SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
ATLANTIC PREMIUM BRANDS, LTD.
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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ATLANTIC PREMIUM BRANDS, LTD.
650 DUNDEE ROAD, SUITE 370
NORTHBROOK, ILLINOIS 60062
(847) 412-6200
Dear Stockholder:
You are cordially invited to attend the 2002 Annual Meeting of Stockholders
of Atlantic Premium Brands, Ltd., a Delaware corporation, to be held at 10:00
a.m. central time on Wednesday, July 31, 2002, at Edens Corporate Center, 650
Dundee Road, 2nd Floor, Northbrook, Illinois.
The matters to be considered at the meeting are described in the
accompanying Proxy Statement. Regardless of your plans for attending in person,
it is important that your shares be represented at the meeting. On behalf of our
Board of Directors, I urge you to please complete, sign, date and return the
enclosed proxy card in the enclosed stamped envelope. Signing this proxy will
not prevent you from voting in person should you be able to attend the meeting,
but will assure that your vote will be counted, if, for any reason, you are
unable to attend. If your shares are held in the name of a broker, you should
obtain a letter of identification from your broker and bring it to the meeting.
In order to personally vote shares held in the name of your broker, you must
obtain from the broker a proxy issued to you.
We look forward to seeing you at the 2002 Annual Meeting of Stockholders.
Sincerely,
/s/ MERRICK M. ELFMAN
Merrick M. Elfman
Chairman
June 28, 2002
ATLANTIC PREMIUM BRANDS, LTD.
650 DUNDEE ROAD, SUITE 370
NORTHBROOK, ILLINOIS 60062
(847) 412-6200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 2002 Annual Meeting of Stockholders of Atlantic Premium Brands, Ltd.
will be held at Edens Corporate Center, 650 Dundee Road, 2nd Floor, Northbrook,
Illinois on Wednesday, July 31, 2002, at 10:00 a.m. central time for the
following purposes:
1. To elect three (3) directors to our Board of Directors to serve for
a term of three (3) years and until their respective successors are elected
and qualified; and
2. To consider and act upon such other business as may properly come
before the meeting.
Ten days prior to the 2002 Annual Meeting of Stockholders, a list of all
stockholders entitled to vote at the meeting will be open to the examination of
any stockholder for any purpose germane to the meeting, during ordinary business
hours, at our office in Northbrook, Illinois.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE IN THE ENCLOSED
STAMPED ENVELOPE.
By Order of the Board of Directors
/s/ TOM D. WIPPMAN
Tom D. Wippman
Secretary
Northbrook, Illinois
June 28, 2002
ATLANTIC PREMIUM BRANDS, LTD.
650 DUNDEE ROAD, SUITE 370
NORTHBROOK, ILLINOIS 60062
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
JULY 31, 2002
This Proxy Statement is furnished on or about June 28, 2002 to stockholders
of Atlantic Premium Brands, Ltd. in connection with the solicitation by our
Board of Directors of proxies to be voted at the 2002 Annual Meeting of
Stockholders (the "Annual Meeting"). The Annual Meeting will be held at 10:00
a.m. central time on Wednesday, July 31, 2002, at Edens Corporate Center, 650
Dundee Road, 2nd Floor, Northbrook, Illinois.
The cost of soliciting proxies will be borne by us. Copies of solicitation
material may be furnished to brokers, custodians, nominees and other fiduciaries
for forwarding to beneficial owners of shares of our common stock, and normal
handling charges may be paid for such forwarding service. Solicitation of
proxies may be made by us by mail or by personal interview, telephone and
telegraph by our officers and other management employees, who will receive no
additional compensation for their services.
Any stockholders giving a proxy pursuant to this solicitation may revoke it
at any time prior to exercise of the proxy by giving notice of such revocation
to the Secretary of our company at our executive offices at 650 Dundee Road,
Suite 370, Northbrook, Illinois 60062, or by attending the meeting and voting in
person.
At the close of business on June 19, 2002, there were 6,734,391 shares of
our Common Stock outstanding and entitled to vote at the meeting. Only
stockholders of record on June 19, 2002, will be entitled to vote at the
meeting, and each share will have one vote. As of June 19, 2002, our common
stock was valued at $2.56 per share.
VOTING INFORMATION
At the Annual Meeting votes will be counted by written ballot. A majority
of the shares entitled to vote will constitute a quorum for purposes of the
Annual Meeting. The election of our Board of Directors' nominees for directors
will require the affirmative vote of a plurality of the shares present in person
or represented by proxy and entitled to vote in the election of directors.
Approval of any other business which may properly come before the Annual
Meeting, or any adjournments thereof, will require the affirmative vote of a
plurality of the shares present in person or represented by proxy and entitled
to vote thereon. Under Delaware law and our certificate of incorporation and
bylaws, the aggregate number of votes entitled to be cast by all stockholders
present in person or represented by proxy at the Annual Meeting, whether those
stockholders vote "For," "Against" or abstain from voting, will be counted for
purposes of determining the minimum number of affirmative votes required for
approval of such matters, and the total number of votes cast "For" each of these
matters will be counted for purposes of determining whether sufficient
affirmative votes have been cast. An abstention from voting on a matter by a
stockholder present in person or represented by proxy at the meeting has the
same legal effect as a vote "Against" the matter even though the stockholder or
interested parties analyzing the results of the voting may interpret such a vote
differently. Broker non-votes will have the effect of reducing the number of
shares considered present and entitled to vote on the matter.
A stockholder may, with respect to the election of directors, (i) vote for
the election of all named director nominees, (ii) withhold authority to vote for
all named director nominees, or (iii) withhold authority to vote with respect to
any nominee, by so indicating in the appropriate space on the proxy card.
Proxies properly executed and received by us prior to the meeting and not
revoked will be voted as directed therein on all matters presented at the
meeting. In the absence of specific direction from a stockholder, proxies will
be voted for the election of all named director nominees. If a proxy indicates
that all
or a portion of the shares represented by such proxy are not being voted with
respect to a particular proposal, such non-voted shares will not be considered
present and entitled to vote on such proposal, although such shares may be
considered present and entitled to vote on other proposals and will count for
the purpose of determining the presence of a quorum.
