FRESH AMERICA CORP, DEF 14A, 1997-05-19

FRESH AMERICA CORP
DEF 14A, 1997-05-19
GROCERIES & RELATED PRODUCTS

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<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934

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

Fresh America Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

Board of Directors of Fresh America Corp.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) 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:(1)

- --------------------------------------------------------------------------------
(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.:

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(3) Filing Party:

- --------------------------------------------------------------------------------
(4) Date Filed:

- --------------------------------------------------------------------------------

- ---------------

(1) Set forth the amount on which the filing fee is calculated and state how it
was determined
<PAGE> 2

FRESH AMERICA CORP.
One Lincoln Centre
5400 LBJ Freeway, Suite 1025
Dallas, Texas 75240

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 19, 1997

As a shareholder of Fresh America Corp. (the "Company"), you are hereby
given notice of and invited to attend in person or by proxy the Annual Meeting
of Shareholders of the Company (the "Meeting") to be held at Lincoln City Club,
Lincoln Centre, 5410 LBJ Freeway, Dallas, Texas 75240, Thursday, June 19, 1997,
at 10:00 a.m. local time, for the following purposes:

1. To elect two Class III directors to serve until the expiration of
their terms and until their successors are elected and qualified;

2. To approve the adoption of the Fresh America Corp. 1996 Stock
Option and Award Plan;

3. To ratify the selection of KPMG Peat Marwick LLP as the Company's
independent auditors for fiscal year 1997; and

4. To transact such other business as may properly come before the
Meeting and any adjournment(s) thereof.

The Board of Directors has fixed the close of business on May 16, 1997 as
the record date (the "Record Date") for the determination of shareholders
entitled to notice of and to vote at the Meeting and any adjournment(s) thereof.
Only shareholders of record at the close of business on the Record Date are
entitled to notice of and to vote at the meeting.

YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. HOWEVER, WHETHER OR NOT
YOU EXPECT TO ATTEND, THE COMPANY DESIRES TO HAVE MAXIMUM REPRESENTATION AT THE
MEETING AND RESPECTFULLY REQUESTS THAT YOU SIGN, DATE, AND MAIL PROMPTLY THE
ENCLOSED PROXY IN THE POSTAGE PAID ENVELOPE PROVIDED. NO ADDITIONAL POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES. A PROXY MAY BE REVOKED BY A SHAREHOLDER
AT ANY TIME PRIOR TO ITS USE AS SPECIFIED IN THE ENCLOSED PROXY STATEMENT.

By Order of the Board of Directors

DAVID I. SHEINFELD
Chairman of the Board and Secretary

Dallas, Texas
May 19, 1997

YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED.
<PAGE> 3

FRESH AMERICA CORP.
One Lincoln Centre
5400 LBJ Freeway, Suite 1025
Dallas, Texas 75240
---------------------
PROXY STATEMENT
---------------------

FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 19, 1997
---------------------
This Proxy Statement is furnished in connection with the solicitation by
Fresh America Corp. (the "Company") of proxies to be voted at its Annual Meeting
of Shareholders to be held at 10:00 a.m. on Thursday, June 19, 1997, at Lincoln
City Club, Lincoln Centre, 5410 LBJ Freeway, Dallas, Texas 75240 (the "Meeting")
and at any adjournment(s) thereof for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. This Proxy Statement and the enclosed
Proxy Card was first mailed or given to shareholders on or about May 19, 1997.

Any proxy may be revoked by a shareholder at any time prior to its use by
execution of another proxy bearing a later date, by written notice to the
Secretary of the Company at the address set forth above or by oral or written
statement at the meeting. Shares represented by any proxy properly executed and
received prior to the meeting will be voted at the meeting in accordance with
the proxy or, if the proxy does not specify, in accordance with the
recommendation of the Board of Directors.

Shareholders of record at the close of business on May 16, 1997 (the
"Record Date") are entitled to notice of and to vote at the meeting. On the
Record Date the Company had 3,740,890 shares of common stock, par value $.01 per
share (the "Common Stock"), outstanding. Each share of Common Stock outstanding
on the Record Date is entitled to one vote on any matter submitted to the
holders of Common Stock for a vote. Shareholders are not entitled to cumulate
their votes in the election of directors.

A quorum for the meeting requires the presence in person or by proxy of
shareholders entitled to cast a majority of the votes entitled to be cast at the
meeting. Shares held by shareholders present at the meeting in person who do not
vote on a particular matter, ballots marked "abstain" with respect to a matter
and "broker nonvotes" that cannot be voted on a matter will be counted as
present at the meeting for quorum purposes, but will be deemed not to have been
cast and will have no legal effect on the vote with respect to any such matter.

MATTERS TO BE BROUGHT BEFORE THE MEETING

PROPOSAL 1 -- ELECTION OF DIRECTORS

There are two Class III directors whose terms expire at the Meeting. The
Board of Directors has proposed Thomas M. Hubbard and Sheldon I. Stein as
nominees for reelection as Class III directors to serve for three year terms and
until their successors are elected and qualified. A plurality of the votes cast
at the Meeting is required to elect each nominee. Shares represented by proxies
will be voted for the election of the foregoing nominees unless authority to do
so is withheld. If, at the time of the Meeting, either nominee should be unable
to serve, the shares represented by a proxy may be voted for a substitute
nominee to be designated by the Board of Directors. For information regarding
each of the nominees, see "Executive Officers and Directors."

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH NOMINEE FOR CLASS III
DIRECTOR.

PROPOSAL 2 -- APPROVAL OF FRESH AMERICA CORP. 1996 STOCK OPTION AND AWARD PLAN

Effective as of July 12, 1996, the Board of Directors adopted the Fresh
America Corp. 1996 Stock Option and Award Plan (the "Original Plan) and
effective as of April 30, 1997 the Board of Directors adopted the First
Amendment to the Fresh America Corp. 1996 Stock Option and Award Plan (the
"First Amendment";
<PAGE> 4

the Original Plan and the First Amendment are collectively, the "1996 Plan"). A
summary of the material features of the 1996 Plan follows. This summary does not
purport to be complete and is qualified in its entirety by reference to the text
of the 1996 Plan, a copy of which is attached as Appendix A and is incorporated
herein by reference.

General. The 1996 Plan provides for grants of stock options ("Options") and
restricted stock ("Restricted Stock") to directors and to officers and key
employees of the Company and its subsidiaries. The 1996 Plan is administered by
a committee of two or more non-employee directors designated by the Board of
Directors (the "Plan Administration Committee") or by the Board of Directors as
a whole.

Purpose of the 1996 Plan. The purpose of the 1996 Plan is to furnish
additional equity incentives to directors, officers and key employees of the
Company because there are a limited number of shares of Common Stock remaining
for issuance under the Fresh America Corp. 1993 Stock Option and Award Plan (the
"1993 Plan;" the 1996 Plan and the 1993 Plan are collectively, the "Stock Option
Plans"). The additional equity incentives are designed to increase shareholder
value and to advance the interests of the Company by furnishing incentives to
attract and retain the best available personnel for positions of substantial
responsibility and to provide incentives to such personnel to promote the
success of the business of the Company and its subsidiaries.

Shares Issuable through the 1996 Plan. A total of 150,000 shares of Common
Stock are authorized and reserved for issuance under the 1996 Plan upon the
exercise of Options or grants of Restricted Stock. Proportionate adjustments
will be made to the number of shares of the Common Stock subject to the 1996
Plan in the event of any recapitalization, stock dividend, stock split,
combination of shares or other change in the Common Stock. The Board of
Directors may, but shall not be required to, also provide additional anti-
dilution protection to a participant under the terms of such participant's
Option or Restricted Stock agreement. Shares of Common Stock subject to Options
or Restricted Stock grants that are canceled, terminated or forfeited will again
be available for issuance under the 1996 Plan. The top five executive officers
of the Company may not be granted Options with respect to more than 150,000
shares in any year; lapsed or cancelled Options count against these limits.

Administration of the 1996 Plan. The Board of Directors or the Plan
Administration Committee administer the 1996 Plan and has authority (i) to
select the participants that will be granted Options and Restricted Stock, (ii)
to terminate the plan or accelerate vesting of Options and Restricted Stock,
(iii) to determine the nature, extent, timing, exercise price, vesting and
duration of Options and Restricted Stock, (iv) to prescribe all other terms and
conditions consistent with the 1996 Plan, (v) to interpret the 1996 Plan, (vi)
to establish any rules or regulations relating to the 1996 Plan that it
determines to be appropriate, and (vii) to make any other determination that it
believes necessary or advisable for the proper administration of the 1996 Plan.

