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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 Commission Only (as permitted by Rule 14a-6
(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to SS. 240.14a-11(c) or SS. 240.14a-12
- --------------------------------------------------------------------------------
William Greenberg Jr. Desserts and Cafes, Inc.
--------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
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)
(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>
<PAGE>
WILLIAM GREENBERG JR. DESSERTS AND CAFES, INC.
222 NEW ROAD
PARSIPPANY, NEW JERSEY 07054
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JULY 21, 1997
To the Shareholders of
WILLIAM GREENBERG JR. DESSERTS AND CAFES, INC.
NOTICE IS HEREBY GIVEN that the annual meeting (the "Annual Meeting") of
shareholders of William Greenberg Jr. Desserts and Cafes, Inc. (the "Company")
will be held at Chatterly Elegant Desserts, Inc., 20 Passaic Avenue, Fairfield,
New Jersey, on Monday, July 21, 1997 at 2:00 p.m., local time, for the following
purposes, all as more fully described in the attached Proxy Statement:
I. To elect five directors to hold office until the next
Annual Meeting and until their respective successors are duly elected
and qualified.
II. To approve an amendment to the Restated Certificate of
Incorporation of the Company to change the Company's name from "William
Greenberg Jr. Desserts and Cafes, Inc." to "Creative Bakeries, Inc."
III. To ratify the selection by the Company's Board of Directors
of Zeller Weiss & Kahn, as the new independent accountants of the
Company for the fiscal year ending December 31, 1997.
IV. To approve the Company's 1997 Stock Option Plan.
V. To transact such other business as may properly come
before the Annual Meeting and any and all adjournments thereof.
The Board of Directors has fixed the close of business on June 13, 1997
as the record date for the determination of shareholders entitled to notice of,
and to vote at, the Annual Meeting or any adjournment thereof.
A copy of the Company's Annual Report on form 10-KSB, as amended on Form
10-KSB/A for the fiscal year ended December 31, 1996 is enclosed.
THE BOARD OF DIRECTORS APPRECIATES AND WELCOMES SHAREHOLDERS
PARTICIPATION IN THE COMPANY'S AFFAIRS. YOU ARE EARNESTLY REQUESTED TO COMPLETE,
SIGN, DATE AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE ENCLOSED ENVELOPE
PROVIDED FOR THAT PURPOSE (TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES) WHETHER OR NOT YOU EXPECT TO ATTEND THE
<PAGE>
<PAGE>
ANNUAL MEETING IN PERSON. THE PROXY IS REVOCABLE BY YOU AT ANY TIME PRIOR TO ITS
EXERCISE AND WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IN THE EVENT YOU
ATTEND THE ANNUAL MEETING. THE PROMPT RETURN OF THE PROXY WILL BE OF ASSISTANCE
IN PREPARING FOR THE ANNUAL MEETING AND YOUR COOPERATION IN THIS RESPECT WILL BE
GREATLY APPRECIATED.
By Order of the Board of Directors
Philip Grabow
President
New York, New York
June 18, 1997
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YOUR VOTE IS IMPORTANT. TO VOTE YOUR SHARES,
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED
PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE.
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<PAGE>
<PAGE>
WILLIAM GREENBERG JR. DESSERTS AND CAFES, INC.
222 NEW ROAD
PARSIPPANY, NEW JERSEY 07054
--------------------------
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 21, 1997
2:00 P.M.
--------------------------
INTRODUCTION
This Proxy Statement and the accompanying proxy are being furnished to
shareholders of William Greenberg Jr. Desserts and Cafes, Inc. (the "Company")
in connection with the solicitation of proxies by the Board of Directors for use
in voting at the Annual Meeting of Shareholders to be held at Chatterly Elegant
Desserts, Inc., 20 Passaic Avenue, Fairfield, New Jersey, on Monday, July 21,
1997 at 2:00 p.m., and at any and all adjournments thereof (the "Annual
Meeting"). This Proxy Statement, the attached Notice of Annual Meeting, the
accompanying proxy, and the Company's Annual Report for the fiscal year ended
December 31, 1996, as amended, including financial statements, are first being
mailed or delivered to shareholders of the Company on or about June 20, 1997.
At the Annual Meeting, shareholders of the Company as of the close of
business on June 13, 1997 (the "Record Date") will consider and vote upon the
following: (i) Proposal I for the election of five directors to hold office
until the next Annual Meeting and until their respective successors are elected
and qualified; (ii) Proposal II to approve an amendment to the Restated
Certificate of Incorporation of the Company to change the Company's name from
"William Greenberg Jr. Desserts and Cafes, Inc." to "Creative Bakeries, Inc.";
(iii) Proposal III for the ratification of the selection by the Company's Board
of Directors of Zeller Weiss & Kahn, as independent accountants of the Company
for the fiscal year ending December 31, 1997; and (iv) Proposal IV for the
approval of the Company's 1997 Stock Option Plan.
Approval of Proposal I to elect five directors requires the affirmative
vote of the holders of a plurality of the outstanding Common Shares represented
in person or by proxy at the Annual Meeting. Approval of Proposal II to amend
the Restated Certificate of Incorporation of the Company to change the Company's
name from "William Greenberg Jr. Desserts and Cafes, Inc." to "Creative
Bakeries, Inc." requires the affirmative vote of the holders of a majority of
the outstanding Common Shares entitled to vote at the Annual Meeting. Approval
of Proposal III to ratify the selection of Zeller Weiss & Kahn, as independent
accountants of the Company for the fiscal year ending December 31, 1997 requires
the affirmative vote of holders of a majority of the Common Shares represented
in person or by proxy at the Annual Meeting. Approval of Proposal IV to approve
the 1997 Stock Option Plan requires the affirmative vote of holders of a
majority of the Common Shares represented in person or by proxy at the Annual
Meeting.
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<PAGE>
The enclosed proxy provides that each shareholder may specify that his
or her shares be voted "for" all the nominees listed in Proposal I or that
authority to vote for one or more of such nominees be withheld, and with respect
to Proposals II, III and IV, that his or her shares be voted "for," "against" or
"abstain" from voting. If the enclosed proxy is properly executed, duly returned
to the Company in time for the Annual Meeting and not revoked, your shares will
be voted in accordance with the instructions contained thereon. Where a signed
proxy is returned, but no specific instructions are indicated, your shares will
be voted FOR the election of each of the nominees in Proposal I and FOR
Proposals II, III and IV.
Proxies marked as abstaining will be treated as present for purposes of
determining a quorum for the Annual Meeting, but will not be counted as voting
in respect of any matter as to which abstinence is indicated. Broker "non-votes"
(i.e., votes withheld by brokers on non-routine proposals in the absence of
instructions from beneficial owners) will not be treated as present for purposes
of determining a quorum for the Annual Meeting and will not be counted as to the
matters for which a non-vote is indicated. Any shareholder who executes and
returns a proxy may revoke it in writing at any time before it is voted at the
Annual Meeting by: (i) filing with Limor Beck, the Secretary of the Company, at
the above address, written notice of such revocation bearing a later date than
the proxy; (ii) submitting a duly executed proxy relating to the same shares
bearing a later date than the initial proxy; or (iii) attending the Annual
Meeting and voting in person (although attendance at the Annual Meeting will not
in and of itself constitute revocation of a proxy).
Representatives of Zeller Weiss & Kahn are expected to be present at the
Annual Meeting and available to respond to appropriate questions. Such
representatives also will have the opportunity, should they so desire, to make
any statements to the shareholders which they deem appropriate.
WHETHER OR NOT YOU ATTEND THE ANNUAL MEETING, YOUR VOTE IS IMPORTANT.
ACCORDINGLY, YOU ARE ASKED TO SIGN AND RETURN THE ACCOMPANYING PROXY REGARDLESS
OF THE NUMBER OF SHARES YOU OWN. SHARES MAY BE VOTED AT THE ANNUAL MEETING ONLY
IF THE HOLDER IS REPRESENTED BY PROXY OR IS PRESENT.
