[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 3, 2000
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of J & J SNACK FOODS CORP. will be held
on Thursday, February 3, 2000 at 10:00 A.M., E.S.T., at The Cherry Hill Hilton,
Route 70 and Cuthbert Road, Cherry Hill, New Jersey 08034 for the following
purposes:
1. To elect one director;
2. To increase the number of shares of Common Stock for issuance under
the Company's Stock Option Plan for officers and key employees
excluding the Chief Executive Officer;
3. To increase the number of shares of Common Stock for issuance under
the Company's Nonstatutory Stock Option Plan for Non-Employee
Directors and Chief Executive Officer; and
4. To consider and act upon such other matters as may properly come
before the meeting and any adjournments thereof.
The Board of Directors has fixed December 6, 1999 as the record date for
the determination of shareholders entitled to vote at the Annual Meeting. Only
shareholders of record at the close of business on that date will be entitled to
notice of, and to vote at, the Annual Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE URGED TO SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY. A SELF-ADDRESSED, STAMPED ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors,
DENNIS G. MOORE,
Secretary
December 15, 1999
[LOGO]
6000 CENTRAL HIGHWAY
PENNSAUKEN, NEW JERSEY 08109
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PROXY STATEMENT
------------------------
The enclosed proxy is solicited by and on behalf of J & J Snack Foods Corp.
("J & J") for use at the Annual Meeting of Shareholders to be held on Thursday,
February 3, 2000 at 10:00 A.M., E.S.T., at The Cherry Hill Hilton, Route 70 and
Cuthbert Road, Cherry Hill, New Jersey 08034 and at any postponement or
adjournment thereof. The approximate date on which this Proxy Statement and the
accompanying form of proxy will first be sent or given to shareholders is
December 15, 1999. Sending a signed proxy will not affect the shareholder's
right to attend the Annual Meeting and vote in person since the proxy is
revocable. The grant of a later proxy revokes this proxy. The presence at the
meeting of a shareholder who has given a proxy does not revoke the proxy unless
the shareholder files written notice of the revocation with the secretary of the
meeting prior to the voting of proxy or votes the shares subject to the proxy by
written ballot.
The expense of the proxy solicitation will be borne by J & J. In addition
to solicitation by mail, proxies may be solicited in person or by telephone,
telegraph or teletype by directors, officers or employees of J & J without
additional compensation. J & J is required to pay the reasonable expenses
incurred by record holders of the common stock, no par value per share, of J & J
(the "Common Stock") who are brokers, dealers, banks or voting trustees, or
other nominees, for mailing proxy material and annual shareholder reports to any
beneficial owners of Common Stock they hold of record, upon request of such
record holders.
A form of proxy is enclosed. If properly executed and received in time for
voting, and not revoked, the enclosed proxy will be voted as indicated in
accordance with the instructions thereon. If no directions to the contrary are
indicated, the persons named in the enclosed proxy will vote all shares of
Common Stock for the election of the nominee for director.
The enclosed proxy confers discretionary authority to vote with respect to
any and all of the following matters that may come before the meeting: (i)
matters which J & J does not know about a reasonable time before the proxy
solicitation, and are presented at the meeting; (ii) approval of the minutes of
a prior meeting of shareholders, if such approval does not amount to
ratification of the action taken at the meeting; (iii) the election of any
person to any office for which a bona fide nominee is unable to serve or for
good cause will not serve; and (iv) matters incident to the conduct of the
meeting. In connection with such matters, the persons named in the enclosed form
of proxy will vote in accordance with their best judgment.
J & J had 9,007,435 shares of Common Stock outstanding at the close of
business on December 6, 1999 the record date. The presence, in person or by
proxy, of shareholders entitled to cast at least a majority of the votes which
all shareholders are entitled to cast on a particular matter constitutes a
quorum for the purpose of considering such matter. Each share of Common Stock is
entitled to one
1
vote on each matter which may be brought before the Meeting. The election of
directors will be determined by a plurality vote and the nominee receiving the
most "for" votes will be elected. Approval of any other proposal will require
the affirmative vote of a majority of the shares cast on the proposal. An
abstention, withholding of authority to vote for or broker non-vote, therefore,
will not have the same legal effect as an "against" vote and will not be counted
in determining whether the proposal has received the required shareholder vote.
Shareholders do not have approval or dissenter rights with respect to election
of Directors.
ELECTION OF DIRECTORS
INFORMATION CONCERNING NOMINEE FOR ELECTION TO BOARD
One (1) director is expected to be elected at the Annual Meeting to serve
on the Board of Directors of J & J until the expiration of his term as indicated
below and until his successor is elected and has qualified.
The following table sets forth information concerning J & J's nominee for
election to the Board of Directors. If the nominee becomes unable or for good
cause will not serve, the persons named in the enclosed form of proxy will vote
in accordance with their best judgment for the election of such substitute
nominee as shall be designated by the Board of Directors. The Board of Directors
of J & J expects the nominee to be willing and able to serve.
YEAR OF
EXPIRATION OF
NAME AGE POSITION TERM AS DIRECTOR
- ---------------------------------------------------------------------------------------------------------------
Gerald B. Shreiber 58 Chief Executive Officer, President and Director 2005
INFORMATION CONCERNING CONTINUING
DIRECTORS AND EXECUTIVE OFFICERS
YEAR OF
EXPIRATION OF
NAME AGE POSITION TERM AS DIRECTOR
- ---------------------------------------------------------------------------------------------------------------
Stephen N. Frankel 58 Director 2003
Leonard M. Lodish 56 Director 2004
Dennis G. Moore 44 Senior Vice President, Chief Financial Officer, Secretary, 2002
Treasurer and Director
Robert M. Radano 50 Senior Vice President, Chief Operating Officer and Director 2001
Peter G. Stanley 57 Director 2001
Robyn Shreiber Cook 39 Senior Vice President, West --
Daniel Fachner 39 President, The ICEE Company --
Gerald B. Shreiber is the founder of J & J and has served as its Chairman
of the Board, President, and Chief Executive Officer since its inception in
1971. He is the father of Robyn Shreiber Cook.
Stephen N. Frankel became a director in 1983. Since 1976 he has been the
President and sole shareholder of Stephen N. Frankel Realtor, Inc. which is
engaged in commercial and industrial real estate in the South Jersey area.
