UNITED STATES
SECURITIES AND EXCHNGE COMMISION
Washington, D. C. 20549
SCHEDULE 14A
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][X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-12
TOFUTTI BRANDS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x][X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)1) Title of each class of securities to which transaction applies:
(2)2) Aggregate number of securities to which transaction applies:
(3)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)4) Proposed maximum aggregate value of transaction:
(5)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)1) Amount previously paid:
(2)2) Form, Schedule or Registration Statement No.:
(3)3) Filing Party:
(4)4) Date Filed:
TOFUTTI BRANDS INC.
50 Jackson Drive
Cranford, New Jersey 07016
Telephone: (908) 272-2400
May 9, 20052006
To Our Shareholders:
On behalf of the Board of Directors, I cordially invite you to attend
the 20052006 Annual Meeting of the Shareholders of Tofutti Brands Inc. The Annual
Meeting will be held at 10:00 a.m. on Thursday, June 9, 2005,8, 2006, at the Crowne
Plaza, 36 Valley Road, Clark,Homewood
Suites, 2 Jackson Drive, Cranford, New Jersey. The Crowne PlazaHomewood Suites is located
on the
circle off exit 135136 of the Garden State Parkway (telephone no. (732) 574-0100)908-709-1980).
The matters expected to be acted upon at the Annual Meeting are
described in the attached Proxy Statement. During the meeting, shareholders who
are present at the meeting will have the opportunity to ask questions.
We hope that as many shareholders as possible will personally attend
the Annual Meeting. Whether or not you plan to attend the Annual Meeting, your
views are important. To assure your representation at the Annual Meeting, please
complete, sign and date the enclosed proxy card and promptly return it in the
enclosed envelope.
Sincerely,
/s/David Mintz
David Mintz
Chairman
and Chief Executive Officer
TOFUTTI BRANDS INC.
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 9, 20058, 2006
---------------------
Cranford, New Jersey
May 9, 20052006
The Annual Meeting of Shareholders of Tofutti Brands Inc. will be
held at the Crowne Plaza, 36 Valley Road, Clark,Homewood Suites, 2 Jackson Drive, Cranford, New Jersey, on
Thursday, June 9, 20058, 2006 at 10:00 a.m., for the following purposes:
1. To elect fivesix directors to the Board of Directors for the
ensuing year;
2. To ratify the selection of Amper, Politziner & Mattia, P.C. as
our independent registered public accounting firm for the
fiscal year ending December 31, 2005;30, 2006; and
3. To act upon any other matters that may properly be brought
before the Annual Meeting and any adjournment thereof.
Shareholders of record at the close of business on May 9, 20052, 2006 will be
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
By order of the Board of Directors,
/s/Steven Kass
Steven Kass
Secretary
PLEASE SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY
IN THE ENVELOPE PROVIDED FOR THAT PURPOSE.
TOFUTTI BRANDS INC.
50 Jackson Drive, Cranford, New Jersey 07016
--------------------------
PROXY STATEMENT
--------------------------
ANNUAL MEETING OF SHAREHOLDERS
June 9, 20058, 2006
This Proxy Statement is furnished to shareholders of Tofutti Brands
Inc. in connection with the Annual Meeting of Shareholders to be held at 10:00
a.m. on Thursday, June 9, 20058, 2006 at the Crowne Plaza, 36 Valley Road, Clark,Homewood Suites, 2 Jackson Drive,
Cranford, New Jersey, and at any adjournment thereof. The Homewood Suites are
located off exit 136 of the Garden State Parkway (telephone no. 908-709-1980).
The Board of Directors is soliciting proxies to be voted at the Annual Meeting.
This Proxy Statement and Notice of Annual Meeting, the proxy card and
our Annual Report to Shareholders are expected to be mailed to shareholders
beginning May 12, 2005.9, 2006.
Proxy Procedure
Only shareholders of record at the close of business on May 9, 20052, 2006 are
entitled to vote in person or by proxy at the Annual Meeting.
Our Board of Directors solicits proxies so that each shareholder has
the opportunity to vote on the proposals to be considered at the Annual Meeting.
When a proxy card is returned properly signed and dated, the shares represented
thereby will be voted in accordance with the instructions on the proxy card. If
a shareholder does not return a signed proxy card or does not attend the Annual
Meeting and vote in person, his or her shares will not be voted. Abstentions and
"broker non-votes" are not counted in determining outcomes of matters being
acted upon. They are counted only for determining a meeting quorum. If a
shareholder attends the Annual Meeting, he or she may vote by ballot.
