-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V1N63qxRCU1u9NOGpBoM/w62Ncfl8bL9sHHTL/dY7P8rIST0yACIbUQJpo6KE8mP tSS39vXxqEclZVo5RVpflQ== 0001026018-99-000011.txt : 19990430 0001026018-99-000011.hdr.sgml : 19990430 ACCESSION NUMBER: 0001026018-99-000011 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYNERGY BRANDS INC CENTRAL INDEX KEY: 0000870228 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & GENERAL LINE [5141] IRS NUMBER: 222993066 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-19409 FILM NUMBER: 99604167 BUSINESS ADDRESS: STREET 1: 10850 PERRY WAY STREET 2: SUITE 203 CITY: WEXFORD STATE: PA ZIP: 15090 BUSINESS PHONE: 5166821980 MAIL ADDRESS: STREET 1: 10850 PERRY WAY STREET 2: SUITE 203 CITY: WEXFORD STATE: PA ZIP: 15090 FORMER COMPANY: FORMER CONFORMED NAME: KRANTOR CORP DATE OF NAME CHANGE: 19930328 FORMER COMPANY: FORMER CONFORMED NAME: DELTA VENTURES INC DATE OF NAME CHANGE: 19600201 DEF 14A 1 PROXY STATMENT SCHEDULE 14A INFORMATION 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-6a-12) [ x ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12 SYNERGY BRANDS INC. ------------------- (Name of Registrant as Specified in Its Charter) ------------------------------------------------ (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 Rule 14a-6(i)(4) and 0-11. 1. Title of each class of securities to which transaction applies - - ------------------------------------------------------------------------------ 2. Aggregate number of securities to which transaction applies: - - ------------------------------------------------------------------------------ 3. Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined) - - ------------------------------------------------------------------------------ 4. Proposed maximum aggregate value of transaction: - - ------------------------------------------------------------------------------ 5. Total fee paid: - - ------------------------------------------------------------------------------ [ ] Fee paid previously with preliminary materials. [ ] check box if any part of the fee is offset as provided by Exchange Act rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1. Amount Previously Paid: - - ------------------------------------------------------------------------------ 2. Form, Schedule or Registration Statement No. - - ------------------------------------------------------------------------------ 3. Filing Party: - - ------------------------------------------------------------------------------ 4. Date Filed: - - ------------------------------------------------------------------------------ -2- SYNERGY BRANDS INC. 40 Underhill Blvd. Syosset, NY 11791 PROXY STATEMENT This statement is furnished in connection with a solicitation of proxies by the Board of Directors (the "Board of Directors" or the "Board") of Synergy Brands Inc. (the "Company") to be used at the Annual Meeting of Stockholders of the Company (the "Meeting") to be held on at 2:30 P.M. at Long Island Marriott, Uniondale, New York. VOTING PROCEDURES Stockholders of record at the close of business on May 1, 1999 will be entitled to vote at the Meeting. On the said record date, there were 8,598,757 shares of Common Stock, par value $.001 per share ("Common Stock"), outstanding, each of which being entitled to one vote at the Meeting, and 100,000 shares of Class A Preferred Stock, par value $.001 per share ("Preferred Stock" and, together with the Common Stock, collectively the "Company Shares"), outstanding, each of which being entitled to 13 votes at the Meeting (vote is controlled by Mair Faibish, Executive Vice President of the Company). Holders of the Common Stock and the Preferred Stock will vote as a single class as to all matters to come before the Meeting. A Shareholder List disclosing shareholders of record on May 1, 1999 shall be made available for inspection by shareholders entitled to vote at the Annual Meeting at the location of the Meeting on the date of and in advance of the date of the Meeting. The By-Laws of the Company (the "By-Laws") provide that the holders of a minimum of one third of the Company Shares issued and outstanding and entitled to vote at the Meeting, present in person or represented by proxy, shall constitute a quorum at the Meeting. The By-Laws further provide that the directors of the Company shall be elected by a plurality vote and that, except as otherwise provided by statute, the Certification of Incorporation of the Company, or the By-Laws, all other matters coming before the meeting shall be decided by the vote of a majority of the number