<CORRESP>
SPAIN & GILLON, L.L.C.
THE ZINSZER BUILDING
2117 SECOND AVENUE NORTH
BIRMINGHAM, ALABAMA 35203-3753
(205) 581-6226
September 2, 1998
Securities and Exchange Commission
Division of Corporate Finance
500 North Capitol Street, N.W.
Washington, D.C. 20549
Re: Golden Enterprises, Inc.
File No.: 0-4339
Definitive Proxy Material
Gentlemen:
Golden Enterprises, Inc. is filing by EDGAR its Proxy
Statement and Proxy Card which will be used with respect to
the Company's Annual Stockholders' Meeting to be held on
September 25, 1998. This Proxy solicitation relates to the
Annual Stockholders' Meeting at which the only matter to be
acted upon is the election of Directors.
Seven (7) hard copies of the Company's Annual Report to
Stockholders will be mailed to the Commission by separate
cover letter.
Copies of the Definitive Proxy Material will be released
to the stockholders of Golden Enterprises, Inc. on or about
August 31, 1998, and the Annual Report to Stockholders will
also be released on that date.
Yours very truly,
SPAIN & GILLON, L.L.C.
By: /s/ John P. McKleroy, Jr.
---------------------
John P.McKleroy, Jr.
</CORRESP>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Golden Enterprises, Inc.
________________________________________________
(Name of Registrant as Specified In Its Charter)
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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>
GOLDEN ENTERPRISES, INC.
2101 Magnolia Avenue South
Suite 212
Birmingham, Alabama 35205
NOTICE OF ANNUAL MEETING
Notice Is Hereby Given that the Annual Meeting of the
Stockholders of Golden Enterprises, Inc., (the "Company") a
Delaware Corporation, will be held at the general offices of Golden
Flake Snack Foods, Inc., a subsidiary of the Company at One Golden
Flake Drive, Birmingham, Alabama, on September 25, 1998, at 11:00
A.M., Birmingham time, for the following purposes:
1. To elect a Board of Directors.
2. To transact such other business as may properly come
before the meeting.
Stockholders of record at the close of business on August 7,
1998, are entitled to notice of and to vote at the meeting. All
Stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors
/s/ John Stein
___________________________________
John Stein
Chairman
Birmingham, Alabama
August 31, 1998
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES MUST BE
PRESENT EITHER IN PERSON OR BY PROXY IN ORDER TO HOLD THE MEETING.
TO INSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE.
IF YOU ARE ABLE TO ATTEND THE MEETING YOU MAY REVOKE THE PROXY AND
VOTE YOUR SHARES PERSONALLY AT ANY TIME BEFORE THE PROXY IS
EXERCISED.
<PAGE>
PROXY STATEMENT
GENERAL
The annual meeting of the stockholders of Golden Enterprises,
Inc. (the "Company") will be held at the general offices of Golden
Flake Snack Foods, Inc., a subsidiary of the Company, at One Golden
Flake Drive, Birmingham, Alabama, on September 25, 1998, at 11:00
A.M. All holders of record of common stock as of August 7, 1998,
will be entitled to vote at the meeting and any adjournment
thereof.
The purpose of this proxy solicitation is to enable those
stockholders who will be unable to personally attend the meeting to
vote their stock.
PERSONS MAKING THE SOLICITATION
This proxy is solicited on behalf of the Board of Directors of
Golden Enterprises, Inc. The cost of solicitation will be paid by
the Company and will include reimbursement paid to brokerage firms
and others for their expenses in forwarding solicitation material
regarding the meeting to beneficial owners. In addition to
solicitation by mail, officers and regular employees of the Company
may solicit proxies by telephone, telegram, or personal interview
at no additional compensation.
SECURITY HOLDERS ENTITLED TO VOTE
Holders of shares of common stock of the Company of record at
the close of business on August 7, 1998, will be entitled to vote
at the Annual Meeting and at any and all adjournments thereof. Each
share of common stock entitles its owner to one vote. The number of
shares of common stock of the Company (exclusive of treasury
shares) outstanding at the close of business on August 7, 1998 was
12,205,950 shares.
Stockholders who execute proxies retain the right to revoke
them at any time before they are voted. If the enclosed proxy is
properly signed and returned to the Company and not so revoked, the
shares represented thereby will be voted in accordance with its
terms.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At August 7, 1998, Sloan Y. Bashinsky, Sr., Chairman Emeritus
of the Board and Compass Bank, as Trustee of the Golden
Enterprises, Inc. and subsidiaries Employee Stock Ownership Plan,
were the only persons who beneficially owned more than 5% of the
outstanding voting securities of the Company. The following table
sets forth the number of shares of common stock of the Company
beneficially owned by these persons.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership (1)
Name and Address of ____________________________________ Percent of
Beneficial Owner Direct Indirect Class
___________________ ______ ________ __________
<S> <C> <C> <C>
Sloan Y. Bashinsky, Sr. 2,000 6,683,672 (2)(3)(4) 54.8%
2101 Magnolia Ave. So.
Suite 212
Birmingham, Alabama 35205
Compass Bank, as Trustee -0- 988,211 (5) 8.1%
of the Golden Enterprises, Inc.
and subsidiaries Employee
Stock Ownership Plan
701 South 32nd Street
Birmingham, Alabama 35233 (a)
<FN>
(1) An indirect beneficial owner as this term is interpreted by
the Securities and Exchange Commission includes any person who
has or shares the (1) voting power which includes the power to
vote or to direct the voting of such security; and/or (2)
investment power which includes the power to dispose, or to
direct the disposition of such security.
