<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
/ / Preliminary Information Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
/X/ Definitive Information Statement
Vestro Natural Foods Inc.
- --------------------------------------------------------------------------------
(Name of Registrant As Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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5) Total fee paid:
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/ / 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:
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<PAGE>
VESTRO NATURAL FOODS INC.
1065 E. Walnut Street
Carson, CA 90746
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
July 18, 1995
-----------------
To the Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders
of Vestro Natural Foods Inc. (the "Company") which will be held at 1065 E.
Walnut Street, Carson, California 90746 on Tuesday, July 18, 1995 at 10:00 A.M.
(Pacific Coast Time) for the following purposes:
(1) To elect directors; and
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on June 10,
1995 as the record date for shareholders entitled to notice of and to vote at
the meeting. The share transfer books will not be closed.
By order of the Board of Directors,
Stephen Schorr
Secretary
June 01, 1995
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
<PAGE>
INFORMATION STATEMENT
For the Annual Meeting to be held on July 18, 1995.
This Information Statement is furnished in connection with the Annual
Meeting of Shareholders of Vestro Natural Foods Inc. (the "Company") to be held
at 10:00 A.M. (Pacific Coast Time) on Tuesday, July 18, 1995 at 1065 E. Walnut
Street, Carson, California 90746 or at any adjournment thereof with respect to
the matters referred to in the accompanying notice. This Information Statement
is to be mailed to shareholders on or about June 01, 1995.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
VOTING SECURITIES AND RECORD DATE
Only holders of record of the Company's Common Stock, $.01 par value,
at the close of business on June 10, 1995 will be entitled to notice of and to
vote at the meeting. On the record date, there were issued and outstanding
5,950,588 shares of Common Stock. Each outstanding share of Common Stock is
entitled to one vote.
See SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, for
information as to the holdings of persons owning in excess of 5% of the Common
Stock as well as the holdings of Management.
MATTERS TO BE ACTED UPON
(1) The election of eight directors to hold office until the next
Annual Meeting of Shareholders and until their respective
successors are duly elected and qualified.
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
1
<PAGE>
ELECTION OF DIRECTORS
Eight directors are to be elected to serve until the next Annual
Meeting of Shareholders and until their successors are elected and qualified.
The following table sets forth the name of each nominee for director
of the Company, his age, position and office with the Company and period he has
served as a director:
Position and Office Director
Name Age with Company Since
- ------------------- ----- ----------------------- --------
Robert J. Cresci 51 Chairman of the Board 1990
Allan Dalfen 52 Director 1992
Anthony J. Harnett 50 Director 1994
B. Allen Lay 60 Interim President and 1987
Chief Executive
Officer and Director
Stephen P. Monticelli 40 Director 1994
Jay J. Miller 62 Director 1966
Henry W. Poett, III 56 Director 1987
Donald R. Stroben 64 Director 1987
Robert J. Cresci has been Chairman of the Board of the Company since
February, 1993. Mr. Cresci, since September 1990, has been the Managing
Director of Pecks Management Partners Ltd., a registered investment advisor.
From 1985 to 1990, Mr. Cresci was Vice President and Co-Manager of the Alliance
Convertible Securities Group. Mr. Cresci serves as a director of Serv-Tech,
Inc., Olympic Financial, Ltd., Sepracor, Inc., Geo Waste, Inc. and Hitox, Inc.
Allan Dalfen was President and Chief Executive Officer of the Company
from February, 1993 to January, 1995. From 1979 to 1992, Mr. Dalfen was
President and Chief Executive Officer of Weider Health and Fitness, a
manufacturer of health and fitness equipment, sports nutrition products and
fitness publications.
Anthony J. Harnett was the owner of Bread & Circus, a leading natural
products retailer, from 1975 through 1992. He currently serves as Chairman of
Harnett's , a homeopathic retail pharmacy. He is also chairman of Hawkins
Associates Inc. and its subsidiary, Hawkins Transport. Hawkins is a major
supplier of organic and commercial produce to the natural foods industry.
2
<PAGE>
B. Allen Lay was elected by the Board of Directors as Interim
President and Chief Executive Officer on January 12, 1995. Mr. Lay has served
as a General Partner of Southern California Ventures, a venture capital firm,
since May, 1983. He is a director of PairGain Technologies (OTC), Physical
Optics Corp., Kofax Imaging and Medclone Inc. Mr. Lay was Chairman and C.E.O.
of Meridian Data Inc. from July, 1993 to December, 1994.
