SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 ss.240.14a-11(c) or ss.240.14a-12
HANOVER FOODS CORPORATION
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
Not Applicable
________________________________________________________________________________
(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.
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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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|_| 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 number, or
the Form or Schedule and the date of its filing.
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<PAGE>
[HANOVER LETTERHEAD]
August 14, 2000
Dear Hanover Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Meeting") of Hanover Foods Corporation (the "Company") to be held on
September 14, 2000, at 4:00 p.m., at the offices of the Company at 1486 York
Street, Hanover, Pennsylvania.
At this meeting you are being asked to elect two directors. Your Board
urges you to support the Company's nominees by voting FOR Arthur S. Schaier and
T. Edward Lippy on the Company's white proxy card enclosed. Please read the
attached proxy materials carefully to make the best informed decision possible.
Also, enclosed is the Company's Annual Report to Shareholders which
includes the Company's 2000 financial results. We believe that the Company is
positioned for continued success.
Whether or not you expect to attend the Meeting in person, it is important
that your shares be voted at the Meeting. I urge you to complete and sign the
enclosed white proxy card and return it promptly in the envelope provided.
Thank you for your continued support and interest in Hanover Foods
Corporation.
Sincerely,
John A. Warehime
Chairman, President and
Chief Executive Officer
<PAGE>
HANOVER FOODS CORPORATION
1486 YORK STREET
HANOVER, PENNSYLVANIA 17331
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 14, 2000
To the Shareholders of Hanover Foods Corporation:
The 2000 Annual Meeting of Shareholders (the "Meeting") of Hanover Foods
Corporation (the "Company") will be held on September 14, 2000, at 4:00 p.m.,
prevailing time, at the offices of the Company, 1486 York Street, Hanover,
Pennsylvania, for the purpose of considering and acting upon the following:
1. To elect two Class B directors to hold office for a term of four
years and until their respective successors are duly elected and
qualified, as more fully described in the accompanying Proxy
Statement; and
2. To transact such other business as may properly come before the
Meeting.
Only shareholders of record at the close of business on August 10, 2000,
are entitled to notice of, and to vote at, the Meeting or any adjournment or
postponement thereof.
If the Meeting is adjourned for one or more periods aggregating at least
15 days because of the absence of a quorum, those shareholders entitled to vote
who attend the reconvened Meeting, if less than a quorum as determined under
applicable law, shall nevertheless constitute a quorum for the purpose of acting
upon any matter set forth in this Notice of Annual Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED WHITE PROXY CARD. A SELF-ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE; NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors
John A. Warehime
Chairman, President and
Chief Executive Officer
Hanover, Pennsylvania
August 14, 2000
<PAGE>
HANOVER FOODS CORPORATION
1486 YORK STREET
HANOVER, PENNSYLVANIA 17331
(717) 632-6000
----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
-----------------
The accompanying proxy is solicited by the Board of Directors of Hanover
Foods Corporation (the "Company") for use at the 2000 Annual Meeting of
Shareholders (the "Meeting") to be held on September 14, 2000 at 4:00 p.m.,
prevailing time, at the offices of the Company, 1486 York Street, Hanover,
Pennsylvania, and any adjournments or postponements thereof. This Proxy
Statement and accompanying proxy card are first being mailed to shareholders on
or about August 14, 2000.
The only matter to be considered and voted upon at the Meeting is the
election of two Class B directors for a term of four years and until their
respective successors are elected and qualified. The Board of Directors has
nominated Arthur S. Schaier and T. Edward Lippy for election as directors of the
Company. Messrs. Schaier and Lippy are currently serving on the Company's Board
of Directors. Certain shareholders of the Company, including Michael A.
Warehime, Sally Warehime Yelland, Elizabeth Warehime Stick, and J. William
Warehime have nominated Michael Stick and Sonny Bowman for election as
directors.
The cost of this solicitation will be borne by the Company. In addition to
solicitation by mail, proxies may be solicited in person or by telephone,
telegraph or fax machine by officers, directors or employees of the Company,
without additional compensation. Total expenditures for the solicitation of
proxies (including fees of attorneys, accountants, public relations or financial
advisors, printing, transportation and other costs incidental to the
solicitation) are estimated to be $15,000, and total cash expenditures to date
have been approximately $12,000. Upon request, the Company will pay the
reasonable expenses incurred by record holders of the Company's Class A and
Class B Common Stock who are brokers, dealers, banks or voting trustees, or
their nominees, for mailing proxy material and annual shareholder reports to the
beneficial owners of the shares they hold of record.
Only shareholders of record, as shown on the transfer books of the
Company, at the close of business on August 10, 2000 (the "Record Date") are
entitled to notice of, and to vote at, the Meeting. On the Record Date, there
were 288,420 shares of Class A Common Stock outstanding, 426,474 shares of Class
B Common Stock outstanding and 10,000 shares of Series C Convertible Preferred
Stock outstanding. The Class A Common Stock, the Class B Common Stock and the
Series C Convertible Preferred Stock are collectively referred to herein as the
"Capital Stock." On the Record Date, the Company also had 6,548 shares of
non-voting Series A Preferred Stock and 8,496 shares of non-voting Series B
Preferred Stock outstanding, all of which is currently convertible into Class A
Common Stock.
White proxy cards in the form enclosed, if properly executed and received
in time for voting, and not revoked, will be voted as directed on the proxies.
If no directions to the contrary are indicated, the persons named in the
enclosed white proxy card will vote all shares of Capital Stock "for" the
election of the nominees for director hereinafter named. Sending in a signed
proxy will not affect a shareholder's right to attend the Meeting and vote in
person since the proxy is revocable. Any shareholder who submits a proxy has the
power to revoke it by, among other methods: (i) giving written notice to the
Secretary of the Company at any time
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<PAGE>
before the proxy is voted; (ii) submitting a duly executed proxy bearing a later
date; or (iii) appearing at the Meeting and giving the Secretary notice of such
shareholder's intention to vote in person.
The Company is not currently aware of any matters which will be brought
before the Meeting (other than procedural matters) which are not referred to in
the enclosed notice of the Meeting.
The presence, in person or represented by proxy, of the holders of a
majority of all votes entitled to be cast with respect to each class of Capital
Stock will constitute a quorum for the transaction of business at the Meeting.
All shares of the Company's Capital Stock present in person or represented by
proxy and entitled to vote at the Meeting, no matter how they are voted or
whether they abstain from voting, will be counted in determining the presence of
a quorum. If the Meeting is adjourned because of the absence of a quorum, those
shareholders entitled to vote who attend the adjourned meeting, although
constituting less than a quorum as provided herein, shall nevertheless
constitute a quorum for the purpose of electing directors. If the Meeting is
adjourned for one or more periods aggregating at least 15 days because of the
absence of a quorum, those shareholders entitled to vote who attend the
reconvened Meeting, if less than a quorum as determined under applicable law,
shall nevertheless constitute a quorum for the purpose of acting upon any matter
set forth in the Notice of Annual Meeting.
