SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No.__)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
STOKELY USA, INC., Commission File Number 0-13943
(Name of Registrant as Specified In Its Charter)
STOKELY USA, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rules 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies: COMMON STOCK
(2) Aggregate number of securities to which transaction applies:
NOT APPLICABLE
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:_/ NOT APPLICABLE
(4) Proposed maximum aggregate value of transaction: NOT APPLICABLE
_/Set forth the amount on which the filing fee is calculated
and state how it was determined.
[ ] 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 of Schedule and the date
of its filing.
(1) Amount Previously Paid: NOT APPLICABLE
(2) Form, Schedule or Registration Statement No.: NOT APPLICABLE
(3) Filing Party: NOT APPLICABLE
(4) Date Filed: NOT APPLICABLE<PAGE>
STOKELY USA, INC.
1055 Corporate Center Drive
Oconomowoc, Wisconsin 53066
--------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On September 12, 1996
--------------
To the Holders of Common Stock of Stokely USA, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Stokely USA, Inc. (the "Company") will be held on
Thursday, September 12, 1996, at 2:00 p.m., Milwaukee time, at the Holiday
Inn SunSpree Resort, 1350 Royal Mile Road, Oconomowoc, Wisconsin.
The Annual Meeting is for the purpose of considering and voting upon
the following matters, all of which are set forth more completely in the
accompanying Proxy Statement:
1. The election of two directors, each for a three-year term; and
2. Such other matters as may properly come before the Annual Meeting
or any adjournments or postponements thereof. The Board of
Directors is not aware of any such other business.
The Board of Directors has established July 5, 1996 as the record date
for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting and any adjournments or postponements thereof. Only
shareholders of record as of the close of business on that date will be
entitled to vote at the Annual Meeting or any adjournments or postponements
thereof. In the event there are not sufficient votes for a quorum or to
approve or ratify any of the foregoing proposals at the time of the Annual
Meeting, the Annual Meeting may be adjourned or postponed in order to
permit further solicitation of proxies by the Company.
By Order of the Board of Directors
Robert M. Brill
Secretary
Oconomowoc, Wisconsin
August 9, 1996
<PAGE>
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. YOUR VOTE IS
IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE EITHER IN PERSON
OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON
AT ANY TIME PRIOR TO THE EXERCISE THEREOF.<PAGE>
STOKELY USA, INC.
1055 Corporate Center Drive
Oconomowoc, Wisconsin 53066
-------------
ANNUAL MEETING OF SHAREHOLDERS
To Be Held On September 12, 1996
-------------
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being furnished to holders of common stock,
$.05 par value per share (the "Common Stock"), of Stokely USA, Inc. (the
"Company") in connection with the solicitation on behalf of the Board of
Directors of the Company of proxies to be used at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held on Thursday, September 12,
1996, at 2:00 p.m., Milwaukee time, at the Holiday Inn SunSpree Resort,
1350 Royal Mile Road, Oconomowoc, Wisconsin and at any adjournments or
postponements thereof.
The Company's 1996 Summary Annual Report to Shareholders and Annual
Report on Form 10-K for the fiscal year ended March 31, 1996, accompanies
this Proxy Statement and appointment form of proxy, which are being mailed
to shareholders on or about August 9, 1996.
Regardless of the number of shares of Common Stock owned, it is
important that holders of record of a majority of the shares be represented
by proxy or present in person at the Annual Meeting. Shareholders are
requested to vote by completing the enclosed proxy and returning it signed
and dated in the enclosed postage-paid envelope. Shareholders are urged to
indicate their vote in the spaces provided on the proxy. Proxies solicited
by the Board of Directors of the Company, if properly executed and
returned, will be voted in accordance with the directions given therein.
Where no instructions are indicated, signed proxies will be voted FOR the
election of each of the nominees for director named in this Proxy
Statement. Returning your completed proxy form will not prevent you from
voting in person at the Annual Meeting should you be present and wish to do
so.
The Board of Directors of the Company knows of no additional matters
that will be presented for consideration at the Annual Meeting. Execution
of a proxy, however, confers on the designated proxy holders discretionary
authority to vote the shares in accordance with their best judgment on such
other business, if any, that may properly come before the Annual Meeting or
any adjournments or postponements thereof.
Any shareholder giving a proxy has the power to revoke it any time
before it is exercised by (i) filing with the Secretary of the Company
written notice thereof (Robert M. Brill, Secretary, Stokely USA, Inc., 1055
Corporate Center Drive, Oconomowoc, Wisconsin 53066); (ii) submitting a
duly-executed proxy bearing a later date; or (iii) appearing at the Annual
Meeting and giving the Secretary notice of his or her intention to vote in
person. If you are a shareholder whose shares are not registered in your
own name, you will need additional documentation from your record holder to
vote personally at the Annual Meeting. Proxies solicited hereby may be
exercised only at the Annual Meeting and any adjournment or postponement
thereof and will not be used for any other meeting.
The cost of solicitation of proxies by mail on behalf of the Board of
Directors will be borne by the Company. Proxies may be solicited by
personal interview or by telephone, in addition to the use of the mail, by
directors, officers and regular employees of the Company without additional
compensation therefor. The Company also has made arrangements with
brokerage firms, banks, nominees and other fiduciaries to forward proxy
solicitation materials for shares of Common Stock held of record by the
beneficial owners of such shares. The Company will reimburse such holders
for their reasonable out-of-pocket expenses.
VOTING SECURITIES
Only shareholders of record at the close of business on July 5, 1996
(the "Record Date") will be entitled to notice of and to vote at the Annual
Meeting or any adjournments or postponements thereof. The total number of
shares of Common Stock outstanding on the Record Date was 11,357,472. For
each matter which may come before the Annual Meeting, each share of Common
Stock, the only class of voting securities of the Company, is entitled to
one vote.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares of Common Stock entitled to vote is
necessary to constitute a quorum at the Annual Meeting. Abstentions are
included in the determination of shares present and voting for purposes of
whether a quorum exists, while broker non-votes are not. Neither
abstentions nor broker non-votes are counted in determining whether a
matter has been approved. In the event there are not sufficient votes for
a quorum or to approve or ratify any proposal at the time of the Annual
Meeting, the Annual Meeting may be adjourned or postponed in order to
permit the further solicitation of proxies.
As to the election of directors, the proxy being provided by the Board
of Directors enables a shareholder to vote for the election of the nominees
proposed by the Board, or to withhold authority to vote for the nominees
being proposed. Under the Wisconsin Business Corporation Law, directors
are elected by a plurality of the votes cast with a quorum present and
cumulative voting is not permitted unless a corporation's articles of
incorporation provide otherwise. The Company's Articles of Incorporation
do not provide cumulative voting rights for the election of directors.
Proxies solicited hereby will be returned to the Board of Directors,
and will be tabulated by inspectors of election designated by the Board of
Directors, who will not be employed by, or a director of, the Company or
any of its affiliates.
<PAGE>
MATTER 1.
ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of ten
directors (the "Board") divided into three classes. Upon Mr. Joseph B.
