<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 [ ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
THORN APPLE VALLEY, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
THORN APPLE VALLEY, INC.
- -------------------------------------------------------------------------------
(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)(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:
- --------------------------------------------------------------------------------
<PAGE> 2
THORN APPLE VALLEY, INC.
___________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held October 29, 1997
To the Shareholders:
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of Thorn Apple
Valley, Inc. (the "Company") will be held at the Radisson Plaza Hotel, 1500
Town Center, Southfield, Michigan on Wednesday, October 29, 1997 at 11:00 A.M.,
Eastern Standard Time, to consider and act upon the following matters:
(1) The election of seven directors to serve until the next Annual Meeting of
Shareholders and until their successors shall have been duly elected and
qualified, unless the Classified Board Proposal is approved, in which case
such directors will serve for the applicable terms of their respective
classes.
(2) A proposal (the "Classified Board Proposal") to amend the Company's
Restated Articles of Incorporation and By-Laws to provide (i) for a
classified Board of Directors who will serve staggered terms and (ii) that
a director may be removed prior to the expiration of his or her term for
cause only.
(3) A proposal (the "Shareholder Consent and Advanced Notice Proposal") to
amend the Company's Restated Articles of Incorporation and By-Laws (i) to
provide that shareholders may take action at a duly called meeting or by
unanimous written consent only and (ii) to require a shareholder to
disclose to the Corporation, in advance of a shareholder meeting, certain
information with respect to each proposed nominee for director and with
respect to each proposed business item to be acted upon at the meeting.
(4) Such other business as may properly come before the meeting.
Only shareholders of record at the close of business on September 1, 1997
will be entitled to vote at the meeting.
Your attention is called to the attached proxy statement and accompanying
proxy. You are requested to sign and return the proxy in the enclosed
envelope, to which no postage need be affixed if mailed in the United States.
If you attend the meeting, you may withdraw your proxy and vote your own
shares.
A copy of the Annual Report of the Company for the fiscal year ended May 30,
1997 accompanies this Notice.
By Order of the Board of Directors
/S/ RONALD D. RISHER
RONALD D. RISHER
Secretary
Southfield, Michigan
September 25, 1997
<PAGE> 3
THORN APPLE VALLEY, INC.
26999 CENTRAL PARK BOULEVARD, SUITE 300
SOUTHFIELD, MICHIGAN 48076
___________________
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 29, 1997
GENERAL INFORMATION
The Annual Meeting of Shareholders of Thorn Apple Valley, Inc. (the
"Company") will be held at the Radisson Plaza Hotel, 1500 Town Center,
Southfield, Michigan on Wednesday, October 29, 1997, at 11:00 A.M., Eastern
Standard Time, for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders. The approximate mailing date for this proxy statement
is September 25, 1997.
It is important that your shares be represented at the meeting. If you do
not intend to attend the meeting, please sign and date the enclosed proxy and
return it to the Company. The proxy is solicited by the Board of Directors of
the Company. The shares represented by valid proxies in the enclosed form will
be voted if received in time for the Annual Meeting. The Company has retained
______________ to assist in the solicitation of proxies. For those services,
the Company will pay this firm certain fees estimated at $________________, plus
reimbursement of out-of-pocket costs and expenses. The expenses in connection
with the solicitation of proxies will be borne by the Company and may include
requests by mail and personal contact by the Company's directors, officers and
employees. The Company will reimburse brokers or other nominees for their
expenses in forwarding proxy materials to principals. Any person giving a proxy
has the power to revoke it at any time before it is voted.
The presence, in person or by proxy, of a majority of the shares of Common
Stock entitled to vote at the Annual Meeting will constitute a quorum at the
Annual Meeting. The persons nominated for election as Directors will be elected
by a plurality of the shares of Common Stock. The Classified Board Proposal and
the Shareholder Consent and Advanced Notice Proposal must be approved by the
affirmative vote of a majority of the shares of Common Stock outstanding and
entitled to vote. Proxies in the accompanying form which are properly executed
and duly returned to the Company and not revoked will be voted as specified and,
if no direction is made, will be voted for each of the persons nominated for
election as directors and for the Classified Board Proposal and the Shareholder
Consent and Advanced Notice Proposal.
Only holders of record of shares of the Company's Common Stock, $0.10 par
value per share ("Common Stock"), at the close of business on September 1, 1997,
are entitled to notice of and to vote at the meeting and at any and all
adjournments or postponements thereof, each share having one vote. On the
record date, the Company had issued and outstanding 6,115,770 shares of Common
Stock.
2
<PAGE> 4
I. ELECTION OF DIRECTORS
The Company's By-laws provide that the Company shall have at least three
and no more than nine directors, with the exact number to be determined by the
Board. The Board of Directors currently is comprised of seven directors. If
the Classified Board Proposal is approved, the directors will be classified into
three classes and will serve for the terms set forth next to their names or
until their successors have been duly qualified and elected. If the Classified
Board Proposal is not approved, each director will serve until the next annual
meeting of shareholders or until his successor has been duly elected and
qualified. Unless otherwise instructed, proxy holders will vote the proxies
received by them for the election of the nominees named below. All of the
nominees for director are currently directors of the Company. If any nominee
becomes unavailable for any reason, it is intended that the proxies will be
voted for a substitute nominee designated by the Board. The Board of Directors
has no reason to believe that the nominees named will be unable to serve if
elected. Any vacancy occurring on the Board of Directors for any reason may be
filled by vote of a majority of the directors then in office until the next
meeting of shareholders.
<TABLE>
<CAPTION>
NOMINEES: Expiration of Term*
------------------
<S> <C>
Class I:
Henry S Dorfman 1998
Joel Dorfman 1998
Class II:
Moniek Milberger 1999
John C. Canepa 1999
Class III:
Louis Glazier 2000
Burton D. Farbman 2000
Seymour Roberts 2000
</TABLE>
- ------------------------
* Assuming approval of the Classified Board Proposal.