Stock Options and Restricted Stock. Unless the Board of Directors or the
Plan Administration Committee determines otherwise, each non-employee director
of the Company will receive nonqualified options to purchase 5,000 shares of
Common Stock on each August 8 that such director serves on the Company's Board
of Directors.

The Board of Directors or the Plan Administration Committee may grant
nonqualified Options or qualified Options ("incentive stock options") to
purchase shares of Common Stock. The Plan Administration Committee has exclusive
authority over grants of Options to the top five executive officers of the
Company. The Board of Directors or the Plan Administration Committee will
determine the number and exercise price (which may not be less than the fair
market value of the Common Stock on the date of grant) of the Options, and the
time or times that the Options become exercisable. The term of an Option will
also be determined by the Board of Directors or the Plan Administration
Committee, provided that the term of a qualified Option may not exceed 10 years.
The 1996 Plan provides that each grant of Options or Restricted Stock will vest
in accordance with the applicable Option or Restricted Stock agreement. The
Option exercise price may be paid in cash, or, at the Company's option, in
shares of Common Stock.

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<PAGE> 5

Termination of Employment. If a participant dies or becomes disabled, all
vested qualified Options may be exercised at any time within one year (or the
remaining term of the Option, if less). If a participant ceases to be a Company
employee for any other reason, he or she must exercise any vested qualified
Options within three months (or their remaining term, if less).

Amendments to the 1996 Plan. The Board of Directors or the Plan
Administration Committee may amend or discontinue the 1996 Plan at any time
subject to certain restrictions set forth in the 1996 Plan. Except in limited
circumstances, no amendment or discontinuance may adversely affect any
previously granted Option award without the consent of the recipient thereof.
Shareholder approval is required if the number of shares issuable under the 1996
Plan is increased or the class of eligible employees is changed.

Federal Income Tax Consequences. The following general description of
federal income tax consequences is based upon current statutes, regulations and
interpretations and does not purport to be complete. Reference should be made to
the applicable provisions of the Internal Revenue Code of 1986 (as amended, the
"Code"). There also may be state, local and foreign income tax consequences
applicable to transactions involving Options or Restricted Stock.

Under existing federal income tax provisions, a participant who receives
stock options will not normally realize any income, nor will the Company
normally receive any deduction for federal income tax purposes, upon the grant
of an Option.

When a nonqualified stock option granted pursuant to the 1996 Plan is
exercised, the employee generally will realize ordinary income (compensation)
measured by the difference between the aggregate purchase price of the Common
Stock as to which the option is exercised and the aggregate fair market value of
the Common Stock on the exercise date, and the Company generally will be
entitled to a deduction in the year the Option is exercised equal to the amount
the employee is required to treat as ordinary income. Any taxable income
recognized in connection with a nonqualified stock option exercised by an
optionee who is also an employee of the Company will be subject to tax
withholding by the Company. The basis for determining gain or loss upon a
subsequent disposition of Common Stock acquired upon the exercise of a
nonqualified stock option will be the purchase price paid to the Company for the
Common Stock increased by an amount included in the optionee's taxable income
resulting from the exercise of such option. The holding period for determining
whether gain or loss on such subsequent disposition is short-term or longterm
generally begins on the date on which the optionee acquires the Common Stock.

An employee generally will not recognize any income upon the exercise of a
qualified stock option, but the exercise may, depending on particular factors
relating to the employee, subject the employee to the alternative minimum tax.
An employee will recognize capital gain or loss in the amount of the difference
between the exercise price and the sale price on the sale or exchange of stock
acquired pursuant to the exercise of a qualified stock option, provided that the
employee does not dispose of such stock within two years from the date of grant
and one year from the date of exercise of the incentive stock option (the
"Required Holding Periods"). An employee disposing of such shares before the
expiration of the Required Holding Periods will recognize ordinary income equal
to the lesser of (i) the difference between the option price and the fair market
value of the stock on the date of exercise, or (ii) the total amount of gain
realized. The remaining gain or loss is generally treated as short term or long
term capital gain or loss depending on how long the shares are held. The Company
will not be entitled to a federal income tax deduction in connection with the
exercise of an incentive stock option, except where the employee disposes of the
shares of Common Stock received upon exercise before the expiration of the
Required Holding Periods.

A restricted stock award is not currently taxable income to a participant
for so long as the stock is subject to a substantial risk of forfeiture and
cannot be transferred free of forfeiture. The participant will generally be
taxed on compensation income equal to the fair market value of the stock on the
date the restrictions on the shares lapse.

The participant may elect under Section 83(b) of the Code, however, to be
taxed immediately on the value of the shares awarded as of the date of grant.
Such an election must be made within 30 days after the award of shares and must
be filed with the Internal Revenue Service. If the participant makes the

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Section 83(b) election and subsequently forfeits his or her shares, no deduction
is permitted with respect to the forfeiture.

The participant's tax basis in shares acquired through a stock award equals
the amount of compensation income recognized upon vesting (or upon grant, in the
case of a Section 83(b) election). Generally, if the participant subsequently
sells the shares, any gain or loss will be capital.

The affirmative vote of the holders of a majority of the total shares of
Common Stock issued and outstanding is required (a) to permit the granting of
qualified Options under the 1996 Plan, and (b) to qualify awards of Options or
Restricted Stock under the 1996 Plan as "performance based" under Section 162(m)
of the Code. If the 1996 Plan is not approved by the shareholders at the
Meeting, then any Options previously granted under the 1996 Plan will be
nonqualified Options, regardless of whether the option agreements relating
thereto purport to grant qualified Options, and any Options granted to executive
officers after the effective date of the First Amendment will be void. As of
January 3, 1997, 59,000 Options were issued under the 1996 Plan.

Interests of Certain Persons in Matters to be Acted Upon. In considering
whether to vote for approval of the 1996 Plan, shareholders should be aware that
each of the directors, nominees for director and executive officers have
received qualified Option grants under the 1996 Plan.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE FRESH
AMERICA CORP. 1996 STOCK OPTION AND AWARD PLAN.

PROPOSAL 3 -- RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS.

KPMG Peat Marwick LLP, independent certified public accountants, served as
independent auditors for the Company for the fiscal year ended January 3, 1997,
and has reported on the Company's financial statements. The Board of Directors,
upon the recommendation of the Audit Committee, has selected KPMG Peat Marwick
LLP as the Company's independent auditors for fiscal year 1997, and recommends
that the shareholders ratify this selection.

A representative of KPMG Peat Marwick LLP is expected to be present at the
Meeting, will have an opportunity to make a statement if he desires to do so,
and is expected to be available to respond to appropriate questions.

Shareholder ratification is not required for the selection of KPMG Peat
Marwick LLP as the Company's independent auditors for fiscal year 1997, because
the Board of Directors has responsibility for selection of the Company's
independent auditors. The selection is being submitted for ratification with a
view toward soliciting the opinion of shareholders, which opinion will be taken
into consideration in future deliberations.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF KPMG
PEAT MARWICK LLP AS THE COMPANY'S INDEPENDENT AUDITORS.

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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information believed by the Company
to be accurate based on information provided to it concerning the beneficial
ownership of Common Stock by (a) each shareholder who is known by the Company to
own beneficially in excess of 5% of the outstanding Common Stock, (b) each
director, (c) the Company's Chief Executive Officer, (d) by each of the
Company's other executive officers and (e) all executive officers and directors
as a group, as of May 14, 1997.

<TABLE>
<CAPTION>
NUMBER OF SHARES OF
BENEFICIAL OWNER COMMON STOCK(1) PERCENT OF CLASS(2)
---------------- ------------------- -------------------
<S> <C> <C>
David I. Sheinfeld(3)(4)................ 561,062 15.00%
Thomas M. Hubbard(3)(5)................. 499,432 13.35%
Steve R. Grinstead(3)(6)................ 103,167 2.76%
Sheldon I. Stein(3)(7).................. 26,969 *
Robert C. Kiehnle....................... 1,500 *
Colon Washburn(3)(8).................... 14,282 *
Scudder, Stevens & Clark, Inc.(9)....... 292,700 7.82%
Gruber & McBaine Capital Management,
Inc.(10).............................. 411,100 10.99%
All directors and executive officers as
a group (6 persons)(11)............... 1,206,412 32.25%
</TABLE>

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* less than one percent

(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Except as indicated in the footnotes to
this table and subject to community property laws, where applicable, each
of the shareholders named in this table has sole voting and investment
power with respect to the shares shown as beneficially owned, unless
otherwise indicated.

