SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
JD AMERICAN WORKWEAR, INC.
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(Name of Registrant as Specified In Its Charter)
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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:
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JD AMERICAN WORKWEAR, INC.
46 OLD FLAT RIVER ROAD
COVENTRY, RHODE ISLAND 02816
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held Friday, December 15, 2000
-----------------------
To the Shareholders of JD AMERICAN WORKWEAR, INC.:
Notice is hereby given that the Annual Meeting of Stockholders of JD
American Workwear, Inc. will be held at the offices of the Company, 1400 Chamber
Dr., Bartow, FL on Friday, December 15, 2000 at 10:00 a.m., local time, for the
purpose of considering and voting upon the following matters:
1. To elect a Board of five Directors three to serve a two year term and
two to serve a one year term until the next Annual Meeting of
Stockholders and until their successors are duly elected and
qualified.
2. To approve an amendment to the Company's Certificate of Incorporation
that would increase the number of authorized shares of Common Stock of
the Company from 7,500,000 shares to 30,000,000 shares.
3. To approve an amendment to the Company's 1995 Stock Option Plan which
would increase the number of shares eligible for issuance under the
Plan from 750,000 shares to 2,000,000 shares.
4. To approve an amendment to the Company's Certificate of Incorporation
that would change the name of the company from JD American Workwear,
Inc. to American Commerce Solutions, Inc.
5. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record as of the close of business on November 20,
2000 are entitled to receive notice of and to vote at the meeting or any
adjournment thereof.
By order of the Board of Directors
Camille Barbone
Secretary
November 21, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING AND VOTE YOUR SHARES. IN
THE EVENT YOU CANNOT ATTEND, PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY IN
THE ENCLOSED SELF-ADDRESSED ENVELOPE. A STOCKHOLDER WHO EXECUTES AND RETURNS A
PROXY IN THE ACCOMPANYING FORM HAS THE POWER TO REVOKE SUCH PROXY AT ANY TIME
PRIOR TO THE EXERCISE THEREOF.
<PAGE>
JD AMERICAN WORKWEAR, INC.
46 OLD FLAT RIVER ROAD
COVENTRY, RHODE ISLAND 02813
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PROXY STATEMENT
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The accompanying proxy is solicited by the Board of Directors of JD
American Workwear, Inc. (the "Company"), for the use at the Annual Meeting of
Stockholders to be held on Friday, December 15, 2000 and any adjournments
thereof.
PROXY SOLICITATION AND EXPENSE
Proxies in the accompanying form, properly executed and received prior to
the meeting and not revoked, will be voted as specified, or if no instructions
are given, will be voted in favor of the proposals described herein. Proxies may
be revoked at any time prior to being voted by written notice to the Secretary
of the Company. Solicitation of proxies may be made by personal interview, mail,
telephone, telegraph, telefax or e-mail by directors, officers and employees of
the Company. The expense of soliciting proxies will be borne by the Company. The
Company may also request banking institutions, brokerage firms, custodians,
trustees, nominees and fiduciaries to forward solicitation material to the
beneficial owners of the Company's Common Stock. The approximate date on which
this Proxy Statement and the accompanying proxy form will first be mailed to
stockholders is December 2 , 2000.
OUTSTANDING VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only stockholders of record at the close of business on November 20, 2000
will be entitled to notice of and to vote at the meeting. At the close of
business on that date, the Company had outstanding 2,984,178 shares of Common
Stock, $.002 par value, exclusive of treasury shares. Each holder of the
Company's Common Stock will be entitled to one vote for each share held. In
addition, there were 112 shares of Mandatorily Convertible Series A Preferred
Stock outstanding, each of which is entitled to 1,289 votes, additionally, there
are 3,207 shares of Series B 12% Cumulative Convertible Preferred Stock
outstanding, each of which is entitled to 200 votes. The holders of the Series B
Preferred Stock, as a class, shall be entitled to elect one (1) director, and
the holder of all other voting stock, as a class, shall be entitled to elect the
remaining members of the Board. The holders of Series C 6% Cumulative Preferred
may vote 9,800 that are entitled to 363.52 votes for each share held. The
presence at the meeting, in person or by proxy, of shareholders entitled to cast
at least a majority of the votes which all shareholders are entitled to cast on
each particular matter to be considered at the meeting will constitute a quorum
for the purpose of considering such matters.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
Shares represented by the enclosed proxy will, unless otherwise directed,
be voted to elect the nominees listed below to serve until the next annual
meeting of stockholders and until their successors are duly elected and
qualified. In the event of a vacancy in the list of nominees, the holders of the
enclosed proxy will vote for the election of a nominee acceptable to the
remaining nominees. Management is not aware of any person who is unable or
unwilling to stand for election or to serve if nominated.