Shareholders are urged to mark the boxes on the proxy card to indicate
how their shares are to be voted. If a shareholder returns a signed proxy card
but does not mark the boxes, the shares represented by that proxy card will be
voted as recommended by the Board of Directors. The proxy card gives the
individuals named as Proxies discretionary authority to vote the shares
represented on any other matter that is properly presented for action at the
Annual Meeting. A shareholder may revoke his or her proxy at any time before it
is voted by: (i) giving notice in writing to the Secretary of the company; (ii)
granting a subsequent proxy; or (iii) appearing in person and voting at the
Annual Meeting.
Cost of Solicitation
The cost of soliciting proxies will be borne by us. Proxies may be
solicited by our directors, officers or regular employees in person or by
telephone or other means. None of these persons will receive additional
compensation for such solicitation but will be reimbursed for
2
actual expenses in connection therewith. We will reimburse brokerage houses and
other custodians, nominees and fiduciaries for their expenses in accordance with
the regulations of the Securities and Exchange Commission concerning the sending
of proxies and proxy material to the beneficial owners of stock.
Voting
As of May 9, 2005,2, 2006, there were 5,636,8675,413,467 shares of our common stock
outstanding. The presence of a majority of the outstanding shares of the common
stock, represented in person or by proxy at the meeting, will constitute a
quorum. If a proxy in the accompanying form is properly executed and returned to
us in time for the Annual Meeting and is not revoked prior to the time it is
exercised, the shares represented by the proxy will be voted in accordance with
the directions specified therein for the matters listed on the proxy card.
Unless the proxy specifies that authority to vote is withheld, proxies will be
voted FOR each Proposal and otherwise in the discretion of the proxy holders as
to any other matter that may come before the Annual Meeting.
Any shareholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with our Secretary written notice thereof,
delivered to Tofutti Brands Inc., 50 Jackson Drive, Cranford, New Jersey 07016;
(ii) submitting a duly executed proxy bearing a later date; or (iii) appearing
at the Annual Meeting and giving the Secretary notice of his or her intention to
vote in person. Proxies solicited hereby may be exercised only at the Annual
Meeting and any adjournment thereof and will not be used for any other meeting.
To be elected a director, each nominee must receive a plurality of the
votes cast at the Annual Meeting for the election of directors. An affirmative
majority of the votes cast at the Annual Meeting is required to ratify the
appointment of auditors. Abstentions and broker non-votes are not counted in
determining the number of shares voted for or against any nominee for director
or any proposal.
Management has received indications from David Mintz, our Chief
Executive Officer, who is the beneficial owner of approximately 47%49% of the
outstanding shares of our common stock, that he presently intends to vote in
favor of all of the resolutions on the agenda for the Annual Meeting. Therefore,
Mr. Mintz has significant influence over the election of the fivesix nominees as directorsfor
director and the ratification of the appointment of Amper, Politziner & Mattia,
P.C. as our independent registered public accounting firm.
Our Annual Report for the fiscal year ended January 1,December 31, 2005, which
report is not part of this proxy solicitation, is being mailed to shareholders
with this proxy solicitation. It is anticipated that this Proxy Statement and
the accompanying form of proxy will first be mailed to shareholders on or about
May 12, 2005.9, 2006.
Proxy Statement Proposals
Each year at the Annual Meeting, the Board of Directors submits to
shareholders its nominees for election as directors. Shareholders also vote to
ratify or reject the appointment of auditors selected by the Board of Directors.
In addition, the Board of Directors may submit other lawful matters to the
shareholders for action at the Annual Meeting.
3
Shareholders may submit proposals for inclusion in our future proxy
material. These proposals must meet the shareholder eligibility and other
requirements of the Securities and 2
Exchange Commission. In order to be included
in our year 20062007 proxy material, a shareholder's proposal must be received not
later than January 2, 20062007 at our headquarters, 50 Jackson Drive, Cranford, New
Jersey 07016, Attention: Secretary.
ITEM 1. ELECTION OF DIRECTORS
The Board of Directors has proposed that fivesix directors be elected at
the Annual Meeting to serve until the next Annual Meeting of Shareholders and
the due election and qualification of their successors. The proxies will be
voted, unless otherwise specified, in favor of the election as directors of the
fivesix persons named below. Should any of the nominees not be available for
election, the proxies will be voted for a substitute nominee designated by the
Board of Directors. It is not expected that any of the nominees will be
unavailable. All of the nominees, with the exception of Mr. Gotthelf, are
members of the Board of Directors, with terms expiring as of the date of this
Annual Meeting.
Jeremy Wiesen, a director of our company since 1999 and a current member of
our Audit Committee, gave notice to the company shortly before the mailing of
this Proxy Statement that he did not wish to stand for re-election at the Annual
Meeting. Although we were unable to select a nominee for the vacant position in
the limited amount of time before the mailing of this Proxy Statement, we intend
to fill the vacant position with a director who complies with the independence
requirements of the Securities and Exchange Commission and the American Stock
Exchange. Such director will also serve on our Audit Committee. We thank Mr.
