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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 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)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1
(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:
(3) Filing Party:
(4) Date Filed:
- -----------------------------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
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FRESH AMERICA CORP.
6600 LBJ Freeway, Suite 180
Dallas, Texas 75240
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 1998
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 the Crowne Plaza
Suites, 7800 Alpha Road, Dallas, Texas 75240, Thursday, June 25, 1998, at 10:00
a.m. local time, for the following purposes:
1. to elect two Class I directors to serve until the expiration
of their terms and until their successors are elected and
qualified;
2. to approve an amended and restated version of the Fresh
America Corp. 1996 Stock Option and Award Plan to, among other
things, increase the number of shares of common stock, par
value $.01 per share, authorized for issuance thereunder from
150,000 shares to 625,000 shares;
3. to ratify the selection of KPMG Peat Marwick LLP as the
Company's independent auditors for fiscal year 1998; and
4. to transact such other business as may properly come before
the Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on May 15, 1998
as the record date (the "Record Date") for the determination of shareholders
entitled to notice of and to vote at the Meeting and any adjournments 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 28, 1998
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED.
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FRESH AMERICA CORP.
6600 LBJ Freeway, Suite 180
Dallas, Texas 75240
---------------------------
PROXY STATEMENT
---------------------------
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 1998
---------------------------
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 25, 1998, at
the Crowne Plaza Suites, 7800 Alpha Road, Dallas, Texas 75240 (the "Meeting"),
and at any adjournments thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. This Proxy Statement and the enclosed
Proxy Card were first mailed or given to shareholders on or about May 28, 1998.
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 15, 1998 (the
"Record Date") are entitled to notice of and to vote at the Meeting. On the
Record Date the Company had 4,853,397 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 I directors whose terms expire at the Meeting. The
Board of Directors has proposed David I. Sheinfeld and Colon Washburn as
nominees for reelection as Class I 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
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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 I
DIRECTOR.
PROPOSAL 2 - APPROVAL OF THE FRESH AMERICA CORP. 1996 STOCK OPTION AND AWARD
PLAN AS AMENDED AND RESTATED
Effective as of July 12, 1996, the Board of Directors adopted the Fresh
America Corp. 1996 Stock Option and Award Plan (the "Original 1996 Plan"), and
effective as of April 30, 1997, the Board of Directors adopted the First
Amendment to such plan (the "First Amendment;" the First Amendment and the
Original Plan are, collectively, the "1996 Plan"). The shareholders of the
Company approved the 1996 Plan at the Company's annual meeting held June 19,
1997. The 1996 Plan presently states that up to a maximum of 150,000 shares of
Common Stock are available for awards of options and restricted stock
thereunder. As of May 15, 1998, options to purchase 126,000 shares of Common
Stock were outstanding and 17,000 shares of Common Stock were available for
future grants under the 1996 Plan.
The Company's other stock option plan, the Fresh America Corp. 1993
Stock Option and Award Plan (the "1993 Plan"), presently states that up to a
maximum of 450,000 shares of Common Stock are available for awards of options
and restricted stock thereunder. As of May 15, 1998, options to purchase 223,087
shares of Common Stock were outstanding and 7,177 shares of Common Stock were
available for future grants under the 1993 Plan.
To continue the effectiveness of the 1996 Plan, on May 22, 1998 the
Board of Directors adopted, subject to shareholder approval, an amended and
restated version of the 1996 Plan (the "Restated 1996 Plan") to (i) increase the
number of shares of Common Stock available for issuance under the 1996 Plan from
150,000 shares to 625,000 shares, (ii) permit, at the discretion of the Board of
Directors or the committee administering the 1996 Plan, the transfer of
nonqualified stock options granted thereunder under certain circumstances, (iii)
clarify the procedures for using shares of Common Stock to exercise options, and
(iv) make other clarifications in the 1996 Plan. Additionally, if the Restated
1996 Plan is approved by the shareholders, no additional grants would be made
under the 1993 Plan. If approved by the shareholders, the Restated 1996 Plan
will permit the Company to continue to grant options and to make awards of
restricted stock under the 1996 Plan, which the Board of Directors believes is
necessary in order to attract, motivate and retain outstanding directors and
employees.
