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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-B
Registration of Securities of Certain Successor Issuers
Filed Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
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FOODBRANDS AMERICA, INC.
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(Exact name of registrant as specified in its charter)
Delaware 13-2535513
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2601 Northwest Expressway, Suite 1000W
Oklahoma City, Oklahoma 73112
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(Address of principal executive offices) (Zip Code)
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Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
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Title of Class
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Item 1. General Information.
(a) The Registrant was incorporated under the laws of the State of
Delaware on December 5, 1994.
(b) The Registrant's fiscal year ends on the Saturday nearest
December 31.
Item 2. Transaction of Succession.
(a) At the time of succession, the common stock, par value $.01
per share, of Doskocil Companies Incorporated, the predecessor of the Registrant
("Doskocil"), was registered pursuant to Section 12(g) of the Securities
Exchange Act of 1933, as amended (the "Doskocil Common Stock").
(b) On May 16, 1995, Doskocil was merged with and into the
Registrant, with the Registrant as the surviving entity (the "Merger").
The information set forth under the headings "The Annual Meeting --
Outstanding Options; Warrants; Other Rights" and "Proposal III. The
Merger" in the Proxy Statement/Prospectus (the "Proxy Statement/Prospectus")
that constitutes a part of the Registration Statement on Form S-4 (Registration
No. 33-57773) is incorporated herein by reference. In connection with the
Merger, the Registrant assumed Doskocil's duties and obligations under the
9 3/4% Senior Subordinated Redeemable Securities due 2000.
Item 3. Securities to be Registered.
The total number of authorized shares of common stock, par value
$.01 per share, of the Registrant (the "Common Stock") is 20,000,000, of which
12,433,705 are issued and outstanding as of the date hereof. There are no
shares of Common Stock held in treasury.
Item 4. Description of Registrant's Securities to Be Registered.
The Common Stock is substantially identical in all material respects
to the Doskocil Common Stock. The information set forth under Item 3 hereof is
incorporated herein by reference. As of the date hereof, there are
approximately 3,133 holders of record of the Common Stock. The holders of
Common Stock are entitled to receive, pro rata, dividends, when, if and as
declared by the Board of Directors from any funds lawfully available therefor.
However, the Registrant's ability to declare and pay dividends on the Common
Stock is limited by the terms of the Credit Agreement among Doskocil, the
Several Lenders from Time to Time Parties Thereto and Chemical Bank, as Agent,
dated as of May 25, 1994 (the "Credit Agreement"). In connection with the
Merger, the Registrant has succeeded to the rights and obligations of Doskocil
under the Credit Agreement.
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In the event of a liquidation, dissolution or winding up of the
Registrant, the holders of Common Stock are entitled to participate ratably in
the distribution of assets remaining after payment of liabilities. The Common
Stock does not have any preemptive rights or redemption or sinking fund
provisions. The issued and outstanding shares of Common Stock are fully paid
and nonassessable. Holders of Common Stock are entitled to vote at all meetings
of stockholders of the Registrant for election of directors and for other
purposes. Holders have one vote for each share of Common Stock held. The
Common Stock does not have cumulative voting rights, thus holders of more than
50% of the shares voting can elect all directors.
On October 31, 1991, Doskocil entered into a warrant agreement (the
"Warrant Agreement") pursuant to which Doskocil issued warrants to purchase up
to 193,066 shares of the Doskocil Common Stock at a price of $17.53 per share.
The Registrant is subject to the terms of the Warrant Agreement pursuant to the
Supplemental Agreement to the Warrant Agreement dated as of May 16, 1995.
Warrants may be exercised at any time before their expiration on December 31,
1998. The number of shares subject to warrants is subject to adjustment. As of
the date hereof, warrants to purchase 282,036 shares were outstanding.
The Warrant Agreement prohibits the declaration or payment of any
dividend or distribution on the Common Stock unless the Registrant pays to the
warrant holders the amount of any such dividend or distribution receivable by a
holder of the number of shares of Common Stock for which such warrants might
have been exercised immediately prior to the declaration or payment of the
dividend or distribution. In addition, if any person or group acquires the
power to vote more than 30% of the Common Stock, the Warrant Agreement provides
that warrant holders may require the Registrant to repurchase the warrants at
the then-current market price of the Common Stock less the warrant price, which
requirement was waived in connection with certain acquisitions of the Doskocil
Common Stock by Joseph Littlejohn & Levy Fund, L.P. and its affiliates ("JLL").
Certain provisions of the Amended and Restated Certificate of
Incorporation and the Credit Agreement may delay, deter or prevent a stockholder
or group of stockholders from taking corporate action or gaining control of the
Registrant. The Amended and Restated Certificate of Incorporation requires the
Registrant's Board of Directors to be divided into three classes, with directors
in each class serving successive three-year terms. The information set forth
under the headings "Proposal I. Election of Directors" and "Proposal III.
The Merger -- Preservation of Tax Benefits" in the Proxy Statement/Prospectus
is incorporated herein by reference. The Credit Agreement provides
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that an event of default shall occur thereunder if any person or group
(excluding JLL), as defined in the Securities Act of 1934, as amended,
beneficially owns or holds the power to vote more than 30% (or, if JLL owns at
least 15% of the outstanding Common Stock, 50%) of the outstanding Common Stock.
Section 203 of the Delaware General Corporation Law ("Section 203")
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested stockholder
unless (i) prior to the date of the business combination, the transaction is
approved by the corporation's board of directors, (ii) upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owns at least 85% of the outstanding
voting stock, or (iii) on or after such date the business combination is
approved by the corporation's board of directors and by the affirmative vote of
at least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder. A "business combination" includes mergers, asset sales
and other transactions resulting in a financial benefit to the stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years did own, 15% or more of the
corporation's voting stock. The Registrant is subject to Section 203.
The information set forth under the headings "The Annual Meeting --
Outstanding Warrants; Options; Other Rights" and "Proposal III. The Merger"
in the Proxy Statement/Prospectus is incorporated herein by reference.
Item 5. Financial Statements and Exhibits.
(a) Financial Statements.
Not Applicable
(b) Exhibits.
3.1 Amended and Restated Certificate of Incorporation
of Foodbrands America, Inc.
3.2 Amended and Restated Bylaws of Foodbrands
America, Inc.
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4.1 Specimen Stock Certificate evidencing the Common
Stock, par value $.01 per share, of Foodbrands
America, Inc.
4.2 Credit Agreement among Doskocil, the Several
Lenders from Time to Time Parties Thereto and
Chemical Bank, as Agent, dated as of May 25, 1994
(incorporated herein by reference to Exhibit 1 to
Doskocil's Current Report on Form 8-K filed on
June 14, 1994)
4.3 First Amendment to Credit Agreement dated November
2, 1994 (incorporated herein by reference to
Exhibit 4.3 to Doskocil's Annual Report on Form
10-K for the year ended December 31, 1994)
4.4 Second Amendment to Credit Agreement dated
February 10, 1995 (incorporated herein by
reference to Exhibit 4.4 to Doskocil's Annual
Report on Form 10-K for the year ended December
31, 1994)
4.5 Form of Doskocil 9 3/4% Senior Subordinated
Redeemable Notes due 2000 (incorporated herein by
reference to Exhibit 4.22 to Amendment No. 2 to
the Registration Statement on Form S-1 filed April
13, 1993 (Registration No. 33-59484))
4.6 Indenture between Doskocil and First Fidelity
Bank, National Association, New York, as Trustee
(incorporated herein by reference to Exhibit 3 to
Doskocil's Current Report on Form 8-K, dated April
28, 1993, and filed April 30, 1993)
4.7 First Supplemental Indenture between Doskocil and
First Fidelity Bank, National Association, as
Trustee dated as of June 1, 1994 (incorporated
herein by reference to Exhibit 4.7 to Doskocil's
Annual Report on Form 10-K for the year ended
December 31, 1994)
4.8 Second Supplemental Indenture between the
Registrant and First Fidelity Bank,
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National Association, as Trustee dated as of May
16, 1995
4.9 Warrant Agreement dated as of October 31, 1991,
between Doskocil and the signatory banks thereto
(incorporated herein by reference to Exhibit 4.2
to Doskocil's Annual Report on Form 10-K dated
March 12, 1992, and filed on March 13, 1992)
4.10 Supplemental Agreement dated as of May 16, 1995 to
Warrant Agreement dated as of October 31, 1991
between Doskocil and the signatory banks thereto
4.11 Amended and Restated Certificate of Incorporation
of Foodbrands America, Inc. (see Exhibit 3.1
above)
4.12 Amended and Restated Bylaws of Foodbrands
America, Inc. (see Exhibit 3.2 above)
4.13 Doskocil Companies Incorporated Retirement and
Profit Sharing Plan (incorporated herein by
reference to Exhibit 4.8 to Doskocil's Annual
Report on Form 10-K filed on March 31, 1994)
4.14 Doskocil Companies Incorporated 1992 Stock
Incentive Plan, as amended (incorporated herein by
reference to Exhibit 4.9 to Doskocil's Annual
Report on Form 10-K filed on March 31, 1994)
4.15 Lease by and between the City of South Hutchinson,
Kansas and Doskocil dated August 1, 1985
(incorporated herein by reference to Exhibit 10.14
to Doskocil's Annual Report on Form 10-K, dated
April 12, 1991, and filed on April 15, 1991)
4.16 Guaranty Agreement between Doskocil and The Fourth
National Bank and Trust Company, Wichita, dated
August 1, 1985 (incorporated herein by reference
to Exhibit 4.12 to Doskocil's Annual Report on
Form 10-K, dated March 12, 1992, and filed on
March 13, 1992)
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4.17 Agreement for Waste Water Treatment Service
between Stoppenbach, Inc. and the City of
Jefferson, Wisconsin, dated November 1985
(incorporated herein by reference to Exhibit
4.13 to Doskocil's Annual Report on Form 10-K,
dated March 12, 1992, and filed March 13, 1992)
10.1 Credit Agreement among Doskocil, the Several
Lenders from Time to Time Parties Thereto and
Chemical Bank, as Agent dated as of May 25, 1994
(see Exhibit 4.2 above)
10.2 First Amendment to Credit Agreement dated November
2, 1994 (see Exhibit 4.3 above)
10.3 Second Amendment to Credit Agreement dated
February 10, 1995 (see Exhibit 4.4 above)
10.4 Form of Doskocil 9 3/4% Senior Subordinated
Redeemable Notes due 2000 (see Exhibit 4.5 above)
10.5 Indenture between Doskocil and First Fidelity
Bank, National Association, New York, as Trustee
(see Exhibit 4.6 above)
10.6 First Supplemental Indenture between Doskocil and
First Fidelity Bank, National Association, New
York, as Trustee dated as of June 1, 1994 (see
Exhibit 4.7 above)
10.7 Second Supplemental Indenture between the
Registrant and First Fidelity Bank, National
Association, as Trustee dated as of May 16, 1995
(see Exhibit 4.8 above)
10.8 Warrant Agreement dated as of October 31, 1991,
between Doskocil and the signatory banks thereto
(see Exhibit 4.9 above)
10.9 Supplemental Agreement dated as of May 16, 1995 to
Warrant Agreement dated as of October 31, 1991
between Doskocil and the signatory banks thereto
(see Exhibit 4.10 above)
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10.10 Doskocil Companies Incorporated Retirement and
Profit Sharing Plan (see Exhibit 4.13 above)
10.11 Doskocil Companies Incorporated Annual Incentive
Plan (incorporated herein by reference to Exhibit
10.9 to Doskocil's Annual Report on Form 10-K
for the year ended December 31, 1995)
10.12 Doskocil Companies Incorporated 1992 Stock
Incentive Plan, as amended (see Exhibit 4.14
above)
10.13 Wilson Foods Corporation Retirement and Profit
Sharing Plan for Salaried Employees of Wilson
Foods Corporation effective January 1, 1985,
restated December 31, 1987 (incorporated herein by
reference to Exhibit 10.15 to Doskocil's Annual
Report on Form 10-K, dated March 12, 1992, and
filed on March 13, 1992)
10.14 Employment Agreement dated November 1, 1991,
between Doskocil and John Hanes (incorporated
herein by reference to Exhibit 9 to Doskocil's
Current Report on Form 8-K, dated November 14,
1991, and filed on November 15, 1991)
10.15 Separation Agreement and Release dated December
31, 1993 between Doskocil and John Hanes
(incorporated herein by reference to Exhibit 10.18
to Doskocil's Annual Report on Form 10-K filed on
March 31, 1994)
10.16 Employment Agreement dated November 1, 1991,
between Doskocil and Theodore A. Myers
(incorporated herein by reference to Exhibit 10 to
Doskocil's Current Report on Form 8-K, dated
November 14, 1991, and filed on November 15, 1991)
10.17 Settlement Agreement dated July 6, 1993 between
Doskocil and Theodore A. Myers (incorporated
herein by reference to Exhibit 10.20 to Doskocil's
Annual Report on Form 10-K filed on March 31,
1994)
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10.18 Employment Agreement dated August 2, 1994, between
Doskocil and R. Randolph Devening (incorporated
herein by reference to the exhibit filed with
Doskocil's Current Report on Form 8-K, dated
August 15, 1994 and filed on August 17, 1994)
10.19 Employment Agreement dated May 3, 1994, between
Doskocil and Robert S. Wright, amended August 17,
1994 and further amended January 6, 1995
(incorporated herein by reference to Exhibit 10.17
to Doskocil's Annual Report on Form 10-K for the
year ended December 31, 1994)
10.20 Employment Agreement dated January 30, 1995
between Doskocil and Larry P. Swafford
(incorporated herein by reference to Exhibit 10.18
to Doskocil's Annual Report on Form 10-K for the
year ended December 31, 1994)
10.21 Settlement Agreement dated December 2, 1994,
between Doskocil and Charles I. Merrick
(incorporated herein by reference to Exhibit 10.19
to Doskocil's Annual Report on Form 10-K for the
year ended December 31, 1994)
10.22 Form of Transition Employment Agreement dated on
or after December 17, 1991, between Doskocil and
Thomas G. McCarley, William L. Brady, David J.
Clapp, Raymond J. Haefele, Darian B. Andersen,
Bryant P. Bynum, Lee C. Harrison, T.D. Traver,
Charles M. Sweeney, Horst O. Sieben, Howard C.
Madsen, Robert S. Riddle, Charles E. Smith, Larry
P. Swafford and Gregory P. Ibsen (incorporated
herein by reference to Exhibit 10.18 to Amendment
No. 3 to Registration Statement on Form S-1,
(Registration No. 33-59484))
10.23 Non-Qualified Stock Option Agreement dated
September 29, 1994 between Doskocil and R.
Randolph Devening (incorporated herein by
reference to Exhibit 10.21 to
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Doskocil's Annual Report on Form 10-K for the year
ended December 31, 1994)
10.24 Form of Non-Qualified Stock Option Agreement dated
on or after September 29, 1994 between Doskocil
and William L. Brady, Bryant P. Bynum, David J.
Clapp, Horst O. Sieben, Thomas G. McCarley, Robert
S. Wright, Raymond J. Haefele and Howard C. Madsen
(incorporated by reference to Exhibit 10.22 to
Doskocil's Annual Report on Form 10-K for the year
ended December 31, 1994)
10.25 Separation Pay Plan, dated April 1, 1995
10.26 Form of Indemnification Agreement between Doskocil
and its non-employee Directors (incorporated
herein by reference to Exhibit 10.42 to Amendment
No. 1 to Registration Statement on Form S-1
(Registration No. 33-59484))
10.27 Lease by and between the City of South Hutchinson,
Kansas and Doskocil dated August 1, 1985 (see
Exhibit 4.15 above)
10.28 Lease dated November 4, 1991, between Doskocil and
American General Life and Accident Insurance
Company (incorporated herein by reference to
Exhibit 10.35 to Doskocil's Annual Report on Form
10-K, dated March 12, 1992 and filed on March 13,
1992)
10.29 Lease Agreement dated April 4, 1992, between
Doskocil and Millard Refrigerated
Services-Atlanta, as amended (incorporated herein
by reference to Exhibit 10.27 to Registration
Statement on Form S-1 (Registration No. 33-51346))
10.30 Agreement between Wilson Foods Corporation the
City of Cherokee, Iowa, dated February 28, 1964,
and First
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Amendment thereto dated October 24, 1978; Second
Amendment thereto dated February 24, 1981; and
Third Amendment thereto dated August 18, 1983,
covering water and sewage services (incorporated
herein by reference to Exhibit 10.34 to
Registration Statement on Form S-1 (Registration
No. 33-59484))
10.31 Agreement dated December 26, 1989, by and between
the City of Cherokee, Iowa and Wilson Foods
Corporation, covering water rates (incorporated
herein by reference to Exhibit 10.35 to
Registration Statement on Form S-1 (Registration
No. 33-59484))
10.32 Equipment Lease Agreement between Wilson Foods and
MDFC Equipment Leasing Corporation, dated May 20,
1992, and related unconditional Guaranty executed
by Doskocil dated June 11, 1992, and Equipment
Lease Addendum to date (incorporated herein by
reference to Exhibit 10.38 to Amendment No. 1 to
Registration Statement on Form S-1 (Registration
No. 33-59484))
10.33 Stock Purchase Agreement by and between Doskocil
and Joseph Littlejohn & Levy Fund, L.P. dated
February 16, 1993 (incorporated herein by
reference to Exhibit 1 to Doskocil's Current
Report on Form 8-K dated February 18, 1993 and
Filed on February 19, 1993)
10.34 Agreement, Acknowledgement and Waiver between the
Registrant and Joseph Littlejohn & Levy Fund,
L.P., dated May 16, 1995
10.35 Agreement dated as of March 22, 1993, by and
between Joseph Littlejohn and Levy Fund, L.P., The
Airlie Group, L.P. and Doskocil (incorporated
herein by reference to Exhibit 10.43 to Amendment
No. 1 to Registration Statement on Form S-1
(Registration No. 33-59484))
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10.36 Stockholders Agreement dated as of March 22, 1993,
by and between the Airlie Group, L.P. and Doskocil
(incorporated herein by reference to Exhibit 10.44
to Amendment No. 1 to Registration Statement on
Form S-1 (Registration No. 33-59484))
10.37 Agreement between Doskocil and the Airlie Group,
L.P. dated as of March 7, 1995 (incorporated
herein by reference to Exhibit 1 to Doskocil's
Current Report on Form 8-K dated March 7, 1995)
10.38 Master Equipment Lease between Doskocil and
Cargill Leasing Corporation dated September 1,
1993 (incorporated herein by reference to Exhibit
10.35 to Doskocil's Annual Report on Form 10-K
filed on March 31, 1994)
10.39 Stock Purchase Agreement between International
Multifoods Corporation and Doskocil Companies
Incorporated dated as of March 17, 1994
(incorporated herein by reference by reference to
Exhibit 10.36 to Doskocil's Annual Report on Form
10-K filed on March 31, 1994)
21.1 Subsidiaries of the Registrant (incorporated
herein by reference to Exhibit 21.1 to Doskocil's
Annual Report on Form 10-K for the year ended
December 31, 1994)
99.1 Proxy Statement/Prospectus included as part of the
Registration Statement on Form S-4 (Registration
No. 33-57773)
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this application for
registration (or registration statement) to be signed on its behalf by the
undersigned, thereunto duly authorized.
FOODBRANDS AMERICA, INC.
By: /s/ Bryant P. Bynum
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Bryant P. Bynum
Vice President and
Treasurer
Date: May 16, 1995
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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
FOODBRANDS AMERICA, INC.
ARTICLE FIRST: NAME. The name of the Corporation is Foodbrands
America, Inc. (the "Corporation").
ARTICLE SECOND: REGISTERED OFFICE AND REGISTERED AGENT. The
registered office of the Corporation in the State of Delaware shall be located
at 1209 Orange Street, City of Wilmington, County of New Castle. The name of
the registered agent in charge thereof is The Corporation Trust Company.
ARTICLE THIRD: PURPOSE. The purpose of the Corporation is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware (the "DGCL") as
presently in effect or as it may hereafter be amended.
ARTICLE FOURTH: AUTHORIZED CAPITAL STOCK. The total number
of shares of all classes of stock that the Corporation shall have authority to
issue is Twenty-Four Million (24,000,000) shares, of which Twenty Million
(20,000,000) shares shall be common stock, $.01 par value per share (the "Common
Stock") and Four Million (4,000,000) shares shall be preferred stock, par value
$.01 per share (the "Preferred Stock"). Authority is hereby expressly vested in
the Board of Directors, subject to the limitations prescribed by law, to
authorize the issuance from time to time of one or more series of Preferred
Stock, and with respect to each such series, to fix by resolution or resolutions
adopted by the affirmative vote of a majority of the Board of Directors of the
Corporation the number of shares within such series and the powers,
designations, preferences, and relative, participating, optional or other rights
thereof, if any, or the qualifications, limitations or restrictions thereof, if
any.
ARTICLE FIFTH: CERTAIN RESTRICTIONS ON THE TRANSFER OF THE
CORPORATION'S STOCK.
SECTION 5.1 TRANSFER RESTRICTIONS. In order to
preserve the net operating loss carryovers (including any "net unrealized
built-in loss," as defined under applicable law), capital loss carryovers,
general business credit carryovers,
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alternative minimum tax credit carryovers and foreign tax credit carryovers (the
"Tax Benefits") to which the Corporation is entitled pursuant to the Internal
Revenue Code of 1986, as amended, or any successor statute (collectively, the
"Code") and the Treasury Regulations promulgated thereunder (the "Treasury
Regulations"), the following restrictions shall apply until the earlier of (x)
the day after the fourteenth (14th) anniversary of the effectiveness of the
merger of Doskocil Companies Incorporated, a Delaware corporation, with and into
the Corporation (the "Merger"), (y) the repeal of Section 382 of the Code if the
Board of Directors determines that the restrictions are no longer necessary, and
(z) the beginning of a taxable year of the Corporation to which the Board of
Directors determines that no Tax Benefits may be carried forward, unless the
Board of Directors shall fix an earlier or later date in accordance with Section
5.7 of this Article Fifth (such date is sometimes referred to herein as the
"Expiration Date"):
(1) For purposes of this Article Fifth, (a) a "Prohibited
Ownership Percentage" shall mean any ownership of the Corporation's stock that
would cause a Person or Public Group to be a "5-percent shareholder" of the
Corporation within the meaning of Treasury Regulation Section 1.382-2T(g)(1);
(b) a "Public Group" shall have the meaning contained in Treasury Regulation
Section 1.383-2T(f)(13); (c) a "Person" shall mean any individual, corporation,
estate, trust, association, company, partnership, joint venture, or similar
organization (including the Corporation); (d)"Transfer" refers to any means of
conveying legal or beneficial ownership of shares of stock of the Corporation,
whether such means are direct or indirect, voluntary or involuntary, including,
without limitation, the issuance by the Corporation of shares of stock of the
Corporation (without regard to whether such shares are treasury shares or new
shares) and the transfer of ownership of any entity that owns shares of stock of
the Corporation; and "Transferee" means any Person to whom stock of the
Corporation is Transferred.
(2) From and after the effectiveness of the Merger, no Person
shall Transfer any shares of stock of the Corporation (other than stock
described in Section 1504(a)(4) of the Code, or stock that is not so described
solely because it is entitled to vote as a result of dividend arrearages) to any
other Person to the extent that such Transfer, if effective, (i) would cause the
Transferee or any Person or Public Group to have a Prohibited Ownership
Percentage; (ii) would increase the ownership percentage of any Transferee or
any Person or Public Group having a Prohibited Ownership Percentage; or (iii)
would create a new Public Group under Treasury Regulation Section
1.382-2T(j)(3)(i).
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(3) Any Transfer of shares of stock of the Corporation that would
otherwise be prohibited pursuant to the preceding subsection, including but not
limited to the issuance of stock by the Corporation pursuant to the exercise of
any warrants, options or other rights to acquire stock in the Corporation, shall
nonetheless be permitted if information relating to a specific proposed
transaction is presented to the Board of Directors and the Board determines
that, based on the facts in existence at the time of such determination, such
transaction will not jeopardize the Corporation's full utilization of the Tax
Benefits, based upon an opinion of legal counsel selected by the Board to that
effect. Nothing in this subsection will be construed to limit or restrict the
Board of Directors in the exercise of its fiduciary duties under applicable law.
SECTION 5.2 ATTEMPTED TRANSFER IN VIOLATION OF TRANSFER
RESTRICTION. Unless approval of the Board of Directors is obtained as
provided in subsection (3) of Section 5.1 of this Article Fifth, any attempted
Transfer of shares of stock of the Corporation in excess of the shares that
could be Transferred to the Transferee without restriction under subsection (2)
of Section 5.1 of this Article Fifth is not effective to Transfer ownership of
such excess shares (the "Prohibited Shares") to the purported acquiror thereof
(the "Purported Acquiror"), who shall not be entitled to any rights as a
Stockholder of the Corporation with respect to the Prohibited Shares (including,
without limitation, the right to vote or to receive dividends with respect
thereto). All rights with respect to the Prohibited Shares shall remain the
property of the Person who initially purported to Transfer the Prohibited Shares
to the Purported Acquiror (the "Initial Transferor") until such time as the
Prohibited Shares are resold as set forth in subsection (1) or subsection (2) of
this Section 5.2. The Purported Acquiror, by acquiring ownership of shares of
stock of the Corporation that are not Prohibited Shares, shall be deemed to have
consented to all the provisions of this Article Fifth and to have agreed to act
as provided in the following subsection (1). The Corporation and the Board of
Directors shall be fully protected in relying in good faith upon the
information, opinions, reports or statements of the chief executive officer, the
chief financial officer, or the chief accounting officer of the Corporation or
of the Corporation's legal counsel, independent auditors, transfer agent,
investment bankers, and other employees and agents in making the determinations
and findings contemplated by this Section 5.2, and neither the Corporation nor
the Board of Directors shall be responsible for any good faith errors made in
connection therewith.
(1) Upon demand by the Corporation, the Purported Acquiror shall
transfer any certificate or other evidence of Purported Acquiror's possession or
control of the Prohibited
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Shares, along with any dividends or other distributions paid by the Corporation
with respect to the Prohibited Shares that were received by the Purported
Acquiror (the "Prohibited Distributions"), to an agent designated by the
Corporation (the "Agent"). If the Purported Acquiror has sold the Prohibited
Shares to an unrelated party in an arms-length transaction after purportedly
acquiring them, the Purported Acquiror shall be deemed to have sold the
Prohibited Shares as agent for the Initial Transferor, and in lieu of
transferring the Prohibited Shares and Prohibited Distributions to the Agent
shall transfer to the Agent the Prohibited Distributions and the proceeds of
such sale (the "Resale Proceeds"), except to the extent that the Agent grants
written permission to the Purported Acquiror to retain a portion of the Resale
Proceeds not exceeding the amount that would have been payable by the Agent to
the Purported Acquiror pursuant to the following subsection (2) if the
Prohibited Shares had been sold by the Agent rather than by the Purported
Acquiror. Any purported transfer of the Prohibited Shares by the Purported
Acquiror other than a transfer described in one of the two preceding sentences
shall not be effective to transfer any ownership of the Prohibited Shares.
(2) The Agent shall sell in an arms-length transaction (through
the NASDAQ National Market System, if possible) any Prohibited Shares
transferred to the Agent by the Purported Acquiror, and the proceeds of such
sale (the "Sale Proceeds"), or the Resale Proceeds, if applicable, shall be
allocated, after reimbursement to the Agent of its expenses, to the Purported
Acquiror up to the following amount: (i) where applicable, the purported
purchase price paid or value of consideration surrendered by the Purported
Acquiror for the Prohibited Shares, or (ii) where the purported Transfer of the
Prohibited Shares to the Purported Acquiror was by gift, inheritance, or any
similar purported Transfer, the fair market value of the Prohibited Shares at
the time of such purported Transfer. Subject to the succeeding provisions of
this subsection, any Resale Proceeds or Sales Proceeds in excess of the Agent's
expenses and the amount allocable to the Purported Acquiror pursuant to the
preceding sentence, together with any Prohibited Distributions, shall be the
property of the Initial Transferor. If the identity of the Initial Transferor
cannot be determined by the Agent through inquiry made to the Purported
Acquiror, the Agent or the Corporation shall hold such amounts pending the
determination of the identity of the Initial Transferor. The Agent may also
take, but is not required to take, any reasonable actions to attempt to identify
the Initial Transferor. If after ninety (90) days following the date the
Prohibited Shares were transferred to the Agent the Initial Transferor has not
been identified, any amounts due to the Initial Transferor pursuant to this
subsection may be paid over to a court
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or governmental agency, if applicable law permits, or otherwise shall be
transferred to an entity designated by the Corporation that is described in
Section 501(c)(3) of the Code. In no event shall any such amounts due to the
Initial Transferor inure to the benefit of the Corporation or the Agent, but
such amounts may be used to cover expenses incurred by the Agent in attempting
to identify the Initial Transferor.
SECTION 5.3 PROMPT ENFORCEMENT AGAINST PURPORTED
ACQUIROR. Within thirty (30) business days of learning of the purported
Transfer of Prohibited Shares to a Purported Acquiror, the Corporation through
its Secretary shall demand that the Purported Acquiror surrender to the Agent
the certificates representing the Prohibited Shares, or any Resale Proceeds, and
any Prohibited Distributions, and if such surrender is not made by the Purported
Acquiror within thirty (30) business days from the date of such demand, the
Corporation shall institute legal proceedings to compel such transfer; provided,
however, that nothing in this Section 5.3 shall preclude the Corporation in its
discretion from immediately bringing legal proceedings without a prior demand,
and provided further that failure of the Corporation to act within the time
periods set out in this Section 5.3 shall not constitute a waiver of any right
of the Corporation to compel any transfer required by subsection (1) of Section
5.2.
SECTION 5.4 ADDITIONAL ACTIONS TO PREVENT VIOLATION OR
ATTEMPTED VIOLATION. Upon a determination by the Board of Directors that
there has been or is threatened a purported Transfer of Prohibited Shares to a
Purported Acquiror, the Board of Directors may take such action in addition to
any action required by the preceding paragraph as it deems advisable to give
effect to the provisions of this Article Fifth, including, without limitation,
refusing to give effect on the books of this Corporation to such purported
Transfer or instituting proceedings to enjoin such purported Transfer.
Notwithstanding the foregoing sentence, the Board of Directors shall take no
action which would prohibit the settlement of transactions entered into through
the NASDAQ National Market System.
SECTION 5.5 OBLIGATION TO PROVIDE INFORMATION. The
Corporation may require as a condition to the registration of the Transfer of
any shares of its stock that the proposed Transferee furnish to the Corporation
all information reasonably requested by the Corporation with respect to all the
proposed Transferee's direct or indirect ownership interest in, or options to
acquire, stock of the Corporation.
SECTION 5.6 LEGENDS. All certificates evidencing
ownership of shares of stock of this Corporation that are subject
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to the restrictions on Transfer contained in this Article Fifth shall bear a
conspicuous legend referencing the restrictions set forth in this Article Fifth.
SECTION 5.7 FURTHER ACTIONS. Nothing contained in
this Article Fifth shall limit the authority of the Board of Directors to take
such other action to the extent permitted by law as it deems necessary or
advisable to protect the Corporation and the interests of the holders of its
securities in preserving the Tax Benefits. Without limiting the generality of
the foregoing, in the event of a change in law making one or more of the
following actions necessary or desirable or in the event that the Board of
Directors believes that such actions are in the best interest of the Corporation
and its Stockholders, the Board of Directors may (i) accelerate or extend the
Expiration Date or (ii) modify the definitions of any terms set forth in this
Article Fifth; provided that the Board of Directors shall determine in writing
that such acceleration, extension change or modification is reasonably necessary
or desirable to preserve the Tax Benefits under the Code and the regulations
thereunder or that the continuation of these restrictions is no longer
reasonably necessary for the preservation of the Tax Benefits, which
determination shall be based upon an opinion of legal counsel to the Corporation
and which determination shall be filed with the Secretary of the Corporation and
mailed by the Secretary to the Stockholders of this Corporation within ten days
after the date of any such determination. In addition, the Board of Directors
may, to the extent permitted by law, from time to time establish, modify, amend
or rescind Bylaws, regulations and procedures of the Corporation not
inconsistent with the express provisions of this Article Fifth for purposes of
determining whether any acquisition of stock of the Corporation would jeopardize
the Corporation's ability to preserve and use the Tax Benefits, and for the
orderly application, administration and implementation of the provisions of this
Article Fifth. Such procedures and regulations shall be kept on file with the
Secretary of the Corporation and with its transfer agent and shall be made
available for inspection by the public and, upon request, shall be mailed to any
holder of stock of the Corporation.
