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 (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 Rule 14a-11(c) or Rule
14(a)-12
NUCO2 INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than 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) ggregate 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
<PAGE>
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:
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<PAGE>
NUCO2 INC.
2800 S.E. MARKET PLACE
STUART, FLORIDA 34997
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 3, 1997
----------------------
To the Shareholders of NUCO2 INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of NUCO2
INC., a Florida corporation (the "Company"), will be held at Indian River
Plantation Marriott Resort, 555 N.E. Ocean Boulevard, Stuart, Florida 34996, on
Wednesday, December 3, 1997 at 8:30 a.m., local time, for the following
purposes:
1. To elect five (5) members of the Board of Directors of the
Company to serve until the next annual meeting of shareholders
and until their successors have been duly elected and shall
have qualified;
2. To amend the 1995 Stock Option Plan of the Company to increase
the number of shares of Common Stock available for issuance
thereunder from 350,000 shares to 850,000 shares; and
3. To transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
Only shareholders of record at the close of business on October 24,
1997 are entitled to notice of, and to vote at, the Annual Meeting.
By Order of the Board of Directors
EDWARD M. SELLIAN
Chairman of the Board and Chief Executive Officer
Stuart, Florida
October 31, 1997
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL
MEETING YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE THAT IS PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
NUCO2 INC.
2800 S.E. MARKET PLACE
STUART, FLORIDA 34997
-------------------------
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 3, 1997
-------------------------
INTRODUCTION
This Proxy Statement is furnished to the shareholders of NUCO2 INC., a
Florida corporation (the "Company"), in connection with the solicitation by the
Board of Directors of the Company of proxies ("Proxies") for the Annual Meeting
of Shareholders (the "Annual Meeting") to be held at Indian River Plantation
Marriott Resort, 555 N.E. Ocean Boulevard, Stuart, Florida 34996, on Wednesday,
December 3, 1997 at 8:30 a.m., local time, or at any adjournments thereof. The
approximate date on which this Proxy Statement and the accompanying Proxy will
be first sent or given to shareholders is October 31, 1997.
RECORD DATE AND VOTING SECURITIES
The voting securities of the Company outstanding on October 24, 1997
consisted of 7,197,718 shares of common stock, $.001 par value ("Common Stock"),
entitling the holders thereof to one vote per share. Only shareholders of record
as at that date are entitled to notice of and to vote at the Annual Meeting or
any adjournments thereof. A majority of the outstanding shares of Common Stock
present in person or by proxy is required for a quorum.
PROXIES AND VOTING RIGHTS
Shares of Common Stock represented by Proxies, in the accompanying form
of Proxy, which are properly executed, duly returned and not revoked, will be
voted in accordance with the instructions contained therein. If no specification
is indicated on the Proxy, the shares represented thereby will be voted (i) for
the election as directors of the persons who have been nominated by the Board of
Directors, (ii) to amend the 1995 Stock Option Plan of the Company (the "1995
Plan") to increase the number of shares of Common Stock available for issuance
thereunder from 350,000 shares to 850,000 shares and (iii) for any other matter
that may properly come before the Annual Meeting in accordance with the judgment
of the person or persons voting the Proxy.
The execution of a Proxy will in no way affect a shareholder's right to
attend the Annual Meeting and vote in person. Any Proxy executed and returned by
a shareholder may be revoked at any time thereafter if written notice of
revocation is given to the Secretary of the Company prior to the vote to be
taken at the Annual Meeting or by execution of a subsequent Proxy which is
presented to the Annual Meeting, or if the shareholder attends the Annual
Meeting and votes by ballot, except as to any matter or matters upon which a
vote shall have been cast pursuant to the authority conferred by such Proxy
prior to such revocation. The election of Directors requires a plurality of
votes cast at the Annual Meeting. In general, action to approve any other matter
requires a majority of votes cast on the matter. An abstention as to any matter
does not constitute a vote "for" or "against" and will be disregarded. "Broker
non-votes" (i.e., where a broker or nominee submits a Proxy specifically
indicating lack of discretionary authority to vote on a matter) will be treated
in the same manner as abstentions.
All expenses in connection with this solicitation will be borne by the
Company. It is expected that solicitations will be made primarily by mail, but
officers, directors, employees or representatives of the Company may also
solicit Proxies by telephone, telegraph or in person, without additional
compensation. The Company will,
<PAGE>
upon request, reimburse brokerage houses and persons holding shares in the names
of their nominees for their reasonable expenses in sending solicitation material
to their principals.
