<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 (S)240.14a-11(c) or (S)240.14a-12
Opta Food Ingredients, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Opta Food Ingredients, Inc.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(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:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[_] 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.:
________________________________________________________________________
(3) Filing Party:
________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
<PAGE>
OPTA FOOD INGREDIENTS, INC.
25 WIGGINS AVENUE
BEDFORD, MA 01730
(781) 276-5100
FAX: (781) 276-5101
April 17, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
of Opta Food Ingredients, Inc. (the "Company") to be held on Tuesday, May 19,
1998, at 9:30 a.m. at the offices of the Company, 25 Wiggins Avenue, Bedford,
Massachusetts.
This year, in addition to the election of seven Directors and approval of
the Company's independent accountants, stockholders are being asked to approve
an amendment to the Company's 1992 Employee, Director and Consultant Stock
Option Plan, increasing by 250,000 the number of shares of common stock
reserved for the grant of stock options under that plan. The Board of
Directors recommends the approval of each of these proposals. Such other
business will be transacted as may properly come before the Annual Meeting.
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement describe the matters that will be presented at the Annual Meeting.
Regardless of the number of shares of Common Stock you may own, your votes
are important. YOU ARE URGED TO VOTE, SIGN, DATE AND MAIL THE ENCLOSED PROXY
CARD PROMPTLY, in accordance with the instructions set forth on the card,
whether or not you plan to attend the Annual Meeting in person. This will
ensure your proper representation at the Annual Meeting.
Thank you for giving these materials your careful consideration.
Sincerely,
LEWIS C. PAINE, III
Chairman of the Board,
Chief Executive Officer and
President
<PAGE>
OPTA FOOD INGREDIENTS, INC.
25 WIGGINS AVENUE
BEDFORD, MA 01730
(781) 276-5100
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 19, 1998
TO THE STOCKHOLDERS OF OPTA FOOD INGREDIENTS, INC.:
Notice is hereby given that the 1998 Annual Meeting of Stockholders of Opta
Food Ingredients, Inc. (the "Company") will be held on Tuesday, May 19, 1998,
at 9:30 a.m. at the offices of the Company at 25 Wiggins Avenue, Bedford,
Massachusetts, to consider and act upon:
(1) The election of seven (7) members of the Board of Directors to serve
until the next Annual Meeting of Stockholders and until their successors
are elected and take office;
(2) The approval of an amendment to the Company's 1992 Employee, Director
and Consultant Stock Option Plan, increasing by 250,000 the aggregate
number of shares of the Common Stock reserved for the grant of stock
options under the plan;
(3) The approval of the appointment by the Board of Directors of Price
Waterhouse LLP as the Company"s independent accountants for the fiscal year
ending December 31, 1998; and
(4) Such other business as may properly come before the Annual Meeting or
any adjournments thereof.
Reference is hereby made to the accompanying Proxy Statement for more
complete information concerning the matters to be acted upon at the Annual
Meeting.
The Board of Directors has fixed the close of business on March 25, 1998 as
the Record Date (the "Record Date") for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. All stockholders are invited to attend the Annual Meeting in person.
HOLDERS OF RECORD OF COMMON STOCK AS OF THE RECORD DATE ARE URGED TO VOTE,
SIGN, DATE AND RETURN THEIR PROXIES IN THE ENCLOSED RETURN ADDRESSED ENVELOPE.
NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES. HOLDERS OF RECORD
OF THE COMMON STOCK AS OF THE RECORD DATE WHO DO ATTEND THE MEETING AND WISH
TO VOTE IN PERSON MAY REVOKE THEIR PROXIES.
By Order of the Board of Directors
JEFFREY M. WIESEN
Secretary
Bedford, Massachusetts
April 17, 1998
<PAGE>
OPTA FOOD INGREDIENTS, INC.
25 WIGGINS AVENUE
BEDFORD, MA 01730
(781) 276-5100
PROXY STATEMENT
FOR THE 1998 ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 19, 1998
GENERAL INFORMATION
This Proxy Statement, with the enclosed proxy card, is being furnished to
stockholders of Opta Food Ingredients, Inc., a Delaware corporation ("Opta" or
the "Company"), in connection with the solicitation by the Company's Board of
Directors (the "Board") of proxies to be voted at the Company's 1998 Annual
Meeting of Stockholders to be held on May 19, 1998 at 9:30 a.m. at the
Company's offices at 25 Wiggins Avenue, Bedford, Massachusetts, and at any
adjournments thereof (the "Meeting").
When the proxy card of a stockholder is duly executed and returned, the
shares represented thereby will be voted in accordance with the voting
instructions given on the proxy by the stockholder. If no such voting
instructions are given on a proxy card with respect to one or more proposals,
the shares represented by that proxy card will be voted, in the election of
Directors, for the nominees named herein, and with respect to other proposals,
in accordance with the recommendations of the Board. Stockholders may revoke
their proxies at any time prior to any vote at the Meeting by written notice
of revocation to the Secretary of the Company at or before the Meeting, by
submission of a duly executed proxy card bearing a later date, or by voting in
person by ballot at the Meeting. The presence, in person or by proxy, of the
holders of a majority of the Company's Common Stock, $.01 par value per share
(the "Common Stock"), entitled to vote at the Meeting, is necessary to
constitute a quorum at the Meeting. As to each matter submitted to a vote of
stockholders, except as provided for under the Company's By-Laws, under
Delaware law, with respect to tabulation of the proxies, abstentions are
treated as votes against a proposal and broker non-votes have no effect on the
vote. Pursuant to the Restated By-Laws, the Directors are elected by a
plurality of the votes cast at the Meeting. The vote required to approve each
proposal is set out at the end of that proposal. No appraisal rights exist for
any action proposed to be taken at the Meeting.
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company.
Proxies may be solicited by Directors, officers, or regular employees of the
Company by mail, by telephone, in person, or otherwise. No such person will
receive additional compensation for such solicitation. In addition, the
Company will request banks, brokers, and other custodians, nominees, and
fiduciaries to forward proxy material to the beneficial owners of Common Stock
and to obtain voting instructions from such beneficial owners. The Company
will reimburse such firms for their reasonable expenses in forwarding proxy
materials and obtaining voting instructions.
This Proxy Statement and the enclosed proxy card are first being mailed or
otherwise furnished to all stockholders of the Company entitled to notice of
and to vote at the Meeting on or about April 17, 1998. The Annual Report to
Stockholders for the fiscal year ended December 31, 1997 is being mailed to
the stockholders with this Proxy Statement, but does not constitute a part
hereof.
