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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
THRIFT MANAGEMENT, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
(2) Aggregate number of securities to which transaction applies: _________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): ___________
(4) Proposed maximum aggregate value of transaction: _____________________
(5) Total fee paid: ______________________________________________________
[ ] Fee paid previously with preliminary materials: ___________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ______________________________________________
(2) Form, Schedule or Registration Statement No.: ________________________
(3) Filing Party: ________________________________________________________
(4) Date Filed: __________________________________________________________
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THRIFT MANAGEMENT, INC.
3141 WEST HALLANDALE BEACH BOULEVARD
HALLANDALE, FLORIDA 33009
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
ON JUNE 1, 2000
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To the Shareholders of Thrift Management, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Thrift Management, Inc., a Florida corporation (the
"Company"), will be held on June 1, 2000, at 11:00 a.m., at 201 S. Biscayne
Boulevard, Suite 3000, Miami, Florida 33131, for the following purposes, all of
which are set forth more completely in the accompanying proxy statement:
1. To elect five directors of the Company for the ensuing year;
2. To consider and vote upon a proposal to approve amendments to
the Company's 1996 Stock Option Plan to increase the number of
shares of the Company's Common Stock reserved for issuance
thereunder from an aggregate of 1,000,000 shares to an
aggregate of 2,200,000 shares;
3. To ratify the appointment of Berkowitz Dick Pollack & Brant LLP
as the Company's independent public accountants for the 2000
fiscal year; and
4. To transact such other business as may properly come before the
Annual Meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on May 3, 2000
as the record date for the determination of shareholders entitled to notice of,
and to vote at, the Annual Meeting and any adjournments or postponements
thereof. A proxy card and a copy of the Company's Annual Report to Shareholders
for the year ended December 26, 1999 are enclosed.
BY ORDER OF THE BOARD OF DIRECTORS
Ileen Little, Secretary
Hallandale, Florida
May 18, 2000
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER
OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN AND
DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH DOES NOT
REQUIRE POSTAGE IF MAILED IN THE UNITED STATES.
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THRIFT MANAGEMENT, INC.
3141 WEST HALLANDALE BEACH BOULEVARD
HALLANDALE, FLORIDA 33009
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 1, 2000
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THE ANNUAL MEETING
TIME, DATE AND PLACE OF ANNUAL MEETING
The enclosed proxy is solicited by the Board of Directors of Thrift
Management, Inc., a Florida corporation (the "Company"), for use at the Annual
Meeting of Shareholders to be held on June 1, 2000, beginning at 11:00 a.m., at
201 S. Biscayne Boulevard, Suite 3000, Miami, Florida 33131, and at any
adjournments or postponements thereof (the "Annual Meeting"). The approximate
date on which this Proxy Statement and the enclosed proxy are being mailed to
shareholders is May 18, 2000.
INFORMATION REGARDING THE PROXY
The form of proxy enclosed provides a space for you to withhold your
vote for any proposal. You are urged to indicate your vote on each matter in the
space provided. Proxies will be voted as marked. If no space is marked, proxies
will be voted by the persons therein named at the meeting: (i) for the election
of the directors recommended by the Company; (ii) for the adoption of an
amendment to the Company's 1996 Stock Option Plan (the "Plan") to increase the
number of shares of the Company's Common Stock reserved for issuance thereunder
from an aggregate of 1,000,000 shares to an aggregate of 2,200,000 shares; (iii)
for the ratification of the appointment of Berkowitz Dick Pollack & Brant LLP as
the Company's independent public accountants for the 2000 fiscal year; and (iv)
in their discretion, upon such other business as may properly come before the
Annual Meeting. Whether or not you plan to attend the meeting, please fill in,
sign and return your proxy card in the enclosed envelope, which requires no
postage if mailed in the United States.
The cost of the proxy solicitation will be borne by the Company. In
addition to solicitation by mail, directors, officers and employees of the
Company may solicit proxies personally and by telephone, all without extra
compensation.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
At the close of business on May 3, 2000 (the "Record Date"), the
Company had outstanding 2,347,210 shares of Common Stock, $.01 par value per
share (the "Common Stock"), and 250,000 shares of Series A Preferred Stock, $.01
par value per share (the "Preferred Stock"). Each share of Common Stock entitles
the holder thereof to one vote, and each share of Preferred Stock entitles the
holder thereof to 10 votes, on each matter submitted to a vote of shareholders.
Only record holders of Common Stock and Preferred Stock on the Record Date are
entitled to notice of, and to vote at, the Annual Meeting. The attendance, in
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person or by proxy, of the holders of a majority of the outstanding shares of
Common Stock and Preferred Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. If less than a majority of the outstanding
shares entitled to vote are represented at the Annual Meeting, a majority of the
shares so represented may adjourn the Annual Meeting to another date, time or
place, and notice need not be given of the new date, time or place if the new
date, time or place is announced at the Annual Meeting before any adjournment is
taken. Directors will be elected by a plurality of the votes cast, either in
person or by proxy, at the Annual Meeting. The approval of the proposals covered
by this Proxy Statement, other than the election of directors, will require an
affirmative vote of the holders of a majority of the shares voting in person or
by proxy at the Annual Meeting.
Prior to the Annual Meeting, the Company will select one or more
inspectors of election for the meeting. Such inspector(s) shall determine the
number of shares of Common Stock and Preferred Stock represented at the meeting,
the existence of a quorum, and the validity and effect of proxies, and shall
receive, count and tabulate ballots and votes and determine the results thereof.
Abstentions will be considered as shares present and entitled to vote at the
Annual Meeting and will be counted as votes cast at the Annual Meeting, but will
not be counted as votes cast for or against any given matter.
A broker or nominee holding shares of Common Stock registered in its
name, or in the name of its nominee, which are beneficially owned by another
person and for which it has not received instructions as to voting from the
beneficial owner, may have discretion to vote the beneficial owner's shares of
Common Stock with respect to the election of directors and other matters
addressed at the Annual Meeting. Any such shares of Common Stock that are not
represented at the Annual Meeting either in person or by proxy will not be
considered to have cast votes on any matters addressed at the Annual Meeting.
A SHAREHOLDER WHO SUBMITS A PROXY ON THE ACCOMPANYING FORM HAS THE
POWER TO REVOKE IT AT ANY TIME PRIOR TO ITS USE BY DELIVERING A WRITTEN NOTICE
TO THE SECRETARY OF THE COMPANY, BY EXECUTING A LATER-DATED PROXY, OR BY
ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON. UNLESS AUTHORITY IS WITHHELD,
PROXIES THAT ARE PROPERLY EXECUTED WILL BE VOTED FOR THE PURPOSES SET FORTH
THEREON.
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BENEFICIAL SECURITY OWNERSHIP
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of the Record Date, by (i)
each of the shareholders of the Company who owns more than 5% of the outstanding
shares of Common Stock, (ii) each director of the Company, (iii) each Named
Executive Officer (as hereinafter defined), and (iv) all directors and executive
officers of the Company as a group. Except as otherwise indicated, the Company
believes that all beneficial owners named in the table have sole voting and
investment power with respect to all shares of Common Stock beneficially owned
by them.
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL PERCENT OF COMMON OF TOTAL
OWNERSHIP OF STOCK BENEFICIALLY VOTING
NAME AND ADDRESS COMMON STOCK OWNED POWER(1)
- ---------------- ---------------- ------------------------- -----------------
Marc Douglas 1,630,000(2)(3) 55.7% 76.1%
3141 W. Hallandale Beach Blvd.
Hallandale, Florida 33009
Ileen Little 43,500(3) 1.8% *
3141 W. Hallandale Beach Blvd.
Hallandale, Florida 33009
Stephen L. Wiley 32,500(3) 1.4% *
3141 W. Hallandale Beach Blvd.
Hallandale, Florida 33009
Jay M. Haft 119,170(3) 4.8% 2.4%
3141 W. Hallandale Beach Blvd.
Hallandale, Florida 33009
Howard Rothchild 10,000(3) * *
3141 W. Hallandale Beach Blvd.
Hallandale, Florida 33009
1997 Ileen Little 150,000(3) 6.0% 3.0%
Irrevocable Family Trust
c/o Barry Nelson, Esq., Trustee
19495 Biscayne Boulevard
Aventura, Florida 33180
InsiderStreet.com 125,000 5.3% 2.3%
2907 Bay to Bay Boulevard
Suite 203
Tampa, Florida 33629
All directors and executive 1,835,170(3) 58.6% 77.0%
officers as a group (five persons)
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* Less than 1%.
