<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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
</TABLE>
UNITED 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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
UNITED FOODS, INC.
TEN PICTSWEET DRIVE
BELLS, TENNESSEE 38006-0119
-----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 12, 1995
-----------------------
To the Stockholders of
UNITED FOODS, INC.
Notice is hereby given that the Annual Meeting of the Stockholders of
UNITED FOODS, INC., a Delaware corporation, hereinafter called the "Company,"
will be held in the Corporate Conference Room of United Foods, Inc., Ten
Pictsweet Drive, Bells, Tennessee, on July 12, 1995, at 9:00 A.M., Central
Daylight Saving Time, for the following purposes:
1. To elect one Class A director and two Class B directors to serve for
terms of three years each and until the election and qualification of their
successors.
2. To approve the appointment of BDO Seidman as independent public
accountants for the Company.
3. To transact such other business as may properly come before the meeting
or at any adjournments thereof, although management is not at present aware of
any other business to be considered.
The stock transfer book will not be closed, but the Board of Directors has
fixed May 31, 1995 as the record date for the determination of stockholders
entitled to notice of and to vote at the meeting. Accordingly, only
stockholders of record at the close of business on such date will be entitled
to vote at the meeting or any adjournments thereof.
RETURN OF PROXIES
It is important that the Proxy be returned promptly in order to assure a
quorum at the Annual Meeting. Stockholders are urged to date, execute and
return the Proxy in the envelope enclosed with it, which requires no postage if
mailed in the United States.
UNITED FOODS, INC.
By: Daniel B. Tankersley
Dated: June 19, 1995 Secretary
<PAGE> 3
UNITED FOODS, INC.
TEN PICTSWEET DRIVE
BELLS, TENNESSEE 38006-0119
----------------------
PROXY STATEMENT
MAILED TO STOCKHOLDERS JUNE 19, 1995
----------------------
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders to be held on July 12,
1995. The cost of soliciting the proxies will be borne by the Company,
including reimbursement of banks, brokerage firms, custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy material
to the beneficial owners of stock. Proxies may be solicited personally, by
mail, by telephone, by facsimile or by telegraph by officers, directors or
other employees of the Company, without remuneration other than their regular
compensation. Proxies may also be solicited by regular employees of the Company
at nominal cost. Any stockholder giving a proxy has the power to revoke it at
any time prior to its exercise either by notifying the Company in writing that
a proxy previously granted to its management is revoked, or by giving a written
proxy regarding the matters discussed herein, appropriately signed and dated,
to any other person.
Votes cast by proxy or in person at the Annual Meeting will be tabulated
by the election inspectors appointed for the meeting and will determine whether
or not a quorum is present. The election inspectors will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum but as unvoted for purposes of determining the approval of
any matter submitted to the shareholders for a vote. An abstention will have
the effect of a vote against the matter submitted for shareholder approval. If
a broker indicates that it does not have discretionary authority to vote
certain shares, those shares will not be considered as present and entitled to
vote with respect to that matter and will have no impact on the outcome of the
vote. The election of directors and approval of outside accountants are matters
on which a broker has the discretion to vote if instructions are not received
from the client at least 10 days prior to the Annual Meeting.
The Company had outstanding on June 9, 1995 an aggregate of 11,797,498
shares of stock, all Common Stock, $1 par value per share, of which 5,914,719
shares are Class A shares and 5,882,779 shares are Class B shares. A majority
of the shares entitled to vote, present in person or represented by proxy,
shall constitute a quorum for the transaction of any business. The Class A
shares and the Class B shares will vote separately on Proposal 1, which is the
election of directors. The Class A shares will elect one director and each
share will be entitled to one vote for one nominee. The Class B shares will
elect two directors and each share will be entitled to one vote for each of two
nominees. Directors shall be elected by a plurality of the outstanding shares
of the respective class present in person or represented by proxy at the
meeting. With respect to Proposal 2, which is to approve the appointment of the
independent public accountants, the Class A shares and Class B shares will vote
as a single class, with each Class A share having one-tenth of a vote and each
Class B share having one vote. The appointment of the independent public
accountants shall be approved by an affirmative vote of the majority of the
votes of the outstanding shares present in person or represented by proxy at
the meeting. With respect to Proposal 3, which is the transaction of such other
business as may properly come before the meeting, the Class A shares and the
Class B shares will vote as a single class, unless the Company's certificate of
incorporation or the General Corporation Law of Delaware expressly requires
voting as separate classes. When voting as a single class, each Class A share
will have one-tenth of a vote and each Class B share will have one vote. When
voting as separate classes, each Class A share and each Class B share will have
one vote. Management is not aware, at present, of any other business to be
considered at the Annual Meeting to be held on July 12, 1995. Any proxy
granting authority to the holder thereof to vote upon matters under Proposal 3
shall be effective with respect to all such matters, whether the voting on any
such matter is as a single class or as separate classes. Only stockholders of
record May 31, 1995, shall be entitled to vote at the Annual Meeting on July
12, 1995, or an adjournment or adjournments thereof.
