SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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
|X| Definitive proxy statement Commission Only
(as permitted by Rule 14a-6(e)(2))
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
BIG SMITH
BRANDS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No Fee required.
|_| Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(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>
BIG SMITH BRANDS, INC.
7100 West Camino Real
Suite 402
Boca Raton, Florida 33433
June 15, 1998
To Our Stockholders:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of Big Smith Brands, Inc. (the "Company"), which will be held at
the Renaissance Airport Hotel, St. Louis, Missouri, on Thursday, June 25, 1998,
at 1:00 P.M., St. Louis time.
The Notice of Annual Meeting and Proxy Statement covering the formal
business to be conducted at the Annual Meeting follow this letter.
We hope you will attend the Annual Meeting in person. Whether or not you
plan to attend, please complete, sign, date and return the enclosed proxy
promptly in the accompanying reply envelope to assure that your shares are
represented at the meeting.
Sincerely yours,
/s/ Peter Lebowitz
------------------
S. PETER LEBOWITZ
Chairman of the Board
<PAGE>
BIG SMITH BRANDS, INC.
7100 WEST CAMINO REAL
SUITE 402
BOCA RATON, FLORIDA 33433
(561) 367-8283
-----------------------------
NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS
JUNE 25, 1998
-----------------------------
The Annual Meeting of Stockholders of Big Smith Brands, Inc. (the
"Company") will be held at the Renaissance Airport Hotel, St. Louis, Missouri,
at 1:00 P.M., St. Louis time, on Thursday, June 25, 1998, for the following
purposes:
1. to elect five directors, each to serve until their respective
successors have been duly elected and qualified;
2. to ratify the appointment of Daszkal, Bolton & Manela, CPAs, as the
Company's independent public auditors for the Company's fiscal year ending
December 31, 1998; and
3. to transact such other business as may be properly brought before
the meeting and any adjournment or postponement thereof.
The Board of Directors unanimously recommends that you vote FOR the
election of all five nominees as directors and FOR the approval of the
appointment of the independent public auditors.
Stockholders of record at the close of business on June 3, 1998, are
entitled to notice of, and to vote at, the Annual Meeting and any adjournment or
postponement thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE REPLY ENVELOPE
PROVIDED WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. STOCKHOLDERS
ATTENDING THE ANNUAL MEETING MAY VOTE IN PERSON EVEN IF THEY HAVE RETURNED A
PROXY. BY PROMPTLY RETURNING YOUR PROXY, YOU WILL GREATLY ASSIST US IN PREPARING
FOR THE ANNUAL MEETING.
By Order of the Board of Directors
/s/ Peter Lebowitz
------------------
S. PETER LEBOWITZ
Chairman of the Board
Boca Raton, Florida
June 15, 1998
<PAGE>
BIG SMITH BRANDS, INC.
7100 WEST CAMINO REAL
SUITE 402
BOCA RATON, FLORIDA 33433
(561) 367-8283
-----------------------------
PROXY STATEMENT FOR
1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 25, 1998
-----------------------------
This Proxy Statement and the enclosed form of proxy are being
furnished, commencing on or about June 15, 1998, in connection with the
solicitation of proxies in the enclosed form by the Board of Directors of Big
Smith Brands, Inc., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders ("Stockholders") of the Company (the "Annual
Meeting") to be held at the Renaissance Airport Hotel, St. Louis, Missouri, at
1:00 P.M., St. Louis time, on Thursday, June 25, 1998, and at any adjournment or
postponement thereof, for the purposes set forth in the foregoing Notice of
Annual Meeting of Stockholders. The hotel is conveniently located near the St.
Louis airport.
The annual report of the Company, containing financial statements of
the Company as of December 31, 1997, and for the year then ended, has been
delivered or is included with this proxy statement. The principal executive
offices of the Company are located at 7100 West Camino Real, Suite 402, Boca
Raton, Florida 33433.
A list of the Stockholders entitled to vote at the Annual Meeting will
be available for examination by Stockholders during ordinary business hours for
a period of ten days prior to the Annual Meeting at the offices of the Company,
7100 West Camino Real, Suite 402, Boca Raton, Florida 33433. A Stockholder list
will also be available for examination at the Annual Meeting.
