<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GB FOODS CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
GB FOODS CORPORATION
23 Corporate Plaza, Suite 246
Newport Beach, California 92660
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 5, 1997
AT THE FOUR SEASONS HOTEL
NEWPORT BEACH, CALIFORNIA
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of GB FOODS CORPORATION, a Delaware corporation (the "Company"), will
be held at THE FOUR SEASONS HOTEL, CABRILLO ROOM, 690 NEWPORT CENTER DRIVE,
NEWPORT BEACH, CALIFORNIA 92660, on MONDAY, MAY 5, 1997 at 2:00 P.M. local
time, for the following purposes:
1. To elect five members of the Board of Directors to serve until the
next Annual Meeting of Stockholders;
2. To vote to ratify the appointment of GRANT THORNTON LLP as the
independent public accountants of the Company for the fiscal year
ending December 31, 1997; and
3. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April 4,
1997 as the record date for the determination of stockholders entitled to notice
of and to vote at the Meeting. Only holders of the Company's Common Stock at
the close of business on the record date are entitled to vote at the Meeting.
You are cordially invited to attend the Meeting in person. However,
whether you plan to attend or not, we urge you to complete, date, sign, and
return the enclosed proxy promptly in the envelope provided, to which no postage
need be affixed if mailed in the United States, in order that as many shares as
possible may be represented at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Bruce H. Haglund
-----------------------------------
Bruce H. Haglund, Secretary
Newport Beach, California
April 7, 1997
<PAGE>
GB FOODS CORPORATION
23 CORPORATE PLAZA, SUITE 246
NEWPORT BEACH, CALIFORNIA 92660
-------------
PROXY STATEMENT
-------------
April 7, 1997
-------------
SOLICITATION OF PROXY, REVOCABILITY, AND VOTING
DATE, TIME AND PLACE
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of GB Foods Corporation, a Delaware
corporation (the "Company"), to be used at the Annual Meeting of Stockholders
(the "Meeting") of the Company to be held at the FOUR SEASONS HOTEL, CABRILLO
ROOM, 690 NEWPORT CENTER DRIVE, NEWPORT BEACH, CALIFORNIA 92660 on MAY 5, 1997
at 2:00 P.M. local time, or any adjournment thereof. This Proxy Statement and
accompanying form of proxy are first being mailed to stockholders on or about
the date shown above.
REVOCABILITY OF PROXY
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its exercise by notice in writing to the
Secretary of the Company prior to the Meeting. Unless the proxy is revoked, the
shares represented thereby will be voted as specified at the Meeting or any
adjournment thereof.
SOLICITATION
This solicitation is made on behalf of the Company. The entire cost of
soliciting proxies will be borne by the Company. Proxies may be solicited by
mail or telegraph, or by the directors, officers or regular employees of the
Company in person or by telephone.
VOTING AND RECORD DATE
Only stockholders of record of the Company's $.08 par value common stock
("Common Stock") at the close of business on April 4, 1997 will be entitled to
notice of and to vote at the Meeting. As of that date, the total number of
shares issued and outstanding of Common Stock was 6,440,414.
In voting on matters other than the election of directors, each share of
Common Stock entitles the holder thereof on the record date to one vote at the
meeting.
With respect to the election of directors of the Company, the
stockholders have cumulative voting rights, whereby any shareholder may multiply
the number of shares he is entitled to vote by the number of directors to be
elected and allocate his votes among the candidates in any manner he chooses.
There are no conditions precedent to the exercise of the right to cumulate votes
in the election of directors of the Company; stockholders may exercise such
cumulative voting rights, either in person or by proxy, with or without advance
notice to the Company.
1
<PAGE>
QUORUM AND PRINCIPAL SHAREHOLDERS
The presence in person or by proxy of the holders of a majority of the
total outstanding voting shares are necessary to constitute a quorum at the
Meeting. Approval of the proposals to be presented at the Meeting, except for
the election of directors (as discussed above), will require the affirmative
vote of the holders of a majority of the shares present at the meeting.
The following table sets forth certain information, as of April 4,
1997, relating to the beneficial ownership of the Company's common stock by (i)
all persons known by the Company to beneficially own more than 5% of the
outstanding shares of the Company's common stock; (ii) each director, director
nominee and officer of the Company; and (iii) all officers and directors of the
Company as a group. Unless otherwise noted, each of the stockholders listed
owns less than 1% of the outstanding common stock of the Company. The Company
had 6,440,414 shares outstanding as of April 4, 1997.
