TO THE STOCKHOLDERS:
The annual meeting of stockholders of John B. Sanfilippo & Son, Inc.
(the "Company") will be held on Wednesday, April 30, 1997 at 10:00
a.m., local time, at the Wyndham Hotel Northwest Chicago, 400 Park
Boulevard, Itasca, Illinois 60143, for the following purposes:
1. To elect directors;
2. To ratify the action of the Board of Directors in appointing
Price Waterhouse LLP as the Company's independent accountants for
the fiscal year ending December 31, 1997; and
3. To transact such other business as may properly be brought before
the annual meeting or any adjournment or postponement thereof.
The annual meeting may be postponed or adjourned from time to time
without any notice other than announcement at the meeting, and any
and all business for which notice is hereby given may be transacted
at any such postponed or adjourned meeting.
The Board of Directors has fixed the close of business on March 14,
1997 as the record date for determination of stockholders entitled to
notice of and to vote at the annual meeting.
Stockholders are requested to complete and sign the enclosed proxy,
which is solicited by the Board of Directors, and promptly return it
in the accompanying envelope whether or not they plan to attend the
annual meeting in person. The proxy is revocable at any time before
it is voted. Returning the proxy will in no way limit your right to
vote at the annual meeting if you should later decide to attend and
vote in person.
Because two classes of stock of the Company are now outstanding, a
separate form of proxy has been prepared with respect to each class
of stock: a white proxy, which relates to the Company's Common
Stock, $.01 par value, and a blue proxy, which relates to the
Company's Class A Common Stock, $.01 par value. Stockholders who own
of record shares of only one class are being furnished only with the
proxy relating to that class. Stockholders who own of record shares
of both classes are being furnished with both proxies (in separate
mailings, each of which also includes a copy of this notice and the
proxy statement). Stockholders who receive both proxies must
complete, sign and return both proxies in order for the shares of
both classes to be voted by proxy.
By Order of the Board of Directors
/s/ Michael J. Valentine
------------------------
MICHAEL J. VALENTINE
Secretary
Elk Grove Village, Illinois
March 26, 1997
JOHN B. SANFILIPPO & SON, INC.
________________________________________
PROXY STATEMENT
________________________________________
ANNUAL MEETING OF STOCKHOLDERS
April 30, 1997
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of John B. Sanfilippo & Son, Inc., a
Delaware corporation, of proxies for use at the annual meeting of
stockholders of the Company to be held on Wednesday, April 30, 1997
at 10:00 a.m., local time, at the Wyndham Hotel Northwest Chicago,
400 Park Boulevard, Itasca, Illinois 60143, and at any postponement
or adjournment thereof (the "Annual Meeting"). All shares of the
Company's Common Stock, $.01 par value (the "Common Stock"), and the
Company's Class A Common Stock, $.01 par value (the "Class A Stock"),
entitled to vote at the Annual Meeting which are represented by
properly executed proxies will, unless such proxies have been
revoked, be voted in accordance with the instructions given in such
proxies. Any stockholder who has given a proxy may revoke it at any
time prior to its exercise at the Annual Meeting by delivering a
written notice of revocation or a duly executed proxy bearing a later
date to the Secretary of the Company, or by attending the Annual
Meeting and voting in person. Any written notice of revocation or
subsequent proxy should be delivered to the Company at 2299 Busse
Road, Elk Grove Village, Illinois 60007, Attention: Secretary, or
hand delivered to the Secretary, before the closing of the polls at
the Annual Meeting. Unless the context otherwise requires,
references herein to the "Company" refer to John B. Sanfilippo & Son,
Inc. and its subsidiaries.
This Proxy Statement and accompanying proxy are being mailed to
stockholders on or about March 28, 1997. The mailing address of the
principal executive offices of the Company is 2299 Busse Road, Elk
Grove Village, Illinois 60007.
RECORD DATE AND SHARES OUTSTANDING
The Company had outstanding on March 14, 1997, the record date for
determination of stockholders entitled to notice of and to vote at
the Annual Meeting, 5,460,240 shares of Common Stock (excluding
117,900 treasury shares) and 3,687,426 shares of Class A Stock. The
Common Stock is traded on the Nasdaq National Market. There is no
established public trading market for the Class A Stock.
VOTING AND QUORUM
Pursuant to the Company's Restated Certificate of Incorporation (the
"Restated Certificate"), so long as the total number of shares of
Class A Stock outstanding is greater than or equal to 12.5% of the
total number of shares of Class A Stock and Common Stock outstanding,
generally the holders of Common Stock voting as a class are entitled
to elect such number (rounded to the next highest number in the case
of a fraction) of directors as equals 25% of the total number of
directors constituting the full Board of Directors and the holders of
Class A Stock voting as a class are entitled to elect the remaining
directors. The holders of Common Stock are not entitled to
cumulative voting. In connection with the election of directors,
however, each holder of Class A Stock has the right, in person or by
proxy, to either (a) vote the number of shares of Class A Stock owned
by such holder for as many persons as there are directors to be
elected by holders of Class A Stock ("Class A Directors"), or (b)
cumulate said votes (by multiplying the number of shares of Class A
Stock owned by such holder by the number of candidates for election
as a Class A Director) and either (i) give one candidate all of the
cumulated votes, or (ii) distribute the cumulated votes among such
candidates as the holder sees fit.
Two proposals are scheduled for stockholder consideration at the
Annual Meeting, each of which is described more fully herein: (i) the
election of seven directors of the Company; and (ii) the ratification
of the action of the Board of Directors in appointing Price
Waterhouse LLP as the Company's independent accountants for the
fiscal year ending December 31, 1997. At the meeting, the holders of
Common Stock voting as a class will be entitled to elect two of the
seven directors, and the holders of Class A Stock voting as a class
will be entitled to elect the remaining five directors. With respect
to all matters other than the election of directors or any matters
for which class voting is required by law, the holders of Common
Stock and the holders of Class A Stock will vote together as a single
class and the holders of Common Stock will be entitled to one vote
per share of Common Stock and the holders of Class A Stock will be
entitled to ten votes per share of Class A Stock.
Attendance at the meeting in person or by proxy by the holders of
Common Stock entitled to cast at least a majority of the votes which
the Common Stock is entitled to cast at the Annual Meeting is
required in order to establish a quorum for the purpose of electing
the directors to be elected by holders of the Common Stock (the
"Common Stock Directors"). Attendance at the Annual Meeting in person
or by proxy by the holders of Class A Stock entitled to cast at least
a majority of the votes which the Class A Stock is entitled to cast
at the Annual Meeting is required in order to establish a quorum for
the purpose of electing the Class A Directors. Attendance at the
meeting in person or by proxy by the holders of Common Stock and
Class A Stock entitled to cast at least a majority of the votes which
such stock is entitled to cast at the Annual Meeting on matters other
than the election of directors is required in order to establish a
quorum for the purpose of any other business. Assuming the presence
of a quorum, (i) the affirmative vote of a majority of the shares of
Common Stock and Class A Stock, voting separately as a class, present
in person or by proxy at the Annual Meeting will be required for the
election of the Common Stock Directors and Class A Directors,
respectively, and (ii) the affirmative vote of the holders of shares
representing a majority of the votes entitled to be cast by the
holders of Common Stock and Class A Stock, voting together as one
class, present in person or by proxy at the Annual Meeting and
entitled to vote thereon shall be required to act on all other
matters to come before the Annual Meeting.
Votes may be cast by a stockholder in favor of the nominees for
election as directors or withheld. Similarly, votes may be cast by a
stockholder in favor or against ratification of the appointment of
the independent accountants, or a stockholder may elect to abstain
from voting on this issue. Directions to withhold authority,
abstentions and broker non-votes (which occur when a nominee holding
shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power with
respect to that item and has not received instructions from the
beneficial owner) will be counted in determining the presence or
absence of a quorum for the transaction of business at the Annual
Meeting. Abstentions and directions to withhold authority will have
the effect of votes against the proposal being considered. Broker
non-votes, because they are not deemed to be entitled to vote with
respect to any matter for which a broker does not have authority to
vote, are not counted in the vote totals and will have no effect on
any proposal scheduled for consideration at the Annual Meeting.