Wiesen for his many years of service to our company.
Background information with respect to the fivesix nominees for director
appears below. See "Security Ownership of Certain Beneficial Owners and
Management" for information regarding such persons' holdings of common stock.
Director
Nominee Principal Occupation Age Since
- ------- -------------------- --- ---------
David Mintz Chairman of the Board of Directors 74 1981
and Chief 73 1981
Executive Officer
Joseph Fischer Principal in FMM Investments 65 2004
Aron Forem President, Wuhl Shafman Lieberman Corp. 50 2000
Reuben Rapoport Director 7576 1983
Franklyn Snitow Partner, Snitow Kanfer Holtzer & Millus LLP 5859 1987
Joseph Fischer Principal in FMM Investments 66 2004
Aron Forem President, Wuhl Shafman Lieberman Corp. 51 2000
Philip Gotthelf President, EQUIDEX Incorporated and EQUIDEX 53 --
Brokerage Group
David Mintz has been the Chairman of our Board of Directors and our
Chief Executive Officer since August 1981.
Joseph Fischer was appointed to our Board of Directors in March 2004. He
has been the principal in FMM Investments, which manages private portfolios,
since 1992. Prior to that and since 1982, Mr. Fischer was the Controller of the
Swingline Division of American Brands Inc.
3
Aron Forem has been a director since 2000. Since 1980, he has been
president of Wuhl Shafman Lieberman Corp., located in Newark, New Jersey, which
is one of the largest produce wholesalers in the Northeast United States.
Reuben Rapoport, our former Director of Product Development who retired
in April 2003, has been a director since July 1983.
4
Franklyn Snitow has been a director since 1987. He has been a partner
in the New York law firm of Snitow Kanfer Holtzer & Millus, LLP, our general
counsel, and its predecessor firm since 1985.
Joseph Fischer was appointed to our Board of Directors in March 2004.
He has been the principal in FMM Investments, which manages private portfolios,
since 1992. Prior to that and since 1982, Mr. Fischer was the Controller of the
Swingline Division of American Brands Inc.
Philip Gotthelf, nominee for director, has been President of EQUIDEX
Incorporated (registered Commodity Trading Advisor) and EQUIDEX Brokerage Group
(registered Introducing Broker) since 1985. He has also been publisher of the
COMMODEX System and COMMODITY FUTURES FORECAST Service since 1975. He has
authored several financial books for Probus/McGraw Hill, McGraw Hill, and John
Wiley & Sons. Mr. Gotthelf is a graduate of Lehigh University with a B.S. in
Economics and Finance.
All of our directors will hold office until the next Annual Meeting of
Shareholders and until their successors have been elected and qualified.
Officers serve at the discretion of the Board of Directors. There are no family
relationships between any of our directors and executive officers. All of the
executive officers devote their full time to ourthe operations of theour company.
The Board recommends that the shareholders vote FOR the election of
each nominee for Director named above.
Board of Directors and Committees
Our business and affairs are managed under the direction of our Board
of Directors, composed of four non-employee directors and one employee director
as of the date of this Proxy Statement. As a small business issuer listed on the
American Stock Exchange, or AMEX, as of July 31, 2005 we are required to have a
board of directors comprised of at least 50% independent directors, within the
meaning of the AMEX Company Guide. Our Board of Directors establishes our
overall policies and standards and reviews the performance of management.
Members of the Board of Directors are kept informed of our operations at
meetings of the Board of Directors and its Audit Committee and through reports
and discussions with management. In addition, members of the Board of Directors
periodically visit our facilities. Members of management are available at Board
of Directors meetings and at other times to answer questions and to discuss
issues.
Our Board of Directors held two meetings during the fiscal year ended
January 1,December 31, 2005. Four of the six directors then in office were in attendance
at each meeting. As of July 31, 2005 we are required by the AMEX to hold
meetings of our Board of Directors on at least a quarterly basis and our
independent directors must meet at least annually in an executive session with
only the independent directors present. We do not have a policy with regard to
directors' attendance at annual meetings of shareholders, but we encourage our
directors to attend the annual meetings. At our 20042005 annual meeting of
shareholders, three of the sixfive directors then in office were present and in
attendance.
Our Board of Directors has an Audit Committee, but there are no
committees performing the functions of either a compensation committee or
nominating committee.
