UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PROVENA FOODS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
PROVENA FOODS INC.
5010 Eucalyptus Avenue
Chino, California 91710
NOTICE OF APRIL 24, 2001 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF PROVENA FOODS INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Provena
Foods Inc., a California corporation, will be held on Tuesday, April 24, 2001,
at 11:00 a.m., at the Corporation's principal office at 5010 Eucalyptus Avenue,
Chino, California 91710 for the following purposes:
1. To elect directors to serve until the next Annual Meeting of
Shareholders;
2. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on March 5, 2001 as
the record date for the determination of shareholders entitled to receive notice
of, and to vote at, said meeting or any adjournment thereof.
WHETHER OR NOT YOU PLAN TO ATTEND, WE URGE YOU TO SIGN AND RETURN THE
ENCLOSED PROXY, WHICH YOU MAY REVOKE PRIOR TO ITS USE.
PROXY STATEMENT
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This Proxy Statement relates to the solicitation by the Board of Directors
of Provena Foods Inc. (the "Company") of proxies to be used at the Company's
April 24, 2001 Annual Meeting of Shareholders (and any adjournment thereof) for
the purposes set forth in the above Notice. This Proxy Statement is to be
mailed to shareholders on or about March 12, 2001. All expenses of distributing
this Proxy Statement, the Notice, and the Proxy card are to be borne by the
Company.
Shares represented by a Proxy card returned properly signed will be voted
as directed in the Proxy card. If no direction is made for a matter, the Proxy
will be voted for the matter. A Proxy may be revoked at any time before it is
voted at the meeting.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
Only shareholders of record at the close of business on March 5, 2001 are
entitled to vote at the meeting or any adjournment thereof. On that date the
Company had outstanding 3,048,172 shares of common stock. Each share is
entitled to one vote, subject to the right to cumulate votes in the election of
directors, as described below under Election of Directors.
IMPORTANT
PLEASE SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
The following table sets forth, for each officer, director and 5%
shareholder of the Company and for all officers and directors as a group (8
persons), the number and percent of outstanding shares of common stock of the
Company owned on March 5, 2001.
Shares Beneficially Owned(2)
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Without Options(6) Options Exercised(7)
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Name or Category(1) Number Percent Number Percent
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John D. Determan 335,327 11.0% 335,327 10.6%
Penny S. Bolton Estate (3) 378,463 12.4% 378,463 12.0%
Theodore L. Arena 140,994 4.6% 232,452 7.4%
Ronald A. Provera (4) 322,330 10.6% 322,330 10.2%
Santo Zito 362,330 11.9% 362,330 11.5%
Thomas J. Mulroney (5) 18,338 .6% 33,991 1.1%
Louis A. Arena 288,030 9.4% 288,030 9.1%
John M. Boukather 3,076 .1% 3,076 .1%
Joseph W. Wolbers 12,250 .4% 12,250 .4%
Officers and Directors 1,482,675 48.6% 1,589,786 50.4%
Shares Outstanding 3,048,172 100% 3,155,283 100%
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(1) The address for each person is c/o Provena Foods Inc., 5010 Eucalyptus
Avenue, Chino, California 91710.
(2) All shares are held directly except as noted below.
(3) Penny S. Bolton was the widow of James H. Bolton, former chairman of the
Company. She died suddenly of an illness on March 5, 2001. Her shares are
not included in the group's shares.
(4) Includes 320,930 shares held by the family trust of Ronald A. Provera and
his wife, Madelyn M. Provera.
(5) Includes 3,800 shares owned by Marsha Mulroney, wife of Thomas J. Mulroney.
(6) Excludes options under the Company's Incentive Stock Option Plan to
Theodore L. Arena to purchase 91,458 shares, to Thomas J. Mulroney to
purchase 15,653 shares and to all officers and directors as a group to
purchase 107,111 shares.
(7) The options of Messrs. Arena, Mulroney, and the group are deemed exercised.
No other person is known to the Company to own beneficially more than 5% of
the outstanding shares of common stock of the Company.
Based on copies of filed forms and written representations, the Company
believes that all officers, directors and 10% shareholders have timely filed all
Forms 3, 4 and 5 required for 2000 and (except as previously disclosed) prior
years by Section 16(a) of the Securities Exchange Act.
ELECTION OF DIRECTORS
Eight directors are to be elected to serve until their successors are
elected at the next annual meeting. Shareholders are entitled to cumulate votes
for directors upon notice by a shareholder at the meeting prior to the voting.
