<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
VILLAGE SUPER MARKET, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(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:
------------------------------------------------------------------------
<PAGE> 2
VILLAGE SUPER MARKET, INC.
733 MOUNTAIN AVENUE
SPRINGFIELD, NEW JERSEY 07081
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 5, 1997
------------------------
The Annual Meeting of the shareholders of Village Super Market, Inc. will
be held at the offices of the Company, 733 Mountain Avenue, Springfield, New
Jersey 07081 on Friday, December 5, 1997 at 10:00 A.M. for the following
purposes:
(1) To elect eight directors for the ensuing year;
(2) To ratify the selection of independent public accountants;
(3) To vote on a proposal to adopt the Company's 1997 Incentive and
Non-Statutory Stock Option Plan; and
(4) To transact any other business which may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on October 3, 1997
as the record date for the determination of the shareholders entitled to notice
of and to vote at the meeting and any adjournment thereof.
By order of the Board of Directors,
ROBERT SUMAS,
Secretary
October 30, 1997
<PAGE> 3
VILLAGE SUPER MARKET, INC.
733 MOUNTAIN AVENUE
SPRINGFIELD, NEW JERSEY 07081
------------------------
PROXY STATEMENT
DECEMBER 5, 1997
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement and the accompanying form of proxy are being mailed to
shareholders of Village Super Market, Inc. (the "Company") in connection with
the solicitation by and on behalf of the management of the Company of proxies to
be voted at the Annual Meeting of Shareholders (the "Annual Meeting") to be held
at the offices of the Company, 733 Mountain Avenue, Springfield, New Jersey on
December 5, 1997 at 10:00 a.m. and at all postponements or adjournments thereof.
At the close of business on October 3, 1997, the Company had outstanding
and entitled to vote 1,315,800 shares of Class A common stock, no par value, and
1,594,076 shares of Class B common stock, no par value. The holders of the
outstanding shares of Class A Stock are entitled to one vote per share and the
holders of Class B Stock are entitled to ten votes per share. Shareholders of
record at the close of business on October 3, 1997 are entitled to vote at this
meeting.
All shares of Common Stock represented by properly executed proxies will be
voted at the Annual Meeting, unless such proxies previously have been revoked.
Unless the proxies indicate otherwise, the shares of Common Stock represented by
such proxies will be voted for the election of management's nominees for
directors, to ratify the Company's 1997 Incentive and Non-Statutory Stock Option
Plan and to ratify the selection of independent public accountants. Management
does not know of any other matter to be brought before the Annual Meeting.
The Company's address is 733 Mountain Avenue, Springfield, New Jersey and
its telephone number is (973) 467-2200. This notice, proxy statement and
enclosed form of proxy are being mailed to shareholders on or about October 30,
1997.
Any shareholder who executes and delivers a proxy may revoke it at any time
prior to its use by: (a) delivering written notice of such revocation to
Secretary of the Company at its office; (b) delivering to the Secretary of the
Company a duly executed proxy bearing a later date; or (c) appearing at the
Meeting and requesting the return of his or her proxy.
YOU ARE REQUESTED TO COMPLETE AND SIGN THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ENVELOPE PROVIDED FOR THAT PURPOSE.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's capital stock by: (i) persons known by the
Company to own beneficially more than 5% of its Class A Stock or Class B Stock;
(ii) each director of the Company; and (iii) all directors and executive
officers of the Company collectively:
<TABLE>
<CAPTION>
CLASS A STOCK(1) CLASS B STOCK(1)
------------------------------ -------------------------------
PERCENTAGE PERCENTAGE
SHARES OF SHARES OF
NAME(2) OWNED CLASS(3) OWNED CLASS(4)
------- -------- -------- --------
<S> <C> <C> <C> <C>
Estate of Nicholas Sumas....... 87,601 6.7% 191,709 12.0%
Perry Sumas.................... 104,565(5)(11)(12) 7.9 541,000(6)(7) 33.9
James Sumas.................... 39,094(5)(12)(14) 3.0 274,857(6)(7)(8) 17.2
Robert Sumas................... 37,522(5)(12)(15) 2.9 181,958(6)(9) 11.4
William Sumas.................. 66,412(11)(12) 5.0 126,956 8.0
John Sumas..................... 81,677(10)(11)(12) 6.2 114,252 7.2
George J. Andresakes........... 1,788 * 20,000(6) 1.3
John J. McDermott.............. 100 * -- --
Norman Crystal................. 158,700(17) 12.1 109,280(18) 6.9
All directors and executive
officers as a group and the
Estate of Nicholas Sumas (11
persons)..................... 441,715(13) 33.6% 1,436,840 90.0%
Towle & Co. ("Towle").......... 71,200(16) 5.4% -- --
Tweedy, Browne Company L.P.
