<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
GOODMARK FOODS, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[GOODMARK LOGO]
6131 FALLS OF NEUSE ROAD
RALEIGH, NORTH CAROLINA 27609
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
September 28, 1995
You are cordially invited to attend the Annual Meeting of Shareholders
of GoodMark Foods, Inc. which will be held on Thursday, September 28, 1995, at
2:00 p.m., local time, at the North Carolina Museum of Art, 2110 Blue Ridge
Road, Raleigh, North Carolina, for the following purposes:
(1) To elect a Board of Directors of GoodMark Foods, Inc. for the
ensuing year;
(2) To ratify the appointment of Deloitte & Touche as independent
auditors for the Company and its subsidiaries for the fiscal
year ending May 26, 1996; and
(3) To transact such other business as may properly come before
the meeting or any adjournment thereof.
Shareholders of record at the close of business on August 4, 1995, are
entitled to notice of and to vote at the Annual Meeting and any and all
adjournments thereof.
IT IS DESIRABLE THAT YOUR SHARES OF STOCK BE REPRESENTED AT THE
MEETING REGARDLESS OF THE NUMBER OF SHARES YOU MAY HOLD. EVEN THOUGH
YOU MAY PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE AND
RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE
MEETING YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON.
By Order of the Board of Directors
Alvin C. Blalock
Secretary
Raleigh, North Carolina
August 17, 1995
<PAGE> 3
GOODMARK FOODS, INC.
6131 Falls of Neuse Road
Raleigh, North Carolina 27609
PROXY STATEMENT
Annual Meeting of Shareholders to be held September 28, 1995
SOLICITATION AND VOTING RIGHTS
This Proxy Statement, the accompanying proxy card and the Annual
Report are being furnished to shareholders on or about August 17, 1995, by the
Board of Directors of GoodMark Foods, Inc. (the "Company") in connection with
the solicitation of proxies for use at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held at the North Carolina Museum of Art, 2110 Blue
Ridge Road, Raleigh, North Carolina, on September 28, 1995, at 2:00 p.m., local
time, and at all adjournments thereof. All expenses incurred in connection
with this solicitation, including postage, printing, handling, and the actual
expenses incurred by custodians, nominees, and fiduciaries in forwarding proxy
material to beneficial owners, will be paid by the Company. In addition to
solicitation by mail, certain officers, directors, and regular employees of the
Company, who will receive no additional compensation for their services, may
solicit proxies by telephone, personal communication or other means. In
addition, the Company has retained Corporate Communications, Inc. to provide
certain services in connection with proxy solicitations. The cost of such
services is not expected to exceed $2,500 and will be paid by the Company.
The principal purposes of the meeting are to: (1) elect seven nominees
to the Board of Directors; (2) ratify the action of the Board of Directors
pursuant to the recommendation of the Audit Committee in appointing Deloitte &
Touche as independent auditors for the Company and its subsidiaries for the
fiscal year ending May 26, 1996; and (3) transact such other business as may
properly come before the meeting or any adjournment thereof. The Board of
Directors knows of no other matters other than those stated above to be brought
before the meeting or any adjournment thereof. The proxyholders named on the
enclosed proxy card may vote in accordance with the instructions of the Board
of Directors or in the absence thereof, in accordance with their discretion, on
any other matter properly presented for action of which the Board of Directors
is not now aware.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted by filing with the Secretary of
the Company written notice of revocation, provided such notice is actually
received prior to the vote of shareholders, duly executing a subsequent proxy
and filing it with the Secretary of the Company before the vote of shareholders
or attending the Annual Meeting and voting in person. If the proxy card is
signed and returned, but voting directions are not made, the proxy will be
voted in favor of the proposals set forth in the accompanying "Notice of Annual
Meeting of Shareholders."
The Board of Directors has fixed the close of business on August 4,
1995, as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting and all adjournments
thereof. As of the close of business on August 4, 1995, the Company had
outstanding 7,817,023 shares of Common Stock. On all matters to come before
the Annual Meeting, each holder of Common Stock will be entitled to one vote
for each share owned.
<PAGE> 4
SHARE OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth certain information, as of July 31,
1995, regarding shares of Common Stock of the Company owned of record or known
to the Company to be owned beneficially by each Director, each executive
officer named in the Summary Compensation Table herein and all Directors and
executive officers as a group. Except as set forth in the footnotes, each of
the shareholders identified below has sole voting and investment power over the
shares beneficially owned by such person. The address of the following
individuals is the Company's address.
