<PAGE>
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 Materials Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CALIFORNIA CULINARY ACADEMY, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: Not
Applicable
(2) Aggregate number of securities to which transaction applies: Not
Applicable
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: Not Applicable
(4) Proposed maximum aggregate value of transaction: Not Applicable
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check the 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: Not Applicable
(2) Form, Schedule or Registration Statement No.: Not Applicable
(3) Filing Party: Not Applicable
(4) Date Filed: Not Applicable
<PAGE>
CALIFORNIA CULINARY ACADEMY, INC.
625 POLK STREET
SAN FRANCISCO, CALIFORNIA 94102
TO THE SHAREHOLDERS OF CALIFORNIA CULINARY ACADEMY, INC.
The Annual Meeting of Shareholders of California Culinary Academy, Inc.
will be held at the Academy's principal facilities at 625 Polk Street, San
Francisco, California, on Saturday, March 15, 1997, at 10:00 A.M., California
time.
The Annual Report to Shareholders for fiscal 1996 is enclosed herewith. At
the shareholders' meeting, we will discuss in more detail the subjects covered
in the Annual Report as well as other matters of interest to shareholders.
The enclosed proxy statement explains the items of business to come
formally before the Annual Meeting. As a shareholder, it is in your best
interest to express your views regarding these matters by signing and returning
your proxy. This will ensure the voting of your shares if you do not attend the
Annual Meeting.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES OF THE ACADEMY'S
COMMON STOCK YOU OWN, AND ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE
ANNUAL MEETING. TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE
MARK, SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY IN THE RETURN ENVELOPE
PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THE GIVING
OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE ANNUAL
MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A
BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE ANNUAL MEETING, YOU
MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
THEODORE G. CROCKER
CHAIRMAN OF THE BOARD
February 15, 1997
San Francisco, California
<PAGE>
CALIFORNIA CULINARY ACADEMY, INC.
625 POLK STREET
SAN FRANCISCO, CALIFORNIA 94102
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS -- MARCH 15, 1997
TO THE SHAREHOLDERS OF CALIFORNIA CULINARY ACADEMY, INC.
Notice is hereby given that the Annual Meeting of Shareholders of
California Culinary Academy, Inc. will be held on Saturday, March 15, 1996, at
10:00 A.M. California time, at the principal facilities of the Academy, 625 Polk
Street, San Francisco, California, for the following purposes:
1. To elect a board of five directors, with each director so elected to
hold office until the next Annual Meeting and until his successor has been
elected and qualified.
2. To ratify the appointment of Deloitte & Touche LLP as the independent
public accountants of the Academy for the fiscal year ending June 30, 1997.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. February 5, 1997 has been fixed as the
record date for the determination of shareholders entitled to notice of and to
vote at the Annual Meeting and any adjournment or postponement thereof.
BY ORDER OF THE BOARD OF DIRECTORS
JOHN SHEA PIERCE
SECRETARY
February 15, 1997
San Francisco, California
- --------------------------------------------------------------------------------
SHAREHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN
THE ENCLOSED ENVELOPE. RETURNING YOUR PROXY DOES NOT DEPRIVE YOU OF YOUR RIGHT
TO ATTEND THE ANNUAL MEETING AND TO VOTE YOUR SHARES IN PERSON.
- --------------------------------------------------------------------------------
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PROXY STATEMENT
--------------
ANNUAL MEETING OF SHAREHOLDERS OF
CALIFORNIA CULINARY ACADEMY, INC.
TO BE HELD ON MARCH 15, 1997
--------------------------------
SOLICITATION AND VOTING RIGHTS
GENERAL
The enclosed proxy is solicited by and on behalf of California Culinary
Academy, Inc. (the "Academy") for use at the Annual Meeting of Shareholders to
be held on Saturday, March 15, 1997, at 10:00 A.M., California time, or at any
adjournment or adjournments thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting
will be held at the principal facilities of the Academy, located at 625 Polk
Street, San Francisco, California. All expenses incurred in connection with this
solicitation, including postage, printing, handling and the actual expenses
incurred by brokerage house, custodians, nominees and fiduciaries in forwarding
proxy material to beneficial owners, will be paid by the Academy. In addition
to solicitation by mail, certain officers, directors and regular employees of
the Academy, who will receive no additional compensation for their services, may
solicit proxies by telephone, telegram or personal call. These proxy
solicitation materials were mailed on or about February 15, 1997, to all
shareholders entitled to vote at the Annual Meeting.
