<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Cuisine Solutions, 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 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
CUISINE SOLUTIONS, INC.
85 SOUTH BRAGG STREET
ALEXANDRIA, VIRGINIA 22312
(703) 750-9600
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Annual Meeting") of Cuisine Solutions, Inc. (the "Company") will be held at the
MGM Grand Hotel, 3799 Las Vegas Boulevard South, Las Vegas, Nevada 89109 on
Thursday, October 28, 1998, at 2:00 p.m. for the following purposes:
1. To elect eight directors to hold office for one year and until their
successors are elected and qualify; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only the stockholders of record at the close of business on September
25, 1998 will be entitled to vote at the Annual Meeting.
All stockholders are requested to be present at the Annual Meeting in
person or by proxy. For the convenience of those stockholders who do not expect
to attend the Annual Meeting in person and desire to have their stock voted, a
form of proxy and an envelope for which no postage is required, are enclosed.
Any proxy may be revoked at any time prior to its exercise by filing with the
Secretary of the Company a written notice of revocation, by delivering a duly
executed proxy bearing a later date, or by attending the Annual Meeting and
voting in person.
Please complete, sign, date and mail promptly the accompanying proxy
card in the return envelope furnished for that purpose, whether or not you plan
to attend the Annual Meeting. Your cooperation is appreciated since a majority
of the outstanding shares of Common Stock of the Company must be represented,
either in person or by proxy, to constitute a quorum for the conduct of business
at the Annual Meeting.
By Order of the Board of Directors
Jean-Louis Vilgrain
Chairman of the Board
Alexandria, Virginia
September 25, 1998
<PAGE> 3
CUISINE SOLUTIONS, INC.
85 SOUTH BRAGG STREET
ALEXANDRIA, VIRGINIA 22312
PROXY STATEMENT
This Proxy Statement is furnished to stockholders of Cuisine Solutions,
Inc., a Delaware corporation (the "Company") in connection with the Annual
Meeting of Stockholders to be held on October 28, 1998 the ("Annual Meeting").
This Proxy Statement, the notice to stockholders, and the enclosed proxy cards
are being mailed to stockholders of the Company on or about September 28, 1998.
SOLICITATION OF PROXIES
Proxies in the form enclosed are solicited by and on behalf of the
Board of Directors of the Company (the "Board"). The individuals named as
proxies are Mr. Jean-Louis Vilgrain and Mr. Stanislas Vilgrain. Proxies may be
solicited by use of the mails, by personal interview, or by telephone and may be
solicited by officers and directors, and by the other employees of the Company.
All costs of solicitation of proxies will be borne by the Company.
All shares of common stock of the Company, par value $.01 per share
("Common Stock") represented by proxies received will be voted in accordance
with instructions contained therein. In the absence of voting instructions, the
shares of Common Stock will be voted for the nominees listed herein. Any proxy
may be revoked at any time prior to its exercise by filing with the Secretary of
the Company a written notice of revocation, by delivering a duly executed proxy
bearing a later date, or by attending the Annual Meeting and voting in person.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
At the close of business on August 28, 1998, there were 13,822,543
shares of Common Stock outstanding, which represent all of the voting securities
of the Company. Each share of Common Stock is entitled to one vote per share.
Stockholders do not have cumulative voting rights in the election of directors
to the Board. Only stockholders of record at the close of business on September
25, 1998 will be entitled to vote at the Annual Meeting. Abstention from voting
at the Annual Meeting will be counted neither for nor against the election of
any nominee for director.
1
<PAGE> 4
The following table sets forth, as of September 19, 1998, certain
information as to the number of shares of Common Stock of the Company
beneficially owned by each person who is known by the Company to own
beneficially more than 5% of its outstanding shares of Common Stock based upon
reports on Schedule 13D filed with the Securities and Exchange Commission (the
"SEC") or other reliable information.
<TABLE>
<CAPTION>
Name and Address of Benefical Owner (1) Title of Amount and Nature of Percent of
- - --------------------------------------- Class Beneficial Ownership Class
------------------------------------------------------------
<S> <C> <C> <C>
Food Research Corporation Common Stock 7,181,588 52.0%
85 South Bragg Street, Suite 600
Alexandria, Virginia 22312
Gruber McBaine Capital Management Common Stock 1,590,857 11.5%
50 Osgood Place
San Francisco, California 94133
</TABLE>
(1) Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities.
The following table sets forth as of September 19, 1998 the beneficial
ownership of each director, nominee for director, each named executive officer,
and the directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
NUMBER PERCENT
NAME OF BENEFICIAL OWNER OF SHARES OF CLASS
- - ------------------------ ------------ ---------
<S> <C> <C>
Jean-Louis Vilgrain................................................... 7,181,588
Alexandre Vilgrain.................................................... 7,181,588
Stanislas Vilgrain (2)................................................ 7,395,588 (1) 1.5%
Carl Youngman (2)..................................................... 62,000 (1) *
Michael C. McCloud (2)................................................ 88,950 (1) *
Robert Murphy (2)..................................................... 20,000 (1) *
Leara L. Dory (2)..................................................... 27,813 (1) *
Directors, nominees and officers
as a group (11 persons)(1)(2)....................................... 7,594,351 54.9%
</TABLE>
* Less than one percent.