SECURITY OWNERSHIP
The following table sets forth information concerning ownership of the
Common Stock, as at October 24, 1997, by (i) each Director, (ii) each executive
officer, (iii) all Directors and executive officers as a group and (iv) each
person known to the Company to be the beneficial owner of more than five percent
of the Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME AND ADDRESS(1) OWNERSHIP(2) CLASS(3)
- ------------------- ------------ --------
<S> <C> <C>
Edward M. Sellian....................................................... 1,041,733(4) 14.5%
Joseph M. Criscuolo..................................................... 120,576(5) 1.7
Robert Ranieri.......................................................... 34,855(6) *
Jean Houghton........................................................... 26,109(7) *
Joann Sabatino.......................................................... 33,333(8) *
Robert L. Frome. ....................................................... 44,222(9) *
John J. O'Neil ......................................................... 4,000(10) *
Edward F. O'Reilly...................................................... 5,000(9)(11) *
Wells Fargo Bank, N.A................................................... 763,000(12) 10.6
464 California Street
San Francisco, CA 94163
All Directors and Executive Officers as a Group (8 persons)............. 1,309,828(13) 17.9%
</TABLE>
- ------------------
* Less than 1%.
(1) Unless otherwise indicated, the address of each beneficial owner is c/o
the Company, 2800 S.E. Market Place, Stuart, FL 34997.
(2) Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934 ("Rule 13d-3") and unless
otherwise indicated, represents shares for which the beneficial owner
has sole voting and investment power and for beneficial ownership
purposes includes any options or other rights to subscribe for Common
Stock which are exercisable within sixty (60) days of October 24, 1997.
(3) The percentage of class is calculated in accordance with Rule 13d-3 and
attributes, for beneficial ownership purposes, any options or other
rights to subscribe for Common Stock which are exercisable within sixty
(60) days of October 24, 1997.
(4) Includes 10,000 shares held of record by Mr. Sellian's wife.
(5) Includes 25,000 shares issuable upon exercise of options held by Mr.
Criscuolo and 1,656 shares issuable upon exercise of options held by
Mr. Criscuolo's wife.
(6) Includes 24,855 shares issuable upon exercise of options.
(7) Includes 300 shares held jointly with Ms. Houghton's husband, 24,855
shares issuable upon exercise of options held by Ms. Houghton and 954
shares issuable upon exercise of options held by Ms. Houghton's
husband.
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<PAGE>
(8) Represents 33,333 shares issuable upon exercise of options.
(9) Includes 4,000 shares issuable upon exercise of options.
(10) Represents 4,000 shares issuable upon exercise of options.
(11) Includes 1,000 shares held of record by Mr. O'Reilly's wife.
(12) Information obtained from Schedule 13F.
(13) Includes 122,653 shares issuable upon exercise of options.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Directors of the Company hold office until the next annual meeting of
shareholders and until their successors are duly elected and shall have
qualified. Directors shall be elected by a plurality of the votes cast, in
person or by proxy, at the Annual Meeting. If no contrary instructions are
indicated, Proxies will be voted for the election of Edward M. Sellian, Joseph
M. Criscuolo, Robert L. Frome, John J. O'Neil and Edward F. O'Reilly, the five
nominees of the Board of Directors. All of the nominees are currently Directors
of the Company. The Company does not expect that any of the nominees will be
unavailable for election, but if that should occur before the Annual Meeting,
the Proxies will be voted in favor of the remaining nominees and may also be
voted for a substitute nominee or nominees selected by the Board of Directors.
The names of the nominees and certain information concerning them
attached set forth below:
NAME AGE POSITION(S)
- ---- --- -----------
Edward M. Sellian......... 55 Chairman of the Board and Chief Executive
Officer
Joseph M. Criscuolo....... 50 President, Secretary and Director
Robert L. Frome........... 56 Director
John J. O'Neil............ 55 Director
Edward F. O'Reilly........ 59 Director
EDWARD M. SELLIAN: Chairman at the Board and Chief Executive officer
since 1991. From 1965 until May 1989, Mr. Sellian was the president of
Sodasystems, Inc. ("Sodasystems"), a supplier of fountain dispensing equipment,
bulk C02 systems and related products operating in the New York, New Jersey and
Connecticut market. Under Mr. Sellian Sodasystems grew internally and through 20
acquisitions to become the largest supplier in the New York metropolitan area.
