<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
VITA FOOD PRODUCTS, 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 Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
VITA FOOD PRODUCTS, INC.
2222 WEST LAKE STREET
CHICAGO, ILLINOIS 60612
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Vita Food Products, Inc.
The Annual Meeting (the "MEETING") of Stockholders of Vita Food Products,
Inc., a Nevada corporation (the "COMPANY"), will be held on June 18, 1998 at
10:00 a.m., local time, at First National Bank Building, First National Plaza,
57th Floor, Chicago, Illinois 60670 for the following purposes, as more fully
described in the accompanying Proxy Statement:
1. To elect seven (7) directors to serve until the next annual
meeting of stockholders or until later successors are elected and
qualified.
2. To ratify the selection by the Board of Directors of BDO
Seidman, LLP as the Company's independent certified public
accountants for 1998.
3. To transact such other business as may properly come before
the Meeting or any adjournment thereof.
Stockholders of record of the Company's Common Stock at the close of
business on May 1, 1998, the record date fixed by the Board of Directors, are
entitled to notice of, and to vote at, the Meeting or any adjournment thereof,
also as more fully described in the Proxy Statement.
All stockholders are cordially invited to attend the Meeting. Those who
cannot are urged to sign, date and otherwise complete the enclosed proxy and
return in the envelope provided. Any stockholder giving a proxy has the right
to revoke it at any time before it is voted.
For the Board of Directors,
Stephen D. Rubin
Chairman of the Board
Chicago, Illinois
May 8, 1998
<PAGE> 3
VITA FOOD PRODUCTS, INC.
2222 WEST LAKE STREET
CHICAGO, ILLINOIS 60612
_______________
PROXY STATEMENT
________________
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
JUNE 18, 1998
The following information is provided in connection with the solicitation
of proxies for the Annual Meeting of Stockholders of Vita Food Products, Inc.,
a Nevada corporation (the "COMPANY"), to be held on June 18, 1998, and any
adjournments thereof (the "MEETING"), for the purposes stated in the attached
Notice of Annual Meeting of Stockholders.
GENERAL INFORMATION
SOLICITATION OF PROXIES
A form of proxy is being furnished herewith by the Company to each
stockholder and, in each case, such proxy is solicited on behalf of the Board
of Directors of the Company for use at the Meeting. The entire cost of
soliciting these proxies will be borne by the Company. Solicitation will be
made by mail, and may also be made by telephone or facsimile by directors,
officers and regular employees of the Company, but these persons will not be
separately compensated for such solicitation services. The Company will
reimburse brokerage houses and other nominees for their expenses in forwarding
proxy solicitation material to beneficial owners of the Company's Common Stock.
AUTHORITY CONFERRED BY PROXIES
The shares represented by proxies duly executed and returned by
stockholders and received by the Company before the Meeting will be voted as
directed in the proxies. In the absence of specific direction, the shares
represented by proxies will be voted: (1) FOR the election of all nominee
directors specified herein; and (2) FOR the ratification of the selection of
BDO Seidman, LLP as independent certified public accountants. As to the other
matters, if any, to be voted upon at the Meeting, the persons designated as
proxies in the accompanying form of proxy will take such action as they, in
their discretion, may deem advisable. The persons named as proxies were
selected by the Board of Directors and are officers of the Company.
REVOCABILITY OF PROXIES
Execution of the enclosed proxy will not affect your right as a
stockholder to attend the Meeting and to vote in person. Any stockholder
giving a proxy has the right to revoke it at any time by: (i) a later dated
proxy, duly executed and delivered or presented at the Meeting; (ii) a written
revocation sent to and received by the Secretary of the Company prior to the
Meeting;
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<PAGE> 4
or (iii) attendance at the Meeting and voting in person. Attendance at the
Meeting will not in and of itself constitute revocation of a proxy.