VOTING RIGHTS AND VOTING SECURITIES
VOTING AT THE ANNUAL MEETING
The Board of Directors has fixed the close of business on June 13, 1997
as the Record Date for the determination of shareholders entitled to notice of,
and to vote at, the Annual Meeting. Only shareholders of record at the close of
business on the Record Date will be entitled to vote at the Annual Meeting or
any and all adjournments thereof. As of the Record Date, there were 3,155,500
Common Shares issued and outstanding. The Common Shares are the only class of
outstanding voting securities of the Company. Each holder of Common Shares will
be entitled to one vote per share, either in person or by proxy, on each matter
presented to the shareholders of the Company at the Annual Meeting. The holders
of a majority of all of the outstanding Common Shares entitled to vote at the
Annual Meeting constitute a quorum at the Annual Meeting. The affirmative vote
of the holders of a plurality of the Common Shares represented in person or by
proxy at the Annual Meeting is required to elect the five directors nominated in
Proposal I. The affirmative vote of the holders of a majority of the outstanding
Common Shares entitled to vote at the Annual Meeting is required to approve the
amendment to the Company's Restated Certificate of Incorporation to change the
name of the Company as recommended in Proposal II. The approval of each of
Proposal III and Proposal IV requires the affirmative vote of the holders of a
majority of the Common Shares represented in person or by proxy at the Annual
Meeting.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of Common
Shares beneficially owned, as of June 13, 1997, by: (i) all persons known by the
Company to be the beneficial owner of more than 5% of the outstanding Common
Shares; (ii) each director and nominee of the Company; (iii) each of the "named
executive officers" as defined under the rules and regulations of the Securities
Act of 1933, as amended; and (iv) all directors and executive officers of the
Company as a group (5 persons):
<TABLE>
<CAPTION>
Numbers
of Shares Percentage
Beneficially Beneficially
NAME Owned(1) Owned(2)
---- ------------- -----------
<S> <C> <C>
Philip Grabow(3)..................................... 850,000 24.3%
Maria Marfuggi(4).................................... 472,500 14.5%
Willa Rose Abramson(5)............................... 472,500 15.0%
Stephen Fass(6)...................................... 335,000 10.3%
Richard Fechtor(7)................................... 137,042 4.3%
Raymond J. McKinstry(8).............................. 50,000 1.6%
InterEquity Capital Partners, L.P.(9)................ 281,185 8.2%
Kenneth Sitomer(10).................................. -- --
Karen Brenner(11).................................... -- --
All executive officers and directors as a group
(3 persons)(12).................................... 1,037,042 30.2%
</TABLE>
- -----------------------------
(1) Unless otherwise noted, the Company believes that all persons named in the
table have sole voting power with respect to all shares beneficially owned
by them. A person is deemed to be the beneficial owner of securities that
can be acquired by such person within 60 days from the date hereof upon the
exercise of warrants or options.
(2) Assumes 3,155,500 Common Shares outstanding as of the date of this Proxy
Statement. Each beneficial owner's percentage ownership is determined by
assuming that options or warrants that are held by such person (but not
those held by any other person) and which are exercisable within 60 days
from the date hereof have been exercised.
(3) Mr. Grabow's business address is 222 New Road, Parsippany, New Jersey 07054.
Includes 500,000 Common Shares and currently exercisable warrants to
purchase an additional 350,000 Common Shares. See "Certain Relationships and
Related Transactions."
(4) Ms. Marfuggi's business address is 116 Village Blvd., Suite 200, Princeton,
New Jersey 08540-5799. Includes 372,500 Common Shares and currently
exercisable warrants to purchase an additional 100,000 Common Shares.
Excludes 75,000 Common Shares pledged by Ms. Marfuggi in November 1996 as
collateral for a loan which the Yardville National Bank has foreclosed upon.
As of the date of this Proxy Statement, Ms. Marfuggi is not employed by the
Company or any subsidiary of the Company. The Company and Ms. Marfuggi have
entered into a settlement relating to Ms. Marfuggi's separation from the
Company. See "Employment Agreements / Termination Settlements."
-3-
<PAGE>
<PAGE>
(5) Ms. Abramson's address is 1800 NE 114th Street, Miami, Florida 33181.
Includes 400,000 Common Shares pledged by Ms. Abramson in March 1996 as
collateral for a loan. Effective April 15, 1996, Ms. Abramson resigned as a
member of the Board of Directors and from the offices of Chairman of the
Board, Chief Financial Officer and Secretary.
(6) Mr. Fass's business address is 210 West 90th Street - Apt 7L, New York, New
York 10024. Includes 225,000 Common Shares and currently exercisable
warrants to purchase an additional 110,000 Common Shares. As of the date of
this Proxy Statement, Mr. Fass is not employed by the Company or any
subsidiary of the Company. The Company and Mr. Fass have entered into a
settlement relating to Mr. Fass' separation from the Company. See
"Employment Agreements / Termination Settlements."
(7) Mr. Fechtor's business address is 155 Federal Street, Boston, Massachusetts
02110. Upon the conversion of a certain note, InterEquity Capital Partners,
L.P., received a six-year warrant exercisable until October 2001 to
purchase, on one occasion, 6% of the issued and outstanding capital shares
of the Company on a fully diluted basis as of the date of exercise. Certain
persons associated with Fechtor, Detwiler & Co., Inc., the representative
of the several underwriters in the Company's initial public offering (the
"Representative"), received an aggregate 17.5% interest in such warrant,
including Mr. Fechtor, who received a 5% interest in such warrant. As of
the date of this Proxy Statement, there are 5,680,500 Common Shares
outstanding on a fully diluted basis, 6% of which equals 340,830 Common
Shares. Accordingly, Mr. Fechtor's ownership as shown in the table includes
17,042 shares issuable upon exercise of such warrant. See "Certain
Relationships and Related Transactions." Also includes 120,000 shares of
Common Stock. Excludes 5,500 shares of Common Stock owned by Mr. Fechtor's
wife, of which he disclaims beneficial ownership.
(8) Mr. McKinstry's business address is 40 Queen Street, London EC4R 1DD,
England. Includes currently exercisable warrants to purchase 50,000 Common
Shares.
(9) InterEquity's business address is 220 Fifth Avenue, New York, New York
10001. Includes an 82.5% interest in a six-year warrant exercisable to
purchase, on one occasion, 6% of the issued and outstanding capital shares
of the Company on a fully diluted basis as of the date of exercise. As of
the date of this Proxy Statement, there are 5,680,500 Common Shares
outstanding on a fully diluted basis, 6% of which equals 340,830 Common
Shares. Accordingly, InterEquity's ownership as shown in the table includes
281,185 shares issuable upon exercise of such warrant. The warrant is
currently exercisable and expires in October 2001.
(10) Mr. Sitomer's address is 303 East 57th Street, New York, New York 10022.
Mr. Sitomer has consented to be nominated for election to the Company's
board of directors.
(11) Ms. Brenner's address is P.O. Box 9109, Newport Beach, California 92660.
Ms. Brenner has consented to be nominated for election to the Company's
board of directors.
(12) Includes the Common Shares beneficially owned by Mr. Grabow, Mr. Fechtor
and Mr. McKinstry.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The Securities and Exchange Commission (the "Commission") has
comprehensive rules relating to the reporting of securities transactions by
directors, officers and shareholders who beneficially own more than 10% of the
Company's Common Shares (collectively, the "Reporting Persons"). These rules are
complex and difficult to interpret. Based solely on a review of Section 16
reports received by the Company from Reporting Persons, the Company believes
that no Reporting Person has failed to file a Section 16 report on a timely
basis during the most recent fiscal year.
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<PAGE>
PROPOSAL I: ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of five members. At
the Annual Meeting, five directors are to be elected to hold office until the
next Annual Meeting and until their respective successors are elected and
qualified. Three of the nominees are currently members of the Board of
Directors.
The persons named in the enclosed proxy intend to vote for the election
of the persons listed below, unless the proxy is marked to indicate that such
authorization is expressly withheld. Should any of the listed persons be unable
to accept nomination or election (which the Board of Directors does not
anticipate), it is the intention of the persons named in the enclosed proxy to
vote for the election of such persons as the Board of Directors may recommend.
Proxies cannot be voted for a greater number of persons than the number of
nominees named.
APPROVAL OF PROPOSAL I TO ELECT FIVE DIRECTORS REQUIRES THE AFFIRMATIVE
VOTE OF THE HOLDERS OF A PLURALITY OF THE COMMON SHARES REPRESENTED IN PERSON OR
BY PROXY AT THE ANNUAL MEETING.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The following table sets forth certain information concerning the
directors and nominees to the Company's Board of Directors:
<TABLE>
<CAPTION>
NAME OF NOMINEE,
AGE AND POSITION PRINCIPAL OCCUPATION DATE OF INITIAL
HELD WITH COMPANY FOR PREVIOUS FIVE YEARS ELECTION AS DIRECTOR
------------------ ----------------------- ---------------------
<S> <C> <C>
Philip Grabow, 57 President of J.M. Specialties, Inc. January 23, 1997
Chief Executive Officer, October 1985 to January 1997.
President and Director
Richard Fechtor, 66 Founder of and since 1974 July 11, 1996
Director Executive Vice President of
Fechtor, Detwiler & Co., Inc., the
representative of the underwriters in the
Company's initial public offering; Director of
Vascular Laboratories since 1989.
Raymond J. McKinstry, 49 Investment manager with Astair August 1995
Director & Partners, Limited, a London
based brokerage company, 1987
to present.
</TABLE>
-5-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
NAME OF NOMINEE,
AGE AND POSITION PRINCIPAL OCCUPATION DATE OF INITIAL
HELD WITH COMPANY FOR PREVIOUS FIVE YEARS ELECTION AS DIRECTOR
------------------ ----------------------- ---------------------
<S> <C> <C>
Kenneth Sitomer, 50, Chief Operating Officer of Sam --
Director Nominee and Libby, Inc., a publicly held
company, 1993 to present; private consultant
to footwear industry 1992 to March 1993;
President and Chief Executive Officer of Russ
Togs, Inc., a publicly held company listed on
the New York Stock Exchange, 1989 to 1992.