A summary of the material features of the Restated 1996 Plan follows.
Such summary does not purport to be complete and is qualified in its entirety by
reference to the text of the Restated 1996 Plan, a copy of which is attached as
Appendix A and is incorporated herein by reference.
General. The Restated 1996 Plan provides for grants of stock
options ("Options") and restricted stock ("Restricted Stock") to directors,
officers and other key employees of the Company and its subsidiaries. The
Restated 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 Restated 1996 Plan. The purpose of the Restated 1996
Plan is to provide equity incentives designed to increase shareholder value and
to advance the interests of the Company by furnishing
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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 Restated 1996 Plan. If the Restated 1996
Plan is approved by the shareholders of the Company, the aggregate number of
shares of Common Stock issuable upon the exercise of Options or grants of
Restricted Stock under the Restated 1996 Plan will be 625,000 shares.
Proportionate adjustments will be made to the number of shares of the Common
Stock subject to the Restated 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 cancelled, terminated or
forfeited and shares of Common Stock used as payment for shares issued upon
exercise of an Option will be available for reissuance under the Restated 1996
Plan. The top five executive officers of the Company may not be granted Options
with respect to more than 625,000 shares in any year; lapsed or cancelled
Options count against these limits.
Administration of the Restated 1996 Plan. The Board of Directors or the
Plan Administration Committee, as the case may be, administers the Restated 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, as applicable, grants of
Restricted Stock, (iv) to prescribe all other terms and conditions consistent
with the Restated 1996 Plan, (v) to interpret the Restated 1996 Plan, (vi) to
establish any rules or regulations relating to the Restated 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 Restated
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 ("nonqualified stock 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. In the case of a participant who owns more than ten percent of
the total outstanding shares of Common Stock, the exercise price for any
incentive stock Option granted to such participant may not be less than 110
percent of the fair market value of the Common Stock on the date of grant and
the term may not exceed five years. The Restated 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.
Termination of Employment. If a participant dies or becomes disabled,
all vested incentive stock 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
incentive stock Options within three months (or their remaining term, if less).
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Transferability of Options. Incentive stock Options granted under the
Restated 1996 Plan are transferable only by will or the laws of descent and
distribution. Nonqualified Options granted under the Restated 1996 Plan are
transferable only by will, the laws of descent and distribution or pursuant to a
domestic relations order issued by a court of competent jurisdiction; provided,
however, that the Board of Directors or Plan Administration Committee, as the
case may be, may, in its discretion and as evidenced in the related nonqualified
Option agreement, permit a participant to transfer his or her nonqualified
Option to such participant's spouse, children or grandchildren or to one or more
partnerships or trusts where such immediate family members are the only partners
or beneficiaries if the Participant does not receive any consideration in any
form for the transfer of such nonqualified Option. Any nonqualified Option so
transferred will continue to be subject to the same terms and conditions in the
hands of the transferee as were applicable immediately prior to the
participant's transfer of such Option.
Amendments to the Restated 1996 Plan. The Board of Directors or the
Plan Administration Committee may amend or discontinue the Restated 1996 Plan at
any time subject to certain restrictions set forth in the Restated 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 Restated 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 Restated 1996
Plan is exercised, the participant 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 such 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 participant is required to treat as ordinary income. Any
taxable income recognized in connection with a nonqualified stock Option
exercised by a participant 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 participant'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
long-term generally begins on the date on which the participant acquires the
Common Stock.
An employee generally will not recognize any income upon the exercise
of an incentive 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 an incentive 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
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income equal to the lesser of (i) the difference between the Option price and
the fair market value of the Common 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 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.
Reasons for the Proposal. The 1996 Plan is designed 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. The Board of Directors is
recommending the Restated 1996 Plan in order to ensure that sufficient shares
are available to reward and motivate existing employees and to enable the
Company to attract the best available personnel in the future. Shareholder
approval is being requested in order for grants of incentive stock Options to be
tax-qualified, and to preserve the Company's full tax deduction with respect to
nonqualified Options granted to the top five executive officers. A majority of
the votes cast is required to approve the Restated 1996 Plan.
