SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c)
or ss.240.14a-12
Worthington Foods, Inc.
________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
WORTHINGTON FOODS, INC.
900 Proprietors Road
Worthington, Ohio 43085
(614) 885-9511
Worthington, Ohio
March 17, 1997
To the Shareholders of
Worthington Foods, Inc.:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of the Shareholders
(the "Annual Meeting") of Worthington Foods, Inc. (the "Company") will be held
at The Worthington Hills Country Club, 920 Clubview Blvd. South, Worthington,
Ohio 43235 on Tuesday, April 22, 1997, at 11:00 a.m., local time, for the
following purposes:
1. To elect three directors to serve for terms of three years each.
2. To consider and vote upon a proposal to adopt an amendment to Article
FOURTH of the Company's Amended and Restated Articles of Incorporation
which would increase the authorized number of Common Shares from
15,000,000 to 30,000,000.
3. To consider and vote upon a proposal to amend the Worthington Foods,
Inc. 1993 Stock Option Plan for Non-Employee Directors.
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment(s) thereof.
Shareholders of record at the close of business on March 3, 1997 will be
entitled to receive notice of and to vote at the Annual Meeting and any
adjournment(s) thereof.
You are cordially invited to attend the Annual Meeting. The vote of each
shareholder is important, whatever the number of Common Shares held. Whether or
not you plan to attend the Annual Meeting, please sign, date and return your
proxy promptly in the enclosed envelope. Should you attend the Annual Meeting,
you may revoke your proxy and vote in person. Attendance at the Annual Meeting
will not, in and of itself, constitute revocation of a proxy.
By Order of the Board of Directors,
/s/ Ronald L. McDermott
__________________________________________
Ronald L. McDermott, Secretary
-1-
<PAGE>
WORTHINGTON FOODS, INC.
900 Proprietors Road
Worthington, Ohio 43085
(614) 885-9511
PROXY STATEMENT
This Proxy Statement and the accompanying proxy are being mailed to
shareholders of Worthington Foods, Inc., an Ohio corporation (the "Company"), on
or about March 17, 1997 in connection with the solicitation of proxies by the
Board of Directors of the Company for use at the 1997 Annual Meeting of
Shareholders of the Company (the "Annual Meeting") called to be held on Tuesday,
April 22, 1997, or at any adjournment(s) thereof. The Annual Meeting will be
held at 11:00 a.m., local time, at The Worthington Hills Country Club, 920
Clubview Blvd. South, Worthington, Ohio 43235.
A proxy for use at the Annual Meeting accompanies this Proxy Statement and
is solicited by the Board of Directors of the Company. A shareholder of the
Company may use his proxy if he is unable to attend the Annual Meeting in person
or wishes to have his Common Shares voted by proxy even if he does attend the
Annual Meeting. Without affecting any vote previously taken, any shareholder
executing a proxy may revoke it at any time before it is voted by filing with
the Secretary of the Company, at the address of the Company set forth on the
cover page of this Proxy Statement, written notice of such revocation; by
executing a later-dated proxy which is received by the Company prior to the
Annual Meeting; or by attending the Annual Meeting and giving notice of such
revocation in person. Attendance at the Annual Meeting will not, in and of
itself, constitute revocation of a proxy.
Only shareholders of the Company of record at the close of business on
March 3, 1997 are entitled to receive notice of and to vote at the Annual
Meeting and any adjournment(s) thereof. At the close of business on March 3,
1997, 8,592,562 Common Shares were outstanding and entitled to vote. Each common
share of the Company entitles the holder thereof to one vote on each matter to
be submitted to shareholders at the Annual Meeting.
The Company will bear the costs of preparing and mailing this Proxy
Statement, the accompanying proxy and any other related materials and all other
costs incurred in connection with the solicitation of proxies on behalf of the
Board of Directors. Proxies will be solicited by mail and may be further
solicited, for no additional compensation, by officers, directors, or employees
of the Company by further mailing, by telephone, or by personal contact. The
Company will also pay the standard charges and expenses of brokerage houses,
voting trustees, banks, associations and other custodians, nominees, and
fiduciaries, who are record holders of Common Shares not beneficially owned by
them, for forwarding such materials to and obtaining proxies from the beneficial
owners of such Common Shares.
The Annual Report to the Shareholders of the Company for the fiscal year
ended December 31, 1996 is enclosed herewith.
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<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 3, 1997, certain information
with respect to the Company's Common Shares beneficially owned by the only
person known by the Company to beneficially own more than 5% of the outstanding
Common Shares of the Company:
Percent
Name and Address of Amount and Nature of of
Beneficial Owner Beneficial Ownership Class (1)
- ------------------- -------------------- ---------
The Huntington Trust Company, N.A. 722,001 8.4%
41 South High Street
Columbus, Ohio 43215 (2)
________________
(1) The percent of class is based upon 8,592,562 Common Shares outstanding on
March 3, 1997.
(2) Includes 640,728 Common Shares held by the Worthington Foods, Inc. Employee
Stock Ownership Plan (the "ESOP"). The Huntington Trust Company, as
trustee, has sole dispositive power and the Compensation Committee of the
Board of Directors has sole investment power with respect to the Common
Shares held by the ESOP and each participant in the ESOP has sole voting
power with respect to the Common Shares held by the ESOP which are
allocated to such participant's account in the ESOP. Included are an
aggregate of 65,000 Common Shares held in the ESOP for the accounts of
executive officers of the Company as to which such executive officers have
sole voting power but no investment/dispositive power.
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<PAGE>
SECURITY OWNERSHIP OF
CERTAIN OFFICERS AND DIRECTORS
The following table sets forth, as of March 3, 1997, certain information
with respect to the Company's Common Shares owned beneficially by each director,
by each nominee for election as a director, by each of the executive officers
named in the Summary Compensation Table and by all directors and executive
officers of the Company as a group:
Percent
Name of Amount and Nature of of
Beneficial Owner Beneficial Ownership (1) Class (2)
- ----------------- ------------------------ ---------
Allan R. Buller (5)(6) 240,883 (7)(8) 2.8%
Dale E. Twomley (5)(6) 192,976 (7)(9) 2.2
Donald B. Burke (6) 21,863 (7) (3)
William T. Kirkwood (6) 64,060 (7)(14) (3)
Ronald L. McDermott (6) 37,610 (7) (3)
James C. Remer (6) 80,115 (7) (3)
Jay L. Robertson (6) 66,999 (7)(10) (3)
Roger D. Blackwell (5) 39,998 (7)(11) (3)
Emil J. Brolick (4)(5) - (3)
Theodore A. Hamer (5)(15) 71,029 (16) (3)
George T. Harding, IV (5) 296,745 (7)(12) 3.4
Donald G. Orrick (5) 163,298 (7)(13) 1.9
William D. Parker (5) 17,999 (7) (3)
Francisco J. Perez (4)(15) 200 (3)
Donald B. Shackelford (4)(5) 36,500 (7) (3)
All Executive Officers 1,330,275 (7) 15.0%
and Directors (including
nominees) as a group
(15 individuals)
______________
(1) Unless otherwise noted, the beneficial owner has sole voting, investment
and dispositive power with respect to all of the Common Shares shown to be
owned by such person in the table.
(2) The percent of class is based upon 8,592,562 Common Shares outstanding on
March 3, 1997 and the number of Common Shares, if any, as to which the
named person has the right to acquire beneficial ownership upon the
exercise of stock options exercisable within 60 days of March 3, 1997.
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<PAGE>
(3) Reflects ownership of less than 1% of the outstanding Common Shares of the
Company.
(4) Nominee for election as a director of the Company.
(5) Director of the Company.
(6) Executive officer of the Company.
(7) The common share ownership information for Messrs. Twomley, Burke,
Kirkwood, McDermott, Remer and Robertson and for all executive officers as
a group includes 17,717; 754; 14,935; 3,844; 19,813; 7,937 and 65,000
shares, respectively, held for the accounts of such persons in the ESOP as
to which shares such persons have sole voting power but no investment
power. The common share ownership for Messrs. Twomley, Burke, Kirkwood,
McDermott, Remer and Robertson and all executive officers as a group
includes 73,334; 6,110; 39,499; 25,583; 25,583; 29,582 and 199,691 shares,
respectively, that are subject to options exercisable within 60 days
following March 3, 1997. The common share ownership for each of Messrs.
Blackwell, Harding, Orrick, Parker and Shackelford includes 16,666 shares
and for Mr. Buller includes 8,666 shares that are subject to an option
exercisable within 60 days following March 3, 1997.
(8) Includes 172,793 Common Shares held in trust established by Mr. Buller as
to which Mr. Buller and his spouse act as joint trustees and have shared
voting and investment/dispositive power. Also includes 53,249 Common Shares
held in trust established by Mr. Buller's spouse as to which she and Mr.
Buller act as joint trustees and have shared voting and
investment/dispositive power.
(9) Includes 49,872 Common Shares held by Mr. Twomley's spouse as to which she
has sole voting and investment/dispositive power and as to which Mr.
Twomley disclaims beneficial ownership. Also included are 1,833 Common
Shares held in an IRA trust for the benefit of Mr. Twomley as to which Mr.