Weix's retirement at the Annual Meeting, the number of directors shall be
reduced to nine. Directors hold office for staggered terms of three years
(or until their successors are elected and qualified). At each annual
meeting of shareholders of the Company, one class of directors will be
elected for a term of three years to succeed the directors whose terms are
expiring. The following nominees, who are directors serving terms which
expire at the Annual Meeting, have been nominated by the Board for
submission to the shareholders to serve a three-year term expiring at the
1999 Annual Meeting of Shareholders. Unless otherwise directed, each proxy
executed and returned by a shareholder will be voted FOR the election of
the nominees for director listed below. If any person named as nominee
should be unable or unwilling to stand for election at the time of the
Annual Meeting, the proxies will nominate and vote for any replacement
nominee or nominees recommended by the Board. At this time, the Board
knows of no reason why any of the nominees listed below may not be able to
serve as a director if elected.
With the exception of Messrs. Mount and Weix who are cousins, there
are no family relationships among the executive officers and directors, and
there are no arrangements or understandings pursuant to which any of them
were elected as executive officers and/or directors or are being nominated
to serve as directors. The following tables present information concerning
the nominees for director and each director serving an unexpired term.
<TABLE>
Position with the Company Director of the
Name Age and Principal Occupation Company Since
---- --- ------------------------- -------------
<S> <C> <C> <C>
Nominees for Election to Terms Expiring in 1999
Charles J. Carey 71 Consultant since 1989; President and 1989
Chief Executive Officer, National Food
Processors Association, a trade
association, 1972-89.
Frank J. Pelisek 66 Chairman of the Board of Directors and 1983
Executive Committee of the Board of
Directors of the Company, since August
1993; Acting Chief Executive Officer and
Chairman of the Executive Committee of the
Board of Directors, June 1992-August 1993;
Partner, Michael Best & Friedrich, legal
counsel to the Company, since 1965; Director,
various privately held companies.
Directors Whose Term Expires at the Annual Meeting
Joseph B. Weix 68 Retired, Chairman of the Board and Chief 1963
Executive Officer of the Company, 1975-92;
joined the Company in 1954.
Position with the Company Director of the
Name Age and Principal Occupation Company Since
---- --- ------------------------- -------------
Directors Whose Terms Expire in 1997
Orren J. Bradley 71 Senior Vice President, Laub Groups, Inc., an1985
insurance operations company, since 1985;
Chairman, Boston Store Division of Federated
Department Stores, Inc., 1967-85; Director,
Hanger-Tight Company, Great Lakes Credit
Corporation and Oshkosh B'Gosh, Inc., an
apparel manufacturer.
James H. DeWees 62 Retired; Chairman, President and Chief 1994
Executive Officer; Godfrey Company, a
division of Fleming Companies, Inc., a
wholesale food distributor, 1984-94; Vice
President, Fleming Companies, Inc. 1987-94;
Chairman, Village of Manor Park Foundation;
Director, Village of Manor Park, Inc. and
Green Bay Packer Hall of Fame; Member, First
Bank Milwaukee Business Advisory Board and
Marquette University Business Advisory Council.
Carol Ward Knox 45 Principal, Morgan & Myers, Inc., a public 1993
relations consulting company, since 1982;
Former Chairperson, Wisconsin Department of
Agriculture, Trade and Consumer Protection
Board; Former Member, Board of Visitors,
University of Wisconsin College of Agriculture
and Life Science, and Wisconsin Rural Leadership
Program Board.
Thomas W. Mount 65 Retired; Chairman of the Company, 1992-93; 1966
President and Chief Operating Officer of the
Company, 1975-92; joined the Company in 1957;
Director, Fiduciary Capital Growth Fund, Inc.
and Fiduciary Total Return Fund, Inc.; Former
Chairman, National Food Processors Association.
Directors Whose Terms Expire in 1998
Russell W. Britt 70 Retired; President, Chief Operating Officer 1985
and a Director of Wisconsin Energy Corp., a
utility service company, 1987-91 and Vice
President, 1981-87; Executive Officer and
Director of Wisconsin Electric Power Co. and
Wisconsin Natural Gas Co., subsidiaries of
Wisconsin Energy Corp., 1982-91.
Ody J. Fish 71 Private Investor; President, Pal-O-Pak 1985
Insulation Co., Inc. an insulation
manufacturing company, 1951-86; Director,
Quest Technologies, Inc., f/k/a La Belle
Industries, Inc.; Director of all of the funds
included in the Marshall Family of Mutual
Funds; Former Member, University of Wisconsin
Board of Regents; Chairman, Wisconsin Education
Commission.
<PAGE>
Position with the Company Director of the
Name Age and Principal Occupation Company Since
---- --- ------------------------- -------------
Directors Whose Terms Expire in 1998 (continued)
Stephen W. Theobald 50 President and Chief Executive Officer of the 1980
Company since April 1996; Vice Chairman and
Treasurer of the Company, 1992-96; Vice
President-Administration and Treasurer of the
Company, 1990-92; Vice President-Administration
of the Company 1985-90; joined the company in
1985.
</TABLE>
The affirmative vote of a plurality of the votes cast is required for
the election of the nominees. Unless otherwise specified, the shares of
Common Stock represented by the proxies solicited hereby will be voted in
favor of election of the above-described nominees.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
THE ELECTION OF THE NOMINEES FOR DIRECTOR.
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the fiscal year ended March 31, 1996, the Board of Directors of
the Company held four regular meetings and no special meetings. No incumbent
director attended fewer than 75% of the aggregate total number of meetings of
the Board held and the total number of committee meetings on which such
director served during the fiscal year ended March 31, 1996. The Board has
standing Executive, Audit, Compensation, Retirement Plan Advisory and
Nominating Committees.
The Executive Committee has the authority during the intervals between
Board meetings to exercise the powers of the Board, except for certain powers
reserved exclusively for the Board. The Executive Committee consists of
Messrs. Pelisek (Chairman), Britt, Fish, Mount and Theobald. The Executive
Committee held one meeting during the fiscal year ended March 31, 1996.
The Audit Committee reviews the scope and timing of the audit of the
Company's financial statements by the Company's independent public
accountants and reviews with the independent public accountants the Company's
management policies and procedures with respect to auditing and accounting
controls. The Audit Committee also reviews and evaluates the independence of
the Company's accountants, approves services rendered by such accountants and
recommends to the Board the engagement, continuation or discharge of the
Company's accountants. The Audit Committee consists of Messrs. Britt
(Chairman), Bradley and DeWees. The Audit Committee held two meetings during
the fiscal year ended March 31, 1996.
The Compensation Committee is responsible for overseeing the management
of human resources activities of the Company, including compensation for
directors and executive officers, and the establishment of employee pension
plans and benefits. The Compensation Committee also is responsible for
determining the recipients and terms of stock options granted under the 1985
Incentive Stock Option Plan and the Stokely USA, Inc. 1994 Executive Stock
Option Plan. The Compensation Committee consists of Messrs. Fish (Chairman),
Carey, Pelisek and Ms. Knox, and met one time during the fiscal year ended
March 31, 1996.