of Company Shares present in person or represented by proxy at the Meeting and entitled to vote thereat. Votes cast at the Meeting will be counted by the person appointed by the Company to act as inspectors of election for the Meeting. The inspectors of election will treat Company Shares represented by a properly executed and returned proxy as present at the Meeting for purpose of determining a quorum. Abstention and broker non-votes with respect to particular proposals will not affect the determination of a quorum. Five directors will be elected by a plurality vote of the Company Shares present, in person or by proxy, and entitled to vote at the Meeting. Accordingly, abstentions and broker non-votes as to the election of directors will have no effect thereon. All other matters to come before the Meeting require the approval of a majority of the Company Shares present entitled to vote thereon, therefore, abstentions as to particular proposals will have the same effect as votes against such proposals. Broker non-votes as to particular proposals will not, however, be deemed to be a part of the voting power present with respect to such proposals and will not therefore count as votes for or against such proposals and will not be included in calculating the number of votes necessary for approval of such proposals. Proxies in the enclosed form are solicited by the Board of Directors to provide an opportunity to every stockholder to vote on all matters to come before the Meeting, whether or not he or she attends in person. If proxies in the enclosed form are properly executed and returned, the Company Shares represented thereby will be voted at the Meeting in accordance with stockholder direction. Proxies in the enclosed form will be voted FOR the election of each director and FOR the election of Belew, Averitt LLP as the Company's auditors for the fiscal year ended December 31, 1999. Any stockholder executing a proxy may revoke that proxy or submit a revised one at any time before it is voted. A stockholder may also attend at the Meeting in person and vote by ballot, thereby canceling any proxy previously given. Except for the election of directors and confirmation of the auditors, management expects no other matters to be presented for action at the Meeting. If, however, any other matters properly come before the Meeting, the persons named as proxies in the enclosed form of proxy intend to vote in accordance with their judgment on the matters presented unless otherwise specified in the Proxy. -3- PROXY SOLICITATION The cost of soliciting proxies will be borne by the Company. In addition to solicitations by mail, arrangements have been made for brokers and nominees to send proxy material to their principals, and the Company will reimburse them for their reasonable expenses in doing so. The Company's transfer agent, American Stock Transfer and Trust Company will assist it in the solicitation of proxies from brokers and nominees. The fees for the services of the transfer agent are included in the monthly fees paid by the Company, however, the Company will reimburse the transfer agent for its reasonable out-of-pocket expenses incurred in connection with providing solicitation services. Certain employees of the Company, who will receive no compensation for their services other than their regular remuneration, may also solicit by telephone, telegram, telex, telecopy, or personal interview. PROPOSAL 1. ELECTION OF DIRECTORS At the Meeting, five directors are to be elected to a one-year term and to hold office until their successors are elected and qualified. The Board of Directors consists of one class, which serves for a one-year term. The persons named in the enclosed form of proxy intend to vote such proxy, unless otherwise directed, FOR the election of each of the directors nominated to serve on the Board to serve until the fiscal 1999 Annual Meeting of Stockholders or other dates for proposed election on new directors. If contrary to present expectation, any of the nominees should become unavailable for any reason, votes may be cast pursuant to the accompanying form of proxy for a substitute nominee designated by the Board. INFORMATION CONCERNING DIRECTORS AND DIRECTOR NOMINEES. Set forth is certain information concerning directors and director nominees. Year First Elected A Name of Nominee Age Position Director --------------- --- -------- -------- Henry J. Platek, Jr. 53 President and Director 1989 Mair Faibish 39 Executive Vice President Chief Financial Officer and Director 1989 Mitchell Gerstein 43 Vice President, Treasurer, Secretary