<TABLE>
<CAPTION>
Name and Address of Number of Shares Percentage of Shares
Beneficial Owner (1)(2)(3) Beneficially Owned (1) Outstanding (4)
- - -------------------------- ---------------------- --------------------
<S> <C> <C>
William M. Theisen 4,269,826 (5) 38.8%
McGrath, North, Mullin & 1,000,000 (6) 9.1%
Kratz, P.C.
222 South 15th Street, Suite 1100
Omaha, NE 68102
Ruben M. Rodriguez 521,514 (7) 4.7%
333 South Ramsgate
Anaheim, CA 92807
T. Anthony Gregory 142,713 (8) 1.3%
25651 Paseo de la Paz
San Juan Capistrano, CA 92675
Bruce H. Haglund 115,794 (9) 1.1%
George J. Kubat 120,000 (10) 1.1%
4601 South 76th Street
Omaha, NE 68127
Michael J. Scherr 53,800 (11) --
210 Regency Parkway, Suite 12
Omaha, Nebraska 68114
Nicholas J. Caddeo 52,500 (12) --
All officers and directors 4,754,633 (13) 43.2%
as a group (six persons)
</TABLE>
- - -----------------------
(1) Unless otherwise noted, the Company believes that all shares are
beneficially owned and that all persons named in the table have sole voting
and investment power with respect to all shares of Company common stock
owned by them.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of warrants or options. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are held
2
<PAGE>
by such person (but not those held by any other person) and which are
exercisable within 60 days from the date hereof have been exercised.
(3) Unless otherwise indicated, the address of each stockholder listed is 23
Corporate Plaza, Suite 246, Newport Beach, California 92660.
(4) Assumes 11,000,494 shares outstanding, including 6,440,414 shares currently
outstanding and 4,560,080 issuable upon exercise of presently exercisable
stock options and warrants held by the above-listed stockholders.
Percentage ownership is left blank where such ownership is less than 1%.
(5) Includes 3,000,000 shares issuable upon the exercise of presently
exercisable warrants. Does not include a total of 743,436 shares
beneficially owned by Mr. Rodriguez and other former officers and directors
of the Company, which shares are the subject of an irrevocable proxy in
favor of Mr. Theisen expiring in November 1997 (the "Theisen Proxy"). If
the shares subject to such irrevocable proxy were included, Mr. Theisen
would beneficially own 5,013,262 shares or 45.6% of the outstanding shares
(computed on the basis of 11,000,494 shares outstanding as set forth in
footnote 4 above). See "Certain Relationships and Related Transactions -
Acquisition on Stock and Warrants by William M. Theisen."
(6) Represents 1,000,000 shares issuable upon the exercise of warrants
exercisable within 60 days of the date hereof.
(7) Includes 5,500 shares owned by the Rodriguez Maintenance Trust of which Mr.
Rodriguez is the trustee and over which Mr. Rodriguez has sole investment
and voting power, and 14,112 shares issuable upon the exercise of presently
exercisable nonstatutory stock options. Does not give effect to the terms
of an escrow agreement among the Company, Mr. Rodriguez and other former
affiliates of the Company. See "Certain Relationships and Related
Transactions - Escrow Agreement with Former Executives."
(8) Includes 74,194 shares issuable upon the exercise of presently exercisable
nonstatutory stock options.
(9) Includes 89,194 shares issuable upon the exercise of presently exercisable
nonstatutory stock options.
(10) Includes 100,000 shares issuable upon the exercise of presently exercisable
nonstatutory stock options.
(11) Includes 50,000 shares issuable upon the exercise of presently exercisable
nonstatutory stock options.
(12) Represents 52,500 shares issuable upon the exercise of presently
exercisable incentive stock options.
(13) Includes an aggregate of 3,365,888 shares issuable upon the exercise of
presently exercisable stock options and warrants. If the 743,436 shares
subject to the Theisen Proxy were included in the total for all officers
and directors as a group, the total shares would be 5,013,262 and the
percentage would be 45.6%.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors, and persons who own more than 10% of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC"), The
Nasdaq Stock Market, and the Boston Stock Exchange. Officers, directors, and
greater than 10% beneficial owners are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such reports furnished to the
Company and written representations that no other reports were required, the
Company believes that during the fiscal year ended December 31, 1996, the
Company's officers, directors and greater than 10% beneficial owners complied
with all applicable Section 16(a) filing requirements.