The Retirement Plan Advisory Committee is responsible for overseeing the
management of the Company's various 401(k), profit sharing and retirement
plans. The Retirement Plan Advisory Committee consists of Messrs. DeWees
(Chairman), Fish, Mount and Ms. Knox, and met two times during the fiscal
year ended March 31, 1996.
The Nominating Committee selects nominees for directors to stand for
election at the Company's annual meetings, and consists of Messrs. Pelisek
(Chairman), Britt, Fish and Theobald. The Nominating Committee did not meet
during the fiscal year ended March 31, 1996. In June 1996, the entire Board
of Directors of the Company acted as a Nominating Committee for the selection
of the nominees for director to stand for election at the Annual Meeting.
The Company's By-Laws allow for shareholder nominations of directors and
require such nomination to be made pursuant to timely notice to the Chief
Executive Officer or President of the Company.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following table summarizes the total compensation earned by the
Company's President and Chief Executive Officer and the next four highest
compensated executive officers whose compensation (salary and bonus) exceeded
$100,000 during the Company's fiscal years ended March 31, 1994, 1995 and
1996. On April 16, 1996, Mr. Vernon L. Wiersma resigned as President and
Chief Executive Officer of the Company and the Board of Directors of the
Company appointed Mr. Stephen W. Theobald as President and Chief Executive
Officer.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation Awards
Value of
Annual Restricted Number of
Compensation<F1> Stock Option All Other
Name and Principal Position Year Salary Bonus Awards<F2> Awards<F3> Compensation<F4>
<S> <C> <C> <C> <C> <C> <C>
Stephen W. Theobald......... 1996 $170,500 -- -- 19,000 $12,636
Current President and Chief 1995 160,400 -- -- 15,000 25,375
Executive Officer; Vice 1994 128,333<F5>$56,000 -- 0 9,891
Chairman and Treasurer
during fiscal 1996
Vernon L. Wiersma........... 1996 $220,000 -- $61,750 0 $13,160
Former President and Chief 1995 205,000 -- -- 30,000 26,399
Executive Officer 1994 162,167<F5>$70,000 -- 0 7,496
Kenneth C. Murray........... 1996 $124,000 -- -- 11,000 $ 5,587
Senior Vice President, 1995 118,000 -- -- 0 15,652
Sales and Marketing 1994 100,000 $20,000 -- 0 926
Russell J. Trunk............ 1996 $124,000 -- -- 10,000 $15,282
Senior Vice President, 1995 118,000 -- -- 6,000 31,666
Operations 1994 100,000 $20,000 -- 0 16,963
Leslie J. Wilson............ 1996 $118,000 -- -- 0 $14,296
Vice President, Finance and 1995 114,500 -- -- 0 28,523
Chief Financial and 1994 100,000 $20,000 -- 0 9,864
Accounting Officer
<FN>
<F1> Perquisites provided to the named executive officers by the Company did not exceed the
lesser of $50,000 or 10% of each named executive officer's total annual salary during
fiscal 1994, 1995 or 1996, and accordingly, are not included.
<F2> Amount shown in this column represents the value of 25,000 shares of Common Stock issued
to Mr. Wiersma on April 16, 1996, based on the value of Common Stock at March 31, 1996
($2.47 per share). See "Severance Agreement with Mr. Wiersma."
<PAGE>
<F3> Amounts shown represent the total number of options awarded under the 1985 Incentive
Stock Option Plan, the 1994 Executive Stock Option Plan and outside such option plans
during the fiscal years indicated. All of the options to purchase shares of Common
Stock indicated as granted during the fiscal year ended March 31, 1996, represent
options which had been previously granted to such individuals but which were repriced in
fiscal 1996. Options to purchase 30,000 shares of Common Stock previously granted to
Mr. Wiersma also were repriced in fiscal 1996; however, such options expired on July 15,
1996 and were not exercised. See "Ten Year Option/SAR Repricings."
<F4> Amounts shown represent contributions by the Company for the benefit of the named
individuals pursuant to the Stokely USA, Inc. Retirement Savings Profit Sharing Plan
("Retirement Savings Plan") and the Split Dollar Life Insurance Plan in the form of
premium payments on behalf of the named executive officers during the fiscal years
indicated. The amounts shown for each individual for the fiscal year ended March 31,
1996 are derived from the following figures: (i) Mr. Theobald - $1,000 Retirement
Savings Plan contribution and $11,636 split dollar premium; (ii) Mr. Wiersma - $1,000
Retirement Savings Plan contribution and $12,160 split dollar premium; (iii) Mr. Murray
- $1,000 Retirement Savings Plan contribution and $4,587 split dollar premium; (iv) Mr.
Trunk - $15,282 split dollar plan premium; and (v) Mr. Wilson - $1,000 Retirement
Savings Plan contribution and $13,296 split dollar plan premium.
<F5> The salaries of Messrs. Wiersma and Theobald were increased in August of fiscal 1995
reflecting the assumption of significant new responsibilities related to their
promotions in June of fiscal 1993, for which no salary increases had been previously
granted. On an annualized basis, the increased salaries were $175,000 for Mr. Wiersma
and $140,000 for Mr. Theobald.
</FN>
</TABLE>
Severance Agreement with Mr. Wiersma
On May 29, 1996, the Company entered into a severance agreement (the
"Severance Agreement") with Mr. Wiersma setting forth the terms and
conditions of his resignation as President, Chief Executive Officer and
Director of the Company, effective April 16, 1996. Pursuant to the
Severance Agreement, Mr. Wiersma will be paid $18,333 per month from
April 16, 1996 through May 30, 1998, and in the event of Mr. Wiersma's
death, such amounts shall be paid to his spouse, or if she is deceased, to
the personal representative of his estate. In the event of a Change of
Control of the Company (as defined in the Contingent Employment Agreements
currently in effect which are discussed herein), the Severance Agreement
provides that Mr. Wiersma shall be paid the then present value of such
monthly payments in a single sum. For the period commencing April 16, 1996
through May 30, 1998 or such earlier date as of the effective date of
coverage for Mr. Wiersma under any other employer's health insurance
program, Mr. Wiersma and his eligible dependents are entitled to
participate in the Company's group health and disability insurance programs
at the same cost to Mr. Wiersma as of the date of his resignation.
Pursuant to the Severance Agreement, the Company will continue to pay the
semi-annual premium of $14,523 under the split dollar life insurance
contract covering Mr. Wiersma through May 30, 1998, and Mr. Wiersma shall
have the option to purchase the contract from the Company by paying to the
Company the aggregate value of the premiums paid by the Company from the
date the contract was entered into to the date Mr. Wiersma exercises such
option to purchase. In addition, pursuant to the Severance Agreement, in
recognition that a portion of the grant of 50,000 shares of restricted
Common Stock to Mr. Wiersma on June 15, 1995 reflected compensation for
prior services, vesting of 25,000 shares was accelerated and such shares
were issued to Mr. Wiersma. Pursuant to the terms of the restricted stock
grant, the Company is obligated to pay an amount equal to the income tax
payable by Mr. Wiersma as a result of the grant of such shares. All rights
under agreements and/or plans which Mr. Wiersma had with respect to options
granted to him prior to April 16, 1996 also remained in effect in
accordance with the terms of such agreements and/or plans. Mr. Wiersma is
entitled to all benefits accrued under the Supplemental Employee Retirement
Plan (described herein) ("SERP") payable pursuant to the terms of the SERP,
upon Mr. Wiersma's attaining age 65, or, in the event of a Change of
Control, the Company shall pay to Mr. Wiersma the then present value of
such benefits, discounted at the rate of 7% per annum, in a single sum. In
addition, Mr. Wiersma received $2,530 as payment for the aggregate Company
contributions accrued for his benefit under the Deferred Compensation Plan
(as described herein). In lieu of outplacement services, the Company paid
to Mr. Wiersma a lump sum of $20,000 and paid $5,000 to Mr. Wiersma's legal
counsel for costs incurred in connection with negotiating the Severance
Agreement.