The Academy's principal executive offices are located at 625 Polk Street,
San Francisco, California 94102 and its telephone number is (415) 771-3536.
REPORT TO SHAREHOLDERS
A report to shareholders of the Academy for the fiscal year ended June 30,
1996, is being mailed with this Proxy Statement to each of the Academy's
shareholders of record at the close of business on February 5, 1997. The report
includes financial statements examined and reported upon by Deloitte & Touche
LLP, independent auditors for the Academy.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of shareholders of the Academy that are intended to be presented
by such shareholders at the Academy's Annual Meeting to be held in 1998 must be
received by the Academy no later than October 18, 1997, in order that they may
be included in the Proxy Statement and form of proxy relating to that meeting.
It is recommended that shareholders submitting proposals direct them to the
Secretary of the Academy and use "certified mail -- return receipt requested"
in order to provide proof of timely delivery. No such proposals were received
with respect to the Annual Meeting scheduled for March 15, 1997.
VOTING OF SECURITIES
The Academy, a corporation existing and organized under the laws of the
State of California, has two classes of equity securities issued and
outstanding, consisting of 3,317,719 shares of common stock, no par value (the
"Common Stock") and 254,541 shares of Series A Preferred Stock (the "Preferred
Stock") as of
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February 5, 1997. The Preferred Stock is not entitled to voting rights except
in the event of non-payment of dividends. No such voting rights have accrued
as of the date hereof. All of the shares of Common Stock are voting shares, but
only those shareholders of record as of the record date, February 5, 1997, will
be entitled to notice of and to vote at the Annual Meeting and at any and all
postponements or adjournments of the Annual Meeting. The presence in person or
by proxy of the holders of a majority of the outstanding shares of Common Stock
entitled to vote at the Annual Meeting will constitute a quorum for the purpose
of transacting business at the Annual Meeting.
Each Common Stock shareholder is entitled to one vote for each share of
Common Stock held by such shareholder of record on each matter that may come
before the Annual Meeting. An affirmative vote of a majority of the shares
present and voting at the meeting is required for approval of all items being
submitted to the shareholders for their consideration, other than the election
of directors, which is determined by a plurality of the votes cast if a quorum
is present and voting. Abstentions and broker-non-votes are each included in the
determination of the number of shares present and voting for purposes of
determining the presence of a quorum. Abstentions will be included in
tabulations of the votes cast on proposals presented to the shareholders and
therefore will have the effect of a negative vote. Broker non-votes will not be
counted for purposes of determining the number of votes cast for a proposal.
Under California law and the Academy's Articles of Incorporation and
Bylaws, cumulative voting is permitted in the election of directors. Under
cumulative voting rules, every shareholder voting in the election of directors
may cumulate such shareholder's votes and give one candidate a number of votes
equal to the number of directors to be elected multiplied by the number of votes
to which the shareholder's shares are entitled, or distribute the shareholder's
votes on the same principle among as many candidates as the shareholder thinks
fit, provided that votes cannot be cast for more candidates than are provided
for by the Bylaws at the time of voting. However, no shareholder will be
entitled to cumulate votes unless the name of the candidate or candidates for
whom such votes would be cast has been placed in nomination prior to the voting
and any shareholder has given notice, at the Annual Meeting and prior to the
commencement of voting, of such shareholder's intention to cumulate his votes.
The candidates receiving the highest number of votes, up to the number of
directors to be elected, shall be elected.
All votes will be tabulated by the inspector of election appointed for the
Annual Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker "non-votes."