1
<PAGE> 4
SECURITY OWNERSHIP
Principal Stockholders
The following table sets forth the number of shares of Common Stock of the
Company which are, to the best of management's belief, controlled or
beneficially owned, directly or indirectly, by the holders of five percent or
more of the voting stock of the Company.
<TABLE>
<CAPTION>
Beneficial Stock Ownership
-------------------------------------------------------------------
Percent Percent
Owner's Name and Address Class A(1) of Class(2) Class B of Class
- - ------------------------ ----------- ------------- --------- --------
<S> <C> <C> <C> <C>
The Baupost Group, Inc.(3) 1,017,469 14.9% 181,400 3.1%
P. O. Box 1288
Cambridge, Massachusetts
Dimensional Fund Advisors, Inc.(4) 491,300 6.7% 458,400 7.8%
1299 Ocean Avenue, Suite 650
Santa Monica, California
Daniel B. Tankersley(5) 571,498 8.2% 172,105 2.9%
2611 Beech Bluff Road
Jackson, Tennessee 38301
James I. Tankersley(6) 2,553,415 27.2% 2,553,415 43.4%
185 North High Street
Bells, Tennessee 38006
</TABLE>
MANAGEMENT
The following table sets forth the number of shares of Common Stock of the
Company which are, to the best of management's belief, controlled or
beneficially owned, directly or indirectly, by each of the present directors
and nominees and by all directors and officers of the Company, as a group.
<TABLE>
<CAPTION>
Beneficial Stock Ownership
------------------------------------------------------------------
Percent of Percent
Name of Director or Nominee Class A(1) Class(2)(7) Class B of Class(7)
- - --------------------------- ---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Darla T. Darnall 440,871 6.1% 440,871 7.5%
W. Donald Dresser(8) 365,300 5.3% 56,800 1.0%
B. M. Ennis(8) 200,400 2.9% 300 (*)
Dr. Joseph A. Geary - - - -
Carl W. Gruenewald, II(8) 105,884 1.6% - -
John D. Haltom(8) 64,200 (*) 4,000 (*)
Mason A. Leonard(8) 101,000 1.5% 500 (*)
Kelle T. Northern 440,871 6.1% 440,871 7.5%
Daniel B. Tankersley(5) 571,498 8.2% 172,105 2.9%
James I. Tankersley(6) 2,553,415 27.2% 2,553,415 43.4%
Julia T. Wells(8) 156,042 2.3% - -
John S. Wilder - - 1,000 (*)
All Directors and Officers of the
Company as a Group(14 Persons) 4,112,586 42.8% 2,781,607 47.3%
</TABLE>
2
<PAGE> 5
- - ---------------------------------
(1) The following table shows shares of Class A Common Stock, included in the
number of shares beneficially owned, which may be acquired upon the conversion
of Class B Common Stock.
<TABLE>
<CAPTION>
Number of Number of
Name Shares Name Shares
- - ------------------------ ----------- ----------------------- ----------
<S> <C> <C> <C>
The Baupost Group, Inc. 181,400 John D. Haltom 4,000
Darla T. Darnall 440,871 Mason A. Leonard 500
Dimensional Fund Advisors, Inc. 458,400 Kelle T. Northern 440,871
W. Donald Dresser 56,800 Daniel B. Tankersley 165,952
B. M. Ennis 300 James I. Tankersley 2,553,415
</TABLE>
(2) Total Class A shares used to calculate percent of class includes
919,384 shares Class A Common Stock underlying Incentive Stock Options and the
shares of Class A Common Stock which may be acquired by the beneficial owner
upon the conversion of Class B Common Stock.
(3) Based on information supplied to the Company by The Baupost Group
on May 23, 1995.
(4) Based on the Schedule 13G filed by Dimensional Fund Advisors, Inc.
on January 31, 1995.
(5) Daniel B. Tankersley has no power to vote or dispose of and disclaims
beneficial ownership of 6,153 shares Class B Common Stock, included in the
number of shares beneficially owned, which are owned by his spouse.
