-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PwRsbO+FbB7vgILGcPODsLVQDwRx7bAP+xnjbd60G9EC6P2ETSogwUoO9WRH+gwC mEXvkbqC0+n/a7qsp670hQ== 0001005477-99-002021.txt : 19990503 0001005477-99-002021.hdr.sgml : 19990503 ACCESSION NUMBER: 0001005477-99-002021 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990101 FILED AS OF DATE: 19990430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN BEEF INC /DE/ CENTRAL INDEX KEY: 0000081942 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 133266114 STATE OF INCORPORATION: DE FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-04485 FILM NUMBER: 99605650 BUSINESS ADDRESS: STREET 1: 47 05 METROPOLITAN AVE CITY: RIDGEWOOD STATE: NY ZIP: 11385 BUSINESS PHONE: 7188210011 FORMER COMPANY: FORMER CONFORMED NAME: QUAREX INDUSTRIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: RANCHERS PACKING CORP DATE OF NAME CHANGE: 19830713 10-K/A 1 FORM 10-K/A-1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A-1 AMENDMENT NO. 1 TO FORM 10-K |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 1, 1999 or |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____ Commission File No. 0-4485 Western Beef, Inc. A Delaware Corporation I.R.S. Employer No. 13-3266114 47-05 Metropolitan Avenue Ridgewood, New York 11385 Telephone Number (718) 417-3770 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common stock par value $.05 per share ("Common Stock") Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the proceeding 12 months (or for such shorter period that the Registrant was required to file such reports,) and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_|. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. |_|. The aggregate market value of the voting stock held by non-affiliates of the registrant, based on the $5.9375 average of the closing bid and asked prices reported by NASDAQ/NMS on April 16, 1999 was $9,185,983. As of April 16, 1999, the registrant had issued and outstanding 5,475,153 shares of Common Stock. DOCUMENTS INCORPORATED BY REFERENCE (None) PART III Part III is amended and restated in its entirety as follows: ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT PRINCIPAL OCCUPATION DURING THE PAST DIRECTORS AGE FIVE YEARS Peter Castellana, Jr. (1) 39 President and Chief Executive Officer of the Company since March 1995; prior to that, Vice-President and President of Retail Operations since May 1992; General Manager- Retail Operations of the Company for more than the past five years; Director of the Company since 1995. Joseph Castellana (1) 41 Executive Vice-President-Retail Operations and Executive Assistant to the President and Chief Executive Officer of the Company since March 1995; prior to that, Vice-President and Secretary for more than the past five years; Director of the Company from 1982 through 1993 and since 1995; Vice-Chairman from 1995 until 1997. Stephen R. Bokser 56 President and Chief Executive Officer of White Rose Food, a wholesale distributor and a division of Di Giorgio Corp. for more than the past five years; Director of Di Giorgio Corp; Director of the Company since 1993. Arnold B. Becker 64 President of The Arnold Becker Group, Inc., provider of management consulting services to retail companies since February 1996; prior to that President of Vendamerica, Inc., the U.S. investment arm of Vendex International N.V. for more than the past five years; Director of the Company since 1995. NON-DIRECTOR EXECUTIVE OFFICERS Frank Castellana (1) 43 Executive Vice-President-Planning and Development since February 1997; prior to that, Chairman and Executive Vice-President-Wholesale Operations of the Company from March 1995 to 1997; prior to that, President of the Company for more than the past five years. Michael Castellana (1) 35 Senior Vice-President-Retail Operations of the Company since March 1995; prior to that, General Manager-Produce Division of the Company for more than the past five years. Chris Darrow (2) 42 Chief Financial Officer of the Company since March 1997; prior to that, Vice-President and Controller of Waldbaums, Inc., a subsidiary of The Great Atlantic & Pacific Tea Co., for more than the past five years. Peter R. Admirand 59 Controller-Retail Operations, for more than the past five years; Secretary of the Company since March 1995. - ---------- (1) Joseph Castellana, Peter Castellana, Jr., Frank Castellana and Michael Castellana are siblings. (2) Mr. Darrow resigned from the Company on February 13, 1999. 2 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires the Company's directors, executive officers and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the SEC initial reports of ownership and reports of changes in beneficial ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file. Based solely upon its review of copies of such reports furnished the Company through the date hereof and written representations that no reports were required to be filed, the Company believes that during the fiscal year ended January 1, 1999, all filing requirements applicable to its officers, directors and ten percent stockholders were complied with, subject to the exceptions set forth below: Chris Darrow, Chief Financial Officer of the Company, did not file a Statement of Beneficial Ownership of Securities on Form 4 in connection with the grant of an Employee Stock Option on July 9, 1998. Mr. Darrow filed an Annual Statement of Changes in Beneficial Ownership on Form 5 disclosing this event on April 26, 1999. Mr. Peter R. Admirand, Secretary and Controller - Retail Operations of the Company, did not file a Statement of Changes in Beneficial Ownership of Securities on Form 4 in connection with the grant of an Employee Stock Option on July 9, 1998. Mr. Admirand filed an Annual Statement of Changes in Beneficial ownership on Form 5 disclosing this event on April 26, 1999. 