ARTICLE SIXTH: CLASSIFICATION OF THE BOARD OF DIRECTORS.
Directors of the Corporation will be divided into three classes, as nearly equal
in number as possible, with the initial term of office of the first class of
Directors to expire at the 1995 Annual Meeting of Stockholders of the
Corporation, the initial term of office of the second class of Directors to
expire at the 1996 Annual Meeting of Stockholders of the Corporation, and the
initial term of office of the third class of Directors to expire at the 1997
Annual Meeting of Stockholders of the Corporation. At each Annual Meeting of
Stockholders of the Corporation, Directors
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elected to succeed those Directors whose terms have thereupon expired shall be
elected for a term of office to expire at the third succeeding Annual Meeting of
Stockholders after their election. If the number of Directors is changed, any
increase or decrease shall be apportioned among the classes so as to maintain or
attain, as nearly as possible, the equality of the number of Directors in each
class, and when the number of Directors is increased and newly created
directorships are filled by the Board of Directors, the terms of the additional
Directors shall expire at the next election of the class for which such
Directors have been chosen. In no case will a decrease in the number of
Directors shorten the term of any incumbent Director.
ARTICLE SEVENTH: STOCKHOLDERS.
SECTION 7.1 ANNUAL MEETING. The Annual Meeting of the
Stockholders of the Corporation shall be held as provided in the Corporation's
Bylaws, as such Bylaws may be amended from time to time.
SECTION 7.2 SPECIAL MEETINGS. Special Meetings of the
Stockholders of the Corporation may be called by the Corporation upon the
written request of the holders of record of outstanding shares representing at
least 25% of the voting power of all the shares of the Corporation then entitled
to vote on the issue or issues to be presented, by the chief executive officer
of the Corporation, or by the Board of Directors pursuant to a resolution
adopted by the affirmative vote of a majority of the entire Board of Directors.
SECTION 7.3 FIRST ANNUAL MEETING. The first Annual Meeting
of the Stockholders of the Corporation shall take place on a date designated by
the Board of Directors of the Corporation which shall in no event be more than
twelve (12) months after the date of the first issuance of stock by the
Corporation.
ARTICLE EIGHTH: BYLAWS. In furtherance and not in limitation
of the powers conferred by the laws of the State of Delaware, the Board of
Directors of the Corporation is authorized and empowered to make, alter, amend
and repeal the Bylaws of the Corporation in any manner not inconsistent with the
laws of the State of Delaware.
ARTICLE NINTH: INDEMNIFICATION. The Corporation shall, to the
fullest extent permitted by Section 145 of the DGCL, as presently in effect or
as it may hereafter be amended, indemnify all persons whom it may indemnify
pursuant thereto and advance expenses of litigation to Directors and Officers
when so requested.
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ARTICLE TENTH: EXCULPATION. To the fullest extent permitted by
the DGCL, as presently in effect or as it may hereafter be amended, a Director
of this Corporation shall not be liable to the Corporation or its Stockholders
for monetary damages for breach of fiduciary duty as a Director.
ARTICLE ELEVENTH: COMPROMISE OR ARRANGEMENT OF CLAIMS.
Whenever a compromise or arrangement is proposed between this Corporation and
its creditors or any class of them and/or between this Corporation and its
Stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or Stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting
of the creditors or class of creditors, and/or of the Stockholders or class of
Stockholders of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
Stockholders or class of Stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the Stockholders or class of
Stockholders, of this Corporation, as the case may be, and also on this
Corporation.
ARTICLE TWELFTH: AMENDMENT. The Corporation reserves the right
to amend, alter, change or repeal any provision contained in this Amended and
Restated Certificate of Incorporation, in the manner now or hereinafter provided
by statute, and all rights conferred upon Stockholders herein are granted
subject to this reservation; PROVIDED, HOWEVER, that the affirmative vote of
Seventy-Five Percent (75%) of the shares of Common Stock entitled to vote
thereon shall be required to delete, modify, or amend any provision of Article
Sixth or this Article Twelfth of this Amended and Restated Certificate of
Incorporation.
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IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Certificate of Incorporation to be executed by Bryant P. Bynum, its
Vice President and Treasurer, and attested by its Secretary this 16th day of
May, 1995.
FOODBRANDS AMERICA, INC.
By: /S/ Bryant P. Bynum
-------------------------------------
Name: Bryant P. Bynum
Title: Vice President and Treasurer
ATTEST:
/S/ Darian B. Andersen
- --------------------------
Name: Darian B. Andersen
Title: Secretary
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EXHIBIT 3.2
AMENDED AND RESTATED
BYLAWS
OF
FOODBRANDS AMERICA, INC.
ARTICLE I
STOCKHOLDERS
Section 1. ANNUAL MEETING. The Annual Meeting of Stockholders of the
Corporation shall be held at the registered office of the Corporation in the
City of Dover, State of Delaware, or at such other place within or without the
State of Delaware, on the date and at the time fixed from time to time by the
Board of Directors and stated in the notice of meeting, for the election of
Directors and for the transaction of any other proper business that may come
before the meeting.
Section 2. SPECIAL MEETINGS. Special Meetings of the Stockholders of the
Corporation shall be called as provided in the Corporation's Certificate of
Incorporation, as such Certificate may be amended from time to time.
Section 3. NOTICE OF MEETINGS. Written notice of each meeting of the
Stockholders, stating the place, date and hour thereof and, in the case of a
Special Meeting, the purpose or purposes for which it is called, shall be
delivered personally or mailed, not less then ten (10) nor more than sixty (60)
days before the date of such meeting (or at such other time as may be required
by statute), to each Stockholder of record entitled to vote at such meeting. If
mailed, such notice is deemed given when deposited in the United States mail,
postage prepaid, directed to each Stockholder at his or her address as it
appears on the records of the Corporation.
Section 4. WAIVER OF NOTICE. Whenever notice is required to be given of
any Annual or Special Meeting of the Stockholders, a written waiver thereof,
signed by the person entitled to notice, whether before or after the time stated
in such notice, shall be deemed equivalent to notice. Neither the business to
be transacted at, nor the purpose of, any Annual or Special Meeting of the
Stockholders need be specified in any written waiver of notice. Attendance of a
person at a meeting of the Stockholders shall constitute a waiver of notice of
such meeting, except when the person attends a meeting for the express purpose
of objecting,
<PAGE>
at the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
Section 5. QUORUM. At any meeting of the Stockholders, the presence, in
person or by proxy, of the holders of a majority of the issued and outstanding
shares of the capital stock of the Corporation entitled to vote at such meeting
shall be necessary in order to constitute a quorum for the transaction of any
business. If there shall not be a quorum at any meeting of the Stockholders,
the holders of a majority of the shares entitled to vote present at such
meeting, in person or by proxy, may adjourn such meeting from time to time until
holders of the amount of shares required to constitute a quorum shall be present
in person or by proxy.
Section 6. ADJOURNMENT. When any meeting of the Stockholders is adjourned
to another time or place, notice need not be given of the adjourned meeting if
the time and place to which the meeting is adjourned are announced at the
meeting at which the adjournment is taken. At the adjourned meeting any
business may be transacted which might have been transacted at the original
meeting. If the adjournment is for more than thirty (30) days, or if after such
adjournment the Board of Directors shall fix a new record date for the adjourned
meeting, a notice of the adjourned meeting shall be given to each Stockholder of
record entitled to vote at such meeting.
Section 7. VOTING. Each Stockholder shall be entitled to one vote for
each share of capital stock of the Corporation held by such Stockholder. Voting
shall be by written ballot unless otherwise provided in the Certificate of
Incorporation, as such Certificate may be amended from time to time. Whenever
any corporate action is to be taken by vote of the Stockholders, it shall,
except as otherwise required by law or by the Certificate of Incorporation, be
authorized by a plurality of the votes cast at a meeting of Stockholders at
which a quorum is present by the holders of shares entitled to vote thereon.
Section 8. RECORD DATE.
(a) The Board of Directors may fix, in advance, a record date, which shall
not be more than sixty (60) nor less than ten (10) days before the date of any
meeting of Stockholders, nor more than sixty (60) days prior to any other
action, as the record date for the purpose of determining the Stockholders
entitled to notice of or to vote at any meeting of the Stockholders or any
adjournment thereof, or to express consent to corporate action in writing with-
out a meeting, or entitled to receive payment of any dividend or distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action.
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(b) If no record date is fixed:
(1) The record date for determining Stockholders entitled to notice
of or to vote at a meeting of Stockholders shall be at the close of
business on the day next preceding the day of notice, or, if notice is
waived, at the close of business on the day next preceding the day on which
the meeting is held.
(2) The record date for determining Stockholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
Section 9. PROXIES. Each Stockholder entitled to vote at a meeting of
Stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three (3) years
from its date, unless the proxy provides for a longer period.
ARTICLE II
DIRECTORS
Section 1. NUMBER; QUALIFICATIONS. The number of directors constituting
the Board of Directors shall be nine (9), unless and until otherwise provided
in the Bylaws or the Certificate of Incorporation of the Corporation, provided,
that the total number of directors shall always be an odd number.
Section 2. TERM OF OFFICE. The term of office of each Director shall be
as set forth in the Corporation's Certificate of Incorporation, as such
Certificate may be amended from time to time.
Section 3. MEETINGS. A meeting of the Board of Directors shall be held
for the election of Officers and for the transaction of such other business as
may come before such meeting as soon as practicable after the Annual Meeting of
the Stockholders. Other regular meetings of the Board of Directors may be held
at such times and places as the Board of Directors of the Corporation may from
time to time determine. Special Meetings of the Board of Directors may be
called at any time by the Chief Executive Officer or by a majority of the
Directors then in office. Meetings of the Board of Directors may be held within
or without the State of Delaware as the Board of Directors may from time to time
determine.
Section 4. NOTICE OF MEETINGS; WAIVER OF NOTICE; ADJOURNMENT. No notice
need be given of the first meeting of the
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Board of Directors after the Annual Meeting of Stockholders or of any other
regular meeting of the Board of Directors. Notice of a Special Meeting of the
Board of Directors, specifying the place, date and hour thereof, shall be
delivered personally, by mail, by telegraph or telecopy, or by telephone to each
Director at his or her address as such address appears on the books of the
Corporation at least one (1) business day (Saturdays, Sundays and legal holidays
not being considered business days for the purpose of these Bylaws) before the
date of such meeting. Whenever notice is required to be given under any
provision of the General Corporation Law of the State of Delaware or of the
Certificate of Incorporation or these Bylaws, a written waiver thereof, signed
by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a Director at a
Special Meeting shall constitute a waiver of notice of such meeting, except when
the Director attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
was not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any meeting of the Directors, or members of a committee of
Directors, need be specified in any written waiver of notice unless so required
by the Certificate of Incorporation or these Bylaws. A majority of the
Directors present, whether or not a quorum is present, may adjourn any meeting
to another time and place. Notice need not be given of the adjourned meeting if
the time and place to which the meeting is adjourned are announced at the
meeting at which the adjournment is taken, and at the adjourned meeting any
business may be transacted that might have been transacted at the original
meeting.
Section 5. QUORUM; VOTING. A majority of the entire Board of Directors
shall constitute a quorum for the transaction of business at a meeting of the
Board of Directors. The vote of the majority of the Directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors.
The Board of Directors may select one of its number to serve as Chairman of the
Board.
Section 6. PARTICIPATION BY TELEPHONE. Members of the Board of Directors,
or any committee thereof, may participate in a meeting of the Board of Directors
or such committee, as the case may be, by means of a conference telephone call
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in a meeting by such means
shall constitute presence in person at such meeting.
Section 7. ACTION WITHOUT A MEETING. Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting if all members of the Board of Directors or such
committee, as the case may be, consent thereto in writing, and such writing or
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writings are filed with the minutes of proceedings of the Board of Directors or
of such committee.
Section 8. COMMITTEES. The Board of Directors, by resolution passed by a
majority of the entire Board of Directors, may designate one or more committees,
each committee to consist of one or more of the directors. At the option of the
Investor (as defined in Article II, Section 10 below), at least one (1) Director
who is an Investor Designee (as defined in the Agreement) shall be appointed to
serve on each committee of the Board, other than committees appointed for the
special purpose of considering transactions with the Investor or any Investor
Affiliate (as defined in the Agreement). All actions taken by the Board of
Directors shall be recommendations that shall be submitted to the full Board of
Directors for approval unless, prior to such action being taken, the Board of
Directors has adopted a resolution expressly delegating to the committee the
power to take the action in question. The Board of Directors may designate one
or more directors as alternate members of any such committee, who may replace
any absent or disqualified member at any meeting of such committee.
Section 9. REMOVAL; RESIGNATION. Any Director or the entire Board of
Directors may be removed with cause by the holders of a majority of the shares
of capital stock of the Corporation then entitled to vote at any election of
Directors; provided, however, that if any inside director who is an officer of
the Corporation at the time of his or her appointment is no longer serving in
his or her position as an officer of the Corporation, such event shall be deemed
cause for removal. Any Director may resign at any time, upon written notice to
the Corporation.
Section 10. VACANCIES. Any vacancy created by the resignation, death or
removal of a director, or by a director declining to stand for re-election or a
director not being renominated for re-election, shall be filled by (a) the vote
of a majority of the Investor Designees (as defined in that certain Stock
Purchase Agreement (the "Agreement") dated February 16, 1993, between the
Corporation and Joseph Littlejohn & Levy Fund, L.P. (the "Investor")) then in
office, if such director was an Investor Designee, or (b) the vote of a majority
of the NonInvestor Directors (as defined in the Agreement) then in office, if
such director was a NonInvestor Director, or (c) another Airlie Designee (as
defined in that certain Stockholders Agreement dated March 22, 1993, between the
Corporation and The Airlie Group, L.P.) who is approved by the affirmative vote
of both a majority of the Directors who are Investor Designees and a majority of
the NonInvestor Directors, if such director was an Airlie Designee, or (d) by
the affirmative vote of both a majority of the Directors who are Investor
Designees and a majority of the NonInvestor Directors, if such director was the
Independent Director (as defined in the Agreement) other than the Airlie
Designee. A director elected to
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fill a vacancy shall hold office for the unexpired term of his or her
predecessor. In the event the number of directors is increased, additional
directors shall be elected as Investor Designees and NonInvestor Directors by
the Investor Designees and NonInvestor Directors, respectively, then in office,
to fill the vacancies created by the increase in the number of directors so that
thereafter the number of Investor Designees shall equal that number that the
Investor would otherwise have the right to nominate at such time pursuant to the
Agreement.
Section 11. COMPENSATION. The Board of Directors may fix the compensation
of Directors.
ARTICLE III
OFFICERS
Section 1. ELECTION; QUALIFICATIONS. At the first meeting of the Board of
Directors and as soon as practicable after each Annual Meeting of Stockholders,
the Board of Directors shall elect or appoint a President, one or more Vice
Presidents, a Secretary, and a Treasurer, and may elect or appoint at such time
or from time to time such additional Officers as it deems advisable. No Officer
need be a Director of the Corporation. Any number of offices may be held by the
same person, except that there shall always be two (2) persons who hold offices
which entitle them to sign instruments and stock certificates.
Section 2. TERM OF OFFICE; VACANCIES. Each Officer shall hold office
until the election and qualification of his or her successor or until his or her
earlier death, resignation or removal. Any vacancy occurring in any office,
whether because of death, resignation or removal, with or without cause, or
otherwise, shall be filled by the Board of Directors.
Section 3. REMOVAL; RESIGNATION. Any Officer may be removed from office
at any time with or without cause by vote of a majority of the Board of
Directors. Any Officer may resign his or her office at any time upon written
notice to the Corporation.
Section 4. POWERS AND DUTIES OF PRESIDENT. Unless the Board of Directors
has appointed a Chairman, the President shall (i) be the Chief Executive Officer
of the Corporation and shall have general charge and supervision of its
business, affairs, administration and operations, (ii) from time to time make
such reports concerning the Corporation as the Board of Directors of the
Corporation may require, (iii) preside at all meetings of the Stockholders and
the Board of Directors and (iv) have such other powers and shall perform such
other duties as may from time to time be assigned to him or her by the Board of
Directors. If a Chairman has been appointed, the President shall have such
powers and perform such duties as may from time to time be assigned to him or
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her by the Board of Directors, and shall, in the absence of
the Chairman, perform the duties and exercise the powers of the Chairman.
Section 5. POWERS AND DUTIES OF VICE PRESIDENTS. Each Vice President
shall be given such titles and designations and shall have such powers and
perform such duties as may from time to time be assigned to him or her by the
Board of Directors.
Section 6. POWERS AND DUTIES OF THE SECRETARY. The Secretary shall record
and keep the minutes of all meetings of the Stockholders and of the Board of
Directors in a book to be kept for that purpose. The Secretary shall attend to
the giving and serving of all notices by the Corporation. The Secretary shall
be the custodian of, and shall make or cause to be made the proper entries in,
the minute book of the Corporation and such other books and records as the Board
of Directors may direct. The Secretary shall be the custodian of the corporate
seal for the Corporation and shall affix or cause to be affixed such seal to
such contracts and other instruments as the Board of Directors may direct. The
Secretary shall have such other powers and shall perform such other duties as
may from time to time be assigned to him or her by the Board of Directors.
Section 7. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall be the
custodian of all funds and securities of the Corporation. Whenever required by
the Board of Directors, the Treasurer shall render a statement of the
Corporation's cash and other accounts, and shall cause to be entered regularly
in the proper books and records of the Corporation to be kept for such purpose
full and accurate accounts of the Corporation's receipts and disbursements. The
Treasurer shall at all reasonable times exhibit the Corporation's books and
accounts to any Director of the Corporation upon application at the principal
office of the Corporation during business hours. The Treasurer shall have such
other powers and shall perform such other duties as may from time to time be
assigned to him or her by the Board of Directors.
Section 8. POWERS AND DUTIES OF ASSISTANT SECRETARY AND ASSISTANT
TREASURER. The Assistant Secretary and Assistant Treasurer (or in the event
there be more than one Assistant Secretary or Assistant Treasurer, in the order
of their seniority, designation or election) shall, in the absence or disability
of the Secretary or Treasurer, respectively, perform the duties and exercise the
powers of the Secretary or Treasurer and shall perform such other duties as the
President or the Board of Directors shall prescribe.
Section 9. DELEGATION. In the event of the absence of any Officer of the
Corporation or for any other reason that the Board of Directors may deem
sufficient, the Board of Directors may at any time or from time to time delegate
all or any part of the
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powers or duties of any Officer to any other Officer or Officers or to any
Director or Directors.
ARTICLE IV
STOCK
The shares of the Corporation shall be represented by certificates in such
form as the Board of Directors may from time to time prescribe, signed by the
President or Vice President and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary. Any or all of the signatures on the
certificates may be a facsimile.
ARTICLE V
EXECUTION OF DOCUMENTS
All contracts, agreements, instruments, bills payable, notes, checks,
drafts, warrants or other obligations of the Corporation shall be made in the
name of the Corporation and shall be signed by such Officer or Officers as the
Board of Directors may from time to time designate. In the absence of such
designation the signature of the President shall suffice.
ARTICLE VI
SEAL
The seal of the Corporation shall contain the name of the Corporation, the
words "Corporate Seal," the year of its organization, and the word "Delaware."
ARTICLE VII
FISCAL YEAR
The fiscal year of the Corporation shall begin and end on such days as the
Board of Directors shall from time to time determine.
ARTICLE VIII
INDEMNIFICATION
The Corporation shall indemnify all Directors, Officers, employees, or
agents to the full extent as provided in the Corporation's Certificate of
Incorporation, as such Certificate may be amended from time to time.
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ARTICLE IX
AMENDMENT OF BYLAWS
These Bylaws may be amended or repealed, and any new Bylaws may be adopted,
by the Stockholders entitled to vote or by the Board of Directors.
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FOODBRANDS AMERICA, INC.
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE CUSIP 344822 10 1
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID AND NON ASSESSABLE SHARES OF THE COMMON STOCK, PAR VALUE $.01, OF
- --------------------------Foodbrands America, Inc.---------------------------
(HEREINAFTER CALLED THE CORPORATION), TRANSFERABLE ON THE BOOKS OF THE
CORPORATION BY THE HOLDER HEREOF IN PERSON OR BY DULY AUTHORIZED ATTORNEY,
UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE IS NOT
VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT.
WITNESS THE FACSIMILE SEAL OF THE CORPORATION AND THE FACSIMILE
SIGNATURES OF ITS DULY AUTHORIZED OFFICERS.
DATED
/s/Darian B. Andersen [corporate seal] /s/ R. Randolph Devening
- --------------------- ------------------------
Secretary Chairman of the Board
<PAGE>
FOODBRANDS AMERICA
THE CORPORATION'S CERTIFICATE OF INCORPORATION CONTAINS RESTRICTIONS
PROHIBITING THE SALE, TRANSFER, DISPOSITION, PURCHASE OR ACQUISITION OF ANY
COMMON STOCK OF THE CORPORATION WITHOUT THE AUTHORIZATION OF THE CORPORATION'S
BOARD OF DIRECTORS OR DESIGNATED OFFICER BY OR TO ANY HOLDER (A) WHO
BENEFICIALLY OWNS DIRECTLY OR THROUGH ATTRIBUTION (AS DETERMINED UNDER SECTION
382 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED FROM TIME TO TIME (THE
"IRC")) 5% OR MORE OF ANY CLASS OF THE THEN ISSUED AND OUTSTANDING SHARES OF
COMMON STOCK OF THE CORPORATION OR (B) WHO, UPON THE SALE, TRANSFER,
DISPOSITION, PURCHASE OR ACQUISITION OF ANY SHARES OF COMMON STOCK OF THE
CORPORATION, WOULD BENEFICIALLY OWN DIRECTLY OR THROUGH ATTRIBUTION (AS
DETERMINED UNDER SECTION 382 OF THE IRC) 5% OR MORE OF ANY CLASS OF THE THEN
ISSUED AND OUTSTANDING SHARES OF COMMON STOCK OF THE CORPORATION. THE
CORPORATION WILL FURNISH A COPY OF ITS CERTIFICATE OF INCORPORATION TO THE
HOLDER OF RECORD OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE
CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT --.................Custodian...............
(Cust) (Minor)
under Uniform Gifts to Minors
Act..........................
(State)
Additional abbreviations may also be used though not in the above list
FOR VALUE RECEIVED___________HEREBY SELL, ASSIGN AND TRANSFER UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
/ /
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(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, AS ASSIGNEE)
-----------------------------------------------------------------------------
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SHARES
----------------------------------------------------------------------
OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY
IRREVOCABLY CONSTITUTE AND APPOINT
ATTORNEY
----------------------------------------------------------------------
TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH
FULL POWER OF SUBSTITUTION IN THE PREMISES.
DATED
------------------------
-------------------------------------------
NOTICE: THE SIGNATURE TO THE ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON
THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
FOODBRANDS AMERICA, INC., as Successor to the Issuer
and
the GUARANTORS as identified herein
and
FIRST FIDELITY BANK, NATIONAL ASSOCIATION, as Trustee
SECOND SUPPLEMENTAL INDENTURE
Dated as of May 16, 1995
$110,000,000
9 3/4% Senior Subordinated Redeemable Securities due 2000
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of May 16, 1995, between
FOODBRANDS AMERICA, INC., a Delaware corporation ("Foodbrands America"), as
successor to Doskocil Companies Incorporated, a Delaware corporation (the
"Company"), DOSKOCIL SPECIALTY BRANDS COMPANY (formerly known as International
Multifoods Foodservice Corp.), a Delaware corporation, WILSON FOODS CORPORATION,
a Delaware corporation, STOPPENBACH, INC., a Wisconsin corporation, CONCORDIA
FOODS CORPORATION, a Delaware corporation, PAFCO IMPORTING COMPANY, INC., a
Delaware corporation, NATIONAL SERVICE CENTER, INC., a Delaware corporation,
DIXIE FOODS COMPANY, a Delaware corporation, SHREVEPORT FOODS COMPANY, a
Delaware corporation, WILSON CERTIFIED EXPRESS, INC., a Delaware corporation,
and MINNESOTA FOODSERVICE, INC., a Minnesota corporation (individually each a
"Guarantor" and collectively the "Guarantors"), and FIRST FIDELITY BANK,
NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee").
WHEREAS, prior to the Merger (as defined below), the Company and
the Trustee are parties to that certain Indenture dated as of April 28, 1993
(the "Indenture") providing for the issuance initially of $110,000,000 aggregate
principal amount of the Company's 9 3/4% Senior Subordinated Redeemable
Securities due 2000 (the "Securities") and to that certain First Supplemental
Indenture dated as of June 1, 1994, whereby each of the Guarantors subjected
itself to the provisions of the Indenture as a Guarantor;
WHEREAS, pursuant to that certain Merger Agreement dated as of
March 24, 1995, the Company, on May 16, 1995, simultaneously with the execution
of this Second Supplemental Indenture, was merged (the "Merger") with and into
New Doskocil Incorporated, a Delaware corporation and a wholly-owned subsidiary
of the Company;
WHEREAS, upon consummation of the Merger, each share of the common
stock of Doskocil was converted into one share of the common stock of the
surviving corporation, which was renamed "Foodbrands America, Inc.," and the
common stock of the surviving corporation was subject to certain stock transfer
restrictions enacted to protect substantial net operating loss carryforwards;
WHEREAS, Foodbrands America, as the successor corporation, by
operation of law, (i) assumed the Company's existing agreements, (ii) has the
same consolidated assets, liabilities and stockholders' equity as the Company
immediately prior to the Merger, and (iii) has the same authorized equity
capital as the Company immediately prior to the Merger;
WHEREAS, among the requirements set forth in Article Five of the
Indenture, which in certain circumstances permits a merger of the Company with
and into another corporation, are that the surviving corporation expressly
assume by supplemental indenture
- 1 -
<PAGE>
all the obligations of the Company under the Securities and the Indenture, and
that each Guarantor confirm by supplemental indenture that its Guarantee of the
Securities will apply to the obligations of the surviving person under the
Indenture;
WHEREAS, Foodbrands America desires to assume all the obligations
of the Company under the Securities and under the Indenture as supplemented by
the First Supplemental Indenture and the Company desires that such assumption
occur; and
WHEREAS, each Guarantor desires that its Guaranty of the
Securities will apply to the obligations of Foodbrands America under the
Indenture as supplemented by the First Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing statements, each
party agrees, for the benefit of the other parties and for the equal and ratable
benefit of the Holders of the Securities, as follows:
SECTION 1. ASSUMPTION OF THE COMPANY'S OBLIGATIONS.
Foodbrands America hereby expressly assumes and covenants to perform all the
duties and obligations of the Company under the Securities and under the
Indenture as supplemented by the First Supplemental Indenture, agrees to be
substituted for the Company under the Securities and under the Indenture as
supplemented by the First Supplemental Indenture, and further agrees to observe,
perform, and be bound by all terms, provisions, covenants and conditions of the
Securities and of the Indenture as supplemented by the First Supplemental
Indenture.
SECTION 2. CONFIRMATION OF THE GUARANTEES. Each Guarantor
hereby expressly agrees and confirms that its Guarantee of the Securities will
remain in full force and effect and will apply to the obligations of Foodbrands
America under the Indenture as supplemented by the First Supplemental Indenture
in the same manner and to the same extent that such Guarantee would apply to the
obligations of the Company if the Merger had not taken place.
SECTION 3. ACKNOWLEDGEMENT. Each party hereto
acknowledges that this Second Supplemental Indenture is delivered as a
supplemental indenture pursuant to Article Five of the Indenture.
SECTION 4. TERMS DEFINED. For all purposes of this Second
Supplemental Indenture, except as otherwise defined or unless the context
otherwise requires, terms used in capitalized form in this Second Supplemental
Indenture and defined in the Indenture or First Supplemental Indenture have the
meanings
- 2 -
<PAGE>
specified in the Indenture or First Supplemental Indenture, as the case may be.
SECTION 5. INDENTURE. Except as amended hereby, the
Indenture, First Supplemental Indenture and the Securities are in all respects
ratified and confirmed and all terms thereof shall remain in full force and
effect.
SECTION 6. GOVERNING LAW. This Second Supplemental
Indenture shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflicts of laws rules existing there.
SECTION 7. SUCCESSORS. All agreements of Foodbrands
America, each of the Guarantors and the Trustee in this Second Supplemental
Indenture and the Securities shall bind and inure to the benefit of their
respective successors.
SECTION 8. SEVERABILITY. If any provision of this Second
Supplemental Indenture is held illegal, invalid or unenforceable for any reason
whatsoever by any court having jurisdiction, the invalidity of such provision
shall not affect any of the other provisions of this Second Supplemental
Indenture, and this Second Supplemental Indenture shall be construed or enforced
to such effect as if the illegal or invalid portion had not been contained
herein.
SECTION 9. AMENDMENTS. The provisions of this Second
Supplemental Indenture may only be amended, waived or modified by a separate
writing executed by the parties hereto.
SECTION 10. MULTIPLE COUNTERPARTS. The parties may sign
multiple counterparts of this Second Supplemental Indenture. Each signed
counterpart shall be deemed an original, but all of them together represent the
same agreement.
SECTION 11. EFFECTIVENESS. The provisions of this Second
Supplemental Indenture will take effect immediately upon its execution and
delivery by the Trustee, Foodbrands America and each of the Guarantors.
SECTION 12. RECITALS. The recitals of fact contained
herein shall be taken as the statements of Foodbrands America and the
Guarantors, and the Trustee assumes no responsibility for the correctness of the
same. The Trustee makes no representations as to the validity or adequacy of
this Second Supplemental Indenture or its due execution by Foodbrands America
and the Guarantors.
SECTION 13. NOTICES. Any notices or communication to any
of the Parties shall be given pursuant to Section 11.02 of the
- 3 -
<PAGE>
Indenture, addressed as set forth therein for the Trustee, as set forth in
Section 2.8 of the First Supplemental Indenture for any Guarantor, and as
follows for Foodbrands America:
Foodbrands America, Inc.
2601 N.W. Expressway, Suite 100
Oklahoma City, Oklahoma 73112
Attention: Darian B. Andersen, Esq.
With a copy to:
Shook Hardy & Bacon P.C.
One Kansas City Place
1200 Main Street
Kansas City, Missouri 64105
Attention: Kevin R. Sweeney, Esq.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
DOSKOCIL SPECIALTY BRANDS COMPANY
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
WILSON FOODS CORPORATION
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
- 4 -
<PAGE>
STOPPENBACH, INC.
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
CONCORDIA FOODS CORPORATION
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
PAFCO IMPORTING COMPANY, INC.
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
NATIONAL SERVICE CENTER, INC.
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
- 5 -
<PAGE>
DIXIE FOODS COMPANY
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
SHREVEPORT FOODS COMPANY
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
WILSON CERTIFIED EXPRESS, INC.
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
- 6 -
<PAGE>
MINNESOTA FOODSERVICE, INC.
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Trustee
By: /s/ George J. Rayzis
--------------------------------
Name: George J. Rayzis
ATTEST: Title: Vice President
SEAL:
By: /s/ John H. Clapham
---------------------------
Name: John H. Clapham
Title: Assistant Secretary
FOODBRANDS AMERICA, INC.
By: /S/ BRYANT P. BYNUM
--------------------------------
Name: Bryant P. Bynum
ATTEST: Title: Vice President
SEAL:
By: /S/ DARIAN B. ANDERSEN
---------------------------
Name: Darian B. Andersen
Title: Secretary
- 7 -
<PAGE>
SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT, dated as of May 16, 1995 (this
"Supplemental Agreement") by Foodbrands America, Inc., a Delaware corporation
("Foodbrands America"), as successor to Doskocil Companies Incorporated, a
Delaware corporation ("Doskocil").
