<PAGE> 1
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BRIDGFORD FOODS CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(l), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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Set forth the amount on which the filing is calculated and state how it was
determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE> 2
BRIDGFORD FOODS CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MARCH 10, 1999
------------------------
TO THE SHAREHOLDERS OF
BRIDGFORD FOODS CORPORATION:
The annual meeting of the shareholders of Bridgford Foods Corporation, a
California corporation (the "Company"), will be held at the Four Points
Sheraton,1500 South Raymond Avenue, Fullerton, California, on Wednesday, March
10, 1999 at 10:00 a.m., for the following purposes:
(1) To elect eight directors to hold office for one year or until
their successors are elected and qualified.
(2) To ratify the proposal to approve the Company's 1999 Stock
Incentive Plan.
(3) To ratify the appointment of PricewaterhouseCoopers LLP as
independent public accountants of the Company for the fiscal year
commencing October 31, 1998.
(4) To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on February 5, 1999 are
entitled to notice of and to vote at said meeting or any adjournment thereof.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ASSURE YOUR REPRESENTATION AT THE MEETING, THE BOARD OF DIRECTORS
RESPECTFULLY URGES YOU TO SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY
CARD IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. IF YOU ATTEND THE MEETING IN
PERSON, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR OWN SHARES.
By order of the Board of Directors
William L. Bridgford
Secretary
Anaheim, California
February 8, 1999
<PAGE> 3
BRIDGFORD FOODS CORPORATION
1308 NORTH PATT STREET, ANAHEIM, CALIFORNIA 92801
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MARCH 10, 1999
The enclosed proxy is solicited by the Board of Directors of Bridgford
Foods Corporation, a California corporation (the "Company"), for use at the
annual meeting of shareholders of the Company (the "Annual Meeting") to be held
at the Four Points Sheraton,1500 South Raymond Avenue, Fullerton, California, on
Wednesday, March 10, 1999 at 10:00 a.m., and at any adjournment thereof. All
shareholders of record at the close of business on February 5, 1999 are entitled
to notice of and to vote at such meeting. This Proxy Statement and the
accompanying proxy are being mailed on or about February 8, 1999.
The persons named as proxies were designated by the Board of Directors and
are officers and directors of the Company. Any proxy may be revoked or
superseded by executing a later proxy or by giving notice of revocation in
writing prior to, or at, the Annual Meeting, or by attending the Annual Meeting
and voting in person. Attendance at the Annual Meeting will not in and of itself
constitute revocation of the proxy. All proxies, which are properly completed,
signed and returned to the Company prior to the Annual Meeting, and not revoked,
will be voted in accordance with the instructions given in the proxy. If a
choice is not specified in the proxy, the proxy will be voted FOR election of
the director nominees proposed by the Board of Directors and FOR the Company's
1999 Stock Incentive Plan, and FOR ratification of the Company's appointment of
PricewaterhouseCoopers LLP as independent public accountants for the Company.
Management does not know of any matters which will be brought before the Annual
Meeting other than those specifically set forth in the notice hereof. However,
if any other matter properly comes before the Annual Meeting, it is intended
that the proxies, or their substitutes, will vote on such matters in accordance
with their best judgment.
All expenses incurred in connection with this solicitation will be borne by
the Company. The Company will reimburse brokers and others who incur costs to
send proxy materials to beneficial owners of stock in a broker or nominee name.
At the close of business on February 5, 1999, there were 11,369,812 shares
of common stock of the Company outstanding. Each share of common stock entitles
the holder thereof to one vote on each matter to be voted upon by such
shareholders. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions are counted in tabulating the votes cast on proposals presented to
shareholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
1
<PAGE> 4
PROPOSAL 1
ELECTION OF DIRECTORS
The directors of the Company are elected annually to serve until the next
annual meeting of the shareholders or until their respective successors are
elected. At the Annual Meeting, eight directors are to be elected. The election
of directors shall be by the affirmative vote of the holders of a plurality of
the shares voting in person or by proxy at the annual meeting. Each of these
individuals has served as a director since the last annual meeting. All current
directorships are being filled.
Unless otherwise instructed, shares represented by the proxies will be
voted for the election of the nominees listed below. Each nominee has indicated
that he is willing and able to serve as director if elected. In the event that
any of such nominees shall become unavailable for any reason, an event which
management does not anticipate, it is intended that proxies will be voted for
substitute nominees designated by management.
The following table and biographical summaries set forth, with respect to
each nominee for director, his age, the positions he holds in the Company and
the year in which he first became a director of the Company. Data with respect
to the number of shares of the Company's Common Stock beneficially owned by each
of such directors as of February 5, 1999 appears on page 4 of this Proxy
Statement.