VOTING SECURITIES AND RECORD DATE
The Company's voting securities consist of the class of Common Stock, par
value $0.01 per share (the "COMMON STOCK"), and one class of Preferred Stock,
par value $0.01 per share (the "PREFERRED STOCK"). The Company had 3,700,000
outstanding shares of Common Stock and no shares of Preferred Stock outstanding
as of the close of business on May 1, 1998 (the "RECORD DATE"). Only
stockholders of record on the books of the Company at the close of business on
the Record Date will be entitled to vote at the Meeting. Each share of Common
Stock is entitled to one vote. Representation at the Meeting by the holders of
a majority of the shares of Common Stock outstanding on the Record Date, either
in person or by proxy, will constitute a quorum.
Directors are elected by a plurality vote of shares present at the
meeting. In an uncontested election for directors, the plurality requirement is
not a factor. Other action is by an affirmative vote of the majority of the
shares present in person or by proxy at the Meeting. Votes for and against,
abstentions and "broker non-votes" will each be counted as present for purposes
of determining the presence of a quorum. To determine whether a specific
proposal has received sufficient votes to be passed, for shares deemed present,
an abstention and a broker non-vote will have the same effect as a vote
"against" the proposal except for director elections.
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
The following table sets forth information as of May 1, 1998, with respect
to the beneficial ownership of the Company's outstanding shares of Common Stock
by each stockholder known by the Company to be the beneficial owner of more
than 5% of its Common Stock, each director, each executive officer named in the
Summary Compensation Table and all the directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
-------------------------
NAME OF BENEFICIAL OWNER(1) NUMBER(2) PERCENT
- --------------------------- --------- -------
<S> <C> <C>
Stephen D. Rubin................................. 1,213,742 32.8%
Clark L. Feldman................................. 625,803 16.9
Sam Gorenstein(3)................................ 503,707 13.6
J.B.F. Enterprises(4)............................ 477,783 12.9
James Rubin(5)................................... 282,870 7.6
Jeffrey C. Rubenstein(6)......................... 98,239 2.7
Michael Horn(7).................................. 2,000 *
Neal Jansen(8)................................... 8,000 *
Steven A. Rothstein(9)........................... 224,777 5.7
Jay H. Dembsky................................... -- *
All directors and executive officers as a group
(8 persons)(10)................................ 2,676,268 68.0%
</TABLE>
* Less than 1% of the outstanding shares of Common Stock
(1) The address of each of the executive officers and directors, unless noted
otherwise in the footnotes, is c/o Vita Food Products, Inc., 2222 West
Lake Street, Chicago, Illinois 60612.
2
<PAGE> 5
(2) Includes, when applicable, shares owned of record by such person's minor
children and spouse and by other related ndividuals and entities over
whose shares of Common Stock such person has custody, voting control, or
power of disposition.
(3) Includes 477,783 shares of Common Stock held by J.B.F. Enterprises, an
Illinois general partnership ("J.B.F."), which are also listed as being
beneficially owned by J.B.F. Mr. Sam Gorenstein and his brother, David
Gorenstein, are general partners of J.B.F. The address of Mr. Sam
Gorenstein is 6770 North Lincoln Avenue, Suite 200, Lincolnwood, Illinois
60046. Includes shares of Common Stock issuable upon exercise of options
to purchase 2,000 shares of Common Stock which are exercisable within 60
days.
(4) Mr. Sam Gorenstein, a director of the Company, and Mr. David Gorenstein,
the brother of Mr. Sam Gorenstein, are partners of J.B.F. The address of
J.B.F. is 6770 North Lincoln Avenue, Suite 200, Lincolnwood, Illinois
60046. These shares are also included in the number of shares beneficially
owned by Mr. Sam Gorenstein.
(5) James Rubin is the brother of Stephen D. Rubin. The address of James
Rubin is 719 Sycamore Lane, Glencoe, Illinois 60022.
(6) Mr. Rubenstein's address is 200 North LaSalle Street, Suite 2100,
Chicago, Illinois 60601. Includes shares of Common Stock issuable upon
exercise of options to purchase 2,000 shares of Common Stock which are
exercisable within 60 days.
