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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 [_] 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 to Section 240.14a-11(c) or Section 240.14a-12
PROVENA FOODS INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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PROVENA FOODS INC.
5010 Eucalyptus Avenue
Chino, California 91710
NOTICE OF APRIL 22, 1997 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF PROVENA FOODS INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Provena
Foods Inc., a California corporation, will be held on Tuesday, April 22, 1997,
at 11:00 a.m., at the Corporation's principal office at 5010 Eucalyptus Avenue,
Chino, California 91710 for the following purposes:
1. To elect directors to serve until the next Annual Meeting of
Shareholders;
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 March 3, 1997 as
the record date for the determination of shareholders entitled to receive notice
of, and to vote at, said meeting or any adjournment thereof.
WHETHER OR NOT YOU PLAN TO ATTEND, WE URGE YOU TO SIGN AND RETURN THE
ENCLOSED PROXY, WHICH YOU MAY REVOKE PRIOR TO ITS USE.
PROXY STATEMENT
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This Proxy Statement relates to the solicitation by the Board of Directors
of Provena Foods Inc. (the "Company") of proxies to be used at the Company's
April 22, 1997 Annual Meeting of Shareholders (and any adjournment thereof) for
the purposes set forth in the above Notice. This Proxy Statement is to be
mailed to shareholders on or about March 10, 1997. All expenses of distributing
this Proxy Statement, the Notice, and the Proxy card are to be borne by the
Company.
Shares represented by a Proxy card returned properly signed will be voted
as directed in the Proxy card. If no direction is made for a matter, the Proxy
will be voted for the matter. A Proxy may be revoked at any time before it is
voted at the meeting.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
Only shareholders of record at the close of business on March 3, 1997 are
entitled to vote at the meeting or any adjournment thereof. On that date the
Company had outstanding 2,816,364 shares of common stock. Each share is
entitled to one vote, subject to the right to cumulate votes in the election of
directors, as described below under Election of Directors.
The following table sets forth, for each officer, director and 5%
shareholder of the Company and for all officers and directors as a group (8
persons), the number and percent of outstanding shares of common stock of the
Company owned on March 3, 1997.
IMPORTANT
PLEASE SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
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<TABLE>
<CAPTION>
Shares Beneficially Owned(2)
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Without Options(4) Options Exercised(5)
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Name or Category(1) Number Percent Number Percent
- ------------------- --------- -------- ---------- --------
<S> <C> <C> <C> <C>
John D. Determan 335,327 11.9% 335,327 11.6%
Penny S. Bolton (3) 378,463 13.4% 378,463 13.1%
Theodore L. Arena 140,994 5.0% 200,994 7.0%
Ronald A. Provera 322,330 11.4% 322,330 11.2%
Santo Zito 352,330 12.5% 352,330 12.2%
Thomas J. Mulroney 20,900 .7% 32,900 1.1%
Louis A. Arena 288,030 10.2% 288,030 10.0%
John M. Boukather 1,660 .1% 1,660 .1%
Joseph W. Wolbers 6,650 .2% 6,650 .2%
Officers and Directors 1,468,221 52.1% 1,540,221 53.3%
Shares Outstanding 2,816,364 100% 2,888,364 100%
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</TABLE>
(1) The address for each person is c/o Provena Foods Inc., 5010 Eucalyptus
Avenue, Chino, California 91710.
(2) All shares are held directly except as noted below.
(3) Penny S. Bolton is the widow of James H. Bolton, former chairman of the
Company. Her shares are not included in the group's shares.
(4) Excludes options under the Company's Incentive Stock Option Plan to
Theodore L. Arena to purchase 60,000 shares, to Thomas J. Mulroney to
purchase 12,000 shares, and to all officers and directors as a group to
purchase 72,000 shares.
(5) The options of Messrs. Arena, Mulroney, and the group are deemed exercised.
No other person is known to the Company to own beneficially more than 5% of
the outstanding shares of common stock of the Company.
Based on copies of filed forms and written representations, the Company
believes that all officers, directors and 10% shareholders have timely filed all
Forms 3, 4 and 5 required for 1996 and (except as previously disclosed) prior
years by Section 16(a) of the Securities Exchange Act.
