<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
COFFEE PEOPLE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
COFFEE PEOPLE, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 1997
To the shareholders of
COFFEE PEOPLE, INC.
The annual meeting of the shareholders of Coffee People, Inc., an Oregon
corporation (the "Company"), will be held at 2 p.m. on April 24, 1997 at the
World Forestry Center, 4033 SW Canyon Road, Portland, Oregon for the following
purposes:
1. To elect a Board of Directors for the current year.
2. To ratify the appointment of Arthur Andersen LLP as the independent
public accountants of the Company.
3. To transact such other business as may be properly brought before
the meeting.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice.
All shareholders are invited to attend the meeting. Shareholders of record
at the close of business on March 14, 1997, the record date fixed by the Board
of Directors, are entitled to notice of and to vote at the meeting.
By order of the Board of Directors.
KENNETH B. ROSS
CHIEF FINANCIAL OFFICER AND SECRETARY
Beaverton, Oregon
March 31, 1997
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING,
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING
ENVELOPE TO ENSURE THAT YOUR SHARES WILL BE VOTED.
<PAGE>
COFFEE PEOPLE, INC.
PROXY STATEMENT
1997 ANNUAL MEETING OF SHAREHOLDERS
INTRODUCTION
The enclosed proxy is solicited by the Board of Directors of Coffee People,
Inc. (the "Company"), to be used at the annual meeting of shareholders to be
held on April 24, 1997, and at any and all adjournments thereof. A copy of the
notice of the meeting is attached. The Company expects to mail this proxy
statement and the proxy to shareholders on or about April 4, 1997.
The persons named in the enclosed proxy will vote in the manner directed,
and in the absence of such direction will vote for the election of each of the
named nominees for director and for ratification of the appointment of Arthur
Andersen LLP ("Arthur Andersen") as the Company's independent public
accountants. As to other items of business that may arise at the meeting, they
will vote in accordance with their best judgment. "Abstentions" and "withheld"
votes will be counted toward the quorum requirement for the meeting but will not
be counted for or against any proposal. Broker non-votes will be counted in
determining whether a quorum is present, but will not be counted either for or
against the proposal at issue.
Any proxy submitted by a shareholder may be revoked by the shareholder at
any time before its use by giving notice of such revocation to the Secretary of
the Company. If a shareholder attends the meeting and desires to vote in person,
his or her proxy will not be used. The Company's principal office is located at
15100 SW Koll Parkway, Suite J, Beaverton, Oregon 97006.
The solicitation of proxies is being handled by the Company at its cost,
principally through the use of the mails. Brokers, dealers, banks and other
nominees will be requested to forward soliciting material to the beneficial
owners of the shares and to obtain authorization for the execution of proxies.
A copy of the Company's Annual Report to Shareholders for the year ended
December 31, 1996 is enclosed.
A COPY OF THE COMPANY'S 1996 ANNUAL REPORT ON FORM 10-KSB, FILED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, IS AVAILABLE TO SHAREHOLDERS
WITHOUT CHARGE UPON WRITTEN REQUEST TO KENNETH B. ROSS, CHIEF FINANCIAL OFFICER
AND SECRETARY, COFFEE PEOPLE, INC., 15100 SW KOLL PARKWAY, SUITE J, BEAVERTON,
OREGON 97006.
VOTING RIGHTS
All holders of record of the Company's Common Stock ("Common Stock") at the
close of business on March 14, 1997 will be entitled to vote in person or by
proxy at the annual meeting. On that date, 3,241,591 shares of Common Stock were
outstanding and entitled to vote. The holders of the Common Stock are entitled
to one vote for each share of Common Stock held. The presence, in person or by
proxy, of a majority of the outstanding shares of Common Stock at the annual
meeting will constitute a quorum for the transaction of business.
PROPOSAL 1
ELECTION OF DIRECTORS
A Board of five directors will be elected. The five nominees, Messrs.
Roberts, Devine, Ferguson, Talboy and Ayer, are the current directors of the
Company. All five of the nominees were elected as directors at the last annual
meeting of shareholders.
