-----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, JjG4D3jUKmjRGXH+/3+F/96iWLe2NSJuZHi3s3X+8FKicIpnSPqEpeFF7bw4v24C k0ZFyTkeJNSUxHs7+lyKgA== 0000927016-97-001116.txt : 19970512 0000927016-97-001116.hdr.sgml : 19970512 ACCESSION NUMBER: 0000927016-97-001116 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970520 FILED AS OF DATE: 19970418 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPTA FOOD INGREDIENTS INC /DE CENTRAL INDEX KEY: 0000883326 STANDARD INDUSTRIAL CLASSIFICATION: 2090 IRS NUMBER: 043117634 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-19811 FILM NUMBER: 97583549 BUSINESS ADDRESS: STREET 1: 25 WIGGINS AVE CITY: BEDFORD STATE: MA ZIP: 01730 BUSINESS PHONE: 6172765100 MAIL ADDRESS: STREET 1: 25 WIGGINS AVENUE CITY: BEDFORD STATE: MA ZIP: 01730 DEF 14A 1 DEFINITIVE PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12 OPTA FOOD INGREDIENTS, INC. ------------------------------------------------ (Name of Registrant as Specified In Its Charter) OPTA FOOD INGREDIENTS, INC. ------------------------------------------------ (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (check the appropriate box): [X] No fee required [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ________________________________________________________________________ (2) Aggregate number of securities to which transaction applies: ________________________________________________________________________ (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ________________________________________________________________________ (4) Proposed maximum aggregate value of transaction: ________________________________________________________________________ (5) Total fee paid: ________________________________________________________________________ [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ________________________________________________________________________ (2) Form, Schedule or Registration Statement No.: ________________________________________________________________________ (3) Filing Party: ________________________________________________________________________ (4) Date Filed: ________________________________________________________________________ OPTA FOOD INGREDIENTS, INC. 25 WIGGINS AVENUE BEDFORD, MA 01730 (617) 276-5100 FAX: (617) 276-5101 April 18, 1997 Dear Stockholder: You are cordially invited to attend the 1997 Annual Meeting of Stockholders of Opta Food Ingredients, Inc. (the "Company") to be held on Tuesday, May 20, 1997, at 9:30 a.m. at the offices of the Company, 25 Wiggins Avenue, Bedford, Massachusetts. This year stockholders are being asked to elect seven Directors and to ratify the selection of Price Waterhouse LLP as the Company's independent public accountants. The Board of Directors recommends both the election of all nominees for Director and approval of the Company's accountants. Such other business will be transacted as may properly come before the Annual Meeting. The accompanying Notice of Annual Meeting of Stockholders and Proxy Statement describe the matters that will be presented at the Annual Meeting. Regardless of the number of shares of Common Stock you may own, your votes are important. YOU ARE URGED TO VOTE, SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD PROMPTLY, in accordance with the instructions set forth on the card, whether or not you plan to attend the Annual Meeting in person. This will ensure your proper representation at the Annual Meeting. Thank you for giving these materials your careful consideration. Sincerely, LEWIS C. PAINE, III Chairman of the Board, Chief Executive Officer and President OPTA FOOD INGREDIENTS, INC. 25 WIGGINS AVENUE BEDFORD, MA 01730 (617) 276-5100 ---------------- NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To Be Held May 20, 1997 TO THE STOCKHOLDERS OF OPTA FOOD INGREDIENTS, INC.: Notice is hereby given that the 1997 Annual Meeting of Stockholders of Opta Food Ingredients, Inc. (the "Company") will be held on Tuesday, May 20, 1997, at 9:30 a.m. at the offices of the Company at 25 Wiggins Avenue, Bedford, Massachusetts, to consider and act upon: (1) The election of seven (7) members of the Board of Directors to serve until the next Annual Meeting of Stockholders and until their successors are elected and take office; (2) The approval of the appointment by the Board of Directors of Price Waterhouse LLP as the Company's independent accountants for the fiscal year ending December 31, 1997; and (3) Such other business as may properly come before the Annual Meeting or any adjournments thereof. Reference is hereby made to the accompanying Proxy Statement for more complete information concerning the matters to be acted upon at the Annual Meeting. The Board of Directors has fixed the close of business on March 25, 1997 as the Record Date (the "Record Date") for the determination of stockholders entitled to notice of and to vote at the Annual Meeting or any adjournments thereof. All stockholders are invited to attend the Annual Meeting in person. HOLDERS OF RECORD OF COMMON STOCK AS OF THE RECORD DATE ARE URGED TO VOTE, SIGN, DATE, AND RETURN THEIR PROXIES IN THE ENCLOSED RETURN ADDRESSED ENVELOPE. NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES. HOLDERS OF RECORD OF THE COMMON STOCK AS OF THE RECORD DATE WHO DO ATTEND THE MEETING AND WISH TO VOTE IN PERSON MAY REVOKE THEIR PROXIES. By Order of the Board of Directors JEFFREY M. WIESEN Secretary Bedford, Massachusetts April 18, 1997 OPTA FOOD INGREDIENTS, INC. 25 WIGGINS AVENUE BEDFORD, MA 01730 (617) 276-5100 PROXY STATEMENT FOR THE 1997 ANNUAL MEETING OF STOCKHOLDERS To Be Held May 20, 1997 GENERAL INFORMATION This Proxy Statement, with the enclosed proxy card, is being furnished to stockholders of Opta Food Ingredients, Inc., a Delaware corporation ("Opta" or the "Company"), in connection with the solicitation by the Company's Board of Directors (the "Board") of proxies to be voted at the Company's 1997 Annual Meeting of Stockholders to be held on May 20, 1997 at 9:30 a.m. at the Company's offices at 25 Wiggins Avenue, Bedford, Massachusetts, and at any adjournments thereof (the "Meeting"). When the proxy card of a stockholder is duly executed and returned, the shares represented thereby will be voted in accordance with the voting instructions given on the proxy by the stockholder. If no such voting instructions are given on a proxy card with respect to one or more proposals, the shares represented by that proxy card will be voted, in the election of Directors, for the nominees named herein, and with respect to other proposals, in accordance with the recommendations of the Board. Stockholders may revoke their proxies at any time prior to any vote at the Meeting by written notice of revocation to the Secretary of the Company at or before the Meeting, by submission of a duly executed proxy card bearing a later date, or by voting in person by ballot at the Meeting. The presence, in person or by proxy, of the holders of a majority of the Company's Common Stock, $.01 par value per share (the "Common Stock"), entitled to vote at the Meeting, is necessary to constitute a quorum at the Meeting. As to each matter submitted to a vote of stockholders, under Delaware law, with respect to tabulation of the proxies, abstentions are treated as votes against a proposal and broker non-votes have no effect on the vote. The vote required to approve each proposal is set out at the end of that proposal. No appraisal rights exist for any action proposed to be taken at the Meeting. The cost of soliciting proxies, including expenses in connection with preparing and mailing this Proxy Statement, will be borne by the Company. Proxies may be solicited by Directors, officers, or regular employees of the Company by mail, by telephone, in person, or otherwise. No such person will receive additional compensation for such solicitation. In addition, the Company will request banks, brokers, and other custodians, nominees, and fiduciaries to forward proxy material to the beneficial owners of Common Stock and to obtain voting instructions from such beneficial owners. The Company will reimburse such firms for their reasonable expenses in forwarding proxy materials and obtaining voting instructions. This Proxy Statement and the enclosed proxy card are first being mailed or otherwise furnished to all stockholders of the Company entitled to notice of and to vote at the Meeting on or about April 18, 1997. The Annual Report to Stockholders for the fiscal year ended December 31, 1996 is being mailed to the stockholders with this Proxy Statement, but does not constitute a part hereof. VOTING SECURITIES Holders of Common Stock of record on the books of the Company at the close of business on March 25, 1997 (the "Record Date") are entitled to notice of and to vote at the Meeting. At March 25, 1997, there were 10,981,015 shares of Common Stock issued and outstanding, each of which entitles the holder to one vote on each matter submitted to a vote at the Meeting. PROPOSAL 1: ELECTION OF DIRECTORS INFORMATION CONCERNING THE NOMINEES FOR DIRECTOR The Restated By-Laws of the Company provide for a Board consisting of such number of Directors as shall be fixed from time to time by the Board. The Board has fixed the number of Directors for the ensuing year at seven, and seven Directors are to be elected at the Meeting. Christopher F.O. Gabrieli, a member of the Board since 1991, has declined to stand for re-election. Pursuant to an agreement with the Company, Nouvelle Holding Guyomarc'h S.A. ("Nouvelle") is entitled to designate a person to serve on the Board of Directors of the Company, and the Company shall nominate such person as a Director at the Annual Meeting of Stockholders. Nouvelle has designated Frederic Stevenin as its representative and Mr. Stevenin was appointed to the Board of Directors of the Company in January 1997. Pursuant to the Restated By-Laws, the Directors are elected by a plurality of the votes cast at the Meeting. Unless otherwise specified, the enclosed proxy will be voted in favor of the election of the nominees named below, all of whom are now Directors of the Company. In the event that a vacancy occurs during the year, such vacancy may be filled by the Board for the remainder of such Director's full term. All nominees will be elected to serve until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified, or until their earlier death, resignation or removal from office. In the event any of these nominees shall be unable to serve as a Director, the shares represented by the proxy will be voted at the Meeting for the person, if any, who is designated by the Board to replace the nominee. Each of the nominees has consented to be nominated and to serve if elected. The table below sets forth certain information with respect to the nominees for election to the Board of Directors.
YEAR FIRST BECAME PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND NAME AGE DIRECTOR OTHER BUSINESS AFFILIATIONS - - ---- --- ---------- --------------------------------------------- A. S. Clausi... 74 1991 A consultant in the food industry since July 1987. At General Foods Corporation from December 1946 to July 1987, where he served most recently as Senior Vice President and Chief Research Officer. Chairman of the Food Research Directors' Roundtable and Chairman of the Monell Institute Nutrition Advisory Board. President of the Institute of Food Technologists in 1993 and 1994 and Chairman of the Institute of Food Technologists Foundation. A member of the Company's Scientific Advisory Board since 1991.