3 ITEM 11. EXECUTIVE COMPENSATION General The following table sets forth information as to the compensation of the Chief Executive Officer and each of the other four most highly compensated executive officers of the Company (the "named executive officers") for services in all capacities to the Company and its subsidiaries during fiscal years 1998, 1997 and 1996. SUMMARY COMPENSATION TABLE ANNUAL COMPENSATION
Long-Term Compensation Awards ------------------------------- Annual Compensation Securities ----------------------- Underlying All Other Name & Principal Position Year Salary (1) Bonus(1) Options (#) Compensation (2) - ------------------------------------------------------------------------------------------------------------ Peter Castellana, Jr ...... 1998 $602,094 $106,203 -- $ 6,000 President and CEO 1997 613,673 98,735 -- 6,000 1996 591,347 170,285 -- 6,000 Frank Castellana .......... 1998 168,493 21,025 -- 6,000 Executive Vice-President 1997 182,308 15,925 -- 6,000 1996 333,320 87,316 -- 6,000 Joseph Castellana ......... 1998 387,308 72,920 -- 6,000 Executive Vice-President 1997 387,308 63,700 -- 6,000 1996 369,309 106,376 -- 6,000 Michael Castellana ........ 1998 287,958 58,762 -- 6,000 Senior Vice-President 1997 293,496 56,056 -- 6,000 1996 284,550 82,214 -- 6,000 Chris Darrow .............. 1998 118,437 21,025 3,000 5,578 Chief Financial Officer 1997 103,365 12,209 3,000 -- 1996 N/A N/A -- --
- ---------- (1) Amounts shown include cash compensation earned by the named executive officers during each respective year covered, including amounts deferred, if any, at the election of those officers. Bonuses are shown for the year in which they were earned. (2) Amounts shown represent the Company's contributions to its Profit Sharing Plan on behalf of the named executives. 4 OPTION GRANTS IN LAST FISCAL YEAR Stock Options The following table sets forth information concerning the grant of stock options under the Company's 1995 Stock Option Plan for Employees.
Number of Percentage of Total Securities Options Granted NAME Underlining Options to All Employees Exercise Price Expiration Grant Date Granted (1) in 1998 Fiscal Year Per Share(2) Date Present Value (3) - ------------------------------------------------------------------------------------------------------------------------ Chris Darrow 3,000 10.15% $8.25 July, 2008 $11,430
(1) The option reflected in the table is a nonqualified stock option under the Internal Revenue Code and was granted on July 9, 1998. The exercise price of the option was equal to 100% of the fair market value of the Common Stock on the date of grant, as determined by the Committee. The option granted vests in increments of 20% on the first, second, third, fourth and fifth anniversaries of the date of grant; however, it may not be exercisable after the expiration of ten (10) years from the date of grant. (2) Options may be exercised by the delivery to the Company at its principal office or at such other address as may be established by the Committee (Attention: Corporate Secretary) of written notice of the number of shares of Common Stock with respect to which the Option is being exercised accompanied by payment in full of the purchase price of such shares. Unless otherwise determined by the Committee at the time of grant, payment for such shares may be made (i) in cash, (ii) by certified check or bank cashier's check payable to the order of the Company in the amount of such purchase price, (iii) by delivery to the Company of shares of Common Stock having a Fair Market Value equal to such purchase price, (iv) at the discretion of the Committee, by simultaneously exercising Options and selling the shares of Common Stock acquired thereby, pursuant to a brokerage or similar arrangement approved by the Committee, and using the proceeds as payment of such purchase price; or (v) by any combination of the methods of payment described in (i) through (iv) above. (3) The option value presented is based on the Black-Scholes option-pricing model adapted for use in valuing stock options. The actual value, if any, that an optionee may realize upon exercise will depend on the excess of the market price of the Common Stock over the option exercise price on the date the option is exercised. There is no assurance that the actual value realized by an optionee upon the exercise of an option will be at or near the value estimated under the Black-Scholes model. The estimated value under the Black-Scholes model is based on arbitrary assumptions as to variables such as interest rates and stock price volatility. 5 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES The following table provides information on option exercises by each of the named executive officers during the past fiscal year and the value of such officers unexercised options at January 1, 1999, the last day of the Company's fiscal year. No SARS were outstanding during this period.