With respect to the election of directors, each share of Class A Common
Stock shall be entitled to one-tenth (1/10) of a vote per share, each share of
Class B Common Stock shall be entitled to one vote per share and each share of
Series C Convertible Preferred Stock shall be entitled to thirty-five votes per
share. The shares of Class A Common Stock and the shares of Class B Common Stock
shall vote together with the shares of Series C Convertible Preferred Stock as a
single class of stock, and not as separate classes, in connection with the
election of directors. The election of directors will be determined by a
plurality vote and the two nominees receiving the most "for" votes will be
elected. Approval of any other proposal will require the affirmative vote of a
majority of the shares of Class B Common Stock cast on the proposal. Under the
Pennsylvania Business Corporation Law, an abstention, withholding of authority
to vote or broker non-vote will not have the same legal effect as an "against"
vote and will not be counted in determining whether the proposal has received
the required shareholder vote.
As used in this Proxy Statement, fiscal 2000 refers to the fiscal year
ended May 28, 2000, fiscal 1999 refers to the fiscal year ended May 30, 1999 and
fiscal 1998 refers to the fiscal year ended May 31, 1998.
2
<PAGE>
BENEFICIAL OWNERSHIP OF CAPITAL STOCK
The following table sets forth as of the Record Date certain information
with respect to the beneficial ownership of the Capital Stock by: (i) each
person who is known by the Company to be the beneficial owner of more than five
percent of any class of the Company's Capital Stock; (ii) each of the Company's
directors and nominees for director; (iii) each of the executive officers of the
Company named in the Summary Compensation Table (the "Named Officers"); and (iv)
the Company's directors, nominees for director and executive officers as a
group. Except as otherwise indicated, the beneficial owners of the Capital Stock
listed below have sole investment and voting power with respect to such shares.
The address of the Directors and Named Officers is that of the Company.
FIVE PERCENT SHAREHOLDERS
Shares Beneficially Owned (1)
-----------------------------
Class Number %of Class
------------------------------
Common Stock
------------
Alan A. Warehime Testamentary Trust A(3)...... Common A -- --%
Allfirst Common B 39,828 9.3
13 Baltimore Street
Hanover, PA 17331
Alan A. Warehime Testamentary Trust B(4)...... Common A -- --
Allfirst Common B 76,165 17.9
13 Baltimore Street
Hanover, PA 17331
Heartland Advisors, Inc(2).................... Common A 50,500 17.5
789 North Milwaukee Street Common B -- --
Milwaukee, WI 53202
Jane Elizabeth Stick.......................... Common A 14,972 5.2
35 Peyton Road Common B 44,244 10.4
York, PA 17403
J. William Warehime........................... Common A 4,734 1.6
257 Frederick Street Common B 78,458 18.4
Hanover, PA 17331
John A. Warehime.............................. Common A 3,662 1.3
6759 E. Moulstown Road Common B 44,730 10.5
Hanover, PA 17331
Sally W. Yelland.............................. Common A -- --
2015 Youngs Road Common B 37,288 8.7
Hanover, PA 17331
Series C Preferred Stock
Hanover Foods Corporation 401(k) Savings Plan
Trust (5)..................................... Common A -- --
1486 York Street Common B -- --
Hanover, PA 17331 Preferred C 10,000 100.0
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<PAGE>
Shares Beneficially Owned(1)
-------------------------------
Class Number % of Class
-------------------------------
DIRECTORS AND NAMED OFFICERS (5)(6)
John A. Warehime................................ Common A 3,662 1.3%
Common B 44,730 10.5
Clayton J. Rohrbach, Jr. (6).................... Common A 88 *
Common B -- --
Cyril T. Noel (6)(7)............................ Common A 301 *
Common B -- --
Preferred A 432 *
Preferred B 360 *
T. Edward Lippy................................. Common A 385 *
Common B -- --
Arthur S. Schaier(6)............................ Common A 3,500 1.2
Common B -- --
James G. Sturgill, CPA, CVA..................... Common A 100 *
Common B -- --
James A. Washburn............................... Common A -- --
Common B -- --
Gary T. Knisely, Esq(7)......................... Common A 1,688 *
Common B -- --
Preferred A 16 *
Pietro D. Giraffa, Jr........................... Common A -- --
Common B -- --
Edward L. Boeckel, Jr........................... Common A -- --
Common B -- --
Alan T. Young................................... Common A -- --
Common B -- --
Robert W. Shelton............................... Common A -- --
Common B -- --
All directors and executive officers as a group
(total of 12)(8)................................ Common A 9,724 3.4
Common B 44,730 10.5
Preferred A 432 6.9
Preferred B 376 4.2
Preferred C 10,000 100.0
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<PAGE>
* Less than one percent.
----------
(1) The securities "beneficially owned" by a person are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission and, accordingly,
include securities owned by or for the spouse, children or certain other
relatives of such person as well as other securities as to which the
person has or shares voting or investment power or has the right to
acquire within 60 days after the Record Date. The same shares may be
beneficially owned by more than one person. Beneficial ownership may be
disclaimed as to certain of the securities.
(2) As reported by Heartland Advisors, Inc. ("Heartland") in Amendment Four to
Schedule 13G filed on January 26, 2000. Heartland reported no voting and
sole dispositive power with respect to the shares held. Such shares are
held in investment advisory accounts of Heartland. The interests of one
such account, Heartland Value Plus Fund, relates to more than 5% of the
class
(3) Includes shares held by the Alan A. Warehime Testamentary Trust A. Voting
and dispositive power with respect to such shares is shared by the five
trustees, each of whom has one vote. A majority vote of such individuals
is required to vote or dispose of such shares. Trustees of such trust
include John A. Warehime, Chairman, President and Chief Executive Officer
of the Company, Cyril T. Noel, a director of the Company, Sally Yelland,
Michael Warehime and Allfirst
(4) Includes shares held by the Alan A. Warehime Testamentary Trust B. Voting
and dispositive power with respect to such shares is shared by the five
trustees, each of whom has one vote. A majority vote of such individuals
is required to vote or dispose of such shares. Trustees of such trust
include John A. Warehime, Chairman, President and Chief Executive Officer
of the Company, Cyril T. Noel, a director of the Company, Sally Yelland,
Michael Warehime and Allfirst
(5) The Hanover Foods Corporation 401(k) Savings Plan ("401(k) Plan") may be
deemed to beneficially own the shares held by such plan. The Series C
Preferred Stock is currently convertible into shares of the Class A Common
Stock on a one for one basis. The trustees of such plan are Directors
Noel, Rohrbach and Schaier. See Footnote 8 below.