2
YEAR FIRST BECAME PRINCIPAL OCCUPATION, BUSINESS EXPERIENCE AND NAME AGE DIRECTOR OTHER BUSINESS AFFILIATIONS - - ---- --- ---------- --------------------------------------------- Anthony B. Evnin, 56 1991 A general partner since 1975 of Venrock Ph.D.(1)............... Associates, a venture capital firm that is an investor in the Company. Also a Director of Arris Pharmaceutical Corporation, Centocor, Inc., Kopin Corporation, Ribozyme Pharmaceuticals, Inc., SUGEN, Inc. and Triangle Pharmaceuticals, Inc. Harry Fields(2)......... 73 1991 President of Fields Associates Ltd., a consulting firm, since April 1990. Served at International Flavors & Fragrances, Inc. from 1948 to April 1990, most recently as President IFF (Flavors) and as a member of the Board of Directors. Glynn C. Morris(1),(2).. 56 1993 Retired. Former President and Chief Operating Officer of Presto Food Products, Inc. from 1989 to 1996. From 1973 to 1989, with Carnation Company in various positions, most recently as Vice President/General Manager of the Specialty Foods Division. Charles W. Newhall, III. 52 1991 A general partner since 1978 of NEA Partners IV Limited Partnership, the general partner of New Enterprise Associates IV, Limited Partnership, a venture capital partnership that is an investor in the Company. Also a Director of HEALTHSOUTH Corporation, Integrated Health Services, Inc., and Med Partners, Inc. Lewis C. Paine, III..... 44 1992 Chairman of the Board of the Company since June 1993; Chief Executive Officer of the Company since December 1992; President of the Company since May 1991. President of the Food Ingredients Division of Enzytech, Inc. (predecessor to the Company) from October 1990 to May 1991. From 1974 to 1990, with Carnation Company and its parent company, Nestle, S.A., most recently as Vice President Marketing and New Business Development for the Refrigerated Products Division from December 1987 to October 1990. Frederic Stevenin....... 30 1997 A Vice President of Paribas Affaires Industrielles since 1993. From 1989 to 1993, served with Banque Paribas within the mergers and acquisitions group. Also a Director of Diana, Soprat, Naidul and Eurogerm.
- - -------- (1)Member of the Compensation Committee. (2)Member of the Audit Committee. 3 MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS During the year ended December 31, 1996, the Board held five meetings. Each of the Directors attended at least 75% of the Board meetings and meetings of committees of the Board of which he was a member. In addition, from time to time, the members of the Board of Directors and its committees may act by unanimous written consent pursuant to Delaware law. The Audit Committee, which consists of Harry Fields and Glynn C. Morris, met twice during 1996 to review with the Company's independent accountants the scope of the annual audit, to discuss the adequacy of internal accounting controls and procedures, and to perform general oversight with respect to the accounting principles applied in the financial reporting of the Company. During the year ended December 31, 1996, the Compensation Committee consisted of Anthony B. Evnin and Christopher F.O. Gabrieli. Mr. Gabrieli, a member of the Board since 1991, has declined to stand for re-election. Glynn C. Morris has been appointed Mr. Gabrieli's successor as a member of the Compensation Committee. The Compensation Committee's functions are to recommend to the full Board the amount, character, and method of payment of compensation of all executive officers and certain other key employees and consultants of the Company and to administer the Company's stock option and stock purchase plans. The Compensation Committee held four meetings during 1996. The Audit Committee and Compensation Committee are the only standing committees of the Board. The Company does not have a standing Nominating Committee. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During the year ended December 31, 1996, the Compensation Committee consisted of Anthony B. Evnin and Christopher F.O. Gabrieli. Neither of them is or has been an employee of the Company. No executive officer of the Company serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of the Company's Board of Directors or Compensation Committee. BOARD RECOMMENDATION THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF THE NOMINEES TO THE BOARD OF DIRECTORS. A PLURALITY OF THE VOTES CAST IN PERSON OR BY PROXY AT THE MEETING IS REQUIRED TO ELECT EACH NOMINEE AS A DIRECTOR. 4 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information regarding beneficial ownership of the Company's Common Stock as of March 25, 1997, by (i) each person known to the Company to be the beneficial owner of more than 5% of the Company's Common Stock, (ii) each Director of the Company, (iii) each executive officer named in the Summary Compensation Table below, and (iv) all Directors and executive officers of the Company as a group.
SHARES PERCENTAGE NAME AND ADDRESS** BENEFICIALLY OWNED(1) OF TOTAL(1) - - ------------------ --------------------- ----------- Nouvelle Holding Guyomarc'h S.A.(2).......... 1,386,674 12.63% 14 Rue Lafayette 75009 Paris, France 48 01 98 50 State of Wisconsin Investment Board(3)....... 1,040,000 9.47% P.O. Box 7842 Madison, WI 53707 Dimensional Fund Advisors, Inc.(4)........... 671,500 6.12% 1129 Ocean Avenue, 11th Floor Santa Monica, CA 90401 New Enterprise Associates IV, Limited Part- 577,500 5.26% nership(5).................................. 1119 Saint Paul Street Baltimore, MD 21202 A. S. Clausi(6).............................. 31,944 * Anthony B. Evnin, Ph.D.(7)................... 326,926 2.98% Harry Fields(8).............................. 20,833 * Christopher F.O. Gabrieli(9)................. 48,125 * Glynn C. Morris(10).......................... 3,000 * Charles W. Newhall, III(11).................. 601,809 5.48% Lewis C. Paine, III(12)...................... 176,246 1.61% Frederic Stevenin(13)........................ 1,386,674 12.63% Arthur J. McEvily, Ph.D.(14)................. 57,751 * Joel A. Stone(15)............................ 54,930 * All Directors and executive officers as a 2,708,238 24.66% group (11 persons)(16)......................