(6) James I. Tankersley has no power to vote or dispose of and disclaims
beneficial ownership of 1,332,613 shares of Class B Common Stock included in
the number of shares beneficially owned, which are owned by his spouse and
children.
(7) (*) Indicates less than one percent of class.
(8) The following table shows shares of Class A Common Stock, included in
the number of shares beneficially owned, which may be purchased upon exercise
of a stock option within 60 days of the Record Date.
<TABLE>
<CAPTION>
Name of Director Number of Name of Director Number of
or Nominee Shares or Nominee Shares
- - ---------------------------- ------------ ----------------------- -----------
<S> <C> <C> <C>
W. Donald Dresser 200,000 John D. Haltom 50,000
B. M. Ennis 200,000 Mason A Leonard 100,000
Carl W. Gruenewald, II 105,884 Julia T. Wells 10,000
</TABLE>
3
<PAGE> 6
ELECTION OF DIRECTORS(1)
Three directors, comprising one third of the entire membership of the
Board of Directors of the Company, are to be elected at the Annual Meeting.
Unless otherwise instructed, the proxy holders will vote the proxies received
by them for the nominees shown below to hold office until their respective
terms expire and until their successors are duly elected and qualified.
Although it is not contemplated that any nominee will decline or be unable to
serve as a director, in either event the proxies will be voted by the proxy
holders for such other person as may be designated by present management.
The names of the nominees and of the directors not standing for election
and certain information about each of them are set forth below.
NOMINEES FOR ELECTION AS DIRECTOR FOR TERMS EXPIRING IN 1998
DR. JOSEPH A. GEARY(3)(4) (AGE 42), CLASS A DIRECTOR
Minister, Concord United Methodist Church, Paducah, Kentucky. He has been
a Director of the Company since 1991.
B. M. ENNIS(5) (AGE 57), CLASS B DIRECTOR
President of the Company since 1989. Mr. Ennis has been associated with
the Company since 1968 and has been a Director of the Company since 1978.
JAMES I. TANKERSLEY(2) (AGE 53), CLASS B DIRECTOR
Chairman of the Board of the Company since 1986. Mr. Tankersley has been
the Chief Executive Officer of the Company since 1983 and served as President
of the Company from 1977 to 1989. He has been associated with the Company since
1964 and has been a Director of the Company since 1972.
DIRECTORS WHOSE TERMS EXPIRE IN 1997
JOHN S. WILDER(3)(4) (AGE 74), CLASS A DIRECTOR
Speaker of the Senate and Lieutenant Governor of the State of Tennessee
since 1970 and has served continuously in the Tennessee State Legislature since
1968, having served two year terms in 1959 and 1966. Governor Wilder is an
attorney with John S. Wilder and Associates, a partnership, in Somerville,
Tennessee and is also Chairman of the Board of Cumberland Bancorp, Inc., a
director of Cumberland Bank of Carthage, Tennessee, Chairman of the Board of
First Federal Bankshares, Inc., a director of First Federal Bank, FSB of
Collierville, Tennessee and a director of the Bank of Green Hills of Nashville,
Tennessee. He is a director and Vice-President of the Longtown Supply Company,
Inc. of Longtown, Tennessee, a farming, cotton-ginning and merchandise
business, a partner in Longtown Farms, a partnership engaged in the business of
farming and a director of Health Management, Inc., a pathological waste
disposal company. He has been a Director of the Company since 1979.
DARLA T. DARNALL (AGE 32), CLASS B DIRECTOR
Marketing Analyst for the Company's Pictsweet Frozen Foods Division from
1985 to 1990. Mrs. Darnall has been associated with the Company since 1981 and
has been a Director of the Company since 1990.
4
<PAGE> 7
KELLE T. NORTHERN (AGE 28), CLASS B DIRECTOR
Manager - Human Resources for the Company's Pictsweet Frozen Foods
Division since 1990. Mrs. Northern has been associated with the Company since
1982 and has been a Director of the Company since 1991.
DIRECTORS WHOSE TERMS EXPIRE IN 1996
DANIEL B. TANKERSLEY(2)(5) (AGE 48), CLASS A DIRECTOR
Vice Chairman of the Board since 1992 and Secretary of the Company since
1978. Mr. Tankersley was Executive Vice President and General Counsel of the
Company from 1989 to 1992 and Vice President of the Company from 1979 to 1989.
He has been associated with the Company since 1973 and has been a Director of
the Company since 1979.
CARL W. GRUENEWALD, II(5) (AGE 61), CLASS B DIRECTOR
Senior Vice President-Finance of the Company since 1982 and Treasurer of
the Company since 1977. Mr. Gruenewald has been associated with the Company
since 1966 and has been a Director of the Company since 1981.