5
Our full Board of Directors fulfills the roles of a nominating
committee. It is the position of our Board of Directors that it is appropriate
for our company not to have a separate nominating committee in light of the
composition of our Board of Directors and the collective independence of our
independent directors, which enable the Board of Directors to fulfill the
4
functions of a standing committee. We are not currently required to have a
nominating committee; however, effective as of July 31, 2005, the AMEX requires
that our director nominations be selected, or recommended for the Board of
Directors' selection, either by a majority of our independent directors or a
nominating committee comprised solely of our independent directors. Messrs.
Fischer, Forem and Snitow meet the independence standards set forth in the AMEX
Company Guide. Mr. Gotthelf, nominee for director, also meets these standards.
Audit Committee
In fiscal 2004 and throughThrough May 1, 2005, the Audit Committee consisted of Messrs. Fischer,
Forem and Wiesen. Mr. Wiesen isdid not seekingseek reelection as a director of our
company, andcompany. Mr. Gotthelf will become a member of the Audit Committee upon his
election to the Board of Directors is currently seeking a
replacement for Mr. Wiesen on the Audit Committee.Directors. As a small business issuer listed on the
AMEX, as of July 31, 2005 our Audit Committee must have at least two members and
be comprised only of independent directors each of whom satisfies the respective
independence requirements of the Securities and Exchange Commission and the
AMEX. The Board of Directors has determined that all of our current Audit
Committee members are independent, as that term is defined under the
independence standards for audit committee members in the Securities and
Exchange Act of 1934, as amended, and in the listing standards of the AMEX. The
Board of Directors has also determined that Joseph Fischer is an audit committee
financial expert, as that term is defined in rules issued pursuant to the
Sarbanes-Oxley Act of 2002.
The Audit Committee is responsible for reviewing and helping to ensure
the integrity of our financial statements. Among other matters, the Audit
Committee, with management and our independent auditors, reviews the adequacy of
our internal accounting controls that could significantly affect our financial
statements, reviews with the independent accountants the scope of their audit,
their report and their recommendations, and recommends the selection of our
independent accountants. The Audit Committee held four meetings in addition to
the meetings of the entire Board of Directors during 2004.2005. As of July 31, 2005,
the AMEX requires that our Audit Committee meet on at least a quarterly basis.
The Board of Directors adopted and maintains a written charter for the
Audit Committee.
Report of Audit Committee
The members of the Audit Committee have been appointed by our Board of
Directors. The Audit Committee is governed by a charter which has been approved
and adopted by the Board of Directors and is reviewed and reassessed annually by
the Audit Committee. The Audit Committee is currently comprised of threetwo directors
who meet the independence and experience requirements of the American Stock
Exchange.Exchange, and after the election of Mr. Gotthelf, will consist of three members
who meet the requirements. The Audit Committee oversees (1) the integrity of the
financial statements of our company, (2) the qualifications, independence and
performance of our independent auditors, (3) our company's financial reporting
processes and
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accounting policies, (4) the performance of our company's internal audit
function, and (5) the compliance by our company with legal and regulatory
requirements. Management is responsible for the preparation and integrity of our
financial statements. In addition, our Audit Committee reviews and has oversight
over all related party transactions.
5
The Audit Committee reviewed our audited financial statements for the
fiscal year ended January 1,December 31, 2005 and members of the Audit Committee met with
both management and our external auditors to discuss those financial statements.
Management and the external auditors have represented to the Audit Committee
that the financial statements were prepared in accordance with the generally
accepted accounting principles. Members of the Audit Committee have received
from and discussed with the external auditors their written disclosure and
letter regarding their independence from our company as required by Independence
Standards Board Standard No. 1. Members of the Audit Committee also discussed
with the external auditors any matters required to be discussed by Statement on
Auditing Standards No. 61. Based upon these reviews and discussions, the Audit
Committee has recommended to the Board of Directors that the audited financial
statements be included in our Annual Report on Form 10-KSB for the fiscal year
ended January 1,December 31, 2005.
Audit Committee
Joseph Fischer
Aron Forem
Jeremy Wiesen
Stockholder Communications with the Board of Directors
Our stockholders may communicate with the members of our Board of
Directors by writing directly to the Board of Directors or specified individual
directors to:
Secretary
Tofutti Brands Inc.