REVOCABILITY OF PROXIES
At the Annual Meeting, valid proxies will be voted as specified by the
shareholder. Any shareholder giving a proxy in the accompanying form retains
the power to revoke at any time prior to the exercise of the powers conferred in
the proxy and may do so by taking any of the following actions: (i) delivering
written notice to the Secretary of the Academy; (ii) delivering to the Secretary
of the Academy a duly executed proxy bearing a later date; or (iii) personally
attending the Annual Meeting and revoking the proxy. A shareholder's attendance
at the Annual Meeting will not revoke the shareholder's proxy unless the
shareholder affirmatively indicates at the Annual Meeting the intention to vote
the shareholder's shares in person. Please note, however, that if shares are
held of record by a broker, bank or other nominee and the shareholder wishes to
vote at the Annual Meeting, the shareholder must obtain from the record holder a
proxy issued in the name of the shareholder.
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PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
GENERAL
Although the Academy's Bylaws and authorized board action presently provide
for a board of seven directors at the Annual Meeting, the Academy will present a
slate of five directors for election to the Board, to hold office until the next
annual meeting of shareholders and until their successors are duly elected and
qualified. The Board has the power between meetings of shareholders to elect
directors to fill the vacancies.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the nominees named below, unless one or
more of such nominees should become unavailable for election by reason of death
or other unexpected occurrence, in which event such shares will be voted for the
election of such substitute nominees as the Board of Directors may propose. In
the event additional persons are nominated for election as directors, the proxy
holders intend to vote all proxies received by them in such a manner in
accordance with cumulative voting as will assure the election of as many of the
nominees listed below as possible and, in such event, the specific nominees to
be voted for will be determined by the proxy holders.
Each person nominated has agreed to serve if elected, and the Academy knows
of no reason why any of the listed nominees would be unavailable to serve.
VOTING REQUIREMENTS
Cumulative voting is permitted in the election of directors. See "Voting
of Securities" for a discussion of the mechanics of cumulative voting. Directors
are elected by a plurality of the votes present and in person or represented by
proxy and entitled to vote on the proposal. Votes withheld from the nominee will
be counted for purposes of determining the presence or absence of a quorum but
will not be counted as affirmative votes. A broker non-vote will be counted for
purposes of determining the presence of absence of a quorum but will not be
treated as entitled to vote on this matter.
NOMINEES
The Board of Directors has nominated five persons for election to the Board
of Directors. There will be two vacancies following the election. There are no
plans to fill such vacancies. Each nominee is currently a director of the
Academy whose present term expires at the Annual Meeting. Messrs. Cockman and
Dame were appointed by the Board of Directors to fill vacancies on the Board and
they accepted such appointments on January 28, 1997.
Set forth below is information regarding the nominees, including
information furnished by them as to their principal occupations for the last
five years, certain other directorships held by them, and their ages as of
January 31, 1997.
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION - POSITION SINCE
- ------------------------- --- --------------------------------- -----
Theodore G. Crocker 50 President of Crocker & Associates 1987
and Chairman of the Board of the
California Culinary Academy, Inc.
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NAME OF NOMINEE AGE PRINCIPAL OCCUPATION - POSITION SINCE
- ------------------------- --- --------------------------------- -----
W. Bruce C. Bailey (1)(2) 42 Chairman of Bailey & Company Inc., 1996
Director
Grover T. Wickersham 46 Attorney, Director 1996
James D. Cockman 53 Chairman and Chief Executive Officer, 1997
American Culinary Equipment, Inc.
Director
Frederick L. Dame 43 Master Sommelier 1997
Vice President, National Accounts
Seagram Chateau Estate Wine Company
Director
- ----------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Mr. Crocker has served as Chairman of the Board since March 1987. Since
1980, Mr. Crocker has also been primarily employed as the President of Crocker &
Associates, a real estate development company located in Watsonville,
California. From 1986 to 1992, Mr. Crocker was the President of Overland
Development Corporation, a real estate development company located in Aptos,
California ("Overland"), where he was responsible for day-to-day management.
Mr. Crocker holds an Associate of Arts degree from Cabrillo Junior College.
Mr. Bailey has served as a director of the Academy since March 1996. Mr.