PROPOSAL ONE
ELECTION OF DIRECTORS
Our Board of Directors currently consists of nine persons and will consist
of nine persons following the Annual Meeting assuming the election of all of the
nominees to our Board of Directors. Our Board of Directors is divided into three
classes, each of whose members serves for a staggered three-year term. The terms
of the current Class III Directors (Messrs. Miller, Sussna and Roth) expire with
this Annual Meeting. Each of these individuals has been nominated as a Class III
Director to be elected at the Annual Meeting. Each of the nominees, if elected,
will serve for three years until the 2005 Annual Meeting of Stockholders and
until a successor has been elected and qualified. The current Class I and II
Directors will continue in office until the 2003 and 2004 Annual Meetings of
Stockholders, respectively.
The following table presents information concerning both persons nominated
for election as directors of our company and continuing directors of our
company, including their current membership on our Board of Directors'
committees, principal occupations or affiliations during the last five years and
certain other directorships held.
NOMINEES FOR DIRECTORS
Class III -- Directors to be Elected at the 2002 Annual Meeting:
John A. Miller. Mr. Miller, age 48, has served as a director of our
company since September 1993 and is currently a member of the Audit Committee
and the Compensation Committee. Mr. Miller has served as President of North
American Paper Company since 1988. Mr. Miller has been a director of Network
Services Inc. since 1991, where he is a member of the Compensation Committee and
Audit Committee, and he has been a director of the Becker Group, Ltd., a
privately-held company in the mall decorations business ("Becker Group"), since
1998. Mr. Miller has also been a director of Sylvan Learning Systems, Inc. since
2001, where he is a member of the Audit Committee.
Franklin M. Roth. Mr. Roth, age 60, was elected to our board of directors
in August 2001. Mr. Roth was employed by Blue Ribbon Packing Co. in Houston,
Texas, for 23 years. In 1986, Mr. Roth resigned as executive vice president of
Blue Ribbon Packing Co. to become founder and president of Prefco Inc., a meat
distribution company in Houston. In 1996, Mr. Roth was appointed president of
Prefco. Corp. in connection with our acquisition of Prefco, Inc.
Alan F. Sussna. Mr. Sussna, age 45, has served as a director, President
and Chief Executive Officer of our company since March 1996. From 1991 through
1995, Mr. Sussna was a director of Bain & Company, a consulting firm. Through
his association with Bain & Company and as a partner in the consulting firm of
McKinsey & Company, he has opened offices as well as led those firms' Consumer
Goods practices. In 2000, Mr. Sussna was elected to the board of directors of
Opto-Lynx, an Indiana based high technology start-up. Mr. Sussna has also held
industry positions as Executive Vice President -- Sales and Marketing for Jim
Beam Brands and in product management at Frito-Lay, Inc.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
Class I -- Directors Serving Until 2003 Annual Meeting:
Eric D. Becker. Mr. Becker, age 40, served as Chairman of our company from
September 1993 through July 1996, and he has been a director since 1991, the
year our Company's business was purchased from a predecessor. Mr. Becker is also
a co-founder and Managing Principal of Sterling Capital, Ltd., a private
investment firm which was founded in 1984 ("Sterling Capital"), and since 1984,
Mr. Becker has also been
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Chairman and Vice President of Sterling Group, Inc., an affiliate of Sterling
Capital ("Sterling Group"). Mr. Becker is also Chairman of Becker Group. Mr.
Becker has also been a Principal of Sterling Advisors, LP ("Sterling Advisors")
since 1984 and Managing Principal of Sterling Venture Partners since 1999.
Additionally, Mr. Becker currently serves as a director and member of the
Compensation Committee of Argent Trading, a venture backed private company.
Brian Fleming. Mr. Fleming, age 56, has served as a director of our
company since December 1997 and is currently a member of the Compensation
Committee and Executive Committee. Mr. Fleming is Vice Chairman of Knauss Foods,
a privately-held processor of meat products specializing in dried beef and meat
snacks, a position he has held since June 2001. From 1998 to 2001, Mr. Fleming
was the President of Knauss Foods. Prior to 1998, Mr. Fleming was the President
and Chief Operating Officer of Knauss Snack Food Company, a privately-held meat
snack company. Mr. Fleming is presently a director of The Decal Source, which
designs and distributes decals for use in Nascar motor sports, a position he has
held since 1998.
G. Cook Jordan, Jr. Mr. Jordan, age 50, has served as a director of our
company since September 1993 and he is a member of the Audit Committee and the
Compensation Committee. Mr. Jordan is a co-founder and managing principal of
Jordan, Knauff & Company, a private investment bank. From 1998 to 1999, Mr.
Jordan was a general partner at CID Equity Partners, a venture capital
investment fund. From 1996 through 1998, Mr. Jordan was a principal at C3
Holdings, LLC, a private investment firm. From 1988 through 1996, Mr. Jordan
served as a Manager of Allstate Venture Capital, which was affiliated with
Allstate Insurance Company. Mr. Jordan has also been a director at Day's Molding
and Machinery, a plastic injection molder, since 1998, and he was a director at
ACR Systems, Inc., a systems developer, from 1997 to 2001.
Class II -- Directors Serving Until 2004 Annual Meeting:
Merrick M. Elfman. Mr. Elfman, age 43, is Chairman of our company, a
position he has held since July 1996, and he has been a director of our company
since 1993. Mr. Elfman is also a member of our Executive Committee. Mr. Elfman
has been Chairman of Ecom Group, Inc., a privately-held distributor of specialty
lighting products ("Ecom"), since 1998. He is also a Managing Partner of
Sterling Capital Partners L.P., a private investment firm with which he has been
involved since 1987.
John T. Hanes. Mr. Hanes, age 65, has served as a director of our company
since December 1997 and is a member of the Audit Committee and Executive
Committee. From 1994 to the present, Mr. Hanes has served as President of The
John T. Hanes Company, a management consulting firm, and he has been a director
of Premier Valley Foods, a privately-held processor and marketer of the DelMonte
brand of dried fruits, since 1998. From 1991 to 1994, Mr. Hanes served as the
Chairman and President of Doskocil Companies/Wilson Foods Corporation,
Incorporated, a publicly-held processor of pizza and other processed meat
products, and he retired as its Chief Executive Officer.
Steven M. Taslitz. Mr. Taslitz, age 43, has served as a director of our
company since 1991. Mr. Taslitz is a co-founder and Managing Principal of
Sterling Capital and Sterling Group, as well as a partner of Sterling Advisors.