Sodasystems had sales of approximately $30 million annually and over 20,000
customer accounts at the time it was sold in May 1989 to The Coca-Cola Bottling
Company of New York, Inc. ("Coca-Cola"). Mr. Sellian continued to work for
Sodasystems after its purchase by Coca-Cola until December 1989. Mr. Sellian
provides overall executive oversight and is primarily responsible for setting
future strategy and implementing the acquisition program.
JOSEPH M. CRISCUOLO: President, Secretary and Director since 1990. From
1990 to March 1997 Mr. Criscuolo was also Chief Operating Officer. Prior to
joining the Company, Mr. Criscuolo was employed by Sodasystems from 1980 until
May 1989, joining Sodasystems as a route driver and rising to vice
president-operations. Mr. Criscuolo continued to work for Sodasystems after its
purchase by Coca-Cola until January 1990. He has experience in warehousing,
dispatching, general management and operations. Mr. Criscuolo has oversight
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<PAGE>
responsibility for the day-to-day operations of the Company and manages investor
relations. Mr. Criscuolo has a B.A. degree from Lehman College/City University
of New York.
ROBERT L. FROME: Director since December 1995. Mr. Frome has been
engaged in the practice of law for more than five years as a senior partner of
the law firm of Olshan Grundman Frome & Rosenzweig LLP. Mr. Frome is a director
Healthcare Services Group, Inc., the nation's leading provider of housekeeping
services to long-term care facilities. Mr. Frome is chairman of the board of
Daytop Village Foundation, a not-for-profit drug treatment center. Mr. Frome has
a B.S. degree from New York University, a L.L.B. degree from Harvard University
and a L.L.M. degree from New York University.
JOHN J. O'NEIL: Director since December 1995. Mr. O'Neil is senior vice
president/food and beverage operations of Restaurant Associates, Inc., an
operator of over 125 full-service restaurants including Acapulco's
Mexican-themed restaurants, Charlie Brown's steakhouses and various
institutional dining facilities. He presently oversees the purchasing, quality
control and executive chef functions, and has been employed by Restaurant
Associates since 1968. Mr. O'Neil has a B.A. degree from St. John's University.
EDWARD F. O'REILLY: Director since December 1995. Mr. O'Reilly has been
involved in the beverage business for three decades and has diversified
experience in various sales, marketing and administrative positions including
chairman of the board and principal shareholder of the Coca-Cola Bottling
Company of Northern New England, chairman and chief executive officer of the
Coca-Cola Bottling Company of New York, president of The Royal Crown Cola
Company and executive vice president, sales and marketing for Joyce Beverages.
Since 1993 Mr. O'Reilly has been a consultant and entrepreneur in several
ventures in which he holds an equity interest. From 1989 to 1992, Mr. O'Reilly
was a managing partner of Millard-O'Reilly Enterprises, a private investment and
consulting firm serving leading soft drink companies. Mr. O'Reilly holds a B.A.
degree from Iona College.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company formally met on four occasions
during the fiscal year ended June 30, 1997. From time to time during such fiscal
year, the members of the Board of Directors acted by unanimous written consent.
The Board of Directors has authorized a Stock Option Committee, an Audit
Committee and a Compensation Committee. The Stock Option Committee members are
Edward F. O'Reilly, John J. O'Neil and Robert L. Frome. The Audit Committee
members are Robert L. Frome, John J. O'Neil and Joseph M. Criscuolo. The
Compensation Committee members are John J. O'Neil and Edward M. Sellian.
The Stock Option Committee determines the term and the grant of stock
options in accordance with each of the Company's stock option plans, and
administers such plans. The Audit Committee reviews the Company's annual audit
and meets with the Company's independent accountants to review the Company's
internal controls and financial management practices. The Compensation Committee
reviews, analyzes and makes recommendations to the Board of Directors regarding
compensation of the key employees of the Company and prepares an annual report
on such policies. From time to time during the fiscal year ended June 30, 1997,
certain of the Committees of the Board of Directors acted by unanimous written
consent. The Company does not have a standing nominating committee or a
committee which serves nominating functions.