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(1) The Common Stock votes together with the Preferred Stock on all matters,
except as required by law. The Preferred Stock entitles the holder to 10
votes per share and the Common Stock entitles the holder to one vote per
share. Mr. Douglas holds the 250,000 shares of Preferred Stock currently
outstanding, which are reflected in Mr. Douglas' percentage of total voting
power.
(2) Does not include 150,000 shares of Common Stock underlying options held by
the 1997 Ileen Little Irrevocable Family Trust (the "Trust") of which Mr.
Douglas is the beneficiary. Mr. Douglas does not exercise voting or
dispositive control of the shares held by the Trust. Of Mr. Douglas' total
shares, 6,000 shares are held of record by Douglas Family Holdings, Inc., a
corporation of which Mr. Douglas is the sole shareholder, and 400,000
shares are held of record by Douglas Family Limited Partnership, of which
Douglas Family Holdings is a general partner.
(3) Includes shares underlying options exercisable within 60 days.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During the fiscal year ended December 26, 1999, the directors,
executive officers and 10% shareholders of the Company were not subject to
filing requirements of Section 16(a) of the Securities Exchange Act of 1934.
PROPOSAL ONE: ELECTION OF DIRECTORS
NOMINEES FOR ELECTION TO THE BOARD
At the Annual Meeting, five directors will be elected by the
shareholders to serve until the next annual meeting of shareholders or until
their successors are elected and qualified. The accompanying form of proxy, when
properly executed and returned to the Company, will be voted FOR the election of
the five persons named below as directors, unless the proxy contains contrary
instructions. Proxies cannot be voted for a greater number of persons than the
number of nominees named in the Proxy Statement. Management has no reason to
believe that any of the nominees is unable or unwilling to serve if elected. In
the event, however, that any of the nominees should become unable or unwilling
to serve as a director, the proxy will be voted for the election of such person
or persons as shall be designated by the Board of Directors.
The following table sets forth certain information about each nominee.
DIRECTOR
NAME AGE POSITION SINCE
- ---- --- -------- -----
Marc Douglas 41 President, Chief Executive Officer 1996
and Director
Ileen Little 62 Vice President, Secretary and Director 1991
Stephen L. Wiley 60 Chief Financial Officer and Director 1997
Jay M. Haft 64 Director 1998
Howard L. Rothchild 65 Director 1999
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MARC DOUGLAS founded the Company in 1991 and has served as its Chief
Executive Officer since its inception, and, in February 1996, was elected
President and a director. Prior thereto, Mr. Douglas was Executive Director of
Thrift Shops of West Broward, Inc., and Southeast Thrift Shops of South Broward,
Inc., since 1986 and 1990, respectively. Mr. Douglas received his A.A. in
Business from Miami Dade College and his B.S. in Business from Florida
International University, Miami, Florida. Mr. Douglas is Ms. Little's son.
In 1985, Mr. Douglas pled guilty to one count of wire fraud in a
federal criminal action arising from his employment from 1980 to 1982 as a
salesman of oil and gas leases for U.S. Oil & Gas Corporation. Mr. Douglas was
sentenced to a 90-day jail term and five years' probation and, in addition,
entered into a settlement agreement in a related civil action brought by the
Federal Trade Commission, in connection with which he paid $65,000 as
restitution. In February 1998, Mr. Douglas filed an application for a
Presidential pardon with the U.S. Department of Justice. No estimate can be made
at this time of the likelihood that a pardon will be granted and, if granted,
when it will be received.
In 1989, Mr. Douglas, his spouse and M.J.S.S. Enterprises, Inc., a
corporation for which Mr. Douglas was an officer, filed for bankruptcy
protection. Both the personal and corporate bankruptcies were discharged in
1990.
ILEEN LITTLE is currently a Vice President, Secretary and a director of
the Company. From its inception until February 1996, when she was elected to her
current position, she acted as President and a Director of the Company. Prior to
joining the Company, Ms. Little was President of Thrift Shops of West Broward,
Inc. and Southeast Thrift Shops of South Broward, Inc., two companies which she
co-founded in 1986 and 1990, respectively. Ms. Little received her B.S. in
business from Brooklyn College. Ms. Little is Mr. Douglas' mother.
STEPHEN L. WILEY became a director of the Company and its Chief
Financial Officer in 1997. Prior to joining the Company, Mr. Wiley had been
Senior Vice President and Chief Financial Officer of Linen Supermarket, Inc.
since 1989. Linen Supermarket, Inc. was a private company that operated 120
specialty linen retail stores in six states. In February 1997, Linen
Supermarket, Inc. filed for protection from its creditors under Chapter 13 of
the Bankruptcy Code, which was converted to Chapter 11 in May 1997. Mr. Wiley
has more than 25 years' experience in the retail industry, including more than
10 years with the W.R. Grace retail companies. Mr. Wiley received his B.S. in
Industrial Management from Purdue University in Indiana and his M.B.A. from the
University of Edinburgh in Edinburgh, Scotland.
JAY M. HAFT has been a Director of the Company since January 1998. Mr.
Haft is a Managing General Partner of Gen Am "1" Venture Fund, an international
venture capital fund. Mr. Haft is also a director of numerous public and private
corporations, including RVSI, Inc., HCTI Group, Inc., Decap Group, Inc., Encore
Medical Corporation, PC Service Source, Inc., DUSA Pharmaceuticals, Inc. and
Oryx Technology Corp. He is a graduate of Yale College and Yale Law School.
HOWARD L. ROTHCHILD has been a Director of the Company since June 1999.
Mr. Rothchild is President of JES/Comm, Inc., a marketing consultant, which
provides services to the Company. He is also a Director of Business Development
of Gold Coast Advertising, Inc., a full service advertising agency in Miami,
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Florida. Mr. Rothchild has more than 30 years' experience in marketing and
advertising. He was a founding Director of the Big Brothers chapter in
Pittsburgh, Pennsylvania, and is a Director of Little Acorns, a non-profit
family and children program organization in Miami, Florida. He received his B.S.
from the University of Vermont, and his M.A. in Advertising from the University
of Pittsburgh.
Each director of the Company holds such position until the next annual
meeting of shareholders and until his or her successor is duly elected and
qualified. The officers hold office until the first meeting of the Board of
Directors following the annual meeting of shareholders and until their
successors are chosen and qualified, subject to earlier removal by the Board of
Directors.
The non-employee directors of the Company receive compensation in the
form of options to purchase shares of the Company's Common Stock. The two
non-employee directors of the Company were a granted total of 35,000 stock
options in 1999 at exercise prices per share equal to the fair market value of
the Common Stock on the dates of the grant. As long as they continue to serve as
a director, they will receive additional grants at the then fair market price of
5,000 options at the end of each quarter and 2,000 options upon each anniversary
of their appointment to the Board of Directors.
Effective January 1, 1998, the Company entered into a consulting
agreement with Jay M. Haft, a director of the Company, pursuant to which Mr.
Haft is assisting the Company in developing, studying and evaluating
capital-raising and proposals to expand the Company's business, including
through mergers and acquisitions. The agreement is for a six-month term that
automatically renews for additional terms unless terminated by the Company or
Mr. Haft at least 15 days prior to the end of the then-current term. As
compensation for his services under the agreement, the Company granted to Mr.
Haft five-year options to purchase 66,000 shares of the Company's Common Stock
at a price of $2.00 per share. The options vest as follows: 5,000 upon execution
of the consulting agreement, 5,000 at the end of the initial six-month term, and
14,000 at the end of every six-month period thereafter until all of the options
are vested and exercisable. Any unvested options will be cancelled if the
consulting agreement is terminated by either party.
JES/Comm, Inc. ("JES"), of which Mr. Rothchild is president, provides
the Company general advertising services. The Company does not have a written
agreement with JES but rather obtains its services on an individual project
basis. JES bills each individual project based on its standard rates. In fiscal
1999, the Company paid a total of $16,817 for the advertising services rendered
by JES.
THE BOARD RECOMMENDS A VOTE IN FAVOR OF THE PERSONS NOMINATED FOR
ELECTION TO THE BOARD OF DIRECTORS.
MEETINGS AND COMMITTEES
During the year ended December 26, 1999, the Board of Directors held
two formal meetings and acted by unanimous written consent on one occasion.