3
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the number of directors shall be
determined by the stockholders. Five members of the Board of Directors are to
be elected at the Meeting. Vacancies on the Board during the year may be filled
by the majority vote of the directors in office at the time of the vacancy
without further action by the stockholders.
The Board of Directors has nominated William M. Theisen, T. Anthony
Gregory, Bruce H. Haglund, George J. Kubat, and Michael J. Scherr for election
as directors. The term of each director will continue until his successor is
elected and has qualified. All nominees are presently directors of the Company.
It is the intention of the persons named in the enclosed form of proxy to
vote such proxies for the election of the nominees listed herein. The proposed
nominees are willing to serve for the ensuing year, but in the event any nominee
at the time of election is unable to serve or is otherwise unavailable for
election, it is intended that votes will be cast pursuant to the accompanying
proxy for substitute nominees designated by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION OF EACH OF THE NOMINEES NAMED BELOW.
INFORMATION ABOUT NOMINEES AND DIRECTORS
The following sets forth certain information for each person who is
nominated for election to the Board of Directors:
<TABLE>
<CAPTION>
Director
Name of Nominee Age Since Position with the Company
--------------- --- ----- -------------------------
<S> <C> <C> <C>
William M. Theisen 51 1994 Chairman, Chief Executive Officer, and Director
Michael J. Scherr 54 1994 Director
Bruce H. Haglund 45 1989 Secretary and Director
T. Anthony Gregory 58 1989 Director
George J. Kubat 51 1996 Director
</TABLE>
William M. Theisen has served as Chairman of the Board, President, Chief
Executive Officer, and as a Director of the Company since June 1994. Since
1984, Mr. Theisen has been a private investor in Business Ventures, a privately-
held company.
Michael J. Scherr has served as a Director the Company since June 1994.
Since 1984, Mr. Scherr has been an investment and asset manager of Business
Ventures, a privately-held company.
Bruce H. Haglund has served as the Secretary and a Director of the
Company since August 1988. Mr. Haglund is an attorney in private practice in
Orange County, California and is currently a principal in the law firm of
Gibson, Haglund & Johnson. He was a principal in the law firm of Phillips,
Haglund, Haddan & Jeffers from February 1991 to April 1994. From 1984 to
February 1991, he was a partner in the law firm of Gibson & Haglund, and from
1980 to 1984 was an associate with the firm.
T. Anthony Gregory has served as a Director of the Company since its
organization in October 1989. Since 1962, Mr. Gregory has owned and operated US
Customs Air Bonded Warehouse. In June 1989, Mr. Gregory opened US Customs
Bonded Container and Freight Station, and in August 1989 opened Custom Air
Trucking Company. Mr. Gregory was Vice President and Secretary of Equitable
Savings & Loan Association, a holding company for several savings and loan
companies from 1963 to 1965.
4
<PAGE>
George J. Kubat has served as a Director of the Company since April 1996.
Mr. Kubat has acted as a consultant to the Company from time to time since
November 1992 and in July 1996 was elected Chief Financial Officer of the
Company. Mr. Kubat is currently the President and Chief Executive Officer of
Phillips Manufacturing, Inc., a company located in Omaha, Nebraska specializing
in the manufacture of drywall metals. From 1969 to 1992, Mr. Kubat worked in
the Omaha office of Coopers & Lybrand as a tax specialist and tax partner,
serving from 1981 to 1992 as the tax partner in charge of the Omaha office.
Mr. Kubat currently serves as a director for three public companies including
American Business Information, Inc., America First Companies L.L.C., and Sitel
Corporation.
MEETINGS, COMPENSATION, AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held seven meetings during the fiscal year ended
December 31, 1996. Each director attended at least 75% of the Board meetings
and meetings of the Board committees on which he served during 1996. Board
members presently receive $1,000 for their attendance in person at Board
meetings and $500 if they are present at a Board meeting telephonically.
Members of the Board of Directors have also received nonstatutory stock options
in the past in recognition of their service as members of the Board of
Directors; however, no options were granted to members of the Board of Directors
for their services as Directors for 1996. See "Executive Compensation -
Nonstatutory Stock Options Issued."