W I T N E S S E T H
WHEREAS, Doskocil, Chemical Bank, a New York banking corporation
and as agent (in such capacity, the "Agent") for the banks listed on Exhibit A
attached hereto (the "Banks") and the Banks are parties to that certain Warrant
Agreement, dated as of October 31, 1991 (the "Warrant Agreement"), and to that
certain Waiver Agreement with respect thereto dated as of March 5, 1993;
WHEREAS, pursuant to that certain Merger Agreement dated as of
March 24, 1995, Doskocil, on May 16, 1995, simultaneously with the execution of
this Supplemental Agreement, was merged (the "Merger") with and into New
Doskocil Incorporated, a Delaware corporation and a wholly-owned subsidiary of
Doskocil;
WHEREAS, upon consummation of the Merger, each share of the common
stock of Doskocil was converted into one share of the common stock of the
surviving corporation, which was renamed "Foodbrands America, Inc.," and the
common stock of the surviving corporation was subject to certain stock transfer
restrictions enacted to protect substantial net operating loss carryforwards;
WHEREAS, Foodbrands America, as the successor corporation, by
operation of law, (i) assumed Doskocil's existing agreements, (ii) has the same
consolidated assets, liabilities and stockholders' equity as Doskocil
immediately prior to the Merger, and (iii) has the same authorized equity
capital as Doskocil immediately prior to the Merger;
WHEREAS, the Warrant Agreement provides in Section 12(a)(iv)
that if Doskocil merges with and into another corporation, the successor
corporation in any such merger must execute and deliver a supplemental agreement
to the Agent (unless otherwise defined herein, capitalized terms are as defined
in the Warrant Agreement) providing that the Holder of any Warrants will
receive, upon proper exercise of the Warrants, the securities or property to
which such Holder is entitled pursuant to the Warrant Agreement; and
WHEREAS, the Warrant Agreement provides in Section 24 that the
successor corporation in any merger of Doskocil shall execute and deliver to the
Holders a supplemental agreement by
<PAGE>
which the successor corporation expressly assumes the due and punctual
performance and observance of each and every covenant and condition of the
Warrant Agreement to be performed and observed by Doskocil, and Foodbrands
America desires to assume all such obligations of Doskocil.
NOW, THEREFORE, in consideration of the foregoing statements and
the mutual agreements set forth in the Warrant Agreement, the undersigned
agrees, pursuant to the terms of the Warrant Agreement, as follows:
SECTION 1. Pursuant to Section 24 of the Warrant Agreement,
Foodbrands America hereby expressly assumes the due and punctual performance and
observance of each and every covenant and condition of the Warrant Agreement to
be performed and observed by Doskocil.
SECTION 2. Pursuant to Section 12(a)(iv) of the Warrant
Agreement, Foodbrands America hereby agrees that the provisions of the Warrant
Agreement shall hereafter be applicable to the shares of the common stock of
Foodbrands America, and that upon the exercise of any Warrants by the Holder
thereof in accordance with the terms of the Warrant Agreement, Foodbrands
America will deliver to such Holder the number of shares of the common stock of
Foodbrands America to which such Holder is entitled pursuant to the Warrant
Agreement.
SECTION 3. Foodbrands America hereby agrees to deliver as
promptly as practicable by certified mail a copy of this Supplemental Agreement
to the Agent and to each of the Holders.
SECTION 4. Except to the extent hereby supplemented, the Warrant
Agreement remains in full force and effect and is hereby ratified and confirmed.
- 2 -
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this document to be
duly executed on the day, month and year first above written.
FOODBRANDS AMERICA, INC.
By: /S/ BRYANT P. BYNUM
---------------------------
Name: Bryant P. Bynum
Title: Vice President
Attest:
/S/ DARIAN B. ANDERSEN
- -----------------------------
Name: Darian B. Andersen
Title: Secretary
(Seal)
- 3 -
<PAGE>
EXHIBIT A
Chemical Bank
Bahrain Middle East Bank
The Bank of New York
CIBC, Inc.
Creditanstalt-Bankverein
First Bank National Association
The First National Bank of Boston
Hibernia National Bank
NCNB National Bank of North Carolina
Oppenheimer & Co., Inc.
- 4 -
<PAGE>
FOODBRANDS AMERICA, INC.
Human Resources Policy/Procedure
INTRODUCTION/PURPOSE
Occasionally, it may be necessary to terminate the employment of
an Officer at the Company's request as a result of a reduction in
workforce or job elimination. This Policy outlines the
eligibility requirements and the level of separation pay and
benefit protection available to an Officer whose job has been
eliminated.
The purpose of this Policy is to establish guidelines to be used
in administering separations which are initiated by the Company
either as a general workforce reduction, closing of a facility,
elimination of position(s), or any reason other than for death,
disability or "cause." Termination for "cause" shall have
occurred where an Officer is terminated because of conviction of
a felony, an act or acts of dishonesty or moral turpitude,
willful misconduct in connection with the Officer's employment
(including excessive absenteeism or tardiness), neglect of duties
or a violation of the rules and policies of the unit, operating
facility, subsidiary, division, branch or location to which the
Officer is assigned. The decision as to whether a termination is
for "cause" will be made at the sole discretion of the Company.
Disability shall be a total disability as defined in the
Company's Long Term Disability Plan.
However, with respect to the sale or divestiture of any unit,
operating facility, subsidiary, division, branch or location of
Foodbrands America, Inc. or any of its subsidiaries, if the
Officer is offered employment with the purchaser, and the Officer
accepts such offer, then, the Officer shall not be entitled to
the separation payment under this Policy.
SCOPE
This Policy is applicable to Corporate and Division Officers of
Foodbrands America, Inc. and its subsidiaries who are serving in
that capacity at the time of separation.
For purposes of this Policy, a Corporate Officer is an employee
who has been elected as an Officer of Foodbrands America, Inc. by
the Board of Directors and is listed or will be listed as an
Officer in the Foodbrands America, Inc. Proxy Statement.
<PAGE>
A Division Officer is a Vice President who is appointed to that
position by the President of Foodbrands America, Inc. or the
President of a division or subsidiary and who is not listed or is
not scheduled to be listed as an Officer in the Proxy Statement
of Foodbrands America, Inc.
To be eligible for and receive pay/benefits under this Policy,
affected Officers must agree to and execute a General Release and
Separation Agreement in a form provided by and acceptable to the
Company. Officers who do not execute the General Release and
Separation Agreement will not be eligible for and will not
receive any separation pay/benefits under this Policy.
SEPARATION PAY SCHEDULE
CORPORATE OFFICERS: Separation pay for Corporate Officers who
have served for two years or less will be as follows:
(a) Current annual base salary for twenty weeks;
(b) Current allowances (i.e., auto allowance) for twenty
weeks;
(c) Vacation accrued but not used; and
(d) Cash bonus(es), earned but not paid in accordance with
the current Cash Incentive Plan.
Separation pay for Corporate Officers who have served for more
than two years will be as follows:
(a) Current annual base salary for nine months;
(b) Current allowances (i.e., auto allowance) for nine
months;
(c) Vacation accrued but not used; and
(d) Cash bonus(es), earned but not paid in accordance with
the current Cash Incentive Plan.
<PAGE>
All Corporate Officers will be eligible for outplacement service
as provided by the Company.
DIVISION OFFICERS: Separation pay for Division Officers who have
served for two years or less will be as follows:
(a) Current annual base salary for eighteen weeks;
(b) Current allowances (i.e., auto allowance) for eighteen
weeks;
(c) Vacation accrued but not used; and
(d) Cash bonus(es), earned but not paid in accordance with
the current Cash Incentive Plan.
Separation pay for Division Officers who have served for more
than two years will be as follows:
(a) Current annual base salary for six months;
(b) Current allowances (i.e., auto allowance) for six
months;
(c) Vacation accrued but not used; and
(d) Cash bonus(es), earned but not paid in accordance with
the current Cash Incentive Plan.
All Division Officers will be eligible for outplacement service
as provided by the Company.
CALCULATING YEARS OF SERVICE: For purposes of calculating Years
of Service under this Policy, Years of Service are determined by
subtracting the eligible Officer's calendar year in which his
most recent date of hire occurred from the current calendar year
in which separation occurs. For example, if an Officer was hired
in 1984 and was involuntarily separated in 1994, then, the
Officer will be credited with 10 Years of Service for purposes of
determining the separation pay. Separation pay under this Policy
will only be granted on the basis of the Years of Service of
continuous employment. Prior periods of employment in which
there has been a break in service (except for authorized leaves
of absence) will not be used to calculate Years of Service for
separation pay.
<PAGE>
METHOD OF PAYMENT
All separation payments made under this Policy will be made only
after the period of time required for the executed General
Release and Separation Agreement to become irrevocable. At that
time, in accordance with the provisions of the General Release
and Separation Agreement, a lump sum payment, less appropriate
federal, state and local taxes, will be made reflecting the
amount provided above. However, the Company reserves the right
to elect to pay separation payments under this Policy over an
extended period, not to exceed two years, to be determined at
such time as the General Release and Separation Agreement is to
be executed.
The payment due under this Policy will be the amount determined
by the following:
(a) Base pay for the salary grade and Years of Service
according to the Separation Pay Schedule;
(b) 100% of vacation accrued but not used; and
(c) 100% of any accrued but unpaid bonus(es), if applicable.
OTHER PROVISIONS
TERMINATION FOR DEATH, DISABILITY OR "CAUSE": In the event an
Officer is terminated for death, disability or "cause," then no
separation payment will be made under this Policy except for
vacation accrued but not used.
BONUS PAYMENTS: Separated Officers who are under the Cash
Incentive Plan at the time of separation will be paid any
bonus(es) earned but not paid in accordance with the current Cash
Incentive Plan.
GROUP LIFE INSURANCE: Group Life Insurance will be cancelled on
the last day of the month following the month in which the
Officer is terminated.
OFFICER HEALTH CARE PLANS: The individual and eligible dependents
covered under the medical, dental, vision, and prescription drug
programs are canceled as of midnight on the last day of the month
following the month in which employment is terminated, provided
the Officer continues to pay the same premium payment which was
being paid prior to separation. The Corporate Office Benefits
Department will send information concerning options to continue
coverage under COBRA.
AMENDMENT OR TERMINATION OF POLICY: The Board of Directors of the
Company reserves the right to amend, modify or terminate this
Policy at any time. The form of any amendment or termination of
this Policy shall be in writing.
<PAGE>
MISCELLANEOUS
EMPLOYMENT STATUS: This Policy does not constitute a contract of
employment or impose any obligation on the Officer to continue,
or for the Company or any subsidiary to retain the Officer's
employment.
CLAIMS PROCEDURE:
(a) Determinations as to the right of any Officer to
payments under this Policy shall be made by a Committee composed
of the Senior Vice President/CFO and Corporate Director of Human
Resources. If any request for payments is wholly or partially
denied, the Officer shall be notified, in writing, of such
denial, including in such notification the following information:
(i) the specific reason(s) for such denial;
(ii) the specific references to the pertinent Policy
provisions upon which the denial is based;
(iii) a description of any additional material and
information which may be needed to clarify the request,
including an explanation of why such information is required;
and
(iv) an explanation of this Policy's review procedure with
respect to denial of such benefits.
Any such notice to be delivered to any Officer shall be
personally delivered within a reasonable time to such Officer by
obtaining a signed receipt or shall be mailed to such Officer by
certified or registered mail with return receipt requested. The
notice shall be written to the best of the ability of the
Committee in a manner that may be understood without legal
counsel.
(b) Any Officer whose claim has been denied in accordance
with the foregoing Section (a) may appeal to the Committee for
review of such denial by making a written request therefore
within 60 days of receipt of the notification of such denial.
Such Officer may examine documents pertinent to the review and
may submit to the Committee written issues and comments. Within
60 days after receipt of the request for review, the Committee
shall communicate to the Officer, in writing, its decision and
the communication shall set forth the reason or reasons for the
decision and specific reference to those Policy provision upon
which the decision is based.
OTHER COMMITTEE POWERS AND DUTIES: The Committee shall have such
powers and duties as may be necessary to discharge its duties
hereunder, including, but not by way of limitation, the
following:
(a) to construe and interpret the Policy and resolve any
ambiguities with respect to any of the terms and provisions
thereof as written and as applied to the operation of the Policy;
and
(b) to decide all questions of eligibility and determine the
amount, manner and time of payment of any benefits hereunder.
Policy Status: This Policy is in lieu of, replaces and
supersedes Policy 3.14.1 dated March 15, 1993.
<PAGE>
AGREEMENT, WAIVER AND ACKNOWLEDGEMENT
AGREEMENT, WAIVER AND ACKNOWLEDGEMENT, dated as of May 16, 1995
(this "Agreement"), between Foodbrands America, Inc., a Delaware corporation
("Foodbrands America"), as successor to Doskocil Companies Incorporated, a
Delaware Corporation ("Doskocil"), and Joseph Littlejohn & Levy Fund, L.P., a
Delaware limited partnership (the "Investor").
W I T N E S S E T H:
WHEREAS, prior to the Merger (as defined below), Doskocil and the
Investor were parties to that certain Stock Purchase Agreement dated February
16, 1993 (the "JLL Agreement");
WHEREAS, pursuant to that certain Merger Agreement dated as of
March 24, 1995, Doskocil, on May 16, 1995, simultaneously with the execution of
this Agreement, was merged (the "Merger") with and into New Doskocil
Incorporated, a Delaware corporation and a wholly-owned subsidiary of Doskocil;
WHEREAS, upon consummation of the Merger, each share of the common
stock of Doskocil was converted into one share of the common stock of the
surviving corporation, which was renamed "Foodbrands America, Inc.," and the
common stock of the surviving corporation was subject to certain stock transfer
restrictions enacted to protect substantial net operating loss carryforwards;
WHEREAS, Foodbrands America, as the successor corporation, by
operation of law, (i) assumed Doskocil's existing agreements, (ii) has the same
consolidated assets, liabilities and stockholders' equity as Doskocil
immediately prior to the Merger, and (iii) has the same authorized equity
capital as Doskocil immediately prior to the Merger; and
WHEREAS, Foodbrands America and the Investor desire that all of
the provisions of the JLL Agreement remain in full force and effect and that all
obligations and rights of Doskocil shall hereafter be binding upon and inure to
the benefit of Foodbrands America as successor to Doskocil.
NOW, THEREFORE, in consideration of the agreements and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. The Investor and Foodbrands America acknowledge
and agree that Foodbrands America shall succeed in all respects to the rights
and obligations of Doskocil under the JLL
<PAGE>
Agreement and that the Investor's rights and obligations under the JLL Agreement
are unaffected by the Merger, except that thereafter all such rights and
obligations are with respect to Foodbrands America rather than Doskocil.
SECTION 2. The Investor hereby waives any termination of, or
right to terminate, any of the provisions of subsections (a), (b) or (c) of
Section 4.4 of the JLL Agreement that has arisen, occurred or accrued pursuant
to the terms of subsections (f) or (g) of said Section 4.4, or pursuant to any
other provision of the JLL Agreement, as a result of approval of the Merger by
any or all of the directors of Doskocil, the consummation of the Merger, or any
actions of Doskocil or its directors related to such approval or consummation.
SECTION 3. Except to the extent hereby supplemented, amended
or waived, the provisions of the JLL Agreement remain in full force and effect
and are hereby ratified and confirmed.
SECTION 4. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which taken together
shall constitute but one instrument. Either party may deliver a signed
counterpart signature page of this Agreement by fax and any such faxed signature
page shall be deemed to be an original for all purposes.
- 2 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the date first
above written.
JOSEPH LITTLEJOHN & LEVY FUND, L.P.
By: JLL Associates, L.P., General
Partner
By: /s/ Angus C. Littlejohn
------------------------------------
Name: Angus C. Littlejohn
Title: Partner
Attest:
/s/ Thomas W. Arenz
- ------------------------------
Name: Thomas W. Arenz
Title: Principal
FOODBRANDS AMERICA, INC.
By: /s/ Bryant P. Bynum
------------------------
Name: Bryant P. Bynum
Title: Vice President
Attest:
/s/ Darian B. Andersen
- --------------------------
Name: Darian B. Andersen
Title: Secretary
- 3 -
<PAGE>
DOSKOCIL COMPANIES INCORPORATED
2601 Northwest Expressway, Suite 1000W
Oklahoma City, Oklahoma 73112
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
MAY 16, 1995
--------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of DOSKOCIL
COMPANIES INCORPORATED, a Delaware corporation (the "Company"), will be held at
the Oklahoma City Marriott Hotel, 3233 Northwest Expressway, Oklahoma City,
Oklahoma, at 10:00 a.m., Central Daylight Time, on Tuesday, May 16, 1995 (the
"Annual Meeting"), for the following purposes:
(1) To elect four members to the Company's Board of Directors;
(2) To increase the aggregate number of shares of the Company's common
stock, par value $.01 per share (the "Existing Common Stock"), available
under the Company's 1992 Stock Incentive Plan from 810,000 to 1,900,000;
(3) To consider and act upon a proposal to approve the Merger Agreement
dated as of March 24, 1995 (the "Merger Agreement"), by and between the
Company and New Doskocil Incorporated, a Delaware corporation and a
newly-formed, wholly-owned subsidiary of the Company ("New Subsidiary"),
pursuant to which the Company will be merged with and into New
Subsidiary, with New Subsidiary being the surviving corporation (the
"Merger"), which is being proposed by the Board of Directors of the
Company to accomplish the following objectives:
(a) to permit the Company to continue its operations under the new name
Foodbrands America, Inc., which the Board believes better reflects the
Company's focus as a diversified and increasingly broad-based food
company; and
(b) to help assure that the Company's substantial tax benefits (in
the form of net operating loss carryforwards) will continue to be
available to offset future taxable income by decreasing the likelihood
of an "ownership change" for federal income tax purposes, which will be
accomplished by including certain transfer restrictions in New
Subsidiary's Certificate of Incorporation and certain legends on the
certificates representing the common stock, par value $.01 per share,
of New Subsidiary (the "New Common Stock"), which will be issued to
stockholders in exchange for the Existing Common Stock; and
(4) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The Board of Directors of the Company has fixed the close of business on
Thursday, March 30, 1995, as the record date for the determination of
stockholders of the Company entitled to notice of and to vote at the Annual
Meeting and at any adjournment thereof. Only holders of record on such date will
be entitled to vote at the Annual Meeting. A copy of the Proxy
Statement/Prospectus relating to the Annual Meeting, a Form of Proxy and the
Company's 1994 Annual Report to Stockholders accompany this Notice. The Proxy
Statement/Prospectus also relates to the shares of New Common Stock that
stockholders will receive pursuant to the Merger.
PLEASE COMPLETE, DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING
RETURN ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. IF YOU LATER DESIRE TO REVOKE OR CHANGE YOUR PROXY FOR ANY REASON, YOU
MAY DO SO AT ANY TIME BEFORE THE VOTING BY DELIVERING TO THE COMPANY A WRITTEN
NOTICE OF REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE OR BY
ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON.
PLEASE DO NOT SEND ANY CERTIFICATES FOR YOUR STOCK AT THIS TIME. IF THE
MERGER IS CONSUMMATED, YOU WILL RECEIVE INSTRUCTIONS REGARDING THE SURRENDER OF
YOUR STOCK CERTIFICATES.
By Order of the Board of Directors,
[signature of Darian B. Andersen]
Darian B. Andersen
Corporate Secretary
Oklahoma City, Oklahoma
April 10, 1995
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROXY STATEMENT/PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 3, 1995
PROXY STATEMENT/PROSPECTUS
------------------------
DOSKOCIL COMPANIES INCORPORATED
NEW DOSKOCIL INCORPORATED
2601 NORTHWEST EXPRESSWAY, SUITE 1000W
OKLAHOMA CITY, OKLAHOMA 73112
------------------------------
ANNUAL MEETING OF STOCKHOLDERS
------------------------
TO BE HELD MAY 16, 1995
This Proxy Statement/Prospectus is being furnished in connection with the
solicitation of proxies by and on behalf of the Board of Directors of Doskocil
Companies Incorporated, a Delaware corporation (the "Company"), for use at the
annual meeting of holders of the common stock, par value $.01 per share, of the
Company (the "Existing Common Stock") to be held on Tuesday, May 16, 1995 at
10:00 a.m., Central Daylight Time, at the Oklahoma City Marriott Hotel, 3233
Northwest Expressway, Oklahoma City, Oklahoma and any adjournment thereof (the
"Annual Meeting"). This Proxy Statement/Prospectus and accompanying Notice of
Annual Meeting of Stockholders, Form of Proxy and the Company's 1994 Annual
Report to Stockholders (the "Annual Report") are first being mailed to
stockholders on or about April 10, 1995.
At the Annual Meeting, stockholders will be asked to consider and act upon
the following proposals: (i) Proposal I: the election of four members to the
Company's Board of Directors; (ii) Proposal II: the increase of the aggregate
number of shares of Existing Common Stock under the Company's 1992 Stock
Incentive Plan (the "Stock Incentive Plan") from 810,000 to 1,900,000; and (iii)
Proposal III: approval of the Merger Agreement, dated as of March 24, 1995 (the
"Merger Agreement"), by and between the Company and New Doskocil Incorporated, a
Delaware corporation and a newly-formed, wholly-owned subsidiary of the Company
("New Subsidiary"), pursuant to which the Company will be merged with and into
New Subsidiary, with New Subsidiary being the surviving corporation (the
"Merger"). The Merger is intended to accomplish two objectives. First, it will
permit the Company to continue its operations under the new name Foodbrands
America, Inc., which the Board believes better reflects the Company's focus as a
diversified and increasingly broad-based food company (the "Name Change").
Second, the Merger will help assure that the Company's substantial net operating
loss carryforwards ("NOLs") will continue to be available to offset future
taxable income by decreasing the likelihood of an "ownership change" for federal
income tax purposes, which will be accomplished by including certain transfer
restrictions in New Subsidiary's Certificate of Incorporation and certain
legends on the stock certificates representing the common stock, par value $.01
per share, of New Subsidiary (the "New Common Stock") (collectively, the
"Transfer Restrictions"). See "Proposal III. The Merger."
Except for the Name Change and the Transfer Restrictions, following the
Merger, New Subsidiary will be substantially identical to the Company. The
directors and officers of the Company immediately prior to the Merger will be
the directors and officers, respectively, of New Subsidiary immediately
following the Merger. Immediately following the Merger, the Certificate of
Incorporation of New Subsidiary will be substantially identical to the Company's
Amended and Restated Certificate of Incorporation (the "Company's Certificate of
Incorporation") immediately prior to the Merger, except for the Name Change and
the Transfer Restrictions, and New Subsidiary's Bylaws will be substantially
identical to the Company's Amended and Restated Bylaws (the "Company's Bylaws").
Immediately following the Merger, New Subsidiary will have the same consolidated
assets, liabilities and stockholders' equity as the Company immediately prior to
the Merger. The authorized equity capital of New Subsidiary following the Merger
will be the same as the authorized equity capital of the Company immediately
prior to the Merger.
As a result of the Merger, each share of Existing Common Stock outstanding
immediately prior to the Merger will be converted automatically into the right
to receive an equivalent share of New Common Stock immediately following the
Merger, and each warrant or other right to purchase or receive Existing Common
Stock outstanding immediately prior to the Merger will be converted immediately
upon consummation of the Merger, as a matter of law and pursuant to the
documents governing such warrants or rights, into a similar warrant or other
right, respectively, to purchase or receive an equivalent share of New Common
Stock. The relative powers, designations, preferences, rights and qualifications
of the New Common Stock will be substantially identical in all material respects
to the relative powers, designations, preferences, rights and qualifications of
the Existing Common Stock, except as described in this Proxy
Statement/Prospectus.
New Subsidiary has filed a Registration Statement on Form S-4 under the
Securities Act of 1933, as amended (the "Securities Act"), covering up to
12,433,705 shares of New Common Stock to be issued to the Company's stockholders
in exchange for their Existing Common Stock pursuant to the Merger (the "Form
S-4"). This Proxy Statement/ Prospectus constitutes the Prospectus of New
Subsidiary relating to the New Common Stock and filed as part of the Form S-4.
Following the Merger, New Subsidiary, as the successor to the Company, will be a
reporting company under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and in accordance therewith will file reports and
other information with the Securities and Exchange Commission (the
"Commission").
Prior to April 3, 1995, the Existing Common Stock was listed for quotation
on the Nasdaq National Market under the symbol "DOSK." Effective April 3, 1995,
the Existing Common Stock is listed for quotation on the Nasdaq National Market
under the symbol "FBAI." Following the Merger, the New Common Stock will be
listed for quotation on the Nasdaq National Market under the symbol "FBAI."
------------------------------
THE SECURITIES ISSUED PURSUANT TO THIS PROXY STATEMENT/PROSPECTUS HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------------
SEE "CERTAIN SPECIAL CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS
THAT STOCKHOLDERS SHOULD CONSIDER PRIOR TO EXECUTING A PROXY OR CASTING A VOTE.
------------------------------
The date of this Proxy Statement/Prospectus is April 6, 1995
<PAGE>
AVAILABLE INFORMATION
The Company is (and, following the Merger, New Subsidiary will be) subject
to the informational requirements of the Exchange Act, and in accordance
therewith files (and New Subsidiary will file) reports, proxy statements and
other information with the Commission. Reports, proxy statements and other
information filed by the Company (and to be filed by New Subsidiary) may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the Regional Offices of the Commission at 7 World Trade Center, Suite 1300, New
York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such information can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. The Existing Common Stock is (and the New Common
Stock will be) listed for quotation on the Nasdaq National Market.
This Proxy Statement/Prospectus does not contain all of the information in
the Form S-4 and exhibits thereto. Statements in this Proxy Statement/Prospectus
as to the contents of any contract, agreement or other document are summaries
only and are not necessarily complete. For complete information as to these
matters, stockholders should refer to the applicable exhibit to the Form S-4.
The Form S-4 and the exhibits thereto filed by New Subsidiary with the
Commission may be inspected at the public reference facilities of the Commission
listed above.
------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR NEW SUBSIDIARY. THIS PROXY STATEMENT/PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE,
ANY SECURITIES, OR SOLICITATION OF A PROXY, IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROXY STATEMENT/ PROSPECTUS NOR ANY DISTRIBUTION OF
SECURITIES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR NEW SUBSIDIARY OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION............................................... 2
CERTAIN SPECIAL CONSIDERATIONS...................................... 4
Market Considerations............................................. 4
Continuation of Net Operating Loss Carryforwards.................. 4
THE ANNUAL MEETING.................................................. 4
Date, Time, Place and Purpose of the Annual Meeting............... 4
Record Date; Proxy Information.................................... 5
Quorum; Vote Required............................................. 5
Market for Common Stock........................................... 6
Outstanding Warrants; Options; Other Rights....................... 6
Address of Principal Executive Offices............................ 7
PROPOSAL I. ELECTION OF DIRECTORS................................... 7
Directors......................................................... 8
Directors Whose Terms Expire in 1995.............................. 9
Continuing Directors.............................................. 10
Meetings of Board of Directors and Committees..................... 11
Executive Officers................................................ 12
Compensation of Directors and Executive Officers.................. 13
Director Compensation........................................... 13
Summary Compensation Table...................................... 13
Option/SAR Grants in Last Fiscal Year........................... 16
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End
Option/SAR Values.............................................. 17
Employment, Termination and Change-in-Control Arrangements...... 17
Compensation Committee Interlocks and Insider Participation..... 21
Report of the Compensation Committee of the Board of Directors.... 22
Stock Price Performance Graph..................................... 26
Certain Relationships and Related Transactions.................... 27
PROPOSAL II. AMENDMENT TO STOCK INCENTIVE PLAN...................... 28
PROPOSAL III. THE MERGER............................................ 33
Name Change....................................................... 33
Transfer Restrictions............................................. 34
Preservation of Tax Benefits...................................... 34
Effectiveness of the Merger....................................... 37
Termination of Transfer Restrictions.............................. 37
Merger Structure.................................................. 37
New Subsidiary's Certificate of Incorporation and Bylaws.......... 37
Conversion of Securities in the Merger............................ 38
Conditions to Consummation of the Merger.......................... 38
Pro Forma and Comparative Financial Statements; Accounting........ 38
Appraisal Rights.................................................. 38
Exchange of Certificates.......................................... 38
Federal Income Tax Consequences................................... 39
PRINCIPAL STOCKHOLDERS.............................................. 41
INTERESTS OF CERTAIN PERSONS........................................ 42
LEGAL MATTERS....................................................... 42
DEADLINE FOR STOCKHOLDER PROPOSALS.................................. 43
INDEPENDENT AUDITORS................................................ 43
ANNUAL REPORT ON FORM 10-K.......................................... 43
ANNEXES
Annex A: Merger Agreement
Annex B: Form of Certificate of Incorporation of New Doskocil
Incorporated
</TABLE>
3
<PAGE>
CERTAIN SPECIAL CONSIDERATIONS
MARKET CONSIDERATIONS
Following the Merger, the New Common Stock will be subject to the Transfer
Restrictions, which do not apply to the Existing Common Stock. There can be no
assurance that the market price of the New Common Stock will be comparable to
the market price of the Existing Common Stock, or that the market price of the
New Common Stock will not be adversely affected by the Transfer Restrictions.
The Transfer Restrictions (i) may have the effect of impeding the attempt of
a person or entity to acquire a significant or controlling interest in New
Subsidiary, (ii) may render it more difficult to effect a merger or similar
transaction even if such transaction is favored by a majority of the independent
stockholders and (iii) may serve to entrench management. See "Proposal III. The
Merger -- Preservation of Tax Benefits." The purpose of the Transfer
Restrictions is to preserve tax benefits, however, not to insulate management
from change. The Company and New Subsidiary believe that the tax benefits of the
Transfer Restrictions outweigh any anti-takeover effect that they may have. Any
anti-takeover effect of the Transfer Restrictions will end when the Transfer
Restrictions terminate, which will occur on the earlier of: (i) the day after
the 14th anniversary of the effective date of the Merger; (ii) the repeal of
Section 382 of the Internal Revenue Code of 1986, as amended (the "Code") if New
Subsidiary's Board of Directors determines that the Transfer Restrictions are no
longer necessary; or (iii) the beginning of a taxable year of New Subsidiary to
which New Subsidiary's Board of Directors determines that no NOLs or other tax
benefits otherwise available to New Subsidiary may be carried forward. In
addition, New Subsidiary's Board, under certain circumstances, may modify
certain terms of the Transfer Restrictions. See "Proposal III. The Merger --
Termination of Transfer Restrictions."
CONTINUATION OF NET OPERATING LOSS CARRYFORWARDS
Notwithstanding the adoption of the Transfer Restrictions, New Subsidiary
may be unable to, or may elect not to, prevent every transaction that could
cause an "ownership change" for federal income tax purposes. Any such
transaction may severely limit New Subsidiary's ability to utilize the NOLs.
There can be no assurance that legislation will not be adopted that would limit
New Subsidiary's ability to utilize the NOLs in future periods. However, the
Company is not aware of any proposed legislation for changes in the tax laws
that could impact the ability of New Subsidiary to utilize the NOLs as described
below.
THE ANNUAL MEETING
DATE, TIME, PLACE AND PURPOSE OF THE ANNUAL MEETING
The Annual Meeting will be held on Tuesday, May 16, 1995, at 10:00 a.m.,
Central Daylight Time, at the Oklahoma City Marriott Hotel, 3233 Northwest
Expressway, Oklahoma City, Oklahoma. At the Annual Meeting, the Company's
stockholders will be asked to consider and act upon the following proposals:
(1) To elect four members of the Company's Board of Directors (see
"Proposal I. Election of Directors");
(2) To approve an amendment to the Stock Incentive Plan to increase the
aggregate number of shares of Existing Common Stock available thereunder
from 810,000 to 1,900,000 (see "Proposal II. Amendment to Stock Incentive
Plan");
(3) To approve the Merger Agreement, in the form attached hereto as
Annex A, pursuant to which the Company will be merged with and into New
Subsidiary, a newly-formed, wholly-owned subsidiary of the Company, with New
Subsidiary being the surviving corporation, to effect the Name Change and
the Transfer Restrictions (see "Proposal III. The Merger"); and
(4) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
4
<PAGE>
For a discussion of the tax consequences of the proposed Merger, see
"Proposal III. The Merger -- Federal Income Tax Consequences." The Company and
New Subsidiary believe that no material federal or state regulatory approvals
are necessary in connection with the Merger, other than registrations in
connection with securities laws.