BOARD OF DIRECTORS COMPENSATION
Directors of the Company who are not executive officers do not receive
cash compensation for acting as a Director but are reimbursed for the reasonable
expenses of attending meetings. In addition, each non-employee Director is
eligible to participate in the Company's Directors' Stock Option Plan.
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<PAGE>
OTHER EXECUTIVE OFFICERS
ROBERT RANIERI: Chief Operating Officer and Executive Vice President
since March 1997. Prior to joining the Company in January 1994, Mr. Ranieri was
owner and operator of 1649 Restaurant Corporation from 1990 to 1993. Prior to
his purchase of 1649 Restaurant Corporation, Mr. Ranieri was employed by
Sodasystems from 1986 to 1990, joining Sodasystems as an assistant distribution
manager and rising to operations manager. Mr. Ranieri has a B.A. degree from the
George Washington University.
JOANN SABATINO: Chief Financial Officer since October 1996. Prior to
joining the Company, Ms. Sabatino was a partner at Cooper, Selvin & Strassberg,
LLP, the Company's independent auditors. Ms. Sabatino commenced her employment
at Cooper, Selvin & Strassberg LLP in 1984, and has over 10 years of experience
serving beverage industry clients. Ms. Sabatino is a Certified Public Accountant
and a member of the American Institute of Certified Public Accountants. Ms.
Sabatino has a B.S. degree in Accounting from the State University of New York
at Oswego.
JEAN HOUGHTON: Vice President-Administration since 1990. Prior to
joining the Company, Ms. Houghton was employed by Sodasystems from 1984 to 1989
in office management. She is responsible for managing the back office operations
and support systems for the Company. Ms. Houghton was instrumental in the
design, development and implementation of the Company's custom designed software
package for customer billing.
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years indicated, all
compensation awarded to, earned by or paid to the chief executive officer
("CEO") of the Company (Mr. Edward M. Sellian, the Chairman of the Board and the
Chief Executive Officer of the Company) and the four most highly compensated
executive officers of the Company other than the CEO whose salary and bonus
exceeded $100,000 with respect to the fiscal year ended June 30, 1997 (the
"Named Executive Officers").
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
-------------------------------------- -----------------------
Fiscal Year
NAME AND PRINCIPAL POSITION ENDED JUNE 30, SALARY($) BONUS($) OPTIONS (#)
- --------------------------- -------------- --------- -------- -----------
<S> <C> <C> <C> <C>
Edward M. Sellian 1997 160,615 -- --
Chairman of the Board, 1996 135,000 25,000 --
Chief Executive Officer 1995 110,000 37,500 --
Joseph M. Criscuolo 1997 125,481 -- --
President, Secretary 1996 78,381 -- 75,000
1995 47,700 -- --
Robert Ranieri 1997 105,463 -- 45,000
Chief Operating Officer, 1996 67,992 -- 14,783
Executive Vice President 1995 45,974 -- --
Joann Sabatino 1997 107,313 -- 100,000
Chief Financial Officer, Treasurer 1996 -- -- --
1995 -- -- --
Jean Houghton 1997 105,463 -- 45,000
Vice President - 1996 76,508 -- 14,783
Administration 1995 43,968 -- --
</TABLE>
The following table sets forth certain information regarding stock
option grants made to the Named Executive Officers during the fiscal year ended
June 30, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------------------------------
% of Total
Options
Granted to Exercise or
Options Employees in Base Price Expiration
NAME Granted(#) Fiscal Year ($/sh) Date
- ---- --------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Robert Ranieri 45,000 20 11.25 12/15/01
Joann Sabatino 100,000 45 11.25 10/16/01
Jean Houghton 45,000 20 11.25 12/15/01
</TABLE>
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<PAGE>
The following table sets forth certain information regarding stock
option exercises by each of the Named Executive Officers during the fiscal year
ended June 30, 1997 and unexercised stock options held by such Named Executive
Officers as of June 30, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Unexercised
Options at
June 30, Value of Unexercised
1997(#) In-the-Money Options at
June 30, 1997 ($)(1)
Shares Acquired Value Exercisable/
NAME on Exercise(#) Realized($) Unexercisable Exercisable/ Unexercisable
- ---- ---------------- --------------- -------------- ---------------------------
<S> <C> <C> <C> <C>
Edward M. Sellian -- -- 0/0 --
Joseph M. Criscuolo -- -- 25,000/50,000 0/0
Robert Ranieri 33,967 844,080 4,927/54,856 40,648/351,312
Joann Sabatino -- -- 0/100,000 0/600,000
Jean Houghton -- -- 4,927/54,856 40,648/351,312
</TABLE>
- -----------------
(1) On June 30, 1997, the last reported sales price of the Company's Common
Stock as reported by the Nasdaq National Market was $17.25 per share.
