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 Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e) (2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RYMER FOODS INC.
(Name of Registrant as Specified In Its Charter)
___________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, If Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
______________________________________________________________
(2) Aggregate numer of securities to which transactions 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>
RYMER FOODS INC.
4600 South Packers Avenue
Suite 400
Chicago, Illinois 60609
Notice of Annual Meeting of Stockholders
to be held April 6, 2000
TO THE HOLDERS OF COMMON STOCK OF RYMER FOODS INC.:
The Annual Meeting of Stockholders of Rymer Foods Inc. (the
"Company") will be held at 11:00 a.m., local time, on Thursday, April
6, 2000, at the offices of the Company's Attorney, Shefsky & Froelich
Ltd., at 444 North Michigan Ave., Suite 2500, Chicago, IL 60611, for
the following purposes:
(1) To elect one Class 2 Director to the Company's Board of
Directors.
(2) To elect one Class 1 Director to the Company's Board of
Directors.
(3) To elect three Class 3 Directors to the Company's Board of
Directors.
(4) To ratify the appointment by the Board of Directors of Grant
Thornton LLP as auditors of the Company for fiscal 2000.
(5) To approve increase of 200,000 shares for the Company's stock
option plan.
(6) To transact any other business that may properly be brought
before the Meeting or any adjournments thereof.
Only holders of record of Common Stock at the close of business on
February 15, 2000 (the "Record Date"), will be entitled to notice of
and to vote at the Meeting or any adjournments thereof.
Stockholders are cordially invited to attend the meeting in
person. IF YOU WILL NOT BE ABLE TO ATTEND THE MEETING IN PERSON,
PLEASE INDICATE YOUR VOTE ON THE MATTERS TO BE VOTED UPON, SIGN AND
DATE THE ENCLOSED PROXY, AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
By Order of the Board of Directors
/s/ EDWARD M. HEBERT
--------------------
EDWARD M. HEBERT
Secretary
February 29, 2000
<PAGE>
RYMER FOODS INC.
4600 South Packers Avenue
Suite 400
Chicago, Illinois 60609
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS - APRIL 6, 2000
This Proxy Statement (the "Proxy Statement") is furnished in
connection with the SOLICITATION OF PROXIES BY THE BOARD OF DIRECTORS
of Rymer Foods Inc. (the "Company") from the holders of shares of its
common stock, $0.04 par value (the "Common Stock"), to be voted at THE
ANNUAL MEETING OF STOCKHOLDERS, which will be held at 11:00 a.m., local
time, on Thursday, April 6, 2000, at the offices of the Company's
Attorney, Shefsky & Froelich Ltd., at 444 North Michigan Avenue, Suite
2500, Chicago, Illinois 60611, and at any adjournments thereof (the
"Meeting").
The purposes of the Meeting are:
(1) To elect one Class 2 Director to the Company's Board of
Directors.
(2) To elect one Class 1 Director to the Company's Board of
Directors.
(3) To elect three Class 3 Directors to the Company's Board of
Directors.
(4) To ratify the appointment by the Board of Directors of Grant
Thornton LLP as auditors of the Company for fiscal 2000.
(5) To approve increase of 200,000 shares for the Company's stock
option plan.
(6) To transact any other business that may properly be brought
before the Meeting or any adjournments thereof.
This Proxy Statement and a form of proxy are first being mailed by
the Company to its stockholders on or about February 29, 2000.
The cost of solicitation of proxies will be borne by the Company.
The solicitation of proxies generally will be by mail. Such
solicitation may also be made in person or by telephone, facsimile or
other means by directors, officers, agents and employees of the
Company. Arrangements have been made with brokers and other
custodians, nominees and fiduciaries to send copies of this Proxy
Statement, proxies and other proxy solicitation materials to their
principals, and the Company will reimburse them for reasonable out-of-
pocket and clerical expenses in so doing.
<PAGE>
STOCKHOLDERS ENTITLED TO VOTE
The Company's Board of Directors (the "Board of Directors" or the
"Board") has fixed the close of business on February 15, 2000 as the
record date (the "Record Date") for the Meeting.
Holders of record of the Company's outstanding Common Stock at the
close of business on the Record Date (consisting of 4,300,000 shares)
are entitled to notice of and to vote at the Meeting. For a quorum to
be present, the holders of at least 50% of the shares entitled to vote
at the Meeting must be present in person or represented by proxy.