Number of Value of Securities Underlying Unexercised Unexercised Options in-the-money Options Shares Acquired Value at Fiscal Year End (1) at Fiscal Year End Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable - ----------------------------------------------------------------------------------------------------------------------- Chris Darrow -0- -0- 600 5,400 -0- N/A
- ---------- (1) All options were granted under the 1995 Stock Option Plan for employees. All options are fully exercisable five years after grant (with 20% becoming exercisable each year on the first through fifth anniversaries of the date of grant). The exercise price may be paid in cash, by the surrender of currently owned Common Stock (valued at 100% of market price) or by the delivery to the Company of a copy of irrevocable instructions to a stockbroker to sell shares of Common Stock to be acquired upon exercise of the option and to deliver promptly to the Company an amount sufficient to pay such purchase price or by any combination of the methods of payment described above. Compensation Committee Interlocks and Insider Participation Compensation of the Company's executive officers currently is administered by the Company's Board of Directors' Compensation Committee which consists of Messrs. Arnold B. Becker and Stephen R. Bokser. Mr. Bokser is President and Chief Executive Officer of White Rose Food. During 1998, 1997 and 1996, the Company purchased various food products in the amounts of $46,287,000, $37,111,000 and $24,423,000 from White Rose Food. As of January 1, 1999 and January 2, 1998 the Company had trade payables of $3,765,000 and $1,997,000 respectively, due to White Rose Food. 6 COMPENSATION OF DIRECTORS Compensation of Non-Employee Directors Pursuant to the Company's compensation policy, each non-employee director will receive: 1. A $5,000 annual retainer to be paid in quarterly installments of $1,250. 2. Reimbursement for reasonable out-of-pocket travel expenses that each non-employee director incurs for each meeting of the Board that such member attends to cover travel and related expenses. 3. A one-time grant of options to purchase 5,000 shares of the Company's Common Stock at a price equal to the fair market value of the Common Stock on the date of grant when the non-employee director is first elected to the Company's Board of Directors. Such options shall vest and become exercisable in 20% increments on the first, second, third, fourth and fifth anniversaries of the date of grant. In addition, all members of the Board are indemnified by a standard Directors and Officers liability policy in a manner consistent with the requirements of Delaware law. Pursuant to the Certificate of Incorporation of the Company, the Company indemnifies all members of the Board to the fullest extent possible under the Delaware General Corporation Law. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth beneficial ownership (determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") of the Company's Common Stock (being the Company's only voting securities) by each Director, each named executive officer designated in the section of this Proxy Statement captioned "Executive Compensation", all Directors and named executive officers as a group, and each person (including any "group" as that term is used in Section 13 (d)(3) of the Exchange Act), known by the Company to own more than 5% of the Common Stock as of April 18, 1999. The Company has been advised that except as otherwise indicated in the notes to such table, all those listed have the sole power to vote and dispose of the number of shares set forth opposite their respective names, and their respective addresses are in care of the Company: NUMBER OF SHARES NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED % OF CLASS - ------------------------ ------------------ ---------- PSL Foods, Inc. (1) 1,690,007 30.9 Camile Castellana (2)(3) 446,126 8.1 Joseph Castellana (2)(4)(5) 447,216 8.2 Frank Castellana (2)(4)(6) 453,529 8.3 Peter Castellana, Jr (2)(4)(7) 446,126 8.1 Michael Castellana (2)(4)(8) 445,036 8.1 Fidelity Management and Research 423,400 7.7 Stephen R. Bokser (4) 10,000 * Arnold B. Becker (4) 10,000 * Chris Darrow (4) -- * All directors and executive officers as 3,926,714 71.7 a group (ten persons) (9) - ---------- * Less than 1% of the outstanding Common Stock 7 (1) PSL Foods, Inc. is owned in equal proportions by the individuals named in note (2) below. (2) Frank Castellana, Joseph Castellana, Peter Castellana, Jr., Michael Castellana and Camile