<TABLE>
<CAPTION>
Name Shares Beneficially Owned Percent of Class
---- ------------------------- ----------------
<S> <C> <C>
Ron E. Doggett(1) 2,371,658 29.2%
H. Hawkins Bradley 406,200 5.2%
Donald H. Grubb(2) 6,162 *
Richard C. Miller(3) 262,695 3.3%
Thomas W. D'Alonzo(4) 8,060 *
Rollie Tillman, Jr. 720 *
Robert B. Seidensticker(5) 1,360 *
Charles E. Hancock(6) 69,000 *
Alvin C. Blalock(7) 132,213 1.7%
Paul L. Brunswick(8) 48,083 *
Richard E. Kennedy(9) 23,218 *
All Directors and executive
officers as a group (11
persons)(10) 3,329,369 38.8%
*Less than one percent
</TABLE>
__________________________________
(1) Includes 286,100 shares owned by Mr. Doggett's wife. Mr. Doggett
disclaims beneficial ownership of all shares owned by his wife.
Includes 299,300 shares which Mr. Doggett has the right to acquire
through the exercise of non-qualified stock options within the next 60
days.
(2) Includes 1,315 shares owned by Mr. Grubb's wife. Mr. Grubb disclaims
beneficial ownership of all shares owned by his wife.
(3) Includes 242,450 shares which Mr. Miller has the right to acquire
through the exercise of non-qualified stock options within the next 60
days, 6,072 shares owned jointly with Mr. Miller's wife, and 10,105
shares owned by Mr. Miller's wife. Mr. Miller disclaims beneficial
ownership of all shares owned by his wife.
(4) Includes 3,600 shares owned jointly with Mr. D'Alonzo's wife and 2,000
shares owned by his daughter. Mr. D'Alonzo disclaims beneficial
ownership of all shares owned by his daughter.
(5) Includes 1,000 shares owned by Mr. Seidensticker's wife. Mr.
Seidensticker disclaims beneficial ownership of all shares owned by
his wife.
(6) Includes 63,000 shares which Mr. Hancock has the right to acquire
through the exercise of non-qualified stock options within the next 60
days and 6,000 shares owned by Mr. Hancock's wife. Mr. Hancock
disclaims beneficial ownership of all shares owned by his wife.
(7) Includes 19,419 shares owned by Mr. Blalock's wife and children. Mr.
Blalock disclaims beneficial ownership of any shares owned by his wife
and children. Includes 109,900 shares which Mr. Blalock has the right
to acquire through the exercise of non-qualified stock options within
the next 60 days.
-2-
<PAGE> 5
(8) Includes 6,011 shares owned jointly with Mr. Brunswick's wife and
38,570 shares which Mr. Brunswick has the right to acquire through the
exercise of non-qualified stock options within the next 60 days.
(9) Includes 19,600 shares which Mr. Kennedy has the right to acquire
through the exercise of non-qualified stock options within the next 60
days.
(10) Includes 772,820 shares subject to presently exercisable stock options
owned by the individual executive officers.
In addition, the following table sets forth certain information as of
July 31, 1995, regarding shares of Common Stock of the Company known to be
beneficially owned by persons with more than five percent of the Company's
Common Stock (except as set forth in the table above relating to the Company's
Directors and executive officers).
<TABLE>
<CAPTION>
Name and Address of Shares Percent
Beneficial Owner Beneficially Owned of Class
-------------------- ------------------ --------
<S> <C> <C>
Fidelity Management & Research Co. 702,600 9.0%
82 Devonshire Street
Boston, Massachusetts 02109
Heine Securities Corp. 532,100 6.8%
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
David L. Babson & Company, Inc. 484,000 6.2%
One Memorial Drive
Cambridge, Massachusetts 02142
</TABLE>
-3-
<PAGE> 6
PROPOSAL 1: ELECTION OF DIRECTORS
Pursuant to the authority granted by the Company's bylaws, the Board
of Directors has established the number constituting the Board of Directors for
the ensuing year to be seven. The nominees for election to the office of
Director are named and certain other information is provided in the following
table:
<TABLE>
<CAPTION>
First Year
Name Position With Company Age Elected Director
---- --------------------- --- ----------------
<S> <C> <C> <C>
Ron E. Doggett (1) Chairman of the Board, Chief 60 1982
Executive Officer, and Director
Richard C. Miller (1) President, Chief Operating Officer, 56 1989
and Director
H. Hawkins Bradley (1)(2)(3) Director 68 1982
Donald H. Grubb (1)(2)(3) Director 70 1985
Thomas W. D'Alonzo (2)(3) Director 51 1991
Rollie Tillman, Jr. (2)(3) Director 62 1991
Robert B. Seidensticker (1)(2)(3) Director 65 1995
</TABLE>
______________________________________________________________
(1) Member of the Executive Committee of the Board.