(6) Excludes 10,000 shares of the Series C Preferred Stock held by the 401(k)
Plan Trust. In their capacity as co-trustees of such plan, Directors Noel,
Rohrbach and Schaier have shared voting and dispositive power over the
10,000 shares held by the 401(k) Plan Trust. Shares held by the 401(k)
Plan Trust are voted by a majority of the plan trustees. Mr. Schaier
indicated his intention to abstain from voting as he is a nominee for
election as a director. The Series C Preferred Stock is convertible into
Class A Common Stock on a one for one basis.
(7) Shares of Series A or B Preferred Stock are convertible into Class A
Common Stock on an equitable basis. The current conversion ratio is 4.0
shares of Series A or B Preferred Stock to one share of Class A Common
Stock. Such conversion ratio is subject to change based upon current book
value of the Class A Common Stock.
(8) Includes 10,000 of Series C Preferred Stock held by the 401(k) Plan Trust
for the benefit of Plan participants. See footnotes 5 and 6 above.
5
<PAGE>
ELECTION OF DIRECTORS
The Company's Amended and Restated By-laws (the "By-laws") provide that
the Board of Directors shall consist of not less than seven and not more than
fifteen directors, with the exact number fixed by the Board of Directors. The
Amended and Restated Articles of Incorporation and amendments thereto (the
"Articles of Incorporation") of the Company provide that the Board of Directors
shall be divided into four classes, having staggered terms of office, which are
as equal in number as possible, and that the members of each class of directors
are to be elected for a term of four years or until their successors are elected
and shall qualify. Holders of Class A and B Common Stock are not permitted to
cumulate their votes for the election of directors. The Company has interpreted
the provisions of its Articles of Incorporation not to permit cumulative voting
by the holders of the Series C Preferred Stock.
At the Meeting, shareholders will elect two Class B directors to serve for
a term of four years and until their respective successors are elected and
qualified. Unless directed otherwise, the person named in the enclosed white
proxy card intends to vote such proxy "for" the election of the listed nominees
or, in the event of inability of either of the nominees to serve for any reason,
for the election of such other person or persons as the Board of Directors may
designate to fill the vacancy. The Board has no reason to believe that the
nominees will not be candidates or will be unable to serve.
The following table sets forth information, as of the Record Date,
concerning the Company's directors and nominees for election to the Board of
Directors. Mssrs. Schaier and Lippy, both current directors, were nominated by
the Board of Directors to serve as directors for a term of four years. The
nominees have consented to being named in the Proxy Statement and to serve if
elected.
<TABLE>
<CAPTION>
Director
Name Age (1) Position Since Term Expires
--------------------------- ------- -------------------- -------- ------------
<S> <C> <C> <C> <C>
Nominees
Arthur S. Schaier.......... 58 Director 1994 2004
T. Edward Lippy............ 70 Director 1994 2004
Directors Remaining in Office
John A. Warhime............ 62 Chairman of the Board 1985 2001
James A. Washburn.......... 50 Director 1996 2001
Cyril T. Noel (2).......... 75 Director 1983 2002
Clayton J. Rohrbach, Jr.... 80 Director 1984 2003
James G. Sturgill, CPA, CVA 59 Director 1994 2003
</TABLE>
----------
(1) Age as of Record Date.
(2) Mr. Noel served on the Board from May 1983 until June 1994 and from
October 1994 to present.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
NAMED IN THIS PROXY STATEMENT FOR DIRECTORS OF THE COMPANY.
The following information about the Company's directors and nominees for
directors is based, in part, upon information supplied by such persons.
6
<PAGE>
John A. Warehime has served as Chairman of the Board and Chief Executive
Officer of the Company since 1989 and as a Director of the Company since 1985.
Mr. Warehime has 49 years of experience in the food processing industry.
Clayton J. Rohrbach, Jr. is currently retired. Prior to his retirement,
Mr. Rohrbach was employed at CPC International, a large New York Stock Exchange
traded food company located in Englewood Cliffs, New Jersey, from 1975 through
1985 as Vice President of Marketing.
James G. Sturgill, CPA, CVA, has been the Managing Partner at Sturgill &
Associates, LLP, a public accounting firm headquartered in Westminster,
Maryland, since 1993. Prior to 1993, he was employed at Sturgill, Rager &
Lehman, a firm located in Westminster, Maryland from 1980 to 1993.
Arthur S. Schaier has been a shareholder, General Manager of Earnhardt's
Dodge Motor Companies located in Gilbert, Arizona, since 1981. Mr. Schaier
currently serves as Director of ADI, the Phoenix, Arizona Metropolitan Dodge
Dealers advertising organization and Board of Directors MOPAR Parts.
T. Edward Lippy has been the Vice President of Lippy Brothers, Inc., a
family farming company located in Hampstead, Maryland, since 1994. Mr. Lippy
currently serves as a director for the following entities: Vice Chairman &
Director of Farmers & Merchants Bank since 1989 and director of Ag First Farm
Credit Bank since 1988. Additionally, Mr. Lippy, served as the Chairman of
Baltimore Farm Credit Bank from 1990 through 1992 and as Chairman of the Farm
Credit Council, Washington, D.C. from 1993 through 1997.
James A. Washburn has been the Chairman and Chief Executive Officer of
Park 100 Foods, a food manufacturing company, located in Tipton, Indiana, since
1991. Prior thereto, Mr. Washburn was the President and Chief Executive Officer
of Hamilton Medaris Corporation and H.M.C. Transportation located in Fishers,
Indiana.
Cyril T. Noel is currently retired. Mr. Noel was the Vice President of
Finance of the Company from 1985 through 1994. Mr. Noel has served on the Board
from May 1983 until June 15, 1994 and from October 18, 1994 to the present.
Board of Directors, Committees and Attendance at Meetings
The Board of Directors held five meetings during fiscal 2000. Each
director attended 75% or more of the meetings of the Board and committees of
which they were members during fiscal 2000.
The Board of Directors has appointed a Compensation Committee to make
recommendations to the Board of Directors concerning compensation for the
Company's executive officers; and take such other actions as may be required in
connection with the Company's compensation and incentive plans. During fiscal
2000, the Compensation Committee held two meetings. Members of the Compensation
Committee include Directors Rohrbach and Schaier. The Report of the Compensation
Committee is contained elsewhere herein.
The Board of Directors also has appointed an Audit Committee to, among
other things, review the Company's financial and accounting practices and
policies and the scope and results of the Company's annual audit. The Audit
Committee also recommends to the Board the selection of the Company's
independent public
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<PAGE>
accountants. Members of the Audit Committee include Directors, Noel, Lippy and
Sturgill. The Audit Committee met twice during fiscal 2000.
The Board of Directors has not appointed a standing Nominating Committee.