(2) Includes 5,283,128 shares owned by SYB, Inc., a corporation of
which Sloan Y. Bashinsky, Sr. is Chairman of the Board and the
majority stockholder. For Securities and Exchange Commission
reporting purposes, Mr. Bashinsky is deemed the beneficial
owner of such shares. Except for SEC reporting purposes, Mr.
Bashinsky disclaims beneficial ownership of such shares.
(3) Includes 1,000,000 shares owned by SYB, Inc. as Trustee of a
Trust created by Sloan Y. Bashinsky, Sr. SYB, Inc. exercises
the right to vote the shares and the investment power relative
to the shares.
(4) Includes 400,544 shares owned by The Bashinsky Foundation,
Inc. of which Sloan Y. Bashinsky, Sr. is the founder and
Chairman of the Board.
(5) The Employee Stock Ownership Plan provides that the shares
held by the Trustee are voted by an administrative committee
made up of 3 members. The Board of Directors of the Company
determines the members of the committee. Present members of
the administrative committee are: John S. Stein, Chairman of
the Board, President and Chief Executive Officer of the
Company; F. Wayne Pate, a Director of the Company and
President of Golden Flake Snack Foods, Inc. and John H.
Shannon, Vice President and Secretary of the Company.
(a) The Employee Stock Ownership Plan is an employee benefit plan
qualified under Section 401(a) of the Internal Revenue Code
and subject to the Employee Retirement Income Security Act of
1974.
</FN>
</TABLE>
Security Ownership Of Management
The following table shows the shares of common stock of Golden
Enterprises, Inc. beneficially owned directly, or indirectly, by
each Director and Nominee for Director and all Directors and
Officers of the Company as a group at August 7, 1998:
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership (1)
_____________________________ Percent of
Name Direct Indirect Class
____ ______ ________ __________
<S> <C> <C> <C>
John S. Stein (a) (b) 288,854 -0- (4) 2.4%
J. Wallace Nall, Jr. -0- 196,000 (5) 1.6%
Edward R. Pascoe 165,500 -0- 1.4%
F. Wayne Pate 136,994 32 (4)(6) 1.1%
John P. McKleroy, Jr. (c) (d) 10,970 (2) -0- *
D. Paul Jones, Jr. 6,570 (3) 2,000 (7) *
James I. Rotenstreich 3,033 -0- *
John S. P. Samford 1,666 -0- *
Joann F. Bashinsky (e) (f) 10,372 (8) -0- *
All Directors and
Officers as a group 673,959 198,032 7.1%
______________
*Less than one percent of class.
<FN>
(1) An indirect beneficial owner as this term is interpreted by
the Securities and Exchange Commission includes any person who
has or shares the (1) voting power which includes the power to
vote or to direct the voting of such security, and/or (2)
investment power which includes the power to dispose of, or to
direct the disposition of, such security.
(2) Includes 9,260 shares held by a self-employed pension plan and
personal IRA account for the benefit of John P. McKleroy, Jr.
(3) Does not include a .6597 fractional share held pursuant to the
Company's Dividend Reinvestment Plan.
(4) Does not include any portion of the 988,211 shares of common
stock of the Company which are owned by Compass Bank, as
Trustee of Golden Enterprises, Inc. and subsidiaries Employee
Stock Ownership Plan. Messrs. Stein and Pate are members of
the plan's administrative committee and exercise the voting
power of the shares. Messrs. Stein and Pate disclaim any
beneficial ownership of such shares with the exception of the
following shares which are vested in their respective account
as an employee-participant under the Plan: Stein 30,167, Pate
19,200.
(5) Shares owned by Nall Development Corporation, a corporation of
which J. Wallace Nall, Jr. is a Director and President. For
Securities and Exchange Commission reporting purposes, Mr.
Nall is deemed the beneficial owner of such shares. Except for
SEC reporting purposes, Mr. Nall disclaims beneficial
ownership of such shares.
(6) Includes 32 shares owned by the wife of F. Wayne Pate.
(7) Shares held by Mr. Jones' wife and mother-in-law.
(8) Does not include a .3154 fractional share held pursuant to the
Company's Dividend Reinvestment Plan.
(a) Mr. Stein is a Director and President of SYB, Inc. which
beneficially owns 6,283,128 shares of the Company's stock. Mr.
Stein does not possess and specifically disclaims any
beneficial ownership of these shares.
(b) Mr. Stein is a Director and officer of The Bashinsky
Foundation, Inc., which owns 400,544 shares of the Company's
stock. Mr. Stein does not possess and specifically disclaims
any beneficial ownership of these shares.
(c) Mr. McKleroy is a Director and Secretary of SYB, Inc. which
beneficially owns 6,283,128 shares of the Company's stock. Mr.
McKleroy does not possess and specifically disclaims any
beneficial ownership of these shares.
(d) Mr. McKleroy is a Director and officer of The Bashinsky
Foundation, Inc., which owns 400,544 shares of the Company's
stock. Mr. McKleroy does not possess and specifically
disclaims any beneficial ownership of these shares.
(e) Mrs. Bashinsky is a Director and Vice President of SYB, Inc.,
which beneficially owns 6,283,128 shares of the Company's
stock. Mrs. Bashinsky does not possess and specifically
disclaims any beneficial ownership of these shares.