(1) Jean-Louis Vilgrain, Chairman of the Company, is Chairman and President
of Food Research Corporation a Delaware corporation ("FRC"). FRC is a
controlled subsidiary of Secria Europe, S.A. ("Secria Europe").
Jean-Louis Vilgrain, is also a director of Secria Europe, the equity
ownership of Secria Europe is held in equal amounts by the five
children of Jean-Louis Vilgrain, including Stanislas Vilgrain, an
officer and director of the Company, and Alexandre Vilgrain, a director
of the Company. As a result of his directorship in Secria Europe and
his position as President and director of FRC, Jean-Louis Vilgrain may
be deemed to be the beneficial owner of the 7,181,588 shares of Common
Stock of the Company held directly by FRC. In addition, as a result of
their ownership of a 20% equity interest in Secria Europe, Stanislas
and Alexandre Vilgrain each respectively, may be deemed to be the
beneficial owner of these 7,181,588 shares of Common Stock of the
Company held by FRC.
2
<PAGE> 5
(2) Includes options to purchase the Company's Common Stock granted under
the Company's 1992 Stock Option Plan that are exercisable currently or
within 60 days after August 28, 1998 in the amounts of 109,500 shares
for Stanislas Vilgrain, 60,000 for Carl Youngman; 75,000 for Michael
McCloud; 20,000 for Robert Murphy, and 27,813 for Leara Dory.
ELECTION OF DIRECTORS
Eight nominees for director are to be elected to the Board for one year
to serve until the Annual Meeting of Stockholders in 1999 and until their
successors are elected and qualified. Six nominees are currently serving as
directors, while two nominees, Mr. David Jordan and Ms. Nancy Schaefer are being
nominated for their initial term.
Unless otherwise specified, proxies received will be voted for the
election of the eight nominees to the Board set forth below. All such nominees
have indicated that they are willing and able to serve as directors. If any
nominee becomes unable or unwilling to serve, the accompanying proxy may be
voted for the election of such other person as shall be designated by the Board.
Each director will be elected to the Board by a plurality vote of Common Stock
represented, in person or by proxy, at the Annual Meeting. Therefore, an
abstention from voting will be counted neither for nor against the election of
any nominee for director to the Board.
The name, principal occupation and selected biographical information of
each nominee to the Board are set forth below:
Mr. Jean-Louis Vilgrain, age 64, has been Chairman of the Company since
September 1977 and has served as director since November 1974. In addition, Mr.
J.L. Vilgrain served as Chief Executive Officer of the Company from September
1977 until October 1993. Mr. J.L. Vilgrain is Chairman and President of the
JLVilgrain Group, and is President of Secria Europe, a French holding company
controlling the JLVilgrain Group. The JLVilgrain Group is an international
consortium of food related businesses and industries with interests ranging from
production engineering to retail food establishments. He is also Chairman and
President of FRC, the majority shareholder of the Company, and a holding company
for certain African and Pacific Rim companies. Mr. J.L. Vilgrain was President
from 1978 to 1989 of Grands Moulins de Paris, an international milling and food
processing company incorporated in France.
Mr. Stanislas Vilgrain, age 39, was appointed President and Chief
Executive Officer in October 1993, having served as President and Chief
Operating Officer of the Company since June 1991 and as a director since 1991.
He served as President of the Vie de France Culinary Division from July 1987 to
June 1991. Previously, he was employed by Vie de France Corporation as Director
of Staff Operations from August 1986 through June 1987. He was Manager of the
Vie de France Corporation's San Francisco bakery from January 1986 through
August 1986, after having served as Assistant Manager of the Denver bakery from
July 1984 through December 1985. Prior to joining Vie de France Corporation, he
was Assistant to the Director of Research & Development for the Bakery Division
of Grands Moulins de Paris from June 1983 to July 1984, and was Regional Manager
of Operations and Sales from July 1982 through May 1983 for O.F.U.P., a
publication distributor in Paris, France. Mr. Stanislas Vilgrain is the son of
Mr. Jean-Louis Vilgrain and the brother of Mr. Alexandre Vilgrain.
3
<PAGE> 6
Mr. Alexandre Vilgrain, age 42, has been employed by S.O.M.D.I.A.A., an
international food processing company, since 1980. He has served in the capacity
of Vice General Manager since January 1987. From January 1982 to December 1986
he served as Secretary, and from April 1980 to December 1981 he was Field
Manager of that company. In 1995, Mr. A. Vilgrain was appointed President of
SETUCAF, a holding company for the JLVilgrain Group trading in the sugar and
cereal industry in Africa. He was elected to the Board in 1991. Mr. Alexandre
Vilgrain is the son of Mr. Jean-Louis Vilgrain, and the brother of Mr. Stanislas
Vilgrain.