The Company established an Audit Committee and Compensation Committee
whose members were T. Anthony Gregory, George J. Kubat, and Michael J. Scherr
during 1996. Both Mr. Kubat and Mr. Scherr were appointed to the Audit and
Compensation Committees in April 1996. The duties of the Audit Committee are to
review with the Company's independent auditors the results of the audit
engagement, review the adequacy of the Company's system of internal accounting
controls, approve the services rendered by the independent auditors, and examine
the range of audit and non-audit fees. The Compensation Committee reviews
compensation policies and decisions of the Board of Directors.
EXECUTIVE COMPENSATION
The following table sets forth information regarding the compensation of
William M. Theisen, the Company's Chief Executive Officer, Nicholas J. Caddeo,
the Company's Chief Operating Officer and George J. Kubat, the Company's Chief
Financial Officer, for each of the last three years ending December 31, 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-term Compensation
------------------- ----------------------
Options
Name and Principal Position Year Salary Other(1) Stock (# of Shares)
- - --------------------------- ---- ------ -------- ----- -----------
<S> <C> <C> <C> <C> <C>
William M. Theisen 1996 $ 50,000 -0- -0- -0-
Chairman, President and 1995 $100,000 -0- -0- 1,000,000(2)
Chief Executive Officer 1994 $ 50,000 -0- $633,500 -0-
Nicholas J. Caddeo 1996 $ 82,800 $11,800 -0- -0-
Chief Operating Officer 1995 $ 92,600 $11,205 -0- -0-
and Executive Vice President 1994 $ 90,000 $ 8,291 -0- -0-
George J. Kubat(3) 1996 $ 3,000 -0- -0- 100,000
Chief Financial Officer
</TABLE>
(footnotes appear on the following page.)
5
<PAGE>
- - -----------------------
(1) The remuneration described in the table does not include the cost to the
Company of benefit furnished to the named executive officer, including
premiums for health insurance and other personal benefits provided to such
individual that are extended to employees of the Company in connection
with their employment. The value of such benefits cannot be precisely
determined; however, the executive officers named above did not receive
other compensation in excess of the lesser of $50,000 or 10% of such
officers' cash compensation.
(2) Represents presently exercisable warrants to purchase 1,000,000 shares of
Company common stock at an exercise price of $7.00 per share granted in May
1995.
(3) Elected Chief Financial Officer in July 1996.
OPTIONS GRANTED IN FISCAL YEAR 1996
During the fiscal year ended December 31, 1996, 100,000 non-qualified
stock options were granted to George J. Kubat at an exercise price of $6.50 per
share, of these shares 50,000 vested in October 1996 and 50,000 will vest in
October 1997, providing George J. Kubat has remained with the Company in an
executive position for one year.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 1996 AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth the number of options, both exercisable
and unexercisable, held by each of the executive officers of the Company as of
December 31, 1996 and the value of any in-the-money options, assuming that the
value of the shares was $7.38, the fair market value of the Company's common
stock on December 31, 1996.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares December 31, 1996 December 31, 1996
Acquired on Value --------------------------- -----------------------
Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
----------- ----------- ----------- ------------- ----------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
William M. Theisen(1) -0- -0- 1,000,000 -0- $380,000 -0-
Nicholas J. Caddeo -0- -0- 55,000 2,500 $268,400 $12,200
George J. Kubat -0- -0- 100,000 50,000 $ 63,000 $44,000
</TABLE>
- - ---------------------
(1) Includes presently exercisable warrants to purchase 1,000,000 shares of
Company common stock at an exercise price of $7.00 per share granted in May
1995. Does not include presently exercisable warrants to purchase 2,000,000
shares of Company's common stock at an exercise price of $5.00 per share
granted to Mr. Theisen in November 1992 (the "1992 Warrants"), prior to his
election as an officer and director of the Company in June 1994. The value
of the unexercised 1992 Warrants at December 31, 1996 was $4,760,000. See
"Certain Relationships and Related Transactions -Acquisition of Stock and
Warrants by William M. Theisen." The exercise price of the warrants equaled
or exceeded the market price of the Company's common stock on the date of
grant.
REPORT OF THE COMPENSATION COMMITTEE
General. The executive compensation program is administered by the
Compensation Committee (the "Committee"). The Committee reviews and recommends
the compensation levels for members of the Company's management, evaluates the
performance of management, and evaluates the administration of the Company's
various incentive plans. The Committee's objectives in developing and
administering the Company's executive compensation program include attracting
qualified management to the Company and motivating management to increase
stockholder value. Management compensation has been designed to help achieve
these goals and has included a compensation mix of base salary, stock grants,
and stock options and warrants to purchase shares of Common Stock at the fair
market value on the date of grant.