<PAGE>
VOTING SECURITIES
Holders of Common Stock of record on the books of the Company at the close
of business on March 25, 1998 (the "Record Date") are entitled to notice of
and to vote at the Meeting. At March 25, 1998, there were 11,079,833 shares of
Common Stock issued and outstanding, each of which entitles the holder to one
vote on each matter submitted to a vote at the Meeting.
PROPOSAL 1:
ELECTION OF DIRECTORS
INFORMATION CONCERNING THE NOMINEES FOR DIRECTOR
The Restated By-Laws of the Company provide for a Board consisting of such
number of Directors as shall be fixed from time to time by the Board. The
Board has fixed the number of Directors for the ensuing year at seven, and
seven Directors are to be elected at the Meeting. Pursuant to the Restated By-
Laws, the Directors are elected by a plurality of the votes cast at the
Meeting. Unless otherwise specified, the enclosed proxy will be voted in favor
of the election of the nominees named below, all of whom are now Directors of
the Company. In the event that a vacancy occurs during the year, such vacancy
may be filled by the Board for the remainder of such Director's full term. All
nominees will be elected to serve until the next Annual Meeting of
Stockholders and until their successors are duly elected and qualified, or
until their earlier death, resignation or removal from office. In the event
any of these nominees shall be unable to serve as a Director, the shares
represented by the proxy will be voted at the Meeting for the person, if any,
who is designated by the Board to replace the nominee. Each of the nominees
has consented to be nominated and to serve if elected.
The table below sets forth certain information with respect to the nominees
for election to the Board of Directors.
<TABLE>
<CAPTION>
YEAR FIRST
BECAME PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND
NAME AGE DIRECTOR OTHER BUSINESS AFFILIATIONS
- ---- --- ---------- ---------------------------------------------
<S> <C> <C> <C>
A. S. Clausi............. 75 1991 A consultant in the food industry since July
1987. Served at General Foods Corporation from
December 1946 to July 1987, most recently as
Senior Vice President and Chief Research
Officer. Chairman of the Food Research
Directors' Roundtable and Chairman of the Monell
Institute Nutrition Advisory Board. President of
the Institute of Food Technologists in 1993 and
1994 and Chairman of the Institute of Food
Technologists Foundation. A member of the
Company's Scientific Advisory Board since 1991.
Anthony B. Evnin, Ph.D... 57 1991 A general partner since 1975 of Venrock
Associates, a venture capital firm that is an
investor in the Company. Also a Director of AXYS
Pharmaceuticals Inc., Centocor, Inc., Ribozyme
Pharmaceuticals, Inc. and Triangle
Pharmaceuticals, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
BECAME PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND
NAME AGE DIRECTOR OTHER BUSINESS AFFILIATIONS
- ---- --- ---------- ---------------------------------------------
<S> <C> <C> <C>
Harry Fields(2)......... 74 1991 President of Fields Associates Ltd., a
consulting firm, since April 1990. Served at
International Flavors & Fragrances, Inc. ("IFF")
from 1948 to April 1990, most recently as
President of IFF and as a member of the Board of
Directors.
Glynn C. Morris(1),(2).. 57 1993 Retired. Former President and Chief Operating
Officer of Presto Food Products, Inc. from 1989
to 1996. From 1973 to 1989, with Carnation
Company in various positions, most recently as
Vice President/General Manager of the Specialty
Foods Division.
Charles W. Newhall, III. 53 1991 A general partner since 1978 of NEA Partners IV
Limited Partnership, the general partner of New
Enterprise Associates IV, Limited Partnership, a
venture capital partnership that is an investor
in the Company. Also a Director of HEALTHSOUTH
Corporation, Integrated Health Services, Inc.,
and Med Partners, Inc.
Lewis C. Paine, III..... 45 1992 Chairman of the Board of the Company since June
1993; Chief Executive Officer of the Company
since December 1992; President of the Company
since May 1991. President of the Food
Ingredients Division of Enzytech, Inc.
(predecessor to the Company) from October 1990
to May 1991. From 1974 to 1990, with Carnation
Company and its parent company, Nestle, S.A.,
most recently as Vice President Marketing and
New Business Development for the Refrigerated
Products Division from December 1987 to October
1990.
Frederic Stevenin....... 31 1997 A Vice President of Paribas Affaires
Industrielles since 1993. From 1989 to 1993,
served with Banque Paribas within the mergers
and acquisitions group. Also a Director of
Diana, Soprat, Naidul and Eurogerm.
</TABLE>
- --------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
3
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the year ended December 31, 1997, the Board held six meetings. Each
of the Directors attended at least 75% of the Board meetings and meetings of
committees of the Board of which he was a member. In addition, from time to
time, the members of the Board of Directors and its committees may act by
unanimous written consent pursuant to Delaware law.
The Audit Committee, which consists of Harry Fields and Glynn C. Morris, met
twice during 1997 to review with the Company's independent accountants the
scope of the annual audit, to discuss the adequacy of internal accounting
controls and procedures, and to perform general oversight with respect to the
accounting principles applied in the financial reporting of the Company.
During the year ended December 31, 1997, the Compensation Committee
consisted of Anthony B. Evnin and Glynn C. Morris. The Compensation
Committee's functions are to recommend to the full Board the amount,
character, and method of payment of compensation of all executive officers and
certain other key employees and consultants of the Company and to administer
the Company's stock option and stock purchase plans. The Compensation
Committee held three meetings during 1997.