If you are unable to attend the Annual Meeting, you may vote by proxy
on any matter to come before that meeting. The enclosed proxy is being solicited
by the Board of Directors. Any proxy given pursuant to such solicitation and
received in time for the Annual Meeting will be voted as specified in such
proxy. If no instructions are given, proxies will be voted (i) FOR the election
of the nominees named below under the caption "Election of Directors," (ii) FOR
the ratification of the appointment of Daszkal, Bolton & Manela, CPAs, ("DB&M")
as independent public auditors for the Company's fiscal year ending December 31,
1998, and (iii) in the discretion of the proxies named on the proxy card with
respect to any other matters properly brought before the Annual Meeting.
Attendance in person at the Annual Meeting will not of itself revoke a proxy;
any Stockholder who does attend the Annual Meeting, however, may revoke a proxy
orally and vote in person. Proxies may be revoked at any time before they are
voted by submitting a properly executed proxy with a later date or by sending a
written notice of revocation to the Secretary of the Company at the Company's
principal executive offices.
This Proxy Statement and the accompanying form of proxy are being
mailed to Stockholders of the Company on or about June 15, 1998.
Following the original mailing of proxy solicitation material,
executive and other employees of the Company and professional proxy solicitors,
may solicit proxies by mail, telephone, telegraph and personal interview.
Arrangements may also be made with brokerage houses and other custodians,
nominees and fiduciaries who are record holders of the Company's Common Stock to
forward proxy solicitation material to the beneficial owners of such stock, and
the Company may reimburse such record holders for their reasonable expenses
incurred in such forwarding. The cost of soliciting proxies in the enclosed form
will be borne by the Company.
The Company's Board of Directors has unanimously voted to recommend the
nominees for election to the Board of Directors listed below and for the
appointment of DB&M as the independent auditors of the Company for the fiscal
year ending December 31, 1998.
<PAGE>
The holders of a majority of the outstanding shares entitled to vote,
present in person or represented by proxy, will constitute a quorum for the
transaction of business. Shares represented by proxies that are marked "abstain"
will be counted as shares present for purposes of determining the presence of a
quorum on all matters. Brokers holding shares for beneficial owners in "street
name" must vote those shares according to specific instructions they receive
from the owners of such shares. If instructions are not received, brokers may
vote the shares, in their discretion, depending on the type of proposals
involved. Broker non-votes result when brokers are precluded from exercising
their discretion on certain types of proposals. However, brokers have
discretionary authority to vote on all the proposals being submitted hereby to
the Stockholders. Shares that are voted by brokers on some but not all of the
matters will be treated as shares present for purposes of determining the
presence of a quorum on all matters, but will not be treated as shares entitled
to vote at the Annual Meeting on those matters as to which authority to vote is
withheld from the broker.
The election of each nominee for director requires a plurality of votes
cast. Accordingly, abstentions and Broker non-votes will not affect the outcome
of the election. The affirmative vote of the holders of a majority of the votes
cast is required for the approval of the appointment of the independent public
auditors. On this matter the abstentions will have the same effect as a negative
vote. Because Broker non-votes will not be treated as shares that are present
and entitled to vote with respect to a specific proposal a Broker non-vote will
have no effect on the outcome.
The Company will appoint an inspector to act at the Annual Meeting who
will: (1) ascertain the number of shares outstanding and the voting powers of
each; (2) determine the shares represented at the Annual Meeting and the
validity of the proxies and ballots; (3) count all votes and ballots; (4)
determine and retain for a reasonable period a record of the disposition of any
challenges made to any determinations by such inspector; and (5) certify his
determination of the number of shares represented at the Annual Meeting and his
count of all votes and ballots.