If a properly executed, unrevoked proxy does not specifically direct
the voting of the shares covered by such proxy, the proxy will be
voted (a) FOR the election of all nominees for election as director
as listed herein, (b) FOR the ratification of the appointment of
Price Waterhouse LLP as the Company's independent accountants for the
fiscal year ending December 31, 1997, and (c) in accordance with the
judgment of the persons named in the proxy as to such other matters
as may properly come before the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 14, 1997 with
respect to the beneficial ownership of Common Stock and Class A Stock
by (a) the persons known by the Company to be the beneficial owners
of more than 5% of the outstanding shares of Common Stock or Class A
Stock, (b) each director of the Company, (c) each of the executive
officers named in the Summary Compensation Table below, and (d) all
directors and executive officers of the Company as a group. The
information set forth in the table as to directors and executive
officers is based upon information furnished to the Company by them
in connection with the preparation of this Proxy Statement. Except
where otherwise indicated, the mailing address of each of the
stockholders named in the table is: c/o John B. Sanfilippo & Son,
Inc., 2299 Busse Road, Elk Grove Village, Illinois 60007.
<TABLE>
<CAPTION>
No. of % of % of % of Outstanding
Shares Outstanding No. of Shares Outstanding Votes on Matters
of Common Shares of of Class Shares of Class Other than Election
Name Stock(1) Common Stock A Stock(1)(2) A Stock of Directors
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jasper B. Sanfilippo(3)+- 31,000 1.0% 1,523,776 41.3% 36.1%
Mathias A. Valentine(4)+- None -- 637,515 17.3 15.1
Marian Sanfilippo(5) 8,152 * 914,720 24.8 21.6
Michael J. Valentine(6)-# 12,977 * 611,415 16.6 14.5
Gary P. Jensen(7)- 6,400 * None -- *
John C. Taylor(8)+- 14,315 * None -- *
Steven G. Taylor(9)- 14,125 * None -- *
William D. Fischer(10)+ 16,000 * None -- *
J. William Petty(11)+ 1,500 * None -- *
John W. A. Buyers(12)+ 5,300 * None -- *
Swiss Bank Corporation(13) 748,200 13.7 None -- 1.8
All directors and executive
officers as a group
(12 persons, all of whom
are stockholders)(3)(4)(6)
(7)(8)(9)(10)(11)(12)(14) 123,571 2.3 2,772,706 75.2 65.7
--------------------------
</TABLE>
+ Denotes Director.
- Denotes Named Executive Officer.
# Denotes nominee for election as a Class A Director.
* Less than one percent.
(1) Except as otherwise indicated below, beneficial ownership means
the sole power to vote and dispose of shares. In calculating
each holder's percentage ownership and beneficial ownership in
the table above, shares of Common Stock which may be acquired by
the holder through the exercise of stock options exercisable on
or within 60 days of March 14, 1997 are included.
(2) Each share of Class A Stock is convertible at the option of the
holder thereof at any time and from time to time into one share
of Common Stock. In addition, the Restated Certificate provides
that Class A Stock may be transferred only to (a) Jasper B.
Sanfilippo or Mathias A. Valentine, (b) a spouse or lineal
descendant of Mr. Sanfilippo or Mr. Valentine, (c) trusts for the
benefit of any of the foregoing individuals, (d) entities
controlled by any of the foregoing individuals, (e) the Company,
or (f) any bank or other financial institution as a bona fide
pledge of shares of Class A Stock by the owner thereof as
collateral security for indebtedness due to the pledgee
(collectively, the "Permitted Transferees"), and that upon any
transfer of Class A Stock to someone other than a Permitted
Transferee each share transferred will automatically be converted
into one share of Common Stock.
(3) Includes 163,045 shares of Class A Stock held as trustee of
certain trusts, the beneficiaries of which are the children of
Jasper and Marian Sanfilippo (two of whom - Jasper B. Sanfilippo,
Jr. and James J. Sanfilippo are executive officers of the
Company). Excludes shares held or voted by Jasper B.
Sanfilippo's wife, Marian Sanfilippo, of which Mr. Sanfilippo
disclaims beneficial ownership.
(4) Excludes 24 shares of Common Stock held by Mathias A. Valentine's
wife, Mary Valentine, of which Mr. Valentine disclaims beneficial
ownership.
(5) Includes 890,220 shares of Class A Stock held as trustee of
certain trusts, the beneficiaries of which are the children of
Jasper and Marian Sanfilippo (two of whom - Jasper B. Sanfilippo,
Jr. and James J. Sanfilippo are executive officers of the
Company). Excludes shares held or voted by Marian Sanfilippo's
husband, Jasper B. Sanfilippo, of which Mrs. Sanfilippo disclaims
beneficial ownership.
(6) Includes (a) options to purchase 1,050 shares of Common Stock,
375 shares of Common Stock and 400 shares of Common Stock at
$15.125, $6.60 and $10.3125, respectively, per share which are
exercisable by Michael J. Valentine on or within 60 days of March
14, 1997, (b) 611,415 shares of Class A Stock held as trustee of
certain trusts (collectively, the "Valentine Trusts"), the
beneficiaries of which are the children of Mathias and Mary
Valentine, including Michael J. Valentine an executive officer of
the Company and nominee for election as a Class A Director, and
(c) 3,000 shares of Common Stock owned by a general partnership,
the general partners of which are the Valentine Trusts.
(7) Includes options to purchase 750 shares of Common Stock and 650
shares of Common Stock at $9.625 and $9.375, respectively, per
share, which are exercisable by Gary P. Jensen on or within 60
days of March 14, 1997.
(8) Includes options to purchase 10,000 shares of Common Stock, 2,550
shares of Common Stock, 750 shares of Common Stock and 825 shares
of Common Stock at $15.00, $13.75, $6.00 and $9.375,
respectively, per share which are exercisable by John C. Taylor
on or within 60 days of March 14, 1997.
(9) Includes options to purchase 10,000 shares of Common Stock, 2,550
shares of Common Stock, 750 shares of Common Stock and 825 shares
of Common Stock at $15.00, $13.75, $6.00 and $9.375,
respectively, per share which are exercisable by Steven G. Taylor
on or within 60 days of March 14, 1997.
(10) Includes options to purchase 4,000 shares of Common Stock, 500
shares of Common Stock, 250 shares of Common Stock and 250 shares
of Common Stock at $12.25, $10.50, $6.00 and $6.625,
respectively, per share which are exercisable by William D.
Fischer on or within 60 days of March 14, 1997. Mr. Fischer's
mailing address is 680 North Lake Shore Drive, Chicago, Illinois
60611.
(11) Includes options to purchase 250 shares of Common Stock and 250
shares of Common Stock at $8.25 and $6.625, respectively, per
share which are exercisable by J. William Petty on or within 60
days of March 14, 1997. Mr. Petty's mailing address is 425
Ahwahnee Road, Lake Forest, Illinois 60045.
(12) Includes options to purchase 4,000 shares of Common Stock, 500
shares of Common Stock, 250 shares of Common Stock and 250 shares
of Common Stock at $12.25, $10.50, $6.00 and $6.625,
respectively, per share which are exercisable by John W. A.
Buyers on or within 60 days of March 14, 1997. Mr. Buyers'
mailing address is 827 Fort Street, Honolulu, Hawaii 96813.
(13) The information set forth in the table above and in this footnote
is based solely on a Schedule 13G dated February 12, 1997 filed
jointly by Brinson Holdings, Inc. ("BHI"), Brinson Partners, Inc.
("BPI"), Brinson Trust Company ("BTC"), SBC Holding (USA), Inc.
("SBCUSA") and Swiss Bank Corporation ("SBC") with the Securities
and Exchange Commission. BTC, which is a wholly-owned subsidiary
of BPI, owns 218,526 shares of Common Stock. BPI, which is a
wholly-owned subsidiary of BHI, owns 529,674 shares of Common
Stock (not including the shares held by BTC). BHI is a wholly-
owned subsidiary of SBCUSA, which is a wholly-owned subsidiary of
SBC. The principal business office of BPI, BTC and BHI is
located at 209 South LaSalle Street, Chicago, IL 60604. The
principal business office of SBCUSA is located at 222 Broadway,
New York, NY 10038. The principal business office of SBC is
located at Aeschenplatz 6 CH-4002, Basel, Switzerland.
(14) Includes options to purchase a total of 56,150 shares of Common
Stock (including the options referred to in footnotes 6, 7, 8, 9,
10, 11 and 12 above) at prices ranging from $6.00 to $15.125 per
share which are exercisable by certain of the directors and
executive officers on or within 60 days of March 14, 1997.