The Audit Committee and Compensation Committee are the only standing
committees of the Board. The Company does not have a standing Nominating
Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 1997, the Compensation Committee
consisted of Anthony B. Evnin and Glynn C. Morris. Neither of them is or has
been an employee of the Company. No executive officer of the Company serves as
a member of the Board of Directors or compensation committee of any entity
that has one or more executive officers serving as a member of the Company's
Board of Directors or Compensation Committee.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE NOMINEES TO THE BOARD OF DIRECTORS. A PLURALITY OF THE VOTES
CAST IN PERSON OR BY PROXY AT THE MEETING IS REQUIRED TO ELECT EACH NOMINEE AS
A DIRECTOR.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership of
the Company's Common Stock as of March 25, 1998, by (i) each person known to
the Company to be the beneficial owner of more than 5% of the Company's Common
Stock, (ii) each Director of the Company, (iii) each executive officer named in
the Summary Compensation Table below, and (iv) all Directors and executive
officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
NAME AND ADDRESS** BENEFICIALLY OWNED(1) OF TOTAL (1)
------------------ --------------------- ------------
<S> <C> <C>
Nouvelle Holding Guyomarc'h S.A.(2)......... 1,390,574 12.55%
14 Rue Lafayette 75009
Paris, France 48 01 98 50
David A. Rocker(3).......................... 1,082,550 9.77%
Suite 1759
45 Rockefeller Plaza
New York, NY 10111
State of Wisconsin Investment Board(4)...... 1,040,000 9.39%
P.O. Box 7842
Madison, WI 53707
Crown Advisors, Ltd.(5)..................... 921,600 8.32%
67 East Park Place, 8th Floor
Morristown, NJ 07960
Dimensional Fund Advisors, Inc.(6).......... 781,000 7.05%
1129 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
New Enterprise Associates IV, Limited Part-
nership(7)................................. 577,500 5.21%
1119 Saint Paul Street
Baltimore, MD 21202
Robertson Stephens Investment Management
Co.(8)..................................... 571,100 5.15%
555 California Street
Suite 2600
San Francisco, CA 94104
A. S. Clausi(9)............................. 33,944 *
Anthony B. Evnin, Ph.D.(10)................. 329,426 2.97%
Harry Fields(11)............................ 23,333 *
Glynn C. Morris(12)......................... 5,000 *
Charles W. Newhall, III(13)................. 604,309 5.45%
Lewis C. Paine, III(14)..................... 192,246 1.74%
Frederic Stevenin(15)....................... 1,391,074 12.56%
Arthur J. McEvily, Ph.D.(16)................ 75,736 *
Joel A. Stone(17)........................... 64,039 *
Scott A. Kumf(18)........................... 10,000 *
All Directors and executive officers as a
group (10 persons)(19)..................... 2,729,107 24.63%
</TABLE>
5
<PAGE>
- --------
* Represents beneficial ownership of less than 1% of the Company's
outstanding Common Stock.
** Address provided for beneficial owners of 5% or more of the Company's
outstanding Common Stock only.
(1) Beneficial ownership of shares for purposes hereof, as determined in
accordance with applicable Securities and Exchange Commission rules,
includes shares as to which a person has or shares voting power and/or
investment power. The persons or entities named in the above table have
sole voting and investment power with respect to all shares shown to be
beneficially owned by them, except as otherwise noted. The percentage of
beneficial ownership of Common Stock of each stockholder named in the
above table is based upon the 11,079,833 shares of Common Stock issued
and outstanding at March 25, 1998, and is calculated by treating any
options held by such person and exercisable within 60 days after March
25, 1998 as having been exercised for Common Stock, but without deeming
such options to have been exercised for purposes of computing beneficial
ownership of Common Stock of any other stockholder. Beneficial ownership
of Common Stock by all Directors and executive officers as a group
assumes such exercises of options by the members of such group, but not
by others.
(2) Based solely upon information reported on Schedule 13D as filed with the
Securities and Exchange Commission on January 29, 1997 on behalf of
Nouvelle Holding Guyomarc'h S.A. ("Nouvelle") and Compagnie Financiere de
Paribas ("Paribas"). Includes 1,390,574 shares held of record by
Nouvelle. As the holder of approximately 95% of the capital stock of
Nouvelle, Paribas may be deemed to have sole voting and dispositive power
over such shares held of record by Nouvelle. Paribas disclaims beneficial
ownership of such shares.
(3) Includes 1,082,550 shares over which Rocker Partners, L.P. exercises
investment discretion as reported on Schedule 13F as filed with the
Securities and Exchange Commission.
(4) Based solely upon information reported on Schedule 13G as filed with the
Securities and Exchange Commission on January 22, 1998.
(5) Based solely upon information reported on Schedule 13G as filed with the
Securities and Exchange Commission on March 4, 1998.
(6) Based solely upon information reported on Schedule 13G as filed with the
Securities and Exchange Commission on February 10, 1998 on behalf of
Dimensional Fund Advisors Inc. ("DFA") an investment advisor registered
under the Investment Advisors Act of 1940 (the "Investment Advisors
Act"). DFA exercises sole voting power with respect to 505,500 of such
shares and sole dispositive power with respect to 781,000 shares, and may
be deemed to be the beneficial owner of all such shares. Persons who are
officers of DFA also serve as officers of DFA Investment Trust Company
(the "Trust"), each an open-end management investment company registered
under the Investment Advisors Act. In their capacity as officers of the
Fund and the Trust, these persons vote 94,900 of such shares held by the
Fund and 180,600 shares held by the Trust.
(7) Includes 105,000 shares held of record by New Enterprise Associates IV,
Limited Partnership and 472,500 shares held of record by New Enterprise
Associates VI, Limited Partnership. NEA Partners VI, Limited Partnership,
NEA Partners IV, Limited Partnership, Frank A. Bonsal, Jr., C. Richard
Kramlich, Arthur J. Marks, Thomas C. McConnell, Charles W. Newhall, III,
and Nancy L. Dorman may be deemed to have shared voting and dispositive
power over such shares. Messrs. Bonsal, Kramlich, Marks, McConnell,
Newhall and Ms. Dorman disclaim beneficial ownership of such shares.
6
<PAGE>
(8) Based solely upon information reported on Schedule 13D as filed with the
Securities and Exchange Commission on October 14, 1997. Includes 571,100
shares held by The Robertson Stephens Orphan Fund of which Bayview
Investors, Ltd. and Robertson Stephens & Company Investment Management,
L.P. are general partners, The Robertson Stephens Orphan Offshore Fund,
L.P. of which Robertson, Stephens & Company Investment Management, L.P.
is the general partner, The Robertson Stephens MicroCap Growth Fund and
the Robertson Stephens Global Low-Priced Stock Fund of which Robertson,
Stephens & Company Investment Management. L.P. is the investment advisor
and client accounts of Robertson, Stephens & Company Investment
Management, L.P. which may be deemed to have shared voting and
dispositive power over such shares.
(9) Includes 23,944 shares which Mr. Clausi may acquire upon the exercise of
options within 60 days after March 25, 1998.