In determining the management compensation, the Committee compares the
compensation paid to management to the level and structure of compensation paid
to competing companies similar to the Company in terms of size, scope of
operations, and growth patterns. Additionally, the Committee
6
<PAGE>
compares the sales and earnings performance of the Company compared to competing
and similarly situated companies. The Committee also compares the compensation
for executives of other similar companies in the same industry and with
comparable industry experience by reviewing industry reports. The Committee
takes into account such relevant external factors as general economic
conditions, stock price performance, and stock market prices generally. Finally,
the Committee evaluates the progress of the Company in achieving the goals of
its business strategy and the efforts of management toward realization of those
goals. However, it is the Company's policy not to disclose the specific goals of
its business strategy. Specific qualitative and quantitative performance-related
factors are kept confidential because such factors are considered to involve
confidential business information and their disclosure may have an adverse
effect on the Company.
This Committee has reviewed in detail the compensation of the Company's
executive officers for the fiscal year ended December 31, 1996. In the opinion
of the Committee, the compensation of the executive officers of the Company is
reasonable in view of the Company's performance, the respective contributions of
such officers to that performance, and in light of comparisons to other
companies.
Base Salary. The base salary program is designed to pay for individual
performance within a structure that is internally equitable and externally
competitive with comparable companies. Base salaries are a function of the
relative value and potential impact of each position on the performance of the
Company and is also adjusted when other compensation is provided, such as stock
options, stock grants, and common stock purchase warrants. Value is measured by
responsibilities and complexity of the position.
The program is designed to provide executives who continue to meet
performance expectations with base compensation that is competitive with median
market rates at comparable companies. Each year the Company compares base
salary, bonus and total compensation ranges of its executives to those of
similar positions in comparable companies, as reported by the Company's peer
group. Secondarily, the Committee reviews available salary surveys conducted by
independent consulting firms. These independent surveys are also used to develop
a merit increase budget. Within this budget, executives may or may not receive a
base salary increase dependent upon performance in the prior year and their
position relative to comparable company positions. The amount of the increase
will vary with individual performance against established performance
objectives.
Stock Options. The Company rewards executives for long-term strategic
management and enhancement of stockholder value through the grant of stock
options. The Committee believes that the grant of stock options promotes
recruitment and retention of key executive personnel by providing meaningful
incentives dependent upon successful corporate performance. Stock options are
awarded based upon overall evaluation of each executive.
Company Performance and Chief Executive Officer Compensation. Company
performance goals are weighted heavily toward obtaining additional dual-concept
agreements, which the Company has promoted since 1992 and achieving profitable
operations. Recognizing the Company's financial condition and prior operating
results when the new Chief Executive Officer was elected in June 1994, the
salary component of his compensation was set at a modest amount while the
incentive component through a stock bonus in 1994 and the grant of common stock
purchase warrants in 1995, was made the most important element of the
compensation strategy. Because of the 1994 stock bonus and 1995 common stock
purchase warrants awarded to the Chief Executive Officer, the Committee felt
that the salary component of the Chief Executive Officer's compensation program
was sufficient in 1996.
Executive compensation is not solely determined by reference to the
strategic objectives of the Company. As the Company's dual-concept strategy is
implemented on a broader scale, the Committee intends to consider other
performance goals in the future that are more quantitative in nature relating to
such factors as new store openings, store revenues, store profitability, and
Company profitability.
Compensation Committee
T. Anthony Gregory, George J. Kubat, and Michael J. Scherr
7
<PAGE>
[LETTERHEAD OF UNIVERSITY OF CHICAGO GRADUATE SCHOOL OF BUSINESS]
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
GB FOODS CORPORATION
Prepared by the Center for Research in Security Prices
Produced on 04/04/97 including data to 12/31/96
<TABLE>
<CAPTION>
Measurement Period GB FOODS Nasdaq Stock NASDAQ Stocks (SIC 5810-5819 US Companies)
(Fiscal Year Covered) CORPORAION Market (US Companies) Eating and Drinking Places
- - -------------------- ---------- -------------------- ------------------------------------------
<S> <C> <C> <C>
Measurement Pt- 12/31/91 $100.0 $100.0 $100.0
FYE 12/31/92 $324.6 $116.4 $139.6
FYE 12/31/93 $191.3 $133.6 $141.9
FYE 12/31/94 $179.7 $130.6 $102.2
FYE 12/31/95 $226.1 $184.7 $125.9
FYE 12/31/96 $171.0 $227.1 $122.8
</TABLE>
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/91.
