SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-2
AMENDMENT NO. 2 TO FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended January 1, 1999
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____
Commission File No. 0-4485
Western Beef, Inc.
A Delaware Corporation I.R.S. Employer No. 13-3266114
47-05 Metropolitan Avenue
Ridgewood, New York 11385
Telephone Number (718) 417-3770
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common stock par value $.05 per share ("Common Stock")
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the proceeding 12 months (or for such shorter period that the Registrant was
required to file such reports,) and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |_|.
The aggregate market value of the voting stock held by non-affiliates of the
registrant, based on the $5.9375 average of the closing bid and asked prices
reported by NASDAQ/NMS on April 16, 1999 was $9,185,983.
As of April 16, 1999, the registrant had issued and outstanding 5,475,153 shares
of Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE (None)
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
General
The following table sets forth information as to the compensation of the
Chief Executive Officer and each of the other four most highly compensated
executive officers of the Company (the "named executive officers") for services
in all capacities to the Company and its subsidiaries during fiscal years 1998,
1997 and 1996.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
Long-Term
Compensation Awards
-------------------------------
Annual Compensation Securities
----------------------- Underlying All Other
Name & Principal Position Year Salary (1) Bonus(1) Options (#) Compensation (2)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Peter Castellana, Jr ...... 1998 $602,094 $106,203 -- $ 6,400
President and CEO 1997 613,673 98,735 -- 6,400
1996 591,347 170,285 -- 6,000
Frank Castellana .......... 1998 168,493 21,025 -- 6,400
Executive Vice-President 1997 182,308 15,925 -- 6,400
1996 333,320 87,316 -- 6,000
Joseph Castellana ......... 1998 387,308 72,920 -- 6,400
Executive Vice-President 1997 387,308 63,700 -- 6,400
1996 369,309 106,376 -- 6,000
Michael Castellana ........ 1998 287,958 58,762 -- 6,400
Senior Vice-President 1997 293,496 56,056 -- 6,400
1996 284,550 82,214 -- 6,000
Chris Darrow .............. 1998 118,437 21,025 3,000 5,578
Chief Financial Officer 1997 103,365 12,209 3,000 --
1996 N/A N/A -- --
</TABLE>
- ----------
(1) Amounts shown include cash compensation earned by the named executive
officers during each respective year covered, including amounts deferred,
if any, at the election of those officers. Bonuses are shown for the year
in which they were earned.
(2) Amounts shown represent the Company's contributions to its Profit Sharing
Plan on behalf of the named executives.
4
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
Stock Options
The following table sets forth information concerning the grant of stock
options under the Company's 1995 Stock Option Plan for Employees.
<TABLE>
<CAPTION>
Number of Percentage of Total
Securities Options Granted
NAME Underlining Options to All Employees Exercise Price Expiration Grant Date
Granted (1) in 1998 Fiscal Year Per Share(2) Date Present Value (3)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Chris Darrow 3,000 10.15% $8.25 July, 2008 $11,430
</TABLE>
(1) The option reflected in the table is a nonqualified stock option under the
Internal Revenue Code and was granted on July 9, 1998. The exercise price
of the option was equal to 100% of the fair market value of the Common
Stock on the date of grant, as determined by the Committee. The option
granted vests in increments of 20% on the first, second, third, fourth and
fifth anniversaries of the date of grant; however, it may not be
exercisable after the expiration of ten (10) years from the date of grant.
(2) Options may be exercised by the delivery to the Company at its principal
office or at such other address as may be established by the Committee
(Attention: Corporate Secretary) of written notice of the number of shares
of Common Stock with respect to which the Option is being exercised
accompanied by payment in full of the purchase price of such shares.
Unless otherwise determined by the Committee at the time of grant, payment
for such shares may be made (i) in cash, (ii) by certified check or bank
cashier's check payable to the order of the Company in the amount of such
purchase price, (iii) by delivery to the Company of shares of Common Stock
having a Fair Market Value equal to such purchase price, (iv) at the
discretion of the Committee, by simultaneously exercising Options and
selling the shares of Common Stock acquired thereby, pursuant to a
brokerage or similar arrangement approved by the Committee, and using the
proceeds as payment of such purchase price; or (v) by any combination of
the methods of payment described in (i) through (iv) above.