Employment Agreements
In 1992, the Company entered into Change of Control Contingent
Employment Agreements with Messrs. Theobald, Murray, Trunk and Wilson
(collectively, the "Contingent Employment Agreements"). Under the
Contingent Employment Agreements, if a change of control occurs, the
Company will continue to employ Mr. Theobald for three years, Mr. Wilson
for two years, and Messrs. Murray and Trunk for one year, following the
date of the change of control. "Change of Control," as defined in the
Contingent Employment Agreements, includes the acquisition of 20% or more
of the Company's Common Stock, a merger, consolidation or reorganization,
the sale of substantially all of the Company's assets or a significant
change in the composition of the Board of Directors of the Company. In the
event of a Change of Control, the employee shall be employed by the Company
for the applicable number of years and shall receive a salary equal to his
salary on the date of the Change of Control, subject to annual upward
adjustments commensurate with increases awarded to other officers and
employees. If, after a Change of Control, the Company terminates the
employee for any reason other than for cause or if the employee elects to
terminate his employment, he shall continue to be paid monthly an amount
equal to his then current monthly base salary plus a certain amount of
incentive payments and shall continue to be entitled to receive all other
employee benefits and perquisites made available to other employees of
comparable status until the end of his employment term. If the Company
terminates the employee for "cause" (as defined in the Contingent
Employment Agreements), the employee is entitled to receive only his
compensation through the date of termination. For purposes of the
Contingent Employment Agreements, the current base salary for Mr. Theobald
is $170,500, Messrs. Murray and Trunk is $124,000, and Mr. Wilson is
$118,000. The amount of the base salary and any incentive payments are
reviewed regularly by the Compensation Committee of the Board of Directors.
The Company also has entered into similar Contingent Employment Agreements
with other key officers and employees of the Company.
In June 1992, the Company entered into an Employment Agreement with
Mr. Wilson (the "Employment Agreement") for a two-year term which
automatically is extended for a period of one year on each anniversary date
unless the Company or Mr. Wilson has provided notice of nonrenewal within
30 days prior to the date thereof. For purposes of the Employment
Agreement, the current base salary for Mr. Wilson is $118,000. In addition
to base salary, the Employment Agreement provides for payments from other
Company incentive compensation plans, and provides for other benefits,
including participation in any group health, life, disability or similar
insurance program and in any pension, profit-sharing, deferred
compensation, 401(k) or other retirement plans maintained by the Company.
The Employment Agreement also provides for participation in any stock-based
incentive programs made available to executive officers of the Company.
The Employment Agreement will terminate in the event the Company ceases
operations and may be terminated by the Company in the event of Mr.
Wilson's disability or retirement, or for "cause" (as defined in the
Employment Agreement) at any time.
Deferred Compensation Plan for Key Executives
On January 1, 1995, the Company entered into Deferred Compensation
Agreements with Messrs. Wiersma, Theobald, Murray, Trunk and Wilson
pursuant to a Deferred Compensation Plan (the "Deferred Compensation
Agreements"). In accordance with the terms of the Deferred Compensation
Agreements, the Company accrues amounts equal to the contributions that
would have been made by the Company under the Retirement Savings Plan
(described herein) but for the maximum annual contribution and compensation
limits under the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"). In addition, pursuant to the Deferred Compensation
Agreements, the executives may elect to defer compensation earned in any
year. The maximum amount that may be deferred in any calendar year is 20%
of the executives' annual compensation less the maximum amount that may be
deferred on an annual basis by such executive pursuant to the Retirement
Savings Plan. Interest is accrued on deferrals and Company contributions
at the rate of interest equal to the average of the U.S. Treasury Bond
rate as published in the Wall Street Journal on the last day of the
calendar year and the last day of the previous three quarters of the
calendar year. Executives may become eligible for receipt of deferred
compensation and Company contributions under the Deferred Compensation
Plans upon death, disability, retirement or termination. The Deferred
Compensation Agreements are non-qualified, unfunded contractual liabilities
of the Company. The Company also has entered into similar deferred
compensation agreements with other key officers and employees of the
Company.
Deferred Compensation Agreements
In 1990, the Company entered into deferred compensation agreements
(the "1990 Deferred Compensation Agreements") with Messrs. Thomas W. Mount,
former President and Chairman of the Board of Directors of the Company, and
Joseph B. Weix, former Chairman of the Board of Directors of the Company.
Under the 1990 Deferred Compensation Agreements, the Company is obligated
to pay Messrs. Mount and Weix each deferred compensation in monthly
installments of $7,500 for a period of 120 consecutive months (or at their
election in one lump sum based upon a present value calculation outlined in
the 1990 Deferred Compensation Agreements) following their death,
disability or retirement. In the event of the death of Messrs. Mount or
Weix, their designated beneficiaries shall receive the deferred
compensation payments over the stated period, or at the Company's election,
such payments may be paid in one lump sum based upon a present value
calculation outlined in the 1990 Deferred Compensation Agreements. The
1990 Deferred Compensation Agreements are non-tax qualified, unfunded
deferred compensation plans. Mr. Mount retired in April 1993, and Mr. Weix
retired in June 1992, and the Company commenced the monthly installment
payments at those dates.
Benefits
Split Dollar Plan
The Company established the Split Dollar Life Insurance Plan,
effective February 1, 1990 (the "Split Dollar Plan"), in which Messrs.
Mount, Theobald, Murray, Trunk and Wilson and other key officers and
employees of the Company participate. The life insurance benefit is equal
to four times the executive's salary. The executive pays the economic
value of the insurance and the Company pays the balance of the premium.
Upon the executive's death or the retirement of the executive, the Company
will receive all premiums paid by it on behalf of the executive and the
executive will receive the remainder of the death benefit or the cash
surrender value. For the fiscal year ended March 31, 1996, Mr. Wiersma
also participated in the Split Dollar Plan. For further information
regarding the Split Dollar Plan arrangements with respect to Mr. Wiersma
made in connection with his resignation, see "Severance Agreement with Mr.
Wiersma."
Supplemental Employee Retirement Plan
The Company established the Supplemental Employee Retirement Plan (the
"SERP"), effective January 1, 1995, in which Messrs. Theobald, Murray,
Trunk, and Wilson participate. For Mr. Theobald, the SERP provides a
benefit at retirement (based on 25 years of service) of 120 equal monthly
payments which equal, on an annual basis, 40% of the salary (excluding
bonus) individually earned during the twelve months preceding retirement.