Stockholders have cumulative voting rights for the election of
directors and one vote per share for all other purposes. Cumulative
voting means that each stockholder is entitled to as many votes as are
equal to the number of shares owned multiplied by the number of
directors to be elected and that the stockholder may cast all of such
votes for a single director or may distribute them among the number to
be voted for, as the stockholder may see fit. Each share of Common
Stock (par value $0.04) is entitled to one vote with respect to the
ratification of Grant Thornton LLP as auditors for fiscal 2000,
ratification of the increase by 200,000 of the number of shares of
stock subject to the Company's Stock Option Plan and any other matters
that may be properly brought before the Meeting.
Elections are determined by a plurality vote, assuming that a
quorum is present. Other matters are determined by vote of the holders
of a majority of the shares present or represented at the Meeting and
voting on such matters. Therefore, the affirmative vote of the holders
of not less than a majority of the shares of Common Stock present at
the Meeting in person or by proxy is required to ratify the appointment
of Grant Thornton LLP as auditors for fiscal 2000 and the increase of
550,000 shares to the Company's stock option plan.
With regard to the election of the Class 1, Class 2 and Class 3
Directors, votes may be cast in favor of or withheld from the nominees,
therefore votes that are withheld will be excluded entirely from the
vote and will have no effect, except for quorum purposes. Abstentions
may be specified on the proposal to ratify the appointment of Grant
Thornton LLP as auditors for fiscal 2000 and the increase of 550,000
shares to the Company's stock option plan and will be counted as
present for purposes of determining the existence of a quorum regarding
the proposal on which the abstention is noted. Because ratification of
Grant Thornton LLP as auditors for fiscal 2000 and the increase of
550,000 shares to the Company's stock option plan requires the
affirmative vote of a majority of shares present in person or by proxy
and entitled to vote, an abstention on either of such proposals will
have the same effect as a negative vote.
Under the rules of the New York and American Stock Exchanges,
brokers who hold shares in street name may have the authority to vote
on certain items when they have not received instructions from
beneficial owners. Brokers that do not receive instructions generally
are entitled to vote on the election of directors and the ratification
of the appointment of auditors. Under applicable Delaware law, a
broker non-vote will have no effect on the outcome of the election of
the Class 1, Class 2 and Class 3 Directors.
<PAGE>
The proxies hereby solicited vest in the proxy holders' cumulative
voting rights (discussed above) with respect to the election of
directors (unless the stockholder marks the proxy so as to withhold
such authority) and all other voting rights of the stockholders signing
such proxies. The shares represented by each duly executed proxy will
be voted and, where a choice is specified by the stockholder on the
proxy, the proxy will be voted in accordance with the specification so
made.
Any proxy given by a stockholder pursuant to this solicitation may
be revoked by the stockholder by written notice delivered to the
Secretary of the Company at any time prior to exercise of the proxy.
All valid proxies on file with the Secretary of the Company, unless
revoked, will be voted in accordance with the instructions of the
stockholder or, in the absence of such instructions, in accordance with
the recommendations of the Board of Directors.
A list of stockholders of the Company will be available at the
Company's offices during ordinary business hours for the ten days
preceding the Meeting for examination by stockholders for any purpose
germane to the Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 15, 2000, the
beneficial ownership of the Common Stock by each of the directors, the
nominees for director and each of the executive officers of the Company
listed in the Summary Compensation Table below and of all directors,
the nominees for director and executive officers of the Company as a
group, and by each person who is known by the Company to beneficially
own 5% or more of the Common Stock. The Common Stock is the only
outstanding class of equity securities of the Company.
Percentage
of
Number of Shares Outstanding
Name Title of Security Beneficially Owned Shares
---- ----------------- ------------------ ------
P. E. Schenk .................... Common Stock 258,000 6%
Edward M. Hebert ................ Common Stock 172,150 4%
Robert Rittmaster ............... Common Stock 110,345 2.6%
Edward Banks .................... Common Stock 1,805,296(1)(2)(4) 42%
c/o W.R. Huff Asset Management
67 Park Place
Morristown, NJ 07960
Tom Krasnor ..................... Common Stock 382,916(2)(3)(5) 8.9%
Riverside Capital Advisors Inc.
1650 S.E. 17th St. Causeway
Suite 204
Fort Lauderdale, FL 33316-1735
Lloyd I. Miller ................. Common Stock 237,607(6) 5.5%
All directors, the nominees for
director, and executive officers
as a group (9 persons) .......... Common Stock 2,458,371 57.2%
<PAGE>
1) The beneficial ownership of these shares of Common Stock derives
from accounts managed by W.R. Huff Asset Management. Edward Banks is
Portfolio Manager of W.R. Huff Asset Management and is in a position to
directly and indirectly determine the investment and voting decisions
made by W.R. Huff Asset Management and, therefore, is deemed to
beneficially own all of the shares that W.R. Huff Asset Management has
in its portfolios. Mr. Banks disclaims beneficial ownership of these
shares.