He has served as the President of Sterling Group since 1984. Mr. Taslitz is a
director of Ecom and Becker Group.
BOARD COMMITTEES
Our Board of Directors has established an Audit Committee, a Compensation
Committee and an Executive Committee. There is no nominating committee.
Selection of nominees for our Board is made by our entire Board of Directors.
Since May 1998, our Audit Committee has been composed of Mr. Hanes, Mr.
Jordan and Mr. Miller. Our Audit Committee is responsible for reviewing the
internal accounting procedures of our company and the results and scope of the
audit and other services provided by our company's independent auditors,
consulting with our independent auditors and recommending the appointment of
independent auditors to our Board of Directors. Our Audit Committee met two
times during the year ended December 31, 2001; each member of our Audit
Committee attended both meetings.
3
Since April 1998, our Compensation Committee has been composed of Mr.
Fleming, Mr. Jordan and Mr. Miller. Our Compensation Committee has the authority
and performs all of the duties related to the compensation of our management,
including determining policies and practices, changes in compensation and
benefits for management, determination of employee benefits and all other
matters relating to employee compensation, including matters relating to the
administration of our 1999 Amended and Restated Stock Option Plan. Our
Compensation Committee met two times during the year ended December 31, 2001;
each member of our Compensation Committee attended both meetings.
Since January 1, 2001, our Executive Committee has been composed of Mr.
Elfman, Mr. Fleming and Mr. Hanes. Our Executive Committee develops and oversees
our company's short-term business and management strategies. Our Executive
Committee met eight times during the year ended December 31, 2001; each member
of our Executive Committee attended all meetings.
ATTENDANCE AT MEETINGS
During the year ended December 31, 2001, our Board of Directors held six
meetings. All directors attended at least 75% of the meetings of our Board of
Directors, except Mr. Becker, who attended four of the six meetings.
DIRECTORS' FEES
Under our option plan, non-employee directors receive options to purchase
10,000 shares of common stock on January 1 of each year. In addition, in 2001,
the members of our Audit Committee each received options to purchase 1,500
shares, the members of our Compensation Committee each received options to
purchase 2,500 shares and the members of our Executive Committee each received
options to purchase 9,000 shares. On October 1, 2000, we entered into an
employment agreement with our chairman, Merrick M. Elfman. Mr. Elfman's
compensation for his services as chairman pursuant to this agreement are
included below in the "Summary Compensation Table" and a description of the
material terms of this agreement are set forth below under the heading
"Employment Agreements."
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership
of our common stock as of June 19, 2002 by (1) each stockholder known by us to
be the beneficial owner of more than five percent of the outstanding shares of
our common stock, (2) each of our directors, (3) each of our Named Officers (as
defined below), and (4) all of our directors and executive officers as a group.
The information presented in the table is based upon the most recent filings
with the Securities and Exchange Commission, referred to in this proxy statement
as the SEC, by such persons or upon information otherwise provided by such
persons to us.
Beneficial ownership is determined according to the rules of the SEC and
generally includes any shares over which a person possesses sole or shared
voting or investment power and options that are currently exercisable or
exercisable within 60 days. Except as otherwise indicated, we believe that the
beneficial owners of common stock listed below have sole investment and voting
power with respect to their shares.
The table lists applicable percentage ownership based on 6,734,391 shares
of common stock outstanding as of June 19, 2002. Shares of common stock subject
to options currently exercisable or exercisable within 60 days of June 19, 2002
are deemed outstanding for the purpose of calculating the percentage ownership
of the person holding these options, but are not treated as outstanding for the
purpose of calculating the percentage ownership of any other person. Unless
otherwise noted, the address for each holder of five percent or more of our
common stock listed below is: c/o Atlantic Premium Brands, Ltd., 650 Dundee
Road, Suite 370, Northbrook, IL 60062.
SHARES BENEFICIALLY
NAMES OF BENEFICIAL OWNERS OWNED PERCENTAGE OWNED
-------------------------- ------------------- ----------------
Douglas L. Becker........................................... 405,957(1) 6.00%
Eric D. Becker.............................................. 523,457(2) 7.66%
Merrick M. Elfman........................................... 569,859(3) 8.32%
Thomas M. Dalton............................................ 382,438(4) 5.42%
Philip L. Glass............................................. 424,268(5) 6.30%
Bruce L. Goldman............................................ 647,076(6) 9.61%
Rudolf Christopher Hoehn-Saric.............................. 436,699(7) 6.46%
Alan F. Sussna.............................................. 730,215(8) 10.09%
Steven M. Taslitz........................................... 597,629(9) 8.66%
Steven Englander............................................ 50,559(10) *
Brian T. Fleming............................................ 71,250(11) 1.05%
John T. Hanes............................................... 68,150(12) 1.00%
G. Cook Jordan, Jr. ........................................ 112,607(13) 1.65%
John A. Miller.............................................. 231,905(14) 3.40%
Franklin M. Roth............................................ 173,000(15) 2.54%
All directors and executive officers as a group (11
persons).................................................. 3,511,069(16) 42.12%
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* Less than one percent.
(1) Includes 30,000 shares underlying currently exercisable options.
(2) Includes 392,293 shares held by Mr. Becker's wife, Jill E. Becker, and
97,500 shares underlying currently exercisable options or options
exercisable within 60 days.
(3) Includes 115,500 shares underlying currently exercisable options or options
exercisable within 60 days. Of the remaining 454,359 shares, 433,805 are
held by Mr. Elfman and his wife jointly.
(4) Includes 320,000 shares underlying currently exercisable options or options
exercisable within 60 days.
(5) Includes 145,740 shares held by the Glass International Ltd. Profit Sharing
Plan and Trust dated July 1, 1983 (the "Trust"). Mr. Glass and his wife,
Ellen V. Glass, are co-trustees and also the beneficiaries of
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the Trust. The remaining 278,528 shares are held by Mr. Glass and his wife
jointly, either as joint tenants or tenants in common. The address for this
shareholder is 20 N. Wacker, #3400, Chicago, IL 60606-3102.
(6) Includes 250,346 shares held by Mr. Goldman and Mr. Taslitz as co-trustees
of the KJT Gift Trust. Mr. Goldman disclaims beneficial ownership of the
shares held by the KJT Gift Trust.