The Board of Directors has an Audit Committee, whose members are Howard
L. Rothchild, Jay M. Haft and Stephen L. Wiley, and a Compensation Committee,
whose members are Marc Douglas, Howard L. Rothchild and Jay M. Haft. The Audit
Committee is responsible for recommending auditors to be engaged by the Company,
assisting with the planning of the audit, reviewing the results from the audit,
and directing and supervising investigations into matters relating to the audit.
The Audit Committee was formed in 1998, but did not hold any formal meetings
during 1999. The Compensation Committee, which was also formed in 1998, reviews
and approves the compensation of the Company's executive officers and
administers the Plan. The Compensation Committee acted by unanimous written
consent on two occasions during 1999.
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During 1999, no director attended or participated in fewer than 75% of
the meetings and actions of the Board and any committee on which such director
served.
During 1999, there was no nominating committee or other similar
committee of the Board of Directors. Rather, such functions were performed by
the Board of Directors as a whole.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth the
aggregate compensation paid in 1999, 1998 and 1997 to the Company's Chief
Executive Officer, Vice President and Chief Financial Officer (the "Named
Executive Officers") for services rendered to the Company during 1999, 1998 and
1997. No other executive officer of the Company earned total cash salary and
bonus in excess of $100,000 during the fiscal years ended December 26, 1999,
December 27, 1998 and December 31, 1997.
Long-Term
Compensation
-------------------
Annual Compensation Awards
------------------------------------------------- -------------------
Name and Principal Other Annual Shares Underlying
Position Year Salary ($) Bonus ($) Compensation ($) Options (#)
---------------------------- --------- ----------- ----------- ------------------ -------------------
1999 380,666 92,241 124,570(1) --
Marc Douglas 1998 346,060 88,646 111,132(1) 105,000(3)
Chief Executive Officer 1997 314,050 75,627 101,491(1)
and President --
Ileen Little 1999 139,600 7,000 (2) 20,000
Vice President and 1998 139,600 -- (2) 23,000(3)
Secretary 1997 129,000 -- (2) 150,000
Stephen Wiley 1999 137,500 -- (2) 5,000
Chief Financial Officer 1998 137,500 -- (2) 3,750(3)
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(1) Includes advances amortized into operations as compensation, car allowance
and life insurance payments.
(2) Perquisites and other personal benefits paid to the Named Executive
Officers for the periods indicated did not exceed 10% of the total of
annual salary and bonus reported.
(3) Reflects the 30% portion of options granted in 1998 that vested as of
December 26, 1999 as a result of the Company's achieving one of three
performance criteria. The remaining 70% of the options granted in 1998 did
not vest and have been cancelled because the Company did not meet the other
two performance criteria.
EXECUTIVE EMPLOYMENT AGREEMENTS. Effective as of June 1, 1996, the
Company entered into an employment agreement with Marc Douglas, its Chief
Executive Officer and President for a term of 60 months. At the end of each
12-month period of the term of the employment agreement, the term automatically
extends for one additional 12-month period unless the Company or Mr. Douglas
gives written notice to the other party of the intent not to renew at least 90
days prior to the end of each 12-month period. The employment agreement provides
for a base salary, subject to 10% annual automatic cost-of living increases, an
annual bonus in an amount equal to 1% of the Company's annual gross revenues
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subsequent to the date of the agreement, and an automobile allowance of $1,500
per month. The employment agreement generally provides that Mr. Douglas will
continue to receive his salary until the expiration of the term of the
employment agreement if terminated by the Company for any reason other than
death, disability or cause (as defined in the employment agreement), or for a
period of 12 months after termination of the employment agreement as a result of
his disability, and that Mr. Douglas' estate will receive a lump sum payment
equal to one year's salary plus a pro rata portion of any bonus to which he is
entitled upon termination of the employment agreement by reason of his death.
The employment agreement also prohibits Mr. Douglas from directly or indirectly
competing with the Company for one year after termination of his employment
agreement for any reason other than the Company's termination of his employment
without cause. If a change of control (as defined in the employment agreement)
occurs, the employment agreement provides for the continued employment of Mr.
Douglas until the later of three years following the change of control or the
then-scheduled expiration date of the term of employment. The term "change of
control," as defined in the employment agreement, generally means (i) any
person's or group's acquisition of 20% or more of the combined voting power of
the Company's outstanding securities, or (ii) in the event of any cash tender or
exchange offer, merger or other business combination, sale of assets or
contested election, the persons who were directors of the Company prior to such
transaction cease to constitute a majority of the Board of Directors following
the transaction. In addition, following a change of control, if Mr. Douglas'
employment is terminated by the Company other than for cause or by reason of his
death or disability, or for certain specified reasons (such as a representation
or diminution of duties), Mr. Douglas will receive a lump sum cash payment equal
to the greater of three times the aggregate compensation paid to him during the
preceding year or the remaining salary, plus any applicable bonus, payable to
him for the remaining term of the agreement.
STOCK OPTION PLAN. The Company has adopted the Plan, under which
options to acquire up to 2,200,000 shares of Common Stock may be granted,
subject to shareholder approval of the proposal set forth in this Proxy
Statement. The Plan is designed to serve as an incentive for retaining qualified
and competent employees, directors, consultants and independent contractors of
the Company. Please see "Proposal Two: Amendment of Stock Option Plan" for a
description of the terms and conditions of the Plan and the Options granted
thereunder.
OPTION GRANTS IN LAST FISCAL YEAR. The following table sets forth
information concerning individual grants of stock options made during the fiscal
year ended December 26, 1999 to the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
----------------------------------------------------------------------------------------
NUMBER OF
SHARES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OF
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE
- ----- ----------------- ----------------------- -------------------- ---------------
Ileen Little 20,000 23.4% $4.00 2009
Stephen L. Wiley 5,000 5.8% $4.00 2009
STOCK OPTIONS HELD AT END OF 1999. The following table indicates the
total number and value of exercisable and unexercisable stock options held by
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the Company's Named Executive Officers as of December 26, 1999. No options were
exercised by the Named Executive Officers during 1999.
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END(1)
---------------------------------------- --------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----- ----------------- ------------------ ---------------- -----------------------
Marc Douglas 580,000(2)(3) 225,000(2) $393,750 --
Ileen Little 33,000(3) 10,000 $ 76,250 $ 10,000
Stephen L. Wiley 31,250(3) 2,500 $ 63,438 $ 2,500
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(1) Based on a closing price on December 26, 1999 of $5.00 per share.
(2) Represents the vested portion of 700,000 options granted to Marc
Douglas in 1996 under the Plan. Of the total amount granted, 125,000 of
such options vested upon the opening of the Company's first thrift
store following the Company's initial public offering and 125,000
vested in 1999 when such first new thrift store operated profitably for
one year. Similarly, 125,000 and 100,000 of such options vested upon
the opening of each of the next two thrift stores, respectively, and
125,000 and 100,000 will vest when such two thrift stores,
respectively, operate profitably for one year.
(3) Reflects the 30% portion of options granted in 1998 that vested as of
December 26, 1999 as a result of the Company's achieving one of three
performance criteria. The remaining 70% of the options granted did not
vest and have been cancelled because the Company did not meet the other
two performance criteria.
CERTAIN TRANSACTIONS
DEFERRED COMPENSATION AGREEMENT
In March 1995, a subsidiary of the Company entered into a deferred
compensation agreement with Ileen Little, a director and executive officer of
the Company. Pursuant to such agreement, Ms. Little would have been entitled to
receive 5% of the gross proceeds from the liquidation of the Company or any of
its subsidiaries, payable in two equal annual installments following such
liquidation. Effective March 31, 1998, Ms. Little agreed to the termination of
this deferred compensation agreement.
LOANS TO/FROM MARC DOUGLAS
The Company had previously advanced Mr. Douglas monies on an
interest-free basis. On December 27, 1998, the balance of such advance was
$63,156. Mr. Douglas and the Company have agreed that the advances to Mr.
Douglas will be taken into income by Mr. Douglas and amortized into income as
compensation by the Company over a three-year period through December 1999.
In January 1998, the Company's Board of Directors approved the
prepayment of up to $130,000 of the 1998 salary and bonus of Mr. Douglas,
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subject to his payment of interest on the amount prepaid at the annual rate of
8.5%. As of December 27, 1998, the prepaid salary and bonus totaled $15,266.
In January 1999, the Company's Board of Directors approved the
prepayment of $155,266 of salary and bonus to Mr. Douglas, subject to the
payment of interest at a rate of 8.0% per annum. The outstanding prepaid salary
and bonus from 1998 was incorporated into the new agreement. As of December 26,
1999, the prepaid salary and bonus was $63,025.