("TBC") and Vanderbilt Part-
ners, L.P. ("Vanderbilt").... 165,100(19) 12.5% -- --
</TABLE>
- - ---------------
(1) Except as noted, each person has sole investment power and sole voting
power with respect to the shares beneficially owned.
(2) The address of each of the Company's principal shareholders is in care of
the Company, 733 Mountain Avenue, Springfield, New Jersey 07081.
(3) Based upon 1,315,800 shares of Class A Stock outstanding.
(4) Based upon 1,594,076 shares of Class B Stock outstanding.
(5) Includes 25,680 shares held by the Company's pension trust of which Perry
Sumas, James Sumas and Robert Sumas are trustees.
(6) Includes 20,000 shares held by a charitable trust of which Perry Sumas,
James Sumas, Robert Sumas and George J. Andresakes are trustees.
(7) Includes 63,172 shares as to which Perry Sumas and James Sumas have agreed
to share the power to vote pursuant to a Voting Agreement dated March 4,
1987.
(8) Includes 2,940 shares owned jointly by Mr. and Mrs. James Sumas; and 9,955
shares owned by Mrs. James Sumas; and 3,280 shares held by Mr. and Mrs.
James Sumas as custodians for their children.
(9) Includes 104 shares owned jointly by Mr. and Mrs. Robert Sumas; and 48,058
shares owned by Mrs. Robert Sumas.
(10) Includes 100 shares owned by Mrs. John Sumas and 1,200 shares held by Mr.
and Mrs. John Sumas as custodians for their minor children.
(11) Includes 52,167 shares held in the name of Perry Sumas, William Sumas and
John Sumas as Co-Trustees of a Trust for the benefit of the grandchildren
of Perry Sumas.
(12) Includes 8,000 shares represented by options exercisable by him under the
Company's Employee Stock Option Plan.
(13) Includes 58,000 shares represented by options exercisable by all officers
and directors under the Company's Employee Stock Option Plan.
(14) Includes 3,842 shares owned by Mrs. James Sumas.
(15) Includes 3,842 shares owned by Mrs. Robert Sumas.
(16) In its capacity as investment advisor, Towle may be deemed to be the
beneficial owner of 71,200 shares of the Company. Towle has sole
dispositive power over 20,500 shares and shared dispositive power for
50,700 shares. Towle's address is 1714 Deer Tracks Trail, St. Louis, MO
63131.
(17) Includes 14,500 shares owned by Mrs. Norman Crystal.
(18) Includes 28,400 shares owned by Mrs. Norman Crystal.
(19) Pursuant to a Schedule 13D filed November 20, 1995, TBC and Vanderbilt may
be deemed to be the beneficial owners of 165,160 shares of the Company.
They have shared dispositive power over 155,160 shares and have sole
dispositive power over 10,000 shares. The address of TBC and Vanderbilt is
52 Vanderbilt Avenue, New York, N.Y. 10017.
* Less than 1%.
The Estate of Nicholas Sumas and these five members of the Sumas family
beneficially own 195,497 shares of Class A Stock and 1,307,560 shares of Class B
Stock, or 76.9% of the combined voting power.
The aggregate number of shares of Class B Stock owned by Perry Sumas and
his sons, William Sumas and John Sumas, exceeds the aggregate number of shares
of Class B Stock owned by the Estate of Nicholas Sumas and his sons, James Sumas
and Robert Sumas (the "Excess Shares"). Perry Sumas and James Sumas have entered
into an agreement whereby the Excess Shares will be voted pursuant to the mutual
agreement of James Sumas and Perry Sumas. The voting agreement will be
automatically cancelled if
2
<PAGE> 5
Perry Sumas either: (i) converts the Excess Shares into shares of Class A Stock;
or (ii) exchanges 50% of the Excess Shares for shares of Class A Stock owned by
the Estate of Nicholas Sumas.