Name of Nominee Age Position with Company
--------------- --- ---------------------
David N. DeBaene 41 President and Chairman of the Board
Norman J. Birmingham 45 Chief Financial Officer and Director
Robert E. Maxwell 65 Senior Vice President and Director
Daniel L. Hefner 50 Vice President and Director
Herbert A. Canapary 67 Director
David N. DeBaene, President and Chairman of the Board. Mr. DeBaene is the
founder of the Company and was responsible for obtaining the patent on the
original Jaque Dubois Construction Jean. Mr. DeBaene is responsible for all
executive level functions regarding the Company's operations and also shares
responsibility for raw materials sourcing and procurement, manufacturing
arrangements, product development, marketing and sales. Prior to founding the
Company, for 14 years Mr. DeBaene was an owner and/or foreman of a construction
company headquartered in West Warwick, Rhode Island, and also was involved in
nursing home administration from 1984 to 1990.
Norman J. Birmingham, Chief Financial Officer and Director, has served as
Chief Financial Officer since January 2000 and as a director since March 2000.
He has previously served as President and/or Chief Financial Officer for two
NASDAQ Small Cap traded companies. From November of 1995 through June 1996 Mr.
Birmingham was President of Heart Labs of America, Inc. upon his resignation as
President he remained a member of the Board of Directors through August 1996. In
December of 1995 Mr. Birmingham became President of Westmark Group Holdings,
Inc. and served as a member of the Board of Directors through August 1997. Mr.
Birmingham resigned as President of Westmark Group Holdings, Inc. in December of
1996 and accepted the post of Chief Financial Officer where he served until his
resignation in August 1997. Mr. Birmingham founded Patina Corporation in April,
1999 and became its President until its sale to JD American Workwear, which was
consummated in December, 1999. Prior to these positions he was the founder of a
successful accounting and financial consulting firm for twenty years. The
company had approximately 2,000 clients when it was sold in 1997.
Robert E. Maxwell, Senior Vice President and Director. He has served the
Company in his current capacities since June 2000. He is currently the Chief
Operating Officer and General Manager of International Machine and Welding, Inc.
He was formerly the owner operator of Florida Machine and Welding, Inc. located
in Bartow, Florida for the past 23 years until the sale of its assets in June
2000. During the past 31 years Mr. Maxwell also operated Florida Equipment and
Service, Inc., which grew, under his leadership to become one of the largest
independently owned construction equipment sales and service organizations in
the South. He began his career in engineering and heavy equipment maintenance
with U.S Agri-Chemicals Corporation, a major phosphate and chemical producer.
Mr. Maxwell has resided in Polk County, FL for 53 years. Mr. Maxwell has been an
officer of a corporation that has been liquidated in bankruptcy during the past
two years.
Daniel L. Hefner, Vice President and Director. Mr. Hefner has served the
Company in his current capacities since June 2000. He currently serves as
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President of International Commerce and Finance, Inc. a holding company for
various manufacturing and high tech operating companies. Mr. Hefner has been
active for the past ten years as an independent consultant to individuals or
business seeking to begin operations or to create turnarounds of existing
business. During the same period Mr. Hefner has also operated his own
independent real estate brokerage operation where he served as President and
Chief Executive Officer. During 1999 Mr. Hefner was Chief Operating Officer for
Chronicle Communications, Inc. (OTCBB:CRNC), a Tampa based printer.
Herbert A. Canapary, Director. Pursuant to the Securities Purchase
Agreement dated April 9, 1998, with The Union Labor Life Insurance Company, a
Maryland corporation, and certain additional agreements related to the
Securities Purchase Agreement, Mr. Canapary was elected to the Board of
Directors in April 1998 by the Board of Directors to fill the vacancy in the
Board resulting from the increase in the number of members of the Board from 5
to 7. Mr. Canapary has been employed by the Union Labor Life Insurance Company,
for 18 years, and presently serves as their Vice-President - Investments.
The terms of office of MSSRS DeBaene, Birmingham and Maxwell shall be from
the time of election until the second annual meeting of stockholders and all
other Directors of the Company are from the time of election until the next
annual meeting of stockholders and until their respective successors are elected
and qualified as provided in the Bylaws of the Company.