and Director 1991 Dominic Marsicovetere 50 Director 1993 Michael Ferrone 47 Director 1995 HENRY J. PLATEK, JR. has been President and a Director of the Company since December 1989. MAIR FAIBISH. Mr. Faibish has been Executive Vice President, Chief Financial Officer and a Director of the Company since May 1989. He serves on the Compensation and Executive committees. MITCHELL GERSTEIN. Mr. Gerstein has been Treasurer since March 1994. Vice President and a Director of the Company since June 1991. Controller and Treasurer of the Company since March 1992, and Secretary of the Company from June 1991 to March 1994, a position he resumed in January 1995. Mr. Gerstein serves on the Audit Committee. -4- DOMINIC A. MARSICOVETERE, CPA. Mr. Marsicovetere has been a Director of the Company since April 1993. Since 1978, Mr. Marsicovetere has been an Accounting Professor in the school of Business Administration at Hofstra University. Since 1978, Mr. Marsicovetere had been in private practice as a certified public accountant. Mr. Marsicovetere is the chairman of the Audit Committee and Independent Compensation Committee. MICHAEL FERRONE. Mr. Ferrone has been an associate at Certified Financial Services for 2 years. Mr. Ferrone has been a Vice President and has served on the Executive Committee of Alliance Financial Group for the past eight years. Mr. Ferrone serves on the Audit Committee and Independent Compensation Committee. CORPORATE GOVERNANCE Directors are elected at the annual meeting of stockholders and hold office until their successors have been duly elected and qualified, or until their earlier death, resignation or removal. The Board of Directors has primary responsibility of directing the management of the business and affairs of the Company. The Board currently consist of five members. The Company has an Audit Committee, an Executive Committee, an Independent Compensation Committee and an Employee Compensation Committee. The Audit Committee is comprised of Dominic A. Marsicovetere (chair) and Mitchell Gerstein and Michael Ferrone and its functions include recommending to the Board of Directors the engagement of the Company's independent certified public accountants, reviewing with such accountants the plan and results of their examination of the consolidated financial statements and determining the independence of such accountants. The Audit Committee will also have primary responsibility for reviewing all related party transactions. However, it is the Company's policy that all related party transactions be approved by a majority of the disinterested directors of the Company. Such directors will not be required to make a determination that each related party transaction meets a fairness test, but will decide whether the transaction is in the best interest of the Company. The Audit Committee is comprised of a majority of independent directors as required by NASDAQ. The Executive Committee is comprised of Henry J. Platek, Jr. and Mair Faibish and is responsible for establishing policies and procedures relating to the administration and operation of the Company. The Independent Compensation Committee, consisting of Dominic Marsicovetere and Michael Ferrone, the Company's two independent non-employee directors, will review and make recommendations with respect to compensation of officers and key employees. They also administer the Company's 1994 Services and Consulting Compensation Plan, as amended with respect to compensation of directors (except non-employee directors) and officers and consultants of the Company. The Employee Compensation Committee, consisting of Mair Faibish and Henry J. Platek, will review and make recommendations with respect to compensation of employees who are not officers or directors. Executive officers serve at the discretion of the Board of Directors, subject to any employment agreement between the executive officer and the Company. The Board of Directors and its Committee voted by unanimous or majority (on notice to others not voting) written consent in lieu of formal meetings with respect to all actions taken in the year ended December 31, 1997 and December 31, 1998, and thereafter in 1999. -5- None of the directors or respective officers of the Company have over the last two fiscal years been involved in any material transactions with the Company wherein the amount of money involved exceeded $100,000 although the Company and its affiliates have purchased insurance instruments through Mr. Ferrone. No material transactions involving the officers and or directors of the Company and the