(7) Includes 24,593 shares held by Mr. Hoehn-Saric as Trustee for the benefit
of Gabriella Hoehn-Saric and 21,519 shares held by him as Trustee for the
benefit of Rudolph Christopher Hoehn-Saric, Jr. Also includes 30,000 shares
underlying currently exercisable options or options exercisable within 60
days.
(8) Includes 175,528 shares held by Mr. Sussna as trustee of the Alan F. Sussna
Trust and 9,803 shares held by Mr. Sussna's wife, Brenda B. Sussna, as
trustee of the Brenda B. Sussna Trust. Mr. Sussna disclaims beneficial
ownership of all 9,803 shares held by his wife as trustee of the Brenda B.
Sussna Trust. Also includes 500,000 shares underlying currently exercisable
options, or options exercisable within 60 days, which are held by Mr.
Sussna as Trustee of the Alan F. Sussna Trust.
(9) Includes 144,923 shares held by Mr. Taslitz as trustee of the Kathy J.
Taslitz Trust and 250,346 shares held by Mr. Taslitz and Mr. Goldman as
co-trustees of the KJT Gift Trust. Mr. Taslitz disclaims beneficial
ownership of the 250,346 shares held by him as co-trustee of the KJT Gift
Trust. Also includes 168,695 shares underlying currently exercisable
options or warrants or options exercisable within 60 days, of which
warrants 66,695 are indirectly held by Mr. Taslitz as the Manager of
Sterling BOCP, LLC, the warrant holder.
(10) Includes 40,000 shares underlying currently exercisable options or options
exercisable within 60 days.
(11) Includes 64,750 shares underlying currently exercisable options or options
exercisable within 60 days.
(12) Includes 63,250 shares underlying currently exercisable options or options
exercisable within 60 days.
(13) Includes 78,000 shares underlying currently exercisable options or options
exercisable within 60 days. Also includes 19,607 shares held by Mr.
Jordan's IRA.
(14) Includes 78,000 shares underlying currently exercisable options or options
exercisable within 60 days.
(15) Includes 75,000 shares underlying currently exercisable options or options
exercisable within 60 days.
(16) Includes 1,600,695 shares underlying currently exercisable options or
options exercisable within 60 days.
6
COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth annual and long-term compensation for the
fiscal years ended December 31, 1999, 2000 and 2001 for services in all
capacities to our company of (i) our chairman, (ii) our chief executive officer,
and (iii) our next three most highly compensated executive officers
(collectively, the "Named Officers"). No other executive officer of our company
received total annual salary and bonus in excess of $100,000 during 2001.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
--------------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) ($)(2)
--------------------------- ---- --------- -------- ------------ ------------
Merrick M. Elfman,....................... 2001 120,000 -- 19,000 --
Chairman(1) 2000 25,385 42,500 10,000 --
1999 -- -- 15,000 --
Alan F. Sussna,.......................... 2001 364,820 -- -- 44,100
President and Chief 2000 348,007 100,000 -- 44,250
Executive Officer 1999 335,394 145,500 -- 40,523
Thomas M. Dalton,........................ 2001 183,171 -- 120,000 24,837
Senior Vice President, Chief 2000 172,048 50,000 -- 23,625
Operating Officer and 1999 159,808 33,750 125,000 20,854
Chief Financial Officer
Steven E. Englander,..................... 2001 118,373 20,000 -- 15,911
Senior Vice President -- Marketing 2000 112,144 6,500 -- 15,724
1999 106,999 10,000 -- 14,060
Franklin M. Roth,........................ 2001 168,980 65,000 -- 11,441
President of Prefco Corp. 2000 154,348 77,352 25,000 15,066
1999 151,719 68,906 25,000 15,826
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(1) Effective October 1, 2000, we entered into an employment agreement with Mr.
Elfman pursuant to which Mr. Elfman is compensated for his services. Prior
to October 1, 2000, Mr. Elfman was a non-employee director and was
compensated for his services as director and chairman in the same manner as
other non-employee directors.
(2) These amounts represent $1,523, $5,250 and $5,100 contributed by us in 1999,
2000 and 2001 respectively, to our 401(k) Plan on behalf of Mr. Sussna;
$39,000, $39,000 and $39,000 paid to Mr. Sussna in 1999, 2000 and 2001,
respectively, as an allowance for transportation costs and health related
benefits; $18,000, $19,500 and $19,500 paid to Mr. Dalton in 1999, 2000 and
2001, respectively, as an allowance for transportation costs and health
related benefits; $12,000, $12,000 and $12,000 paid to Mr. Englander in
1999, 2000 and 2001, respectively, as an allowance for transportation costs
and health related benefits; $11,862, $10,556 and $6,592 paid to Mr. Roth in
1999, 2000 and 2001, respectively, as an allowance for transportation costs
and health related benefits; $2,854, $2,060 and $3,964 contributed by us in
1999 to our 401(k) Plan on behalf of Mr. Dalton, Mr. Englander and Mr. Roth,
respectively; $4,125, $3,724 and $4,510 contributed by us in 2000 to our
401(k) Plan on behalf of Mr. Dalton, Mr. Englander and Mr. Roth,
respectively; and $5,337, $3,911 and $4,849 contributed by us in 2001 to our
401(k) Plan on behalf of Mr. Dalton, Mr. Englander and Mr. Roth,
respectively.
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OPTION GRANTS AND EXERCISES
The following table sets forth certain information concerning option grants
to the Named Officers during 2001:
OPTION GRANTS IN 2001
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
---------------------------------------------------------------------------------- -----------------------
PERCENT OF
TOTAL
OPTIONS
NUMBER OF GRANTED TO
SECURITIES EMPLOYEES IN EXERCISE
NAME AND UNDERLYING FISCAL PRICE(5) EXPIRATION 5% 10%
PRINCIPAL POSITION OPTIONS GRANTED YEAR(4) ($/SH) DATE ($) ($)
------------------ --------------- ------------ -------- ---------- ---------- ----------
Merrick M. Elfman......... 10,000(1) 6.9 % 0.875 1/01/11 $ 5,503 $ 13,945
Chairman 9,000(2) 6.21% 1.33 5/10/11 $ 7,527 $ 19,077
Thomas M. Dalton.......... 120,000(3) 82.76% 1.33 3/22/11 $100,368 $254,364
Chief Financial Officer
and Chief Operating
Officer
---------------
(1) These options vest 2,500 each quarter so long as the holder remains a
director of our company. As a result, by December 31 of the year in which
they were granted, all 10,000 of theses options are exercisable.