<TABLE>
<CAPTION>
YEAR
FIRST BECAME
NAME AGE CURRENT POSITION AT THE COMPANY(1) DIRECTOR
- ---- --- ----------------------------------- ------------
<S> <C> <C> <C>
Allan L. Bridgford....................... 64 Chairman and Member of the
Executive Committee 1952
Robert E. Schulze........................ 64 President and Member of the
Executive Committee 1980
Hugh Wm. Bridgford....................... 67 Chairman of the Executive Committee
and Vice President 1952
Paul A. Gilbert.......................... 56 Director 1993
John W. McNevin.......................... 75 Director 1987
Steven H. Price.......................... 58 Director 1988
Norman V. Wagner II...................... 69 Director 1990
Paul R. Zippwald......................... 61 Director 1992
</TABLE>
(1) Allan L. Bridgford and Robert E. Schulze are full-time employees of the
Company. Hugh Wm. Bridgford and Allan L. Bridgford are brothers.
DIRECTORS
Allan L. Bridgford, elected Chairman in March of 1995, served previously as
President of the Company for more than five years and has been a full-time
employee of the Company since 1957.
Robert E. Schulze, elected President in March of 1995, served previously as
Executive Vice President, Secretary and Treasurer of the Company for more than
five years. Mr. Schulze has been a full-time employee of the Company since 1964.
Hugh Wm. Bridgford, Chairman of the Executive Committee and elected Vice
President in March of 1995, previously served as Chairman of the Board of the
Company for more than five years and has been a full time employee of the
Company since 1955. Hugh Wm. Bridgford reduced his work schedule to 80% in the
1997-98 fiscal year.
Paul A. Gilbert has been Senior Vice President, Sales, Salomon Smith
Barney, Inc. since August 1994 and was formerly with Kidder, Peabody & Co.
Incorporated, an investment banking firm. Mr. Gilbert has held these respective
positions for more than the past five years.
2
<PAGE> 5
John W. McNevin has been a consultant to Eastman/Office Depot, Inc., an
office supply company since 1996. Prior to 1996, Mr. McNevin was vice president
of Eastman/Office Depot, a position he held for more than five years.
Steven H. Price has been in the family property management business for
more than the past five years. Mr. Price also was active as an avocado farmer
for more than five years prior to the sale of his property in 1991.
Norman V. Wagner II was President of Signal Landmark Properties, Inc., a
real estate development firm, from 1976 until his retirement in 1988. Mr. Wagner
is currently retired.
Paul R. Zippwald was Regional Vice President and Head of Commercial Banking
for Bank of America NT&SA, North Orange County, California, for more than five
years prior to his retirement in July 1992.
During fiscal year 1998 the Company's Board of Directors held 12 regular
monthly meetings. Each of the nominees holding office attended at least 75% of
the monthly meetings. Non-employee directors were paid $800 for each meeting
attended. Employee directors received no additional compensation for their
services.
COMPENSATION AND AUDIT COMMITTEES
During fiscal 1998, the Board of Directors maintained two committees, the
Compensation Committee and the Audit Committee. The Compensation Committee
consisted of Messrs. Gilbert, McNevin, Price, Wagner and Zippwald, each of whom
served thereon without additional compensation. Each of these individuals were
non-employee directors. The Compensation Committee is responsible for
establishing and administering the Company's compensation arrangements for all
executive officers. The Compensation Committee held two formal meetings during
fiscal 1998, each of which was attended by all committee members.
The Audit Committee consisted of Messrs. Gilbert, McNevin, Price, Wagner
and Zippwald, each of whom served thereon without additional compensation. The
Audit Committee meets periodically with the Company's independent public
accountants and reviews the Company's accounting policies and internal controls.
It also reviews the scope and adequacy of the independent accountants'
examination of the Company's annual financial statements. In addition, the Audit
Committee recommends the firm of independent public accountants to be retained
by the Company and approves all material non-audit services provided by them.
The Audit Committee held two formal meetings during fiscal 1998, each of which
was attended by all committee members.
EXECUTIVE OFFICERS
The Company has five executive officers elected on an annual basis to serve
at the pleasure of the Board of Directors:
<TABLE>
<S> <C>
Allan L. Bridgford Chairman(1)
Robert E. Schulze President(1)
Hugh Wm. Bridgford Vice President(1)
Salvatore F. DeGeorge Senior Vice President
Lawrence D. English Vice President
</TABLE>
(1) Messrs. Allan L. Bridgford, Robert E. Schulze and Hugh Wm. Bridgford are
each members of the Company's Executive Committee which acts in the capacity
of Chief Executive Officer of the Company.