CONSULTING AGREEMENT
See "Directors and Executive Officers" for a description of the
consulting agreement between the Company and Jay M. Haft, a director of the
Company.
APPROVAL OF AFFILIATED TRANSACTIONS
The Company believes that the transactions described above were on
terms no less favorable than those that could be obtained from unaffiliated
third parties. All such proposed transactions with affiliated parties are
presented to the Company's Board of Directors for approval by a majority of the
independent, disinterested directors of the Company. Any Board member who has an
interest in such transactions abstains from voting thereon.
PROPOSAL TWO: AMENDMENT OF
STOCK OPTION PLAN
The Board of Directors has approved amendments to the Plan, subject to
shareholder approval, to increase the number of shares of Common Stock reserved
for issuance thereunder from a total of 1,000,000 shares to a total of 2,200,000
shares and to make certain other changes to the Plan based on changes in
applicable laws since the Plan's initial adoption and to clarify certain
existing provisions, as described below.
PLAN DESCRIPTION
The statements in this Proxy Statement concerning the terms and
provisions of the Plan are summaries only and do not purport to be complete. All
such statements are qualified in their entirety by reference to the full text of
the Plan as proposed to be amended, a copy of which is set forth in Appendix A
hereto.
The purpose of the Plan is to advance the interests of the Company by
providing an additional incentive to attract and retain qualified and competent
persons to serve as employees of or consultants to the Company, upon whose
efforts and judgment the success of the Company is largely dependent, and to
encourage stock ownership in the Company by such persons. The Plan was effective
as of May 4, 1996, and, unless sooner terminated by the Board of Directors of
the Company in accordance with the terms thereof, shall terminate on May 4,
2006.
The Plan is administered by the Compensation Committee of the Board of
Directors, which has the right to determine, among other things, the persons to
whom options are granted, the number of shares of Common Stock subject to
options, the exercise price of options and the other terms and conditions
thereof.
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The Plan provides for the issuance of incentive stock options
("Incentive Stock Options") and nonqualified stock options ("Nonqualified Stock
Options"). An Incentive Stock Option is an option to purchase Common Stock that
meets the definition of "incentive stock option" set forth in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). A Nonqualified Stock
Option is an option to purchase Common Stock that meets certain requirements in
the Plan but does not meet the definition of an "incentive stock option" set
forth in Section 422 of the Code.
The number of shares of Common Stock that may be issued pursuant to
options granted under the Plan is currently 1,000,000, and if the proposed
amendments are approved by the shareholders, the number of shares available for
issuance pursuant to options granted under the Plan will be increased to
2,200,000. If any option granted pursuant to the Plan terminates, expires, or is
canceled or surrendered, in whole or in part, shares subject to the unexercised
portion may again be issued pursuant to the exercise of options granted under
the Plan. The shares to be issued upon exercise of options granted under the
Plan will be from the authorized but unissued shares of Common Stock of the
Company. The Company's shareholders do not have any preemptive rights to
purchase or subscribe for the shares reserved for issuance under the Plan.
All employees of the Company, including officers and directors and
consultants to the Company, are eligible to receive grants of options under the
Plan; however, no Incentive Stock Option may be granted to a consultant who is
not also an employee of the Company or any of its subsidiaries. Upon receiving
grants of options, each holder of an option (an "Optionee") must enter into an
option agreement with the Company that contains the appropriate terms and
conditions as determined by the Committee.
TERMS AND CONDITIONS OF OPTIONS
OPTION PRICE. For any option granted under the Plan, the option price
per share of Common Stock is determined by the Compensation Committee but may
not be less than par value; furthermore, the option price per share of any
Incentive Stock Option may not be less than the "Fair Market Value" (as defined
in the Plan) of the Common Stock on the date such Incentive Stock Option is
granted. As of the Record Date, the fair market value of the Company's Common
Stock was $2.00 per share.
EXERCISE OF OPTIONS. Each option is exercisable in such amounts, at
such intervals and upon such terms as the Compensation Committee may determine.
In no event may an option be exercisable after 10 years from the date of grant.
The proposed amendments to the Plan clarify that option agreements may provide
for "cashless" exercise of options. Unless otherwise provided in an option, each
outstanding option granted under the Plan shall become immediately exercisable
in full (i) if there occurs any transaction (which shall include a series of
transactions occurring within 60 days or occurring pursuant to a plan), that has
the result that shareholders of the Company immediately before such transaction
cease to own at least 51% of the voting stock of the Company or of any entity
that results from the participation of the Company in a reorganization,
consolidation, merger, liquidation or any other form of corporate transaction;
(ii) if the shareholders of the Company
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shall approve a plan of merger, consolidation, reorganization, liquidation or
dissolution in which the Company does not survive (unless such plan is
subsequently abandoned); or (iii) if the shareholders of the Company shall
approve a plan for the sale, lease, exchange or other disposition of all or
substantially all the property and assets of the Company (unless such plan is
subsequently abandoned). The Compensation Committee may in its sole discretion
accelerate the date on which any option may be exercised and may accelerate the
vesting of any shares subject to any option or previously acquired by the
exercise of any option.
NONTRANSFERABILITY. Options granted under the Plan are not transferable
by an Optionee other than by will or the laws of descent and distribution, and
options are exercisable during an Optionee's lifetime only by the Optionee. The
Plan as proposed to be amended would allow Optionees to transfer Options granted
under the Plan by gift to certain specified family members and as part of a
marital property settlement during their lifetime.
TERMINATION OF OPTIONS. The expiration date of an option is determined
by the Compensation Committee at the time of the grant and is set forth in the
applicable stock option agreement. In no event may an option be exercisable
after 10 years from the date it is granted.
The Plan provides that if an Optionee's employment is terminated, or,
in the case of a consultant, if the consultant ceases his or her relationship
with the Company, for any reason other than for "Cause," mental or physical
disability or death, then the unexercised portion of the Optionee's options
shall terminate three months after the such termination. "Cause" is defined
under the Plan as termination of the Optionee's employment, or in the case of a
consultant, the removal of the Optionee as a consultant, by reason of the
Optionee's willful misconduct or gross negligence. If an Optionee's employment
is terminated or the consultant is removed for Cause, the unexercised portion of
the Optionee's options shall terminate immediately upon such termination. If an
Optionee's employment is terminated or the consultant is removed by reason of
the Optionee's mental or physical disability, the unexercised portion of the
Optionee's options shall terminate six months after such termination. If an
Optionee's employment is terminated or the consultant is removed by reason of
the Optionee's death, the unexercised portion of the Optionee's options shall
terminate 12 months after the Optionee's death.
The Compensation Committee in its sole discretion may by giving written
notice cancel, effective upon the date of the consummation of certain corporate
transactions that would result in an option becoming fully exercisable, any
option that remains unexercised on such date. Such notice shall be given a
reasonable period of time prior to the proposed date of such cancellation and
may be given either before or after shareholder approval of such corporate
transaction.
OUTSTANDING OPTIONS
As of the Record Date, options exercisable for a total of 1,395,567
shares of Common Stock had been granted pursuant to the Plan, of which 36,510
had been exercised. Outstanding options, which are held by 31 persons, are
exercisable at prices ranging from $1.25 to $5.625 per share and expire on
various dates from December 2002 through September 2009.
The following table sets forth the number of options under the Plan
received or to be received by: (i) the Named Executive Officers; (ii) all
current executive officers as a group; (iii) all current directors who are not
executive officers as a group; (iv) each nominee for election as a director; (v)
each associate of any such director, executive officer or nominee; (vi) each
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other person who received or is to receive 5% of such options; and (vii) all
employees, including all current officers who are not executive officers, as a
group:
Dollar Number of
Optionee Value($)(1) Options Held
----------- ----------------------- -----------------------
Marc Douglas, Chief Executive Officer and
President......................................................... $1,610,000 805,000
Ileen Little, Vice President and Secretary............................. 86,000 43,000
Stephen L. Wiley, Chief Financial Officer.............................. 67,500 33,750
All current executive officers as a group
(three persons)................................................... 1,763,500 881,750
All current directors who are not executive
officers as a group (two persons)................................. 350,000 175,000
All employees, including all current officers
who are not executive officers, as a group........................ 667,634 338,817
- ------------
(1) Based on a fair market value of the Common Stock of $2.00 per share as on
May 3, 2000.