Mr. Bruno Goussault, age 56, has been employed since 1991 by Centre de
Recherche d'Etude pour l'Alimentation (a food industry research center) as
Scientific Managing Director. From 1981 to 1990, he served as Director of
Research for the Institut Superieur de l'Alimentation (Food Industry Institute),
while from 1975 to 1981 he served as Assistant Laboratory Director for the
Institute. Prior to working at the Institute, Mr. Goussault worked in a number
of capacities within the food engineering industry. Mr. Goussault received an
advanced degree in engineering from the world renown National School of
Agricultural and Food Industries. He also holds several other advanced degrees,
including a Doctorate of Economic Development from Paris Pantheon. Mr. Goussault
is considered internationally as a leading expert in the sous vide field. He
became a member of the Board in 1993.
Mr. Carl M. Youngman, age 55, was appointed Treasurer in October 1996.
He served as Chief Financial Officer of the Company from February 1996 to
November 1997. Mr. Youngman has over twenty five years of experience in
executive-level positions. During this period he has been an executive in over
twenty companies and an advisor to over fifty other companies. From 1993 to the
present, Mr. Youngman has been the senior partner of Youngman and Charm, a
professional firm which specializes in corporate renewal and corporate finance.
Mr. Youngman holds a B.S. degree in Electrical Engineering from Worcester
Polytechnic Institute and a Master's Degree from Harvard Business School. He is
a member of the Audit and Stock Option Committees of the Board.
Carl M. Youngman, signed a consent decree December 4, 1995, to resolve
an action brought against him by the SEC for alleged insider-trading in
violation of the federal securities laws. The transaction at issue occurred in
1992 and involved Youngman's purchase of shares of American Biltrite Inc.,
("ABL") allegedly on the basis of material non-public information conveyed to
him by a friend who was ABL's Chief Operating Officer. By signing the decree,
Youngman consented to an Order issued by the United States District Court for
the District of Massachusetts, enjoining him from future violation of Section
10(b) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78j(b)) and rule
10b-5 thereunder (17 C.F.R. Section 240.10b-5), as well as requiring him to pay
approximately $9,000 to the SEC representing the profits from the transaction
plus interest, and a penalty.
Mr. Charles McGettigan, age 52, was a co-founder and is a general
partner of Proactive Investment Managers, L.P. which is the general partner of
Proactive Partners, L.P., a San Francisco-based merchant banking fund. Mr.
McGettigan is a graduate of Georgetown University and has been an investment
banker since receiving his MBA in Finance from the Wharton School at the
University of Pennsylvania in 1969. From 1970 to 1978 Mr. McGettigan was with
Blyth Eastman Dillon's corporate finance department in New York and then in San
Francisco from 1978 to 1980. In 1975, he was made a partner at Blyth and a
Senior Vice President in 1978. He was a Senior Vice President of Dillon, Read &
Co., running its corporate finance activities in San Francisco from 1980 through
1982. In January 1983, Mr. McGettigan was a founding partner of Woodman,
Kirkpatrick & Gilbreath, which was sold to Hambrecht & Quist in September 1984.
Mr. McGettigan was a co-founder, in November 1988, and continues to be a
managing director of McGettigan, Wick & Co., Inc., an investment banking firm.
Mr. McGettigan currently serves on the Boards of Directors of Digital Dictation,
Inc., I-Flow Corporation, Modtech Inc., Onsite Energy Corporation, PMR
Corporation, Phoenix Network Inc., Sonex Research, Inc. Tanknology-NDE Corp.,
and Wray-Tech Instruments, Inc.
4
<PAGE> 7
Mr. David Jordan, age 35, is Vice President for Pepsi Cola North
America Fountain Division. From 1996 until recently Mr. Jordan was Senior Vice
President of Business Development for Shoney's Corporation. He served as
President of Sonic Corporation's Sonic Industries Franchising Subsidiary from
1994 to 1996. From 1989 to 1994 Mr. Jordan was Director of National Accounts for
Coca-Cola's Fountain Division and prior to that was District Manager for Proctor
and Gamble's Foodservice Division for 10 years. Mr. Jordan served as an Army
Lieutenant for the 82nd Airborne Command at Fort Bragg as a Master Parachuter
for three and a half years.
Ms. Nancy Shaeffer, age 45, is a founding partner of Consumer Dynamics,
a marketing and new products consultancy based in New York City. Prior to that,
she was a Consultant and Project Director for Kane, Bortree and Faith Popcorn.
She began her career in advertising at Young & Rubicam, followed by marketing at
General Foods, where she was the Vice President of Marketing for Culinova, a
refrigerated meals venture. In her capacity as a consultant, she has worked with
leading food companies like Kraft Foods, Entemann's, Con Agra, Campbell Soup
Company, Clorox Foods and Lipton. Ms. Schaefer has a B.A. from Occidental
College in Los Angeles, and an MBA from Columbia University in New York City.
BOARD COMMITTEES AND MEETINGS
Active committees of the Board include the Audit Committee, the Stock
Option Committee, the Compensation Committee and the Technology Committee.