(7) Mr. Horn's address is 835 Potts Avenue, Green Bay, Wisconsin 54303.
Includes shares of Common Stock issuable upon exercise of options to
purchase 2,000 shares of Common Stock which are exercisable within 60
days.
(8) Mr. Jansen's address is 6216 St. Albans Circle, Edina, Minnesota 55439.
Includes shares of Common Stock issuable upon exercise of options to
purchase 2,000 shares of Common Stock and warrants to purchase 3,000
shares of Common Stock which are exercisable within 60 days.
(9) Mr. Rothstein's address is 875 North Michigan Avenue, Suite 1560,
Chicago, Illinois 60611. Includes shares of Common Stock issuable upon
exercise of options to purchase 2,000 shares of Common Stock and warrants
to purchase 222,777 shares of Common Stock which are exercisable within 60
days.
(10) Includes 477,783 shares of Common Stock beneficially owned by J.B.F.
which are also deemed to be beneficially owned by Mr. Sam Gorenstein,
shares of Common Stock issuable upon exercise of options to purchase
10,000 shares of Common Stock which are exercisable within 60 days and
shares of Common Stock issuable upon exercise of warrants to buy 225,777
shares of Common Stock which are exercisable within 60 days.
3
<PAGE> 6
PROPOSAL NO. 1
- --------------
ELECTION OF DIRECTORS
The By-Laws of the Company currently provide that the Board of Directors
shall consist of at least six (6) directors to be elected at the annual meeting
of stockholders to hold office until the next annual meeting or until their
successors are elected and qualified. The Board of Directors currently has
seven (7) members. The proxies solicited by and on behalf of the Board of
Directors will be voted FOR the election of the seven nominees listed below,
unless authority to do so is withheld as provided in the proxy. All nominees
are currently members of the Company's Board of Directors. The proxies cannot
be voted for a greater number of persons than the number of nominees named. If
for any reason one or more of the nominees should be unable to serve or refuse
to serve as a director (an event which is not anticipated), the persons named
as proxies will vote for another candidate or candidates nominated by the Board
of Directors, and discretionary authority to case such votes is included in the
proxy.
NOMINEES
The Board of Directors has nominated for election the following
individuals, all of whom are currently directors:
STEPHEN D. RUBIN, age 58, has served as a director and President of the
Company since 1982. Mr. Rubin is responsible for the overall operations of the
Company with an emphasis on production, finance and quality control.
Previously, Mr. Rubin was the owner and chief operating officer of several
other companies which included food, manufacturing and industrial companies.
Mr. Rubin received a B.B.A. from the University of Wisconsin and a J.D. from
the University of Wisconsin Law School.
CLARK L. FELDMAN, age 63, has served as a director and Executive Vice
President and Secretary of the Company since the Company was acquired in 1982.
Mr. Feldman has an extensive background in strategic financial planning and
marketing and is responsible for all sales personnel, including brokers. Mr.
Feldman received a B.S. from Indiana University.
SAM GORENSTEIN, age 50, has served as a director of the Company since
February, 1990. For the past 20 years, Mr. Gorenstein has served as Secretary
of Three G Care Management, Inc., a nursing home management company. Mr.
Gorenstein is also a major shareholder of Three G Care Management, Inc. Mr.
Gorenstein attended the University of Manitoba in Winnipeg, Canada.
JEFFREY C. RUBENSTEIN, age 56, has been a Director of the Company since
September, 1986. Since 1991, Mr. Rubenstein has been a partner in the law firm
of Much Shelist Freed Denenberg Ament Bell & Rubenstein, P.C., an Illinois
professional corporation which is counsel to the Company. From January, 1989
until June, 1991, Mr. Rubenstein was of counsel to the law firm of Sachnoff &
Weaver, Ltd., an Illinois professional corporation and of which he was a
principal until July, 1988. From March, 1988 until January 1989, Mr.
Rubenstein was President of Medical Management of America, Inc. a management
services company for health care providers. Mr. Rubenstein is a Director of
Miller Building Systems, Inc., Home Products International, Inc. and a number
of privately held firms.