Bailey founded the investment banking firm of Bailey & Company Inc., Toronto,
Canada, in December 1988, and has been employed by such firm since that date in
various capacities. From December 1988 through December 1990, he served as the
Managing Director; from January 1991 to January 1994, he served as Senior Vice
President; and from January 1994 to the present, he has served as President and
Chairman of the Board. Bailey & Company Inc. is currently serving as an
investment banker to the Academy. See "Executive Compensation - Certain
Relationships and Related Transactions." Mr. Bailey holds a B.A. [Hons.] degree
from Queen's University, Kingston, Canada, an LL.B. from Dalhousie University,
Halifax, Canada, an LL.M. from Columbia University, New York, New York, and Call
to the Bar, Law Society of Upper Canada, Toronto, Canada.
Mr. Wickersham has served as a director of the Academy since March 1996.
Mr. Wickersham became a founding member of the law firm, Grover T. Wickersham,
P.C., Palo Alto, California, in July 1986. This firm serves as security counsel
to the Academy. In December 1996, Mr. Wickersham founded Wickersham Asset
Management, Inc., Palo Alto, California, which provides asset management
services for private clients. Mr. Wickersham has served as President and
Treasurer of this firm since its inception. Mr. Wickersham holds a Bachelor of
Arts degree in American Studies from the University of California at Berkeley, a
J.D. degree from Hastings College of the Law and an MBA degree from Harvard
Business School.
Mr. Cockman has served as a member of the Board of Directors since January
1997 when he was appointed by the Board to fill a vacancy. He currently serves
as the Chairman and Chief Executive Officer of American Culinary Equipment,
Inc., Greenville, South Carolina, a distributor of professional culinary
equipment to the foodservice industry. From 1977 through September 1992, he
served in various senior level management capacities in Sara Lee Corporation,
most recently as the Chairman of Sara Lee Foodservice. Mr. Cockman serves on
the boards of Ryans Family Steak House, Greenville, South Carolina, Clayton
Homes, Inc., Knoxville Tennessee, Clemson University, College of Commerce and
Industry, Clemson, South Carolina, Greenville Technical College Foundation,
Greenville, South Carolina.
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Mr. Dame has served as a member of the Board of Directors since January
1997 when he was appointed by the Board to fill a vacancy. He has served in
various senior level management capacities in the Seagram organization since
1988, and is currently the Vice President of National Accounts for Seagram
Chateau Estate Wine Company, San Mateo, California. Mr. Dame is a columnist for
the "Wine Trader" as well as for a number of gourmet and hotel-restaurant
publications in Japan. He received his degree in Journalism and Communications
from Washington & Lee University.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS ELECT THE FOREGOING
NOMINEES TO SERVE AS DIRECTORS OF THE ACADEMY UNTIL THE NEXT ANNUAL MEETING OR
UNTIL THEIR SUCCESSORS HAVE BEEN ELECTED AND QUALIFIED.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors has two standing committees: The Compensation
Committee and the Audit Committee. The Board does not have a nominating
committee. Each standing committee has at least one outside director. The
Board has delegated certain advisory authority to each committee, but the
decision making and management responsibilities of the Academy remain with the
full board.
The Audit Committee was established in November 1993 to recommend
engagement of the Academy's independent public accountants, to approve services
performed by such accountants and to review, in consultation with the
independent accountants, the Academy's accounting system and system of internal
controls. The Audit Committee met one time during the fiscal year ended
June 30, 1996.
The Compensation Committee was established in November 1993 to administer
the Academy's stock option plans and other employee benefit plans and to approve
salaries, bonuses and other compensation arrangements for the Academy's
executive officers. The Compensation Committee met one time during the fiscal
year ended June 30, 1996.