(10) Includes 15,000 shares which Dr. Evnin may acquire upon the exercise of
options within 60 days after March 25, 1998. Also includes 207,163 shares
held by Venrock Associates and 92,882 shares held by Venrock Associates
II, L.P. Dr. Evnin is a general partner of Venrock Associates and Venrock
Associates II, L.P. and may be deemed to have shared voting and
dispositive power over such shares, but disclaims beneficial ownership of
such shares.
(11) Includes 16,666 shares which Mr. Fields may acquire upon the exercise of
options within 60 days after March 25, 1998.
(12) Represents shares which Mr. Morris may acquire upon the exercise of
options within 60 days after March 25, 1998.
(13) Includes 15,000 shares which Mr. Newhall may acquire upon the exercise of
options within 60 days after March 25, 1998. Also includes 577,500 shares
held of record by New Enterprise Associates IV, Limited Partnership and
New Enterprise Associates VI, Limited Partnership. See Note 7 above.
(14) Includes 87,000 shares which Mr. Paine may acquire upon the exercise of
options within 60 days after March 25, 1998.
(15) Includes 500 shares which Mr. Stevenin may acquire upon the exercise of
options within 60 days after March 25, 1998. Also includes 1,386,674
shares held of record by Nouvelle. See Note 2 above. Mr. Stevenin is an
officer of Paribas Affaires Industrielles ("PAI"), and may be deemed to
be an indirect beneficial owner of such shares owned by Nouvelle because
PAI and Nouvelle are each primarily owned by Paribas. Mr. Stevenin
disclaims beneficial ownership of such shares.
(16) Includes 73,500 shares which Dr. McEvily may acquire upon the exercise of
options within 60 days after March 25, 1998.
(17) Includes 32,000 shares which Mr. Stone may acquire upon the exercise of
options within 60 days after March 25, 1998.
(18) Represents shares which Mr. Kumf may acquire upon the exercise of options
within 60 days after March 25, 1998.
(19) Includes an aggregate of 278,610 shares which may be acquired upon the
exercise of options within 60 days after March 25, 1998.
7
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
Executive officers of the Company are elected by the Board of Directors on
an annual basis and serve at the discretion of the Board of Directors. The
following table (the "Summary Compensation Table") sets forth a summary of the
compensation paid by the Company during its 1995, 1996 and 1997 fiscal years
to each of (i) its Chief Executive Officer (the "CEO") and (ii) persons who
were serving as executive officers of the Company (other than the CEO) as of
December 31, 1997 whose total annual salary and bonus exceeded $100,000 for
the fiscal year ended December 31, 1997.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------- ------------ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- --------------------------- ---- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Lewis C. Paine, III 1997 $ 207,000 -0- 40,000 $20,000(1)
Chairman of the Board, 1996 $ 190,000 -0- 100,000 $56,893(2)
President and Chief 1995 $ 162,000 $ 40,000 -0- $83,708(3)
Executive Officer
Arthur J. McEvily, Ph.D. 1997 $ 140,000 $ 10,000 37,500 -0-
Senior Vice President, 1996 $ 125,000 -0- 20,000 -0-
Commercial Development 1995 $ 110,000 -0- -0- -0-
Joel A. Stone 1997 $ 125,000 -0- 15,000 -0-
Vice President, 1996 $ 112,000 $ 10,000 20,000 -0-
Operations 1995 $ 105,000 -0- -0- -0-
Scott A. Kumf 1997 $ 125,000 $ 20,000 -0- -0-
Chief Financial Officer, 1996 $ 46,475(4) -0- 50,000 -0-
Vice President,
Administration and
Treasurer
</TABLE>
- --------
(1) Represents forgiveness of a non-interest bearing note dated January 8,
1993 ("the Note").
(2) Includes $21,268 representing loan interest and principal forgiven on the
note during 1996 and $35,625 paid in connection with reimbursement of
certain relocation costs.
(3) Includes $41,858 representing loan interest and principal forgiven on the
note during 1995 and $41,850 paid in connection with reimbursement of
certain relocation costs.
(4) Represents 1996 compensation from August 12, 1996, which was Mr. Kumf's
date of hire.
8
<PAGE>
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth information concerning stock options granted
during the fiscal year ended December 31, 1997 to the officers named in the
Summary Compensation Table.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (2)
OPTIONS EMPLOYEES PRICE PER EXPIRATION ---------------------
NAME GRANTED (1) IN FISCAL YEAR SHARE DATE 5% 10%
---- ----------- -------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lewis C. Paine, III..... 40,000 19.6% $5.53 2/7/07 $157,517 $381,844
Arthur J. McEvily,
Ph.D................... 25,000 12.3% $5.53 2/7/07 $ 98,448 $238,844
12,500 6.1% $6.50 7/18/07 $ 41,554 $114,295
Joel A. Stone........... 15,000 7.4% $5.53 2/7/07 $ 59,068 $143,191
</TABLE>
- --------
(1) These options are non-qualified or incentive stock options granted under
the Company's 1992 Employee, Director and Consultant Stock Option Plan
with an exercise price equal to the fair market value per share at the
date of grant, for a term of ten (10) years, vesting in annual
installments over five (5) years from the date of grant.
(2) The potential realizable values that would exist for the respective
options are based on assumed rates of annual compound stock price
appreciation of 5% and 10% from the date of grant over the full term of
the option. Actual gains, if any, on stock options, exercises and Common
Stock holdings are dependent on the future performance of the Common
Stock.
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning the number of
unexercised options held by such persons at the end of the last fiscal year
and the value of such unexercised options as of such date. None of the people
named in the Summary Compensation Table exercised any options during the last
fiscal year.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTION EXERCISES OPTIONS AT FISCAL YEAR END AT FY-END (1)
-------------------- ------------------------------ -------------------------
SHARES
ACQUIRED VALUE
NAME ON EXERCISE RECEIVED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ------------ -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lewis C. Paine, III..... -0- $ -0- 67,000 153,000 $ 6,000 $10,300
Arthur J. McEvily,
Ph.D................... -0- $ -0- 61,606 73,394 $81,864 $ 7,000
Joel A. Stone........... -0- $ -0- 28,000 42,000 $ 2,000 $ 3,800
Scott A. Kumf........... -0- $ -0- -0- 50,000 $ -0- $ -0-
</TABLE>
- --------
(1) Value is calculated by determining the difference between the average of
the high and low sales prices for the Company's Common Stock on the Nasdaq
National Market System on December 31, 1997 ($5.75) and the exercise price
of the option.