(f) Mrs. Bashinsky is a Director and Vice President of Bashinsky
Foundation, Inc., which owns 400,544 shares of the Company's
stock. Mrs. Bashinsky does not possess and specifically
disclaims any beneficial ownership of these shares.
Each Director has the sole voting and investment power of the
shares directly owned by him.
SYB, Inc., beneficially owns 6,283,128 shares of common stock
of the Company. John S. Stein, Joann F. Bashinsky and John P.
McKleroy, Jr., Directors of the Company, each serves as a Director
and Officer of SYB, Inc. Joann F. Bashinsky is the wife of Sloan Y.
Bashinsky, Sr. Mr. Bashinsky is Director Emeritus of the Company
and owns 80% of the voting stock of SYB, Inc. and the other 20% is
vested in a trust for the use and benefit of his children and
grandchildren of which John P. McKleroy, Jr., serves as a
Co-Trustee. In Mr. Bashinsky's will and in the trust document, he
has provided that in the event SYB, Inc. or his estate owns any
shares of Golden Enterprises stock at his death, the shares of
Golden Enterprises held by SYB, Inc. and the estate and the voting
shares of SYB, Inc. shall be voted by a committee made up of each
member of the Board of Directors of Golden Enterprises and one
member designated by his executors/trustees.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the Annual Meeting, nine Directors (constituting the entire
Board of Directors) are to be elected, each to hold office until
the next Annual Meeting of Stockholders, or until a successor has
been elected and qualified. All nominees are presently members of
the Board of Directors and were elected to the Board by vote of the
stockholders at the last Annual Meeting.
Shares represented by your proxy will be voted in accordance
with your direction as to the election as directors of the persons
hereinafter listed as nominees. In the absence of direction, the
shares represented by your proxy will be voted FOR such election.
Should any of the persons listed as nominees become unavailable as
a nominee for election, it is intended that the shares represented
by your proxy will be voted for the balance of those named and for
a substitute nominee or nominees unless the Board of Directors
reduces the number of directors, but the Board knows of no reason
to anticipate that this will occur.
The following table shows the names of the nominees for
election as directors, their respective ages as of August 7, 1998,
the principal occupation, business experience and other
directorships held by such nominees, and the period during which
such nominees have served as directors of the Company.
Principal Occupation,
Business Experiences Director
Name and Age and Other Directorships Since
____________ _______________________ ________
John S. Stein, 61 Mr. Stein is Chairman of the Board, 1971
President and Chief Executive
Officer of the Company. He was
elected Chairman on June 1, 1996 and
has served as President of the
Company since 1985 and assumed the
position of Chief Executive Officer
on June 1, 1991. Mr. Stein has been
employed with the Company and its
subsidiaries since 1961. Mr. Stein
is a Director of Compass Bancshares,
Inc.
Edward R. Pascoe, 61 Mr. Pascoe is employed as Chairman 1971
of the Board of Steel City Bolt &
Screw, Inc. (formerly Coosa
Acquisition, Inc.) which, on
February 8, 1995, acquired the bolt
and special fastener business owned
by the Company. He served as
President of Steel City Bolt &
Screw, Inc. and Nall & Associates,
Inc., which were wholly-owned
subsidiaries of the Company, from
1972 and 1973, respectively, until
1995.
John P. McKleroy, Jr., 54 Mr. McKleroy is an attorney and 1976
partner with Spain & Gillon, L.L.C.,
general counsel for the Company. He
has practiced law with this firm
since 1968.
James I. Rotenstreich, 61 Mr. Rotenstreich is Chairman and 1984
Chief Executive Officer of JHF
Holdings, Inc. ("JHF"), a company
formerly doing business under the
name of Jefferson Home Furniture
Company, Inc. He has served as Chief
Executive Officer since 1967 and as
Chairman since 1992. In May of 1994,
JHF sold its retail home furniture
interest and is presently engaged in
real estate and investment holdings.
John S. P. Samford, 48 Mr. Samford is President and sole 1984
owner of Samford Capital
Corporation, an investment holding
company which he formed in 1989.
D. Paul Jones, Jr., 55 Mr. Jones is Chairman of the Board 1991
and Chief Executive Officer of
Compass Bancshares, Inc. (a bank
holding company), and of its
subsidiary, Compass Bank. He assumed
these positions on April 1, 1991.
Mr. Jones has been employed with
Compass Bancshares, Inc. (formerly
Central Bancshares of the South,
Inc.) and Compass Bank (formerly
Central Bank of the South) since
1978.
J. Wallace Nall, Jr., 58 Mr. Nall is President of Nall 1991
Development Corporation and a
General Partner of Nall Partnership,
Ltd. He has held these positions
since 1981. Nall Development
Corporation is an investment holding
company and Nall Partnership, Ltd.
is a real estate investment and
development company.
F. Wayne Pate, 63 Mr. Pate is President of Golden 1992
Flake Snack Foods, Inc., a
wholly-owned subsidiary of the
Company. He was elected President on
September 20, 1991, and has been
employed by Golden Flake since 1968.
During his employment, he has served
as Vice President of Research and
Development, Vice President of
Manufacturing and Executive Vice
President of Manufacturing and
Sales.
Joann F. Bashinsky, 66 Mrs. Bashinsky is Vice President of 1996
SYB, Inc., which position she has
held since 1981. SYB, Inc. is an
investment holding company, which is
the principal owner of the Company.