(2) These options vest one-fourth at the end of each calendar quarter in the
year in which they were granted so long as the holder remains a director of
our company. As a result, by December 31 of the year in which they were
granted, all of these options are exercisable.
(3) These options are immediately exercisable.
(4) Based on 145,000 options granted to all of our employees in 2001.
(5) Based on the market price on the date of grant.
There were no option exercises by our Named Officers in 2001. Shown below
is information with respect to outstanding options held by our Named Officers as
of December 31, 2001. All options reflected in the chart below were granted
under our Option Plan.
AGGREGATED 2001 YEAR-END OPTION VALUES
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY
UNEXERCISED OPTIONS AT 12/31/01 OPTIONS AT 12/31/01
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE (1)
---- ------------------------------- ---------------------------------
Merrick M. Elfman................. 103,500/0 $61,568/$0
Alan F. Sussna.................... 500,000/250,000 $225,000/$0
Thomas M. Dalton.................. 320,000/0 $128,400/$0
Steven E. Englander............... 30,000/15,000 $4,312/$4,406
Franklin M. Roth.................. 75,000/0 $20,000/$0
---------------
(1) Based on the closing price of $2.40 per share of our Common Stock on
December 31, 2001, as reported by the American Stock Exchange.
8
PERFORMANCE GRAPH
The graph below compares our cumulative stockholder return on our common
stock since December 31, 1996 with the CRSP Total Return Index for the Nasdaq
Stock Market (U.S. Companies) and a composite peer group of Hormel Foods Corp.,
Smithfield Foods, Inc., Thorn Apple Valley, Inc. and Bridgford Foods Corp.
Since December 31, 1997, our Common Stock has been principally traded on
the American Stock Exchange ("AMEX") under the symbol "ABR."
[LINE GRAPH]
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12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
-------------------------------------------------------------------------------------------------
Atlantic Premium Brands, Ltd. 100.0 129.7 64.9 69.2 30.3 87.4
-------------------------------------------------------------------------------------------------
Nasdaq Stock Market (U.S.) 100.0 122.5 172.7 320.9 193.0 153.1
-------------------------------------------------------------------------------------------------
Composite Peer Group 100.0 137.9 138.8 145.8 154.7 223.9
-------------------------------------------------------------------------------------------------
This graph is not deemed to be "soliciting material" or to be "filed" with
the SEC or subject to the SEC's proxy rules or to the liabilities of Section 18
of the Securities Act of 1934 (the "1934 Act"), and the graph shall not be
deemed to be incorporated by reference into any prior or subsequent filing by us
under the Securities Act of 1933 (the "1933 Act") or the 1934 Act.
EMPLOYMENT AGREEMENTS
We have employment agreements with the following Named Officers: Mr.
Elfman, Mr. Sussna, Mr. Dalton and Mr. Englander.
Mr. Elfman's employment agreement is currently in effect until April 30,
2003, and extends for additional one year periods thereafter, unless terminated
by written notice given by either party to the other three months prior to each
April 30th. The employment agreement provides for a signing bonus of $42,500
which was paid upon execution of the employment agreement in October 2000, and a
salary of $115,000 per year, which increases by 5% on May 1 of each year,
beginning May 1, 2002. If Mr. Elfman's employment terminates for any reason
prior to a scheduled expiration date, we remain obligated to pay all amounts and
provide all benefits provided for in his employment agreement through the
scheduled expiration date. In addition, all amounts due under Mr. Elfman's
employment agreement will be immediately due in the event that our company is
sold, whether through a change of control or a sale of substantially all of our
assets, or we are taken private.
9
Mr. Sussna's employment agreement remains in effect until terminated by
either party and provides for base compensation of $367,593 and eligibility to
receive a bonus of up to 50% of base compensation to be determined by the
Compensation Committee of the Board of Directors based on standards and criteria
they establish. If Mr. Sussna's employment is terminated either (1) by us
without cause, or (2) by the executive due to a reduction in responsibility
without his consent, a reduction in his base salary, relocation of his office
from Chicago, Illinois, our failure to comply with the terms of the employment
agreement, or certain changes of control of our company, then the executive will
receive $183,796.50 payable over six months in accordance with our payroll
policies (the "Termination Payment"), the annual bonus to which the executive
would have been entitled but for the termination, and continued employee
benefits for the maximum period permitted by law. These separation benefits are
also triggered if the aggregate beneficial ownership of the following
individuals is reduced to less than 15% of the number of shares of common stock
outstanding: Douglas L. Becker, Eric D. Becker, Merrick M. Elfman, Bruce L.
Goldman, Rudolf Christopher Hoehn-Saric and Steven M. Taslitz, as well as their
spouses and dependent children or trusts established for their benefit (a
"Stockholder Exit"). In addition, Mr. Sussna's employment agreement provides
that if there is a change of control of our company during the term of Mr.
Sussna's employment with us, or within 120 days after a termination by us
without cause, then Mr. Sussna shall receive $367,593, less any amounts already
received pursuant to the Termination Payment.
Mr. Dalton's employment agreement is currently in effect until April 6,
2003, and extends for additional one year periods unless terminated by written
notice given by either party to the other six months prior to April 5 of each
year. Pursuant to the employment agreement, Mr. Dalton's base compensation is
subject to normal cost of living increases, as well as those increases permitted
by our Compensation Committee, and his employment agreement provides for an
annual bonus of up to 40% of his base salary based on management objectives and
actual cash flow. Mr. Dalton's employment agreement provides that if his
employment is terminated either (1) by us without cause, or (2) by the executive
due to a reduction in responsibility without his consent, a reduction in his
base salary, relocation of his office from Chicago, Illinois, our failure to
comply with the terms of the employment agreement, certain changes of control of
our company or a Stockholder Exit, then Mr. Dalton will receive his full base
salary, the annual bonus to which the executive would have been entitled but for
the termination, and continued employee benefits for the maximum period
permitted by law.
Mr. Englander's employment agreement may be terminated by Mr. Englander or
us at any time, subject in some circumstances to our obligation to pay Mr.
Englander's compensation for a period of up to six months after the termination,
which period depends upon the reason for the termination and the duration of Mr.