ELECTION OF DIRECTORS
The following eight persons will be nominated by the management of the
Company for election as directors at the Annual Meeting. If elected, they will
serve until their successors are duly elected and qualified at the next Annual
Meeting of Shareholders, which is expected to be held on December 4, 1998.
Directors shall be elected by a plurality of the votes cast. All of the nominees
are now directors of the Company.
Certain information is given below with respect to each nominee for
election as a director. The table below and the following paragraphs list their
respective ages, positions and offices held with the Company, the period served
as a director and business experience during past 5 years. Perry Sumas is the
father of William Sumas and John Sumas and is the uncle of James Sumas and
Robert Sumas. The other nominees are not related.
NOMINEES
The following table sets forth information concerning the nominees for
director:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
-----------
<S> <C> <C>
Perry Sumas................... 82 President, Chief Executive Officer
and
Director
James Sumas................... 64 Chief Operating Officer, Treasurer
and Chairman of the Board of
Directors
Robert Sumas.................. 56 Executive Vice President, Secretary
and Director
William Sumas................. 50 Executive Vice President and Director
John Sumas.................... 48 Executive Vice President and Director
George J. Andresakes.......... 84 Director
John J. McDermott............. 72 Director
Norman Crystal................ 71 Director
</TABLE>
Perry Sumas, together with Nicholas Sumas, founded the Company in 1937. He
has served as a Director of the Company since its incorporation in 1955 and has
served as President and Chief Executive Officer since 1973.
James Sumas was elected Chairman of the Board in 1989. He also serves as
the Company's Chief Operating Officer and as its Treasurer. He has served as
Vice President, Treasurer and a Director of the Company since its incorporation
in 1955. James Sumas is Vice Chairman of Wakefern Food Corporation and is a
member of its Board of Directors. Mr. Sumas also is the Chairman of Wakefern's
Grocery Committee and its Advertising Committee. In addition, he is Vice
Chairman of Wakefern's Sales and Merchandising Committee and of ShopRite
Supermarkets, Inc., Wakefern's supermarket operating subsidiary. Mr. Sumas also
is a member of Wakefern's Finance, Trade Name and Trademark and Strategic
Planning Committees.
Robert Sumas has served as Vice President, Secretary and a Director of the
Company since 1969. Since 1989, he has served as an Executive Vice President. He
has responsibility for finance and administration matters and retail computer
operations. Robert Sumas is Chairman of Wakefern's General Merchandise Committee
and is a member of Wakefern's Communications, Consumer Affairs and Property
Management Committees.
William Sumas has served as Vice President and a Director of the Company
since 1980. Since 1989, he has served as an Executive Vice President. He has
responsibility for real estate development. William Sumas is Chairman of
Wakefern's Commercial Bakery Committee and is a member of Wakefern's Loss
Prevention Policy Committee.
John Sumas has served as Vice President and a Director of the Company since
1982. Since 1989, he has served as an Executive Vice President. He has
responsibility for the Company's frozen food, appetizing and fresh bakery
operations. John Sumas is a member of Wakefern's Frozen Food, Dairy/Deli, Fresh
Bakery and Liquor Committees.
3
<PAGE> 6
George J. Andresakes has served as a Director of the Company since 1969. He
was General Counsel to the Company until 1979 and is now retired.
John J. McDermott has served as a Director of the Company since 1982. Mr.
McDermott is the President of John J. McDermott Enterprises, a bank consulting
firm. He was Executive Vice President of Dollar Dry Dock Savings from 1983 until
he retired in 1989. Mr. McDermott previously served as General Counsel to the
Company from 1982 to 1983.
Norman Crystal has served as a Director of the Company since 1992. Mr.
Crystal is an owner of an entity that owns and manages apartment complexes. In
addition, Mr. Crystal is a registered floor broker with the Commodity Futures
Trading Commission and Mr. Crystal is an independent commodities and securities
investor.
The Certificate of Incorporation includes a provision that no director
shall be personally liable for monetary damages to the Company or its
shareholders for a breach of any fiduciary duty except for: (i) breach of a
director's duty of loyalty; (ii) acts and omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii)
intentionally or knowingly authorizing any unlawful dividends or distributions;
and (iv) any transaction from which a director derived an improper personal
benefit.
