qualified. Six (6)
directors are to be elected by the Common Stockholders, and two (2) directors
are to be elected by the Series C Preferred Stockholders.
It is the intention of the persons named in the accompanying form of proxy
to vote for the nominees named below. In the event that, because of death or
unforeseen disability, any of the nominees designated below is unavailable for
election, the persons named in the accompanying form of proxy reserve the right
to vote such proxy for such other person or persons as may be nominated by the
Board of Directors to fill such vacancies so as to provide a full board.
Election of directors requires a plurality vote. The two (2) nominees for
directors are listed below with brief statements of their principal occupations
and other pertinent information. Also indicated below is the number of shares
of the Company's various classes of stock owned beneficially by each of the
nominees as of September 30, 1999.
Director Nominees
T. Nathanael Shepherd became a director of the Company in November 1998. Mr.
Shepherd is President of The Shepherd Group LLC, a Massachusetts venture capital
and private equity investment firm. Before that he was the Director of
Development, Planning and Human Resources at The Doctor Franklin Perkins School,
a century old $10 million residential program. From 1990-1991 Mr. Shepherd
provided small business consulting at the Central Massachusetts Small Business
Development Center. Mr. Shepherd currently serves on the board of directors for
three private companies, as well as on the board of The Doctor Franklin Perkins
School. Shares held: 56.8 Preferred "C" (89.7%)
Thomas R. Shepherd became a director of the Company in November 1998. Mr.
Shepherd is Chairman of The Shepherd Group LLC, a Massachusetts venture capital
and private equity investment firm. He also serves as a Special Partner of
Thomas H. Lee Company (THL), a Boston leverage buyout and private equity
investment firm. Prior to joining THL, he was President of GTE Lighting
Products Group (GTE Sylvania) from 1983 through 1986, and was President of North
American Philips Commercial Electronics Corporation from 1981 until 1983. He is
a director of one private company, Andover.Net, Inc., the Internet's leading
Linux and Open Source destination and Rayovac Corporation, the third largest
U.S. manufacturer of batteries and battery operated lighting products. Shares
held: 63.3 Preferred "C" (100.0%)
Voting Information
The Board of Directors recommends a vote FOR approval of the nominees
named above to serve as directors of the Company for the ensuing year and until
their successors are elected and qualified. The affirmative vote of a plurality
of the shares of the Company's Series C Preferred Stock entitled to vote at the
Annual Meeting of Shareholders is required for the election of directors.
Appointed proxies will vote shares FOR election of all the directors enumerated
above unless instructed otherwise in the proxy. Abstentions and broker non-
votes will have the same effect as votes against election.
ITEM 3: Proposal to Select Independent Public Accountants
During fiscal year 1999, Arthur Andersen LLP audited the Company's
financial statements and also provided other professional services to the
Company in connection with Securities and Exchange Commission filings. The
report of Arthur Andersen LLP regarding the Company's financial statements for
the year ending June 30, 1999, appears in the Company's 1999 Annual Report on
Form 10-KSB. In accordance with the recommendation of its Audit Committee, the
Board of Directors has appointed Arthur Andersen LLP as independent public
accountants of the Company for the year ending June 30, 2000, subject to
ratification by Stockholders at the Annual Meeting. Stockholder ratification of
Arthur Andersen LLP as independent public accountants of the Company requires a
majority vote.
A representative of Arthur Andersen LLP is expected to be present at the
Annual Meeting of Stockholders on December 2, 1999, and shall have the
opportunity to make a statement, if the representative desires to do so, and is
expected to be available to respond to appropriate questions.
Voting Information
The Board of Directors recommends a vote FOR approval of ratifying the
selection of Arthur Andersen LLP as independent public accountants for the
fiscal year ending June 30, 2000. The affirmative vote of a majority of the
shares of the Company's Common Stock entitled to vote at the Annual Meeting of
Shareholders is required for the ratification of the selection of Arthur
Andersen LLP as independent public accountants. Appointed proxies will vote
shares FOR election of all the directors enumerated above unless instructed
otherwise in the proxy. Abstentions and broker non-votes will have the same
effect as votes against election.
ITEM 4. Other Business
The Company's Board of Directors knows of no other matters which may come
before the Annual Meeting. If, however, any other business should properly come
before the Annual Meeting, the proxies relating to such meeting will be voted
with respect thereto in accordance with the best judgment of the Board.