Englander's employment with us prior to termination. The employment agreement
provides for Mr. Englander's base compensation, which is subject to normal cost
of living increases, and an annual bonus of up to 30% of his base salary, 50% of
which will be based on our overall performance and 50% of which will be based
upon management objectives described by our chief executive officer on an annual
basis.
The employment agreements for Mr. Sussna, Mr. Dalton, Mr. Elfman and Mr.
Englander also contain certain non-competition and confidentiality provisions
pursuant to which they agree not to compete with our company for a period of two
years following termination of their employment with us, nor will they solicit
for employment any director, stockholder or certain employees of our company
during such period (except for Mr. Sussna, who may not solicit such persons for
three years). The employment agreements also provide that Mr. Sussna, Mr.
Dalton, Mr. Elfman and Mr. Englander will not disclose any confidential
information concerning our company and our business to any other person or
entity except as may be required by law.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Our Board of Directors and our Compensation Committee have furnished the
following report on our policies with respect to the compensation of our
executive officers. The report is not deemed to be "soliciting material" or to
be "filed" with the SEC or subject to the SEC's proxy rules or to the
liabilities of Section 18 of the 1934 Act, and the report shall not be deemed to
be incorporated by reference into any prior or subsequent filing by us under the
1933 Act or the 1934 Act.
10
Our Board of Directors established our Compensation Committee at the end of
1993, and our Compensation Committee will determine and act upon compensation
decisions as described below in 2002 and future years. Decisions on compensation
of our executive officers generally will be made by our Compensation Committee
of the Board of Directors. No member of our Compensation Committee is an
employee of our company. Since April 1998, our Compensation Committee has
consisted of Mr. Fleming, Mr. Jordan and Mr. Miller. All decisions by our
Compensation Committee relating to the compensation of our executive officers
will be reviewed by our full Board of Directors.
Compensation Policies Toward Named Officers and Executive Officers
Our executive compensation policies are intended to provide competitive
levels of compensation that reflect our annual and long-term performance goals,
reward superior corporate performance and assist us in attracting and retaining
qualified executives. Total compensation for our executive officers is comprised
of three principal components: base salary, annual incentive compensation and
grants of options to purchase our common stock. The base salaries, if not fixed
by contract, are set at levels which our Compensation Committee believe are
comparable to those of executives of similar status in the food industry. In
addition to base salary, each senior executive may be eligible to receive an
annual bonus tied to our success in achieving certain annual performance
measures, as well as individual performance. Our Board of Directors and
Compensation Committee also believe that longer-term incentives are appropriate
to motivate and retain key personnel and that stock ownership by management is
beneficial in aligning management's and stockholders' interests in the
enhancement of stockholder value. Accordingly, our Compensation Committee
intends to consider annual grants of stock options to certain of our executive
officers and other eligible persons under our option plan.
The following describes in more specific terms the three elements of our
executive officers' compensation in 2001:
Base Salary. The base salaries for Mr. Elfman, Mr. Sussna, Mr. Dalton
and Mr. Englander are fixed by contract. Our Compensation Committee may
also consider discretionary adjustments for those executive officers under
contract. In 2001, the base salaries for Mr. Sussna, Mr. Dalton and Mr.
Englander were adjusted.
Annual Incentive Bonus. Annual incentive bonuses are primarily based
upon the achievement of measurable pre-tax earnings performance goals
established at the beginning of the fiscal year. With respect to Mr.
Sussna, we are to pay Mr. Sussna an annual bonus of up to 50% of his base
salary, based on standards and criteria established by the Compensation
Committee. Mr. Dalton's bonus of up to 40% of base salary is based on our
actual cash flow and management objectives. Mr. Englander's bonus of up to
30% of base salary is based 50% on our overall performance and 50% on
management objectives described by our Chief Executive Officer on an annual
basis. Our Compensation Committee may also consider discretionary bonuses
for those executive officers under contract. Mr. Elfman's Employment
Agreement does not provide for such an annual incentive bonus.
Long-Term Stock Option Incentives. Stock options provide executives
with the opportunity to buy an equity interest in our company and to share
in the appreciation of the value of our common stock. Stock options are
granted at the fair market value price of our common stock on the date of
grant, are subject to vesting over time and only have future value for our
executive officers if the stock price appreciates from the date of grant.
All options have terms of ten years from the date of grant. Factors
influencing stock option grants to our executive officers include
performance of our company, relative levels of responsibility,
contributions to the businesses of our company and competitiveness with
other growth oriented companies. Stock options granted to our executive
officers and other management employees are approved by our Compensation
Committee. In 2001, Mr. Sussna, Mr. Englander and Mr. Roth were not granted
any options and Mr. Elfman was not granted any options other than options
to purchase 10,000 shares as compensation for services as a director and
options to purchase 9,000 shares as compensation for his services on the
Executive Committee. In 2001, Mr. Dalton was granted 120,000 immediately
exercisable stock options.
11
Other Compensation Plans. We maintain a defined contribution plan
(the "401(k) Plan") which is intended to satisfy the tax qualification
requirements of Sections 401(a), 401(k) and 401(m) of the Internal Revenue
Code of 1986, as amended (the "Code"). Our executive officers are eligible
to participate in the 401(k) Plan and are permitted to contribute up to the
maximum percentage allowable not to exceed the limits of Code Sections
401(k), 404 and 415 (i.e., $10,500 in 2001). All amounts deferred under the
401(k) Plan's salary reduction feature by a participant vest immediately in
the participant's account while contributions made by us vest over a six
year period in the participant's account. We will make a matching
contribution to the 401(k) Plan equal to 50% of each participant's
contribution, up to a maximum of 6% of the participant's salary. We may
make additional discretionary contributions.
Benefits. Benefits offered to our executive officers are largely
those that are offered to our general employee population, such as group
health and life insurance coverage and participation in the 401(k) Plan.
Benefits are not tied directly to corporate performance.
Our Compensation Committee believes that our executive compensation
policies and programs serve the interests of our company and our stockholders.
Total compensation to our executive officers is linked to our performance.
Submitted by the Members of the Compensation Committee:
Brian Fleming
G. Cook Jordan, Jr.
John A. Miller
AUDIT MATTERS
We engaged the firm of KPMG LLP as our independent public accountants for
2001 and 2002. It is expected that a representative from this firm will be
present at the Annual Meeting, and will be available to respond to appropriate
questions from the stockholders if the need arises, or make a statement if the
representative desires to do so.