The Plan is not qualified under the provisions of Section 401(a) of the
Code, nor is it subject to any of the provisions of the Employee Retirement
Income Security Act of 1974, as amended.
FEDERAL INCOME TAX EFFECTS OF OPTIONS GRANTED UNDER THE PLAN
INCENTIVE STOCK OPTIONS. Incentive Stock Options granted under the Plan
are "incentive stock options" as defined in Section 422 of the Internal Revenue
Code. Under the Code, an Optionee generally is not subject to ordinary income
tax upon the grant or exercise of an Incentive Stock option. However, an
employee who exercises an Incentive Stock Option by delivering shares of Common
Stock previously acquired pursuant to the exercise of an Incentive Stock Option
is treated as making a Disqualifying Disposition (defined below) of such shares
if the employee delivers such shares before the expiration of the holding period
applicable to such shares. The applicable holding period is the longer of two
years from the date of grant or one year from the date of exercise. The effect
of this provision is to prevent "pyramiding" the exercises of an Incentive Stock
Option (i.e., the exercise of the Incentive Stock Option for one share and the
use of that share to make successive exercises of the Incentive Stock Option
until it is completely exercised) without the imposition of current income tax.
The amount by which the fair market value of the shares acquired at the
time of exercise of an Incentive Stock Option exceeds the purchase price of the
shares under such option will be treated as an item of adjustment included in
the Optionee's alternative minimum taxable income for purposes of the
alternative minimum tax. If, however, there is a Disqualifying Disposition in
the year in which the option is exercised, the maximum amount of the item of
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adjustment for such year is the gain on the disposition of the Common Stock. If
there is Disqualifying Disposition in a year other than the year of exercise,
the dispositions will not result in an item of adjustment for such other year.
If, subsequent to the exercise of an Incentive Stock Option (whether
paid for in cash or in shares), the Optionee holds the shares received upon
exercise for a period that exceeds (a) two years from the date such Incentive
Stock Option was granted or, if later, (b) one year from the date of exercise
(the "Required Holding Period"), the difference (if any) between the amount
realized from the sale of such shares and their tax basis to the holder will be
taxed as long-term capital gain or loss. If the holder is subject to the
alternative minimum tax in the year of disposition, such holder's tax basis in
his or her shares will be increased for purposes of determining his or her
alternative minimum tax for such year, by the amount of the item of adjustment
recognized with respect to such shares in the year the option was exercised.
In general, if, after exercising an Incentive Stock Option, an employee
disposes of the shares so acquired before the end of the Required Holding Period
(a "Disqualifying Disposition"), such Optionee would be deemed in receipt of
ordinary income in the year of the Disqualifying Disposition, in an amount equal
to the excess of the fair market value of the shares at the date the Incentive
Stock Option was exercised over the exercise price. If the Disqualifying
Disposition is a sale or exchange that would permit a loss to be recognized
under the Code (were a loss in fact to be sustained), and the sales proceeds are
less than the fair market value of the shares on the date of exercise, the
Optionee's ordinary income would be limited to the gain (if any) from the sale.
If the amount realized upon disposition exceeds the fair market value of the
shares on the date of exercise, the excess would be treated as short-term or
long-term capital gain, depending on whether the holding period for such shares
exceeded one year.
An income tax deduction is not allowed to the Company with respect to
the grant or exercise of an Incentive Stock Option or the disposition, after the
Required Holding Period, of shares acquired upon exercise. In the event of a
Disqualifying Disposition, a federal income tax deduction will be allowed to the
Company in an amount equal to the ordinary income to be recognized by the
Optionee, provided that such amount constitutes an ordinary and necessary
business expense to the Company and is reasonable, and the Company satisfies its
withholding obligation with respect to such income.
NONQUALIFIED STOCK OPTIONS. An Optionee granted a Nonqualified Stock
Option under the Plan will generally recognize, at the date of exercise of such
Nonqualified Stock Option, ordinary income equal to the difference between the
exercise price and the fair market value of the shares of Common Stock subject
to the Nonqualified Stock Option. This taxable ordinary income will be subject
to federal income tax withholding. A federal income tax deduction will be
allowed to the Company in an amount equal to the ordinary income to be
recognized by the Optionee, provided that such amount constitutes an ordinary
and necessary business expense to the Company and is reasonable, and the Company
satisfies its withholding obligation with respect to such income.
If an Optionee exercises a Nonqualified Stock Option by delivering
other shares, the Optionee will not recognize gain or loss with respect to the
exchange of such shares, even if their then fair market value is different from
the Optionee's tax basis. The Optionee, however, will be taxed as described
above with respect to the exercise of the Nonqualified Stock Option as if he or
she had paid the exercise price in cash, and the Company likewise generally will
be entitled to an equivalent tax deduction. Provided a separate identifiable
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stock certificate is issued therefor, the Optionee's tax basis in that number of
shares received on such exercise that is equal to the number of shares
surrendered on such exercise will be equal to his or her tax basis in the shares
surrendered, and his or her holding period for such number of shares received
will include the holding period for the shares surrendered. The Optionee's tax
basis and holding period for the additional shares received on exercise of a
Nonqualified Stock Option paid for, in whole or in part, with shares will be the
same as if the Optionee had exercised the Nonqualified Stock Option solely for
cash.
The deductibility by the Company of compensation expense in excess of
$1,000,000 to certain executive officers is prohibited by Section 162(m) of the
Code. The amount otherwise deductible by the Company upon the exercise of a
Nonqualified Stock Option or upon a Disqualifying Disposition of an Incentive
Stock Option may be counted against such $1,000,000 limit.
The discussion set forth above does not purport to be a complete
analysis of the potential tax consequences relevant to the Optionees or to the
Company, or to describe tax consequences based on particular circumstances. It
is based on federal income tax law and interpretational authorities as of the
date of this Proxy Statement, which are subject to change at any time.
THE BOARD RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
PROPOSAL THREE: RATIFICATION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Berkowitz Dick Pollack & Brant LLP, independent public
accountants, served as the Company's independent public accountants for the
fiscal year ended December 26, 1999. The Board of Directors has appointed the
firm of Berkowitz Dick Pollack & Brant LLP be appointed to serve as independent
auditors of the Company for the 2000 fiscal year and recommends ratification of
such appointment. One or more representatives of Berkowitz Dick Pollack & Brant
LLP are expected to be present at the Annual Meeting, will have the opportunity
to make a statement if they desire to do so, and are expected to be available to
respond to appropriate questions from shareholders.
THE BOARD RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
OTHER MATTERS
The Board of Directors is not aware of any other business that may come
before the Annual Meeting. If additional matters properly come before the Annual
Meeting, however, the persons named in the accompanying proxy will vote proxies
as in their discretion they may deem appropriate, unless they are directed by a
proxy to do otherwise.
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SHAREHOLDER PROPOSALS
Shareholder proposals that are to be considered for inclusion in the
proxy materials of the Company for its 2001 Annual Meeting of Shareholders must
be received by the Company in writing by January 8, 2001. Such proposals must
comply with the requirements as to the form and substance established by
applicable law and regulations in order to be included in the Proxy statement.
Shareholder proposals intended to be presented at, but not included in
the Company's proxy materials for, that meeting must be received by the Company
no later than April 3, 2001, at its principal executive offices; otherwise, such
proposals will be subject to the grant of discretionary authority to vote on
them contained in the Company's form of proxy.
ADDITIONAL INFORMATION
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 26, 1999 is being provided to shareholders with this Proxy Statement.
Kindly date, sign and return the enclosed proxy card.
By Order of the Board of Directors
Ileen Little
Secretary
May 18, 2000
Hallandale, Florida
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APPENDIX A
THRIFT MANAGEMENT, INC.
1996 STOCK OPTION PLAN
(As proposed to be amended June 1, 2000)
1. PURPOSE. The purpose of this Plan is to advance the interests
of THRIFT MANAGEMENT, INC., a Florida corporation (the "Company"), by providing
an additional incentive to attract, retain and motivate highly qualified and
competent persons who are key to the Company, including key employees,
consultants, independent contractors, Officers and Directors, and upon whose
efforts and judgment the success of the Company and its Subsidiaries is largely
dependent, by authorizing the grant of options to purchase Common Stock of the
Company to persons who are eligible to participate hereunder, thereby
encouraging stock ownership in the Company by such persons, all upon and subject
to the terms and conditions of this Plan.