The Board of Directors is responsible for the general supervision,
management and control of the Academy's business. During the fiscal year ended
June 30, 1996, the Board of Directors held four meetings. No member of the
Board attended fewer than 75% of the meetings in the last fiscal year.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by the General Corporation Law of California (the
"Corporations Code"), the Academy's Articles of Incorporation eliminate, to the
fullest extent permitted under California law, the personal liability of a
director to the Academy for monetary damages in an action brought by or in the
right of the Academy for breach of a director's duties to the Academy and its
shareholders. Under current California law, liability is not eliminated for (i)
acts or omissions that involve intentional misconduct or a knowing and culpable
violation of law; (ii) acts or omissions that a director believed to be contrary
to the best interest of the corporation or its shareholders or that involve the
absence of good faith on the part of the director; (iii) any transaction from
which a director derived an improper personal benefit; (iv) acts or omissions
that show a reckless disregard for the director's duty to the corporation or its
shareholders in circumstances in which the director was aware, or should have
been aware, in the ordinary course of performing a director's duties, of a risk
of serious injury to the corporation or its shareholders; (v) acts or omissions
that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the corporation or its shareholders; (vi)
contracts or other transactions between corporations and directors having
interrelated directors in violation of Section 310 of the Corporations Code; and
(vii) distributions, loans or guarantees made in violation of Section 316 of the
Corporations Code. In addition, the Academy's Articles of Incorporation and
Bylaws provide for
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indemnification, to the fullest extent permitted under the Corporations Code, of
directors, officers and agents of the Academy and persons who serve at the
request of the Academy as a director, officer, employee, trustee or agent of
another corporation, partnership, joint venture, trust or other enterprise.
The Academy has also entered into indemnification agreements with its
directors and executive officers, as permitted under the Bylaws. The
indemnification agreements provide that the directors and executive officers
will be indemnified to the fullest extent permitted by applicable law against
all expenses (including attorneys' fees), judgments, fines and amounts
reasonably paid or incurred by them for settlement in any threatened, pending or
completed action, suit or proceeding, including any derivative action, on
account of their services as a director or executive officer of the Academy of
any subsidiary of the Academy or of any other company or enterprise in which
they are serving at the request of the Academy. No indemnification will be
provided under the indemnification agreements, however, to any director or
executive officer in certain limited circumstances, including knowingly
fraudulent, deliberately dishonest or willful misconduct. To the extent the
provisions of the indemnification agreements exceed the indemnification
permitted by applicable law, such provisions may be unenforceable or may be
limited to the extent they are found by a court of competent jurisdiction to be
contrary to public policy. In addition, in the opinion of the Securities and
Exchange Commission, indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Act"), is against public policy and,
therefore, unenforceable. Accordingly, these indemnification provisions may not
limit the liability of directors and executive officers under the Act.
EXECUTIVE OFFICERS
The names of the Academy's executive officers who are not also directors of
the Academy and certain information about each of them are set forth below:
Keith H. Keogh, age 43, joined the Academy as Executive Vice President and
Chief Operating Officer in June 1995. In April 1996, he was appointed as
President and Chief Operating Officer of the Academy. From 1971 until joining
the Academy, Mr. Keogh had been employed at Walt Disney World, Orlando, Florida,
and held various positions, most recently as Executive Chef, Research and
Development - Theme Parks. Mr. Keogh is also the Manager of the Culinary Team
USA as well as the World Ambassador and past President of the World Association
of Cooks Societies.
Robert A. Stoffregen, age 47, joined the Academy in June 1996 as Executive
Vice President, Chief Financial Officer and Director of Corporate Development.
From January 1996 to June 1996, he was a member of the accounting firm of Jones,
Henle & Schunck, Danville, California. From April 1995 to December 1995, he was
an independent business consultant. From September 1994 to March 1995, he was
the Chief Financial Officer of YES! Entertainment, Pleasanton, California, a
consumer product development company. From August 1991 to September 1994, Mr.
Stoffregen was Chief Financial Officer of Sharper Image Corporation, San
Francisco, California, a retail and catalog merchandising company. Prior to
August 1991, Mr. Stoffregen was a partner in the public accounting firm of
Deloitte & Touche. Mr. Stoffregen holds a B.A. degree in accounting from the
University of Minnesota - Duluth and a JD from William Mitchell College of Law,
Saint Paul, Minnesota.