2) The beneficial ownership of these shares of Common Stock includes
multiple beneficial ownership of the same shares.
3) The beneficial ownership of these shares of Common Stock derives
from accounts managed by Riverside Capital Advisors Inc. Riverside
Capital Advisors Inc. is in a position to directly and indirectly
determine investment and voting decisions and, therefore, is deemed to
beneficially own all of the shares that it has in its portfolios. Mr.
Krasnor disclaims beneficial ownership of these shares.
4) The beneficial ownership of these shares of Common Stock derives
from accounts managed by W.R. Huff Asset Management. W.R. Huff Asset
Management is in a position to directly and indirectly determine
investment and voting decisions and, therefore, is deemed to
beneficially own all of the shares that it has in its portfolios.
5) Mr. Tom Krasnor is Portfolio Manager of Riverside Capital Advisors
Inc. and is in a position to directly and indirectly determine
investment and voting decisions and, therefore, is deemed to
beneficially own all of the shares that it has in its portfolio. Mr.
Krasnor disclaims beneficial ownership of these shares.
6) Mr. Miller has sole voting power of 137,866 shares and shared voting
power of 99,641 shares.
ELECTION OF DIRECTORS
[Item (1) on Proxy Card]
ITEM 1
Pursuant to its Certificate of Incorporation, the Board of
Directors is comprised of three classes, consisting of eight Directors
in total. Class 3 consists of three Directors whose terms expire when
their successors are elected at this Meeting. Class 1 consists of two
Directors whose terms expire in 2002 and one Director to be elected at
this meeting. Class 2 consists of one Director whose term will expire
in 2001 and one Director to be elected at this meeting.
At the Meeting, three Class 3 Directors will be elected for a term
of 3 years, one Class 2 Director for a one year term and one Class 1
Director for a two year term. Messrs. Edward M. Hebert, Robert
Rittmaster and Edward Banks, are management's nominees for Class 3
Directors. Mr. Hebert is now serving as Class 3 Director. Mr. Kenneth
Harmonay, is management's nominee for the open Class 2 Director. Mr.
Joseph Thornton, is management's nominee for the open Class 1 Director.
<PAGE>
Unless otherwise indicated on a proxy, the proxy holders intend to
vote the shares of Common Stock for which they hold proxies "FOR" the
election of Edward M. Hebert, Robert Rittmaster and Edward Banks as
Class 3 Directors, Kenneth Harmonay as Class 2 Director and Joseph
Thornton as Class 2 Director without cumulation. Each of such persons
has consented to being named as a nominee in this Proxy Statement and
to serve as a Class 3, Class 2 or Class 1 Director if elected.
The affirmative vote of a plurality of the shares of the Common
Stock, present or represented by proxy and voted at the Meeting, is
required for the election of Directors, assuming that a quorum is
present. See "Stockholders Entitled to Vote" above.
The Board has no nominating committee. The nominees for Class 1,
Class 2 and 3 Directors were selected by the entire Board of Directors.
At the Meeting, stockholders may make nominations for Class 1, Class 2
and 3 Directors.
The votes applicable to the shares represented by proxies in the
accompanying form will be cast in favor of Messrs. Hebert, Banks,
Rittmaster, Harmonay and Thornton as nominees. While it is not
anticipated that such nominees will be unable to serve, if any of them
should be unable to serve, the proxy holders reserve the right to
substitute any other person.
Class 2 Directors (Term of Office Expiring in 2001)
MICHAEL BRINATI (age 40; Director since 1997). Mr. Brinati is
President, Chief Executive Officer and a principal shareholder of Iowa
Grain Company, a Chicago-based Futures Commission Merchant clearing
member. Mr. Brinati is also a full member of the Chicago Board of
Trade ("CBOT") and has been a member of the CBOT since 1984. He is an
active floor broker and proprietary trader in the soybean quadrant on
the CBOT trading floor. Mr. Brinati is currently a governor of the
Board of Trade Clearing Corporation, a term expiring in February 2001.