Twomley has sole voting and investment/dispositive power. Also included are
3,332 Common Shares held by Mr. Twomley's children.
(10) Includes 5,688 Common Shares held jointly by Mr. Robertson and his spouse
as to which Mr. Robertson shares voting and investment/dispositive power.
(11) Includes 15,666 Common Shares held in an IRA trust for the benefit of Mr.
Blackwell as to which Mr. Blackwell has sole voting and investment/disposi-
tive power.
(12) Includes 48,600 Common Shares held by Dr. Harding's spouse as to which she
has sole voting and investment/dispositive power and as to which Dr.
Harding disclaims beneficial ownership. Also included are 77,399 Common
Shares held in an IRA trust for the benefit of Dr. Harding as to which Dr.
Harding has sole voting and investment/dispositive power.
(13) Includes 1,966 Common Shares held by Dr. Orrick's spouse as to which she
has sole voting and investment/dispositive power and as to which Dr. Orrick
disclaims beneficial ownership. Includes 144,666 Common Shares held in a
Keogh plan for the benefit of Dr. Orrick as to which Dr. Orrick has sole
voting and investment/ dispositive power.
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<PAGE>
(14) Includes 164 Common Shares held by Mr. Kirkwood's step-children as to which
shares Mr. Kirkwood disclaims beneficial ownership.
(15) Theodore A. Hamer, a director of the Company, has notified the Board of
Directors of his decision to retire from the Board of Directors effective
immediately prior to the Annual Meeting. The Board of Directors has named
Francisco J. Perez as a nominee for the election as a director at the
Annual Meeting to serve as the successor to Mr. Hamer.
(16) Includes 3,333 Common Shares held by Mr. Hamer's spouse as to which she has
sole voting and investment/dispositive power and as to which Mr. Hamer
disclaims beneficial ownership.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act") requires the Company's directors and executive officers to file reports of
ownership and changes of ownership with the Securities and Exchange Commission
("SEC"). The Company assists its directors and executive officers in completing
and filing those reports. The Company believes that during the year ended
December 31, 1996, all filing requirements applicable to its directors and
executive officers were complied with.
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<PAGE>
ELECTION OF DIRECTORS
(Item 1 on Proxy)
In accordance with Section 2.02 of the Amended Regulations of the Company,
three directors are to be elected at the Annual Meeting for terms of three years
each and until their respective successors are elected and qualified. It is the
intention of the persons named in the accompanying proxy to vote the Common
Shares represented by the proxies received pursuant to this solicitation for the
nominees named below who have been designated by the Board of Directors, unless
otherwise instructed on the proxy.
The following table gives certain information concerning each nominee for
election as a director of the Company. Unless otherwise indicated, each person
has held his principal occupation for more than five years.
<TABLE>
Director of
Position(s) Held with the the Company Nominee
Company and Principal Continuously For Term
Nominee Age Occupation(s) Since Expiring In
- --------------------- ----- ------------------------- ------------ -----------
<S> <C> <C> <C> <C>
Emil J. Brolick 49 Senior Vice President, Strategic 1997(1) 2000
Planning, Research & New Product
Marketing, Wendy's International,
Inc.
Francisco J. Perez 53 President and Chief Executive (2) 2000
Officer of Kettering Medical
Center, Kettering, Ohio since 1994;
prior thereto, he was President and
Chief Executive Officer of New
England Memorial Hospital,
Stoneham, Massachusetts
Donald B. Shackelford 64 Chairman of State Savings Bank, a 1991 2000
savings and loan institution based
in Columbus, Ohio (3)
(1) Mr. Brolick was appointed to the Board of Directors on February 18, 1997 to
fill a vacancy on the Board which occurred in January, 1997.
(2) Mr. Perez will be nominated at the Annual Meeting for election as a
director to serve as the successor to Theodore A. Hamer who is retiring as
a director of the Company effective as of the date of the Annual Meeting.
(3) Mr. Shackelford is also a director of The Limited, Inc., Intimate Brands,
Inc. and Progressive Corporation.
</TABLE>
- 7 -
<PAGE>
While it is contemplated that all nominees will stand for election, if one
or more of the nominees at the time of the Annual Meeting should be unavailable
or unable to serve as a candidate for election as a director of the Company, the
proxies reserve full discretion to vote the Common Shares represented by the
proxies for the election of the remaining nominees and for the election of any
substitute nominee or nominees designated by the Board of Directors. The Board
of Directors knows of no reason why any of the above-mentioned persons will be
unavailable or unable to serve if elected to the Board.
Under Ohio law and the Company's Regulations, the three nominees receiving
the greatest number of votes will be elected as directors. Common Shares as to
which the authority to vote is withheld are not counted toward the election of
directors, or toward the election of the individual nominees specified on the
form of proxy.
The following table gives certain information concerning the current
directors whose terms will continue after the Annual Meeting. Unless otherwise
indicated, each person has held his principal occupation for more than five
years.
<TABLE>
Director of
Position(s) Held with the the Company Nominee
Company and Principal Continuously For Term
Name Age Occupation(s) Since Expiring In
- --------------------- ----- ------------------------- ------------ -----------
<S> <C> <C> <C> <C>
Roger D. Blackwell 56 Professor of Marketing at The 1992 1998
Ohio State University,
Columbus, Ohio; self-employed
as a business consultant (1)
Donald G. Orrick 68 Retired since 1992; prior 1983 1998
thereto, Dr. Orrick was in
the private practice of
dentistry in the Columbus,
Ohio metropolitan area
Dale E. Twomley 57 President and Chief 1985 1998
Executive Officer of the
Company
Allan R. Buller 80 Chairman of the Board since 1982 1999
1990, and Treasurer since
1986, of the Company
George T. Harding, IV 69 Physician and since 1995, 1982 1999
Chairman of the Board of
Harding, a psychiatric
hospital in Worthington, Ohio;
prior thereto he was President
of Harding.
- 8 -
<PAGE>
William D. Parker 60 Retired since January, 1997; 1996 1999
from 1993 to January, 1997 he was
President of the Kroger Columbus,
Ohio Marketing Area, a division of
The Kroger Company, a multi-state
supermarket chain; prior thereto, he
was President of the Kroger Dallas,
Texas Marketing Area and the Delta
Marketing Area in Memphis,
Tennessee.
(1) Mr. Blackwell is also a director of Max & Erma's, Checkpoint Systems, Inc.,
Intimate Brands, Abercrombie & Fitch, AirNet Systems, Flex-Funds, Applied
Industrial Technologies and Cheryl & Co.
</TABLE>
There are no family relationships among any of the directors, nominees for
election as directors and executive officers of the Company.
Except as discussed below, each of the directors of the Company who is not
a full-time employee of the Company ("Non-Employee Director") has been granted a
non-qualified stock option (an "NQSO") to purchase 16,666 Common Shares of the
Company pursuant to the 1993 Stock Option Plan for Non-Employee Directors.
Currently, any individual who becomes a Non-Employee Director is automatically
granted an NQSO to purchase 16,666 Common Shares effective on the third business
day following the first meeting of the Board of Directors after his election or
appointment to the Board. The exercise price of each NQSO granted to a
Non-Employee Director is equal to the fair market value of the Common Shares on
the date of grant. NQSO's granted to Non-Employee Directors have terms of five
years and may not be exercised during the six months following their date of
grant.
At the Annual Meeting, the shareholders will vote on a proposal to amend
the Worthington Foods, Inc. 1993 Stock Option Plan for Non-Employee Directors.
Mr. Brolick did not receive a NQSO upon his joining the Board of Directors in
February of 1997 because he will receive a NQSO following the Annual Meeting if
the proposal to amend such plan is adopted by the shareholders. A discussion of
this proposal can be found beginning on page 15.
- 9 -
<PAGE>
The Board of Directors of the Company held a total of five meetings during
the Company's 1996 fiscal year. Each director attended 75% or more of the
aggregate of the total number of meetings held by the Board of Directors during
the period he served as a director and the total number of meetings held by all
committees of the Board of Directors on which he served during the period he
served.
The Company's Board of Directors has standing Audit, Compensation and
Nominating Committees.
The Audit Committee consists of Theodore A. Hamer, George T. Harding, IV,
Donald B. Shackelford and William D. Parker. The function of the Audit Committee
is to review the adequacy of the Company's system of internal controls, to
investigate the scope and adequacy of the work of the Company's independent
public accountants and to recommend to the Board of Directors a firm of
accountants to serve as the Company's independent public accountants. The Audit
Committee met two times during the 1996 fiscal year.
During 1996, the Compensation Committee consisted of Roger D. Blackwell and
Donald G. Orrick and John B. Gerlach. (Mr. Gerlach passed away during January,
1997. It is anticipated that the Board of Directors will appoint a new member to
the Compensation Committee prior to the Annual Meeting.) The function of the
Compensation Committee is to review and supervise the operation of the Company's
compensation plans, to select those employees who may participate in each plan
(where selection is required), to prescribe the terms of any stock options
granted under the Company's stock option plan for employees and to approve the
compensation of the Company's executive officers. The Compensation Committee met
twice during the 1996 fiscal year.