A biographical summary regarding Messrs. Allan L. Bridgford, Robert E.
Schulze and Hugh Wm. Bridgford is set forth above under the caption "Directors."
Biographical information with respect to the Company's other executive officers
is set forth below:
Salvatore F. DeGeorge, age 67, has served as a Vice President of the
Company for more than the past five years and was elected Senior Vice President
in 1990.
Lawrence D. English, age 67, has served as a Vice President of the Company
for more than the past five years.
3
<PAGE> 6
PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
February 5, 1999 by each shareholder known by the Company to be the beneficial
owner of more than 5% of the Company's Common Stock, by each director, by each
executive officer named in the Summary Compensation Table and by all officers
and directors as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF SHARES BENEFICIALLY OWNED
----------------------------------------------------------- PERCENTAGE OF
SOLE SHARED OUTSTANDING
NAME AND ADDRESS VOTING AND VOTING AND TOTAL SHARES
OF BENEFICIAL OWNER INVESTMENT POWER INVESTMENT POWER(1) BENEFICIALLY OWNED BENEFICIALLY OWNED
------------------- ---------------- ------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Bridgford Industries........... 7,156,396 -- 7,156,379 62.94
Incorporated
1308 N. Patt St.
Anaheim, CA 92801
Hugh Wm. Bridgford............. 51,001 7,156,396 7,207,380 63.39
1308 N. Patt St.
Anaheim, CA 92801
Allan L. Bridgford............. 153,882 7,156,396 7,310,278 64.29
1308 N. Patt St.
Anaheim, CA 92801
Bruce H. Bridgford............. 5,987 7,156,396 7,162,383 62.99
1308 N. Patt St.
Anaheim, CA 92801
Baron R.H. Bridgford........... 1,654 7,156,396 7,158,050 62.96
170 North Green St.
Chicago, IL 60607
Robert E. Schulze.............. 166,505 -- 166,505 1.46
Salvatore F. DeGeorge.......... 2,522 -- 2,522 *
Lawrence D. English............ 5,282 -- 5,282 *
Paul A. Gilbert................ 605 -- 605 *
John W. McNevin................ 15,138 -- 15,138 *
Steven H. Price................ 1,397 -- 1,397 *
Norman V. Wagner II............ 1,360 -- 1,360 *
Paul R. Zippwald............... 1,452 -- 1,452 *
All directors and officers as a
group and beneficial owners
of more than 5% of common
stock (13 persons)........... 7,563,181 -- 7,563,181 66.52
</TABLE>
* Less than one percent (1%).
(1) Represents shares beneficially owned by Bridgford Industries Incorporated, a
Delaware corporation ("BII"), which presently has no other significant
business or assets. Allan L. Bridgford, Hugh Wm. Bridgford, Baron R.H.
Bridgford and Bruce H. Bridgford presently own 16.06%, 10.54%, 9.54% and
10.29%, respectively, of the outstanding voting capital stock of BII and
each has the right to vote as trustee or custodian for other stockholders of
BII 0%,0%, 2.94% and 1.21%, respectively, of such outstanding voting capital
stock. The remaining percentage of BII stock (49.3%) is owned of record, or
beneficially, by 34 additional members of the Bridgford family. The officers
of BII jointly vote all shares.
4
<PAGE> 7
COMPLIANCE WITH SECTION 16(a)
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers, and holders of more than 10% 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
of the Company. Based solely upon information provided to the Company by
individual directors and executive officers, the Company believes that during
the preceding fiscal year its officers, directors and holders of more than 10%
of its Common Stock complied with all Section 16(a) filing requirements.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth summary information concerning compensation
paid or accrued by the Company for services rendered during the three fiscal
years ended 1996, 1997 and 1998 to the Company's chief executive officer and the
four remaining most highly paid executive officers whose salary and bonus
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------ ------ -------
OTHER(4) ALL(5)
ANNUAL RESTRICTED OTHER
COMPEN- STOCK OPTIONS/ COMPENSA-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) SATION AWARDS SARS(#) TION($)
--------------------------- ---- --------- ------------ -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Allan L. Bridgford 1998 199,108 410,000(2)(3) -- -0- -0- -0- 3,500
Chairman of the 1997 185,490 320,000(2)(3) -- -0- -0- -0- 3,500
Board(1) 1996 169,070 272,500(2)(3) -- -0- -0- -0- 3,500
Robert E. Schulze 1998 199,108 410,000(2)(3) -- -0- -0- -0- --
President(1) 1997 185,490 320,500(2)(3) -- -0- -0- -0- --
1996 169,070 272,500(2)(3) -- -0- -0- -0- --
Hugh Wm. Bridgford 1998 178,317 328,000(2)(3) -- -0- -0- -0- 3,222
Vice President and 1997 185,490 320,000(2)(3) -- -0- -0- -0- 3,222
Chairman of the 1996 169,070 272,500(2)(3) -- -0- -0- -0- 3,222
Executive Committee(1)
Salvatore F. DeGeorge 1998 82,520 123,664(3) -- -0- -0- -0- --
Senior Vice President 1997 79,040 121,061(3) -- -0- -0- -0- --
1996 75,860 107,850(3) -- -0- -0- -0- --
Lawrence D. English 1998 63,780 90,672 -- -0- -0- -0- --
Vice President 1997 60,970 81,880 -- -0- -0- -0- --
1996 58,320 67,116 -- -0- -0- -0- --
</TABLE>
(1) Messrs. Hugh Wm. Bridgford, Allan L. Bridgford and Robert E. Schulze are
members of the Company's Executive Committee which acts in the capacity of
Chief Executive Officer of the Company.