The function of nominating directors is carried out by the entire Board of
Directors. Pursuant to the By-laws, a shareholder may nominate persons for
election as director, provided that the shareholder (i) is a shareholder of
record at the time of the nomination and is entitled to vote at the meeting of
shareholders for the Board seat to which the nomination relates, and (ii)
complies with the notice procedures of Article III, Section 3 of the By-laws.
That section as currently in effect provides that the nominating shareholder
must deliver notice of the nomination to the Company's Secretary not later than
June 1 of the calendar year in which the meeting to elect the director or
directors is to be held. The required notice must contain certain information
including information about the nominee, as prescribed in the By-laws. The
By-laws are subject to amendment from time to time.
Director Compensation
During fiscal year 2000, each director of the Company was paid an annual
retainer of $12,000 payable in equal monthly installments of $1,000. Board
Members also receive a fee of $1,500 for each quarterly Board meeting attended
in person and $750 for each quarterly Board meeting which the director
participated in by telephone. Directors are paid $1,000 for each special Board
meeting attended in person and $500 for each special Board meeting which the
director participated in by telephone. In addition, an annual fee of $1,000 per
year was paid for service as a committee chairman. Committee members also
received a fee of $1,000 for each committee meeting attended in person and $500
for each committee meeting which the director participated in by telephone.
In addition, James Sturgill, a director of the Company provides consulting
services on a hourly fee basis. See "Certain Relationships and Related
Transactions."
8
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding the
compensation paid to the Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company for services rendered in
all capacities during the past three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
------------------------------------
Other Annual All Other
Name and Principal Position Fiscal Year Salary Bonus Compensation Compensation
----------------------------------- ----------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
John A. Warehime................... 2000 $ 636,694 $ 823,606 $16,437 (1) $589,000 (2)(4)(5)
Chairman and Chief Executive Officer 1999 606,375 502,000 7,070 785,000
1998 578,000 584,000 39,753 580,888
Gary T. Knisely.................... 2000 $210,000 $104,600 $-0- $53,000 (3)(4)(5)
Executive V. President, Secretary 1999 200,000 88,100 -0- 89,000
and Counsel 1998 192,500 96,250 -0- 69,500
Alan T. Young...................... 2000 $138,020 $55,885 $-0- $8,000 (4)(5)
Senior V.P. - Purchasing & 1999 134,000 59,429 -0- 8,000
Transportation 1998 126,764 63,420 -0- 9,500
Robert W. Shelton (6).............. 2000 $113,300 $67,980 $-0- $6,636
President L.K. Bowman Co. 1999 110,000 85,800 -0- -0-
1998 9,168 -0- -0- -0-
Pietro D. Giraffa, Jr............. 2000 $123,600 $42,136 $-0- $8,000 (4)(5)
V.P. - Controller 1999 120,000 53,220 -0- 8,000
1998 120,000 60,000 -0- 9,500
</TABLE>
----------
(1) Includes legal and accounting fees in the amount of $12,372 and other
perquisites paid pursuant to the June 12, 1995 Employment Agreement, as
amended, including the value of a company car and country club dues
totaling $4,065. See "Employment Agreements and Change in Control
Severance Agreement."
(2) Includes the Company's payment for premiums of $153,000 for two
split-dollar life insurance policies on the life of Patricia M. Warehime,
the wife of Mr. Warehime, and the accrual of $428,000 to reflect
supplemental pension benefits to be paid pursuant to Mr. Warehime's
Employment Agreement dated June 12, 1995, as amended.
(3) Includes the Company's accrual of $45,000 to reflect supplemental pension
benefits to be paid pursuant to Mr. Knisely's Employment Agreement, dated
January 23, 1997.
(4) Includes the Company's matching contributions pursuant to the 401(k) Plan
made to the accounts of Messrs. Warehime, Knisely, Young and Giraffa in
the amount of $8,000 each and to the account of Mr. Shelton in the amount
of $6,636.
(5) Excludes payments made to such individuals in connection with the
termination of the Pension Plan. See "Pension Plan" herein.
(6) On May 1, 1998, Robert W. Shelton was employed as President, L.K. Bowman,
Co. when the Company acquired the assets of L.K. Bowman Co., Inc. and L.K.
Bowman Pacific, Inc.
The Company did not grant any options to the named officers during fiscal
2000.
9
<PAGE>
401(k) Plan
On April 2, 1990, the Company adopted a defined contribution benefit plan,
known as the Company's 401(k) Savings Plan (the "401(k) Plan"). The 401(k) Plan
was amended on June 5, 1992, April 4, 1994, April 28, 1995, July 25, 1997 and
December 14, 1997 to read in its present form. Non-union, full-time domestic
employees and those employees who are members of Local 56 of the United Food and
Commercial Workers Union are eligible to participate after completion of one
year of service. Each eligible employee has the option to defer up to 16% of his
or her total annual cash compensation per year. As of December 31st of each
year, the Company, at its discretion, may make matching contributions equal to
one hundred percent of each participating employee's account for the first five
percent of compensation deferred by each employee. These contributions may be
made in cash, Company Stock, or a combination of cash and Company Stock. The
401(k) Plan provides various investment options. The 401(k) Plan provides for
loans to plan participants but does not permit early withdrawals. Matching
contributions made by the Company to the accounts of the named officers are
included in the Summary Compensation Table contained previously herein.
Employment Agreements and Change in Control Severance Agreement
On June 12, 1995, the Company entered into a five year employment
agreement with its Chief Executive Officer, John A. Warehime, at an annual base
salary of $650,000 with such compensation payable retroactively from April 1,
1994 (the "1995 Employment Agreement"). The 1995 Employment Agreement was
amended on February 13, 1997 (the "Amended Employment Agreement") to, among
other things, reduce the annual base salary payable under the agreement to
$498,866, which modification was applied retroactively to April 1, 1994 (the
effective date of the 1995 Employment Agreement) and modified the method of
calculating bonuses payable to the employee under such agreement. As a result of
these retroactive changes, Mr. Warehime is required to reimburse the Company for
$83,024 in excess compensation previously paid to him through the deduction of
such amount from annual base salary increases provided for under the terms of
the Amended Employment Agreement and to waive accrued bonuses payable for fiscal
1997 under the 1995 Employment Agreement which would have equaled $2,250,000.
The principal terms of Mr. Warehime's employment arrangements with the Company
as amended by the Amended Employment Agreement are set forth below.
The Amended Employment Agreement provides for annual increases (but not
decreases) in the employee's annual salary equal to the greater of 5% of the
prior year's salary or the annual percentage increase in the Consumer Price
Index (CPI). Mr. Warehime's annual base salary for fiscal 2000, 1999 and 1998
was $636,000, $606,000 and $578,000, respectively. Unless terminated by either
party, the Amended Employment Agreement automatically renews annually on each
anniversary date so that five years always remain on the term of the agreement.