<PAGE>
A quorum being present at the shareholder meeting, the five nominees for
director receiving the most votes cast in person or by proxy will be elected as
directors for the current year. There is no cumulative voting. Shareholders
cannot vote for more than five directors. Directors will hold office until the
next annual meeting of shareholders or until their successors are duly elected.
All nominees for director have agreed to serve if elected. If any nominee should
become unavailable to serve as a director prior to the annual meeting, the
persons named in the enclosed proxy will vote for such substitute nominee as may
be designated by the Board of Directors.
The Board of Directors met formally 3 times and acted by consent minutes 19
times during 1996. All directors attended each meeting of the Board and of each
committee on which the director served.
BOARD COMMITTEES
The Board of Directors has an Audit Committee and a Compensation Committee.
The Audit Committee's purposes are, among other things, to make recommendations
concerning the selection of the Company's independent auditors, to review the
independence of such auditors, to review the scope of services to be performed
by the independent auditors, and to review internal accounting procedures and
the implementation by the Company of recommendations made by the independent
auditors. Mr. Talboy and Mr. Ayer serve on the Audit Committee, with Mr. Talboy
acting as Chairman. The Audit Committee met once during 1996.
The purposes of the Compensation Committee are to make recommendations to
the Board of Directors with respect to executive compensation and to administer
the Company's employee stock option plans. Mr. Ferguson, Mr. Talboy and Mr. Ayer
serve on the Compensation Committee, with Mr. Talboy acting as Chairman. The
Compensation Committee acted by consent minutes once during 1996.
The Board of Directors does not have a nominating committee.
EXECUTIVE OFFICERS
The executive officers of the Company as of the date of this proxy statement
are as follows:
<TABLE>
<CAPTION>
HAS SERVED
AS A
NAME AGE OFFICE DIRECTOR(1)
- ------------------------------------------------ --- ---------------------------------------------------------- -----------
<S> <C> <C> <C>
James L. Roberts................................ 47 Chairman of the Board and Chief Executive Officer Since 1992
Taylor H. Devine................................ 56 President, Chief Operating Officer and Director Since 1995
Kenneth B. Ross................................. 47 Chief Financial Officer and Secretary
Steven P. Crantz................................ 41 Vice President--Development
Matthew J. Kimble............................... 45 Vice President--Human Resources
Jeffrey M. Ferguson(2).......................... 47 Vice President--Coffee and Director Since 1992
Gary G. Talboy(2)(3)............................ 48 Director Since 1992
Douglas L. Ayer(2)(3)........................... 59 Director Since 1996
</TABLE>
- ------------------------
(1) The directors hold office until the next annual meeting of shareholders or
until their successors are duly elected.
(2) Member of Compensation Committee
(3) Member of Audit Committee
2
<PAGE>
Mr. Roberts opened the first Coffee People store with his wife, Patricia J.
Roberts, in 1983. Mr. Roberts has served as Chief Executive Officer and as a
director of the Company since it was organized in 1992, and was President of the
Company from 1992 to September 1995. From 1982 until 1985, he was employed as
inside sales manager of Coffee Bean International, Inc. Mr. Roberts received a
B.A. in English from the University of Oregon in 1971 and attended its Master of
Fine Arts program in creative writing until 1973.
Mr. Devine joined Coffee People in September 1995 as President, Chief
Operating Officer and a director. Mr. Devine served as President and a director
of Takeout Taxi Holdings, Inc., a multi-restaurant marketing and delivery
company, from January 1992 to September 1995. Mr. Devine continued to serve as a
director of Takeout Taxi Holdings until his resignation in March 1997. From
October 1987 until December 1991, Mr. Devine served in several capacities,
including Vice President of International Operations, with Blockbuster
Entertainment Corporation. Previously, Mr. Devine was founder, President and
Chief Executive Officer of Inform, Inc. and served as Executive Vice President
and Chief Operating Officer for Field Financial Corporation (dba Mrs. Fields
Cookies) from August 1982 until December 1985. Mr. Devine received a B.A. from
Hillsdale College in 1963 and an M.B.A. from the University of Chicago in 1991.
Mr. Ross joined Coffee People in November 1993 as Chief Financial Officer.