The Company does not have a standing audit or nominating committees. Upon
the election of the Directors listed in this Proposal No. 1, the Company
anticipates that the new Board will form such committees. The Company does have
a compensation committee consisting of David N. DeBaene, Herbert A. Canapary and
Norman J. Birmingham.
The Board of Directors of the Company held six meetings during the fiscal
year ended February 29, 2000. Each incumbent director has attended 100% of the
meetings during their term of service in the 2000 fiscal year, except Mr.
Canapary who attended less than 50% of the meetings.
PROPOSAL NO. 2
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL
GENERAL
The Board of Directors of the Company has adopted a resolution unanimously
approving and recommending to the Company's stockholders for their approval, an
amendment to the Company's Certificate of Incorporation to increase from
7,500,000 shares to 30,000,000 shares the number of authorized shares of the
Company's Common Stock, par value $.002 per share. The purpose of the amendment
is to increase the number of authorized shares available for issuance for the
following purposes: (i) to enable the Company to fulfill its existing
commitments to issue shares of Common Stock, as described below; (ii) to permit
the Company to obtain additional financing, if the Board of Directors so
determines; and (iii) for such other purposes as the Board of Directors
determines to be in the best interests of the Company, including, without
limitation, for working capital and capital expenditures, acquisitions of other
businesses, various employee benefit plans, stock dividends and stock splits.
REASONS FOR INCREASE
The Company's Certificate of Incorporation, as amended, currently
authorizes the issuance of 7,500,000 shares of Common Stock, plus additional
1,000,000 shares of preferred stock. As of November 20, 2000, the Company had
2,984,178 shares of Common Stock issued and outstanding. In addition, there are
outstanding options and warrants to acquire an aggregate 1,099,889 shares at
exercise price of $0.01 as well as outstanding convertible notes convertible
into 188,889 shares of Common Stock. In addition, there are 360,545 Class A
Warrants outstanding, each of which enables the holder thereof to purchase one
share of Common Stock plus one Class B Warrants at a purchase price of $4.99 per
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unit. Class B Warrants total 360,545, which enables the holder thereof to
purchase one share of Common Stock at a purchase price of $5.70 per share.
Additional warrants were issued to consultants totaling 287,041 at exercise
prices ranging from $2.85 of $1.07 per common share. In connection with the
Company's Initial Public Offering, the Company issued to its underwriter an
option to purchase 32,777 units each consisting of one share of Common Stock and
One Class A Warrant, at a purchase price of $8.44 per unit. Finally the Company
issued 112,500 warrants in connection with an 11% Convertible Note with a
current strike price of $1.43.
There are 1,000,000 authorized shares of "blank check" Preferred Stock,
$.001 par value, of the Company, of which the Board of Directors has designated
600 shares as Series A Convertible Preferred Stock. As of November 20, 2000,
there were 112 shares of Series A Mandatorily Convertible Preferred Stock
outstanding, which shares are convertible, in the aggregate, into 144,368 shares
of Common Stock of the Company. The 3,207 shares Series B 12% Cumulative
Preferred shares are convertible into 641,400 common shares. The 11,300 shares
of Series C 6% Cumulative Preferred Shares are convertible into 11,300,000
common shares. 1,500 of the Series C 6% Cumulative Preferred shares are held in
escrow for future considerations and do not vote until released.
The newly authorized common stock is intended to be used to cover the
shortfall in shares required for Preferred Stock conversion and the exercise of
all outstanding warrants and options. Further, the Company intends to have
certain growth from acquisitions and requires various funding that may cause
partial utilization of the proposed shares. The Board of Directors believes that
the newly authorized common shares are desirable for future use in accordance
with its business plans.
The Common Stock to be authorized will have the same rights and preferences
as the Common Stock presently authorized. The holders of shares of Common Stock
have no preemptive rights. The authorization of the additional shares of Common
Stock will have no effect on the rights of existing security holders; provided,
however, that the issuance of additional shares of Common Stock may dilute the
interest of current stockholders. Stockholders should note the potential
anti-takeover effects of the issuance of shares of Common Stock. Common Stock
may be used, if the Board of Directors determines to do so, subject to their
fiduciary obligations, so as to deter or make more difficult tender offers for
stock of the Company, thereby perpetuating management's position and potentially
denying stockholders the opportunity to receive above-market prices for their
shares. Management is not aware of any prospective tender offer for the stock of
the Company and has no present intention of using the additional authorized
shares for any such purpose.
VOTE REQUIRED
In order for this Proposal to be approved, a majority of all outstanding
shares of Common Stock voting as a class and a majority of all votes entitled to
be cast at the Shareholders Meeting must be voted in favor of such amendment.