During fiscal year 1998 the Audit Committee consisted of Mr. James
Hackney, Mr. Charles McGettigan and Mr. Carl Youngman. The Audit Committee's
functions include making recommendations to the Company regarding the selection
of independent accountants, conferring with the independent accountants and
reviewing the scope and fees of the prospective annual audit and the results of
their work, reviewing the financial statements and reviewing the adequacy of the
internal auditing, accounting, financial controls and procedures. The committee
held three meetings during fiscal year 1998, each committee member attended the
meetings with the exception that Mr. J. Hackney was unable to attend any of the
meetings.
The Stock Option Committee was established pursuant to the adoption of
the 1992 Stock Option Plan, and was made up of Mr. Hackney, Mr. McGettigan and
Mr. Youngman. The Stock Option Committee's function is to grant options to
eligible employees and to administer the 1992 Stock Option Plan. The committee
held three meetings during fiscal year 1998, each committee member attended the
meetings with the exception that Mr. J. Hackney was unable to attend any of the
meetings.
The Compensation Committee consisted of Mr. Hackney, Mr. McGettigan and
Mr. Youngman. The Compensation Committee's function is to review and approve all
compensation packages totaling over $99,500. The committee held three meetings
during fiscal year 1998, each committee member attended the meetings with the
exception that Mr. J. Hackney was unable to attend any of the meetings.
The Technology Committee is made up of Mr. Goussault and Mr. Stanislas
Vilgrain. The Technology Committee's function is to oversee the implementation,
application, efficiency and quality standards of sous vide technology to the
Company's production facilities. This committee meets through on-site inspection
and performs written recommendations to Company management on an as-needed
basis. Both committee members were present at all of the meetings of the
committee during fiscal year 1998.
5
<PAGE> 8
The Board currently does not have a nominating committee. Although
there are no formal procedures for the stockholders to nominate persons to serve
on the Board, the Board will consider recommendations from stockholders, which
should be addressed to Leara Dory, Secretary of the Company, at the Company's
address.
During fiscal year 1998, there were three regular meetings of the Board
of Directors. Each Board member attended the meeting during his respective
directorship, with the exception that Mr. J. Hackney was unable to attend two
meetings and Mr. A. Vilgrain was unable to attend any of the meetings.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors and persons who own more that ten percent of the
issued and outstanding shares of Common Stock to file reports of beneficial
ownership and changes in beneficial ownership with the SEC and to furnish copies
of all Section 16(a) forms to the Company.
On September 23, 1998 the annual Form 5 was filed with the SEC for
those officers falling under the guidelines of Section 16(a).
Based solely on the Company's review of the copies of such forms
received by it, or written representations from certain reporting persons that
no Form 5's were required for those persons, the Company believes that during
the last fiscal year all required filings were timely made as required by
Section 16(a). SEC rules require the Company to disclose all know delinquent
Section 16(a) filings by its officers, directors and ten percent shareholders in
this Proxy Statement.
NOTICE OF DELISTING FROM NASDAQ
On June 11, 1998 of fiscal year 1998 the Company was notified by the
NASDAQ Stock Market, Inc., that the Company has failed to maintain a value of
public float greater than or equal to $5,000,000 in accordance with Marketplace
Rule 4450(a) under Maintenance Standard 1. In addition, subsequent to fiscal
year 1998, on July 28, 1998 the Company received a second notification from
NASDAQ that the Company failed to maintain a closing bid price of greater than
or equal to $1.00 in accordance with Marketplace Rule 4450(a) under Maintenance
Standard 1. The Company has been given ninety days from the date of each letter
to come into compliance with the Maintenance Standard before the NASDAQ will
consider any delisting action with respect to the market value of the public
float and closing bid price of the Company.
6
<PAGE> 9
OFFICERS OF THE COMPANY
In addition to Stanislas Vilgrain and Carl Youngman from whom
biographical information is included in the "ELECTION OF DIRECTORS," the
following are officers of the Company:
<TABLE>
<CAPTION>
NAME AGE OFFICE HELD WITH COMPANY SINCE
- - ---- --- ------------------------ -----
<S> <C> <C> <C>
Arthur J. Stouffs 54 Vice President, Culinary Sales. 1990
Leara L. Dory 37 Secretary and Vice President of Finance 1996
Michael C. McCloud 35 Vice President of Sales and Marketing 1997
Robert Murphy 35 Vice President and Chief Financial Officer 1998
</TABLE>
Mrs. Dory was appointed to the position of Controller and Secretary in
February 1996. Subsequent to the end of fiscal year 1997, Mrs. Dory was promoted
to the position of Vice President of Finance. Mrs. Dory also remains the
Secretary for the Company. She came to the Company in November 1995 as the
Controller. Prior to joining the Company, Mrs. Dory was a Controller/Director of
Finance for Thomas Enterprises and Assistant Controller for Telecommunications
Technique Corporation from 1989 through 1995. Mrs. Dory has over 13 years of
experience in the manufacturing industry. Mrs. Dory is a Certified Public
Accountant and holds a B.S. degree in Accounting.