(2) Represents deferred contingent compensation payable over periods of five
years pursuant to bonuses granted by the Company's Compensation Committee.
(3) Includes amounts related to the Deferred Compensation Savings Plan as
follows: Hugh Wm. Bridgford, Allan L. Bridgford and Robert E.
Schulze-- $50,000 each ; Salvatore F. DeGeorge, $25,000. The Deferred
Compensation Savings Plan enables certain employees designated by the Board
of Directors to elect, during November of each calendar year, to defer the
payment of a specified portion of their future compensation to subsequent
years. The Company's obligation to pay the sums deferred is unsecured.
Deferred sums are payable to participants upon retirement or termination of
employment. In fiscal 1998, all sums deferred under the Deferred
Compensation Savings Plan earned an interest rate of 9.84%. In future years
the yield on these deferrals is credited at Moody's Investors Service, Inc.
average seasoned bond rate plus 2%. Under current federal tax law, a
participant will not be taxed on the amount of compensation deferred until
it is paid to the participant pursuant to the Deferred Compensation Savings
Plan.
(4) Other annual compensation does not exceed the lesser of $50,000 or 10% of
the total salary and bonus reported for any of the named executives.
(5) Represents premiums paid by the Company in connection with split dollar
insurance policies.
5
<PAGE> 8
RETIREMENT PLAN
The Company has a defined benefit plan ("Plan") for those of its employees
not covered by collective bargaining agreements. The Plan, administered by a
major life insurance company, presently provides that participants receive an
annual benefit on retirement equal to 1 1/2% of their total compensation from
the Company during their period of participation from 1958. Benefits are not
reduced by Social Security payments or by payments from other sources and are
payable in the form of fully-insured monthly lifetime annuity contracts
commencing at age 65 or the participant's date of retirement, whichever is
later. Based on projections used for computing benefits under the Plan, the
estimated annual benefits at normal retirement would be as follows: Allan L.
Bridgford -- $52,320; Robert E. Schulze -- $48,492; Hugh Wm. Bridgford --
$47,460 Salvatore F. DeGeorge -- $34,620 and Lawrence D. English -- $23,592; all
officers as a group (5 persons) -- $206,484.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Retirement benefits otherwise available to key executives under the
Company's Plan have been limited by the effects of the Tax Equity and Fiscal
Responsibility Act of 1982 ("TEFRA") and the Tax Reform Act of 1986 ("TRA"). To
offset the loss of retirement benefits associated with TEFRA and TRA, the
Company has adopted a non-qualified "makeup" benefit plan (Supplemental
Executive Retirement Plan). Benefits will be provided under this plan for key
employees equal to 60% of their final average earnings minus any pension
benefits and primary insurance amounts available to them under Social Security.
However, in all cases the combined benefits are capped at $120,000 per year.
Eligibility is determined by the Board of Directors of the Company and the
projected annual benefits to be paid at normal retirement date to those
presently selected are as follows: Allan L. Bridgford -- $53,904; Robert E.
Schulze -- $58,500; Hugh Wm. Bridgford -- $61,084 Salvatore F.
DeGeorge -- $64,447; all officers as a group (4 persons) -- $237,935.
6
<PAGE> 9
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
the Performance Graphs on page 8 and 9 shall not be incorporated by reference
into any such filings.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Company consists of the outside members
of the Board of Directors. During fiscal 1998, the Compensation Committee
consisted of Messrs. Gilbert, McNevin, Price, Wagner and Zippwald. The Company's
executive compensation policy's aim is to attract, retain and motivate key
employees while making sure that a relationship exists between executive
compensation and the Company's performance. Accordingly, the Company policy of
compensation for its executive officers is to combine annual base salaries with
bonuses based upon corporate performance.