Mrs. Bashinsky also serves as Vice
President of Bashinsky Foundation,
Inc., a private charitable
foundation. Mrs. Bashinsky is the
wife of Sloan Y. Bashinsky, Sr., who
retired as Chairman of the Board of
the Company on May 31, 1996.
Sloan Y. Bashinsky, Sr., the husband of Joann F. Bashinsky is
a "control person" by reason of his beneficial ownership of voting
securities.
Committees Of The Board Of Directors
The Company has a Compensation Committee, a Stock Option
Committee and an Audit Committee. The Board of Directors has no
standing Nominating Committee.
During the fiscal year ended May 31, 1998, the Compensation
Committee was made up of John S. Stein, John S. P. Samford, James
I. Rotenstreich, D. Paul Jones, Jr. and J. Wallace Nall, Jr. The
Compensation Committee reviews the performance of the Executive
Officers of the Company and the top executive officer of Golden
Flake Snack Foods, Inc., a wholly-owned subsidiary, and recommends
to the Board of Directors of the Company the appropriate
compensation level and compensation and benefit programs of such
officers.
During the fiscal year ended May 31, 1998, the Stock Option
Committee was made up of James I. Rotenstreich, John S. P. Samford,
D. Paul Jones, Jr. and J. Wallace Nall, Jr. The Stock Option
Committee determines the key employees of the Company and its
subsidiary to whom stock options and stock appreciation rights will
be granted under the 1988 Stock Option and Stock Appreciation
Rights Plan and the 1996 Long Term Incentive Plan.
The Audit Committee is made up of James I. Rotenstreich, John
S. P. Samford and D. Paul Jones, Jr. The Audit Committee reviews
with the independent auditors, the corporate controller and the
Company's general counsel the results of the independent auditor's
annual report on the Company's financial statements. The Audit
Committee also reviews and confers with management and the Board of
Directors with respect to the selection of the Company's
independent auditors and performs such additional functions as are
necessary or prudent to fulfill the Committee's duties and
responsibilities and reports its recommendations and findings to
the full Board of Directors.
Meetings Of The Board Of Directors and Committees
During the fiscal year ended May 31, 1998, there were four
meetings of the Board of Directors. The Compensation Committee and
the Stock Option Committee met once and the Audit Committee met
twice during the year. All incumbent directors attended all of the
meetings of the Board and the Committees on which they served,
except Joann F. Bashinsky, J. Wallace Nall, Jr. and John S. P.
Samford who attended 75% of the Board meetings.
Compensation Of Directors
During the fiscal year ended May 31, 1998, the Company paid
each of its non-employee Directors a retainer of $300 per month and
all Directors, including Directors who were employees of the
Company, were paid a fee of $2,000 for each Board meeting attended.
The members of the Compensation Committee were each paid $2,000 for
attending the Compensation Committee meeting and the members of the
Audit Committee were paid $1,000 for each meeting attended.
Stock Ownership Reporting By Directors And Officers
Section 16(a) of the Securities Exchange Act of 1934 requires
that Directors, certain Executive Officers and beneficial owners of
more than ten percent of the stock of the Company file reports of
stock ownership and changes in ownership with the Securities and
Exchange Commission. These reports consist of Forms 3, Initial
Statement of Ownership, 4, Monthly Reports, and 5, Annual Reports.
Based upon a review of copies of such reports, or representations
that no reports were due to be filed by Directors, Officers or
beneficial owners of more than ten percent of the stock of the
Company, the Company believes that Section 16(a) filing
requirements applicable to its Directors, Executive Officers and
beneficial owners of more than ten percent of the stock of the
Company were complied with during the fiscal year 1998, except that
John S. Stein, F. Wayne Pate and John H. Shannon, as members of the
Administrative Committee of the Company's Employee Ownership Plan,
due to inadvertence, failed to timely report the receipt of 3,912
shares acquired by the Plan on August 2, 1997. Messrs. Stein, Pate
and Shannon subsequently reported this transaction to the
Securities and Exchange Commission on Form 4 Reports filed in
January of this year.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table summarizes the compensation paid or
accrued by the Company and its subsidiary during the fiscal years
1996, 1997 and 1998 to the Company's Chief Executive Officer and to
the three most highly compensated executive officers, other than
the Chief Executive Officer, whose compensation exceed $100,000.
</TABLE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
_____________________________________ ____________
Securities
Other Annual Underlying All Other
Name and Salary Bonus Compensation Options/SARs Compensation
Principal Position Year ($) ($) ($) (#)(1) ($)
____________________ ____ ________ _______ ____________ ____________ __________________
<S> <C> <C> <C> <C> <C> <C>
John S. Stein (a) 1998 $259,000 $25,368 -- -- $124,031 (2)(3)(4)
President and Chief 1997 $259,000 $19,962 -- 40,000 $119,871
Executive Officer 1996 $259,000 $21,195 -- -- $117,846
F. Wayne Pate 1998 $189,000 $25,368 -- -- $147,787 (2)(3)(4)
President of 1997 $189,000 $19,962 -- 30,000 $142,312
Golden Flake 1996 $189,000 $21,195 -- -- $143,992
Snack Foods, Inc.
John H. Shannon 1998 $111,600 -- -- -- $ 3,012 (3)
Vice President, 1997 $111,600 -- -- 10,000 $ 2,729
Secretary & Controller 1996 $111,600 -- -- -- $ 5,782
Sloan Y. Bashinsky, Sr. (b) 1998 -- -- -- -- --
Chairman of the Board 1997 -- -- -- -- --
1996 $100,000 -- $79,960 -- $ 11,000
<FN>
(1) During the 1998 fiscal year, no incentive stock options were
granted under the 1996 Long Term Incentive Plan.