RECOMMENDATION OF THE BOARD OF DIRECTORS
For the reasons set forth above, The Board of Directors recommends to its
shareholders that they vote "FOR" this proposal. Unless otherwise directed,
proxies will be voted for the adoption of the amendment.
PROPOSAL NO. 3
PROPOSED AMENDMENT TO COMPANY'S 1995 STOCK OPTION PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL
In January 1995, the Board of Directors adopted the JD American Workwear,
Inc. 1995 Stock Option Plan (the "Plan") and 500,000 shares of Common Stock were
reserved for issuance hereunder. In January 1996, the Plan was amended to
reflect the Company's two-for-one reverse stock split; accordingly, the total
number of shares that are currently authorized for issuance under the Plan is
250,000 shares. As of February 28, 1998, all 250,000 of these shares have been
issued or are subject to issuance upon exercise of presently exercisable
options.
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On March 27, 1998, the shareholders of the Company approved an amendment
to the Plan, which would increase the number of shares available under the 1995
Stock Option Plan from 250,000 shares to 750,000 shares. On December 27, 1999
the Board of Directors elected to request an increase in the Plan's authorized
shares from 750,000 to 2,000,000 subject to the approval of additional
authorized common shares identified in Proposal No. 2 above. The additional
1,250,000 shares should allow the Plan to continue to make offerings to attract
and retain necessary officers, employees, directors and consultants. This
amendment to the Plan will not take effect until it is approved by the
affirmative vote of the holders of a majority of the securities present, or
represented, and entitled to vote at the Annual Meeting.
SUMMARY OF THE 1995 STOCK OPTION PLAN
The Plan, adopted by the Company's Board of Directors in February 1995 and
by the stockholders in July 1995, provides for the issuance of options
("Options") to employees, officers and, under certain circumstances, directors
of and consultants to the Company ("Eligible Participants").Options granted
under the plan may be either "incentive stock options" ("ISOs") as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") or
"nonqualified stock options" ("NQSOs"). The Plan does not provide for the
issuance of stock appreciation rights but does permit the granting of restricted
stock and deferred stock awards. A total of 750,000 shares of Common Stock are
currently reserved for issuance under the Plan,; however, as of January 17,
2000, 514,000 shares reserved for issuance under the Plan have been issued or
are issuable upon exercise of presently exercisable options. The Plan is
presently administered by the Board of Directors, however, upon the election of
directors set forth in Proposal No. 1, above, it is anticipated that the Board
of Directors will grant the newly elected Compensation Committee of the Board of
Directors sole discretion and authority, consistent with the provisions of the
Plan, to select the Eligible Participants to whom Options may be granted under
the Plan, the number of shares which will be covered by each Option and the form
and terms of the agreement to be used. All employees and officers of the Company
(except for members of the Committee) are eligible to participate in the Plan.
Directors are eligible to participate only if they have been declared to be
"eligible directors" by resolution of the Board of Directors. Members of the
Committee are not Eligible Participants. At November 20, 2000, approximately 4
persons were eligible to receive ISOs under the Plan. The Plan anticipates a
significant increase in the number of qualified employees during the next fiscal
year.
Options. The Compensation Committee is empowered to determine the exercise
price of Options granted under the Plan, but the exercise price of ISOs must be
equal to or greater than the fair market value of a share of Common Stock on the
date the Option is granted (110% with respect to optionees who own at least 10%
of the outstanding Common Stock). The exercise price of NQSOs granted under the
Plan must not be less than 85% of the fair market value of the Common Stock on
the date the Option is granted. The Committee has the authority to determine the
time or times at which Options granted under the Plan become exercisable, but
the Options expire no later than ten years from the date of grant (five years
with respect to Optionees who own at least 10% of the outstanding Common Stock
of the Company). The Options are non-transferable, other than by will and the
laws of descent, and generally may be exercised only by an employee while
employed by the Company or within 90 days after termination of employment (one
year from termination resulting from death or disability).
There were three grants of Options under the Plan during fiscal 2000,
50,000 shares were granted to a financial consultant, 7,500 shares to legal
counsel and 50,000 to employees. 107,500 options remain outstanding at November
20, 2000.
VOTE REQUIRED
In order for this Proposal to be approved, a majority of all outstanding
shares of Common Stock voting as a class and a majority of all votes entitled to
be cast at the Shareholders Meeting must be voted in favor of such amendment.
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RECOMMENDATION OF THE BOARD OF DIRECTORS
For the reasons set forth above, The Board of Directors recommends to its
shareholders that they vote "FOR" this proposal. Unless otherwise directed,
proxies will be voted for the adoption of the amendment.