4
<PAGE> 7
NEAL JANSEN, age 60, has served as a director of the Company since April,
1983. Mr. Jansen is currently CEO and Chairman of Farm Fresh Catfish Co. From
1986 to 1996, he served as President and CEO of Pies, Inc. and was a major
shareholder until it was sold to Flowers Industries in 1991. Prior to 1986 he
was President of Gordon Fleming and Associates, a food brokerage company in
Minnesota, and a Senior Vice President of Red Owl Stores, Inc., a large
Midwestern supermarket chain. Mr. Jansen received a B.A. from St. Norbert
College and an M.B.A. from Michigan State University.
MICHAEL HORN, age 61, has served as a director of the Company since April,
1983. For the past six years, Mr. Horn, as the largest shareholder of Save
More Foods Supermarkets and a significant shareholder of Performance Foods of
Wisconsin, Inc., has acted in a management advisory role to both companies.
Prior to that Mr. Horn was president of the Green Bay Division of Super Valu
Stores, Inc., a national grocery food wholesaler and distributor. Mr. Horn is
also a Vice President and a director on the Executive Committee of the Green
Bay Packer Hall of Fame. Mr. Horn has a B.A. degree in business from the
University of Minnesota at Duluth.
STEVEN A. ROTHSTEIN, age 47, has served as a director of the Company since
May 1, 1997. Mr. Rothstein has been Chairman of the Board of National
Securities Corporation, a securities broker-dealer and a Representative of the
Underwriters, since 1995. From 1994 to 1995, Mr. Rothstein was employed by
H.J. Meyers & Co., a securities broker-dealer, and from 1992 to 1994, he was
employed by Rodman and Renshaw, a securities broker-dealer, in both cases as a
Managing Director. From 1989 to 1992, Mr. Rothstein served as a Managing
Director of Oppenheimer & Co., a securities broker-dealer. From 1979 to 1989,
Mr. Rothstein was a limited partner of Bear Stearns & Co., a securities
broker-dealer. Mr. Rothstein currently is a director of SigmaTron
International, Inc. and New World Coffee, Inc., both of which are publicly held
companies. Mr. Rothstein received an A.B. from Brown University in Providence,
Rhode Island.
COMMITTEES AND ATTENDANCE
The Board of Directors met 3 times during the year ended December 31,
1997. Each of the directors other than Steven A. Rothstein and Sam Gorenstein
attended more than 75% of the meetings of the Board of Directors and of each
committee of the Board of Directors of which he was a member held during the
last fiscal year. The Audit Committee, comprised of directors Neal Jansen and
Jeffrey C. Rubenstein, met 2 times during this period. The Audit Committee
oversees the activities of the Company's independent auditors. The
Compensation Committee, comprised of directors Sam Gorenstein, Jeffrey C.
Rubenstein, Neal Jansen, Steven A. Rothstein and Michael Horn, met 1 time
during this period. The Compensation Committee reviews and makes
recommendations to the Board of Directors with regard to the salaries,
incentive compensation and related benefits of corporate officers and other
employees. The Company does not have a nominating committee.
COMPENSATION OF DIRECTORS
Directors who are employees of the Company are not separately compensated
for serving on the Board of Directors. Non-employee directors are paid a fee
of $1,000 for each Board of Directors meeting or committee meeting attended.
During 1997, each non-employee
5
<PAGE> 8
director was granted an option to purchase 2,000 shares of Common Stock
at an exercise price of $4.875 per share, the Fair Market Value (as defined in
the 1996 Stock Option Plan for Non-employee Directors) on the date of grant.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
ELECTION OF THE NOMINEES SET FORTH HEREIN.
PROPOSAL NO. 2
- --------------
RATIFICATION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected BDO Seidman, LLP as independent
certified public accountants for the Company for 1998. BDO Seidman, LLP has
been engaged as the Company's independent auditors since January, 1995. The
ratification of the selection of independent certified public accountants is to
be voted upon at the Meeting, and it is intended that the persons named in the
accompanying Proxy will vote for BDO Seidman, LLP.