(2) Member of the Human Resources Committee of the Board.
(3) Member of the Audit Committee of the Board.
All Directors and executive officers hold office until the next annual
meeting of shareholders or until their successors are elected and qualified.
Ron E. Doggett has been a Director of the Company since the Company's
organization in 1982, Chief Financial Officer from 1982 until 1985, President
from 1983 until 1989, Chief Executive Officer since June 1, 1985, and Chairman
of the Board since June 1, 1987. He served as Chief Operating Officer from
1983 until June 1, 1985, and as Executive Vice President from 1982 until 1983.
From 1967 until 1982, he held various management positions with the GoodMark
Foods Division of General Mills. Mr. Doggett currently serves on the Board of
Directors of Exide Electronics Group, Inc., a publicly owned company.
Richard C. Miller has been President and Chief Operating Officer of
the Company since April 1989 and a Director of the Company since September
1989. He was President of Sun-Diamond Growers of California from 1988 until
March 1989 and served as Senior Vice President-Business Management/Marketing
with Sun-Diamond from 1986 until 1988. Prior to that time, he was President
and CEO of S.B. Thomas, a division of CPC International, Inc. from 1984-1986.
He served in various other management positions with CPC International, Inc. or
its affiliates from 1967 to 1984 and with Procter & Gamble from 1962 to 1967.
H. Hawkins Bradley has been a Director of the Company since its
organization in 1982 and was Chairman of the Board from 1983 until his
retirement in 1987. He served as President in 1982 and 1983. He served as
Senior Vice President of Operations with the GoodMark Foods Division of General
Mills from 1970 until 1982, and from 1950 until 1970 he held various managerial
positions with Jesse Jones Sausage Company.
-4-
<PAGE> 7
Donald H. Grubb is President of GEDON Enterprises, a management
consulting firm. He held various management positions with Westvaco
Corporation and was President and Chief Executive Officer of Huyck Corporation
from 1973 until 1980. He is also on the Board of Directors of National
Electrical Carbon Products Co. Inc., Morganite, Inc., and Carbon Technology,
Inc., all of which are part of Morgan Crucible Co. PLC, a public company whose
shares are traded on the London Stock Exchange. He has been a Director of the
Company since September 1985.
Thomas W. D'Alonzo has served as President and Chief Executive Officer
of GenVec, Inc., a privately-owned gene therapy research company, since October
1993. He was Group Vice President and served on the Board of Directors of
Glaxo Inc. from 1983 until June 30, 1993. Prior to that time, Mr. D'Alonzo
held positions with Adria Laboratories, Inc. in Columbus, Ohio and with
Hercules, Inc. in Wilmington, Delaware. He has been a Director of the Company
since September 1991.
Rollie Tillman, Jr. has served as Professor of Business since 1968 and
as Chairman of the Board of Trustees of the Frank Hawkins Kenan Institute of
Private Enterprise at the University of North Carolina at Chapel Hill since
1990. Prior to these positions, Mr. Tillman served as Director of the Masters
of Business Administration Program, of the Corporate Executive Program and as
Vice Chancellor of the University of North Carolina at Chapel Hill. Mr.
Tillman received his doctorate degree from the Harvard School of Business
Administration. He currently serves on the Board of Directors of Renfro, Inc.,
a privately owned company. He has been a Director of the Company since
September 1991.
Robert B. Seidensticker is President of RBS Associates, a management
consulting firm. He was Vice Chairman of Pinkerton Group, Inc. from 1992 until
his retirement in 1994. For ten years prior to 1992 he was President and Chief
Executive Officer of Pinkerton Group, Inc. and Chairman of American Candy
Company. Prior to that time he was President of Liggett & Myers International
Corporation and served in executive capacities with Philip Morris International
and The Rothmans Group. He has been a Director of the Company since January
1995.