PROPOSAL NO. 4
CHANGE OF CORPORATE NAME TO
AMERICAN COMMERCE SOLUTIONS, INC.
THE BOARD OF DIRECTORS RECOMENDS A VOTE "FOR" THE PROPOSAL
The Board of Directors has been requested by certain shareholders
comprising more than fifty percent of the outstanding voting shares to change
the name of the company to American Commerce Solutions, Inc. to more accurately
reflect the expanded nature of the company.
VOTE REQUIRED
In order for the Proposal to be approved, a majority of all outstanding
shares entitled to be cast at the Shareholders Meeting must be voted in favor of
such amendments.
RECOMMENDATION OF THE BOARD OF DIRECTORS
For the reasons set forth above, the Board of Directors recommends to its
shareholders that they vote "FOR" the proposal. Unless otherwise directed,
proxies will be voted for the adoption of the amendments.
MANAGEMENT
The following is a list of the Company's executive officers, their ages
and their positions and offices:
Name Age Position with Company
---- --- ---------------------
David N. DeBaene 42 President and Director
Norman J. Birmingham 45 Chief Financial Officer and Director
Robert E. Maxwell 65 Senior Vice President and Director
Daniel L. Hefner 50 Vice President and Director
Herbert A. Canapary 67 Director
Mr. DeBaene's biography is included above under Proposal No. 1 -- Election
of Directors.
Mr. Birmingham's biography is included above under Proposal No. 1 --
Election of Directors.
Mr. Maxwell's biography is included above under Proposal No. 1 -- Election
of Directors.
Mr. Hefner's biography is included above under Proposal No. 1 -- Election
of Directors.
Mr. Canapary's biography is included above under Proposal No. 1 - Election
of Directors.
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All officers hold office at the pleasure of the Board of Directors. See
"Executive Compensation - Employment Agreements" below. None of the Company's
executive officers has a family relationship with any Director or other
executive officer of the Company.
EXECUTIVE COMPENSATION
The following table sets forth a summary for the fiscal years ended
February 29, 2000 and February 28, 1999, and 1998, respectively, of the cash and
non-cash compensation awarded, paid or accrued, by the Company to the President
and CEO and to the Company's second most highly compensated executive officer
who was serving as such at the end of fiscal 1998 (collectively, he "named
executive officers"). The Company at no time during the last three fiscal years
had more than two named executive officers that earned annual compensation of
$100,000 or more.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Compensation Options by Annual
Name and Fiscal ---------------- No. of All Other
Principal Position Year Salary Bonus Shares Compensation
------------------ ------ ------ ----- ---------- ------------
David N. DeBaene, 2000(1) $145,000 -- -- --
President 1999(2) 125,000 -- -- --
1998(3) 105,000 -- -- --
Under his employment agreement Mr. DeBaene was entitled to be paid at a
rate of $150,000 per annum plus the previous deferrals from fiscal years 1998
and 1999. Mr. DeBaene elected to continue the deferrals of the previous year and
deferred approximately an additional $15,000 from his fiscal 1999 salary.
Under his employment agreement, Mr. DeBaene was entitled to be paid at a
rate of $125,000 per annum for fiscal 1999. However, in order to conserve cash,
Mr. DeBaene has agreed to defer approximately $15,000 of such compensation to
fiscal 2001.
The Company does not have any annuity, retirement, pension, deferred or
incentive compensation plan or arrangement under which any executive officers
are entitled to benefits, nor does the Company have any long-term incentive plan
pursuant to which performance units or other forms or compensation are paid.
Executive officers who qualify will be permitted to participate in the Company's
1995 Stock Option Plan, which was adopted in February 1995. See "Stock Option
Plan." Executive officers may participate in group life, health and
hospitalization plans if and when such plans are available generally to all
employees.
EMPLOYMENT AGREEMENTS
Effective as of March 1, 1995, the Company entered into an employment
agreement with David N. DeBaene as Chairman and President. The agreement is for
a base term of five years and is thereafter renewable for additional periods of
three-years, unless the Company gives notice to the contrary. In accordance with
his agreement with the Company, Mr. DeBaene's first year base salary was
$65,000, increasing annually thereafter in $20,000 increments. In addition, Mr.
DeBaene is entitled to receive an annual cash bonus based upon a percentage of
the Company's pre-tax income for each fiscal year in accordance with a sliding
scale schedule contained in the agreements. No bonus is payable unless and until
the Company earns pre-tax income in excess of $5 million. The agreement also
provides for certain non-competition and non-disclosure covenants of the
executive and for certain Company paid fringe benefits such as disability
insurance and inclusion in pension, profit sharing, stock option, savings,
hospitalization and other benefit plans at such times as the Company shall adopt
them.