8
<PAGE>
STOCK OPTION PLANS
Incentive Stock Option Plan. In 1989, the Board of Directors of the
Company adopted an Incentive Stock Option Plan (the "ISOP"), which was ratified
by the stockholders in March 1990. In the annual stockholders meeting held June
12, 1991, the stockholders approved an amendment to the ISOP to increase the
number of shares authorized to be issued under the ISOP to 312,500. The purpose
of the ISOP is to provide certain officers and key employees of the Company and
its subsidiaries with an added incentive to continue their service to the
Company, to induce them to exert maximum efforts toward the Company's success,
and to provide a closer connection between the interests of the Company and its
employees. The ISOP provides for administration either by the Board of Directors
or a Board-appointed stock option committee. Among other things, the Board of
Directors and the stock option committee have the authority to determine the
employees to be granted options under the ISOP and the number of shares subject
to each option. All key employees of the Company and its subsidiaries are
eligible to receive options to purchase up to an aggregate of 312,500 shares.
The exercise price of any option granted under the ISOP must be
determined by the Board of Directors or the stock option committee. The
exercise price may not be less than the fair market value of the shares subject
to the option on the date of grant; provided, however, that the exercise price
of any option granted to an eligible employee owning more than 10% of the
outstanding Common Stock may not be less than 110% of the fair market value of
the shares underlying such option on the date of grant.
The number of shares of Common Stock for which options may be granted
to any individual, the time or times when options will be granted, and any other
term or condition as to the grant of the options is within the discretionary
authority of the Board of Directors or the stock option committee. The term of
each option and the manner in which it may be exercised is determined by the
Board of Directors or stock option committee, provided that no option may be
exercisable in whole or in part prior to six months from the date it is granted,
nor more than 10 years after the date of grant. Subject to certain rights of
cumulating provided for in the ISOP, each option shall be exercisable as to not
more than one-third of the total number of shares covered thereby during each
12-month period commencing six months from the date of granting of the option
until all shares covered by the option shall have been purchased. The Company
may accelerate the foregoing schedule as to the number of shares into which any
option is exercisable during a given period if the officer or employee holding
the option retires with the approval of the Company. The aggregate fair market
value of shares for which options granted to any employee are exercisable for
the first time by such employee during any calendar year (under all stock option
plans of the Company and any related corporation) may not exceed $100,000.
In the event that an optionholder shall cease to be employed by the
Company or its subsidiaries for any reason other than his permanent disability,
subject to the condition that no option shall be exercisable after the
expiration of 10 years from the date granted, the optionholder shall have the
right to exercise the option at any time within three months after such
termination to the extent the right to exercise the option had accrued at the
termination date. In the event of the permanent disability of an optionholder,
subject to the condition that no option shall be exercisable after the
expiration of 10 years from the date granted, and to the extent the right to
exercise the option had accrued at the date of such termination, the
optionholder shall have the right to exercise the option at any time within one
year after such termination as a result of disability. In the event that an
optionholder shall die while in the employ of the Company or its subsidiaries,
or within a period of three months after the termination of such employment, to
the extent that his option was not previously fully exercised, the option may be
exercised, subject to the condition that no option shall be exercisable after
the expiration of 10 years from the date granted and to the extent the right to
exercise the option accrued at the time of his death, at any time within three
months after the death of the optionholder, by the executors or administrators
of the deceased optionholder or by persons who acquired the option directly from
the deceased optionholder by bequest or inheritance.