5 - - -------- * Represents beneficial ownership of less than 1% of the Company's outstanding Common Stock. ** Address provided for beneficial owners of 5% or more of the Company's outstanding Common Stock only. (1) Beneficial ownership of shares for purposes hereof, as determined in accordance with applicable Securities and Exchange Commission rules, includes shares as to which a person has or shares voting power and/or investment power. The persons or entities named in the above table have sole voting and investment power with respect to all shares shown to be beneficially owned by them, except as otherwise noted. The percentage of beneficial ownership of Common Stock of each stockholder named in the above table is based upon the 10,981,015 shares of Common Stock issued and outstanding at March 25, 1997, and is calculated by treating any options held by such person and exercisable within 60 days after March 25, 1997 as having been exercised for Common Stock, but without deeming such options to have been exercised for purposes of computing beneficial ownership of Common Stock of any other stockholder. Beneficial ownership of Common Stock by all Directors and executive officers as a group assumes such exercises of options by the members of such group, but not by others. (2) Based solely upon information reported on Schedule 13D as filed with the Securities and Exchange Commission on January 9, 1997 on behalf of Nouvelle Holding Guyomarc'h S.A. ("Nouvelle") and Compagnie Financiere de Paribas ("Paribas"). Includes 1,386,674 shares held of record by Nouvelle. As the holder of approximately 95% of the capital stock of Nouvelle, Paribas may be deemed to have sole voting and dispositive power over such shares held of record by Nouvelle. Paribas disclaims beneficial ownership of such shares. (3) Based solely upon information reported on Schedule 13G as filed with the Securities and Exchange Commission on January 28, 1997. (4) Based solely upon information reported on Schedule 13G as filed with the Securities and Exchange Commission on February 13, 1997 on behalf of Dimensional Fund Advisors Inc. ("DFA") an investment advisor registered under the Investment Advisors Act of 1940 (the "Investment Advisors Act"). DFA exercises sole voting power with respect to 444,000 of such shares and sole dispositive power with respect to 671,500 shares, and may be deemed to be the beneficial owner of all such shares. Persons who are officers of DFA also serve as officers of DFA Investment Trust Company (the "Trust"), each an open-end management investment company registered under the Investment Advisors Act. In their capacity as officers of the Fund and the Trust, these persons vote 92,000 of such shares held by the Fund and 134,900 shares held by the Trust. (5) Includes 105,000 shares held of record by New Enterprise Associates IV, Limited Partnership and 472,500 shares held of record by New Enterprise Associates VI, Limited Partnership. NEA Partners VI, Limited Partnership, NEA Partners IV, Limited Partnership, Frank A. Bonsal, Jr., C. Richard Kramlich, Arthur J. Marks, Thomas C. McConnell, Charles W. Newhall, III, and Nancy L. Dorman may be deemed to have shared voting and dispositive power over such shares. Messrs. Bonsal, Kramlich, Marks, McConnell, Newhall and Ms. Dorman disclaim beneficial ownership of such shares. (6) Includes 21,944 shares which Mr. Clausi may acquire upon the exercise of options within 60 days after March 25, 1997. (7) Includes 12,500 shares which Dr. Evnin may acquire upon the exercise of options within 60 days after March 25, 1997. Also includes 207,163 shares held by Venrock Associates and 92,882 shares held by Venrock Associates II, L.P. Dr. Evnin is a general partner of Venrock Associates and Venrock Associates II, L.P. and may be deemed to have shared voting and dispositive power over such shares, but disclaims beneficial ownership of such shares. 6 (8) Includes 14,166 shares which Mr. Fields may acquire upon the exercise of options within 60 days after March 25, 1997. (9) Includes 12,500 shares which Mr. Gabrieli may acquire upon exercise of options within 60 days after March 25, 1997. Also includes 30,191 shares held by Bessemer Venture Partners II L.P. Mr. Gabrieli is a general partner of Deer II & Co., the general partner of Bessemer Venture Partners II L.P. Mr. Gabrieli shares voting and investment power with the general partners of such entity, with respect to the shares held by Bessemer Venture II L.P., and disclaims beneficial ownership of such shares. (10) Represents shares which Mr. Morris may acquire upon the exercise of options within 60 days after March 25, 1997. (11) Includes 12,500 shares which Mr. Newhall may acquire upon the exercise of options within 60 days after March 25, 1997. Also includes 577,500 shares held of record by New Enterprise Associates IV, Limited Partnership and New Enterprise Associates VI, Limited Partnership. See Note 5 above. (12) Includes 71,000 shares which Mr. Paine may acquire upon the exercise of options within 60 days after March 25, 1997. (13) Includes 1,386,674 shares held of record by Nouvelle. See Note 2 above. Mr. Stevenin is an officer of Paribas Affaires Industrielles ("PAI"), and may be deemed to be an indirect beneficial owner of such shares owned by Nouvelle because PAI and Nouvelle are each primarily owned by Paribas. Mr. Stevenin disclaims beneficial ownership of such shares. (14) Includes 56,106 shares which Dr. McEvily may acquire upon the exercise of options within 60 days after March 25, 1997. (15) Includes 25,000 shares which Mr. Stone may acquire upon the exercise of options within 60 days after March 25, 1997. (16) Includes an aggregate of 228,716 shares which may be acquired upon the exercise of options within 60 days after March 25, 1997. 7 EXECUTIVE COMPENSATION AND OTHER INFORMATION SUMMARY COMPENSATION TABLE Executive officers of the Company are elected by the Board of Directors on an annual basis and serve at the discretion of the Board of Directors. The following table (the "Summary Compensation Table") sets forth a summary of the compensation paid by the Company during its 1994, 1995 and 1996 fiscal years to each of (i) its Chief Executive Officer (the "CEO") and (ii) persons who were serving as executive officers of the Company (other than the CEO) as of December 31, 1996 whose total annual salary and bonus exceeded $100,000 for the fiscal year ended December 31, 1996.