Historically, the Company has been principally managed by an Executive
Committee consisting of senior executive officers of the Company. The Executive
Committee, as a unit, serves as the Company's "Chief Executive Officer". The
Executive Committee currently consists of three members. The current members are
Allan L. Bridgford, Chairman of the Board of Directors, Robert E. Schulze,
President, and Hugh Wm. Bridgford, Chairman of the Executive Committee and Vice
President. For the last several years, the Compensation Committee has determined
that each member of the Executive Committee should be compensated on an equal
basis with pro-rata adjustments for reduced work schedules.
The current compensation plan sets forth a minimum base salary of $2,000
per week for each member of the Executive Committee plus incentive amounts that
may be earned as additional future salary and/or as deferred contingent
compensation ("bonuses"). The Compensation Committee deems continuity of
management to be an important consideration for the long-term success of the
business and, therefore, payments of bonuses are currently deferred over a
five-year period. No interest is paid or accrued on the earned but unpaid
bonuses. Consistent with the compensation policy for all of the Company's
corporate officers, as discussed below, the principal factor used by the
Compensation Committee to determine the bonuses to be paid the members of the
Executive Committee is the measure of the Company's performance which is based
upon the Company's pretax income and return on shareholders' equity for the
current fiscal year.
The Compensation Committee has elected not to provide incentive
compensation in the form of stock options, stock appreciation rights, restricted
stock or other similar plans. The Compensation Committee also directs that
perquisite compensation be minimal for members of the Executive Committee.
Members of the Executive Committee are not to be provided with country club
memberships or other similar perquisites.
Compensation for executive officers other than those on the Executive
Committee are recommended to the Compensation Committee by the Executive
Committee which regularly reports to the Board of Directors and the Compensation
Committee on compensation matters relating to other corporate officers. All
corporate officers, top-level managers and many midlevel managers receive
compensation determined by performance based criteria, including both individual
and team accomplishments.
COMPENSATION COMMITTEE
Paul A. Gilbert
John W. McNevin
Steven H. Price
Norman V. Wagner II
Paul R. Zippwald
7
<PAGE> 10
PERFORMANCE GRAPHS
The comparative stock performance graphs shown below compare the yearly
change in cumulative value of Bridgford Foods Corporation's common stock with
certain index values for both the five and ten year periods ended October 30,
1998. Both graphs set the beginning value of Bridgford common stock and the
indexes at $100. All calculations assume reinvestment of dividends on a monthly
basis. The five-year graph is in dollars and the ten-year graph is in thousands
of dollars. The peer group consists of eighteen companies, including the
Company, that comprised the Meat and Poultry Industry Group of Media General
Financial Services. The group includes Bob Evans Farms, Inc.; Cagles', Inc.;
Hormel Foods Corp.; Hudson Foods, Inc.; IBP, Incorporated; Thorn Apple Valley,
Inc.; Tyson Foods, Inc.; Western Beef Inc. and others.
NOTE: The stock price performance shown on the following graphs is not
necessarily indicative of future price performance.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
BRIDGFORD FOODS
CORP S&P 500 INDEX PEER GROUP
--------------- ------------- ----------
<S> <C> <C> <C>
29-Oct-93 100.00 100.00 100.00
28-Oct-94 99.65 104.01 112.41
3-Nov-95 94.61 133.11 128.86
1-Nov-96 86.27 162.19 129.51
31-Oct-97 128.50 214.70 140.21
30-Oct-98 146.71 261.92 164.04
</TABLE>
Source: Standard & Poor's Compustat Services, Inc.
Assumes $100 invested October 29, 1993
Assumes dividends reinvested
Fiscal year ending October 30, 1998
8
<PAGE> 11
<TABLE>
<CAPTION>
BRIDGFORD FOODS
CORP S&P 500 INDEX PEER GROUP
--------------- ------------- ----------
<S> <C> <C> <C>
29-Oct-88 100.00 100.00 100.00
3-Nov-89 160.10 125.58 124.27
2-Nov-90 194.20 119.70 125.35
1-Nov-91 394.05 154.64 173.74
30-Oct-92 458.68 169.81 192.45
29-Oct-93 318.64 194.95 218.51
28-Oct-94 317.54 202.76 245.62
3-Nov-95 301.47 259.49 281.57
1-Nov-96 274.91 316.18 282.99
31-Oct-97 409.46 418.55 306.37
30-Oct-98 467.47 510.60 358.43
</TABLE>
Source: Standard & Poor's Compustat Services, Inc.
Assumes $100 invested October 29, 1988
Assumes dividends reinvested
Fiscal year ending October 30, 1998
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has no employment contracts and has no change in control
agreements.