Jay J. Miller has been a practicing attorney in the State of New York
for more than thirty years. Mr. Miller is a director of Total-Tel USA
Communications, Inc. a long distance telephone service provider, and Edison
Control Corporation, a manufacturer of electronic fault locating devices for the
power utility industry. He is Chairman of the Board of Gulf USA Corporation, a
property and natural resource company in reorganization, and a director of its
New Zealand property subsidiary, Gulf Resources Pacific Limited.
Stephen P. Monticelli is a partner and Managing Director of Baccharis
Capital, Inc., a venture capital and buyout firm located in Menlo Park,
California. From 1987 to 1991, Mr. Monticelli was a Principal in the Private
Ventures group of Bechtel Investments, Inc., a private family investment firm.
Prior to 1987, he was a management consultant with Marakon Associates and a CPA
with Deloitte and Touche. Mr. Monticelli also serves as a director of Earth's
Best, Inc., an organic baby food company.
Henry W. Poett, III was President and Chief Executive Officer of the
Company from April, 1992 to January, 1993. Previously he was Executive Vice
President-Operations and Chief Operating Officer of the Company from May, 1990
to March, 1992. Mr. Poett is currently a partner in Dalton Partners, a
management services company. Mr. Poett was an independent management consultant
from 1989 to 1990. He served as President and Chief Operating Officer of
Transcisco Industries Inc. from 1987 to 1988. From 1984 to 1987, he was Chief
Executive Officer of Wilsey Foods, Inc., a packager, marketer and distributor of
food products. He is a director of Biovation Inc., Wilsey Bennett Company, and
Armanino Foods.
Donald R. Stroben was Chairman of the Board of the Company from
January, 1987 to January, 1993. He has served as a Managing General Partner of
Princeton/Montrose Partners, a venture capital firm, since December 1981. Mr.
Stroben currently serves as a director of The Beard Company (ASE) and Etz Lavud
Ltd. (ASE). Mr. Stroben is also past Chairman of the Board of Laura Scudder's,
Inc., a snack food manufacturer.
During 1994, the Board held four meetings. Each director attended at
least 75% of the meetings held. Where formal action has otherwise been
required, the Board has acted by unanimous written consent as permitted under
applicable corporate law and the Company's By-Laws. The Company's Board of
Directors currently has an Audit Committee consisting of Messrs. Stroben and Lay
and a Compensation Committee consisting of Messrs. Dalfen, Miller and Cresci.
The Board currently has no Nominating Committee.
3
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REQUIRED VOTE
For election of Directors:
Assuming the presence of a quorum (a majority of the total issued and
outstanding shares of the Company's Common Stock) a favorable vote of
the holders of a plurality of the shares of the Company's Common Stock
present and voting at the meeting for the election of each nominee is
required for his election.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth information covering the executive
officers of the Company. See CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
All officers serve at the pleasure of the Board of Directors. There are no
family relationships among any officers or directors of the Company.
Name Age Position
- ------------------- ----- -------------------------------
Robert J. Cresci 51 Chairman of the Board
B. Allen Lay 60 Interim President and Chief
Executive Officer
Stephen Schorr 49 Vice President; Finance,
Secretary, Treasurer and Chief
Financial Officer
Messrs. Cresci and Lay currently serve as directors of the Company.
See ELECTION OF DIRECTORS for employment and background information for these
individuals.
Mr. Schorr joined the Company in July, 1988 as Vice President;Finance.
He is an officer and director of each of the Company's subsidiaries. From
December, 1982 through June, 1988, he held the positions of Vice President,
Finance and Corporate Controller of Linear Corporation, a manufacturer of
electronic components.
SIGNIFICANT EMPLOYEES
Andrew Jacobson (33) has been President of the Company's subsidiaries,
Westbrae Natural Foods, Inc. and Little Bear Organic Foods, Inc. since joining
the Company in November, 1992. From 1985 to 1992, Mr. Jacobson was employed by
Tree of Life Inc., a major national natural products distributor, in several
executive capacities culminating as Director of Sales of Tree of Life West, Sun
Valley and Hayward, CA.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation which the Company paid
during the three years ended December 31, 1994 to the Chief Executive Officer
and to its other executive officers.