Company are proposed. There are also no common affiliations between the Company and officers and/or directors in any other business or entity, to the best knowledge of the Company. No officer, director and/or former member or affiliate thereof is or in the last two fiscal years has been in debt to the Company in excess of $100,000. COMPENSATION OF DIRECTORS/ NON-EMPLOYEE DIRECTOR PLAN Directors and committee members who are part of management serve as such without compensation but are reimbursed for their reasonable out-of-pocket expenses in attending meetings of the Board and its committees. Pursuant to the Option Plan, directors who are not employees of the Company are granted an option to purchase 10,000 shares of Common Stock at an exercise price equal to fair market value on the date of grant immediately upon their election or reelection to the Board of Directors. RECOMMENDATION AND VOTE The Board of Directors recommends the election of the nominees listed above as directors of the Company to hold office until the next annual meeting or until their successors are elected and qualified. The affirmative vote of a plurality of the Company Shares represented at the Meeting where a quorum is presented is required for such approval. Quorum at the meeting shall require attendance in perosn and/or by proxy by at least one-third amount of the potential votes outstanding. -6- PRINCIPAL STOCKHOLDERS The following table sets forth as of April 21, 1999 information regarding the beneficial ownership of the Company's voting securities (i) by each person who is known to the Company to be the owner of more than five percent of the Company's voting securities, (ii) by each of the Company's directors, and (iii) by all directors and executive officers of the Company as a group: Amount and Nature of Beneficial Ownership Percent of Class Name and Address of Common Preferred Common Preferred Beneficial Owner(1) Stock Stock Stock Stock - --------------------- ----- ----- ----- ----- Henry J. Platek (2).......... 86,990 -0- 1.01% -- 10850 Perry Way Ste. 203 Wexford, Penna 15090 Mair Faibish (3)............. 1,079,850 100,000 12.56% 100.0% 10850 Perry Way Ste. 203 Wexford, Penna 15090 Mitchell Gerstein(4)......... 25,324 -0- .30% -- 10850 Perry Way Ste. 203 Wexford, Penna 15090 Dominic A. Marsicovetere..... 10,000 -0- .10% -- 10850 Perry Way Ste. 203 Wexford, Penna 15090 Michael Ferrone............. -0- -0- -0- -- 10850 Perry Way Ste. 203 Wexford, Penna 15090 Larry Fleischman............ 581,915 -0- 6.8% -- 150 Vanderbilt Pkwy Hauppauge, NY 11788 All Officers and Directors as Group.................... 1,787,079 100,000 20.48% 100.0% (1) Unless otherwise indicated, each person named in the table exercises sole voting and investment power with respect to all shares beneficially owned. (2) Includes 333 shares owned by Michaleen Platek, wife of Henry J. Platek Jr., and 333 shares owned by MNP Corporation d/b/a Twin Cities Wholesale Grocers Incorporated ("MNP"), a corporation wholly-owned by Mrs. Platek. Henry Platek disclaims beneficial ownership of the shares held by Michaleen Platek and MNP. Also includes 75,000 options expiring 10/2003 (3) Mr. Faibish owns the 100,000 shares of Preferred Stock outstanding. Each share of Preferred Stock is entitled to 13 votes on all matters on which Common Stock may vote. Accordingly, the percentage of overall voting power of the Company's voting securities beneficially owned by Mair Faibish and all officers and directors as a group is increased accordingly. Also includes 735,000 options expiring 10/2003 (4) Includes 25,000 options expiring 10/2003 -7- PROPOSAL 2. ELECTION OF AUDITORS Belew, Averitt LLP are expected to be the independent auditors of the financial statements of the Company and its subsidiaries for the fiscal year ending December 31, 1999 and have acted as such during the last two years of the Company. At the meeting, Belew, Averitt LLP are being nominated to serve as the auditors for the Company for the fiscal year ending December 31, 1999. It is not expected however that any representative of the auditors will be available at the Meeting to respond to questions. The financial statements of the Company as of and for the fiscal years ended December 31, 1997 and December 31, 1998 were audited by Belew, Averitt LLP and such did not contain an adverse opinion or a disclaimer of an opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. RECOMMENDATION AND VOTE The Board of Directors recommends the election of Belew, Averitt LLP to serve as auditors for the Company for the fiscal year ended December 