RECORD DATE; PROXY INFORMATION
The Board of Directors of the Company has fixed the close of business on
Thursday, March 30, 1995 as the record date (the "Record Date") for the
determination of stockholders of the Company entitled to notice of and to vote
at the Annual Meeting. Only holders of record of Existing Common Stock on the
Record Date will be entitled to notice of and to vote at the Annual Meeting. At
the close of business on the Record Date, there were 12,433,705 shares of
Existing Common Stock issued and outstanding and entitled to vote at the Annual
Meeting. As of such date, there were approximately 3,139 holders of record of
Existing Common Stock.
Stockholders are requested to complete, date, sign and promptly return the
accompanying Form of Proxy in the enclosed envelope. All shares of Existing
Common Stock represented by properly executed proxies returned to the Company
prior to or at the Annual Meeting will be voted at the Annual Meeting in
accordance with the instructions marked thereon, unless such proxy has been
revoked.
EXECUTED PROXIES WITH NO INSTRUCTIONS INDICATED THEREON WILL BE VOTED IN
FAVOR OF THE NOMINEES FOR ELECTION TO THE COMPANY'S BOARD OF DIRECTORS STATED
HEREIN, FOR APPROVAL OF THE AMENDMENT TO THE STOCK INCENTIVE PLAN AND FOR
APPROVAL OF THE MERGER AGREEMENT.
Any stockholder who executes and delivers a proxy may unconditionally revoke
it at any time before it is voted by delivering to Darian B. Andersen, Corporate
Secretary of the Company, at 2601 Northwest Expressway, Suite 1000W, Oklahoma
City, Oklahoma 73112, a written notice of revocation or a duly executed proxy
bearing a later date, or by attending the Annual Meeting and voting in person
(although attendance at the Annual Meeting will not, in and of itself,
constitute a revocation of a proxy).
It is not anticipated that any matters other than those set forth in this
Proxy Statement/ Prospectus will be brought before the Annual Meeting. However,
if any other matters properly come before the Annual Meeting, the persons named
as proxies will vote upon such matters in their discretion in accordance with
their best judgment.
This Proxy Statement/Prospectus and the accompanying Notice of Annual
Meeting of Stockholders, Form of Proxy and Annual Report are first being mailed
to stockholders on or about April 10, 1995. The Company will bear the costs of
soliciting the proxies. In addition to the use of the mails, proxies may be
solicited by personal contact, telephone or telegraph by directors, officers,
employees or representatives of the Company, and the Company will reimburse
brokers or other persons holding stock in their names, or in the names of
nominees, for their reasonable expenses in forwarding proxy soliciting materials
to beneficial owners.
QUORUM; VOTE REQUIRED
As of the Record Date, the Company had outstanding 12,433,705 shares of
Existing Common Stock. Stockholders are entitled to one vote for each share of
Existing Common Stock held as of the Record Date on each matter voted on at the
Annual Meeting. Stockholders do not have cumulative voting rights. The presence,
in person or by proxy, of the holders of a majority of the issued and
outstanding shares of Existing Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum to transact business. Abstentions
and broker non-votes will be treated as present for determining whether a quorum
has been reached. If a quorum is not present or represented at the Annual
Meeting, the stockholders that are present in person or by proxy who are
entitled to vote at the Annual Metting may, by majority vote, adjourn the Annual
Meeting from time to time until a quorum is present or represented. Assuming
that a quorum is present or represented at the Annual Meeting, then: (i) the
election of the nominees to the Company's Board of Directors will be by
plurality vote; (ii) approval of the amendment to the Stock Incentive Plan will
require the affirmative vote of the
5
<PAGE>
holders of a majority of the shares of Existing Common Stock present, or
represented, and entitled to vote at the Annual Meeting; and (iii) approval of
the Merger Agreement will require the affirmative vote of the holders of a
majority of the shares of Existing Common Stock entitled to vote thereon.
Stockholders will not have dissenters' rights of appraisal in connection with
the Merger.
All shares of Existing Common Stock represented by properly executed proxies
returned to the Company will be voted at the Annual Meeting. Votes submitted as
abstentions on matters to be voted on at the Annual Meeting will be counted as
votes against such matters. Broker non-votes will effectively be votes against
the Merger Agreement, but will not count for or against the election of
directors or the amendment to the Stock Incentive Plan.
The 166,440 shares of Existing Common Stock held in the Disputed Claims
Reserve (as defined below) as of the Record Date will be counted as present for
quorum purposes and will be voted by proxy on matters at the Annual Meeting in
the same proportion as all other shares are voted on such matters.
As of the Record Date, the directors and executive officers of the Company
as a group beneficially own 6,414,789 shares of the issued and outstanding
Existing Common Stock, or approximately 51.6% (including the 810,363 shares of
Existing Common Stock held by The Airlie Group L.P. ("Airlie") and the 5,515,833
shares of Existing Common Stock held by JLL Associates, L.P. and its affiliates
("JLL Associates")). See "Principal Stockholders." Management believes that all
of the shares of Existing Common Stock held by directors, executive officers,
JLL Associates and Airlie will be voted in favor of the nominees for election to
the Company's Board of Directors stated herein, the amendment to the Stock
Incentive Plan and the Merger Agreement.
MARKET FOR COMMON STOCK
Prior to April 3, 1995, the Existing Common Stock was listed for quotation
on the Nasdaq National Market under the symbol "DOSK." On February 16, 1995, the
last trading day before the initial filing of the Form S-4, the last sale price
of the Existing Common Stock as reported by the Nasdaq Stock Market was $8.
Effective April 3, 1995, the Existing Common Stock is listed for quotation under
the symbol "FBAI." Following the Merger, the New Common Stock will be listed for
quotation on the Nasdaq National Market under the symbol "FBAI." See "Certain
Special Considerations -- Market Considerations."
OUTSTANDING WARRANTS; OPTIONS; OTHER RIGHTS
All outstanding rights to acquire Existing Common Stock by reason of
warrants, options, rights to purchase stock, rights to convert other instruments
into stock, and options or other rights to acquire any such interest
(collectively, "Rights") will be converted immediately upon consummation of the
Merger, as a matter of law and pursuant to the documents governing such Rights,
into Rights with respect to the same number of shares of New Common Stock and on
the same terms and conditions as previously were applicable to such Rights.
The following categories of Rights currently exist with respect to the
Existing Common Stock: (i) warrants to purchase up to 282,036 shares of Existing
Common Stock issued under the Warrant Agreement dated as of October 31, 1991, by
and among the Company, Chemical Bank and the other parties named therein; (ii)
options to purchase up to 1,169,008 shares of Existing Common Stock under the
Stock Incentive Plan; (iii) the rights of holders of shares of the common stock
of the Company or the securities of the predecessors of the Company that were
outstanding prior to the implementation of the Reorganization Plan (as defined
below) and that have not been exchanged for shares of Existing Common Stock
pursuant to the terms of the Reorganization Plan to receive 14,194 shares of
Existing Common Stock and (iv) the rights of certain claimholders to receive
166,440 shares of Existing Common Stock held in the Disputed Claims Reserve upon
the resolution of disputed claims pursuant to the Reorganization Plan. The
number of shares of Existing Common Stock held in the Disputed Claims Reserve
are included in the number of shares of Existing Common Stock currently deemed
to be issued and outstanding, as noted above. The shares covered by the other
Rights, which equal 1,465,238 shares in the aggregate or approximately 11% of
the Existing Common Stock on a fully diluted basis, are not included in the
number of currently issued and outstanding shares of Existing Common Stock.
6
<PAGE>
The Third Amended Joint Plan of Reorganization For Doskocil Companies
Incorporated and Chapter 11 Affiliates, as Modified (the "Reorganization Plan")
became effective on October 31, 1991, and has been substantially consummated.
Under the terms of the Reorganization Plan, however, certain claimholders and
interestholders are still entitled to receive a distribution of the Existing
Common Stock in consideration of and as satisfaction for claims they previously
held against the Company or its subsidiaries. Such parties included unsecured
creditors of the Company and its subsidiaries and certain stockholders of the
Company and its subsidiaries.
Under the terms of the Reorganization Plan, a stock reserve (the "Disputed
Claims Reserve") was established from which distributions of shares of Existing
Common Stock would be made upon the allowance of the claims of unsecured
creditors and interestholders. To date, a substantial number of the shares of
Existing Common Stock held by the Company in the Disputed Claims Reserve have
been distributed. However, as of the Record Date, 166,440 shares of Existing
Common Stock remain in the Disputed Claims Reserve. These shares will be
exchanged for shares of New Common Stock, which will be distributed to unsecured
creditors and/or interestholders upon resolution of the remaining claims against
the bankruptcy estates, with the number of shares to be distributed to creditors
or interestholders being determined by the nature and amount of their claim.
Notwithstanding the continued jurisdiction of the bankruptcy court over the
Disputed Claims Reserve, the Company does not believe it is necessary to obtain
bankruptcy court approval to consummate the Merger. The Company does not believe
that the Merger constitutes a modification of the Reorganization Plan because
the Merger will have no effect upon the amount or value of the consideration to
be distributed thereunder to creditors or interestholders. Further, the
Reorganization Plan expressly provides that the Company may merge, consolidate,
dissolve, or take other corporate action at any time on or after the Effective
Date of the Reorganization Plan.
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES
The principal executive offices of the Company and New Subsidiary are
located at 2601 Northwest Expressway, Suite 1000W, Oklahoma City, Oklahoma
73112. The telephone number for both the Company and New Subsidiary is (405)
879-5500.
PROPOSAL I. ELECTION OF DIRECTORS
At the Annual Meeting, the positions of the four directors whose current
terms expire in 1995 are to be filled. The persons elected to three of these
positions shall hold office until their successors are duly elected and
qualified at the annual meeting of stockholders in 1998, or until they earlier
die, resign or are removed from office in accordance with applicable law.
Messrs. Devening, Levy and Littlejohn, who currently hold three of the four
positions that are to be filled at the Annual Meeting, are nominees for
re-election at the Annual Meeting for three-year terms expiring at the annual
meeting of stockholders in 1998. Ms. Cliff, who is the fourth director whose
term expires in 1995, is a nominee for a one year term expiring at the annual
meeting of stockholders in 1996, or until she earlier dies, resigns or is
removed from office in accordance with applicable law. This one year term will
enable the Company to establish a Board with three equal classes. See "Directors
Whose Terms Expire in 1995" for information with respect to each of the
nominees.
It is the intention of the persons named in the enclosed proxy to vote the
shares of Existing Common Stock represented thereby for the election of these
nominees unless authority therefor is withheld. While it is not expected that
any of the nominees will be unable or unwilling to accept office, if for any
reason any of them shall be unable or unwilling to do so and a position on the
Board of Directors remains vacant as a result, then the proxies will be voted
for a nominee or nominees selected by the Board of Directors of the Company. The
Company knows of no family relationships between any director or executive
officer and any other director or executive officer of the Company.
The election of the nominees to the Board of Directors will be by plurality
vote. Management believes that all of the shares of Existing Common Stock held
by JLL Associates and Airlie will be voted in favor of the nominees named
herein.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE
NOMINEES.
7
<PAGE>
DIRECTORS
The directors of the Company immediately prior to the Merger will be the
directors of New Subsidiary immediately after the Merger. New Subsidiary's Board
of Directors will establish committees similar to those currently provided for
by the Company's Board of Directors, and the members of various committees of
the Company's Board of Directors immediately prior to the Merger will be the
members of the corresponding committees of New Subsidiary's Board of Directors
immediately following the Merger. In addition, the provisions in New
Subsidiary's Certificate of Incorporation and Bylaws regarding directors will be
substantially identical to the corresponding provisions of the Company's
Certificate of Incorporation and Bylaws. The Company's Certificate of
Incorporation provides that, and New Subsidiary's Certificate of Incorporation
will provide that, the directors of the Company and New Subsidiary,
respectively, be divided into three classes, as nearly equal in number as
possible, with approximately one-third of the Board of Directors to be elected
at each annual meeting of stockholders to hold office for a term expiring at the
third annual meeting of stockholders after their election. Michael I. Klein, who
previously served as a director of the Company, resigned in December 1994. In an
effort to reduce cost and to match the number of directors on the Company's
Board of Directors with that typical of a company its size, the Company's Bylaws
were amended to reduce the number of directors from fifteen to nine at a meeting
of the Company's Board of Directors in March 1995. In this connection, as an
accommodation, at that meeting Thomas W. Arenz, Richard N. Bauch, Robert D. Cook
and Peter A. Joseph resigned as directors of the Company. Pursuant to the
Company's Certificate of Incorporation and applicable law, the current Board of
Directors of the Company is comprised of the following persons, listed by
classification of the year in which their current terms of office expire:
<TABLE>
<CAPTION>
1995 1996 1997
- ------------------------------ ------------------------------ ------------------------------
<S> <C> <C>
Yvonne V. Cliff Richard T. Berg Theodore Ammon
R. Randolph Devening Paul W. Marshall Dort A. Cameron III
Paul S. Levy Terry M. Grimm
Angus C. Littlejohn, Jr.
</TABLE>
Pursuant to the Stock Purchase Agreement (the "JLL Agreement") dated
February 16, 1993, between the Company and Joseph Littlejohn & Levy Fund, L.P.,
an affiliate of JLL Associates ("JLL"), on March 22, 1993, JLL purchased two
million newly-issued shares of Existing Common Stock at $15.00 per share.
Pursuant to the terms of the JLL Agreement, JLL is entitled to designate for
nomination to the Company's Board of Directors (the "JLL Designees") one less
than the number of persons that would constitute a majority of the members of
the Company's Board of Directors and the Company agreed to nominate and use its
best efforts to cause the JLL Designees to be elected to the Company's Board of
Directors. The number of JLL Designees will be reduced as JLL's stock holdings
decrease. Further, pursuant to the JLL Agreement, for so long as JLL is entitled
to nominate a JLL Designee, the Company agrees to nominate and use its best
efforts to cause to be elected to the Company's Board of Directors one
individual who is not affiliated either with the Company or with JLL (the
"Independent Director") mutually acceptable to both a majority of the directors
who are JLL Designees and a majority of the directors who are not JLL Designees.
New Subsidiary, as successor to the Company, will be bound by the terms of the
JLL Agreement.
Pursuant to the terms of the JLL Agreement, the Company entered into a
Stockholders Agreement dated March 22, 1993 (the "Airlie Agreement") with Airlie
pursuant to which, among other things, Airlie has the right, for so long as it
owns 5% or more of the Outstanding Shares (as defined in the Airlie Agreement),
to nominate one person for election to the Company's Board of Directors provided
that such person is mutually acceptable to both a majority of the Company's
directors who are JLL Designees and a majority of the Company's directors who
are not JLL Designees (the "Airlie Designee"). The Company director who is the
Airlie Designee shall be the Independent Director, so long as there is a
director who is the Airlie Designee. New Subsidiary, as successor to the
Company, will be bound by the terms of the Airlie Agreement.
JLL and Airlie each separately have agreed to vote all voting securities
held by them in favor of persons nominated by the Company in accordance with the
JLL Agreement and the Airlie Agreement,
8
<PAGE>
respectively. JLL shall have the right to fill vacancies created if a director
who is a JLL Designee shall resign, die, or is removed, or declines to stand for
re-election or is not renominated for re-election (a "Vacancy"). Any Vacancy
involving the director who is the Airlie Designee shall be filled with another
Airlie Designee. The directors who are not JLL Designees shall have the right to
fill any Vacancy involving a director who is not a JLL Designee, except that any
Vacancy involving the Independent Director (if he or she is not the Airlie
Designee) shall be filled by a person mutually acceptable to both a majority of
the directors who are JLL Designees and a majority of the directors who are not
JLL Designees.
The JLL Agreement and the Airlie Agreement each include certain restrictions
on the ability of JLL and Airlie, respectively, among other things, to resell or
otherwise transfer securities of the Company or to purchase additional
securities of the Company and grant certain demand and piggyback registration
rights to each of JLL and Airlie. The JLL Agreement generally provides that,
without the approval of a majority of the directors who are not JLL Designess,
(i) JLL may not, until March 1997, sell any Existing Common Stock unless such
sales are in compliance with Rule 144 under the Securities Act, are registered
pursuant to the Securities Act or are privately negotiated transactions in which
JLL uses its best efforts to prevent persons from acquiring 5% of the Existing
Common Stock; and (ii) JLL or any of its affiliates (as defined in Rule 144
under the Securities Act) may not, until March 1998, (a) purchase or otherwise
acquire in excess of 33% of the Existing Common Stock (which restriction was
waived by the Company in connection with the Rights Offering (as defined
below)), (b) participate in any solicitation of proxies relating to the Existing
Common Stock or become a participant in an election contest relating to the
election of directors of the Company, (c) join any group for the purpose of
acquiring, holding, voting or disposing of Existing Common Stock or (d) enter
into a voting trust or similar agreement relating to the Existing Common Stock.
The Airlie Agreement included similar restrictions which expired on March 22,
1995. In March 1995, the Company and Airlie entered into an agreement (the
"Supplemental Airlie Agreement") which provides that Airlie may not buy or sell
any Existing Common Stock until the earlier of the effective date of the Merger
or March 22, 1996. As a result, if the Merger is consummated, the restrictions
set forth in the Supplemental Airlie Agreement will terminate and the New Common
Stock to be received by Airlie in connection with the Merger will be subject to
the Transfer Restrictions. The Company has agreed, in connection with the
Supplemental Airlie Agreement, to grant Airlie a waiver from the Transfer
Restrictions after March 22, 1996. See "Proposal III. The Merger -- Preservation
of Tax Benefits."
Pursuant to the terms of the JLL Agreement, the existing JLL Designees on
the Company's Board of Directors, and following the Merger, on New Subsidiary's
Board of Directors, are Ms. Cliff and Messrs. Littlejohn, Levy and Ammon.
Pursuant to the terms of the Airlie Agreement, the existing Airlie Designee and
the Independent Director is Mr. Cameron. The directors who are not JLL Designees
are Messrs. Berg, Devening, Grimm and Marshall.
DIRECTORS WHOSE TERMS EXPIRE IN 1995
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- -------------------------------- -------------------------------------------------------- ----------------
<S> <C> <C>
Yvonne V. Cliff(1) General Partner, JLL Associates March 1993
Age 33
R. Randolph Devening(2) Chairman, President & Chief August 1994
Age 53 Executive Officer of the Company
Paul S. Levy(3) General Partner, JLL Associates March 1993
Age 46
Angus C. Littlejohn, Jr.(4) General Partner, JLL Associates March 1993
Age 44
<FN>
- ------------------------
(1) Ms. Cliff is a partner of JLL Associates, which she joined in June 1988.
Ms. Cliff serves on the Board of Directors of OrNda HealthCorp.
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
(2) Mr. Devening has been Chairman, President, Chief Executive Officer and a
director of the Company since August 1994. From May 1993 until July 1994,
Mr. Devening was Vice Chairman and Chief Financial Officer of Fleming
Companies, Inc., ("Fleming"), which is the second-largest food marketing
and distribution company in the United States and one of the Company's
largest customers. From June 1989 to April 1993, Mr. Devening was Executive
Vice President and Chief Financial Officer of, and from February 1990 to
July 1994 was a director of, Fleming. Mr. Devening currently serves on the
Boards of Directors of Arkwright Mutual Insurance Company, Hancock Fabrics,
Inc., The Fred Jones Companies, Inc., Furr's Supermarkets, Inc. and ABCO
Markets, Inc.
(3) Mr. Levy has been a partner of JLL Associates and its predecessors since
May 1988. Mr. Levy serves as Chairman of the Board of Directors of Lancer
Industries, Inc. and as a member of the Board of Directors of OrNda
HealthCorp. and of Tyco International, Inc.
(4) Mr. Littlejohn has been a partner of JLL Associates and its predecessors
since July 1987. Mr. Littlejohn serves on the Board of Directors of OrNda
HealthCorp. and of Lancer Industries, Inc.
</TABLE>
CONTINUING DIRECTORS
The following table sets forth information with respect to the directors of
the Company and, following the Merger, New Subsidiary, whose current terms
expire in 1996 and 1997.
<TABLE>
<CAPTION>
NAME AND AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- -------------------------------- -------------------------------------------------------- ----------------
<S> <C> <C>
Theodore Ammon(1) Private Investor March 1993
Age 44
Richard T. Berg(2) Director of the Company October 1991
Age 68
Dort A. Cameron III(3) General Partner, EBD L.P., a General May 1992
Age 50 Partner of Airlie
Terry M. Grimm(4) Partner, Winston & Strawn law firm October 1991
Age 52
Paul W. Marshall(5) Chairman and Chief Executive Officer October 1991
Age 52 of Rochester Shoe Tree Company
<FN>
- ------------------------
(1) Mr. Ammon is a private investor based in New York. From 1990 to 1992, Mr.
Ammon was a general partner of Kohlberg Kravis Roberts & Company, an
investment firm. Mr. Ammon serves as Chairman of the Board of Big Flower
Press, Inc. and as a member of the Board of Directors of Host Marriott
Corporation and Astrum International Corp.
(2) From September 1990 to October 1991, Mr. Berg served as an employee of a
subsidiary of the Company and from October 1991 to December 1992 served as
a consultant to a subsidiary of the Company. Mr. Berg was retired from
October 1988 to September 1990.
(3) Mr. Cameron has been the general partner of EBD L.P., the general partner
of Airlie, a manager of private investment funds, since October 1988. Mr.
Cameron has been for more than five years the general partner of BMA
Limited Partnership, the general partner of Investment Limited Partner-
ship. Mr. Cameron serves as Chairman of the Board of Darling/Delaware
Company Incorporated and Entex and as a member of the Board of Directors of
Perkins Management Company, Inc., which is a general partner of Perkins
Family Restaurants, L.P.
(4) Mr. Grimm has been for more than five years a partner with the law firm of
Winston & Strawn and is a member of that firm's Executive Committee and
Litigation Committee.
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
(5) Mr. Marshall has been Chairman and Chief Executive Officer of the Rochester
Shoe Tree Company, a shoe tree manufacturing company, since October 1991.
Mr. Marshall was an adjunct professor of the Harvard Graduate School of
Business Administration from July 1989 through February 1992. He also was
Chairman of Industrial Economics, Incorporated, a consulting firm, from
1989 to 1991, and a Member of the Lexington Board of Selectmen from 1984 to
1993. Mr. Marshall serves on the Board of Directors of Applied Extrusion
Technologies, Inc., BE Aerospace, Inc. and Raymond James Financial, Inc.
</TABLE>
MEETINGS OF BOARD OF DIRECTORS AND COMMITTEES
During the Company's fiscal year ended December 31, 1994 ("Fiscal 1994"),
the Board of Directors of the Company held five regular meetings and two special
meetings. During Fiscal 1994, no incumbent directors attended fewer than 75% of
the aggregate of (i) the total number of meetings of the Company's Board of
Directors (held during the period for which they served as directors of the
Company) and (ii) the total number of meetings held by all committees of the
Board of Directors on which they served, if any (during the periods that each
served).
The Company's Board of Directors has standing Executive, Audit and
Compensation Committees. The Company does not have a standing nominating
committee. The normal duties of such a committee are carried out by the
Executive Committee.
The Executive Committee is responsible for submitting major long-range plans
and policies to the Board of Directors for consideration and approval, and,
subject to certain exceptions, has the full power of the Board. The Executive
Committee also recommends to the Board the names of candidates for election to,
or to fill vacancies on, the Board of Directors. The Executive Committee will
consider qualified candidates recommended by stockholders. The Executive
Committee currently is composed of R. Randolph Devening, Chairman, Richard T.
Berg, Dort A. Cameron III and Angus C. Littlejohn, Jr. The Executive Committee
held one meeting and acted by unanimous written consent on three occasions in
Fiscal 1994.
The Audit Committee is responsible for recommending the selection of
independent auditors, reviewing with the independent auditors the general scope
of their audit services to be performed and the annual results of their audit.
The Audit Committee also reviews reports and recommendations made to the Audit
Committee by the independent auditors and the Company's system of internal
control and consults with management as it deems appropriate on the results of
its reviews. The Audit Committee currently is composed of Paul W. Marshall,
Chairman, Richard T. Berg and Angus C. Littlejohn, Jr. The Audit Committee held
two meetings in Fiscal 1994.
The Compensation Committee is responsible for reviewing salaries, bonuses
and other compensation arrangements of all officers of the Company and is
responsible for granting incentive awards and stock options pursuant to the
Company's incentive plans. The Compensation Committee currently is composed of
Terry M. Grimm, Chairman, Dort A. Cameron III and Yvonne V. Cliff. The
Compensation Committee held two meetings in Fiscal 1994 and acted by written
consent on one occasion.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires directors, executive officers and
beneficial owners of more than 10% of the Existing Common Stock to file initial
reports of ownership and reports of changes in ownership with the Commission and
the National Association of Securities Dealers, Inc., and to provide the Company
with copies. Based solely on a review of the copies of such reports provided to
the Company and written representations from the directors and executive
officers, the Company believes that: (i) one report was not timely filed when
Dr. Howard C. Madsen became an executive officer of the Company, (ii) one report
was not timely filed when Mr. Horst O. Sieben became an executive officer of the
Company, and (iii) reports were not timely filed when Mr. Robert S. Wright (a)
became an executive officer of the Company, (b) was granted an option to
purchase 30,000 shares of Existing Common Stock, and (c) was granted an option
to purchase 38,814 shares of Existing Common Stock. All such filings
subsequently have been made.
11
<PAGE>
EXECUTIVE OFFICERS
The officers of the Company immediately prior to the Merger will be the
officers of New Subsidiary immediately following the Merger. The provisions in
New Subsidiary's Certificate of Incorporation and Bylaws regarding officers will
be substantially identical to the corresponding provisions of the Company's
Certificate of Incorporation and Bylaws.
The following individuals currently serve as executive officers of the
Company, each of whom has been elected to serve for a term of one year or until
his successor is duly elected and qualified, and, following the Merger, will
serve as executive officers of New Subsidiary.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------ --- ---------------------------------------------------------------------
<S> <C> <C>
R. Randolph Devening(1) 53 Chairman, President & Chief Executive Officer
Horst O. Sieben(2) 56 Senior Vice President and Chief Financial Officer
Thomas G. McCarley(3) 49 Senior Vice President and President, Food Service Division of the
Company (the "Food Service Division")
Larry P. Swafford(4) 48 Senior Vice President and President, Retail Division of the Company
(the "Retail Division")
Robert S. Wright(5) 49 Senior Vice President and President, Doskocil Specialty Brands
Company ("Specialty Brands Division")
William L. Brady(6) 46 Vice President and Controller
Bryant P. Bynum(7) 32 Vice President-Planning and Corporate Finance & Treasurer
David J. Clapp(8) 50 Vice President-Operating Services
Raymond J. Haefele(9) 44 Vice President and President, Deli Division of the Company (the "Deli
Division")
Howard C. Madsen(10) 51 Vice President-Procurement
Darian B. Andersen(11) 52 Corporate Secretary and Director-Law Department
<FN>
- ------------------------
(1) Mr. Devening has been Chairman, President, Chief Executive Officer and a
director of the Company since August 1994. See "Directors Whose Terms
Expire in 1995" for a description of Mr. Devening's business experience.
(2) Mr. Sieben has been Senior Vice President and Chief Financial Officer of
the Company since October 1994. For more than four years prior thereto, Mr.
Sieben was the Chief Financial Officer of Golding Industries, Inc., a
subsidiary of Lancer Industries, Inc.
(3) Mr. McCarley has been Senior Vice President-General Manager, Food Service
Division of the Company since October 1991 and President of the Food
Service Division since September 1994. Prior to that time, Mr. McCarley was
Senior Vice President-Sales and Marketing of the Company.
(4) Mr. Swafford became Senior Vice President of the Company and President of
the Retail Division effective January 31, 1995. From February 1993 to
January 1995, Mr. Swafford was Vice President and General Manager of a
division of Bryan Foods, a subsidiary of Sara Lee Corporation and, for more
than three years prior thereto, Mr. Swafford was Vice President of John
Morrell & Co., a subsidiary of Chiquita Brands International.
(5) Mr. Wright has been Senior Vice President of the Company and President of
Specialty Brands Division since June 1994. From May 1992 to June 1994, Mr.
Wright was President of the Prepared Foods Division of International
Multifoods Corporation, a processor and marketer of food products; from
October 1991 to May 1992, Mr. Wright was Vice President of Marketing of
Masterlock Co., a manufacturer of lock products and a division of American
Brands Inc.; and prior to October 1991, Mr. Wright was Group Vice
President, Universal Foods Corp., a diversified manufacturer of food
products.
(6) Mr. Brady has been Vice President of the Company since January 1990 and
Controller of the Company since May 1990.
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
(7) Mr. Bynum has been Vice President-Planning and Corporate Finance of the
Company since February 1993 and Treasurer of the Company since January
1994. Mr. Bynum was Director-Corporate Planning and Development of the
Company prior to February 1993.
(8) Mr. Clapp has been Vice President-Operating Services of the Company since
October 1991. Mr. Clapp was Vice President of Operations of Wilson Brands
("Wilson Brands"), a division of Wilson Foods Corporation, a subsidiary of
the Company ("Wilson Foods"), prior to September 1991.
(9) Mr. Haefele has been Vice President-General Manager, Deli Division of the
Company since January 1993 and President of the Deli Division since
September 1994. Mr. Haefele was Vice President-Retail Sales of the Company
from October 1991 to January 1993 and Vice President of Sales of Wilson
Brands prior to October 1991.
(10) Dr. Madsen has been Vice President-Procurement of the Company since
February 1994. Dr. Madsen was Vice President of Purchasing at Sara Lee Meat
Group, a division of Sara Lee Corporation, for more than four years prior
thereto.
(11) Mr. Andersen has been Corporate Secretary and Director-Law Department of
the Company since October 1991. Prior to that time, Mr. Andersen served as
Corporate Secretary and Associate General Counsel of Wilson Foods.
</TABLE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTOR COMPENSATION
Directors who are not employees of the Company or its subsidiaries each
receive from the Company $20,000 per year (prorated for partial years) for
serving on the Board of Directors, plus expenses, and $750 for each Board
meeting attended in person or by telephone conference call, and $500 for each
committee meeting attended. In addition, directors who are not employees of the
Company or its subsidiaries and who serve as committee chairmen receive an
additional $2,000 per year. Each non-employee director also receives a one-time
grant of options to purchase 5,000 shares of Existing Common Stock pursuant to
the Stock Incentive Plan.
SUMMARY COMPENSATION TABLE
The following table summarizes, for each of Fiscal 1994, fiscal 1993 and
fiscal 1992, the compensation awarded, paid to or earned by: (i) John T. Hanes,
the chief executive officer of the Company from January 1, 1994, to August 15,
1994; (ii) R. Randolph Devening, who became the chief executive officer of the
Company effective as of August 15, 1994; (iii) each of the four most highly
compensated executive officers, other than Messrs. Hanes and Devening, who
served as executive officers of the Company or its subsidiaries as of December
31, 1994; and (iv) Charles I. Merrick, the former Vice
13
<PAGE>
President-Administration of the Company who resigned effective November 13,
1994, and who would have been one of the four most highly compensated executive
officers but for the fact that he was not serving as an executive officer of the
Company as of December 31, 1994.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------
AWARDS
---------------------------
SECURITIES ALL
ANNUAL COMPENSATION RESTRICTED UNDERLYING OTHER
NAME AND ------------------------- STOCK AWARDS OPTIONS/SARS COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) ($)(2) (#) ($)(3)
- -------------------------------- ---- ---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
R. Randolph Devening(4) 1994 229,187 500,000 -- 625,593 3,039
Chairman, President and 1993 -- -- -- -- --
Chief Executive Officer 1992 -- -- -- -- --
John T. Hanes(5) 1994 270,000 -- -- -- 662,440
Former Chairman, 1993 405,000 226,559 -- -- 27,013
President and Chief 1992 375,000 157,500 375,000 40,000 25,067
Executive Officer
Thomas G. McCarley 1994 171,593 101,276 -- 33,814 5,175
Senior Vice President and 1993 165,000 -- -- -- 7,294
President, Food Service 1992 150,000 72,545 187,500 10,000 7,388
Division
Robert S. Wright(6) 1994 151,750 127,961 -- 68,814 4,139
Senior Vice President and 1993 -- -- -- -- --
President, Specialty 1992 -- -- -- -- --
Brands Division
Raymond J. Haefele 1994 124,520 80,275 -- 27,540 4,415
Vice President and 1993 113,120 -- -- -- 4,944
President, Deli Division 1992 101,304 45,324 -- 5,000 6,214
Howard C. Madsen(7) 1994 117,205 47,000 -- 25,024 306
Vice President - 1993 -- -- -- -- --
Procurement 1992 -- -- -- -- --
Charles I. Merrick(8) 1994 126,091 -- -- -- 126,812
Former Vice 1993 129,600 -- -- -- 14,104
President-Administration 1992 120,000 46,090 150,000 8,000 13,232
<FN>
- ------------------------------
(1) The amounts in this column include, with respect to Mr. Devening, a
$500,000 signing bonus, and, with respect to Dr. Madsen, a $37,000 signing
bonus. The amounts also include a special cash bonus of $10,000 paid to Dr.