He was appointed Secretary in August 1996. From 1979 to November 1993, he
engaged in the private practice of law in Portland, Oregon. He has also taught
accounting and real estate classes at Portland State University. Mr. Ross
received a B.S. degree in engineering from Oregon State University in 1971, an
M.B.A. from the University of Southern California in 1973 and a J.D. from Lewis
and Clark College, Northwestern School of Law in 1978. Mr. Ross is a Certified
Public Accountant and an Attorney at Law.
Mr. Crantz joined Coffee People in April 1996 as Vice
President--Development. From October 1994 through March 1996 he was Vice
President of Real Estate and Construction for Country Harvest Buffet
Restaurants, Inc. From August 1993 through October 1994, Mr. Crantz served as
President and Chief Executive Officer of American Capital Resources, Inc., a
privately held business equipment financing firm. Mr. Crantz was a founder and
served as Chairman from January 1992 through October 1994 of National Capital
Services, a privately held firm providing management services to the FDIC and
RTC in connection with managing assets from failed banks and thrifts. From
January 1985 through January 1992, Mr. Crantz held various positions with
Marriott Hotels and Resorts, including Vice President of Development, Divisional
Vice President of Development for Courtyard by Marriott, and Divisional Vice
President for Development for Fairfield Inn by Marriott. He received a B.B.A.
from Pacific Lutheran University in 1977.
Mr. Kimble joined Coffee People in January 1997 as Vice President--Human
Resources. From February 1996 to January 1997, Mr. Kimble was Human Resources
Manager for Thrifty Payless Drug Stores, and he served as that company's Human
Resources Manager--Special Assignment from April 1994 to February 1996. From
June 1991 to April 1994, Mr. Kimble was Employment Manager for Payless Drug
Stores N.W.
Mr. Ferguson has been a director and officer of the Company since it was
organized in 1992. From 1985 until 1992, Mr. Ferguson was a 50% partner in the
partnership that was the predecessor to the Company. Currently, Mr. Ferguson is
primarily involved with Coffee Creations, Inc., a company which he co-founded in
1988 to develop specialty coffee beverages and products. Coffee Creations, Inc.
competes from time to time with the Company in the development of new products
and may compete with the Company in the future. He was a co-founder of Coffee
Bean International, Inc., in which he served as Secretary-Treasurer from 1976
until 1991, when he and Mr. Talboy sold the business. He has been active with
the Organic Crop Improvement Association and has been active in organic coffee
certification efforts. He received a B.S. in English from Southern Oregon State
College in 1971. Mr. Ferguson is a co-founder of the Specialty Coffee
Association of America (the "SCAA") and has been active in that organization
since 1982.
3
<PAGE>
Mr. Talboy has been a director of the Company since it started corporate
operations in 1992. He was Secretary-Treasurer of the Company from 1992 to
August 1996. From 1985 until 1992, Mr. Talboy was a 50% partner in the
partnership that was the predecessor of the Company. Currently, Mr. Talboy is
primarily active as a coffee industry consultant through his company, Specialty
Coffee Consultants. Through his business, Mr. Talboy assists roasters in
identifying sources for green coffee and in helping farmers in the coffee
producing countries develop means of producing and marketing better quality
green coffees. He is a co-founder of Coffee Bean International, Inc., in which
he served as President from 1976 until he and Mr. Ferguson sold the business in
1991. Mr. Talboy is also a founding director of the SCAA and was selected by the
SCAA as an industry representative to serve consecutive terms on the board of
the Coffee Development Group, a United States organization funded by the
International Coffee Organization. He received a B.S. in marketing from Southern
Oregon State College in 1971.
Mr. Ayer has been a director of the Company since January 1996, when
International Capital Partners, Inc. ("ICP"), of which he is President and
Managing Partner, represented investors in a private placement of Common Stock
of the Company. Mr. Ayer has been associated with ICP since 1989 when it was
founded. He serves on the board of directors of four private companies and two
additional public companies, BioPool International Inc., a medical diagnostic
test kit company, and Zila, Inc., a dental supply company. Prior to joining ICP,
Mr. Ayer was Chief Executive Officer and a principal stockholder of Cametrics,
Inc., a privately held manufacturer of custom fabricated engineered components.