LONG TERM ANNUAL COMPENSATION COMPENSATION -------------------- ------------ ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION - - --------------------------- ---- ---------- --------- ------------ ------------ Lewis C. Paine, III 1996 $ 190,000 -0- 100,000 $56,893(1) Chairman of the Board, 1995 $ 162,000 $ 40,000 -0- $83,708(2) President and 1994 $ 154,500 -0- 25,000 $76,800(3) Chief Executive Officer Arthur J. McEvily, Ph.D. 1996 $ 125,000 -0- 20,000 -0- Vice President of Applica- 1995 $ 110,000 -0- -0- -0- tions, 1994 $ 90,000 -0- 25,000 -0- Technical Service and New Product Commercialization Joel A. Stone 1996 $ 112,000 $ 10,000 20,000 -0- Vice President of Opera- 1995 $ 105,000 -0- -0- -0- tions 1994 $ 99,534 -0- 15,000 -0- and Manufacturing
- - -------- (1) Includes $21,268 representing loan interest and principal forgiven during 1996 and $35,625 paid in connection with reimbursement of certain relocation costs. (2) Includes $41,858 representing loan interest and principal forgiven during 1995 and $41,850 paid in connection with reimbursement of certain relocation costs. (3) Represents loan interest and principal forgiven during 1994. OPTION GRANTS IN THE LAST FISCAL YEAR The following table sets forth information concerning stock options granted during the fiscal year ended December 31, 1996 to the officers named in the Summary Compensation Table.
POTENTIAL REALIZABLE VALUE AT INDIVIDUAL GRANTS ASSUMED ANNUAL ---------------------------------------------- RATES OF STOCK NUMBER OF % OF TOTAL PRICE APPRECIATION SECURITIES OPTIONS FOR OPTION TERM(2) UNDERLYING GRANTED TO EXERCISE ------------------- OPTIONS EMPLOYEES PRICE PER EXPIRATION NAME GRANTED(1) IN FISCAL YEAR SHARE DATE 5% 10% - - ---- ---------- -------------- --------- ---------- -------- ---------- Lewis C. Paine, III 100,000 17.9% $11.00 3/6/06 $692,400 $1,756,800 Arthur J. McEvily, Ph.D. 20,000 3.6% $11.00 3/6/06 $138,480 $ 351,360 Joel A. Stone 20,000 3.6% $11.00 3/6/06 $138,480 $ 351,360
- - -------- (1) These options are non-qualified or incentive stock options granted under the Company's 1992 Employee, Director and Consultant Stock Option Plan with an exercise price equal to the fair market value per share at the date of grant, for a term of ten (10) years, vesting in annual installments over five (5) years from the date of grant. (2) The potential realizable values that would exist for the respective options are based on assumed rates of annual compound stock price appreciation of 5% and 10% from the date of grant over the full term of the option. Actual gains, if any, on stock options, exercises and Common Stock holdings are dependent on the future performance of the Common Stock. 8 OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES The following table sets forth information concerning the number of unexercised options held by such persons at the end of the last fiscal year and the value of such unexercised options as of such date. Except for Mr. Stone, none of the people named in the Summary Compensation Table exercised any options during the last fiscal year.