Each of the foregoing nominees was elected to his present term at the
1996 Annual Meeting of Shareholders. The following table sets forth the name,
age, position with the Company, principal occupation, term of service and
beneficial ownership of Common Stock with respect to each nominee to serve as a
director. The information as to securities owned by each nominee has been
furnished by such nominee. The following table also sets forth the name and
beneficial ownership of Common Stock with respect to each executive officer of
the Company named in the Summary Compensation Table below and all directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK OF THE PERCENTAGE OF
COMPANY OUTSTANDING COMMON
POSITIONS AND OFFICES BENEFICIALLY OWNED STOCK OF THE COMPANY
NAME AND YEAR FIRST WITH COMPANY AND AS OF BENEFICIALLY OWNED AS
BECAME A DIRECTOR AGE OTHER PRINCIPAL OCCUPATIONS SEPTEMBER 1, 1997 OF SEPTEMBER 1, 1997
----------------- --- --------------------------- ----------------- --------------------
-- NOMINEES FOR ELECTION AS DIRECTORS --
<S> <C> <C> <C> <C>
Henry S Dorfman (1959) . . . 75 Chairman of the Board . . . . . . 2,421,178(1) 39.6%
Joel Dorfman (1978) . . . . 46 President and Chief Executive
Officer of the Company . . . . . . 588,896(2) 9.2%
Moniek Milberger (1959) . . 67 Certified Public Accountant and
Consultant to the Company,
Southfield Michigan . . . . . . . 650 *
John C. Canepa (1983) . . . 67 Consulting Principal, Crowe
Chizek, Grand Rapids, Michigan . . 0 *
Louis Glazier (1988) . . . . 48 Executive Vice President Finance
and Administration of the Company
74,149(3) 1.2%
Burton D. Farbman (1988) . . 54 President of The Farbman Group,
Southfield, Michigan . . . . . . . 1,375 *
Seymour Roberts (1992) . . . 63 Senior Vice President, Senior
Partner, N.W. Ayer & Partners,
Detroit, Michigan . . . . . . . . 300 *
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
SHARES OF COMMON PERCENTAGE OF
STOCK OF THE COMPANY OUTSTANDING COMMON
BENEFICIALLY OWNED STOCK OF THE COMPANY
NAME AS OF BENEFICIALLY OWNED AS
- ----
SEPTEMBER 1, 1997 OF SEPTEMBER 1, 1997
----------------- --------------------
--- OTHER EXECUTIVE OFFICERS ---
<S> <C> <C>
Keith Jahnke . . . . . . . . . . . . . . . . . . . . . . . . . . 58,150(4) *
Edward Boan . . . . . . . . . . . . . . . . . . . . . . . . . . 50,517(5) *
All directors and executive officers as a group (9 persons) . . 2,908,019(6) 44.3%
</TABLE>
* Less than 1.0%
(1) Henry S Dorfman owns outright and has the sole voting and investment power
for 378,176 shares. Also included in the shares beneficially owned by
Henry S Dorfman are (a) 1,700,806 shares held by Henry S Dorfman as trustee
under charitable remainder trusts for the benefit of Henry S Dorfman's
children, which Henry S Dorfman has the power to vote, (b) 55,000 shares
held by the Henry S Dorfman and Mala Dorfman Foundation, which shares Henry
S Dorfman has the power to vote, and (c) 287,196 shares owned by his son,
Joel Dorfman, which shares are subject to the Shareholder Agreement,
pursuant to which Henry S Dorfman has the sole power to vote such shares.
Such 287,196 shares are also included in the shares indicated as shares
beneficially owned by Joel Dorfman.
(2) Joel Dorfman, the son of Henry S Dorfman, owns 287,196 shares, all of which
are subject to the Shareholder Agreement and which Henry S Dorfman has the
power to vote. In addition, within 60 days of September 1, 1996, Joel
Dorfman has the right to acquire 301,250 shares pursuant to the Company's
1982 Stock Option Plan, the Company's 1990 Employee Stock Option Plan and
the Company's 1996 Stock Option Plan (collectively referred to as the
"Company's Stock Option Plans"). Also included in the number listed in the
table above are 450 shares held in custodial accounts for the benefit of
Joel Dorfman's sons.
(3) Louis Glazier owns outright and has the sole voting and investment power
for 16,342 shares. In addition, within 60 days of September 1, 1996, Mr.
Glazier has the right to acquire 57,500 shares pursuant to the Company's
Stock Option Plans. Also included in the number listed in the table above
are 307 shares owned by one of Mr. Glazier's daughters.
(4) Keith Jahnke owns outright and has the sole voting and investment power for
650 shares. In addition, within 60 days of September 1, 1996, Keith Jahnke
has the right to acquire 57,500 shares pursuant to the Company's Stock
Option Plans.
(5) Mr. Boan owns outright and has sole voting and investment power for 517
shares. In addition, within 60 days of September 1, 1996, Edward Boan has
the right to acquire 50,000 shares pursuant to the Company's Stock Option
Plans.
(6) Total includes 466,250 shares which such persons have the right to acquire
within 60 days of September 1, 1996 pursuant to the Company's Stock Option
Plans.
4
<PAGE> 6
OTHER INFORMATION RELATING TO NOMINEES
The following is a brief account of the business experience during the
past five years of each nominee for election as a director of the Company:
Henry S Dorfman has served as Chairman of the Board of Directors since
1959. Mr. Dorfman also served as Chief Executive Officer of the Company from
1959 to July, 1995.
Joel Dorfman has served as President of the Company since March, 1985
and Chief Executive Officer of the Company since July, 1995.
Moniek Milberger has been a Certified Public Accountant in private
practice since 1960 and serves as a consultant to the Company.
John C. Canepa has been a consulting principal of Crowe Chizek, a
certified public accounting and consulting firm, since November, 1995. From
1970 to November, 1995, Mr. Canepa served as President and Chief Executive
Officer of Old Kent Financial Corporation and Old Kent Bank and Trust Company,
Grand Rapids, Michigan.
Louis Glazier has been Executive Vice President Finance and
Administration of the Company since July, 1988.
Burton D. Farbman has been President of The Farbman Group, a real
estate development and management company, since 1987, and prior to that was
President of the Farbman Group in 1977.
Seymour Roberts has been a Senior Vice President and Senior Partner of
N.W. Ayer & Partners,an advertising agency, since February, 1992. From 1973 to
1991, Mr. Roberts served as Executive Vice President and General Manager of
W.B. Doner & Company, an advertising agency.
During the fiscal year ended May 30, 1997 ("fiscal 1997"), the Board
of Directors held four meetings. Each of the incumbent directors listed above
attended at least 75% of the Board of Directors and committee meetings held
during the period in which he served.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has a standing Executive Committee. The members of the
Executive Committee are Henry S Dorfman, Joel Dorfman and John C. Canepa. The
Executive Committee meets on call as required between meetings of the Board of
Directors and has authority to take any action which is not specifically
prohibited by the Michigan Business Corporation Act. During fiscal 1997, the
Executive Committee did not meet.
The Company has a standing Stock Option Committee. The members of the
Stock Option Committee are Henry S Dorfman, Moniek Milberger and Burton D.
Farbman. The duties of the Stock Option Committee include the administration
and the granting of stock options under the Company's stock option plans.
During fiscal 1997, the Stock Option Committee held one meeting.
The Company has a standing Nominating Committee. The members of the
Nominating Committee are Joel Dorfman, Burton D. Farbman and John C. Canepa.