Interests of Certain Persons in Matters to be Acted Upon. In
considering whether to vote for approval of the Restated 1996 Plan, shareholders
should be aware that each of the directors, nominees for director and executive
officers have received Option grants under the 1996 Plan and will be eligible to
receive Option grants and Restricted Stock awards under the Restated 1996 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
RESTATED 1996 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 2,
1998 and has reported on the Company's financial statements. The Board of
Directors has selected KPMG Peat Marwick LLP as the Company's independent
auditors for fiscal year 1998 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.
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Shareholder ratification is not required for the selection of KPMG Peat
Marwick LLP as the Company's independent auditors for fiscal year 1998, 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.
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) each of the
Company's other named executive officers and (e) all executive officers and
directors as a group, as of May 15, 1998.
<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 11.40%
Thomas M. Hubbard (3)(5)............... 504,432 10.35%
Steve R. Grinstead (3)(6).............. 103,167 2.10%
Sheldon I. Stein (3)(7)................ 29,813 *
Robert C. Kiehnle (8).................. 12,000 *
Colon Washburn (3)(9).................. 19,382 *
Lawrence V. Jackson (3)................ 1,000 *
Edward U. Sabin........................ -- --
Arnold Fogle (10)...................... 276,722 5.43%
Agostino Sarraino (11)................. 276,722 5.43%
Gruber & McBaine Capital
Management, Inc. (12)............. 426,100 8.78%
All directors and executive officers
as a group (8 persons) (13)....... 1 ,246,412 24.73%
</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 (the "SEC"). 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 outstanding at May
15, 1998, plus the total number of outstanding options held by each
such person that are exercisable within 60 days of such date and
securities exchangeable into Common Stock within 60 days of such date.
Shares issuable upon exercise of outstanding options or through the
conversion of securities exchangeable into Common Stock, however, are
not deemed outstanding for purposes of computing the percentage
ownership of any other person.
(3) Director of the Company.
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(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 Company's stock option plans that are
exercisable within 60 days. Mr. Sheinfeld's address is c/o Fresh
America Corp. at 6600 LBJ Freeway, Suite 180, Dallas, Texas 75240.
(5) Includes 20,000 shares subject to options issued to Mr. Hubbard under
the Company's stock option plans that are exercisable within 60 days.
Mr. Hubbard's address is 740 Airport Blvd., Salinas, California 93912.
(6) Includes 54,993 shares subject to options issued to Mr. Grinstead under
the Company's 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 22,813 shares subject to options issued to Mr. Stein under the
Company's stock option plans that are exercisable within 60 days.
(8) Includes 10,000 shares subject to options issued to Mr. Kiehnle under
the Company's stock option plans that are exercisable within 60 days.
(9) Includes 500 shares held of record by Mr. Washburn and his spouse for
the benefit of their minor child and 10,000 shares subject to options
issued to Mr. Washburn under the Company's stock option plans that are
exercisable within 60 days.
(10) Based on information set forth in Schedule 13G, dated March 16, 1998,
filed with the SEC by Arnold Fogle, includes 13,261 shares held of
record by Arnold Fogle Holdings Limited, an Ontario corporation
wholly-owned by Arnold Fogle ("AFHL"), 11,780 shares that Mr. Fogle has
the right to acquire within 60 days through the conversion of
exchangeable common shares of 1277649 Ontario Limited, a wholly-owned
subsidiary of the Company (the "Exchangeable Shares"), and 242,219
shares that AFHL has the right to acquire within 60 days through the
conversion of Exchangeable Shares. Mr. Fogle's address is c/o Ontario
Tree Fruits Limited, 165 Queens Way, Toronto, Ontario, Canada M8Y 1H8.
(11) Based on information set forth in Schedule 13G, dated March 16, 1998,
filed with the SEC by Agostino Sarraino, includes 20,078 shares held of
record by Sarraino Holdings Limited, an Ontario corporation
wholly-owned by Agostino Sarraino ("SHL"), 11,780 shares that Mr.
Sarraino has the right to acquire within 60 days through the conversion
of Exchangeable Shares, and 235,402 shares that SHL has the right to
acquire within 60 days through the conversion of Exchangeable Shares.