(2) Percentages are based on the total number of shares of Common Stock
outstanding at May 14, 1997, plus the total number of outstanding options
held by each such person that are exercisable within 60 days of such date.
Shares issuable upon exercise of outstanding options, however, are not
deemed outstanding for purposes of computing the percentage ownership of
any other person.

(3) Director of the Company.

(4) Consists of 362,037 shares held of record by David I. Sheinfeld, as trustee
of the Sheinfeld Family Trust, 130,100 shares held of record by the
Sheinfeld Family Partnership and 68,925 shares subject to options issued to
Mr. Sheinfeld under the Stock Option Plans that are exercisable within 60
days. Mr. Sheinfeld's address is c/o Fresh America Corp. at One Lincoln
Center, 5400 LBJ Freeway, Suite 1025, Dallas, Texas 75240.

(5) Includes 15,000 shares subject to options issued to Mr. Hubbard under the
Stock Option Plans that are exercisable within 60 days. Mr. Hubbard's
address is 740 Airport Blvd., Salinas, California 93912.

(6) Consists of 102,367 shares subject to options issued to Mr. Grinstead under
the Stock Option Plans that are exercisable within 60 days and 800 shares
owned by Mr. Grinstead for the benefit of his minor children.

(7) Includes 17,813 shares subject to options issued to Mr. Stein under the
Stock Option Plans that are exercisable within 60 days.

(8) Includes 5,000 shares subject to options issued to Mr. Washburn under the
Stock Option Plans that are exercisable within 60 days.

(9) Based on information set forth in Schedule 13G, dated February 10, 1997,
filed with the Securities and Exchange Commission by Scudder, Stevens &
Clark, Inc. ("SSC"), a registered investment advisor. SSC reported it has
sole voting power with respect to 172,600 shares and sole dispositive power
with

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respect to 292,700 shares. SSC disclaims beneficial ownership of the shares as
it does not own the shares or have custody over such shares. SSC's advisory
clients have their own custody arrangements. The business address of SSC is 345
Park Avenue, New York, New York 10154.

(10) Based on information set forth in Form 3, dated May 13, 1997, filed with
the Securities and Exchange Commission by Gruber & McBaine Capital
Management, Inc. ("GMCM"), Gruber & McBaine Capital Management
International ("Intl"), Jon D. Gruber ("Gruber"), J. Patterson McBaine
("McBaine"), Lagunitas Partners ("LP") and GMJ Investments, L.P. ("GMJ").
The filing group reported it had total ownership of 411,100 shares. The
beneficial ownership of the filing group was reported as follows.

<TABLE>
<CAPTION>
AGGREGATE
BENEFICIALLY OWNED
------------------
NAME NUMBER PERCENT
---- ------- -------
<S> <C> <C>
GMCM.................................... 292,900 7.83%
Gruber.................................. 388,200 10.38%
McBaine................................. 356,800 9.54%
LP...................................... 145,400 3.89%
GMJ..................................... 10,000 0.27%
Intl.................................... 41,000 1.10%
</TABLE>

The business address of Gruber & McBaine Capital Management is 50 Osgood
Place, San Francisco, California 94133.

(11) Includes 209,105 shares subject to options issued to certain directors and
executive officers of the Company.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act of 1934, as amended (the "Exchange Act"),
requires the Company's executive officers and directors and persons who own more
than ten percent (10%) of a registered class of the Company's equity securities
(collectively, the "Reporting Persons") to file reports of ownership and changes
in ownership with the Securities and Exchange Commission and to furnish the
Company with copies of these reports. The Company believes that all filings
required to be made by the Reporting Persons during the fiscal year ended
January 3, 1997 were made on a timely basis.

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information concerning the executive
officers and directors of the Company as of May 14, 1997.

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
David I. Sheinfeld...................... 42 Chairman of the Board and Chief Executive Officer
Steve R. Grinstead...................... 38 President, Chief Operating Officer and Director
Robert C. Kiehnle....................... 47 Executive Vice President and Chief Financial Officer
Thomas M. Hubbard*...................... 54 Director
Sheldon I. Stein*....................... 43 Director
Colon Washburn.......................... 51 Director
</TABLE>

- ---------------

* Nominee for Class III Director.

David I. Sheinfeld. Mr. Sheinfeld joined the Company in June 1990 and
joined its Board of Directors in March 1991. In 1992, Mr. Sheinfeld became
Chairman of the Board and Chief Executive Officer of the Company. Prior to
joining the Company, Mr. Sheinfeld was self-employed and an active participant
and investor in real estate development projects. From 1989 to 1992, Mr.
Sheinfeld was a principal of The Resort Group, Inc., a real estate development
firm.

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<PAGE> 9

Steve R. Grinstead. Mr. Grinstead joined the Company in January 1992 and
was named President, Chief Operating Officer and a director of the Company in
May 1992. From 1981 to 1991, Mr. Grinstead held various positions in purchasing,
marketing and management with Grocers' Supply Company in Houston, Texas,
including serving as a general manager of its banana processing plant and
perishables division. From 1980 to 1981, he was Director of Produce for
O'Brians, an independent chain of grocery stores located in Houston, Texas. From
1974 to 1980, he worked for Winn Dixie Food Stores in Florida. Mr. Grinstead is
active in produce industry associations and was previously President of the
Houston Fresh Fruit and Vegetable Association.

Robert C. Kiehnle. Mr. Kiehnle joined the Company in August 1996 as
Executive Vice President and Chief Financial Officer. From January 1994 through
June 1996, Mr. Kiehnle served as Treasurer of Aviall, Inc., an aircraft service
and parts distribution company located in Dallas, Texas. From 1978 through 1993,
he held various positions in financial management for Itel Rail Corporation, the
rail car leasing subsidiary of Itel Corporation, where he served most recently
as Vice President Finance and Administration.

Thomas M. Hubbard. Mr. Hubbard, a founder of the Company, has been a
director since 1989 and served as the Company's President until April 1992. Mr.
Hubbard has worked in the produce industry for more than 30 years and is an
active investor in a number of produce companies.

Sheldon I. Stein. Mr. Stein has been a director of the Company since
December 1992. Mr. Stein is a Senior Managing Director of Bear, Stearns & Co.
Inc. and heads the firm's southwestern investment banking operation. Mr. Stein
serves as a director of five other companies with publicly-traded securities,
Cinemark USA, Inc., The Mens Wearhouse, Tandycrafts, Inc., First Plus Financial
Group and Cellstar Corp.

Colon Washburn. Mr. Washburn has been a director of the Company since July
1993. From 1971 until January 1993, Mr. Washburn was employed by Wal-Mart
Stores, Inc., ("Wal-Mart") where he served most recently as Executive Vice
President of Wal-Mart and also as Senior Vice President of Sam's Wholesale Club,
a division of Wal-Mart. Since February 1993, Mr. Washburn has been President of
Beau Chene Farms, a real estate development company.

BOARD OF DIRECTORS AND MEETINGS

The Bylaws of the Company provide that the number of directors shall be
fixed from time to time by resolution of the Board of Directors. By resolution
of the Board of Directors the number of directors was reduced from six to five
concurrently with the effectiveness of the resignation of Ben T. Morris as a
director on January 1, 1997. The Board of Directors is divided into three
classes serving staggered three-year terms. Directors for each class will be
elected at the annual meeting of shareholders held in the year in which the term
for such class expires and will serve for three years. The terms of Thomas M.
Hubbard and Sheldon I. Stein will expire at the Meeting and, if reelected, at
the 2000 annual meeting; and the terms of David I. Sheinfeld and Colon Washburn
will expire at the 1998 annual meeting; and the term of Steve Grinstead will
expire at the 1999 annual meeting.

The business of the Company is managed under the direction of the Board of
Directors. The Board meets during the Company's fiscal year to review
significant developments affecting the Company and to act on matters requiring
Board approval. The Board of Directors held one meeting during the fiscal year
ended January 3, 1997 and each director attended the meeting. The Board also
acted by unanimous written consent on nine occasions.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has established Audit, Compensation and Plan
Administration Committees, which devote attention to specific subjects and
assist the Board of Directors in the discharge of its responsibilities. The
functions of each committee and its current members are described below.

