<PAGE>
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 27, 1999 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 27, 1999,
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 8, 1999 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 27, 1999 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 15, 1999. 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 8, 1999 are
entitled to vote at the meeting or any adjournment thereof. On that date the
Company had outstanding 2,927,353 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.
IMPORTANT
PLEASE SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
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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 8, 1999.
Shares Beneficially Owned(2)
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Without Options(6) Options Exercised(7)
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Name or Category(1) Number Percent Number Percent
---------------- ------- ------- ------ -------
John D. Determan 335,327 11.5% 335,327 11.0%
Penny S. Bolton (3) 378,463 13.0% 378,463 12.5%
Theodore L. Arena 140,994 4.8% 232,452 7.7%
Ronald A. Provera (4) 322,330 11.0% 322,330 10.6%
Santo Zito 352,330 12.0% 352,330 11.6%
Thomas J. Mulroney (5) 13,900 .5% 32,191 1.1%
Louis A. Arena 288,030 9.9% 288,030 9.5%
John M. Boukather 1,796 .1% 1,796 .1%
Joseph W. Wolbers 12,250 .4% 12,250 .4%
Officers and Directors 1,466,957 50.1% 1,576,706 52.0%
Shares Outstanding 2,927,353 100% 3,037,102 100%
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(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) Includes 320,930 shares held by the family trust of Ronald A. Provera and
his wife, Madelyn M. Provera.
(5) Includes 2,000 shares owned by Marsha Mulroney, wife of Thomas J. Mulroney.
(6) Excludes options under the Company's Incentive Stock Option Plan to
Theodore L. Arena to purchase 91,458 shares, to Thomas J. Mulroney to
purchase 18,291 shares and to all officers and directors as a group to
purchase 109,749 shares.
(7) 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 1998 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 number of the
shareholder's shares, 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 66, has been a vice president and director of the
Company since its formation in 1972, General Counsel from 1986 to 1992, Chief
Executive Officer from 1992 to February 21, 1998 and Chairman of the Board since
1992. He is a member of the audit and option committees.
THEODORE L. ARENA, age 56, has been the General Manager of the Company's
meat division since 1976, the President and a director of the Company since 1985
and the Chief Executive Officer since February 21, 1998. He is the nephew of
Louis A. Arena, a director of the Company.
RONALD A PROVERA, age 61, 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 the Company's
pasta division. He is a member of the option committee.
SANTO ZITO, age 62, 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 53, 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 76, 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 69, 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 62, 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 1998. 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 1998.
The board held four formal meetings and acted by unanimous consent twice
during 1998. All members were present at all board and committee meetings,
except Ronald A. Provera was absent from one board meeting.
Directors who are not officers or employees of the Company are paid a fee
of $1,000 for each board meeting or committee meeting attended.
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<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth for the years ended December 31, 1998,
1997 and 1996, all compensation of all executive officers of the Company serving
at December 31, 1998.
<TABLE>
<CAPTION>
Annual Restricted SEP/IRA
Name and Position Year Salary Option Award Contributions
----------------- ---- ------ ------------ -------------
Shares
<S> <C> <C> <C> <C>
John D. Determan, 1998 $ 80,771 $12,116
Chairman of the Board 1997 66,658 9,849
1996 62,791 9,419
Theodore L. Arena, 1998 133,749 20,062
President and 1997 110,790 91,458 16,618
Chief Executive Officer 1996 107,135 16,070
Ronald A. Provera, 1998 129,641 19,466
Secretary 1997 105,414 15,812
1996 103,568 15,535
Santo Zito, 1998 132,806 19,921
Vice President 1997 108,195 16,229
1996 106,246 15,937
Thomas J. Mulroney, 1998 129,793 19,469
Chief Financial Officer 1997 105,552 18,291 15,833
1996 102,161 15,324
</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. Effective November 1,
1997, Mr. Determan's basic annual salary was raised from $60,000 to $75,000 and
the basic annual salary of each of the other four officers was raised from
$100,000 to $125,000. The annual salary shown above 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 1998, the Company contributed $424,327 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. In April 1997, outstanding options of Messrs. Arena
and Mulroney to purchase 60,000 and 12,000 shares, respectively, were
terminated and options were granted to Messrs. Arena and Mulroney to purchase
91,458 and 18,291 shares, respectively, at a price of $2-9/16 per share.
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, 1997 and 1998, options were
exercised to purchase 16,000, 20,400 and 10,000 shares, respectively, none by
executive officers. The following table shows, for the two executive officers,
the number of unexercised options held on January 1, 1999, the number
exercisable and unexercisable and their aggregate value based on the year end
closing price of $2-15/16.
Option Values at January 1, 1999
--------------------------------
Number of Unexercised Value of Unexercised In-the-
Options at 1/1/99 Money Options at 1/1/99
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
Theodore L. Arena 78,000/13,458 $29,250/5,047
Thomas J. Mulroney 18,291/ -0- $6,859/ -0-
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
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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. The board members own over 50% of the outstanding shares
of the Company. Four out of five of the executive officers are substantial
shareholders of the Company. Maintaining low executive compensation and
promoting management stock ownership tends to cause the executive officers who
are substantial shareholders 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.
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<PAGE>
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. There is no
specific relationship between Company performance and compensation for any
executive officer, other than through stock options for two executive officers.
John D. Determan Ronald A. Provera John M. Boukather Thomas J. Mulroney
Theodore L. Arena Santo Zito Joseph W. Wolbers Louis A. Arena
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.
5 YEAR CUMULATIVE TOTAL RETURNS
Assuming Reinvestment of Dividends
1993 1994 1995 1996 1997 1998
S&P 500 Stock Index 100 101 139 171 229 294
S&P Food Group Index 100 112 143 169 242 262
Provena Foods Inc. 100 86 126 90 115 115
CUMULATIVE & CHANGE AT 12/31 OF YEAR
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
KPMG 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 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 represented 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.
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<PAGE>
2000 SHAREHOLDER PROPOSALS
Any proposal a shareholder of the Company wishes to have presented at the
2000 Annual Meeting of Shareholders must be received by the Company by January
1, 2000.
By Order of the Board of Directors.
JOHN D. DETERMAN
Chino, California Chairman of the Board
March 15, 1999
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 8, 1999, at the
Annual Meeting of Shareholders to be held on April 27, 1999 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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X Please mark
your votes
as indicated
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
PROPOSAL DIRECTIONS
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1. ELECTION OF DIRECTORS [_]FOR all nominees [_]WITHOUT AUTHORITY
To elect the nominees except those deleted. to vote for directors.
listed below.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEES, PLEASE STRIKE OUT 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.
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