ELECTION OF DIRECTORS
Seven directors are to be elected to serve until the next annual
meeting of stockholders and until their respective successors shall
be elected and qualified. Two of such directors are to be elected by
the holders of Common Stock voting as a class and the remaining five
directors are to be elected by the holders of Class A Stock voting as
a class. While the Board of Directors does not contemplate that any
nominee for election as a director will not be able to serve, if any
of the nominees for election shall be unable or shall fail to serve
as a director, the holders of proxies shall vote such proxies for
such other person or persons as shall be determined by such holders
in their discretion or, so long as such action does not conflict with
the provisions of the Company's Restated Certificate relating to the
proportion of directors to be elected by the holders of Common Stock,
the Board of Directors may, in its discretion, reduce the number of
directors to be elected.
The Board of Directors recommends that the stockholders vote "FOR"
each of the nominees listed herein.
The affirmative vote of a majority of the shares of Common Stock
present at the Annual Meeting is required to elect the nominees for
election by the holders of Common Stock. The affirmative vote of a
majority of the total votes possessed by the shares of Class A Stock
present at the meeting, in accordance with the cumulative voting
rights possessed by holders of Class A Stock, is required to elect
the nominees for election by the holders of Class A Stock.
NOMINEES FOR ELECTION BY THE HOLDERS OF COMMON STOCK
The name of and certain information regarding each nominee for
election to the Company's Board of Directors by the holders of Common
Stock, as reported to the Company, is set forth below.
William D. Fischer, Director, age 68 -- Mr. Fischer served as the
President and Chief Operating Officer of Dean Foods Company, a
publicly traded dairy and specialty food products company based in
Franklin Park, Illinois from 1989 through December 1993. He also
served as that company's Vice President, Finance from 1971 to 1989,
Secretary from 1973 to 1988, Treasurer from 1973 to 1984 and a director
from 1979 to March 1996. Mr. Fischer has also served as a director
and a member of the compensation committee of Allied Products
Corporation, a manufacturer of industrial and agricultural machinery,
since 1993. Mr. Fischer has been a member of the Company's Board of
Directors since December 1991 and is a member of the Company's Audit
Committee and Compensation Committee.
John W. A. Buyers, Director, age 68 -- Mr. Buyers is currently
employed by C. Brewer and Company, Limited ("C. Brewer"), based in
Honolulu, Hawaii, where he has served as Chief Executive Officer
since 1975 and as Chairman of the Board since 1982. Mr. Buyers is
also currently the Chairman of the Board, President and Chief
Executive Officer of Buyco, Inc., the privately-held parent company
of C. Brewer, and has served in those capacities since 1986.
C. Brewer is a diversified agribusiness, specialty foods company and
developer of commercial and agricultural real estate. It is the
world's leading producer of macadamia nuts (Mauna Loar) and guava
(KAIr and Mauna La'ir). In addition, C. Brewer specializes in the
roasting, processing, marketing and distribution of Kona Coffee
(Royal Konar and Mauna Kear) as well as the processing, marketing and
distribution of Hawaiian fruit jams, jellies and syrups (Kukuir). C.
Brewer also distributes products and services for the agricultural,
environmental and construction industries. See "Certain
Relationships and Related Transactions." In addition, Mr. Buyers
currently serves on the board of directors of First Hawaiian Bank,
First Hawaiian, Inc., Mauna Loa Macadamia Partners, L.P., and
C. Brewer Homes, Inc. Mr. Buyers has been a member of the Company's
Board of Directors since January 1992 and is a member of the
Company's Audit Committee and Compensation Committee.
NOMINEES FOR ELECTION BY THE HOLDERS OF CLASS A STOCK
The name of and certain information regarding each nominee for
election to the Company's Board of Directors by the holders of Class
A Stock, as reported to the Company, is set forth below.
Jasper B. Sanfilippo, Chairman of the Board and Chief Executive
Officer and Director, age 66 -- Mr. Sanfilippo has been employed by
the Company since 1953. Mr. Sanfilippo served as the Company's
President from 1982 to December 1995 and was the Company's Treasurer
from 1959 to October 1991. He became the Company's Chairman of the
Board and Chief Executive Officer in October 1991 and has been a
member of the Company's Board of Directors since 1959.
Mr. Sanfilippo is also a member of the Company's Compensation
Committee and, until February 27, 1997, was a member of the Stock
Option Committee. Since June 1992, Mr. Sanfilippo has been a member
of the Board of Directors and a Vice President of Sunshine Nut Co.,
Inc. ("Sunshine"), a wholly-owned subsidiary acquired by the Company
in 1992. Mr. Sanfilippo is the father of Jasper B. Sanfilippo, Jr.
and James J. Sanfilippo, each of whom is an executive officer of the
Company, the brother-in-law of Mathias A. Valentine, the President
and a director of the Company, and the uncle of Michael J. Valentine,
a nominee for election as a Class A Director and an executive officer
of the Company.
Mathias A. Valentine, President and Director, age 64 -- Mr. Valentine
has been employed by the Company since 1960 and was named its
President in December 1995. He served as the Company's Secretary
from 1969 to December 1995, as its Executive Vice President from 1987
to October 1991, and as its Senior Executive Vice President and
Treasurer from October 1991 to December 1995. He has been a member
of the Company's Board of Directors since 1969. Mr. Valentine is
also a member of the Company's Compensation Committee and, until
February 27, 1997, was a member of the Stock Option Committee. Mr.
Valentine has been a member of the Board of Directors and a Vice
President of Sunshine since June 1992. Mr. Valentine is the brother-
in-law of Jasper B. Sanfilippo, Chairman of the Board and Chief
Executive Officer and a director of the Company, the father of
Michael J. Valentine, a nominee for election as a Class A Director
and an executive officer of the Company, and the uncle of Jasper B.
Sanfilippo, Jr. and James J. Sanfilippo, each of whom is an executive
officer of the Company.
John C. Taylor, Executive Group Vice President and Director, age 51 -
- - Mr. Taylor has been the President and a director of Sunshine, which
the Company acquired in May 1992, since 1976. In August 1995, Mr.
Taylor was named a director of the Company and in December 1995 was
appointed the Executive Group Vice President of the Company
(responsible for coordinating certain joint activities of the Company
and Sunshine). Mr. Taylor and Sunshine are parties to an Employment
Agreement pursuant to which Mr. Taylor is to be employed by Sunshine
as Sunshine's President until June 1997. As President of Sunshine,
Mr. Taylor is responsible for overseeing that company's processing,
packaging, marketing and distribution of shelled nuts. Mr. Taylor is
the brother of Steven G. Taylor, an executive officer of the Company.
William Petty, Director, age 64 -- Mr. Petty served as the President
and Chief Executive Officer of Curtice Burns Foods, Inc. ("Curtice
Burns") from March 1993 until his retirement in November 1994 and as
a director of Curtice Burns from 1990 until November 1994. Curtice
Burns is a manufacturer and marketer of a diversified line of food
products, including canned and frozen vegetables and fruits,
condiments, snack foods and canned entrees. From 1990 to March 1993,
Mr. Petty was the Executive Vice President of Curtice Burns. In
January 1996, Mr. Petty became the President, Chief Executive Officer
and a director of Orval Kent Food Company, Incorporated, a Chicago,
Illinois manufacturer and marketer of refrigerated salads, side
dishes and entrees.
Mr. Petty has been a director of the Company since August 1995 and is
a member of the Company's Audit Committee. He is a former member of
the Board of Directors of the Grocery Manufacturers of America and
the National Food Processors Association.
Michael J. Valentine, Vice President and Secretary, age 37 -- Mr.
Valentine has been employed by the Company since 1987 and was named
its Vice President and Secretary in December 1995. He served as an
Assistant Secretary and the General Manager of External Operations
for the Company from June 1987 and 1990, respectively to December
1995. Mr. Valentine is the son of Mathias A. Valentine, the
President and a Director of the Company, the nephew of Jasper B.
Sanfilippo, Chairman of the Board and Chief Executive Officer of the
Company, and cousin of Jasper B. Sanfilippo, Jr. and James J.
Sanfilippo, each of whom is an executive officer of the Company.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company met four times during 1996.