Mr. McCloud was appointed to the position of Vice President of Sales
and Marketing in March 1997. He came to the Company in October 1996. Prior to
joining the Company, Mr. McCloud was Vice President of Sales for Edwards Baking
Company since July 1994. He previously served as Edwards' Vice President of
Marketing, and as that Company's Director of Marketing. Before joining Edwards,
Mr. McCloud was Director of Marketing for Borden, Inc.'s snacks and
international consumer products division. He has also held sales and marketing
positions with units of Coca-Cola, USA and Proctor & Gamble. Mr. McCloud holds a
B.S. degree in
7
<PAGE> 10
Management.
Mr. Murphy joined the Company in November 1997 and was appointed
Vice President and Chief Financial Officer. Mr Murphy has 19 years of food
experience, 14 of which are in the manufacturing sector. Prior to joining the
Company, Mr. Murphy was the Senior Director of Acquisitions and Integration for
Edwards Baking Company. He also held the positions of Operations Controller and
Manager of Financial Systems and Development. Prior to Edwards, Mr. Murphy was a
Controller with Bunge Foods working in the Bakery and Dairy Industrial
Ingredient Divisions. Mr. Murphy started his finance career with a multi-unit
Burger King Franchisee and also spent five years in food retail operation with
the Grand Union Company. Mr Murphy has a B.S. degree in Accounting.
8
<PAGE> 11
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides information concerning compensation paid
by the Company to each of the named executive officers of the Company,
consisting of the Chief Executive Officer and the four other most highly
compensated officers of the Company for each of the Company's last three fiscal
years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION
NAME AND PRINCIPAL POSITION YEAR
----------------------------------------------------
OTHER ANNUAL
BONUS ($) COMPENSATION
SALARY ($) (3) ($) (4)
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
STANISLAS VILGRAIN (1,2)
President and Chief Executive Officer 1998 191,480 -- 15,353
President and Chief Operating Officer 1997 181,100 -- 16,000
President and Chief Operating Officer 1996 117,000 25,000 6,000
- - ----------------------------------------------------------------------------------------------------------------
MICHAEL MCCLOUD
Executive Vice President 1998 233,323 -- 3,257
1997 123,000 -- 5,300
- - ----------------------------------------------------------------------------------------------------------------
JEAN-PIERRE GUILLAUD
Vice President - Operations 1998 119,359 43,333 9,353
1997 90,000 10,000 7,748
1996 77,000 17,000
- - ----------------------------------------------------------------------------------------------------------------
GERARD BERTHOLON
Vice President - Technical Support and 1998 95,004 25,012 7,345
International Sales 1997 110,900 1,600 1,250
1996 92,000 6,500 --
- - ----------------------------------------------------------------------------------------------------------------
MICHAEL AEVERMANN
Vice President - Transportation and On-Board 1998 105,210 40,000
Services 1997 96,022 10,928 3,940
1996 87,967 19,027 3,940
- - ----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------
ALL OTHER
LONG TERM COMPENSATION
NAME AND PRINCIPAL POSITION COMPENSATION ($)(5)
-----------------------------------
SECURITIES
UNDERLYING
OPTIONS (#)
- - -----------------------------------------------------------------------------------
<S> <C> <C>
STANISLAS VILGRAIN (1,2)
President and Chief Executive Officer -- 6,286
President and Chief Operating Officer 200,000 3,374
President and Chief Operating Officer 8,000 3,254
- - -----------------------------------------------------------------------------------
MICHAEL MCCLOUD
Executive Vice President -- 5,274
150,000 --
- - -----------------------------------------------------------------------------------
JEAN-PIERRE GUILLAUD
Vice President - Operations -- 3,843
90,000 1,800
2,500 1,540
- - -----------------------------------------------------------------------------------
GERARD BERTHOLON
Vice President - Technical Support and 25,000 2,917
International Sales -- 2,062
27,500 1,830
- - -----------------------------------------------------------------------------------
MICHAEL AEVERMANN
Vice President - Transportation and On-Board -- 1,654
Services -- 800
2,500 293
- - -----------------------------------------------------------------------------------
</TABLE>
(1) Mr. Stanislas Vilgrain could be deemed to own a majority of the Common
Stock of the Company. See "VOTING SECURITIES AND PRINCIPAL HOLDERS
THEREOF", Note 1.
(2) At the October 1993 meeting of the Board of Directors, Mr. Stanislas
Vilgrain was appointed Chief Executive Officer, succeeding Mr. Jean-Louis
Vilgrain in that position.
(3) The Company's officers are eligible for cash bonuses under the Company's
Executive Incentive Compensation Plan, which are based on objectives determined
by the Compensation Committee of the Board. See "BOARD OF DIRECTORS REPORT ON
EXECUTIVE COMPENSATION".
(4) Other annual compensation consists of annual car allowances.
9
<PAGE> 12
(5) All other compensation consists of 401(k) and supplemental retirement plan
matching funds paid by the Company.