For Messrs. Murray, Trunk, and Wilson, the SERP provides a benefit at
retirement (based on 25 years of service) of 120 equal monthly payments
which equal, on an annual basis, 20% of the salary (excluding bonus)
individually earned during the twelve months preceding retirement. The
monthly payment is reduced on a percentage basis of years of service that
are less than 25 at the time of retirement. For information relating to
the SERP arrangements made with respect to Mr. Wiersma in connection with
his resignation, see "Severance Agreement with Mr. Wiersma."
Retirement Savings Plan
The Company maintains a retirement savings plan, the Stokely USA, Inc.
Retirement Savings Profit Sharing Plan (the "Retirement Savings Plan"),
covering all of its eligible employees. Employees are eligible to
participate after completing a twelve-month period of 1,000 or more hours
of employment. The Retirement Savings Plan involves a Company Profit
Sharing Contribution account, a Voluntary Contribution account and a 401(k)
Salary Deferral account. Subject to the Company's operating results, the
Company may make contributions up to 8% of pre-tax profits to the Profit
Sharing Contribution account which would be allocated to participants pro
rata based upon their eligible compensation. Participants become 20%
vested in the profit sharing contributions credited to their accounts and
the earnings thereon after three years of credited service, and 20% per
year thereafter until 100% vested after seven years. Participants also
become 100% vested upon death, disability or attainment of age 62. The
Voluntary Contribution account permits participants to make voluntary
after-tax savings contributions in amounts between 2% and 10% of their
annual compensation. Participants in the Voluntary Contribution account
are 100% vested in their contributions and the earnings thereon. Under the
Retirement Savings Plan, through the 401(k) Salary Deferral account,
participants are permitted, subject to the limitations imposed by Section
401(k) of the Internal Revenue Code to make voluntary tax-deferred
contributions in amounts between 1% and 10% of their annual compensation.
The Company may make a matching contribution to the 401(k) Salary Deferral
account in an amount up to 25% of the first 6% of compensation deferred by
the participant for participants who meet all eligibility and participant
requirements. Participants in the 401(k) Salary Deferral account are 100%
vested in their contributions, the Company's matching contribution and the
earnings thereon. Under the Retirement Savings Plan, a separate account is
maintained for each type of account and each participating employee.
Participating employees direct the Retirement Savings Plan trustee with
respect to the investment of assets held in their accounts among up to six
investment options made available by the trustee, including shares of
Common Stock.
Stock Option Plans
Incentive Stock Option Plan
The Company established the 1985 Incentive Stock Option Plan (the
"Incentive Stock Option Plan") in which key employees of the Company and
its subsidiaries, as determined by the Compensation Committee, are eligible
to participate. As of March 31, 1996, the Company and its subsidiaries had
36 eligible employees. The Incentive Stock Option Plan authorizes the
grant of options to purchase shares of Common Stock intended to qualify as
incentive stock options under Section 422A of the Internal Revenue Code.
The Compensation Committee administers the Incentive Stock Option Plan. As
of March 31, 1996, options to purchase 164,000 shares of Common Stock had
been granted and were outstanding under the Incentive Stock Option Plan and
a total of 60,550 shares of Common Stock were available for granting under
the Incentive Stock Option Plan. In fiscal 1996, a total of 29,900 options
which were to expire on August 30, 1995 were surrendered by participants
and cancelled, and replacement options were issued for the same number of
shares and at the same exercise price. The expiration date for all of such
replacement options is June 17, 1998. In addition, during fiscal 1996, the
exercise prices of a total of 87,600 options granted under the Incentive
Stock Option Plan were adjusted for those options which had an exercise
price 25% greater than the closing price of the Common Stock on May 31,
1995. The exercise price of such amended options was adjusted to $6.875, a
price 25% greater than the closing price of the Common Stock on May 31,
1995. For information regarding the repricing of options granted to those
executive officers named in the Summary Compensation Table, see "Ten Year
Option/SAR Repricings."
<PAGE>
Non-Qualified Stock Option Grants
On April 8, 1994, the Company granted options to purchase 30,000
shares of Common Stock and 15,000 shares of Common Stock to Mr. Wiersma and
Mr. Theobald, respectively, with an exercise price of $8.50 per share, the
market price at date of grant. These options are non-qualified under the
Internal Revenue Code and were not awarded under either the 1985 Incentive
Stock Option Plan or the 1994 Executive Stock Option Plan. In fiscal 1996,
the exercise price of these options was adjusted to $6.875. There were no
other options granted outside of the 1985 Incentive Stock Option Plan or
the Executive Stock Option Plan in fiscal 1996.
Executive Stock Option Plan
On June 3, 1994, the Board of Directors of the Company adopted the
Stokely USA, Inc. 1994 Executive Stock Option Plan (the "Executive Stock
Option Plan"). The Executive Stock Option Plan was ratified by
shareholders of the Company at the Annual Meeting of Shareholders held on
August 26, 1994. All key full-time employees of the Company and its
subsidiaries are eligible to participate in the Executive Stock Option
Plan. At March 31, 1996, the Company and its subsidiaries had 45 eligible
employees. The Executive Stock Option Plan provides for the granting of
(i) incentive stock options ("ISOs"), (ii) non-qualified stock options
("NSOs"), and (iii) stock appreciation rights ("SARs"). At March 31, 1996,
options to purchase 3,796 shares had been granted and were outstanding
under the Executive Stock Option Plan and options for a total of 396,204
shares of Common Stock were available for granting to eligible
participants. A total of 3,796 shares of Common Stock were granted under
the Executive Stock Option Plan in fiscal 1996. The Compensation Committee
of the Board, or such other committee appointed by the Board, administers
the Executive Stock Option Plan. Under the Executive Stock Option Plan,
the maximum number of shares for which grants may be made to any eligible
employee may not exceed 50,000 shares.
<PAGE>
The following table sets forth certain information concerning the
grant of stock options to the current executive officers listed in the
Summary Compensation Table during the fiscal year ended March 31, 1996,
including the options which had been previously granted but which were
repriced in fiscal 1996.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable
% of Total Value at Assumed
Options Annual Rates of Stock
Granted to Exercise Price Appreciation
Options Employees in Price Expiration for Option Terms<F2>
Name Granted<F1> Fiscal Year<F1> ($/Sh) Date 5% 10%
---- ----------- --------------- ------ ---- --- ---
<S> <C> <C> <C> <C> <C> <C>
Stephen w. Theobald 4,000 2.9% $6.875 07/03/96 $ 229 $ 458
15,000 10.8 6.875 04/08/04 56,856 140,038
Kenneth C. Murray 2,500 1.8 6.875 02/05/00 4,487 9,864
2,500 1.8 6.875 02/01/02 6,709 15,545
6,000 4.3 6.875 12/11/02 18,486 43,824
Russell J. Trunk 4,000 2.9 6.875 05/20/01 9,353 21,218
6,000 4.3 6.875 04/08/04 19,695 47,173
- --------------
<FN>
<F1> All of these options represent options which had previously been granted to such
individuals but which were repriced in fiscal 1996. In fiscal 1996, options to purchase
138,896 shares of Common Stock were granted to all eligible participants, including a
total of 135,100 options which were repriced during the fiscal year ended March 31,
1996.