Leonard M. Lodish became a director in 1992. He is Samuel R. Harrell
Professor in the Marketing Department of The Wharton School at the University of
Pennsylvania where he has been a professor since 1968. He is a Director of
Franklin Electronic Publishing, Inc. (maker of portable electronic reference
works) and Information Resources, Inc. (marketing data and marketing research).
2
Dennis G. Moore joined J & J in 1984, and has served in various capacities
since that time. He was named Chief Financial Officer in 1992 and was elected to
the Board of Directors in 1995.
Robert M. Radano joined the Company in 1972 and in May 1996 was named Chief
Operating Officer of the Company. Prior to becoming Chief Operating Officer, he
was Senior Vice President, Sales responsible for national foodservice sales of
J & J. He was elected to the Board of Directors in 1996.
Peter G. Stanley became a director in 1983. From April 1, 1992 to September
1995, Mr. Stanley was a self-employed Marketing and Sales Consultant. From
September 1995 to September 1996, Mr. Stanley was Executive Vice President of
Tri-Arc Financial Services, Inc., a commercial insurance broker. He presently is
a self-employed financial consultant.
Robyn Shreiber Cook joined the Company in 1982 and in February 1996 was
named Senior Vice President, West with operating and sales responsibilities for
the Company's West coast foodservice and bakery business. Prior to becoming
Senior Vice President, West she was responsible for Western region foodservice
sales.
Daniel Fachner has been an employee of The ICEE Company since 1979. Prior
to becoming President of The ICEE Company in August 1997, he had various
operational responsibilities.
BOARD OF DIRECTORS, COMMITTEES AND ATTENDANCE AT MEETINGS
The Board of Directors held 4 meetings during fiscal 1999. Each director
attended at least 75 percent of the meetings of the Board and committees of
which he was a member during fiscal 1999.
The Board of directors has appointed a Compensation Committee consisting of
Messrs. Frankel, Lodish and Stanley to fix the compensation of the chief
executive officer. The Compensation Committee also administers the Company's
Stock Option Plan. The Board of Directors also has appointed an Audit Committee
consisting of Messrs. Frankel, Lodish and Stanley to, among other things, review
the Company's financial and accounting practices and policies and the scope and
results of the Company's annual audit. The Audit Committee also recommends to
the Board the selection of the Company's independent public accountants. During
fiscal 1999, the Compensation Committee and the Audit Committee each held one
meeting.
The Board of Directors has not appointed a standing Nominating Committee.
DIRECTOR COMPENSATION
Each director of the Company who is not also an employee receives an annual
fee of $3,000 and a fee of $1,000 for each meeting of the Board or committee
meeting attended, plus reimbursement of expenses incurred in attending meetings.
Additionally, pursuant to the terms of the Company's Nonstatutory Stock Option
Plan for Non-employee Directors and Chief Executive Officer, each Director is
annually granted an option to purchase 3,000 shares of Common Stock and the
Chief Executive Officer is granted an option to purchase 25,000 shares of Common
Stock at an exercise price equal to the Common Stock's fair market value on May
1 each year which will first be exercisable one year later.
Each director who is not also an executive officer of the Company is
entitled annually to deferred compensation of 500 shares of the Company's common
stock under a Deferred Stock Plan. The stock will be issued to the director on
the date the director leaves the Board.
3
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table sets forth certain information regarding the
compensation paid to the Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company for services rendered in
all capacities for fiscal 1999, 1998 and 1997:
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------- ------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
- --------------------------------------------- ---- -------- -------- ------------- ---------------
Gerald B. Shreiber 1999 $450,000 $420,000 25,000 $ 4,000
Chairman of the Board, 1998 $425,000 $350,000 25,000 $ 4,000
President, Chief Executive 1997 $400,000 $250,000 25,000 $ 3,000
Officer and Director
Robert M. Radano 1999 $197,000 $134,000 4,371 $ 4,000
Chief Operating Officer, 1998 $185,000 $ 75,000 6,349 $ 4,000
Senior Vice President, 1997 $185,000 $ 60,000 7,000 $ 3,000
Sales and Director
Robyn Shreiber Cook 1999 $154,000 $129,000 4,371 $ 4,000
Senior Vice President, West 1998 $145,000 $110,000 6,349 $ 4,000
1997 $143,000 $ 50,000 7,000 $ 3,000
Dennis G. Moore 1999 $219,000 $115,000 4,371 $ 4,000
Senior Vice President, Chief 1998 $204,000 $100,000 6,349 $ 4,000
Financial Officer and Director 1997 $189,000 $ 75,000 7,000 $ 3,000
Daniel Fachner 1999 $196,000 $200,000 4,371 $ 4,000
President 1998 $174,000 $175,000 6,349 $ 4,000
The ICEE Company 1997 $150,000 $125,000 6,000 $ 3,000
- ------------------
(1) 401(k) Profit Sharing Plan Contribution.
4
OPTION GRANTS
The following table sets forth certain information concerning stock options
granted during fiscal 1999 to the Chief Executive Officer and to each of the
four other most highly compensated executive officers of the Company.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUES AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
- ----------------------------------------------------------------------------------------- STOCK PRICE
% OF TOTAL APPRECIATION FOR
OPTIONS GRANTED OPTION TERM
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION --------------------
NAME GRANTED IN FISCAL YEAR PRICE DATE 5% 10%
- -----------------------------------------------------------------------------------------------------------------
Gerald B. Shreiber.............. 25,000(1) 10% $ 21.75 4/30/09 $342,000 $867,000
Robert M. Radano................ 4,371(2) 2% $ 22.875 7/01/04 $ 28,000 $ 61,000
Dennis G. Moore................. 4,371(2) 2% $ 22.875 7/01/04 $ 28,000 $ 61,000
Robyn Shreiber Cook............. 4,371(2) 2% $ 22.875 7/01/04 $ 28,000 $ 61,000
Daniel Fachner.................. 4,371(2) 2% $ 22.875 7/01/04 $ 28,000 $ 61,000
- ------------------
(1) All options granted are first exercisable on May 1, 2000.