If the appointment of BDO Seidman, LLP as independent auditors for 1998 is
not approved by the stockholders, the adverse vote will be considered a
direction to the Board of Directors to consider other auditors for next year.
However, because of the difficulty in making any substitution of auditors so
long after the beginning of the current year, the appointment for the year 1998
will stand unless the Board finds other good reason for making a change.
Representatives of BDO Seidman, LLP are expected to attend the Meeting,
will have an opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
RATIFICATION OF BDO SEIDMAN, LLP.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the 1934 Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of the Company. Executive officers, directors, and greater
than ten-percent shareholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely upon the Company's review of the copies of such reports
furnished to the Company or written representations that no other reports were
required, the Company believes that during the 1997 fiscal year, all Section
16(a) filing requirements applicable to its executive officers, directors and
greater than ten-percent beneficial owners were complied with, except that (i)
Steven A. Rothstein inadvertently failed to timely file a Form 3 upon becoming
a director in May, 1997, (ii) Steven A. Rothstein inadvertently failed to
timely file a Form 4 with respect to
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<PAGE> 9
warrants to purchase 222,777 shares of Common Stock purchased in November,
1997 and (iii) Neal Jansen inadvertently failed to timely file a Form 4 with
respect to 3,000 shares of Common Stock and warrants to purchase 3,000 shares
of Common Stock purchased in January, 1997.
7
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation awarded to the chief
executive officer and each other executive officer of the Company where
aggregate compensation for services in all capacities rendered during the year
ended December 31, 1997 exceeded $100,000 (the "NAMED EXECUTIVE OFFICERS").
Mr. Rubin became President of the Company in March, 1982. Mr. Feldman become
Executive Vice President and Secretary of the Company in March, 1982. Mr.
Dembsky became Treasurer of the Company in October, 1996. The compensation
paid to Mr. Dembsky in 1996 is not required to be disclosed in this table.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)
- --------------------------- ---- -------- --------- ---------------
<S> <C> <C> <C> <C>
Stephen D. Rubin 1997 $212,070 -- $28,712
President and Director 1996 $212,934 $ 15,000 $29,447
1995 $207,001 $ 15,000 $24,154
Clark L. Feldman 1997 $213,172 -- --
Executive Vice President, 1996 $226,523 $ 15,000 --
Secretary and Director 1995 $218,068 $ 15,000 --
Jay H. Dembsky 1997 $110,044 $ 40,000 --
Treasurer and Chief Financial
Officer
</TABLE>
(1) This column reflects perquisite compensation if such compensation exceeds
the lesser of $50,000 or 10% of the Named Executive Officer's total salary
and bonus. For fiscal years ended December 31, 1996 and 1995,
respectively, Mr. Rubin's perquisites included $8,505 and $11,042 for
lease payments for a car which were paid by the Company. For the fiscal
year ended December 31, 1996 and 1995, respectively, Mr. Rubin's
perquisites included $10,922 for payment of club dues and $7,644 for
health insurance payments for Mr. Rubin's family members which were paid
by the Company. For the fiscal year December 31, 1997, no one
prerequisite compensation item represented more than 25% of "Other Annual
Compensation" for Mr. Rubin.
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<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table provides information on option exercises in fiscal
1997 by the Named Executive Officers and the value of such officers'
unexercised options at December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN THE
OPTIONS AT MONEY OPTION AT
DECEMBER 31, 1997 DECEMBER 31, 1997($)
SHARES ----------------------------- ------------------------------
ACQUIRED VALUE
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jay H. Dembsky --- --- --- 80,000 --- ---
</TABLE>
TEN-YEAR OPTION REPRICINGS
During 1997, the Company's Board of Directors canceled options to purchase
80,000 shares of Common Stock held by Jay H. Dembsky at an exercise price of
$5.22 per share and issued replacement options to purchase the same number of
shares of Common Stock at an exercise price of $3.50 per share which exceeded
the fair market value, as defined in the 1996 Employee Stock Option Plan, on
the date of grant. The options were canceled and repriced to provide a more
realistic and attainable incentive based on the market price of the Common
Stock ($2.25) on the date of grant.