50 Jackson Drive
Cranford, New Jersey 07016
Our Secretary will deliver stockholder communications to the specified
individual director, if so addressed, or to one of our directors who can address
the matter.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of May 9, 20052, 2006 certain information
regarding the ownership of our common stock, $.01 par value, for each person
known by us to be the beneficial owner of more than 5% of the outstanding shares
of common stock, for each executive officer named in the Summary Compensation
Table, for each of our directors seeking reelection and for our executive officers and such directors as
a group:
67
Amount of
Beneficial Percent of
Name Ownership(1) Class(2)
- ---- ------------ --------
David Mintz............................Mintz...................... 2,630,440 46.7%48.6%
Steven Kass............................ 795,000(3) 12.4%Kass...................... 795,000 (3) 12.8%
Financial & Investment Management
Group, Ltd. ........................... 380,350(4) 6.8%
John V. Winfield....................... 304,300(5) 5.4%..................... 498,835 (4) 9.2%
Reuben Rapoport........................ 90,000 1.6 %Rapoport.................. 85,000 1.5%
Franklyn Snitow........................Snitow.................. 24,000 *
Aaron Forem............................ 20,000(6)Forem...................... 20,000 (5) *
Joseph Fischer......................... 6,667(7)Fischer................... 13,334 (6) *
Philip Gotthelf.................. -- --
All Executive Officers,
Directors and DirectorsNominee for
Director as a group (6(7 persons)...................... 3,585,807(8) 55.5% 3,567,774 (7) 57.2%
- --------------
* Less than 1%.
The address of Messrs. Mintz, Kass, Fischer, Rapoport and RapoportGotthelf is
c/o Tofutti Brands Inc., 50 Jackson Drive, Cranford, New Jersey 07016.
The address of Mr. Snitow is 575 Lexington Avenue, New York, New York
10017. The address of Mr. Forem is 52-62 Cornelia Street, Newark,
New Jersey 07105. Each of these persons has sole voting and/or
investment power of the shares attributed to him.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
relating to options currently exercisable or exercisable within 60 days
of May 9, 20052, 2006 are deemed outstanding for computing the percentage of
the person holding such securities but are not deemed outstanding for
computing the percentage of any other person. Except as indicated by
footnote, and subject to community property laws where applicable, the
persons named in the table above have sole voting and investment power
with respect to all shares shown as beneficially owned by them.
(2) Based on 5,636,8675,413,467 shares issued and outstanding as of May 9, 2005.2, 2006.
(3) Issuable upon the exercise of 795,000 currently exercisable stock
options.
(4) Based on the information contained in a Schedule 13 G13G filed by the
Financial & Investment Management Group, Ltd., or the FIM Group, filed February 1, 2005.9, 2006.
The address of the FIMFinancial & Investment Management Group, Ltd. is 111
Cass Street, Traverse City, MI 49684.
(5) Based on a Schedule 13 D filed by Mr.Winfield filed December 23, 2004. The
address of Mr. Winfield is 820 Moraga Drive, Los Angeles, CA 90049.
(6) Issuable upon the exercise of 6,667 currently exercisable stock options.
(7) Includes 20,000 shares issuable upon the exercise of currently
exercisable stock options.
(8)(6) Includes 821,66713,334 shares issuable upon the exercise of currently
exercisable stock options.
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(7) Includes 828,334 shares issuable upon the exercise of currently
exercisable stock options.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our officers and directors and persons who own more than ten percent of
our common stock to file initial
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statements of beneficial ownership (Form 3) and statements of changes in
beneficial ownership (Forms 4 or 5) of common stock and other equity securities
of the company with the Securities and Exchange Commission (the "SEC") and the
American Stock Exchange. Officers, directors and greater than ten-percent
stockholders are required by SEC regulation to furnish us with copies of all
such forms they file.
To our knowledge, based solely on our review of the copies of such
forms received by us, or written representations from certain reporting persons
that no additional forms were required for those persons, we believe that during
fiscal 20042005 all persons subject to these reporting requirements filed the
required reports on a timely basis, except for the following inadvertently late
filings by directors: Mr. Snitow was late filing two Form 4s and Mr. Rapoport
was late filing one Form 4.basis.
Executive Compensation
The following table sets forth information concerning the total
compensation during the last three fiscal years for our executive officers whose
total salary in fiscal 20042005 totaled $100,000 or more:
SUMMARY COMPENSATION TABLE
--------------------------
Annual Long-Term
Compensation Compensation
------------ ------------
Securities Underlying
Name and Principal Position Year Salary ($) Options (#)
- --------------------------- ---- ---------- -----------
David Mintz, 2004 $656,000(1)2005 $800,000(1) --
Chief Executive Officer 2003 603,000(2)2004 656,000(2) --
and Chairman of the Board 2002 500,000(3)2003 603,000(3) --
Steven Kass, 2004 $277,000(1)2005 $275,000(1) --
Chief Financial Officer, 2003 275,000(2)2004 277,000(2) --
Secretary and Treasurer 2002 250,000(3)2003 275,000(3) --
- -----------------------------
(1) Includes bonuses of $350,000 and $150,000 for Messrs. Mintz and Kass,
respectively, accrued at year end and paid on or about April 24, 2006.
(2) Includes bonuses of $350,000 and $150,000 for Messrs. Mintz and Kass,
respectively, accrued at year end and paid on or about April 1, 2005.