(2) All options granted are first exercisable on July 1, 2002.
OPTION EXERCISES AND HOLDINGS
The following table summarizes exercises of stock options during fiscal
year 1999 by the Chief Executive Officer and highly compensated executives and
the number of unexercised options and the value of unexercised options held at
the end of fiscal year 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON OPTIONS AT FY-END (#) AT FY-END($)
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------------------------------------------
Gerald B. Shreiber................... 57,062 $754,000 200,000/25,000 $ 1,666,000/$ --
Robert M. Radano..................... 11,000 $106,000 17,000/17,720 $ 172,000/$104,000
Dennis G. Moore...................... 3,000 $ 23,000 18,000/17,720 $ 196,000/$104,000
Robyn Shreiber Cook.................. 8,048 $ 81,000 16,903/17,720 $ 113,000/$104,000
Daniel Fachner....................... 4,000 $ 42,000 11,000/16,720 $ 114,000/$ 94,000
5
OPTION REPRICING
The following table sets forth information concerning repricings of options
held by executive officers of the Company during the last ten completed fiscal
years:
TEN-YEAR OPTION/SAR REPRICINGS
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE EXERCISE OPTION TERM
UNDERLYING OF STOCK AT PRICE AT REMAINING AT
OPTIONS/SARS TIME OF TIME OF NEW DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED (#) AMENDMENT ($) AMENDMENT ($) PRICE ($) AMENDMENT
- --------------------------------------------------------------------------------------------------------------------
Robert M. Radano 8/l/96 6,000* $9.75 $12.375 $9.75 58 months
Senior Vice President,
Chief Operating
Officer
Dennis G. Moore 8/l/96 6,000* $9.75 $12.375 $9.75 58 months
Senior V.P., Chief
Financial Officer,
Secretary/Treasurer
Robyn Shreiber Cook 8/l/96 6,000* $9.75 $12.375 $9.75 58 months
Senior V.P., West
Daniel Fachner 8/l/96 5,000* $9.75 $12.375 $9.75 58 months
President,
ICEE-USA Corp.
- ------------------
* Effective August 1, 1996, above referenced options to purchase shares of
Common Stock at an exercise price of $12.375 per share, granted on May 24,
1996, were canceled and replaced by options to purchase shares at an exercise
price of $9.75 per share.
401(K) PROFIT SHARING PLAN
J & J maintains a 401(k) Profit Sharing Plan for the benefit of eligible
employees. J & J's contribution is based upon the individual employee's
contribution. During the fiscal year ended September 25, 1999 contributions in
the amount of $684,000 were made to the 401(k) Profit Sharing Plan.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors is composed of
directors who are not employees of J & J and is responsible for developing and
making recommendations to the Board with respect to J & J's executive
compensation programs. In addition, the Compensation Committee, pursuant to
authority delegated by the Board, determines on an annual basis the compensation
to be paid to the Chief Executive Officer. The Compensation Committee neither
reviews nor approves the decisions of the Chief Executive Officer with respect
to the compensation of the other executive officers.
6
J & J's compensation is comprised of base salary, bonus, long term
incentive compensation in the form of stock options, and various benefits
generally available to all full-time employees of the Company, including
participation in group medical and life insurance plans and the 401(k) Profit
Sharing Plan.
BASE SALARY
Base salary levels for J & J's executive officers are competitively set
relative to companies in the food industry. In obtaining competitive
information, the Company informally reviews newspaper and trade journal reports
and information gathered from discussion with others in the industry. No formal
survey is undertaken.
BONUSES
Annual performance standards for each executive officer's area of
responsibility are established by the Chief Executive Officer for other
executive officers. In some cases, bonuses are linked primarily to achieving
increases from the prior year's sales and/or earnings. In other cases, bonuses
reflect a more subjective view of an individual's performance.
The bonus for Mr. Shreiber was not linked to any specific formula. The
Compensation Committee considers both the long term aspect of the Company's
performance and year to year results. Among the items considered by the
Committee were J & J's Sales, Operating Income, Operating Income as a percent of
sales, Net Earnings, Earnings Per Share, Return on Equity and Stock Price. These
items were reviewed for the previous year and for a five year period. The
Committee reviewed and considered published reports about the compensation
levels of the 100 largest public companies in the Delaware Valley. The Committee
also considers matters which are likely to have a long term impact on the
Company but may not be reflected on the annual financial statements.
The above factors were considered subjectively without specific weight to
any item.
STOCK OPTIONS
The Company uses the Stock Option Plan as its long-term incentive plan for
executive officers and key employees. The objectives of this Plan are to align
the long term interests of executive officers and shareholders by creating a
direct link between executive compensation and shareholder return and to enable
executives to develop and maintain a significant long term equity interest in J
& J. Options given to the Chief Executive Officer are fixed according to a
Nonstatutory Plan. Options given to other executive officers are recommended by
the Chief Executive Officer and approved by the Compensation Committee. On June
29, 1999 and on July 2, 1999, options were awarded to various employees at the
then price of $21.625 and $22.875, respectively.
7
STOCK PERFORMANCE GRAPH
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG J & J SNACK FOODS CORP., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S & P FOODS INDEX
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts
the following plot points:
J & J SNACK FOODS CORP. NASDAQ STOCK MARKET(U.S.) S & P FOODS
----------------------- ------------------------- -----------
9/94 100 100 100
9/95 92 138 124
9/96 84 164 153
9/97 127 225 204
9/98 145 229 217
9/99 155 372 209
* $100 INVESTED ON 9/30/94 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING SEPTEMBER 30.
8
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of December 1, 1999
concerning (i) each person or group known to J & J to be the beneficial owner of
more than 5% of Common Stock, (ii) each director and nominee for director of the
Company, (iii) each of the Company's five most highly compensated executive
officers for the 1999 fiscal year, and (iv) the beneficial ownership of Common
Stock by J & J's directors and all executive officers as a group. Except as
otherwise noted, each beneficial owner of the Common Stock listed below has sole
investment and voting power.