Karen Brenner, 43, President of Fortuna Advisors, --
Director Nominee Inc., an investment advisory firm
in California 1993 to present; founder and
President of Karen Brenner, Registered
Investment Advisor, the predecessor to Fortuna
Advisors, Inc., 1984 to 1993; Managing Partner
of F.C. Partners, a California limited
partnership, April 1996 to present; Director
on DDL Electronics, Inc., a publicly held
company, July 1996 to present; Director of
Krug International Corp., a publicly held
company, July 1996 to present.
</TABLE>
All directors hold office until the next annual meeting of shareholders
or until their successors are elected and qualified. For a period of five years
from October 12, 1995, the Representative has the right to nominate one member
to the Company's Board of Directors. Mr. Fechtor is the Representative's current
nominee to the Board of Directors. There are no family relationships among any
of the directors and executive officers of the Company.
BOARD COMMITTEES
The Company's Board of Directors has an Audit Committee, a Compensation
Committee and an Executive Committee but does not have a nominating committee.
The members of each committee are appointed by the Board of Directors.
Audit Committee. The Audit Committee recommends to the Board of
Directors the firm to be selected each year as independent auditors of the
Company's financial statements and to perform services related to the completion
of such audit. The Audit Committee also has responsibility for (i) reviewing the
scope and results of the audit with the independent auditors, (ii) reviewing the
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<PAGE>
<PAGE>
Company's financial condition and results of operations with management, (iii)
considering the adequacy of the internal accounting, bookkeeping and control
procedures of the Company, and (iv) reviewing any non-audit services and special
engagements to be performed by the independent auditors and considering the
effect of such performance on the auditors' independence. The Audit Committee
currently consists of Messrs. Fechtor and McKinstry and has one vacancy. It is
anticipated that Kenneth Sitomer, a nominee for director, will fill the vacancy
on the Audit Committee and Mr. Grabow will replace Mr. Fechtor. The Audit
Committee held four meetings during 1996.
Compensation Committee. The Compensation Committee reviews and approves
overall policy and structure with respect to compensation matters, including the
determination of compensation arrangements for directors, executive officers and
key employees of the Company. The Compensation Committee will also be
responsible for the administration and award of options to purchase Common
Shares pursuant to the 1997 Stock Option Plan. The Compensation Committee
currently consists of Messrs. Fechtor and McKinstry and has one vacancy. It is
anticipated that Karen Brenner, a nominee for director, will fill the vacancy on
the Compensation Committee and Mr. Grabow will replace Mr. Fechtor. The
Compensation Committee held three meetings in 1996.
Executive Committee. The Executive Committee is empowered to act for the
full Board of Directors in intervals between board meetings, with the exception
of certain matters that by law may not be delegated. The members of the
Executive Committee are Messrs. Fechtor and Grabow. The Executive Committee held
12 meetings in 1996.
MEETINGS OF THE BOARD OF DIRECTORS
The business affairs of the Company are managed under the direction of
the Board of Directors. Members of the Board of Directors are kept informed
through various reports and documents sent to them, through operating and
financial reports routinely presented at Board of Directors and committee
meetings by the Chairman and other officers, and through other means. In
addition, directors of the Company discharge their duties throughout the year
not only by attending Board of Directors meetings, but also through personal
meetings and other communications, including considerable telephone contact,
with management and others regarding matters of interest and concern to the
Company.
During the year ended December 31, 1996, the Company's Board of
Directors held three formal meetings and acted by unanimous written consent in
lieu of a meeting, on two occasions. Each director attended at least 75% of the
Board meetings and any applicable committee meetings during 1996.
-7-
<PAGE>
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth information, as of the Record Date,
relating to each executive officer of the Company.
<TABLE>
<CAPTION>
NAME OF OFFICER, DATE OF
AGE AND POSITION PRINCIPAL OCCUPATION APPOINTMENT
HELD WITH COMPANY FOR PREVIOUS FIVE YEARS AS OFFICER
----------------- ----------------------- ------------
<S> <C> <C>
Philip Grabow, 57 President of J.M. Specialties, Inc. January 23, 1997
Chief Executive Officer, from October 1985 to January
President and Director 1997
</TABLE>
As of the date of this Proxy Statement, Ms. Marfuggi is no longer
employed as (a) Executive Vice President, Secretary and Director of the Company,
(b) President and Director of the WGJ Subsidiary and (c) Executive Vice
President, Secretary and Director of the JMS Subsidiary, and Mr. Fass is no
longer employed as (a) Executive Vice President and Director of the Company, (b)
Executive Vice President, Secretary and Director of the WGJ Subsidiary and (c)
President and Director of the JMS Subsidiary. The Company has entered into
settlement agreements with each of Ms. Marfuggi and Mr. Fass relating to their
separation from the Company. The Board of Directors intends to appoint officers
to replace Ms. Marfuggi and Mr. Fass. See "Employment Agreements / Termination
Settlements."
COMPENSATION OF DIRECTORS
Directors of the Company who are not salaried officers receive a fee of
$500 for attending each meeting of the Board of Directors or a committee
thereof. In addition, all directors are reimbursed for their reasonable
out-of-pocket expenses incurred in connection with attending such meetings.
EXECUTIVE COMPENSATION IN 1996
The following table sets forth compensation paid to the Chief Executive
Officer and to executive officers of the Company, excluding those executive
officers who did not receive an annual salary and bonus in excess of $100,000 in
the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Name and Principal Position Annual Compensation
-------------------------------------------------------
Other Annual
Year Salary ($) Bonus ($) Compensation ($)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maria Marfuggi, CEO 1996 $67,308 $0.00 $0.00
- -------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
No other executive officer received a salary and bonus in excess of
$100,000 for the year ended December 31, 1996. The Company has not granted any
stock options, stock appreciation rights or long-term incentive awards to any
executive officer of the Company since its inception.
EMPLOYMENT AGREEMENTS / TERMINATION SETTLEMENTS
In July 1995, the Company entered into employment agreements with each
of Maria Maggio Marfuggi and Stephen Fass. Ms. Marfuggi and Mr. Fass are no
longer employed by the Company. In June 1997, the Company entered into
separation agreements with each of Ms. Marfuggi and Mr. Fass. Pursuant to the
settlement agreement with Ms. Marfuggi, the Company agreed to pay to Ms.
Marfuggi $40,000 of compensation, plus medical expenses and unreimbursed
business expenses, of which $15,000 was paid upon the signing of the settlement
agreement and $5,000 is payable each month over the next five months. The
Company also agreed to cause to be purchased from Ms. Marfuggi warrants to
purchase 50,000 shares, for an aggregate purchase price of $55,000 and issued to
Ms. Marfuggi additional warrants to purchase 50,000 shares of Common Stock of
the Company at $2.50 per share. Pursuant to the settlement agreement with Mr.
Fass, the Company agreed to pay to Mr. Fass $63,800 in compensation plus
unreimbursed business expenses, of which $3,800 was paid upon signing of the
settlement agreement and $60,000 is payable over the next 12 months in $5,000
monthly installments. The Company also paid certain legal expenses incurred by
Mr. Fass in the amount of $8,200. In addition, the Company agreed to cause to be
purchased from Mr. Fass 215,000 shares of Common Stock for an aggregate price of
$336,750 and warrants to purchase 60,000 shares for an aggregate purchase price
of $55,000, and issued to Mr. Fass additional warrants to purchase 60,000 shares
of Common Stock of the Company at $2.50 per share. The settlement agreements
each contain mutual releases by the parties.
In addition, the Company entered into a settlement agreement with
William, Carol and Seth Greenberg (collectively, the "Greenberg Group")
regarding their separation from the Company. Pursuant to this agreement, the
Company paid the Greenberg Group $65,000 and forgave a loan in the principal
amount of $21,000 made by the Company to Seth Greenberg in January 1997. The
Company also issued warrants to the Greenberg Group to purchase 80,000 shares of
Common Stock of the Company at $2.50 per share and agreed, upon demand, to
purchase, or cause to be purchased, such warrants for an aggregate purchase
price of $88,000 within a certain period. The settlement agreement contains
mutual releases by the parties.
NEW EMPLOYMENT AGREEMENTS
In January 1997, the Company entered into an employment agreement with
Philip Grabow, the President and Chief Executive Officer of the Company, for a
term lasting until December 31, 1998 with successive automatic renewal periods
of one year, with a base salary of $250,000 for the first year, and $150,000 for
the second year. Either the Company or Mr. Grabow may cancel the agreement for
any reason after two years upon 60 days' written notice prior to a scheduled
expiration date. Upon any termination of the agreement, other than for cause,
Mr. Grabow shall be entitled to a severance payment equal to his then base
salary for a period one year.
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SIGNIFICANT EMPLOYEES
Marilyn Miller is the manager of the Company's baking division. Her
responsibilities include kosher baking, European specialties and the development
of new products. Prior to 1992, Ms. Miller was a principal in a kosher bakery.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
THE ACQUISITION
In June 1995, the Company entered into a purchase and sale agreement
with Greenberg's--L.P., a New York limited partnership doing business as William
Greenberg Jr. Desserts, Inc., its general partner and all of its limited
partners pursuant to which the Company agreed to acquire, subject to the terms
and conditions contained therein, the operating assets and certain liabilities
of Greenberg's--L.P. for $2,000,000 (the "Acquisition"). On July 10, 1995, the
Company consummated the Acquisition. At the closing, the Company entered into an
employment and consulting agreement with Seth Greenberg, a consulting agreement
with William Greenberg, Jr. and Carol S. Greenberg and a consulting agreement
with Marilyn Miller. See "Significant Employees." In connection with the
Acquisition, the general partner and Greenberg's--L.P. agreed that they would
not, for a period of five years from closing, compete with the Company.