JOSEPH THORNTON (age 38; Nominee for Director). Mr. Thornton is
counsel to W.R. Huff Asset Management Co., L.L.C., and has worked with
the firm for ten years. Mr. Thornton received a BA degree (Economics)
and JD and MBA degrees from the University of North Carolina at Chapel
Hill. He has served on the Board of Directors of e.spire
Communications and as an observer to the Board of Price Communications.
Class 1 Directors (Term of Office Expiring in 2002)
P. E. SCHENK (age 62; Director since November 1995). Mr. Schenk
was named to the Board of Directors of the Company on November 8, 1995
as a Class 1 Director to fill a vacancy therein created by a
resignation. Mr. Schenk has served as Chief Executive Officer of the
Company since November 1995, and President until April 1999. In 1994
and 1995, Mr. Schenk operated Schenk & Associates, Inc., a consulting
practice. Mr. Schenk was Executive Vice President of Lykes Processed
Meats Group from December 1993 to November 1994, and from August 1993
to December 1993 he served as Senior Vice President of Sales &
Marketing. From 1986 to 1993, Mr. Schenk was employed by Smithfield
Foods, Inc. as President and Chief Operating Officer of various meat
processing subsidiaries.
<PAGE>
BARRY SPECTOR (age 57; Director since 1997). Mr. Spector has been
the Managing Director of Bengur, Bryan & Co., Inc. since March 1997.
Prior to such date, Mr. Spector was President and Chief Executive
Officer of Acme Foods Co., a national snack meat company.
KENNETH HARMONAY (age 38; Nominee for Director). Mr. Harmonay is
Director of Research at W.R. Huff Asset Management Co. L.L.C., and has
been with the firm for more than ten years. Mr. Harmonay received a BS
degree (Economics) from Lehigh University and an MBA degree from
Fordham University. He has served on the Boards of Directors of Price
Communication, Trident NGL, Inc. and Multi-Market Radio (prior to its
acquisition by SFX Broadcasting), and as an observer to the Boards of
Benedek Corporation and Arcadian Corporation.
Nominees for Class 3 Directors (Term of Office Expiring in 2003)
EDWARD BANKS (age 37; Nominee for Director). Mr. Banks is a
Portfolio Manager at W.R. Huff Asset Management Co., L.L.C., and has
been with the firm for more than eleven years. He received his BA
degree (History) and his MBA degree from Rutgers University. Mr. Banks
has served on the Boards of Directors of Magellan Health Services, The
Del Monte Corporation, Abco Foods, Arch Communications Group and
e.spire Communications. He also has been an observer to the Boards of
Multi-Market Radio (prior to its Acquisitions by SFX Broadcasting) and
Powertel, Inc.
EDWARD M. HEBERT (age 49; Director since 1997). Mr. Hebert was
appointed President in April 1999. Mr. Hebert was appointed Secretary
in April 1998. Mr. Hebert was named to the Board of Directors as part
of the Company's Restructuring in 1997. Mr. Hebert was appointed Chief
Financial Officer on October 6, 1995. Mr. Hebert has been Senior Vice
President Finance of the Company since January 1990 and Treasurer of
the Company since January 1993. Prior thereto, Mr. Hebert was
Controller of the Company since December 1988. Prior to that time, Mr.
Hebert was employed by Arco Metals Company in various financial
positions.
ROBERT RITTMASTER (age 74; Nominee for Director). Mr. Rittmaster,
is a former CEO and Director of the Company from 1982 to 1988. Mr.
Rittmaster has been president of Rittmaster & Co., Inc., a business
consulting firm, from 1989 to present.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
During fiscal 1999, there were 5 meetings of the Board. Each
director then in office attended more than 80% of the combined meetings
of the Board of Directors and the Committees on which he served held
during the year while he served as Director.
<PAGE>
The Executive Committee, consisting of Messrs. P. E. Schenk,
Michael Bowen and John Elting, did not meet in fiscal 1999. Except for
certain matters, the duties of the Executive Committee include the
exercise of all of the powers and authority of the Board of Directors
and the management of the business and affairs of the Company, except
for any powers and authority granted to another Committee. The
authority of the Executive Committee is generally limited to
acquisitions and dispositions of assets and negotiations to accomplish
the same; personnel matters; guidance to senior management on policy
matters; negotiations, review and analysis of financial needs;
litigation matters; and public or private stock placement or other
equity or debt offerings.
The Audit Committee, consisting of Messrs. Michael Brinati and
Barry Spector met once during fiscal 1999. The Audit Committee reviews
the proposed scope of audit and non-audit services to be performed by
the Company's independent public accountants; reviews and reports on
audits and the Company's accounting policies and controls; and annually
recommends independent public accountants for selection as auditors of
the Company. The Audit Committee also monitors the administration of
the Company's business ethics and conflicts of interest policies.