Directors who are not employees of the Company receive $250 per diem for
attendance at meetings of the Board of Directors.
DIRECTORS MEETINGS AND COMMITTEES
The Board held three meetings in fiscal 1997. All directors attended at
least 75% of the meetings of the Board. The Board does not have a standing
nominating committee.
The Executive Committee, which consists of Perry Sumas, James Sumas, Robert
Sumas, William Sumas and John Sumas, meets on call and is authorized to act on
all matters pertaining to corporate policies and overall Company performance.
The Audit Committee, which consists of Robert Sumas, George Andresakes and
John J. McDermott, reviews the internal controls of the Company, meets with the
Company's financial personnel and certified public accountants in connection
with these reviews, and recommends to the Board the appointment of independent
certified public accountants to serve as the Company's auditors for the ensuing
year, subject to ratification by the stockholders at the Annual Meeting. The
committee met three times during fiscal 1997.
The Compensation Committee, which consists of Perry Sumas, James Sumas and
George Andresakas, establishes the compensation of the officers of the Company.
Members of each committee attended 75% or more of the meetings of their
respective committees.
4
<PAGE> 7
EXECUTIVE COMPENSATION
Except for the Stock Option Plan, the Company does not have any long term
compensation plans. No bonuses were awarded and no stock options were granted to
the Chief Executive Officer and four named executive officers during the last
three fiscal years. The following table sets forth the compensation paid by the
Company during the last three fiscal years to the Chief Executive Officer and
the four most highly compensated executive officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
OTHER
ANNUAL
NAME AND POSITION YEAR SALARY COMPENSATION(A)
- - ------------------------------------------------- ---- -------- ---------------
<S> <C> <C> <C>
Perry Sumas...................................... 1997 229,950 --
President and Chief Executive Officer 1996 219,450 --
1995 199,500 --
James Sumas...................................... 1997 343,055 2,250
Chairman of Board and Chief Operating Officer 1996 333,890 2,310
and Treasurer 1995 303,603 2,310
Robert Sumas..................................... 1997 290,010 2,250
Executive Vice President 1996 264,900 2,310
and Secretary 1995 267,572 1,989
William Sumas.................................... 1997 248,635 2,250
Executive Vice President 1996 218,780 2,014
1995 203,641 2,002
John Sumas....................................... 1997 264,335 2,250
Executive Vice President 1996 246,000 2,310
1995 223,565 2,016
</TABLE>
- - ---------------
(a) Company Paid 401K match
The following table sets forth information with respect to the exercise of
options during fiscal 1997 and the value of the unexercised options as of July
26, 1997.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED VALUE OF
SHARES OPTIONS AT UNEXERCISED
ACQUIRED ON VALUE JULY 26, IN-THE-MONEY
NAME EXERCISE REALIZED 19971 AT JULY 26, 19972
- - ---------------------------------------- ----------- -------- ------------- -----------------
<S> <C> <C> <C> <C>
Perry Sumas............................. 0 0 8,000 $ 6,000
James Sumas............................. 0 0 8,000 $ 6,000
Robert Sumas............................ 0 0 8,000 $ 6,000
William Sumas........................... 0 0 8,000 $ 6,000
John Sumas.............................. 0 0 8,000 $ 6,000
</TABLE>
- - ---------------
1 All outstanding options held by Executive Officers were exercisable at year
end.
2 Based upon the price of $8.75 as of July 26, 1997.
5
<PAGE> 8
BENEFIT PLANS
The Company maintains a defined benefit pension plan for employees not
covered by a collective bargaining agreement who have been employed with the
Company for more than six months and who are over the age of twenty-one. The
amount of the Company's contribution to this plan with respect to a specified
person cannot readily be separated or individually calculated by the actuaries
for the plan. For purposes of determining plan benefits, compensation is the
regular base pay of the participant plus bonuses, overtime pay and other extra
compensation. Effective January 1, 1989, the plan benefit formula was amended.