Mr. Ayer holds a B.S. cum laude from Princeton University and an M.B.A. from
Harvard Business School.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation earned by (a) the Company's
Chief Executive Officer in 1995 and 1996, and (b) the Company's President and
Chief Operating Officer in 1996. None of the Company's other executives received
compensation in excess of $100,000 for services rendered to the Company in all
capacities in 1995 or 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
----------------
ANNUAL COMPENSATION AWARDS
---------------------------- ----------------
OTHER ANNUAL SECURITIES
SALARY COMPENSATION UNDERLYING
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS/SARS (#)
- ---------------------------------------------------------------------- ---- ------- ------------- ----------------
<S> <C> <C> <C> <C>
James L. Roberts, Chairman of the Board and Chief Executive Officer 1996 79,689 *
1995 74,682 *
Taylor H. Devine, President and Chief Operating Officer 1996 150,000 * 63,000
</TABLE>
- ------------------------
* Benefits and perquisites received totalled less than 10% of combined salary
and bonus.
STOCK OPTION INFORMATION
The following tables set forth certain information regarding options for the
purchase of the Company's Common Stock that were awarded to the Company's Chief
Executive Officer and its President and Chief Operating Officer during 1996 or
were held by them at December 31, 1996:
OPTION/SAR GRANTS IN 1996
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL OPTIONS/ EXERCISE OR
UNDERLYING OPTIONS/ SARS GRANTED TO BASE EXPIRATION
NAME SARS GRANTED EMPLOYEES IN 1996 PRICE ($/SH) DATE
- ----------------------------------------- ------------------- ------------------- --------------- ------------
<S> <C> <C> <C> <C>
James L. Roberts......................... -- -- -- --
Taylor H. Devine......................... 63,000(1) 31.94% $ 9.00/share 10/16/2006
</TABLE>
- ------------------------
(1) Of these shares, 12,600 are exercisable and 12,600 will vest each October
through 2000.
AGGREGATED OPTION/SAR EXERCISES IN LAST YEAR AND FY-END OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
NUMBER SECURITIES
UNDERLYING UNEXERCISED VALUE OF
OPTIONS/ UNEXERCISED IN-THE-MONEY
SARS AT FY-END (#) OPTIONS/SARS AT FY-END ($)
-------------------------- ----------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------- ----------- ------------- --------------- -----------------
<S> <C> <C> <C> <C>
James L. Roberts.......................................... -- -- -- --
Taylor H. Devine.......................................... 42,600 170,400 (1) (1)
</TABLE>
- ------------------------
(1) As of December 31, 1996, the exercise price of all of Mr. Devine's options
exceeded the fair-market value of the Common Stock.
5
<PAGE>
EMPLOYMENT AGREEMENTS
The Company has employment agreements with James L. Roberts, its Chairman
and Chief Executive Officer and Taylor H. Devine, its President and Chief
Operating Officer.
The agreement with Mr. Roberts is for a five-year term through December 31,
1997. The agreement provides for a base salary during 1997 of at least $83,459.
The agreement may be terminated by either Mr. Roberts or the Company upon 21
days prior written notice. If the agreement is terminated by the Company without
cause, Mr. Roberts is entitled to a payment of $25,000. The agreement may also
be terminated without notice by the Company for cause.
The agreement with Mr. Devine is for a five-year term, ending December 31,
2000. The agreement provides for a base annual salary of $150,000, with the
potential for scheduled increases if certain annual sales targets are met.
Bonuses are paid to Mr. Devine based on a percentage of the Company's pre-tax
operating income, and based on certain pre-tax operating margin targets, as
established by the Board of Directors. The agreement may be terminated by either
Mr. Devine or the Company on 30 days prior written notice. In the event of
termination by the Company without cause, Mr. Devine is entitled to receive
payment of his base salary for a period of six months following termination,
plus a prorated bonus accrued through the date of termination. The Company may
also terminate the agreement without prior notice for cause. Upon termination
for cause, or termination at the election of Mr. Devine, he is entitled to a
severance payment of one month's base salary plus prorated bonus accrued to the
date of termination.