The Nominating Committee consists of Roger D. Blackwell, Theodore A. Hamer
and Dale E. Twomley and met twice during 1996. The functions of the Nominating
Committee include the consideration of the size and composition of the Board,
review and recommendation of individuals for election as directors or officers
of the Company, and review of the criteria for selecting directors. In carrying
out its responsibilities for recommending candidates to fill vacancies on the
Board and in recommending a slate of directors for election by the shareholders
at the Annual Meeting, the Committee will consider candidates suggested by other
directors, employees and shareholders. Suggestions for candidates, accompanied
by biographical material for evaluation, may be sent to the Secretary of the
Company at its Corporate Headquarters. Individuals suggested as candidates
should have high level management experience in a relatively complex
organization or have experience dealing with complex problems. A candidate also
must include a willingness to attend scheduled Board and Committee meetings.
- 10 -
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The compensation paid to the Company's executive officers is evaluated and
approved by the Compensation Committee of the Company's Board of Directors. The
Compensation Committee consists of three directors, all of whom are Outside
Directors.
All decisions of the Compensation Committee are reviewed by the full Board
of Directors. During 1996, none of the compensation decisions of the
Compensation Committee were modified or rejected in any material way by the full
Board.
COMPENSATION PROGRAM FOR EXECUTIVE OFFICERS
The Company's compensation program for its executive officers is based on
the following objectives:
o Total compensation of the executive officers should be linked to the
financial performance of the Company.
o The compensation paid to the executive officers of the Company should
compare favorably with executive compensation levels of other
similarly-sized companies so that the Company can continue to attract and
retain outstanding executives.
o The compensation program should reward outstanding individual performance
and contributions as well as experience.
The Company's executive compensation program consists of annual cash
compensation and longer-term incentive compensation. Historically, annual cash
compen-sation has been comprised of base salary and an annual incentive award.
In determining executive compensation, the Compensation Committee wishes to
maintain competitive salaries for the officers by targeting compensation within
the competitive ranges of data compiled by the Company's executive compensation
consulting firm. The Compensation Committee believes that the emphasis should be
on performance linked rewards, so that compensation for key executives improves
in line with improvements in return to the shareholders. Base salaries are
targeted at adequate minimum total cash compensation in a year when no bonus is
earned.
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<PAGE>
Base salaries awarded in 1996 by the Compensation Committee to each
executive officer, other than the Chief Executive Officer, were based upon a
recommendation to the Compensation Committee made by Mr. Twomley, the Company's
Chief Executive Officer. Mr. Twomley makes his recommendations after considering
the individual performance, duties, responsibilities, experience and tenure of
each executive officer, general current economic conditions, the recent
financial performance of the Company and other factors. The Compensation
Committee approves the base salary of each of these executive officers after
meeting with Mr. Twomley and discussing with him his salary recommendations and
the basis for his recommendations. The Compensation Committee determines Mr.
Twomley's base salary on the basis of the same factors.
The Company also has an annual incentive program for its executive
officers, including the Chief Executive Officer. Annual incentive awards are
based on the extent to which the Company achieves or exceeds annual financial
performance goals established by the Board on an annual basis. The actual amount
of the bonus that an executive officer will receive at various performance
levels is approved by the Compensation Committee at the beginning of each year
and is based upon the position, duties and responsibilities of each such
executive officer. Bonuses paid under the annual incentive program for 1996
totaled 48% of the base salaries for the Company's vice-presidents, 72% of the
base salaries for the Company's executive vice-presidents and 96% of the base
salary for the Company's Chief Executive Officer.
The Company's longer-term compensation program for its executive officers
consists primarily of stock options, both incentive stock options and
non-qualified stock options. Award opportunities for the stock option program
are determined by the Compensation Committee. Incentive stock options are
granted at 100% of fair market value on the date of grant so that the holders of
the options do not receive a benefit from the stock option unless and until
there is an increase in the market price of the Company's shares. During 1996,
non-qualified stock options were granted to the Chief Executive Officer and one
of the executive vice-presidents at 100% of the fair market value on the date of
the grant.
The Company also maintains for its executive officers a supplemental
executive retirement plan, which is a non-qualified plan designed to provide
supplemental retirement benefits to the Company's executive officers. This plan
is designed to provide a retiring executive officer with 30 years of service a
target benefit (after adjustment for other retirement benefits and Social
Security benefits) equal to 50 percent of final salary. The Compensation
Committee views this plan as a valuable tool in hiring and retaining superior
executives.
- 12 -
<PAGE>
1996 COMPENSATION OF MR. TWOMLEY
Mr. Twomley's base salary for 1996 was targeted to be within competitive
ranges based upon data compiled by the Company's executive compensation
consulting firm. The Compensation Committee believes that the base salary for
Mr. Twomley should be adequate minimum total cash compensation in a year when no
bonus is earned. Earnings beyond that level should be linked to the Company's
financial performance. Mr. Twomley's base salary for 1996 represented a 7.1%
increase over his prior year's base salary. In setting Mr. Twomley's 1996 base
salary, the Compensation Committee gave consideration to Mr. Twomley's many
contributions toward the Company's operations in 1995 in establishing an
adequate minimum compensation for 1996.
A cash bonus was paid to Mr. Twomley for 1996 under the incentive program
described above due to the Company achieving certain specified net income goals.
The maximum formula-determined bonus that Mr. Twomley could have achieved in
1996 under the incentive program would have represented 120% of his base salary.
Respectfully submitted,
THE COMPENSATION COMMITTEE
Roger D. Blackwell, Chr. Donald G. Orrick
- 13 -
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary of Cash and Certain Other Compensation
The following table shows, for the Company's fiscal years ended December
31, 1996, 1995 and 1994, the cash compensation paid by the Company, as well as
certain other compensation paid or accrued for those years, to the Company's
Chief Executive Officer and to the other executive officers of the Company.
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation Awards
------------------------------------ --------------------------
Securities
Other Annual Restricted Underlying All Other
Year Salary Bonus Compensation Stock Award Options/ Compensation
Name/Principal Position ($) ($) (1)($) ($) SARS (#) (2) ($)
_____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Dale E. Twomley, 1996 $210,870 $203,558 $9,158 -- 40,000 $29,730
President and Chief 1995 198,000 237,600 8,639 -- 50,000 31,449
Executive Officer 1994 198,000 65,000 8,150 -- -- 28,677
William T. Kirkwood, 1996 138,760 100,829 3,387 -- 26,665 13,521
Executive Vice President 1995 124,680 100,000 3,195 -- 16,666 13,595
and Chief Financial 1994 124,680 38,000 2,844 -- -- 12,124
Officer
Donald B. Burke, 1996 129,665 93,658 3,357 -- 20,000 12,498
Executive Vice President 1995 125,100 75,000 3,167 $25,575(3) 16,666 11,865
of Marketing and Sales 1994 16,575 -- -- -- 25,000 --
Jay L. Robertson, 1996 118,890 57,254 3,205 -- 13,333 12,725
Vice President of Sales 1995 114,600 69,000 3,024 -- 8,332 12,382
1994 114,600 15,460 2,853 -- -- 11,462
James C. Remer, 1996 105,700 50,976 4,387 -- 6,666 15,300
Vice President of 1995 100,200 60,000 4,139 -- 6,666 14,053
Manufacturing 1994 100,200 18,020 3,905 -- -- 12,586
Ronald L. McDermott, 1996 105,500 50,803 2,724 -- 13,333 12,343
Vice President of 1995 101,760 61,000 2,570 -- 6,666 10,639
Research and Technology, 1994 101,760 14,180 2,424 -- -- 9,648
Secretary
</TABLE>
____________________
(1) Other Annual Compensation consists of gross-up payments for tax liabilities
related to contributions to the Worthington Foods, Inc. Supplemental
Executive Retirement Plan.
- 14 -
<PAGE>
(2) "All Other Compensation" for 1996 includes the following: (a) contributions
of $3,000; $3,000; $2,031; $2,527; $3,000 and $3,000 to the Worthington
Foods Tax Savings Plan (the "401(k) Plan") on behalf of Messrs. Twomley,
Kirkwood, Burke, Robertson, Remer and McDermott respectively, to match 1996
pre-tax elective deferral contributions made by each to the 401(k) Plan and
a discretionary contribution made by the Company; (b) the amount of $4,500
allocated to the respective accounts of each of the named executive
officers under the ESOP; (c) $5,950 representing the dollar value of split
dollar life insurance premiums paid for the benefit of Mr. Twomley; and (d)
contributions of $16,280; $6,021; $5,967; $5,698; $7,800; and $4,843 to the
Worthington Foods, Inc. Supplemental Executive Retirement Plan on behalf of
Messrs. Twomley, Kirkwood, Burke, Robertson, Remer and McDermott,
respectively.
(3) The restrictions on Mr. Burke's Common Shares lapsed on November 14, 1996.
There are no restricted Common Shares held by the executive officers named
in the Summary Compensation Table at December 31, 1996.