<F2> Amount shown represents the potential realizable value, net of the option exercise
price, assuming that the underlying market price of the Common Stock appreciates in
value from the date of repricing (May 12, 1995) to the end of the option term at
annualized rates of 5% and 10%. These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on stock option exercises are dependent upon
the future performance of the Common Stock and overall stock market conditions. There
can be no assurance that amounts reflected in this table will be achieved.
</FN>
</TABLE>
<PAGE>
No options issued under the Incentive Stock Option Plan, the Executive
Stock Option Plan or outside of either option plans were exercised by any
of the current named executive officers in the Summary Compensation Table
during fiscal 1996. The number and total value of unexercised in-the-money
options held by such individuals at March 31, 1996 are shown in the
following table.
<TABLE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Value of
Number of Unexercised
Number of Unexercised In-the-Money
Shares Options Options at
Acquired Value at Fiscal Year End Fiscal Year End<F1>
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen W. Theobald 0 $0 22,500 7,500 -- --
Kenneth C. Murray 0 0 11,000 -- -- --
Russell J. Trunk 0 0 7,000 3,000 -- --
Leslie J. Wilson 0 0 10,000 -- -- --
- ------------
<FN>
<F1> The value of unexercised in-the-money options is based upon the difference between the
fair market value of the securities underlying the options of $2.47 at March 31, 1996 and
the exercise price of the options. No options held by the named executive officers were
in-the-money at March 31, 1996.
</FN>
</TABLE>
<PAGE>
The following table sets forth certain information concerning the
repricing of options held by the current named executive officers in the
Summary Compensation Table during the fiscal year ended March 31, 1996.
<TABLE>
TEN-YEAR OPTION/SAR REPRICINGS<F1>
<CAPTION>
Length of
Number of Market Original
Securities Price of Exercise Option Term
Underlying Stock at Price at Remaining
Options/SARs Time of Time of New at Date of
Repriced or Repricing or Repricing or Exercise Repricing or
Name Date Amended Amendment<F2> Amendment<F2> Price<F2> Amendment
---- ---- ------------ ------------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen W. Theobald.. 07/03/864,000 $5.50 $10.50 $6.875 1 yr, 1 mnth
Current President 04/08/94 15,000 5.50 8.50 6.875 9 yrs
and Chief Executive
Officer, Vice Chair-
man and Treasurer
during fiscal 1996
Kenneth C. Murray..... 02/05/90 2,500 5.50 10.00 6.875 4 yrs,9 mnths
Senior Vice President,02/01/92 2,500 5.50 15.875 6.875 6 yrs,9 mnths
Sales and Marketing 12/11/92 6,000 5.50 7.75 6.875 7 yrs,7 mnths
Russell J. Trunk...... 05/20/91 4,000 5.50 10.00 6.875 6 yrs
Senior Vice President,04/08/94 6,000 5.50 8.50 6.875 9 yrs
Operations
- ------------
<FN>
<F1> Submitted by the Compensation Committee of the Board of Directors, consisting of Messrs.
Ody J. Fish (Chairman), Charles J. Carey, Frank J. Pelisek and Ms. Carol Ward Knox.
<F2> The options were approved for repricing by the Compensation Committee on May 12, 1995;
however, the repricing date was May 31, 1995. All options which had an exercise price 25%
greater than the closing price of the Common Stock on May 31, 1995 ($5.50) were amended
and the new exercise price was adjusted to $6.875, a price 25% greater than the closing
price of the Common Stock on May 31, 1995.
</FN>
</TABLE>
Directors' Compensation
Board Fees
Non-employee directors receive compensation of $6,000 per year for
service on the Board plus $500 for each Board or Committee meeting
attended. Directors may defer all or any portion of such compensation
under a Directors' Deferred Compensation Plan adopted in 1985. Deferred
compensation is credited to the account of a participating director in the
form of "phantom stock" of the Company based on the market price at the
time of each quarterly credit. Shares credited to the accounts of
directors electing to participate in the Directors' Deferred Compensation
Plan during the fiscal year ended March 31, 1996, were as follows: Mr.
Britt, 2,442 shares; and Mr. Fish, 2,671 shares. Directors who have served
two full terms (six years) and are Board members upon attaining the age 65
become eligible for retirement compensation of $500 per month upon
completion of service.
In May 1995, each non-employee director was issued a restricted stock
grant of 5,000 shares of Common Stock, each of which is subject to the
following vesting schedule: (i) 1,250 shares (06/01/96); (ii) 1,250 shares
(06/01/97); (iii) 1,250 shares (06/01/98); and (iv) 1,250 shares
(06/01/99). The restricted stock grants shall become fully vested upon (i)
completion of the term in which the Director attains age 72: (ii) death; or
(iii) incapacitation.
COMPENSATION COMMITTEE REPORT
Compensation Committee
The Compensation Committee of the Company reviews and establishes
compensation levels and benefits applicable to executive officers and
employees of the Company and makes recommendations with respect to all
issues pertaining to executive compensation for ratification by the Board
of Directors of the Company.
Compensation Committee Interlocks and Insider Participation
For the fiscal year ended March 31, 1996, the Compensation Committee
of the Board of Directors was composed of Messrs. Fish, Carey, Pelisek and
Ms. Knox, each of whom are not officers or employees of the Company. There
are no interlocks, as defined under the rules and regulations of the
Securities and Exchange Commission ("SEC"), between the Compensation
Committee and corporate affiliates of members of the Compensation
Committee.
Compensation Committee Report
Under rules established by the SEC, the Company is required to provide
certain data and information regarding the compensation and benefits
provided to executive officers of the Company. The rules require a report
of the Compensation Committee which explains the rationale and
considerations that led to fundamental compensation decisions affecting
such individuals. The Compensation Committee of the Company has prepared
the following report, at the direction of the Board of Directors of the
Company, for inclusion in this Proxy Statement.
It is the policy of the Company to maintain an executive compensation
program which will attract, motivate, retain and reward employees at all
levels of the organization and provide appropriate incentives intended to
generate long-term financial results which will benefit the Company and the
shareholders of the Company. The executive compensation program of the
Company incorporates a pay-for-performance policy that compensates
executives for both corporate and individual performance.
The executive compensation program is designed to achieve the
following objectives:
- Provide the Company with the ability to compete for and retain
talented executives that are critical to the Company's long term
success;
- Provide incentives to achieve the Company's financial performance
objectives and strategic business initiatives with the objective
of enhancing shareholder value;
- Provide competitive compensation packages comparable to those
offered by other peer group companies; and
- Reward executives for individual performance in long-term
strategic management.
The Company's executive compensation package consists of three major
components: (i) cash compensation, including base salary and an annual
incentive bonus; (ii) long-term incentive compensation in the form of stock
options (including options awarded under the Incentive Stock Option Plan
and the Executive Stock Option Plan); and (iii) executive benefits.