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PROPOSAL NO. 2 RATIFICATION OF SELECTION
OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP as the Academy's
independent auditors for the fiscal year ending June 30, 1997 and has further
directed that management subject the selection of independent auditors for
ratification by the shareholders at the Annual Meeting. Deloitte & Touche has
audited the Academy's financial statements since 1996. Representatives of
Deloitte & Touche are expected to be present at the Annual Meeting and will have
an opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
Shareholder ratification of the selection of Deloitte & Touche as the
Academy's independent auditors is not required by the Academy's Bylaws or
otherwise. However, the Board is submitting the selection of Deloitte & Touche
to the shareholders for ratification as a matter of good corporate practice. If
the shareholders fail to ratify the selection, the Audit Committee and the Board
of Directors will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Audit Committee and the Board of Directors, in their
discretion, may direct the appointment of a different independent accounting
firm at any time during the year if they determine that such a change would be
in the best interest of the Academy and its shareholders.
VOTING REQUIREMENTS
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting will
be required to ratify the selection of Deloitte & Touche LLP.
SHAREHOLDERS ARE REQUESTED IN THIS PROPOSAL NO. 2 TO RATIFY THE SELECTION OF
DELOITTE & TOUCHE LLP AS THE ACADEMY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING JUNE 30, 1997.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of January 31, 1997
with respect to the shares of Common Stock beneficially owned by (i) persons
known by the Academy to own more than five percent of the outstanding shares of
Common Stock; (ii) each director and nominee for director; (iii) the executive
officers named in the Summary Compensation Table (see "Executive Compensation")
and (iv) all directors and executive officers of the Academy as a group.
Ownership information is based upon information furnished by the respective
individuals.
NAME & ADDRESS OF DIRECTORS NUMBER OF SHARES
& 5% SHAREHOLDERS BENEFICIALLY OWNED (1) PERCENT
- --------------------------- ---------------------- -------
Theodore G. Crocker 1,295,599 (2) 32.4%
625 Polk Street
San Francisco, CA 94102
William G. DeMar 175,135 (3) 4.4%
6 Steuben Bay
Alameda, CA 94501
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NAME & ADDRESS OF DIRECTORS NUMBER OF SHARES
& 5% SHAREHOLDERS BENEFICIALLY OWNED (1) PERCENT
- --------------------------- ---------------------- -------
Robert J. Marani 150,950 (4) 3.8%
8070 Soquel Drive
Aptos, CA 95003
W. Bruce C. Bailey 25,454 (5) 0.6%
74 Willcocks Street
Toronto, Ontario, Canada M5S 1C8
Grover T. Wickersham 16,350 (6) 0.4%
430 Cambridge Avenue, Suite 100
Palo Alto, CA 9494306
James D. Cockman 0 0%
PO Box 9338
Greenville, SC 29604
Frederick L. Dame 0 0%
2600 Campus Drive
San Mateo, CA 94403
Keith H. Keogh 61,035 (7) 1.5%
625 Polk Street
San Francisco, CA 94102
Alexander M. Hehmeyer 100 0%
625 Polk Street
San Francisco, CA 94102
Christine E. Munson 20 0%
625 Polk Street
San Francisco, CA 94102
All Executive Officers, Directors
and Director Nominees as a group
(11 persons) 1,724,523 (8) 43.1%
- ---------------
(1) Beneficial ownership of directors, officers and 5% or more shareholders
includes both outstanding Common Stock, shares issuable upon exercise of
warrants or options, or through conversion of a security that are currently
exercisable or will become exercisable within 60 days after the date of
this table.
(2) Includes 107,990 shares of Common Stock issuable upon exercise of currently
exercisable options.
(3) Includes 35,850 shares of Common Stock issuable upon exercise of currently
exercisable options and 3,000 shares owned of record by his spouse as
custodian for his minor children, as to which he may be deemed to be the
beneficial owner.
(4) Includes 45,850 shares of Common Stock issuable upon exercise of currently
exercisable options.
(5) Includes 25,454 shares of Common Stock issuable upon exercise of currently
exercisable warrants.
(6) Includes 14,850 shares of Common Stock issuable upon exercise of currently
exercisable options.
(7) Includes 60,000 shares of Common Stock issuable upon exercise of currently
exercisable options.