- 15 -
<PAGE>
Grants of Stock Options
The following table sets forth certain information concerning options
granted during 1996 to the named executives:
<TABLE>
Option Grants in Last Fiscal Year
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term(2)
- ------------------------------------------------------------------------------------- -----------------------------
Number of % of Total
Securities Options
Underlying Granted to
Options Employees Exercise Price Expiration
Name Granted(#)(1) in Fiscal Year ($/Share) Date 5% ($) 10%($)
- ------------------------- --------------- ---------------- ---------------- ------------ ----------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dale E. Twomley 13,333 4.15% $17.81 10/22/99 $ 37,430 $ 78,600
13,333 4.15% 17.81 10/22/00 51,174 110,206
13,334 4.16% 17.81 10/22/01 65,611 144,983
------ ----- -------- --------
40,000 12.46% 154,215 333,789
====== ===== ======== ========
William T. Kirkwood 8,888 2.77% 17.81 10/22/99 24,951 52,396
8,888 2.77% 17.81 10/22/00 34,114 73,465
8,889 2.77% 17.81 10/22/01 43,739 96,652
------- ----- -------- --------
26,665 8.31% 102,804 222,513
====== ===== ======== ========
Donald B. Burke 2,333 0.73% 17.81 10/22/99 6,549 13,753
2,333 0.73% 17.81 10/22/00 8,954 19,284
4,167 1.30% 17.81 10/22/01 20,504 45,309
4,167 1.30% 17.81 10/22/02 25,240 57,261
5,600 1.74% 17.81 10/22/03 40,603 94,621
1,400 0.43% 17.81 10/22/04 11,905 28,514
------- ----- ------- --------
20,000 6.23% 113,755 258,742
====== ===== ======== ========
Jay L. Robertson 4,200 1.31% 17.81 10/22/99 11,791 24,759
4,566 1.42% 17.81 10/22/00 17,525 37,741
4,567 1.42% 17.81 10/22/01 22,472 49,658
------- ----- ------ --------
13,333 4.15% 51,788 112,158
====== ===== ======== ========
James C. Remer 2,222 0.69% 17.81 10/22/99 6,238 13,099
2,222 0.69% 17.81 10/22/00 8,528 18,366
2,222 0.69% 17.81 10/22/01 10,934 24,160
----- ----- ------ ------
6,666 2.07% 25,700 55,625
====== ===== ======== ========
Ronald L. McDermott 4,444 1.38% 17.81 10/22/99 12,476 26,198
4,444 1.38% 17.81 10/22/00 17,057 36,732
4,445 1.39% 17.81 10/22/01 21,872 48,331
------- ----- ------ --------
13,333 4.15% 51,405 111,261
====== ===== ======== ========
</TABLE>
(1) The options granted to each named executive officer except Mr. Burke and
Mr. Robertson, become exercisable in equal increments on each of the first
three anniversaries of the date of the grant. The options granted to Mr.
Burke become exercisable on the first six anniversaries of the date of
grant in the following increments: 2,333; 2,333; 4,167; 4,167; 5,600 and
- 16 -
<PAGE>
1,400. The options granted to Mr. Robertson become exercisable on the first
three anniversaries of the date of grant in the following increments:
4,200; 4,566 and 4,567. Upon a termination of employment, options not yet
exercised for any reason other than death of the option holder or
termination of employment for willful, deliberate or gross misconduct, are
terminated within three months of the termination date. In the event of the
death of the option holder, the termination is twelve months after the date
of death. In the event of termination of employment for willful, deliberate
or gross misconduct, the option terminates immediately. In the event that
the Company has a change in the control of ownership, each option
outstanding shall become exercisable during the fifteen days immediately
prior to the scheduled consummation of the change of control. Generally,
the exercise price of options may be paid for in cash or in Common Shares
of the Company. In addition, any tax which the Company is required to
withhold in connection with the exercise of any stock option may be
satisfied by the option holder by electing to have the number of Common
Shares to be delivered on the exercise of the option reduced by, or
otherwise by delivering to the Company, such number of Common Shares having
a fair market value equal to the amount of the withholding requirement.
(2) The 5% and 10% assumed annual rates of appreciation are set by the
Securities and Exchange Commission and are not intended to forecast future
appreciation, if any, of the Company's Common Shares. If the Company's
Common Shares do not increase in value, then the option grants described in
the table will have no value.
Option Exercises And Holdings
The following table sets forth information with respect to options
exercised during the 1996 fiscal year by the named executive officers and
unexercised options held as of the end of the 1996 fiscal year by such executive
officers:
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Value
Shares Realized (Fair Number of Unexercised Value of Unexercised In-the-Money
Underlying Market Value at Options at FY-End (#) Options at FY-End ($)
Options Exercise less ______________________________ _____________________________
Name Exercised Exercise Price)($) Exercisable Unexercisable Exercisable Unexercisable
_________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Dale E. Twomley 6,666 $101,240 62,500 84,167 $865,876 $628,394
William T. Kirkwood 3,666 55,677 39,499 34,999 543,611 141,312
Donald B. Burke -- -- 8,888 51,111 119,377 447,910
Jay L. Robertson 2,917 43,390 29,582 17,499 408,658 70,650
James C. Remer 2,250 31,500 25,583 12,221 353,298 51,761
Ronald L. McDermott 2,250 33,469 25,583 16,666 353,298 59,695
</TABLE>
- 17 -
<PAGE>
Directors' Compensation
Non-Employee Directors of the Company are paid an annual fee of $8,000, a
fee of $1,000 for each Board of Directors meeting attended and a fee of $500 for
each committee meeting attended. Directors who are also employees of the Company
receive no additional compensation from the Company for serving in such
capacity. Directors are reimbursed their expenses in attending meetings of the
Board and Committee meetings.
Performance Graph
Performance graph omitted. It is represented by the following table:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
WORTHINGTON FOODS INC., Russell 2000 Index And Food Proc's:Sm.Cap
(Performance Results Through 12/31/96)
4/6/92 1992 1993 1994 1995 1996
------- ------- ------- ------- ------- -------
Worthington Foods Inc. $100.00 $ 78.85 $ 63.92 $ 71.21 $152.37 $277.43
Russell 2000 Index 100.00 110.15 130.98 128.38 164.89 190.04
Food Proc's:Sm.Cap 100.00 107.57 106.26 110.80 136.39 154.26
_____________________
Assumes $100 invested at the open of trading on 4/16/92 in WORTHINGTON FOODS INC
common stock, Russell 2000 Index, and Food Proc's: Sm.Cap.
*Cumulative total return assumes reinvestment of dividends.
Source: Value Line, Inc.
- 18 -
<PAGE>
PROPOSED AMENDMENT OF AMENDED AND RESTATED
ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED NUMBER
OF COMMON SHARES
(Item 2 on Proxy)
The Amended and Restated Articles of Incorporation of the Company presently
authorize 17,000,000 shares, of which 15,000,000 are Common Shares, without par
value, and 2,000,000 are preferred shares, without par value. The Company's
Board of Directors unanimously adopted a resolution proposing and declaring it
advisable that Article FOURTH of the Company's Amended and Restated Articles of
Incorporation be amended in order to increase the authorized number of shares of
the Company to 32,000,000 shares, of which 30,000,000 will be Common Shares,
without par value ("Common Shares"), and 2,000,000 will be preferred shares,
without par value, and recommending to the shareholders of the Company the
approval of the proposed amendment. Thus, the only class of shares which will be
increased in authorized number will be the Common Shares. Of the Company's
presently authorized 15,000,000 Common Shares, as of March 3, 1997, 8,592,562
were outstanding, an aggregate of 1,076,049 were reserved for issuance under the
Company's existing stock option plans, and 5,331,389 were available for
issuance. Common Shares are purchased in the open market for the Company's
existing employee stock ownership plan and the Company's existing stock purchase
plan. In 1995, 150,000 preferred shares were designated "Series A Junior
Participating Preferred Shares" and were reserved for issuance pursuant to a
Rights Agreement, dated as of June 13, 1995 (the "Rights Agreement"), between
the Company and National City Bank, as Rights Agent.
The Board of Directors believes that it is desirable and in the best
interests of the Company and its shareholders to increase the number of Common
Shares that the Company is authorized to issue in order to ensure that the
Company will have a sufficient number of authorized Common Shares available in
the future to provide it with the desired flexibility to meet its business
needs. If this proposal is approved by the shareholders, the additional Common
Shares could be available for a variety of corporate purposes, including, for
example, the declaration and payment of share dividends to the Company's
shareholders; share splits; use in the financing of expansion or future
acquisitions; issuance pursuant to the terms of employee benefit plans; and use
in other possible future transactions of a currently undetermined nature.