The Nominating Committee considers the performance of incumbent directors and
recommends to the shareholders nominees for election as directors. The
Nominating Committee will consider nominees for directors recommended by
shareholders. Such recommendations for the 1998 Annual Meeting of Shareholders
should be submitted to the Chairman of the Board at 26999 Central Park
Boulevard, Suite 300, Southfield, Michigan 48076, no later than August 30,
1998.
5
<PAGE> 7
The Company has a standing Compensation Committee. The members of the
Compensation Committee are Joel Dorfman, John C. Canepa, Burton D. Farbman,
Moniek Milberger and Seymour Roberts. The duties of the Compensation Committee
include recommending to the entire Board of Directors of the Company the
compensation arrangements for senior management and directors of the Company
and approving transactions between the Company, on the one hand, and officers,
directors and shareholders of the Company, on the other hand. During fiscal
1997 the Compensation Committee held one meeting.
The Company has a standing Audit Committee. The members of the Audit
Committee are John C. Canepa, Burton D. Farbman, Moniek Milberger and Seymour
Roberts. The duties of the Audit Committee include overseeing the relationship
with the Company's independent accountants; nominating the Company's
independent accountants for approval by the entire Board of Directors of the
Corporation; reviewing with the independent accountants the scope, cost and
results of the auditing engagement; reviewing and approving fees for audit and
non-audit professional services provided by the independent accountants;
reviewing reports submitted by the independent accountants; and reviewing the
adequacy of the Company's system of internal accounting controls. During
fiscal 1997, the Audit Committee held two meetings.
The Company has an Executive Compensation Committee. The members of
the Executive Compensation Committee are Burton D. Farbman and Seymour Roberts.
The duties of the Executive Compensation Committee include administering the
cash bonus plan for participating executives ("Participants"); establishing
performance criteria for granting the annual cash bonus; insuring Participants
have met their stated performance goals and approving the annual cash bonus
paid to such Participants. During fiscal 1997, the Executive Compensation
Committee did not meet.
PRINCIPAL HOLDERS OF SECURITIES
As of September 1, 1997, Henry S Dorfman was the beneficial owner of
2,421,178 shares (39.6%) of the Company's Common Stock. Included in the shares
beneficially owned by Henry S Dorfman are (a) 1,700,806 shares of the Company's
Common Stock held by Henry S Dorfman as trustee under charitable remainder
trusts for the benefit of Henry S Dorfman's children, which shares Henry S
Dorfman has the power to vote, and (b) 55,000 shares of the Company's Common
Stock held by the Henry S Dorfman and Mala Dorfman Foundation, which Henry S
Dorfman has the power to vote. Also included in the shares beneficially owned
by Henry S. Dorfman are 287,196 shares of the Company's Common Stock that are
subject to a Shareholder Agreement, dated as of August 1, 1988 (the
"Shareholder Agreement"), pursuant to which Henry S Dorfman has the sole power
to vote such shares; such shares are owned by Joel Dorfman, Henry S Dorfman's
son.
As of September 1, 1997, Joel Dorfman was the beneficial owner of
588,896 shares (9.2%) of the Company's Common Stock, which includes 287,196
shares which Henry S Dorfman has the power to vote. As of September 1, 1997,
Henry S Dorfman, together with members of his family, directly or indirectly
beneficially owned 2,722,878 shares (42.4%) of the Company's outstanding Common
Stock. The address of Henry S. Dorfman and Joel Dorfman is 26999 Central Park
Boulevard, Suite 300, Southfield, Michigan 48076.
As of September 1, 1997, David A. Rocker, a registered investment
advisor, beneficially owned 530,000 shares (8.7%) of the Company's Common
Stock, all of which shares are held in investment advisory accounts managed by
Mr. Rocker. Mr. Rocker has sole voting and investment power over all such
shares. The address of Mr. Rocker is 45 Rockefeller Plaza, New York, New York
10111.
6
<PAGE> 8
As of September 1, 1997, Heartland Advisors, Inc. ("Heartland"), a
registered investment advisor, beneficially owned 453,600 shares (7.4%) of the
Company's Common Stock, all of which shares are held in investment advisory
accounts of Heartland. Heartland has sole voting and/or investment power over
such shares. The address of Heartland is 790 North Milwaukee Street,
Milwaukee, Wisconsin 53202.
As of September 1, 1997, DDJ Capital Management, LLC ("DDJ"), a
registered investment advisor, may be deemed to beneficially own 427,140 shares
(7.0%) of the Company's Common Stock, all of which are held in portfolios of
clients advised by DDJ. In particular, DDJ Overseas Corp., a company advised
by and affiliated with DDJ, owns 268,590 shares of Common Stock, The Copernicus
Fund, L.P., a limited partnership advised by and affiliated with DDJ, owns
68,110 shares of Common Stock, Kepler Overseas Corp., a company advised by DDJ,
owns 10,720 shares of Common Stock, and Crocodile I, LLC, a company advised by
DDJ, owns 10,720 shares of Common Stock. DDJ Copernicus, an affiliate of DDJ,
is the general partner of The Copernicus Fund, L.P., and may be deemed to
beneficially own the shares of Common Stock owned by The Copernicus Fund, L.P.
DDJ Galileo Corp., an affiliate of DDJ, is the general partner of DDJ Overseas
Corp., and may be deemed to beneficially own the shares of Common Stock owned
by DDJ Overseas Corp. The address of each of DDJ, DDJ Galileo Corp., The
Copernicus Fund, L.P., and DDJ Copernicus, LLC is 141 Linden Street, Suite 4,
Wellesly, Massachusetts 02181. The address of each of DDJ Overseas Corp. and
Kepler Overseas Corp. is c/o Goldman Sachs (Cayman), Harbour Centre, George
Town, Post Office Box 896, Grand Cayman Islands.
As of September 1, 1997, the Capital Group Companies, Inc. ("Capital
Group"), a bank as defined in Section 3(a)6 of the Exchange Act, beneficially
owned 405,000 shares (6.6%) of the Company's Common Stock, all of which shares
are held in investment accounts over which investment managements companies
indirectly owned by Capital Group exercise voting and/or investment power.
Capital Guardian Trust Company, a bank as defined in Section 3(a)6 of the
Exchange Act and a wholly-owned subsidiary of Capital Group, serves as an
investment advisor to the various investment accounts described above and may
also be deemed to beneficially own the 404,000 shares of Common Stock described
in this paragraph. The address of Capital Group is 333 South Hope Street, Los
Angeles, California 90071.
As of September 1, 1997, Fidelity Management and Research Corp.
("Fidelity"), a registered investment advisor, beneficially owned 352,900
shares (5.8%) of the Company's Common Stock, all of which shares are held in
investment advisory accounts managed by and affiliated with Fidelity. Fidelity
shares voting and investment power over all such shares with certain of its
affiliates. The address of Fidelity is 82 Devonshire Street, Boston,
Massachusetts 02109.