LONG-TERM INCENTIVE AND PENSION PLANS
The Company does not have any long-term incentive or defined benefit
pension plans.
EMPLOYMENT AGREEMENT
Ms. Joann Sabatino is employed as Chief Financial Officer of the
Company under an employment agreement expiring on October 15, 1999 at a salary
of $150,000 per annum. In connection with the employment agreement, Ms. Sabatino
was granted options to purchase 100,000 shares of the Common Stock of the
Company. See "Option Grants in Last Fiscal Year." In the event that Ms.
Sabatino's employment is terminated other than for cause, permanent disability
or death or she voluntarily terminates her employment during the 24 month period
after a "Change in Control" of the Company occurs, Ms. Sabatino is entitled to
receive a payment equal to 300% of her highest annual compensation during the
three fiscal years preceding the date of termination and other specified
benefits.
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<PAGE>
STOCK OPTION PLANS
1995 STOCK OPTION PLAN. Under the Company's 1995 Stock Option Plan (the
"1995 Plan"), 350,000 shares of Common Stock are reserved for issuance upon the
exercise of stock options. The Board of Directors has proposed an amendment to
the 1995 Plan to increase the number of shares of Common Stock reserved for
issuance thereunder from 350,000 shares to 850,000 shares. See "Proposal No. 2
- -- Amendment to the 1995 Stock Option Plan." Options to purchase an aggregate of
346,304 shares of Common Stock are presently outstanding. The 1995 Plan is
designed as a means to attract, retain and motivate key employees. The Stock
Option Committee administers and interprets the 1995 Plan.
The 1995 Plan provides for the granting of both incentive stock options
(as defined in Section 422 of the Internal Revenue Code of 1986, as amended) and
nonqualified stock options. Options are granted under the 1995 Plan on such
terms and at such prices as determined by the Stock Option Committee, except
that the per share exercise price of incentive stock options cannot be less than
the fair market value of the Common Stock on the date of grant and the per share
exercise price of nonqualified stock options cannot be less than 75% of the fair
market value of the Common Stock on the date of grant. Each option is
exercisable after the period or periods specified in the option agreement, but
no option may be exercisable after the expiration of ten years from the date of
grant. Options granted under the 1995 Plan are not transferable other than by
will or by the laws of descent and distribution.
DIRECTORS' STOCK OPTION PLAN. The Company's Directors' Stock Option
Plan (the "Directors' Plan") provides for the grant of options to purchase
Common Stock of the Company to non-employee Directors of the Company. The
Directors' Plan authorizes the issuance of a maximum of 60,000 shares of Common
Stock.
The Directors' Plan is administered by the Board of Directors. Under
the Directors' Plan each non-employee Director receives options for 6,000 shares
of Common Stock on the date of his or her first election to the Board of
Directors. In addition, on the third anniversary of each Director's first
election to the Board, and on each three year anniversary thereafter, each
non-employee Director will receive an additional option to purchase 6,000 shares
of Common Stock. The exercise price per share for all options granted under the
Directors' Plan will be equal to the fair market value of the Common Stock as of
the date preceding the date of grant. All options vest in three equal annual
installments beginning on the first anniversary of the date of grant. Each of
Messrs. Frome, O'Neil and O'Reilly received options to purchase 6,000 shares of
Common Stock on the date of his election to the Board.
NONCOMPETITION AGREEMENT
Mr. Sellian does not have an employment agreement with the Company. The
Company has, however, entered into a noncompetition agreement with Mr. Sellian.
Mr. Sellian's agreement provides that for as long as he is Chairman of the Board
of the Company or owns at least 25% of the Company's outstanding Common Stock
and for two years thereafter, he shall not, without the prior written consent of
the Company, associate with any competing entity within the United States or
employ, or solicit the employment of any employee of the Company.