VALUE OF UNEXERCISED NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS OPTION EXERCISES OPTIONS AT FISCAL YEAR END AT FY-END (1) -------------------- ------------------------------ ------------------------- SHARES ACQUIRED VALUE NAME ON EXERCISE RECEIVED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - - ---- ----------- -------- ------------ -------------- ----------- ------------- Lewis C. Paine, III -0- $ -0- 51,000 129,000 $ 2,250 $1,500 Arthur J. McEvily, Ph.D. -0- $ -0- 50,106 47,394 $74,782 $1,500 Joel A. Stone (2) 25,000 $298,500 21,000 34,000 $ 750 $ 500
- - -------- (1) Value is calculated by determining the difference between the average of the high and low sales prices for the Company's Common Stock on the Nasdaq National Market System on December 31, 1996 ($5.50) and the exercise price of the option. (2) Mr. Stone exercised an option to purchase 25,000 shares at $.06 per share during 1996. Mr. Stone has not sold any of these shares acquired upon exercise of such option. COMPENSATION OF DIRECTORS The Company's independent Directors, who are neither affiliated with a major shareholder nor parties to consulting arrangements with the Company, each receive a fee of $1,000 for each Board meeting attended. Mr. Clausi has a consulting agreement with the Company pursuant to which he receives $10,000 per annum, plus $1,000 per day for meetings attended in excess of 10 days per year. In addition, the Company has a stock option program for Directors under its 1992 Employee, Director and Consultant Stock Option Plan pursuant to which, on March 31 of each year, each non-employee Director then in office receives options to purchase 2,500 shares of Common Stock at the then fair market value thereof. Such options vest in equal annual installments over a five-year period based on continued service on the Board of Directors. Options to purchase 2,500 shares were granted under this program during fiscal 1996 to Mr. Clausi, Dr. Evnin, and Messrs. Fields, Morris, Gabrieli and Newhall. EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS The Company's employment agreement with Lewis C. Paine, III pursuant to which Mr. Paine has agreed to serve as President and Chief Executive Officer of the Company has been extended at an annual base salary of $207,000 plus an annual performance bonus at the discretion of the Board of Directors through December 31, 1997. The Company's agreement with Mr. Paine may be terminated by the Company at any time for cause. In the event Mr. Paine voluntarily terminates his employment, or if such employment is terminated as a result of Mr. Paine's death or permanent disability, or the Company terminates the employment of Mr. Paine without cause, or Mr. Paine's employment by the Company is not extended beyond December 31, 1997 for any reason, the Company has agreed to pay Mr. Paine severance for one year in an amount equal to his annual base salary payable in equal monthly installments. 9 COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION(/1/) The Compensation Committee of the Board of Directors (the "Committee") is composed entirely of outside, non-employee Directors. During the year ended December 31, 1996, the members of the Compensation Committee were Anthony B. Evnin and Christopher F.O. Gabrieli. Mr. Gabrieli has indicated that he will not stand for re-election as a Director at the Meeting, and Mr. Glynn C. Morris has been elected by the Board of Directors to replace him on the Committee. The Committee determines the base salaries of the Company's executive officers and the amount of annual bonus awards, if any, and other compensation to be paid to the Company's executive officers. In addition, the Committee administers the Company's 1992 Employee, Director and Consultant Stock Option Plan (the "Option Plan") under which incentive or non-qualified stock options may be granted to executive officers and other employees. COMPENSATION POLICIES APPLICABLE TO EXECUTIVE OFFICERS; COMPONENTS OF COMPENSATION The Committee's executive compensation policies have as their cornerstone the fundamental purpose of enabling the Company to attract and retain key executive personnel and motivate those executives to achieve the Company's goals. The food ingredients industry and related industries such as the consumer food products industry are extremely competitive with respect to recruitment and retention of qualified personnel. In this environment, the Committee believes that it will be critical to the Company's long-term success that its compensation program appropriately balances competitive compensation features with components structured to motivate the diligent pursuit and accomplishment of Company objectives. Each executive officer's compensation package is reviewed annually and is comprised of up to three components: base salary, incentive cash bonus and stock options. In addition to these components, executive officers of the Company are eligible to participate in employee benefit programs available broadly to other Company employees. Executive compensation is determined based on progress toward both Company-wide goals and individual goals. Starting with the Company's broad strategic goals, including introducing new products, increasing revenue and gross margins and becoming a profitable enterprise, the Committee reviews specific annual corporate objectives and goals. Personal objectives and milestones for individual executives are then designed to fit within the framework of the Company's overall goals and objectives. Subjective factors, such as changes in business conditions and other relevant external circumstances, are also taken into consideration. The Company believes the nature of its specific goals and milestones and progress toward their achievement constitute proprietary and confidential information, disclosure of which would place the Company at a competitive disadvantage. BASE SALARY In setting the annual base salary levels for each executive officer, the Committee obtains information on the base salaries of executive officers in other food ingredient and consumer food product companies. Members of the Committee also have considered knowledge about salaries paid to executives in companies that are in relatively early stages of commercialization of novel products resulting from internal research and development efforts. In determining which companies to include in its comparison, the Committee considers the size and - - -------- (1) The report of the Compensation Committee of the Board of Directors shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this report by reference. 