31, 1999 and until successors are elected and qualified. The affirmative vote of a plurality of the Company Shares represented at the Meeting where a quorum is present is required for such approval. Quorum at the Meeting shall require attendance in person and/or by proxy by at least one-third amount of potential votes outstanding. OTHER BUSINESS Management knows of no other business which is to be presented for action at the meeting. Should any other matters properly come before the meeting, the persons named in the accompanying proxy will have discretionary authority to vote all proxies in accordance with their judgement. It is important that proxies be returned promptly. Therefore, stockholders who do not expect to attend in person are urged to execute and return the enclosed proxy to which no postage need be affixed if mailed in the United States. EXECUTIVE COMPENSATION Set forth below are tables showing (i) in summary form, the compensation paid to Henry J. Platek and Mair Faibish the only executive officers of the Company who earned in excess of $100,000 during any of the fiscal year presented: and (ii) the options and stock appreciation rights (SARs) granted to such executives in 1998. -8- SUMMARY COMPENSATION TABLE annual long term compensation compensation awards --------------- ----------------------------------- restricted securities underlying salary stock bonus stock options NAME - ---- Henry Platek, CEO 1996 $105,867.00 0 0 1997 $ 62,927.00 3,750 0 1998 $ 52,174.00 0 90,000 Mair Faibish, CFO 1996 $112,440.00 0 0 1997 $ 97,782.00 0 500,000 1998 $113,745.00 0 385,000 OPTION GRANTS IN THE LAST FISCAL YEAR
number of securities exerciseof base potential realizable at assumed underlying options percent of total options price expiration annual rates of stock price granted granted to employees $/share date appreciation for option term 5% 10% Henry Platek, CEO 30,000 0.67% $0.65 10/05/03 $5,460 $11,895 60,000 1.33% $0.40 10/05/03 $6,720 $14,640 Mair Faibish, CFO 75,000 1.67% $0.65 10/05/03 $13,650 $29,738 75,000 1.67% $0.40 10/05/03 $8,400 $18,300 235,000 5.22% $0.50 10/05/03 $32,900 $71,675
Compensation Committee Interlocks and Insider Participation All decisions with respect to the stock compensation of the Company's executive officers and key employees are made by the Independent Compensation Committee, which is comprised of Mr. Marsicovetere and Mr. Ferrone under the 1994 Plan. Neither Mr. Marsicovetere nor Mr. Ferrone are officers or employees of the Company nor were they at any time. All decisions with respect to the compensation of employees who are not officers or key employees are made by the Employee Compensation Committee which is comprised of Mr. Platek and Mr. Faibish. Mr. Faibish is the Executive Vice President and Chief Financial Officer of the Company. -9- REPORT OF THE BOARD OF DIRECTORS ON ANNUAL COMPENSATION ADMINISTRATION OF COMPENSATION PROGRAM The Independent Compensation Committee will be responsible for establishing and administering the stock compensation policies applicable to the Company's executive officers. Prior to the establishment of the Committee, decisions with respect to the compensation of the Company's executive officers have been made by the Board of Directors. COMPENSATION POLICY The goals of the Company's executive compensation policy are to (i) attract and retain qualified executives and (ii) ensure that an appropriate relationship exists between executive pay and the creations of shareholder value. To achieve these goals, the Company's executive compensation policy will reward executives for long term strategic management and the enhancement of stockholder value by integrating annual base compensation with other forms of incentive compensation based upon corporate results and individual performance. Measurement of corporate performance will be primarily based on the level of achievement of Company goals and upon Company performance levels compared with industry performance levels. The Committee will obtain compensation survey data where available for similar industries to be used as a guide to establish compensation levels to be competitive with and comparable to other companies in its industry group. FISCAL 1998 EXECUTIVE COMPENSATION PROGRAM The Company's fiscal 1998 executive compensation program was comprised exclusively of base salary and stock grants pursuant to the Company's compensation plan. During fiscal 1998 Mr. Faibish and Mr. Platek, the Company's two executive officers, did not receive salary increases. The decisions not to grant increases were made by the