(2) Includes director's fees paid by the Company and its
subsidiary as follows: Mr. Stein ($16,000), Mr. Pate
($14,000).
(3) Includes contributions to the Company's and subsidiary Profit
Sharing Plan and Employee Stock Ownership Plan as follows: Mr.
Stein ($2,592), Mr. Pate ($3,858) and Mr. Shannon ($3,012).
(4) Includes amounts accrued, but not paid, to provide for
possible future payments under salary continuation plans
covering Mr. Stein and Mr. Pate. The plans provide for
payments of up to $120,000 per year for fifteen years
following death, disability or retirement at age 65. During
the 1998 Fiscal Year, the amounts accrued, respectively, were
as follows: Mr. Stein ($105,439) and Mr. Pate ($129,929). The
plans are funded in part with life insurance on the life of
Mr. Stein and during the fiscal year ended May 31, 1998, the
Company paid a premium of $11,555 for Mr. Stein.
(a) John S. Stein served as President and Chief Executive Officer
for fiscal year 1996 and as Chairman of the Board, President
and Chief Executive Officer for fiscal years 1997 and 1998.
(b) Sloan Y. Bashinsky, Sr. served as Chairman of the Board for
fiscal year 1996.
</FN>
</TABLE>
401(k) Profit Sharing Plan And Employee Stock Ownership Plan
The Company and its subsidiary each maintain a 401(k) Profit
Sharing Plan and Employee Stock Ownership Plan for the benefit of
their employees. Annual contributions are made to the plans in
amounts as determined by the Board of Directors of each company.
Contributions to the Employee Stock Ownership Plan are invested in
stock of the Company which is held for the account of the
participating employees and is distributed to the employees upon
their retirement or termination of employment. All contributions to
the Profit Sharing Plan and Employee Stock Ownership Plan are
allocated to the accounts of the participating employees based upon
their annual compensation and each employee account vests 100% in
the employee after five years of service. The contribution to the
plans for the fiscal year ended May 31, 1998 was $556,240, with the
following amounts being credited to the accounts of the following
persons named in the Cash Compensation Table: Sloan Y. Bashinsky,
Sr., $0; John S. Stein, $2,592; F. Wayne Pate, $3,858; and John H.
Shannon, $3,012. (See Summary Compensation Table on page 8 -- These
amounts are included within compensation shown in table.)
The Employee Stock Ownership Plan provides that the shares
held by the Trustee are voted by an administrative committee made
up of 3 members. The Board of Directors of the Company determines
the members of the committee. Present members of the administrative
committee are: John S. Stein, Chairman of the Board, President and
Chief Executive Officer of the Company; F. Wayne Pate, a Director
of the Company and President of Golden Flake Snack Foods, Inc.; and
John H. Shannon, Vice President and Secretary of the Company.
1988 Stock Option And Stock Appreciation Rights Plan
In 1988, the Company's shareholders approved the 1988 Stock
Option and Stock Appreciation Rights Plan (the "1988 Plan"). The
purpose of the 1988 Plan is to make shares of the common stock of
the Company available for purchase by key employees and to provide
the employees with the opportunity to participate in the growth and
financial success of the Company and to give them an increased
personal interest in and a greater concern for the Company's
continued success and growth.
Under the 1988 Plan, non-qualified Stock Options to purchase
up to 175,500 shares of Common Stock of the Company and Stock
Appreciation Rights (SARs) may be granted to key employees.
Directors of the Company who are not officers are not eligible to
participate in the 1988 Plan.
The grant of stock options and SARs is administered by the
Stock Option Committee of the Board of Directors. The Committee
selects those key employees of the Company to whom options are
granted, the time at which options are granted, and the number and
price of shares which may be purchased upon the exercise of
options. The option price may be less than, equal to or greater
than the fair market value of the stock on the day the option is
granted and the option price may vary among employees.
The Committee may also grant SARs when granting options. SARs
are exercisable only when the underlying option is exercisable.
SARs granted to an employee shall be equal to the number of shares
that the employee is entitled to purchase under the related option.
An employee to whom an SAR is granted may not exercise the SAR
unless he simultaneously exercises the stock option to which the
SAR relates and the employee shall be deemed to have automatically
exercised his SAR when and at the same time that he exercises his
stock option to which the SAR relates. If an employee does not
exercise his stock option so that it expires, his SAR which relates
to said option shall also expire.
When SARs are exercised, the optionee receives from the
Company a sum of cash equal to the amount of the appreciation in
the underlying common stock as determined by the excess of the fair
market value of a share of common stock on the exercise date of the
related stock option over the option price.
During the fiscal year ended May 31, 1998, no options or SARs
were granted under the 1988 Plan to any employee, including the
executive officers named in the Summary Compensation Table above
and no options or SARs were exercised. There are currently no
options or SARs outstanding under the 1988 Plan which are presently
exercisable or may be exercisable in the future.
1996 Long Term Incentive Plan
On September 27, 1996, the Company's shareholders approved the
Golden Enterprises, Inc. 1996 Long Term Incentive Plan (the "1996
Plan"). The purpose of the 1996 Plan is to further the growth in
earnings and market appreciation of the Company by providing long
term incentives to those officers and key employees of the Company
or its subsidiaries who make substantial contributions to the
Company through their ability, loyalty, industry and invention.
The 1996 Plan is administered by the Stock Option Committee of
the Board of Directors.