10 complexity of the company, the stage of development of its products and geographical location. Within this group, the Committee seeks to make comparisons to executive officers with comparable levels of experience, and with similar responsibilities and expected levels of contribution to the Company's performance. The Committee seeks to set base salaries and annual cash bonuses at the midpoint of the range of compensation paid by comparable companies. In addition, the initial level of compensation paid to those executives hired more recently has been determined by market forces and is consistent with industry practice, if any. BONUS AWARDS The Company has an annual incentive bonus plan for its executives. Annual cash bonuses are based on the Company achieving certain corporate financial goals and each executive officer's achieving his or her individual performance objectives. As noted above, the Company's annual planning effort includes the establishment of Company-wide objectives into which individual objectives and milestones are structured for key executives, relevant to their specific areas of corporate responsibility. The Committee, in conjunction with the Chief Executive Officer, reviews proposed milestones and objectives for each key executive early in the fiscal year and performs a follow-up review after the fiscal year-end to assess performance and achievement of the objectives. A review of the executive's performance in relation to such objectives, in the context of the Company's overall performance and the Committee's assessment of the executive's contributions to overall corporate results, leads to the Committee's determination of an incentive bonus. For fiscal 1996, no executive officer received a bonus. STOCK OPTIONS Subject to the provisions of the Option Plan, the Committee has the authority to determine the terms under which options are granted and the individuals to whom such options may be granted. The Committee believes that equity participation is a key component of the Company's executive compensation program. The stock option program is the Company's major long- term incentive plan, designed to retain executive officers and other employees and motivate them to enhance shareholder value by aligning the long-term interests of the Company's employees with those of its outside shareholders. The Committee believes that stock options provide an effective long-term incentive for executive officers and other employees to create shareholder value, since the full benefit of the options cannot be realized unless an appreciation in the price of the Company's Common Stock occurs over a number of years. The executive officers participate in the Option Plan in the same manner as all of the Company's employees. Initial stock option awards are individually determined prior to employment at levels based upon an employee's potential contribution to the Company's growth and are designed to be competitive with awards by other companies within the consumer food products and food ingredients industries. Subsequent annual stock option awards are based on individual performance and position within the Company. The Committee also takes into account the aggregate amount of stock options previously granted to an individual. All of the Company's current executive officers listed in the summary compensation table were awarded stock options in 1996. All such options have exercise prices equal to the fair market value of the Company's Common Stock on the date of grant. The options granted to Mr. Stone and Dr. McEvily were non-qualified or incentive stock options vesting ratably at a rate of 20% per year following the date of grant. COMPENSATION OF THE CHIEF EXECUTIVE OFFICER Mr. Paine's employment agreement with the Company was renewed in April 1996 and established his base salary at $190,000. The agreement also provided for the reimbursement of certain relocation-related costs not to exceed $50,000, as well as the forgiveness in five equal annual installments commencing in 1994 of a $100,000 bridge loan. These benefits have been structured to accrue over time, thereby serving the Company's goal of retention of Mr. Paine's services. 11 The employment agreement also provided for the grant of a non-qualified stock option for 100,000 shares of Common Stock, vesting at the rate of 20% each year commencing with the first anniversary of the option grant. The agreement also set forth certain 1996 corporate financial performance goals which, if met, would result in the acceleration of the vesting of 50% of the option. The Committee recognized that such performance goals were ambitious and the accelerated vesting percentage was therefore intended to award exceptional Company financial results. While the Committee is pleased with the Company's performance for 1996, the specified milestones were not met, and vesting was not accelerated. The employment agreement also provided for a cash bonus upon the attainment of mutually agreed upon performance goals. Mr. Paine did not receive a cash bonus for fiscal 1996. Overall, Mr. Paine's employment agreement has been designed to align Mr. Paine's interests with those of the Company's Stockholders, both with respect to short-term operating results and long-term increases in the price of the Company's Common Stock. It is the Committee's intention to establish new performance goals each year in consultation with Mr. Paine and to evaluate his performance and compensation against such objectives. COMPENSATION COMMITTEE: Anthony B. Evnin Christopher F.O. Gabrieli 12 SHAREHOLDER RETURN PERFORMANCE GRAPH The following graph compares the performance of the Company's Common Stock to the Standard & Poor's 500 Index (The "S&P 500 Index") and to the Standard & Poor's Foods-500 Index (The "S&P Foods-500 Index") since the Company's initial public offering on March 4, 1992. The graph assumes that the value of the investment in the Company's Common Stock and each index was $100 at March 4, 1992 and that the Company has not paid any dividends on the common stock, and no dividends are included in the representation of the Company's performance. The stock price performance on the graph below is not necessarily indicative of future price performance. [PERFORMANCE GRAPH APPEARS HERE] COMPARISON OF CUMULATIVE TOTAL RETURN AMONG OPTA FOOD INGREDIENTS, INC., S&P 500 INDEX AND S&P FOODS-500 INDEX
Opta Food S&P S&P Measurement period Ingredients, 500 Foods-500 (Fiscal Year Covered) Inc. Index Index - - --------------------- ----------- -------- --------- Measurement PT - 03/04/92 $100.00 $100.00 $100.00 FYE 12/31/92 $ 54.17 $108.88 $111.33 FYE 12/31/93 $ 45.83 $119.86 $102.17 FYE 12/31/94 $ 48.96 $121.44 $114.20 FYE 12/31/95 $107.29 $167.08 $145.68 FYE 12/31/96 $ 47.92 $205.44 $172.60