Madsen in Fiscal 1994 for his individual accomplishments. The amounts also
include a performance bonus of $127,961 paid to Mr. Wright pursuant to the
terms of the Employment Agreement between Mr. Wright and the Company. See
"-- Employment, Termination and Change-in-Control Arrangements -- Wright
Agreement." In addition, the Compensation Committee waived certain target
requirements under the Company's Annual Incentive Plan (the "Annual
Incentive Plan") and granted special bonuses of $101,276 and $80,275,
respectively, to Mr. McCarley and Mr. Haefele because of the high level of
performance of the Company's Food Service and Deli Divisions. The amounts
in this column also include Performance Shares granted pursuant to the
Stock Incentive Plan. See "-- Employment, Termination and Change-in-Control
Arrangements -- Doskocil Companies Incorporated 1992 Stock Incentive Plan."
No Performance Shares were granted in Fiscal 1994. The Company does not
believe that it will be denied any deductions under Section 162(m) of the
Code in connection with compensation paid for Fiscal 1994. Pursuant to the
Hanes Settlement Agreement (as defined below), the Company waived the
requirements for the vesting of the Performance Shares held by Mr. Hanes,
and all unvested Performance Shares held by Mr. Hanes vested during fiscal
1993. As a result, the amounts shown in this column reflect the fair market
value of Mr. Hanes' 20,833 Performance Shares that vested in fiscal 1993
based on their fair market value as of December 31, 1993.
(2) The amounts shown are the fair market value of shares of restricted stock
granted under the Stock Incentive Plan ("Restricted Stock") as of February
3, 1992, the date of grant. Pursuant to the terms of such grant, one-third
of the shares of Restricted Stock were to vest on January 1, 1993,
one-third were to vest on January 1, 1994, and the balance were to vest on
January 1, 1995. Under the Hanes Settlement Agreement, Mr. Hanes' remaining
shares of Restricted Stock became vested on December 31, 1993. Under the
Merrick Settlement Agreement (as defined below), Mr. Merrick's remaining
shares of Restricted Stock became vested on December 2, 1994. A total of
79,168 shares of Restricted Stock had vested by January 1, 1994, and a
total of 14,166 shares of Restricted Stock had vested by January 1, 1995.
The executives were entitled to any dividends paid on the Restricted Stock,
but no dividends were paid. In addition to the above terms, the Restricted
Stock generally vested upon a Change of Control Event (as defined below) if
the executive's employment with the Company was terminated following a
Change of Control Event. The Stock Incentive Plan defines a "Change of
Control
</TABLE>
14
<PAGE>
<TABLE>
<S> <C>
Event" as any of the following: (i) a person, company or group acquires a
sufficiently large block of Existing Common Stock which, when voted with
shares solicited by proxy or written consent without the benefit of a
management supported proxy, would enable such person, company or group to
elect a member of the Company's Board of Directors; (ii) a merger or
consolidation of the Company with and into another company (other than a
wholly-owned subsidiary of the Company) in which the Company is not the
surviving company, or the Company is the surviving company and the members
of the Company's Board of Directors immediately prior to the merger or
consolidation do not constitute a majority of the board of the surviving
company after the merger; (iii) a sale of all or substantially all of the
Company's assets; or (iv) any other kind of corporate reorganization where
the Company is not the survivor or the members of the Company's board
immediately prior to the reorganization do not constitute a majority of the
board of the surviving company.
(3) For Mr. Devening, includes $3,039 contributed by the Company to the
Doskocil Retirement & Profit Sharing Plan (the "Doskocil 401(k) Plan")
during Fiscal 1994.
For Mr. Hanes, includes $634,760 in separation payments, $10,800 relating
to an interest-free loan, $10,000 for financial counseling and professional
advisory services, $2,130 paid by the Company for term life insurance, and
$4,750 contributed by the Company to the Doskocil 401(k) Plan during Fiscal
1994; $3,767 paid by the Company for term life insurance, $3,788
contributed by the Company to the Doskocil 401(k) Plan and $19,458
contributed by the Company to the Wilson Foods Corporation Retirement and
Profit-Sharing Plan for Salaried Employees (the "Wilson Plan") for fiscal
1993; and $3,542 paid by the Company for term life insurance, and $21,525
contributed by the Company to the Wilson Plan during 1992.
For Mr. McCarley, includes $425 paid by the Company for term life insurance
and $4,750 contributed by the Company to the Doskocil 401(k) Plan during
Fiscal 1994; $574 paid by the Company for term life insurance, and $6,720
contributed by the Company to the Doskocil 401(k) Plan during fiscal 1993;
and $522 paid by the Company for term life insurance, and $6,866
contributed by the Company to the Doskocil 401(k) Plan during fiscal 1992.
For Mr. Wright, includes $234 paid by the Company for term life insurance
and $3,905 contributed by the Company to the Doskocil 401(k) Plan during
Fiscal 1994.
For Mr. Haefele, includes $153 paid by the Company for term life insurance,
and $4,262 contributed by the Company to the Doskocil 401(k) Plan during
Fiscal 1994; $259 paid by the Company for term life insurance, $2,062
contributed by the Company to the Doskocil 401(k) Plan and $2,623
contributed by the Company to the Wilson Plan for fiscal 1993; and $244
paid by the Company for term life insurance, and $5,970 contributed by the
Company to the Wilson Plan for fiscal 1992.
For Dr. Madsen, includes $306 paid by the Company for term life insurance
during Fiscal 1994.
For Mr. Merrick, includes $122,395 in separation payments, $425 paid by the
Company for term life insurance, and $3,992 contributed by the Company to
the Doskocil 401(k) Plan during Fiscal 1994; $821 paid by the Company for
term life insurance, $2,309 contributed by the Company to the Doskocil
401(k) Plan and $10,974 contributed by the Company to the Wilson Plan for
fiscal 1993; and $798 paid by the Company for term life insurance, and
$12,434 contributed by the Company to the Wilson Plan for fiscal 1992.
(4) On August 15, 1994, R. Randolph Devening became Chairman of the Board,
President and Chief Executive Officer of the Company. See "-- Employment,
Termination and Change-in-Control Arrangements -- Devening Agreement."
(5) On October 23, 1993, John T. Hanes announced his intention to retire as
Chairman, President and Chief Executive Officer of the Company, effective
when a successor was named. On December 31, 1993, Mr. Hanes and the Company
entered into a Settlement Agreement, which was subsequently amended. See
"-- Employment, Termination and Change-in-Control Arrangements -- Hanes
Settlement Agreement." Mr. Hanes' retirement became effective on August 15,
1994.
(6) Mr. Wright became Senior Vice President of the Company and President of
Specialty Brands in June 1994.
See "-- Employment, Termination and Change-in-Control Arrangements --
Wright Agreement."
(7) Dr. Madsen became Vice President - Procurement of the Company in February
1994.
(8) Effective November 12, 1994, Charles I. Merrick resigned as Vice President
-Administration of the Company and as an officer of all related entities.
See "-- Employment, Termination and Change-in-Control Arrangements --
Merrick Settlement Agreement."
</TABLE>
15
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZED
---------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/ SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (1)
OPTIONS/SARS EMPLOYEES IN OR BASE ----------------------
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) EXPIRATION DATE 5% ($) 10% ($)
- ------------------------------ ------------- --------------- ----------------- ------------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
R. Randolph Devening 625,593(2) 68.5 9 September 28, 2004 3,413,511 8,770,479
John T. Hanes 0 -- -- -- -- --
Thomas G. McCarley 33,814(3 ) 3.7 9 September 28, 2004 184,489 474,072
Robert S. Wright 30,000(4 ) 3.3 10.75 May 31, 2004 202,830 513,990
38,814(3 ) 4.2 9 September 28, 2004 211,769 544,172
Raymond J. Haefele 27,540(3 ) 3.0 9 September 28, 2004 150,258 386,111
Howard C. Madsen 22,357(3 ) 2.4 9 September 28, 2004 121,980 313,445
2,667(5 ) * 11 February 2, 1998 6,322 13,615
Charles I. Merrick 0 -- -- -- -- --
<FN>
- ------------------------------
* Less than one percent
(1) The assumed annual rates of stock price appreciation of 5% and 10% are set
by the Commission's rules and are not intended as a forecast of possible
future appreciation in stock prices.
(2) The Company granted to Mr. Devening options to purchase, in the aggregate,
a number of shares of Existing Common Stock equal to 5% of the total number
of shares of Existing Common Stock outstanding on September 29, 1994 (the
date of grant), as adjusted to reflect the number of shares issued in the
rights offering made pursuant to the offering prospectus dated September
19, 1994 (the "Rights Offering"), at an exercise price per share equal to
the greater of the exercise price under the Rights Offering ($9) or the
fair market value on the date of grant ($8 7/8). Accordingly, Mr. Devening
has been granted options to purchase 625,593 shares of Existing Common
Stock at an exercise price of $9 per share. These options are subject to
stockholder approval of an increase in the number of shares authorized for
issuance under the Stock Incentive Plan, which approval is being sought at
the Annual Meeting pursuant to Proposal II. See "Proposal II. Amendment to
Stock Incentive Plan." Nine percent of such options vested on December 31,
1994, and 18.2% of such options vest on December 31 of each of the
subsequent five years if Mr. Devening remains an employee of the Company
and the Company meets the specified earnings target for such year. The
options terminate 10 years from the date of grant and must be exercised
within 90 days after Mr. Devening ceases to be an employee of the Company.
(3) The Company granted these options on September 29, 1994, at an exercise
price of $9 per share. Nine percent of such options vested on December 31,
1994, and 18.2% of such options will vest on December 31 of each of the
subsequent five years if the recipient remains an employee of the Company
and the Company meets the specified earnings target for such year. These
options are subject to stockholder approval of an increase in the number of
shares authorized for issuance under the Stock Incentive Plan, which
approval is being sought at the Annual Meeting pursuant to Proposal II. See
"Proposal II. Amendment to Stock Incentive Plan." The options terminate 10
years from the date of grant and must be exercised within 90 days after the
recipient ceases to be an employee of the Company.
(4) The Company granted to Mr. Wright 30,000 options on June 1, 1994, pursuant
to an Employment Agreement between the Company and Mr. Wright. See "--
Employment, Termination and Change-in-Control Arrangements -- Wright Agree-
ment." These options have an exercise price of $10.75 per share and
one-third of such options vest on each of the first three anniversaries of
the date of grant.
(5) The Company granted to Dr. Madsen 2,667 options on February 26, 1994. These
options have an exercise price of $11 per share, and became exercisable on
February 3, 1995.
</TABLE>
16
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
SHARES ACQUIRED VALUE REALIZED FY-END (#) AT FY-END ($)
NAME ON EXERCISE (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE (1)
- --------------------------------- ----------------- ----------------- ----------------------- -----------------------------
<S> <C> <C> <C> <C>
R. Randolph Devening 0 0 56,303/569,290 0/0(2)
John T. Hanes 0 0 40,000/0 0/0(3)
Thomas G. McCarley 0 0 9,709/34,105 0/0(4)
Robert S. Wright 0 0 3,493/65,321 0/0(5)
Raymond J. Haefele 0 0 5,812/26,728 0/0(6)
Howard C. Madsen 0 0 2,012/23,012 0/0(7)
Charles I. Merrick 0 0 5,333/0 0/0(8)
<FN>
- ------------------------------
(1) The last sale price of Existing Common Stock on December 30, 1994, was
$7.50.
(2) All of Mr. Devening's options have an exercise price of $9 per share and
are subject to stockholder approval of an increase in the number of shares
authorized for issuance under the Stock Incentive Plan, which approval is
being sought at the Annual Meeting pursuant to Proposal II. See "Proposal
II. Amendment to Stock Incentive Plan."
(3) Under the Hanes Settlement Agreement, Mr. Hanes' remaining options became
vested on December 31, 1993, and remain exercisable until February 2, 1998.
All of Mr. Hanes' options have an exercise price of $14 per share.
(4) The Company granted to Mr. McCarley 10,000 options on February 3, 1992,
one-third of which became exercisable on February 3, 1993, one-third of
which became exercisable on February 3, 1994, and the remainder of which
became exercisable on February 3, 1995. These options have an exercise
price of $14 per share. In addition, on September 29, 1994, the Company
granted to Mr. McCarley 33,814 options, 3,043 of which vested on December
31, 1994. These options have an exercise price of $9 per share. The options
granted on September 29, 1994 are subject to stockholder approval of an
increase in the number of shares authorized for issuance under the Stock
Incentive Plan, which approval is being sought at the Annual Meeting
pursuant to Proposal II. See "Proposal II. Amendment to Stock Incentive
Plan."
(5) On June 1, 1994, the Company granted to Mr. Wright 30,000 options,
one-third of which vest on each of the first three anniversaries of the
date of grant. These options have an exercise price of $10.75 per share. In
addition, on September 29, 1994, the Company granted to Mr. Wright 38,814
options, 3,493 of which vested on December 31, 1994. These options have an
exercise price of $9 per share. The options granted on September 29, 1994
are subject to stockholder approval of an increase in the number of shares
authorized for issuance under the Stock Incentive Plan, which approval is
being sought at the Annual Meeting pursuant to Proposal II. See "Proposal
II. Amendment to Stock Incentive Plan."
(6) The Company granted to Mr. Haefele 5,000 options on February 3, 1992,
one-third of which became exercisable on February 3, 1993, one-third of
which became exercisable on February 3, 1994, and the remainder of which
became exercisable on February 3, 1995. These options have an exercise
price of $14 per share. In addition, on September 29, 1994, the Company
granted to Mr. Haefele 27,540 options, 2,479 of which vested on December
31, 1994. These options have an exercise price of $9 per share. The options
granted on September 29, 1994 are subject to stockholder approval of an
increase in the number of shares authorized for issuance under the Stock
Incentive Plan, which approval is being sought at the Annual Meeting
pursuant to Proposal II. See "Proposal II. Amendment to Stock Incentive
Plan."
(7) The Company granted to Dr. Madsen 2,667 options on February 26, 1994. These
options vested on February 3, 1995, and have an exercise price of $11 per
share. In addition, on September 29, 1994, the Company granted to Dr.
Madsen 22,357 options, 2,012 of which vested on December 31, 1994. These
options have an exercise price of $9 per share. The options granted on
September 29, 1994 are subject to stockholder approval of an increase in
the number of shares authorized for issuance under the Stock Incentive
Plan, which approval is being sought at the Annual Meeting pursuant to
Proposal II. See "Proposal II. Amendment to Stock Incentive Plan."
(8) The Company granted to Mr. Merrick 8,000 options on February 3, 1992,
one-third of which became exercisable on February 3, 1993, one-third of
which became exercisable on February 3, 1994, and the remainder of which
were forfeited when Mr. Merrick resigned on November 14, 1994. Mr.
Merrick's options terminated February 14, 1995.
</TABLE>
EMPLOYMENT, TERMINATION AND CHANGE-IN-CONTROL ARRANGEMENTS
Upon consummation of the Merger, New Subsidiary will assume the Company's
obligations under each of the agreements and plans described below.
DEVENING AGREEMENT. Pursuant to the terms of the Employment Agreement (the
"Devening Agreement") between Mr. Devening and the Company, Mr. Devening's term
of employment continues until December 31, 1998, and automatically extends for
an additional one-year term unless either
17
<PAGE>
party elects not to extend the term (the "Employment Period"). Under the
Devening Agreement, Mr. Devening is entitled to an annual base salary of not
less than $550,000. The Devening Agreement provides for a signing bonus of
$500,000 and a performance bonus for each fiscal year beginning after December
31, 1994 if the Company achieves certain financial goals for such year set by
the Compensation Committee of the Company's Board of Directors in consultation
with senior management, provided Mr. Devening remains an employee on the last
day of such year. The performance bonus amount is 75% of Mr. Devening's base
salary for such year, plus additional minimum percentages of such base salary if
the financial goals are exceeded by specified amounts. These bonuses are payable
in cash or Existing Common Stock (based on the market price on the payment date)
or a combination thereof as selected by Mr. Devening, subject to such limitation
on the number of shares as the Compensation Committee may have set for the year.
The Company agreed to grant to Mr. Devening options to purchase, in the
aggregate, a number of shares of Existing Common Stock equal to 5% of the total
number of shares outstanding on September 29, 1994 (the date of grant), as
adjusted to reflect the number of shares issued in the Rights Offering, at an
exercise price per share equal to the greater of the exercise price under the
Rights Offering ($9) or the fair market value on the date of grant ($8 7/8).
Accordingly, Mr. Devening has been granted options to purchase 625,593 shares of
Existing Common Stock at an exercise price per share of $9. These options are
subject to stockholder approval. See Note (2) to the table entitled "Option/SAR
Grants in Last Fiscal Year" above and "Proposal II. Amendment to Stock Incentive
Plan." Nine percent of such options vested on December 31, 1994, and 18.2% of
such options vest on December 31 of each of the subsequent five years if Mr.
Devening remains an employee and the Company meets the specified earnings target
for such year. The options terminate 10 years from the date of grant and must be
exercised within 90 days after Mr. Devening ceases to be an employee.
In the event that Mr. Devening's employment is terminated during the
Employment Period other than for "cause" (defined generally as gross negligence,
commission of a felony, incompetence, fraud or dishonesty, misconduct or
intentional and repeated failure to perform duties under, or any other material
breach of, the Devening Agreement), or if Mr. Devening terminates his employment
for "Good Reason" (defined generally as any significant failure by the Company
to comply with the provisions of the Devening Agreement that govern the duties,
status and compensation of Mr. Devening, requiring that Mr. Devening relocate
other than to certain agreed upon locations, any purported termination of Mr.
Devening's employment other than as provided in the Devening Agreement, failure
of the Company to require any successor to assume the Devening Agreement or
failure of the Company to make any gross-up payment required as a result of the
imposition of any excise taxes pursuant to Section 4999 of the Code) or within
18 months after a "Change of Control" (which has the same meaning as a "Change
of Control Event" as defined in the Stock Incentive Plan, which is described in
"Proposal II. Amendment to Stock Incentive Plan -- Change of Control Event"
below), the Company will be required to pay Mr. Devening an amount equal to two
times the sum of his base salary for the previous 12-month period plus the
amount of his performance bonus, if any, for the previous fiscal year. Upon a
Change of Control, all outstanding option shares not previously vested will
vest, provided Mr. Devening is an employee on such date. In the event of the
death of Mr. Devening between July 31, 1997 and January 1, 2000 while an
employee of the Company, all outstanding option shares not previously vested
will vest. Mr. Devening is entitled to employee benefit arrangements on a
comparable basis with other senior executives, and to financial, tax planning
and consulting services.
WRIGHT AGREEMENT. Pursuant to the terms of the Employment Agreement (the
"Wright Agreement") between Robert S. Wright and the Company, Mr. Wright's term
of employment continues until June 1, 1997, and automatically extends for
additional one-year terms thereafter unless either party elects not to extend
the term. The Wright Agreement provides for an annual salary of $250,000.
Pursuant to the Wright Agreement, Mr. Wright will receive an annual performance
bonus of at least $50,000, subject to increase if the Specialty Brands Division
meets specified earnings targets. In addition, Mr. Wright received options to
purchase 30,000 shares of Existing Common Stock at an exercise price of $10.75
per share, one-third of which vest on each of June 1 of 1995, 1996 and 1997. Mr.
Wright also received, subject to stockholder approval, options to purchase
38,814 shares of Existing Common Stock at an exercise price per share of $9.
Nine percent of such options vested on December 31, 1994, and 18.2% of such
options vest on December 31 of each of the subsequent five
18
<PAGE>
years if Mr. Wright remains an employee and the Specialty Brands Division meets
the specified earnings target for such year. The options granted to Mr. Wright
pursuant to the Wright Agreement will expire 10 years after the date of such
grant.
In the event that Mr. Wright's employment is terminated during the term of
the Wright Agreement by reason of death, the Company will pay Mr. Wright's
estate his base compensation through the expiration of such term and his annual
stock option bonus or portion thereof for the bonus period in which the
termination date occurs. If Mr. Wright's employment is terminated during the
term of the Wright Agreement by the Company for "cause" (defined generally as an
indictment for or conviction of any felony or crime involving moral turpitude,
commission of any theft, fraud or embezzlement, failure to follow instructions
from the Chief Executive Officer, addiction to alcohol or drugs or breach of the
Wright Agreement) or as a result of voluntary termination, the Company will pay
Mr. Wright his base compensation through the date specified as his last day of
employment.
HANES SETTLEMENT AGREEMENT. Effective August 15, 1994, John T. Hanes
retired as Chairman, President, Chief Executive Officer and a director of the
Company. Mr. Hanes and the Company previously had entered into a Settlement
Agreement dated December 31, 1993 (the "Hanes Settlement Agreement") concerning
the payment of certain consideration upon the termination of his employment
agreement. Pursuant to the Hanes Settlement Agreement, as amended through June
1, 1994, in Fiscal 1994, the Company paid Mr. Hanes payments in the amount of
$921,640, representing the sum of the amount of base salary received by Mr.
Hanes for the period from January 2, 1994, through August 31, 1994, separation
payments beginning on January 31, 1994 and ending on December 31, 1994, at Mr.
Hanes' base salary rate as in effect on August 31, 1994, reimbursement for
professional and financial counseling services of $10,000, $2,130 for term life
insurance and a $4,750 contribution to the Doskocil 401(k) Plan. Pursuant to the
Hanes Settlement Agreement, Mr. Hanes is also entitled to continued medical
insurance coverage for himself and his spouse until he reaches age 65 and
continued life insurance coverage under a separate policy which the Company has
purchased and which will be maintained until Mr. Hanes reaches age 65 with
coverage equal to his coverage during employment. In addition, Mr. Hanes
received an interest-free loan from the Company in the amount of $225,000, which
was repaid in full on January 4, 1995. Also, pursuant to the Hanes Settlement
Agreement, as of December 31, 1993, all Performance Shares and Restricted Stock
previously granted to Mr. Hanes that had not yet vested became fully vested and
all options previously granted to Mr. Hanes that had not yet vested became fully
vested and the expiration date of such options was extended until February 3,
1998.
The Hanes Settlement Agreement has effectively replaced the Employment
Agreement with Mr. Hanes (the "Hanes Agreement"). Mr. Hanes and the Company
entered into the Hanes Agreement on November 1, 1991, pursuant to which Mr.
Hanes served as the Chairman of the Board, President and Chief Executive Officer
of the Company. Pursuant to the Hanes Agreement, Mr. Hanes received a one-time
cash payment in the amount of $100,000 as of November 1, 1991. Mr. Hanes' annual
base salary rate for 1994 was $405,000, although as a result of his retirement
in August of 1994, Mr. Hanes received only $270,000 of his annual base salary.
The Hanes Agreement provided that Mr. Hanes would receive a cash bonus pursuant
to the terms of the Annual Incentive Plan. The Hanes Agreement also provided for
50,000 shares of Existing Common Stock to be awarded to Mr. Hanes in accordance
with and pursuant to the Stock Incentive Plan, pursuant to which the Company
awarded 25,000 shares of Restricted Stock and 25,000 Performance Shares, as
disclosed above. The Hanes Agreement also contained certain confidentiality,
change of control and non-competition covenants.
MERRICK SETTLEMENT AGREEMENT. Effective November 14, 1994, Charles I.
Merrick resigned as Vice President-Administration of the Company and as an
officer of all of its related entities. Mr. Merrick and the Company entered into
a Settlement Agreement dated December 2, 1994 (the "Merrick Settlement
Agreement") concerning the payment of certain consideration upon his
resignation. Pursuant to the Merrick Settlement Agreement, Mr. Merrick received
his base salary through November 12, 1994, and the Company has made a separation
payment to Mr. Merrick in the amount of $122,395. In addition, Mr. Merrick
received the option of continuing existing medical insurance coverage and the
right to receive the remaining 3,334 shares of Restricted Stock granted to him
in 1992 but not yet vested under the Stock Incentive Plan. See "-- Summary
Compensation Table."
19
<PAGE>
TRANSITION EMPLOYMENT AGREEMENTS. The Company has entered into Transition
Employment Agreements with each of 15 of the key employees of the Company,
including all of the executive officers listed in the "Summary Compensation
Table" above, other than Messrs. Devening, Wright and Hanes (each an
"Executive"). The Transition Employment Agreements are effective for a period of
two years (the "Term") after a Change of Control, which generally has the same
meaning as a "Change of Control Event" under the Stock Incentive Plan, as
described in "Proposal II. Amendment to Stock Incentive Plan -- Change of
Control Event," and which includes, among other things, a change in stock
ownership whereby a person or group acquires a sufficiently large block of
Existing Common Stock which, when voted with shares solicited by proxy or
written consent without the benefit of a management supported proxy, would
enable such person or group to elect a member of the Company's Board of
Directors. If the Executive's employment is terminated by the Company without
Cause (defined generally as the filing of charges alleging commission of a
felony or willful or gross misconduct) or by the Executive for Good Reason (as
defined below), within two years following a Change of Control, then: (i) for
the remainder of the Term, the Executive shall continue to be paid his or her
Compensation (defined generally as all remuneration including salary, benefit
plans, company car, club dues and incentive and stock option programs that the
Executive received or participated in prior to the Change of Control); (ii) all
options, Performance Shares, and shares of Restricted Stock held by the
Executive shall vest; and (iii) the Executive shall have a period of three
months to exercise any such options. The Transition Employment Agreement also:
(w) provides that the Company will indemnify the Executives to the fullest
extent permitted by the Company's Certificate of Incorporation, the Bylaws and
the General Corporation Law of the State of Delaware (the "DGCL"); (x) includes
confidentiality and noncompetition covenants by the Executives; (y) includes
notice requirements prior to termination; and (z) provides for continuation of
pre-Change of Control pay levels after a Change of Control. For purposes of the
Transition Employment Agreements, the term "Good Reason" is defined generally as
(i) the assignment of duties or limitations on responsibilities inconsistent
with the Executive's positions, duties and responsibilities prior to the Change
of Control, (ii) the removal from or failure to reelect the Executive to any of
the positions held prior to the Change of Control, (iii) the reduction or
failure to pay the Executive's compensation as in effect prior to the Change of
Control, (iv) the failure to provide an opportunity to continue to participate
in the benefit plans and programs that the Executive was participating in prior
to the Change of Control, (v) the failure to provide customary fringe benefits,
(vi) relocation to a location that is more than 35 miles further from the
Executive's residence than the place of employment prior to the Change of
Control, except in connection with a move of the corporate headquarters in which
the Executive's moving expenses are reimbursed, (vii) imposition of travel
requirements not substantially consistent with the Executive's travel
requirements prior to the Change of Control, or (viii) the failure of the
Company to require any successor to assume the Executive's Transition Employment
Agreement.
OFFICER SEPARATION PAY PLAN. In 1993, the Company adopted a separation pay
plan for certain officers which takes effect on termination of employment of an
officer other than by voluntary resignation or for cause. The plan provides that
separation pay will consist of a lump sum of 75% of current annual base salary
and current allowances (i.e., auto allowance) for a six-month period for an
officer who has served for less than two years and for a 12-month period for an
officer who has served two years or more. Under the plan, an officer may elect
to receive separation pay as unreduced salary continuance on the condition that
benefits will terminate when the officer obtains suitable employment. Such an
officer will be eligible for outplacement service (selected and paid for by the
Company) as needed for a maximum of six months. Incumbent officers on March 31,
1993, the effective date of the plan, were deemed to have been officers for two
years.
DOSKOCIL RETIREMENT AND PROFIT SHARING PLAN. The Doskocil 401(k) Plan
provides that all eligible employees of the Company who have attained the age of
21, have completed one year of employment and are not subject to a collective
bargaining agreement are permitted to contribute up to 15% of their salary to
the Doskocil 401(k) Plan. The Company makes contributions on behalf of each
participant of a matching amount up to an employee contribution of 3% of such
employee's salary. Under the Doskocil 401(k) Plan, the Company also makes a 1%
seed contribution to the employee's account up to $250. Employees are fully
vested at all times with respect to all employee contributions to the Doskocil
401(k) Plan. Employees become fully vested in Company matching contributions to
the Doskocil 401(k) Plan after three years of employment with the Company. The
Company may make a profit-
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sharing contribution to the Doskocil 401(k) Plan. Such contribution, if any,
will be an amount determined and authorized by the Board of Directors of the
Company for each plan year. Upon severance from service with the Company,
participants are entitled to a distribution in a single lump sum of their vested
interest in the Doskocil 401(k) Plan. On November 27, 1988, the Company's Board
of Directors amended the Doskocil 401(k) Plan to merge the former Stoppenbach,
Inc. Thrift Plan and Trust into the Doskocil Retirement Plan. In 1991, the
Company suspended the purchase of the common stock of the Company as one of the
investment options under the Doskocil 401(k) Plan.
On July 1, 1993, the Wilson Plan was merged into the Doskocil 401(k) Plan.
Mr. Hanes, Mr. Haefele and Mr. Merrick were covered by the Wilson Plan until the
merger. The Wilson Plan provided defined contributions to individual accounts of
all qualified employees who are not eligible for membership in a bargaining
unit. The Wilson Plan provided basic contributions out of Accumulated Net
Profits (as defined in the Wilson Plan) for a stated target benefit at age 65,
with supplemental contributions based upon Wilson Foods' current Net Profits (as
defined in the Wilson Plan). Effective July 1, 1989, contributions to the Wilson
Plan became 100% vested immediately.
ANNUAL INCENTIVE PLAN. The Annual Incentive Plan was adopted by the Board
of Directors of the Company effective as of January 1, 1992. The primary purpose
of the Annual Incentive Plan is to create incentives that are designed to
enhance the efficiency and profitability of the Company and to provide
participating key employees with an opportunity to earn financial rewards in the
form of annual incentive payments if certain Performance Objectives (as defined
in the Annual Incentive Plan) are met. Any active key management employee of the
Company or of any subsidiary, division or operating unit thereof, is eligible to
participate in the Annual Incentive Plan. The Annual Incentive Plan provides for
the formation of Incentive Award Groups, Target Incentive Levels and Performance
Objectives (each as defined in the Annual Incentive Plan) for each plan year.
The payment of awards to participants is determined by the extent to which
certain Performance Objectives have been obtained with respect to each plan
year.
In 1995, the Company replaced the Annual Incentive Plan with the Key
Management Cash Incentive Plan (the "Management Incentive Plan"), under which
annual cash bonuses may be awarded to executive officers and key employees of
the Company and its subsidiaries, divisions and operating units based on the
achievement of annual performance targets as approved by the Company's Board of
Directors. The targets consist of a combination of corporate, individual and
division or staff function performance objectives and are based on corporate
and/or divisional EBITDA (as defined below). Bonuses generally will be paid only
if corporate performance is at or above the established target. If corporate
performance is below the established target, an exception to the general rule
allows divisional personnel to receive a reduced bonus if the divisional target
is achieved. Individuals must be employed at year end to receive an award under
the Management Incentive Plan.
DOSKOCIL COMPANIES INCORPORATED 1992 STOCK INCENTIVE PLAN. On February 3,
1992, the Board of Directors of the Company adopted the Stock Incentive Plan.