Retirement benefits are equal to the pension accrued to December 31, 1988 plus
1% of average compensation times each year of post-1988 service plus .75% of
average compensation in excess of Table II of the 1989 Covered Compensation
Table times each year of post-1988 service. Average compensation for post-1988
service is based on the five highest consecutive years' compensation. The
approximate annual retirement benefits at age 65 (computed as of January 1,
1997) are $52,980 to James Sumas; $62,844 to Robert Sumas; $61,932 to William
Sumas; $67,200 to John Sumas; and $348,928 to all executive officers and
directors as a group. Due to his age, Perry Sumas cannot participate in this
plan.
The Company also maintains a plan which permits salary reduction
contributions by participants under Section 401(k) of the Internal Revenue Code.
Pursuant to this plan, each person not covered by a collective bargaining
agreement who has been employed by the Company for more than twelve months and
is over the age of twenty-one may direct that a percentage of his or her salary,
up to 18%, but not more than $9,500, be withheld and paid over to the plan
trustees for investment. The Company, in turn, will pay to the plan trustees a
further sum equal to the lesser of (a) 25% of the amount so directed by the
employee to be withheld from the employee's salary and contributed to the plan
or (b) 1.5% of the employee's salary. Until the employee has reached his normal
retirement age, the employee's contribution may not be withdrawn without
incurring a tax penalty.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Securities and Exchange Commission has adopted new rules concerning the
format for the disclosure of executive compensation. These rules also require
proxy statement disclosure of specified information regarding certain
relationships of executive officers and members of the Company's board of
directors which might bear on decisions concerning the compensation of executive
officers of the Company. None of the executive officers or the members of the
Company's board of directors has a relationship requiring such disclosure except
as set forth below. The Compensation Committee consists of Perry Sumas, who is
an executive officer of the Company serving as the President and Chief Executive
Officer; James Sumas, who is an executive officer of the Company serving as the
Chairman of the Board of Directors, Chief Operating Officer and Treasurer; and
George J. Andresakes, who is a former executive officer of the Company, having
resigned as General Counsel in 1979. As noted elsewhere in the Proxy Statement
under "Certain Transactions", Perry Sumas and James Sumas, through Sumas Realty
Company and Sumas Realty Associates, have certain business relationships with
the Company.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Company's compensation policies, as applicable to its executive
officers, are administered by its Compensation Committee of the Board of
Directors (the "Committee"). The Committee members recognize that the Company
is, to a significant extent, a family owned business. The Chief Executive
Officer and each of the other executive officers named in this proxy statement
own substantial amounts of the Company's common stock and thus have a direct and
substantial interest in the long-term growth of shareholder's wealth. In light
of this ownership, there is less need to directly relate executive compensation
to Company performance. It is the view of the Committee that there is no need
for formal bonus plans designed to better align the interests of executive
officers with those of shareholders in general. The Company previously granted
certain stock options to each of the named executive officers. However, no stock
options were granted during fiscal 1997 or during the current fiscal year to the
Chief Executive Officer or the named executive officers.
6
<PAGE> 9
The basic criteria used in making determinations concerning base salary is
the level of compensation paid to comparable executives in the industry, in
particular to corporate executives at other ShopRite co-op members and at
competing regional supermarket chains. The principal factors which have been
considered by the Committee in implementing this policy are time devoted to
Company affairs, reputation in the industry, record of accomplishment and
efforts on the Company's behalf. Increases in the cost of living also have been
considered.
The Committee notes that compensation tables required by the rules of the
Securities and Exchange Commission are based upon fiscal year totals, which in
the case of the Company are July to July periods of 52 or 53 weeks. Executive
compensation decisions are implemented on a calendar year basis. Thus, minor
apparent year to year variations in compensation levels appearing in the tables
may not be reflective of actual Committee actions.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
PERRY SUMAS
JAMES SUMAS
GEORGE J. ANDRESAKES
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total return on the
Company's Class A Common Stock against the cumulative total return of the S&P
500 Composite Stock Index and the NASDAQ Retail Index for the Company's last
five fiscal years.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG VILLAGE SUPER MARKET, INC., THE S&P 500 INDEX
AND THE NASDAQ RETAIL INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD VILLAGE NASDAQ RETAIL
(FISCAL YEAR COVERED) SUPERMARKET, INC. S&P 500 TRADE
<S> <C> <C> <C>
7/92 100 100 100
7/93 138 109 105
7/94 115 114 103
7/95 108 144 122
7/96 131 168 132
7/97 135 256 156
</TABLE>
7
<PAGE> 10
CERTAIN TRANSACTIONS
The Company's supermarket in South Orange, New Jersey, its supermarket in
Springfield, New Jersey and its executive headquarters in Springfield, New
Jersey are leased from Sumas Realty Company. Sumas Realty Company is a
corporation owned by the Estate of Nicholas Sumas, Perry Sumas and James Sumas.