If the proposed amendment is adopted, the Company would be permitted to
issue the additional authorized Common Shares without further shareholder
approval, except to the extent otherwise required by the Company's Amended and
Restated Articles of Incorporation, by law or by The Nasdaq Stock Market or any
securities exchange on which the Common Shares may be listed at the time (the
Common Shares are currently listed on The Nasdaq Stock Market). The
authorization of additional Common Shares will enable the Company, as the need
may arise, to take timely advantage of market conditions and the availability of
favorable opportunities without the delay and expense associated with the
holding of a special meeting of its shareholders. It is the belief of the Board
of Directors that the delay necessary for shareholder approval of a specific
issuance could be to the detriment of the Company and its shareholders. The
Board of Directors does not intend to issue any Common Shares except on terms
- 19 -
<PAGE>
which the Board deems to be in the best interests of the Company and its
shareholders. Existing shareholders of the Company will have no pre-emptive
rights to purchase any Common Shares issued in the future. Depending on the
terms thereof, the issuance of the Common Shares may or may not have a dilutive
effect on the Company's then-existing shareholders. Other than the Common Shares
which may be acquired pursuant to the Company's existing stock option plans and
stock purchase plan, the Company presently has no plans, agreements or
understandings to issue any of the newly authorized Common Shares.
Although the Company has no such present intentions, the proposed increase
in the authorized and unissued Common Shares might be considered as having the
effect of discouraging an attempt by another person or entity, through the
acquisition of a substantial number of Common Shares, to acquire control of the
Company with a view to imposing a merger, sale of all or any part of its assets,
or a similar transaction without prior approval of the Company's Board of
Directors, since the issuance of new Common Shares, in a public or private sale,
merger or similar transaction, could be used to dilute the share ownership of a
person or entity seeking to obtain control of the Company. Furthermore, since
Section 2.04 of the Company's Amended Regulations requires that the removal of a
director be approved by the affirmative vote of the holders of at least 80% of
the voting power of the Company to elect directors, the Board could (within the
limits imposed by Ohio law) issue new Common Shares to purchasers who, together
with other shareholders of the Company, might block such an 80% vote. As of
March 3, 1997, the Company's executive officers and directors held approximately
15.0% of the Company's voting power. This proposal to amend Article FOURTH is
not in response to any effort of which the Company is aware to accumulate the
Company's Common Shares or obtain control of the Company.
The Company's Amended and Restated Articles of Incorporation and Amended
Regulations contain other provisions which could potentially make a change of
control of the Company more difficult. These provisions include: (a) the
classification of the Board of Directors of the Company into three classes of
directors so that each director serves for three years, with one class being
elected each year; (b) the elimination of cumulative voting in the election of
directors; (c) the requirement that holders of shares entitling them to exercise
not less than 80% of the voting power of the Company (i) vote in favor of the
removal of a director from office or (ii) vote to change the number of directors
in each class; (d) the requirement of the affirmative vote of at least 80% of
the outstanding voting shares of the Company, in addition to any other vote
required by law or the Company's Amended and Restated Articles of Incorporation,
as a condition of certain major corporate transactions (e.g., adoption of
amendments to the Company's Amended and Restated Articles of Incorporation or
the Company's Amended Regulations; approval of a merger or consolidation
involving the Company; approval of a combination or majority share acquisition
involving the issuance of shares of the Company; approval of a sale, lease or
exchange of all or substantially all of the Company's assets; or approval of the
dissolution of the Company) unless at least two-thirds of the "Continuing
Directors" of the Company (i.e., persons who were directors of the Company on
February 26, 1992 or whose initial election to the Board of Directors of the
Company was recommended or approved by the Board or a committee thereof then
comprised of a majority of directors who are Continuing Directors) approve the
transaction; and (e) certain procedural requirements, including provisions
governing the time period for setting special shareholder meetings, record dates
and procedures for nominating directors, and specifying who may call special
shareholder meetings.
- 20 -
<PAGE>
Under the Rights Agreement, each of the Company's shareholders has one
preferred share purchase right (a "Right") for each outstanding Common Share
held and each newly-issued Common Share will have issued with it one Right. The
Rights currently have no value, are represented by the certificates evidencing
the Common Shares and trade only with such Common Shares. The Rights may only be
separated from the Common Shares and exercised upon the earlier to occur of (1)
10 business days following a public announcement that a person or group
("Acquiror") has acquired, without the prior consent of the Board of Directors,
beneficial ownership of 15% or more of the then outstanding Common Shares (a
"Triggering Event") or (ii) 10 business days following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer that
would result in beneficial ownership by a person or group of 30% or more of the
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"). The Rights Agreement provides that, upon the Rights
becoming exercisable, shareholders would be entitled to purchase, at the
"Exercise Price," six one-thousandths of one share of the Series A Junior
Participating Preferred Shares (the "Preferred Shares"). Such fractional share
is intended to be the practical equivalent of one Common Share. In the event of
a Triggering Event, the Rights will entitle each holder (except the Acquiror or
any affiliate or associate thereof, whose Rights become null and void) to
purchase Common Shares of the Company having a value equal to twice the Exercise
Price. In the event the Company is acquired in a merger or other business
combination or 50% or more of its consolidated assets or earning power is sold,
mortgaged, or otherwise transferred, shares of the Acquiror (or shares of the
surviving corporation in such acquisition, which could be the Company) having a
market value of two times the Exercise Price may be purchased. The Exercise
Price and the number of Preferred Shares or other securities or property
issuable upon exercise of a Right are subject to adjustment upon the occurrence
of certain events including, for example, a share dividend or share split
payable in the Company's Common Shares. The Rights expire on June 26, 2005,
unless earlier redeemed by the Company. The Rights may cause substantial
dilution to a person or group that attempts to acquire the Company and thus have
an anti-takeover effect.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF COMMON SHARES ENTITLING THEM TO
EXERCISE AT LEAST A MAJORITY OF THE VOTING POWER OF THE COMPANY IS REQUIRED TO
ADOPT THE PROPOSED AMENDMENT TO ARTICLE FOURTH OF THE COMPANY'S AMENDED AND
RESTATED ARTICLES OF INCORPORATION. If the amendment is approved, it will become
effective upon the filing of a Certificate of Amendment to the Company's Amended
and Restated Articles of Incorporation with the Ohio Secretary of State, which
is expected to be accomplished as promptly as practicable after such approval is
obtained.
The Board of Directors of the Company unanimously recommends that the
shareholders vote FOR the proposed amendment to Article FOURTH of the Company's
Amended and Restated Articles of Incorporation. Unless otherwise directed, the
persons named in the enclosed proxy will vote the Common Shares represented by
all proxies received prior to the Annual Meeting, and not properly revoked, in
favor of the proposed amendment to Article FOURTH.
- 21 -
<PAGE>
PROPOSAL TO AMEND THE WORTHINGTON FOODS, INC.
1993 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
(Item 3 on Proxy)
The Board of Directors of the Company unanimously recommends that the
shareholders approve the amendment of the Worthington Foods, Inc. 1993 Stock
Option Plan for Non-Employee Directors to increase the number of Common Shares
which may be issued during the term of the Plan by 175,000; to modify the
formula for the automatic grant of options to the Company's Non-Employee
Directors (those directors who are not full-time employees of the Company or any
subsidiary of the Company); to change the vesting schedule of options granted;
and to extend the term of the Plan so that it will continue in effect until
April 22, 2003. A copy of the Worthington Foods, Inc. 1993 Stock Option Plan for
Non-Employee Directors, as proposed to be amended (the "Directors Plan"), is
attached to this Proxy Statement as Exhibit A. The following summary of certain
provisions of the Directors Plan is qualified in its entirety by reference to
said Exhibit A.
General
The principal purpose of the Directors Plan is to benefit the Company
through offering to the Company's Non-Employee Directors a favorable opportunity
to increase their ownership interest in the Company, thereby providing them with
a greater stake in the growth and prosperity of the Company, enabling them to
represent the viewpoint of other shareholders of the Company more effectively
and encouraging them to continue serving as directors of the Company.
A total of 200,000 Common Shares (adjusted for share splits) were
originally authorized for issuance pursuant to the Directors Plan. As of March
3, 1997, a total of 50,000 Common Shares remained available for the grant of new
options to Non-Employee Directors under the Directors Plan. The Board of
Directors believes that is desirable to continue the incentive provided by the
Directors Plan and, therefore, recommends that the shareholders approve the
amendment of the Directors Plan to make an additional 175,000 Common Shares
available thereunder and to extend the term of the Directors Plan for an
additional five years. The Board of Directors also believes that the formula by
which options are granted to Non-Employee Directors should be modified so as to
provide for grants at the beginning of each term for which a Non-Employee
Director is elected or re-elected as a director of the Company so as to provide
a continuing incentive to represent the viewpoint of other shareholders. If the
proposed amendment of the Directors Plan is approved and Messrs. Brolick, Perez
and Shackelford are elected as directors at the Annual Meeting, each of these
persons will automatically be granted an option to purchase 7,500 Common Shares
effective as of the third business day after the date of the Annual Meeting.
Each of the current Non-Employee Directors (other than Mr. Brolick who was
appointed as a director on February 18, 1997 to fill a vacancy on the Board) was
granted an option to purchase 16,666 Common Shares (adjusted for share splits)
in accordance with the original terms of the Directors Plan.
- 22 -
<PAGE>
Summary Of Operation Of The Directors Plan
The Directors Plan is administered by the Board of Directors. The Board
interprets the Directors Plan and makes all determinations necessary for the
administration of the Directors Plan.