The Compensation Committee, consisting of Messrs. Michael Bowen
and John Elting, did not meet during fiscal 1999. The Compensation
Committee reviews the compensation policies of the Company, determines
compensation of the Company's executive officers, determines general
compensation and benefit levels for all officers, and recommends to the
full Board future compensation of executive officers. The Compensation
Committee administers the Company's employee benefit plans presently in
effect.
REMUNERATION OF DIRECTORS
Directors who are not officers of the Company or its subsidiaries
are not compensated in cash, however, they are eligible to receive
stock options. Directors who are also officers of the Company or its
subsidiaries do not receive additional compensation for attending board
meetings. Directors are reimbursed only for out-of-pocket expenses
incurred in attending Board or Committee meetings.
Incentive Compensation Program
The Incentive Compensation Program provides opportunities for
executives to receive incentive compensation if specific performance
goals, proposed by management and approved by the Board, are met.
Stock Options
In fiscal 1999, under the Stock Option Plan, there were 426,000
options granted to acquire shares of the Common Stock. See "Security
Ownership of Certain Beneficial Owners and Management."
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Awards Payouts
Other
Annual Restricted Securities All Other
Com- Stock Underlying LTIP Compen-
Salary Bonus pensation Award(s) Options Payouts sation
Principal Position Year1 ($) ($) ($)2 ($) (#) ($) ($)3
- ------------------ ----- ------- ----- ----- ------ --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
P.E.Schenk 1999 126,923 - 1,650 - - - 4,293
Chairman and Chief 1998 207,692 - 6,600 - - - 8,000
Executive Officer 1997 223,908 - 6,600 - - - 265,500
Edward M. Hebert 1999 179,231 - 6,000 - - - 8,435
President, CFO, 1998 130,353 - 6,000 - - - 6,796
Treasurer and
Secretary 1997 141,031 - 6,000 - - - 178,909
Jose Muguerza 1999 138,077 - 6,000 - - - 6,690
Executive V.P. 1998 99,192 - 6,000 - 175,000 - 5,201
Chief Operating
Officer 1997 96,625 2,500 6,000 - - - 5,669
Gary Penczek 1999 75,769 100,000 - - 19,000 - 2,615
Vice President of
Purchasing
Paul Conti 1999 111,539 - 5,400 - 50,000 - -
Executive V.P.
1 For fiscal year ended on the last Saturday of October in each
year.
2 Reimbursement allowance for automobile use and maintenance.
3 Represents vested amount from the Company's 401k Plan and also
includes a one-time stock grant under the terms of the Company's
prepackaged plan of reorganization to Mr. Schenk and Mr. Hebert of
$258,000 and $172,000 respectively.
</TABLE>
<PAGE>
OPTION GRANTS IN 1999 FISCAL YEAR
Number Percent of
of Total
Securities Options
Underlying Granted to Exercise Present Value
Options Employees or Base Under
Granted in Fiscal Price Expiration Black Shoal
Name # Year ($/Sh) Date Model
- ---- ------- ---- ------ -------- -----
P.E. Schenk - - - - -
Edward M. Hebert - - - - -
Jose Muguerza 175,000 41.1 .22 10/30/99 .07
Paul Conti 50,000 11.7 .22 10/30/99 .08
Gary Penczek 19,000 4.5 .86 10/30/99 .31
AGGREGATED OPTION EXERCISES IN 1999 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Values
Number of Unexercisable
Unexercised In-the-Money
Options Options
Shares Value at Fiscal Year-End at Fiscal Year-End
Acquired on Realized (#) ($)
Name Exercise ($) Exercisable/ Exercisable/
Unexercisable Unexercisable
---- -------- --- ------------- -------------
P.E. Schenk 0 0 0/0 0
Edward M. Hebert 0 0 0/0 0
Jose Muguerza 0 0 0/175,000 0
Paul Conti 0 0 0/50,000 0
Gary Penczek 0 0 0/19,000 0
REMUNERATION OF EXECUTIVE OFFICERS
Compensation Committee Report
In fiscal 1999, the Company's philosophy on executive compensation
was to attempt to provide a compensation package competitive with
comparable companies in the food industry and which linked the amount
of compensation provided to the achievement of business objectives
while recognizing the economic factors then affecting the Company. In
this regard, individual base salaries were established for the Chief
Executive Officer and others based generally on the Board of Directors'
perception of competitive, industry-wide salaries, the executive's
experience and seniority, as well as his or her performance,
while considering the overall level of spending which the Board deemed
appropriate for officers' salaries in light of these economic factors.