(2)(3) Includes bonuses of $350,000 and $150,000 for Messrs. Mintz and Kass,
respectively, accrued at year endyear-end and paid on or about January 16,
2004.
(3) Includes bonuses of $250,000 and $125,000 for Messrs. Mintz and Kass,
respectively, accrued at year-end and paid on or about March 28, 2003.
8
The aggregate value of all other perquisites and other personal
benefits furnished in each of the last three years to each of these executive
officers was less than 10% of each officer's salary for such year.
There are currently no employment agreements between us and any of our
officers. Mr. Snitow and Mr. Forem did not earn compensationreceive any cash remuneration for
their services as directors in the last three years. Mr. Fischer did not
receive any cash remuneration for his service as a director in
the last three years. In 20029
2004 and 2003,received $3,500 in 2005. Mr. Wiesen, who resigned from the Board of
Directors in June 2005, earned $2,500$1,000, $0 and $1,000,$3,500 in 2003, 2004 and 2005,
respectively, for his services as director . For 2004, Mr Wiesen received $3,500
in cash compensation for his services as a director, which was paid in January
2005. In 2002, Mr. Forem donated his $1,000 fee for services as director to
charity and did not receive any earned compensation in 2003 or 2004. Since his
appointment in March 2004, Mr. Fischer received $3,500 in cash compensation for
his service as a director, which was paid in January 2005. Mr. Fischer was
granted options to purchase 20,000 shares of common stock at fair market value
as of June 3, 2004.director.
On January 27, 2005, our Board of Directors, based on the
recommendation of the independent directors of our company, adopted a resolution
increasing David Mintz's salary by $150,000 to $450,000 effective as of January
2, 2005.
Stock Options
Neither of the officers named above in the Summary Compensation Table
received a grant of stock options nor exercised stock options in our last fiscal
year.
The following table provides information concerning stock options held
in 20042005 by each of the executive officers named above in the Summary
Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
-----------------------------------------------------------------------------------------
Number of Shares Underlying Value of Unexercised
Shares Unexercised Options at in the Money Options
Acquired on Value FY-End (#) at FY-End ($)
Name Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------ ------------ ------------------------- -------------------------
David Mintz, -- $ -- -- --
Chief Executive Officer
and Chairman of the Board
Steven Kass, -- -- 795,000(E) 1,904,000(E)$1,877,000(E)(1)
Chief Financial Officer,
Secretary and Treasurer
- -----------------------
- -----------------------(E) Exercisable options
(1) Calculated by subtracting option exercise price from year-end market
price of $3.29$3.14 per share.
(E) Exercisable options
Certain Transactions
In view of the strong financial condition of our company, the Board of
Directors on October 17, 2003 authorized a transaction with David Mintz whereby
Mr. Mintz surrendered
9
300,000 of his options in consideration of the payment to him of $358,000, an
amount equal to the difference of 75% of the closing market price of our common
stock on that date ($3.45) less the exercise price of such options. In October
2003, $358,000 was paid to Mr. Mintz.
On October 17, 1994, our Board of Directors adopted a resolution wherein we
were authorized to purchase a $1 million plan on the life of our Chairman and
President. The purpose of this transaction was to provide the Mintz estate with
funds sufficient to pay any estate taxes levied upon the transfer of Mr. Mintz's
Tofutti stock, which would otherwise have necessitated a sale of the stock which
might have had the negative effect of significantly decreasing the market price
of the stock to the detriment of other shareholders. Upon the death of the
family member or termination of the policy prior to death, we were guaranteed to
receive a complete refund of all premiums paid plus interest at 4%. As of
December 28, 2002, the $200,000 balance receivable under this contract was
completely secured by the guaranteed cash surrender value of the policy and the
assets in a related party trust created specifically to generate payment to us
in the event of termination of the policy prior to the death of the insured.
Under the Sarbanes-Oxley Act of 2002, public companies are prohibited from
extending credit to any director or executive officer, or from renewing or
extending existing loans. As a result, public companies have taken the view that
they may not make annual premium payments on split dollar insurance plans, since
they may be deemed to be prohibited loans. In 2003, we ceased making any
payments under the policy, subject to future guidance as to the legality of such
payments. On December 24, 2003, we sold the policy to Mr. Mintz for $208,000,
which represented all previous premiums paid by us plus interest of 4% per
annum.
On January 12, 2004, our Board of Directors authorized us to enter into
a transaction with David Mintz whereby Mr. Mintz surrendered an additional 300,000 of his
stock options, which represented the balancewere all of the options held by him at such time, in
consideration of the payment to him of $324,000, an amount equal to the
difference of 75% of the average closing price of our common stock on the nine
days of trading from December 29, 2003 through January 9, 2004 ($3.00) less the
exercise price of such options. In January 2004, $324,000 was paid to Mr. Mintz.