Only Stockholders of record at the close of business on June 3, 1998 are
entitled to notice of, and to vote at, the Annual Meeting and any adjournment or
postponement thereof. As of the close of business on June 3, 1998, there were
7,099,842 shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), outstanding. Each share of Common Stock entitles the record
holder thereof to one vote on all matters properly brought before the Annual
Meeting and any adjournment or postponement thereof, with no cumulative voting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 3, 1998, the number of
shares of common stock beneficially owned (and the percentage of the Company's
common stock) by (i) each person known (based solely on Schedules 13D or 13G
filed) to the Company to be the beneficial owner of more than 5% of the common
stock, (ii) each director and nominee to the Board of Directors of the Company,
(iii) the Named Executive (as hereinafter defined) and (iv) all directors and
executive officers of the Company as a group (based upon information furnished
by such persons). Under the rules of the Commission, a person is deemed to be a
beneficial owner of a security if such person has or shares the power to vote or
direct the voting of such security or the power to dispose of or to direct the
disposition of such security. In general, a person is also deemed to be a
beneficial owner of any securities of which that person has the right to acquire
beneficial ownership within 60 days. Accordingly, more than one person may be
deemed to be a beneficial owner of the same securities.
-2-
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE (%)
NAME AND ADDRESS BENEFICIALLY OWNED OF COMMON STOCK
- ---------------- ------------------ ---------------
<S> <C> <C>
S. Peter Lebowitz 1,509,000 21.3%
c/o Big Smith Brands, Inc.
7100 West Camino Real, Suite 402
Boca Raton, Florida 33433
Theresa Lebowitz and Michael S. Nelson,
Esq., as trustees (1) 474,000 6.7%
c/o Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Glen Freeman (2) 15,000 *
c/o Big Smith Brands, Inc.
7100 West Camino Real, Suite 402
Boca Raton, Florida 33433
Theodore Listerman (2) 25,000 *
c/o Big Smith Brands, Inc.
7100 West Camino Real, Suite 402
Boca Raton, Florida 33433
Jack Schultz (2) (3) 17,000 *
c/o Big Smith Brands, Inc.
7100 West Camino Real, Suite 402
Boca Raton, Florida 33433
Julian Shaps (2) 15,000 *
c/o Big Smith Brands, Inc.
7100 West Camino Real, Suite 402
Boca Raton, Florida 33433
John Bagdasian (4) 8,500 *
c/o Big Smith Brands, Inc.
7100 West Camino Real, Suite 402
Boca Raton, Florida 33433
All directors and officers as a group (6
persons) (5) 1,589,500 22.2%
</TABLE>
- -----------------
* Indicates beneficial ownership of less than one (1%) percent.
(1) Represents shares held in trust for the benefit of Barbara Lynn Van Achte,
Karen Sue Hart and Wendy Ann Lebowitz, with respect to which Mrs. Lebowitz
and Mr. Nelson, a partner at the law firm of Kramer, Levin, Naftalis &
Frankel, the Company's outside corporate counsel, serve as trustees. Under
the Trust Agreement, Mrs. Lebowitz and Mr. Nelson share voting and
dispositive power, subject only to the beneficiaries' right to withdraw the
shares under certain circumstances. Mrs. Lebowitz is the wife, and the
three trust beneficiaries are the daughters, of Mr. Lebowitz.
(2) Includes 15,000 shares issuable upon exercise of options exercisable within
60 days.
-3-
<PAGE>
(3) Includes 2,000 shares issuable upon exercise of warrants exercisable within
60 days.
(4) Includes 2,500 shares issuable upon exercise of options exercisable within
60 days.
(5) Includes options and warrants to purchase 64,500 shares exercisable within
60 days.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than ten percent (10%) of a registered class of the
Company's equity securities, to file with the Securities and Exchange Commission
(the "Commission") initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Reporting
persons are required by Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, the following persons failed to file, on a
timely basis, reports required by Section 16(a) of the Exchange Act, for the
number of transactions indicated, during fiscal year 1997.
Messrs. Freeman, Listerman, Schultz and Shap each failed to file on a
timely basis an Annual Statement of Beneficial Ownership of Securities on Form 5
with regard to the year ended December 31, 1997 in connection with 20,000
options granted to each of them during such fiscal year. See "--Compensation of
Directors." Mr. Bagdasian failed to file on a timely basis an Initial Statement
of Beneficial Ownership of Securities on Form 3 in connection with his
appointment as Vice President and General Manager of the Company's sportswear
division as of March 17, 1997.
PROPOSALS
The Company's Board of Directors has unanimously voted to recommend the
nominees for election to the Board of Directors listed below and for the
appointment of DB&M as the independent public auditors of the Company for the
fiscal year ending December 31, 1998.