As of September 1, 1997, Dimensional Fund Advisors Inc.
("Dimensional"), a registered investment advisor, may be deemed to beneficially
own 332,840 shares (5.4%) of the Company's Common Stock, all of which shares
were held in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust Company,
a Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, for all of
which Dimensional serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares. The address of Dimensional is 1299
Ocean Avenue, l1th Floor, Santa Monica, California 90401.
Management does not know of any other person who beneficially owned,
as of September 1, 1997, more than 5% of the Company's Common Stock.
7
<PAGE> 9
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY COMPENSATION TABLE
The following table sets forth information for each of the fiscal
years ended May 30, 1997, May 31, 1996 and May 26, 1995 concerning the
compensation of Joel Dorfman, the executive officer of the Company who performs
the functions of the chief executive officer, and each of the Company's other
four most highly compensated executive officers whose total annual salary and
bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
FISCAL OTHER ANNUAL ----------- ALL OTHER
YEAR SALARY BONUS(1) COMPENSATION OPTIONS COMPENSATION(2)
---- ------ -------- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Joel Dorfman . . . . . . . . . . 1997 $486,100 --- $20,003(3) 50,000 $31,352(4)
President and Chief 1996 600,000 --- 12,387(3) 40,000 25,361(4)
Executive Officer 1995 650,000 $250,000 12,791(3) 40,000 31,062(4)
Henry S Dorfman . . . . . . . . 1997 500,000 --- 52,943(3) --- 7,178(4)
Chairman of the Board 1996 500,000 --- 119,262(3) --- 7,178(4)
1995 550,000 175,000 32,573(3) --- 7,231(4)
Louis Glazier . . . . . . . . . 1997 250,000(3) --- 22,415(3) 12,500 1,000
Executive Vice President 1996 250,000 --- 13,103(3) 10,000 2,261(4)
Finance and Administration 1995 175,000 137,500 198,366(3)(5) 10,000 1,961(4)
Keith Jahnke . . . . . . . . . . 1997 250,000 --- 2,675(3) 12,500 1,000
Executive Vice President 1996 250,000 --- 2,675(3) 10,000 1,000
Processed Meats 1995 175,000 75,000 2,145(3) 10,000 700
Edward Boan . . . . . . . . . . 1997 250,000 --- 2,150(3) 12,500 1,000
Executive Vice President 1996 250,000 --- 1,975(3) 10,000 1,000
Pork and Human Resources 1995 175,000 75,000 93,850(3)(6) 10,000 700
</TABLE>
(1) Each bonus accrued in the fiscal year indicated and was paid in the
following fiscal year.
(2) Except as noted, consists only of the Company's 401(k) contributions.
(3) Includes amounts relating to use of company-owned automobiles and
reimbursement of business, entertainment and other expenses.
(4) Includes premiums paid by the Company for Joel Dorfman, Henry S Dorfman and
Louis Glazier in connection with split dollar life insurance policies
maintained by the Company on their lives in policy amounts (as of May 31,
1997) of $1,995,101, $178,000 and $100,000, respectively. Pursuant to this
arrangement, the Company pays the annual premiums on such policies, each of
which is owned by the spouse of the insured, and the Company has received a
collateral assignment of the policies and will recover the premiums
advanced, without interest, upon the death or termination of employment of
each insured. The aggregate premiums paid (and to be recovered by the
Company) for these policies on the lives of Joel Dorfman, Henry S Dorfman
and Louis Glazier as of May 31, 1997 were $362,975, $215,130 and $12,455,
respectively.
(5) Includes gain on exercise of stock options of $196,500.
(6) Includes gain on exercise of stock options of $91,875.
8
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning individual
grants of stock options made during the fiscal year ended May 30, 1997 to each
of the executive officers of the Company named in the Summary Compensation
Table above:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------- POTENTIAL REALIZED VALUE AT
PERCENTAGE OF ASSUMED ANNUAL RATES OF
TOTAL OPTIONS STOCK PRICE APPRECIATION AT
GRANTED TO PER SHARE END OF TEN-YEAR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ----------------------------
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
---- ------- ------------- ----------- ------------ -- ---
<S> <C> <C> <C> <C> <C> <C>
Joel Dorfman . . . 50,000 18.69% $10.25 8/22/06 $322,500 $1,329,500
Henry S Dorfman . . --- --- --- --- --- ---
Louis Glazier . . 12,500 4.67 10.25 8/22/06 80,625 332,375
Keith Jahnke . . . 12,500 4.67 10.25 8/22/06 80,625 332,375
Edward Boan . . .. 12,500 4.67 10.25 8/22/06 80,625 332,375
</TABLE>
(1) Each Option granted in fiscal 1997 is exercisable immediately.
COMPENSATION OF DIRECTORS
Under the Company's standard arrangements, each director who is not an
officer of the Company receives an annual director's fee in the amount of
$5,000 and a fee of $500 for each meeting of the Board of Directors of the
Company which he attends. In addition, during fiscal 1997, Mr. Milberger
received $21,200 as compensation for consulting services rendered to the
Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended May 30, 1997, Joel Dorfman, John C.
Canepa, Burton D. Farbman, Moniek Milberger and Seymour Roberts served as
members of the Company's Compensation Committee. Joel Dorfman has been
President of the Company since March, 1985 and Chief Executive Officer since
July, 1995.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General. The Compensation Committee's overall compensation policy
applicable to the Company's executive officers is to provide a compensation
program that is intended to attract and retain qualified executives for the
Company and to provide them with incentives to achieve Company goals and
increase shareholder value. The Compensation Committee implements this policy
through establishing salaries and bonuses. The Compensation Committee's
current policy is not to provide significant pension or other retirement
benefits for the Company's employees.
Salaries. The Compensation Committee's policy is to provide salaries
that are generally similar to those of similar executive officers in similar
companies. The Compensation Committee determines comparable salaries through
discussions with candidates for such positions, Company research and the
research of independent consultants concerning the salaries paid by the
Company's competitors.
9
<PAGE> 11
Bonuses. Messrs. Henry S Dorfman, Joel Dorfman, Glazier, Jahnke and
Boan are eligible to receive cash bonuses pursuant to the Company's Cash Bonus
Plan, which was approved by the shareholders at the 1994 Annual Meeting, and
which is administered by the Executive Compensation Committee. The Company's
bonus program (the "Executive Bonus Program") permits other executive officers,
and certain other participating employees, as selected by the Compensation
Committee in its sole discretion, to earn annual cash bonus awards. The
Compensation Committee's policy is to provide a major portion of each executive
officer's total compensation in the form of such bonuses to provide them with
incentives to achieve the Company's financial and operational goals and
increase shareholder value. Bonuses are generally determined as a percentage
of the Company's pre-tax income in excess of predetermined target levels which
vary from year to year as established by the Compensation Committee at the
beginning of each fiscal year. As a result, the compensation of the Company's
executive officers is made dependent on the Company's overall performance.