CERTAIN TRANSACTIONS
Effective January 4, 1993, the Company redeemed a total of 282,094.5 shares
of Common Stock owned by each of Jeffrey M. Ferguson and Gary G. Talboy. The
total purchase price was $500,750. As part of the consideration for the
redemption, the Company gave promissory notes in the amount of $245,000 to each
of Messrs. Ferguson and Talboy. Mr. Ferguson's note was prepaid in full in
August 1995. A monthly payment in the amount of $2,975 is made to Mr. Talboy on
his note, which bears interest at the rate of 2% over the prime rate of interest
(10.25% at December 31, 1996). The principal amount of the note at March 1, 1997
was $174,318. Mr. Talboy's note may be prepaid in full at any time without
penalty. His note is secured by substantially all of the Company's assets,
including accounts receivable, inventories, trade fixtures and equipment,
tangible and intangible personal property, after acquired property and the
proceeds thereof. Mr. Talboy's security interest is subordinate to the security
interest held by the Company's bank.
Simultaneously, Messrs. Ferguson and Talboy each sold 281,219 shares of
Common Stock (in the aggregate, 50% of the then outstanding shares) to James L.
Roberts and Patricia J. Roberts. As part of the consideration for the purchase,
Mr. and Mrs. Roberts gave each of Messrs. Ferguson and Talboy promissory notes
in the original principal amount of $249,500. The promissory notes were
restructured in September 1996, and Mr. Ferguson's note was paid in full in
January 1997. Mr. Talboy's note bears interest at an annual rate ranging from a
minimum of 6% to a maximum of 10%, depending on the annualized investment return
on a certain investment account owned by Mr. and Mrs. Roberts.
On December 31, 1993, Kenneth B. Ross, Chief Financial Officer and
Secretary, exercised incentive stock options for 37,500 shares of Common Stock
and paid for such shares by giving a promissory note to the Company in the
amount of $83,333. The note bears interest at the rate of 8.5% per annum and is
due on December 31, 1998. On January 17, 1995, Mr. Ross exercised incentive
stock options for 26,250 shares of Common Stock and paid for such shares by
giving promissory notes to the Company in the aggregate amount of $58,333. The
notes bear interest at the rate of 8.5% per annum and are due December 31, 1999.
The notes provide that in the event any of the stock is sold before the notes
mature, all accrued interest and a pro rata portion of the principal balance
must be paid.
6
<PAGE>
In January 1994, the Company entered into a lease agreement with Timothy M.
O'Callaghan, then Vice President--Real Estate of the Company, for the lease of
property at Southeast 102nd and Stark Streets, Portland, Oregon, where the
Company now operates a Motor Moka drive-through store. The initial term of the
lease is for a period of six years which expires on February 28, 2000. The lease
automatically renews for an additional five-year period and contains one further
renewal option to extend the term of the lease through October 16, 2008, unless
the Company delivers notice that it is not exercising the renewal option. The
sublease requires the Company to pay Mr. O'Callaghan monthly the sum of $2,677
plus one-half of the net profits from the operation of the store, in addition to
amounts due under the ground lease underlying the Company's sublease, which
amount is currently $1,895. For purposes of determining the profits under the
sublease, the Company may offset a full allocable portion of corporate overhead
expenses. These lease terms may not be as favorable to the Company as the
Company might have been able to obtain from an unrelated third party.
In 1996 the Company began purchasing cocoa mix and chocolate espresso bean
packaging from Coffee Creations, Inc. ("Coffee Creations") an Oregon corporation
owned in part by Mr. Ferguson. During 1996, Coffee People paid Coffee Creations,
directly or through a third-party supplier, approximately $99,100 for cocoa mix
and $6,200 for packaging of chocolate espresso beans. The Company continues to
purchase cocoa mix from Coffee Creations. The supply relationship is based on
the perceived quality of the product, and the Company could possibly obtain
similar products from other suppliers at lower prices. The supply relationship
is terminable by the Company at any time.
Coffee People currently purchases all of its Black Tiger Sparkling Coffee
from Coffee Creations. During 1995 and 1996, Coffee People paid Coffee Creations
directly or through a third-party supplier approximately $8,500 and $9,100,
respectively, for purchases of Black Tiger Sparkling Coffee. During 1996, sales
of Black Tiger Sparkling Coffee were not material, and the Company does not
consider itself to be materially dependent on Coffee Creations as the source for
this product.