SHARES
NAME AND ADDRESS OWNED PERCENT
OF BENEFICIAL OWNER BENEFICIALLY(1) OF CLASS
- ----------------------------------------------------------------------------------------------------------------------
DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS
Gerald B. Shreiber................................................................... 2,457,436(2) 27%
6000 Central Highway
Pennsauken, NJ 08109
Stephen N. Frankel................................................................... 76,230(3)(4) *
Leonard M. Lodish.................................................................... 31,000(5) *
Dennis G. Moore...................................................................... 34,136(6) *
Robert M. Radano..................................................................... 56,756(7) *
Peter G. Stanley..................................................................... 59,438(3)(8) *
Robyn Shreiber Cook.................................................................. 98,885(9) 1%
Daniel Fachner....................................................................... 16,204(10) *
All executive officers and
directors as a group (8 persons)................................................... 2,830,085(11) 30%
FIVE PERCENT SHAREHOLDERS
David L. Babson & Company............................................................ 452,750 5%
1 Memorial Drive
Cambridge, MS 02142
Dimensional Fund Advisors............................................................ 497,700 6%
1299 Ocean Avenue
Santa Monica, CA 90041
Fleming Capital Management........................................................... 516,950 6%
320 Park Avenue
New York, NY 10022
9
- ------------------
* Less than 1%
(1) The securities "beneficially owned" by a person are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission and, accordingly,
include securities owned by or for the spouse, children or certain other
relatives of such person as well as other securities as to which the person
has or shares voting or investment power or has the right to acquire within
60 days of Record Date. The same shares may be beneficially owned by more
than one person. Beneficial ownership may be disclaimed as to certain of
the securities.
(2) Includes 200,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Shreiber and exercisable within 60 days from the
date of this Proxy Statement, 1,000 shares owned as trustee for a niece,
and 68,949 shares held for the benefit of Mr. Shreiber in J & J's 401(k)
Plan.
(3) Includes 27,500 shares of Common Stock issuable upon the exercise of
options and exercisable within 60 days from the date of this Proxy
Statement and 1,500 shares issuable under the Deferred Stock Plan.
(4) Includes 160 shares owned as trustee for children, and 500 shares owned by
Mr. Frankel's spouse.
(5) Includes 28,000 shares of Common Stock issuable upon the exercise of
options granted to Dr. Lodish and exercisable within 60 days from the date
of this Proxy Statement and 1,500 shares issuable under the Deferred Stock
Plan.
(6) Includes 18,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Moore and exercisable within 60 days from the date
of this Proxy Statement and 1751 shares held for the benefit of Mr. Moore
in the Company's 401(k) Plan and 1,167 shares in the Company's Stock
Purchase Plan.
(7) Includes 17,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Radano and exercisable within 60 days from the date
of this Proxy Statement and 1,167 shares in the Company's Stock Purchase
Plan.
(8) Includes 21,308 shares owned jointly with Mr. Stanley's spouse with shared
voting and investment power.
(9) Includes 16,903 shares of Common Stock issuable upon the exercise of
options granted to Ms. Cook and exercisable within 60 days from the date of
this Proxy Statement, 6,960 shares owned as trustee for her son, and 414
shares held for the benefit of Ms. Cook in the Company's 401(k) Plan.
(10) Includes 11,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Fachner and exercisable within 60 days from the date
of this Proxy Statement and 735 shares held for the benefit of Mr. Fachner
in the Company's 401(k) Plan and 469 shares in the Company's Stock Purchase
Plan.
(11) Includes 345,903 shares of Common Stock issuable upon the exercise of
options granted to executive officers and directors of J & J and
exercisable within 60 days from the date of this Proxy Statement and 4,500
issuable under the Deferred Stock Plan.
10
PROPOSAL TO APPROVE AMENDMENTS TO
COMPANY'S STOCK OPTION PLAN
The Board of Directors has also approved an increase in the maximum number
of shares issuable under the Stock Option Plan by 500,000 to a total of
2,000,000. The Board of Directors recommends a vote "For" this proposal.
INCREASES IN AUTHORIZED SHARES UNDER STOCK OPTION PLAN
Currently, options for a total of 1,500,000 shares may be issued under the
Stock Option Plan. The amendment increases the maximum number of shares issuable
under the Stock Option Plan by 500,000 to a total of 2,000,000 shares. No
options have been issued to date from said 500,000 shares.
The purpose of the proposed increase is to provide sufficient shares for
future option grants to officers and key employees of the Company. As of
December 1, 1999, the Company had 265,000 shares available for grant under the
Stock Option Plan. The Board of Directors believes that it is in the best
interests of the Company to have sufficient shares available under the Stock
Option Plan to provide options to certain of its officers and key employees. In
fiscal 1999, the Company granted 242,000 options under the Stock Option Plan and
it is prudent to increase the number available for future grants so as to
continue to grant options, which is a critical part of long term compensation.
The Board of Directors believes that the Company and its shareholders
significantly benefit from having the Company's key management employees receive
options to purchase the Company's Common Stock and that the opportunity thus
afforded these employees to acquire Common Stock is an essential element of an
effective management incentive program. Approval by the shareholders is
requested in order to grant Incentive Stock Options under the Plan. The Board of
Directors also believes that stock options are very valuable in attracting and
retaining highly qualified management personnel and in providing additional
motivation to management to use their best efforts on behalf of the Company.
Set forth below is a summary of certain significant portions of the Stock
Option Plan.
Eligibility and Administration. All officers other than the Chief
Executive officer and key employees of the Company or any current or future
subsidiary corporation are eligible to receive options under the 1992 Plan.
The 1992 Plan is administered by the Compensation Committee which is
appointed by the Board of Directors and consists only of Directors who are not
eligible to receive options under the 1992 Plan. The Compensation Committee
consists of a minimum of three directors, each of whom must be a "disinterested
person" as defined in rule 16b-3 under the Exchange Act. Generally, a
"disinterested" director is a director who has not received options under the
1992 Plan during the one year period prior to service on the Compensation
Committee. Subject to the numerical limitations described above, the Board of
Directors may at any time appoint additional members of the Compensation
Committee or remove any member of the Compensation Committee with or without
cause. Vacancies in the Compensation Committee, however caused, may be filled by
the Board of Directors if it so desires.