In determining specific cash compensation for executive officers for
the fiscal year ended March 31, 1996, the Compensation Committee considered
the following factors:
1. Company performance relative to certain goals and objectives in
effect during the prior year;
2. Individual performance relative to certain goals and objectives
in effect during the prior year;
3. Company performance compared to broader based industry
performance; and
4. Salary surveys for positions with similar responsibilities in
similar sized companies.
The annual incentive bonus is determined under the Company's Annual
Incentive Plan (the "Incentive Plan") which was developed to recognize and
reward performance and provide a total annual cash bonus consistent with
the Company's executive compensation strategy. Under the Incentive Plan,
executives earn incentive compensation if the Company achieves various
targets set for profits (defined as income before taxes and before profit-
sharing expense) as a percent of sales. Incentive compensation earned is
established as a percentage of each officer's base salary, and the
applicable percentage is dependent upon the individual's base salary
amount. If the financial performance of the Company falls below the
threshold level, no awards will be earned. If threshold levels of the
performance indicators are achieved, the Incentive Plan provides for
payment of incentive compensation in amounts ranging between 10% to 25% of
an individual's base salary. If target levels are achieved by the Company,
the Incentive Plan provides for payment of incentive compensation in
amounts ranging from 20% to 50% of an individual's base salary. Incentive
compensation may exceed 50% of an individual's base salary if the Company
surpasses target levels, but may not exceed 75% of an individual's base
salary. Prior to payment of incentive compensation after completion of the
Company's financial audit, the Compensation Committee certifies the
performance objectives of the Incentive Plan have been met.
Based on the above noted factors, the Compensation Committee
implemented the following increases in executive base salaries, effective
April 1, 1995, for the fiscal year ending March 31, 1996: Mr. Theobald,
6%; Mr. Murray, 5%; Mr. Trunk, 5%; and Mr. Wilson, 3%. No incentive bonus
payments were made to executive officers for the fiscal year ended March
31, 1996, because the targets set for profits under the above-described
Incentive Plan were not achieved.
The base salary for the Chief Executive Officer is determined by the
Compensation Committee in general accordance with the same criteria noted
herein for determining compensation for all executive officers. Based on
those factors, the Compensation Committee implemented a 7% increase in Mr.
Wiersma's base salary for the fiscal year ending March 31, 1996. No
incentive bonus payments were made to Mr. Wiersma for the fiscal year
ending March 31, 1996, because the targets set for profits under the above-
described Incentive Plan were not achieved.
The Compensation Committee believes aligning the financial interests
of management more closely with those of the shareholders influences the
creation of shareholder value. Therefore, the Compensation Committee has
required certain executive stock ownership levels for certain of its
executive officers. For Mr. Theobald, the requirement is stock ownership
representing a value at least two times his annual salary, and for Messrs.
Murray, Trunk and Wilson, the stock ownership requirement is value
representing at least one times their annual salary. Executives are
required to use a portion of any annual cash bonus received to purchase
shares of Common Stock until the ownership requirement is met.
To further encourage stock ownership among executive and other key
employees, the Company has two stock option plans which it administers, the
Incentive Stock Option Plan and the Executive Stock Option Plan. The stock
option plans are designed to encourage and create ownership and retention
of the Company's Common Stock by key employees. Through the option grants,
the objective of aligning key employees' long-range interests with those of
shareholders may be met by providing key employees with the opportunity to
build, through achievement of corporate goals, a meaningful stake in the
Company. In fiscal 1996, a total of 29,900 options granted under the
Incentive Stock Option Plan which were to expire on August 30, 1995 were
surrendered by participants and cancelled, and replacement options were
issued for the same number of shares and at the same exercise price. The
expiration date for all of such replacement options is June 17, 1998. In
addition, during fiscal 1996, the exercise prices of a total of 87,600
options were adjusted for those options which had an exercise price 25%
greater than the closing price of the Common Stock on May 31, 1995. The
exercise price of such amended options was adjusted to $6.875, a price 25%
greater than the closing price of the Common Stock on May 31, 1995. The
Compensation Committee believed that the issuance of the replacement
options and the repricing of certain options was in the best interests of
the Company and in the long-term interests of the Company's shareholders.
The Compensation Committee believed such adjustments were necessary in
order for the option grants to continue to serve their primary purpose to
encourage key employees to remain with the Company and provide adequate
incentive for such individuals to contribute toward efforts to increase the
value of the Common Stock. For a further discussion of the Company's stock
option plans and the repricing of the options, see "Compensation of
Executive Officers and Directors - Stock Option Plans" and "Ten Year
Option/SAR Repricings."
For a discussion of the executive benefits made available to officers
of the Company during the fiscal year ended March 31, 1996, see
"Compensation of Executive Officers and Directors - Benefits." Executive
benefits paid by the Company to its executive officers were based upon each
executive officer's contribution to the success of the Company and
reflected each executive officer's position, salary and specific
responsibilities.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
PERFORMANCE GRAPH FOR STOKELY USA, INC.
Set forth below is a line graph comparing the cumulative shareholder
return on the shares of Common Stock, based on the market price of the
Common Stock and assuming reinvestment of dividends, with the cumulative
total return of companies included in the Center for Research on Security
Prices Index for NASDAQ Stock Market companies and a peer group chosen by
the Company. The peer group includes NASDAQ-listed companies included in
Standard Industrial Classification (SIC) codes 2030-2039 (Canned, Frozen
and Preserved Fruits, Vegetables and Food Specialties) and AMEX and NYSE
companies with 2030-2039 SIC codes.
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
Stokely USA, Inc. NASDAQ NYSE/AMEX/NASDAQ
---------------- ------ ----------------
3/31/92 $100.0 $100.0 $100.0
3/31/93 95.4 115.0 113.0
3/31/94 98.5 124.1 105.4
3/31/95 67.7 138.0 131.8
3/29/96 30.4 187.4 163.5
The index level for all series was set to $100.0 on 3/31/92.<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of June 30, 1996
(except as noted below), (i) by each person who is known to the Company to
beneficially own more than 5% of the Common Stock, (ii) by each of the
current and former executive officers of the Company appearing in the
Summary Compensation Table, (iii) by each director of the Company, and (iv)
by all directors and executive officers as a group.
Number of Percent of
Shares of Shares of
Common Stock Common Stock
Name Beneficially Owned<F1> Beneficially Owned
---- ---------------------- -------------------
David L. Babson & Co., Inc<F2> . . . 1,177,600 10.37%
Winogene Kile<F3>. . . . . . . . . . 502,000 4.42
Vernon L. Wiersma<F4>. . . . . . . . 85,000 *
Stephen W. Theobald<F5>. . . . . . . 193,191 1.70
Russell J. Trunk<F6> . . . . . . . . 10,000 *
Leslie J. Wilson<F7> . . . . . . . . 10,000 *
Robert M. Brill<F8>. . . . . . . . . 10,000 *
Robert Cook<F9>. . . . . . . . . . . 5,700 *
Eddie W. Foster<F10> . . . . . . . . 7,130 *
Kenneth C. Murray<F11> . . . . . . . 16,000 *
Frank J. Pelisek . . . . . . . . . . 3,650 *
Orren J. Bradley . . . . . . . . . . 1,750 *
Russell W. Britt . . . . . . . . . . 1,450 *
Charles J. Carey . . . . . . . . . . 2,250 *
James H. DeWees. . . . . . . . . . . 2,250 *
Ody J. Fish. . . . . . . . . . . . . 2,250 *
Carol Ward Knox. . . . . . . . . . . 5,250 *
Thomas W. Mount. . . . . . . . . . . 180,506 1.59
Joseph B. Weix<F12>. . . . . . . . . 65,883 *
All directors and executive
officers as a group (17 persons) 602,260 5.20
- ------------------------
* Amount represents less than 1% of the total shares of Common Stock
outstanding.