Audit Committee. The Audit Committee consists of two members appointed by
the Board of Directors from directors who are neither officers nor employees of
the Company or its subsidiaries. The Audit Committee recommends to the Board of
Directors the appointment of a firm of independent certified public

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accountants to conduct audits of the books, records and accounts of the Company
and monitors the performance, findings and reports of, and approves the fee
arrangement with the independent certified public accountants. The Audit
Committee also reviews accounting objectives and procedures of the Company and
makes reports and recommendations to the Board of Directors as it deems
appropriate. The Audit Committee currently consists of Messrs. Sheinfeld and
Stein. The Audit Committee held one formal meeting during the 1996 fiscal year
and each member of the Audit Committee attended the meeting.

Compensation Committee. The Compensation Committee consists of two members
of the Board of Directors who are neither officers nor employees of the Company.
The Compensation Committee determines the compensation of the Chief Executive
Officer and, with the assistance of management, of senior executive employees of
the Company (including salary, bonus, equity participation through grants of
stock options, and benefits). The Compensation Committee currently consists of
Messrs. Stein and Washburn. During the 1996 fiscal year, the Compensation
Committee acted only by unanimous consent on two occasions and did not hold any
formal meetings.

Plan Administration Committee. The Plan Administration Committee consists
of two members, Messrs. Washburn and Stein, neither of whom are employees or
officers of the Company. The Plan Administration Committee administers the Stock
Option Plans. In general, the Plan Administration Committee construes,
interprets and administers the Stock Option Plans and the provisions of the
options granted thereunder, prescribes and amends rules for the operation of the
Stock Option Plans and makes all other determinations necessary or advisable for
implementation and administration of the Stock Option Plans. The Plan
Administration Committee has full and final authority to select the key
employees to whom awards are granted, the number of shares of Common Stock
subject to awards and the terms of awards, including the exercise price and
vesting period of options. During the 1996 fiscal year, the Plan Administration
Committee acted only by unanimous consent on six occasions and did not hold any
formal meetings.

COMPENSATION OF DIRECTORS

The Company's non-employee directors receive cash compensation of $10,000
per year for serving on the Board of Directors and are reimbursed for expenses
reasonably incurred in connection with their services as directors.

Each director who is not an officer or employee of the Company is eligible
to receive stock options and awards under the 1993 Plan and each director is
eligible to receive stock options and awards under the 1996 Plan. Members of the
Plan Administration Committee may receive stock options or awards under the 1993
Plan only pursuant to the automatic grant provisions of such plan. Pursuant to
the Stock Option Plans, options to purchase 5,000 shares are automatically
granted annually to each director who is not an officer or employee of the
Company. Such automatic option grants are exercisable at fair market value on
the date of grant. Pursuant to these provisions, on August 8, 1996, each of
Messrs. Hubbard, Morris, Stein and Washburn received options to purchase 5,000
shares of Common Stock at $14.00 per share.

8
<PAGE> 11

EXECUTIVE COMPENSATION AND OTHER INFORMATION

SUMMARY COMPENSATION TABLE

The following table sets forth certain information regarding compensation
paid during each of the last three fiscal years to the Company's chief executive
officer and each of the Company's executive officers (the "named executive
officers").

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SHARES
NAME AND ---------------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OTHER OPTIONS COMPENSATION(1)
------------------ ---- -------- ------- ------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
David I. Sheinfeld............ 1996 $187,500 $90,000 $54,000(2) 20,000 $2,885
Chairman of the Board 1995 150,000 50,000 45,536(3) 17,000 2,714
and Chief Executive Officer 1994 130,484 -- -- 15,000 --
Steve R. Grinstead............ 1996 145,000 45,000 -- 15,000 4,750
President and Chief 1995 115,000 25,000 -- 16,000 2,200
Operating Officer 1994 103,814 -- -- 14,000 796
Marc K. Rieke(4).............. 1996 105,000 -- -- -- 3,280
Vice President and Chief 1995 105,000 12,500 -- 15,000 2,393
Financial Officer 1994 95,349 -- -- 13,000 665
</TABLE>

- ---------------

(1) These amounts consist of contributions by the Company to a 401(k) plan on
behalf of the named executive.

(2) This amount includes payments of $45,600 for a housing allowance and $8,400
for an automobile allowance.

(3) This amount includes payments of $41,800 for a housing allowance and $3,736
for an automobile allowance.

(4) Effective in September 1996 Mr. Rieke resigned as Chief Financial Officer
and resigned as an officer of the Company in December 1996. Robert C.
Kiehnle was employed by the Company in August 1996 to serve in the capacity
as Executive Vice President and Chief Financial Officer.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information concerning options to
purchase Common Stock by the named executive officers during fiscal 1996 under
the Company's Stock Option Plans.

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENT OF AT ASSUMED ANNUAL RATE OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(1)
OPTIONS EMPLOYEES EXERCISE EXPIRATION ---------------------------
NAME GRANTED IN 1996 PRICE DATE 5% 10%
---- ---------- ------------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
David I. Sheinfeld........ 20,000 21.3% $11.75 7/12/2001 $ 64,926 $143,470
Steve R. Grinstead........ 15,000 16.0 11.75 7/12/2006 110,843 280,897
Marc K. Rieke............. -- -- -- -- -- --
</TABLE>

- ---------------

(1) The "Potential Realizable Value" portion of the table illustrates value that
might be realized upon the exercise of the options immediately prior to the
expiration of their term, assuming the specified compounded rates of
appreciation of the Common Stock over the term of the options.

9
<PAGE> 12

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth certain information related to options
exercised by the named executive officers during the 1996 fiscal year and the
number and value of options held at fiscal year end.

<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED
OPTIONS AT VALUE OF UNEXERCISED
JANUARY 3, IN-THE-MONEY OPTIONS
1997 AT JANUARY 3, 1997(1)
------------- ---------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
---- --------------- -------- ------------- ---------------------
<S> <C> <C> <C> <C>
David I. Sheinfeld................... -- -- 48,925/20,000 $ 499,775/$97,500
Steve R. Grinstead................... -- -- 87,367/15,000 1,210,054/ 73,125
Marc K. Rieke........................ 51,587 $813,281 -- --
</TABLE>

- ---------------

(1) The value indicated is the amount by which the market value of the
underlying stock on the last trading day of fiscal 1996 ($16 5/8 per share)
exceeded the aggregate exercise price of the options.

EMPLOYMENT AGREEMENTS

In April 1995, the Company entered into severance agreements with Messrs.
Sheinfeld, Grinstead and Rieke pursuant to which each such officer would be
entitled to receive severance compensation equal to two times his annual salary
if his employment with the Company is actually or constructively terminated
following a change in control of the Company. All of the severance agreements
expired in April 1997.

In September 1996, the Company entered into a ten month employment
agreement with Mr. Rieke pursuant to which, among other things, Mr. Rieke
resigned as an officer of the Company.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Stein and Washburn serve as the Compensation Committee of the Board
of Directors. No Compensation Committee interlocks existed in fiscal 1996 and no
insiders participated in Compensation Committee decisions in fiscal 1996.

COMPENSATION COMMITTEE'S REPORT
ON EXECUTIVE COMPENSATION

The Compensation Committee was formed in April 1994 in anticipation of the
Company's initial public offering. Prior to the establishment of the
Compensation Committee, the entire Board of Directors was responsible for
determining executive compensation. Since its formation, the Compensation
Committee has been responsible for recommending bonuses and any increase in base
salaries for the Company's executive officers.

The Compensation Committee believes that, in order for the Company to
succeed, it must be able to attract and retain qualified executive officers. In
determining the type and amount of executive officer compensation, the
objectives of the Compensation Committee are to provide levels of base
compensation, bonuses and long-term incentives (in the form of stock options or
other plans) that will attract and retain talented executive officers and align
their interests with the success of the Company. The Company's executive officer
compensation program currently is comprised of base salary, bonus plan,
long-term incentive compensation (in the form of stock options) and various
benefits generally available to employees of the Company (such as health and
disability insurance). Under the supervision of the Compensation Committee and
the Board of Directors, the Company has developed and implemented compensation
policies, plans and programs which seek to enhance the profitability of the
Company and increase shareholder value.

10
<PAGE> 13

BASE SALARIES

The Company's policy is to maintain base salaries competitive with salaries
paid to similarly situated executive officers of companies of similar size in
comparable industries. Although neither the Board of Directors nor the
Compensation Committee has conducted a formal review of base salaries paid to
similarly situated executive officers, the Company believes that the base
salaries payable to its executive officers are comparable to those paid by
similar companies located in the Company's geographical area and engaged in
industries comparable to the Company's. The Compensation Committee anticipates
that adjustments to base compensation will generally be made based upon assigned
responsibility and performance and successful attainment of specific goals and
objectives of the Company and individual employees. For fiscal 1996, the
Compensation Committee recommended increases in the minimum levels of base
compensation payable to the Company's executive officers.