(8) Includes 289,994 shares of Common Stock issuable upon exercise of currently
exercisable options and warrants.
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The Academy knows of no arrangements that will result in a change in
control subsequent to the date hereof. Except as otherwise noted, the persons
named in the table have sole voting and investment power with respect to all
shares shown as beneficially owned by then, subject to community property laws,
where applicable.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the Academy's executive officers and directors and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file with the Commission reports of ownership and changes
in ownership of Common Stock and other equity securities of the Academy.
Executive officers, directors and greater than ten percent shareholders are
required by Commission regulations to furnish the Academy with copies of all
Section 16(a) forms they file. Based solely on review of this information,
including written representations that no other reports were required, the
Academy believes that during the fiscal year ended June 30, 1996, each of the
Academy's executive officers, directors and holders of ten percent or more of
the Academy's Common Stock timely filed all reports required to be filed
pursuant to Section 16(a) of the Exchange Act.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Directors who are employees of the Academy are not separately compensated
for their services as directors or as members of committees of the Board of
Directors. During fiscal 1996, directors who were not employees of the Company
were to receive $15,000 per annum as an annual retainer for serving on the
Board, plus reimbursement for reasonable out-of-pocket expenses incurred in
connection with attendance at meetings of the Board or committees thereof.
Messrs. Bailey and Wickersham waived the annual retainer in fiscal 1996, but Mr.
Bailey is to be reimbursed $3,000 for his out-of-pocket expenditures in
connection with his board service in fiscal 1996, which amount has not been
paid.
Effective following the Annual Meeting, the Board has agreed that
non-employee directors will receive $750 per month ($9,000 per annum). In
addition, Messrs. Bailey and Cockman, who reside on the East Coast, will receive
an additional $250 per month ($3,000 per anum) for travel expenses. Directors
are also eligible to receive stock options under the Academy's Stock Option
Plan. The Board expects that it will grant option to its four outside directors
(Messrs. Bailey, Cockman, Dame and Wickersham) during fiscal 1997, but no such
grants have been made.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain information regarding compensation
paid by the academy for services rendered during the fiscal years ended June 30,
1996 and 1995 and the ten-month fiscal period ended June 30, 1994 to the
Academy's Chief Executive Officers and all other executive officers of the
Academy who received total annual salary and bonus exceeding $100,000 for the
fiscal year ended June 30, 1996 (the "Named Executives").
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
------------------------
Long Term Compensation
Name and Other Annual ---------------------- ALL OTHER
Principal Position Year Salary Compensation Options/SARs Awarded COMPENSATION
($$) ($$) (#) ($$)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alexander M. Hehmeyer, 1996 204,769 36,486(2)
CEO and President(1) 1995 220,000 180,488 4,526(3)
1994 36,666 47,000(4)
Theodore G. Crocker, 1996 72,000 15,000(6) (6)
CEO & Chairman of the Board 1995
1994
Keith H. Keogh, 1996 153,846 564(3)
President 1995 73,846 60,000
Christine E. Munson, 1996 107,077 2,500(7)
Chief Financial Officer 1995 52,145 1,300(7)
1994 40,000
</TABLE>
- --------------------
(1) Mr. Hehmeyer terminated his employment on May 1, 1996, so 1996 amounts
represent 10 months of salary.
(2) Represents $8,986 of employer contributions to the 401(k) Plan and $27,500
in severance payments paid after termination of employment.
(3) Represents payments on life insurance policy.
(4) Represents $32,000 in earnings as a consultant to the Academy through April
30, 1994, and $15,000 in fees paid as a member of the Board of Directors
prior to appointment as President and CEO.
(5) Mr. Crocker was appointed Chief Executive Officer on May 1, 1996, so the
1996 salary figure includes only two months as CEO.
(6) Represents Board of Director fees.
(7) Represents employer contributions to the 401(k) Plan.
EMPLOYMENT AGREEMENTS
In May 1994, the Academy entered into a three-year employment agreement
with Alexander Hehmeyer, who served as the Academy's Chief Executive Officer
from May 1994 until May 1, 1996. The agreement provided for an annual base
salary, possible annual bonus payments and certain other benefits. The
agreement provided that in the event of termination, the Academy pay Mr.