During 1996, all directors attended at least 75% of the meetings of
the Board of Directors and the committees thereof on which they
served. Standing committees of the Board of Directors include the
Audit Committee, the Compensation Committee and, until February 27,
1997, the Stock Option Committee. The Board does not have a
nominating committee and, as described below, eliminated the Stock
Option Committee effective as of February 27, 1997. The usual
functions of such committees are performed by the entire Board.
The Audit Committee reviews and, as it deems appropriate, approves
internal accounting and financial controls for the Company and
accounting principles and auditing practices and procedures to be
employed in the preparation and review of financial statements of the
Company. The Audit Committee also makes recommendations to the Board
concerning the engagement of independent public accountants to audit
the annual consolidated financial statements of the Company and
arranges with such accountants the scope of the audit to be
undertaken by them. Further, the Audit Committee also reviews related
party transactions in accordance with the rules promulgated by the
National Association of Securities Dealers, Inc. The current members
of the Audit Committee are John W. A. Buyers, William D. Fischer and
J. William Petty. The Audit Committee held two meetings during 1996.
The Compensation Committee reviews and makes recommendations to the
Board with respect to the salaries, bonuses and other compensation of
officers and other executives, including matters relating to stock
options, which are determined by the entire Board of Directors. The
Compensation Committee consists of Jasper B. Sanfilippo, William D.
Fischer, John W. A. Buyers and Mathias A. Valentine. The
Compensation Committee held one meeting during 1996.
Until February 27, 1997, the The Stock Option Committee administered
the Company's 1991 Stock Option Plan (the "Prior Plan," which was
terminated during 1995) and its 1995 Equity Incentive Plan (the "1995
Plan"). In its capacity as administrator of the 1995 Plan, the Stock
Option Committee granted options and determined the terms thereof.
The Stock Option Committee also administered matters relating to
options outstanding under the Prior Plan. Effective February 27,
1997, the Board eliminated the Stock Option Committee, ratified the
Committee's past actions with respect to the Prior Plan and 1995 Plan
and assumed the Committee's responsibilities for administering the
Prior Plan and 1995 Plan.
COMPENSATION OF DIRECTORS
Compensation to directors who are not employees of the Company is
paid at the rate of $16,000 per year plus $1,000 for each Board
meeting attended, $350 for each telephonic meeting of the Board in
which they participate, $500 for each committee meeting attended and
$350 for each telephonic committee meeting in which they participate.
Directors are also reimbursed for their expenses incurred in
attending such meetings. Directors who are employees of the Company
receive no additional compensation for their services as directors.
Under the 1995 Plan, a director who is not an employee of the
Company, its subsidiaries, or any of their affiliates (an "Outside
Director") is automatically granted an option to purchase 1,000
shares of Common Stock on the date of his or her election to the
Company's Board, and on each date of his or her re-election to the
Board. Options granted to Outside Directors under the 1995 Plan are
granted at an exercise price equal to the fair market value (as
defined in the 1995 Plan) of a share of Common Stock on the date of
grant. Pursuant to the 1995 Plan, on April 30, 1996, Messrs. Buyers,
Fischer and Petty each were granted an option to purchase up to 1,000
shares of Common Stock at an exercise price of $6.625 per share.
EXECUTIVE COMPENSATION
The following table sets forth a summary of compensation for services
in all capacities to the Company during the fiscal years ended
December 31, 1996, 1995 and 1994 paid to or accrued for (i) the
Company's Chief Executive Officer, and (ii) each of the four
additional most highly compensated executive officers of the Company
(together with the Chief Executive Officer, the "Named Executive
Officers").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Compensation
Annual Compensation(1) Awards
---------------------- ------------
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus Options(#) Compensation
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jasper B. Sanfilippo(2) 1996 $395,877 0 -- $129,960(3)(4)
Chairman of the 1995 372,444 $53,502 -- 130,200
Board and Chief 1994 356,815 0 -- 133,701
Executive Officer
Mathias A. Valentine(5) 1996 $236,539 0 -- $ 64,678(4)(6)
President 1995 217,720 $31,276 -- 68,428
1994 208,235 0 -- 68,558
John C. Taylor(7) 1996 $172,424 0 -- $ 6,486(8)
Executive Group 1995 164,649 $20,651 4,800 10,635
Vice President 1994 161,330 0 -- 7,407
Steven G. Taylor(7) 1996 $172,424 0 -- $ 1,065(9)
Executive Vice 1995 164,649 $20,651 4,800 4,614
President 1994 161,330 0 -- 649
Gary P. Jensen(10) 1996 $138,408 0 -- $ 300(11)
Executive Vice 1995 115,204 $14,067 5,600 --
President, Finance and 1994 -- 0 -- --
Chief Financial Officer
- -------------------------
</TABLE>
(1) None of the Named Executive Officers received perquisites
in excess of the lesser of $50,000 or 10% of the aggregate of
such officer's salary and bonus.
(2) Mr. Sanfilippo also served as the Company's President
during 1994 and the majority of 1995.
(3) Includes $116,520 of premiums paid by the Company under a
split-dollar agreement with Mr. Sanfilippo covering certain
joint and survivor life insurance policies issued on the joint
lives of Jasper B. Sanfilippo and his spouse. Also includes
$13,440 of life insurance premiums. During 1996, the Company
paid $5,088 for the term portions of the split-dollar life
insurance premiums of Mr. Sanfilippo.
(4) The split-dollar agreements require that the Company be
reimbursed for all premiums paid upon either the surrender of
the policies or the death of both insureds. The reimbursement
obligation is secured by a collateral assignment to the Company
of certain rights in the policies. The Company is required to
pay the monthly premiums; provided, however, each of Messrs.
Sanfilippo and Valentine may elect in any year to pay that
portion of the monthly premiums which would otherwise be
treated as taxable compensation to him under the Internal
Revenue Code of 1986, as amended (the "Code"). The Company
reflects the total amount of premiums it pays under the split-
dollar agreements as an asset on its financial statements.
(5) During 1994 and the majority of 1995, Mr. Valentine served
as the Company's Senior Executive Vice President, Secretary and
Treasurer. He was named President of the Company in December
1995.
(6) Includes $40,008 of premiums paid by the Company under a
split-dollar agreement with Mr. Valentine covering certain
joint and survivor life insurance policies issued on the joint
lives of Mathias A. Valentine and his spouse. Also includes
$24,370 of life insurance premiums, $300 of matching
contributions to the 401(k) Plan described below. During 1996,
the Company paid $4,114 for the term portions of the split-
dollar life insurance premiums of Mr. Valentine.
(7) The salary and bonus amounts set forth for Messrs. John C.
Taylor and Steven G. Taylor, executive officers of JBSS and
Sunshine employees of Sunshine, were paid to them by Sunshine.
(8) Includes $5,040 of premiums paid by the Company under a
split-dollar agreement with Mr. Taylor covering his life. Also
includes $1,146 of disability insurance premiums and $300 of
matching contributions to the 401(k) Plan described below. The
split-dollar agreement requires that the Company be reimbursed
for all premiums paid upon either the surrender of the policy
or the death of the insured. Sunshine reflects the total
amount of premiums it pays under the split-dollar agreement as
an asset on its financial statements.
(9) Includes $300 of matching contributions to the 401(k) Plan
described below, $765 of disability insurance premiums paid by
the Company for 1996.
(10) During 1995, Mr. Jensen was hired as Vice President and
Chief Financial Officer of the Company. Mr. Jensen was
named the Company's Executive Vice President, Finance and Chief
Financial Officer in December 1995.
(11) Includes $300 of matching contributions to the 401(k) Plan
described below.
INCENTIVE COMPENSATION PROGRAM
The Company maintains an Incentive Compensation Program (the
"Incentive Compensation Program") to provide key employees with
cash bonuses. Under the Incentive Compensation Program, a return
on equity target is established by the Compensation Committee at
the beginning of each year. If the Company meets the return on
equity target, the Compensation Committee establishes a bonus pool
based on the amount by which the Company exceeded the target.