Castellana are siblings and are referred to herein as "the Principal Stockholders." (3) Includes 32,818 shares owned by the minor children of Camile Castellana. (4) Member of the Company's Board of Directors and/or a named executive officer of the Company. Includes options to purchase 10,000 shares of Common Stock each for Messrs. Bokser and Becker. (5) Includes 38,968 shares owned by the wife and minor children of Joseph Castellana. (6) Includes 17,528 shares owned by the wife and minor children of Frank Castellana. (7) Includes 179,164 shares owned by the wife and minor children of Peter Castellana, Jr. (8) Includes 52,894 shares owned by the wife and minor children of Michael Castellana. (9) Includes shares owned by PSL Foods, Inc. Also includes options to purchase 21,400 shares of Common Stock held by certain Directors and Executive Officers ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. For more than a decade, the Company and the Principal Stockholders have had continuing relationships simultaneously as lessors and lessees, suppliers and customers and debtors and creditors. They have also shared certain management personnel and certain administrative functions, such as insurance, advertising and payrolls, and have attempted to allocate the common costs fairly. In October 1992, the parties consummated an Agreement of Combination ("the Combination") pursuant to which the Company and the food business of the Principal Stockholders were combined under a publicly traded successor Delaware corporation. Since the consummation of the Combination, the Principal Stockholders have held in excess of 70% of the outstanding Common Stock of the Company. The Company leases certain retail food stores, office and warehouse facilities from the Principal Stockholders. Concurrent with the Combination, independent appraisals were obtained of the rentals under all then existing Company leases in which the Principal Stockholders had an interest as landlord or tenant (other than one food store lease which was fixed on a formula basis). Any necessary revisions to the leases were made so that in the aggregate, such rentals did not exceed fair market value. The Company and the Principal Stockholders agreed that any future leases from such affiliates would be based on fair market value as established by independent appraisal. All Company leases in which the Principal Stockholders had an interest have been amended periodically, so that the rentals thereunder do not exceed fair market value. The Company leases land, various retail food stores and warehouse storage and office space from affiliates of the Principal Stockholders under various leases which expire through January 2017. For fiscal years 1998, 1997 and 1996 rent expense, relating to these leases was $3,004,000, $2,829,000 and $2,737,000 respectively. The Company made capital expenditures of approximately $436,000, $2,022,000 and $725,000 during 1998, 1997 and 1996, respectively, at leaseholds owned by affiliates of the Principal Stockholders. 8 The average square foot rental for property leased from the Principal Stockholders is $3.91 per square foot as compared with an average square foot rental of $3.93 for property leased from third party landlords. The Company had sales to affiliates controlled by the Company's Principal Stockholders for 1998, 1997 and 1996 of $561,000, $894,000, and $335,000 respectively. During 1998, 1997 and 1996 the Company purchased various food products in the amounts of $46,287,000, $37,111,000 and $27,423,000 respectively, from White Rose Food, of which Stephen R. Bokser, a Director of the Company, is an officer. As of January 1, 1999 and January 2, 1998 the Company had trade payables of $3,765,000 and $1,997,000 respectively, due to White Rose Food. 9 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WESTERN BEEF, INC. By: /s/ Peter Castellana, Jr., ---------------------------------------- Peter Castellana, Jr., President, Date: April 30, 1999 SIGNATURE TITLE DATE - --------- ----- ---- /s/ Peter Castellana, Jr. President, Chief Executive Officer April 30, 1999 - ------------------------ and Director Peter Castellana, Jr. /s/ Chris Darrow Chief Financial Officer April 30, 1999 - ------------------------ Chris Darrow /s/ Joseph Castellana Director April 30, 1999 - ------------------------ Joseph Castellana /s/ Stephen R.Bokser Director April 30, 1999 - ------------------------ Stephen R. Bokser /s/ Arnold B. Becker Director April 30, 1999 - ------------------------ Arnold B. Becker -----END PRIVACY-ENHANCED MESSAGE-----