ACQUISITION INDEBTEDNESS
In July 1995, in order to finance the Acquisition, the Company obtained
a senior, secured term loan represented by two promissory notes issued to
InterEquity Capital Partners, L.P. ("InterEquity"). One promissory note was in
the original principal amount of $1,999,000 (the "Amortizing Note") and the
other was in the original principal amount of $1,000 (the "Convertible Note").
The term loan was secured by substantially all of the Company's assets. The
Convertible Note was convertible into Common Shares or a warrant to purchase
capital stock of the Company. Upon consummation of the Company's initial public
offering of 1,000,000 Common Shares (the "Offering"), which occurred in October
1995, the Company used a portion of the net proceeds of the Offering to pay the
term loan in full, together with accrued interest, and a prepayment penalty
($530,000). As a result, the liens against the Company's assets and the
collateral assignments were terminated. In addition, upon consummation of the
Offering, InterEquity paid the Company $1,000 and converted the Convertible Note
into a six-year warrant exercisable to purchase, on one occasion, 6% of the
Company's issued and outstanding capital stock on a fully diluted basis at the
time of exercise. In addition, the Company has granted InterEquity an option to
put those shares acquired by InterEquity upon the conversion of the warrant to
the Company commencing on July 10, 2000 through July 31, 2005 if the Common
Shares have not been listed or admitted to trading on a national securities
exchange and/or are not quoted on an automated quotations system at the time the
put is exercised, at a price equal to a multiple of earnings as defined in the
loan agreement between the parties or a price established by independent
appraisal. In addition, pursuant to the terms of the loan agreement, the Company
has granted InterEquity certain "piggyback" registration rights with respect to
the Common Shares issuable upon exercise of the warrant.
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THE JMS ACQUISITION
On January 17, 1997, the Company entered into a stock purchase agreement
(the "Stock Purchase Agreement") with Philip Grabow ("Grabow"), pursuant to
which, on January 23, 1997, the Company consummated the purchase from Grabow of
all the outstanding shares of J.M. Specialties, Inc., a New Jersey corporation
(the "JMS Subsidiary"), in exchange for (i) $900,000 in cash, (ii) 500,000
shares (the "JMS Shares") of the Common Stock of the Company and (iii) 350,000
warrants (the "JMS Warrants") exercisable for shares of Common Stock of the
Company (the "JMS Transaction"). Each JMS Warrant entitles Grabow to purchase
one Common Share of the Company at the exercise price of $2.50 per share until
December 31, 2000.
In connection with the Stock Purchase Agreement, Grabow and the Company
also entered (i) a registration rights agreement, dated as of January 23, 1997,
regarding the terms of the registration of the Common Shares of issuable upon
exercise of the JMS Warrants, and (ii) an employment agreement dated as of
January 23, 1997. Pursuant to the employment agreement, Grabow will serve as
President and Chief Executive Officer of the Company at an annual salary level
of $250,000 for the first year, and a minimum of $150,000 thereafter. Also in
connection with the JMS Transaction, effective January 23, 1997, Grabow was
elected to serve as a director of the Company.
JMS ACQUISITION INDEBTEDNESS
The payment of the cash portion of the purchase price for the JMS
Subsidiary and such working capital, was funded through the net proceeds
received from the sale by the Company of 1,500,000 common stock purchase
warrants (the "Private Placement Warrants") at a price of $1.10 per Private
Placement Warrant to a limited number of purchasers that qualified as
"accredited investors" under the Securities Act of 1933. The terms of the
Private Placement Warrants are substantially similar to the JMS Warrants.
TRANSACTIONS WITH EXECUTIVE OFFICERS AND DIRECTORS
In April 1994, Stephen Fass purchased 225,000 Common Shares from the
Company for an aggregate purchase price of $22,500.
At December 31, 1994, the Company was indebted to Mr. Fass in the
aggregate amount of $50,432. Of this amount, $35,000 pertained to a verbal
consulting agreement with the Company whereby Mr. Fass agreed to perform
consulting services for the Company at a rate of $5,000 per month effective June
1, 1994 and the balance of $15,432 represented expenses incurred by the Company
which Mr. Fass personally paid on its behalf. Through June 30, 1995, Mr. Fass
earned additional consulting fees of $30,000 and paid additional costs and
expenses incurred on behalf of the Company of $24,933, which increased the
amount owed to Mr. Fass to $105,365. In October 1996, all amounts owed to Mr.
Fass by the Company were repaid in full.
For a description of the employment agreements with Mr. Fass and Ms.
Marfuggi and their separation from the Company, see "Employment Agreements /
Termination Settlements."
On February 8, 1996, the Company made an unsecured loan in the amount of
$212,000 to the spouse of the Company's former Chairman of the Board. The loan
bore interest at the rate of 6.75% per annum. On April 5, 1996, the loan was
repaid in full with all accrued interest.
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In October 1995, persons associated with the Representative purchased a
$350,000 participation interest in a $2,000,000 term loan obtained from
InterEquity in connection with the Acquisition and, as a result, received
through the conversion of the Convertible Note, a 17.5% participation interest
in a six-year warrant issued to InterEquity to purchase 6% of the issued and
outstanding shares of capital stock of the Company on a fully diluted basis at
the time of exercise. Richard Fechtor, a Director of the Company, is a principal
of the Representative and received a 5% interest in such warrant. See "--
Acquisition Indebtedness" and "Security Ownership of Certain Beneficial Owners
and Management."
J.P. Veggi's, Inc. ("J.P.'s") is engaged in a co-packing arrangement
with the JMS Subsidiary pursuant to which J.P.'s paid the JMS Subsidiary
approximately $65,000 during the year ended December 31, 1996. Philip Grabow,
the President and Chief Executive Officer and a Director of the Company is a
co-founder and President of J.P.'s and owns 10% of the outstanding shares of
J.P.'s.
PROPOSAL II: APPROVAL OF AN AMENDMENT TO THE RESTATED
CERTIFICATE OF INCORPORATION OF THE COMPANY TO
CHANGE THE COMPANY'S NAME
The Company's Board of Directors has approved and recommends the
adoption by the stockholders of the following amendment to Article 1 of the
Restated Certificate of Incorporation of the Company, which amendment would
change the Company's name from "William Greenberg Jr. Desserts and Cafes, Inc."
to "Creative Bakeries, Inc."
TEXT OF AMENDMENT
The Restated Certificate of Incorporation of the corporation hereby is
amended by deleting Article 1 thereof in its entirety and inserting in lieu
thereof the following:
"FIRST: The name of the corporation is Creative Bakeries, Inc."
REASONS FOR THE PROPOSED AMENDMENT
The Board believes that the adoption of the name Creative Bakeries, Inc.
will better reflect the broader scope of the Company's current operations and
planned future operations. In the recent JMS Acquisition, the Company acquired a
line of batter and frozen-finished cakes, brownies and muffins distinct from its
existing bakery retail operations. In connection with the JMS Acquisition, the
Company transferred all of the business assets then owned by the Company into
the WGJ Subsidiary in exchange for all of the issued and outstanding shares of
common stock of the WGJ Subsidiary. As a result, the Company currently acts as a
holding company with two wholly-owned subsidiaries, the JMS Subsidiary and the
WGJ Subsidiary. The name William Greenberg Jr. Desserts and Cafes, Inc. is
largely associated with the Company's bakeries and related operations. The Board
believes that the name Creative Bakeries Inc. more accurately encompasses the
Company's diverse interests.
In order to more accurately reflect the particular focus of each
subsidiary, the Company will thereafter change the name of the WGJ Subsidiary to
"William Greenberg Jr. Desserts and Cafes, Inc." and the name of the JMS
Subsidiary to "Batter Bake Bakeries, Inc."
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The change of the Company's name will not affect in any way the validity
of currently outstanding stock certificates. Stockholders will not be required
to surrender or exchange any stock certificates currently held by them.
Concurrently with the name change, the Company will change its Nasdaq trading
symbol from "BAKE" to "CBAK".
REQUIRED AFFIRMATIVE VOTE
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote thereon is required to approve the amendment to the
Restated Certificate of Incorporation of the Company to change the Company's
name from "William Greenberg Jr. Desserts and Cafes, Inc." to "Creative
Bakeries, Inc."
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL IS IN THE BEST
INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR APPROVAL OF THE CONSENT TO A CHANGE IN THE NAME OF THE
COMPANY AS SET FORTH IN THIS PROPOSAL II.