Such bonuses are also intended to identify and give priority to the Company's
goals by tying compensation to the Company's business plans. In addition to
the foregoing, for employees who are not covered by the Company's Cash Bonus
Plan, the Compensation Committee takes into account the participant's position,
salary level and individual contributions to the Company in determining a
particular bonus award. Other participants in the Executive Bonus Program are
selected from among those employees of the Company who the Compensation
Committee believes have the capacity to contribute in a substantial way to the
successful performance of the Company. Bonuses are paid following the end of
the fiscal year for which the bonus is earned. None of the Company's executive
officers received a cash bonus in fiscal 1997.
Stock Options. Stock options are awarded by the Stock Option
Committee of the Board of Directors. The Stock Option Committee's policy is to
award stock options to the Company's officers in amounts reflecting the
participant's position and ability to influence the Company's overall
performance. Options are intended to provide participants with an increased
incentive to make contributions to the long-term performance of growth of the
Company, to join the interests of participants with the interests of
shareholders of the Company and to attract and retain qualified employees. The
Stock Option Committee's policy has been to grant options with a term of
ten-years to provide a long-term incentive and to fix the exercise price of the
options at the fair market values of the underlying shares on the date of
grant. As a result, such options will only have value if the price of the
underlying shares increases.
Fiscal 1997 Compensation Decisions Regarding Joel Dorfman. In
accordance with the Company's Cash Bonus Plan, the Executive Compensation
Committee did not approve a bonus for Joel Dorfman for fiscal 1997. Joel
Dorfman did not participate in the approval of his own compensation, but did
participate in discussion of the Company's performance for fiscal 1997 and the
determination of bonuses for the other participants in the Executive Bonus
Program.
By the Compensation Committee
JOEL DORFMAN
JOHN C. CANEPA
BARTON D. FARBMAN
MONIEK MILBERGER
SEYMOUR ROBERTS
10
<PAGE> 12
PERFORMANCE GRAPH
The following line graph compares for the fiscal years ended May 29,
1992, May 28, 1993, May 22, 1994, May 26, 1995, May 31, 1996 and May 30, 1997
(i) the yearly cumulative total shareholder return (i.e., the change in share
price plus the cumulative amount of dividends, assuming dividend reinvestment,
divided by the initial share price, expressed as a percentage) on the Company's
Common Stock, with (ii) the cumulative total return of the NASDAQ Market Index,
and with (iii) the cumulative total return on the common stock of the Media
General Meat Packing Index (assuming dividend reinvestment and weighted based
on market capitalization at the end of each year):
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG THORN APPLE VALLEY, INC., NASDAQ MARKET INDEX AND MEAT PACKING INDEX
FISCAL YEAR ENDING
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
COMPANY 1992 1993 1994 1995 1996 1997
THORN APPLE VALLEY 100 124.24 157.32 114.09 88.48 111.76
INDUSTRY INDEX 100 102.38 120.48 145.16 182.78 240.77
BROAD MARKET 100 119.67 131.23 143.63 202.74 227.47
</TABLE>
__________________
* Total return assumes reinvestment of dividends.
TRANSACTIONS WITH MANAGEMENT
The Company uses a freezer warehouse facility owned by Freezer
Services of Michigan, Inc., a corporation of which 75% of the stock is owned by
Henry S Dorfman. During fiscal 1997, the Company paid approximately $1,482,000
to Freezer Services of Michigan for storage charges, blast freezing and
handling. Additionally, the Company paid Freezer Services of Michigan $882,000
for rent during fiscal 1997 under a three- year lease that expired in 1994.
The Company is currently operating under a one-year lease extension that
expires in January 1998. In the opinion of management, the terms of the
Company's dealings with Freezer Services of Michigan were at least as favorable
to the Company as generally available to the Company from independent parties
at the time of the transactions.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 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 Securities and Exchange Commission ("SEC") initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the two fiscal years ended May 30, 1997 all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with; except that one
report, covering one transaction, was filed late by Louis Glazier, the
Company's Executive Vice President Finance and Administration. As of the date
hereof, the Company is not aware of any failure to file a required report.
11
<PAGE> 13
ANTI-TAKEOVER AMENDMENTS
The Board of Directors has considered and recommends amending the
Company's Articles of Incorporation and By-Laws to include various
anti-takeover provisions. The proposed package of defensive amendments
includes classifying the Board of Directors into three classes serving
staggered terms and permitting the involuntary removal of directors for good
cause only; permitting shareholder action in lieu of meetings only by unanimous
written consent; and requiring advanced notice for shareholder proposals. The
Board of Directors is not aware of any specific attempt to acquire a
controlling block of shares or to otherwise obtain control of the Company.
The Board of Directors recommends the adoption of these provisions as
a means to enhance the continuity and stability of the Company's management by
making it more difficult and time-consuming for a third party to gain control
of the Company's Board of Directors. Management of the Company and the Board
of Directors believes that these amendments will provide the Company's
management with the means and opportunity to defend shareholder interests. The
proposed amendments may make it more difficult or discourage an unsolicited
tender offer, proxy contest or assumption of control by a holder of a large
block of the Common Stock of the Company and the removal of incumbent
management, even in the event that any of these transactions are favored by the
shareholders of the Company.
II. THE CLASSIFIED BOARD PROPOSAL
General
Currently, the election and removal of directors is governed by the
Company's By-laws and the provisions of the Michigan Business Corporation Act
("MBCA"). The By-laws provide that each director is elected at the annual
meeting of shareholders and holds office until his successor is elected and
qualified or until his resignation or renewal. Additionally, a director may be
removed with or without cause by a majority vote of the shareholders at a
meeting called for such purpose. Under the Company's current By-Laws and the
MBCA, only one meeting of shareholders would be required to effect a change in
the majority or all of the Company's Board of Directors.
Proposed Amendments
The Board recommends that shareholders consider and approve a proposal
to amend the Company's By-Laws to provide for the classification of the Board
of Directors into three classes and to amend the Company's Restated Articles of
Incorporation to permit the shareholders of the Company to remove a director
before his or her term expires only if the removal is for cause. Each class of
directors will be as nearly equal in number to the others as possible. Under
the Classified Board Proposal, each class of the Board of Directors will serve
a three year term, with one class elected each year.
The Board believes that the staggered three year terms of a classified
Board of Directors will help to assure the continuity and stability of the
Company's policies. At any given time, two of the three classes of Directors
will have had prior experience as directors of the Company. In addition, the
shareholders will only be able to remove a director for cause.