Bonus awards from that pool are then allocated to eligible
employees, including executive officers of the Company. The
amount of each bonus awarded to an executive officer is determined
under a formula that includes factors such as position held,
annual performance rating, department profitability and the
subjective judgment of the Compensation Committee. The Company
did not accrue or pay bonuses under the Incentive Compensation
Program for 1995 or 1994. However, the Compensation Committee did
elect to award discretionary bonuses totaling $368,302 to its
employees for 1995, which were paid in March of 1996. The Company
did not have an Incentive Compensation Program in 1996 and did
not pay any bonuses in 1996. The Compensation Committee is
reviewing an Incentive Compensation Program for 1997.
401(K) PLAN
The Company maintains a plan (the "401(k) Plan") which is intended
to qualify under sections 401(a) and 401(k) of the Code. The
401(k) Plan was adopted in January 1986 and amended in August
1992, January 1993, January 1994 and January 1996. All non-union
employees of the Company who have attained age 21 and completed at
least one year of service with the Company are eligible to
participate in the 401(k) Plan. The 401(k) Plan permits each
participant to make contributions on a pretax basis subject to
limitations established by the trustees who administer the 401(k)
Plan. The amount of participant contributions to the 401(k) Plan
may also be limited by Code requirements. Effective January 1,
1994, the Company contributes 50% of the amount each employee
contributes to the 401(k) Plan up to a maximum matching
contribution of $300 per employee. The Company may also make
discretionary contributions to the 401(k) Plan which are allocated
among participants pro rata based on compensation. The pretax
contributions made by participants and the matching contributions
made by the Company, and earnings thereon, are at all times fully
vested. A participant's interest in discretionary contributions
made by the Company and earnings thereon vest over a six year
period and becomes fully vested upon the earliest to occur of such
participant's attainment of age 65, death, disability or
completion of six years of service. Benefits under the 401(k)
Plan may be distributed to participants upon their termination of
employment. In addition, the 401(k) Plan permits employees who
have attained age 59 1/2 years and who have completed 10 years of
service to withdraw all or a portion of their 401(k) Plan account
balances under certain circumstances. In 1996, the Company made
matching contributions to the 401(k) Plan of $300 on behalf of
each of Messrs. Valentine, Jensen, Steven G. Taylor and John C.
Taylor, and $2,100 for all executive officers as a group.
Mr. Sanfilippo did not make any elective contributions to the
401(k) Plan in 1996 and, consequently, did not receive any
matching contributions. The Company did not make any
discretionary contributions to the 401(k) Plan for 1994 or 1996.
The Company did make a discretionary contribution for 1995 to the
401(k) Plan of $383,460.
1991 STOCK OPTION PLAN
The Company's 1991 Stock Option Plan (the "Prior Plan") was
adopted in 1991 and terminated by the Board of Directors as of
February 28, 1995. The termination of the Prior Plan does not,
however, affect options granted under the Prior Plan which remain
outstanding. The Prior Plan was administered by the Stock Option
Committee, which was comprised of Jasper B. Sanfilippo and
Mathias A. Valentine. Messrs. Sanfilippo and Valentine were not
eligible to participate in the Prior Plan. Effective February 27,
1997, the Stock Option Committee was eliminated and administration
of the Prior Plan was assumed by the Board of Directors. An
aggregate of 350,000 shares of Common Stock were available for
awards under the Prior Plan, subject to adjustments reflecting
changes in the Company's capitalization. Options granted under
the Prior Plan were either incentive stock options or such other
forms of nonqualified stock options as the Stock Option Committee
determined. Incentive stock options granted under the Prior Plan
were intended to qualify as "incentive stock options" within the
meaning of Section 422 of the Code. The exercise price of such
options was determined by the Stock Option Committee except that
the exercise price of (a) an incentive stock option granted to an
individual who owned (directly or by attribution under Section
424(d) of the Code) shares possessing more than 10% of the total
combined voting power of all classes of stock of the Company (a
"10% Owner") is at least 110% of the fair market value (as defined
in the Prior Plan) of a share of Common Stock on the date the
incentive stock option was granted; (b) an incentive stock option
granted to an individual other than a 10% Owner is at least 100%
of the fair market value of a share of Common Stock on the date
the incentive stock option was granted; and (c) a nonqualified
stock option is at least 33% of the fair market value of a share
of Common Stock on the date the nonqualified stock option was
granted. Subject to certain exceptions, an individual's options
expire if the individual's employment with or service as a
director of the Company, as the case may be, terminates. As of
February 28, 1995, the date the Prior Plan was terminated, the
Company had granted options to purchase a total of 373,000 shares
of Common Stock pursuant to the Prior Plan (although no more than
350,000 shares of Common Stock were, at any given time, subject to
options granted under the Prior Plan). Of these options, 142,250
had been canceled and 1,750 had been exercised as of March 14,
1997 and 199,900 were exercisable on or within 60 days of March
14, 1997 (the balance of such options becoming exercisable in
various increments over the next four years).
1995 EQUITY INCENTIVE PLAN
The Company's 1995 Equity Incentive Plan (the "1995 Plan") was
adopted in 1995 to encourage and facilitate the acquisition of
Common Stock by those key employees and Outside Directors upon
whose judgment and interest the growth, development and financial
success of the Company is dependent. Subject to antidilution and
similar provisions, an aggregate of 200,000 shares of Common Stock
may be issued upon the exercise of stock options granted under the
1995 Plan. As of March 14, 1997, the Company had granted options
to purchase a total of 99,300 shares of Common Stock under the
1995 Plan. Of these options, 11,300 had been canceled as of March
14, 1997, and 22,000 were exercisable on or within 60 days of
March 14, 1997 (the balance of such options becoming exercisable
in various increments over the next four years).
The 1995 Plan is administered by the Stock Option Committee that
is comprised, as of February 27, 1997, of the Company's Board of
Directors. Pursuant to the 1995 Plan, the Stock Option Committee
may select key employees of the Company to receive awards of stock
options, which may be either nonqualified stock options or
"incentive stock options" within the meaning of Section 422 of the
Code, in consideration for their services. In addition, under the
1995 Plan each Outside Director is granted a nonqualified option
to purchase up to 1,000 shares of Common Stock (i) on the date of
his or her initial election to the Board of Directors, and (ii) on
the date of each subsequent re-election to the Board.
Generally, stock options granted under the 1995 Plan become
exercisable in equal installments of 25% of the shares covered by
the option on the first four anniversaries of the date of grant
subject to, in the case of an employee, continued employment with
the Company or its subsidiaries, or in the case of an Outside
Director, continued service as a director, on such date. However,
all options granted under the 1995 Plan become fully vested and
exercisable on the first date on which no shares of Class A Stock
are outstanding. The exercise price of options granted to
employees under the 1995 Plan is determined by the Stock Option
Committee; provided, however, that (i) the exercise price for
nonqualified stock options granted to employees may not be less
than 50% of the fair market value of a share of Common Stock on
the date of grant, and (ii) the exercise price for incentive stock
options may not be less than 100% of the fair market value of a
share of Common Stock on the date of the grant (110% in the case
of incentive stock options granted to a 10% Owner). The exercise
price for each option granted to an Outside Director under the
1995 Plan must equal 100% of the fair market value for a share of
Common Stock on the date such option is granted. The Stock Option
Committee may provide that if a grantee delivers shares of Common
Stock in full or partial payment of the exercise price, the
grantee will be granted a "reload stock option" to purchase the
number of shares of Common Stock so delivered by the grantee.
Options granted under the 1995 Plan may not be assigned or
transferred other than by will or the laws of descent and
distribution and may be exercised during the grantee's lifetime
only by the grantee. No option granted under the 1995 Plan may be
exercised after the expiration of ten years after the date of the
grant (five years in the case of incentive stock options granted
to a 10% Owner). Unexercised options terminate upon or within one
year of an employee's termination of employment with the Company.
OPTION EXERCISES AND HOLDINGS
The following table sets forth the certain information regarding
option exercises during 1996 by each of the Named Executive
Officers and the number and value of securities underlying options
held by each of the Named Executive Officers at December 31, 1996.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL-YEAR END OPTION VALUES
<CAPTION>
Number of Unexercised Value of Unexercised In the Money
Shares Acquired Value Options at Fiscal-Year End(#) Options at Fiscal-Year End($)
Name on Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable(1)
- --------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Jasper B. Sanfilippo -- -- --
Mathias A. Valentine -- -- --
John C. Taylor -- -- 13,750 / 4,450 $ 0 / 0
Steven G. Taylor -- -- 13,750 / 4,450 0 / 0
Gary P. Jensen -- -- 1,400 / 4,200 0 / 0
____________________
</TABLE>
(1) The exercise price for each of the exercisable options which
remained unexercised as of December 31, 1996 exceeded the fair
market value of the Common Stock underlying such options at
December 31, 1996.