Hehmeyer a severance payment equal to 12 months' salary, or $220,000. Mr.
Hehmeyer terminated his employment with the Academy as of May 1, 1996, and
pursuant to his employment agreement, he was paid $220,000.
The Academy has no employment agreements with any other Named Executive
Officers.
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<PAGE>
STOCK OPTION GRANTS AND EXERCISES
The Academy grants both incentive stock options and non-statutory stock
options to its executive officers and other employees under its 1992 Stock
Option Plan (the "1992 Plan"). Options are granted to employees, including
executive officers, as well as directors and consultants, based on current
performance, anticipated future contribution based on that performance and
ability to impact corporate and/or business results in order to provide
meaningful incentives to such key personnel and to align the interests of the
Academy's employees with those of its shareholders. As of January 31, 1997,
options to purchase a total of 358,120 shares of Common Stock had been granted
and were outstanding under the 1992 Plan, and options to purchase an additional
299,777 shares of Common Stock remained available for grant thereunder.
The following tables show, for the fiscal year ended June 30, 1996, certain
information regarding options granted to, exercised by and held at year end by
the Named Executive Officers:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Shares Acquire Value Options/SARs at FY-End Options/SARs at FY-End
Name on Exercise Realized Exercisable / Unexercisable Exercisable / Unexercisable
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alexander M. Hehmeyer 40,000 $57,500 53,333 / 19,120 $139,999(1) / $68,258(2)
Theodore G. Crocker 0 $0 97,990 / 10,000 $349,824(3) / $21,875(4)
Keith H. Keogh 0 $0 60,000 / 0 $0 / $0
Christine E. Munson 23,120 $48,248 5,000 / 0 $0 / $0
</TABLE>
- --------------------
(1) Calculated as the difference between the fair market value of the Common
Stock at June 30, 1996 of $7.75 and the option exercise price of $5.125 per
share.
(2) Calculated as the difference between the fair market value of the Common
Stock at June 30, 1996 of $7.75 and the option exercise price of $4.18 per
share.
(3) Calculated as the difference between the fair market value of the Common
Stock at June 30, 1996 of $7.75 and the option exercise price of $4.18 per
share.
(4) Calculated as the difference between the fair market value of the Common
Stock at June 30, 1996 of $7.75 and the option exercise price of $5.56 per
share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In fiscal 1996, the Academy entered into an agreement with Bailey &
Company, Inc., Toronto, Canada, to serve as the selling agent for a private
placement of up to $10,000,000 of the Academy's securities. W. Bruce C. Bailey,
a director of the Academy, is the Chairman and President of Bailey & Company.
The Academy, with the assistance of Bailey & Company, offered convertibles
notes, which, pursuant to their terms, automatically converted to Series A
Preferred Stock as of August 23, 1996. $1,400,000 in gross proceeds was raised.
Upon full conversion a total of 254,541 shares of Common Stock will be issued.
As a result of this
11
<PAGE>
offering, Bailey & Company received a cash commission of $98,000 (7% of the
gross proceeds), a non-accountable expense allowance of $42,000 and warrants to
purchase 25,454 shares of the Common Stock (equal to 10% of the number of Common
Shares into which the securities ultimately are convertible). The warrants are
exercisable for five years at an exercise price of $6-5/8, which was the average
of the bid and ask price on the last trading day preceding the closing of the
offering.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting. If other matters are properly brought
before the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
By Order of the Board of Directors
JOHN SHEA PIERCE
CORPORATE SECRETARY
February 15, 1997
------------
A COPY OF THE ACADEMY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
ON FORM 10-KSB FOR THE FISCAL YEAR ENDED JUNE 30, 1996, IS AVAILABLE WITHOUT
CHARGE UPON WRITTEN REQUEST TO INVESTOR RELATIONS, CALIFORNIA CULINARY ACADEMY,
INC., 625 POLK STREET, SAN FRANCISCO, CALIFORNIA 94102.
12