The Board of Directors has no reason to believe that the persons named
above as nominees for Directors will be unable or will decline to serve if
elected. However, in the event of death or disqualification of any nominee or
refusal or inability of any nominee to serve, it is the intention of the
proxyholders to vote for the election of such other person or persons as the
proxyholders determine in their discretion, but in no circumstance will the
proxy be voted for more than seven nominees. Properly executed and returned
proxies, unless revoked, will be voted as directed by the shareholder or, in
the absence of such direction, will be voted in favor of the election of the
recommended nominees. The Company's bylaws provide that the nominees who
receive the highest number of votes will be elected as Directors.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the last fiscal year, the Board of Directors met four times.
Each Director attended 75% or more of the Board meetings and committee meetings
of the Board of which the Director was a member.
The Board has a standing Executive, Human Resources, and Audit
Committee. The Executive Committee has the authority to exercise all powers of
the Board of Directors in the management of the business and affairs of the
Company. The Executive Committee also serves as the nominations committee of
the Board. It presently does not have a policy for considering shareholder
recommendations for Board nominees and pursuant to the bylaws, no nominations
to the Board of Directors may be made from the floor of the annual meeting of
shareholders. During fiscal 1995 the Executive Committee met twice. The Human
Resources Committee reviews and approves
-5-
<PAGE> 8
compensation of the executive officers and administers the Company's Executive
Management Incentive Plan and Non-Qualified Stock Option Plan. The Human
Resources Committee met one time during fiscal 1995. The Audit Committee is
responsible for reviewing the scope and effectiveness of accounting controls
and audits by the independent public accountants. The Audit Committee also
recommends to the Board the employment of independent auditors. The Audit
Committee met one time during the last fiscal year.
EXECUTIVE COMPENSATION
The following tables set forth a summary of compensation of the
executive officers of the Company for the fiscal years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation(1) Long Term Compensation Awards
--------------------------------- -----------------------------
Securities
Name and Restricted Underlying All Other
Principal Position Year Salary Bonus Stock Awards Options(#) Compensation(2)
------------------ ---- ------ ----- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Ron E. Doggett 1995 $336,600 $329,900 0 $3,394
Chairman of the 1994 323,664 339,800 0 4,459
Board and Chief 1993 311,220 263,000 106,700 2,343
Executive Officer 1992 296,400 160,100 25,000
1991 285,400 21,400 20,000
Richard C. Miller(3) 1995 214,656 189,300 0 3,083
President and Chief 1994 206,400 195,000 0 3,064
Operating Officer 1993 198,432 139,300 68,050 2,295
1992 187,200 94,300 25,000
1991 180,000 12,600 20,000
Charles E. Hancock 1995 123,156 96,600 0 2,044
Senior Vice 1994 118,416 99,500 0 2,112
President Operations 1993 113,856 71,000 39,050 1,902
1992 107,904 48,600 14,800
1991 103,756 6,500 12,000
Alvin C. Blalock 1995 110,760 86,800 0 1,801
Vice President and 1994 106,500 89,500 0 1,927
Director of 1993 102,400 63,900 35,100 1,680
Manufacturing 1992 96,984 38,400 12,200
1991 93,256 5,100 8,400
Paul L Brunswick(4) 1995 110,256 86,400 0 1,943
Vice President and 1994 104,000 87,400 0 1,988
Chief Financial 1993 50,000 26,000 $13,125(5) 38,570 569
Officer
Richard E. Kennedy(6) 1995 101,280 79,400 0 1,786
Vice President and 1994 91,536 58,600 1,000 1,709
Director of Snack
Sales
</TABLE>
_______________________________________________________________________________
(1) Disclosure of perquisites and other personal benefits is not required
because such benefits did not equal or exceed the lesser of $50,000 or
10% of any individual's annual salary and bonus shown above.
(2) The 1995 amounts shown represent contributions made by the Company to
the officers under the Company's 401(k) Investment and Savings Plan as
follows: R. Doggett $3,108; R. Miller
-6-
<PAGE> 9
$2,797; C. Hancock $1,758; A. Blalock $1,515; P. Brunswick $1,657; and
R. Kennedy $1,500; and the remaining amounts are premiums paid by the
Company on term life insurance.
(3) Includes $70,000 in 1995 and 1994 which Mr. Miller has elected to
defer pursuant to a non-qualified deferred compensation arrangement.
(4) Mr. Brunswick joined the Company in December 1992, and the amounts for
1993 reflect his compensation for the remainder of the fiscal year
ended May 30, 1993.
(5) The amount shown in this column is the value of the restricted shares
as of the date of grant. The total number and value of Mr.