The lease with respect to the Company's supermarket in South Orange expired
on August 31, 1997 but has been extended until August 31, 1998. In fiscal 1997,
a total of $143,512 in rent was paid to Sumas Realty Company with respect to the
South Orange supermarket.
The lease with respect to the Company's supermarket in Springfield is dated
June 1, 1986 and expires on May 31, 2006. In fiscal 1997, the Company paid
$300,000 in rent to Sumas Realty under this lease. In 2001, the annual rent will
increase to $340,000 per year.
The Company's executive office in Springfield also is leased from Sumas
Realty Company. This lease expired on January 31, 1997 but was extended until
January 31, 1998. The Company paid $171,000 to Sumas Realty under this lease
during fiscal 1997.
The Company believes that the terms of the leases listed above are as
favorable to the Company as it could have obtained from unrelated lessors.
During the fiscal year ended July 26, 1997, the Company paid to Sumas Realty
Company a total of $614,512 in rent under the foregoing leases.
The Company's supermarket in Chatham, New Jersey is leased from Hickory
Square Associates, a limited partnership. The lease is dated April 1, 1986 and
expires March 31, 2006. The annual rent under this lease is $549,160. Sumas
Realty Associates is a 30% limited partner in Hickory Square Associates. Sumas
Realty Associates is a general partnership among Perry Sumas, James Sumas,
Robert Sumas, William Sumas and John Sumas.
PROPOSAL TO ADOPT THE INCENTIVE AND
NON-STATUTORY STOCK OPTION PLAN
DESCRIPTION OF THE PLAN
The following summary of the Company's 1997 Incentive and Nonstatutory
Stock Option Plan (the "Plan") is qualified entirely by reference to the copy of
the Plan attached hereto as Exhibit A.
The Plan provides for grants of both incentive stock options ("ISOs") and
nonstatutory options to purchase up to a total of 250,000 shares of the
Company's Class A common stock, no par value.
The Plan is administered by a committee appointed by the Board of Directors
of the Company. The Plan authorizes the grant of ISOs with an exercise price
equal to 100% (110% in the event the optionee holds more than 10% of the voting
stock of the Company) of the fair value market value of the shares of the
Company's Class A Common Stock on the date the option is granted. Only those
officers and employees of the Company designated by the Board are eligible to
participate in the Plan.
The options are to contain such terms as the Committee shall determine,
including the term and installments, if any, during which the options may be
exercised. The term of options granted under the Plan cannot exceed ten years.
The Plan provides that options may be exercised not later than three months
after the date of termination except in the event of the termination of
employment as the result of the death or disability of the optionee in which
event the options are exercisable to the extent they were exercisable at the
time of death or disability for a period of twelve months following the date of
death or disability. The options may not be transferred other than by will or
the laws of descent and distribution.
Under the Internal Revenue Code (the "Code"), and the regulations
thereunder, there is also an annual limit, currently $100,000 plus the "unused
limit carryover" as defined under the Code, on the value of stock exercisable by
incentive stock options that can be issued to an optionee.
8
<PAGE> 11
TAX CONSIDERATIONS
Incentive Stock Options
Under the Code, an employee will not recognize income for Federal income
tax purposes upon the grant of an ISO under the Plan or the subsequent purchase
of stock pursuant to the exercise of such ISO. The adjusted basis of the
optionee in the shares received on the exercise of such option will equal the
amount paid for such shares.
If the employee makes no disposition of the shares purchased on exercise of
an ISO within two years from the date of grant and within one year from the date
of exercise of the option, upon a subsequent sale or taxable exchange of shares,
the employee will recognize a long-term capital gain or loss equal to the
difference between the amount realized on the disposition of such shares and his
adjusted basis in such shares.