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The agreement provides for the payment of severance compensation of
$250,000 in the event that at any time during the term thereof, the agreement is
terminated by the Company without cause, or terminated by the employee due to a
change in control. The Company believes that the change in control provisions in
this agreement may tend to discourage attempts to acquire a controlling interest
in the Company and may also tend to make the removal of management more
difficult; however, the Company believes such provisions provide security and
decision-making independence for its executive officers.
On January 1, 2000, the prior agreement was cancelled and a new contract
signed providing for a five-year term expiring on December 31, 2004. The
contract automatically renews in five years absent any notice 180 days prior to
the end of the term. The base salary of $150,000 increases on each anniversary
at a rate of 13% over the prior year's salary. Mr. DeBaene was granted 25,000
options upon signing at an exercise price of $1.59, which was in excess of the
$1.30 price per share on the nearest trading date to the signing of the
contract. The contract further provides for bonuses on the net pre-tax profits
of the Consumer Products Division at 4% of the profit of the division if the
profit is less than $2,500,000 and increasing ratably to a maximum of 10% if the
profit exceeds $5,000,001.
The contract also provides for certain payments in the event Mr. DeBaene is
terminated without cause or a change in control or position occurs that Mr.
DeBaene has not agreed to. These payments would require the remaining term of
the contract to be paid upon termination and the repurchase by the company of
all outstanding stock owned by Mr. DeBaene.
On January 1, 2000 Norman J. Birmingham signed an employment contract that
provides for a salary of $150,000 in the first year of a five-year term, with
annual increases of 13%. Mr. Birmingham was granted 25,000 options with an
exercise price of $1.59, which was above the $1.30 closing bid price on the
nearest trading day to the contract signing. The contract further provides that
a bonus will be paid on the consolidated pre tax income of the corporation
beginning with 2% if the corporation's net pre-tax income is less than
$2,500,000 and increasing ratably to 4.5% if the pre-tax income is over
$5,000,001.
The contract also provides for certain payments in the event Mr. Birmingham
is terminated without cause or a change in control or position occurs that Mr.
Birmingham has not agreed to. These payments would require the remaining term of
the contract to be paid upon termination and the repurchase by the company of
all outstanding stock owned by Mr. Birmingham.
DIRECTOR COMPENSATION
The Directors of the Company are elected annually and have historically
served until the next annual meeting of stockholders and until a successor shall
have been duly elected and qualified. Directors of the Company who are not
employees or consultants do not receive any compensation for their services as
members of the Board of Directors, but are reimbursed for expenses incurred in
connection with their attendance at meetings of the Board of Directors.
Directors may be removed with or without cause by a vote of the majority of the
stockholders then entitled to vote.
COMPENSATION COMMITTEE
The Company has a standing compensation committee consisting of MSSRS.
DeBaene, Canapary and Birmingham. Upon the election of the Directors listed in
this Proposal No. 1, the Company anticipates that the new board will change the
members of the committee and include independent outside members. The Board of
Directors reviews and approves and/or ratifies all compensation of officers,
employees and consultants, including the granting of options under the Company's
1995 Stock Option Plan.
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STOCK OPTION PLAN
See Summary of 1995 Stock Option Plan under "Proposal No. 3" above.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(individual grants)
There were two grants, each of 25,000 stock options to Messrs DeBaene and
Birmingham in fiscal 2000.
OPTION REPRICING
Not applicable.
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION
No directors other than those identified above as members of the
Compensation Committee served on that Committee during the last completed fiscal
year. None of the executive officers of the Company has served on the board of
directors or on the compensation committee of any other entity, any of whose
officers served either on the Board of Directors or on the Compensation
Committee of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of November 20, 2000 certain information
regarding the ownership of the Common Stock by (i) each person known by the
Company to be the beneficial owner of more than 5% of the Common Stock, (ii)
each of the Company's directors, and (iii) all of the Company's executive
officers and directors as a group. Beneficial ownership has been determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended. Under this Rule, certain shares may be deemed to be beneficially owned
by more than one person (such as where persons share voting power or investment
power). In addition, shares are deemed to be beneficially owned by a person if
the person has the right to acquire the shares (for example, upon exercise of an
option) within 60 days of the date as of which the information is provided; in
computing the percentage ownership of any person, the amount of shares
outstanding is deemed to include the amount of shares beneficially owned by such
person (and only such person) by reason of these acquisition rights. As a
result, the percentage of outstanding shares of any person as shown in the
following table does not necessarily reflect the person's actual ownership or
voting power at any particular date.