EMPLOYMENT AGREEMENTS
On January 16, 1997, the Company entered into a three-year employment
agreement with both Mr. Stephen D. Rubin and Mr. Clark L. Feldman (the
"EMPLOYMENT AGREEMENTS"). The terms of the Employment Agreements are identical
except for the capacity in which Mr. Rubin and Mr. Feldman are employed. Under
the Employment Agreements, the Company agrees to employ Mr. Rubin as its
President and Mr. Feldman as its Executive Vice President, each at a salary of
$215,000 per year (adjusted for cost of living increases) plus certain
additional perquisites, not to exceed $30,000 per year, including, among other
things, a car payment allowance, reimbursement of country club or health club
membership dues and expenses, the right to designate a charitable contribution
to be paid by the Company and a non-accountable business expense allowance.
The Employment Agreements also provide that Mr. Rubin and Mr. Feldman may
receive an annual bonus based on Company and individual performance as
determined by the Board of Directors and the Compensation Committee and a
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<PAGE> 12
special bonus for any consulting work developed by Mr. Rubin or Mr. Feldman as
determined by the Board of Directors. The Employment Agreements provide for
termination of Mr. Rubin or Mr. Feldman (i) for "cause" as defined in the
Employment Agreements, (ii) upon Mr. Rubin's or Mr. Feldman's death or "total
disability," as defined in the Employment Agreements, or (iii) if Mr. Rubin or
Mr. Feldman terminates his employment because of a breach of the Employment
Agreements by the Company. The Employment Agreements contain provisions that
restrict Mr. Rubin's and Mr. Feldman's ability to compete with the Company or
solicit its employees or customers for a specified period following the
termination of their employment.
On January 16, 1997, the Company and Mr. Jay H. Dembsky, in connection
with his employment as the Company's Chief Financial Officer, entered into a
two-year employment agreement containing provisions which are substantially
similar to the provisions of the Employment Agreements of Mr. Rubin and Mr.
Feldman except that Mr. Dembsky: (i) receives a salary of $110,000 per year
(adjusted for cost of living expenses) with a guaranteed bonus of $20,000 in
1997; (ii) received options to purchase 80,000 shares of Common Stock at the
initial public offering price per share less the underwriting discount and pro
rata portion of the non-accountable expense allowance per share of the shares
of Common Stock issued in the 1997 offering by the Company which were to vest
in 20% increments over a 5-year period but such options were cancelled and
replaced in November, 1997 by a grant of options to purchase the same number of
shares of Common Stock at $3.50 per share and the new options will vest over a
new 5-year period; and (iii) will receive a payment in an amount equal to twice
his salary and bonus for the previous fiscal year in the event of change in
control of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the initial purchase of the Company from Dean Foods in 1982,
the Company borrowed money at an interest rate of 10% per annum from certain
officers, directors and Company shareholders, evidenced by ten-year unsecured
promissory notes entered into in March, 1982 (the "ORIGINAL NOTES") in the
following original principal amounts: (i) Stephen D. Rubin - $98,591; (ii)
Clark L. Feldman - $49,483; (iii) Sam Gorenstein - $20,894; (iv) David
Gorenstein - $20,894; (v) James Rubin - $24,741; (vi) Edward Levine - $9,897;
and (vii) Sachnoff Weaver & Rubenstein, Ltd. - $11,842. The principal amounts
of all Original Notes remain outstanding except for the Original Note to
Sachnoff Weaver & Rubenstein, Ltd. which has been repaid. The scheduled
maturity of the Original Notes was extended for five years to February, 1997 by
a resolution of the Board of Directors in February, 1992 and was extended an
additional three years to February, 2000 by a resolution of the Board of
Directors in September, 1996. The Company borrowed additional amounts at an
interest rate of 8% per annum, evidenced by promissory notes dated February 1,