Brunswick's restricted stock holdings as of the fiscal year ended May
28, 1995, were 1,200 shares, and $18,900 respectively. The restricted
shares vest at a rate of 400 shares per year. Quarterly dividends are
paid on the shares of restricted stock.
(6) Mr. Kennedy was appointed an executive officer of the Company on
January 10, 1994. The 1994 amounts reflect his compensation in all
capacities for the full fiscal year ended May 29, 1994.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
----------------- ----------------------------------
% of Total
Number of Options
Securities Granted to Exercise
Underlying Employees or Base
Options in Fiscal Price Per Expiration
Name Granted(1) Year Share Date 0%($) 5%($) 10%($)
------ ---------- --------- --------- ---------- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ron E. Doggett 0
Richard C. Miller 0
Charles E. Hancock 0
Alvin C. Blalock 0
Paul L. Brunswick 0
Richard E. Kennedy 10,000 100% $11.50 6-27-00 $0 $35,761 $84,301
</TABLE>
________________________________
(1) The option granted to Mr. Kennedy is a non-qualified stock option
issued at an option exercise price equal to market price on the date
of grant pursuant to the Non-Qualified Stock Option Plan. The above
option vested on June 27, 1995.
-7-
<PAGE> 10
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-the-Money
Shares Acquired Value Options at FY-End Options at FY-End
Name on Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable(1)
---- ----------------- -------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Ron E. Doggett 0 $ 0 192,600/106,700 $1,531,475/906,950
Richard C. Miller 0 0 174,400/68,050 1,404,150/578,425
Charles E. Hancock 3,600 18,450 99,600/39,050 840,225/331,925
Alvin C. Blalock 2,500 30,781 74,800/35,100 628,800/298,350
Paul L. Brunswick 0 0 10,000/28,570 91,875/242,845
Richard E. Kennedy 3,200 24,300 9,600/10,000 85,538/42,500
</TABLE>
________________________________
(1) Based on the fair market value of the Common Stock on May 28, 1995, of
$15.75 per share.
The following table sets forth estimated annual benefits computed on a
straight-life basis which would become payable under the Company's Non-Union
Employees Pension Plan (including amounts attributable to the Company's new
Executive Pension Plan for corporate officers) upon retirement to persons in
certain specified salary and years of service classifications. These benefits
may be reduced by the election of a joint-and-survivor annuity payment for
married participants.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Service
----------------
Remuneration 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$125,000 $23,056 $ 30,741 $ 38,427 $ 46,112 $ 46,112
150,000 28,056 37,408 46,760 56,112 56,112
175,000 33,056 44,075 55,093 66,112 66,112
200,000 38,056 50,741 63,427 76,112 76,112
225,000 43,056 57,408 71,760 86,112 86,112
250,000 48,056 64,075 80,093 96,112 96,112
300,000 58,056 77,408 96,760 116,112 116,112
400,000 78,056 104,075 130,093 156,112 156,112
450,000 88,056 117,408 146,760 176,112 176,112
500,000 98,056 130,741 163,427 196,112 196,112
</TABLE>
-8-
<PAGE> 11
Officers who are employees of the Company and whose compensation is
included in the Summary Compensation Table are eligible to participate in the
Company's Non-Union Employees Pension Plan. The credited years of service
under the plan for each of the individuals named in the Summary Compensation
Table are as follows: Mr. Doggett, 33 years; Mr. Miller, 5 years; Mr. Blalock,
23 years; Mr. Hancock, 32 years; Mr. Brunswick, 2 years; and Mr. Kennedy, 15
years. Upon retirement at age 65 (or otherwise as provided by the plan), a
participant in the plan receives (subject to the limitations referred to below)
an annual benefit which equals a percentage of the average of the highest 5
consecutive calendar years of basic compensation (base salary plus bonus,
excluding overtime pay, or other special compensation of any kind as shown in
the Annual Compensation column of the Summary Compensation Table) paid during
the 10 calendar years preceding the earlier of actual or normal retirement age.
The percentage amount is 25% of the final 5-year average monthly compensation
up to the covered compensation level (varies according to year-of-birth and
year-of-benefit determination), plus 40% of the final 5-year average monthly
compensation above the covered compensation level, with the benefit determined
being reduced pro rata for each year of service which is less than 30 years.