In fiscal 1999, there were two programs of direct executive
officer compensation: the Base Salary Program and the Incentive
Compensation Program. Subsequent to fiscal 1997, executives have been
awarded stock options as part of their compensation package.
<PAGE>
Base Salary Program
Base salary for 1999 for the executive officers named in the
Summary Compensation Table was determined based on their respective
employment agreements. See "Certain Transactions and Related
Transactions."
[PERFORMANCE GRAPH DATA FOLLOWS]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG RYMER FOODS INC., THE RUSSELL 2,000 INDEX AND THE S&P FOODS INDEX
Cumulative Total Return*
10/94 10/95 10/96 10/97 10/98 10/99
----- ----- ----- ----- ----- -----
Rymer Foods Inc...... 100 31 14 25 12 21
Russell 2,000 ....... 100 118 138 179 161 174
S&P Foods ........... 100 121 148 198 233 220
EXECUTIVE OFFICERS
The following is a list of the names and ages of the current
executive officers of the Company, the period during which each has
served as such and their respective positions:
Name and Age Position(s)
------------ -----------
P. E. Schenk (62) ....... Chairman and Chief Executive Officer
(since November 95)
Edward M. Hebert (49) ... President (since 1999), Treasurer and
Chief Financial Officer and Secretary
(since April 98)
Jose Muguerza (37) ...... Executive Vice President and Chief
Operating Officer of Rymer Meat Inc.
(since October 95)
Gary Penczek (55) ....... Vice President of Purchasing of
Rymer Meat Inc. (since August 98)
Paul Conti (58) ......... Executive Vice President of Rymer Meat
Inc. (since February 99)
<PAGE>
P. E. Schenk. Mr. Schenk was named to the Board of Directors of
the Company on November 8, 1995 as a Class 1 Director to fill a vacancy
therein created by a resignation. Mr. Schenk has served as President
and Chief Executive Officer of the Company since November 1995. In
April 1999, Mr. Schenk resigned the Presidency but remains as Chief
Executive Office and Chairman of the Board. In 1994 and 1995, Mr.
Schenk operated Schenk & Associates, Inc., a consulting practice. Mr.
Schenk was Executive Vice President of Lykes Processed Meats Group from
December 1993 to November 1994, and from August 1993 to December 1993
he served as Senior Vice President of Sales & Marketing. From 1986 to
1993, Mr. Schenk was employed by Smithfield Foods, Inc. as President
and Chief Operating Officer of various meat processing subsidiaries.
Edward M. Hebert. Mr. Hebert was appointed President in April
1999 and Secretary on April 30, 1998. Mr. Hebert was appointed Chief
Financial Officer on October 6, 1995. Mr. Hebert has been Senior Vice
President, Finance of the Company since January 1990 and Treasurer of
the Company since January 1993. Prior thereto, Mr. Hebert was
Controller of the Company since December 1988. Prior to that time, Mr.
Hebert was employed by Arco Metals Company in various financial
positions.
Jose Muguerza. Mr. Muguerza was appointed Executive Vice
President and Chief Operating Officer in September 1997. Prior to that
time, Mr. Muguerza was Vice President of Operations and Technical
Services since October 1995. Prior to such election, Mr. Muguerza was
Vice President-Technical Services of a subsidiary of the Company.
Prior to joining the Company, Mr. Muguerza was with several foodservice
companies in the meat production and cooked products industries.
Gary Penczek. Mr. Penczek was appointed Vice President of
Purchasing in December 1999. Mr. Penczek has been the Manager of
Purchasing since August 1998. Prior to August 1999, Mr. Penczek has
been in the meat industry in various capacities for more than 30 years.
Paul Conti. Mr. Conti was appointed Executive Vice President in
February 1999. Mr. Conti, prior to joining Rymer Meat Inc. ran his own
foodservice company for more than 25 years.
All of the executive officers are citizens of the United States of
America. Edward M. Hebert served as an executive officer of the
Company during its 1993 Restructuring.