10
<PAGE> 13
STOCK OPTIONS
The following table sets forth certain information regarding stock
options granted to the named executive officers during the Company's 1998 fiscal
year. No stock appreciation rights were granted during fiscal year 1998.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1998
- - -----------------------------------------------------------------------------------------------------------------
CURRENT YEAR INDIVIDUAL GRANTS
- - -----------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL EXERCISE OR EXPIRATION DATE
UNDERLYING OPTIONS GRANTED TO BASE PRICE
OPTIONS EMPLOYEES IN ($/SH)
GRANTED FISCAL EAR
NAME (#) (1)
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stanislas Vilgrain 0
Michael McCloud 0
Jean-Pierre Guillaud 0
Gerard Bertholon (3) 25,000 22.73% 1.125 10/28/07
Michael Aevermann 0
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1998
- - ----------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK PRICE
APPRECIATION FOR OPTION TERM (2)
NAME
------------------ ------------------
5% ($) 10% ($)
- - -------------------------------- -------------------------------------
<S> <C> <C>
Stanislas Vilgrain
Michael McCloud
Jean-Pierre Guillaud
Gerard Bertholon (3) 17,688 44,824
Michael Aevermann
- - ----------------------------------------------------------------------
</TABLE>
(1) Under the 1992 Stock Option Plan (the "Plan"), each option granted under the
Plan may be exercised during the period of the employee's continuous employment
by the Company, or within three months thereafter, or within one year after the
employee's death or total and permanent disability, if the death or total and
permanent disability occurs while employed or if the death occurs during the
three months after termination; provided that no option is exercisable after its
expiration date. All options granted in fiscal year 1998 expire within ten years
from the date of grant. All unvested options of an optionee become fully vested
and exercisable upon the death or total and permanent disability of an optionee
and all unvested options of all optionees become fully vested and exercisable
upon a change of control of the Company. A change of control is defined as an
event, the result of which would be that more than 50% of the voting stock of
the Company would be owned by persons or entities other than FRC or any persons
controlling or controlled by FRC.
(2) These amounts are based on compounded annual rates of stock price
appreciation of five and ten percent over the ten year term of the options and
are mandated by the SEC. Actual gains, if any, on stock option exercises are
dependant on the future performance of the Common Stock, overall market
conditions, as well as the option holder's continued employment throughout any
applicable vesting period. Thus, the values reflected in this table are based on
hypothetical rates and these values may not be achieved or may be exceeded.
The value indicated in this table is a net amount, as the aggregate exercise
price has been deducted from the final appreciated value.
(3) The options were granted pursuant to the 1992 Stock Option Plan. Grants vest
and become exercisable to the extent of 25% of the total on the day of grant,
and 25% of the total on each of the first three anniversaries of the date
11
<PAGE> 14
of grant.
The following table sets forth certain information regarding stock
options exercised by the executive officers named in the Summary Compensation
Table during the Company's 1998 fiscal year and the year-end values of
unexercised options held by such executive officers.
AGGREGATED OPTION EXERCISES IN 1998 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------
Name Shares Acquired on Value Realized ($)
Exercise
- - ------------------------------------------------------------------------------------
<S> <C> <C>
Stanislas Vilgrain None None
Michael McCloud None None
Jean-Pierre Guillaud None None
Gerard Bertholon None None
Michael Aevermann None None
- - ------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------
Name Number of Unexercised Options Value of Unexercised in-the-money
at Fiscal Year End(#) options at Fiscal Year End (#)
Exercisable\ Exercisable\
Unexercisable Unexercisable
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Stanislas Vilgrain 109,500 \ 202,000 $0 \ $0
Michael McCloud 75,000 \ 75,000 $0 \ $0
Jean-Pierre Guillaud 52,375 \ 45,625 $0 \ $0
Gerard Bertholon 71,375 \ 25,625 $0 \ $0
Michael Aevermann 18,375 \ 625 $0 \ $0
- - ------------------------------------------------------------------------------------------------------------
</TABLE>
COMPENSATION OF DIRECTORS
Each Director, except for the Chairman and the President receives
$7,000 per year for serving on the Board and attending special and annual
meetings. For fiscal year 1998, the Chairman of the Board received a total of
$1,000 for serving in that capacity. Members of the committees receive $1,000
each for service on each committee. No fees are paid to members of the
Technology Committee, except as set forth below. The Company also reimburses
directors for their costs incurred in attending meetings of the Board of
Directors.
Mr. Goussault, who serves on the Technology Committee, provides
engineering consulting services to the Company through his own company, at his
normal billing rates. As a member of the Technology Committee, Mr. Goussault is
paid an annual fee of $15,000, less the amount of any engineering consulting
fees paid to him during the fiscal year.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
In fiscal year 1998 the full Board approved the Company's compensation
policy.
EXECUTIVE COMPENSATION OBJECTIVES AND POLICIES
The Board evaluates and sets the base salary for the Chief Executive
Officer of the (the "CEO") Company. The CEO evaluates and sets the base salaries
for all other executive officers of the Company. In addition, the Board
evaluates and sets the parameters for the Executive Incentive Compensation Plan
("EICP"). The Stock Option Committee of the Board administers the Company's
1992 Stock Option Plan.
12
<PAGE> 15
The major objective of the Company's compensation program is to align
compensation with business results. The Company's program is designed to (1)
attract, retain, and reward senior management who are able to meet and exceed
business objectives, (2) tie a meaningful portion of compensation to the
achievement of improved earnings growth and other business objectives, and (3)
provide stock-based long term incentives to executives that directly link their
compensation to stock appreciation. To this end, the components of the
compensation program include base salary, results-based cash incentives, and
long-term equity-based rewards.