PROPOSAL III: SELECTION OF INDEPENDENT ACCOUNTANTS
Weinick, Sanders & Co. LLP has served as the Company's independent
accountants since 1995. During the fiscal year ended December 31, 1996, Weinick,
Sanders & Co. LLP audited the accounts of the Company and also provided other
audit and accounting services to the Company in connection with Commission
filings. As of the date of this Proxy Statement, Weinick, Sanders & Co. LLP has
been dismissed. The Company has not had any disagreements with Weinick, Sanders
& Co. LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure.
Weinick, Sanders & Co. LLP's report on the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1996 contained an opinion
which stated that the Company's year end net loss and working capital deficiency
raised "substantial doubt about the Company's ability to continue as a going
concern."
Upon recommendation of the Audit Committee of the Board of Directors,
the Board has selected Zeller Weiss & Kahn as the new independent accountants
for the fiscal year ending December 31, 1997. The shareholders are being asked
to approve this action of the Board. The approval requires a majority vote of
those Common Shares represented in person or by proxy at the Annual Meeting. In
the event the appointment is not approved, the Board of Directors will
reconsider its selection.
Representatives of Zeller Weiss & Kahn are expected to be present at the
Annual Meeting and available to respond to appropriate questions. Such
representative will also have the opportunity, should he so desire, to make any
statements to the shareholders which he deems appropriate.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
PROPOSAL III.
PROPOSAL IV: APPROVAL OF 1997 STOCK OPTION PLAN
The 1997 Stock Option Plan was adopted by the Company's Board of
Directors in June, 1997. The 1997 Stock Option Plan provides for the grant of
both incentive stock options ("ISOs"),
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intended to qualify for preferential tax treatment under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and nonstatutory
stock options ("NSOs") that do not qualify for such treatment. Only employees
(including officers and directors who are also employees) of the Company are
eligible to receive grants of ISOs. Employees, officers, directors, consultants,
and other service providers of the Company are eligible to receive grants of
NSOs. The 1997 Stock Option Plan will be administered by the Board of Directors
or a committee appointed by the Board of Directors. No ISOs can be granted under
the 1997 Stock Option Plan with an exercise price of less than 100% of the fair
market value of the Company's Common Shares on the date of grant. The Board (or
the committee appointed by the Board of Directors to administer the 1997 Stock
Option Plan) determines the exercise price of any NSOs granted under the 1997
Stock Option Plan. The 1997 Stock Option Plan provides that a maximum of 300,000
Common Shares may be issued upon the exercise of options granted under such plan
and that no employee of the Company may be granted options with respect to more
than 100,000 Common Shares in any calendar year. If any option granted under the
1997 Stock Option Plan expires, terminates or is cancelled for any reason
without having been exercised in full, then the unpurchased shares subject to
that option will be available for additional option grants.
The purpose of the 1997 Stock Option Plan is to secure for the Company
and its stockholders the benefits arising from capital stock ownership by
employees, officers, directors, consultants and other service providers of the
Company who are expected to contribute to the Company's future growth and
success and to assist the Company in attracting and retaining other persons who
will provide services to the Company.
The Board of Directors has retained the right to amend or terminate the
1997 Stock Option Plan as it deems advisable. However, no amendment may become
effective until shareholder approval is obtained to the extent that such
approval is required by applicable law. Generally, no amendments to, or
termination of, the 1997 Stock Option Plan may adversely affect the rights of
any individual pursuant to options previously granted to such individual without
that individual's consent. However, the Board of Directors may, without the
consent of such individual, amend or modify (i) the 1997 Stock Option Plan and
any outstanding Incentive Stock Options to the extent necessary to qualify such
options for favorable federal income tax treatment, (ii) the 1997 Stock Option
Plan and of any outstanding options to the extent necessary to ensure the
qualification of such plan and options under Rule 16b-3 (if applicable to such
plan and options), and (iii) the 1997 Stock Option Plan and any outstanding
options to the extent that the Board of Directors determines necessary to
preserve the Company's deduction of compensation resulting from the grant or
exercise of options by certain employees of the Company who are "covered
employees," within the meaning of Treasury Regulation Section 1.162-27(c)(2).
The 1997 Stock Option Plan shall terminate in 2002. Any option outstanding under
the 1997 Stock Option Plan at the time of the 1997 Stock Option Plan's
termination shall remain outstanding until the option expires by its terms or
the terms of such plan.
As of the Record Date, the Company has not granted options under the
1997 Stock Option Plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following outlines certain federal income tax consequences of the
1997 Stock Option Plan under present law to the Company and participants in such
plan.
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Incentive Options. A participant will not realize income (except that
the alternative minimum tax may apply), and the Company will not be entitled to
a deduction for federal income tax purposes, upon the grant of an ISO, and, if
certain requirements of the Code and 1997 Stock Option Plan are met, upon
exercise of an ISO. If Common Shares acquired upon the exercise of an ISO are
disposed of by the participant within two years from the date of granting of the
option or within one year after the date of exercise (a "disqualifying
disposition"), the excess, if any, of (i) the amount realized (up to the fair
market value of such Common Shares on the exercise date) over (ii) the exercise
price, will be ordinary income to the participant, and the Company will be
entitled to a deduction for federal income tax purposes equal to the amount of
ordinary income realized by the participant. The Code limits to $100,000 the
value of employee stock subject to ISOs that first become exercisable in any one
year, based upon the fair market value of the stock on the date of grant.
Non-Qualified Options. A participant who receives an NSO does not
recognize taxable income on the grant of the option. Upon the receipt of shares
when an NSO is exercised, a participant generally has ordinary income in an
amount equal to the excess of the fair market value of the shares at the time of
exercise over the exercise price paid for the shares. However, if the
participant (i) is an officer or director of the Company or the beneficial owner
of more than 10% of the Company's equity securities (in each case, within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), an "Insider") and (ii) receives shares upon the exercise of an
NSO, the recognition of income (and the determination of the amount of income)
is deferred until the earlier of (a) six months after the shares are acquired or
(b) the earliest date on which the Insider could sell the shares at a profit
without being subject to liability under Section 16(b) of the Exchange Act (six
months after the NSO is granted, in the case of an "in-the-money" option).
Income is not deferred, however, if such a participant makes a Section 83(b)
election at the time he receives the shares. Rather, income is recognized on the
date of exercise in an amount equal to the excess of the fair market value of
the shares on such date over the exercise price. A Section 83 election must be
filed with the Internal Revenue Service no later than thirty (30) days after an
option is exercised.
A participant's tax basis in shares received upon exercise of an NSO is
generally equal to the amount of ordinary income recognized on the receipt of
the shares plus the amount paid upon exercise. The holding period for the shares
begins on the day after the shares are received or, in the case of an Insider
that has not made a Section 83 election, on the day after the date on which
income is recognized by the Insider on account of the receipt of the shares.
The ordinary income recognized by an employee of the Company on account
of the exercise of an NSO is subject to both wage withholding and employment
taxes. A deduction for federal income tax purposes is allowed to the Company in
an amount equal to the amount of ordinary income included in the participant's
income, provided that such amount constitutes an ordinary and necessary business
expense of the Company and that such amount is reasonable.
If a participant exercises an NSO by delivering previously held shares
in payment of the exercise price, the participant does not recognize gain or
loss on the delivered shares, even if their fair market value is different from
the participant's tax basis in the shares. However, the exercise of the NSO is
taxed and the Company generally is entitled to a deduction, in the same amount
and at the same time as if the participant had paid the exercise price in cash.
If the participant receives a separate identifiable stock certificate therefor,
his tax basis in the number of shares received equal to the number of shares
surrendered on exercise will be the same as his tax basis in the shares
surrendered. His holding period for such number of shares will include his
holding period for the shares surrendered. The participant's
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tax basis and holding period for the additional shares received upon exercise
will be the same as it would if the participant had paid the exercise price in
cash.
If a participant receives shares upon the exercise of an NSO and
thereafter disposes of the shares in a taxable transaction, the difference
between the amount realized on the disposition and the participant's tax basis
in the shares is taxed as capital gain or loss (provided the shares are held as
a capital asset on the date of disposition), which is long-term or short-term
depending on the participant's holding period for the shares.
REQUIRED AFFIRMATIVE VOTE
Approval of the adoption of the 1997 Stock Option Plan requires the
affirmative vote of the holders of a majority of the Common Shares represented
in person or by proxy at the Annual Meeting.
THIS SUMMARY OF THE 1997 STOCK OPTION PLAN IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE FULL TEXT OF THE 1997 STOCK OPTION PLAN AS SET FORTH IN EXHIBIT
A TO THIS PROXY STATEMENT.
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL IS IN THE BEST
INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR APPROVAL OF THE 1997 STOCK OPTION PLAN AS SET FORTH IN
THIS PROPOSAL IV.
1998 SHAREHOLDER PROPOSALS
In order for shareholder proposals for the 1998 Annual Meeting of
Shareholders to be eligible for inclusion in the Company's 1998 Proxy Statement,
they must be received by the Company at its principal executive offices, 222 New
Road, Parsippany, New Jersey 07054 (Attn: Secretary), prior to March 21, 1998.
The Board of Directors will review any shareholder proposals that are filed as
required and will determine whether such proposals meet applicable criteria for
inclusion in the Company's 1998 Proxy Statement for the Annual Meeting.