REPRICING OF OPTIONS
The Board of Directors, the Stock Option Committee and the Compensation
Committee believe that the future growth and success of the Company is dependent
upon, and the best interests of the Company and its shareholders are served by,
the Company's ability to successfully attract, retain and motivate its key
employees and the 1995 Plan is an important factor in accomplishing these goals
and for aligning the interests of its key employees with the interests of the
shareholders. On November 22, 1996, the Stock Option Committee of the Board of
Directors approved the cancellation and replacement grant of an option pursuant
to the 1995 Plan to purchase 100,000 shares of Common Stock (the "Option") held
by Joann Sabatino, the Chief Financial Officer of the Company. The Stock Option
Committee determined that the exercise price of the Option was significantly in
excess of the then current
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<PAGE>
market price of the Common Stock, and was not fulfilling its designated purpose
under the 1995 Plan of providing an incentive for Ms. Sabatino to remain in the
employ of the Company and to stimulate her efforts on behalf of the Company.
Accordingly, to restore the purpose for which the Option was granted, the
exercise price of the Option was reduced from $20.50 per share to $11.25 per
share, the fair market value of the Common Stock on November 22, 1996. This
action was taken to help restore the incentive value of the Option.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission (the "Commission"). Officers, directors and greater than ten percent
shareholders are required by the Commission's regulations to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on review of copies of such forms furnished to the
Company, or written representations that no Form 5's were required, the Company
believes that during the year ended June 30, 1996, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-percent
beneficial owners were complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases its Stuart, Florida headquarters from Mr. Sellian
pursuant to a lease expiring on March 31, 2001 for $13,935 per month, the fair
market value for the premises determined by an independent real estate
appraisal. Rent expense for the headquarters totalled $139,796 for the fiscal
year ended June 30, 1997. The Company's lease for its former headquarters, which
terminated, was also leased from Mr. Sellian. Rent expense on the former
headquarters totalled $68,900 for the fiscal year ended June 30, 1996 and
$22,967 for the fiscal year ended June 30, 1997. The Company also leases its Ft.
Myers, Florida and Stuart, Florida storage depots from Mr. Sellian and a
corporation owned by Mr. Sellian, respectively, for $795 and $321 per month,
respectively. Rent expense for these storage depots totalled $13,140 for the
fiscal year ended June 30, 1996 and $13,326 for the fiscal year ended June 30,
1997. The Company leased a C414A Chancellor airplane for a minimum of 250 hours
annually at a cost of $300 per hour from a corporation controlled by Mr.
Sellian. Rent expense for the airplane totalled $77,305 for the fiscal year
ended June 30, 1996 and $31,250 for the fiscal year ended June 30, 1997. In
addition, the Company leased an IBM AS/400 computer from a corporation
controlled by Mr. Sellian. Expense for the computer totalled $24,000 for the
fiscal year ended June 30, 1996 and $46,000 for the fiscal year ended June 30,
1997. The computer lease was terminated by mutual agreement of Mr. Sellian and
the Company during the fiscal year ended June 30, 1997.
On November 25, 1996, the Company acquired certain assets relating to
the carbon dioxide business of David Soda Dispensing Co., a Connecticut
corporation owned by James E. Sellian ("David Soda"). The purchase price for the
assets acquired from David Soda was $130,000. James E. Sellian is the brother of
Edward M. Sellian. The Company believes that the purchase price for the assets
acquired from David Soda was fair market value.
The Company was indebted to Mr. Sellian in the aggregate principal
amount of $830,592 pursuant to two Senior Subordinated Notes in the principal
amounts of $788,000 and $42,592, dated July 1, 1993 and May 6, 1994,
respectively. The Senior Subordinated Notes bore interest at the rate of 14% per
annum. Pursuant to the provisions of the Senior Subordinated Notes, $144,608 of
the principal amount of such Senior Subordinated Notes was converted into
226,205 shares of Common Stock effective with the closing of the Company's
initial public offering in December 1995 (the "IPO"). The balance of the
principal amount of such Senior Subordinated Notes, together with accrued
interest thereon, was repaid with a portion of the net proceeds of the IPO. Mr.
Sellian's purchase of such Senior Subordinated Notes and related warrants to
purchase shares of Common Stock was on the same terms and conditions as other
Senior Subordinated Notes and related warrants purchased by non-affiliated
third-parties of the Company simultaneously with Mr. Sellian's purchases.