The Compensation Committee determines, among other things, which officers
and key employees receive an option or options under the 1992 Plan, the type of
option (Incentive Stock Options or Non-Qualified Stock Options, or both) to be
granted, the number of shares subject to each option, the time or times at which
an option is granted, the rate of option exercisability, and, subject to certain
other provisions to be discussed below, the exercise price and duration of the
option.
The Compensation Committee may, in its discretion, modify or amend any of
the option terms hereafter described, provided that if an Incentive Stock Option
is granted under the 1992 Plan, the option as modified or amended continues to
be an Incentive Stock Option.
11
Amendment and Termination. The Company's Board of Directors has the right
at any time, and from time to time, to modify, amend, suspend or terminate the
1992 Plan, without shareholder approval, except to the extent that shareholder
approval of the 1992 Plan modification or amendment is required by the Code to
permit the granting of Incentive Stock Options under the 1992 Plan. Any such
action will not affect options previously granted. If the Board of Directors
voluntarily submits a proposed modification, amendment, suspension or
termination for shareholder approval, such submission will not require any
future modifications, amendments, suspensions or terminations (whether or not
relating to the same provision or subject matter) to be similarly submitted for
shareholder approval.
No options may be granted pursuant to the 1992 Plan after December 2002.
ERISA Compliance. The 1992 Plan is not subject to any provisions of ERISA.
Transferability. Options granted pursuant to the 1992 Plan are not
transferable, except (i) by the will or the laws of descent and distribution in
the event of death, and (ii) the Compensation Committee has the authority to
provide for the transferability of Non-Qualified Stock Options. During an
optionee's lifetime, the option is exercisable only by the optionee, including,
for this purpose, the optionee's legal guardian or custodian in the event of
disability and the optionee's transferee to the extent permitted by the
Compensation Committee with respect to Non-Qualified Stock Options.
Number of Shares and Adjustment. As of December 1, 1999, the aggregate
number of shares which may be issued upon the exercise of options under the 1992
Plan is 1,500,000 shares of Common Stock (as adjusted for all stock splits and
stock dividends through November 30, 1999). As of December 1, 1999, 1,235,000
options covering shares of Common Stock had been granted under the 1992 Plan and
265,000 shares were available for future options. Options may continue to be
granted under the 1992 Plan through December, 2002. In the event of any change
in the capitalization of the Company, such as by stock dividend, stock split or
what the Board of Directors deems in its sole discretion to be similar
circumstances, the aggregate number and kind of shares which may be issued under
the 1992 Plan will be appropriately adjusted in a manner determined in the sole
discretion of the Board of Directors. Reacquired shares of the Company's Common
Stock, as well as authorized but unissued shares and shares purchased in the
open market by the Company, may be used for purposes of the 1992 Plan. Common
Stock of the Company subject to options which have terminated unexercised,
either in whole or in part, will be available for future options granted under
the 1992 Plan.
Exercise Price and Terms. The exercise price for options issued under the
1992 Plan must be at least equal to 100% of the fair market value of the Common
Stock as of the date the option is granted, except that for an Incentive Stock
Option granted to any person who possesses more than 10% of the total combined
voting power of all classes of stock of the Company, the exercise price will be
at least 110% of the fair market value of the Common Stock as of such date. The
fair market value of the Common Stock is the market price as reported on NASDAQ.
Incentive Stock Options first exercisable by an employee in any one year
under the 1992 Plan (and all other plans of the Company) may not exceed $100,000
in value (determined at the time of grant). Generally under the Code, to the
extent that the fair market value of the Common Stock which may be acquired
under all Incentive Stock Options which first become exercisable by an optionee
in any calendar year exceeds $100,000 (determined at the time the option is
granted), options to purchase Common Stock with a fair market value in excess of
$100,000 automatically will become Non-Qualified Stock Options.
Payment of the exercise price on options granted under the 1992 Plan may be
made in (a) cash, (b) (unless prohibited by the Compensation Committee) the
Company Common Stock which will be
12
valued by the Compensation Committee or Board at its fair market value or (c)
(unless prohibited by the Compensation Committee or the Board) any combination
of cash and Common Stock of the Company valued as provided in clause (b).
Under the terms of the 1992 Plan, the Board has interpreted the provision
of the 1992 Plan which allows payment of the exercise price in Common Stock of
the Company to permit the "pyramiding" of shares in successive exercises. Thus,
an optionee could initially exercise an option in part, acquiring a small number
of shares of Common Stock, and immediately thereafter effect further exercises
of the option, using the Common Stock acquired upon earlier exercises to pay for
an increasingly greater number of shares received on each successive exercise.
This procedure could permit an optionee to pay the exercise price by using a
single share of Common Stock or a small number of shares of Common Stock to
acquire a number of shares of Common Stock having an aggregate fair market value
equal to the excess of (a) the fair market value (as determined above) of all
shares to which the option relates over (b) the aggregate exercise price under
the option.
Except as otherwise described below, none of the options granted under the
1992 Plan since May 1, 1994 may be exercised prior to three years after the date
granted.
Unless terminated earlier by the option's terms both Incentive Stock
Options and Non-Qualified Stock Options expire according to the time period
determined by the Compensation Committee at the time of grant up to a maximum of
ten years after the date they are granted, except that if Incentive Stock
Options are granted to a person possessing more than 10% of the total combined
voting power of all classes of stock of the Company on the date of grant, such
option will expire five years after the date they are granted.
Restriction on Transfer. All options issued since July 1, 1999 contain a
restriction requiring upon the exercise of an option, 50 percent of the stock
received must be held for two years from date of issuance. This restriction does
not apply to employees with at least ten (10) years of service with the Company
who retire at their normal retirement.