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
It is proposed to elect a Board of five directors for the upcoming year
and until their respective successors are duly elected and qualified. All of the
nominees set forth below are currently members of the Board of Directors. Unless
instructed otherwise, the enclosed proxy will be voted FOR the election of the
nominees named below. Voting is not cumulative. While management has no reason
to believe that the nominees will not be available as candidates, should such a
situation arise, proxies may be voted for the election of such other persons as
a director as the holders of the proxies may, in their discretion, determine.
-4-
<PAGE>
The following sets forth certain information with respect to each of the
five nominees to the Board of Directors as well as to the remaining executive
officers of the Company:
<TABLE>
<CAPTION>
Year First Elected
Name Age Director Office
- ---- --- -------- ------
<S> <C> <C> <C>
Nominees to the Board
S. Peter Lebowitz 66 1985 Chief Executive Officer, President
and Director
Glen Freeman 68 1994 Director
Theodore Listerman 74 1995 Director
Jack Schultz 61 1994 Director
Julian Shaps 72 1994 Director
Other Executive Officers and
Significant Employees
Terry L. Dober 41 N/A Chief Financial Officer, Vice
President for Finance
John Bagdasian 49 N/A Vice President and General
Manager of the sportswear
division
Howard Kaplan 50 N/A Secretary
==============================================================================================
</TABLE>
Nominees to the Board
S. Peter Lebowitz has served as Chief Executive Officer and President
of the Company since 1980. Mr. Lebowitz has been employed full time in the men's
apparel industry for over 40 years beginning in 1954 when he joined Hochschild,
Kohn & Co., Baltimore, Maryland. Thereafter, he served as a salesman in the
Menswear Divisions at The Van Heusen Company and as Vice-President of Big Yank
Corporation and Anvil Brands, Inc. From 1971 to 1979, he was Chairman and Chief
Executive Officer of Smith Brothers Manufacturing Company, Carthage, Missouri,
then the corporate owner of the Big Smith label. In 1980, he founded the
Company, and in 1985, the Company acquired certain assets of Smith Brothers
Manufacturing Company, including the ownership of the Big Smith label.
Glen Freeman was elected a director of the Company in September 1994.
Mr. Freeman served as General Manager of the Company after its acquisition of
certain assets of Smith Brothers Manufacturing Company in 1985 until 1994. Mr.
Freeman served as Vice-President of Merchandising of Smith Brothers
Manufacturing Company from 1969, when it acquired Continental Manufacturing
Company, to 1985. From 1945 to 1969, Mr. Freeman was employed by Continental
Manufacturing Company. Mr. Freeman has been employed in the workwear industry
for 49 years.
-5-
<PAGE>
Theodore L. Listerman was elected a director of the Company in January
1995. Mr. Listerman was involved in various aspects of the apparel business for
approximately thirty years. Mr. Listerman served in numerous senior management
positions at a number of major manufacturers and marketers of men's apparel
products. At present Mr. Listerman is a doctoral candidate at the University of
Missouri.
Julian Shaps was elected a director of the Company in February 1994.
Mr. Shaps retired from full time participation in business in October 1990
following a career that spanned forty years in the sales and merchandising
segment of the apparel industry. Mr. Shaps' previous positions include
twenty-five years in various senior management positions at Salant, Inc., and
approximately fifteen years as Vice President of Sales and Merchandising at M.
Fine & Sons, Inc.
Jack Schultz was elected a director of the Company in February 1994.
Since 1993, Mr. Schultz has served as an active consultant to the retail
industry dealing with assignments that cover a broad range of issues and
entities involving virtually all major segments of the retail industry. Prior to
his full time entry into the consulting business, Mr. Schultz served from 1991
to 1993 as the President of the National Retail Federation, a leading retail
industry trade association.
Executive Officers and Significant Employees
Terry L. Dober joined the Company in January 1994 as Chief Financial
Officer. He was appointed Vice President for Finance in November 1995. As such,
he is responsible for all financial reporting, accounting, internal auditing and
related administrative functions. Mr. Dober, a Certified Public Accountant,
received a Bachelor's Degree in Business Administration/Accounting from Monmouth
College of Monmouth, Illinois in 1979. Mr. Dober has held increasingly
responsible financial, administrative, accounting and management positions in a
variety of business environments. From November 1989 until December 1993, Mr.