2. DEFINITIONS. As used herein, the following terms shall have
the meanings indicated:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Cause" shall mean any of the following:
(i) a determination by the Company that there
has been a willful, reckless or grossly negligent failure by the Optionee to
perform his or her duties as an employee of the Company;
(ii) a determination by the Company that there
has been a willful breach by the Optionee of any of the material terms or
provisions of any employment agreement between such Optionee and the Company;
(iii) any conduct by the Optionee that either
results in his or her conviction of a felony under the laws of the United States
of America or any state thereof, or of an equivalent crime under the laws of any
other jurisdiction;
(iv) a determination by the Company that the
Optionee has committed an act or acts involving fraud, embezzlement,
misappropriation, theft, breach of fiduciary duty or material dishonesty against
the Company, its properties or personnel;
(v) any act by the Optionee that the Company
determines to be in willful or wanton disregard of the Company's best interests,
or which results, or is intended to result, directly or indirectly, in improper
gain or personal enrichment of the Optionee at the expense of the Company;
(vi) a determination by the Company that there
has been a willful, reckless or grossly negligent failure by the Optionee to
comply with any rules, regulations, policies or procedures of the Company, or
that the Optionee has engaged in any act, behavior or conduct demonstrating a
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deliberate and material violation or disregard of standards of behavior that the
Company has a right to expect of its employees; or
(vii) if the Optionee, while employed by the
Company and for two years thereafter, violates a confidentiality and/or
noncompete agreement with the Company, or fails to safeguard, divulges,
communicates, uses to the detriment of the Company or for the benefit of any
person or persons, or misuses in any way, any Confidential Information;
provided, however, that, if the Optionee has entered into a written employment
agreement with the Company which remains effective and which expressly provides
for a termination of such Optionee's employment for "cause," the term "Cause" as
used herein shall have the meaning as set forth in the Optionee's employment
agreement in lieu of the definition of "Cause" set forth in this Section 2(b).
(c) "Change of Control" shall mean the acquisition by any
person or group (as that term is defined in the Securities Exchange Act of 1934
(the "Exchange Act"), and the rules promulgated pursuant to that act) in a
single transaction or a series of transactions of 30% or more in voting power of
the outstanding stock of the Company and a change of the composition of the
Board of Directors so that, within two years after the acquisition took place, a
majority of the members of the Board of Directors of the Company, or of any
corporation with which the Company may be consolidated or merged, are persons
who were not directors or officers of the Company or one of its Subsidiaries
immediately prior to the acquisition, or to the first of a series of
transactions which resulted in the acquisition of 30% or more in voting power of
the outstanding stock of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(e) "Committee" shall mean the stock option committee
appointed by the Board or, if not appointed, the Board.
(f) "Common Stock" shall mean the Company's Common Stock,
par value $.01 per share.
(g) "Confidential Information" shall mean any and all
information pertaining to the Company's financial condition, clients, customers,
prospects, sources of prospects, customer lists, trademarks, trade names,
service marks, service names, "know-how," trade secrets, products, services,
details of client or consulting contracts, management agreements, pricing
policies, operational methods, site selection, results of operations, costs and
methods of doing business, owners and ownership structure, marketing practices,
marketing plans or strategies, product development techniques or plans,
procurement and sales activities, promotion and pricing techniques, credit and
financial data concerning customers and business acquisition plans, that is not
generally available to the public.
(h) "Director" shall mean a member of the Board.
(i) "Employee" shall mean any person, including officers,
directors, consultants and independent contractors employed by the Company or
any parent or Subsidiary of the Company within the meaning of Section 3401(c) of
the Code or the regulations promulgated thereunder.
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(j) "Fair Market Value" of a Share on any date of
reference shall be the Closing Price of a share of Common Stock on the business
day immediately preceding such date, unless the Committee in its sole discretion
shall determine otherwise in a fair and uniform manner. For this purpose, the
"Closing Price" of the Common Stock on any business day shall be (i) if the
Common Stock is listed or admitted for trading on any United States national
securities exchange, or if actual transactions are otherwise reported on a
consolidated transaction reporting system, the last reported sale price of the
Common Stock on such exchange or reporting system, as reported in any newspaper
of general circulation, (ii) if the Common Stock is quoted on the National
Association of Securities Dealers Automated Quotation System ("Nasdaq"), or any
similar system of automated dissemination of quotations of securities prices in
common use, the mean between the closing high bid and low asked quotations for
such day of the Common Stock on such system, or (iii) if neither clause (i) nor
(ii) is applicable, the mean between the high bid and low asked quotations for
the Common Stock as reported by the National Quotation Bureau, Incorporated if
at least two securities dealers have inserted both bid and asked quotations for
the Common Stock on at least five of the 10 preceding days. If the information
set forth in clauses (i) through (iii) above is unavailable or inapplicable to
the Company (E.G., if the Company's Common Stock is not then publicly traded or
quoted), then the "Fair Market Value" of a Share shall be the fair market value
(I.E., the price at which a willing seller would sell a Share to a willing buyer
when neither is acting under compulsion and when both have reasonable knowledge
of all relevant facts) of a share of the Common Stock on the business day
immediately preceding such date as the Committee in its sole and absolute
discretion shall determine in a fair and uniform manner.
(k) "Family Member" shall mean any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the Employee's household (other than a tenant or Employee), a trust in
which these persons have more than 50% of the beneficial interest, a foundation
in which these persons (or the Employee) control the management of assets, and
any other entity in which these persons (or the Employee) own more than 50% of
the voting interests.
(l) "Incentive Stock Option" shall mean an incentive
stock option as defined in Section 422 of the Code.
(m) "Non-Employee Directors" shall have the meaning set
forth in Rule 16b-3(b)(3)(i) under the Securities Exchange Act.
(n) "Non-Statutory Stock Option" or "Nonqualified Stock
Option" shall mean an Option which is not an Incentive Stock Option.
(o) "Officer" shall mean the Company's chairman,
president, principal financial officer, principal accounting officer (or, if
there is no such accounting officer, the controller), any vice-president of the
Company in charge of a principal business unit, division or function (such as
sales, administration or finance), any other officer who performs a
policy-making function, or any other person who performs similar policy-making
functions for the Company. Officers of Subsidiaries shall be deemed Officers of
the Company if they perform such policy-making functions for the Company. As
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used in this paragraph, the phrase "policy-making function" does not include
policy-making functions that are not significant. Unless specified otherwise in
a resolution by the Board, an "executive officer" pursuant to Item 401(b) of
Regulation S-K (17 C.F.R. ss.229.401(b)) shall be only such person designated as
an "Officer" pursuant to the foregoing provisions of this paragraph.
(p) "Option" (when capitalized) shall mean any stock
option granted under this Plan.
(q) "Optionee" shall mean a person to whom an Option is
granted under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.
(r) "Plan" shall mean this 1996 Stock Option Plan of the
Company, as effective on May 31, 1996, and as thereafter amended, upon approval
by the Board and shareholders of the Company.
(s) "Securities Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(t) "Share" or "Shares" shall mean a share or shares, as
the case may be, of the Common Stock, as adjusted in accordance with Section 10
of this Plan.
(u) "Subsidiary" shall mean any corporation (other than
the Company) in any unbroken chain of corporations beginning with the Company
if, at the time of the granting of the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
3. SHARES AND OPTIONS. Subject to adjustment in accordance with
Section 10 hereof, the Company may grant to Optionees from time to time Options
to purchase an aggregate of up to Two Million, Two Hundred Thousand (2,200,000)
from Shares held in the Company's treasury or from authorized and unissued
Shares. If any Option granted under this Plan shall terminate, expire, or be
canceled, forfeited or surrendered as to any Shares, the Shares relating to such
lapsed Option shall be available for issuance pursuant to new Options
subsequently granted under this Plan. Upon the grant of any Option hereunder,
the authorized and unissued Shares to which such Option relates shall be
reserved for issuance to permit exercise under this Plan. Subject to the
provisions of Section 14 hereof, an Option granted hereunder shall be either an
Incentive Stock Option or a Non-Statutory Stock Option as determined by the
Committee at the time of grant of such Option and shall clearly state whether it
is an Incentive Stock Option or Non-Statutory Stock Option. All Incentive Stock
Options shall be granted within 10 years from the effective date of this Plan.
4. LIMITATIONS. Options otherwise qualifying as Incentive Stock
Options hereunder will not be treated as Incentive Stock Options to the extent
that the aggregate Fair Market Value (determined at the time the Option is
granted) of the Shares, with respect to which Options meeting the requirements
of Code Section 422(b) are exercisable for the first time by any individual
during any calendar year (under all stock option or similar plans of the Company
and any Subsidiary), exceeds $100,000.