Effective January 1, 1995, the annual retirement benefit payable under
the Company's Non-Union Employees Pension Plan is limited by the Internal
Revenue Code (the "Code") to $120,000 and the maximum covered compensation is
limited to $150,000. For corporate officers covered under the Company's
Executive Pension Plan, any excess annual retirement benefit which could not be
paid under the Non-Union Employees Pension Plan because of such limitations
would be payable under the Executive Pension Plan. The benefit paid, if any,
under the Executive Pension Plan is the difference between the Non-Union
Employees Pension Plan benefit calculated as described above and the amount
that would have been paid under such plan in the absence of dollar limits in
the Code.
DIRECTORS' FEES
All Directors who are not executive officers are paid an annual
retainer of $12,000. In addition, each such Director is compensated $800 for
attending each meeting of the Board and $400 for attending each committee
meeting of the Board. The Directors' fees may be payable in part or in full,
at the option of the individual Director, in the Company's Common Stock at the
then current market price or in cash. All expenses associated with attending
those meetings are reimbursed by the Company.
CERTAIN AGREEMENTS
The Company extended its employment agreement with Mr. Doggett in 1995
which is to remain in effect until August 1, 2000, with the Company having the
right to extend the agreement for additional successive periods as the parties
may mutually agree. Under the agreement, Mr. Doggett's compensation is subject
to such increases as the Board of Directors may determine. In addition, Mr.
Doggett is entitled to the use of a Company car and other retirement and
disability benefits similar to those available for other executive officers.
The agreement provides that the Company may terminate Mr. Doggett's employment
at any time. If Mr. Doggett is terminated without cause, the Company is
obligated to continue the benefits under the agreement for the remaining period
of the agreement. Similarly, in the event Mr. Doggett terminates the agreement
for cause, Mr. Doggett is entitled to the above benefits for the remaining
period of the agreement.
The Board of Directors approved an executive severance compensation
plan in 1988. Pursuant to this plan, the Company has entered into agreements
("Severance Compensation Agreements") with the executive officers of the
Company named in the Summary Compensation Table, other than Mr. Doggett. The
Severance Compensation Agreements each provide that if the executive's
employment is terminated within two years after a "change in control" of the
Company, the executive will receive
-9-
<PAGE> 12
an amount equal to the greater of two (2) times the executive's most recent
annual compensation, including the amount of his most recent annual bonus at
the time of termination, or an amount equal to the executive's most recent
monthly salary times the number of years of employment with the Company, unless
the termination is by the executive other than for "good reason", by the
Company for "cause," or because of the executive's disability, death or
retirement. The severance compensation shall be paid in twenty-four (24) equal
monthly installments, without interest, commencing one (1) month after
termination, unless and until the executive obtains other full-time employment,
at which time the balance of the severance compensation due shall be paid in a
lump sum amount. In addition, in the event of the executive's termination
after a "change in control" and during the two-year period following the change
in control, unless and until the executive obtains full-time employment, the
executive is entitled to receive all insurance benefits to which such employee
is entitled immediately prior to the date of termination.
For purposes of the Severance Compensation Agreements, a "change in
control" of the Company would be deemed to have occurred if (a) a third person
(including a "group", as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934) becomes the beneficial owner of shares of the Company which
constitutes either more than 50% of the shares which voted in the election of
Directors of the Company at the shareholders' meeting immediately preceding
such determination or more than 33% of the Company's then outstanding shares
entitled to vote, (b) as a result of a merger or consolidation to which the
Company is a party and either the Company is not the surviving corporation or
Directors of the Company immediately prior to the merger or consolidation
constitute less than a majority of the Board of Directors of the surviving
corporation, or (c) all or substantially all of the Company's assets are sold,
leased or disposed of in one transaction or a series of related transactions.
An agreement to bring about a change in control also constitutes a change in
control, provided, however, that a change in control shall not be deemed to
have occurred under (b) so long as Mr. Doggett remains a Director, executive
officer and a 15% voting stock shareholder in the surviving company. Further,
a change in control shall not be deemed to have occurred under (a) as a result
of the beneficial ownership of voting stock of the Company by Mr. Doggett or
any group with which Mr. Doggett is acting in concert.
HUMAN RESOURCES COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
H. Hawkins Bradley serves on the Human Resources Committee and was
Chairman of the Board of the Company until his retirement in 1987.
-10-
<PAGE> 13
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The following graph compares the cumulative total shareholder return
on the Company's Common Stock with the cumulative total return on the NASDAQ
Market Index and a peer group selected on a line-of-business basis consisting
of selected snack food companies with small to medium market capitalizations
(the "Peer Group Index"), assuming in each case the reinvestment of dividends.