Holders of Common Shares desiring to have proposals submitted for
consideration at any future meeting of shareholders should consult with the
applicable rules and regulations of the Commission with respect to such
proposals.
OTHER MATTERS
The Board of Directors does not know of any other matters that are to be
presented for consideration at the Annual Meeting. Should any other matters
properly come before the Annual Meeting, it is the intention of the persons
named in the accompanying proxy to vote such proxy on behalf of the shareholders
they represent in accordance with their best judgment.
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SOLICITATION OF PROXIES
Proxies are being solicited by and on behalf of the Board of Directors.
The Company will bear the costs of preparing and mailing the proxy materials to
its shareholders in connection with the Annual Meeting. The Company will solicit
proxies by mail and the directors and certain officers and employees of the
Company may solicit proxies personally or by telephone or telegraph. These
persons will receive no additional compensation for such services but will be
reimbursed for reasonable out-of-pocket expenses. The Company also will request
brokers, dealers, banks and their nominees to solicit proxies from their
clients, where appropriate, and will reimburse them for reasonable out-of-pocket
expenses related thereto.
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ADDITIONAL INFORMATION
THE COMPANY WILL MAKE AVAILABLE TO ANY SHAREHOLDER, WITHOUT CHARGE, UPON
A WRITTEN REQUEST THEREFOR, ADDITIONAL COPIES OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-KSB, AS AMENDED, FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 AND COPIES
OF ANY QUARTERLY REPORT ON FORM 10-QSB OF THE COMPANY FILED AFTER DECEMBER 31,
1996. ANY SUCH REQUEST SHALL BE DIRECTED TO WILLIAM GREENBERG JR. DESSERTS AND
CAFES, INC., ATTENTION: SECRETARY, AT THE FOLLOWING ADDRESS: 222 NEW ROAD,
PARSIPPANY, NEW JERSEY 07054.
PHILIP GRABOW
President
New York, New York
June 18, 1997
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EXHIBIT A
WILLIAM GREENBERG JR. DESSERTS AND CAFES, INC.
1997 STOCK OPTION PLAN
I. PURPOSE
The purpose of this plan (the "Plan") is to secure for WILLIAM GREENBERG
JR. DESSERTS AND CAFES, INC. (the "Company") and its stockholders the benefits
arising from capital stock ownership by employees, officers, directors,
consultants and other service providers of the Company or an Affiliate (as that
term is defined in the Plan) who are expected to contribute to the Company's
future growth and success. The Plan is also designed to attract and retain other
persons who will provide services to the Company. Those provisions of the Plan
which make express reference to Section 422 of the Internal Revenue Code of
1986, as amended or replaced from time to time (the "Code"), shall apply only to
Incentive Stock Options (as that term is defined in the Plan).
II. TYPE OF OPTIONS AND ADMINISTRATION
a. Types of Options. Options granted pursuant to the Plan shall be
authorized by action of the Board of Directors (the "Board") of the Company (or
the committee appointed by the Board in accordance with Section 2(b) below) and
may be either incentive stock options ("Incentive Stock Options") intended to
meet the requirements of Section 422 of the Code or non-statutory options which
are not intended to meet the requirements of Section 422 of the Code
("Non-Qualified Options").
b. Administration. The Plan will be administered by the Board or by a
committee consisting of two or more directors each of whom shall be a
"non-employee director," within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor rule ("Rule 16b-3"), and an "outside director," within the meaning of
Treasury Regulation Section 1.162-27(e)(3) promulgated under Section 162(m) of
the Code, (the "Committee") appointed by the Board, in each case whose
construction and interpretation of the terms and provisions of the Plan shall be
final and conclusive. If the Board determines to create a Committee to
administer the Plan, the delegation of powers to the Committee shall be
consistent with applicable laws or regulations (including, without limitation,
applicable state law and Rule 16b-3). The Board or the Committee may in its sole
discretion grant options to purchase shares of the Company's Common Stock,
$0.001 par value per share ("Common Stock"), and issue shares upon exercise of
such options as provided in the Plan. The Board or the Committee shall have
authority, subject to the express provisions of the Plan, to construe the
respective option agreements and the Plan; to prescribe, amend and rescind rules
and regulations relating to the Plan; to determine the terms and provisions of
the respective option agreements, which need not be identical; and to make all
other determinations in the judgment of the Board or the Committee necessary or
desirable for the administration of the Plan. The Board or the Committee may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any option agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect and it shall be the sole and final judge
of such expediency. No director or person acting pursuant to authority delegated
by the Board shall be liable for any action or determination under the Plan made
in good faith.
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III. ELIGIBILITY
Options may be granted to persons who are, at the time of grant,
employees, officers, directors, consultants or other service providers of the
Company or any parent or subsidiary of the Company as defined in Sections 424(e)
and 424(f) of the Code ("Affiliate"), provided that Incentive Stock Options may
only be granted to individuals who are employees (within the meaning of Section
3401(c) of the Code) of the Company or any Affiliate. Options may also be
granted to other persons, provided that such options shall be Non-Qualified
Options. A person who has been granted an option may, if he or she is otherwise
eligible, be granted additional options if the Board or the Committee shall so
determine. Notwithstanding anything in the Plan to the contrary, no employee of
the Company or an Affiliate shall be granted options with respect to more than
100,000 shares of Common Stock during any calendar year.
IV. STOCK SUBJECT TO PLAN
The stock subject to options granted under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. Subject to adjustment as
provided in Section 15 below, the maximum number of shares of Common Stock of
the Company which may be issued and sold under the Plan is 300,000. If an option
granted under the Plan shall expire, terminate or is cancelled for any reason
without having been exercised in full, the unpurchased shares subject to such
option shall again be available for subsequent option grants under the Plan.
V. FORMS OF OPTION AGREEMENTS
As a condition to the grant of an option under the Plan, each recipient
of an option shall execute an option agreement in such form not inconsistent
with the Plan and as may be approved by the Board or the Committee. The terms of
such option agreements may differ among recipients.
VI. PURCHASE PRICE
a. General. The purchase price per share of Common Stock issuable upon
the exercise of an option shall be determined by the Board or the Committee at
the time of grant of such option, provided, however, that in the case of an
Incentive Stock Option, the exercise price shall not be less than 100% of the
Fair Market Value (as hereinafter defined) of such Common Stock at the time of
grant of such option, or less than 110% of such Fair Market Value in the case of
Incentive Stock Options described in Section 11(b). "Fair Market Value" of a
share of Common Stock of the Company as of a specified date for purposes of the
Plan shall mean the closing price of a share of the Common Stock on the
principal securities exchange (including but not limited to the Nasdaq Stock
Market or the Nasdaq National Market) on which such shares are traded on the day
immediately preceding the date as of which Fair Market Value is being
determined, or on the next preceding date on which such shares are traded if no
shares were traded on such immediately preceding day, or if the shares are not
traded on a securities exchange, Fair Market Value shall be deemed to be the
average of the high bid and low asked prices of the shares in the
over-the-counter market on the day immediately preceding the date as of which
Fair Market Value is being determined or on the next preceding date on which
such high
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bid and low asked prices were recorded. If the shares are not publicly traded,
Fair Market Value of a share of Common Stock (including, in the case of any
repurchase of shares, any distributions with respect thereto which would be
repurchased with the shares) shall be determined in good faith by the Board. In
no case shall Fair Market Value be determined with regard to restrictions other
than restrictions which, by their terms, will never lapse.
b. Payment of Purchase Price. Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the
order of the Company in an amount equal to the exercise price of such options,
or by any other means which the Board determines are consistent with the purpose
of the Plan and with applicable laws and regulations (including, without
limitation, the provisions of Rule 16b-3).
VII. EXERCISE OPTION PERIOD
Subject to earlier termination as provided in the Plan, each option and
all rights thereunder shall expire on such date as determined by the Board or
the Committee and set forth in the applicable option agreement, provided that
such date shall not be later than ten (10) years after the date on which the
option is granted.
VIII. EXERCISE OF OPTIONS
Each option granted under the Plan shall be exercisable either in full
or in installments at such time or times and during such period as shall be set
forth in the option agreement evidencing such option, subject to the provisions
of the Plan. Subject to the requirements in the immediately preceding sentence,
if an option is not at the time of grant immediately exercisable, the Board or
the Committee may (i) in the agreement evidencing such option, provide for the
acceleration of the exercise date or dates of the subject option upon the
occurrence of specified events, and/or (ii) at any time prior to the complete
termination of an option, accelerate the exercise date or dates of such option.
IX. NONTRANSFERABILITY OF OPTIONS
No option granted under this Plan shall be assignable or otherwise
transferable by the optionee, except by will or by the laws of descent and
distribution. An option may be exercised during the lifetime of the optionee
only by the optionee.
X. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP
Except as provided in Section 11(d) with respect to Incentive Stock
Options and except as otherwise determined by the Board or the Committee at the
date of grant of an option, and subject to the provisions of the Plan, an
optionee may exercise an option at any time within three (3) months following
the termination of the optionee's employment or other relationship with the
Company and its Affiliates or within one (1) year if such termination was due to
the death or disability (within the meaning of Section 22(e)(3) of the Code or
any successor provisions thereto) of the optionee (to the extent such option is
otherwise exercisable at the time of such termination) but in no event later
than
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the expiration date of the option. If the termination of the optionee's
employment is for cause or is otherwise attributable to a breach by the optionee
of an employment or confidentiality or non- disclosure agreement, the option
shall expire immediately upon such termination. The Board or the Committee shall
have the power to determine, in its sole discretion, what constitutes a
termination for cause or a breach of an employment or confidentiality or
non-disclosure agreement, whether an optionee has been terminated for cause or
has breached such an agreement, and the date upon which such termination for
cause or breach occurs. Any such determinations shall be final and conclusive
and binding upon the optionee and all other persons interested or claiming
interests under the Plan.
XI. INCENTIVE STOCK OPTIONS
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
a. Express Designation. All Incentive Stock Options granted under the
Plan shall, at the time of grant, be specifically designated as such in the
option agreement covering such Incentive Stock Options.
b. 10% Shareholder. If any employee to whom an Incentive Stock Option is
to be granted under the Plan is, at the time of the grant of such option, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company (after taking into account the attribution
of stock ownership rules of Section 424(d) of the Code), then the following
special provisions shall be applicable to the Incentive Stock Option granted to
such individual:
i. the purchase price per share of the Common Stock subject
to such Incentive Stock Option shall not be less than 110% of the Fair
Market Value of one share of Common Stock at the time of grant; and
ii. the option exercise period shall not exceed five (5) years
from the date of grant.
c. Dollar Limitation. For so long as the Code shall so provide, options
granted to any employee under the Plan (and any other incentive stock option
plans of the Company) which are intended to constitute Incentive Stock Options
shall not constitute Incentive Stock Options to the extent that such options, in
the aggregate, become exercisable for the first time in any one calendar year
for shares of Common Stock with an aggregate Fair Market Value, as of the
respective date or dates of grant, of more than $100,000.
d. Termination of Employment, Death or Disability. No Incentive
Stock Option may be exercised unless, at the time of such exercise, the optionee
is, and has been continuously since the date of grant of his or her option,
employed by the Company or an Affiliate, except that:
i. an Incentive Stock Option may be exercised within the period
of three (3) months after the date the optionee ceases to be an employee
of the Company or an Affiliate (or within such lesser period as may be
specified in the applicable option agreement), to the extent it is
otherwise exercisable at the time of such cessation,
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ii. if the optionee dies while in the employ of the Company or an
Affiliate, or within three (3) months after the optionee ceases to be
such an employee, the Incentive Stock Option may be exercised by the
person to whom it is transferred by will or the laws of descent and
distribution within the period of one (1) year after the date of death
(or within such lesser period as may be specified in the applicable
option agreement), to the extent it is otherwise exercisable at the time
of the optionee's death, and
iii. if the optionee becomes disabled (within the meaning of
Section 22(e)(3) of the Code or any successor provisions thereto) while
in the employ of the Company or an Affiliate, the Incentive Stock Option
may be exercised within the period of one (1) year after the date the
optionee ceases to be such an employee because of such disability (or
within such lesser period as may be specified in the applicable option
agreement), to the extent it is otherwise exercisable at the time of
such cessation.
For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
XII. ADDITIONAL PROVISIONS
a. Additional Option Provisions. The Board or the Committee may, in its
sole discretion, include additional provisions in option agreements covering
options granted under the Plan, including without limitation, restrictions on
transfer, repurchase rights, rights of first refusal, commitments to pay cash
bonuses or to make, arrange for or guaranty loans or to transfer other property
to optionees upon exercise of options, or such other provisions as shall be
determined by the Board or the Committee, provided that such additional
provisions shall not be inconsistent with the requirements of applicable law and
such additional provisions shall not cause any Incentive Stock Option granted
under the Plan to fail to qualify as an Incentive Stock Option within the
meaning of Section 422 of the Code.
b. Acceleration, Extension, Etc. The Board or the Committee may, in its
sole discretion (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised, or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised, provided, however, that no such acceleration or extension
shall be permitted if it would (i) cause any Incentive Stock Option granted
under the Plan to fail to qualify as an Incentive Stock Option within the
meaning of Section 422 of the Code, or (ii) cause the Plan or any option granted
under the Plan to fail to comply with Rule 16b-3 (if applicable to the Plan or
such option).
XIII. GENERAL RESTRICTIONS
a. Investment Representations. The Board or the Committee may require
any person to whom an option is granted, as a condition of exercising such
option or award, to give written assurances in substance and form satisfactory
to the Board or the Committee to the effect that such person is acquiring the
Common Stock subject to the option or award for his or her own account for
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investment and not with any present intention of selling or otherwise
distributing the same, and to such other effects as the Board or the Committee
deems necessary or appropriate in order to comply with applicable federal and
state securities laws, or with covenants or representations made by the Company
in connection with any public offering of its Common Stock, including any
"lock-up" or other restriction on transferability.
b. Compliance With Securities Law. Each option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such option
or award upon any securities exchange or automated quotation system or under any
state or federal law, or the consent or approval of any governmental or
regulatory body, or that the disclosure of non-public information or the
satisfaction of any other condition, is necessary as a condition of, or in
connection with the issuance or purchase of shares thereunder, except to the
extent expressly permitted by the Board, such option or award may not be
exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval or satisfaction of such condition shall have
been effected or obtained on conditions acceptable to the Board or the
Committee. Nothing herein shall be deemed to require the Company to apply for or
to obtain such listing, registration, qualification, consent or approval, or to
satisfy such condition. In addition, Common Stock issued upon the exercise of
options may bear such legends as the Company may deem advisable to reflect
restrictions which may be imposed by law, including, without limitation, the
Securities Act of 1933, as amended, any state "blue sky" or other applicable
federal or state securities law.
XIV. RIGHTS AS A STOCKHOLDER
The holder of an option shall have no rights as a stockholder with
respect to any shares covered by the option (including, without limitation, any
right to vote or to receive dividends or non-cash distributions with respect to
such shares) until the effective date of exercise of such option and then only
to the extent of the shares of Common Stock so purchased. No adjustment shall be
made for dividends or other rights for which the record date is prior to the
date of exercise.
XV. ADJUSTMENT PROVISIONS FOR RECAPITALIZATIONS,
REORGANIZATIONS AND RELATED TRANSACTIONS
a. Recapitalizations and Related Transactions. If, through or as a
result of any recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction (i) the outstanding shares of
Common Stock are increased, decreased or exchanged for a different number or
kind of shares or other securities of the Company, or (ii) additional shares or
new or different shares or other non-cash assets are distributed with respect to
such shares of Common Stock or other securities, an appropriate and
proportionate adjustment shall be made in (x) the maximum number and kind of
shares reserved for issuance under or otherwise referred to in the Plan, (y) the
number and kind of shares or other securities subject to any then-outstanding
options under the Plan, and (z) the price for each share subject to any
then-outstanding options under the Plan, without changing the aggregate purchase
price as to which such options remain exercisable. Notwithstanding the
foregoing, no adjustment shall be made pursuant to this Section 15 if such
adjustment (A) would cause any Incentive Stock Option granted under the Plan to
fail to qualify as an Incentive Stock Option within the meaning of Section 422
of the Code, (B) would cause the Plan or any option granted under
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the Plan to fail to comply with Rule 16b-3 (if applicable to the Plan or such
option), or (C) would be considered as the adoption of a new plan requiring
stockholder approval.
b. Reorganization, Merger and Related Transactions. All outstanding
options under the Plan shall become fully exercisable for a period of sixty (60)
days following the occurrence of any Trigger Event (as defined below), whether
or not such options are then exercisable under the provisions of the applicable
agreements relating thereto. For purposes of the Plan, a "Trigger Event" is any
one of the following events:
i. the date the Company acquires knowledge that any person or
group deemed a person under Section 13(d)-3 of the Exchange Act (other
than the Company, any Affiliate, any employee benefit plan of the
Company or of any Affiliate or any entity holding shares of Common Stock
or other securities of the Company for or pursuant to the terms of any
such plan or any individual or entity or group or affiliate thereof
which acquired its beneficial ownership interest prior to the date the
Plan was adopted by the Board), in a transaction or series of
transactions, has become the beneficial owner, directly or indirectly
(with beneficial ownership determined as provided in Rule 13d-3, or any
successor rule, under the Exchange Act), of securities of the Company
entitling the person or group to 30% or more of all votes (without
consideration of the rights of any class or stock to elect directors by
a separate class vote) to which all stockholders of the Company would be
entitled in the election of the Board were an election held on such
date;
ii. the date, during any period of two (2) consecutive years,
when individuals who at the beginning of such period constitute the
Board cease for any reason to constitute at least a majority thereof,
unless the election, or the nomination for election by the stockholders
of the Company, of each new director was approved by a vote of at least
a majority of the directors then still in office who were directors at
the beginning of such period; and
iii. the date of approval by the stockholders of the Company of
an agreement (a "reorganization agreement") providing for:
(1) The merger or consolidation of the Company with
another corporation (x) where the stockholders of the Company,
immediately prior to the merger or consolidation, do not
beneficially own, immediately after the merger or consolidation,
shares of the corporation issuing cash or securities in the
merger or consolidation entitling such stockholders to 80% or
more of all votes (without consideration of the rights of any
class of stock to elect directors by a separate class vote) to
which all stockholders of such corporation would be entitled in
the election of directors, or (y) where the members of the Board,
immediately prior to the merger or consolidation, do not,
immediately after the merger or consolidation, constitute a
majority of the Board of Directors of the corporation issuing
cash or securities in the merger or consolidation, or
(2) The sale or other disposition of all or substantially
all the assets of the Company.
c. Board Authority to Make Adjustments. Any adjustments under this
Section 15 will be made by the Board or the Committee, whose determination as to
what adjustments, if any, will be
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made and the extent thereof will be final, binding and conclusive. No fractional
shares will be issued under the Plan on account of any such adjustments.