Board of Directors based on the company performance and financial condition. The compensation program described below will be implemented by the Independent Compensation Committee on a going forward basis. BASE SALARY. The Independent Compensation Committee will review and approve all salary changes and stock grants for executive officers. The Committee will base its approval of such salary changes on: (i) performance of the executive, (ii) Company performance, (iii) experience, and (iv) external salary surveys. ANNUAL INCENTIVE. The Company may use annual performance incentives to focus management on achieving financial and operating results. The Company may establish a bonus pool for executive officers for particular year or years, from which bonuses will be paid at the discretion of the President and Executive Vice President upon approval of the Committee, except that bonuses awarded to the President and Executive Vice President will be at the discretion of the Committee based on the financial performance of the Company. LONG TERM INCENTIVE. The primary purpose of the long-term incentive compensation plan (the "Plan") is to link management pay with the long term interests of stockholders. The Independent Compensation Committee will use stock options to achieve this link. The grant of options at 100 percent for the fair value assures that the executive officers will receive a benefit only when stock price increases. The amount of options granted is based on comparative data on the estimated value of long term compensation for other industry executives. In determining annual stock option grants, the Independent Compensation Committee will base its decision on the individual's performance and potential to improve stockholder value. -10- In March 1994, certain executive officers of the Company were awarded st CEO COMPENSATION DURING FISCAL 1998 Mr. Platek's salary is intended to be competitive with salary arrangements received by other chief executive officers in the industry. The Committee will base future bonuses or awards to Mr. Platek on Company and Individual performance as compared to other promotional wholesale distribution companies, and the criteria set forth above for executive officers generally. COMPENSATION OF DIRECTORS The Company's executive officers do not receive any compensation for their services as Directors; however, such officers are reimbursed for their reasonable out-of-pocket expenses in attending any meetings of the Board and/or its committees. The Company's two non-employee Directors, on the other hand, each receive compensation for their service in the form of an option to purchase 10,000 shares of the Company's Common Stock immediately upon their election or re-election to the Board. These options, which are granted pursuant to the Company's Stock Option Plan for Non-Employee Directors (the "Option Plan"), are issued at their fair market value, are immediately exercisable and have a term of ten years. EMPLOYMENT CONTRACTS The Company entered into employment agreements (the "Agreements") with each of Messrs. Platek and Faibish on November 14, 1994, providing for their continued employment in their current capacities until October 1997 and such agreements have been extended until terminated or new employment agreements are executed subject to termination for cause at an annual base salary, effective November 14, 1994 with respect to Mr. Platek and effective April 1, 1995 with respect to Mr. Faibish, of $108,000 (with automatic 5% annual increases). Under these Agreements, Messrs. Platek and Faibish will each be eligible to receive bonus payments at the discretion of the Independent Compensation Committee. In addition, the Agreements provide for each of Messrs. Platek and Faibish to receive certain stock option grants pursuant to the Company's 1994 Plan. Each officer has agreed that upon termination of his employment he will not compete with the Company for a period of one year in any area within a 50 mile radius of the Company's principal place of business. The Agreements also provide for certain payments in the event of either officers' disability and for the use of a Company automobile. CONCLUSION The Board of Directors and the Independent Compensation Committee believe that the quality and motivation of management make a significant difference in the long term performance of the Company. The Board of Directors and the Committee also believe that a compensation program which rewards performance that meets or exceeds high standards also benefits the stockholders, so long as there is an appropriate