BONUSES

Year-end cash bonuses are designed to motivate the Company's executive
officers to achieve specific annual financial goals and to achieve favorable
returns for the Company's stockholders. At the end of each fiscal year, the
Compensation Committee will assess each executive's contributions to the Company
as well as the degree to which specific annual financial, strategic, and
operating objectives were met by the Company. For fiscal 1996, the Compensation
Committee granted cash bonuses of $155,000 to the Company's executive officers.

LONG-TERM INCENTIVES

Stock option grants under the Company's Stock Option Plans form the basis
of the Company's long-term incentive compensation for executive officers and
employees. The specific objective of the Stock Option Plans is to align the
long-term interests of the Company's executive officers and employees with those
of shareholders by creating a strong link between executive pay and shareholder
returns. The Company encourages its executive officers and employees to develop
and maintain a significant, long-term stock ownership position in the Company's
Common Stock. Stock options are awarded to executive officers and employees in
order to encourage future management actions aimed at improving the Company's
sales efforts, product quality and profitability. The Company believes that
success in these endeavors will increase the value of the Company's Common Stock
for shareholders. Recipients of options will have the opportunity to share in
the increased value that results from their efforts. The Plan Administration
Committee makes specific awards of options based on an individual's ability to
impact Company-wide performance and in light of the total compensation
appropriate for the individual's position. The Compensation Committee and the
Plan Administration Committee may also consider other bonus or long-term
incentives in their discretion.

CHIEF EXECUTIVE OFFICER COMPENSATION

In approving Mr. Sheinfeld's compensation, the Board of Directors evaluated
and compared Mr. Sheinfeld's duties, responsibilities and performance results,
and the overall results of the Company, to industry norms to determine the
minimum level of base compensation required under the agreement. The
Compensation Committee recommended a cash bonus of $90,000 for fiscal 1996 and
an increase in Mr. Sheinfeld's base salary to $225,000 for fiscal 1997. During
1996, the Plan Administration Committee granted Mr. Sheinfeld options to
purchase 20,000 shares of Common Stock at an exercise price of $11.75 per share.
See "Option Grants in Last Fiscal Year."

This Report is submitted by the members of the Compensation Committee of
the Board of Directors.

Sheldon I. Stein
Colon Washburn

This Report will not be deemed to be incorporated by reference in any
filing by the Company under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, except to the extent that the Company
specifically incorporates this Report by reference.

11
<PAGE> 14

CORPORATE PERFORMANCE GRAPH

The following graph compares the cumulative total return of the Company's
Common Stock during the period commencing May 26, 1994, the date public trading
of the Common Stock began following the Company's initial public equity
offering, to January 3, 1997, with the Nasdaq Market Index and an index of
companies within the Standard Industrial Code for Groceries and Related Products
(the "Peer Index").

The graph depicts the results of investing $100 in the Company's Common
Stock, the Nasdaq Market Index and the Peer Index at closing prices on May 26,
1994. The graph assumes that all dividends were reinvested.

<TABLE>
<CAPTION>
Measurement Period Fresh America Nasdaq Market
(Fiscal Year Covered) Corp. Peer Index Index
<S> <C> <C> <C>
5/26/94 100 100 100
1/1/95 87.50 93.59 101.30
1/1/96 119.12 121.49 131.40
1/1/97 195.59 123.57 163.29
</TABLE>

The stock price performance depicted in the Corporate Performance Graph is
not necessarily indicative of future price performance. The Corporate
Performance Graph will not be deemed to be incorporated by reference in any
filing by the Company under the Securities Act or the Exchange Act.

SHAREHOLDER PROPOSALS

A proper proposal submitted by a shareholder in accordance with applicable
rules and regulations for presentation at the Company's next annual meeting that
is received at the Company's principal executive office, One Lincoln Centre,
5400 LBJ Freeway, Suite 1025, Dallas, Texas 75240, Attention: Investor
Relations, by January 18, 1998, will be included in the Company's proxy
statement and form of proxy for that meeting.

Shareholders wanting to present proposals for action at the next Annual
Meeting of Shareholders must give written notice, in accordance with Article II,
Section 4 of the Company's Restated Bylaws, to the Secretary of the Company at
the address set forth on the cover page of this Proxy Statement not less than 60
days nor more than 90 days prior to the anniversary date of the immediately
preceding annual meeting; provided however, in the event that the annual meeting
is called for a date that is not within 30 days before or after such anniversary
date, notice must be received not later than the tenth day following the day on
which notice of the annual meeting was mailed or publicly disclosed, whichever
first occurs. The chairman presiding at any meeting of the shareholders may, in
his sole discretion, refuse to allow a shareholder or the

12
<PAGE> 15

shareholder's representative to present any proposal which the Company would not
be required to include in a proxy statement pursuant to any rule promulgated by
the Securities and Exchange Commission.

PERSONS MAKING THE SOLICITATION

The enclosed proxy is solicited on behalf of the Board of Directors of the
Company. The cost of soliciting proxies in the accompanying form will be paid by
the Company. Officers of the Company may solicit proxies by mail, telephone or
telegraph. Upon request, the Company will reimburse brokers, dealers, banks and
trustees, or their nominees, for reasonable expenses incurred by them in
forwarding proxy material to beneficial owners of shares of the Common Stock.

OTHER MATTERS

The Board of Directors is not aware of any matter to be presented for
action at the meeting other than the matters set forth herein. Should any other
matter requiring a vote of shareholders arise, the proxies in the enclosed form
confer upon the person or persons entitled to vote the shares represented by
such proxies discretionary authority to vote the same in accordance with their
best judgment in the interest of the Company.

FINANCIAL STATEMENTS

A copy of the Company's 1996 Annual Report containing audited financial
statements accompanies or has preceded this Proxy Statement. The Annual Report
does not constitute a part of the proxy solicitation material.

THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON TO WHOM A COPY OF
THIS PROXY STATEMENT IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON AND BY FIRST CLASS MAIL OR OTHER EQUALLY PROMPT MEANS WITHIN ONE BUSINESS
DAY OF RECEIPT OF SUCH REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-K. REQUESTS SHOULD BE DIRECTED TO INVESTOR RELATIONS, FRESH AMERICA CORP.,
ONE LINCOLN CENTRE, 5400 LBJ FREEWAY, SUITE 1025, DALLAS, TEXAS 75240.

By Order of the Board of Directors,

DAVID I. SHEINFELD
Chairman of the Board and
Secretary

May 19, 1997

13
<PAGE> 16

APPENDIX A

FRESH AMERICA CORP.
1996 STOCK OPTION AND AWARD PLAN

1. Purpose of the Plan. This Plan shall be known as the Fresh America Corp.
1996 Stock Option and Award Plan. The purpose of the Plan is to attract and
retain the best available personnel for positions of substantial responsibility
and to provide incentives to such personnel to promote the success of the
business of Fresh America Corp. and its subsidiaries.

Certain options granted under this Plan are intended to qualify as
"incentive stock options" pursuant to Section 422 of the Internal Revenue Code
of 1986, as amended from time to time, while certain other options granted under
the Plan will constitute nonqualified options.

2. Definitions. As used herein, the following definitions shall apply:

(a) "Board" means the Board of Directors of the Corporation.

(b) "Common Stock" means the Common Stock, $.01 par value per share,
of the Corporation. Except as otherwise provided herein, all Common Stock
issued pursuant to the Plan shall have the same rights as all other issued
and outstanding shares of Common Stock, including but not limited to voting
rights, the right to dividends, if declared and paid, and the right to pro
rata distributions of the Corporation's assets in the event of liquidation.

(d) "Committee" means the committee described in Section 19 that
administers the Plan.

(e) "Corporation" means Fresh America Corp., a Texas corporation.

(f) "Date of Grant" means the date on which an Option is granted or
Restricted Stock is awarded pursuant to this Plan or, if the Board or the
Committee so determines, the date specified by the Board or the Committee
as the date the award is to be effective.

(g) "Employee" means any officer or other key employee of the
Corporation or one of its Subsidiaries (including any director who is also
an officer or key employee of the Corporation or one of its Subsidiaries).

(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

(i) "Fair Market Value" means the closing sale price (or average of
the quoted closing bid and asked prices if there is no closing sale price
reported) of the Common Stock on the trading day immediately prior to the
date specified as reported by The Nasdaq Stock Market or by the principal
national stock exchange on which the Common Stock is then listed. If there
is no reported price information for the Common Stock, the Fair Market
Value will be determined by the Board or the Committee, in its sole
discretion. In making such determination, the Board or the Committee may,
but shall not be obligated to, commission and rely upon an independent
appraisal of the Common Stock.