<TABLE>
<CAPTION>
Name and Options All Other
Principal Position Year Salary Bonus Granted Compensation
- ------------------ ---- ------------ ------------ --------- --------------
<S> <C> <C> <C> <C> <C>
Allan Dalfen CEO 1994 $120,000 (e) $ 3,120 (c) (d)
Allan Dalfen CEO 1993 $ 75,000 (e) $ 32,220 (c)
Henry W. Poett III CEO 1992 $172,865 $ 87,500 (a)
Andrew Jacobson, Pres., Westbrae Natural Foods, Inc.
1994 $120,000 $ 3,120 (c)
1993 $110,000 $ 32,220 (c) 329,875
1992 $ 14,577 (b)
Stephen Schorr CFO 1994 $105,000 $ 2,000 20,000 (f)
1993 $ 95,000 $ 9,500
1992 $ 95,000
<FN>
(a) Mr. Poett discontinued active employment with the Company on December
31, 1992. He was awarded severance pay of $87,500 (six months salary)
which was accrued in 1992 and paid in 1993.
(b) Began employment on November 2, 1992.
(c) Bonus accrued under a management bonus agreement which provides for the
payment of 6% of pretax income above $500,000 in a year to Mr. Dalfen and
Mr. Jacobson.
(d) Mr. Dalfen purchased 395,850 shares of Common Stock for $510,025 ($1.29 per
share), consisting of $66,000 in cash and a note for $444,025 bearing
interest at 5.75% per annum under a Stock Purchase Agreement as of July 29,
1993 and a Severance and Settlement Agreement as of March 1, 1995. The
total difference between the quoted price and the sale price of these
shares was $178,000.
(e) Represents amounts paid as a consulting fee to Dalfen Corporation, of which
Mr. Dalfen is the sole shareholder.
(f) Replaced options that expired in 1994.
</TABLE>
5
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Annual Rates
of Stock
Options % of Total Exercise Expiration Appreciation
Name Granted Granted Price Date 5% 10%
- ---- ------- ---------- -------- ---------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Stephen Schorr
20,000 35 $2.75 04/19/99 $12,005 $29,552
<FN>
(a) The exercise price was changed to $1.375 (then-current market value) on
February 28, 1995.
</TABLE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Board of Directors had established a compensation package for the
Company's Chief Executive Officer commensurate with the time devoted by him to
the Company's activities (Mr. Dalfen shared his time between the Company and
several privately held investments) and the performance of the Company.
Unfortunately, Mr. Dalfen suffered a heart attack in March, 1994 and eventually
relinquished his position in January, 1995. He received a nominal bonus for the
year 1994 and the Company has reacquired 40% of the shares he had purchased.
The Company is actively recruiting a new Chief Executive Officer and
intends to structure a compensation package for that person comparable to those
of other public companies of similar size and characteristics. A large portion
of such compensation may be derived from incentives, such as bonuses or equity
participation, closely aligning the Chief Executive Officer's interests with
those of the Company's shareholders.
Board of Directors Compensation Committee
Robert J. Cresci
Allen Dalfen
Jay J. Miller
6
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COMPARISON OF FIVE YEAR TOTAL RETURN
VESTRO NATURAL FOODS INC AND NASDAQ INDEX
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Vestro Natural Food 100 48 30 27 32 19
Nasdaq Index 100 88 142 155 178 170
</TABLE>
7
<PAGE>
STOCK OPTION PLANS
The Company adopted a Stock Option plan at its May 23, 1988 Annual
meeting. This plan provides for options to purchase up to 150,000 shares of the
Company's Common Stock to be granted at prices not less than the fair market
value on the date of grant. Both incentive and non-incentive options may be
issued under the 1988 Plan. At December 31, 1994 there were 56,500 incentive
options outstanding under the 1988 Plan, of which 8,750 options were currently
exercisable. During the year ended December 31, 1994, options to purchase
56,500 shares of the Company's Common Stock were granted under this plan.
The Company has granted non-qualified stock options to certain
officers, key employees, and directors of the Company. All non-qualified stock
options were granted at a prices representative of the fair market value of the
Common Stock at the dates of grant. All options granted are for a five-year
period, and generally become exercisable, ratably, over three to four years.
Options granted to officers are not exercisable for a period of one year after
date of grant and, thereafter, become exercisable at 25% per year. During 1994,
no options were granted or exercised under this Plan.
On January 31, 1995 a non-qualified option to purchase 60,000 shares
of the Company's Common Stock was issued to Mr. Lay. Such option is immediately
exercisable in full.
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is certain information concerning persons known by the
Company to own beneficially more than 5% of the shares of Common Stock of the
Company outstanding on March 31, 1995. See CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.