JULIA T. WELLS(2) (AGE 56), CLASS B DIRECTOR
Director of Marketing Services for the Company's Pictsweet Frozen Foods
Division since 1986. Mrs. Wells has been associated with the Company since 1964
and has been a Director of the Company since 1990.
COMMITTEES
The Company does not have a Nominating Committee, but the Board of
Directors has appointed a standing Audit Committee, Compensation Committee,
Executive Committee and Retirement Plan Committee.
The members of the Audit Committee are John S. Wilder (Chairman) and Dr.
Joseph A. Geary, neither of whom is an employee of the Company. The Committee
recommends to the Board of Directors the firm to be employed as independent
public accountants. The Committee periodically reviews with internal management
the Company's accounting policies, internal control systems and public
disclosure system. The Committee also consults with the Company's independent
public accountants regarding the plan of audit, the adequacy of internal
controls and the audit report.
The members of the Compensation Committee are John S. Wilder (Chairman)
and Dr. Joseph A. Geary, neither of whom is an employee of the Company. The
Committee has the responsibility to review and recommend to the Board of
Directors for approval the annual salary, bonus, stock options and other
benefits of the five most highly compensated senior executives of the Company
and to review generally the executive compensation programs and policies of the
Company. The Compensation Committee was first established by the Board of
Directors on May 12, 1995.
The members of the Executive Committee are James I. Tankersley (Chairman),
Daniel B. Tankersley and Julia T. Wells. The Committee acts for the Board of
Directors, within certain limits, when necessary, in managing the business and
affairs of the Company.
The members of the Retirement Plan Committee are Daniel B. Tankersley
(Chairman), B. M. Ennis and Carl W. Gruenewald, II. The Committee provides for
the general administration of the various retirement and deferred compensation
plans of the Company.
5
<PAGE> 8
MEETING ATTENDANCE
The Board of Directors met four times, the Audit Committee met four times,
the Executive Committee met three times and the Retirement Plan Committee met
seven times during the last fiscal year and each director attended 100 percent
of the total number of applicable Board or Committee meetings.
- - -----------------------------------------
(1) On May 12, 1995, the Board of Directors amended the Bylaws of the
Company, effective July 12, 1995, to reduce the size of the Board of
Directors from twelve to nine. To help accommodate the reduction in the
size of the Board of Directors John D. Haltom, a Class B director with a
term expiring in 1997, resigned as director effective July 12, 1995 and B.
M. Ennis, a Class B director with a term expiring in 1996, resigned as
director effective July 12, 1995 and will stand for election as a Class B
Director with a term expiring in 1998.
(2) Member of the Executive Committee.
(3) Member of the Audit Committee.
(4) Member of the Compensation Committee.
(5) Member of the Retirement Plan Committee.
6
<PAGE> 9
EXECUTIVE OFFICERS
The names and positions of all the executive officers of the Company are
listed below along with their business experience during the past five years.
Officers are appointed annually by the Board of Directors at the meeting of
directors immediately following the annual meeting of stockholders. There are
no arrangements or understandings between any officer and any other person
pursuant to which the officer was appointed.
<TABLE>
<CAPTION>
NAME, AGE AND POSITION BUSINESS EXPERIENCE DURING PAST FIVE YEARS
- - ------------------------------ ---------------------------------------------------
<S> <C>
James I. Tankersley, 53 Chairman of the Board since 1986; Chief Executive Officer since 1983;
Chairman of the Board and President from 1977 to 1989; joined the Company in 1964.
Chief Executive Officer
Daniel B. Tankersley, 48 Vice Chairman since 1992 and Secretary since 1978;
Vice Chairman and Secretary Executive Vice President and General Counsel from 1989 to 1992;
Vice President from 1979 to 1989; joined the Company in 1973.
B. M. Ennis, 57 President since 1989; Vice Chairman from 1989 to 1990; Senior Vice
President President from 1982 to 1989; joined the Company in 1968.
Carl W. Gruenewald, II, 61 Senior Vice President and Chief Financial Officer since 1982 and Treasurer
Senior Vice President, Chief since 1977; joined the Company in 1966.
Financial Officer and Treasurer
W. Donald Dresser, 47 Executive Vice President and Director of Development since 1989. Vice
Executive Vice President and President-Business Development and General Counsel from joining the Company
Director of Development in 1985 to 1989.
Mason A. Leonard, 50 Division President since 1989; Vice President from 1985 to 1989; joined the
Division President Company in 1982.