Dober served as Controller of Miracle Recreation Equipment Co. From July 1984 to
November 1989, Mr. Dober was Accounting Manager for Electrovert Companies.
John Bagdasian joined the Company in March 1997 as Vice President and
General Manager of the Company's sportswear division. Mr. Bagdasian has over 20
years of experience in the apparel industry. From 1996 to 1997, Mr. Bagdasian
was Sales Manager for Seattle Pacific Industries in the Union Bay division. From
1990 to 1996, Mr. Bagdasian was President of Marketing for CAS, Inc./ Maneuvers.
From 1983 to 1990, Mr. Bagdasian was Sales Manager for Bugle Boy Industries.
Howard Kaplan was elected Secretary of the Company in August 1994.
Since 1991, Mr. Kaplan has served as President of Fabric Resources Corporation,
a denim jobber, and from 1988 to 1991, he served as Purchasing Agent for the
Company. Mr. Kaplan is not currently an employee of the Company.
All directors hold office until the next annual meeting of the
stockholders of the Company and until their successors have been duly elected
and qualified, or until their earlier death, resignation or removal. The
Company's outside directors devote such time as is necessary and customary to
attend meetings of the Board of Directors and committees of the Board of
Directors and otherwise to perform their duties as directors.
The Company's officers are elected annually by, and serve at the
pleasure of, the Board of Directors, subject to the terms of any employment
agreements. Mr. Lebowitz has an employment agreement with the Company. See
"Executive Compensation-Employment Arrangements." No familial relationships
exist between any directors or officers of the Company.
COMMITTEES
The Company's Board of Directors has an Internal Audit Committee and an
Executive Compensation Committee. Messrs. Glen Freeman and Theodore Listerman
serve on the Internal Audit Committee and Messrs. Theodore Listerman, Jack
Schultz and Julian Shaps serve on the Executive Compensation Committee. The
Internal Audit Committee is the principal financial organ to review the results
of the annual audit. The Internal Audit
-6-
<PAGE>
Committee also reviews the scope of the annual audit and other services before
they are undertaken by the Company's auditors and reviews the adequacy and
effectiveness of the Company's internal accounting controls. The Executive
Compensation Committee administers the Company's 1994 Stock Incentive Plan, as
amended (the "1994 Plan") and makes recommendations to the full Board concerning
compensation, including incentive arrangements, for the Company's officers and
employees.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the fiscal year ended December 31, 1998, there were five meetings
of the Board of Directors of the Company, three meetings of the Audit Committee,
three meetings of the Executive Compensation Committee and three meetings of the
Executive Committee. No director attended fewer than 75% of the aggregate of (1)
the total number of meetings held by all committees of the board on which he
served (during the periods that he served).
COMPENSATION OF DIRECTORS
Non-employee directors of the Company receive one thousand
dollars plus expenses for each meeting of the Board of Directors that they
attend and, pursuant to the Company's 1994 Stock Incentive Plan (the "1994
Plan") are automatically granted 10,000 options annually upon election at the
Annual Meeting. On June 12, 1997, each non-employee director received an option
to purchase 20,000 shares of the Company's Common Stock at an exercise price of
$0.42. On February 11, 1998, each non-employee director was granted an option to
purchase 10,000 shares of the Company's Common Stock at an exercise price of
$0.53. Each grant under the 1994 Plan vests in four substantially equal parts on
each of the first four anniversaries of the date of the grant. To the extent the
options are unexercised, they expire on the fifth anniversary of the date of the
grant.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation
for services in all capacities for the fiscal years ended December 31, 1997,
December 31, 1996 and December 31, 1995, of the Chief Executive Officer of the
Company and John Bagdasian, Vice President and General Manager of the Company's
sportswear division, the only other executive officer of the Company who earned
over $100,000 during such fiscal years.