<F1> Unless otherwise indicated, includes shares of Common Stock held
directly by the individuals as well as by members of such
individual's immediate family who share the same household,
shares held in trust and other indirect forms of ownership over
which shares the individuals exercise sole or shared voting
and/or dispositive power.
<F2> Based on a Schedule 13G, dated February 12, 1996, filed by David
L. Babson & Co., Inc., located at One Memorial Drive, Cambridge,
MA 02142-1300, which indicated sole voting power of 841,100
shares of Common Stock and shared voting power of 336,500 shares
of Common Stock.
<F3> Winogene Kile's address is P. O. Box 592, Oconomowoc, Wisconsin
53066.
<PAGE>
<F4> Includes 60,000 shares of Common Stock issuable pursuant to
stock options exercisable as of June 30, 1996 held by Mr.
Wiersma. On April 16, 1996, Mr. Wiersma resigned as President
and Chief Executive Officer of the Company.
<F5> Includes 162,191 shares of Common Stock held by Mr. Theobald as
co-trustee for which he has shared dispositive and voting power
with The First National Bank of Chicago, and 30,000 shares of
Common Stock issuable pursuant to presently exercisable stock
options.
<F6> Includes 10,000 shares of Common Stock issuable pursuant to
presently exercisable stock options.
<F7> Includes 10,000 shares of Common Stock issuable pursuant to
presently exercisable stock options.
<F8> Includes 10,000 shares of Common Stock issuable pursuant to
presently exercisable stock options.
<F9> Includes 4,500 shares of Common Stock issuable pursuant to
presently exercisable stock options.
<F10> Includes 5,000 shares of Common Stock issuable pursuant to
presently exercisable stock options.
<F11> Includes 11,000 shares of Common Stock issuable pursuant to
presently exercisable stock options.
<F12> Includes 5,000 shares of Common Stock held by Mr. Weix as
co-trustee for which he has shared dispositive and voting power, and
as to which he disclaims any beneficial interest.
<PAGE>
INDEPENDENT AUDITORS
Deloitte & Touche LLP served as the Company's independent auditors
for the fiscal year ended March 31, 1996 and are serving in such capacity for
the current fiscal year. The appointment of independent auditors is made
annually by the Board of Directors. The decision of the Board is based on
the recommendation of the Audit Committee of the Board, which reviews both
the audit scope and estimated audit fees. Representatives of Deloitte &
Touche LLP are expected to be present at the Annual Meeting and will have the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions.
CERTAIN TRANSACTIONS
On March 21, 1996, the United States District Court for the Eastern
District of Wisconsin dismissed a consolidated class action lawsuit brought
against the Company, all of the individual members of the Board of Directors
of the Company (in both their capacity as individual members of the Board of
Directors and as executive officers, as applicable), William Blair & Company
and Dain Bosworth, Inc. This class action was a consolidated action,
including the action filed by Philip D. Freeman in January 1995 and a second
class action lawsuit filed by Daniel J. Sweeney in May 1995 which made
similar claims against the Company and certain officers arising from the same
facts and events. In conjunction with dismissing the consolidated action,
the court denied plaintiff's motion to certify the class as moot. The
lawsuit raised claims under various provisions of the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The plaintiffs alleged that they sustained losses in
connection with the purchase of shares of Common Stock of the Company during
the period from October 17, 1994 to December 19, 1994, as a result of the
Company's alleged misleading statements and alleged omissions to state
material facts in the prospectus and other materials. The court dismissed
the action after finding that the alleged misrepresentations were not
actually made by the Company and/or were not misrepresentations, and that the
alleged omissions of material facts were in fact adequately disclosed to
investors. Further, the court refused to permit the plaintiff to amend the
complaint, stating that an amendment would be futile because the court's
dismissal was based on the conclusion that the prospectus and other materials
did not contain the misrepresentations or omissions alleged in the complaint.
On April 8, 1996, the plaintiff filed a Motion for Reconsideration requesting
that the Court reconsider its decision refusing plaintiff leave to amend the
complaint. The Company has opposed the motion, which is still pending before
the court.
The Company has adopted a policy governing related party transactions
providing that any transaction by and between the Company and officers,
directors, principal shareholders or their affiliates will be for bona fide
business purposes and on terms no less favorable to the Company than those
obtainable in arms-length transactions with unaffiliated parties, and will be
subject to approval of a majority of the Company's outside directors.
<PAGE>
SECTION 16 COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of the shares of Common
Stock outstanding, to file reports of ownership and changes in ownership with
the SEC and the National Association of Securities Dealers, Inc. Officers,
directors and greater than ten percent shareholders are required by
regulation to furnish the Company with copies of all Section 16(a) forms they
file. Based upon review of the information provided to the Company, the
Company believes that during the fiscal year ended March 31, 1996, officers,
directors and greater than ten percent shareholders complied with all Section
16(a) filing requirements, with the exception of one individual. Mr. Charles
J. Carey, a director of the Company, did not timely report the acquisition of
800 shares of Common Stock, but reported said purchase on a Form 5 (Annual
Statement of Changes in Beneficial Ownership), for the fiscal year ended
March 31, 1996.
SHAREHOLDER PROPOSALS
Shareholders of the Company may submit matters to be considered at
the 1997 Annual Meeting of Shareholders. In order to be included in the 1997
Proxy Statement, such written proposals must be received on or before
April 12, 1997, at the principal offices of the Company at 1055 Corporate
Center Drive, Oconomowoc, Wisconsin, 53066-0248, Attention: Robert M. Brill,
Secretary. If such proposal is in compliance with all of the requirements of
17 C.F.R. Section 240.14a-8 ("Rule 14a-8") of the Rules and Regulations under
the Exchange Act, it will be included in the proxy statement and set forth on
the appointment form of proxy issued for such annual meeting of shareholders.
It is urged that any such proposals be sent certified mail, return receipt
requested.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented
for consideration at the Annual Meeting other than as stated in the Notice of
Annual Meeting of Shareholders. If, however, other matters are properly
brought before the Annual Meeting or any adjournments or postponements
thereof, it is the intention of the persons named in the accompanying proxy
to vote the shares represented thereby on such matters in accordance with
their best judgment.
By Order of the Board of Directors
Robert M. Brill
Secretary
Oconomowoc, Wisconsin
August 9, 1996
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