The Directors Plan is currently scheduled to expire on April 21, 1998. If
the proposed amendment of the Directors Plan is approved, the Directors Plan
will expire on April 22, 2003.
If the proposed amendment of the Directors Plan is approved, an aggregate
of 333,662 Common Shares of the Company will be available for issuance under the
Directors Plan, of which 108,662 Common Shares will be subject to outstanding
options. Under the Directors Plan, as proposed to be amended, each Non-Employee
Director will automatically be granted an option to purchase a total of 7,500
Common Shares of the Company effective on the third business day after the date
on which he or she is first elected to the Board of Directors by the
shareholders of the Company. In addition, each Non-Employee Director will
automatically be granted an option, effective on the third business day after
the date on which he or she is re-elected to the Board of Directors, to purchase
7,500 Common Shares. If a person is appointed by the Board of Directors as a
Non-Employee Director to fill a vacancy on or after February 18, 1997, then he
or she will automatically be granted an option, effective on the third business
day after the date on which he or she is appointed, to purchase a number of
Common Shares equal to (a) 2,500 times (b) the number obtained by subtracting
the calendar year in which he or she is appointed to the Board from the calendar
year in which his or her initial term of office will expire. Currently,
Non-Employee Directors may receive only one grant of an option under the
Directors Plan covering 16,666 Common Shares, which grant is made effective as
of the third business day following their election or appointment. If the
amendment of the Directors Plan is not approved, Non-Employee Directors will
continue to receive only one grant of an option covering 16,666 Common Shares
upon their initial election or appointment to the Board.
In the event that Common Shares of the Company are increased through the
payment of a stock dividend or the declaration of a stock split or are changed
into or exchanged for a different kind of stock or other securities of the
Company or of another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares or
otherwise), an adjustment will be made in the number and kind of shares or other
securities subject to unexercised options and available for new option grants
under the Directors Plan. In addition, outstanding options will also be
appropriately amended as to price and other terms as may be necessary to reflect
the foregoing events.
Under the Directors Plan, as proposed to be amended, no options may be
granted subsequent to April 22, 2003, although options granted prior to that
date will continue in effect after that date until their date of expiration. In
the event an option expires or is terminated or canceled unexercised as to any
Common Shares, such released Common Shares may again become the subject of
options. Common Shares subject to options may be made available from unissued or
reacquired Common Shares of the Company. Nothing contained in the Directors Plan
or any option granted pursuant thereto will in itself confer upon any optionee
any right to continue serving as a director of the Company or interfere in any
way with the removal of such director pursuant to the Amended and Restated
Articles of Incorporation or Amended Regulations of the Company or applicable
law.
- 23 -
<PAGE>
The price at which Common Shares may be purchased pursuant to an option is
the fair market value of the Common Shares on the date as of which the option is
granted, which will be equal to the last reported sales price of a common share
of the Company on the Nasdaq National Market System on such date or, if there
are no reported sales on such date, then the last reported sales price on the
next preceding day on which a sale was transacted. On March 3, 1997, the last
reported sales price of the Company's Common Shares on the Nasdaq National
Market System was $20.75 per share. Optionees must pay the full purchase price
for Common Shares being purchased in cash or by check payable to the Company
within ten business days after exercise or by delivery of Common Shares already
owned at the time of the exercise of an option. Each option granted under the
Directors Plan on or after February 18, 1997 will be for a term of five years
from the date of grant and will become exercisable with respect to 2,500 Common
Shares on each anniversary of the grant date until the option is fully
exercisable. Options granted under the Directors Plan prior to February 18, 1997
are for a term of five years but vest in full when the Outside Director has
served as a director of the Company for a period of six months following the
date on which the option was granted.
Options under the Directors Plan are not transferable by the optionees
otherwise than by will or the laws of descent and distribution. Such options may
be exercised only while an optionee is a director of the Company and will expire
immediately when an optionee ceases to be a director, except that upon
termination of director status by reason of death or permanent disability, an
optionee (or, if the optionee is not living, the optionee's heirs, legatees or
legal representatives) may exercise the options in full at any time during their
term prior to twelve months after the date of death or permanent disability.
Federal Income Tax Consequences
The Company understands that under existing federal income tax law, (i) no
income will be recognized by an optionee at the time of grant; (ii) upon
exercise of an option, the optionee will be required to treat as ordinary income
the difference on the date of exercise between the option price and the fair
market value of the Common Shares purchased, and the Company will be entitled to
a deduction equal to such amount; and (iii) assuming the Common Shares received
upon the exercise of an option constitute capital assets in the optionee's
hands, any gain or loss upon disposition of the Common Shares will be treated as
a capital gain or loss, which will be long-term if the Common Shares have been
held longer than one year.
In the case of the exercise of an option using previously acquired Common
Shares, the Company understands that (i) with respect to the evenly exchanged
Common Shares (I.E., the new Common Shares received which are equal in number to
the old Common Shares surrendered), no gain or loss will be recognized by the
optionee at the time of exercise, the Company will not be entitled to a
deduction, and the basis and holding period of the equal number of new Common
Shares received in the exchange will be the same as the basis and holding period
of the surrendered Common Shares; and (ii) with respect to the additional Common
Shares received upon exercise, the optionee will be required to recognize as
ordinary income in the year of exercise an amount equal to the fair market value
on the date of exercise of the additional Common Shares received, less any cash
paid upon exercise, and the Company will be entitled to a deduction in a
corresponding amount. The basis of the additional Common Shares received will be
equal to their fair market value on the date of exercise and the holding period
for such Common Shares will begin on the date of exercise.
- 24 -
<PAGE>
Amendment Of Directors Plan
The Board of Directors may amend or discontinue the Directors Plan at any
time; provided that, no such amendment may be made without approval of the
Company's shareholders if such approval is required: (a) to satisfy the
requirements of Rule 16b-3 under the 1934 Act; (b) to satisfy applicable
requirements of the Internal Revenue Code of 1986; or (c) to satisfy applicable
requirements of the Nasdaq National Market System or of any securities exchange
on which the Company's Common Shares may be listed. Notwithstanding the
foregoing, no amendment or discontinuance of the Directors Plan may, without the
consent of the optionee, change or impair any option previously granted
thereunder.
Recommendation And Vote
The Board of Directors recommends a vote FOR this proposal. Unless
otherwise instructed, each properly executed proxy which is returned in a timely
manner and not revoked will be voted for approval of the Directors Plan as
proposed to be amended. The affirmative vote of the holders of a majority of the
outstanding Common Shares of the Company, present in person or by proxy and
entitled to vote at the Annual Meeting, is necessary to approve the amendment of
the Directors Plan. Abstentions and broker non-votes are counted as present; the
effect of an abstention or broker non-vote on the proposal to approve the
amendment of the Directors Plan is the same as a "no" vote.
- 25 -
<PAGE>
INDEPENDENT ACCOUNTANTS
The Company engaged Ernst & Young LLP as its independent accountants to
audit its financial statements for the year ended December 31, 1996. Ernst &
Young LLP has served as independent public accountants for the Company since
1989. The Company's Audit Committee makes its selection of the Company's
independent accountants for the 1997 fiscal year in July, 1997.
The Board of Directors expects that representatives of Ernst & Young LLP
will be present at the Annual Meeting, will have the opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any qualified shareholder who desires to present a proposal for
consideration at the 1998 Annual Meeting of Shareholders must submit the
proposal in writing to the Company. If the proposal is received by the Company
on or before November 17, 1997 and otherwise meets the requirements of
applicable state and federal law, it will be included in the proxy statement and
form of proxy of the Company relating to its 1998 Annual Meeting of
Shareholders.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
other business to be presented for action by the shareholders at the 1997 Annual
Meeting of Shareholders other than as set forth in this Proxy Statement.
However, if any other matter is properly presented at the Annual Meeting, or at
any adjournment(s) thereof, it is intended that the persons named as proxies in
the enclosed proxy may vote the Common Shares represented by such proxy on such
matters in accordance with their best judgment in light of the conditions then
prevailing.
It is important that proxies be voted and returned promptly; therefore,
shareholders who do not expect to attend the Annual Meeting in person are urged
to fill in, sign and return the enclosed proxy in the self-addressed envelope
furnished herewith.
By Order of the Board of Directors,
/s/ Ronald L. McDermott
_______________________________________
Ronald L. McDermott
Secretary
March 17, 1997
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Exhibit A
WORTHINGTON FOODS, INC. 1993 STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS
(Reflects share splits through March 3, 1997 and proposed amendments)
1. Purpose and Eligibility. The purpose of this Worthington Foods, Inc.
1993 Stock Option Plan for Non-Employee Directors (the "Directors Plan") is to
enhance the value of the shareholders' investment in Worthington Foods, Inc.
(the "Company") by encouraging those directors of the Company who are not
full-time employees of the Company or any of its subsidiaries (collectively, the
"Outside Directors" and individually, an "Outside Director") to acquire or
increase and retain a financial interest in the Company and thereby encouraging
the Outside Directors to remain as directors of the Company and to put forth
maximum efforts for the success of the Company.
It is intended that stock options ("Nonqualified Stock Options"), other
than incentive stock options ("ISOs") (as defined by Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code")), may be granted to Outside
Directors under the Directors Plan.