Name and Address Amount and Nature of Percentage
or Number in Group Beneficial Ownership of Class*
------------------ -------------------- ----------
David N. DeBaene 638,300 20.38%
Annette DeBaene 51,000 1.71%
Norman DeBaene 48,000 1.61%
Elizabeth Cotter 12,500 **
Norman Birmingham 25,000 **
Norman Birmingham 1,000,000 (A) 8.85%
Daniel Hefner 300,000 (A) 2.65%
David N. DeBaene 400,000 (A) 3.54%
Herbert Canapary 641,400 (A) 100.00%
Robert Maxwell 0 **
All Officers and Directors
as a group (5 persons) 774,800 25.96%
(A) on as converted basis with voting rights no common has been issued.
* Assumes 2,984,178 shares issued and outstanding less than 1% except as
otherwise indicated, each named holder has, to the Company's
knowledge, sole voting and investment power with respect to the shares
indicated. The 628,300 listed for David N. DeBaene includes 25,000
options granted under the terms of his employment contract and also
include 25,800 shares owned of record by David N. DeBaene's sister.
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Annette and Norman DeBaene are the parents of David N. DeBaene. Ms.
Cotter is the spouse of David N. DeBaene. Mr. Birmingham is the owner
of 1,000 Series C 6% Convertible Preferred Shares that convert into
1,000,000 common shares when available and includes 25,000 options
granted pursuant to his employment contract. Mr. Hefner is the owner
of 300 Series C 6% Convertible Preferred Shares that convert into
300,000 common shares when available. Mr. DeBaene is the owner of 400
Series C 6% Convertible Preferred Shares that convert into 400,000
common shares when available. All Series C 6% Convertible Preferred
Stock has voting rights of 363.52 common share equivalents per share.
Mr. Canapary is the beneficial owner due to his relationship as the
Vice President of Investments for Union Labor Life Insurance Company.
His duties include overseeing this investment. Union Labor Life
Insurance Company is the holder of 3,207 shares of the Series B 12%
Mandatorily Convertible Preferred Stock. Each share converts to common
at a ratio of 1:200.
** Less than 1%.
ESCROW OF SHARES
In accordance with the requirements of certain state securities
administrators, certain of the Company's principal stockholders have agreed to
place into escrow an aggregate of 700,000 shares (the "Escrow Shares") of the
875,000 shares of Common Stock held by them. Under the escrow agreement, the
Escrow Shares will be ratably released to the holders in 25% increments on the
sixth, seventh, eighth and ninth anniversaries, respectively, of the initial
public offering. If the Company meets or exceeds certain net earnings or stock
price targets, the release of the Escrow Shares will be accelerated.
CONSULTING AGREEMENTS
Mission Bay Consultants, Inc. On April 2, 1997, the Company entered into a
one (1) year Consulting Agreement with Mission Bay Consulting, Inc., a financial
public relations firm ("Mission Bay"), for certain financial consulting
services. In connection with this Consulting Agreement the Company issued to
Mission Bay an option under the Company's 1995 Stock Option Plan to purchase an
aggregate of 200,000 shares of common stock, and also issued 28,000 shares of
common stock under the 1995 Stock Option Plan. The Company has also agreed to
reimburse Mission Bay for its accountable expenses incurred in connection with
the Agreement. In September 1997, in consideration of the extension of the
Consulting Agreement, 50,000 of said options were cancelled, and the Company
issued 50,000 shares of Common Stock to Mission Bay Consulting under the 1995
Stock Option Plan. In January 1998, the Company issued 9,500 shares to Randy
Beimel, an employee of Mission Bay Consulting, in consideration of services
rendered outside of the scope of the Consulting Agreement. In June 1999 the
Company issued an additional 50,000 Options for additional services rendered
outside of the contract. In March 2000 the Company issued 10,000 additional
options for services rendered to Mr. Beimel.
