SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ESKIMO PIE
(Name of Registrant as Specified in its Charter)
YOGEN FRUZ WORLD-WIDE INCORPORATED
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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<PAGE>
September 2, 1999
Dear Fellow Eskimo Pie Shareholder:
The current proxy contest highlights the perennial potential for conflict
between an entrenched management's urge for self-preservation and the legitimate
interests of shareholders to get the most value for their investment.
Yogen Fruz World-Wide Incorporated owns 587,700 shares of Eskimo Pie
Corporation at an average price of approximately $13.00 per share. That means
our investment totals approximately $7.6 million. As by far the largest
shareholder of Eskimo Pie, it is clear where our interest lies - getting $13.00
or more for our stock.
On the other side is Eskimo Pie's Board of Directors and Management, with
hardly any of their own money invested in the Company. They say that Eskimo
Pie's business is improving, and that you should stay the course. Yet
IRI/Infoscan market data confirms sales to consumers of Eskimo Pie and Welch's
brand products - which account for more than two thirds of all Eskimo Pie
consumer products sold -- are suffering significant declines versus last year, a
fact which management has not disputed.
In fact, the value of Eskimo Pie as a whole has declined dramatically since
it began selling shares to the public in 1992. At that time, the Company was
valued at $17.00 per share, or approximately $59 million. Based on yesterday's
closing price of $9.875 per share, the market value of Eskimo Pie was
approximately $34 million.
Yogen Fruz is in the same industry as Eskimo Pie, and is familiar with how
frozen desserts businesses and assets are valued, bought and sold, having been a
buyer and a seller in many such transactions. We performed thorough due
diligence on Eskimo Pie, spending a week in Richmond interviewing management and
studying all of its businesses in detail, and have concluded that the sum of the
value of each asset is greater than the value of the Company as a going concern.
Thus, we believe shareholders will receive the greatest value for their
investment in Eskimo Pie by selling these assets to strategic buyers. We would
be harming no one more than ourselves to pursue this strategy if we did not
believe it could succeed.
Our interest in asking for your proxy is solely that of a fellow
shareholder seeking to maximize value for the equal benefit of all shareholders.
To underscore this, we have agreed not to accept any fees or other compensation
for managing Eskimo Pie through the break-up process and serving on its Board of
Directors. (Currently, each Director earns fees of $10,000 per year plus $500
per meeting, plus expenses.)
The Board of Directors has created considerable doubt as to what
shareholders may expect if the current regime is left in control of Eskimo Pie.
On the one hand, they express support for their restructuring plan - which
appears to us to consist of selling certain assets and using the proceeds to
finance expenditures on advertising and promotion in an attempt to reverse the
declines suffered by the Eskimo Pie brand. In our judgement, this flawed plan
amounts to a wasting of the Company's assets to subsidize attempts to stem the
erosion of the Company's core brand. Contrary to the Board's plan, we believe
the $9.5 million - or approximately $2.75 per share - when collected from the
sale of the flavors division should be dividended out to shareholders.
<PAGE>
On the other hand, the Board is seriously considering an anonymous offer to
buy the Company for $10.125 per share. Curiously, it took the Board only one day
to reject as "inadequate" Yogen Fruz's bid of $13.00 per share, while today,
more than 10 days after the $10.125 offer was announced, the Board has not
rejected this offer for almost $3.00 less per share.
No one regrets more than Yogen Fruz the need to undertake this expensive
proxy contest. However, we would not have shouldered this burden if we did not
believe that the return would be there, for us and for all other shareholders of
Eskimo Pie.
Please vote FOR the Yogen Fruz Proposals by signing, dating and returning
the enclosed BLUE PROXY CARD in the enclosed overnight courier package TODAY.
If you previously returned a WHITE PROXY CARD, you should revoke that vote
by signing, dating and returning the enclosed BLUE PROXY CARD in the enclosed
overnight courier package TODAY.
If you previously returned a BLUE PROXY CARD, you should vote AGAIN by
signing, dating and returning the enclosed BLUE PROXY CARD in the enclosed
overnight courier package TODAY, to ensure that your vote is received in time to
be counted at the Annual Shareholders Meeting on September 8, 1999.
If you wish to discuss these matters with me personally, please call me
collect at (905) 479 - 8762, extension 225.
Thank you for your support,
Michael Serruya
Co-Chairman and Co-CEO
<PAGE>
ESKIMO PIE CORPORATION
ANNUAL MEETING OF SHAREHOLDERS -- SEPTEMBER 8, 1999
THIS PROXY IS SOLICITED BY YOGEN FRUZ WORLD WIDE INCORPORATED
IN OPPOSITION TO THE ESKIMO PIE CORPORATION BOARD OF DIRECTORS
AND FOR THE AMENDMENT OF ESKIMO PIE'S BY-LAWS
The undersigned shareholder of Eskimo Pie Corporation ("Eskimo") hereby
appoints Michael Serruya, Richard Smith and David Stein, each of them with full
power of substitution, to vote all shares of Common Stock, par value $1.00 per
share, of Eskimo that the undersigned is entitled to vote if personally present
at the 1999 Annual Meeting of Shareholders of Eskimo to be held on September 8,
1998, and at any adjournments or postponements thereof as indicated below and in
the discretion of the proxies, to vote upon such other business as may properly
come before the meeting, and any adjournment or postponement thereof. The
undersigned hereby revokes any previous proxies with respect to matters covered
by this Proxy.
YOGEN FRUZ WORLDWIDE INCORPORATED RECOMMENDS A VOTE FOR PROPOSALS 1 THROUGH 3.
PROPOSAL 1. (ELECTION OF YOGEN SLATE OF DIRECTORS) to elect the following
individuals as Directors of Eskimo until the 2000 Annual
Meeting of Shareholders: Michael Serruya, Aaron Serruya,
David Prussky, David M. Smith, David J. Stein, Benjamin
Raphan and Edward Obadiah.
(To withhold authority to vote for any individual nominee listed above, write
that nominee's name in the space provided below)
[ ] FOR ALL NOMINEES LISTED ABOVE
[ ] AGAINST ALL NOMINEES LISTED ABOVE
[ ] ABSTAIN WITH RESPECT TO ALL NOMINEES LISTED ABOVE
PROPOSAL 2. (By Law Amendment with respect to Rights Agreement) to amend the
by-laws to require the Eskimo Board of Directors to carry
out a resolution authorizing partial or complete redemption
or amendment to the Eskimo Rights Agreement, if such
resolution is authorized and approved by affirmative vote of
shareholders owning or having the right to vote at least a
majority of the capital stock of Eskimo.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 3. (By Law Amendment with respect to Special Meeting) to amend the
by-laws to allow the shareholders owning or having the right
to vote at least 5% of the outstanding capital stock of
Eskimo to call a special meeting of shareholders.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER SPECIFIED BY THE
UNDERSIGNED SHAREHOLDER. IF NO MARKING IS MADE, THIS PROXY WILL BE DEEMED TO BE
A DIRECTION TO VOTE FOR PROPOSALS 1 THROUGH 3 AND IN THE DISCRETION OF THE
PROXIES, TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING, AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
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(Signature, if held jointly)
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, guardian, corporate officer or
partner, please give full title as such. If a corporation, please sign in
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by an authorized person. This Proxy votes all
shares held in all capacities.