2. Administration of the Directors Plan.
(a) GENERAL. The Directors Plan shall be administered by the Board of
Directors of the Company (the "Board").
(b) AUTHORITY OF THE BOARD. The Board shall have full power and authority
in its discretion, subject to and not inconsistent with the express provisions
of this Directors Plan, to administer the Directors Plan and to exercise all the
power and authority specifically granted to it under the Directors Plan or
necessary or advisable, in the sole and absolute discretion of the Board, in the
administration of the Directors Plan including, without limitation, the
authority to: interpret and construe any provision of the Directors Plan or any
option granted hereunder; make all required or appropriate determinations under
the Directors Plan or any option granted hereunder; adopt, amend and rescind
such rules and regulations relating to the Directors Plan as the Board shall
determine in its discretion subject to the express provisions of the Directors
Plan; and make all other determinations deemed by it necessary or advisable for
the administration of the Directors Plan.
(c) INTERPRETATION. The interpretation and construction of any provision of
the Directors Plan or any option granted hereunder and all determinations by the
Board in each case shall be final, binding and conclusive with respect to all
interested parties, unless otherwise determined by the Board. No member of the
Board shall be personally liable for any action, failure to act, determination,
interpretation or construction made in good faith with respect to the Directors
Plan or any option or transaction hereunder.
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(d) NO OTHER RIGHTS. Nothing contained in the Directors Plan, nor any
option granted pursuant to the Directors Plan, shall confer upon any Outside
Director covered by the Directors Plan any right to continue as a director of
the Company nor limit in any way the right of the Company to terminate his
status as a director at any time.
3. The Stock. The shares available for issuance pursuant to the grant of
options under the Directors Plan shall consist of a maximum 375,000 Common
Shares, without par value (the "Common Stock"), of the Company, subject to
adjustment as provided in Section 6 hereof. All shares acquired upon the
exercise of options will be, in whole or in part, either Common Stock purchased
by the Company in the open market and held in the treasury of the Company or
authorized and unissued shares of Common Stock of the Company. Should an option
(or a portion thereof) expire for any reason without being exercised, the shares
subject to the portion of such option not so exercised shall be available for
subsequent grants under the Directors Plan.
4. Effective Date and Termination of Plan. The Directors Plan was adopted
by the affirmative vote of the Board of Directors of the Company on February 9,
1993 and approved by the affirmative vote of the shareholders of the Company on
April 21, 1993. The Directors Plan shall terminate upon the earlier of (i) April
22, 2003; or (ii) the date on which all shares available for issuance under the
Directors Plan have been issued pursuant to the exercise of options granted
hereunder; or (iii) the determination of the Board that the Directors Plan shall
terminate. No options may be granted under the Directors Plan after the
termination date, provided that the options granted and outstanding on such date
shall continue to have force and effect in accordance with the provisions of the
instruments evidencing such options.
5. Grant, Terms and Conditions of Options.
(a) GRANT OF OPTIONS. Each person who was an Outside Director on April 21,
1993 was granted an option to purchase 16,666 shares of Common Stock (as
adjusted for share splits) effective on April 21, 1993. Any individual who was
newly elected or appointed an Outside Director after April 21, 1993 and prior to
February 18, 1997 was granted an option to purchase 16,666 shares of Common
Stock (as adjusted for share splits) effective on the third business day
following the date of his appointment or election to the Board. Any individual
who is first elected to the Board of Directors by the shareholders of the
Company on or after April 22, 1997, shall be granted an option to purchase 7,500
shares of Common Stock effective on the third business day after the date on
which he is so elected. In addition, each Outside Director who is re-elected to
the Board by the shareholders on or after April 22, 1997, shall be granted an
option, effective on the third business day after the date on which he is
re-elected to the Board of Directors, to purchase 7,500 shares of Common Stock.
If a person is appointed by the Board of Directors as an Outside Director to
fill a vacancy on or after February 18, 1997, then he shall be granted an
option, effective on the third business day after the date on which he is
appointed, to purchase a number of shares of Common Stock equal to (a) 2,500
times (b) the number obtained by subtracting the calendar year in which he is
appointed to the Board from the calendar year in which his initial term of
office shall expire.
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(b) WHEN EXERCISABLE. Each option granted under the Directors Plan prior to
February 18, 1997 shall vest and become nonforfeitable when, and only if, the
Outside Director who has received the option continues to serve as a director of
the Company for a period of six months following the date on which the option
was granted. An option shall thereafter be fully vested and exercisable for the
total number of shares subject to the option. Each option granted under the
Directors Plan on or after February 18, 1997 shall vest and become
nonforfeitable with respect to 2,500 shares of Common Stock on each anniversary
of the grant date until the option is fully vested and exercisable so long as
the Outside Director who has been granted the option continues to serve as a
director of the Company on such anniversary date.
(c) PRICE. The option exercise price per share of each option shall be
equal to the fair market value of a share of Common Stock on the date of grant
(as defined in subsection (i) hereof); provided that, the option exercise price
shall be subject to adjustment as provided in Section 6 hereof.
(d) TERM OF OPTIONS. Options shall be effective on and shall be of a term
of five (5) years from the date of grant. Each such option shall be subject to
earlier termination as provided in subsection (f) hereof.
(e) NOTICE OF EXERCISE AND PAYMENT. To the extent that it is exercisable,
an option shall be exercised by oral or written notice to the Company, stating
the number of shares with respect to which the option is being exercised and the
intended manner of payment. The date of the notice shall be the exercise date.
Any oral notice of exercise shall be confirmed in writing in all cases to the
Company no later than concurrently with payment for the shares as required
herein. Payment for the shares purchased shall be made in full to the Company
within ten (10) business days after the exercise date in cash or check payable
to the order of the Company in an amount equal to the option price for the
shares being purchased, in whole shares of Common Stock of the Company owned by
the optionee having a fair market value on the exercise date (as defined in
subsection (i) hereof) equal to the option price for the shares being purchased,
or a combination of Common Stock and cash or check payable to the order of the
Company, equal in the aggregate to the option price for the shares being
purchased. Payments of Common Stock shall be made by delivery of stock
certificates properly endorsed for transfer in negotiable form. The person or
persons exercising an option on behalf of an optionee shall be required to
furnish to the Company appropriate documentation that such person or persons
have the full legal right and power to exercise the option on behalf of and for
the optionee.
(f) TERMINATION OF SERVICE.
(i) Except as otherwise provided herein, an optionee's opinions are
exercisable only by the optionee, are exercisable only while the optionee is a
director of the Company and then only if the options have become exercisable by
their terms and shall expire on the date the optionee ceases to be a director of
the Company.
(ii) In the event of the death of an optionee while a director of the
Company, any unexercised options of such optionee granted under the Directors
Plan (whether or not then exercisable by their terms) shall become immediately
exercisable by his estate for a period ending on the earlier of the fixed
expiration date of such options or twelve months after the date of death, after
which period such options shall expire. For purposes hereof, the estate of an
optionee shall be defined to include the legal representatives thereof or any
person who has acquired the right to exercise an option by reason of the death
of the optionee.
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(iii) In the event an optionee ceases to be a director of the Company by
reason of a permanent disability (as defined below), any unexercised options of
such optionee (whether or not then exercisable by their terms) shall become
immediately exercisable for a period ending on the earlier of the fixed
expiration date of such options or twelve months from the date the optionee
ceases to be a director after which period such options shall expire. For
purposes hereof, "permanent disability" shall be deemed to be the inability of
the optionee to perform the duties of a director of the Company because of a
physical or mental disability as evidenced by the opinion of a Company-approved
doctor of medicine.
(g) TRANSFERABILITY OF OPTIONS. Any option granted hereunder shall be
transferable only by will or the laws of descent and distribution and shall be
exercisable during the lifetime of the optionee only by the optionee or by his
guardian or legal representative.
(h) TAX WITHHOLDING. Any option granted hereunder shall provide for
appropriate arrangements for the satisfaction by the Company and the optionee of
all federal, state, local or other income, excise or employment taxes or tax
withholding requirements applicable to the exercise of the option or the later
disposition of the shares of Common Stock or other property thereby acquired and
all such additional taxes or amounts as determined by the Board in its
discretion. "Appropriate arrangements" may include the right to withhold Common
Stock upon exercise of an option to satisfy withholding obligations.
(i) FAIR MARKET VALUE. The "fair market value" of a share of Common Stock
on any relevant date for purposes of any provision of the Directors Plan shall
be the last reported sales price of a share of Common Stock on the Nasdaq
National Market System on such date or, if there are no reported sales on such
date, then the last reported sales price on the next preceding day on which such
a sale was transacted.
(j) OPTION AGREEMENT. Each option granted under the Directors Plan shall be
evidenced by an option agreement (an "Agreement") duly executed on behalf of the
Company and by the Outside Director to whom such option is granted and dated as
of the applicable date of grant. Each Agreement shall be signed on behalf of the
Company by an officer or officers delegated such authority by the Board. Each
Agreement shall comply with and be subject to the terms and conditions of the
Directors Plan. Any Agreement may contain such other terms, provisions and
conditions not inconsistent with the Directors Plan or Rule l6b-3 under Section
16 of the Securities Exchange Act of 1934, as amended ("Rule l6b-3"), as may be
determined by the Board.