12
<PAGE> 14
Considerations in Support of the Proposal
The overall effect of the Classified Board Proposal would be to make
more difficult any hostile attempt to take control of the Company through a
proxy contest. In order to change the membership of a majority of the Board of
Directors, at least two years would be required. This would encourage persons
seeking to acquire control of the Company to engage in good-faith, arm's-length
negotiations with the Board of Directors. The Company also believes that (i)
ensuring continuity of service among the Board members and three-year
commitments for Board service is desirable, (ii) the proposed amendments would
facilitate the Company's attracting and retaining qualified members of the
Board of Directors and (iii) the proposed amendments would facilitate hiring
and retaining competent management personnel by increasing the likelihood of a
stable employment environment.
Other Considerations
The proposed amendments would make more difficult the removal of
current management and the Board of Directors. The classification provision
will apply to every election of directors, whether or not a change in a
majority of the Board of Directors might arguably be beneficial to the Company
and its shareholders and whether or not shareholders holding a majority of the
then outstanding shares of Common Stock believe that such a change might be
desirable.
The Classified Board Proposal could have the effect of deterring
certain third parties from initiating proxy contests or from acquiring
substantial blocks of the Company's Common Stock. Such proxy contests and
acquisitions of substantial blocks of Common Stocks tend to increase, at least
temporarily, market prices for the Company's stock. Consequently, if the
Classified Board Proposal is approved, shareholders of the Company could be
deprived of temporary opportunities to sell their shares at higher market
prices. Moreover, by possibly deterring proxy contests or acquisitions of
substantial blocks of Common Stock, the Classified Board Proposal might have
the incidental effect of inhibiting certain changes in incumbent management,
some or all of whom may be replaced in the course of a change in control.
Because directors will be directly affected by the Classified Board
Proposal, they may be deemed to have an interest in its outcome.
Vote Required
The Classified Board Proposal requires for its passage the affirmative
vote of majority of the votes present in person or by proxy at the Annual
Meeting. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF
THE CLASSIFIED BOARD PROPOSAL.
Although the Company believes that the material provisions of the
amendments to the Company's Restated Articles of Incorporation and By-Laws are
set forth above, reference should be made to the text of the amendments, copies
of which are attached to this Proxy Statement as Annex A and Annex B,
respectively.
13
<PAGE> 15
III. THE SHAREHOLDER CONSENT AND ADVANCED NOTICE PROPOSAL
General
Under the Company's current Restated Articles of Incorporation and
By-Laws, shareholders are permitted to take action which would otherwise be
required or permitted at a shareholders' meeting without prior notice, without
a meeting, and without a vote. In order to take action in such a way, a
majority of the shareholders entitled to vote on the action must consent in
writing. Under this operation, a person who holds or controls a large block of
Common Stock could take shareholder action unilaterally.
In addition, the By-Laws of the Company do not specify what business
may be conducted at a meeting of Company's shareholders. Therefore, any
business may be conducted that is specified in the notice of such meeting or
that is properly brought before such meeting. Presently, a determination as to
whether business which is not specified in the notice of meeting is properly
brought before a meeting would generally be made by the chairman of the meeting
at the time any such business is presented. Under the current By-Laws, a
shareholder could nominate any person for election as a director, or introduce
any business, without prior notice to the Board of Directors or the other
shareholders, at any meeting of the Company's shareholders.
Proposed Amendments
The Board of Directors proposes an amendment to the Company's Restated
Articles of Incorporation and By-Laws which would allow the Company's
shareholders to act by written consent in lieu of a meeting only if the
shareholders approve the action unanimously.
The Board of Directors also proposes an amendment to the Company's
By-Laws to add a provision which provides that with respect to an annual
meeting of shareholders, nominations of persons for election to the Company's
Board of Directors and the proposal of business to be considered by
shareholders may be made only (i) pursuant to the Company's notice of the
meeting, (ii) by the Company's Board of Directors or (iii) by a shareholder who
was a shareholder of record both at the time of giving notice and at the time
of the annual meeting, who is entitled to vote at the meeting and has complied
with the advance notice procedures set forth in the next sentence. For
nominations or other business to be properly brought before an annual meeting
by a shareholder pursuant to clause (iii) of the preceding sentence, the
shareholder must have given timely notice thereof in writing to the Secretary
of the Company and such other business must otherwise be a proper matter for
action by shareholders. To be timely, a shareholder's notice shall be
delivered to the Secretary of the Company at the principal executive offices of
the Company not later than the close of business on the 60th day nor earlier
than the close of business on the 90th day prior to the first anniversary of
the preceding year's annual meeting; provided, however, that in the event that
the date of the annual meeting is advanced by more than 30 days or delayed by
more than 60 days from such anniversary date or if the Company has not
previously held an annual meeting, notice by the shareholder to be timely must
be so delivered not earlier than the close of business on the later of the 60th
day prior to such annual meeting or the tenth day following the day on which
public announcement of the date of such meeting is first made by the Company.
The By-Laws also set forth the requirements as to the content of the
shareholders' notice.
The proposed amendment to the By-Laws also provides that with respect
to special meetings of the shareholders, only the business specified in the
Company's notice of meeting may be brought before
14
<PAGE> 16
the meeting of shareholders and nominations of persons for election to the
Company's Board of Directors may be made only (i) pursuant to the Company's
notice of the meeting, (ii) by the Company's Board of Directors or (iii)
provided that the Company's Board of Directors has determined that directors
shall be elected at such meeting, by a shareholder who was a shareholder of
record both at the time of giving notice of the meeting and the time of special
meeting, who is entitled to vote at the meeting and has complied with the
advance notice provisions which are summarized in the next sentence. In the
event the Company calls a special meeting of shareholders for the purpose of
electing one or more directors to the Board of Directors, any such shareholder
may nominate a person or persons (as the case may be) for election to such
position as specified in the Company's notice of meeting, if the shareholder's
notice containing the information required by the By-Laws is delivered to the
Secretary at the principal executive offices of the Company not earlier than
the close of business on the 90th day prior to such special meeting and not
later than the close of business on the later of the 60th day prior to such
special meeting or the tenth day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed
by the directors to be elected at such meeting.
The determination as to whether the notice provisions have been met
will be made by the presiding officer at the annual meeting. This amendment
does not give the Board of Directors any power to approve or disapprove the
business that shareholders desire to be conducted at the meeting.
Considerations in Support of the Proposal
The proposed amendment concerning the ability of the shareholders to
act by consent would prevent a takeover bidder who holds or controls a large
block of the Common Stock of the Company from using the written consent
procedure to take shareholder action unilaterally. It is intended to prevent
shareholders from soliciting consents in order to effect changes without giving
all of the Company's shareholders who are entitled to vote on a proposed action
an adequate opportunity to participate in the action or at the meeting where
such proposed action is considered. This amendment will ensure that all
shareholders will have notice of any attempted major corporate action by
shareholders. Shareholders will have an equal opportunity to participate in
the written consent at a meeting where such action is being considered. It
should reduce the possibility of disputes or confusion regarding the validity
of purported shareholder action.