The law firm of Snitow Kanfer Holtzer & Millus, LLP, of which one of
directors, Franklyn Snitow, is a partner, representsrepresented us in our legal action
against thea candy manufacturer. During the fiscal years ended December 31, 2005
and January 1, 2005, and December 27, 2003, we paid $47,000$98,000 and $9,000,$47,000, respectively, in legal fees to
Snitow Kanfer Holtzer & Millus, LLP.
10
ITEM 2. APPOINTMENT OF AUDITORS
Effective January 14, 2005, Wiss & Company, LLP, or Wiss, our independent
accountants since April 1999, notified us that they would not stand for
reappointment as our independent accountants. Wiss did not qualify their audit
opinion for either of the past two fiscal years as to uncertainty, audit scope
or accounting principles. There were no disagreements with Wiss on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure in any of the two most recent fiscal years or any later
interim period. None of the kinds of events listed in (A) or (B) of Item
304(a)(1)(iv) of Regulation S-B occurred during either of our two most recent
fiscal years or any later interim period. Wiss was asked to provide a letter
addressed to the SEC stating that they agreed with the above statements.
10
This letter was filed as Exhibit 16 to our Form8-K/A bearing a cover date of
January 14, 2005 on January 25, 2005.INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS
On January 18, 2005, our Audit Committee appointed Amper, Politziner &
Mattia, P.C. as our independent registered public accountants and on January 25,
2005, Amper, Politziner & Mattia, P.C. accepted the appointment as our
independent registered public accountants.accountants and they have acted as such since that
time.
The following resolution will be offered by the Board of Directors at
the Annual Meeting.
"RESOLVED: That the selection of Amper, Politziner & Mattia,
P.C. by the Board of Directors to act as our independent
registered public accountants and conduct the annual audit of
the financial statements of Tofutti Brands Inc. for the fiscal
year ending December 31, 200530, 2006 is ratified, confirmed and
approved."
The Board of Directors believes that Amper, Politziner & Mattia, P.C.
has the necessary knowledge of our operations, and the personnel, professional
qualifications and independence to act as our auditors.independent registered public
accountants. The Board of Directors recommends that the shareholders ratify and
approve the selection of Amper, Politziner & Mattia, P.C. as our auditorsindependent
registered public accountants for the fiscal year ending December 31, 2005.30, 2006.
In the event this resolution does not receive the necessary vote for
adoption, or if for any reason Amper, Politziner & Mattia, P.C. ceases to act as
our auditors,independent registered public accountants, the Board of Directors will
appoint other independent registered public accountants as our auditors.accountants.
Representatives of Amper, Politziner & Mattia, P.C. will attend the
Annual Meeting. They will be available to respond to appropriate questions from
shareholders at the meeting and will have an opportunity to make a statement if
they desire to do so.
Fees Paid to Independent Registered Public Accountants
The following table sets forth, for each of the last two fiscal years,
the fees paid to our independent public accountants.
Fiscal Year Ended,
-------------------------------
January 1, December 27,31,
2005 2003
--------------- -----------------2005
------------ --------------
Audit Fees (1) .................... $36,225.................. $33,000 $66,000
Audit-Related Fees .............................. -- --
Tax Fees .................................................. -- --
All Other Fees ...................................... -- --
--------------- ----------------------------- --------------
Total ............................ $36,225(2) $33,000(3).......................... $33,000 $66,000
============ ==============
- -----------------------
11
(1) "Audit Fees" are fees for professional services rendered by our
independent accountants for the audit of our annual financial
statements and review of our financial statements included in our Form
10-KSB, and services that are normally provided by our independent
accountants in connection with statutory and regulatory filings or
engagements for each of the fiscal years.
(2) Fees paid to Amper, Politziner & Mattia, P.C. in 2005 for the fiscal 2004
audit.
(3) Fees paid to Wiss & Company, LLP in 2004.
11
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee is responsible for the appointment, compensation
and oversight of the work of our independent auditors.registered public accountants. Our
Audit Committee has established a policy for pre-approving the services provided
by our independent auditorsregistered public accountants in accordance with the auditor
independence rules of the Securities and Exchange Commission. The policy is
designed to ensure that the Audit Committee will not delegate to management the
Audit Committee's responsibilities, including the pre-approval of services to be
performed by the independent auditors.registered public accountants.
The policy requires the review and pre-approval by the Audit Committee
of all audit and permissible non-audit services provided by our independent
auditors.registered public accountants. A proposed service may either be pre-approved by
the Audit Committee, or otherwise requires the specific pre-approval of the
Audit Committee, on a case-by-case basis. Any proposed services exceeding
pre-approved levels will also require specific pre-approval by the Audit
Committee.