If an employee disposes of shares purchased on the exercise of an ISO
within the foregoing two and one year periods, for the taxable year in which the
disposition occurs, he will be required to include in gross income as
compensation the amount by which the fair market value of the shares on the date
the option was exercised by the employee (or the amount realized upon
disposition, if that amount is less than the fair market value on the date of
exercise and if the disposition is a sale or exchange with respect to which the
employee would recognize a loss if one were sustained) exceeds the option
exercise price. In addition, upon a sale or taxable exchange within either
period, the employee will recognize capital gain or loss (long or short term as
the case may be) equal to the difference between (i) the sum of the exercise
price he paid (or in the event that the exercise price is paid in whole or in
part by the transfer of stock of the Company previously owned by the employee,
the amount of money plus the adjusted basis of such previously owned stock) and
any amount he is required to include in his gross income in accordance with the
preceding sentence, and (ii) the amount realized on the sale or taxable
exchange.
The Company will be entitled to a deduction for compensation with respect
to an ISO only in the event and to the extent that the employee recognizes
ordinary income for disqualifying dispositions of stock received upon the
exercise of such ISO.
Nonstatutory Options
The grant of nonstatutory options will have no immediate tax consequences
to the Company or the optionee. When an optionee exercises a nonstatutory option
and shares are transferred to him, he will be required to include in his gross
income, as compensation, and the Company will be entitled to deduct, the amount
by which the fair market value of the shares at that time exceeds the option
price. Upon a subsequent sale or taxable exchange of the shares, the optionee
will recognize a capital gain or loss equal to the difference between (i) the
sum of the option price he paid and any amount he is required to include in his
gross income pursuant to the preceding sentence, and (ii) the amount realized on
the sale or taxable exchange. Such capital gain will be long term or short term
depending on the optionee's holding period after the date of his exercise of the
options.
Interest of Executive Officers
While the benefits of this plan will extend to officers of the Company who
are not executive officers, the eight executive officers can be expected to
benefit from this Plan, if adopted. Any benefit, however, will be dependant upon
increases in the market price of the Class A stock. The relative amounts of such
benefit cannot be determined at present as benefits will depend upon the
participants selected for option grants, the amounts of such grants and the
price of the Class A Stock at the time of such grants.
Amendment
The Committee is authorized by the Plan to amend its terms without the
approval of shareholders. The Committee may not amend the Plan to materially
increase the number of shares subject to option (except for antidilution
adjustments). The Committee may not materially modify the class of eligible
participants under the Plan or amend the Plan in any way which is inconsistent
with applicable provisions of the Code which
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<PAGE> 12
provide a tax benefit to holders of ISOs. It is anticipated that the Committee
would use this power principally to adapt the Plan to changes in the tax and
securities laws. Nevertheless the exercise of this power could materially
increase the cost of this Plan to the Company.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The selection by the Board of Directors, on recommendation of the Audit
Committee, of KPMG Peat Marwick LLP, as independent public accountants to
examine the financial statements of the Company for the fiscal year ending July
25, 1998, is to be submitted to the meeting for ratification or rejection. The
financial statements of the Company for the 1997, 1996, and 1995 fiscal years
were examined by KPMG Peat Marwick LLP.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
1997 Annual Meeting of Shareholders and will be given the opportunity to make a
statement if they wish to do so and will be available to respond to appropriate
questions.
Although ratification by the stockholders of the selection of independent
public accountants is not required, the Board will reconsider its selection of
KPMG Peat Marwick LLP if such ratification is not obtained. Ratification shall
require a majority of the votes cast.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any proposal that a shareholder intends to present at the Company's 1998
Annual Meeting of Shareholders, presently scheduled to be held on December 4,
1998, and requests to be included in the Company's Proxy Statement for the 1998
Annual Meeting, must be received by the Company no later than June 1, 1998. Such
requests should be made in writing and sent to the Secretary of the Company,
Robert Sumas, Village Super Market, Inc., 733 Mountain Avenue, Springfield, New
Jersey 07081.
OTHER MATTERS
The Company will furnish a copy of its Annual Report on Form 10-K for the
year ended July 26, 1997, without exhibits, without charge to each person who
forwards a written request, including a representation that he was a record or
beneficial holder of the Company's Common Stock on October 3, 1997. Requests are
to be addressed to Mr. Robert Sumas, Secretary, Village Super Market, Inc., 733
Mountain Avenue, Springfield, New Jersey 07081.