The 1996 Plan authorizes the Stock Option Committee to grant
to officers and key employees in the 1996 Plan (i) stock options
(which may be non-qualified options or incentive stock options for
tax purposes), (ii) stock appreciation rights ("SARs") (which may
be issued in tandem with stock options), (iii) restricted stock
awards, (iv) performance units (which may be in stock, cash or a
combination thereof), and (v) supplemental cash payments. Persons
eligible to participate in the 1996 Plan shall be those officers
and key employees of the Company and its subsidiaries who are in
positions in which their decisions, actions and counsel
significantly impact the performance of the Company or its
subsidiaries. Participants are chosen from this group by the Stock
Option Committee.
Shares Reserved for Issuance. The aggregate number of shares
of the Company's common stock which may be issued under the 1996
Plan may not exceed 500,000. Shares subject to options granted
under the 1996 Plan which expire unexercised, or shares subject to
awards which are otherwise forfeited or canceled, will not count
against this limit. The maximum number of shares with respect to
which awards may be granted to any individual in any one year under
the 1996 Plan is 100,000.
Stock Options. The Stock Option Committee is authorized to
determine the terms and conditions of all option grants, subject to
certain specific limitations as set forth in the 1996 Plan. In
general, no option may be granted with an exercise price of less
than the fair market value of a share of the Company's common stock
on the date of grant (110% if the grantee beneficially owns more
than 10% of such stock), the term of an option may not be longer
than ten (10) years, and any option shall be subject to certain
restrictions on transferability. Payment of the option price may be
in cash, check or other instrument acceptable to the Stock Option
Committee, or, in the discretion of the Stock Option Committee, in
the form of unrestricted common stock of the Company owned by the
optionee.
Stock Appreciation Rights. The Stock Option Committee is
authorized to grant SARs either independent of or in connection
with stock options granted under the 1996 Plan. The exercise of
SARs will entitle the holder thereof to an amount (the
"appreciation") equal to the difference between the fair market
value of the common stock on the date the SAR was issued (or, in
the case of SARs issued in connection with options, the exercise
price under the related option agreement) and the fair market value
of a share of common stock of the Company on the date the SAR is
exercised. The appreciation will be payable in cash or common stock
of the Company at the discretion of the Stock Option Committee. The
exercise of SARs granted in connection with options will terminate
those options.
The exercise of SARs which are paid in common stock will be
treated as the issuance of the shares of common stock to which the
SARs relate for purposes of calculating the maximum number of
shares which have been issued under the 1996 Plan.
Restricted Stock. The Stock Option Committee is authorized to
award restricted stock under the 1996 Plan subject to such terms
and conditions as the Stock Option Committee may determine. The
Stock Option Committee will have authority to determine the number
of shares of restricted stock to be awarded, the price, if any, to
be paid by the recipient of the restricted stock, and the date on
which the restricted stock will vest. The vesting of restricted
stock may be conditioned upon the completion of a specified period
of service with the Company, upon the attainment of specified
performance goals, or upon such other criteria as the Stock Option
Committee may determine. The Stock Option Committee has the
discretion to make loans to the recipients for the purchase price
of the restricted stock and to accelerate the vesting of the
restricted stock on a case by case basis at any time.
Performance Units. The Stock Option Committee may grant
performance units under which payment may be made to the
participant upon the attainment of specific performance goals. Such
performance goals will be established by the Stock Option Committee
and will relate to the performance of the Company (or any segment
thereof) over a specified performance period, as judged under any
business criteria deemed appropriate by the Stock Option Committee,
including, without limitation, growth in earnings, the ratio of
earnings to shareholder's equity or the ratio of earnings to total
capital.
The Stock Option Committee shall determine the extent to which
the performance targets have been attained, and what, if any,
payment is due the participant on the performance unit. Such
payment may be made, at the Stock Option Committee's discretion, in
cash or common stock of the Company (based on the then current fair
market value of such stock).
Supplemental Cash Payments. A stock option, SAR, restricted
stock or performance unit award may provide for the Company to make
a supplemental cash payment to a participant. Payments may be made
for the purpose of, but not limited to, assisting the employee in
paying income taxes resulting from an award under the 1996 Plan. In
no event shall the amount of cash payment exceed the value of the
award to which it relates.
During the fiscal year ended May 31, 1998, no incentive stock
options were granted under the 1996 Plan to any employee, including
the executive officers named in the Summary Compensation Table
shown on Page 8 hereof and no options were exercised. There are
currently options outstanding under the 1996 Plan which are set
forth in the following table.
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End
Option/SAR Values
<CAPTION>
(a) (b) (c) (d) (e)
Number of Secur- Value of
ities Underlying Unexercised In-
Unexercised the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
________________ _______________
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
____ _______________ __________________ ________________ _______________
<S> <C> <C> <C> <C>
John S. Stein, 0 0 40,000/0 0/0
CEO
F. Wayne Pate 0 0 30,000/0 0/0
John H. Shannon 0 0 10,000/0 0/0
</TABLE>
Compensation Committee Interlocks And Insider Participation
During the fiscal year ended May 31, 1998, John S. Stein,
John S. P. Samford, James I. Rotenstreich, D. Paul Jones, Jr., and
J. Wallace Nall, Jr., constituted the Compensation Committee of the
Company's Board of Directors. John S. P. Samford, James I.