The term of any general pre-approval is 12 months from the date of
pre-approval, unless the Audit Committee considers a different period and states
otherwise. The Audit Committee will annually review and pre-approve the services
that may be provided by the independent auditorregistered public accountants without
obtaining specific pre-approval from the Audit Committee. The Audit Committee
may add to or deduct from the list of general pre-approved services from time to
time, based on subsequent determinations. The Audit Committee will monitor the
audit services engagement on a quarterly basis and will also approve, if
necessary, any changes in terms, conditions and fees resulting from changes in
audit scope, company structure or other items. Requests or applications to
provide services that require specific approval by the Audit Committee will be
submitted by our Chief Financial Officer to the Audit Committee.
All of the audit services provided by the independent auditorsregistered public
accountants in fiscal year 20042005 were approved by the Audit Committee under its
pre-approval policies.
The Board of Directors recommends a vote FOR the foregoing proposal.
OTHER MATTERS
Our Board of Directors does not intend to bring any matters before the
Annual Meeting other than those specifically set forth in the Notice of the
Annual Meeting and knows of no matters to be brought before the Annual Meeting
by others. If any other matters properly come before the Annual Meeting, it is
the intention of the persons named in the accompanying proxy to vote such proxy
in accordance with the judgment of the Board of Directors.
Our financial statements are included in our Annual Report to
Shareholders for the 20042005 fiscal year, which was expected to be mailed to the
shareholders beginning May 12, 2005.9, 2006.
12
A COPY OF OUR 20042005 ANNUAL REPORT ON FORM 10-KSB FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS AVAILABLE WITHOUT CHARGE TO THOSE
SHAREHOLDERS WHO WOULD LIKE MORE DETAILED INFORMATION CONCERNING THE COMPANY.
TO OBTAIN A COPY, PLEASE WRITE TO: STEVEN KASS, SECRETARY, TOFUTTI BRANDS INC.,
50 JACKSON DRIVE, CRANFORD, NEW JERSEY 07016.
By Order of the Board of Directors,
/s/Steven Kass
Steven Kass
Secretary
Dated: May 9, 2005
132006
12
APENDIXAPPENDIX A
TOFUTTI BRANDS INC.
50 Jackson Drive
Cranford, New Jersey 07016
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David Mintz and Steven Kass, or either
of them, attorneys or attorney of the undersigned, for and in the names(s) of
the undersigned, with power of substitution and revocation in each to vote any
and all shares of common stock, par value $.01 per share, of Tofutti Brands Inc.
(the "Company"), which the undersigned would be entitled to vote as fully as the
undersigned could if personally present at the Annual Meeting of Shareholders of
the Company to be held on June 9, 20058, 2006 at 10:00 a.m. at the Crowne Plaza, 36
Valley Road, Clark,Homewood Suites, 2
Jackson Drive, Cranford, New Jersey and at any adjournment or adjournments
thereof, hereby revoking any prior proxies to vote said shares, upon the
following items of business more fully described in the notice of and proxy
statement for such Annual Meeting (receipt of which is hereby acknowledged):
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF SHAREHOLDERS OF
TOFUTTI BRANDS INC.
June 9, 20058, 2006
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
1. The election of fivesix Directors.
NOMINEES:
[ ] FOR ALL NOMINEES ( ) DAVID MINTZ
( ) JOSEPH FISCHER
( ) ARON FOREM
[ ] WITHHOLD AUTHORITY FOR ALL NOMINEES ( ) PHILIP GOTTHELF
( ) REUBEN RAPOPORT
( ) FRANKLYN SNITOW
[ ] FOR ALL EXCEPT (See instructions below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s),
- ----------- mark "FOR ALL EXCEPT" and fill in the circle next to each
nominee you wish to withhold, as shown here: (X)
2. To ratify the selection of Amper, Politziner & Mattia, P.C. as the
Company's independent registered public accounting firm for the fiscal year
ending December 31, 2005.30, 2006.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the meeting, or
any adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. UNLESS OTHERWISE INDICATED, THIS
PROXY WILL BE VOTED FOR THE (i) ELECTION OF THE FIVESIX NOMINEES FOR DIRECTOR NAMED
IN ITEM 1 AND (ii) RATIFICATION OF THE SELECTION OF AMPER, POLITZINER & MATTIA,
P.C. AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2005.30, 2006.
To change the address on your account, please check the box at right and
indicate your new address in the space above. Please note that changes to the
registered name(s) on the account may not be submitted via this method. [ ]
Signature of Shareholder__________ Date _____
Signature of Shareholder__________ Date _____
Note:Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.