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5. CONDITIONS FOR GRANT OF OPTIONS.
(a) Each Option shall be evidenced by an option agreement
that may contain any term deemed necessary or desirable by the Committee,
provided such terms are not inconsistent with this Plan or any applicable law.
Optionees shall be those persons selected by the Committee from the class of all
regular Employees of the Company or its Subsidiaries, including Directors and
Officers who are regular or former regular employees of the Company, as well as
consultants to the Company. Any person who files with the Committee, in a form
satisfactory to the Committee, a written waiver of eligibility to receive any
Option under this Plan shall not be eligible to receive any Option under this
Plan for the duration of such waiver.
(b) In granting Options, the Committee shall take into
consideration the contribution the person has made, or is expected to make, to
the success of the Company or its Subsidiaries and such other factors as the
Committee shall determine. The Committee shall also have the authority to
consult with and receive recommendations from Officers and other personnel of
the Company and its Subsidiaries with regard to these matters. The Committee may
from time to time in granting Options under this Plan prescribe such terms and
conditions concerning such Options as it deems appropriate, including, without
limitation, (i) the exercise price or prices of the Option or any installments
thereof, (ii) prescribing the date or dates on which the Option becomes and/or
remains exercisable, (iii) providing that the Option vests or becomes
exercisable in installments over a period of time, and/or upon the attainment of
certain stated standards, specifications or goals, (iv) relating an Option to
the continued employment of the Optionee for a specified period of time, or (v)
conditions or termination events with respect to the exercisability of any
Option, provided that such terms and conditions are not more favorable to an
Optionee than those expressly permitted herein; provided, however, that to the
extent not cancelled pursuant to Section 9(b) hereof, upon a Change in Control,
any Options that have not yet vested shall vest upon such Change in Control.
(c) The Options granted to employees under this Plan
shall be in addition to regular salaries, pension, life insurance or other
benefits related to their employment with the Company or its Subsidiaries.
Neither this Plan nor any Option granted under this Plan shall confer upon any
person any right to employment or continuance of employment (or related salary
and benefits) by the Company or its Subsidiaries.
6. EXERCISE PRICE. The exercise price per Share of any Option
shall be any price determined by the Committee but shall not be less than the
par value per Share; provided, however, that in no event shall the exercise
price per Share of any Incentive Stock Option be less than the Fair Market Value
of the Shares underlying such Option on the date such Option is granted and, in
the case of an Incentive Stock Option granted to a 10% shareholder, the per
Share exercise price will not be less than 110% of the Fair Market Value in
accordance with Section 14 of this Plan. Re-granted Options, or Options which
are canceled and then re-granted covering such canceled Options, will, for
purposes of this Section 6, be deemed to have been granted on the date of the
re-granting.
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7. EXERCISE OF OPTIONS.
(a) An Option shall be deemed exercised when (i) the
Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, (iii) the Optionee has
agreed to be bound by the terms, provisions and conditions of any applicable
shareholders' agreement, and (iv) arrangements that are satisfactory to the
Committee in its sole discretion have been made for the Optionee's payment to
the Company of the amount that is necessary for the Company or the Subsidiary
employing the Optionee to withhold in accordance with applicable federal or
state tax withholding requirements. Unless further limited by the Committee in
any Option, the exercise price of any Shares purchased pursuant to the exercise
of such Option shall be paid in cash, by certified or official bank check, by
money order, with Shares or by a combination of the above; provided, however,
that the Committee in its sole discretion may accept a personal check in full or
partial payment of any Shares. If the exercise price is paid in whole or in part
with Shares, the value of the Shares surrendered shall be their Fair Market
Value on the date the Option is exercised. The Company in its sole discretion
may, on an individual basis or pursuant to a general program established by the
Committee in connection with this Plan, lend money to an Optionee to exercise
all or a portion of the Option granted hereunder. If the exercise price is paid
in whole or part with the Optionee's promissory note, such note shall (i)
provide for full recourse to the maker, (ii) be collateralized by the pledge of
the Shares that the Optionee purchases upon exercise of such Option, (iii) bear
interest at a rate no less than the rate of interest payable by the Company to
its principal lender, and (iv) contain such other terms as the Committee in its
sole discretion shall require. Additionally, any Option may be exercised
pursuant to a "cashless" or "net issue" exercise provision set forth therein.
(b) No Optionee shall be deemed to be a holder of any
Shares subject to an Option unless and until a stock certificate or certificates
for such Shares are issued to such person(s) under the terms of this Plan. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
expressly provided in Section 10 hereof.
8. EXERCISABILITY OF OPTIONS. Any Option shall become exercisable
in such amounts, at such intervals, upon such events or occurrences and upon
such other terms and conditions as shall be provided in an individual Option
agreement evidencing such Option, except as otherwise provided in Section 5(b)
or this Section 8.
(a) The expiration date(s) of an Option shall be
determined by the Committee at the time of grant, but in no event shall an
Option be exercisable after the expiration of 10 years from the date of grant of
the Option.
(b) Unless otherwise expressly provided in any Option as
approved by the Committee, notwithstanding the exercise schedule set forth in
any Option, each outstanding Option, may, in the sole discretion of the
Committee, become fully exercisable upon the date of the occurrence of any
Change of Control, but, unless otherwise expressly provided in any Option, no
A-6
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earlier than six months after the date of grant, and if and only if Optionee is
in the employ of the Company on such date.
(c) The Committee may in its sole discretion accelerate
the date on which any Option may be exercised and may accelerate the vesting of
any Shares subject to any Option or previously acquired by the exercise of any
Option.
9. TERMINATION OF OPTION PERIOD.
(a) Unless otherwise expressly provided in any Option,
the unexercised portion of any Option shall automatically and without notice
immediately terminate and become forfeited, null and void at the time of the
earliest to occur of the following:
(i) three months after the date on which the
Optionee's employment is terminated for any reason other than by reason of (A)
Cause, (B) the termination of the Optionee's employment with the Company by such
Optionee following less than 90 days' prior written notice to the Company of
such termination (an "Improper Termination"), (C) a mental or physical
disability (within the meaning of Section 22(e) of the Code) as determined by a
medical doctor satisfactory to the Committee, or (D) death;
(ii) immediately upon (A) the termination by the
Company of the Optionee's employment for Cause, or (B) an Improper Termination;
(iii) one year after the date on which the
Optionee's employment is terminated by reason of a mental or physical disability
(within the meaning of Code Section 22(e)) as determined by a medical doctor
satisfactory to the Committee; or
(iv) the later of (A) 12 months after the date of
termination of the Optionee's employment by reason of death of the employee, or
(B) three months after the date on which the Optionee shall die if such death
shall occur during the one-year period specified in Subsection 9(a)(iii) hereof.
(b) The Committee in its sole discretion may, by giving
written notice ("cancellation notice"), cancel effective upon the date of the
consummation of any corporate transaction described in Subsection 10(d) hereof,
any Option that remains unexercised on such date. Such cancellation notice shall
be given a reasonable period of time prior to the proposed date of such
cancellation and may be given either before or after approval of such corporate
transaction.
(c) Upon Optionee's termination of employment as
described in this Section 9, or otherwise, any Option (or portion thereof) not
previously vested or not yet exercisable pursuant to Section 8 of this Plan or
the vesting schedule set forth in such Option shall be immediately canceled.
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10. ADJUSTMENT OF SHARES.
(a) If at any time while this Plan is in effect or
unexercised Options are outstanding, there shall be any increase or decrease in
the number of issued and outstanding Shares through the declaration of a stock
dividend or through any recapitalization resulting in a stock split, combination
or exchange of Shares (other than any such exchange or issuance of Shares
through which Shares are issued to effect an acquisition of another business or
entity or the Company's purchase of Shares to exercise a "call" purchase
option), then and in such event:
(i) appropriate adjustment shall be made in the
maximum number of Shares available for grant under this Plan, so that the same
percentage of the Company's issued and outstanding Shares pursuant to a plan of
repurchase approved by the Board or shall continue to be subject to being so
optioned;
(ii) appropriate adjustment shall be made in the
number of Shares and the exercise price per Share thereof then subject to any
outstanding Option, so that the same percentage of the Company's issued and
outstanding Shares shall remain subject to purchase at the same aggregate
exercise price; and
(iii) such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive.