(j) "Non-Employee Director" means an individual who is a "non-employee
director" as defined in Rule 16b-3 under the Exchange Act and also an
"outside director" within the meaning of Treasury Regulation
sec. 1.162-27(e)(3).

(k) "Nonqualified Option" means any Option that is not a Qualified
Option.

(l) "Option" means a stock option granted pursuant to Section 6 of
this Plan.

(m) "Optionee" means any Employee or director who receives an Option.

(n) "Participant" means an Employee or director who receives an Option
or Restricted Stock pursuant to this Plan.

14
<PAGE> 17

(o) "Plan" means the Fresh America Corp. 1996 Stock Option and Award
Plan, as amended from time to time.

(p) "Qualified Option" means any Option that is intended to qualify as
an "incentive stock option" within the meaning of Section 422 of the Code.

(q) "Restricted Stock" means Common Stock awarded to an Employee or
director pursuant to Section 7 of this Plan.

(r) "Rule 16b-3" means Rule 16b-3 of the rules and regulations under
the Exchange Act, as Rule 16b-3 may be amended from time to time, and any
successor provisions to Rule 16b-3 under the Exchange Act.

(s) "Subsidiary" means any now existing or hereinafter organized or
acquired company of which more than fifty percent (50%) of the issued and
outstanding voting stock is owned or controlled directly or indirectly by
the Corporation or through one or more Subsidiaries of the Corporation.

3. Term of Plan. The Plan has been adopted by the Board effective as of
July 12, 1996. To permit the granting of Qualified Options under the Code, and
to qualify awards of Options or Restricted Stock hereunder as "performance
based" under Section 162(m) of the Code, the Plan will be submitted for approval
by the shareholders of the Corporation by the affirmative votes of the holders
of a majority of the shares of Common Stock then issued and outstanding, for
approval no later than the next annual meeting of shareholders. If the Plan is
not so approved by the shareholders of the Corporation, then any Options
previously granted under the Plan will be Nonqualified Options, regardless of
whether the option agreements relating thereto purport to grant Qualified
Options. The Plan shall continue in effect until terminated pursuant to Section
19(a).

4. Shares Subject to the Plan. Except as otherwise provided in Section 18
hereof, the aggregate number of shares of Common Stock issuable upon the
exercise of Options or upon the grant of Restricted Stock pursuant to this Plan
shall be 150,000 shares. Such shares may either be authorized but unissued
shares or treasury shares. The Corporation shall, during the term of this Plan,
reserve and keep available a number of shares of Common Stock sufficient to
satisfy the requirements of the Plan. If an Option should expire or become
unexercisable for any reason without having been exercised in full, or
Restricted Stock should fail to vest and be forfeited in whole or in part for
any reason, then the shares that were subject thereto shall, unless the Plan has
terminated, be available for the grant of additional Options or Restricted Stock
under this Plan, subject to the limitations set forth above.

5. Eligibility. Qualified Options may be granted under Section 6 of the
Plan to such Employees of the Corporation or its Subsidiaries as may be
determined by the Board or the Committee. Nonqualified Options may be granted
under Section 6 of the Plan to such Employees and directors of the Corporation
or its Subsidiaries as may be determined by the Board or the Committee.
Restricted Stock may be granted under Section 7 of the Plan to such Employees
and directors of the Corporation or its Subsidiaries as may be determined by the
Board or the Committee. Subject to the limitations and qualifications set forth
in this Plan, the Board or the Committee shall also determine the number of
Options or shares of Restricted Stock to be granted, the number of shares
subject to each Option or Restricted Stock grant, the exercise price or prices
of each Option, the vesting and exercise period of each Option and the vesting
and/or forfeiture provisions relating to Restricted Stock, whether an Option may
be exercised as to less than all of the Common Stock subject thereto, and such
other terms and conditions of each Option or grant of Restricted Stock, if any,
as are consistent with the provisions of this Plan. In connection with the
granting of Qualified Options, the aggregate Fair Market Value (determined at
the Date of Grant of a Qualified Option) of the shares with respect to which
Qualified Options are exercisable for the first time by an Optionee during any
calendar year (under all such plans of the Optionee's employer corporation and
its parent and subsidiary corporations as defined in Section 424(e) and (f) of
the Code, or a corporation or a parent or subsidiary corporation of such
corporation issuing or assuming an Option in a transaction to which Section
424(a) of the Code applies (collectively, such corporations described in this
sentence are hereinafter referred to as "Related Corporations")) shall not
exceed $100,000 or such other amount as from time to time provided in Section
422(d) of the Code or any successor provision.

15
<PAGE> 18

6. Grant of Options. Except as provided in Section 19(c), the Board or the
Committee shall determine the number of shares of Common Stock to be offered
from time to time pursuant to Options granted hereunder and shall grant Options
under the Plan. The grant of Options shall be evidenced by Option agreements
containing such terms and provisions as are approved by the Board or the
Committee and executed on behalf of the Corporation by an appropriate officer.
In connection with the granting of any Options under the Plan, the aggregate
number of shares of Common Stock issuable to any single Participant shall not
exceed the number of shares subject to the Plan referred to in Section 4.

Unless the Board or the Committee determines otherwise with respect to a
particular year, each NonEmployee Director will automatically be granted a
Nonqualified Option to purchase 5,000 shares of Common Stock (subject to
adjustment pursuant to Section 18 hereof), at an exercise price equal to the
Fair Market Value of the Common Stock on the Date of Grant, on August 8 of each
year.

7. Restricted Stock. Except as provided in Section 19(d), the Board or the
Committee shall determine the number of shares of Common Stock to be granted as
Restricted Stock from time to time under the Plan. The grant of Restricted Stock
shall be evidenced by Restricted Stock agreements containing such terms and
provisions as are approved by the Board or the Committee and executed on behalf
of the Corporation by an appropriate officer.

8. Time of Grant of Options. The date of grant of an Option or Restricted
Stock under the Plan shall be the date on which the Board or the Committee
awards the Option or Restricted Stock or, if the Board or the Committee so
determines, the date specified by the Board or the Committee as the date the
award is to be effective. Notice of the grant shall be given to each Participant
to whom an Option or Restricted Stock is granted promptly after the date of such
grant.

9. Price. The exercise price for each share of Common Stock subject to an
Option (the "Exercise Price") granted pursuant to Section 6 of the Plan shall be
determined by the Board or the Committee at the Date of Grant; provided,
however, that (a) the Exercise Price for any Option shall not be less than 100%
of the Fair Market Value of the Common Stock at the Date of Grant, and (b) if
the Optionee owns on the Date of Grant more than 10 percent of the total
combined voting power of all classes of stock of the Corporation or its parent
or any of its subsidiaries, as more fully described in Section 422(b)(6) of the
Code or any successor provision (such shareholder is referred to herein as a
"10-Percent Shareholder"), the Exercise Price for any Qualified Option granted
to such Optionee shall not be less than 110% of the Fair Market Value of the
Common Stock at the Date of Grant. The Board or the Committee in its discretion
may award shares of Restricted Stock under Section 7 of the Plan to Participants
without requiring the payment of cash consideration for such shares.

10. Vesting. Subject to Section 12 of this Plan, each Option and Restricted
Stock award under the Plan shall vest or be subject to forfeiture in accordance
with the provisions set forth in the applicable Option agreement or Restricted
Stock agreement. The Board or the Committee may, but shall not be required to,
permit acceleration of vesting or termination of forfeiture provisions upon any
sale of the Corporation or similar transaction. A Participant's Option or
Restricted Stock agreement may contain such additional provisions with respect
to vesting as the Board or the Committee may specify.

11. Exercise. A Participant may pay the Exercise Price of the shares of
Common Stock as to which an Option is being exercised by the delivery of cash,
check or, at the Corporation's option, by the delivery of shares of Common Stock
having a Fair Market Value on the date immediately preceding the exercise date
equal to the Exercise Price.