AUDIT FEES
The aggregate fees we incurred with KPMG LLP for professional services
rendered for the annual audit and for the review of our quarterly reports on
Form 10-Q for the fiscal year 2001 totaled $137,700.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
KPMG LLP did not render any professional services to us for fiscal year
2001 in connection with financial information systems design or implementation,
the operation of our information systems or the management of our local area
network.
ALL OTHER FEES
The aggregate fees we incurred with KPMG LLP for all other non-audit
services during fiscal year 2001 totaled $104,875, which included fees for work
performed in connection with an audit of an employee benefit plan, changes in
accounting principles, and a new debt agreement. The Audit Committee has
determined that the non-audit services performed by KPMG LLP are compatible with
maintaining KPMG LLP's independence.
AUDIT COMMITTEE REPORT
Our Audit Committee is comprised of three independent directors and
operates under a written charter adopted by our Board of Directors and attached
to this Proxy Statement as EXHIBIT A. The members of our Audit Committee are
John T. Hanes, G. Cook Jordan, Jr. and John A. Miller.
12
Our Committee recommends to our Board of Directors the selection of our
independent public accountants. Our Committee also provides assistance to the
members of our Board of Directors in fulfilling their oversight functions over
our financial statements. It is not the duty of our Committee, however, to plan
or conduct audits or to determine that our financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
The responsibility to plan and conduct audits is that of our independent public
accountants. Our management has the responsibility to determine that our
financial statements are complete and accurate and in accordance with generally
accepted accounting principles.
Our Committee has received reports and met and held discussions with
management and the independent accountants. Our Committee has also discussed
with the independent accountants matters required to be discussed by Statement
on Auditing Standards No. 61. Our independent public accountants also provided
to our Committee the written report, disclosure and letter required by the
Independent Standards Board Standard No. 1. Our Committee discussed with the
independent public accountants these materials and the firm's independence from
us.
Based on our Committee's discussion with, and review of the reports from,
management and our independent public accountants and our Committee's reliance
on the representation of management that our audited consolidated financial
statements were prepared in accordance with generally accepted principles, our
Committee recommends that our Board of Directors include the audited
consolidated financial statements in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2001, filed with the Securities and Exchange
Commission.
Submitted by the Members of the Audit Committee:
John T. Hanes
G. Cook Jordan, Jr.
John A. Miller
The above Audit Committee Report is not deemed to be "soliciting material"
or to be "filed" with the SEC or subject to the SEC's proxy rules or to the
liabilities of Section 18 of the 1934 Act, and the report shall not be deemed to
be incorporated by reference into any prior or subsequent filing by us under the
1933 Act or the 1934 Act.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 1934 Act requires our officers, directors and certain
beneficial holders of our common stock to file reports about their beneficial
ownership of our common stock. Specific due dates for these reports have been
established and we are required to disclose in this proxy statement any failure
to file by these dates during 2001. All of these filing requirements were timely
satisfied, except Mr. Miller failed to timely report four transactions and Mr.
Taslitz failed to timely report one transaction. In making these disclosures, we
have relied solely upon written representations of our directors and executive
officers and copies of the reports they filed with the SEC.
CERTAIN TRANSACTIONS WITH MANAGEMENT AND OTHERS
On October 1, 2000, we entered into a management agreement with Sterling
Advisors pursuant to which Sterling Advisors was to provide us with management
and advisory services, including assisting our executives in making management,
financial and strategic decisions, during the initial term ending April 30,
2002. Messrs. Douglas Becker (a 5% beneficial owner of our common stock), Eric
Becker (a director and 5% beneficial owner), Rudolph Christopher Hoehn-Saric (a
5% beneficial owner), and Steven Taslitz (a director and 5% beneficial owner)
own Sterling Advisors. During the initial term of the management agreement, we
were to pay Sterling Advisors a consulting fee of $36,000 per month.
Additionally, we were to pay $200,000 to Sterling Advisors on the date of
execution of the management agreement. The management agreement also contains
certain non-competition and confidentiality provisions pursuant to which
Sterling Advisors agrees not to compete with us or disclose any confidential
information for a period of two years following termination of
13
the agreement, nor will it solicit for employment any director, stockholder or
certain employees of our company during such period. In connection with the
April 2001 restructuring of our senior subordinated debt to Banc One Capital
Partners, described in the Management's Discussion and Analysis of Financial
Condition and Results of Operations section of the Annual Report to stockholders
which accompanies this proxy statement, this management agreement was terminated
and all amounts payable thereunder were waived.
Also in connection with the April 2001 restructuring of our senior
subordinated debt to Banc One Capital Partners, Sterling BOCP, LLC purchased a
10% interest in the senior subordinated debt from Banc One Capital Partners,
including a corresponding 10% interest in the warrants with a put option which
were issued in connection with the senior subordinated debt. These warrants with
a put option are described in the "Liquidity and Capital Resources" section of
the Management's Discussion and Analysis of Financial Condition and Results of
Operations. Sterling BOCP is owned by Messrs. Douglas Becker (a 5% beneficial
owner), Eric Becker (a director and 5% beneficial owner), Merrick Elfman (an
executive officer, director and 5% beneficial owner), Bruce Goldman (a 5%
beneficial owner), John Miller (a director) and Steven Taslitz (a director and
5% beneficial owner).
STOCKHOLDER PROPOSALS
All stockholder proposals intended to be presented at the 2003 Annual
Meeting of Stockholders must be received by us no later than February 28, 2003
and must otherwise comply with rules of the Securities and Exchange Commission
for inclusion in our proxy statement and form of proxy relating to the meeting.
If a stockholder wishes to present a proposal before the 2003 Annual Meeting of
Stockholders, but does not wish to have the proposal considered for inclusion in
our proxy statement and form of proxy relating to the meeting, then the proposal
must be received by us no later than May 14, 2003.
OTHER MATTERS
We know of no other matters to be presented for action at the Annual
Meeting other than those mentioned above. However, if any other matters should
properly come before the meeting, it is intended that the persons named in the
accompanying proxy card will vote on such matters in accordance with their best
judgment.
A COPY OF THE ANNUAL REPORT TO STOCKHOLDERS FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2001 ACCOMPANIES THIS PROXY STATEMENT. STOCKHOLDERS MAY OBTAIN,
FREE OF CHARGE, A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE SAME YEAR BY
WRITING TO ATLANTIC PREMIUM BRANDS, LTD., ATTENTION: TOM WIPPMAN, SECRETARY, 650
DUNDEE ROAD, SUITE 370, NORTHBROOK, ILLINOIS 60062.