9
<PAGE>
TEN YEAR OPTION REPRICING
The following table provides information related to the repricing of certain
options held by executive officers of the Company which occurred during the
fiscal year ended December 31, 1997:
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES TERM
UNDERLYING MARKET PRICE OF EXERCISE PRICE REMAINING
OPTIONS STOCK AT TIME AT TIME OF NEW AT DATE OF
REPRICED OR OF REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED AMENDMENT($) AMENDMENT($) PRICE($) AMENDMENT
---- ------- ----------- --------------- -------------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Lewis C. Paine, III.... 5/20/97 100,000 $5.38 $11.00 $6.00 8 years 289 days
Chairman of the Board,
President and Chief
Executive Officer
Arthur J. McEvily,
Ph.D. ................ 5/20/97 20,000 $5.38 $11.00 $6.00 8 years 289 days
Senior Vice President,
Commercial Development
Joel A. Stone.......... 5/20/97 20,000 $5.38 $11.00 $6.00 8 years 289 days
Vice President,
Operations
Scott A. Kumf.......... 5/20/97 50,000 $5.38 $9.00 $6.00 9 years 85 days
Chief Financial Offi-
cer, Vice President,
Administration and
Treasurer
</TABLE>
COMPENSATION OF DIRECTORS
The Company's independent Directors, who are neither affiliated with a major
shareholder nor parties to consulting arrangements with the Company, each
receive a fee of $1,000 for each Board meeting attended. Mr. Clausi has a
consulting agreement with the Company pursuant to which he receives $10,000
per annum, plus $1,000 per day for meetings attended in excess of 10 days per
year.
In addition, the Company has a stock option program for Directors under its
1992 Employee, Director and Consultant Stock Option Plan pursuant to which, on
March 31 of each year, each non-employee Director then in office receives
options to purchase 2,500 shares of Common Stock at the then fair market value
thereof. Such options vest in equal annual installments over a five-year
period based on continued service on the Board of Directors. Options to
purchase 2,500 shares were granted under this program during fiscal 1997 to
Mr. Clausi, Dr. Evnin, and Messrs. Fields, Morris, Newhall and Stevenin.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company's employment agreement with Lewis C. Paine, III pursuant to
which Mr. Paine has agreed to serve as President and Chief Executive Officer
of the Company has been extended at an annual base salary of $220,000 plus an
annual performance bonus at the discretion of the Board of Directors through
December 31, 1998. The Company's agreement with Mr. Paine may be terminated by
the Company at any time for cause. In the event Mr. Paine voluntarily
terminates his employment, or if such employment is terminated as a result of
Mr. Paine's death or permanent disability, or the Company terminates the
employment of Mr. Paine without cause, or Mr. Paine's employment by the
Company is not extended beyond December 31, 1998 for any reason, the Company
has agreed to pay Mr. Paine severance for 15 months in an amount equal to his
annual base salary payable in equal monthly installments.
10
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION(1)
The Compensation Committee of the Board of Directors (the "Committee") is
composed entirely of outside, non-employee Directors. During the year ended
December 31, 1997 the members of the Compensation Committee were Anthony B.
Evnin and Glynn C. Morris. The Committee determines the base salaries of the
Company's executive officers and the amount of annual bonus awards, if any,
and other compensation to be paid to the Company's executive officers. In
addition, the Committee administers the Company's 1992 Employee, Director and
Consultant Stock Option Plan (the "Option Plan") under which incentive or non-
qualified stock options may be granted to executive officers and other
employees.
COMPENSATION POLICIES APPLICABLE TO EXECUTIVE OFFICERS; COMPONENTS OF
COMPENSATION
The Committee's executive compensation policies have as their cornerstone
the fundamental purpose of enabling the Company to attract and retain key
executive personnel and motivate those executives to achieve the Company's
goals. The food ingredients industry and related industries such as the
consumer food products industry are extremely competitive with respect to
recruitment and retention of qualified personnel. In this environment, the
Committee believes that it will be critical to the Company's long-term success
that its compensation program appropriately balances competitive compensation
features with components structured to motivate the diligent pursuit and
accomplishment of Company objectives.
Each executive officer's compensation package is reviewed annually and is
comprised of up to three components: base salary, incentive cash bonus and
stock options. In addition to these components, executive officers of the
Company are eligible to participate in employee benefit programs available
broadly to other Company employees. Executive compensation is determined based
on progress toward both Company-wide goals and individual goals. Starting with
the Company's broad strategic goals, including introducing new products,
increasing revenue and gross margins and becoming a profitable enterprise, the
Committee reviews specific annual corporate objectives and goals. Personal
objectives and milestones for individual executives are then designed to fit
within the framework of the Company's overall goals and objectives. Subjective
factors, such as changes in business conditions and other relevant external
circumstances, are also taken into consideration. The Company believes the
nature of its specific goals and milestones and progress toward their
achievement constitute proprietary and confidential information, disclosure of
which would place the Company at a competitive disadvantage.
BASE SALARY
In setting the annual base salary levels for each executive officer, the
Committee obtains information on the base salaries of executive officers in
other food ingredient and consumer food product companies. Members of the
Committee also have considered knowledge about salaries paid to executives in
companies that are in relatively early stages of commercialization of novel
products resulting from internal research and development efforts. In
determining which companies to include in its comparison, the Committee
considers the size and complexity of the company, the stage of development of
its products and geographical location. Within this group, the Committee seeks
to make comparisons to executive officers with comparable levels of
experience,
- --------
(1) The report of the Compensation Committee of the Board of Directors shall
not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934,
except to the extent that the Company specifically incorporates this
report by reference.
11
<PAGE>
and with similar responsibilities and expected levels of contribution to the
Company's performance. The Committee seeks to set base salaries and annual
cash bonuses at the midpoint of the range of compensation paid by comparable
companies. In addition, the initial level of compensation paid to those
executives hired more recently has been determined by market forces and is
consistent with industry practice, if any.
BONUS AWARDS
The Company has an annual incentive bonus plan for its executives. Annual
cash bonuses are based on the Company achieving certain corporate financial
goals and each executive officer achieving their individual performance
objectives. As noted above, the Company's annual planning effort includes the
establishment of Company-wide objectives into which individual objectives and
milestones are structured for key executives, relevant to their specific areas
of corporate responsibility. The Committee, in conjunction with the Chief
Executive Officer, reviews proposed milestones and objectives for each key
executive early in the fiscal year and performs a follow-up review after the
fiscal year-end to assess performance and achievement of the objectives. A
review of the executive's performance in relation to such objectives, in the
context of the Company's overall performance and the Committee's assessment of
the executive's contributions to overall corporate results, leads to the
Committee's determination of an incentive bonus.