XVI. NO EMPLOYMENT RIGHTS
Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment or
other relationship with the Company or an Affiliate or interfere in any way with
the right of the Company or an Affiliate at any time to terminate such
employment or relationship or to increase or decrease the compensation of the
optionee.
XVII. AMENDMENT, MODIFICATION OR TERMINATION OF THE PLAN
a. The Board may at any time modify, amend or terminate the Plan,
provided that to the extent required by applicable law, any such modification,
amendment or termination shall be subject to the approval of the stockholders of
the Company.
b. The modification, amendment or termination of the Plan shall not,
without the consent of an optionee, affect his or her rights under an option
previously granted to him or her. With the consent of the optionee affected, the
Board or the Committee may amend or modify outstanding option agreements in a
manner not inconsistent with the Plan. Notwithstanding the foregoing, the Board
shall have the right, without the consent of the optionee affected, to amend or
modify (i) the terms and provisions of the Plan and of any outstanding Incentive
Stock Options granted under the Plan to the extent necessary to qualify any or
all such options for such favorable federal income tax treatment (including
deferral of taxation upon exercise) as may be afforded incentive stock options
under Section 422 of the Code, (ii) the terms and provisions of the Plan and of
any outstanding options to the extent necessary to ensure the qualification of
the Plan and such options under Rule 16b-3 (if applicable to the Plan and such
options), and (iii) the terms and provisions of the Plan and any outstanding
option to the extent that the Board determines necessary to preserve the
deduction of compensation paid to certain optionees who are "covered employees,"
within the meaning of Treasury Regulation Section 1.162-27(c)(2), as a result of
the grant or exercise of options under the Plan.
XVIII. WITHHOLDING
a. The Company shall have the right to deduct and withhold from payments
of any kind otherwise due to the optionee any federal, state or local taxes of
any kind required by law to be so deducted and withheld with respect to any
shares issued upon exercise of options under the Plan. Subject to the prior
approval of the Company, which may be withheld by the Company in its sole
discretion, the optionee may elect to satisfy such obligations, in whole or in
part by (i) causing the Company to withhold shares of Common Stock otherwise
issuable pursuant to the exercise of an option, (ii) delivering to the Company
shares of Common Stock already owned by the optionee, or (iii) delivering to the
Company cash or a check to the order of the Company in an amount equal to the
amount required to be so deducted and withheld. The shares delivered in
accordance with method (ii) above or withheld in accordance with method (i)
above shall have a Fair Market Value equal to such withholding obligation as of
the date that the amount of tax to be withheld is to be determined. An optionee
who has made an election pursuant to method (i) or (ii) of this Section 18(a)
may only satisfy
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his or her withholding obligation with shares of Common Stock which are not
subject to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements.
b. The acceptance of shares of Common Stock upon exercise of an
Incentive Stock Option shall constitute an agreement by the optionee (i) to
notify the Company if any or all of such shares are disposed of by the optionee
within two (2) years from the date the option was granted or within one (1) year
from the date the shares were issued to the optionee pursuant to the exercise of
the option, and (ii) if required by law, to remit to the Company, at the time of
and in the case of any such disposition, an amount sufficient to satisfy the
Company's federal, state and local withholding tax obligations with respect to
such disposition, whether or not, as to both (i) and (ii), the optionee is in
the employ of the Company or an Affiliate at the time of such disposition.
XIX. CANCELLATION AND NEW GRANT OF OPTIONS, ETC.
The Board or the Committee shall have the authority to effect, at any
time and from time to time, with the consent of the affected optionees the (i)
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan (or any successor stock
option plan of the Company) covering the same or different numbers of shares of
Common Stock and having an option exercise price per share which may be lower or
higher than the exercise price per share of the cancelled options, or (ii)
amendment of the terms of any and all outstanding options under the Plan to
provide an option exercise price per share which is higher or lower than the
then-current exercise price per share of such outstanding options.
XX. EFFECTIVE DATE AND DURATION OF THE PLAN
a. Effective Date. The Plan shall become effective when adopted by the
Board, but no Incentive Stock Option granted under the Plan shall become
exercisable unless and until the Plan shall have been approved by the Company's
stockholders. If such stockholder approval is not obtained within twelve (12)
months after the date of the Board's adoption of the Plan, no options previously
granted under the Plan shall be deemed to be Incentive Stock Options and no
Incentive Stock Options shall be granted thereafter. Amendments to the Plan not
requiring stockholder approval shall become effective when adopted by the Board
and amendments requiring stockholder approval (as provided in Section 17) shall
become effective when adopted by the Board, but no Incentive Stock Option
granted on or after the date of such amendment shall become exercisable unless
and until such amendment shall have been approved by the Company's stockholders.
If such stockholder approval is not obtained within twelve (12) months of the
Board's adoption of such amendment, no options granted on or after the date of
such amendment shall be deemed Incentive Stock Options and no Incentive Stock
Options shall be granted thereafter. Subject to above limitations, options may
be granted under the Plan at any time after the effective date and before the
date fixed for termination of the Plan.
b. Termination. Unless sooner terminated by the Board, the Plan shall
terminate upon the close of business on the day next preceding the fifth
anniversary of the date of its adoption by the Board. After termination of the
Plan, no further options may be granted under the Plan; provided, however, that
such termination will not affect any options granted prior to termination of the
Plan.
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XXI. GOVERNING LAW
The provisions of this Plan shall be governed and construed in
accordance with the laws of the State of New York without regard to the
principles of conflicts of laws.
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APPENDIX I
PROXY
WILLIAM GREENBERG JR. DESSERTS AND CAFES, INC.
Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Philip Grabow and Richard Fechtor (with
full power to act without the other and with power to appoint his/her
substitute) as the undersigned's proxies to vote all of the undersigned's common
shares of WILLIAM GREENBERG JR. DESSERTS AND CAFES, INC., a New York corporation
(the "Company"), which the undersigned would be entitled to vote at the Annual
Meeting of Shareholders of the Company (the "Annual Meeting") to be held at
Chatterly Elegant Desserts, Inc., 20 Passaic Avenue, Fairfield, New Jersey, on
Monday, July 21, 1997 at 2:00 p.m., local time, and at any and all adjournments
thereof, as follows:
I. ELECTION OF DIRECTORS [ ] FOR all nominees listed below (except as
marked to the contrary below)
[ ] WITHOUT AUTHORITY to vote for all nominees
listed below
PHILIP GRABOW, RICHARD FECHTOR, RAYMOND J. MCKINSTRY, KENNETH SITOMER and KAREN
BRENNER.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line set forth below.)
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II. Proposal to approve an amendment to the Restated Certificate of
Incorporation of the Company to a change the name of the Company from
"William Greenberg Jr. Desserts and Cafes, Inc." to "Creative Bakeries,
Inc." as described more fully in the Proxy Statement accompanying this
Proxy.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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III. Proposal to ratify the selection by the Board of Directors of Zeller Weiss
& Kahn, certified public accountants, as the new independent accountants of
the Company for the fiscal year ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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IV. Proposal to approve the Company's 1997 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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V. In their discretion, to transact such other business as may properly come
before the Annual Meeting and any and all adjournments thereof.
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The shares of common stock represented by this Proxy will be voted in
accordance with the foregoing instructions. In the absence of any
instructions, such shares will be voted FOR the election of all the
nominees listed in Item I and FOR the proposals in Items II and III.
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The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders to be held on Monday, July 21, 1997, the Proxy Statement of
the Company, dated June 18, 1997, accompanying form of proxy, and the
Company's Annual Report on Form 10-KSB, as amended on Form 10-KSB/A, for
the fiscal year ended December 31, 1996, each of which has been enclosed
herewith.
The undersigned hereby revokes any proxy to vote shares of common stock of
the Company heretofore given by the undersigned.
Dated
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Signature
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Signature, if held jointly
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Title (if applicable)
Please date, sign exactly as your name
appears on this Proxy and promptly return
in the enclosed envelope. In the case of
joint ownership, each joint owner must
sign. When signing as guardian, executor,
administrator, attorney, trustee,
custodian, or in any other similar
capacity, please give full title. If a
corporation, sign in full corporate name
by president or other authorized officer,
giving title, and affix corporate seal.
If a partnership, sign in partnership
name by an authorized person.
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STATEMENT OF DIFFERENCES
The section symbol shall be expressed as................... 'SS'
<PAGE>