The Stock Incentive Plan authorizes the Company's Compensation Committee to
grant awards during the period beginning January 1, 1992 and ending December 31,
2001. On June 10, 1993, the Stock Incentive Plan was amended to increase the
shares reserved for issuance from 510,000 to 810,000. Under the Stock Incentive
Plan, Restricted Stock awards, Performance Share awards and option awards have
been granted to the directors, to certain executive officers listed on the
preceding Summary Compensation Table, and to other officers and employees of the
Company. The option awards have a per share exercise price no lower than the
fair market value of the Existing Common Stock on the date of grant. The value
of the stock options is related directly to the market price of the Existing
Common Stock and thus to the long-term performance of the Company. Stockholder
approval of the Merger will constitute approval of the assumption by New
Subsidiary of the Stock Incentive Plan. See "Proposal II. Amendment To Stock
Incentive Plan."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During Fiscal 1994, the Compensation Committee of the Board of Directors of
the Company was comprised of Terry W. Grimm, Chairman, Richard N. Bauch, Dort A.
Cameron III and Yvonne V. Cliff. None of the members of the Compensation
Committee has ever been an employee or officer of the Company or any of its
subsidiaries, with the exception of Mr. Bauch, who was an executive officer of
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the Company from May 1987 to June 1989 and who served as an independent
contractor consultant to a subsidiary of the Company from January until April of
1993 but did not receive compensation in excess of $60,000. In addition, none of
the members of the Compensation Committee has any relationship requiring
disclosure under any paragraph of Item 404 or in Item 402(j)(3) of Regulation
S-K promulgated by the Commission, with the exception of Mr. Grimm, who is a
partner in the law firm of Winston & Strawn, which provided legal services to
the Company in connection with the negotiation of amendments to the Hanes
Settlement Agreement and the Devening Agreement for which it received fees of
$27,477 in Fiscal 1994.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The following is the report of the Compensation Committee of the Company
(the "Committee") on executive compensation for Fiscal 1994.
COMPENSATION PHILOSOPHY. The Committee believes that it is in the best
interests of the Company's stockholders for the Company to attract, maintain and
motivate top quality management personnel, especially its executive officers, by
offering and maintaining a competitive compensation package that exhibits an
appropriate relationship between executive pay and the creation of stockholder
value. The general philosophy of the Committee is to integrate (i) adequate
levels of annual base compensation; (ii) annual cash bonuses and equity awards
based on achievement of short-term corporate and individual performance goals,
such that executive compensation levels will be higher in years in which
performance goals are achieved or exceeded; and (iii) equity awards, to ensure
that management has a continuing stake in the long-term success of the Company
and return of value to its stockholders.
During fiscal 1993, Mr. Hanes, then Chairman, President and Chief Executive
Officer of the Company, announced his retirement from the Company, effective
upon the naming of a new Chief Executive Officer. During Fiscal 1994, the Board
of Directors successfully recruited and hired a group of new executive managers
(the "New Executive Group") to supplement the remaining members of the prior
executive group. The New Executive Group included Mr. Devening as Chairman,
President and Chief Executive Officer; Mr. Sieben as Senior Vice President and
Chief Financial Officer; Mr. Wright as Senior Vice President and President of
the Specialty Brands Division; Mr. Swafford, as Senior Vice President and
President of the Retail Division; and Dr. Madsen as Vice President-Procurement.
As a part of the recruitment process, the Company agreed to pay negotiated
salary and benefit amounts to the members of the New Executive Group and to pay
one-time signing bonuses to certain members of the New Executive Group to induce
them to join the Company.
In conjunction with Mr. Devening's employment agreement, during Fiscal 1994,
the Compensation Committee modified the method of implementation of the general
philosophies described above, primarily to increase certain salary levels, to
increase the number of options granted to the senior executive group, and to
extend the time for vesting of newly-issued options. During Fiscal 1994, the
Compensation Committee applied these modified methodologies to not only the New
Executive Group but to other similarly-situated members of the executive
management of the Company, who were Messrs. McCarley, Brady, Bynum, Clapp and
Haefele.
The elements of the Committee's integrated compensation philosophy and the
application of these philosophies during Fiscal 1994, including in connection
with the hiring of the New Executive Group, are summarized as follows:
BASE COMPENSATION LEVELS. Although the Committee believes that
performance-based pay elements should be a key element in the compensation
packages for its executive officers, the Company must maintain base compensation
levels commensurate with other comparable companies in its industry with whom
the Company competes for management personnel (the "Comparable Companies").
The Comparable Companies selected by the Company are food industry companies
that have production and marketing strategies similar to those of the Company,
which are similar to the Company and which compete for executives in the same
markets as the Company. Management of the Company compiled the list of
Comparable Companies and their compensation information based upon executive
compensation studies of Wyatt Data Services and William L. Mercer, Incorporated,
as well as
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proxy statement disclosure for companies meeting the criteria set forth in the
preceding sentence. Although there is only a slight overlap between the
Comparable Companies and those companies included in the Dow Jones Food
Sub-Industry Group (the "Sub-Industry Group"), see "Stock Price Performance
Graph" below, the Committee believes that both groups generally consist of
similar companies, but that the Company more closely competes with the
Comparable Companies for executive officers than with others in the Sub-Industry
Group.
Although the process of setting base compensation levels often reflects
subjective factors, such as leadership, commitment, attitude and motivational
effect, the Committee also considers objective factors, such as achievement of
performance goals (primarily profitability of the areas over which the executive
has management responsibility), level of responsibility and prior experience. In
addition, during Fiscal 1994 the levels of base compensation were heavily
influenced by the negotiations necessary to induce the New Executive Group to
join the Company.
In setting compensation levels for Fiscal 1994, the Committee utilized the
services of outside, independent advisors to assist it in evaluating the
Company's compensation policies and levels and in comparing them to those of
other Comparable Companies. Based on this evaluation, the Committee believes
that the overall compensation paid to the Company's executive officers for the
last year was approximately equal to the median of the base salaries and of
overall compensation paid by the Comparable Companies for similar positions.
Base salaries for executives who were employed by the Company at the
beginning of Fiscal 1994 were based in large part on the salaries established by
the Company when it emerged from Chapter 11 reorganization proceedings in
October 1991, rather than on specific formulas or performance-related analysis
or criteria. At that time, the base salaries of the Company's then-chief
executive officer and then-chief financial officer were determined based upon
negotiations with creditors' committees and banks. Base salaries for the New
Executive Group were based on negotiations between such executives and the
Company and were not based on objective criteria or on a specific formula.
PERFORMANCE-BASED COMPENSATION. The Company provides executive officers
with the following performance-based compensation programs:
- CASH BONUSES. Under the Company's Annual Incentive Plan, cash bonuses
based on a percentage of an executive's salary (the "Target Bonus") may be
earned if certain specified Company, division and/or individual-based
performance goals (the "Performance Goals"), which the Committee sets at
the beginning of each year, are achieved.
At the beginning of Fiscal 1994, the Compensation Committee
established Target Bonus levels for the executive officers then employed
by the Company equal to between 30% and 50% of their individual base
compensation, with the target percentage increasing with the level of
responsibility of the executive. These Target Bonuses were based in large
part on levels set in 1992 based upon negotiations with creditors'
committees and banks at the time of the Company's emergence from Chapter
11 reorganization proceedings, and were not based upon objective criteria
or formulas. The Target Bonus percentages for Fiscal 1994 for the New
Executive Group were set by negotiation between the Company and those
individuals.
For Fiscal 1994, a portion of the Target Bonus set for each
individual, as described above, could be earned if certain Performance
Goals set by the Committee were substantially achieved and the Target
Bonus could be exceeded (up to a set maximum) if the Performance Goals
were exceeded. The Performance Goals for Company and division performance
for Fiscal 1994 were based primarily on earnings before interest, taxes,
depreciation, amortization and extraordinary items ("EBITDA"). No
Performance Goals for individual performance were established by the
Compensation Committee for Fiscal 1994. The Company-wide Performance Goals
set by the Compensation Committee at the beginning of Fiscal 1994 were
applied to Dr. Madsen. The Performance Goals for the remainder of the New
Executive Group were determined by negotiation and contractual agreement
between the Company and each such executive.
The Company failed to meet the Performance Goals for Fiscal 1994.
After the end of Fiscal 1994, however, the Compensation Committee
determined that it was in the best interests of the stockholders of the
Company to grant discretionary one-time bonuses
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outside of the Annual Incentive Plan in an aggregate amount of $827,000 to
the key employees of the Company's Deli and Food Service Divisions, due to
the high level of performance of those specific divisions in Fiscal 1994.
In addition, the Committee approved certain one-time cash bonuses in the
amount of $80,000 in the aggregate outside of the Annual Incentive Plan
for seven employees in connection with certain individual accomplishments.
- PERFORMANCE SHARES. In 1992, 105,000 Performance Share awards were
granted pursuant to the Stock Incentive Plan, to vest at the target rate
of up to one-third per year in 1992, 1993, and 1994, based on achievement
of the Performance Goals relating to the Company as a whole. In Fiscal
1994, the Company failed to meet these Performance Goals and, as a result,
none of the Performance Shares vested in Fiscal 1994, except for those of
Mr. Hanes pursuant to the Hanes Settlement Agreement. In the aggregate,
51,670 Performance Shares vested during 1992, 1993, and 1994, and 53,330
Performance Shares expired at the end of Fiscal 1994 without vesting.
The aggregate number of Performance Shares granted in 1992 for vesting
in 1992, 1993 and 1994 was determined based upon negotiations with
creditors' committees and banks at the time of the Company's emergence
from Chapter 11 reorganization proceedings and was not based upon
objective criteria or formulas.
- STOCK OPTIONS. Options may be granted pursuant to the Stock Incentive
Plan at an exercise price equal to or greater than the fair market value
of the shares of Existing Common Stock on the date of the grant. The value
of the options is related directly to the market price of the Existing
Common Stock and, accordingly, to the long-term performance of the
Company.
An aggregate of 94,500 options were granted to the Company's executive
officers in 1992 under the Stock Incentive Plan, pursuant to negotiations
with creditors' committees and banks at the time of the Company's
emergence from Chapter 11 reorganization proceedings. The number of
options granted was not based upon objective criteria or formulas. Prior
to June of Fiscal 1994, as new executives subsequently joined the Company,
they generally were granted options based on the relative relationship
between their level of responsibility in the Company and the number of
options then held by other executives.
In September of 1994, the Company granted options to Mr. Devening
based on negotiations between the Company and Mr. Devening. Pursuant to
such negotiations, Mr. Devening holds 625,593 options (approximately 5% of
the shares of outstanding Existing Common Stock), which vest over a
six-year period. The Compensation Committee then approved a revised
approach to granting options proposed by Mr. Devening, pursuant to which
options were granted to the executive officer group on terms similar to
those granted to Mr. Devening and in amounts determined by the employee's
level of responsibility as recommended by Mr. Devening. As a result, since
September of 1994, all of the Company's executive officers, other than Mr.
Devening, received options for an additional 312,915 shares in the
aggregate on a vesting schedule similar to that applicable to Mr.
Devening's options, in addition to any other options previously held by
such executive officers. An aggregate of 1,169,008 options currently are
outstanding. Options to purchase 938,508 shares of Existing Common Stock
are subject to approval by the Company's stockholders of an increase in
the number of shares of Existing Common Stock available under the Stock
Incentive Plan pursuant to Proposal II below.
LONG-TERM FOCUS. In 1992, 105,000 shares of Restricted Stock were granted
pursuant to the Stock Incentive Plan, to vest one-third each as of the end of
fiscal 1992, fiscal 1993 and Fiscal 1994, based on the continued employment of
the holder with the Company at the end of each vesting period. The Committee
believes that Restricted Stock awards provided an incentive for long-term
performance and continued employment. Such awards were intended by the Committee
to focus management on achievement of sustained performance over the vesting
period and to align the interests of management with those of other equity
holders, as discussed below. As of the end of Fiscal 1994, 79,168 shares of the
Restricted Stock had vested, with 35,001 shares vesting in Fiscal 1994
(including 3,334 shares of Restricted Stock that vested pursuant to the Merrick
Settlement Agreement). The remaining 11,666 unvested shares of Restricted Stock
lapsed when certain employees left the Company and forfeited their shares of
Restricted Stock.
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<PAGE>
The number of shares of Restricted Stock granted in fiscal 1992 to Mr.
Hanes, then the Chief Executive Officer of the Company, was determined by
negotiations with the Company's creditors' committees and banks in conjunction
with the Company's emergence from Chapter 11 reorganization proceedings, which
became effective on October 31, 1991. The Company awarded the remainder of the
shares of Restricted Stock to other employees based upon the recommendation of
the chief executive officer, after an evaluation of the employee's job
responsibility, among other performance-related factors. Mr. Devening received
no grants of Restricted Stock.
EQUITY BASED INCENTIVES. The Performance Shares, options and Restricted
Stock were granted by the Committee pursuant to the Stock Incentive Plan to
create in the Company's management a vested interest in maximizing the value of
the Company's stock and align management's interest in maximizing stockholder
value on a long-term basis with that of all other stockholders. The Committee
considers the number of options already held by an executive when determining
whether to grant additional options.
RELATIONSHIP OF CORPORATE PERFORMANCE TO FISCAL 1994 COMPENSATION. At the
beginning of Fiscal 1994, the Committee set base salaries for executive officers
and set the performance goals under the Annual Incentive Plan and the
Performance Share awards, based on the recommendations of the then-chief
executive officer of the Company. The base salaries were increased over fiscal
1993 amounts between 4% and 10%. The base salary increase generally was not
linked directly to any element of the Company's performance for fiscal 1993, but
instead was linked to an attempt to make the salaries of the Company's
executives more competitive with those paid to executives of Comparative
Companies.
Although the Company failed to meet the Performance Goals for Fiscal 1994,
as discussed above, the Compensation Committee determined that it was in the
best interests of the stockholders of the Company to grant one-time
discretionary bonuses in the aggregate amount of $907,000 to certain key
employees for high division performance and seven employees for outstanding
individual accomplishments. Mr. Wright also received a bonus of $127,961
pursuant to his employment agreement with the Company. As a result, with the
exception of bonuses outlined above and negotiated amounts paid to Mr. Hanes and
Mr. Merrick in Fiscal 1994, officers of the Company received only their base
salaries set by the Compensation Committee at the beginning of Fiscal 1994 and
vested amounts of Restricted Stock.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. Mr. Hanes compensation for Fiscal
1994 pursuant to the settlement of his employment agreement was the same as for
fiscal 1993. Mr. Devening's compensation for Fiscal 1994 was determined by
negotiation between the Company and Mr. Devening in furtherance of the Company's
goal to retain top-quality management as a part of the New Executive Group, as
described above. There is no direct quantitative link between the compensation
of Mr. Hanes or Mr. Devening for Fiscal 1994 and any quantitative measure of
Company performance, including the Company's stock performance graph.
DEDUCTION LIMITATION ON EXECUTIVE COMPENSATION. The Company intends to
comply with Section 162(m) of the Code (as defined below), which limits to $1
million per person the deduction a publicly-held corporation may take for
compensation paid to its chief executive officer and its four other highest
compensated employees, unless the compensation paid to such persons constitutes
"performance-based" compensation. Because of the Company's substantial NOL
carryforwards, management of the Company does not believe that the loss of a
deduction with respect to amounts in excess of $1 million per person, if any,
will negatively impact the Company.
The Committee of the Board of Directors of the Company is composed of Mr.
Grimm, Chairman, Mr. Bauch, Mr. Cameron, and Ms. Cliff.
Terry M. Grimm, Chairman
Richard N. Bauch
Dort A. Cameron III
Yvonne V. Cliff
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STOCK PRICE PERFORMANCE GRAPH
The following line graph compares the yearly percentage change:
(i) in the Company's cumulative Total Stockholder Return (as herein defined)
(the solid line); with
(ii) the cumulative Total Stockholder Return of the Standard & Poor's 500
Stock Index (the long broken line); and with
(iii) the cumulative Total Stockholder Return of the Dow Jones Food
Sub-Industry Group (the short broken line).
"Total Stockholder Return" is measured by dividing (i) the sum of (A) the
cumulative amount of dividends for the measurement period, assuming dividend
reinvestment, and (B) the difference between the share price at the end and the
beginning of the measurement period; by (ii) the share price at the beginning of
the measurement period.
This graph should be viewed in light of the following information: On March
5, 1990, the Company filed for protection under Chapter 11 of Title 11 of the
United States Code. On October 31, 1991 the Reorganization Plan became
effective. On that date, approximately 5,115,714 shares of the Company's
outstanding common stock were cancelled (the "Cancelled Common Stock"). Pursuant
to the Reorganization Plan, the Company issued the Existing Common Stock to
certain parties that held claims against the Company as of the date of the
Chapter 11 filing and the holders of the Cancelled Common Stock were issued 5.3
shares of Existing Common Stock for each 100 shares of Cancelled Common Stock.
This graph illustrates the comparisons set forth in the first paragraph of
this section for a measurement period beginning December 30, 1989, and ending
December 31, 1994. The Company's cumulative Total Stockholder Return for this
period, as reflected in the solid line on this graph, is impacted by the fact
that it relates to the Cancelled Common Stock prior to October 31, 1991 and the
Existing Common Stock thereafter.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOSK S&P 500 DOW JONES FOOD INDEX
<S> <C> <C> <C>
Dec-89 100 100 100
Dec-90 10 97 107
Dec-91 8 126 155
Dec-92 12 136 158
Dec-93 9 150 144
Dec-94 6 152 157
</TABLE>
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For a description of employment, separation and/or severance agreements with
Messrs. Devening, Wright, Hanes and Merrick, see "Compensation of Directors and
Executive Officers -- Employment, Termination and Change-in-Control
Arrangements."
On January 12, 1995, the Company entered into an agreement with, among
others, Joseph Littlejohn & Levy, Inc. ("JLL, Inc."), an affiliate of JLL
Associates, the Company's 44.4% stockholder, pursuant to which the Company and
JLL, Inc. together purchased an undivided 12.5% interest in a Cessna Citation
aircraft for an aggregate purchase price of $330,000. In connection therewith,
the Company and JLL, Inc. entered into an agreement pursuant to which the
Company paid 75% of the purchase price, or $247,500, for which it received a 75%
interest in the undivided 12.5% interest in such aircraft, and JLL, Inc. paid
25% of the purchase price, or $82,500, for which it received a 25% interest in
the undivided 12.5% interest. In addition, on December 14, 1994, the Company and
JLL, Inc. entered into an agreement pursuant to which the Company and JLL, Inc.
together purchased an undivided 25% interest in a Hawker 1000 aircraft for an
aggregate purchase price of $3,016,000. In connection therewith, the Company and
JLL, Inc. entered into an agreement pursuant to which the Company paid 75% of
the purchase price, or $2,262,000, for which it received a 75% interest in the
undivided 25% interest, and JLL, Inc. paid 25% of the purchase price, or
$754,000, for which it received a 25% interest in the undivided 25% interest.
The following members of the Company's Board of Directors are affiliated with
JLL, Inc. or its affiliates: Theodore Ammon, Yvonne V. Cliff, Paul S. Levy and
Angus C. Littlejohn, Jr. See "Directors." New Subsidiary, as successor to the
Company, will be bound by the aircraft agreements described above.
In Fiscal 1994, John T. Hanes received an interest-free loan from the
Company in the amount of $225,000, pursuant to the Hanes Settlement Agreement.
The loan was repaid in full on January 4, 1995.
New Subsidiary, as successor to the Company, will be bound by the employment
agreements for Messrs. Sieben and Swafford described below.
SIEBEN AGREEMENT. Pursuant to the terms of a letter of offer from the
Company, Horst O. Sieben, Senior Vice President and Chief Financial Officer,
will receive an annual salary of $225,000 and, for the first year of his
employment, a monthly living allowance of $2,000 in lieu of certain other
allowances. Mr. Sieben will be eligible to participate in the Annual Incentive
Plan, under which he will be eligible for an annual bonus of up to 50% of his
base salary if certain performance objectives are met. In addition, Mr. Sieben
received a signing bonus of $65,000. The Company granted to Mr. Sieben options
to purchase, in the aggregate, 68,814 shares of Existing Common Stock at an
exercise price per share of $9 pursuant to a Non-Qualified Stock Option
Agreement dated September 29, 1994 (the "Sieben Agreement"). These options are
subject to stockholder approval of an increase in the number of shares
authorized for issuance under the Stock Incentive Plan, which approval is being
sought at the Annual Meeting pursuant to Proposal II. See "Proposal II.
Amendment to Stock Incentive Plan." Nine percent of such options vested on
December 31, 1994, and 18.2% of such options vest on December 31 of each of the
subsequent five years if Mr. Sieben remains an employee and the Company meets
the specified earnings target for such year. The options terminate 10 years from
the date of grant and must be exercised within 90 days after Mr. Sieben ceases
to be an employee. Upon a Change of Control Event (as defined in the Stock
Incentive Plan, which is described under "Proposal II. Amendment to the Stock
Incentive Plan -- Change of Control Event"), or in the event of the death of Mr.
Sieben, all outstanding option shares not previously vested will vest, provided
Mr. Sieben is an employee on the date of such event. In the event Mr. Sieben is
terminated for any reason other than dishonesty or malfeasance, he will be
entitled to receive his base salary for a period of six months from the
termination date. In addition, the Company and Mr. Sieben have entered into a
Transition Employment Agreement. See "Compensation of Directors and Executive
Officers -- Employment, Termination and Change-in-Control Arrangements --
Transition Employment Agreements."
SWAFFORD AGREEMENT. Pursuant to the terms of a letter of offer from the
Company, Larry P. Swafford, Senior Vice President and President, Retail
Division, will receive an annual salary of $200,000 and a 1995 incentive bonus
of $70,000 payable in February 1996. In addition, Mr. Swafford
27
<PAGE>
received a signing bonus of $60,000. The Company granted to Mr. Swafford options
to purchase, in the aggregate, 68,814 shares of Existing Common Stock at an
exercise price of $9 per share. These options are subject to stockholder
approval of an increase in the number of shares authorized for issuance under
the Stock Incentive Plan, which approval is being sought at the Annual Meeting
pursuant to Proposal II. See "Proposal II. Amendment to Stock Incentive Plan."
Nine percent of such options vested on January 30, 1995, and 18.2% of such
options vest on January 30 of each of the subsequent five years if Mr. Swafford
remains an employee and the Company meets the specified earnings target for such
year. The options terminate 10 years from the date of grant and must be
exercised within 90 days after Mr. Swafford ceases to be an employee. If Mr.
Swafford is terminated without cause, he will receive severance payments equal
to one year's base compensation. Mr. Swafford also is entitled to severance
payments in the event of a change of control, among other things. In addition,
the Company and Mr. Swafford have entered into a Transition Employment
Agreement. See "Compensation of Directors and Executive Officers -- Employment,
Termination and Change-in-Control Arrangements -- Transition Employment
Agreements."
MYERS SETTLEMENT AGREEMENT. On July 6, 1993, Theodore A. Myers resigned as
Senior Vice President, Chief Financial Officer and director of the Company.
Pursuant to the settlement agreement between the Company and Mr. Myers (the
"Myers Settlement Agreement"), which replaced the Employment Agreement dated
November 1, 1991, between the Company and Mr. Myers pursuant to which Mr. Myers
served as the Chief Financial Officer of the Company (the "Myers Agreement"),
Mr. Myers was paid a lump sum cash payment of $452,712. This amount included:
(i) $421,874, which represented the present value of the unpaid portion of Mr.
Myers' compensation as set forth in Section 3 of the Myers Agreement; (ii)
$21,307, which represented the present value of his automobile and club
allowance as set forth in Section 8 of the Myers Agreement; and (iii) $9,531,
which represented the present value of the amounts the Company would have
contributed to the Doskocil 401(k) Plan on behalf of Mr. Myers through December
31, 1994 had he remained employed by the Company. In addition, with respect to
fiscal 1993, Mr. Myers received a prorated incentive bonus of $189,579, which
was equal to one-half of the amount of the incentive bonus which would have been
paid to Mr. Myers had he remained employed by the Company based on the
achievement of certain performance objectives described in the Annual Incentive
Plan. Mr. Myers also received reimbursement of reasonably incurred business
expenses prior to the Settlement Date (as defined in the Myers Settlement
Agreement) and reasonable moving expenses of approximately $3,000. Mr. Myers has
also received financial counseling services through December 31, 1994 and
continues to participate in insurance plans and programs (excluding life
insurance plans) that he participated in prior to the Settlement Date. As part
of the Myers Settlement Agreement, the Company agreed to pay 40% of the premiums
for a life insurance policy. Also, all previously granted but unvested options
became fully vested and exercisable in accordance with the Stock Incentive Plan.
On August 2, 1993, all unvested Restricted Stock became fully vested.
PROPOSAL II. AMENDMENT TO STOCK INCENTIVE PLAN
The Company's Board of Directors has adopted a resolution amending Section
IV.1(a) of the Stock Incentive Plan to increase the aggregate number of shares
of Existing Common Stock authorized for issuance thereunder from 810,000 to
1,900,000. The amendment is being proposed to facilitate the achievement of the
goals of the Stock Incentive Plan. Pursuant to Section XI.1 of the Stock
Incentive Plan, the amendment is subject to the approval of the stockholders of
the Company.
There are currently 434,497 shares of Existing Common Stock available for
awards under the Stock Incentive Plan. Since September 1994, the Company has
granted options to purchase 938,508 shares of Existing Common Stock to certain
executive officers. These options are subject to stockholder approval of an
increase in the number of shares authorized for issuance under the Stock
Incentive Plan, which approval is being sought in connection with this Proposal
II. See "Proposal I. Election of Directors -- Compensation of Directors and
Executive Officers." If the proposed amendment to the Stock Incentive Plan is
approved, there will be 585,989 shares of Existing Common Stock available for
awards thereunder, which the Board of Directors believes is reasonable to
achieve the goals of the Stock Incentive Plan. If the proposed amendment is not
approved, the options to purchase
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<PAGE>
938,508 shares that are subject to stockholder approval will be allocated, pro
rata, among the 434,497 shares currently available under the Stock Incentive
Plan, and the remaining options to purchase 504,011 shares will be treated as
granted outside the Stock Incentive Plan and will be subject to the provisions
of Section 16(b) under the Exchange Act. Management believes that all of the
shares of Existing Common Stock held by JLL Associates and Airlie will be voted
in favor of the amendment to the Stock Incentive Plan.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
BACKGROUND
The purpose of the Stock Incentive Plan is to create incentives that are
designed to motivate key employees of the Company to put forth maximum efforts
toward the success and growth of the Company and to enable the Company to
attract and retain experienced individuals who by their position, ability and
diligence are able to make important contributions to the Company's success.
Toward these objectives, the Stock Incentive Plan provides for the granting of
options, Restricted Stock, Performance Share awards and other incentive awards.
The Stock Incentive Plan was designed to enable the Company to adapt the
long-term incentive compensation of its key employees to changing business
conditions.
ADMINISTRATION
The Stock Incentive Plan provides for administration by a committee (the
"Plan Committee") to be comprised of either the Compensation Committee of the
Board or another committee designated by the Board. Members of the Plan
Committee may participate in the Stock Incentive Plan, but only to the extent
set forth below in the section entitled "Non-Employee Director Options." Among
the powers granted to the Plan Committee are the powers to interpret the Stock
Incentive Plan, establish rules and regulations for its operation, select
employees of the Company and its subsidiaries to receive awards, and determine
the timing, form, amount and other terms and conditions pertaining to any award.
The Stock Incentive Plan requires that the Plan Committee, in exercising the
foregoing powers, seek the recommendation of the Chief Executive Officer of the
Company or his delegate.
ELIGIBILITY FOR PARTICIPATION
Any key employee of the Company or any of its subsidiaries is eligible to
participate in the Stock Incentive Plan. The selection of participants from
among key employees is within the discretion of the Plan Committee.
Approximately 63 employees are eligible to participate in the Stock Incentive
Plan. The benefits or amounts to be received by or allocated to the participants
in the Stock Incentive Plan, as amended by the proposed amendment to the Stock
Incentive Plan, have been and will be determined in the sole discretion of the
Plan Committee, as described in the preceding paragraph. See "Compensation of
Directors and Executive Officers" for a description of the benefits and amounts
received by or allocated to such participants in Fiscal 1994.
TYPES OF AWARDS
The Stock Incentive Plan provides for the granting of any or all of the
following types of awards: (1) stock options, including non-qualified stock
options and stock options intended to qualify as "incentive stock options" under
Section 422 of the Code; (2) Restricted Stock; (3) Performance Shares; and (4)
any other incentive award of, or based on, the Existing Common Stock that is
established by the Plan Committee and is consistent with the Stock Incentive
Plan's purpose. The awards may be granted singly, in combination or in tandem as
determined by the Plan Committee. For a description of the awards made under the
Stock Incentive Plan, see "Compensation of Directors and Executive Officers."
AMENDMENT OF THE STOCK INCENTIVE PLAN
The Company, through the Board, may amend the Stock Incentive Plan at any
time, but may not, without stockholder approval, adopt any amendment that would
materially increase the benefits accruing to participants, materially increase
the maximum number of shares that may be issued under the Stock Incentive Plan
(except for certain antidilution adjustments described below), or materially
modify the Stock Incentive Plan's eligibility requirements. Notwithstanding the
foregoing, certain amendments to the provisions governing non-employee director
options may not be amended
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<PAGE>
more than once every six months (even with stockholder approval), other than to
conform with changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations thereunder. In addition, the
Stock Incentive Plan provides for the automatic adjustment of the number and
kind of shares available thereunder and the number and kind of shares subject to
outstanding awards in the event the Existing Common Stock is changed into or
exchanged for a different number or kind of shares of stock or other securities
of the Company or another corporation, or if the number of shares of Existing
Common Stock is increased through a stock dividend. The Stock Incentive Plan
also provides that an adjustment in the number of shares available thereunder
and in the number of shares subject to any outstanding awards may be made if the
Plan Committee determines that any other change in the number or kind of shares
of Existing Common Stock equitably requires such an adjustment.
OTHER COMPONENTS OF THE STOCK INCENTIVE PLAN
The Stock Incentive Plan authorizes the Plan Committee to grant awards
during the period beginning January 1, 1992 and ending December 31, 2001. Upon
adoption of the amendment to the Stock Incentive Plan, 1,900,000 shares of
Existing Common Stock will be reserved for issuance subject to awards under the
Stock Incentive Plan. Shares of Existing Common Stock subject to awards that
terminate by expiration, forfeiture, cancellation or otherwise without the
issuance of shares, or which are settled in cash in lieu of Existing Common
Stock, will again be available for issuance subject to awards under the Stock
Incentive Plan.
STOCK OPTIONS
Under the Stock Incentive Plan, the Plan Committee may grant awards in the
form of options to purchase shares of Existing Common Stock. The Plan Committee
will, with regard to each option, determine the number of shares subject to the
option, the manner and time of the option's exercise and the exercise price per
share of stock subject to the option. The exercise price of an option may, at
the discretion of the Plan Committee, be paid by a participant in cash, shares
of Existing Common Stock, a combination thereof, or such other consideration as
the Plan Committee may deem appropriate. For example, in a transaction commonly
known as pyramiding, a participant could successively exercise a portion of an
option and then exchange the shares purchased to further exercise the same
option. Any option granted in the form of an incentive stock option will satisfy
the applicable requirements of Section 422 of the Code.
NON-EMPLOYEE DIRECTOR OPTIONS
The Stock Incentive Plan automatically grants a single option to purchase
5,000 shares of Existing Common Stock to all non-employee directors who were
serving in such capacity on the date the Stock Incentive Plan was approved by
the Board (the "Director Option.") A similar grant will be made to all future
non-employee directors who join the Board subsequent to such date. Each Director
Option shall become exercisable with respect to one-third of the shares of
Existing Common Stock to which it relates on each of the first three
anniversaries of the date of grant so long as the non-employee director remains
a director at such time. The per share exercise price of each such option is
equal to the per share fair market value of the Existing Common Stock as of the
date of the grant, and they may be exercised within 10 years from the date of
grant. Director Options shall be forfeited if the directorship of an optionee is
terminated on account of any act of fraud, intentional misrepresentation,
embezzlement, misappropriation, or conversion of assets or opportunities of the
Company or any of its subsidiaries. The exercise price of a Director Option must
be paid by a director in cash or pursuant to a "cashless exercise" feature of
the Stock Incentive Plan pursuant to which the option may be exercised by a
broker-dealer acting on behalf of the director provided (i) the broker-dealer
has received a duly endorsed stock option agreement and instructions signed by
the director requesting the Company to deliver the shares of Existing Common
Stock subject to such option to the broker-dealer on behalf of the director,
(ii) adequate provision has been made for the payment of any withholding taxes
due upon such exercise, (iii) the broker-dealer and director have otherwise
complied with Section 220.3(e)(4) of Regulation T under the Exchange Act, (iv)
six months have elapsed since the date of grant and (v) the option is exercised
during a period beginning on the third business day following the release of a
summary statement of the Company's quarterly or annual sales and earnings and
ending on the twelfth business day following such date. All Director Options
shall become immediately exercisable
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<PAGE>
in the manner set forth below in the section entitled "Change of Control Event"
if the directorship of an optionee is terminated within two years following a
Change of Control Event. Directors have 90 days following resignation to
exercise Director Options.