RELATED PARTY LOANS
As disclosed in the Notes to the financial statements, the Company has
borrowed money from time to time from related parties. At February 29, 2000, the
Company owed approximately $142,003 to Annette and Norman DeBaene, principal
stockholders. These loans bear interest @ 10% per annum and are due September
2001. These notes will be repaid out of operating cash flow.
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RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Bella, Hermida, Gilman, Hancock and Mueller L.L.C.
served as the Company's independent certified public accountants for the year
ended February 29, 2000 and management anticipates that such firm will be
reappointed for the present fiscal year
ANNUAL REPORT
ANY PERSON FROM WHOM PROXIES FOR THIS MEETING ARE SOLICITED MAY OBTAIN FROM
THE COMPANY, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-KSB FOR THE FISCAL YEAR ENDED FEBRUARY 29, 2000,
INCLUDING THE FINANCIAL STATEMENTS THEREIN AND THE RELATED SCHEDULES, BY WRITING
THE COMPANY AT 46 OLD FLAT RIVER ROAD, COVENTRY, RHODE ISLAND 02816 ATTENTION:
SECRETARY. ANY SUCH REQUEST FROM A BENEFICIAL OWNER OF STOCK NOT REGISTERED IN
HIS NAME MUST CONFIRM THAT HE WAS A BENEFICIAL OWNER OF SUCH STOCK ON THE RECORD
DATE.
STOCKHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next annual
meeting of stockholders must be received by the Company at 46 Old Flat River
Road, Coventry, Rhode Island 02816, on or before March 1, 2001 for inclusion in
the proxy material for said meeting.
OTHER BUSINESS
It is not anticipated that any business other than as set forth
hereinabove will be brought before the meeting. Management is not aware of any
matters proposed to be presented to the meeting by any other person. However, if
any other business should properly come before the meeting, it is the intention
of the persons named in the enclosed form of proxy in accordance with their best
judgment on such business.
Items included with this proxy solicitation:
The JD American Workwear, Inc. Form 10-KSB/A for the year ended
February 29, 2000
The JD American Workwear, Inc. Form 10-QSB for the six months ended
August 31, 2000
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JD AMERICAN WORKWEAR, INC.
Annual Meeting of Stockholders
December 15, 2000
The undersigned hereby appoints David N. DeBaene and Camille Barbone, or either
one of them, as proxy or proxies for the undersigned, with full powers of
substitution, to vote at the Annual Meeting of Stockholders to be held on
Friday, DECEMBER 15, 2000 at 10:00 a.m., local time, at the offices of the
Company, 1400 Chamber Dr, Bartow, FL and at any and all adjournments thereof,
according to the number of votes that the undersigned would be entitled to cast
with all powers the undersigned would possess if personally present at said
meeting. This proxy may be exercised to vote for the following purposes:
1. FOR [ ] AGAINST [ ]
the election of all of the following nominees listed below as
Directors of the Company:
David N. DeBaene
Norman J. Birmingham
Robert E. Maxwell
Daniel L. Hefner
Herbert A. Canapary
If you do not wish your shares be voted "FOR" a particular nominee, mark
"AGAINST" above and strike a line through the name(s) of the person(s)for
whose election you do not wish to consent.
2. FOR [ ] WITHHOLD AUTHORITY TO VOTE ON [ ] AGAINST [ ]
The proposal to approve an amendment to the Company's Certificate of
Incorporation that would increase the number of authorized shares of
Common Stock of the Company from 7,500,000 shares to 30,000,000 shares.
3. FOR [ ] WITHHOLD AUTHORITY TO VOTE ON [ ] AGAINST [ ]
The proposal to approve an amendment to the Company's 1995 Stock Option
Plan, which would increase the number of shares eligible for issuance
under the Plan from 750,000 shares to 2,000,000 shares.
4. FOR [ ] WITHHOLD AUTHORITY TO VOTE ON [ ] AGAINST [ ]
The proposal to approve an amendment to the Company's Certificate of
Incorporation changing the Company name from JD American Workwear, Inc. to
American Commerce Solutions, Inc. to reflect the expanded nature of the
Company's business.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH PROPOSAL
The undersigned hereby ratifies and confirms all that said proxy or
proxies, or substitutes, may do by virtue hereof. The proxies are authorized to
vote in their discretion with respect to matters not known or determined at the
date of the Proxy Statement. Receipt of the Notice of Meeting, Proxy Statement
and Annual Report is hereby acknowledged.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR
SPECIFICATIONS ABOVE. IN THE ABSENCE OF SPECIFICATIONS, THIS PROXY WILL BE VOTED
"FOR" ALL OF THE PROPOSALS SET FORTH ABOVE.
Dated:________________________, 2000
________________ L.S.
Please sign here exactly as name appears at the left. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title as such. Each joint owner or trustee should sign the proxy. If the
stockholder is a corporation, the office of the person signing should be
indicated.
Please sign, date and mail today.
This proxy is solicited on behalf of the Board of Directors of the Company.
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