STOCK OPTIONS
Subject to the provisions of the Option Plan, the Committee has the
authority to determine the terms under which options are granted and the
individuals to whom such options may be granted. The Committee believes that
equity participation is a key component of the Company's executive
compensation program. The stock option program is the Company's major long-
term incentive plan, designed to retain executive officers and other employees
and motivate them to enhance shareholder value by aligning the long-term
interests of the Company's employees with those of its outside shareholders.
The Committee believes that stock options provide an effective long-term
incentive for executive officers and other employees to create shareholder
value, since the full benefit of the options cannot be realized unless an
appreciation in the price of the Company's Common Stock occurs over a number
of years. The executive officers participate in the Option Plan in the same
manner as all of the Company's employees. Initial stock option awards are
individually determined prior to employment at levels based upon an employee's
potential contribution to the Company's growth and are designed to be
competitive with awards by other companies within the consumer food products
and food ingredients industries. Subsequent annual stock option awards are
based on individual performance and position within the Company. The Committee
also takes into account the aggregate amount of stock options previously
granted to an individual. All of the Company's current executive officers
listed in the summary compensation table were awarded stock options in 1997
which had exercise prices equal to the fair market value of the Company's
Common Stock on the date of grant.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Paine's employment agreement with the Company was amended in November
1997 and established his base salary at $220,000 for the period January 1,
1998 through December 31, 1998. The amendment also provided for the
forgiveness of $20,000 in January 1998 which was the final installment of a
$100,000 bridge loan to be forgiven in five equal annual installments
beginning in 1994. These benefits have been structured to accrue over time,
thereby serving the Company's goal of retention of Mr. Paine's services.
12
<PAGE>
The employment agreement also provided for the grant of a non-qualified
stock option for 45,000 shares of Common Stock, vesting at the rate of 20%
each year commencing with the first anniversary of the option grant. The
employment agreement also provided for a cash bonus upon the attainment of
mutually agreed upon performance goals. Mr. Paine did not receive a cash bonus
for fiscal 1997.
Overall, Mr. Paine's employment agreement has been designed to align Mr.
Paine's interests with those of the Company's Stockholders, both with respect
to short-term operating results and long-term increases in the price of the
Company's Common Stock. It is the Committee's intention to establish new
performance goals each year in consultation with Mr. Paine and to evaluate his
performance and compensation against such objectives.
COMPENSATION COMMITTEE REPORT ON OPTION REPRICING
The Company's Stock Option Plan was established as an employment incentive
to retain the persons necessary for the development and financial success of
the Company. As a result of the decrease in the market price of the Company's
shares during the preceding months and recognizing that previously granted
stock options had lost much of their value in motivating employees, including
the named executive officers, to remain with the Company and share in its
overall financial goals, the Compensation Committee of the Board of Directors,
in May 1997, pursuant to the authority granted under the Company's Stock
Option Plan, voted to allow employees of the Company, including the named
executive officers, holding options to purchase shares with an option price
greater than $6.00 per share, subject to a provision that all prior vesting
would be forfeited and vesting for the substitute options would commence on
the date of exchange, May 20, 1997. Directors holding options with exercise
prices of greater than $6.00 were not offered the opportunity to exchange
their options. Options for a total of 425,425 shares were surrendered by
employees and exchanged for new options at a new option exercise price of
$6.00 per share (which was in excess of the then current fair market value of
the shares on the date of the exchange), and vesting schedule. By repricing
the existing options granted under the Stock Option Plan, the Company intends
to reward key employees, including the named executive officers, holding such
options for their contributions to the Company.
COMPENSATION COMMITTEE
Anthony B. Evnin
Glynn C. Morris
13
<PAGE>
SHAREHOLDER RETURN
PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock
to the Standard & Poor's 500 Index (The "S&P 500 Index") and to the Standard &
Poor's Foods-250 Index (The "S&P Foods-250 Index") since December 31, 1992.
The graph assumes that the value of the investment in the Company's Common
Stock and each index was $100 at December 31, 1992 and that the Company has
not paid any dividends on the common stock, and no dividends are included in
the representation of the Company's performance. The stock price performance
on the graph below is not necessarily indicative of future price performance.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Opta Food Ingredients, Inc. 100.00 84.62 90.38 198.08 88.46 92.31
- -----------------------------------------------------------------------------------------------------------------
S&P 500 Index 100.00 110.08 111.54 153.45 188.69 251.64
- -----------------------------------------------------------------------------------------------------------------
S&P Foods-250 Index 100.00 91.77 102.58 130.85 155.03 222.19
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
CERTAIN TRANSACTIONS
During 1997, the Company had a non-interest bearing note receivable from
Lewis C. Paine, III, President and Chief Executive Officer, secured by the
Company's Common Stock owned by Mr. Paine, with a balance of $40,000 at
January 1, 1997 and $20,000 at December 31, 1997. The term of the note calls
for the forgiveness of the principal of the note and related interest ratably
over a five year period as long as Mr. Paine remains employed by the Company
or immediately if Mr. Paine is terminated by the Company without cause.
PROPOSAL 2:
APPROVAL OF AMENDMENT TO
1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN
Amendment
The Board recommends that the stockholders consider and approve a proposal
to approve an amendment to the Company's 1992 Employee, Director and
Consultant Stock Option Plan (the "Plan") that would increase the number of
shares of Common Stock reserved for the grant of options thereunder. Currently
1,666,667 shares of Common Stock are reserved for the grant of options under
the Plan. On February 26, 1998, the Compensation Committee of the Board of
Directors approved an amendment to the Plan, increasing the number of shares
reserved for issuance under the Plan by 250,000, to a total of 1,916,667. At
December 31, 1997, an aggregate of 1,216,480 shares had been issued upon the
exercise of options or were issuable upon the exercise of options outstanding
under the Plan, with exercise prices ranging from $.06 to $15.50, and
expiration dates ranging from May 2001 to July 2007, leaving 147,927 shares
available for future option grants.
This amendment is being submitted for stockholder approval at the Meeting in
order to ensure the continued qualification of the Plan under Rule 16b-3 under
the Securities Exchange Act of 1934, as amended, and applicable regulations
under the code. The Board of Directors believes that having available the
additional shares for grant of options under the Plan is necessary and
desirable in order to enable the Company to continue to attract, retain and
motivate qualified personnel.