In the event the employee is terminated without cause, or in the event the
employee terminates his employment after a reduction (without his written
consent) of his duties or authority, compensation or similar events, the Amended
Employment Agreement provides for the payment of the salary and bonus (including
all other benefits) over the remaining term of the agreement. In the event of
termination due to death or disability, the Amended Employment Agreement
provides for the same payment to the employee (or in the event of the death of
the employee, his spouse or descendants) for one year and thereafter the payment
of supplemental pension benefits as described below. In addition, the Amended
Employment Agreement provides for the reimbursement by the Company of the
employee's legal and accounting fees up to $75,000 per year and reasonable
business expenses incurred by the employee in connection with the business of
the Company. The Amended Employment Agreement also provides the employee with
various other benefits including the use of an automobile, disability and life
insurance, split-dollar life insurance on the life of employee's spouse and a
club membership.
10
<PAGE>
The annual bonus payable to the employee under the Amended Employment
Agreement is equal to $100,000 plus 10% of the Company's pretax earnings over
$5.0 million provided that no annual bonus is payable if pretax earnings of the
Company are less than $5.0 million. The Amended Employment Agreement limits
salary and the annual bonus payment described above to an aggregate of not more
than $1.0 million annually. Annual bonuses can be paid in cash or Class A Common
Stock at the option of the employee. For the years ended May 28, 2000, May 30,
1999, and May 31, 1998, the bonus accrued under this agreement was $364,000,
$394,000 and $422,500, respectively.
The Amended Employment Agreement also provides for the annual payment of a
long-term performance bonus based upon the Company's performance over the prior
five-year period as measured by its average sales growth and average increase in
operating profits as compared to an industry peer group over the same period.
The bonus payable is calculated based upon a formula set forth in the Amended
Employment Agreement, with such calculation performed by an independent
management consulting firm retained by the Company and approved by the
Compensation Committee of the Board of Directors. For the years ended May 28,
2000, May 30, 1999 and May 31, 1998, the long-term performance bonus accrued
under this agreement was $114,000, $108,000 and $162,000, respectively.
The Amended Employment Agreement was revised effective as of August 1,
1997 to make certain clarifying changes and to require that bonus payments to
Mr. Warehime in any taxable year in excess of $1.0 million would be subject to
shareholder approval. At a meeting of the holders of the Class B Common Stock
held on August 14, 1997, John A. Warehime, in his capacity as voting trustee of
approximately 52% of the Class B Common Stock, approved such bonus payments.
The Amended Employment Agreement provides for annual supplemental pension
benefits, commencing upon the earlier of (a) five years after termination of the
employee (or one year following his death or disability) or (b) the date of
retirement, payable during the life of the employee and upon his death, for the
life of his spouse. Such annual supplemental pension benefits are equal to 60%
of average total compensation (including bonuses) over the latest three-year
period prior to retirement, assuming retirement at age 65 or later. Supplemental
pension benefits are reduced based upon an established formula to the extent the
employee retires prior to age 65. The net present value of the cost of providing
this future benefit is recognized by the Company over the remaining expected
years of service. The expense recognized under this agreement was approximately
$428,000, $624,000 and $411,000 for the years ended May 28, 2000, May 30, 1999
and May 31, 1998. The accrued benefit obligation was approximately $2,174,000,
$1,747,000 and $1,123,000 at May 28, 2000, May 30, 1999 and May 31, 1998,
respectively.
On January 23, 1997, the Company entered into a five-year employment
agreement with Gary T. Knisely, Executive Vice President, Secretary and Counsel
of the Company, at an annual salary of $175,000 with such compensation payable
retroactively from June 1, 1996 (the "Knisely Agreement"). Unless terminated by
either party, the Knisely Agreement automatically renews annually on each
anniversary date so that five years always remain on the term of the agreement.
The Knisely Agreement provides for annual salary increases (but not decreases)
equal to the greater of 5% of the prior year's salary or the annual percentage
increase in the CPI, as well as incentive bonuses and various other benefits. As
of May 28, 2000, the aggregate liability of the Company under this agreement for
the next five years is estimated to be $1,218,000, excluding annual performance
bonuses. In the event the employee is terminated without cause, or in the event
the employee terminates his employment after a reduction (without his written
consent) of his duties or authority, compensation or similar events, the Knisely
Agreement provides for the payment of the salary and bonus (including all other
benefits) over the remaining term of the agreement. In the event of termination
due to
11
<PAGE>
death or disability, the Knisely Agreement provides for the payment of salary
and bonus (including all other benefits) to the employee (or his spouse or other
descendants in the event of the employee's death) for the later of one year from
the date of such termination or the death of the employee.
The Knisely Agreement also provides for annual supplemental pension
benefits equal to 60% of the employee's average annual compensation (including
bonuses but excluding other benefits) over the three most recent fiscal years
prior to the employee's termination if the employee is no longer employed by the
Company and the employee has attained the age of 55. Such annual supplemental
pension benefits are payable for the remainder of the lifetime of the employee.
The net present value of the cost of providing this future pension benefit is
recognized by the Company over Mr. Knisely's expected remaining years of
service. The expense recognized for supplemental pension benefits under this
agreement was approximately $45,000, $81,000 and $60,000 for the years ended May
28, 2000, May 30, 1999 and May 31, 1998, respectively. The accrued benefit
obligation was approximately $233,000, $188,000 and $107,000 at May 28, 2000,
May 30, 1999 and May 31, 1998, respectively.
The Company also entered into a change in control severance agreement with
Alan T. Young which provides for termination compensation if Mr. Young's
employment is terminated: (i) involuntarily or (ii) voluntarily, following a
reduction in base salary, duties and responsibilities, within 24 months of a
change in control. A "change in control" shall be deemed to occur if John A.
Warehime ceases to be Chief Executive Officer of the Company or ceases to have
the power and authority of the Chief Executive Officer. Pursuant to the terms of
this agreement, any payment due thereunder shall be made over a two year period
no less frequently than monthly and all payments during any 12 month period
shall not in the aggregate exceed the officer's total cash compensation (salary
and bonus) received from the Company during fiscal 2000. Amounts paid to such
officer during fiscal 2000 are included in the Summary Compensation Table.
All payments made pursuant to this agreement are subject to the further
conditions that: (i) the officer maintain the confidentiality of the Company's
trade secrets, customer lists and other proprietary information of the Company;
(ii) for a period of two years following the termination of the officer, neither
the officer or his employer or business associate shall enter into or attempt to
enter into any business relationship, solicit for employment or employ any
person, employed by the Company or its affiliates at any time within six months
prior to the officer's termination; and (iii) for a period of two years
following the termination, the officer shall not directly or indirectly own,
manage, operate, join or participate in any capacity, any entity which is
primarily engaged in a business which competes with any significant business of
the Company or its affiliates. If Mr. Young was terminated on May 28, 2000 under
circumstances entitling him to severance payments pursuant to this agreement,
the aggregate amount due to Mr. Young under this agreement would have been
$237,000.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who beneficially own more
than ten percent of a registered class of the Company's Common Stock to file
with the Securities and Exchange Commission ("SEC") initial reports of ownership
and reports of changes, in ownership of Common Stock and other equity securities
of the Company. Executive officers, directors and greater than ten percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
12
<PAGE>
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to the
Company's executive officers, directors and greater than ten percent beneficial
shareholders were complied with during the year ended May 28, 2000.