Termination of Service; Death; Non-Transferability. Except as provided
below, all unexercised options will terminate immediately upon an optionee's
ceasing to be employed by the Company or a subsidiary, or the Company or a
subsidiary delivers or receives notice of an intention to terminate the
employment relationship, regardless of whether or not a different effective date
of termination is provided in such notice, other than termination by reason of
disability or death (but not later than the option expiration date), whether or
not such termination is voluntary. If an optionee is employed by a subsidiary,
the optionee is deemed to cease being an employee of the subsidiary if and when
the entity ceases to be a subsidiary of the Company, unless the optionee on that
date is transferred to the Company or another subsidiary. If an employee has
been employed by the Company or any of its subsidiaries for a period in excess
of ten (10) years and retires at his/her normal retirement date, any unexercised
options will not terminate on retirement but will remain exercisable until the
option expiration date.
An optionee (or such optionee's legal guardian or custodian) holding an
option who ceases to be employed by the Company or a Company subsidiary
corporation because of a disability may exercise any such option within one year
after termination of employment (but not later than the option expiration date);
any unexercised options will terminate at the earlier of (i) the end of such one
year period or (ii) the option expiration date. The executor, administrator or
personal representative of a deceased optionee may exercise any options within
one year following the optionee's death (but not later than the option
expiration date); any unexercised options will terminate at the earlier of (i)
the end of such one year period or (ii) the option expiration date. In any
event, the option may be exercised
13
only as to any shares which the employee had a right to purchase and did not
purchase prior to termination of employment, or termination due to disability or
death, as the case may be.
Federal Income Tax Consequences of the Stock Option Plan. Set forth below,
is a description of the federal income tax consequences to the recipient of
options and the Company under the Internal Revenue Code of 1986, as amended, of
the grant and exercise of options awarded under the Stock Option Plan.
Incentive Stock Options Under the Stock Option Plan. Generally, under the
Code, an optionee will not realize taxable income by reason of the grant or the
exercise of an Incentive Option (see, however, discussion of Alternative Minimum
Tax below). If an optionee exercises an Incentive Option and does not dispose of
the shares until the later of (i) two years from the date the option was granted
and (ii) one year from the date of exercise, the entire gain, if any, realized
upon disposition of such shares will be taxable to the optionee as long-term
capital gain, and the Corporation will not be entitled to any deduction. If an
optionee disposes of the shares within the period of two years from the date of
grant or one year from the date of exercise (a "disqualifying disposition"), the
optionee generally will realize ordinary income in the year of disposition and
the Corporation will receive a corresponding deduction, in an amount equal to
the excess of (1) the lesser of (a) the amount, if any, realized on the
disposition and (b) the fair market value of the shares on the date the option
was exercised over (2) the option price. Any additional gain realized on the
disposition will be long-term or short-term capital gain and any loss will be a
long-term or short-term capital loss. The optionee will be considered to have
disposed of a share if he sells, exchanges, makes a gift of or transfers legal
title to the share (except transfers, among others, by pledge, on death or to
spouses) If the disposition is by sale or exchange, the optionee's tax basis
will equal the amount paid for the share plus any ordinary income realized as a
result of the disqualifying disposition.
The exercise of an Incentive Option may subject the optionee to the
alternative minimum tax. The amount by which the fair market value of the shares
purchased at the time of the exercise exceeds the option exercise price is an
adjustment for purposes of computing the alternative minimum tax. In the event
of a disqualifying disposition of the shares in the same taxable year as
exercise of the Incentive Option, no adjustment is then required for purposes of
the alternative minimum tax, but regular income tax, as described above, may
result from such disqualifying disposition.
An optionee who surrenders shares as payment of the exercise price of his
Incentive Option generally will not recognize gain or loss on his surrender of
such shares. The surrender of shares previously acquired upon exercise of an
Incentive Option in payment of the exercise price of another Incentive Option,
is, however, a "disposition" of such stock. If the incentive stock option
holding period requirements described above have not been satisfied with respect
to such stock, such disposition will be a disqualifying disposition that may
cause the optionee to recognize ordinary income as discussed above.
Under the Code, all of the shares received by an optionee upon exercise of
an Incentive Option by surrendering shares will be subject to the incentive
stock option holding period requirements. Of those shares, a number of shares
(the "Exchange Shares") equal to the number of shares surrendered by the
optionee will have the same tax basis for capital gains purposes (increased by
any ordinary income recognized as a result of any disqualifying disposition of
the surrendered shares if they were incentive stock option shares) and the same
capital gains holding period as the shares surrendered. For purposes of
determining ordinary income upon a subsequent disqualifying disposition of the
Exchange Shares, the amount paid for such shares will be deemed to be the fair
market value of the shares surrendered. The balance of the shares received by
the optionee will have a tax basis (and a deemed purchase price)
14
of zero and a capital gains holding period beginning on the date of exercise.
The Incentive Stock Option holding period for all shares will be the same as if
the option had been exercised for cash.
Non-Qualified Options granted under the Stock Option Plan and the
Nonstatutory Plan for Non-Employee Directors and Chief Executive
Officer. Generally, there will be no federal income tax consequences to either
the optionee or the Corporation on the grant of Non-Qualified Options. On the
exercise of a Non-Qualified Option, the optionee has taxable ordinary income
equal to the excess of the fair market value of the shares acquired on the
exercise date over the option price of the shares. The Corporation will be
entitled to a federal income tax deduction (subject to the limitations contained
in Section 162 of the Code) in an amount equal to such excess.
Upon the sale of stock acquired by the exercise of a Non-Qualified Option,
optionees will realize long-term or short-term capital gain or loss depending
upon their holding period for such stock. In order to qualify for the new
reduced 20% rate, a holding period of more than twelve months is required.
Capital losses are deductible only to the extent of capital gains for the year
plus $3,000 for individuals.
An optionee who surrenders shares in payment of the exercise price of a
Non-Qualified Option will not recognize gain or loss with respect to the shares
so delivered unless such shares were acquired pursuant to the exercise of an
Incentive Option and the delivery of such shares is a disqualifying disposition.
The optionee will recognize ordinary income on the exercise of the Non-Qualified
Option as described above. Of the shares received in such an exchange, that
number of shares equal to the number of shares surrendered will have the same
tax basis and capital gains holding period as the shares surrendered. The
balance of the shares received will have a tax basis equal to their fair market
value on the date of exercise and the capital gains holding period will begin on
the date of exercise.