Mr. Sarraino's address is c/o Ontario Tree Fruits Limited, 165 Queens
Way, Toronto, Ontario, Canada M8Y 1H8.
(12) Based on information provided by Gruber & McBaine Capital Management,
LLC ("GMCM"), Jon D. Gruber ("Gruber"), J. Patterson McBaine
("McBaine"), Thomas O. Lloyd-Butler ("Lloyd-Butler"), Lagunitas
Partners ("LP") and GMJ Investments, L.P. ("GMJ"). This group reported
that it had total ownership of 426,100 shares, and that the voting and
dispositive power among such group's members is as follows:
<TABLE>
<CAPTION>
Aggregate Voting and Dispositive
Beneficially Owned Power
------------------------ ----------------------
Name Number Percent Sole Shared
- ---- ------ ------- -------- ------
<S> <C> <C> <C> <C>
GMCM 347,000 7.15% -- 347,900
Gruber 403,200 8.31% 10,000 347,900
McBaine 370,800 7.69% 55,300 347,900
Lloyd-Butler 347,900 7.17% -- 347,900
LP 150,400 3.10% 150,400 --
GMJ 10,000 * 10,000 --
</TABLE>
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The business address of Gruber & McBaine Capital Management is 50
Osgood Place, San Francisco, California 94133.
(13) Includes 201,731 shares subject to options issued to certain directors
and executive officers of the Company that are exercisable within 60
days.
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 2, 1998 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 15, 1998.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
David I. Sheinfeld 43 Chairman of the Board and Chief Executive Officer
Steve R. Grinstead 39 President, Chief Operating Officer and Director
Robert C. Kiehnle 48 Executive Vice President and Chief Financial Officer
Edward U. Sabin 50 Executive Vice President
Thomas M. Hubbard 55 Director
Sheldon I. Stein 44 Director
Colon Washburn 52 Director
Lawrence V. Jackson 44 Director
</TABLE>
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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.
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. Mr. Grinstead is active in produce industry associations and was
previously President of the Houston Fresh Fruit and Vegetable Association.
Edward U. Sabin. Mr. Sabin joined the Company in May 1997 as Executive
Vice President. Mr. Sabin has worked in the produce industry for over 27 years.
He has held various positions in sales, marketing and management, including
senior executive positions with Chiquita Brands and Del Monte Fresh. Mr. Sabin
also served as Chief Operating Officer of Cincinnati-based wholesaler Caruso,
Inc. Prior to joining the Company, Mr. Sabin was principal of his own firm
providing consulting services to the produce industry.
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. Prior to 1993, Mr.
Kiehnle 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
8
<PAGE> 11
active investor in a number of produce companies, including Pacific Fresh
Marketing, Inc., which harvests, packs and markets fresh vegetables in the
southwestern United States and central Mexico.
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 operations. Mr. Stein
serves as a director of five other companies with publicly-traded securities,
namely The Men's Wearhouse, Tandycrafts, Inc., First Plus Financial Group,
Cellstar Corp. and Precept Business Services, Inc.
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.
Lawrence V. Jackson. Mr. Jackson has been a director of the Company
since September 1997. Mr. Jackson is a Senior Vice President with Safeway, Inc.
Prior to joining Safeway, Inc., Mr. Jackson was a Senior Vice President with
PepsiCo, Inc. During Mr. Jackson's 17 years with PepsiCo, he held a number of
positions with the beverage and food service sectors, including that of Senior
Vice President of Worldwide Operations.
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 increased from five to six
concurrently with the appointment of Lawrence V. Jackson as a director on
September 4, 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 David I. Sheinfeld and
Colon Washburn will expire at the Meeting and, if reelected, at the 2001 annual
meeting; and the terms of Steve R. Grinstead and Lawrence V. Jackson will expire
at the 1999 annual meeting; and the terms of Thomas M. Hubbard and Sheldon I.
Stein will expire at the 2000 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 2, 1998 and each director attended the meeting. The Board also
acted by unanimous written consent on thirteen occasions.
COMMITTEES OF THE BOARD OF 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
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. Stein and
Washburn. The Audit Committee did not meet during the 1997 fiscal year.