Pictsweet Frozen Foods
John D. Haltom, 47 Division President since 1990; Director-Inventory, Purchasing and
Division President Distribution for the Pictsweet Frozen Foods Division from 1979 to 1990;
Pictsweet Mushroom Farms joined the Company in 1974.
Robert B. Kendrick, 57 Vice President, Engineering since 1993; Director-Manufacturing for the
Vice President, Engineering Pictsweet Frozen Foods Division from 1984 to 1993; joined the Company in
1970.
Lowell E. Pugh, II, 39 General Counsel and Assistant Secretary since 1992. Director of Legal
Assistant Secretary Services from joining the Company in 1991 to 1992. He practiced law with
the Dallas, Texas firm of Johnson and Gibbs from 1981 to 1991.
</TABLE>
FAMILY RELATIONSHIPS
James I. Tankersley, Daniel B. Tankersley and Julia T. Wells are brothers
and sister. Darla T. Darnall and Kelle T. Northern are the daughters of James
I. Tankersley. These are the only family relationships between any director or
executive officer and any other director or executive officer of the Company.
7
<PAGE> 10
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1991 the Company guaranteed a $225,000 bank loan to the Senior Vice
President - Finance of the Company. The purpose of this guarantee was to allow
him to refinance a loan he had with another bank and to meet certain family
financial obligations which he felt obliged to assume. On July 12, 1991 the
Board of Directors determined that the loan guarantee was reasonably expected
to benefit the Company and authorized the guarantee. The largest amount
outstanding of such indebtedness during the year ended February 28, 1995 was
$138,237 and the amount outstanding on May 1, 1995 was $98,967.
During 1995 Darla T. Darnall, a Director of the Company, reimbursed the
Company for the cost of construction materials and labor paid for by the
Company on her behalf. The maximum amount outstanding during the year ended
February 28, 1995 was $93,743 and on May 1, 1995 there was no outstanding
balance. Interest at the prime rate was paid on all outstanding balances.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
GENERAL
The following table sets forth the total annual compensation paid or
accrued by the Company during the three years ended February 28, 1995, to or
for the account of each of the five most highly compensated executive officers
of the Company whose total cash compensation exceeded $100,000:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
- - --------------------------------------------------------------------------------------- All Other
Compen
Salary Bonus sation
Name and Principal Position Year ($) ($) ($)(1)
- - ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James I. Tankersley 1995 724,817 103,596 314,308
Chairman & CEO 1994 670,125 20,539 93,979
1993 578,462 10,496 79,003
Daniel B. Tankersley 1995 490,073 68,934 222,601
Vice Chairman 1994 463,933 14,220 83,269
1993 358,789 6,510 68,981
B. M. Ennis 1995 245,337 31,649 107,155
President 1994 232,741 7,133 61,042
1993 219,635 3,985 54,364
Carl W. Gruenewald, II 1995 230,337 29,803 110,988
Senior VP 1994 217,741 6,674 69,005
1993 204,636 3,713 61,844
W. Donald Dresser 1995 230,337 29,261 91,573
Executive VP 1994 217,741 6,674 52,983
1993 204,636 3,713 48,743
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
(1) All Other Compensation
Unfunded Group Life
Committee Retirement Insurance
Board Fees Fees Plan Premiums
Name and Principal Position Year ($) ($) ($) ($)
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
James I. Tankersley 1995 50,750 30,000 216,453 17,105
Chairman & CEO 1994 48,000 30,000 15,979
1993 44,000 20,000 15,003
Daniel B. Tankersley 1995 50,750 30,000 136,254 5,597
Vice Chairman 1994 48,000 30,000 5,269
1993 44,000 20,000 4,981
B. M. Ennis 1995 50,750 - 42,223 14,182
President 1994 48,000 - 13,042
1993 44,000 - 10,364
Carl W. Gruenewald, II 1995 50,750 - 40,454 19,784
Senior VP 1994 48,000 - 21,005
1993 44,000 - 17,844
W. Donald Dresser 1995 50,750 - 35,526 5,297
Executive VP 1994 48,000 - 4,983
1993 44,000 - 4,743
</TABLE>
OPTIONS/SAR GRANTS
The Company did not grant stock options or stock appreciation rights to
any of the officers named in the Summary Compensation Table during the last
fiscal year. The following table sets forth the options and/or stock
appreciation rights exercised during the last fiscal year by each named
officer, the aggregate number of options held by each named officer, and the
value realized from exercised options and inherent in unexercised options:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
------------------------------------
Shares Acquired Value Exercisable/ Exercisable/
on Exercise Realized Unexercisable(1) Unexercisable
Name and Principal Position (#) ($) (#) ($)
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James I. Tankersley -0- -0- -0-/-0- -0-/-0-
Chairman & Chief Exec. Officer -0-/-0- -0-/-0-
Daniel B. Tankersley -0- -0- -0-/-0- -0-/-0-
Vice Chairman -0-/-0- -0-/-0-
B. M. Ennis -0- -0- 200,000/-0- 212,500/-0-
President 200,000/-0- 212,500/-0-
Carl W. Gruenewald, II -0- -0- 105,884/-0- 112,502/-0-
Senior Vice President 105,884/-0- 112,502/-0-
W. Donald Dresser -0- -0- 200,000/-0- 212,500/-0-
Executive Vice President 200,000/-0- 212,500/-0-
- - -------------------------------------
</TABLE>
(1) The options expire in 1997.