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Payment for the shares purchased pursuant to the exercise of an option
shall be made in full at the time of the exercise of the option, in cash, by
check, by delivery to the Company of shares of the Company's Common Stock or any
combination of such methods of payment. An optionee may, upon exercise of his
option, elect to receive cash or whole shares of stock in an amount not greater
than the excess of the fair market value of one share on the date of exercise
over the option price multiplied by the number of shares as to which the option
is exercised. All options and all rights granted thereunder are non-
transferable and non-assignable by the holder thereof and shall be exercisable
only by the holder, except to the extent that the representative of the estate
or the heirs of a deceased optionholder may be permitted to exercise them. All
options terminate within a specified period of time following the optionholder's
termination of employment with the Company. The Board of Directors is
authorized, insofar as permitted by law, from time to time, with respect to any
shares at the time not subject to options, to suspend or discontinue the ISOP or
revise or amend it in any respect whatsoever except that, without approval of a
majority of the stockholders within one year from such action taken by the
Board, no such revision or amendment shall change the number of shares subject
to the ISOP, change the designation of the class of employees eligible to
receive options, decrease the price at which options may be granted, remove the
administration of the ISOP under the ISOP while serving thereon, or cause the
options issued under it to fail to meet the requirements of qualified stock
options as defined in Section 422A of the Internal Revenue Code, as amended.
Options for the purchase of 145,777 shares of Common Stock issued
pursuant to the ISOP were outstanding as of December 31, 1996, of which 124,274
were exercisable as of December 31, 1996. The exercise prices of the options
granted pursuant to the ISOP range from $2.50 to $7.00 per share. During 1996,
1,667 options granted pursuant to the ISOP were canceled and 8,417 options were
exercised.
Non-Qualified Stock Option Plan. In October 1989, the Company adopted
a non-qualified stock option plan (the "NQSOP") to attract and retain qualified
persons for positions of substantial responsibility as officers, directors,
consultants, legal counsel and other positions of significance to the Company.
The plan provides for the issuance of a maximum of 125,000 shares of common
stock at the market price thereof on the date of grant. Such options are
exercisable over a 10-year period from the date of grant. Each option lapses,
if not previously exercised, on the 10th anniversary of the date of grant or
after 90 days after the optionee has terminated his continuous activity with the
Company, except that if his continuous activity with the Company terminates by
reason of his death, to the extent that exercise rights have accrued and remain
unexercised on the date of the optionee's death, such option of the deceased
optionee may be exercised within one year after the death of such optionee, but
in no event later than five years after the date of grant. Options granted
under the NQSOP to Company employees may not be sold, pledged, assigned or
transferred in any manner otherwise than by will or the laws of descent or
distribution. Options granted under the NQSOP to persons who are not Company
employees may be sold, pledged, assigned or transferred to other persons who, at
the time of such sale, pledge, assignment or transfer, qualifies as an optionee
under the NQSOP.
Options for the purchase of 85,806 shares of Common Stock issued pursuant
to the NQSOP were outstanding as of December 31, 1996, of which all were
exercisable. The exercise prices of the options granted pursuant to the NQSOP
range from $1.80 to $6.25 per share.
NONSTATUTORY STOCK OPTIONS ISSUED
In 1995, the Company granted nonstatutory stock options to purchase
260,000 shares, including (i) an option granted in January 1995 to Mr. Haglund,
a director of the Company to purchase 10,000 shares at an exercise price of
$5.75 per share; (ii) options granted in May 1995 (and approved by stockholder
vote in September 1995) to each of Messrs. Gregory, Haglund, and Scherr,
directors of the Company, to purchase 50,000 shares at an exercise price of
$7.00
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per share; (iii) an option granted in May 1995 (and approved by stockholder vote
in September 1995) to Michael G. Murphy, a former director of the Company who
resigned in February 1996, for 50,000 shares at an exercise price of $7.00 per
share; and (iv) an option granted in October 1995 to Mr. Kubat, then a
consultant to the Company who was elected a director of the Company in April
1996, to purchase 50,000 shares at an exercise price of $7.00 per share. Options
for 9,000 shares were exercised in 1995 by a non-affiliate of the Company.
During the fiscal year ended December 31, 1996, 100,000 non-qualified
stock options were granted to George J. Kubat at an exercise price of $6.50 per
share; of these shares, 50,000 vested in October 1996, and 50,000 will vest in
October 1997, providing that Mr. Kubat has remained with the Company in an
executive position for one year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
General
The Company believes that the transactions hereunder were the
result of arm's-length negotiations, and the terms of each such transaction were
no less favorable to the Company as would have been available from an
unaffiliated third party. The transactions discussed below were negotiated
either (i) before the parties became affiliates; (ii) after the parties ceased
to be affiliates; or (iii) with a majority of disinterested members of the
Company's Board of Directors. Furthermore, it is the policy of the Company that
a majority of the disinterested members of the Company's Board of Directors must
approve related-party transactions.