ELECTION OF DIRECTORS
Eight directors are to be elected to serve until their successors are
elected at the next annual meeting. Shareholders are entitled to cumulate votes
for directors upon notice by a shareholder at the meeting prior to the voting.
Under cumulative voting, each shareholder may cast a number of votes equal to
the number of directors to be elected multiplied by the shareholder's normal
number of votes, and may allocate the votes to one or distribute them among some
or all of the candidates. The eight candidates nominated prior to the voting
receiving the highest number of votes are elected directors.
Unless otherwise directed in the Proxy card, if cumulative voting is
invoked, votes under proxies received pursuant to this solicitation will be
distributed among the eight nominees listed below so as to elect as many of them
as possible. If any nominees become unavailable, the proxies may be voted in
the proxyholders' discretion for substitute nominees.
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NOMINEES FOR BOARD OF DIRECTORS
The name, age, principal position for the past five years and other relevant
information for each nominee for the Board of Directors is as follows:
John D. Determan, age 64, has been a vice president and director of the
Company since its formation in 1972, General Counsel from 1986 to 1992, and
Chairman and Chief Executive Officer since 1992. He is a member of the audit
and option committees.
Theodore L. Arena, age 54, has been the General Manager of Swiss American
since 1976 and has been the President and a director of the Company since 1985.
He is the nephew of Louis A. Arena, a director of the Company.
Ronald A. Provera, age 59, has been the secretary and a director of the
Company since its formation in 1972 and was the General Manager of Sav-On Food
Co., the Company's distribution business, from its formation in 1960 until its
liquidation in 1991. He is currently providing sales support to Royal-Angelus.
He is a member of the option committee.
Santo Zito, age 60, has been the Company's plant engineer since 1976, and a
vice president and director of the Company since its formation in 1972. He is
currently the General Manager of the pasta division. He is a member of the
option committee.
Thomas J. Mulroney, age 51, has been the Company's chief accountant since
1976, the Chief Financial Officer since 1987, a vice president since 1991, and a
director since 1992.
Louis A. Arena, age 74, has been a director of the Company since 1972, a
vice president from 1972 to 1989, and General Manager of the Royal-Angelus
Macaroni Co. division from 1975 until his retirement in 1989.
Joseph W. Wolbers, age 67, has been a director of the Company and Chairman
of the audit committee since 1990. He retired in 1989 as a vice president of
First Interstate Bank where he had been employed since 1950.
John M. Boukather, age 60, is a management consultant. He was the Director
of Operations of PW Supermarkets from 1993 to 1994, Vice President, Retail
Sales, of Certified Grocers of California, Ltd. from 1992 to 1993 and president
of Pantry Food Markets from 1983 to 1987. He has been a director of the Company
and member of the audit committee since 1987.
BOARD COMMITTEES AND MEETINGS
The Board of Directors has two committees, the audit committee and the
option committee. The board has no executive, nominating or compensation
committees, and the full board acts in these capacities.
The audit committee's function is to oversee the Company's relationship with
its independent accountants and to ensure that the Company's financial practices
are adequate. The audit committee met once in 1996. The option committee's
function is to grant options under and administer the Company's 1987 Incentive
Stock Option Plan. The option committee did not meet in 1996.
The board held four formal meetings during 1996. All members were present
at all board and committee meetings.
Directors who are not officers or employees of the Company are paid a fee of
$500 for each board meeting or committee meeting attended.
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EXECUTIVE COMPENSATION
The following table sets forth for the years ended December 31, 1996, 1995
and 1994, all compensation of all executive officers of the Company serving at
December 31, 1996.
<TABLE>
<CAPTION>
Annual SEP/IRA
Name and Position Year Salary Contributions
- ----------------- ---- -------- -------------
<S> <C> <C> <C>
John D. Determan, 1996 $ 62,791 $ 9,419
Chief Executive Officer 1995 63,098 9,465
1994 100,686 15,103
Theodore L. Arena, 1996 107,135 16,070
President 1995 105,887 15,883
1994 104,973 15,745
Ronald A. Provera, 1996 103,568 15,535
Secretary 1995 103,338 15,501
1994 102,474 15,371
Santo Zito, 1996 106,246 15,937
Vice President 1995 111,586 16,738
1994 104,548 15,582
Thomas J. Mulroney, 1996 102,161 15,324
Chief Financial Officer 1995 101,693 15,254
1994 101,262 15,189
</TABLE>
See Incentive Stock Option Plan below for information on Incentive Stock
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Options. See Simplified Employee Pension Plan below for more information on
--------------------------------
SEP/IRA Contributions.