Limitation on Corporation's Deduction. Section 162(m) of the Code will
generally limit to $1.0 million the Corporation's federal income tax deduction
for compensation paid in any year to its chief executive officer and its four
highest paid executive officers, to the extent that such compensation is not
"performance based." Under Treasury regulations, and subject to certain
transition rules, a stock option will, in general, qualify as "performance
based" compensation if it (i) has an exercise price of not less than the fair
market value of the underlying stock on the date of grant, (ii) is granted under
a plan that limits the number of shares for which options may be granted to an
employee during a specified period, which plan is approved by a majority of the
shareholders entitled to vote thereon, and (iii) is granted by a compensation
committee consisting solely of at least two independent directors. If a stock
option to an executive referred to above is not "performance based", the amount
that would otherwise be deductible by the Corporation in respect of such stock
option will be disallowed to the extent that the executive's aggregate
non-performance based compensation paid in the relevant year exceeds $1.0
million.
NEW PLAN BENEFITS TABLE
The amount, if any, of stock options to be awarded to key employees is
determined on an annual basis by the Committee and is not presently
determinable. Information regarding awards to the Named Officers in 1999 is
provided elsewhere in this Proxy Statement. See "Executive Compensation". There
would not have been any difference in the amount of these grants had they been
made under the Stock Option Plan if the amendments were approved.
15
PROPOSAL TO APPROVE AMENDMENTS TO THE COMPANY'S
NON-STATUTORY STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS AND CHIEF EXECUTIVE OFFICER
The Board of Directors has approved an increase in the maximum number of
shares issuable under the Nonstatutory Stock Option Plan for Non-Employee
Directors and Chief Executive Officer (the "Nonstatutory Plan") by 100,000
shares to a total of 440,000 shares and an increase in the total shares that the
Chief Executive Officer may receive under the plan from 250,000 shares to
350,000 shares, subject to approval by the shareholders of J & J.
Under the Nonstatutory Plan, non-employee directors and the chief executive
officer of J & J will be granted options to purchase shares of Common Stock. The
Board of Directors recommends that you vote FOR approval of the Nonstatutory
Plan because it believes that the Nonstatutory Plan will advance the interests
of J & J and its shareholders by strengthening the ability of J & J to attract,
retain and motivate non-employee directors and the chief executive officer of J
& J. Approval by the shareholders is requested in order to qualify the options
as performance based compensation under Section 162(m) of the Code. The
affirmative vote of a majority of the votes cast by all shareholders entitled to
vote thereon will be required to approve the Nonstatutory Plan.
Set forth below is a summary of certain significant provisions of the
Nonstatutory Plan.
NONSTATUTORY PLAN
Pursuant to the Nonstatutory Plan, stock options (the "Non-Qualified
Options") may be granted which do not satisfy the requirements of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"). The purpose of the
Nonstatutory Plan is to enhance the ability of J & J to attract, retain and
motivate its chief executive officer (the "CEO") and non-employee members of its
Board of Directors and to provide additional incentive to the CEO and such
members of the Board of Directors by encouraging them to invest in shares of
Common Stock of J & J and thereby acquire a proprietary interest in J & J and an
increased personal interest in J & J's continued success and progress, to the
mutual benefit of J & J and its shareholders.
Eligibility and Administration. Only non-employee directors and the CEO of
J & J are eligible to receive options under the Nonstatutory Plan. The
Nonstatutory Plan is administered by the Compensation Committee of J & J. The
Board of Directors will adopt such rules for the conduct of its business and
administration of the Nonstatutory Plan and the options issued pursuant to it,
to correct defects and omissions and to reconcile inconsistencies to the extent
necessary to effectuate the purpose of the Nonstatutory Plan. The Board of
Directors also has the right to modify, amend, suspend, or terminate the
Nonstatutory Plan, subject to certain conditions.
Number of Shares and Adjustment. The aggregate number of shares which may
be issued upon the exercise of options granted under the Nonstatutory Plan are
340,000 shares of Common Stock. As of December 1, 1999 the Company had issued
322,000 options and had 18,000 shares available for grant under the Nonstatutory
Plan. The aggregate number and kind of shares issuable under the Nonstatutory
Plan are subject to appropriate adjustment to reflect changes in the
capitalization of J & J, such as by stock dividend, stock split or other
circumstances deemed by the Board of Director to be similar. Reacquired shares
of Common Stock, as well as unissued shares, may be used for the purpose of the
Nonstatutory Plan. Any shares of Common Stock subject to options that terminate
unexercised will be available for future options under the Nonstatutory Plan.
Exercise Price and Other Terms. The exercise price for Non-Qualified
Options granted under the Nonstatutory Plan shall be equal to the fair market
value, as determined by the Board of Directors
16
of the Corporation's Common Stock on the date of the grant of the option. Unless
terminated earlier by the option's terms, Non-Qualified Options granted under
the Nonstatutory Plan will expire ten years after the date they are granted.
According to the terms of the Nonstatutory Plan, each person who is not an
employee of J & J or any subsidiary corporation of J & J but is a director of
J & J as of May 1 of each year, shall automatically be granted an option to
purchase 3,000 shares of Common Stock. Additionally, the CEO shall, as of May 1
of each year, automatically be granted an option to purchase 10,000 shares of
Common Stock in addition to 3,000 shares of Common Stock for every full calendar
year the CEO held such office since J & J held its initial public stock offering
in 1986. However, the CEO may not receive an option or options to purchase more
than 25,000 shares of Common Stock in any calendar year and no more than 250,000
shares (350,000 shares if this amendment is approved) may be granted to the CEO
under the Nonstatutory Plan. Notwithstanding the foregoing, in the event of any
change in the capitalization of J & J, such as by stock dividend, stock split,
or what the Board of Directors deems in its sole discretion to be similar
circumstances, the number and kind of shares which may be issued under the
Nonstatutory Plan shall be adjusted by the Board of Directors. The Nonstatutory
Plan provides that options issued during calendar year 1991 shall be issued as
of the date of the Non-statutory Plan, April 9, 1991, and not as of May 1.
For information concerning Payment of Exercise Price; Market Price and
Termination of Service; Death, see corresponding headings under Proposal 2 to
Approve Amendments to Company's Stock Option Plan.