(3) The option value presented is based on the Black-Scholes option-pricing
model adapted for use in valuing stock options. The actual value, if any,
that an optionee may realize upon exercise will depend on the excess of
the market price of the Common Stock over the option exercise price on the
date the option is exercised. There is no assurance that the actual value
realized by an optionee upon the exercise of an option will be at or near
the value estimated under the Black-Scholes model. The estimated value
under the Black-Scholes model is based on arbitrary assumptions as to
variables such as interest rates and stock price volatility.
5
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table provides information on option exercises by each of
the named executive officers during the past fiscal year and the value of such
officers unexercised options at January 1, 1999, the last day of the Company's
fiscal year. No SARS were outstanding during this period.
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised Options in-the-money Options
Shares Acquired Value at Fiscal Year End (1) at Fiscal Year End
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Chris Darrow -0- -0- 600 5,400 -0- N/A
</TABLE>
- ----------
(1) All options were granted under the 1995 Stock Option Plan for employees. All
options are fully exercisable five years after grant (with 20% becoming
exercisable each year on the first through fifth anniversaries of the date of
grant). The exercise price may be paid in cash, by the surrender of currently
owned Common Stock (valued at 100% of market price) or by the delivery to the
Company of a copy of irrevocable instructions to a stockbroker to sell shares of
Common Stock to be acquired upon exercise of the option and to deliver promptly
to the Company an amount sufficient to pay such purchase price or by any
combination of the methods of payment described above.
Compensation Committee Interlocks and Insider Participation
Compensation of the Company's executive officers currently is administered
by the Company's Board of Directors' Compensation Committee which consists of
Messrs. Arnold B. Becker and Stephen R. Bokser. Mr. Bokser is President and
Chief Executive Officer of White Rose Food. During 1998, 1997 and 1996, the
Company purchased various food products in the amounts of $46,287,000,
$37,111,000 and $24,423,000 from White Rose Food. As of January 1, 1999 and
January 2, 1998 the Company had trade payables of $3,765,000 and $1,997,000
respectively, due to White Rose Food.
6
<PAGE>
COMPENSATION OF DIRECTORS
Compensation of Non-Employee Directors
Pursuant to the Company's compensation policy, each non-employee director
will receive:
1. A $5,000 annual retainer to be paid in quarterly installments of
$1,250.
2. Reimbursement for reasonable out-of-pocket travel expenses that each
non-employee director incurs for each meeting of the Board that such
member attends to cover travel and related expenses.
3. A one-time grant of options to purchase 5,000 shares of the
Company's Common Stock at a price equal to the fair market value of
the Common Stock on the date of grant when the non-employee director
is first elected to the Company's Board of Directors. Such options
shall vest and become exercisable in 20% increments on the first,
second, third, fourth and fifth anniversaries of the date of grant.
In addition, all members of the Board are indemnified by a standard
Directors and Officers liability policy in a manner consistent with the
requirements of Delaware law. Pursuant to the Certificate of Incorporation of
the Company, the Company indemnifies all members of the Board to the fullest
extent possible under the Delaware General Corporation Law.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
WESTERN BEEF, INC.
By: /s/ Peter Castellana, Jr.,
----------------------------------------
Peter Castellana, Jr.,
President,
Date: May 3, 1999
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Peter Castellana, Jr. President, Chief Executive Officer May 3, 1999
- ------------------------ and Director
Peter Castellana, Jr.
/s/ Chris Darrow Chief Financial Officer May 3, 1999
- ------------------------
Chris Darrow
/s/ Joseph Castellana Director May 3, 1999
- ------------------------
Joseph Castellana
/s/ Stephen R.Bokser Director May 3, 1999
- ------------------------
Stephen R. Bokser
/s/ Arnold B. Becker Director May 3, 1999
- ------------------------
Arnold B. Becker
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