Base Salary
The Directors set the base salary for the CEO based upon the historical
salary levels for the past five years, along with Company performance and
prevailing food service industry conditions. The CEO sets base salary for each
other executive officer based on the relative level of responsibility of the
respective position within the organization, and the base salaries paid to
executives holding similar positions within the same industry.
Incentive Compensation
The EICP provides the opportunity for eligible executives to earn a
specified percentage of division and/or Company operating income on the
achievement of pre-determined objectives. The Board establishes the percentages
and goals for the CEO, and the CEO establishes the percentages and the goals for
each other eligible executive based on the responsibility of each executive
position. The percentage so established for each executive is then applied to
revenues, profits, and achievement of targeted profit levels, or a combination
thereof, as deemed appropriate by the Board or the CEO, as the case may be. No
profit related incentive compensation is paid to these executives should the
results of the division be unprofitable.
Stock Option Program
The 1992 Stock Option Plan was established to provide additional
incentive and reward to those executives who deliver the results that maximize
stockholder value. Stock Options valued at fair market value as of the date of
grant provide potential reward based on the Company's future stock performance.
Additionally, the option program for executives utilizes vesting periods to
encourage key executives to continue in the employ of the Company. One of the
factors considered by the Stock Option Committee in granting options is the
relative level of responsibility of the executive officer's position within the
Company.
13
<PAGE> 16
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The compensation level for Mr. Stanislas Vilgrain, the CEO of the
Company is a combination of salary, incentive compensation, and stock options.
The Compensation Committee reviews the salary level of the CEO on an annual
basis and makes a recommendation to the Board, after consideration of company
performance relative to its business plan, individual performance of the CEO,
the expected objectives for the coming year, and other factors that the Board
may, in its discretion, deem relevant at that time.
In recognition of the responsibilities of the CEO, including that of
attaining the goal of Company profitability, the Board established Mr. S.
Vilgrain's incentive compensation program to include 3.5% consolidated after tax
profit if above budget, and other discretionary compensation as the Board deems
appropriate.
In preparation for making any decision regarding the grant of stock
options, the Stock Option Committee evaluates Mr. S. Vilgrain's past
achievements and his critical leadership role in the Company's future success.
In addition, the Stock Option Committee is mindful of the goals described above
and its intent to use the Stock Option Plan as a means to align the financial
interest of the CEO with those of the Company's stockholders.
Jean-Louis Vilgrain
Stanislas Vilgrain
Alexandre Vilgrain
Bruno Goussault
James Hackney
Charles McGettigan
Carl Youngman
The Board of Directors of
the Company
14
<PAGE> 17
FIVE-YEAR PERFORMANCE COMPARISON
The following graph shows the changes over the past five-year period in
the value of $100 invested in Common Stock of the Company, the NASDAQ Stock
Market-US Index and the Dow Jones Food Index. The Company has been notified by
NASDAQ that it no longer meets the requirement to be included in the NASDAQ
National Market. The Company is seeking a temporary or permanent waiver of these
requirements to maintain its inclusion. There can be no assurance that the
Company will be granted such waiver by NASDAQ. In the event that the Common
Stock is not included in the NASDAQ Market, there could be a material adverse
change in the price and liquidity of the Common Stock.
15
<PAGE> 18
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG CUISINE SOLUTIONS, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE DOW JONES FOOD INDEX
<TABLE>
<CAPTION>
June June June June June June
1993 1994 1995 1996 1997 1998
- - ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CUISINE SOLUTIONS, INC. 100.00 114.29 92.86 64.29 37.50 25.00
- - ------------------------------------------------------------------------------------------------------
NASDAQ STOCK MARKET (U.S.) 100.00 100.96 134.77 173.03 210.38 277.69
- - ------------------------------------------------------------------------------------------------------
DOW JONES FOOD 100.00 99.63 126.73 150.06 197.94 230.73
- - ------------------------------------------------------------------------------------------------------
</TABLE>
* $100 INVESTED ON 6/30/93 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JUNE 30.
<PAGE> 19
CERTAIN TRANSACTIONS
The Company receives consulting services under an agreement with Food
Investors Corporation ("FIC"), which is majority owned by the Secria Europe.
FRC, the majority stockholder of the Company, also owns Secria Europe. Pursuant
to the consulting agreement, FIC provides services related to management,
planning, strategy development and pursuing world-wide interests of the Company.
This agreement is renewable by the Company annually. The amount paid by the
Company to FIC in fiscal year 1998 was $144,000.
During fiscal year 1998 the Company issued an officer loan in the
amount of $375,000. The loan of $375,000 was combined with the loan this officer
had outstanding in the amount of $45,000 at the end of fiscal year 1997. The
revised loan amount of $420,000 bears interest of at 6.5% per annum and is
payable on October 1, 2002 and is collateralized by the officer's home.