<PAGE>
CERTAIN TRANSACTIONS AND RELATED TRANSACTIONS
Stock Purchase Agreements and Certain Additional Compensation
Upon the completion of the Company's prepackaged plan of
reorganization, Mr. Schenk and Mr. Hebert were granted 258,000 and
172,000 fully-vested shares, respectively, of the Company's Common
Stock. Under the terms of their employment agreements, the Company
will provide a loan to the executives to assist with the tax
consequences of the grant of such stock. Mr. Schenk and Mr. Hebert
will also be eligible to receive stock option grants consistent with
those grants made to other executives in 1998 and subsequent years. No
options were granted to Mr. Schenk or Mr. Hebert in 1999.
The value of the stock grants issued to Mr. Schenk and Mr. Hebert
is reflected in the Summary Compensation Table as shown on page seven
of this report.
Employment and Consulting Agreements and Other Arrangements
P.E. Schenk. On November 8, 1995, Mr. Schenk entered into a two
year employment agreement with the Company providing for annual
compensation of $200,000, subject to mandatory annual escalation in the
event of an increase in the regional Consumer Price Index equivalent to
the percentage increase of such index. Pursuant to the employment
agreement, Mr. Schenk was also issued a warrant to acquire 750,000
shares of Common Stock for an exercise price of $1.00 per share for a
period of three years commencing November 8, 1996.
Warrants previously issued to Mr. Schenk were cancelled as a
result of the Company's recent Senior Note restructuring. Also, in
conjunction with the Company's restructuring, on August 21, 1997, Mr.
Schenk entered into a new employment agreement with the Company. The
new agreement provided for annual compensation of $250,000. Under the
agreement, Mr. Schenk was entitled to an automobile allowance of $550
per month, as well as other normal executive benefits. The agreement
term was for an initial period of two years, commencing August 21, 1997
and continuing through August 20, 1999. Beginning on August 21, 1999,
the term of employment was to be renewed annually for a period of 12
months unless Mr. Schenk provides the Board of Directors with written
notice to the contrary at least ninety days prior to any annual renewal
date.
Mr. Schenk is entitled to annual increases in salary equal to the
percentage increase in the Consumer Price Index for all Urban Consumers
for the Chicago Metropolitan area.
On December 26, 1997, Mr. Schenk voluntarily reduced his annual
salary to $200,000 as part of a cost savings initiative program. In
April 1999, Mr. Schenk retired from the Presidency of Rymer, while
remaining as CEO and Chairman of the Board. Mr. Schenk's compensation
in his new position is $50,000 annually. Beginning in April 2001, the
term of employment shall be renewed annually for a period of 12 months
unless Mr. Schenk provides the Board of Directors with written notice
to the contrary at least ninety days prior to any annual renewal date.
<PAGE>
Edward M. Hebert. The Company entered into an employment
agreement with Edward M. Hebert, the Company's Senior Vice President,
Treasurer and Chief Financial Officer, on June 1, 1991. The
agreement's original one-year term that began on June 1, 1991,
automatically extends thereafter for successive one-year periods unless
either the Company or Mr. Hebert notifies the other not later than May
1 of any year that the agreement is to be terminated on June 1 of such
year. Mr. Hebert was entitled in the first year of the agreement to a
salary of $100,000 per year with an increase in subsequent years based
on increases in the Consumer Price Index limited to 6% of the amount in
effect for the prior year. In connection with the 1993 restructuring,
Mr. Hebert's salary was set at $112,200.
In conjunction with the Company's restructuring, on August 21,
1997, Mr. Hebert entered into a new employment agreement with the
Company. The new agreement provides annual compensation of $140,000.
Under the agreement, Mr. Hebert is entitled to an automobile allowance
of $500 per month, as well as other normal executive benefits. The
agreement term was for an initial period of two years, commencing
August 21, 1997 and continuing through August 20, 1999. Beginning on
August 21, 1999, the term of employment is to be renewed annually for a
period of 12 months unless Mr. Hebert provides the Board of Directors
with written notice to the contrary at least ninety days prior to any
annual renewal date.
Mr. Hebert is entitled to annual increases in salary equal to the
percentage increase in the Consumer Price Index for all Urban Consumers
for the Chicago Metropolitan area.
On December 26, 1997, Mr. Hebert voluntarily reduced his annual
salary to $128,600 as part of a cost savings initiative program.
In April 1999, Mr. Hebert was appointed President of the Company.
Mr. Hebert entered into a two year agreement with the Company. The
new agreement provides annual compensation of $200,000. Mr. Hebert is
entitled to an automobile allowance of $500 per month, as well as other
normal executive benefits. Beginning in April 2001, the term of
employment shall be renewed annually for a period of 12 months unless
Mr. Hebert provides the Board of Directors with written notice to the
contrary at least ninety days prior to any annual renewal date.