Rotenstreich, D. Paul Jones, Jr. and J. Wallace Nall, Jr. also
served on the Company Stock Option Committee. Mr. Stein is
Chairman, President and Chief Executive Officer of the Company and
is a member of the Board of Directors of Compass Bancshares, Inc.,
of which D. Paul Jones, Jr., a Director of the Company, is
Chairman, Chief Executive Officer and President.
Compensation Committee Report On Executive Compensation for the
Fiscal Year Ended May 31, 1998
The Compensation Committee of the Board of Directors (the
"Compensation Committee") was comprised during fiscal 1998 of John
S. Stein, John S. P. Samford, James I. Rotenstreich, D. Paul Jones,
Jr. and J. Wallace Nall, Jr., none of whom, with the exception of
Mr. Stein, are officers of the Company or its subsidiary.
The Compensation Committee reviews the compensation structure
of the Executive Officers of the Company and the top executive
officer of Golden Flake Snack Foods, Inc. ("Golden Flake"), a
wholly-owned subsidiary, and recommends to the Board the
appropriate base and incentive bonus compensation of such officers.
The Stock Option Committee during fiscal 1998 was made up of
James I. Rotenstreich, D. Paul Jones, Jr., John S. P. Samford and
J. Wallace Nall, Jr. The Stock Option Committee determines the key
employees of the Company and Golden Flake to whom stock options and
stock appreciation rights are granted under the 1988 Stock Option
and Stock Appreciation Rights Plan and the 1996 Long Term Incentive
Plan.
The Company's executive compensation program consists of three
primary components: base salary, annual incentive bonus, and grants
of stock options and stock appreciation rights.
Base salary is the foundation of executive compensation. Base
salaries are reviewed annually and adjusted, if deemed appropriate,
based upon recommendations of the Compensation Committee after its
review of recommendations received from the Chairman of the Board
("Chairman") and Chief Executive Officer ("CEO").
Annual incentive bonus formulas are established for the CEO
and the top executive officer of Golden Flake. The CEO and the top
executive officer of Golden Flake are paid a percentage of that
company's pre-tax operating earnings that exceed a targeted return
on equity.
The base salaries and incentive bonus formulas for fiscal 1998
reported in this Proxy Statement were recommended by the
Compensation Committee in April, 1997 to the Board. The
Compensation Committee received and reviewed recommendations from
the Chairman and CEO, which recommendations were based upon a
number of factors, including overall earnings of the Company and
Golden Flake, pre-tax earnings from operations, return on equity,
the financial performance of the Company and its subsidiary, the
complexities of the job, and individual performance and
achievements of each of the executive officers.
In reviewing the recommendations of the Chairman and CEO and
in making its recommendations to the Board, the Compensation
Committee undertook a subjective consideration of the executive
officers' base salaries and incentive bonus formulas that was not
related to any specific qualitative or quantitative criteria.
The Board's approval of such recommendations of the
Compensation Committee have generally been based on its subjective
analysis of what it considers to be a reasonable and appropriate
base salary and incentive bonus formula for the CEO and other
executive officers taking into consideration their individual job
responsibilities and the financial performance of the Company
during the prior fiscal year.
The Company has used stock options and stock appreciation
rights to reward the performance of executives. These are granted
through the 1988 Stock Option and Stock Appreciation Rights Plan
and under the 1996 Long Term Incentive Plan. Grant of stock options
and stock appreciation rights are made by the Stock Option
Committee to key employees after considering the recommendations of
the Chairman and CEO.
The Compensation Committee believes that the incentive bonus
formulas and stock options/stock appreciation rights assure that a
significant portion of the CEO's compensation relate to the
Company's performance.
The base salary and incentive bonus formula for John S. Stein,
the Company's CEO, for fiscal 1998 were determined based upon his
responsibilities and contributions to the Company and the
performance of the Company. During fiscal 1998, Mr. Stein did not
receive any increase in base salary. His incentive bonus was based
upon a pre-determined percentage of the Company's pre-tax operating
earnings that exceeded a target of return on equity, producing a
bonus for fiscal 1998 of $25,368, which was 9.8% of his base
salary.
Compensation Committee: John S. Stein, John S. P. Samford,
James I. Rotenstreich, D. Paul Jones, Jr., J. Wallace Nall, Jr.
Shareholder Return Performance Graph
The following graph illustrates, for the period commencing May
31, 1993, and ending May 31, 1998, the yearly percentage change in
the cumulative total shareholder return on the Company's common
stock as compared with the cumulative total returns of other
companies included within the NASDAQ Stock Market (U.S. Companies)
Index and the Company's Peer Group.
The Company has selected a Peer Group consisting of the three
publicly-traded companies named below, which are in the snack food
industry. Virtually all of the Company's direct competitors and
peers are privately-held companies or subsidiaries or divisions of
larger publicly-held companies so that the available members of the
Peer Group are limited.
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
____ _____ _____ _____ _____ _____
<S> <C> <C> <C> <C> <C> <C>
NASDAQ 100 105.3 125.2 182 205.1 260.6
PEER GROUP 100 87.3 92.2 90.3 117.5 133.2
GOLDEN ENTERPRISES 100 94.1 95.2 144.0 109.2 102.3
</TABLE>
This graph assumes that $100 was invested in the Company's
common stock on May 31, 1993, in the NASDAQ Stock Market (U.S.
Companies) Index and in the Peer Group, which consisted of Lance,
Inc., Grist Mill Company and J & J Snack Foods Corp., and that
dividends were reinvested.