The corporations making up the Peer Group Index are Ben & Jerry's Homemade,
Inc., Bridgford Foods Corporation, Golden Enterprises, Inc., Grist Mill Co.,
J&J Snack Foods Corporation, Lance Inc., Tootsie Roll Industries, Inc., and
Topps Co., Inc.
<TABLE>
<CAPTION>
Measurement Period Goodmark NASDAQ Market Peer Group
(Fiscal Year Covered) Foods, Inc Index Index
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 65.30 111.72 106.68
1992 104.08 134.85 131.73
1993 110.20 162.16 120.70
1994 173.29 170.30 97.98
1995 265.91 204.96 102.47
</TABLE>
-11-
<PAGE> 14
HUMAN RESOURCES COMMITTEE REPORT
The Company's executive officers' compensation policies are based on
the premise that the strategic objectives of the Company are best achieved by
(i) attracting and retaining the most qualified individuals available and (ii)
rewarding such individuals on the basis of business and individual performance.
The Company believes that this approach best serves the interests of the
Company's shareholders.
The Human Resources Committee of the Board of Directors (the
"Committee") is responsible for setting and administering the policies which
govern both annual compensation and stock ownership programs. The Committee
annually evaluates the Company's corporate performance, actual compensation and
share ownership in comparison with both its own industry and a broader group of
companies representing a national general industrial perspective.
The annual compensation program for the Company's executive officers
is highly leveraged on the basis of performance. The Company's annual
compensation mix generally has lower base salaries than comparable companies,
coupled with a leveraged incentive system which makes higher payments with good
performance, lower payments with performance below par and no incentive
payments if corporate earnings fall below 75% of the Board-approved earnings
per share target or below 100% of the previous year's earnings per share,
whichever occurs first, unless the current year's earnings per share target as
approved by the Board is less than the previous year's earnings per share.
The Company has an Executive Incentive Plan ("EIP") under which cash
incentive awards may be made annually to the executive officers, including the
Chief Executive Officer. The EIP is based on two equally weighted factors:
corporate performance and group performance. The corporate performance rating
is based on the Company's achievement of annual earnings versus a
Board-approved annual target amount. The Committee believes that annual
earnings is a primary determinant of share price over time. The group rating
is based on the annual achievement by the executive officers of a
Board-approved list of corporate performance objectives, such as the
achievement of net sales, gross margin, return on equity and assets, managed
expenses, headcount and capital spending goals. Both the corporate and group
ratings are heavily dependent on the achievement of financial objectives.
The Company's corporate rating can range from 0 to 1.5. If the
corporate rating is 1.4 or higher, the Company establishes its executive
officer compensation in the top quartile of the companies surveyed by Hay
Management Consultants. The Company retains Hay Management Consultants to
provide a summary of compensation data of approximately 400 United States
industrial companies. The group rating can range from 0.1 to 1.5 and may vary
among participants. These ratings are then combined with the participant's
target incentive participation rate (a percentage of base salary which
increases for higher positions within the Company). The resulting factor is
then multiplied by the participant's fiscal year base salary to determine the
annual incentive award.
The Committee's evaluation of corporate performance in the fiscal year
ended May 28, 1995, was 1.4. This figure was based on fiscal 1995 earnings per
share which were 125% of the target amount and approximately 40% greater than
fiscal 1994 earnings per share.
Under the terms of the Company's Non-Qualified Stock Option Plan,
stock options may be granted to certain key officers and employees. The value
to the participant depends upon the extent to which the market value of the
stock exceeds the option exercise price. Stock options awarded to executive
officers are approved by the Committee based upon criteria similar to that used
for the EIP. The Committee has the discretion to determine the term of the
options granted, but such term may
-12-
<PAGE> 15
not be less than one year from the date of grant nor longer than 10 years and
30 days from the date of grant.
The 1995 compensation of the Chief Executive Officer consisted of
cash, which included his base salary pursuant to his employment contract and
payments earned under the terms of the EIP. Mr. Doggett's cash compensation
contains both fixed and variable components. The fixed portion of his
compensation is comprised of his base salary. The balance of his compensation
is variable and includes any payments earned under the EIP and any gains from
the exercise of stock options.