6. Adjustment and Changes in the Common Stock.
(a) ADJUSTMENTS. In the event that the outstanding shares of Common Stock
of the Company shall be changed into or exchanged for a different kind of shares
of stock or other securities of the Company or of another corporation (whether
by reason of merger, consolidation, recapitalization, reclassification,
split-up, combination of shares or otherwise) or if the number of such shares of
Common Stock shall be increased through the payment of a stock dividend or the
declaration of a stock split, then there shall be substituted for or added to
each share of Common Stock of the Company theretofore appropriated or thereafter
subject or which may become subject to an option under the Directors Plan, the
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<PAGE>
number and kind of shares of stock or other securities into which each
outstanding share of Common Stock of the Company shall be so changed, or for
which each such share shall be exchanged, or to which each such share shall be
entitled, as the case may be. Outstanding options shall also be appropriately
amended as to price and other terms as may be necessary to reflect the foregoing
events. In the event there shall be any other change in the number or kind of
the outstanding shares of Common Stock of the Company, or of any stock or other
securities into which such stock shall have been changed, or for which it shall
have been exchanged, then if such change equitably requires an adjustment in any
option theretofore granted or which may be granted under the Directors Plan,
such adjustment shall be made by the Board in accordance with such
determination. Fractional shares resulting from any adjustment in options
pursuant to this Section 6 shall be rounded to the nearest whole number of
shares.
(b) NOTICE OF ADJUSTMENT. Notice of any adjustment shall be given by the
Company to each holder of an option which shall have been so adjusted, provided
that such adjustment (whether or not such notice is a given) shall be effective
and binding for all purposes of the Directors Plan and any instrument issued
thereunder.
(c) OTHER PROVISIONS. The grant of options under the Directors Plan shall
in no way affect the right of the Company to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
7. Regulatory Requirements.
(a) REGISTRATION OF SHARES. No option granted pursuant to the Directors
Plan shall be exercisable in whole or in part if at any time the Board shall
determine in its discretion that the registration or qualification of the shares
of Common Stock subject to such option on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection with, the granting
of such option or the issue of shares thereunder, unless such registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board. Any option issued under the
Directors Plan in a transaction that is subject to Chapter 1707 of the Ohio
Revised Code shall not be exercisable except for shares of Common Stock which at
the time of exercise are exempt, are the subject of an exempt transaction or are
registered, under said Chapter 1707.
(b) TRANSFER OF SHARES. If shares of Common Stock subject to an option are
sold and transferred upon the exercise thereof to a person who (at time of such
exercise or thereafter) controls, is controlled by or is under common control
with the Company, or are sold and transferred in reliance upon exemptions under
the Securities Act of 1933, as amended (the "Act"), or the securities laws of
any state, then upon such sale and transfer:
(i) Such shares shall not be transferable by the
holder thereof, and neither the Company nor its transfer agent
or registrar, if any, shall be required to register or
otherwise to give effect to any transfer thereof and may
prevent any such transfer, unless the Company shall have
received an opinion from its counsel to the effect that any
such transfer would not violate the Act or the applicable laws
of any state; and
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(ii) The Company shall cause each stock certificate
evidencing such shares to bear a legend reflecting applicable
restrictions on the transfer thereof and may use the following
or any other appropriate legend for that purpose:
SHARES EVIDENCED BY THIS CERTIFICATE ARE OWNED BY A
PERSON WHO MAY BE DEEMED AN AFFILIATE OF THE COMPANY WITHIN
THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT
OF 1933 (THE "ACT") AND MAY NOT BE SOLD, TRANSFERRED OR
DISTRIBUTED EXCEPT PURSUANT TO (l) AN EFFECTIVE REGISTRATION
STATEMENT REGISTERING THE SHARES UNDER THE ACT OR (2) UNTIL
THE COMPANY HAS RECEIVED AN OPINION FROM ITS COUNSEL TO THE
EFFECT THAT SUCH TRANSFER DOES NOT VIOLATE THE ACT OR THE
APPLICABLE LAWS OF ANY STATE.
(c) NO OBLIGATION. Nothing contained in the Directors Plan or elsewhere
shall be construed to require the Company to take any action whatsoever to make
exercisable any option granted under the Directors Plan or to make transferable
any shares of Common Stock issued upon the exercise of any such option.
8. Amendment of the Directors Plan. The Board may amend, terminate or
suspend the Directors Plan at any time, in its sole and absolute discretion;
provided that, shareholder approval of any such amendment of the Directors Plan
shall be required if such approval is required (a) to satisfy the requirements
of Rule 16b-3; (b) to satisfy applicable requirements of the Code; or (c) to
satisfy applicable requirements of the Nasdaq National Market System.
9. Shareholder Rights. An optionee shall have none of the rights of a
shareholder of the Company with respect to any shares subject to any option
granted hereunder until such individual shall have exercised the option and been
issued shares therefor.
10. Severability. If any provision of the Directors Plan shall cause the
Directors Plan to violate any provision of any applicable law, rule or
government regulation or to be considered null and void, such provision shall be
severed from the Directors Plan and shall be null and void or shall be deemed
null and void ab initio, as shall be appropriate or necessary, and the Directors
Plan shall continue in full force and effect as if such provision were not part
of the Directors Plan.
11. Use of Proceeds. The proceeds received by the Company from the sale of
shares pursuant to the exercise of options granted under the Directors Plan
shall be used for general corporate purposes.
12. Expenses. The expenses of the Directors Plan shall be borne by the
Company.
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<PAGE>
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 22, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder(s) of common shares of Worthington Foods, Inc. (the
"Company") hereby constitutes and appoints Allan R. Buller, George T. Harding,
IV and William D. Parker, or any one of them, the Proxy or Proxies of the
undersigned, with full power of substitution in each of them, to attend the
Annual Meeting of Shareholders of the Company (the "Annual Meeting") to be held
on Tuesday, April 22, 1997, at The Worthington Hills Country Club, 920 Clubview
Blvd. S., Worthington, Ohio 43235, at 11:00 a.m., local time, and any
adjournment(s) thereof, and to vote all of the common shares of the Company
which the undersigned is entitled to vote at such Annual Meeting or at any
adjournment(s) thereof as follows:
1. To elect three directors to serve for terms of three years each.
|_| FOR election as director of the Company |_| WITHHOLD AUTHORITY to
of all the nominees listed below (except vote for all nominees
as marked to the contrary below).* listed below.
Emil J. Brolick Francisco J. Perez Donald B. Shackelford
*(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list above.)
2. To adopt the proposed amendment to Article FOURTH of the Company's Amended
and Restated Articles of Incorporation to increase the authorized number of
common shares from 15,000,000 to 30,000,000.
|_| FOR |_| AGAINST |_| ABSTAIN
3. To approve the amendment of the Worthington Foods, Inc. 1993 Stock Option
Plan for Non-Employee Directors.
|_| FOR |_| AGAINST |_| ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the Annual Meeting or any
adjournment(s) thereof.
(CONTINUED, AND TO BE EXECUTED AND DATED ON THE OTHER SIDE.)
<PAGE>
(Continued from the other side)
WHERE A CHOICE IS INDICATED, THE COMMON SHARES REPRESENTED BY THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED OR NOT VOTED AS SPECIFIED. IF NO CHOICE IS
INDICATED, THE COMMON SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES LISTED IN ITEM NO. 1 AS DIRECTORS OF THE COMPANY AND
FOR PROPOSAL NOS. 2 AND 3. IF ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE
ANNUAL MEETING OR ANY ADJOURNMENT(S) THEREOF OR IF A NOMINEE FOR ELECTION AS A
DIRECTOR NAMED IN THE PROXY STATEMENT IS UNABLE TO SERVE, THE COMMON SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE PROXY OR
PROXIES ON SUCH MATTERS OR FOR SUCH SUBSTITUTE NOMINEES AS THE DIRECTORS MAY
RECOMMEND.
ALL PROXIES PREVIOUSLY GIVEN OR EXECUTED BY THE UNDERSIGNED ARE HEREBY
REVOKED. The undersigned acknowledges receipt of the accompanying Notice of
Annual Meeting of Shareholders and Proxy Statement for the April 22, 1997
meeting.
Dated:____________________, 1997
--------------------------------
Signature of Shareholder(s)
--------------------------------
Signature of Shareholder(s)
Please sign exactly as your name
appears hereon. When common
shares are registered in two
names, both shareholders should
sign. When signing as executor,
administrator, trustee,
guardian, attorney or agent,
please give full title as such.
If shareholder is a corporation,
please sign in full corporate
name by President or other
authorized officer. If
shareholder is a partnership,
please sign in partnership name
by authorized person. (Please
note any change of address on
this proxy.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF WORTHINGTON
FOODS, INC. PLEASE FILL IN, DATE AND SIGN AND RETURN IT PROMPTLY USING THE
ENCLOSED ENVELOPE.