The proposed amendment to the Company's By-Laws to establish advanced
notice procedures for shareholders to bring matters before an annual or special
meeting of the shareholders, including the nominations of directors, will
permit the Board of Directors to plan the shareholder meetings more
efficiently. Advanced notice will better enable the Board of Directors to
inform the shareholders, prior to the meeting, of any new business that will be
presented at the meeting. The Board of Directors will also be able to make a
recommendation or to state its position. By doing so, shareholders will be
better able to determine whether they desire to attend the meeting or to grant
the Board of Directors a proxy as to the disposition of such business.
Additionally, the proposed notice procedure will discourage belated attempts by
third parties to begin ill-considered, disruptive discussions at shareholders'
meetings.
The Board of Directors believes that advanced notice of Board
nominations by shareholders provides the Company with an opportunity to
consider the qualifications of the proposed nominees. The Board of Directors
considers this opportunity advantageous to the Company and its shareholders, as
opposed to being confronted with a surprise nomination at or shortly before a
meeting of shareholders at which director nominees are to be considered.
Advanced notice also provides an opportunity for the Board of Directors to
inform shareholders about these nominee qualifications. The proposal may also
15
<PAGE> 17
discourage or deter a shareholder from conducting a solicitation of proxies in
order to elect its own directors or otherwise attempting to obtain control of
the Company if that shareholder does not desire to provide the advance notice
required.
Other Considerations
The Board of Directors does not believe that simply eliminating
majority shareholder action by written consent will create a significant
impediment to a tender offer or other effort to take control of the Company.
Nevertheless, this amendment to the Company's Restated Articles of
Incorporation and By-Laws may make more difficult, or delay, certain actions by
a person or group acquiring a substantial percentage of the Common Stock of the
Company. This proposal would apply, however, even though such actions might be
desired by, or beneficial to, the holders of a majority of the Common Stock of
the Company.
The proposed notice procedure may limit to some degree the ability of
shareholders to initiate discussion at a shareholders' meeting. It will also
preclude the conducting of business at a particular meeting if the proper
notice procedures have not been followed. Nothing in the proposed amendment
precludes discussion by any shareholder of any business properly brought before
a shareholders' meeting. This notice requirement may preclude the nomination
of a person for election to the Board of Directors at a particular meeting if
the proper procedures are not followed.
Vote Required
The Shareholder Consent and Advanced Notice Proposal requires for its
passage the affirmative vote of a majority of the votes present in person or by
proxy at the Annual Meeting. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE FOR APPROVAL OF THE SHAREHOLDER CONSENT AND ADVANCED NOTICE PROPOSAL.
Although the Company believes that the material provisions of the
amendment to the Company's Restated Articles of Incorporation and By-Laws are
set forth above, reference should be made to the text of the amendments, copies
of which are attached to this Proxy Statement as Annex C and Annex D,
respectively.
16
<PAGE> 18
IV. OTHER MATTERS
INDEPENDENT PUBLIC ACCOUNTANT
Coopers & Lybrand L.L.P. is the independent auditor for the Company
and its subsidiaries and has reported on the consolidated financial statements
included in the Annual Report of the Company which accompanies this proxy
statement. The Company's independent auditor is appointed by the Board of
Directors. The Board of Directors has reappointed Coopers & Lybrand L.L.P. as
independent auditor for the fiscal year ending May 29, 1998.
Representatives of Coopers & Lybrand L.L.P. are expected to be present
at the Annual Meeting of Shareholders and will be available to respond to
appropriate questions and will have an opportunity to make a statement at the
meeting if they desire to do so.
OTHER PROPOSALS
Neither the Company nor its Board of Directors intends to bring before
the Annual Meeting any matters other than those set forth in the Notice of
Annual Meeting, and they have no present knowledge that any other matters will
be presented for action at the Meeting by others. However, if any other
matters properly come before such Meeting, it is the intention of the persons
named in the enclosed form of proxy to vote in accordance with their best
judgment.
A shareholder proposal which is intended to be presented at the 1998
Annual Meeting of Shareholders must be received by the Company at its principal
executive office, 26999 Central Park Boulevard, Suite 300, Southfield, Michigan
48076, by August 30, 1998.
By Order of the Board of Directors
/S/ RONALD D. RISHER
RONALD D. RISHER
Secretary
17
<PAGE> 19
ANNEX A
CLASSIFIED BOARD AMENDMENT
The number of directors which shall constitute the whole board shall
not be less than three (3) nor more than nine (9). Within these limits, the
number of directors shall be determined from time to time by resolution of the
Board of Directors. In lieu of electing the whole number of directors
annually, the directors shall be divided into three classes designated as Class
I, Class II and Class III, each class to be as nearly equal in number as
possible. The term of office of the Class I directors shall expire at the
first annual meeting of the shareholders after the date on which this provision
of the By-Laws first becomes effective. The term of office of the Class II
directors shall expire at the second annual meeting of shareholders after the
date on which this provision of the By-Laws first becomes effective. The term
of office of the Class III directors shall expire at the end of the third
annual meeting after this provision of the By-Laws first becomes effective.
After such classification, each class of directors shall serve a term of three
(3) years. The class of directors whose term expires at the time of the
shareholder's meeting for a given year shall be elected to hold office until
the third succeeding annual meeting. Notwithstanding any of the foregoing,
each director shall serve until his or her successor is elected and has
qualified or until the director's death, retirement, resignation or removal.
Should a vacancy occur or be created, any director elected or appointed to fill
such vacancy shall serve for the full term of the class in which the vacancy
occurs or is created. If the number of directors is changed, any increase or
decrease in the number of directors shall be apportioned among the classes so
as to maintain the number of directors in each class as nearly equal in number
as possible.
ANNEX B
FOR CAUSE DIRECTOR REMOVAL AMENDMENT
A director or the entire Board of Directors may be removed only for
cause.
ANNEX C
SHAREHOLDER WRITTEN CONSENT AMENDMENT
Any action required or permitted to be taken at a meeting of
shareholders may be taken without a meeting if a consent in writing, setting
forth such action, is signed by each shareholder entitled to vote on the matter
and any other shareholder entitled to notice of a meeting (but not to vote
thereat) has waived in writing any right to dissent from such action, and such
consent and waiver are filed with the minutes of proceedings of the
shareholders.
A-1
<PAGE> 20
ANNEX D
ADVANCED NOTICE AMENDMENT
(a) Annual Meetings of Shareholders. (1) Nominations of persons
for election to the Board of Directors and the proposal of business to be
considered by the shareholders may be made at an annual meeting of shareholders
(i) pursuant to the corporation's notice of meeting, (ii) by or at the
direction of the directors or (iii) by any shareholder of the corporation who
was a shareholder of record both at the time of giving of notice provided for
in this Section and at the time of the annual meeting, who is entitled to vote
at the meeting and who complied with the notice procedures set forth in this
Section.