9
<PAGE> 12
COMPENSATION OF DIRECTORS
All directors of the Company receive an annual fee of $45,000 for service
on the Board and $1,750 for each meeting of the Board of Directors attended
(not including telephone meetings). Each member of the Executive Committee
receives an annual fee of $30,000 for service on the Committee. In addition,
any director subject to self-employment tax is reimbursed for one-half of the
self-employment taxes payable with respect to director or committee fees, plus
an amount equal to the additional taxes resulting from such reimbursement. Dr.
Geary, a non-employee director, receives additional compensation in the form of
personal travel expense reimbursement and Mrs. Darnall, a non-employee
director, receives additional compensation in the form of personal travel
expense reimbursement and use of a company car, but in neither case does the
value of such compensation exceed $15,000.
COMPENSATION REPORT FROM THE BOARD OF DIRECTORS
GENERAL
On May 12, 1995, the Board of Directors established a Compensation
Committee and appointed John S. Wilder and Dr. Joseph A. Geary to serve on the
Committee. The Compensation Committee has the responsibility to review and
recommend to the Board of Directors for approval the annual salary, bonus,
stock options and other benefits of the five most highly compensated senior
executives of the Company and to review generally the executive compensation
programs and policies of the Company. During the fiscal year ended February 28,
1995, the Board of Directors ("Board") was responsible for setting the
compensation for all executive officers of the Company. The Board determined
compensation for the executive officers based on the recommendation of the
Chairman of the Board.
COMPENSATION PHILOSOPHY
Due to the extreme cyclical conditions inherent in the agricultural
economy, the increasing degree of regulation affecting the Company at all
levels, the strong competitive challenges from both public and private
companies and the resulting cyclical nature of the Company's earnings, the
Board has determined that the nature of its industry requires that it manage
the Company for long-term balance sheet strength and soundness. The Board
believes that this emphasis on a long term strategy has resulted in the Company
becoming one of the strongest competitors in its industry during a period in
which many of its competitors have failed.
Because of the difficulties inherent in the long-term strategy adopted by
the Board, it has for many years had an established policy of recruiting and
hiring the best management available and of providing a level of compensation
to its management which, in its opinion, will result in management having no
incentive to leave the Company due to inadequate compensation. The Board has
determined that this strategy will not be effective if compensation is
materially affected by changes in U. S. individual income tax rates. Therefore
the Board has adopted a policy of adjusting executive compensation to reflect
changes in U. S. individual income tax rates. The Board believes it is
imperative that the Company retain, for the long term, the executives who are
essential for carrying out the Company's business strategy. The Chairman of the
Board periodically reviews the compensation practices of other public and
private companies to determine the level of compensation which he believes is
required to attract and retain the caliber of management necessary to
successfully carry out the Company's business strategy.
BASE SALARY
Because of the cyclical nature of the Company's earnings, the Board has
determined that the principal portion of management's compensation should be in
the form of salary. The Board believes that its goal of retaining the best
management available requires a large element of stability in its compensation
policies and this can only be provided by fixed salaries. The Board reviews
each executive officer's base salary annually.
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<PAGE> 13
INCENTIVE COMPENSATION
The Company has established an Incentive Compensation Plan, which covers
the named officers, which uses net profits, return on average assets and return
on equity to determine the amount of bonus payable to each. The Board has
explored incentive compensation strategies tied to the performance of specific
functions in the Company, but due to the close inter-relationship of the
factors of production in this industry, the Board has determined that such
programs would be counter-productive. The Board believes that the broad
measures of the Company's performance incorporated into the Incentive
Compensation Plan provides an appropriate incentive to achieve the Company's
long-term goals.