The Committee reviews Mr. Doggett's base salary annually in June and
makes recommendations for action by the independent directors of the Board of
Directors after considering a number of factors, including the Company's just
completed year's performance compared to Board-approved targets, as well as the
Company's progress in accomplishing its five-year performance goals.
HUMAN RESOURCES COMMITTEE
H. HAWKINS BRADLEY
DONALD H. GRUBB
THOMAS W. D'ALONZO
ROLLIE TILLMAN, JR.
ROBERT B. SEIDENSTICKER
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Pursuant to the recommendation of the Audit Committee, the Board of
Directors has appointed Deloitte & Touche as independent accountants for the
fiscal year 1996. Deloitte & Touche has served as independent auditors for the
Company since inception. Although shareholder approval is not required, the
Company desires to obtain from the shareholders an indication of their approval
or disapproval of the Board's action in appointing Deloitte & Touche as the
independent auditors of the Company and its subsidiaries. If the shareholders
do not ratify this appointment, such appointment will be reconsidered by the
Audit Committee and the Board of Directors. The proxy will be voted as
specified, and if no specification is made, the proxy will be cast "For" this
proposal.
A representative of Deloitte & Touche will be present at the Annual
Meeting and will be afforded an opportunity to make a statement and to respond
to questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE FOR FISCAL YEAR 1996.
MISCELLANEOUS
UPON WRITTEN REQUEST MADE BY ANY SHAREHOLDER TO PAUL L. BRUNSWICK,
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, GOODMARK FOODS, INC., 6131 FALLS OF
NEUSE ROAD, RALEIGH, NORTH CAROLINA 27609, A COPY OF THE COMPANY'S 1995 ANNUAL
REPORT ON FORM 10-K WILL BE PROVIDED WITHOUT CHARGE.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Any proposals which shareholders intend to present for a vote of
shareholders at the 1996 Annual Meeting of Shareholders and which such
shareholders desire to have included in the Company's Proxy Statement and form
of proxy relating to that meeting must be sent to the Company's principal
-13-
<PAGE> 16
executive offices, marked to the attention of the Secretary of the Company, and
received by the Company at such offices on or before April 18, 1996. The
determination by the Company of whether it will oppose inclusion of any
proposal in its Proxy Statement and form of proxy will be made on a
case-by-case basis in accordance with its judgment and the rules and
regulations promulgated by the Securities and Exchange Commission. Proposals
received after April 18, 1996, will not be considered for inclusion in the
Company's proxy materials for its 1996 Annual Meeting.
By Order of the Board of Directors
Alvin C. Blalock
Secretary
August 17, 1995
-14-
<PAGE> 17
APPENDIX A
GOODMARK FOODS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Ron E. Doggett and Alvin C. Blalock as
proxies, each with the full power of substitution, to represent the undersigned
and to vote all of the shares of stock in GoodMark Foods, Inc. (the "Company")
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
to be held at the North Carolina Museum of Art, 2110 Blue Ridge Road, Raleigh,
North Carolina, on Thursday, September 28, 1995, at 2:00 p.m., local time, and
any adjournment thereof (1) as hereinafter specified upon the proposals listed
below and as more particularly described in the Company's Proxy Statement,
receipt of which is hereby acknowledged; and (2) in their discretion upon such
other matters as may properly come before the meeting and any adjournment
thereof.
1. Election of the Board of Directors
<TABLE>
<S> <C>
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote for
(except as marked to the contrary). all nominees listed below.
</TABLE>
Ron E. Doggett; Richard C. Miller; H. Hawkins Bradley; Donald H. Grubb; Thomas
W. D'Alonzo; Rollie Tillman, Jr.; and Robert B. Seidensticker.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE THAT
NOMINEE'S NAME ON THE SPACE PROVIDED BELOW:
--------------------------------------------------------------------------------
2. Ratify appointment of Deloitte & Touche as independent auditors for the
Company and its subsidiaries for the fiscal year ending May 26, 1996.
/ / FOR / / AGAINST / / ABSTAIN
The shares represented hereby shall be voted as specified. If no
specification is made, such shares shall be voted FOR Proposal 1 and Proposal 2.
Please sign exactly as your name appears below. When shares are held by
joint tenants, both should sign.
Date
-----------------------, 1995
(Be sure to date proxy)
Signature and title, if applicable
----------------------------------
Signature if held jointly
----------------------------------
When signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If a
corporation, please sign the
full corporate name by the
President or other authorized
officer. If a partnership,
please sign in the partnership
name by an authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