On July 1, 1994, Mr. Talboy purchased the land and building on which the
Company operates its Motor Moka drive-through espresso bar at 525 NE Grand
Avenue, Portland, Oregon. Immediately following the closing of Mr. Talboy's
purchase, the Company leased the property from Mr. Talboy under a 15-year lease
that requires the Company to pay Mr. Talboy base rent of $6,375 per month. The
lease provides for rent escalation in 2000 and annually thereafter based upon
the increase in the consumer price index in effect at the end of 1997 and also
requires the Company to pay all utilities, insurance, property taxes, and
repairs and maintenance relating to the property. These lease terms may not be
as favorable to the Company as the Company might have been able to obtain from
an unrelated third party.
The Company's retail store at 817 NW 23rd Avenue, Portland, Oregon is leased
by Mr. Ferguson, Mr. Talboy and Mr. and Mrs. Roberts (dba Coffee People
Immediate Care Center). The Company is permitted to operate at such location and
makes all rental payments under the lease agreement for such location without
incurring any additional obligation to the lessees. However, the Company has no
written sublease agreement relating to the store.
In January 1996, the Company issued a warrant to purchase 135,000 shares of
Common Stock at an exercise price of $8.00 per share to ICP. The warrant is
exercisable through the period ending September 30, 1997. Douglas L. Ayer, a
director of the Company, is President and Managing Partner of ICP.
The Company pays Mr. Talboy consulting fees of $1,000 per month for
consulting services with respect to the Company's sourcing and supply of coffee.
7
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table shows, as of March 14, 1997, the number and percentage
of outstanding shares of the Company's Common Stock beneficially owned by each
person known by the Company to beneficially own 5% or more of the Company's
Common Stock, by each director, by each of the executive officers named in the
Summary Compensation Table, and by all directors and executive officers of the
Company as a group. To the Company's knowledge, each named beneficial owner has
sole voting and investment power with respect to the shares listed except as
indicated below.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENTAGE OF
OF BENEFICIAL OWNER(1) OWNERSHIP COMMON STOCK
- ---------------------------------------------------------------------------- ---------------------- ---------------
<S> <C> <C>
Zesiger Capital Group, LLC(2)............................................... 450,000 13.9%
320 Park Avenue
New York, New York, 10022
Fiduciary Trust Company International(3).................................... 407,400 12.6%
Two World Trade Center
New York, New York, 10048
Black & Company, Inc.(4).................................................... 395,899 12.2%
One SW Columbia Street
Suite 1200
Portland, Oregon, 97258
James L. Roberts(5)......................................................... 387,500 12.0%
Patricia J. Roberts(6)...................................................... 387,500 12.0%
Gary G. Talboy.............................................................. 285,250 8.8%
Jeffrey M. Ferguson(7)...................................................... 264,650 8.2%
Douglas L. Ayer(8).......................................................... 135,000 4.2%
Taylor H. Devine(9)......................................................... 73,800 4.3%
All officers and directors as a group (7 persons)[(5)(7)(8)(9)(10)]......... 1,245,530 38.4%
</TABLE>
- ------------------------
(1) Unless otherwise indicated, the address for each person in this table is c/o
Coffee People, Inc., 15100 SW Koll Parkway, Suite J, Beaverton, Oregon
97006.
(2) Consists of shares over which Zesiger Capital Group, LLC has dispositive
power pursuant to authority granted by its investment clients. Zesiger
Capital Group, LLC disclaims beneficial ownership of all such shares.
(3) Includes 80,000 shares over which Fiduciary Trust Company International
shares the power to vote or to direct vote.
(4) Black & Company, Inc. owns 344,899 shares directly, and 51,000 indirectly
through Black & Company Asset Management, a wholly-owned subsidiary of Black
& Company, Inc. 275,450 shares are held in discretionary investment
accounts, either by Black & Company, Inc. (224,450 shares or 7.0% of class)
or Black & Company Asset Management (51,000 shares or 1.6% of class). None
of the beneficial owners of such investment accounts holds in excess of 5%
of the class of securities.
(5) Includes 193,750 shares owned by his wife, Patricia J. Roberts.
(6) Includes 193,750 shares owned by her husband, James L. Roberts.