No member of the Compensation Committee is a former or current officer or
employee of the Company or any of its subsidiaries. The Company is not aware of
any transaction involving any member of the Compensation Committee that would
require disclosure for "Compensation Committee Interlocks and Insider
Participation".
RELATED PARTY TRANSACTIONS
The Company is not aware of any related party transactions that would
require disclosure.
9
<PAGE> 12
PROPOSAL 2
APPROVAL OF THE 1999 STOCK INCENTIVE PLAN
Subject to approval by the Company's shareholders, the Board of Directors
adopted the 1999 Stock Incentive Plan (the "1999 Plan") on January 11, 1999. The
primary purposes of the 1999 Plan are (a) to enhance the Company's ability to
attract and retain the services of qualified employees and officers upon whose
judgment, initiative and efforts the successful conduct and development of the
Company's business largely depends, and (b) to provide additional incentives to
such persons to devote their utmost effort and skill to the advancement and
betterment of the Company, by providing them an opportunity to participate in
the ownership of the Company and thereby have an interest in the success and
increased value of the Company.
Approval of the 1999 Plan will require the affirmative vote of the holders
of a majority of the shares outstanding of common stock present or represented
at the Annual Meeting and entitled to vote thereat. Proxies received in response
to this solicitation for which no specific direction is included will be voted
for approval of the 1999 Plan.
The essential features of the 1999 Plan are summarized below. This summary
does not purport to be a complete description of the 1999 Plan. The Company's
shareholders may obtain a copy of the 1999 Plan upon written request to the
Treasurer of the Company.
SUMMARY OF 1999 PLAN
The 1999 Plan was adopted by the Board of Directors on January 11, 1999
subject to approval by the Company's shareholders. The 1999 Plan provides for
the grant by the Company of options to purchase up to an aggregate of 900,000
shares of common stock. As of February 5, 1999, the seven officers of the
Company and all other employees were eligible to participate.
The 1999 Plan provides that it is to be administered by the Board of
Directors or a committee, consisting of two (2) or more members, appointed by
the Board of Directors (the "Administrator"). At the meeting of the Board of
Directors on January 11, 1999, the Board of Directors appointed the Company's
Executive Committee to be the Administrator. The Administrator has broad
discretion to determine the persons entitled to receive options under the 1999
Plan, the terms and conditions on which options are granted and the number of
shares subject thereto. The Administrator also has discretion to determine the
nature of the consideration to be paid upon exercise of an option granted under
the 1999 Plan.
All options granted under the 1999 Plan are considered "incentive stock
options," within the meaning of Section 422 of the Internal Revenue Code (the
"Code"). Options may be granted under the 1999 Plan for terms up to ten (10)
years. The exercise price of options shall not be less than the fair market
value of such shares on the date on which the option is granted; provided,
however, that the exercise price shall not be less than 110% of fair market
value if the person to whom the option is granted owns 10% or more of the
outstanding stock of the Company. No optionee may be granted options under the
1999 Plan to the extent that the aggregate fair market value (determined as of
the date of grant) of the shares of common stock with respect to which options
are exercisable for the first time by the optionee during any calendar year
would exceed $100,000.
Options granted under the 1999 Plan are not assignable. Each option shall
vest and be exercisable in one or more installments at such time or times and
subject to such conditions, including without limitation the achievement of
specified performance goals or objectives, as shall be determined by the
Administrator.
In the event that the Company at any time proposes to merge into,
consolidate with or enter into any other reorganization (including the sale of
substantially all of its assets or a "reverse" merger in which the Company is
the surviving entity pursuant to which the ownership of the outstanding voting
capital shall change by at least 50%), the vesting of all options shall be
automatically accelerated, and the Administrator may, in its
10
<PAGE> 13
discretion, provide for additional adjustments to such terms in order to
preserve, but not to increase, the benefits to persons then holding options.
Payment for shares upon exercise of an option must be made in full at the
time of exercise. The form of consideration payable upon exercise of an option
shall, at the discretion of the Administrator, be by: (a) cash; (b) check; (c)
the surrender of shares of common stock owned by the optionee that have been
held by the optionee for at least six (6) months, which surrendered shares shall
be valued at fair market value as of the date of such exercise; (d) the
optionee's promissory note in a form and on terms acceptable to the
Administrator; (e) the cancellation of indebtedness of the Company to the
optionee; (f) the waiver of compensation due or accrued to the optionee for
services rendered; (g) provided that a public market exists, a "same day sale"
commitment from the optionee and an NASD dealer whereby the optionee irrevocably
elects to exercise the option and to sell a portion of the shares so purchased
to pay for the exercise price and whereby the NASD dealer irrevocably commits
upon receipt of such shares to forward the exercise price directly to the
Company; (h) provided that a public market for the common stock exists, a
"margin" commitment from the optionee and an NASD dealer whereby the optionee
irrevocably elects to exercise the option and to pledge the shares so purchased
to the NASD dealer in a margin account as security for a loan from the NASD
dealer in the amount of the exercise price, and whereby the NASD dealer
irrevocably commits upon receipt of such shares to forward the exercise price
directly to the Company; or (i) any combination of the foregoing methods of
payment or any other consideration or method of payment as shall be permitted by
applicable corporate law.