Under cumulative voting, each shareholder may cast a number of votes equal to
the number of directors to be elected multiplied by the number of the
shareholder's shares, and may allocate the votes to one or distribute them among
some or all of the candidates. The eight candidates nominated prior to the
voting receiving the highest number of votes are elected directors.
Unless otherwise directed in the Proxy card, if cumulative voting is
invoked, votes under proxies received pursuant to this solicitation will be
distributed among the eight nominees listed below so as to elect as many of them
as possible. If any nominees become unavailable, the proxies may be voted in
the proxyholders' discretion for substitute nominees.
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NOMINEES FOR BOARD OF DIRECTORS
The name, age, principal position for the past five years and other relevant
information for each nominee for the Board of Directors is as follows:
John D. Determan, age 68, has been a vice president and director of the
Company since 1972, General Counsel from 1986 to 1992, Chief Executive Officer
from 1992 to 1998 and Chairman of the Board since 1992. He is a member of the
option committee.
Theodore L. Arena, age 58, has been the General Manager of the Company's
Swiss American Sausage Co. meat division since 1976, the President and a
director of the Company since 1985 and the Chief Executive Officer since 1998.
He is the nephew of Louis A. Arena, a director of the Company.
Ronald A. Provera, age 63, has been the secretary and a director of the
Company since 1972 and was the General Manager of Sav-On Food Co., the Company's
distribution business, from its formation in 1960 until its liquidation in 1991.
He is currently providing sales support to the Company's Royal-Angelus Macaroni
Company pasta division. He is a member of the option committee.
Santo Zito, age 64, has been the Company's plant engineer since 1976, and a
vice president and director of the Company since 1972. He is currently the
General Manager of the pasta division. He is a member of the option committee.
Thomas J. Mulroney, age 55, has been the Company's chief accountant since
1976, the Chief Financial Officer since 1987, a vice president since 1991, and a
director since 1992.
Louis A. Arena, age 78, has been a director of the Company since 1972, a
vice president from 1972 to 1989, and General Manager of the pasta division from
1975 until his retirement in 1989. He is a member of the audit committee.
Joseph W. Wolbers, age 71, has been a director of the Company since 1990.
He retired in 1989 as a vice president of First Interstate Bank where he had
been employed since 1950. He is Chairman of the audit committee.
John M. Boukather, age 64, is a management consultant. He was the Director
of Operations of PW Supermarkets from 1993 to 1994, Vice President, Retail
Sales, of Certified Grocers of California, Ltd. from 1992 to 1993 and president
of Pantry Food Markets from 1983 to 1987. He has been a director of the Company
since 1987. He is a member of the audit committee.
BOARD COMMITTEES AND MEETINGS
The Board of Directors has two committees, the audit committee and the
option committee. The board has no executive, nominating or compensation
committees, and the full board acts in these capacities.
The audit committee's function is to oversee the Company's financial
practices and controls and its relationship with its outside auditors, as
provided by the audit committee charter adopted by the board on May 20, 2000 and
set forth as Appendix A hereto. The audit committee met three times in 2000.
The option committee's function is to administer the Company's 1987 Incentive
Stock Option Plan. The option committee did not meet in 2000.
The board held five formal meetings and did not act by unanimous written
consent during 2000. All members were present at all board and committee
meetings.
Directors who are not officers or employees of the Company are paid a fee of
$1,000 for each board meeting or committee meeting attended.
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Audit Committee Report
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Beginning with the 2nd quarter of 2000, the audit committee has met at least
quarterly. The outside auditors were invited to each meeting to discuss any
significant matters relating to the quality and accuracy of the Company's
financial reporting principles, policies and practices. The auditors reported
no material deficiencies. The committee reviewed and discussed with the
auditors and management the results of the annual audit and the audited
financial statements for the year 2000. The committee also reviewed with the
auditors and received a written statement from them on their independence and
any relationships that might compromise that independence. Based on the
foregoing, the committee recommended to the board that the financial statements
be included in the Form 10-K. Each member of the audit committee is independent
within the meaning of the AMEX rules.
Joseph W. Wolbers John M. Boukather Louis A. Arena
EXECUTIVE COMPENSATION
The following table sets forth for the years ended December 31, 2000, 1999
and 1998, all compensation of all executive officers of the Company serving at
December 31, 2000.