If the shares to be purchased are covered by an effective registration
statement under the Securities Act of 1933, as amended, any Option granted under
the Plan may be exercised by a broker-dealer acting on behalf of an Optionee if
(a) the broker-dealer has received from the Optionee or the Corporation a fully-
and duly-endorsed agreement evidencing such Option, together with instructions
signed by the Optionee requesting the Corporation to deliver the shares of
Common Stock subject to such Option to the broker-dealer on behalf of the
Optionee and specifying the account into which such shares should be deposited,
(b) adequate provision has been made with respect to the payment of any
withholding taxes due upon such exercise, and (c) the

16
<PAGE> 19

broker-dealer and the Optionee have otherwise complied with Section 220.3(e)(4)
of Regulation T, 12 CFR Part 220, or any successor provision.

12. When Qualified Options May be Exercised. No Qualified Option shall be
exercisable at any time after the expiration of ten (10) years from the Date of
Grant; provided, however, that if the Optionee with respect to a Qualified
Option is a 10-Percent Shareholder on the Date of Grant of such Qualified
Option, then such Option shall not be exercisable after the expiration of five
(5) years from its Date of Grant. In addition, if an Optionee of a Qualified
Option ceases to be an employee of the Corporation or any Related Corporation
for any reason, such Optionee's vested Qualified Options shall not be
exercisable after (a) 90 days following the date such Optionee ceases to be an
employee of the Corporation or any Related Corporation, if such cessation of
service is not due to the death or permanent and total disability (within the
meaning of Section 22(e)(3) of the Code) of the Optionee, or (b) twelve months
following the date such Optionee ceases to be an employee of the Corporation or
any Related Corporation, if such cessation of service is due to the death or
permanent and total disability (as defined above) of the Optionee. Upon the
death of an Optionee, any vested Qualified Option exercisable on the date of
death may be exercised by the Optionee's estate or by a person who acquires the
right to exercise such Qualified Option by bequest or inheritance or by reason
of the death of the Optionee, provided that such exercise occurs within both the
remaining option term of the Qualified Option and twelve months after the date
of the Optionee's death. This Section 12 only provides the outer limits of
allowable exercise dates with respect to Qualified Options; the Board or the
Committee may determine that the exercise period for a Qualified Option shall
have a shorter duration than as specified above.

13. Option Financing. Upon the exercise of any Option granted under the
Plan, the Corporation may, but shall not be required to, make financing
available to the Participant for the purchase of shares of Common Stock pursuant
to such Option on such terms as the Board or the Committee may specify.

14. Withholding of Taxes. The Board or the Committee shall make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of any taxes that the Corporation is required by any law or
regulation of any governmental authority to withhold in connection with any
Option or Restricted Stock including, but not limited to, withholding the
issuance of all or any portion of the shares of Common Stock subject to such
Option or Restricted Stock until the Participant reimburses the Corporation for
the amount it is required to withhold with respect to such taxes, canceling any
portion of such issuance in an amount sufficient to reimburse the Corporation
for the amount it is required to withhold or taking any other action reasonably
required to satisfy the Corporation's withholding obligation.

15. Conditions Upon Issuance of Shares. The Corporation shall not be
obligated to sell or issue any shares upon the exercise of any Option granted
under the Plan or to deliver Restricted Stock unless the issuance and delivery
of shares complies with all provisions of applicable federal and state
securities laws and the requirements of The Nasdaq Stock market or any other
stock exchange upon which shares of the Common Stock may then be listed.

As a condition to the exercise of an Option or the grant of Restricted
Stock, the Corporation may require the person exercising the Option or receiving
the grant of Restricted Stock to make such representations and warranties as may
be necessary to assure the availability of an exemption from the registration
requirements of applicable federal and state securities laws.

The Corporation shall not be liable for refusing to sell or issue any
shares covered by any Option or for refusing to issue Restricted Stock if the
Corporation cannot obtain authority from the appropriate regulatory bodies
deemed by the Corporation to be necessary to sell or issue such shares in
compliance with all applicable federal and state securities laws and the
requirements of The Nasdaq Stock market or any other stock exchange upon which
shares of the Common Stock may then be listed. In addition, the Corporation
shall have no obligation to any Participant, express or implied, to list,
register or otherwise qualify the shares of Common Stock covered by any Option
or Restricted Stock.

No Participant will be, or will be deemed to be, a holder of any Common
Stock subject to an Option unless and until such Participant has exercised his
or her Option and paid the purchase price for the subject shares of Common
Stock. Each Qualified Option under this Plan shall be transferable only by will
or the laws

17
<PAGE> 20

of descent and distribution and shall be exercisable during the Participant's
lifetime only by such Participant. Each nonqualified Option under this Plan
shall be transferable only by will, the laws of descent and distribution,
pursuant to a domestic relations order issued by a court of competent
jurisdiction, or to a trust established by the Participant for estate planning
purposes.

16. Restrictions on Shares. Shares of Common Stock issued pursuant to the
Plan may be subject to restrictions on transfer under applicable federal and
state securities laws. The Board may impose such additional restrictions on the
ownership and transfer of shares of Common Stock issued pursuant to the Plan as
it deems desirable; any such restrictions shall be set forth in any Option
agreement entered into hereunder.

17. Modification of Options. Except as provided in Section 19(c) of this
Plan, at any time and from time to time, the Board or the Committee may execute
an instrument providing for modification, extension or renewal of any
outstanding Option, provided that no such modification, extension or renewal
shall impair the Option without the consent of the holder of the Option.
Notwithstanding the foregoing, in the event of such a modification,
substitution, extension or renewal of a Qualified Option, the Board or the
Committee may increase the exercise price of such Option if necessary to retain
the qualified status of such Option.

18. Effect of Change in Stock Subject to the Plan. In the event that each
of the outstanding shares of Common Stock (other than shares held by dissenting
shareholders) shall be changed into or exchanged for a different number or kind
of shares of stock of the Corporation or of another corporation (whether by
reason of merger, consolidation, recapitalization, reclassification, split-up,
combination of shares or otherwise), or in the event a stock split or stock
dividend occurs, then there shall be substituted for each share of Common Stock
then subject to Options or Restricted Stock awards or available for Options or
Restricted Stock awards the number and kind of shares of stock into which each
outstanding share of Common Stock (other than shares held by dissenting
shareholders) shall be so changed or exchanged, or the number of shares of
Common Stock as is equitably required in the event of a stock split or stock
dividend, together with an appropriate adjustment of the Exercise Price. The
Board may, but shall not be required to, provide additional anti-dilution
protection to a Participant under the terms of the Participant's Option or
Restricted Stock agreement.

19. Administration.

(a) The Plan shall be administered by the Board or by a committee
comprised solely of two or more Non-Employee Directors appointed by the
Board (the "Committee"). Options and Restricted Stock may be granted under
Sections 6 and 7, respectively, only (i) by the Board as a whole, or (ii)
by majority agreement of the members of the Committee. Option agreements
and Restricted Stock agreements, in the forms as approved by the Board or
the Committee, and containing such terms and conditions consistent with the
provisions of this Plan as are determined by the Board or the Committee,
may be executed on behalf of the Corporation by the Chairman of the Board,
the President or any Vice President of the Corporation. The Board or the
Committee shall have complete authority to construe, interpret and
administer the provisions of this Plan and the provisions of the Option
agreements and Restricted Stock agreements granted hereunder; to prescribe,
amend and rescind rules and regulations pertaining to this Plan; to suspend
or discontinue this Plan; and to make all other determinations necessary or
deemed advisable in the administration of the Plan. The determinations,
interpretations and constructions made by the Board or the Committee shall
be final and conclusive. No member of the Board or the Committee shall be
liable for any action taken, or failed to be taken, made in good faith
relating to the Plan or any award thereunder, and the members of the Board
or the Committee shall be entitled to indemnification and reimbursement by
the Corporation in respect of any claim, loss, damage or expense (including
attorneys' fees) arising therefrom to the fullest extent permitted by law.

(b) Members of the Committee shall be specified by the Board, and
shall consist solely of NonEmployee Directors. Non-Employee Directors may
not possess an interest in any transaction for which disclosure is required
under Section 404(a) of Regulation S-K under the Exchange Act or be engaged
in a business relationship that must be disclosed under Section 404(a).

18
<PAGE> 21

(c) Although the Board or the Committee may suspend or discontinue the
Plan at any time, all Qualified Options must be granted within ten (10)
years from the effective date of the Plan or the date the Plan is approved
by the shareholders of the Corporation, whichever is earlier.

20. Continued Employment Not Presumed. Nothing in this Plan or any document
describing it nor the grant of any Option or Restricted Stock shall give any
Participant the right to continue in the employment of the Corporation or affect
the right of the Corporation to terminate the employment of any such person with
or without cause.