RESTRICTED STOCK AWARDS
The Stock Incentive Plan authorizes the Plan Committee to grant awards in
the form of Restricted Stock ("Restricted Stock Awards"). Restricted Stock
Awards will be subject to such terms, conditions, restrictions and/or
limitations, if any, as the Plan Committee deems appropriate including, but not
limited to, restrictions on transferability and continued employment. The Stock
Incentive Plan gives the Plan Committee the discretion to accelerate the vesting
of Restricted Stock Awards under certain circumstances.
PERFORMANCE SHARE AWARDS
The Stock Incentive Plan also authorizes the Plan Committee to grant awards
in the form of Performance Shares ("Performance Share Awards"). Under the Stock
Incentive Plan, Performance Share Awards will be contingent upon the attainment,
over a period to be determined by the Plan Committee, of certain performance
objectives. The performance objectives to be achieved during a performance
period and the measure of whether and to what degree such objectives have been
attained also will be determined by the Plan Committee.
OTHER INCENTIVE AWARDS
Under the Stock Incentive Plan, the Plan Committee also has the discretion
to grant other types of awards under which the Existing Common Stock is or may
in the future be acquired by a participant. Such awards may include grants of
debt securities convertible into or exchangeable for shares of the Existing
Common Stock upon the attainment of performance goals or such other conditions
as the Plan Committee shall determine.
OTHER TERMS OF AWARDS
Options and Restricted Stock Awards shall be paid in Existing Common Stock.
Performance Share Awards may be paid in cash, Existing Common Stock, or a
combination of cash and Existing Common Stock, as the Plan Committee shall
determine. If an award is granted in the form of an option, Restricted Stock
Award, Performance Share Award, or any other form of a stock-based grant, the
Plan Committee may include as part of such award an entitlement to receive
dividends or dividend equivalents.
The Stock Incentive Plan provides for the forfeiture of awards under certain
circumstances as determined by the Plan Committee. The Stock Incentive Plan
authorizes the Plan Committee to promulgate administrative guidelines for the
purpose of determining what treatment will be afforded to a participant under
the Stock Incentive Plan in the event of his death, disability, retirement or
termination for an approved reason.
Upon granting of any award, the Plan Committee may, by way of an award
notice or otherwise, establish such other terms, conditions, restrictions and/or
limitations governing the granting of such awards as are not inconsistent with
the Stock Incentive Plan.
CHANGE OF CONTROL EVENT
The Stock Incentive Plan defines a "Change of Control Event" as (i) a change
in stock ownership of the Company whereby a person or group of persons acquires
a sufficiently large block of Existing Common Stock that, when voted with all
shares of Existing Common Stock of all other stockholders whose proxies or
consents are solicited by such person or group without the benefit of a
management-supported proxy statement, would enable such person or group to elect
a member of the Company's Board of Directors, (ii) a merger or consolidation of
the Company with and into another company, other than a wholly-owned subsidiary,
where the Company is not the surviving corporation or where the Company is the
surviving corporation but the members of the Company's Board of Directors
immediately prior to the merger or consolidation do not constitute a majority of
the board of the surviving corporation after the merger or consolidation, (iii)
the sale of all or substantially all of the assets of the Company or (iv) any
other kind of corporate reorganization or takeover where the
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<PAGE>
Company is not the surviving corporation or the members of the Company's Board
of Directors immediately prior to the merger or consolidation do not constitute
a majority of the board of the surviving corporation.
Upon the occurrence of a Change of Control Event, a participant whose
employment is terminated, for reasons other than fraud, intentional
misrepresentation, embezzlement, misappropriation or conversion of assets or
opportunities of the Company or any of its subsidiaries, within two years of the
date of such Change of Control Event, may be entitled to the following: (i) all
of the terms, conditions, restrictions and limitations in effect on any of the
participant's outstanding awards would immediately lapse; (ii) all of the
participant's outstanding awards would automatically become fully vested; and
(iii) the Company would, within the three-month period immediately following
such termination of employment, make full payment to each such participant with
respect to any Performance Share Award or other incentive award, deliver
certificates to such participant with respect to each Restricted Stock Award and
permit the exercise of options granted to such participant.
FEDERAL TAX TREATMENT
Under current federal tax law, the following are the federal tax
consequences generally arising with respect to awards under the Stock Incentive
Plan. A participant who is granted an incentive stock option does not realize
any taxable income at the time of the grant or at the time of exercise.
Similarly, the Company is not entitled to any deduction at the time of grant or
at the time of exercise. If the participant makes no disposition of the shares
acquired pursuant to an incentive stock option before the later of two years
from the date of grant of such option and one year of the transfer of such
shares to him, any gain or loss realized on a subsequent disposition of the
shares will be treated as a long-term capital gain or loss. Under such
circumstances, the Company will not be entitled to any deduction for federal
income tax purposes.
The participant who is granted a non-qualified stock option does not have
taxable income at the time of grant, but does have taxable income at the time of
exercise equal to the difference between the exercise price of the shares and
the market value of the shares on the date of exercise. The Company is entitled
to a corresponding deduction for the same amount.
A participant who has been granted a Performance Share Award will not
realize taxable income at the time of the grant, and the Company will not be
entitled to a deduction at such time. A participant will realize ordinary income
at the time the award is paid, and the Company will have a corresponding
deduction.
A participant who has been granted a Restricted Stock Award will not realize
taxable income at the time of the grant, and the Company will not be entitled to
a deduction at the time of the grant, assuming that the restrictions constitute
a substantial risk of forfeiture for federal income tax purposes. When such
restrictions lapse, the participant will receive taxable income in an amount
equal to the excess of the fair market value of the shares at such time over the
amount, if any, paid for such shares. The Company will be entitled to a
corresponding deduction.
The award of an outright grant of non-restricted Existing Common Stock to a
participant will produce immediate tax consequences for both the participant and
the Company. The participant will be treated as having received taxable
compensation in an amount equal to the then fair market value of the Existing
Common Stock distributed to him. The Company will receive a corresponding
deduction for the same amount.
MARKET VALUE
Based on the last sale price of the Existing Common Stock on March 30, 1995
of $7 7/8 per share, as reported by the Nasdaq Stock Market, the 1,090,000
additional shares of Existing Common Stock to be reserved for issuance under the
Stock Incentive Plan had an aggregate market value of $8,583,750.
VOTE REQUIRED
To be adopted, the amendment to the Stock Incentive Plan must be approved by
the holders of a majority of the shares of Existing Common Stock present, or
represented, and entitled to vote at the Annual Meeting.
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<PAGE>
NEW PLAN BENEFITS
The benefits that will be received under the amendment to the Stock
Incentive Plan by the persons listed on the Summary Compensation Table above and
the groups described below, to the extent that they are determinable, are set
forth in the following table. These amounts include options granted on or after
September 29, 1994 and do not include option grants prior thereto.
<TABLE>
<CAPTION>
DOLLAR VALUE
OF OPTIONS NUMBER OF
NAME AND POSITION ($)(1)(2) OPTIONS(2)
- -------------------------------------------------- ------------ -----------
<S> <C> <C>
R. Randolph Devening ............................. $0 625,593
Chairman, President and Chief Executive Officer
Thomas G. McCarley ............................... $0 33,814
Senior Vice President and President, Food Service
Division
Robert S. Wright ................................. $0 38,814
Senior Vice President and President, Specialty
Brands Division
Raymond J. Haefele ............................... $0 27,540
Vice President and President, Deli Division
Howard C. Madsen ................................. $0 22,357
Vice President - Procurement
All Current Executive Officers as a Group......... $0 938,508
All Current Directors Who are not Executive
Officers as a Group.............................. $0 0
All Employees, Including All Current Officers Who
Are Not Executive Officers, as a Group........... $0 0
<FN>
- ------------------------
(1) Based on an exercise price of $9 per share and the closing price on March
30, 1995, of $7 7/8.
(2) Reflects 938,508 options granted since September 29, 1994, to certain key
executive officers subject to stockholder approval of the amendment to the
Stock Incentive Plan, at an exercise price of $9 per share. See
"Compensation of Directors and Executive Officers."
</TABLE>
PROPOSAL III. THE MERGER
At the Annual Meeting, the Company's stockholders will be asked to approve
the Merger Agreement, pursuant to which the Company will be merged with and into
New Subsidiary, with new subsidiary being the surviving corporation. The purpose
of the Merger is to effect the Name Change and implement the Transfer
Restrictions.
The Merger Agreement must be approved by the holders of a majority of the
shares of Existing Common Stock entitled to vote on such a proposal. Management
believes that all of the shares of Existing Common Stock held by JLL Associates
and Airlie will be voted in favor of the Merger Agreement.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
NAME CHANGE
The Name Change is being effected to change the corporate name under which
the business of the Company is conducted to Foodbrands America, Inc. See "-- New
Subsidiary's Certificate of Incorporation and Bylaws." Management believes that
the Name Change is appropriate to reflect the change in the Company's business
strategy from its historic basis as a meat processing company to a more
diversified and increasingly broad-based food company.
The Company's business objective is to increase revenue and earnings growth
rates through internal means and appropriate acquisitions so as to continue to
improve the level and consistency of profitability in a menner that enhances
stockholder value. The key elements of the Company's strategy include: (i)
manage product quality and consistency to meet customer expectations and needs;
(ii) expand market share in the growing foodservice and deli markets; (iii)
provide industry-
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superior customer service; and (iv) introduce new products and make appropriate
acquisitions that promote continued growth. Implementation of these strategies
will focus the Company's business on higher growth and higher margin food
segments, thereby transforming the Company from a meat processor to a
broad-based food company.
This strategic change is evidenced by, among other things, the acquisition
by the Company of the Frozen Specialty Foods division of International
Multifoods Corporation in June of 1994.
Management believes that the Name Change will enhance the Company's ability
to implement these strategies and will more accurately reflect its current and
future business. At the present time, the Company does not plan to change the
trademarks and trade names under which the Company's products are marketed.
TRANSFER RESTRICTIONS
The Transfer Restrictions to be implemented by the Merger are intended to
help assure that an "ownership change" as defined under the Code and the
Treasury Regulations promulgated thereunder (an "Ownership Change"), that could
severely limit the availability of the Company's NOLs will not occur. Pursuant
to the Reorganization Plan, a provision of the Company's Certificate of
Incorporation imposing transfer restrictions similar to the Transfer
Restrictions was in effect from October 31, 1991 until October 31, 1993, when it
expired by its terms. The purpose of the Transfer Restrictions is to reinstate
the protections previously provided by that provision of the Company's
Certificate of Incorporation.
The New Common Stock to be issued by New Subsidiary in exchange for Existing
Common Stock will be deemed to be issued after the adoption of the Transfer
Restrictions, which are set forth in Article Fifth of the Certificate of
Incorporation of New Subsidiary to be in effect upon consummation of the Merger
("New Subsidiary's Certificate of Incorporation"), a copy of which is included
as Annex B to this Proxy Statement/Prospectus. Accordingly, the Transfer
Restrictions will apply to all shares of New Common Stock, and all New Common
Stock certificates will contain a legend informing holders and transferees of
the Transfer Restrictions.
PRESERVATION OF TAX BENEFITS
NOLs offset taxable income in future years and eliminate income taxes
otherwise payable on such taxable income (except for purposes of calculating
alternative minimum tax liability). As of December 31, 1994, the Company's NOLs
were approximately $133.4 million. Due to certain limitations on the Company's
ability to utilize its NOLs resulting from Ownership Changes experienced by the
Company or its subsidiaries in prior years, the Company's NOLs may be utilized
to offset up to $87.9 million in taxable income in 1995, plus an additional
$13.3 million in each of years 1996 through 1998, $5.0 million in 1999 and $0.6
million in 2000. Assuming the Company does not experience another Ownership
Change, NOLs not fully utilized up to such allowable amounts in the first year
they are available may be carried over and utilized in subsequent years, subject
to their expiration provisions. The Company's NOLs expire as follows: $43.6
million in 1996, $17.5 million in 1998, $6.0 million in 1999, $.8 million in
2000 and $65.5 million during the years 2001 through 2008. As a result of the
acquisition of shares of Existing Common Stock by JLL Associates since March 21,
1993, and other stock transfers, the availability of the Company's NOLs may be
jeopardized (as described below) if a change in ownership of 5% of the stock (or
if another event that would cause an Ownership Change) occurs in the future.
Although JLL and Airlie are subject to agreements that limit their ability to
buy or sell Existing Common Stock, there is a risk that, absent the Transfer
Restrictions, an Ownership Change could result if other persons acquire 5% or
more of the Existing Common Stock. In addition, the restrictions in the JLL
Agreement and the Supplemental Airlie Agreement expire in March 1998 and March
1996, respectively (see below for a description of the terms of the Supplemental
Airlie Agreement). Management is proposing implementation of the Transfer
Restrictions to reduce these risks.
Section 382 of the Code provides that, if a corporation undergoes an
Ownership Change, its ability to use its NOLs in the future may be limited. An
Ownership Change occurs when the aggregate cumulative increase in the percentage
ownership of a corporation's capital stock owned by persons
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<PAGE>
holding 5% or more of the fair market value of such stock ("5-Percent
Shareholders") is more than 50 percentage points within a three-year testing
period. For purposes of determining percentage ownership, Section 382 generally
defines stock to include all issued and outstanding stock, except certain
preferred stock. In addition, recently finalized Treasury Regulations provide
that certain stock that may be acquired pursuant to warrants, options, rights to
purchase stock, rights to convert other instruments into stock, and options or
other rights to acquire any such interest may under certain circumstances be
deemed to have been acquired for purposes of determining the existence of an
Ownership Change under Section 382 of the Code.
In determining whether the aggregate cumulative increase in the percentage
ownership of capital stock by 5-Percent Shareholders is more than 50 percentage
points in any three-year testing period, certain special rules apply. All
stockholders who are not 5-Percent Shareholders individually are aggregated into
one or more public groups, each of which is considered to be a 5-Percent
Shareholder. Ownership of stock is generally attributed to the ultimate
individual beneficial owner, and ownership by nominees, corporations,
partnerships, trusts or other entities generally is disregarded (except to the
extent used to identify different public groups or other 5-Percent
Shareholders). When 5% or more of a corporation's stock is owned by another
entity (such as a corporation, trust or partnership) at any time during the
testing period, the owners of the other entity may be treated as one or more
separate, segregated groups of stockholders that are 5-Percent Shareholders of
the corporation, depending on whether such owners indirectly own as much as 5%
of the corporation's stock. Similarly, the purchasers of any stock from the
entity may be treated as a separate, segregated group of stockholders that is a
5-Percent Shareholder.
The applicable Treasury Regulations also provide that purchasers of stock
from the issuing corporation in a public offering may under certain
circumstances be considered a separate stockholder group that is treated as a
5-Percent Shareholder that previously owned no stock. The Transfer Restrictions,
accordingly, are generally designed to prohibit transfers to persons holding or
who thereafter hold sufficient New Subsidiary stock, either directly or
constructively, such that they would be treated as 5-Percent Shareholders under
the applicable Treasury Regulations and are intended to prevent an Ownership
Change and thereby preserve New Subsidiary's ability to maximize use of the
NOLs.
If an Ownership Change occurs within the meaning of Code Section 382, the
amount of NOLs that a company may use to offset income in any future taxable
year is limited, in general, to an amount determined by multiplying the fair
market value of such company's outstanding capital stock on the change date by
the "long-term tax-exempt rate" (currently 6.83%), which is published monthly by
the Internal Revenue Service. For purposes of this calculation, the fair market
value of a company's outstanding capital stock is adjusted to exclude any
capital infusions occurring during the prior two years.
The following is a summary of the Transfer Restrictions, which are set forth
in Article Fifth of New Subsidiary's Certificate of Incorporation. See Annex B.
The Transfer Restrictions apply to transfers of New Common Stock and any other
instrument that would be treated as "stock," as determined under applicable
Treasury Regulations (collectively, "Stock"). They are intended to prevent any
person or group of persons from becoming a 5-Percent Shareholder of New
Subsidiary and to prevent an increase in the percentage Stock ownership of any
existing person or group of persons that constitutes a 5-Percent Shareholder.
Under the Transfer Restrictions, if a stockholder transfers or agrees to
transfer Stock, the transfer will be prohibited and void to the extent that it
would cause the transferee to hold a prohibited ownership percentage, which is
defined under New Subsidiary's Certificate of Incorporation by reference to
complex federal tax laws and regulations, but generally means direct and
indirect ownership of 5% or more (based on value) of Stock or any other
percentage that would cause a transferee to be considered a 5-Percent
Shareholder under applicable Treasury Regulations (a "Prohibited Ownership
Percentage"). A transfer is also prohibited and void if either it would result
in the transferee's ownership percentage increasing if the transferee had held
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<PAGE>
a Prohibited Ownership Percentage within the three prior years or the
transferee's ownership percentage already exceeds the Prohibited Ownership
Percentage, unless otherwise agreed to by New Subsidiary. The Transfer
Restrictions do not prevent transfers of Stock between persons who do not hold a
Prohibited Ownership Percentage.
The acquisition of Stock from an individual or entity that owns directly 5%
of the Stock would be deemed to result in the identification of a separate,
segregated "public group" which is a new 5-Percent Shareholder. Consequently,
the Transfer Restrictions will prohibit certain transfers of equity interests
by, and other actions involving, persons having a Prohibited Ownership
Percentage, unless the transfer or other action is approved by New Subsidiary's
Board of Directors in advance or permitted by a resolution of such board.
The Transfer Restrictions do not apply to any transfer that has been
approved by New Subsidiary's Board of Directors if such approval is based upon a
determination by the Board that such proposed transfer will not jeopardize New
Subsidiary's full utilization of the NOLs. The Board may or may not grant any
such transfer requests based upon existing facts and circumstances at the time.
Company management believes that the New Subsidiary Board most likely will
approve one such proposed transfer by Airlie. Pursuant to the Supplemental
Airlie Agreement, after March 22, 1996, Airlie will have the right to transfer
its shares of New Common Stock based upon a determination by the New Subsidiary
Board that, based on existing facts, such a transfer by Airlie will not
jeopardize New Subsidiary's full utilization of the NOLs. Board approval of any
prohibited transfer transactions must be based upon an opinion of counsel.
In addition to voiding prohibited transfers, the Transfer Restrictions
provide a method of nullifying the effect of certain prohibited transfers after
the transfers have purportedly occurred. If such a purported transfer is made in
violation of the Transfer Restrictions, the transferee (the "Purported
Acquiror") will not be recognized as the owner of the Stock. If New Subsidiary
determines that such a purported transfer has violated the Transfer
Restrictions, it shall require the Purported Acquiror to surrender the relevant
Stock and any dividends he or she has received on them to an agent designated by
New Subsidiary (the "Agent"). The Agent will sell the Stock in an arm's length
transaction. If the Purported Acquiror has resold the Stock before receiving New
Subsidiary's demand to surrender such Stock, the Purported Acquiror generally
will be required to transfer to the Agent the proceeds of the sale and any
distributions he or she has received on the Stock. After repaying its own
expenses and reimbursing the Purported Acquiror for the price paid for the Stock
(or the fair market value of the Stock at the time of the attempted transfer to
the Purported Acquiror by gift, inheritance or similar transfer), the Agent will
pay any remaining amounts to the person who sold such Stock to the Purported
Acquiror. If the identity of the person who sold such Stock cannot be determined
through inquiry of the Purported Acquiror, the Agent or New Subsidiary shall
hold such amounts pending determining such identity and, if after 90 days, such
identity cannot be determined, then such amounts may be paid over to a court or
governmental agency or to a tax-exempt entity designated under Section 501(c)(3)
of the Code.
The Transfer Restrictions (i) may have the effect of impeding the attempt of
a person or entity to acquire a significant or controlling interest in New
Subsidiary, (ii) may render it more difficult to effect a merger or similar
transaction even if such transaction is favored by a majority of the independent
stockholders and (iii) may serve to entrench management. In addition to the
Transfer Restrictions, New Subsidiary will be subject to certain other
provisions, which the Company is currently subject to, that may have the effect
of discouraging a takeover or similar transaction, including (x) a classified
Board of Directors, which may be amended only by the vote of the holders of 75%
of the New Common Stock entitled to vote thereon, (y) the authority, vested in
New Subsidiary's Board of Directors, to issue up to four million shares of
preferred stock and to fix the preferences and rights thereof and (z) a
provision of New Subsidiary's Bylaws that provides that directors may be removed
only for cause. Also, New Subsidiary's stockholders will not have cumulative
voting rights. Management does not presently intend to adopt any anti-takeover
measures, and the Company and New Subsidiary believe that the tax benefits of
the Transfer Restrictions outweigh any anti-takeover effects they may have.
36
<PAGE>
EFFECTIVENESS OF THE MERGER
The Merger will become effective immediately upon the filing of a
Certificate of Merger in accordance with the DGCL and upon the satisfaction or
waiver of the conditions to the Merger (the "Effective Date"). It is presently
contemplated that the Certificate of Merger will be filed, and the Effective
Date will occur, on May 16, 1995, or as soon as practicable thereafter as the
conditions to the Merger may be satisfied.
The Merger Agreement provides that the Company and New Subsidiary, by mutual
consent of their respective Boards of Directors, may amend, modify or supplement
the Merger Agreement, and either of the respective Boards of Directors may
terminate the Merger Agreement or abandon the Merger at any time prior to the
Effective Date, even following stockholder approval.
TERMINATION OF TRANSFER RESTRICTIONS
The Transfer Restrictions will terminate upon the earliest of: (i) the day
after the 14th anniversary of the Effective Date; (ii) the repeal of Section 382
of the Code if the New Subsidiary Board of Directors determines that the
Transfer Restrictions are no longer necessary; or (iii) the beginning of a
taxable year of New Subsidiary to which the New Subsidiary Board of Directors
determines that no NOLs or other tax benefits otherwise available to New
Subsidiary may be carried forward (the "Expiration Date"). In addition, the
Board of Directors of New Subsidiary is authorized to modify certain terms of
the Transfer Restrictions (including acceleration or extension of the Expiration
Date), if the Board determines that such modification is reasonably necessary or
desirable to preserve the NOLs or other tax benefits or that the Transfer
Restrictions are no longer necessary for the preservation thereof.
MERGER STRUCTURE
The Merger will be accomplished under the DGCL pursuant to the Merger
Agreement by and between the Company and New Subsidiary. Pursuant to the Merger
Agreement, the Company will be merged with and into New Subsidiary, with New
Subsidiary being the surviving corporation. Upon consummation of the Merger, New
Subsidiary will become the successor in interest to the Company in all respects.
The Merger Agreement has been approved by each of the Company's and New
Subsidiary's Board of Directors and is included as Annex A to this Proxy
Statement/Prospectus. The Merger Agreement is incorporated herein in its
entirety by this reference.
New Subsidiary's Board of Directors immediately after the Merger will
consist of the persons serving on the Company's Board of Directors immediately
prior to the Merger, and New Subsidiary's executive officers immediately after
the Merger will consist of persons serving as the Company's executive officers
immediately prior to the Merger in their same respective positions. See "
Directors" and "Executive Officers." There are no other material contracts
between the Company and New Subsidiary other than the Merger Agreement.
NEW SUBSIDIARY'S CERTIFICATE OF INCORPORATION AND BYLAWS
New Subsidiary's Certificate of Incorporation contains articles
substantially the same as those in the Company's Certificate of Incorporation,
with the following exceptions: (i) Article Fifth of the Company's Certificate of
Incorporation, which contains the transfer restrictions that expired in October
1993, has been replaced in New Subsidiary's Certificate of Incorporation with
the Transfer Restrictions; (ii) Article First in the Company's Certificate of
Incorporation provides that the corporate name is Doskocil Companies
Incorporated, while Article First in New Subsidiary's Certificate of
Incorporation provides that the corporate name is Foodbrands America, Inc.;
(iii) Article Eighth of the Company's Certificate of Incorporation, which
concerned the implementation of the Reorganization Plan, is not included in New
Subsidiary's Certificate of Incorporation because all of the shares to be issued
pursuant to such article have been issued and the article has no further force
or effect; (iv) Section 4.2 of the Company's Certificate of Incorporation,
which, in accordance with the requirements of the Reorganization Plan,
restricted the Company from issuing certain capital stock without voting rights
or with less than proportional voting rights is not included in New Subsidiary's
Certificate of Incorporation because the Reorganization Plan has been
substantially consummated and therefore such provision is no longer required;
and (v) the Company's Certificate of Incorporation
37
<PAGE>
requires the affirmative vote of 75% of the shares of Existing Common Stock to
delete, modify or amend the transfer restrictions that expired in October 1993,
whereas New Subsidiary's Certificate of Incorporation does not contain a similar
provision. A copy of New Subsidiary's Certificate of Incorporation is included
as Annex B to this Proxy Statement/Prospectus. Except for the Name Change, the
Bylaws of New Subsidiary will be identical to the Company's Bylaws.
CONVERSION OF SECURITIES IN THE MERGER
Each share of Existing Common Stock outstanding immediately prior to the
Merger will be converted, by reason of the Merger, pursuant to the Merger
Agreement and without any action by the holder thereof, into the right to
receive one share of New Common Stock. The relative powers, designations,
preferences, rights and qualifications of the New Common Stock, as in effect
immediately prior to the Merger, will be substantially equivalent in all
material respects to the Existing Common Stock so converted, except that the New
Common Stock will be subject to the Transfer Restrictions. Upon consummation of
the Merger, Rights to shares of Existing Common Stock will become Rights to
shares of New Common Stock, pursuant to applicable law and the documents
governing such Rights.
CONDITIONS TO CONSUMMATION OF THE MERGER
Consummation of the Merger is subject to stockholder approval and receipt of
all orders, consents or approvals, governmental or otherwise, that may be
required or advisable. The Company and New Subsidiary believe that no material
federal or state regulatory approvals are necessary other than registrations in
connection with securities laws. The Merger is subject to the approval of the
lenders under the Company's Credit Agreement dated as of May 25, 1994.
Management believes that all of the conditions precedent to the Merger will
be satisfied prior to the anticipated Effective Date.
PRO FORMA AND COMPARATIVE FINANCIAL STATEMENTS; ACCOUNTING
Pro forma and comparative financial information regarding New Subsidiary and
its consolidated subsidiaries giving effect to the Merger have not been included
herein because immediately following the consummation of the Merger, the
consolidated financial statements of New Subsidiary will be the same as the
consolidated financial statements of the Company immediately prior to the
Merger. Similarly, no selected historical pro forma and other financial data
have been included because the Merger will have no effect on the Company's
historical financial statements.
The Merger will be accounted for as a pooling of interests.
APPRAISAL RIGHTS
Pursuant to Section 262 of the DGCL, no holder of the Company's securities
will have appraisal rights in connection with the Merger because the Existing
Common Stock is designated as a national market system security on an
interdealer quotation system by the National Association of Securities Dealers,
Inc., and the Company's stockholders will be required under the terms of the
Merger Agreement to accept shares of the surviving entity, New Subsidiary, for
their Existing Common Stock.
EXCHANGE OF CERTIFICATES
As soon as practicable after the Effective Date, New Subsidiary will furnish
a letter of transmittal to stockholders for use in exchanging their stock
certificates (each a "Letter of Transmittal"), which will contain instructions
with respect to the surrender of Existing Common Stock certificates and the
distribution of New Common Stock certificates. The Company's stockholders should
not send in certificates until they receive the Letter of Transmittal.
The Company's stockholders who fail to exchange their Existing Common Stock
certificates on or after the Effective Date by surrendering such certificates,
together with a properly completed Letter of Transmittal, to the agent
designated by the Company and New Subsidiary (the "Exchange Agent") will not
receive their New Common Stock until such time as their Existing Common Stock
certificates are later surrendered to the Exchange Agent for transfer,
accompanied by such instruments of transfer and supporting evidence as New
Subsidiary may reasonably require. Any dividends declared or distributions made
on shares of New Common Stock which such holders have a right to receive will
38
<PAGE>
be retained by New Subsidiary until such holders surrender their Existing Common
Stock certificates in exchange for New Common Stock certificates or until paid
to a public official pursuant to applicable abandoned property, escheat or
similar laws. No interest will accrue or be payable with respect to any
dividends or distributions retained on unissued New Common Stock certificates.
On the Effective Date, holders of certificates representing Existing Common
Stock will cease to have any rights with respect to such shares and each such
certificate will be deemed for all corporate purposes to evidence only the right
to receive shares of New Common Stock for which such shares may be exchanged.
The stock transfer books of the Company will be closed at the close of business
on the business day immediately preceding the Effective Date, and the holders of
record of Existing Common Stock as of the Effective Date will be the
stockholders entitled to exchange their shares of Existing Common Stock for
shares of New Common Stock as provided in the Merger Agreement. No transfer or
assignment of any shares of Existing Common Stock will take place after the
Effective Date until the certificates for such shares are exchanged pursuant to
the Merger Agreement. In the event of a transfer of ownership of any such shares
which is not registered in the stock transfer records of the Company, no shares
of New Common Stock exchangeable for such shares will be issued to the
transferee until the certificate or certificates representing such transferred
shares are delivered to the Exchange Agent together with all documents required
to evidence and effect such transfer. In addition, it will be a condition to the
issuance of any certificate for any shares of New Common Stock in a name other
than the name in which the surrendered Existing Common Stock is registered that
the person requesting the issuance of such certificate either pay to the
Exchange Agent any transfer or other taxes required by reason of the issuance of
a certificate of New Common Stock in a name other than the registered holder of
the certificate surrendered, or establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable.
In no event will the Exchange Agent, the Company or New Subsidiary be liable
to any holder of Existing Common Stock for shares of New Common Stock, or
dividends or distributions thereon, delivered in good faith to a public official
pursuant to any applicable abandoned property, escheat or similar law. All
shares of New Common Stock issued upon the surrender of shares of Existing
Common Stock shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of Existing Common Stock, subject, however, to
New Subsidiary's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Date which may have been declared or
made by the Company on such shares of Existing Common Stock prior to the
Effective Date and that remain unpaid as of the Effective Date.
FEDERAL INCOME TAX CONSEQUENCES
The Company has received an opinion from Shook, Hardy & Bacon P.C., its
legal counsel, as to certain federal income tax considerations with respect to
the Merger that are generally applicable to the Company and its stockholders.
These considerations are summarized below.
The following discussion does not include any state, local and foreign tax
consequences, and does not specifically address the consequences to stockholders
other than individual United States citizens who hold their Company securities
as a capital asset. This discussion is for general information only and each
stockholder should consult with his or her own tax advisor as to the
consequences of the Merger.
For federal income tax purposes, the Merger should qualify as a tax-free
reorganization under Section 368(a) of the Code. If the Merger so qualifies, the
Company's stockholders would not recognize gain or loss upon the exchange of
their Company shares for New Subsidiary shares. The New Subsidiary shares should
have the same basis and holding period in the stockholders' hands as the Company
shares.
No gain or loss should be recognized by the Company on the transfer of its
assets to New Subsidiary pursuant to the Merger, and no gain or loss should be
recognized by New Subsidiary on receipt of the Company's assets and New
Subsidiary's assumption of the Company's liabilities. The
39
<PAGE>
basis of the Company's assets acquired by New Subsidiary in the Merger should be
the same as the basis of those assets in the Company's hands immediately prior
to the Merger, and New Subsidiary's holding period should include the Company's
holding period with respect to the assets.
The Company's tax attributes generally will carry over to New Subsidiary.