Number of Percent
Name and Address Beneficially of
of Beneficial Owner Owned Shares (1) Class (1)
- ------------------------------ ---------------- ---------
NAP & Company 983,940 16.5%
Nominee for Delaware State
Employee's Retirement Fund
1 Hopkins Plaza
Baltimore, MD 21203
Baccharis Capital, Inc. 702,814 11.8%
2420 Sand Hill Rd., Suite 100
Menlo Park, CA 94025
Allan Dalfen 589,055 9.9%
467 S. Rodeo Drive
Beverly Hills, CA 90212
8
<PAGE>
Princeton/Montrose Partners 548,016 9.2%
243 No. Highway 101
Solana Beach, CA 92075
Scottish Invest. Trust PLC 527,111 8.9%
6 Albyn Place
Edinburgh, Scotland EH24 NL
Southern Calif. Ventures II 365,345 6.1%
A California Limited Partnership
406 Amapola Avenue, Suite 205
Torrance, CA 90501
Natural Venture Partners I 351,407 5.9%
100 Crescent Rd.
Needham, MA 02194
The following table sets forth the beneficial share ownership of each
director of the Company, and the number of shares of Common Stock beneficially
owned by all officers and directors as a group as of March 31, 1994:
Number of Percent
Name and Address Beneficially of
of Beneficial Owner Owned Shares Class (1)
- ------------------------------ ---------------- ---------
Robert J. Cresci (5) 1,405,629 23.6%
Allan Dalfen 589,055 (7) 9.9%
Anthony J. Harnett (2) 351,407 5.9%
B. Allen Lay (4) 442,916 7.4%
Jay J. Miller 85,144 1.4%
Stephen P. Monticelli (6) 707,814 11.9%
Henry W. Poett, III 33,786 .6%
Donald R. Stroben (3) 548,016 9.2%
Officers and directors as a
group (9 persons) 4,172,554 70.2%
9
<PAGE>
(1) Based upon an aggregate of 5,950,588 shares of Common Stock outstanding and
currently exercisable stock options to purchase an aggregate of 225,700
shares of Common Stock. Each of the above shareholders has sole voting and
sole dispositive power with respect to the shares beneficially owned.
(2) Mr. Harnett is a partner of Natural Venture Partners I.
(3) Mr. Stroben is a Managing General Partner of Princeton/Montrose Partners.
(4) Mr. Lay is a General Partner of Southern California Ventures II.
(5) Mr. Cresci is the investment advisor for Nap & Company, Fuelship & Company
and Northman and Company.
(6) Mr. Monticelli is a Managing Director of Baccharis Capital, Inc.
(7) Includes 263,900 shares of the Company's Common Stock purchased in 1993 at
a price of $1.29 Per share and 131,950 shares of the Company's Common Stock
purchased in 1995 under a Severance and Settlement Agreement at a price of
$1.29 Per share. Mr. Dalfen paid the Company $66,000 for the shares and
executed notes payable to the Company for $444,025. The notes are interest
bearing at the rate of 5.75%, due on December 31, 1997 and are secured by
the shares of stock purchased.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Subsidiaries of the Company currently rent warehouse and office space
from a partnership, in which Mr. Poett is a partner, for which they paid rentals
of $161,000 in 1994. The rent paid for such space is believed to be equivalent
to that which would be paid under an arm's length transaction. The lease
expires on September 30, 1997 subject to earlier termination by the lessor or
the Company under certain circumstances.
The Company has used Mr. Miller for certain legal services. It is
believed that the fees paid for such services are not greater than those that
would have been paid to an unaffiliated party .
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended December
31, 1994 is being mailed to shareholders with this Information Statement. The
Company's audited financial statements and Management's Discussion and Analysis
of Financial Condition and results of operations for the year ended December 31,
1994, are included in the Annual Report. The Company's Form 10-K as filed with
the Securities and Exchange Commission is available upon request.
10
<PAGE>
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Any proposals by a shareholder intended to be presented at the 1996
Annual Meeting of Shareholders must be received by the Corporation no later than
March 31, 1996 and be in compliance with applicable Securities and Exchange
Commission regulations, for inclusion in the Corporation's information statement
relating to such meeting.
INDEPENDENT PUBLIC ACCOUNTANTS
It is expected that a representative of Price Waterhouse, which serves
as the Company's independent public accountants will be available to respond to
questions raised at the Meeting.
OTHER MATTERS
The Management knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Meeting.
By Order of the Board of Directors,
Stephen Schorr
Secretary
June 01, 1995
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