Description of Plan
Options granted under the Plan may be either (i) options intended to qualify
as "incentive stock options" ("ISOs") under Section 422 of the Code, or (ii)
nonqualified stock options. ISOs may be granted under the Plan to employees of
the Company and its affiliates. Nonqualified stock options may be granted to
consultants, Directors, employees or officers of the Company and its
affiliates. As of March 25, 1998, approximately 80 employees were eligible to
participate in the Plan. The Plan provides for an annual grant to each non-
employee Director on March 31, of a nonqualified option to purchase 2,500
shares of Common Stock, at an exercise price equal to the fair market value of
the Common Stock on such date and vesting in equal installments over five
years, based on continued service on the Board of Directors. See "Compensation
of Directors" above.
The Plan is administered by the Compensation Committee of the Board of
Directors. Subject to the provisions of the Plan, the Compensation Committee
has the authority to interpret the provisions of the Plan, and to determine
the persons to whom options will be granted, the number of shares to be
covered by each option and the terms and conditions upon which an option may
be granted. The aggregate fair market value (determined at the time of grant)
of shares issuable pursuant to ISOs which become exercisable in any calendar
year by any
15
<PAGE>
employee or officer may not exceed $100,000. ISOs granted under the Plan may
not be granted at a price less than the fair market value of the Common Stock
on the date of grant (or 110% of fair market value in the case of employees or
officers holding 10% or more of the voting stock of the Company). Nonqualified
stock options granted under the Plan may not be granted at an exercise price
less than the par value of a share of Common Stock. ISOs granted under the
Plan expire not more than ten years from the date of grant, or not more than
five years from the date of grant in the case of incentive stock options
granted to an employee or officer holding 10% or more of the voting stock of
the Company.
An option granted under the Plan is exercisable, during the optionholder's
lifetime, only by the optionholder and is not transferable by him or her
except by will or by the laws of descent and distribution. An incentive stock
option granted under the Plan may, at the Board of Directors' discretion, be
exercised after the termination of the optionholder's employment with the
Company (other than by reason of death, disability or termination for cause as
defined in the Plan) to the extent exercisable on the date of such
termination, for up to 90 days following such termination, provided that such
incentive stock option has not expired on the date of such exercise. In
granting any nonqualified stock option, the Board of Directors may specify
that such nonqualified stock options may be exercised, to the extent
exercisable on the date of death, by the optionholder's survivors at any time
prior to the earlier of the option's specified expiration date or one year
from the date of the optionholder's death.
The Plan may be amended by the stockholders of the Company. The Plan may
also be amended by the Board of Directors or the Compensation Committee,
provided that any amendment approved by the Board of Directors or the
Compensation Committee which is of a scope that requires stockholder approval
in order to ensure favorable federal income tax treatment for any incentive
stock options under Code Section 422 or requires stockholder approval in order
to ensure the qualification of the Plan under Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, is subject to obtaining such stockholder
approval. Any modification or amendment of the Plan shall not, without the
consent of a participant, affect his or her rights under an option previously
granted to him or her. With the consent of the participant affected, the Board
of Directors or the Compensation Committee may amend outstanding option
agreements in a manner not inconsistent with the Plan.
Federal Income Tax Consequences
The following is a description of certain U.S. Federal income tax
consequences of the issuance and exercise of options under the Plan:
Incentive Stock Options. An ISO does not result in taxable income to the
optionee or deduction to the Company at the time it is granted or exercised,
provided that no disposition is made by the optionee of the shares acquired
pursuant to the ISO within two years after the date of granting of the ISO nor
within one year after the date of transfer of shares to him or her (the "ISO
holding periods"). However, the difference between the fair market value of
the stock on the date of exercise and the option price therefor will be an
"item of tax preference" includable in "alternative minimum taxable income."
The optionee's initial basis for determining taxable gain or loss will be the
option price paid for the stock, and any gain or loss from a disposition of
the stock after the expiration of the ISO holding periods will generally be
long-term capital gain or loss.
Except for transfers upon the death of an optionee or in certain tax-free
exchanges or certain bankruptcy proceedings, if the stock is disposed of prior
to the expiration of the ISO holding periods (a "Disqualifying Disposition"),
the optionee will be considered to have realized taxable compensation in the
year of the Disqualifying Disposition equal to the excess of the fair market
value of the stock on the date of exercise of the option over the option
price. Any additional gain realized on the disposition will normally
constitute capital gain.
16
<PAGE>
If the amount realized upon such a Disqualifying Disposition is less than the
fair market value of the stock on the date of exercise (and if the disposition
is a sale or exchange with respect to which a loss, if sustained, would be
recognized by the optionee), the amount of compensation income will be limited
to the excess of the amount realized over the optionee's adjusted basis in the
stock. Compensation income of an employee optionee realized on a Disqualifying
Disposition may be subject to withholding taxes, and a deduction will then be
allowable to the Company in an amount equal to the optionee"s compensation
income.
Nonqualified Stock Options. A nonqualified stock option ordinarily will not
result in taxable income to the optionee or deduction to the Company at the
time of grant. The nonqualified optionee will recognize taxable compensation
income at the time of exercise of such nonqualified option in an amount equal
to the excess of the then fair market value of the shares acquired over the
exercise price. Such compensation income of optionees may be subject to
withholding taxes, and a deduction may then be allowable to the Company in an
amount equal to the optionee's compensation income. An optionee's initial
basis in stock so acquired will be the amount paid on exercise of the
nonqualified stock option plus the amount of any corresponding compensation
income. Any gain or loss as a result of a subsequent disposition of the stock
so acquired will generally be capital gain or loss.