9
<PAGE> 12
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 1997 fiscal year, the
Compensation Committee held one meeting at which all members were present and
acted by unanimous consent on two occasions.
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 1993 Plan and the 1996 Plan (collectively, 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 such 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 1997 fiscal year, the Plan Administration
Committee acted only by unanimous consent on one occasion 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 Company's 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 7,
1997, each of Messrs. Hubbard, Stein and Washburn received options to purchase
5,000 shares of Common Stock at $17.50 per share.
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 other executive officers (the "named executive
officers").
10
<PAGE> 13
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
NAME AND ANNUAL COMPENSATION SHARES
------------------------------ UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OTHER OPTIONS COMPENSATION(1)
- ------------------------------- ---- -------- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
David I. Sheinfeld ............ 1997 $250,230 $ 90,000 $ -- -- $ 4,750
Chairman of the Board and 1996 187,500 90,000 54,000(2) 20,000 2,885
Chief Executive Officer 1995 150,000 50,000 45,536(3) 17,000 2,714
Steve R. Grinstead ............ 1997 $175,000 $ 45,000 $ -- -- $ 4,750
President and Chief 1996 145,000 45,000 -- 15,000 4,750
Operating Officer 1995 115,000 25,000 -- 16,000 2,200
Robert C. Kiehnle(4) .......... 1997 $150,000 $ 25,000 $ -- -- $ 1,431
Executive Vice President and 1996 37,760 20,000 -- 25,000 --
Chief Financial Officer
Edward U. Sabin(5) ............ 1997 $107,692 $ 45,000 $ -- 7,500 $ --
Executive Vice President
</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) Robert C. Kiehnle was employed by the Company in August 1996 to serve
in the capacity as Executive Vice President and Chief Financial
Officer.
(5) Edward U. Sabin was employed by the Company in May 1997 to serve in the
capacity as Executive Vice President.
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 the 1997 fiscal
year under the 1996 Plan.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF POTENTIAL REALIZABLE VALUE
SECURITIES TOTAL OPTIONS AT ASSUMED ANNUAL RATE
UNDERLYING GRANTED TO OF
OPTIONS EMPLOYEES EXERCISE EXPIRATION STOCK PRICE APPRECIATION
NAME GRANTED IN 1997 PRICE DATE FOR OPTION TERM (1)
-------------------------
5% 10%
- ---------------------- ---------- ------------- -------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Edward U. Sabin....... 7,500 20.5% $14.00 4/30/2007 $66,034 $334,686
</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.
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 1997 fiscal year and the
number and value of options held at fiscal year end.
11
<PAGE> 14
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT JANUARY 2, IN-THE-MONEY OPTIONS AT
1998 JANUARY 2, 1998(1)
--------------------- -----------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ----------------------- --------------- ---------- --------------------- -----------------------
<S> <C> <C> <C> <C>
David I. Sheinfeld..... -- -- 68,925/-- $834,205/$--
Steve R. Grinstead..... -- -- 54,993/-- $685,572/$--
Robert C. Kiehnle...... -- -- 10,000/15,000 $23,125/$34,688
Edward U. Sabin........ -- -- --/7,500
$--/$45,469
</TABLE>
------------------
(1) The value indicated is the amount by which the market value of the
underlying stock on the last trading day of fiscal 1997 ($20.06 per
share) exceeded the aggregate exercise price of the options.
EMPLOYMENT AGREEMENTS
In April 1995, the Company entered into severance agreements with
Messrs. Sheinfeld and Grinstead 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.
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 during the 1997
fiscal year, and no insiders participated in Compensation Committee decisions
during the 1997 fiscal year.
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.
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
12
<PAGE> 15
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 1997, 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 1997, the Compensation
Committee granted cash bonuses of $205,000 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 Company's 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
Mr. Sheinfeld's compensation. The Compensation Committee recommended a cash
bonus of $90,000 for fiscal 1997 and an increase in Mr. Sheinfeld's base salary
to $300,000 for fiscal 1998.
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.