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<PAGE>
The Company was also indebted to Mr. Sellian in the principal amount of
$725,000 pursuant to a Junior Subordinated Note dated August 30, 1994. The
Junior Subordinated Note bore interest at the rate of 14% per annum. The
principal amount of such Junior Subordinated Note, together with accrued
interest thereon, was repaid with a portion of the net proceeds of the IPO. In
consideration of Mr. Sellian's guarantee in the amount of $500,000 to the
Company's prior bank simultaneously with the issuance of the Junior Subordinated
Note, Mr. Sellian was issued a warrant to purchase shares of Common Stock.
Effective with the closing of the IPO, such warrant was exercised at a price of
$235,195 for an aggregate for 73,042 shares of Common Stock.
On November 7, 1995 Mr. Sellian loaned the Company $200,000. Such loan,
together with interest at 14% per annum, was repaid with a portion of the net
proceeds of the IPO.
On May 21, 1992, Mr. Sellian purchased 485 shares of Series A Preferred
Stock and 500 shares of Series B Preferred Stock for aggregate consideration of
$485,000 and $500,000, respectively. Mr. Sellian was the sole holder of all
outstanding shares of the Series A Preferred Stock and Series B Preferred Stock.
All outstanding shares of the Series A Preferred Stock and Series B Preferred
Stock were redeemed for $485,000 and approximately $226,000 of accrued
dividends, and $500, respectively, in connection with the IPO.
Mr. Robert L. Frome, a Director of the Company, is a member of the law
firm of Olshan Grundman Frome & Rosenzweig LLP, which law firm has been retained
by the Company during the last fiscal year. Fees received from the Company by
such firm during the last fiscal year did not exceed 5% of such firm's or the
Company's revenues.
PROPOSAL NO. 2
AMENDMENT TO THE 1995 STOCK OPTION PLAN
The Board of Directors proposes the amendment of the 1995 Plan to
increase the number of shares of Common Stock reserved for issuance thereunder
from 350,000 shares to 850,000 shares (the "Amendment"). The 1995 Plan is
designed as a means to attract, retain and motivate key employees. On September
26, 1997, the Board of Directors voted to approve the Amendment, subject to
shareholder approval.
The Stock Option Committee administers and interprets the 1995 Plan.
The 1995 Plan provides for the granting of both incentive stock options (as
defined in Section 422 of the Internal Revenue Code of 1986, as amended) and
nonqualified stock options. Options are granted under the 1995 Plan on such
terms and at such prices as determined by the Stock Option Committee, except
that the per share exercise price of incentive stock options cannot be less than
the fair market value of the Common Stock on the date of grant and the per share
exercise price of nonqualified stock options cannot be less than 75% of the fair
market value of the Common Stock on the date of grant. Each option is
exercisable after the period or periods specified in the option agreement, but
no option may be exercisable after the expiration of ten years from the date of
grant. Options granted under the 1995 Plan are not transferable other than by
will or by the laws of descent and distribution.
As of the date hereof, stock options to purchase 346,304 shares of
Common Stock, at exercise prices ranging from $9.00 to $17.50 per share, have
been granted and are outstanding under the 1995 Plan. Options to purchase 322
shares of Common Stock have been exercised through the date hereof. The 1995
Plan will terminate on November 7, 2005, but may be terminated by the Board of
Directors at any time prior to such date. The following table sets forth certain
information regarding stock options held by employees of the Company.
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<PAGE>
NAME AND POSITION NUMBER OF OPTIONS(1)(2)
- ----------------- -----------------------
Edward M. Sellian, --
Chairman of the Board, Chief Executive Officer
Joseph M. Criscuolo, 75,000
President, Secretary
Robert Ranieri, 54,856
Chief Operating Officer, Executive Vice President
Joann Sabatino, 100,000
Chief Financial Officer, Treasurer
Jean Houghton, 54,856
Vice President, Administration
Executive Group(3) 284,712
Non-Executive Officer Employee Group(4) 61,892
- ----------------------
(1) On October 20, 1997, the last reported sales price of the Company's
Common Stock as reported by the Nasdaq National Market was $15 per
share.
(2) Information contained in this table is duplicative of information
contained in "Executive Compensation" and does not signify additional
grants of options to purchase shares of Common Stock.
(3) All current executive officers as a group.
(4) All employees, including all current officers who are not executive
officers, as a group.