Federal Income Tax Consequences of Nonstatutory Plan. See Proposal 2 --
Approval of the Stock Option Plan -- Federal Income Tax Consequences of the
Nonstatutory Plan and the Plan -- (i) Non-Qualified Options under the
Nonstatutory Plan and the Plan.
SHAREHOLDER PROPOSALS
Pursuant to recent amendments to the proxy rules under the Securities
Exchange Act, the Company's shareholders are notified that the deadline for
providing the Company timely notice of any shareholder proposal to be submitted
outside of the Rule 14a-8 process for consideration at the Company's 2001 Annual
Meeting of Shareholders (the "Meeting") will be October 2, 2000. As to all such
matters which the Company does not have notice on or prior to October 2, 2000,
discretionary authority shall be granted to the persons designated in the
Company's proxy related to the 2001 Meeting to vote on such proposal. This
change in procedure does not affect the Rule 14a-8 requirements applicable to
inclusion of shareholder proposals in the Company's proxy materials related to
the 2001 Meeting. A shareholder proposal regarding the 2001 Meeting must be
submitted to the Company at its office located at 6000 Central Highway,
Pennsauken, New Jersey 08109, by August 18, 2000 to receive consideration for
inclusion in the Company's 2000 proxy materials. Any such proposal must also
comply with the proxy rules under the Securities Exchange Act, including Rule
14a-8.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's directors and executive officers, and persons who beneficially own
more than ten percent of the Company's Common Stock, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater than ten-percent shareholders are required by regulation
of the Securities and Exchange Commission to furnish the Company with copies of
all Section 16(a) forms they file.
17
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to the
Company's officers, directors and greater than ten-percent beneficial owners
were complied with during fiscal 1998.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has selected Grant Thornton
LLP to be employed as J & J's independent certified public accountants to make
the annual audit and to report on, as may be required, the consolidated
financial statements which may be filed by J & J with the Securities and
Exchange Commission during the ensuing year.
A representative of Grant Thornton LLP is expected to be present at the
Annual Meeting of Shareholders and to have the opportunity to make a statement,
if he or she desires to do so, and is expected to be available to respond to
appropriate questions.
OTHER MATTERS
The Company is not presently aware of any matters (other than procedural
matters) which will be brought before the Meeting which are not reflected in the
attached Notice of the Meeting. The enclosed proxy confers discretionary
authority to vote with respect to any and all of the following matters that may
come before the Meeting: (i) matters which the Company does not know, a
reasonable time before the proxy solicitation, are to be presented at the
Meeting; (ii) approval of the minutes of a prior meeting of shareholders, if
such approval does not amount to ratification of the action taken at the
meeting; (iii) the election of any person to any office for which a bona fide
nominee named in this Proxy Statement is unable to serve or for good cause will
not serve; (iv) any proposal omitted from this Proxy Statement and the form of
proxy pursuant to Rules 14a-8 or 14a-9 under the Securities Exchange Act of
1934; and (v) matters incident to the conduct of the Meeting. In connection with
such matters, the persons named in the enclosed proxy will vote in accordance
with their best judgment.
ANNUAL REPORT TO SHAREHOLDERS AND FORM 10-K
This Proxy Statement is accompanied by the Company's Annual Report to
Shareholders for fiscal 1999.
EACH PERSON SOLICITED HEREUNDER CAN OBTAIN A COPY OF J & J'S ANNUAL REPORT
ON FORM 10-K FOR FISCAL 1999 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE YEAR ENDED SEPTEMBER 25, 1999, WITHOUT CHARGE, BY SENDING A
WRITTEN REQUEST TO J & J SNACK FOODS CORP., 6000 CENTRAL HIGHWAY, PENNSAUKEN,
NEW JERSEY 08109, ATTENTION: DENNIS G. MOORE.
By Order of the Board of Directors,
DENNIS G. MOORE, Secretary
18
J & J SNACK FOODS CORP.
ANNUAL MEETING OF SHAREHOLDERS -- FEBRUARY 3, 2000
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints STEVE TAYLOR and HARRY McLAUGHLIN, each of
them with full power of substitution, proxy agents to vote all shares which the
undersigned is entitled to vote at the Annual Meeting of its Shareholders
February 3, 2000, on all matters that properly come before the meeting, subject
to any directions indicated below. The proxy agents are directed to vote as
follows on the proposals described in J & J's Proxy Statement.
This proxy will be voted as directed. If no directions to the contrary are
indicated, the proxy agents intend to vote "FOR" the election of J & J's nominee
as director and "FOR" the proposals to provide for increases in the number of
shares of Common Stock for issuance under the Company's Stock Option Plan and
the Company's Nonstatutory Stock Option Plan.
The proxy agents present and acting at the meeting, in person or by their
substitutes (or if only one is present and acting, then that one), may exercise
all powers conferred hereby. Discretionary authority is conferred hereby as to
certain matters described in J & J's Proxy Statement.
1. Election of Directors WITHHOLD
Gerald B. Shreiber FOR / / AUTHORITY / /
(Continued and to be signed on reverse side)
2. Increase in the number of shares of Common Stock for
issuance under the Company's Stock Option Plan for officers WITHHOLD
and key employees excluding the Chief Executive Officer FOR / / AGAINST / / AUTHORITY / /
3. Increase in the number of shares of Common Stock for
issuance under the Company's Nonstatutory Stock Option Plan WITHHOLD
for Non-Employee Directors and Chief Executive Officer FOR / / AGAINST / / AUTHORITY / /
Receipt of J & J's Annual Report to Shareholders and the Notice of the
Meeting and Proxy Statement dated December 15, 1999 is hereby acknowledged.
Dated: ____________________ , 199_
(Please date this proxy)
__________________________________
__________________________________
(Signature)
It would be helpful if you signed
your name as it appears hereon,
indicating any official position
or representative capacity. If
shares are registered in more than
one name, all owners should sign.
PLEASE DATE AND SIGN THIS PROXY
AND RETURN IT PROMPTLY IN THE
ENCLOSED POSTAGE PAID ENVELOPE.