13
<PAGE> 16
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 2, 1998, 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>
Fresh
Measurement Period America SIC Code Nasdaq
(Fiscal Year Covered) Corp. Index Market Index
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 87.50 93.59 101.30
1996 119.12 121.49 131.40
1997 195.59 123.57 163.29
1998 236.03 165.05 199.73
</TABLE>
ASSUMES $100 INVESTED ON MAY 26, 1994 ASSUMES DIVIDEND REINVESTED FISCAL YEAR
ENDING JAN. 02, 1998
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.
14
<PAGE> 17
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, 6600 LBJ
Freeway, Suite 180, Dallas, Texas 75240, Attention: Investor Relations, by
February 24, 1999, 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 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 1997 Annual Report containing audited financial
statements accompanies this Proxy Statement. The Annual Report does not
constitute a part of the proxy solicitation material.
15
<PAGE> 18
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.,
6600 LBJ FREEWAY, SUITE 180, DALLAS, TEXAS 75240.
By Order of the Board of Directors,
DAVID I. SHEINFELD
Chairman of the Board and
Secretary
May 28, 1998
16
<PAGE> 19
APPENDIX A
FRESH AMERICA CORP.
1996 STOCK OPTION AND AWARD PLAN
AS AMENDED AND RESTATED
EFFECTIVE MAY 22, 1998
1. Purpose of the Plan. This Plan shall be known as the Fresh America
Corp. 1996 Stock Option and Award Plan as Amended and Restated Effective May 22,
1998. 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. This Plan replaces the Fresh America Corp. 1993 Stock
Option and Award Plan (the "Prior Plan"), which has been frozen as of the
effective date of this Plan. Options, stock appreciation rights, restricted
stock, or other stock rights granted under the Prior Plan before the effective
date of this Plan shall continue to be governed by the terms of the Prior Plan,
except to the extent specifically provided otherwise hereinafter, but no
additional options, restricted stock, or other stock rights shall be granted
under the Prior Plan after the effective date of this Plan.
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.
(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(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) "Executive" means an Employee who is, or in the judgment of the
Committee may become as of the date of the exercise of an Option, the Chief
Executive Officer of the Corporation or any of the other four highest
compensated officers of the Corporation.
(j) "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
1
<PAGE> 20
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.
(k) "Immediate Family" means the children, grandchildren or spouse
of any Participant.
(l) "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 ss.
1.162-27(e)(3).
(m) "Nonqualified Option" means any Option that is not a Qualified
Option.
(n) "Option" means a stock option granted pursuant to Section 6 of
this Plan.
(o) "Optionee" means any Employee or director who receives an
Option.
(p) "Original Plan" means the Fresh America Corp. 1996 Stock Option
and Award Plan, as amended by the First Amendment to the Fresh America Corp.
1996 Stock Option and Award Plan.
(q) "Participant" means an Employee or director who receives an
Option or Restricted Stock pursuant to this Plan.
(r) "Plan" means the Fresh America Corp. 1996 Stock Option and Award
Plan as Amended and Restated Effective May 22, 1998, as amended from time to
time.
(s) "Qualified Option" means any Option that is intended to qualify
as an "incentive stock option" within the meaning of Section 422 of the Code.
(t) "Restricted Stock" means Common Stock awarded to an Employee or
director pursuant to Section 7 of this Plan.
(u) "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.
(v) "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 Original Plan was adopted by the Board effective
as of July 12, 1996 and was approved by the shareholders of the Corporation on
June 19, 1997. The Plan was approved by the Board effective May 22, 1998. 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 majority of the votes cast,
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
granted in excess of the 150,000 shares authorized under the Original Plan will
be Nonqualified Options, regardless of whether the option agreements relating
thereto purport to grant Qualified Options, and any such excess Options granted
to Executives will be void.
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 625,000 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
2
<PAGE> 21
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. In the event that the
Participant's total Qualified Options exceed the $100,000 limit in any calendar
year (whether due to acceleration of exercisability, miscalculation, error or
otherwise) the amount of Qualified Options that exceed such limit shall be
treated as Nonqualified Options. The Qualified Options granted earliest (whether
under this Plan or any other agreement or plan) shall be applied first to the
$100,000 limit. In the event that only a portion of the Qualified Options
granted at the same time can be applied to the $100,000 limit, the Corporation
shall issue separate share certificates for such number of shares as does not
exceed the $100,000 limit, and shall designate such shares as Qualified Option
stock in its share transfer records.