14
EXHIBIT A
ATLANTIC PREMIUM BRANDS, LTD.
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. In so doing, it shall
be the responsibility of the Committee to maintain free and open means of
communication between the members of the Board, the Company's independent
public accountants who audit the Company's financial statements (the
"Auditors"), and the Company's financial management. The Board shall have
the ultimate authority and responsibility, based upon recommendations from
the Committee, to select, and where appropriate, replace the Auditors, who
are ultimately accountable to the Board of Directors and the Committee.
While the Committee has the functions set forth in this Charter, it is not
the duty of the Committee to plan or conduct audits or to determine that
the Company's financial statements are complete and accurate or are in
accordance with generally accepted accounting principles. The
responsibility to plan and conduct audits is that of the Company's
independent accountants. The Company's management has the responsibility to
determine that the Company's financial statements are complete and accurate
and in accordance with generally accepted accounting principles. Nor is it
the duty of the Committee to assure the Company's compliance with laws and
regulations. The primary responsibility for these matters also rests with
the Company's management.
II. Audit Committee Composition and Meetings
The Committee shall be comprised of three directors as determined by the
Board. Committee members shall meet the requirements of the American Stock
Exchange.
If a Committee Chair is not designated or present, the members of the
Committee may designate a Chair by majority vote of the Committee
membership.
The Committee shall hold such regular meetings as may be necessary and such
special meetings as may be called by the Chair of the Committee or at the
request of the Auditors or management. The Committee Chair shall prepare
and/or approve an agenda in advance of each meeting. The Committee should
meet privately in executive session at least annually with management, the
Auditors, and as a committee to discuss any matters that the Committee or
each of these groups believe should be discussed privately. In addition,
the Committee should communicate with management and the Auditors quarterly
to review the Company's financial statements and significant findings based
upon the Auditor's limited review procedures. The Chair of the Committee
may represent the entire Committee for purposes of this review.
III. Audit Committee Responsibilities and Duties
Review Procedures
1. Assist the Board of Directors of the Company in fulfilling its
oversight functions with respect to the quality, integrity and annual
independent audit of the Company's financial statements.
2. Review and reassess the adequacy of this Charter at least annually.
Submit the Charter to the Board of Directors for approval and have the
document published at least every three years in accordance with SEC
regulations.
3. Review the Company's annual audited financial statements prior to
filing with the SEC. This review should include discussion with
management and the Auditors of significant issues regarding accounting
principles, practices, and judgments.
A-1
4. Review with financial management and the Auditors the Company's
quarterly financial results prior to the release of earnings and/or
the Company's quarterly financial statements prior to filing or
distribution. Discuss any significant changes to the Company's
accounting principles and any items required to be communicated by the
Auditors in accordance with Statement of Accounting Standards No. 61.
The Chair of the Committee may represent the entire Committee for
purposes of this review.
Independent Auditors
5. The Committee shall review the independence and performance of the
Auditors and annually recommend to the Board of Directors the
appointment of the Auditors or approve any discharge of the Auditors
when circumstances warrant.
6. Approve the fees and other significant compensation to be paid to the
Auditors.
7. On an annual basis, the Committee should review and discuss with the
Auditors all significant relationships they have with the Company that
could impair the Auditors' independence. The Committee shall receive
from the Auditors a formal written statement delineating all
relationships between the Auditors and the Company.
8. Review the Auditors' audit plan -- discuss scope, staffing, locations,
reliance upon management, and internal audit and general audit
approach.
9. Discuss with the Auditors their judgments about the quality of the
Company's accounting principles and financial disclosure practices
used or proposed and the appropriateness of significant management
judgments.
10. Review any significant disagreements between financial management and
the Auditors in connection with the preparation of the Company's
financial statements.
11. Review with the Auditors and financial management the extent to which
changes or improvements in financial or accounting practices, as
approved by the Committee, have been implemented.
12. Provide an open avenue of communication among the Auditors, management
and the Board of Directors.
Other Audit Committee Responsibilities
13. Annually prepare a report to shareholders as required by the Securities
and Exchange Commission. The report should be included in the Company's
annual proxy statement.
14. Perform any other activities consistent with this Charter, the
Company's by-laws, and governing law, as the Committee or the Board
deems necessary or appropriate.
15. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
A-2
[FRONT SIDE OF PROXY CARD]
PROXY ATLANTIC PREMIUM BRANDS, LTD. PROXY
NORTHBROOK, ILLINOIS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of the Common Stock of
Atlantic Premium Brands, Ltd. (the "Corporation")
acknowledges receipt of the Proxy Statement and Notice of
Annual Meeting of Stockholders, dated June 28, 2002, hereby
constitutes and appoints Thomas M. Dalton, Merrick M. Elfman
and Tom D. Wippman, and each of them acting singly in the
absence of the other, as Proxies and with full power of
substitution, and hereby authorize(s) them to represent and
to vote, as designated below, all of the shares of Common
Stock of the Corporation held of record by the undersigned
on June 19, 2002, at the Annual Meeting of Stockholders to
be held at 10:00 a.m. local time on July 31, 2002, or at any
adjournment(s) thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL OF
THE DIRECTOR NOMINEES LISTED IN PROPOSAL ONE, AND, IF OTHER
BUSINESS IS PRESENTED AT THE MEETING, IN ACCORDANCE WITH THE
BEST JUDGMENT OF THE PROXIES ON THOSE MATTERS.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
(Continued and to be signed on reverse side.)
[BACK SIDE OF PROXY CARD]
ELECTION OF THREE (3) DIRECTORS FOR A THREE-YEAR TERM.
CLASS III (to serve until the 2005 annual meeting of stockholders)
The Board of Directors Unanimously Recommends a Vote FOR the
Following Nominees.
FOR WITHHOLD
01 - John A. Miller [ ] [ ]
02 - Franklin M. Roth [ ] [ ]
03 - Alan F. Sussna [ ] [ ]
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment(s) thereof.
Dated: ______________, 2002
____________________________________
Signature(s)
Please sign exactly as your name appears on this form. When shares are held in
more than one name, each joint owner should sign. When signing as an attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.