13
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal 2000, the Company and its subsidiaries, in the normal course
of business, purchase and sell goods and services to related companies.
During fiscal 2000, the Company rented equipment from, ARWCO Corporation,
Warehime Enterprises, Inc. and Park 100 Foods, Inc. The rental payments pursuant
to such lease agreements totaled $100,000 during fiscal 2000. John A. Warehime,
the Chairman of the Company, owns 33.3% of the outstanding stock of ARWCO
Corporation. J. William Warehime, a shareholder of the Company, and John A.
Warehime own 44.4% and 14.8% of the outstanding stock of Warehime Enterprises,
Inc., respectively. James A. Washburn, a director of the Company, owns
approximately 80% of the outstanding stock of Park 100 Foods, Inc.
During fiscal 2000, the Company stored raw potatoes at its Centre Hall,
Pennsylvania plant for Snyder's of Hanover, Inc., Hanover, Pennsylvania
("Snyder's"), for a total rental of $151,000. The following shareholders of the
Company are over 5% shareholders of Snyder's who are also 5% or greater
shareholders of the Company: J. William Warehime (13.7% shareholder of
Snyder's), Jane Elizabeth Stick (7.0% shareholder of Snyder's) and John A. and
Patricia M. Warehime (7.2% shareholders of Snyder's).
During fiscal 2000, the Company leased a two story farm house, adjoining
one story guest house and adjoining ground located on Trolley Road, R.D. # 3,
Hanover, Heidelberg Township, Pennsylvania, for customer housing and
entertainment and temporary new employee housing from John A. and Patricia M.
Warehime for a total of $65,000.
During fiscal 2000, the Company purchased $675,000 of contracted
vegetables from Lippy Brothers, Inc. T. Edward Lippy, a director of the Company,
owns approximately 37.0% of the outstanding stock of Lippy Brothers, Inc.
During fiscal 2000, the Company retained James G. Sturgill, CPA, CVA a
director of the Company, as a financial consultant to provide financial and
accounting services to the Company. During fiscal 2000, the Company paid Mr.
Sturgill a total of $26,000 in consulting fees.
During fiscal 2000, the Company sold approximately $2.4 million of frozen
food products to Park 100 Foods, Inc., Tipton, Indiana. James A. Washburn, a
director of the Company, owns approximately 80% of the outstanding stock of Park
100 Foods.
During fiscal 1996, the Company repurchased 5,148 shares of Class B Common
Stock from Cyril T. Noel and Frances L. Noel for $367,567. In connection with
this transaction, the Company provided the Noels with a note to fund the
repurchase price. During fiscal 2000, this note was repaid in full.
14
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Hanover Foods has designed its executive compensation program to attract,
motivate and retain talented executives. Toward this end, the executive
compensation program provides:
o A base salary program and benefits to attract and retain talented
executives who demonstrate the qualities required in Hanover Food's
business operations and who meet the Company's established goals and
standards.
o Annual incentive bonus payments that are highly variable based on
the achievement of the Company's pre-tax earnings goals and
pre-established individual goals. These incentive bonuses reward
individuals whose performance contributes to achieving strategic and
financial corporate objectives, which increase shareholder value.
Additionally, the long-term component of the Chief Executive
Officer's bonus is determined pursuant to a formula based on the
Company's performance over the prior five years as compared to an
industry peer group over the same period.
The Company's officer compensation program is comprised of base salary,
annual cash incentive compensation and various benefits generally available to
all full-time employees of the Company, including participation in group medical
and life insurance plans and a 401(k) plan. The Company seeks to be competitive
with compensation programs offered by companies in the food processing industry
and other companies of similar size located in its market area based on formal
and informal surveys conducted by the Company.
Base Salary. The Company has entered into employment agreements with
Messrs. Warehime and Knisely pursuant to which they were entitled to receive
annual base salaries of $636,394 and $210,000 during fiscal 2000, respectively.
Pursuant to the terms of the employment agreements, such salaries are adjusted
each year in accordance with the Consumer Price Index. The Board of Directors
believes that the compensation levels established in the employment agreements
were consistent with competitive practices for executives at this level based
upon an evaluation performed on these employment agreements by an independent
management consulting firm.
The Company also entered into change in control severance agreement with
Mr. Alan T. Young, which provide for severance payments to this officer in the
event that he is terminated, voluntarily (following a reduction in base salary,
duties and responsibilities) or involuntarily, in connection with a change in
control of the Company. This agreement does not establish a base salary for such
officer.
The Compensation Committee decided on base salaries for Messrs. Young,
Shelton and Giraffa for fiscal 2000, in the amounts of $138,000, $113,300 and
$123,600 respectively, (representing increases to each of 3%, and annual bonus
amounts reflected in the Summary Compensation Table based upon fiscal 1999
performance of the Company and the individual.
In arriving at these decisions, the Compensation Committee considered
individual contributions during fiscal 2000 as well as annual performance
reviews completed by supervising officers.
Annual Incentive Compensation. Under his employment agreement, Mr.
Warehime is entitled to receive an annual bonus if the Company's pre-tax
earnings are $5.0 million or more. Such bonus is equal to $100,000 plus 10% of
all pre-tax earnings over $5.0 million. Such bonus, along with base salary, are
limited to a maximum of $1.0
15
<PAGE>
million per year. Mr. Warehime is also entitled to a long-term annual bonus
based upon the Company's performance over the past five years as measured by its
average sales growth percentage ("Sales Performance Index") and average
percentage of operating profits to sales ("Profitability Index") as compared to
the performance of companies in an industry peer group. The bonus amount is
determined by a formula contained in Mr. Warehime's employment agreement as
calculated by an independent management consulting firm retained by the Company.
Annual cash bonuses of up to 100% of an officer's base salary are paid to
the Company's officers, other than the Chief Executive Officer, based upon the
Company's pre-tax earnings, such individual's contribution to the Company's
earnings, and the achievement of certain individual performance goals
established for each officer. In November 1999, the Compensation Committee
recommended that a one time discretionary bonus, in an aggregate amount not to
exceed $100,000, be paid to Gary T. Knisely and any other employee deemed by
John A. Warehime to have played an important role in the Company's acquisitions
during fiscal 2000. This discretionary bonus was paid to Mr. Knisely in the
amount of $50,000, to Mr. Young in the amount of $20,000 and to Mr. Giraffa in
the amount of $10,000. Bonuses of $20,000 in aggregate were paid to two other
employees.