1993 (the "1993 NOTES") in the following original principal amounts: (i)
Stephen D. Rubin - $52,500; (ii) Clark L. Feldman - $26,250; (iii) Sam
Gorenstein - $11,037; (iv) David Gorenstein - $11,037; (v) Edward Levine -
$5,225; (vi) Jeffrey C. Rubenstein - $3,750; (vii) Arnold Pagniucci - $460; and
(viii) Philip Wong - $200. The principal amounts of the 1993 Notes remain
outstanding except the 1993 Notes to Mr. Pagniucci and Mr. Wong which have been
repaid and the 1993 Note to Mr. Feldman which was partially repaid and has a
remaining balance of $7,105. The scheduled maturity of the 1993 Notes is
December 31, 1998. Interest on the Original Notes and the 1993 Notes is
currently being paid by the Company. The Loan and Security Agreement dated
March 20, 1995 (the "BANK AGREEMENT") with American National Bank and Trust
Company of Chicago
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<PAGE> 13
("ANB") required those officers, directors and shareholders owning the 1993
Notes (the "1993 NOTEHOLDERS") to enter into Subordination Agreements dated
March 20, 1995 (the "SUBORDINATION AGREEMENTS") subordinating the 1993 Notes to
any amounts which the Company owes to ANB under the Bank Agreement. The
Subordination Agreements allow the Company to pay the 1993 Noteholders currently
accruing interest as long as the Company is not in default under the Bank
Agreement. The 1993 Noteholders also have a security interest in Company
property, pursuant to a Security Agreement dated March 20, 1995 provided,
however, that the security interest of the 1993 Noteholders is subordinated to
the security interest of ANB.
On February 26, 1990, David Gorenstein, Sam Gorenstein, Sid Gorenstein and
J.B.F. Enterprises (the "GORENSTEINS") entered into a Settlement Agreement and
General Release (the "SETTLEMENT AGREEMENT") with the Company, Stephen Rubin,
Clark Feldman, Jeffrey Rubenstein, Neal Jansen, Michael Horn and V-F
Acquisition, Inc. ("V-F ACQUISITION"). The Settlement Agreement released
various complaints and actions brought by the Gorensteins against the Company
and the other named parties and other claims that the Gorensteins and the
Company may have against one another through the date of the settlement. The
Settlement Agreement also required that Mr. Rubin, Mr. Feldman and V-F
Acquisition enter into a voting agreement with Sam Gorenstein and J.B.F.
Enterprises (the "VOTING AGREEMENT") that required each party to vote their
shares of Common Stock for the election of Sam Gorenstein, Stephen D. Rubin and
Clark L. Feldman as directors of the Company. The Voting Agreement terminated
on January 16, 1997. The Settlement Agreement also contains limits on the
maximum compensation including bonuses and amounts paid to family members that
can be paid to Mr. Rubin and Mr. Feldman. The maximum compensation allowable
for the fiscal year ending August 31, 1990 was $215,000 and increases each year
by an amount tied to the Consumer Price Index or five percent, whichever is
greater. In 1997, the maximum compensation limit was not exceeded. If
salaries are paid in excess of the limit, then pro-rata dividends must be paid
to the shareholders of the Company. In addition, Consulting Agreements,
required by the Settlement Agreement, provided for payments of consulting fees
to Sam and David Gorenstein in the annual amount of $12,500 through February,
1995, with fees paid quarterly. The Settlement Agreement also provides that
the Company will not attempt to force the Gorensteins to relinquish ownership
through any type of "freeze out" transaction, except under defined
circumstances.
Mr. Steven A. Rothstein is being nominated as a director as designee of
the underwriters of the Company's initial public offering. The Company has
agreed that, for three years after January 16, 1997, it will use its best
efforts to cause one individual designated by such underwriters, if any, to be
elected to the Company's Board of Directors.
Mr. Jeffrey C. Rubenstein, a director of the Company, is a partner with
the law firm of Much Shelist Freed Denenberg Ament Bell & Rubenstein P.C. which
is the Company's general counsel.