(2) For nominations or other business to be properly brought
before an annual meeting by a shareholder pursuant to clause (iii) of paragraph
(a) (1) of this Section, the shareholder must have given timely notice thereof
in writing to the Secretary of the corporation and such other business must
otherwise be a proper matter for action by shareholders. To be timely, a
shareholder's notice shall be delivered to the Secretary at the principal
executive offices of the corporation not later than the close of business on
the 60th day nor earlier than the close of business on the 90th day prior to
the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is advanced by
more than 30 days or delayed by more than 60 days from such anniversary date or
if the corporation has not previously held an annual meeting, notice by the
shareholder to be timely must be so delivered not earlier than the close of
business on the 90th day prior to such annual meeting and not later than the
close of business on the later of the 60th day prior to such annual meeting or
the tenth day following the day on which public announcement of the date of
such meeting is first made by the corporation. In no event shall the public
announcement of a postponement or adjournment of an annual meeting to a later
date or time commence a new time period for the giving of a shareholder's
notice as described above. Such shareholder's notice shall set forth (i) as to
each person whom the shareholder proposes to nominate for election or
reelection as a corporation all information relating to such person that is
required to be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (including
such person's written consent to being named in the proxy statement as a
nominee and to serving as a corporation if elected); (ii) as to any other
business that the shareholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest
in such business of such shareholder and of the beneficial owner, if any, on
whose behalf the proposal is made; and (iii) as to the shareholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made, (x) the name and address of such shareholder, as they appear
on the corporation's books, and of such beneficial owner and (y) the number of
each class of shares of the corporation which are owned beneficially and of
record by such shareholder and such beneficial owner.
A-2
<PAGE> 21
(3) Notwithstanding anything in the second sentence of
paragraph (a)(2) of this Section to the contrary, in the event that the number
of directors to be elected to the Board of Directors is increased and there is
no public announcement by the corporation naming all of the nominees for
director or specifying the size of the increased Board of Directors at least 70
days prior to the first anniversary of the preceding year's annual meeting, a
shareholder's notice required by this Section shall also be considered timely,
but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive
offices of the corporation not later than the close of business on the tenth
day following the day on which such public announcement is first made by the
corporation.
(b) Special Meetings of Shareholders. Only such business shall
be conducted at a special meeting of shareholders as shall have been brought
before the meeting pursuant to the corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of shareholders at which directors are to be elected (i)
pursuant to the corporation's notice of meeting (ii) by or at the direction of
the Board of Directors or (iii) provided that the Board of Directors has
determined that directors shall be elected at such special meeting, by any
shareholder of the corporation who was a shareholder of record both at the time
of giving of notice provided for in this Section and at the time of the special
meeting, who is entitled to vote at the meeting and who complied with the
notice procedures set forth in this Section. In the event the corporation
calls a special meeting of shareholders for the purpose of electing one or more
directors to the Board of Directors, any such shareholder may nominate a person
or persons (as the case may be) for election to such position as specified in
the corporation's notice of meeting, if the shareholder's notice containing the
information required by paragraph (a) (2) of this Section shall be delivered to
the Secretary at the principal executive offices of the corporation not earlier
than the close of business on the 90th day prior to such special meeting and
not later than the close of business on the later of the 60th day prior to such
special meeting or the tenth day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed
by the directors to be elected at such meeting. In no event shall the public
announcement of a postponement or adjournment of a special meeting to a later
date or time commence a new time period for the giving of a shareholder's
notice as described above.
(c) General. (1) Only such persons who are nominated in
accordance with the procedures set forth in this Section shall be eligible to
serve as directors and only such business shall be conducted at a meeting of
shareholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section. The presiding officer of the meeting
shall have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made in accordance with the
procedures set forth this Section and, if any proposed nomination or business
is not in compliance with this Section, to declare that such defective
nomination or proposal be disregarded.
(2) For purposes of this Section, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable news service or in a document publicly
filed by the corporation with the Securities and Exchange Commission pursuant
to Section 13, 14 or 15(d) of the Exchange Act.
A-3
<PAGE> 22
(3) Notwithstanding the foregoing provisions of this
Section, a shareholder shall also comply with all applicable requirements of
state law and of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Section. Nothing in this Section
shall be deemed to affect any rights of shareholders to request inclusion of
proposals in the corporation's proxy statement pursuant to Rule 14a-8 under the
Exchange Act.
A-4
<PAGE> 23
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THORN APPLE VALLEY, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THORN
APPLE VALLEY, INC.
The undersigned hereby appoints Henry S Dorfman and Louis Glazier, and
each of them, the proxies of the undersigned, with full power of substitution,
to vote all shares of Common Stock, $0.10 par value per share, of Thorn Apple
Valley, Inc. (the "Company") which the undersigned is entitled to vote at the
Annual Meeting of Shareholders of the Company to be held on October 29, 1997
and at any and all adjournments or postponements thereof:
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<S> <C> <C>
1. ELECTION OF [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
7 DIRECTORS (except as marked to the contrary below) to vote for all nominees listed below.
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(Instruction: To withhold authority to vote for any individual
nominee, mark the box next to the nominee's name below.)
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<S> <C> <C> <C>
[ ] Henry S Dorfman [ ] John C. Canepa [ ] Louis Glazier [ ] Burton D. Farbman
[ ] Seymour Roberts [ ] Joel Dorfman [ ] Moniek Milberger
</TABLE>
<TABLE>
<S> <C>
2. The Classified Board Proposal. [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The Stockholder Consent and Advanced Notice Proposal. [ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
IF NO CHOICE IS SPECIFIED, THE SHARES WILL BE VOTED FOR THE ELECTION OF
THE DIRECTORS NAMED ABOVE AND FOR PROPOSALS 2 AND 3. EXCEPT AS SPECIFIED TO
THE CONTRARY ABOVE, THE UNDERSIGNED AUTHORIZES THE PROXIES TO EXERCISE THEIR
DISCRETION WITH RESPECT TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
MEETING.
(Continued and to be Signed on Reverse Side)
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Proxy No. No. of Shares
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<S> <C> <C>
Dated: _______________, 1997 _________________________ (L.S.) __________________________ (L.S.)
SIGNATURE SIGNATURE
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Please sign exactly as your name appears hereon. When signing as attorney,
executor, personal representative, administrator or guardian, please give
your full title as such. If shares are held in the name of more than one
person, each person must sign the Proxy. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person. PLEASE SIGN AND RETURN
THIS PROXY IN THE ENCLOSED ENVELOPE.