Payments on the loan will be derived from the equity proceeds from the sale of
the officer's first residence, a portion of future annual bonuses to be paid to
the officer by the Company as negotiated. All outstanding balances of the note,
including principal and interest accrued thereon, shall become payable in full
on October 1, 2002. At the end of fiscal year 1998 the officer sold his first
residence and applied the net proceeds of $26,000 from the sale of the residence
as payment towards the loan.
At June 27, 1998 and June 28, 1997, the Company also has an employee
loan outstanding in the amount of $68,000 and $56,000, respectively. This loan
was made in two payments, $12,000 in fiscal year 1998 and $56,000 was made
during fiscal year 1996 and bears no interest through April, 1997. Effective
April, 1997 this loan was renewed, and interest shall accrue on the outstanding
principal of the note and shall be payable at a rate of 8.5% per annum,
commencing April, 2000. The note is due in full in April, 2002. The employee
will pay against the principal with 50% of all future cash bonuses earned with
the Company and any additional payments made by the employee, until the loan is
relinquished. This loan was established as a part of the employee's employment
contract.
Subsequent to fiscal year 1998 the Company issued one officer and
one employee loan in the amount of $55,000 and $85,000, respectively. The loan
of $55,000 is collateralized by the officer's first residence and bears
interest of 6.5% per annum. The payment of the note is payable from the net
equity proceeds on the sale of the collateralized property and shall be deemed
payable in full within two years from the date of the note if the property is
not sooner sold. The loan of $85,000 is collateralized by the employee's home
and bears interest at 6.6% per annum. The payment of the note is due and
payable in full five years from the date of the loan or six months after the
employee's termination whichever comes first.
In April 1998 Mr. Arthur Stouffs who was Vice President of Culinary
Sales was terminated. Mr. Stouffs was employed with the Company for eighteen
years and received a three year guaranteed severance package in the amount of
$322,000.
17
<PAGE> 20
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP, of Washington, DC was selected by the Board as
independent accountants to examine the financial statements of the Company for
the fiscal year ended June 27, 1998. KPMG Peat Marwick LLP was first engaged in
May 1996. It is anticipated that representatives of KPMG Peat Marwick LLP will
be present at the Annual Meeting, and will be given an opportunity to respond to
appropriate stockholder questions and to make a statement, if they so desire.
18
<PAGE> 21
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of stockholders intended to be presented at the next annual
meeting in order to be included in the 1998 proxy statement must be received by
the Corporate Secretary, Cuisine Solutions, Inc., 85 South Bragg Street,
Alexandria VA 22312, no later than June 11, 1999.
The Board knows of no other business which will be presented at the
Annual Meeting. If any other business is properly brought before the Annual
Meeting, proxies in the enclosed proxy form will be voted in respect thereof in
accordance with the judgements of the persons voting the proxies.
It is important that the proxies be returned promptly and that your
shares be represented in the Annual Meeting. Stockholders are urged to sign,
date and promptly return the enclosed proxy card in the enclosed envelope.
A copy of the Company's 1998 Annual Report to Stockholders accompanies
this Proxy Statement. The Company has filed an Annual Report for its fiscal year
ended June 27,1998 on Form 10-k with the SEC. Stockholders may obtain, free of
charge, a copy of the Form 10-K by writing to Leara Dory, the Secretary of the
Company, at the Company's address. The Edgar version of the Annual Report, 10-K
and Proxy will also be available on-line through the Company's Internet web site
(http://www.cuisinesolutions.com). The Company's symbol is CUIS.
By Order of the Board of Directors
Jean-Louis Vilgrain
Chairman of the Board
19
<PAGE> 22
<TABLE>
<S> <C>
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CUISINE SOLUTIONS, INC. The undersigned hereby appoints Jean-Louis Vilgrain and Stanislas Vilgrain, and each of
85 S. BRAGG STREET, SUITE 600 each of them, as proxies, with power of substitution and hereby authorizes them to
ALEXANDRIA, VA 22312 represent and to vote, as designated below, the shares of common stock of Cuisine
Solutions, Inc. held of record by the undersigned on September 25, 1998 at the annual
meeting of stockholders to be held on October 28, 1998 or any adjournment thereof.
</TABLE>
- - ----------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITS NOMINEES.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS: [ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
</TABLE>
Jean-Louis Vilgrain, Stanislas Vilgrain, Alexandre Vilgrain, Bruno Goussault,
David Jordan, Charles McGettigan, Nancy Schaefer and Carl M. Youngman
(INSTRUCTION: To withhold authority to vote for any individual nominee mark 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 this meeting.
(THIS PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE.)
<PAGE> 23
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, 2& 3 LISTED ON THE REVERSE SIDE.
Please sign below exactly as name appears on
the account. 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.
DATE:________________________________, 1998
--------------------------------------------
Signature
--------------------------------------------
Signature if held jointly.
PLEASE MARK, SIGN DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
2