Except as described above, the Company is not a party to any other
material transactions of the type required to be described herein.
11
<PAGE> 14
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders has previously been
sent to the Company's stockholders or accompanies this Proxy Statement. The
Company's Annual Report on Form 10-KSB, for the year ended December 31, 1997,
as filed with the Securities and Exchange Commission, is available without
charge to any stockholder upon written request to Jay H. Dembsky, Investor
Relations, Vita Food Products, Inc., 2222 West Lake Street, Chicago, Illinois
60612. Copies of exhibits filed with the Form 10-KSB will be furnished, if
requested, upon payment of the Company's reasonable expenses in furnishing
those materials.
STOCKHOLDER PROPOSALS
Stockholder proposals submitted for evaluation as to inclusion in the
proxy materials for the Company's 1999 annual meeting of stockholders must be
received by the Company not later than January 8, 1999, at the Company's
principal executive offices at 2222 West Lake Street, Chicago, Illinois 60612.
OTHER MATTERS
Management is not aware of any other matters to be presented for action at
the Meeting. If any other matters are properly brought before the Meeting, it
is the intention of the persons named as proxies in the accompanying form of
proxy to vote the shares represented thereby in accordance with their best
judgment.
For the Board of Directors,
Stephen D. Rubin
Chairman of the Board
Chicago, Illinois
May 8, 1998
12
<PAGE> 15
VITA FOOD PRODUCTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING TO BE HELD ON JUNE 18, 1998
The undersigned hereby constitutes and appoints Stephen D. Rubin and Clark
L. Feldman, and each of them, with full power to act with or without the other
and with full power of substitution, his or her true and lawful agents and
proxies to represent the undersigned at the Annual Meeting of Shareholders of
Vita Food Products, Inc. (the "Company") to be held on June 18, 1998, at 10:00
A.M., and at any adjourments or postponements thereof, to vote all shares of
the undersigned at such meeting as specified herein and, in their best
judgment, on any other business that may properly come before such meeting. The
undersigned acknowledges receipt of the Proxy Statement related to such
Meeting.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF ALL NOMINEES AND FOR PROPOSAL 2.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE> 16
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
VITA FOOD PRODUCTS, INC.
JUNE 18, 1998
* PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED *
- -------------------------------------------------------------------------------
A [ X ] PLEASE MARK YOUR
VOTES AS IN THE
EXAMPLES.
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR THE ELECTION OF
ALL NOMINEES AND FOR PROPOSAL 2.
<TABLE>
<S> <C> <C> <C> <C>
FOR ALL
NOMINEES (except WITHHELD
as marked to the FROM ALL
contrary below) NOMINEES
FOR AGAINST ABSTAIN
1. ELECTION [ ] [ ] NOMINEES: 2. TO RATIFY THE APPOINTMENT [ ] [ ] [ ]
OF Stephen d. Rubin OF BDO SEIDMAN, LLP AS THE
DIRECTORS. Clark L. Feldman COMPANY'S INDEPENDENT PUBLIC
Sam Gorenstein ACCOUNTANTS FOR THE FISCAL YEAR
(INSTRUCTION: To withhold authority to vote for Jeffrey C. Rubenstein ENDING DECEMBER 31, 1998.
any nominee, write such nominee's name(s) Neal Jansen
below.) Michael Horn "NOTE" SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
Steven A. Rothstein MEETING OR ANY ADJOURNMENT THEREOF.
- -----------------------------------------------
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY
IN THE ENCLOSED ENVELOPE.
</TABLE>
SIGNATURE ___________________DATE_______SIGNATURE ___________________DATE_______
NOTE: Please sign exactly as your name appears hereon. When signing as
attorney, administrator, executor, guardian or trustee, please give your
full title as such. If a corporation, please sign by president or other
authorized officer and indicate title. If shares are registered in the
names of joint tenants or trustees, each tenant or trustee is required
to sign.