As of February 5, 1999, no options have been granted under the 1999 Plan.
AMENDMENT AND TERMINATION OF THE 1999 PLAN
The 1999 Plan may be altered, amended, suspended or terminated by the Board
of Directors at any time. In addition, to the extent necessary and desirable to
comply with Section 422 of the Code (or any other applicable law or regulation),
the Company shall obtain shareholder approval of any amendment or modification
to the 1999 Plan. No amendment, modification or termination of the 1999 Plan
shall affect or impair any rights or obligations under any option granted prior
to the date of such amendment, modification or termination without the consent
of the holder of such option. Unless previously terminated by the Board of
Directors, the 1999 Plan will terminate on January 10, 2009.
SUMMARY OF FEDERAL TAX CONSEQUENCES
The Company believes the following is a brief summary of the tax effects
under the Code that may accrue to participants in the 1999 Plan. State and local
income taxes, which may vary from locality to locality, are not discussed.
No taxable income is recognized by an optionee or the Company upon either
the grant or exercise of an incentive stock option. When an optionee sells or
otherwise disposes of the shares acquired upon the exercise of an incentive
stock option, the entire gain or loss realized will be treated as long-term
capital gain if the disposition occurs more than one year after the option was
exercised and more than two years after the date of grant of the option. If,
however, the disposition occurs before either the one-year or two-year periods
have elapsed (a "disqualifying disposition"), any gain realized will be taxed as
ordinary income in an amount equal to the difference between the option price
and either the fair market value of the shares at the time of exercise or the
sale price, whichever is less, and the balance, if any, will be treated as
capital gain. Any loss realized upon a disqualifying disposition will be treated
as a capital loss. Special rules may apply in specific circumstances, such as
the use of already-owned stock to exercise an incentive stock option. The
Company will be entitled to a deduction for federal income tax purposes only to
the extent that an optionee recognizes ordinary income upon a disqualifying
disposition of shares. The difference between the option price and the fair
market value of the shares acquired at the time of exercise of an incentive
stock option will be an item of tax preference to an optionee for purposes of
computing the alternative minimum tax under Section 55 of the Code.
TAX WITHHOLDING
Under the 1999 Plan, the Company has the power to withhold, or require a
participant to remit to the Company, an amount sufficient to satisfy federal,
state and local withholding tax requirements with respect to any options
exercised under the 1999 Plan.
11
<PAGE> 14
PROPOSAL 3
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has, subject to ratification
by the shareholders, appointed PricewaterhouseCoopers as independent public
accountants for the Company for the fiscal year commencing October 31, 1998.
PricewaterhouseCoopers LLP has been the Company's independent public accountants
since 1958.
Proxies received in response to this solicitation will be voted in favor of
the approval of such firm unless otherwise specified in the proxy. In the event
of a negative vote on such ratification, the Board of Directors will reconsider
its selection. A representative of PricewaterhouseCoopers LLP will be present at
the meeting and available for questions and will have the opportunity to make a
statement if they so desire.
VOTING
Every shareholder, or his proxy, entitled to vote upon the election of
directors may cumulate his or her votes and give one candidate a number of votes
equal to the number of directors to be elected multiplied by the number of votes
to which his shares are entitled, or distribute his or her votes on the same
principle among as many candidates as he thinks fit. No shareholder or proxy,
however, shall be entitled to cumulate votes unless such candidate or candidates
have been nominated prior to the voting and the shareholder has given notice at
the meeting, prior to the voting, of the shareholder's intention to cumulate
such shareholder's votes. If any one shareholder gives such notice, all
shareholders may cumulate their votes for candidates in nomination. Other than
in connection with the election of directors, an affirmative vote of a majority
of the shares present and voting at the meeting is required for approval of all
items being submitted to the shareholders for their consideration.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2000 Annual
Meeting of Shareholders must be received at the Company's principal office no
later than October 13, 1999 in order to be considered for inclusion in the proxy
statement and form of proxy relating to that meeting. On May 21, 1998 the
Securities and Exchange Commission adopted an amendment to Rule 14a-4, as
promulgated under the Securities and Exchange Act of 1934, as amended. The
amendment to Rule 14a-4(c)(1) governs the Company's use of its discretionary
proxy voting authority with respect to a shareholder proposal which is not
addressed in the Company's proxy statement. The new amendment provides that if a
proponent of a proposal fails to notify the Company at least 45 days prior to
the month and day of mailing of the prior year's proxy statement, then the
Company will be allowed to use its discretionary voting authority when the
proposal is raised at the meeting, without any discussion of the matter in the
proxy statement.