INCENTIVE STOCK OPTIONS
The Company has adopted an Incentive Stock Option Plan which provides for
the grant of stock options to key employees of the Company. To date, the Board
has limited the award of options to 200,000 shares for any individual. The
award of options under the plan is normally made when an employee has become
established in a key management position. The Company adopted this plan to
provide additional incentive to achieve the long-term goals of the Company
which should over time be reflected in a rising market for the Company's common
stock. There are twenty-one employees of the Company who have options currently
outstanding under the plan and three of the five named individuals have been
granted options. The plan provides that an option may not be granted to any
person who owns, as defined in Section 422 of the Internal Revenue Code, stock
aggregating more than 10% of the combined voting power or value of all classes
of stock of the Company. As a result, no options have been issued to James I.
Tankersley or Daniel B. Tankersley.
DEFERRED COMPENSATION
The Company has adopted a deferred compensation plan which permits the
named officers to defer portions of their compensation and earn interest on the
deferred amount. The deferred compensation, including interest will be paid
either in a lump sum or in approximate equal installments over ten years at the
later of such officer's date of disability, termination from the Company, or
65th birthday.
UNQUALIFIED SUPPLEMENTAL RETIREMENT PLAN
In addition, the Company has adopted a non-contributory, unqualified,
unfunded supplemental retirement plan, which covers the named officers, whereby
a calculated amount is credited to an interest bearing deferred compensation
account for each covered officer. The amount credited to each deferred
compensation account is an amount sufficient to adjust the officer's annual
United Foods, Inc. sourced after tax earnings to the level it would have been
using 1992 federal tax rates, assuming standard deductions and no other income.
The deferred compensation, including interest will be paid in approximate equal
installments over ten years at the later of such officer's date of disability,
termination from the Company, or 65th birthday.
COMPENSATION OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER
The same philosophies that underlie the Board's policies with respect to
compensation of executive officers in general form the basis for decisions
concerning the compensation of James I. Tankersley, the Company's Chairman and
Chief Executive Officer. Thus, in response to the cyclical nature of the
Company's earnings, the compensation of the Chairman and Chief Executive
Officer is intended to provide benefits primarily through salary and
secondarily through participation in the Company's Incentive Compensation Plan.
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<PAGE> 14
SECTION 162(M)
Recently amended Section 162(m) of the Internal Revenue Code of 1986
("Section 162 (m)") generally limits federal income tax deductions for
compensation paid after 1993 to the chief executive officer and the four most
highly compensated officers of the Company to $1 million per year, but provides
an exception for performance-based compensation that satisfies certain
conditions. The Board has not adopted a definitive policy regarding Section
162(m). However, in making compensation decisions, the Board will consider the
net cost of compensation to the Company and whether it is consistent with other
compensation objectives.
<TABLE>
<S> <C> <C>
Darla T. Darnall Carl W. Gruenewald, II Daniel B. Tankersley
W. Donald Dresser John D. Haltom James I. Tankersley
B. M. Ennis Mason A. Leonard Julia T. Wells
Dr. Joseph A. Geary Kelle T. Northern John S. Wilder
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
On May 12, 1995, the Board of Directors established a Compensation
Committee and appointed John S. Wilder and Dr. Joseph A. Geary to serve on the
Committee. During the fiscal year ended February 28, 1995, the Company did not
have a Compensation Committee and the entire Board of Directors participated in
deliberations concerning executive officer compensation. The following members
of the Board were officers or employees of the Company: W. Donald Dresser, B.
M. Ennis, Carl W. Gruenewald, II, John D. Haltom, Mason A. Leonard, Kelle T.
Northern, Daniel B. Tankersley, James I. Tankersley and Julia T. Wells. During
1995 Darla T. Darnall reimbursed the Company for construction materials and
labor paid for by the Company on her behalf in a maximum amount (including
interest at the prime rate) of $93,743. In 1991 the Company guaranteed a
$225,000 bank loan to Carl W. Gruenewald, II, a director of the Company. The
maximum amount outstanding during the year ended February 28, 1995 was
$138,237.