EMPLOYMENT CONTRACT
Sunshine is a party to an Employment Agreement with each of John C.
Taylor and Steven G. Taylor (the "Employment Agreements"), dated
June 17, 1992, pursuant to which John C. Taylor is to be employed
as and serve as the President of Sunshine until June 17, 1997 and
Steven G. Taylor is to be employed as and serve as a Vice President
of Sunshine until June 17, 2000. Each individual's annual base
compensation under his Employment Agreement is $150,000, subject to
increase from time to time in the sole discretion of the board of
directors of Sunshine but generally in accordance with Sunshine's
customary practices for increases in base salaries. Under his
Employment Agreement, each of John C. Taylor and Steven G. Taylor
is entitled to participate in employment plans and benefits
provided by Sunshine to executive officers of Sunshine and is also
entitled to receive pay increases, bonuses and stock options
comparable to those available annually to upper level management
employees of the Company. In accordance with the terms of the
Employment Agreements, the board of directors of Sunshine fixed the
1996 salary for each of John C. Taylor and Steven G. Taylor at
$172,424. The Company has guaranteed the performance of Sunshine
under the Employment Agreements.
The Joint Report of the Compensation and Stock Option Committees on
Executive Compensation and the Performance Graph below shall not be
deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement or any portion
hereof into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, and
shall not otherwise be deemed filed under such Acts. As described
above, the Stock Option Committee was eliminated and the duties and
responsibilities of that committee with respect to the Prior Plan
and the 1995 Plan were assumed by the entire Board of Directors
effective as of February 27, 1997.
JOINT REPORT OF THE COMPENSATION AND
STOCK OPTION COMMITTEES ON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION PRINCIPLES
The Company's Executive Compensation Program is based on principles
designed to align executive compensation with Company objectives,
management initiatives and business financial performance. These
principles are applied by the Compensation Committee to:
- -- Attract and retain key executives critical to the success of the
Company and its subsidiaries.
- -- Reward executives for long-term strategic management and the
enhancement of stockholder value.
- -- Support a performance-oriented environment that rewards
performance based on Company goals.
OVERVIEW OF EXECUTIVE COMPENSATION PROGRAM
The Company's total compensation program for its executive officers
consists of both cash and, except with respect to the Chief
Executive Officer and the President, equity based compensation.
Each executive officer's annual compensation consists of a base
salary, eligibility for matching and discretionary contributions to
the 401(k) Plan and eligibility for an annual bonus under the
Incentive Compensation Program. In addition, the Company provides
life (including split-dollar life insurance) and disability
insurance for certain executive officers. The Compensation
Committee determines the level of base salary for key executive
officers, including the Chief Executive Officer, and a base salary
range for other executive officers. The Compensation Committee
generally determines such salary or salary range based on a number
of factors and criteria, including the salaries paid by the Company
to its executive officers during the immediately preceding year,
the rate of inflation, the Company's performance during the
immediately preceding fiscal year, the performance of the executive
officer during the immediately preceding fiscal year, and the
salaries paid to the executive officers of certain other companies
engaged in the food or agricultural commodity business and with
annual sales of less than $1.0 billion (the "Compensation
Comparison Group"). The weight and importance given each year to
the foregoing factors, the individual components of each factor and
the decision whether to consider additional factors, lies within
the subjective discretion of the Compensation Committee. Because
the compensation levels of the Company's executive officers are
significantly below compensation levels that would be affected by
the limitations on the deduction of executive salaries imposed by
Section 162(m) of the Code ("Section 162(m)"), the Compensation
Committee has not formulated a policy with respect to Section
162(m). The 1995 Plan provides for certain limits, consistent with
Code Section 162 and the regulations promulgated thereunder, on the
maximum number of shares of Common Stock subject to options that
may be granted to any grantee in any one calendar year.
1996 EXECUTIVE COMPENSATION
The Compensation Committee primarily based 1996 salaries and salary
ranges of the Company's executive officers, including the Chief
Executive Officer, on the salaries paid to such executive officers
in 1995. For 1996, such base salaries and salary ranges were
generally increased by a percentage slightly greater than the
percentage change in the Consumer Price Index in 1995. The
Compensation Committee determined, in general, not to increase
additionally such salaries and salary ranges, including the salary
of the Chief Executive Officer, based on the Company's 1995
performance because the Company's return on equity, growth in net
sales, and actual versus anticipated results of operations for 1995
did not meet the expectations of management. The Compensation
Committee evaluated the foregoing performance criteria subjectively
without giving specific weight to any particular criteria and in
conjunction with a subjective evaluation of the Company's overall
financial performance in 1995. The Compensation Committee did not
use the salaries of executive officers of the Compensation
Comparison Group to establish base salaries and salary ranges for
the Company's executive officers, including the Chief Executive
Officer, for 1996, but did compare its determination of such
salaries and salary ranges against the base salaries reported for
executive officers of the Compensation Comparison Group as an
independent measure of reasonableness. The 1996 base salaries for
the Company's executive officers set by the Compensation Committee
were, in general, at the low to medium ranges when compared to the
base salaries of the Compensation Comparison Group executives.
However, the Compensation Committee does not currently have an
established policy with regard to the salaries and salary ranges of
the Company's executive officers, including the salary of the Chief
Executive Officer, relative to the salaries paid to the
Compensation Comparison Group executive officers.
The Compensation Committee also awards annual bonuses to
participants in the Incentive Compensation Program, including the
executive officers of the Company. The Company did not have a
formal incentive compensation plan for 1996. A formal program is
under consideration by the Compensation Committee for 1997. No
bonuses were paid or accrued by the Company in 1996
The Company provides long-term incentives to its executive officers
through its stock option plans. Through the award of stock option
grants, the objective of aligning executive officers' long-range
interests with those of the stockholders are met by providing the
executive officers with the opportunity to build a meaningful stake
in the Company. The Stock Option Committee reviewed and approved
the participation of employees of the Company and its subsidiaries
under the Prior Plan (which was terminated in February 1995) and
the 1995 Plan through February 27, 1997, at which time the
Committee was eliminated and its duties and responsibilities under
both plans were assumed by the full Board.. The Stock Option
Committee did not award stock option grants to any executive
officer in 1996.
Executive officers are eligible to participate in the Company's
401(k) Plan, including Company matching and discretionary
contributions to the 401(k) Plan. The Company made no
discretionary contributions to the 401(k) Plan for 1996; however,
the Executive Officers as a whole had $2,100 contributed as
matching funds under the 401(k) Plan. The Company provides certain
executive officers with life and disability insurance. The Company
also maintains split-dollar life insurance policies on the joint
lives of Jasper B. Sanfilippo and his spouse and Mathias A.
Valentine and his spouse and on the life of John C. Taylor. See
"Executive Compensation - Summary Compensation Table."
The Compensation Committee and the Board of Directors believe that
their respective grants of compensation awards will produce
significant long-term compensation for periods when the Company's
performance objectives are met.
1996 CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee increased the Chief Executive Officer's
1996 base salary to $395,877, which was a percentage increase from
his 1995 base salary that was slightly greater than the rate of
inflation for 1995. The Compensation Committee based this increase
in the Chief Executive Officer's base salary on the factors and
criteria discussed above with regard to the establishment of 1996
base salaries and salary ranges for the Company's executive
officers. The Chief Executive Officer's 1996 base salary was at
the medium range of the base salaries of chief executive officers
of the companies in the Compensation Comparison Group. William D.
Fischer and John W. A. Buyers, as the only disinterested directors
on the Compensation Committee during 1996, were assisted in
establishing the increase in the Chief Executive Officer's base
salary for fiscal 1996 by their broad knowledge of executive pay
practices in the food industry and the importance to the Company of
the services provided by the Chief Executive Officer. The Chief
Executive Officer did not participate in the Prior Plan and does
not participate in the 1995 Plan. In 1996, the Company also
provided the Chief Executive Officer with life insurance and split-
dollar life insurance as discussed above.