General. Executive Officers of the Company and its subsidiaries
("Subsidiaries") generally receive participation in benefit plans,
split dollar life insurance programs, an automobile expense
reimbursement allowance or use of an automobile, bonuses at the
discretion of the Board of Directors, reimbursement of business-related
expenses and certain fringe benefits.
<PAGE>
APPOINTMENT OF AUDITORS
[Item (5) on Proxy Card]
ITEM 2
It is intended that the shares represented by the proxy holders
will be voted for approval of the appointment of Grant Thornton LLP
(unless otherwise indicated on the proxy) as independent public
accountants (auditors) to report to the stockholders on the financial
statements of the Company for the fiscal year ending October 28, 2000.
Each professional service performed by Grant Thornton LLP during
fiscal 1999 was approved in advance or was subsequently approved, and
the possible effect on the auditors' independence was considered, by
the Audit Committee. The Audit Committee has recommended, and the
Board of Directors has approved, the appointment of Grant Thornton LLP
subject to the approval of the stockholders at the Meeting. Although
submission of the appointment of independent public accountants to
stockholders is not required by law, the Board of Directors, consistent
with its past policy, considers it appropriate to submit the selection
of auditors for stockholder approval. Representatives of Grant
Thornton LLP are expected to be present at the Meeting with the
opportunity to make a statement if they desire to do so and to be
available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the shares of
Common Stock of the Company present, or represented by proxy, and voted
at the Meeting is required for the approval of this Item. The Board
has not determined what action it would take if the stockholders do not
approve the selection of Grant Thornton LLP, but would reconsider its
selection in light of the stockholders' action.
The resignation of Coopers & Lybrand L.L.P. was not recommended
nor approved by the Company's Audit Committee as it was the decision of
Coopers & Lybrand L.L.P. not to continue as the Company's auditors.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE APPOINTMENT OF GRANT THORNTON LLP
APPROVAL OF ADDITIONAL OPTIONS
[ITEM (4) ON PROXY CARD]
The Company has a stock option plan with 430,000 shares authorized
and 421,000 shares issued. The options are used by the Company as
compensation for the Company's outside Board members and as incentive
to existing management of the Company and to attract new management
talent. The Company is requesting that shareholders approve a 200,000
increase to the stock option plan which was previously approved by the
Board with such options to be used to retain key management, Board
Members and attract new management talent.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF
ADDITIONAL OPTIONS.
<PAGE>
EXPENSES
The Company will bear all costs of this solicitation. In
addition, the Company will reimburse banks, custodians, fiduciaries,
nominees, securities dealers, trust companies and other persons for
their reasonable expenses in forwarding this Proxy Statement, proxies
and other related materials to the beneficial owners of shares of
Common Stock.
OTHER MATTERS
Management knows of no other business that will be presented for
action at the Meeting. If any other matters properly come before the
Meeting, the persons named in the enclosed proxy will vote or refrain
from voting such proxy in accordance with their best judgment.
ANNUAL REPORT
A copy of the Company's Annual Report for the 1999 fiscal year
(the "Annual Report") has been mailed to its stockholders. The
sections entitled "Security Ownership of Certain Beneficial Owners and
Management," "Election of Directors," "Information about the Board and
Its Committees," "Remuneration of Directors," "Remuneration of
Executive Officers," "Executive Officers" and "Certain Transactions and
Related Transactions" in this Proxy Statement. The Annual Report is
furnished to stockholders for information only and no part of it is
incorporated by reference in this Proxy Statement.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports, proxy
statements, and other information with the Securities and Exchange
Commission (the "Commission"). The public may inspect and copy at
prescribed rates such reports, proxy statements, and other information
that the Company has filed with the Commission, at the public reference
facilities that the Commission maintains at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located
at 500 West Madison Street, Chicago, Illinois 60661 and Seven World
Trade Center, New York, New York 10048. In addition, the public may
obtain such reports, proxy statements and other information concerning
the Company from the Public Reference Section of the Commission,
Washington, D.C. 20549 at prescribed rates.
STOCKHOLDER PROPOSALS
Stockholder proposals for the 2001 Annual Meeting of Stockholders must
be received by the Corporation at its executive office in Chicago,
Illinois, on or prior to December 8, 2000 for inclusion in the
Corporation's proxy statement for that meeting. Any stockholder
proposal must also meet the other requirements for stockholder
proposals as set forth in the rules of the U.S. Securities and Exchange
Commission relating to stockholder proposals.