The Company does not currently pay bonuses or deferred compensation to any
executive officer and does not provide them with automobiles, other perquisites,
employment contracts or "golden parachute" arrangements. Officers who are over
5% shareholders have not received an increase in their basic weekly wage since
1986, except that the compensation of John D. Determan, currently at the same
basic wage as it had been since 1986, was increased only for the year 1994 to
$100,000. The annual salary is as reported on Form W-2 and includes the cost of
life insurance and other costs taxable to the officer.
Simplified Employee Pension Plan
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In 1988, the Company adopted a Simplified Employee Pension-Individual
Retirement Accounts ("SEP-IRA") plan and executed SEP-IRA Agreements with Wells
Fargo Bank, N.A. and Dean Witter Reynolds Inc., covering all employees at least
18 years old who have worked at least six months and earned at least $300 during
the year, except certain union employees.
The Company makes contributions under the plan in the discretion of the
board, allocated in proportion to compensation, to an Individual Retirement
Account ("IRA") established by each eligible employee.
Contributions, up to 15% of eligible compensation, are deductible by the
Company and not taxable to the employee. An employee may withdraw SEP-IRA funds
from the employee's IRA. Withdrawals are taxable as ordinary income, and
withdrawals before age 59-1/2 may be subject to tax penalties.
For 1996, the Company contributed $393,880 to IRA's under the plan.
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Incentive Stock Option Plan
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In April 1987, the Company adopted an Incentive Stock Option Plan under
Section 422A of the Internal Revenue Code of 1986. Under the plan, as amended
in 1988, for a period of 10 years from the date of adoption, an Option Committee
appointed by the Board of Directors is authorized in its discretion to grant to
key management employees options to purchase up to an aggregate of 261,704
shares of common stock of the Company. The options may become exercisable in
such installments as may be established by the Option Committee. The purchase
price of shares covered by an option may not be less than the market value of
the shares on the date of grant. The term of an option may not exceed 10 years
and an option may not become exercisable in any year with respect to the
purchase of more than $100,000 worth of shares based on the market value on the
date of grant.
In August 1987, options were granted under the plan to purchase 185,000
shares at a price of $7.00 per share, 125,000 to Theodore L. Arena, 30,000 to
Thomas J. Mulroney and 30,000 to another employee. In June 1988, those options
were terminated and options were granted to purchase 230,000 shares at a price
of $3-5/8 per share, 155,000 to Mr. Arena, 30,000 to Mr. Mulroney and the
balance to three other employees. In December 1992, the outstanding options
were terminated and options were granted to purchase 260,000 shares at a price
of $2-1/4 per share, 150,000 to Mr. Arena, 30,000 to Mr. Mulroney, and the
balance to four other employees.
No options were exercised prior to 1994. In 1994, options were exercised
to purchase 52,000 shares, including 30,000 by Mr. Arena and 6,000 by Mr.
Mulroney. In 1995, options were exercised to purchase 53,555 shares, including
30,000 by Mr. Arena and 6,000 by Mr. Mulroney. In 1996, options were exercised
to purchase 16,000 shares, none by executive officers. The following table
shows, for the two executive officers, the number of unexercised options held on
January 1, 1997, the number exercisable and unexercisable and their aggregate
value based on the year end closing price of $2-7/16.
Option Values at January 1, 1997
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<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the-
Options at 1/1/97 Money Options at 1/1/97
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- ----------------------------
<S> <C> <C>
Theodore L. Arena 60,000/ -0- $11,250/ -0-
Thomas J. Mulroney 12,000/ -0- $2,250/ -0-
</TABLE>
Performance Graph
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The following graph compares the yearly percentage change in the cumulative
total shareholder return on the Company's common stock to the S&P 500 Stock
Index and the S&P Food Group Index for five years, assuming reinvestment of
dividends.