(b) Subject to the specific terms of any Option, the
Committee may change the terms of Options outstanding under this Plan, with
respect to the option price or the number of Shares subject to the Options, or
both, when, in the Committee's sole discretion, such adjustments become
appropriate by reason of a corporate transaction described in Subsection 10(d)
hereof, or otherwise.
(c) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into or exchangeable for shares of its capital stock of
any class, either in connection with a direct or underwritten sale or upon the
exercise of rights or warrants to subscribe therefor or purchase such Shares, or
upon conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to the number of or exercise price of Shares
then subject to outstanding Options granted under this Plan.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under this Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, reclassifications, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business; (ii) any
merger or consolidation of the Company or to which the Company is a party; (iii)
any issuance by the Company of debt securities, or preferred or preference stock
that would rank senior to or above the Shares subject to outstanding Options;
(iv) any purchase or issuance by the Company of Shares or other classes of
A-8
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common stock or common equity securities; (v) the dissolution or liquidation of
the Company; (vi) any sale, transfer, encumbrance, pledge or assignment of all
or any part of the assets or business of the Company; or (vii) any other
corporate act or proceeding, whether of a similar character or otherwise.
(e) The Optionee shall receive written notice within a
reasonable time prior to the consummation of such action advising the Optionee
of any of the foregoing. The Committee may, in the exercise of its sole
discretion, in such instances declare that any Option shall terminate as of a
date fixed by the Board and give each Optionee the right to exercise his or her
Option.
11. TRANSFERABILITY OF OPTIONS. Unless otherwise authorized by the
Board, no Option granted hereunder shall be sold, pledged, assigned,
hypothecated, disposed or otherwise transferred by the Optionee other than by
(a) will or the laws of descent and distribution, (b) by gift to a Family
Member, or (c) through a domestic relations order in settlement of marital
property rights. No Option shall be exercisable during the Optionee's lifetime
by any person other than the Optionee or certain transferees expressly permitted
under this Section.
12. ISSUANCE OF SHARES. As a condition of any sale or issuance of
Shares upon exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not limited to, the
following:
(a) a representation and warranty by the Optionee to the
Company, at the time any Option is exercised, that he is acquiring the Shares to
be issued to him for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and
(b) an agreement and undertaking to comply with all of
the terms, restrictions and provisions set forth in any then applicable
shareholders' agreement relating to the Shares, including, without limitation,
any restrictions on transferability, any rights of first refusal and any option
of the Company to "call" or purchase such Shares under then applicable
agreements; and
(c) any restrictive legend or legends, to be embossed or
imprinted on Share certificates, that are, in the discretion of the Committee,
necessary or appropriate to comply with the provisions of any securities law or
other restriction applicable to the issuance of the Shares.
13. ADMINISTRATION OF THIS PLAN.
(a) This Plan shall be administered by the Committee,
which shall consist of not less than two non-Employee Directors. The Committee
shall have all of the powers of the Board with respect to this Plan. Any member
of the Committee may be removed at any time, with or without cause, by
resolution of the Board and any vacancy occurring in the membership of the
Committee may be filled by appointment by the Board.
(b) Subject to the provisions of this Plan, the Committee
shall have the authority, in its sole discretion, to: (i) grant Options, (ii)
determine the exercise price per Share at which Options may be exercised, (iii)
determine the Optionees to whom, and time or times at which, Options shall be
granted, (iv) determine the number of Shares to be represented by each Option,
(v) determine the terms, conditions and provisions of each Option granted (which
need not be identical) and, with the consent of the holder thereof, modify or
amend each Option, (vi) defer (with the consent of the Optionee) or accelerate
A-9
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the exercise date of any Option, and (vii) make all other determinations deemed
necessary or advisable for the administration of this Plan, including repricing,
canceling and regranting Options.
(c) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of this Plan. The Committee's
determinations and its interpretation and construction of any provision of this
Plan shall be final, conclusive and binding upon all Optionees and any holders
of any Options granted under this Plan.
(d) Any and all decisions or determinations of the
Committee shall be made either (i) by a majority vote of the members of the
Committee at a meeting of the Committee or (ii) without a meeting by the
unanimous written approval of the members of the Committee.
(e) No member of the Committee, or any Officer or
Director of the Company or its Subsidiaries, shall be personally liable for any
act or omission made in good faith in connection with this Plan.
14. INCENTIVE OPTIONS FOR 10% SHAREHOLDERS. Notwithstanding any
other provisions of this Plan to the contrary, an Incentive Stock Option shall
not be granted to any person owning directly or indirectly (through attribution
under Section 424(d) of the Code) at the date of grant, stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company (or of a Subsidiary) at the date of grant unless the exercise price of
such Option is at least 110% of the Fair Market Value of the Shares subject to
such Option on the date the Option is granted, and such Option by its terms is
not exercisable after the expiration of 10 years from the date such Option is
granted.
15. INTERPRETATION.
(a) This Plan shall be administered and interpreted so
that all Incentive Stock Options granted under this Plan will qualify as
Incentive Stock Options under Section 422 of the Code. If any provision of this
Plan should be held invalid for the granting of Incentive Stock Options or
illegal for any reason, such determination shall not affect the remaining
provisions hereof, and this Plan shall be construed and enforced as if such
provision had never been included in this Plan.
(b) This Plan shall be governed by the laws of the State
of Florida.
(c) Headings contained in this Plan are for convenience
only and shall in no manner be construed as part of this Plan or affect the
meaning or interpretation of any part of this Plan.
(d) Any reference to the masculine, feminine, or neuter
gender shall be a reference to such other gender as is appropriate.
(e) Time shall be of the essence with respect to all time
periods specified for the giving of notices to the Company hereunder, as well as
all time periods for the expiration and termination of Options in accordance
with Section 9 hereof (or as otherwise set forth in an Option agreement).
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16. AMENDMENT AND DISCONTINUATION OF THIS PLAN. Either the Board
or the Committee may from time to time amend this Plan or any Option without the
consent or approval of the shareholders of the Company; PROVIDED, HOWEVER, that,
except to the extent provided in Section 9, no amendment or suspension of this
Plan or any Option issued hereunder shall substantially impair any Option
previously granted to any Optionee without the consent of such Optionee.
17. TERMINATION DATE. This Plan shall terminate 10 years after the
date of adoption by the Board of Directors.
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30
THRIFT MANAGEMENT, INC.
3141 W. HALLANDALE BEACH BOULEVARD
HALLANDALE, FLORIDA 33009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 1, 2000
The undersigned hereby appoints Marc Douglas and Stephen L. Wiley, and each
of them with the power to appoint his substitute, as proxies, and hereby
authorizes either of them to represent and to vote all shares of Common Stock of
the Company held of record by the undersigned on May 3, 2000, at the Annual
Meeting of Shareholders to be held on June 1, 2000 (the "Annual Meeting"), or
any adjournments or postponements thereof, upon the matters referred to on the
reverse side, and in their discretion, upon any other business that may properly
come before the Annual Meeting.
[X] Please mark your votes as in this example
1. ELECTION OF DIRECTORS
Nominees: Marc Douglas, Jay M. Haft, Ileen Little, Howard L. Rothchild,
Stephen L. Wiley
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
(except as marked to the contrary) to vote for all such nominees
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE, PLEASE
DRAW A LINE THROUGH THAT NOMINEE'S NAME)
2. To approve and adopt an amendment to the Company's 1996 Stock Option Plan
pursuant to which the number of shares reserved for issuance under the Plan
will be increased from an aggregate of 1,000,000 shares to 2,200,000 shares
of the Company's Common Stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To ratify the appointment of Berkowitz Dick Pollack & Brant LLP as auditors
of the Company's financial statements for the 2000 fiscal year.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(Continued and to be signed on the reverse side.)
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting or any adjournments
or postponements thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THRIFT
MANAGEMENT, INC. This Proxy when executed will be voted in the manner
directed herein by the undersigned shareholder. If no direction is made, this
Proxy will be voted FOR the nominees listed in Proposal 1 and FOR Proposals 2
and 3.
The undersigned shareholder hereby acknowledges receipt of the Notice of
Annual Meeting and Proxy Statement dated May 18, 2000 and hereby revokes any
proxy or proxies previously given. This Proxy may be revoked at any time
prior to the Annual Meeting. If you received more than one proxy card, please
date, sign and return all cards in the accompanying envelope.
----------------------------------
Signature(s) of Shareholder
----------------------------------
Signature(s) of Shareholder
----------------------------------
Dated
NOTE: Please date and sign exactly as your name appears above. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in the corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.