Stock Options. The Company does not currently utilize stock options as a
means of compensating its executive officers and key employees, however, the
Compensation Committee may consider implementing an option plan in the future.
Compensation of Chief Executive Officer. Pursuant to his employment
agreement, Mr. Warehime's annual base salary for fiscal 2000 was $636,394, which
represents an increase of $30,019 from fiscal 1999. Mr. Warehime also was paid a
bonus (which represents both short and long term components of Mr. Warehime's
bonus) pursuant to his employment agreement as a result of the achievement of
certain levels of pre-tax income by the Company and increases in the Company's
sales performance index and profitability index as compared to its peers. During
fiscal 2000, Mr. Warehime also received a one time discretionary bonus of
$346,306 based upon the Board's determination that Mr. Warehime's compensation
provided for in his employment agreement did not properly reflect the Company's
extraordinary performance in 1999 which was a result of several acquisitions
which Mr. Warehime and certain senior executives were instrumental in
completing. The amount of this bonus was determined with the assistance of a
compensation analysis prepared by an independent benefits consulting firm.
Policy with respect to Section 162(m) of the Internal Revenue Code.
Generally, Section 162(m) of the Internal Revenue Code of 1986, and the
regulations promulgated thereunder (collectively, "Section 162(m)"), denies a
deduction to any publicly held Company, such as the Company, for certain
compensation exceeding $1,000,000 paid during a taxable year to the chief
executive officer and the four other highest paid executive officers, excluding,
among other things, certain performance-based compensation. The Compensation
Committee evaluates to what extent Section 162(m) will apply to its compensation
programs. In order to bring bonus payments to Mr. Warehime under his Employment
Agreement in excess of $1,000,000 into compliance with Section 162(m),
shareholders of the Class B Common Stock approved such bonus payments at a
meeting held in August 1997.
Members of the Compensation Committee
Clayton J. Rohrbach, Jr. Arthur S. Schaier
16
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph shows a comparison of the cumulative total return for
the Company's Class A Common Stock, the NASDAQ Stock Market and the Hanover
Composite Index (defined below), assuming an investment of $100 in each on March
31, 1996, the earliest date such information is available, and the reinvestment
of all dividends. The data points used for the performance graph are listed
below.
The following graph is required to be included in these proxy materials by
SEC regulations; however, in reviewing these materials shareholders are advised
that since the Company's Class A Common Stock is not actively traded, it can not
be properly compared to companies whose securities are traded on an exchange or
the NASDAQ Stock Market.
The Hanover Composite Index reflects the performance of the following
publicly traded companies in industries similar to that of the Company: Seneca
Foods Corp., United Foods, Inc. and Dean Foods.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
Performance Graph Data Points 3/31/96 6/2/96 6/1/97 5/31/98 5/30/99 05/28/00
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hanover Foods Corporation $100.00 $79.77 $82.04 $122.48 $145.78 $148.83
-------------------------------------------------------------------------------------
Hanover Composite Index $100.00 $98.17 $151.12 $197.63 $157.15 $134.12
-------------------------------------------------------------------------------------
NASDAQ $100.00 $114.61 $129.56 $164.07 $231.48 $308.29
-------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
SHAREHOLDER PROPOSALS
Pursuant to the proxy rule under the Securities Exchange Act, the
Company's shareholders are notified that the deadline for providing the Company
timely notice of any shareholder proposal to be submitted outside of the Rule
14a-8 process for consideration at the Company's 2001 Annual Meeting of
Shareholders (the "Meeting") will be June 1, 2001, as set forth in the Company's
Amended and Restated Bylaws. As to all such matters which the Company does not
have notice by June 1, 2001, discretionary authority shall be granted to the
persons designated in the Company's proxy related to the 2001 Meeting to vote on
such proposal. This change in procedure does not affect the Rule 14a-8
requirements applicable to inclusion of shareholder proposals in the Company's
proxy materials related to the 2001 Meeting. A shareholder proposal regarding
the 2001 Meeting must be submitted to the Company at its office located at 1486
York Street, P.O. Box 334, Hanover, Pennsylvania, 17331, by April 18, 2001 to
receive consideration for inclusion in the Company's 2001 proxy materials. Any
such proposal must also comply with the proxy rules under the Securities
Exchange Act, including Rule 14a-8.
INDEPENDENT AUDITORS
The Company's independent auditors for fiscal 2000 was the firm of
KPMG LLP, Harrisburg, Pennsylvania. A representative of KPMG LLP is expected to
be present at the Meeting and to be available to respond to appropriate
questions. The representative will have the opportunity to make a statement if
he so desires.
OTHER MATTERS
The Company is not presently aware of any matters (other than procedural
matters) which will be brought before the Meeting which are not reflected in the
attached Notice of the Meeting. Pursuant to the Company's Amended and Restated
Bylaws, for any proposal to be considered at the Annual meeting, notice of such
proposal must be received by the Company by June 1 of the year in which the
meeting is to be held. The enclosed proxy confers discretionary authority to
vote with respect to any and all of the following matters that may come before
the Meeting: (i) matters which the Company had notice by June 1, 2000 are to be
presented at the Meeting; (ii) approval of the minutes of a prior meeting of
shareholders, if such approval does not amount to ratification of the action
taken at the Meeting; (iii) the election of any person to any office for which a
bona fide nominee named in this Proxy Statement is unable to serve or for good
cause will not serve; (iv) any proposal omitted from this Proxy Statement and
the form of proxy pursuant to Rules 14a-8 or 14a-9 under the Securities Exchange
Act of 1934; and (v) matters incident to the conduct of the Meeting. In
connection with such matters, the persons named in the enclosed proxy will vote
in accordance with their best judgment.
18
<PAGE>
ANNUAL REPORT TO SHAREHOLDERS AND FORM 10-K
This Proxy Statement is accompanied by the Company's Annual Report to
Shareholders for fiscal 2000.
EACH PERSON SOLICITED HEREUNDER CAN OBTAIN A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR FISCAL 2000 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WITHOUT CHARGE, EXCEPT FOR EXHIBITS TO THE REPORT, BY SENDING A
WRITTEN REQUEST TO:
HANOVER FOODS CORPORATION
P.O. BOX 334
1486 YORK STREET
HANOVER, PENNSYLVANIA 17331
ATTENTION: John A. Warehime, Chairman,
President and Chief Executive Officer
By Order of the Board of Directors
Gary T. Knisely
Executive Vice President,
Secretary and Counsel
Hanover, Pennsylvania
August 14, 2000
19
<PAGE>
EXHIBIT A
INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth the name and the present principal
occupation or employment (except with respect to the directors whose principal
occupation is set forth in the Proxy Statement), and the name, principal
business and address of any corporation or other organization in which such
employment is carried on, of the directors and executive officers of the Company
who may assist in soliciting proxies from the Company's stockholders. Unless
otherwise indicated below, the principal business address of each such person is
1486 York Street, P.O. Box 334, Hanover, PA 17331 and such person is an employee
of the Company. Directors are indicated with an asterisk.