For example, for purposes of the federal income tax treatment of the NOLs,
subject to certain limitations, New Subsidiary should be permitted to utilize
such NOLs to the same extent as the Company would have been so permitted. New
Subsidiary also should succeed to the Company's earnings and profits. New
Subsidiary should be treated as a continuation of the Company for purposes of
computing depreciation and for other specified purposes.
40
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of the Existing Common Stock as of March 30, 1995, with respect to (i)
each person known by the Company to beneficially own in excess of 5% of the
outstanding shares of Existing Common Stock, (ii) each of the Company's
directors, (iii) each named executive officer of the Company and (iv) all
directors and executive officers as a group. The percentages set forth in this
table are based on the number of shares outstanding on March 30, 1995, plus
shares that are deemed to be outstanding according to the rules of the
Commission. See notes (1) and (2) below. Unless otherwise indicated, each of the
stockholders has sole voting and investment power with respect to the shares
beneficially owned.
<TABLE>
<CAPTION>
PERCENT OF
BENEFICIAL
AMOUNT AND OWNERSHIP
NATURE OF SHARES
BENEFICIAL OUTSTANDING
NAME OF BENEFICIAL OWNER OWNERSHIP (1) (2)
- -------------------------------------------------- ------------- ----------
<S> <C> <C>
JLL Associates, L.P. (3) 5,515,833 43.7%
126 East 56th Street
New York, NY 10022
The Airlie Group L.P. (4) 810,363 6.4
115 East Putnam Avenue
Greenwich, CT 06830
R. Randolph Devening (5) 68,311 *
John T. Hanes (6) 90,000 *
Thomas G. McCarley (7) 27,627 *
Howard C. Madsen (8) 4,679 *
Robert S. Wright (9) 3,493 *
Raymond J. Haefele (10) 12,602 *
Charles I. Merrick (11) 11,667 *
Theodore Ammon (12) 3,333 *
Richard T. Berg (13) 40,811 *
Dort A. Cameron III (14) 810,363 6.4
Yvonne V. Cliff (15) 5,515,833 43.7
Terry M. Grimm (13) 5,226 *
Paul S. Levy (15) 5,515,833 43.7
Angus C. Littlejohn, Jr. (15) 5,515,833 43.7
Paul W. Marshall (13)(16) 8,340 *
All directors and executive officers as
a group (19 persons) (14)(15)(17) 6,555,586 52
<FN>
- ------------------------
* Less than one percent
(1) Beneficial ownership includes shares subject to stock options currently
exercisable or exercisable within 60 days ("Option Shares").
(2) Percentages are based on 12,433,705 shares of Existing Common Stock
outstanding as of March 30, 1995, (which includes 166,440 shares of
Existing Common Stock held in the Disputed Claims Reserve, 93,334 shares of
Restricted Stock and 51,669 Performance Shares) plus 180,797 Option Shares,
as described in notes (5)-(17), inclusive, below, or an aggregate of
12,614,502.
(3) The following persons filed a Schedule 13D on or about October 27, 1994
reporting shared voting and shared dispositive power over the shares of
Existing Common Stock held by JLL Associates: Yvonne V. Cliff; Peter A.
Joseph; Paul S. Levy; Angus C. Littlejohn, Jr; and, with respect to
2,182,500 shares, JLL; and, with respect to 3,333,333 shares, the Joseph
Littlejohn & Levy Fund II, L.P. (the "JLL Fund II").
(4) The following persons filed a Schedule 13D on or about October 25, 1994,
reporting that they had shared or sole voting and dispositive power over
the shares of Existing Common Stock held by
</TABLE>
41
<PAGE>
<TABLE>
<S> <C>
The Airlie Group L.P.: EBD L.P.; TMT-FW, Inc.; Dort A. Cameron III; and
Thomas M. Taylor. As part of that Schedule 13D, the following persons
reported sole voting and sole dispositive power over 6,983 shares of
Existing Common Stock, which shares are not included in the preceding
table: Lee M. Bass, Inc.; Lee M. Bass; Sid R. Bass, Inc.; Sid R. Bass; Thru
Line Inc.; and E.P. Bass. The Schedule 13D states that the single, joint
filing was made by all such persons because they may be deemed to
constitute a "group" under Section 13(d)(3) of the Exchange Act, but all
such persons disclaim membership in such group. In addition, Airlie
received 8,122 shares of Existing Common Stock in the most recent
distribution from the Disputed Claims Reserve.
(5) Includes 56,303 Option Shares.
(6) Includes 25,000 vested shares of Restricted Stock, 25,000 Performance
Shares and 40,000 Option Shares. Mr. Hanes has retired from his positions
with the Company. See "Compensation of Directors and Executive Officers --
Employment, Termination and Change-in-Control Arrangements -- Hanes
Settlement Agreement."
(7) Includes 12,500 vested shares of Restricted Stock, 2,084 Performance Shares
and 13,043 Option Shares.
(8) Includes 4,679 Option Shares.
(9) Includes 3,493 Option Shares.
(10) Includes 5,000 vested shares of Restricted Stock, 834 Performance Shares
and 7,479 Option Shares.
(11) Includes 10,000 vested shares of Restricted Stock and 1,667 Performance
Shares. Mr. Merrick has resigned from his positions with the Company. See
"Compensation of Directors and Executive Officers -- Employment,
Termination and Change-in-Control Arrangements -- Merrick Settlement
Agreement."
(12) Includes 3,333 Option Shares.
(13) Includes 5,000 Option Shares.
(14) Includes the 810,363 shares of Existing Common Stock beneficially owned by
Airlie. Mr. Cameron is the General Partner of EBD L.P., which is a general
partner of Airlie, and may disclaim beneficial ownership of some or all of
these shares.
(15) Includes the 5,515,833 shares of Existing Common Stock held by JLL
Associates; these directors, who are general partners of JLL Associates,
may disclaim beneficial ownership of some or all of these shares.
(16) Includes 3,340 shares of Existing Common Stock held by Paul W. Marshall, as
Trustee of the Marshall Bartlett Inc. Restricted Preferred Stock and
Savings Plan.
(17) Includes 32,500 vested shares of Restricted Stock and 5,418 Performance
Shares.
</TABLE>
INTERESTS OF CERTAIN PERSONS
Certain key employees, including Messrs. Devening, McCarley, Wright, Haefele
and Madsen, have received options to purchase shares of Existing Common Stock
that are subject to stockholder approval of an increase in the number of shares
authorized for issuance under the Stock Incentive Plan, which is being sought at
the Annual Meeting pursuant to Proposal II. See "Compensation of Directors and
Executive Officers," "Certain Relationships and Related Transactions" and
"Proposal II. Amendment to Stock Incentive Plan."
LEGAL MATTERS
The validity of the shares of New Common Stock will be passed upon for New
Subsidiary by Shook, Hardy & Bacon P.C., Kansas City, Missouri.
42
<PAGE>
DEADLINE FOR STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company intended to be presented at the
1996 annual meeting of stockholders must be received by the Company by December
12, 1995 for inclusion in the proxy statement and form of proxy relating to the
1996 annual meeting to be held by the Company or, if the Merger is consummated,
by New Subsidiary.
INDEPENDENT AUDITORS
Representatives of Coopers & Lybrand, the Company's independent auditors,
will be present at the Annual Meeting and will be available to respond to
appropriate questions, with an opportunity to make a statement if they so
desire. The Audit Committee will select the Company's independent auditors for
fiscal 1995 in September 1995.
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K, including the financial statements
and the financial schedules, excluding exhibits thereto, as filed with the
Commission for Fiscal 1994 is available at no charge to stockholders upon
written request to the undersigned. The financial statements of the Company for
Fiscal 1994 and other information were sent to stockholders as a part of the
Annual Report.
By Order of the Board of Directors,
[signature of Darian B. Andersen]
Darian B. Andersen
CORPORATE SECRETARY
Oklahoma City, Oklahoma
April 10, 1995
43
<PAGE>
ANNEX A
MERGER AGREEMENT
<PAGE>
ANNEX A
MERGER AGREEMENT
THIS MERGER AGREEMENT, dated as of March 24, 1995 (the
"Agreement"), is by and between DOSKOCIL COMPANIES INCORPORATED, a Delaware
corporation ("Doskocil") and NEW DOSKOCIL INCORPORATED, a Delaware corporation
("New Doskocil").
WITNESSETH:
WHEREAS, the respective Boards of Directors of Doskocil and New
Doskocil deem it advisable that Doskocil merge with and into New Doskocil (the
"Merger"), upon the terms and conditions set forth herein and in accordance with
the laws of the State of Delaware, and that the shares of stock of each of
Doskocil and New Doskocil shall be converted upon the Merger as set forth
herein.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
SECTION 1.
TERMS
1.1 At the Effective Time (as hereinafter defined) of the Merger,
Doskocil shall be merged with and into New Doskocil, with New Doskocil as the
surviving corporation (hereinafter called the "Surviving Corporation").
1.2 At the Effective Time, each share of Common Stock of Doskocil
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger, be converted into one share of Common Stock of the Surviving
Corporation. Each share of Common Stock of New Doskocil issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action by the holder thereof, be cancelled.
1.3 If any certificate representing stock of the Surviving
Corporation is to be issued in a name other than that in which a surrendered
certificate theretofore representing stock of Doskocil is registered, it shall
be a condition of such issuance that the surrendered certificate shall be
properly endorsed or otherwise in proper form for transfer and that the person
requesting such issuance shall either pay to the Surviving Corporation or its
transfer agent any transfer or other taxes required by reason of the issuance of
a certificate or certificates
<PAGE>
representing the Surviving Corporation stock in a name other than that of the
registered holder of the certificate surrendered, or establish to the
satisfaction of the Surviving Corporation or its transfer agent that such tax
has been paid or is not applicable.
1.4 Upon and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises, and be subject
to all the restrictions, disabilities and duties, of the Constituent
Corporations (as hereinafter defined); and all rights, privileges, powers and
franchises of the Constituent Corporations shall be vested in and be the
property of the Surviving Corporation; and all debts, liabilities and duties of
the Constituent Corporations shall thenceforth attach to the Surviving
Corporation and may be enforced against it to the same extent as if said debts,
liabilities and duties have been incurred or contracted by it.
SECTION 2.
EFFECTIVE TIME
2.1 Subsequent to the execution of this Agreement, Doskocil and New
Doskocil (collectively, the "Constituent Corporations") shall each submit this
Agreement to their respective stockholders for their approval pursuant to the
applicable provisions of the General Corporation Law of the State of Delaware.
2.2 Following approval of this Agreement in accordance with Section
2.1 above, and provided that:
(a) the conditions specified in Section 5.1 hereof have been
fulfilled or waived; and
(b) this Agreement has not been terminated and abandoned
pursuant to Section 5.3 hereof;
the Surviving Corporation will cause a Certificate of Merger to be executed,
acknowledged and filed with the Secretary of the State of Delaware as provided
in Section 251 of the General Corporation Law of the State of Delaware and a
copy of the Certificate of Merger, certified by the Secretary of State of the
State of Delaware, to be recorded in the Office of the Recorder of Deeds of New
Castle County, all in accordance with the provisions of Section 103 of the
General Corporation Law of the State of Delaware.
2.3 The Merger shall become effective immediately upon the filing of
the Certificate of Merger with the Secretary of State
- 2 -
<PAGE>
of the State of Delaware (the date and time of such filing being herein referred
to as the "Effective Time").
SECTION 3.
COVENANTS AND AGREEMENTS
3.1 Doskocil covenants and agrees that it will, as sole stockholder
of New Doskocil, vote the Common Stock of New Doskocil owned by it to approve
this Agreement as provided by law.
3.2 New Doskocil covenants and agrees that as the Surviving
Corporation it shall be liable for all the obligations of the Constituent
Corporations outstanding as of the Effective Time and hereby expressly assumes
all such obligations as of the Effective Time.
SECTION 4.
CERTIFICATE OF INCORPORATION AND BYLAWS; BOARD OF DIRECTORS
4.1 The Certificate of Incorporation of New Doskocil as constituted
at the Effective Time shall thereafter be the Certificate of Incorporation of
the Surviving Corporation until such time as it shall be amended as provided by
law. At the Effective Time and by virtue of the Merger, the certificate of New
Doskocil shall be amended and restated to read in full as set forth in Exhibit A
hereto, which is incorporated herein by this reference.
4.2 The Bylaws of New Doskocil shall be the bylaws of the Surviving
Corporation, subject to alteration, amendment or repeal from time to time by the
Board of Directors or the stockholders of the Surviving Corporation.
4.3 From and after the Effective Time the members of the Board of
Directors of the Surviving Corporation shall consist of the members of the Board
of Directors of Doskocil immediately prior to the Effective Time, to hold office
until the expiration of their then current terms and until their respective
successors shall be elected.
4.4 From and after the Effective Time, the officers of New Doskocil
shall consist of the officers of Doskocil immediately prior to the Effective
Time, to hold office until the next annual meeting of the stockholders of New
Doskocil and until their respective successors are elected and appointed.
- 3 -
<PAGE>
SECTION 5.
CONDITIONS, AMENDMENT AND TERMINATION
5.1 The respective obligations of the Constituent Corporations to
consummate the Merger under this Agreement are subject to the following
conditions, any and all of which (other than paragraph (d)) may be waived by the
party for whose benefit they are included:
(a) All third party consents which are required in order to
consummate the Merger and to effectuate the contemplated transactions
incidental or related thereto shall have been obtained;
(b) The Common Stock of the Surviving Corporation shall have
been approved for quotation on the Nasdaq National Market;
(c) Doskocil shall have received a ruling of the Internal
Revenue Service or an opinion of counsel in form and substance satisfactory
to Doskocil as to the tax treatment of the Merger; and
(d) Each of the Constituent Corporations shall have received the
approval of its stockholders.
5.2 To the fullest extent permitted by applicable law, the
Constituent Corporations, by mutual consent of their respective Boards of
Directors, may amend, modify or supplement this Agreement in such a manner as
may be agreed upon by them in writing at any time prior to the Effective Time,
even though the Agreement shall have been approved by the stockholders of the
Constituent Corporations or of either thereof.
5.3 This Agreement may be terminated and the Merger abandoned for any
reason by resolution adopted by either of the respective Boards of Directors of
the Constituent Corporations at any time prior to the Effective Time, even
though this Agreement shall have been approved by the stockholders of the
Constituent Corporations or of either thereof.
- 4 -
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their respective officers thereunto duly authorized and their
respective corporate seals affixed, all as of the day and year first above
written.
NEW DOSKOCIL INCORPORATED
DOSKOCIL COMPANIES INCORPORATED
- 5 -
<PAGE>
ANNEX B
FORM OF CERTIFICATE OF INCORPORATION OF NEW DOSKOCIL INCORPORATED
<PAGE>
ANNEX B
FORM OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
FOODBRANDS AMERICA, INC.
__________________________________
ARTICLE FIRST: NAME. The name of the Corporation is Foodbrands
America, Inc. (the "Corporation").
ARTICLE SECOND: REGISTERED OFFICE AND REGISTERED AGENT. The
registered office of the Corporation in the State of Delaware shall be located
at 1209 Orange Street, City of Wilmington, County of New Castle. The name of
the resident agent in charge thereof is The Corporation Trust Company.
ARTICLE THIRD: PURPOSE. The purpose of the Corporation is to engage
in any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware (the "DGCL") as presently in
effect or as it may hereafter be amended.
ARTICLE FOURTH: AUTHORIZED CAPITAL STOCK. The total number of shares
of all classes of stock that the Corporation shall have authority to issue is
Twenty-Four Million (24,000,000) shares, of which Twenty Million (20,000,000)
shares shall be common stock, $.01 par value per share (the "Common Stock") and
Four Million (4,000,000) shares shall be preferred stock, par value $.01 per
share (the "Preferred Stock"). Authority is hereby expressly vested in the
Board of Directors, subject to the limitations prescribed by law, to authorize
the issuance from time to time of one or more series of Preferred Stock, and
with respect to each such series, to fix by resolution or resolutions adopted by
the affirmative vote of a majority of the Board of Directors of the Corporation
the number of shares within such series and the powers, designations,
preferences, and relative, participating, optional or other rights thereof, if
any, or the qualifications, limitations or restrictions thereof, if any.
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ARTICLE FIFTH: CERTAIN RESTRICTIONS ON THE TRANSFER OF THE
CORPORATION'S STOCK.
SECTION 5.1 TRANSFER RESTRICTIONS. In order to preserve the net
operating loss carryovers (including any "net unrealized built-in loss," as
defined under applicable law), capital loss carryovers, general business credit
carryovers, alternative minimum tax credit carryovers and foreign tax credit
carryovers (the "Tax Benefits") to which the Corporation is entitled pursuant to
the Internal Revenue Code of 1986, as amended, or any successor statute
(collectively, the "Code") and the Treasury Regulations promulgated thereunder
(the "Treasury Regulations"), the following restrictions shall apply until the
earlier of (x) the day after the fourteenth (14th) anniversary of the
effectiveness of the merger of Doskocil Companies Incorporated, a Delaware
corporation, with and into the Corporation (the "Merger"), (y) the repeal of
Section 382 of the Code if the Board of Directors determines that the
restrictions are no longer necessary, and (z) the beginning of a taxable year of
the Corporation to which the Board of Directors determines that no Tax Benefits
may be carried forward, unless the Board of Directors shall fix an earlier or
later date in accordance with Section 5.7 of this Article Fifth (such date is
sometimes referred to herein as the "Expiration Date"):
(1) For purposes of this Article Fifth, (a) a "Prohibited Ownership
Percentage" shall mean any ownership of the Corporation's stock that would cause
a Person or Public Group to be a "5-percent shareholder" of the Corporation
within the meaning of Treasury Regulation Section 1.382-2T(g)(1); (b) a "Public
Group" shall have the meaning contained in Treasury Regulation Section 1.383-
2T(f)(13); (c) a "Person" shall mean any individual, corporation, estate, trust,
association, company, partnership, joint venture, or similar organization
(including the Corporation); (d) "Transfer" refers to any means of conveying
legal or beneficial ownership of shares of stock of the Corporation, whether
such means are direct or indirect, voluntary or involuntary, including, without
limitation, the issuance by the Corporation of shares of stock of the
Corporation (without regard to whether such shares are treasury shares or new
shares) and the transfer of ownership of any entity that owns shares of stock of
the Corporation; and "Transferee" means any Person to whom stock of the
Corporation is Transferred.
(2) From and after the effectiveness of the Merger, no Person shall
Transfer any shares of stock of the Corporation (other than stock described in
Section 1504(a)(4) of the Code, or stock that is not so described solely because
it is entitled to vote as a result of dividend arrearages) to any other Person
to the extent
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that such Transfer, if effective, (i) would cause the Transferee or any Person
or Public Group to have a Prohibited Ownership Percentage; (ii) would increase
the ownership percentage of any Transferee or any Person or Public Group having
a Prohibited Ownership Percentage; or (iii) would create a new Public Group
under Treasury Regulation Section 1.382-2T(j)(3)(i).
(3) Any Transfer of shares of stock of the Corporation that would
otherwise be prohibited pursuant to the preceding subsection, including but not
limited to the issuance of stock by the Corporation pursuant to the exercise of
any warrants, options or other rights to acquire stock in the Corporation, shall
nonetheless be permitted if information relating to a specific proposed
transaction is presented to the Board of Directors and the Board determines
that, based on the facts in existence at the time of such determination, such
transaction will not jeopardize the Corporation's full utilization of the Tax
Benefits, based upon an opinion of legal counsel selected by the Board to that
effect. Nothing in this subsection will be construed to limit or restrict the
Board of Directors in the exercise of its fiduciary duties under applicable law.
SECTION 5.2 ATTEMPTED TRANSFER IN VIOLATION OF TRANSFER
RESTRICTION. Unless approval of the Board of Directors is obtained as provided
in subsection (3) of Section 5.1 of this Article Fifth, any attempted Transfer
of shares of stock of the Corporation in excess of the shares that could be
Transferred to the Transferee without restriction under subsection (2) of
Section 5.1 of this Article Fifth is not effective to Transfer ownership of such
excess shares (the "Prohibited Shares") to the purported acquiror thereof (the
"Purported Acquiror"), who shall not be entitled to any rights as a Stockholder
of the Corporation with respect to the Prohibited Shares (including, without
limitation, the right to vote or to receive dividends with respect thereto).
All rights with respect to the Prohibited Shares shall remain the property of
the Person who initially purported to Transfer the Prohibited Shares to the
Purported Acquiror (the "Initial Transferor") until such time as the Prohibited
Shares are resold as set forth in subsection (1) or subsection (2) of this
Section 5.2. The Purported Acquiror, by acquiring ownership of shares of stock
of the Corporation that are not Prohibited Shares, shall be deemed to have
consented to all the provisions of this Article Fifth and to have agreed to act
as provided in the following subsection (1). The Corporation and the Board of
Directors shall be fully protected in relying in good faith upon the
information, opinions, reports or statements of the chief executive officer, the
chief financial officer, or the chief accounting officer of the Corporation or
of the Corporation's legal counsel, independent auditors, transfer agent,
investment bankers, and other employees and agents in making
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the determinations and findings contemplated by this Section 5.2, and neither
the Corporation nor the Board of Directors shall be responsible for any good
faith errors made in connection therewith.
(1) Upon demand by the Corporation, the Purported Acquiror shall
transfer any certificate or other evidence of Purported Acquiror's possession or
control of the Prohibited Shares, along with any dividends or other
distributions paid by the Corporation with respect to the Prohibited Shares that
were received by the Purported Acquiror (the "Prohibited Distributions"), to an
agent designated by the Corporation (the "Agent"). If the Purported Acquiror
has sold the Prohibited Shares to an unrelated party in an arms-length
transaction after purportedly acquiring them, the Purported Acquiror shall be
deemed to have sold the Prohibited Shares as agent for the Initial Transferor,
and in lieu of transferring the Prohibited Shares and Prohibited Distributions
to the Agent shall transfer to the Agent the Prohibited Distributions and the
proceeds of such sale (the "Resale Proceeds"), except to the extent that the
Agent grants written permission to the Purported Acquiror to retain a portion of
the Resale Proceeds not exceeding the amount that would have been payable by the
Agent to the Purported Acquiror pursuant to the following subsection (2) if the
Prohibited Shares had been sold by the Agent rather than by the Purported
Acquiror. Any purported transfer of the Prohibited Shares by the Purported
Acquiror other than a transfer described in one of the two preceding sentences
shall not be effective to transfer any ownership of the Prohibited Shares.
(2) The Agent shall sell in an arms-length transaction (through the
NASDAQ National Market System, if possible) any Prohibited Shares transferred to
the Agent by the Purported Acquiror, and the proceeds of such sale (the "Sale
Proceeds"), or the Resale Proceeds, if applicable, shall be allocated, after
reimbursement to the Agent of its expenses, to the Purported Acquiror up to the
following amount: (i) where applicable, the purported purchase price paid or
value of consideration surrendered by the Purported Acquiror for the Prohibited
Shares, or (ii) where the purported Transfer of the Prohibited Shares to the
Purported Acquiror was by gift, inheritance, or any similar purported Transfer,
the fair market value of the Prohibited Shares at the time of such purported
Transfer. Subject to the succeeding provisions of this subsection, any Resale
Proceeds or Sales Proceeds in excess of the Agent's expenses and the amount
allocable to the Purported Acquiror pursuant to the preceding sentence, together
with any Prohibited Distributions, shall be the property of the Initial
Transferor. If the identity of the Initial Transferor cannot be determined by
the Agent through inquiry made to the Purported Acquiror, the Agent or the
Corporation shall hold
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such amounts pending the determination of the identity of the Initial
Transferor. The Agent may also take, but is not required to take, any
reasonable actions to attempt to identify the Initial Transferor. If after
ninety (90) days following the date the Prohibited Shares were transferred to
the Agent the Initial Transferor has not been identified, any amounts due to the
Initial Transferor pursuant to this subsection may be paid over to a court or
governmental agency, if applicable law permits, or otherwise shall be
transferred to an entity designated by the Corporation that is described in
Section 501(c)(3) of the Code. In no event shall any such amounts due to the
Initial Transferor inure to the benefit of the Corporation or the Agent, but
such amounts may be used to cover expenses incurred by the Agent in attempting
to identify the Initial Transferor.
SECTION 5.3 PROMPT ENFORCEMENT AGAINST PURPORTED ACQUIROR. Within
thirty (30) business days of learning of the purported Transfer of Prohibited
Shares to a Purported Acquiror, the Corporation through its Secretary shall
demand that the Purported Acquiror surrender to the Agent the certificates
representing the Prohibited Shares, or any Resale Proceeds, and any Prohibited
Distributions, and if such surrender is not made by the Purported Acquiror
within thirty (30) business days from the date of such demand, the Corporation
shall institute legal proceedings to compel such transfer; provided, however,
that nothing in this Section 5.3 shall preclude the Corporation in its
discretion from immediately bringing legal proceedings without a prior demand,
and provided further that failure of the Corporation to act within the time
periods set out in this Section 5.3 shall not constitute a waiver of any right
of the Corporation to compel any transfer required by subsection (1) of Section
5.2.
SECTION 5.4 ADDITIONAL ACTIONS TO PREVENT VIOLATION OR ATTEMPTED
VIOLATION. Upon a determination by the Board of Directors that there has been
or is threatened a purported Transfer of Prohibited Shares to a Purported
Acquiror, the Board of Directors may take such action in addition to any action
required by the preceding paragraph as it deems advisable to give effect to the
provisions of this Article Fifth, including, without limitation, refusing to
give effect on the books of this Corporation to such purported Transfer or
instituting proceedings to enjoin such purported Transfer. Notwithstanding the
foregoing sentence, the Board of Directors shall take no action which would
prohibit the settlement of transactions entered into through the NASDAQ National
Market System.
SECTION 5.5 OBLIGATION TO PROVIDE INFORMATION. The Corporation may
require as a condition to the registration of the Transfer of any shares of its
stock that the proposed Transferee
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furnish to the Corporation all information reasonably requested by the
Corporation with respect to all the proposed Transferee's direct or indirect
ownership interest in, or options to acquire, stock of the Corporation.
SECTION 5.6 LEGENDS. All certificates evidencing ownership of
shares of stock of this Corporation that are subject to the restrictions on
Transfer contained in this Article Fifth shall bear a conspicuous legend
referencing the restrictions set forth in this Article Fifth.
SECTION 5.7 FURTHER ACTIONS. Nothing contained in this Article
Fifth shall limit the authority of the Board of Directors to take such other
action to the extent permitted by law as it deems necessary or advisable to
protect the Corporation and the interests of the holders of its securities in
preserving the Tax Benefits. Without limiting the generality of the foregoing,
in the event of a change in law making one or more of the following actions
necessary or desirable or in the event that the Board of Directors believes that
such actions are in the best interest of the Corporation and its Stockholders,
the Board of Directors may (i) accelerate or extend the Expiration Date or
(ii) modify the definitions of any terms set forth in this Article Fifth;
provided that the Board of Directors shall determine in writing that such
acceleration, extension change or modification is reasonably necessary or
desirable to preserve the Tax Benefits under the Code and the regulations
thereunder or that the continuation of these restrictions is no longer
reasonably necessary for the preservation of the Tax Benefits, which
determination shall be based upon an opinion of legal counsel to the Corporation
and which determination shall be filed with the Secretary of the Corporation and
mailed by the Secretary to the Stockholders of this Corporation within ten days
after the date of any such determination. In addition, the Board of Directors
may, to the extent permitted by law, from time to time establish, modify, amend
or rescind Bylaws, regulations and procedures of the Corporation not
inconsistent with the express provisions of this Article Fifth for purposes of
determining whether any acquisition of stock of the Corporation would jeopardize
the Corporation's ability to preserve and use the Tax Benefits, and for the
orderly application, administration and implementation of the provisions of this
Article Fifth. Such procedures and regulations shall be kept on file with the
Secretary of the Corporation and with its transfer agent and shall be made
available for inspection by the public and, upon request, shall be mailed to any
holder of stock of the Corporation.
ARTICLE SIXTH: CLASSIFICATION OF THE BOARD OF DIRECTORS. Directors
of the Corporation will be divided into three classes, as nearly equal in number
as possible, with the initial term of office
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of the first class of Directors to expire at the 1996 Annual Meeting of
Stockholders of the Corporation, the initial term of office of the second class
of Directors to expire at the 1997 Annual Meeting of Stockholders of the
Corporation, and the initial term of office of the third class of Directors to
expire at the 1998 Annual Meeting of Stockholders of the Corporation. At each
Annual Meeting of Stockholders of the Corporation, Directors elected to succeed
those Directors whose terms have thereupon expired shall be elected for a term
of office to expire at the third succeeding Annual Meeting of Stockholders after
their election. If the number of Directors is changed, any increase or decrease
shall be apportioned among the classes so as to maintain or attain, as nearly as
possible, the equality of the number of Directors in each class, and when the
number of Directors is increased and newly created directorships are filled by
the Board of Directors, the terms of the additional Directors shall expire at
the next election of the class for which such Directors have been chosen. In no
case will a decrease in the number of Directors shorten the term of any
incumbent Director.
ARTICLE SEVENTH: STOCKHOLDERS.
SECTION 7.1 ANNUAL MEETING. The Annual Meeting of the Stockholders
of the Corporation shall be held as provided in the Corporation's Bylaws, as
such Bylaws may be amended from time to time.
SECTION 7.2 SPECIAL MEETINGS. Special Meetings of the Stockholders
of the Corporation may be called by the Corporation upon the written request of
the holders of record of outstanding shares representing at least 25% of the
voting power of all the shares of the Corporation then entitled to vote on the
issue or issues to be presented, by the chief executive officer of the
Corporation, or by the Board of Directors pursuant to a resolution adopted by
the affirmative vote of a majority of the entire Board of Directors.
SECTION 7.3 FIRST ANNUAL MEETING. The first Annual Meeting of the
Stockholders of the Corporation shall take place on a date designated by the
Board of Directors of the Corporation which shall in no event be more than
twelve (12) months after the date of the first issuance of stock by the
Corporation.
ARTICLE EIGHTH: BYLAWS. In furtherance and not in limitation of the
powers conferred by the laws of the State of Delaware, the Board of Directors of
the Corporation is authorized and empowered to make, alter, amend and repeal the
Bylaws of the Corporation in any manner not inconsistent with the laws of the
State of Delaware.
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ARTICLE NINTH: INDEMNIFICATION. The Corporation shall, to the
fullest extent permitted by Section 145 of the DGCL, as presently in effect or
as it may hereafter be amended, indemnify all persons whom it may indemnify
pursuant thereto and advance expenses of litigation to Directors and Officers
when so requested.
ARTICLE TENTH: EXCULPATION. To the fullest extent permitted by the
DGCL, as presently in effect or as it may hereafter be amended, a Director of
this Corporation shall not be liable to the Corporation or its Stockholders for
monetary damages for breach of fiduciary duty as a Director.
ARTICLE ELEVENTH: COMPROMISE OR ARRANGEMENT OF CLAIMS. Whenever a
compromise or arrangement is proposed between this Corporation and its creditors
or any class of them and/or between this Corporation and its Stockholders or any
class of them, any court of equitable jurisdiction within the State of Delaware
may, on the application in a summary way of this Corporation or of any creditor
or Stockholder thereof or on the application of any receiver or receivers
appointed for this Corporation under the provisions of Section 291 of Title 8 of
the Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for this Corporation under the provisions of
Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or
class of creditors, and/or of the Stockholders or class of Stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the Stockholders or class of
Stockholders of this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the Stockholders or class of Stockholders, of this Corporation, as the case
may be, and also on this Corporation.
ARTICLE TWELFTH: AMENDMENT. The Corporation reserves the right to
amend, alter, change or repeal any provision contained in this Amended and
Restated Certificate of Incorporation, in the manner now or hereinafter provided
by statute, and all rights conferred upon Stockholders herein are granted
subject to this reservation; PROVIDED, HOWEVER, that the affirmative vote of
Seventy-Five Percent (75%) of the shares of Common Stock entitled to vote
thereon shall be required to delete, modify, or amend any provision of Article
Sixth or this Article Twelfth of this Amended and Restated Certificate of
Incorporation.
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IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Certificate of Incorporation to be executed by ____________________,
its _______________, and attested by its __________________ this ____ day of
_______, 1995.
By:________________________________
Name:
Title:
ATTEST:
____________________________
Name:
Title:
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