Annual SEP/IRA
Name and Position Year Salary Contributions
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John D. Determan, 2000 $82,051 $12,308
Chairman of the Board 1999 80,637 12,096
1998 80,771 12,116
Theodore L. Arena, 2000 127,323 19,098
President and Chief 1999 127,344 19,102
Executive Officer 1998 133,749 20,062
Ronald A. Provera, 2000 127,568 19,135
Secretary 1998 127,536 19,130
1997 129,641 19,446
Santo Zito, 2000 130,277 19,542
Vice President 1999 129,640 19,446
1998 132,806 19,921
Thomas J. Mulroney, 2000 126,160 18,924
Chief Financial Officer 1999 127,757 19,164
1998 129,793 19,469
See Incentive Stock Option Plan below for information on Incentive Stock
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Options. See Simplified Employee Pension Plan below for more information on
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SEP/IRA Contributions.
The Company does not currently pay bonuses or deferred compensation to
executive officers or provide them with automobiles, employment contracts or
"golden parachute" arrangements.
Simplified Employee Pension Plan
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In 1988, the Company adopted a Simplified Employee Pension-Individual
Retirement Accounts ("SEP-IRA") plan and executed SEP-IRA Agreements with Wells
Fargo Bank, N.A. and Dean Witter Reynolds Inc., covering all employees at least
18 years old who have worked at least six months and earned at least $300 during
the year, except certain union employees. Union plant employees at both
divisions do not participate in the SEP-IRA plan under the terms of their
current collective bargaining agreements.
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The Company makes contributions under the plan in the discretion of the
board, allocated in proportion to compensation, to an Individual Retirement
Account ("IRA") established by each eligible employee.
Contributions, up to 15% of eligible compensation, are deductible by the
Company and not taxable to the employee. An employee may withdraw SEP-IRA funds
from the employee's IRA. Withdrawals are taxable as ordinary income, and
withdrawals before age 59-1/2 may be subject to tax penalties.
For 2000, the Company contributed $376,558 to IRA's under the plan.
Incentive Stock Option Plan
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In April 1987, the Company adopted an Incentive Stock Option Plan under
Section 422A of the Internal Revenue Code of 1986. Under the plan, as amended
in 1988, for a period of 10 years from the date of adoption, an Option Committee
appointed by the Board of Directors was authorized in its discretion to grant to
key management employees options to purchase up to an aggregate of 261,704
shares of common stock of the Company. The purchase price of shares covered by
an option could not be less than the market value of the shares on the date of
grant and the term of an option could not exceed 10 years.
Options may no longer be granted under the plan. No options were exercised
in 2000. At January 1, 2001, outstanding options to purchase shares at $2-9/16
per share were held 91,458 by Theodore L. Arena and 15,653 by Thomas J.
Mulroney. All outstanding options are exercisable at a price which exceeds the
year end stock market closing price of $1-11/16 per share.
Compensation Committee Interlocks and Insider Participation
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The Company has no compensation committee. All executive officers are
members of the board and participate in the board's deliberations concerning
executive compensation.
Board Report on Executive Compensation
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The major Company policy affecting past and current executive compensation
is to run the Company for the benefit of its shareholders and not for the
benefit of management. The board members own close to half of the outstanding
shares of the Company. Four out of five of the executive officers are
substantial shareholders of the Company. Executive officers who are substantial
shareholders have the same interest as the other shareholders in the long term
performance of the Company. Their stock interest causes them to be directly
rewarded or penalized by the extent the Company pays dividends and maintains its
growth, which should ultimately be reflected in the value of the Company's
stock.
The salary of the one executive officer who is not a substantial
shareholder is based upon the judgment of the board of how well the officer is
performing his duties and how well the Company is performing. There is no
specific relationship between Company performance and compensation for any
executive officer, other than through stock options for two executive officers.
John D. Determan Ronald A. Provera John M. Boukather Thomas J. Mulroney
Theodore L. Arena Santo Zito Joseph W. Wolbers Louis A. Arena
Performance Graph
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The following graph compares the yearly percentage change in the cumulative
total shareholder return on the Company's common stock to the S&P 500 Stock
Index and the S&P Food Group Index for five years, assuming reinvestment of
dividends.