-7-
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
======================================================================================================
Annual Compensation Long Term Compensation
- ------------------------------------------------------------------------------------------------------
Other Annual Awards All Other
Name and Fiscal Salary Bonus Compensation Options Compensation
Principal Position Year ($) ($) ($) (1) (#) ($)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
S. Peter Lebowitz-Chief 1997 $300,000 - $ 10,996 - -
Executive Officer 1996 $300,000 - $ 9,973 - -
1995 $250,000 - $ 8,700 175,000 (2) -
- ------------------------------------------------------------------------------------------------------
John Bagdasian, Vice 1997 $110,000 - - 10,000(3) -
President and General
Manager of the
sportswear division
======================================================================================================
</TABLE>
(1) Represents the valuation of certain club membership dues and
automobile lease payments of approximately $10,996, $9,973 and $8,700 for 1997,
1996 and 1995, respectively.
(2) Represents grants of options in connection with the Company's
initial public offering, the vesting of which was contingent upon the Company
achieving a certain level of net income during the fiscal year ended December
31, 1995, which level was not achieved.
(3) Represents options granted in 1997.
EMPLOYMENT ARRANGEMENTS
S. Peter Lebowitz is employed as the Company's President and
Chief Executive Officer under an employment agreement, expiring on December 31,
2003. Pursuant to the employment agreement, Mr. Lebowitz receives annual
compensation of $300,000 and an annual bonus of up to $200,000 if the Company
achieves a certain specified level of net income. The employment agreement with
Mr. Lebowitz further provided that if his employment were terminated by the
Company without cause or at any time following a change of control, or by Mr.
Lebowitz within twelve months after a change of control, the Company will pay to
Mr. Lebowitz three years' salary, bonus and benefits in the amount and kind then
in effect subject to certain adjustments in a lump sum 30 days after such
termination.
On February 11, 1998, in connection with his entry into the
employment agreement, Mr. Lebowitz was granted options for the purchase of
1,000,000 shares of Common Stock pursuant to the terms and conditions of the
Company's 1994 Plan. Such grant is subject to stockholder approval to the extent
the grant exceeded the shares then available for grant under the 1994 Plan
(i.e., 861,650 shares) and approval of the increase to 1,000,000 in the maximum
number of shares which may be subject to options granted to any employee in a
single year. The options are exercisable at $0.53 per share, the highest ask
price on the last date on which trading took place prior to the date of grant,
and vest in equal annual installments on the first four anniversaries of the
date of grant. A majority of the Company's stockholders approved the above
reference amendments to the 1994 Plan by written consent, executed as of June
11, 1998 and effective July 1, 1998.
VOTE REQUIRED FOR APPROVAL OF THE ELECTION OF DIRECTORS
The election of each nominee for director requires a plurality of votes
cast. Accordingly, abstentions and Broker non-votes will not affect the outcome
of the Election. Proxies solicited by the Board of Directors will be voted for
each of the nominees listed above, unless Stockholders specify otherwise.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
EACH OF THE NOMINEES LISTED ABOVE.
-8-
<PAGE>
PROPOSAL 2 - APPOINTMENT OF INDEPENDENT PUBLIC AUDITORS
The firm of Daszkal, Bolton & Manela, CPAs, independent certified public
auditors, has audited the Company's financial statements for the fiscal year
ended December 31, 1997. The firm of Baird, Kurtz & Dobson ("BK&D") were the
Company's independent public auditor's for the five previous fiscal years. On
February 11, 1998, the Board of Directors appointed DB&M as the Company's
independent public auditors for the fiscal year ending December 31, 1998, and
the Stockholders will be asked to ratify such appointment. It is expected that a
representative of DB&M will be present at the Annual Meeting with the
opportunity to make a statement if he desires to do so, and will be available to
respond to appropriate questions.
On January 16, 1998, the Company accepted the resignation of BK&D as its
independent auditors. The decision to accept the resignation of BK&D was
approved by the Company's Board of Directors. BK&D's reports on the financial
statements for the past two years contained no qualification, adverse or
disclaimer of opinion. Their report dated February 26, 1997, however, included a
paragraph reflecting substantial doubt about the Company's ability to continue
as a going concern. Through the date of the change in accountants, there were no
disagreements with BK&D on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of such accountants, would
have caused them to make reference to the subject matter of the disagreements in
connection with their reports.