1997 Option Grants
During the year ended December 31, 1997, options under the Plan were granted
to the individuals and groups named below, as follows:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES EXERCISE PRICE PER SHARE
- ---- ---------------- ------------------------
<S> <C> <C>
Lewis C. Paine, III................. 40,000 $5.53
Arthur J. McEvily, Ph.D. ........... 37,500 $5.85
Joel A. Stone....................... 15,000 $5.53
All executive officers as a group (3
persons)........................... 92,500 $5.66
A.S. Clausi......................... 2,500 $5.50
Anthony B. Evnin.................... 2,500 $5.50
Harry Fields........................ 2,500 $5.50
Glynn C. Morris..................... 2,500 $5.50
Charles W. Newhall, III............. 2,500 $5.50
Frederic Stevenin................... 2,500 $5.50
All current Directors (excluding
executive officers) as a group
(6 persons)........................ 15,000 $5.50
All employees (excluding executive
officers) as a group (approximately
48 persons)........................ 111,572 $4.59 - $8.25
</TABLE>
The closing price of the Company's Common Stock, as reported on the Nasdaq
National Market System, on March 25, l998, was $5.56 per share.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
APPROVAL OF THE AMENDMENT TO THE 1992 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK
OPTION PLAN. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES
OF COMMON STOCK VOTING IN PERSON OR BY PROXY AT THE MEETING IS REQUIRED FOR
SUCH APPROVAL.
17
<PAGE>
PROPOSAL 3:
APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Price Waterhouse LLP as the Company's
independent accountants for the 1998 fiscal year. The Board of Directors
proposes that the stockholders ratify this appointment. Price Waterhouse LLP
has served as the Company's independent accountants since its organization in
1991.
Representatives of Price Waterhouse LLP will be present at the Meeting to
respond to questions and will be given the opportunity to make a statement
should they desire to do so.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR APPROVAL OF
THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS FOR THE 1998 FISCAL YEAR. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A
MAJORITY OF THE SHARES OF COMMON STOCK VOTING IN PERSON OR BY PROXY AT THE
MEETING IS REQUIRED FOR SUCH APPROVAL. IF THE APPOINTMENT IS NOT APPROVED BY
THE STOCKHOLDERS, THE BOARD IS NOT OBLIGATED TO SELECT OTHER INDEPENDENT
ACCOUNTANTS, BUT WILL CONSIDER SUCH UNFAVORABLE VOTE.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and officers, and persons who own more than 10% of the Company's
Common Stock, to file with the Securities and Exchange Commission (the "SEC")
initial reports of beneficial ownership and reports of changes in beneficial
ownership of the Common Stock and other equity securities of the Company.
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.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1997 all
Section 16(a) filing requirements applicable to its officers, Directors and
greater than 10% beneficial owners were complied with.
STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
In order to be considered for inclusion in the Proxy Statement and form of
proxy for the Company's 1999 Annual Meeting of Stockholders, stockholder
nominations of persons for election to the Board and proposals of business to
be considered by the stockholders must be received by the Company no earlier
than February 16, 1999 and no later than March 17, 1999. Proposals should be
sent to the attention of the Assistant Secretary at the Company's offices at
25 Wiggins Avenue, Bedford, Massachusetts 01730.
Stockholder proposals and nominations for election to the Board at the 1998
Annual Meeting of Stockholders may be submitted to the Assistant Secretary of
the Company and must include (a) as to each person whom the stockholder
proposes to nominate for election or reelection as a Director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of Directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Exchange Act of 1934, as amended
(including such
18
<PAGE>
person's written consent to being named in the proxy statement as a nominee
and to serving as a Director if elected); (b) as to any other business that
the stockholder proposes to bring before the Meeting, a brief description of
the business desired to be brought before the Meeting, the reasons for
conducting such business at the Meeting and any material interest in such
business of such stockholder and the beneficial owner, if any, on whose behalf
the proposal is made; and (c) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such stockholder, as they appear on the Company's
books, and of such beneficial owner and (ii) the class and number of shares of
the Company that are owned beneficially and held of record by such stockholder
and such beneficial owner.
OTHER MATTERS
The 1998 Annual Meeting of Stockholders is called for the purposes set forth
in the notice. The Board of Directors does not know of any matter for action
by the stockholders at the Meeting other than the matters described in the
notice. However, the enclosed proxy confers discretionary authority on the
persons named therein with respect to matters which are not known to the
Directors at the date of printing hereof and which may properly come before
the Meeting. It is the intention of the persons named in the proxy to vote in
accordance with their best judgment on any such matter.
ANNUAL REPORT ON FORM 10-K
Copies of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 as filed with the Securities and Exchange Commission are
available to stockholders upon written request addressed to the Assistant
Secretary at the Company's offices at 25 Wiggins Avenue, Bedford,
Massachusetts 01730.
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE URGED TO
FILL OUT, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST
CONVENIENCE.
By Order of the Board of Directors
JEFFREY M. WIESEN
Secretary
April 17, 1998
19
<PAGE>
OPTA FOOD INGREDIENTS, INC.
PROXY PROXY
25 WIGGINS AVENUE, BEDFORD, MASSACHUSETTS 01730
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Lewis C. Paine, III, and Scott A. Kumf, and
each of them, with full power of substitution, the proxies of the undersigned to
vote all the shares of the Common Stock of Opta Food Ingredients, Inc. which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
on May 19, 1998 or any adjournment thereof.
In their discretion the proxies are authorized to vote upon such other
business as may properly come before the 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 VOTED "FOR" ALL NOMINEES FOR DIRECTOR AND WILL BE VOTED "FOR" PROPOSALS 2 AND
3.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and the related Proxy Statement.
(PLEASE VOTE, SIGN AND DATE ON THE REVERSE SIDE)
FOLD AND DETACH HERE
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSALS 1, 2 AND 3
PLEASE MARK [X]
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
1. Election of Directors. Nominees for election: A.S. Clausi,
Anthony B. Evnin, Harry Fields,
FOR all nominees listed Glynn C. Morris, Charles W. Newhall, III,
to the right (except as Frederic Stevenin and Lewis C. Paine, III.
marked to the contrary)
(Instructions: To withhold your vote for any
[_] individual nominee, write that nominee's
name on the line below.)
WITHHOLD
AUTHORITY ------------------------------------------------
to vote for all nominees
listed to the right
[_]
2. Approval of the amendment to the 1992 Employee,
Director and Consultant Stock Option Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Approval of appointment of Price Waterhouse LLP as
the Company's independent accountants for the fiscal
year 1998.
FOR AGAINST ABSTAIN
[_] [_] [_]
I PLAN TO ATTEND THE MEETING [_]
DATED: , 1998 Please sign exactly as name appears
------------------------- at left. When shares are held by
joint owners, both should sign.
- ------------------------------------- When signing as attorney, executor,
Signature administrator, trustee, or guardian,
please give full title as such.
- ------------------------------------- If a corporation, please sign in
Signature (if held jointly) such corporate name by President or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
FOLD AND DETACH HERE