Stock Option Committee
Compensation Committee (eliminated as of February 27, 1997)
---------------------- ------------------------------------
Jasper B. Sanfilippo Jasper B. Sanfilippo
Mathias A. Valentine Mathias A. Valentine
William D. Fischer
John W. A. Buyers
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative
total stockholder return on its Common Stock for the period from
December 31, 1991 to December 31, 1996, with the cumulative total
return of the Standard & Poor's 500 stock index and a peer group of
companies selected by the Company (the "Peer Group") for purposes
of the comparison and described more fully below. Dividend
reinvestment has been assumed and, with respect to companies in the
Peer Group, the returns of each such company have been weighted to
reflect relative stock market capitalization.
Comparison of Cumulative Total Return(1)
Among the Company, S&P 500 Index and Peer Group(2)
The following table represents a comparison of the total return between John
B. Sanfilippo $ Son, Inc., the S&P 500 and the Peer Group Index.
Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96
--------------------------------------------------
John B. Sanfilippo
& Son, Inc. 100.00 131.16 112.24 42.89 72.13 38.99
S&P 500 100.00 107.61 118.41 120.01 164.95 202.72
Peer Group Index(2) 100.00 93.93 96.63 81.73 112.00 109.50
(1) Assumes $100 invested on December 31, 1991 in the Company's
Common Stock, S&P 500 Index and Peer Group.
(2) The Peer Group selected by the Company is comprised of the
following companies: Chock Full O'Nuts Corp., J&J Snack Foods
Corp., Universal Foods Corp. and Tootsie Roll Industries, Inc.
("Tootsie Roll"). The Peer Group was selected by the Company in
good faith based upon similarities in the nature of the business
of the companies, total revenues, seasonality of business of the
companies and market capitalization. The Peer Group selected by
the Company for its 1993 Proxy Statement included Jimbo's Jumbos
Inc. ("Jimbo's") but did not include Tootsie Roll. The Company
is no longer able to include Jimbo's in its Peer Group because
Jimbo's was acquired by the JJJ Acquisition Corporation in July
1993 and is no longer publicly traded. The cumulative total
return for the Peer Group in the Performance Graph above has
been recalculated to exclude Jimbo's and to include Tootsie Roll
for the period from December 31, 1991 to December 31, 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee, which reviews and makes recommendations
to the Board with respect to salaries, bonuses and other
compensation of officers and other executives, was comprised of
Jasper B. Sanfilippo, Mathias A. Valentine, William D. Fischer and
John W. A. Buyers. Mr. Sanfilippo is the Company's Chairman of the
Board and Chief Executive Officer and is a director and Vice
President of Sunshine. Mr. Valentine is the Company's President
and a director and Vice President of Sunshine.
In addition, Messrs. Sanfilippo and Valentine served on the Stock
Option Committee, which, until its elimination by the Board on
February 27, 1997, had discretion in granting stock options to key
employees of the Company and its subsidiaries. Neither
Mr. Sanfilippo nor Mr. Valentine were eligible to participate in
the Prior Plan and neither were eligible to participate in the 1995
Plan during their service on the Stock Option Committee. Effective
February 27, 1997, the Board eliminated the Stock Option Committee
and assumed responsibility for administering the Prior Plan and
1995 Plan.
Below is a summary of certain transactions between the Company and
either of Messrs. Sanfilippo or Valentine, or persons with whom
they are related or entities in which they have an interest. All
such transactions have been and will continue to be on terms which
the Company believes to be at least as favorable to the Company as
could be obtained from unaffiliated parties.
LEASE ARRANGEMENTS
The Company leases a warehousing and retail facility in Des
Plaines, Illinois (the "Des Plaines Facility") and its production
and office facilities at 2299 Busse Road, Elk Grove Village,
Illinois (the "Busse Road Facility") from land trusts in which the
direct and indirect beneficiaries are Jasper B. Sanfilippo (a
stockholder, director and executive officer of the Company),
Mathias A. Valentine (a stockholder, director and executive officer
of the Company), their respective spouses, Anne Karacic and Rose
Laketa (sisters of Mr. Sanfilippo) and Rosalie Sanfilippo (Mr.
Sanfilippo's mother). The lease for the Des Plaines Facility
expires on October 31, 2010 and provides for monthly rent of
$21,250, subject to periodic increases based on increases in the
Consumer Price Index (the "CPI") on each of June 1, 2003 and
June 1, 2005. The lease for the Busse Road Facility expires on May
31, 2015 and provides for monthly rent of $74,084, subject to CPI
increases on each of June 1, 1997, June 1, 2002, June 1, 2007 and
June 1, 2012. The leases for the Des Plaines Facility and the
Busse Road Facility also require the Company to pay the real estate
taxes on, and to maintain and insure, the Des Plaines Facility and
the Busse Road Facility. During 1996, the aggregate amount of real
estate taxes on and insurance premiums paid by the Company under
both leases was approximately $300,000.
The Company has constructed an addition to the Busse Road Facility
(the "Addition") which is situated on property owned by the land
trust that owns the Busse Road Facility (the "Busse Land Trust")
and on property owned by the Company. Accordingly, (i) the Company
and the Busse Land Trust entered into a ground lease with a term
beginning January 1, 1995 pursuant to which the Company leases from
the Busse Land Trust the land on which a portion of the Addition is
situated and all related improvements thereon (the "Busse Addition
Property"), and (ii) the Company, the Busse Land Trust and the sole
beneficiary of the Busse Land Trust entered into a party wall
agreement effective as of January 1, 1995, which sets forth the
respective rights and obligations of the Company and the Busse Land
Trust with respect to the common wall which separates the existing
Busse Road Facility and the Addition. The ground lease has a term
which expires on May 31, 2015 (the same date on which the Company's
lease for the Busse Road Facility expires) and requires the Company
to pay the Busse Land Trust annual rent of $6,425, subject to CPI
increases on each of June 1, 2000, June 1, 2005 and June 1, 2010.
The Company has an option to extend the term of the ground lease
for one five-year term, an option to purchase the Busse Addition
Property at its then appraised fair market value at any time during
the term of the ground lease, and a right of first refusal with
respect to the Busse Addition Property. The ground lease also
requires the Company to pay the real estate taxes on, and to
insure, the Busse Addition Property. The party wall agreement
grants the Company the right to use and the obligation to
participate pro rata with the Busse Partnership (defined below) in
the maintenance of the common wall shared by the Addition and Busse
Road Facility.
The sole beneficiary of the Busse Land Trust is the Arthur/Busse
Limited Partnership (the "Busse Partnership"). The general partner
of the Busse Partnership is Arthur/Busse Properties, Inc. The
shareholders of Arthur/Busse Properties, Inc. and the limited
partners of the Busse Partnership are Jasper B. Sanfilippo, Marian
Sanfilippo (Mr. Sanfilippo's wife), Mathias A. Valentine, Mary
Valentine (Mr. Valentine's wife), Anne Karacic and Rose Laketa
(sisters of Mr. Sanfilippo), and Rosalie Sanfilippo
(Mr. Sanfilippo's mother).
LOAN ARRANGEMENTS
The Company made advances to Navarro Pecan Company, Inc.
("Navarro") during 1987 and 1988 aggregating $825,000 (the "Navarro
Advances"). Jasper B. Sanfilippo, a stockholder, director and
executive officer of the Company, also serves as a director and
officer of Navarro. In addition, Mr. Sanfilippo owns 33-1/3% of
the outstanding common stock of Navarro. The Navarro Advances
accrued 10% simple interest. On October 15, 1991, the Company
assigned all of its rights in the Navarro Advances to Mr.
Sanfilippo for a total purchase price of approximately $1.2
million, the aggregate amount of principal and accrued interest
outstanding under the Navarro Advances as of August 31, 1991. The
purchase price for the Navarro Advances was paid by Mr. Sanfilippo
pursuant to a promissory note made payable to the Company in the
original principal amount of approximately $1.2 million. The note
bore simple interest at the rate of 8% per annum and required Mr.
Sanfilippo to make quarterly principal installments of $50,000
(plus interest) which commenced on March 31, 1992 and on the last
day of each quarter thereafter, with a final payment on March 31,
1996. The note was paid off in full in 1996 in accordance with
its terms and, accordingly, at December 31, 1996 there were no
amounts outstanding thereunder. The largest amount outstanding
under the note (including accrued interest) during 1996 was
$360,956.