Payments to Director for Professional Services
The law firm of Gibson, Haglund & Johnson, of which Mr. Haglund, the
Company's Secretary and a Director, is a principal, received compensation in the
form of legal fees for services rendered to the Company in 1996 of $48,467.
PROPOSAL TWO
APPROVAL OF ENGAGEMENT OF AUDITORS
The Board of Directors has selected GRANT THORNTON LLP as independent
public accountants for the Company for the fiscal year ending December 31, 1996,
subject to the approval of the stockholders. GRANT THORNTON LLP has served as
independent public accountants for the Company since 1989. To the knowledge of
the Company, at no time has GRANT THORNTON LLP had any direct or indirect
financial interest in or any connection with the Company other than as
independent public accountants. A representative of GRANT THORNTON LLP is
expected to be available at the Meeting to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE ENGAGEMENT OF THE AUDITORS.
SUBMISSION OF SHAREHOLDER PROPOSALS
Stockholders are advised that any shareholder proposal intended for
consideration at the 1997 Annual Meeting must be received by the Company on or
before February 28, 1997 to be included in any proxy materials prepared for the
1997 Annual Meeting of Stockholders. It is recommended that stockholders
submitting proposals direct them to the Secretary of the Company and utilize
certified mail-return receipt requested to insure timely delivery of the
proposal.
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MISCELLANEOUS AND OTHER MATTERS
FINANCIAL STATEMENTS
The Company's 1996 financial statements appear on pages 16 through 32 of
its 1996 Annual Report which is being mailed to all stockholders along with this
Proxy Statement. Said pages are incorporated herein by reference.
MATTERS NOT DETERMINED AT THE TIME OF THE SOLICITATION
Management knows of no matters to come before the Meeting other than as
specified herein. If any other matter should come before the Meeting, the
persons named in the enclosed form of proxy will have discretionary authority to
vote all proxies with respect thereto in accordance with their judgment.
VOTE OF PROXIES
All shares represented by duly executed proxies will be voted for the
election of the nominees named above as directors unless authority to vote for
the proposed slate of directors or any individual director has been withheld.
With respect to the proposal to approve the appointment of GRANT THORNTON LLP as
the Company's independent accountants, all such shares will be voted for or
against, or not voted, as specified on each proxy. If no choice is indicated, a
proxy will be voted for the proposal to approve GRANT THORNTON LLP as the
Company's independent accountants.
A COPY OF THE COMPANY'S CURRENT ANNUAL REPORT ON FORM 10-K AS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, IS AVAILABLE WITHOUT CHARGE TO STOCKHOLDERS UPON WRITTEN
REQUEST TO: SECRETARY, GB FOODS CORPORATION, 23 CORPORATE PLAZA, SUITE 246,
NEWPORT BEACH, CALIFORNIA 92660.
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GB FOODS CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 5, 1997
The undersigned hereby constitutes and appoints William H. Theisen and Bruce
H. Haglund, and each of them, the true and lawful attorneys, agents and proxies
of the undersigned, with full power of substitution, to vote with respect to all
the shares of Common Stock, par value $.08 of GB FOODS CORPORATION, standing in
the name of the undersigned at the close of business on April 4, 1997 at the
Annual Meeting of Stockholders to be held May 5, 1997 and at any and all
adjournments and postponements thereof, to vote:
1. ELECTION OF DIRECTORS FOR all nominees listed below
------ (Except as marked to the contrary below)
WITHHOLD AUTHORITY to vote
------ for all nominees listed below
William M. Theisen, George J. Kubat, Bruce H. Haglund, T. Anthony Gregory,
Michael J. Scherr
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below:
-----------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF GRANT THORNTON LLP AS THE INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDED DECEMBER 31,
1997.
FOR AGAINST ABSTAIN
------- ------- ------
The shares represented by this Proxy will be voted in the manner directed
herein by the undersigned stockholder. If no directions to the contrary are
made, this Proxy will be voted FOR the election of all of the nominee directors
named above and FOR approval of Proposal 2.
DATED: , 1997
----------------------
--------------------------------
(Signature)
--------------------------------
(Signature if held jointly)
IMPORTANT: Please sign exactly as name
appears at the left.Each joint owner
should sign. Executors, administrators,
trustees, etc., should give full title.
If a corporation, please sign in full
corporate name by authorized officer. If
a partnership, please sign in
partnership name by authorized person.
Please mark, sign, date and return
promptly.
THIS PROXY IS BEING SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
OF GB FOODS CORPORATION