VOTE REQUIRED FOR RATIFICATION OF DB&M
Ratification of the appointment of DB&M requires the affirmative vote of
a majority of the shares of Common Stock present at the Annual Meeting and
entitled to vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF DB&M.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors is not
aware of any other matter that is to be presented to Stockholders for formal
action at the Annual Meeting. If, however, any other matter properly comes
before the meeting or any adjournment or postponement thereof, it is the
intention of the persons named in the enclosed form of proxy to vote such
proxies in accordance with their judgment on such matters.
STOCKHOLDER PROPOSALS
Any Stockholder proposal intended to be presented at the next annual
meeting of Stockholders must be received by the Company at its principal
executive offices, 7100 West Camino Real, Suite 402, Boca Raton, Florida 33433,
no later than February 3, 1999, in order to be eligible for inclusion in the
Company's proxy statement and form of proxy to be used in connection with that
meeting.
OTHER INFORMATION
Although it has entered into no formal agreements to do so, the Company
will reimburse banks, brokerage houses and other custodians, nominees and
fiduciaries for their reasonable expenses in forwarding proxy-soliciting
materials to their principals. The cost of soliciting proxies on behalf of the
Board of Directors will be borne by the Company. Such proxies will be solicited
principally through the mail but, if deemed desirable, may also be solicited
personally or by telephone, telegraph, facsimile transmission or special letter
by directors, officers and regular employees of the Company without additional
compensation.
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<PAGE>
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE ANNUAL MEETING
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING. THE BOARD URGES YOU TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID
REPLY ENVELOPE. YOUR COOPERATION AS A STOCKHOLDER, REGARDLESS OF THE NUMBER OF
SHARES OF STOCK YOU OWN, WILL REDUCE THE EXPENSES INCIDENT TO A FOLLOW-UP
SOLICITATION OF PROXIES.
IF YOU HAVE ANY QUESTIONS ABOUT VOTING YOUR SHARES, PLEASE TELEPHONE THE
COMPANY AT (561) 367-8283.
Sincerely yours,
/s/ Peter Lebowitz
------------------
S. PETER LEBOWITZ
Chairman of the Board
Boca Raton, Florida
June 15, 1998
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<PAGE>
BIG SMITH BRANDS, INC.
ANNUAL MEETING OF STOCKHOLDERS
-----------------------------
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints S. Peter Lebowitz and Howard H. Ward, or
if only one is present, then that individual, with full power of substitution,
to vote all shares of BIG SMITH BRANDS, INC. (the "Company"), which the
undersigned is entitled to vote at the Company's Annual Meeting to be held at
the Renaissance Airport Hotel, St. Louis, Missouri, on the 25th day of June,
1998, at 1:00 p.m. St. Louis time, and at any adjournment thereof, hereby
ratifying all that said proxies or their substitutes may do by virtue hereof,
and the undersigned authorizes and instructs said proxies to vote as follows:
1. ELECTION OF DIRECTORS: To elect the nominees for director below for a term
of one year;
FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY
(except as marked to the contrary below) |_| to vote for all nominees
listed below |_|
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
S. Peter Lebowitz Jack Schultz
Glen Freeman Julian Shaps
Theodore Listerman
2. APPROVAL OF AUDITORS: To ratify and approve the appointment of Daszkal,
Bolton & Manela, CPAs, as independent public auditors of the Company for
the fiscal year ending December 31, 1998;
FOR |_| AGAINST |_| ABSTAIN |_|
and in their discretion, upon any other matters that may properly come before
the meeting or any adjournments thereof.
(Continued and to be dated and signed on the other side.)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDERS. IF NO OTHER DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
Receipt of the Notice of Annual Meeting and of the Proxy Statement and
Annual Report of the Company accompanying the same is hereby acknowledged.
Dated: _____________________________, 1998
------------------------------------------------
(Signature of Stockholder)
------------------------------------------------
(Signature of Stockholder)
Your signature should appear the same as your
name appears herein. If signing as attorney,
executor, administrator, trustee or guardian,
please indicate the capacity in which signing.
When signing as joint tenants, all parties to
the joint tenancy must sign. When the proxy is
given by a corporation, it should be signed by
an authorized officer.
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