8
<PAGE>
(7) Includes 4,400 shares held in trusts for his children for which he serves as
trustee.
(8) Includes 135,000 shares issuable upon exercise of a warrant owned by
International Capital Partners, Inc., of which Mr. Ayer is President and
Managing Partner. See "Certain Transactions."
(9) Includes 72,600 shares issuable upon exercise of stock options.
(10) Includes 15,000 shares issuable upon exercise of stock options held by
certain executive officers.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors and 10% shareholders to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the
"Commission"). Officers, directors and 10% shareholders are required by
Commission regulations to furnish the Company with all Section 16(a) forms they
file.
Based solely on the Company's review of the copies of such forms the Company
received and written representations from its officers and directors, the
Company believes that all required forms were timely filed during 1996.
PROPOSAL 2
RATIFICATION OF THE INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE CURRENT YEAR
The Board of Directors has selected Arthur Andersen as its independent
public accountants for the current year. Arthur Andersen has been the principal
accountant for the Company since 1993.
Certified financial statements of the Company appear in the Company's 1996
Annual Report to Shareholders, a copy of which is enclosed with this proxy
statement. Management recommends that shareholders ratify the appointment of
Arthur Andersen as the Company's independent public accountants for the current
year. A representative of Arthur Andersen will be present at the annual meeting,
will have the opportunity to make a statement, and will be available to respond
to appropriate questions.
Accounting services provided by Arthur Andersen during the year ended
December 31, 1996 consisted of the audit of the financial statements of the
Company, reviews of information in certain filings with the Commission, review
of the Company's federal, state and local tax returns, and periodic consultation
regarding accounting and financial matters.
Approval of Proposal 2 will require that a quorum be present and that the
number of votes cast in favor of the proposal exceed the number of votes cast in
opposition to the proposal.
SHAREHOLDER PROPOSALS
A proposal by a shareholder for inclusion in the Company' s proxy statement
and form of proxy for the 1998 annual meeting of shareholders must be received
by the Company at 15100 SW Koll Parkway, Suite J, Beaverton, Oregon 97006,
attention: Secretary, on or before December 1, 1997 in order to be eligible for
such inclusion.
9
<PAGE>
OTHER MATTERS
While the notice of the annual meeting of shareholders provides for the
transaction of such other business as may properly come before the meeting,
management does not know of any matters to be presented other than those set
forth in this proxy statement. If any further business is presented to the
meeting, the persons named in the proxies will vote the shares represented by
such proxies according to their best judgment.
For the Board of Directors
Kenneth B. Ross
Chief Financial Officer and Secretary
Beaverton, Oregon
March 31, 1997
10
<PAGE>
COFFEE PEOPLE, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS APRIL 24, 1997
The undersigned hereby appoints Taylor H. Devine and Kenneth B. Ross, and
each of them, proxies with full power of substitution, to represent and vote,
as designated below, on behalf of the undersigned, all shares which the
undersigned may be entitled to vote at the annual meeting of shareholders of
Coffee People, inc. on April 24, 1997, and any adjournment or postponement
thereof, with all powers that the undersigned would possess if personally
present.
Either or both of the proxies may exercise all powers granted hereby. The
proxies are authorized to vote in their discretion upon any other matters
properly coming before the meeting or any adjournment or adjournments thereof.
PLEASE SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED ENVELOPE
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<PAGE>
Please mark your votes
as indicated in this example
/ X /
VOTE FOR all nominees listed (except WITHHOLD AUTHORITY
as marked to the contrary below) to vote for all nominees listed
/ / / /
1. Election of Directors.
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)
James L. Roberts Taylor H. Devine
Jeffrey M. Ferguson Gary G. Talboy
Douglas L. Ayer
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR 1997
FOR AGAINST ABSTAIN
/ / / / / /
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF
THE NOMINEES FOR DIRECTOR AND FOR APPROVAL OF ARTHUR ANDERSEN LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY.
Signature(s) Dated , 1997
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Please date and sign exactly as your name or names appear below. If more than
one name appears, all should sign. Persons signing as attorney, executor,
administrator, trustee, guardian, corporate officer or in any other official
or representative capacity, should also provide full title. If a partnership,
please sign in full partnership name by authorized person.
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