SUPPLIER, VENDOR, BROKER AND OTHER ARRANGEMENTS
During 1996, the Company purchased $531,736 of products and
services from Navarro, a processor of pecans, and sold
approximately $1.2 million of products and services to Navarro.
The Company anticipates that it will continue to make such
purchases from and sales to Navarro in 1997 and thereafter. Jasper
B. Sanfilippo, a stockholder, director and executive officer of the
Company, also serves as a director and officer of Navarro. In
addition, Mr. Sanfilippo owns 33-1/3% of the outstanding common
stock of Navarro. The remaining two-thirds of the outstanding
common stock of Navarro is owned by unaffiliated parties.
During 1996, the Company purchased approximately $5.0 million of
raw materials from an entity in respect of which Mr. Sanfilippo
serves as a director and owns 50% of the outstanding common stock.
During 1995, the Company purchased $442,213 of manufacturing
equipment (such as canning and packaging machinery) and engineering
services from JesCorp, Inc. ("JesCorp"). The Company anticipates
that it will continue to make such purchases of products and
services from JesCorp in 1997 and thereafter. James J. Sanfilippo
and John Sanfilippo are the stockholders, directors and officers of
JesCorp and are employees (James Sanfilippo is an executive
officer) and stockholders of the Company and sons of Jasper B.
Sanfilippo, a stockholder, director and executive officer of the
Company. Marian Sanfilippo, Jasper B. Sanfilippo's wife and a
beneficial owner of more than 5% of the Company's outstanding Class
A Stock, is also a director of JesCorp. During 1996, JesCorp
subleased from the Company approximately 10,981 square feet of
space at the Company's facilities and paid rent for this space at
the rate of $5,138 per month. JesCorp subleased additional space
beginning February, 1997. This brought the total space subleased
to JesCorp to approximately 17,481 square feet. JesCorp is paying
$8,198 of rent per month under the new arrangement. This amount
is equal to the amount paid by the Company in respect for such
space. JesCorp's lease will expire December 31, 2000.
During the year ended December 31, 1996, the Company paid brokerage
commissions of $90,332 to JR Carroll, Inc., a food brokerage firm
of which John Carroll, Jr. is the president. Mr. Carroll is the
son-in-law of Mathias A. Valentine, a stockholder, director and
executive officer of the Company. The Company anticipates that it
will continue to transact business with JR Carroll, Inc. in 1997
and thereafter. During 1996, Sunshine (the Company's wholly owned
subsidiary) purchased $136,695 of products from, and sold $5,570 of
products to, National Food Traders. National Food Traders is a
trading company of which John Carroll, Jr. is the President.
Gibson Specialty Corporation ("Gibson") subleases approximately
11,605 square feet of space from the Company. Gibson's rent is
equal to the amount paid by the Company in respect for such space.
Gibson is owned 60% by Jerome Evon, the son-in-law of Jasper B.
Sanfilippo. The remaining 40% of Gibson is owned by unaffiliated
parties. Gibson's lease will expire December 31, 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the year ended December 31, 1996, the Company sold
approximately $1.0 million of products and services to Mauna Loa
Macadamia Nut Corporation ("Mauna Loa"). Mauna Loa is a wholly-
owned subsidiary of C. Brewer and Company, Limited ("C. Brewer")
and C. Brewer, in turn, is a wholly-owned subsidiary of Buyco, Inc.
("Buyco"). John W. A. Buyers, a stockholder and director of the
Company, is a stockholder, director and executive officer of Buyco,
an executive officer and director of C. Brewer and a director of
Mauna Loa. All such transactions have been and will continue to be
on terms which the Company believes to be at least as favorable to
the Company as could be obtained from unaffiliated parties.
RATIFY APPOINTMENT OF PRICE WATERHOUSE LLP
AS INDEPENDENT ACCOUNTANTS
The stockholders will be asked to ratify the appointment of the
firm of Price Waterhouse LLP as the Company's independent
accountants for 1997. This appointment was made by the Board of
Directors on recommendation of its Audit Committee.
Price Waterhouse LLP served as independent accountants for 1996 and
has acted as accountants for the Company since 1982.
Representatives of Price Waterhouse LLP are expected to be present
at the Annual Meeting with the opportunity to make a statement if
they desire to do so and are expected to be available to respond to
appropriate questions.
The Board of Directors recommends a vote "FOR" ratification of the
appointment of Price Waterhouse LLP as independent accountants for
1997.
The affirmative vote of the holders of shares representing a
majority of the votes entitled to be cast by the holders of shares
present and entitled to vote at the meeting is required for
ratification of this item. No determination has been made as to
what action the Board of Directors would take if the appointment is
not ratified.
ANNUAL REPORT
The Company's annual report for the year ended December 31, 1996
has been included in the mailing of this Proxy Statement.
Stockholders are referred to the report for financial and other
information about the Company, but such report is not incorporated
in this Proxy Statement and is not to be deemed a part of the proxy
soliciting material.
STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
Any stockholder proposal to be considered for inclusion in the
proxy materials for the Company's 1998 annual meeting of
stockholders must be received at the principal executive offices of
the Company no later than November 29, 1997 and must otherwise
comply with the requirements of Rule 14a-8 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
PROXY SOLICITATION
Proxies will be solicited by mail. Proxies may also be solicited
by directors, officers and a small number of regular employees of
the Company personally or by mail, telephone or telegraph, but such
persons will not be specially compensated for such services.
Brokerage houses, custodians, nominees and fiduciaries will be
requested to forward the soliciting material to the beneficial
owners of stock held of record by such persons, and the Company
will reimburse them for their expenses in doing so. The entire
cost of the preparation and mailing of this Proxy Statement and
accompanying materials and the related proxy solicitation will be
borne by the Company.
OTHER MATTERS
Management does not intend to present, and does not have any reason
to believe that others will present, any item of business at the
Annual Meeting other than those specifically set forth in the
notice of the Annual Meeting. However, if other matters are
properly presented for a vote, the proxies will be voted for such
matters in accordance with the judgment of the persons acting under
the proxies.
By Order of the Board of Directors
/s/ Michael J. Valentine
------------------------
MICHAEL J. VALENTINE
Secretary
Elk Grove Village, Illinois
March 26, 1997
APPENDIX A - CLASS A COMMON STOCK PROXY CARD
- - - - Please mark your Nominees: Jasper B. Sanfilippo
|X X | votes as in this Mathias A. Valentine
| X | example Michael J. Valentine
|X X | John C. Taylor
- - - - J. William Petty
FOR WITHHELD
1. Election of Directors by ----- -----
holders of Class A | | | |
Common Stock | | | |
----- -----
For, except vote withheld from the following nominee(s):
______________________________
2. Approval of Appointment of Accountants.
FOR AGAINST ABSTAIN
----- ----- -----
| | | | | |
| | | | | |
----- ----- -----
3. Approval of such matters as may properly come before the
meeting: In their discretion, the proxies are authorized to vote on
such other matters as may properly come before the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE DEEMED TO CONSTITUTE
DIRECTION TO VOTE "FOR" EACH OF THE ABOVE PROPOSALS.
Please mark, sign, date and return the proxy card using the enclosed
envelope.
SIGNATURE(S)__________________________ DATE __________
NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee,
guardian, corporate officer or partner please give full title as such.
If a corporation, please sign in corporate name by President or other
authorized officer. If a partnership, please sign in partnership name
by authorized person.
APPENDIX B - COMMON STOCK PROXY CARD
- - - - Please mark your Nominees: William D. Fischer
|X X | votes as in this John W.A. Buyers
| X | example
|X X |
- - - -
FOR WITHHELD
1. Election of Directors ----- -----
| | | |
| | | |
----- -----
For, except vote withheld from the following nominee(s):
_____________________________
2. Approval of Appointment of Accountants.
Approval of appointment of
Price Waterhouse LLP FOR AGAINST ABSTAIN
as independant auditors
for 1997. ----- ----- -----
| | | | | |
| | | | | |
----- ----- -----
3. UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING:
In their discretion, the proxies are authorized to vote on
such other matters as may properly come before the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE DEEMED TO CONSTITUTE
DIRECTION TO VOTE "FOR" EACH OF THE ABOVE PROPOSALS.
SIGNATURE(S)__________________________ DATE __________
NOTE: Please sign exactly as name appears on this Proxy. When shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, guardian, corporate officer or partner,
please give full title as such. If a corporation, please sign in
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