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5 YEAR CUMULATIVE TOTAL RETURNS
Assuming Reinvestment of Dividends
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
CUMULATIVE % CHANGE AT 12/31 OF YEAR
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
S&P 500 STOCK INDEX 100 108 118 120 165 203
S&P FOOD GROUP INDEX 100 100 92 102 131 155
PROVENA FOODS INC. 100 66 100 86 127 91
</TABLE>
Compensation Committee Interlocks and Insider Participation
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The Company has no compensation committee. All executive officers are
members of the board and participate in the board's deliberations concerning
executive compensation.
Board Report on Executive Compensation
- --------------------------------------
The major Company policy affecting past and current executive compensation
is to run the Company for the benefit of its shareholders and not for the
benefit of management. Maintaining low executive compensation and promoting
management stock ownership tends to cause the executive officers to have the
same interest as the other shareholders in the long term performance of the
Company. Their stock interest causes them to be directly rewarded or penalized
by the extent the Company continues to pay dividends and maintain its growth,
which should ultimately be reflected in the value of the Company's stock.
Three of the five executive officers each own over 10% of the Company's
stock and a fourth owns over 5%. They are substantial shareholders and their
compensation has not increased for over 9 years, except that the compensation of
John D. Determan, chief executive officer, was increased only for the year 1994.
There is no specific relationship between Company performance and
compensation for any executive officer, other than through stock options for two
executive officers. The salary of the one executive officer who is not a
substantial shareholder is based upon the judgment of the board of how well the
officer is performing his duties and how well the Company is performing. The
board members own over 50% of the outstanding shares of the Company.
John D. Determan Ronald A. Provera John M. Boukather Thomas J. Mulroney
Theodore L. Arena Santo Zito Joseph W. Wolbers Louis A. Arena
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RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP is the Company's firm of independent certified public
accountants and is expected to continue in this capacity for the current year.
Representatives of KPMG Peat Marwick LLP have indicated that they intend to be
present at the Annual Meeting and will have an opportunity to address the
shareholders and respond to appropriate questions.
OTHER MATTERS
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
Meeting. If any other business should properly come before the meeting, votes
may be cast pursuant to the proxies solicited hereby with respect to such
business in the discretion of the proxyholders.
1998 SHAREHOLDER PROPOSALS
Any proposal a shareholder of the Company wishes to have presented at
the 1998 Annual Meeting of Shareholders must be received by the Company by
January 1, 1998.
By Order of the Board of Directors.
JOHN D. DETERMAN
Chino, California Chairman of the Board
March 10, 1997
PLEASE SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
ACCOMPANYING SELF-ADDRESSED POSTAGE PREPAID ENVELOPE.
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PROVENA FOODS INC.
SHAREHOLDER'S PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints JOHN D. DETERMAN, THEODORE L. ARENA and
RONALD A. PROVERA as Proxies, each with full power of substitution, to
represent and to vote as directed below, all of the shares of common stock of
Provena Foods Inc. held of record by the undersigned on March 3, 1997, at the
Annual Meeting of Shareholders to be held on April 22, 1997 or any adjournment
thereof.
This Proxy, when properly executed, will be voted as the undersigned
shareholder directs below.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
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FOLD AND DETACH HERE
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<TABLE>
<CAPTION>
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[X] Please mark
your votes
as indicated
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
<S> <C>
PROPOSAL DIRECTIONS
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1. ELECTION OF DIRECTORS [_] FOR all nominees [_] WITHOUT AUTHORITY
To elect the nominees listed below. except those deleted. to vote for directors.
<CAPTION>
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEES, MARK HERE [_] AND STRIKE THEIR NAMES BELOW.
John D. Determan, Theodore L. Arena, Ronald A. Provera, Louis A. Arena, Santo Zito,
Thomas J. Mulroney, John M. Boukather and Joseph W. Wolbers.
2. In their discretion, to vote on such other business as may properly come before the meeting.
<S> <C>
PLEASE MARK, DATE, SIGN AND
RETURN PROXY CARD PROMPTLY
IN THE ENCLOSED ENVELOPE.
Mark [_] if you plan to attend meeting.
Signature(s) ____________________________________________________________ Date _______________________________
NOTE: Please sign exactly as name appears above. If signing as representative, state capacity.
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FOLD AND DETACH HERE
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