21. Liability of the Corporation. Neither the Corporation, its directors,
officers or employees or the Committee, nor any Subsidiary which is in existence
or hereafter comes into existence, shall be liable to any Participant or other
person if it is determined for any reason by the Internal Revenue Service or any
court having jurisdiction that any Qualified Option granted hereunder does not
qualify for tax treatment as an incentive stock option under Section 422 of the
Code.

22. Governing Law. THE PLAN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF STATE OF TEXAS AND THE UNITED STATES, AS APPLICABLE,
WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

23. Severability of Provisions. If any provision of this Plan is determined
to be invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect the remaining provisions of the Plan, but such
invalid, illegal or unenforceable provision shall be fully severable, and the
Plan shall be construed and enforced as if such provision had never been
inserted herein.

19
<PAGE> 22

FIRST AMENDMENT
TO
FRESH AMERICA CORP.
1996 STOCK OPTION AND AWARD PLAN

Fresh America Corp., a Texas corporation (the "Corporation"), previously
established the Fresh America Corp. 1996 Stock Option and Award Plan (the
"Plan").

Fresh America Corp. desires to amend the Plan effective as of April 30,
1997 as hereinafter set forth.

1. AMENDMENTS TO THE PLAN. The Plan is hereby amended as follows:

a. Definitions. Section 2, "Definitions," is hereby amended by adding
thereto the definition of "Executive" to read in its entirety as follows:

"Executive" means the Chief Executive Officer of the Corporation
and the other four highest compensated officers of the Corporation."

b. Term of Plan. Section 3, "Term of Plan," is hereby amended by
deleting the third sentence therein in its entirety and inserting the
following in lieu thereof:

"If the Plan is not so approved by the shareholders of the
Corporation, then any Options previously granted under the Plan will be
Nonqualified Options, regardless of whether the option agreements
relating thereto purport to grant Qualified Options, and any Options
granted to Executives will be void."

c. Grant of Options. Section 6, "Grant of Options," is hereby deleted
in its entirety and the following is inserted in lieu thereof:

"6. Grant of Options. Except as provided in Section 19(c), the Board or
the Committee shall determine the number of shares of Common Stock
to be offered from time to time pursuant to Options granted
hereunder and shall grant Options under the Plan. Notwithstanding
the foregoing, the Committee shall have the exclusive authority to
grant Options to Executives. The grant of Options shall be evidenced
by Option agreements containing such terms and provisions as are
approved by the Board or the Committee and executed on behalf of the
Corporation by an appropriate officer. In connection with the
granting of any Options under the Plan, the aggregate number of
shares of Common Stock with respect to which Options may be granted
to any single Executive in any one year shall not exceed the number
of shares subject to the Plan referred to in Section 4. Solely for
this purpose, Options that lapse or are cancelled continue to count
against such limit."

d. When Qualified Options May be Exercised. Section 12, "When
Qualified Options May be Exercised is hereby amended by deleting the
reference therein to "90 days" in its entirety and inserting "three months"
in lieu thereof.

e. Modifications of Plan and Options. Section 17 of the Plan,
"Modification of Options," is hereby deleted in its entirety and the
following inserted in lieu thereof:

"17. Modification of Plan and Options.

(a) The Board or the Committee may from time to time and at any
time alter, amend, suspend, discontinue or terminate this Plan;
provided, however, that no such action of the Board or Committee may,
without the approval of the shareholders of the Corporation, alter the
provisions of the Plan so as to (i) increase the maximum number of
shares of Common Stock that may be subject to this Plan (except as
provided in Section 18 of this Plan), (ii) change the class of employees
eligible to participate in this Plan, or (iii) change the annual limit
on the number of Options granted to an Executive in Section 6 above.

(b) Except as provided in Section 19(c) of this Plan, at any time
and from time to time, the Board or the Committee may execute an
instrument providing for modification, extension or renewal

20
<PAGE> 23

of any outstanding Option, provided that no such modification, extension
or renewal shall impair the Option without the consent of the holder of
the Option. Notwithstanding the foregoing, in the event of such a
modification, substitution, extension or renewal of a Qualified Option,
the Board or the Committee may increase the exercise price of such
Option if necessary to retain the qualified status of such Option."

f. Administration. Section 19, "Administration," is hereby deleted in
its entirety and the following inserted in lieu thereof:

"19. Administration.

(a) The Plan shall be administered by the Board or by a committee
comprised solely of two or more Non-Employee Directors appointed by the
Board (the "Committee"). Options and Restricted Stock may be granted
under Sections 6 and 7, respectively, only (i) by the Board as a whole,
or (ii) by majority agreement of the members of the Committee. Option
agreements and Restricted Stock agreements, in the forms as approved by
the Board or the Committee, and containing such terms and conditions
consistent with the provisions of this Plan as are determined by the
Board or the Committee, may be executed on behalf of the Corporation by
the Chairman of the Board, the President or any Vice President of the
Corporation. The Board or the Committee shall have complete authority to
construe, interpret and administer the provisions of this Plan and the
provisions of the Option agreements and Restricted Stock agreements
granted hereunder; to prescribe, amend and rescind rules and regulations
pertaining to this Plan; to suspend, discontinue or terminate this Plan;
and to make all other determinations necessary or deemed advisable in
the administration of the Plan. The determinations, interpretations and
constructions made by the Board or the Committee shall be final and
conclusive. No member of the Board or the Committee shall be liable for
any action taken, or failed to be taken, made in good faith relating to
the Plan or any award thereunder, and the members of the Board or the
Committee shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage or expense (including
attorneys' fees) arising therefrom to the fullest extent permitted by
law.

(b) Members of the Committee shall be specified by the Board, and
shall consist solely of Non-Employee Directors. Non-Employee Directors
may not possess an interest in any transaction for which disclosure is
required under Section 404(a) of Regulation S-K under the Exchange Act
or be engaged in a business relationship that must be disclosed under
Section 404(a) and must qualify as 'outside directors' as defined in
Section 162(m) of the Code and regulations thereunder.

(c) Although the Board or the Committee may suspend, discontinue or
terminate the Plan at any time, all Qualified Options must be granted
within ten (10) years from the effective date of the Plan or the date
the Plan is approved by the shareholders of the Corporation, whichever
is earlier."

2. RATIFICATION. Except as modified hereby, the terms of the Plan are in full
force and effect.

FRESH AMERICA CORP.

By: /s/ DAVID I. SHEINFELD
----------------------------------
David I. Sheinfeld, Chairman of
the
Board and Chief Executive Officer

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<PAGE> 24

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FRESH AMERICA CORP.
BOARD OF DIRECTORS PROXY FOR THE ANNUAL MEETING
OF SHAREHOLDERS AT 10:00 A.M. THURSDAY, JUNE 19, 1997
LINCOLN CITY CLUB, LINCOLN CENTRE, 5410 LBJ FREEWAY, DALLAS, TEXAS 75240

The undersigned shareholder of Fresh America Corp. (the "Company") hereby
appoints David I. Sheinfeld and Steve R. Grinstead or either of them, as
proxies, each with full powers of substitution, to vote the shares of the
undersigned at the above-stated Annual Meeting and at any adjournment(s)
thereof:

(1) Election of Thomas M. Hubbard and Sheldon I. Stein as Class III Directors.

FOR all nominees (except as WITHHOLD AUTHORITY
provided to the contrary below) [ ] to vote for all
nominees [ ]

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME HERE):

(2) Approval of Fresh America Corp. 1996 Stock Option and Award Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(3) Ratification of the selection of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year 1997.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

(4) In their discretion, the proxies are authorized to vote upon such other
business or matters as may properly come before the meeting or any
adjournment thereof.

(Continued and to be signed on the reverse side)

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<PAGE> 25

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(Continued from reverse side)

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE REVERSE SIDE. IF A
CHOICE IS NOT INDICATED WITH RESPECT TO ITEMS (1), (2) AND (3) THIS PROXY WILL
BE VOTED "FOR" SUCH ITEM. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO
ANY MATTER REFERRED TO IN ITEM (4). THIS PROXY IS REVOCABLE AT ANY TIME BEFORE
IT IS EXERCISED.

Receipt herewith of the Company's Annual Report and Notice of Meeting and
Proxy Statement, dated May 19, 1997, is hereby acknowledged.
Dated: , 1997

-----------------------------------

(Signature(s) of Shareholder(s))

(Joint owners must EACH sign.
Please sign EXACTLY as your name(s)
appear(s) on this card. When
signing as attorney, trustee,
executor, administrator, guardian
or corporate officer, please give
your FULL title.)

PLEASE SIGN, DATE AND MAIL TODAY.

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