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5 YEAR CUMULATIVE TOTAL RETURNS
Assuming Reinvestment of Dividends
[PERFORMANCE GRAPH APPEARS HERE]
1995 1996 1997 1998 1999 2000
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S&P 500 Stock Index 100 123 164 211 255 232
S&P Food Group Index 100 118 170 184 145 183
PRovena Foods Inc. 100 72 91 91 88 56
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
KPMG LLP is the Company's firm of independent certified public accountants
and is expected to continue in this capacity for the current year. KPMG LLP's
audit fees for 2000 were $30,000 and there were no other charges.
Representatives of KPMG LLP have indicated that they intend to be present at the
Annual Meeting and will have an opportunity to address the shareholders and
respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of
Meeting. If any other business should properly come before the meeting, votes
may be cast pursuant to the proxies solicited hereby with respect to such
business in the discretion of the proxyholders.
2002 SHAREHOLDER PROPOSALS
Any proposal a shareholder of the Company wishes to have presented at
the 2002 Annual Meeting of Shareholders must be received by the Company by
January 1, 2002.
By Order of the Board of Directors.
JOHN D. DETERMAN
Chino, California Chairman of the Board
March 12, 2001
PLEASE SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE
ACCOMPANYING SELF-ADDRESSED POSTAGE PREPAID ENVELOPE.
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APPENDIX A
PROVENA FOODS INC.
AUDIT COMMITTEE CHARTER
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The audit committee shall be composed of three independent directors who
have financial literacy - at least one of whom has financial sophistication.
Meetings and actions of the audit committee shall be governed generally by the
same rules of procedure as the board; the audit committee may select a member as
chairman; minutes of audit committee meetings shall be filed chronologically
with board and shareholder minutes; audit committee meetings may be called by
any director or officer; and at least four audit committee meetings shall be
held each year.
The audit committee shall generally oversee the corporation's financial
practices and controls and its relationship with its outside auditors and report
significant matters to the board. The audit committee may investigate any
matter within its purview, have direct access to the outside auditors and all
corporate personnel and engage outside consultants.
The audit committee shall: (a) review the outside auditors' audit plan and
approve the estimate and payment of audit fees; (b) review, with the outside
auditors and the chief financial officer, the results of the annual audit and
the audited financial statements prior to the release of earnings or financial
statements and recommend to the board whether the financial statements be
included in the 10-K; (c) discuss quarterly with the outside auditors any
significant matters relating to the quality and accuracy of the corporation's
financial reporting principles, policies and practices; and (d) at least
annually review with the outside auditors, and receive a written statement from
the outside auditors on, their independence and any relationships that might
compromise that independence.
The board, as representatives of the shareholders, selects the outside
auditors. The audit committee shall make any appropriate recommendation to the
board regarding the selection of outside auditors.
The audit committee shall prepare a report to be included in the annual
proxy statement stating whether items (b), (c) and (d) above were done. The
audit committee shall review and assess the adequacy of this charter annually
and a copy shall be included as an appendix to the proxy statement unless a copy
has been included within the past three years.
APPENDIX A
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PROVENA FOODS INC.
SHAREHOLDER'S PROXY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints JOHN D. DETERMAN, THEODORE L. ARENA and
RONALD A. PROVERA as Proxies, each with full power of substitution, to
represent and to vote as directed below, all of the shares of common stock of
Provena Foods Inc. held of record by the undersigned on March 5, 2001, at the
Annual Meeting of Shareholders to be held on April 24, 2001 or any adjournment
thereof.
This Proxy, when properly executed, will be voted as the undersigned
shareholder directs below.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
(Continued and To Be Signed on Other Side)
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FOLD AND DETACH HERE
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[X]
Please mark
your votes
as indicated
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
Proposal
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1. ELECTION OF DIRECTORS [_] FOR all nominees [_] WITHOUT AUTHORITY
To elect the nominees except those deleted. to vote for directors.
listed below.
To withhold authority to vote for any nominees, please strike out their names
below.
John D. Determan, Theodore L. Arena, Ronald A. Provera, Louis A. Arena,
Santo Zito, Thomas J. Mulroney, John M. Boukather and Joseph W. Wolbers.
2. In their discretion, to vote on such other business as may properly come
before the meeting.
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| PLEASE MARK, DATE, SIGN AND
| RETURN PROXY CARD PROMPTLY
| IN THE ENCLOSED ENVELOPE.
Mark [_] if you plan to attend meeting.
Signature(s) __________________________ Date _______________________________
NOTE: Please sign exactly as name appears above. If signing as representative,
state capacity.
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FOLD AND DETACH HERE