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<PAGE> 15
COMMON STOCK PERFORMANCE
As part of the executive compensation information disclosures, the
Securities and Exchange Commission requires a five-year comparison of stock
performance for the Company with stock performance of appropriate similar
companies. The Company's common stock is traded on the American and Pacific
stock exchanges and one appropriate index is the S&P 500. Because "peer
companies" are either privately owned or are part of much larger conglomerates,
the Company is not able to construct its own peer group index. The closest
additional index which is available is the S&P Food Products Index. The
comparison shows the cumulative total return for five years, assuming
reinvestment of dividends, on $100 invested on March 1, 1990 in United Foods,
Inc. Class A Common Stock, United Foods, Inc. Class B Common Stock, the
Standard and Poors 500 and the Standard and Poors Food Products Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL VALUE AMONG UNITED FOODS, INC.,
S&P 500 AND S&P FOOD PRODUCTS INDEX
<TABLE>
<CAPTION>
UNITED FOODS, INC. UNITED FOODS, INC. S&P S&P
CLASS A CLASS B 500 FOOD PRODUCTS INDEX
<S> <C> <C> <C> <C>
1990 100.00 100.00 100.00 100.00
1991 77.78 70.00 110.60 130.14
1992 77.78 70.00 124.35 157.02
1993 77.78 75.00 133.59 164.87
1994 83.33 72.52 140.75 146.70
1995 102.80 102.52 146.85 165.78
</TABLE>
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INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors of the Company has
recommended the appointment of BDO Seidman as the independent public
accountants to audit the financial statements of United Foods, Inc., for the
year ending February 29, 1996. This recommendation has been approved by the
Board of Directors and is being presented for approval or rejection by our
stockholders. A majority vote is required for approval. A member of that firm
will have the opportunity to make a statement at the annual meeting and will be
available to respond to any appropriate question.
OTHER INFORMATION
No business other than that set forth in the attached Notice of Annual
Meeting is expected to come before the meeting, but should other matters
requiring a vote of the stockholders arise, including a question of adjourning
the meeting, the persons named in the accompanying Proxy will vote thereon
according to their best judgment in the interest of the Company. In the event
that any of the above-named nominees for the office of director shall withdraw
or otherwise become unavailable for reasons not presently known, the persons
named as proxies will vote for other persons in their place in the best
interest of the Company.
STOCKHOLDERS' PROPOSALS
The last day for receipt of resolutions for inclusion in the Company's
Proxy Material for the 1996 Annual Meeting is February 9, 1996.
ADJOURNMENT OF MEETING
It is intended that the proxies will be voted in favor of adjourning the
meeting from time to time in the event that a quorum is not present at the
scheduled meeting date, until such time as a quorum is present, and if present
or desirable, to recess. A majority constitutes a quorum.
FORM 10-K
Form 10-K as filed with the Securities and Exchange Commission is included
as a part of the Annual Report, except for certain exhibits and schedules which
have been omitted. Such exhibits and schedules or additional copies of the
Annual Report will be forwarded to stockholders without charge, upon written
request addressed to United Foods, Inc., Attention Secretary, Ten Pictsweet
Drive, Bells, Tennessee 38006-0119.
RETURN OF PROXIES
It is important that the proxies be returned promptly so as to assure a
quorum in order that the business meeting may be conducted and accomplished.
Stockholders who do not expect to attend are urged to execute and return their
proxy in the enclosed Business Reply Envelope, which requires no postage if
mailed in the United States.
June 19, 1995 Daniel B. Tankersley
Secretary
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<PAGE> 17
<TABLE>
<CAPTION>
APPENDIX A
FORM OF PROXY
<S> <C>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
PROXY
The undersigned hereby appoints James I. Tankersley and B.M. Ennis, or either of
UNITED FOODS, INC. them, as Proxies, each with full power to appoint his substitute, and hereby
TEN PICTSWEET DRIVE authorizes them to represent and to vote, as designated below, all the shares of
BELLS, TENNESSEE 38006-0119 Class A and Class B Common Stock of United Foods, Inc., held of record by the
under signed on May 31, 1995, at the annual meeting of stockholders to be held on
July 12, 1995, or any adjournments thereof.
1. ELECTION OF DIRECTORS: [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed below
contrary below)
Nominee for election by Class A Common Stockholders: Dr. Joseph A. Geary
Nominees for election by Class B Common Stockholders: B. M. Ennis and James I. Tankersley
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name in space provided below.)
2. PROPOSAL TO APPROVE THE APPOINTMENT OF BDO SEIDMAN AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. AUTHORIZATION FOR PROXIES TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING:
[ ] GRANT AUTHORITY [ ] WITHHOLD AUTHORITY
(Continued and to be signed on the other side)
___________________________________________________ COMA
___________________________________________________ COMB
Shares of the Company's Class A Common Stock are designated above
as "COMA" and shares of the Company's Class B Common Stock are designated
above as "COMB".
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" Proposals 1 and 2 and to "GRANT AUTHORITY" for Proposal 3.
Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as
attorney, 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.
DATED: __________________________________________ SIGNATURE
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD SIGNATURE IF HELD JOINTLY
PROMPTLY IN THE ENCLOSED ENVELOPE.
</TABLE>