With respect to the Company's 2000 Annual Meeting of Shareholders, if the
Company is not provided notice of a shareholder proposal, which the shareholder
has not previously sought to include in the Company's proxy statement, by
December 25, 1999, the Company will be allowed to use its voting authority as
outlined.
OTHER MATTERS
The Board of Directors is not aware of any matters to be acted upon at the
meeting other than the election of directors, the approval of the 1999 Stock
Incentive Plan and the ratification of the appointment of PricewaterhouseCoopers
LLP. If, however, any other matter shall properly come before the meeting, the
persons named in the proxy accompanying this statement will have discretionary
authority to vote all proxies with respect thereto in accordance with their best
judgment.
12
<PAGE> 15
FINANCIAL STATEMENTS
The annual report of the Company for the fiscal year ended October 30, 1998
accompanies this proxy statement but is not a part of the proxy solicitation
material.
By order of the Board of Directors
William L. Bridgford
Secretary
February 8, 1999
FORM 10-K
The Corporation will furnish without charge to each person whose proxy is being
solicited, upon request of any such person, a copy of the Annual Report of the
Corporation on Form 10-K for the fiscal year ended October 30, 1998, as filed
with the Securities and Exchange Commission, including financial statements and
schedules thereto. Such report was filed with the Securities and Exchange
Commission on or about January 28, 1999. Requests for copies of such report
should be directed to the Treasurer, Bridgford Foods Corporation, P.O. Box 3773,
Anaheim, California 92803.
13
<PAGE> 16
BRIDGFORD FOODS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 10, 1999
The undersigned shareholder of BRIDGFORD FOODS CORPORATION, a California
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated February 8, 1999, and hereby
appoints Hugh Wm. Bridgford and Allan L. Bridgford, and each of them, proxies
and attorneys-in-fact, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the 1999 Annual
Meeting of Shareholders of BRIDGFORD FOODS CORPORATION, to be held on March 10,
1999 at 10:00 a.m., local time, at the Four Points Sheraton, 1500 South Raymond
Avenue, Fullerton, California, and at any adjournment thereof, and to vote all
shares of Common Stock which the undersigned would be entitled to vote if then
and there personally present, on the matters set forth below:
1. ELECTION OF DIRECTORS:
FOR all nominees listed below (except as indicated) [ ]
WITHHOLD AUTHORITY (to vote for all nominees) [ ]
<TABLE>
<S> <C> <C> <C>
Hugh Wm. Bridgford Allan L. Bridgford Robert E. Schulze Paul A. Gilbert
John W. McNevin Steven H. Price Norman V. Wagner II Paul R. Zippwald
</TABLE>
If you wish to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below:
<TABLE>
<S> <C> <C> <C>
Hugh Wm. Bridgford Allan L. Bridgford Robert E. Schulze Paul A. Gilbert
John W. McNevin Steven H. Price Norman V. Wagner II Paul R. Zippwald
</TABLE>
2. PROPOSAL TO APPROVE COMPANY'S 1999 STOCK INCENTIVE PLAN:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. PROPOSAL TO RATIFY APPOINTMENT OF PricewaterhouseCoopers LLP AS THE
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY FOR 1999:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. In their discretion, the proxies are authorized to vote upon such other
matter or matters that may properly come before the meeting or any
adjournment thereof.
(continued on reverse side)
<PAGE> 17
(continued from reverse side)
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF THE EIGHT DIRECTOR NOMINEES LISTED
ABOVE, FOR THE APPROVAL OF THE COMPANY'S 1999 STOCK INCENTIVE PLAN, FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS
MAY PROPERLY COME BEFORE THE MEETING.
- ---------------------------- # of shares Dated: , 1999
Name (Please Print) --------- --------------
---------------------------
(Signature)
---------------------------
(Signature)
(This Proxy should be
marked, dated and signed by
the shareholder(s) exactly
as his or her name appears
hereon, and returned
promptly in the enclosed
envelope. Persons signing
in a fiduciary capacity
should so indicate. If
shares are held by joint
tenants or as community
property, both should
sign.)