CERTAIN TRANSACTIONS
During the fiscal year ended May 31, 1998, the law firm of
Spain & Gillon, L.L.C., of which John P. McKleroy, Jr. is a member,
served as General Counsel and performed various legal services for
the Company and its subsidiary. The firm will continue to perform
legal services for the current fiscal year.
During the fiscal year ended May 31, 1998, Golden Flake Snack
Foods, Inc. ("Golden Flake"), a wholly-owned subsidiary of the
Company, leased 30 trailers from SYB, Inc., a corporation
principally owned and controlled by Sloan Y. Bashinsky, Sr. These
leases were executed in prior years. Golden Flake uses the trailers
in its ordinary course of business of distributing snack food
products. During the fiscal year ended May 31, 1998, Golden Flake
paid an average monthly lease payment of $773 per trailer. Upon
expiration of the leases, Golden Flake has the option to purchase
the trailers at their salvage value at an average of $8,000 each.
The Company believes that these transactions were on terms
equal to or better than those available from unaffiliated third
parties.
INDEPENDENT ACCOUNTANTS
Dudley, Hopton-Jones, Sims & Freeman PLLP, Certified Public
Accountants, were selected by the Board of Directors as the
independent accountants to audit the Company's financial statements
for the fiscal year ended May 31, 1998. Representatives of Dudley,
Hopton-Jones, Sims & Freeman PLLP will be present at the Annual
Meeting and will have the opportunity to make a statement if they
wish to do so, and will be available to respond to appropriate
questions from stockholders.
During the fiscal year ended May 31, 1998, Dudley,
Hopton-Jones, Sims & Freeman PLLP provided various audit and
non-audit services to the Company and its subsidiary. As a part of
their services as the Company's auditors, they audited the
consolidated financial statements of the Company and its
subsidiary, the individual financial statements of the Company and
Golden Flake Snack Foods, Inc. and its subsidiary and also assisted
in the preparation of the Company's Annual Report (Form 10-K) for
filing with the Securities and Exchange Commission.
The Company has not selected the principal accountants to
audit its financial statements for the current fiscal year. It is
the Company's policy to select its principal accountants after the
preceding year's audit has been completed and the Company has had
time to consider the selection.
FINANCIAL STATEMENTS
Consolidated Financial Statements of the Company and its
subsidiary for the fiscal year ended May 31, 1998, are contained in
the 1998 Annual Report to Stockholders which accompanies this Proxy
Statement. However, such Report and Financial Statements contained
therein are not to be considered a part of this solicitation
material since they are not deemed material to the matters to be
acted upon at the meeting.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any stockholder desiring to submit a proposal to be considered
by the Board of Directors for inclusion in the proxy statement and
form of proxy relating to next year's Annual Meeting of
Stockholders must do so in writing received by the Company on or
before May 31, 1999. Any other stockholder proposals for the
Company's 1999 Annual Meeting of Stockholders must be received no
later than July 24, 1999. The proposals must comply with all
applicable statutes and regulations. Any such proposals should be
submitted to: Golden Enterprises, Inc., Attention: John H. Shannon,
Vice President & Secretary, 2101 Magnolia Avenue South, Suite 212,
Birmingham, Alabama 35205.
OTHER BUSINESS
It is not anticipated that there will be presented to the
meeting any business other than the matters set forth herein and
the management was not aware, a reasonable time before this
solicitation of proxies, of any other matters which may properly be
presented for action at the meeting. If any other business should
come before the meeting, the persons named on the enclosed proxy
will have discretionary authority to vote all proxies in accordance
with their best judgment.
By Order of the Board of Directors
/s/ John Stein
___________________________________
John Stein
Chairman
<PAGE>
P R O X Y
GOLDEN ENTERPRISES, INC.
2101 Magnolia Avenue South
Birmingham, Alabama 35205
Annual Meeting of Stockholders
September 25, 1998
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints John S. Stein and John H. Shannon
as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote as designated
below, all the shares of common stock of Golden Enterprises, Inc.
held of record by the undersigned on August 7, 1998 at the annual
meeting of stockholders to be held on September 25, 1998 or any
adjournment thereof.
1. ELECTION OF DIRECTORS
FOR all nominees listed below [ ]
(except as designated to the contrary below)
WITHHOLD AUTHORITY [ ]
to vote for all nominees listed below
John S. Stein, Edward R. Pascoe, John P. McKleroy, Jr., James
I. Rotenstreich, John S. P. Samford, D. Paul Jones, Jr., J.
Wallace Nall, Jr., F. Wayne Pate, Joann F. Bashinsky
(INSTRUCTION: To withhold authority to vote for any
individual nominee write that nominee's name in the space
provided below)
2. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting,
which business the Board of Directors was not aware of before
July 24, 1998.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction is
made, this proxy will be voted for the election of directors. (To
be signed on other side.)
(Continued on back)
The Board of Directors knows of no other matters that may properly
be, or which are likely to be, brought before the meeting. However,
if any other matters are properly brought before the meeting, the
persons named in the proxy or their substitutes will vote in
accordance with their best judgment on such matters.
The undersigned acknowledges receipt with this Proxy of a copy of
the Notice of Annual Meeting and Proxy Statement dated August 31,
1998, and the 1998 Annual Report to Stockholders.
Please sign exactly as name appears below. When shares are held by
joint tenants, both should sign. When signing as
attorney, as executor, administrator, trustee or guardian, please
give full title as such. 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.
DATE ________________________________, 1998
____________________________________________
Signature
____________________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