downside risk element to compensation when performance falls short of such standards. The Board of Directors and the Committee are of the opinion that the Company's management compensation program meets these requirements, has contributed to the Company's success, and is deserving of stockholder support. -11- COMPANY STOCK PERFORMANCE (PLEASE SEE SCHEDULE A) ANNUAL REPORT The Annual Report to Shareholders of the Company for the fiscal year ended December 31, 1997 which includes audited financial statements has been previously mailed to stockholders and the 1998 Annual Report being mailed to shareholders herewith. Such reports are incorporated herein by reference and should be review by the recipient of this Proxy Statement in conjunction with review of the other information on the company included herewith. FORM 10-KSB The Company is furnishing herewith to each person whose Proxy is being solicited, a copy of the Annual Report of the Company on Form 10-KSB for the fiscal year ended December 31, 1998, as filed with the Securities and Exchange Commission. The 10-KSB report of the Company for 1998 is incorporated herein by reference and should be reviewed by the recipient of this Proxy Statement in conjunction with review of the other information on the Company included herein. STOCKHOLDER PROPOSALS If any stockholder desires to present a proposal for action at the Company's annual meeting to be held in 1999, such proposal must be in compliance with applicable laws and Securities and Exchange Commission regulations and must be received by the Company on or prior to February 1, 1999. -12- SECTION 16 REQUIREMENTS Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and officers, and persons who own more than 10% of a registered class of the Company's equity securities, to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission ("SEC"). Such persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file. Based solely on its review of the copies of such reports received by it with respect to fiscal 1997 and 1998 or written representations from certain reporting persons, the Company believes that all filing requirements applicable to its directors, officers and persons who own more than 10% of a registered class of the Company's equity securities have been timely complied with. By Order of the Board of Directors Mitchell Gerstein Secretary Syosset, NY -13- SCHEDULE A COMPANY STOCK PERFORMANCE 1994 1995 1996 1997 1998 ---- ---- ---- ---- ---- SYNERGY BRANDS INC. 100 28 3 2 6 NASDAQ MARKET 100 138 170 209 240 PEER GROUP 100 100 100 126 100 PEER GROUP INCLUDES: FLEMING (FLM), SUPERVALU (SVA), ALLOU (ALU) (GRAPH ALSO INCLUDED) Graph represents the total return of $100 investment in the COmaony relative to sample peer group and a national stock index -14- EXHIBIT A SYNERGY BRANDS INC. 40 UNDERHILL BLVD. SYOSSET, NY 11791 THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Mair Faibish and Mitchell Gerstein, and each of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and vote, as designated herein, all of the shares of the common stock, par value $.001 per share, of Synergy Brands Inc.the "Company"), held of record by the undersigned on at the Annual Meeting (the "Annual Meeting") of Stockholders of the Company to be held on , and any adjournment(s) thereof. THIS PROXY, WHEN PROPERLY EXECUTED AND DATED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND PROPOSAL 2, AND THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO ANY MATTERS PRESENTED FOR SHAREHOLDER VOTE AT THE ANNUAL MEETING. 1. PROPOSAL TO ELECT THE FOLLOWING PERSONS TO SERVE AS THE BOARD OF DIRECTORS FOR KRANTOR CORPORATION FOR ONE YEAR FROM THE EFFECTIVE DATE OF THE ANNUAL MEETING OF SHAREHOLDERS TO WHICH THIS PROXY RELATES OR UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED: HENRY J. PLATEK, JR. MAIR FAIBISH MITCHELL GERSTEIN DOMINIC MARSICOVETERE MICHAEL FERRONE 2. PROPOSAL TO ELECT BELEW, AVERITT & COMPANY TO SERVE AS THE COMPANY'S AUDITORS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 AND UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED. FOR { } AGAINST { } ABSTAIN { } 3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND ANY ADJOURNMENT(S) THEREOF. FOR { } AGAINST { } ABSTAIN { } -15- MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW { } PLEASE EXECUTE THIS PROXY AS YOUR NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY THE PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON. SIGNATURE: DATE: SIGNATURE: DATE: PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. -16- -----END PRIVACY-ENHANCED MESSAGE-----