NAME AND PRINCIPAL PRESENT OFFICE OR OTHER
BUSINESS ADDRESS PRINCIPAL OCCUPATION OR EMPLOYMENT
--------------------------- -----------------------------------------------
John A. Warehime*.......... Chairman of the Board of the Company
Clayton J. Rohrbach, Jr.* . Retired; Formerly Vice President of Marketing
1304 Devonshire Way at CPC International
Palm Beach, FL 33418
Cyril T. Noel*............. Retired; Formerly Vice President of Finance
3442 North Street
McSherrystown, PA 17344
T. Edward Lippy* .......... Vice President at Lippy Brothers, Inc.
209 Lees Mill Road
Hampstead, MD 21074
Arthur S. Schaier*......... Corporate General Manager - Earnhardt Motor
890 West San Marcos Drive Companies
Chandler, AZ 85224
James G. Sturgill, CPA, CVA* Managing Partner at Sturgill & Associates, LLP
4833 Wentz Road
Manchester, MD 21102-1243
James A. Washburn* ........ Chairman and CEO at Park 100 Foods
12643 Royce Court
Carmel, IN 46033
Gary T. Knisely, Esq....... Executive Vice President, Secretary and
Counsel of the Company
Alan T. Young.............. Vice President of Purchasing & Transportation
of the Company
Robert W. Shelton.......... President, L. K. Bowman, division of the
Company
Pietro D. Giraffa, Jr...... Vice President and Controller of the Company
Edward L. Boeckel, Jr...... Treasurer of the Company; General Manager -
Bickel's Snack Foods, Inc.
<PAGE>
EXHIBIT B
TRANSACTIONS IN THE SECURITIES OF THE COMPANY WITHIN
THE PAST TWO YEARS AND CERTAIN OTHER TRANSACTIONS
The following table sets forth information with respect to all purchases
and sales of shares of Class A Common Stock, Class B Common Stock, Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock of the
Company by the Company and the directors and executive officers of the Company
during the past two years.
<TABLE>
<CAPTION>
# of # of # of # of # of
Shares of Class Shares of Class Shares of Class Shares of Class Shares of Class
A Common Stock- B Common Stock- A Preferred Stock- B Preferred Stock- C Preferred Stock-
NAME Purchased/Sold Purchased/Sold Purchased/Sold Purchased/Sold Purchased/Sold Date
---- -------------- -------------- -------------- -------------- -------------- ----
<S> <C> <C> <C> <C> <C> <C>
John A. Warehime............. 1,718 / - - / - - / - - / - - / - 09/18/98
200 / - - / - - / - - / - - / - 11/30/98
200 / - - / - - / - - / - - / - 01/19/99
500 / - 08/24/99
500 / - 02/09/00
500 / - 03/08/00
Clayton J. Rohrbach, Jr ..... - / - - / - - / - - / - - / - ________
Cyril T. Noel................ - / - - / - - / - - / - - / - ________
T. Edward Lippy.............. - / - - / - - / - - / - - / - ________
Arthur S. Schaier............ 1,000 / - - / - - / - - / - - / - 14/12/00
100 / - 05/08/00
1,000 / - 06/08/00
900 / - 06/13/00
James G. Sturgill, CPA, CVA.. 100 / - - / - - / - - / - - / - 03/24/99
James A. Washburn............ - / - - / - - / - - / - - / - ________
Gary T. Knisely, Esq. ....... - / - - / - - / - - / - - / - ________
Pietro D. Giraffa, Jr........ - / - - / - - / - - / - ________
Alan T. Young................ - / - - / - - / - - / - - / - ________
Edward L. Boeckel, Jr........ - / - - / - - / - - / - - / - ________
Robert W. Shelton............ - / - - / - - / - - / - - / - ________
</TABLE>
<PAGE>
PROXY
HANOVER FOODS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS ON SEPTEMBER 14, 2000
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF HANOVER FOODS CORPORATION
The undersigned hereby constitutes and appoints GARY T. KNISELY and JEFFREY A.
WAREHIME, and each of them, as attorneys and proxies for the undersigned, with
full power of substitution, for and in the name, place and stead of the
undersigned, to appear at the Annual Meeting of Shareholders of Hanover Foods
Corporation (the "Company") to be held on the 14th day of September, 2000, and
at any postponement or adjournment thereof, and to vote all of the shares of the
Company which the undersigned is entitled to vote, with all the powers and
authority the undersigned would possess if personally present.
1. The election of the following nominees as Class B directors of the
Company, Arthur S. Schaier and T. Edward Lippy, to hold office for a term
of four years and until their successors are duly elected and qualified:
|_| FOR |_| WITHHOLD AUTHORITY
To withhold a vote for any individual nominee, write the individual's name on
the line below:
______________________________________________.
2. To transact such other business as may properly come before the Annual
Meeting.
Should the undersigned be present and choose to vote at the Annual Meeting or at
any adjournments or postponements thereof, and after notification to the
Secretary of the Company at the Annual Meeting of Shareholders of the
shareholder's decision to terminate this proxy, then the power of such attorneys
or proxies shall be terminated and shall have no force and effect. This proxy
may also be revoked by filing a written notice of revocation with the Secretary
or by duly executing a proxy bearing a later date.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS TO THE CONTRARY ARE
INDICATED, THE PROXY AGENTS INTEND TO VOTE FOR THE ELECTION FOR THE NOMINEES
LISTED HEREIN. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY
WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE
PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED
AT THE MEETING.
THE PROXY AGENTS PRESENT AND ACTING IN PERSON OR BY THEIR SUBSTITUTES (OR, IF
ONLY ONE IS PRESENT AND ACTING, THEN THAT ONE) MAY EXERCISE ALL THE POWERS
CONFERRED BY THIS PROXY. DISCRETIONARY AUTHORITY IS CONFERRED BY THIS PROXY AS
TO CERTAIN MATTERS DESCRIBED IN THE COMPANY'S PROXY STATEMENT.
Date:____________________________ , 2000
(Please date this Proxy)
________________________________________
Signature(s)
Please sign your name exactly as it appears on this proxy indicating any
official position or representative capacity. If shares are registered in more
than one name, all owners must sign.
The undersigned hereby acknowledges receipt of the Company's 2000 Annual Report
to Shareholders, Notice of the Company's 2000 Annual Meeting of Shareholders and
the Proxy Statement relating thereto.
PLEASE DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE
PAID ENVELOPE.