Only 3,374 shares of Common Stock remain available for the grant of
options under the 1995 Plan. The Board of Directors believes it is in the
Company's best interests to approve the Amendment which would allow the Company
to continue to grant options under the 1995 Plan to secure for the Company the
benefits of the additional incentive inherent in the ownership of shares of
Common Stock by key employees of the Company and to help the Company secure and
retain the services of key employees. The 1995 Plan is an important factor in
accomplishing these goals, especially in small companies like the Company that
utilize stock options as a portion of the compensation and incentives of
employees and for aligning the interests of its employees with the interests of
its shareholders. Rule 16b-3 of the Securities Exchange Act of 1934, as amended,
and the rules promulgated thereunder ("Rule 16b-3") require the affirmative vote
of the holders of record of a majority of the shares of Common Stock present in
person or by proxy at the Meeting for approval of the Amendment.
THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS A VOTE "FOR" THE AMENDMENT.
SHAREHOLDER PROPOSALS
To the extent required by law, any shareholder proposal intended for
presentation at next year's annual shareholders' meeting must be received at the
Company's principal executive offices prior to July 3, 1998.
OTHER MATTERS
So far as it is known, there is no business other than that described
above to be presented for action by the shareholders at the forthcoming Annual
Meeting, but it is intended that Proxies will be voted upon any other matters
-11-
<PAGE>
and proposals that may legally come before the Annual Meeting, or any
adjustments thereof, in accordance with the discretion of the persons named
therein.
The Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1997, including financial statements, has been mailed to shareholders
with this Proxy Statement. If, for any reason, you did not receive your copy of
the Annual Report, please advise the Company and a copy will be sent to you.
By Order of the Board of Directors
EDWARD M. SELLIAN
Chairman of the Board and Chief Executive Officer
Stuart, Florida
October 31, 1997
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<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
NUCO2 INC.
PROXY -- ANNUAL MEETING OF SHAREHOLDERS, DECEMBER 3, 1997
The undersigned, a shareholder of NuCo2 Inc., a Florida corporation (the
"Company"), does hereby constitute and appoint Edward M. Sellian and Joseph M.
Criscuolo and each of them, the true and lawful attorneys and proxies with full
power of substitution, for and in the name, place and stead of the undersigned,
to vote all of the shares of Common Stock of the Company that the undersigned
would be entitled to vote if personally present at the 1997 Annual Meeting of
Shareholders of the Company to be held at Indian River Plantation Marriott
Resort, 555 N.E. Ocean Boulevard, Stuart, Florida 34996 on December 3, 1997 at
8:30 a.m., local time, or at any adjournment or adjournments thereof.
The undersigned hereby instructs said proxies or their substitutes as set
forth below.
1. ELECTION OF DIRECTORS:
The election of Edward M. Sellian, Joseph M. Criscuolo, Robert L. Frome,
John J. O'Neil and Edward F. O'Reilly.
/ / FOR / / TO WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), PRINT NAME(S)
BELOW:
2. TO AMEND THE COMPANY'S 1995 STOCK OPTION PLAN. / / FOR / / AGAINST
/ / ABSTAIN
3. DISCRETIONARY AUTHORITY.
(Continued on the reverse side)
<PAGE>
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE
GIVEN. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE
NOMINEES AS DIRECTORS, TO APPROVE THE AMENDMENT OF THE COMPANY'S 1995 STOCK
OPTION PLAN AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES OR PROXY WITH
RESPECT TO ANY OTHER BUSINESS TRANSACTED AT THE ANNUAL MEETING.
The undersigned hereby revokes any proxy or proxies heretofore given and
acknowledges receipt of a copy of the Notice of Annual Meeting and Proxy
Statement, both dated October 31, 1997, and a copy of the Company's Annual
Report on Form 10-KSB for the fiscal year ended June 30, 1997.
PLEASE MARK, DATE, SIGN AND MAIL THIS
PROXY IN THE ENVELOPE PROVIDED FOR THIS
PURPOSE. NO POSTAGE IS REQUIRED IF
MAILED IN THE UNITED STATES.
---------------------------------, 1997
---------------------------------(L.S.)
---------------------------------(L.S.)
Signature(s)
NOTE: Please sign exactly as your name
or names appear hereon. When signing as
attorney, executor, administrator,
trustee or guardian, please indicate
the capacity in which signing. When
signing as joint tenants, all parties
in the joint tenancy must sign. When a
proxy is given by a corporation, it
should be signed with full corporate
name by a duly authorized officer.