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
625,000. Solely for this purpose, Options that lapse or are canceled continue to
count against such limit.
Unless the Board or the Committee determines otherwise with respect
to a particular year, each Non-Employee 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.
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<PAGE> 22
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 Participant-owned Common Stock is used to pay
the purchase price, the Common Stock used must have been held by the Participant
for at least six months prior to the date of exercise. Payments made in Common
Stock shall be made by tendering to the Company shares owned by the Participant
having an aggregate Fair Market Value on the date immediately preceding the
exercise date that is not greater than the aggregate Exercise Price for the
shares as to which the Option is being exercised and by paying any remaining
amount of such exercise price by check. The Board or the Committee may, in its
discretion, authorize a constructive exchange of existing shares, as follows:
the Participant may exercise the option by delivering a notarized statement that
the Participant has owned for at least six months the number of shares of Common
Stock to be used for payment of the exercise of the Option (and delivering cash,
to the extent the value of such shares is less than the aggregate Exercise
Price), and thereupon, a new certificate shall be issued to the Participant for
the number of shares being acquired pursuant to the exercise of the Option, less
the number of shares being constructively tendered as set forth in the
Participant's notarized statement.
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 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
4
<PAGE> 23
Optionee's vested Qualified Options shall not be exercisable after (a) three
months 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.
16. Restrictions on Shares; Transferability of Options. Shares of
Common Stock issued pursuant to the Plan may be subject to restrictions on
transfer under applicable federal and state securities laws. Each Qualified
Option under this Plan shall be transferable only by will or the laws 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 or pursuant to a
domestic relations order
5
<PAGE> 24
issued by a court of competent jurisdiction. Notwithstanding the foregoing, the
Board or the Committee may, in its discretion and as evidenced in the related
nonqualified Option agreement, grant a nonqualified Option to a Participant on
terms that permit the Participant to transfer such nonqualified Option to
members of his or her Immediate Family members, or to one or more partnerships
or trusts where such Immediate Family members are the only partners or
beneficiaries (i) the related nonqualified Option agreement also expressly
provides that the Option may be transferred only with the express written
consent of the Board or the Committee, and (ii) the Participant does not receive
any consideration in any form whatsoever for the transfer. Any nonqualified
Option so transferred shall continue to be subject to the same terms and
conditions in the hands of the transferee as were applicable to said
nonqualified Option immediately prior to the transfer thereof. 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.
(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 4 or 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 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; provided, however, that the
Committee shall have exclusive authority over grants of Options and Restricted
Stock awards to the Executives of the Company. 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.
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<PAGE> 25
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.
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.
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<PAGE> 26
APPENDIX B
FRONT OF PROXY CARD
FRESH AMERICA CORP.
BOARD OF DIRECTORS PROXY FOR THE ANNUAL MEETING
OF SHAREHOLDERS AT 10:00 A.M. THURSDAY, JUNE 25, 1998
------------------------------------------------------------
The undersigned shareholder of Fresh America Corp. (the "Company") hereby
appoints David I. Sheinfeld and Steve R. Grinstead or either or 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 David I. Sheinfeld and Colon Washburn as Class I Directors.
<TABLE>
<S> <C>
FOR all nominees (except as provided to the contrary WITHHOLD AUTHORITY to vote for all nominees [ ]
below) [ ]
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEES,
WRITE THAT NOMINEE'S NAME HERE):
- --------------------------------------------------------------------------------
(2) Approval of the Fresh America Corp. 1996 Stock Option and Award Plan as
Amended and Restated.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
- --------------------------------------------------------------------------------
(3) Ratification of the selection of KPMG Peat Marwick as the Company's
independent auditors for the fiscal year 1998.
[ ] 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)
<PAGE> 27
BACK OF PROXY CARD
(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 28, 1998, is hereby acknowledged.
Dated:
, 1998
-------------------------
-------------------------------
-------------------------------
(Signature(s) of
Stockholder(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.