13 CERTAIN TRANSACTIONS In June 1991, Opta entered into a collaborative relationship with Pfizer, Inc. ("Pfizer") which included an equity investment in the Company. Pfizer purchased additional shares of the Company's Common Stock in 1994 and 1995. Separate from the equity investments, Opta licensed to the Pfizer Food Science Group the exclusive, worldwide right to manufacture and market EverFresh for use in seafood processing, and the exclusive rights to manufacture and market certain Opta Oat Fibers and OptaGrade products outside the U.S. in exchange for license fees and royalty payments. In January 1997, all agreements with Pfizer were terminated, except for the EverFresh license agreement which was assigned to an unrelated third party. Pfizer entered into a Securities Purchase Agreement with Nouvelle Holding Guyomarc'h S.A. ("Nouvelle") dated as of December 30, 1996 pursuant to which Nouvelle purchased 854,744 shares of Opta's Common Stock from Pfizer at a purchase price of $8.50 per share. During 1996, the Company had a non-interest bearing note receivable from Lewis C. Paine, III, President and Chief Executive Officer, secured by the Company's Common Stock owned by Mr. Paine, with a balance of $60,000 at January 1, 1996 and $40,000 at December 31, 1996. The term of the note calls for the forgiveness of the principal of the note and related interest ratably over a five year period as long as Mr. Paine remains employed by the Company or immediately if Mr. Paine is terminated by the Company without cause. PROPOSAL 2: APPROVAL OF INDEPENDENT ACCOUNTANTS The Board of Directors has appointed Price Waterhouse LLP as the Company's independent accountants for the 1997 fiscal year. The Board of Directors proposes that the stockholders ratify this appointment. Price Waterhouse LLP has served as the Company's independent accountants since its organization in 1991. Representatives of Price Waterhouse LLP will be present at the Meeting to respond to questions and will be given the opportunity to make a statement should they desire to do so. BOARD RECOMMENDATION THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR APPROVAL OF THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE 1997 FISCAL YEAR. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF COMMON STOCK VOTING IN PERSON OR BY PROXY AT THE MEETING IS REQUIRED FOR SUCH APPROVAL. IF THE APPOINTMENT IS NOT APPROVED BY THE STOCKHOLDERS, THE BOARD IS NOT OBLIGATED TO SELECT OTHER INDEPENDENT ACCOUNTANTS, BUT WILL CONSIDER SUCH UNFAVORABLE VOTE. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires the Company's Directors and officers, and persons who own more than 10% of the Company's Common Stock, to file with the Securities and Exchange Commission (the "SEC") initial reports of beneficial ownership and reports of changes in beneficial ownership of the Common Stock and other equity securities of the Company. Officers, Directors and greater than 10% beneficial owners are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. To the Company's knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal year ended December 31, 1996 all Section 16(a) filing requirements applicable to its Officers, Directors and greater than 10% beneficial owners were complied with. 14 STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING In order to be considered for inclusion in the Proxy Statement and form of proxy for the Company's 1998 Annual Meeting of Stockholders, stockholder nominations of persons for election to the Board and proposals of business to be considered by the stockholders must be received by the Company no earlier than February 16, 1998 and no later than March 17, 1998. Proposals should be sent to the attention of the Assistant Secretary at the Company's offices at 25 Wiggins Avenue, Bedford, Massachusetts 01730. Stockholder proposals and nominations for election to the Board at the 1998 Annual Meeting of Stockholders may be submitted to the Assistant Secretary of the Company and must include (a) as to each person whom the stockholder proposes to nominate for election or reelection as a Director all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); (b) as to any other business that the stockholder proposes to bring before the Meeting, a brief description of the business desired to be brought before the Meeting, the reasons for conducting such business at the Meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Company's books, and of such beneficial owner and (ii) the class and number of shares of the Company that are owned beneficially and held of record by such stockholder and such beneficial owner. OTHER MATTERS The 1997 Annual Meeting of Stockholders is called for the purposes set forth in the notice. The Board of Directors does not know of any matter for action by the stockholders at the Meeting other than the matters described in the notice. However, the enclosed proxy confers discretionary authority on the persons named therein with respect to matters which are not known to the Directors at the date of printing hereof and which may properly come before the Meeting. It is the intention of the persons named in the proxy to vote in accordance with their best judgment on any such matter. ANNUAL REPORT ON FORM 10-K Copies of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996 as filed with the Securities and Exchange Commission are available to stockholders upon written request addressed to the Assistant Secretary at the Company's offices at 25 Wiggins Avenue, Bedford, Massachusetts 01730. WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE URGED TO FILL OUT, SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE. By Order of the Board of Directors Jeffrey M. Wiesen Secretary April 18, 1997 15 PROXY OPTA FOOD INGREDIENTS, INC. PROXY 25 Wiggins Avenue, Bedford, Massachusetts 01730 PROXY SOLICITED BY THE BOARD OF DIRECTORS The undersigned hereby appoints Lewis C. Paine, III, and Scott A. Kumf, and each of them, with full power of substitution, the proxies of the undersigned to vote all of the shares of the Common Stock of Opta Food Ingredients, Inc. which the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held on May 20, 1997 or any adjournment thereof. In their discretion the proxies are authorized to vote upon such other business as may properly come before the meeting. This proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder. If no direction is made, this proxy will be voted "FOR" all nominees for Director and will be voted "FOR" Proposal 2. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and the related Proxy Statement. (PLEASE VOTE, SIGN AND DATE ON THE REVERSE SIDE) 1. Election of Directors. Nominees for election: A. S. Clausi, Anthony B. Evnin, Harry Fields, Glynn C. Morris, Charles W. Newhall, III, Lewis C. Paine, III and Frederic Stevenin. FOR all nominees WITHHOLD listed to the right AUTHORITY (Instructions: To withhold your vote for any individual nominee, write that (except as marked to vote for all nominees nominee's name on the line below.) to the contrary) listed to the right [_] [_] --------------------------------------------------------------------------------- 2. Approval of appointment of Price Waterhouse LLP as the I plan to attend the Company's Independent accountants for the fiscal year 1997. meeting [_] FOR AGAINST ABSTAIN [_] [_] [_] ---- Dated: __________________________________________, 1997 | ________________________________________________________ Signature ________________________________________________________ Signature (if held jointly) Please sign exactly as name appears at left. When shares are held by joint owners, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in such corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
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