Any stockholder proposal intended for presentation at the 2000 Annual
Meeting of Stockholders must be received by the Secretary of the Company at its
principal offices in Shelburne, Vermont, by July 30, 2000, for inclusion in the
Company's Proxy Statement and form of proxy relating to the 2000 Annual Meeting.
September 30, 1999 The Vermont Teddy Bear Co., Inc.
<PAGE>
PROXY FOR COMMON STOCKHOLDERS
THE VERMONT TEDDY BEAR CO., INC
Proxy for the Annual Meeting of Shareholders on December 2, 1999
THIS PROXY IS SUBMITTED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
appoints Fred Marks, Spencer C. Putnam, and Elisabeth B. Robert, and each of
them, as Proxies, each with power to appoint his/her substitute, and hereby
authorize any of them to represent and to vote, as designated below, all shares
of Common Stock of The Vermont Teddy Bear Co., Inc. held of record by the
undersigned on October 18, 1999, at the Annual Meeting of Shareholders to be
held at 10:00am EST on December 2, 1999 at the corporate headquarters of The
Vermont Teddy Bear Co., Inc., 6655 Shelburne Road, Shelburne, Vermont, or any
adjournment thereof.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. ELECTION OF DIRECTORS BY COMMON STOCKHOLDERS
(Instruction: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.)
Jason Bacon, Robert Hamilton, Barbara Johnson, Fred Marks, Spencer C. Putnam,
Elisabeth B. Robert
[ ] FOR all nominees listed above
[ ] WITHHOLD AUTHORITY to vote for nominees with a line through their name,
FOR all other nominees
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above
2. ELECTION OF DIRECTORS BY SERIES C PREFERRED STOCKHOLDERS
(Not applicable to Common Stockholders.)
3. RATIFICATION OF SELECTION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 30, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the stockholder. IF NO DISCRETION IS MADE, THIS PROXY WILL BE VOTED FOR ALL
PROPOSALS.
Dated: ______________________________, 199_
__________________________________________
Signature
__________________________________________
Signature, if held jointly
NOTE: Please sign exactly as name appears hereon.
Joint owners should each sign. When signing as an
attorney, executor, administrator, trustee, or
guardian, please give full title as such.
<PAGE>
PROXY FOR SERIES C PREFERRED STOCKHOLDERS
THE VERMONT TEDDY BEAR CO., INC
Proxy for the Annual Meeting of Shareholders on December 2, 1999
THIS PROXY IS SUBMITTED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned
appoints Fred Marks, Spencer C. Putnam, and Elisabeth B. Robert, and each of
them, as Proxies, each with power to appoint his/her substitute, and hereby
authorize any of them to represent and to vote, as designated below, all shares
of Series C Preferred Stock of The Vermont Teddy Bear Co., Inc. held of record
by the undersigned on October 18, 1999, at the Annual Meeting of Shareholders to
be held at 10:00am EST on December 2, 1999 at the corporate headquarters of The
Vermont Teddy Bear Co., Inc., 6655 Shelburne Road, Shelburne, Vermont, or any
adjournment thereof.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. ELECTION OF DIRECTORS BY COMMON STOCKHOLDERS
(Instruction: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)
Jason Bacon, Robert Hamilton, Barbara Johnson, Fred Marks, Spencer C. Putnam,
Elisabeth B. Robert
[ ] FOR all nominees listed above
[ ] WITHHOLD AUTHORITY to vote for nominees with a line through their name,
FOR all other nominees
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above
2. ELECTION OF DIRECTORS BY SERIES C PREFERRED STOCKHOLDERS
(Instruction: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)
Nathanael Shepherd, Thomas R. Shepherd
[ ] FOR all nominees listed above
[ ] WITHHOLD AUTHORITY to vote for nominees with a line through their name,
FOR all other nominees
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above
3. RATIFICATION OF SELECTION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE 30, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the stockholder. IF NO DISCRETION IS MADE, THIS PROXY WILL BE VOTED FOR ALL
PROPOSALS.
Dated: ______________________________, 199_
__________________________________________
Signature
__________________________________________
Signature, if held jointly
NOTE: Please sign exactly as name appears hereon.
Joint owners should each sign. When signing as an
attorney, executor, administrator, trustee, or
guardian, please give full title as such.