All expenses incurred in connection with the preparation and circulation of
this Proxy Statement in an amount that would normally be expended in connection
with an Annual Meeting in the absence of a contest will be paid by the Company.
No solicitation expenses will be incurred. Management does not know of any other
business that will be presented at the Annual Meeting.
By order of the Board of Directors,
ROBERT SUMAS,
Secretary
October 30, 1997
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<PAGE> 13
VILLAGE SUPER MARKET, INC.
1997 INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN
1. PURPOSE.
The purpose of this 1997 Incentive and Non-Statutory Stock Option Plan (the
"Plan") is to give officers and executive personnel ("key employees") of Village
Super Market, Inc. (the "Company"), and corporations with respect to which the
Company directly or indirectly controls 50% or more of the combined voting power
("subsidiaries") an opportunity to acquire shares of the Class A common stock of
the Company ("Class A Stock"), to provide an incentive for key employees to
continue to promote the best interests of the Company and enhance its long-term
performance, and to provide an incentive for key employees and other
participants to join or remain with the Company and its subsidiaries.
2. ADMINISTRATION.
(a) Board of Directors. The Plan shall be administered by the Board of
Directors of the Company (the "Board"), which, to the extent it shall determine,
may delegate its powers with respect to the administration of the Plan (except
its powers under Section 12(c)) to a committee (the "Committee") appointed by
the Board and composed of not less than three members of the Board. If the Board
chooses to appoint a Committee, references hereinafter to the Board (except in
Section 12(c)) shall be deemed to refer to the Committee.
(b) Powers. Within the limits of the express provisions of the Plan, the
Board shall determine:
(i) the persons to whom awards hereunder shall be granted,
(ii) the time or times at which such awards shall be granted,
(iii) the form and amount of the awards, and
(iv) the limitations, restrictions and conditions applicable to any
such award.
In making such determinations, the Board may take into account the nature
of the services rendered by such key employees, their present and potential
contributions to the Company's success and such other factors as the Board in
its discretion shall deem relevant.
(c) Interpretations. Subject to the express provisions of the Plan, the
Board may interpret the Plan, prescribe, amend and rescind rules and regulations
relating to it, determine the terms and provisions of the respective awards and
make all other determinations it deems necessary or advisable for the
administration of the Plan.
(d) Determinations. The determinations of the Board on all matters
regarding the Plan shall be conclusive. A member of the Board shall only be
liable for any action taken or determination made in bad faith.
(e) Nonuniform Determinations. The Board's determinations under the Plan,
including without limitation, determinations as to the persons to receive
awards, the terms and provisions of such awards and the agreements evidencing
the same, need not be uniform and may be made by it selectively among persons
who receive or are eligible to receive awards under the Plan, whether or not
such persons are similarly situated.
3. AWARDS UNDER THE PLAN.
(a) Form. Awards under the Plan may be granted in any of the following
forms:
(i) Incentive Stock Options, as described in Section 4,
(ii) Non-Statutory Stock Options, as described in Section 5, and
(iii) Stock Appreciation Rights, as described in Section 6.
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<PAGE> 14
(b) Maximum Limitations. The aggregate number of shares of Class A Stock
available for grant under the Plan is 250,000 subject to adjustment pursuant to
Section 8. Shares of Class A Stock issued pursuant to the Plan may be either
authorized but unissued shares or shares now or hereafter held in the treasury
of the Company. In the event that, prior to the end of the period during which
Stock Options may be granted under the Plan, any Stock Option under the Plan
expires unexercised or is terminated, surrendered or cancelled (other than in
connection with the exercise of a Stock Appreciation Right with respect to which
common stock is delivered to the key employee under Section 6(b)(ii)), without
being exercised, in whole or in part, for any reason, the number of shares
theretofore subject to such Stock Option, or the unexercised, terminated,
forfeited or unearned portion thereof, shall be added to the remaining number of
shares of Class A Stock available for grant as a Stock Option under the Plan,
including a grant to a former holder of such Stock Option, upon such terms and
conditions as the Board shall determine, which terms may be more or less
favorable than those applicable to such former Stock Option.
(c) Ten Percent Shareholder. Notwithstanding any other provision herein
contained, no key employee may receive an Incentive Stock Option under the Plan
if such employee, at the time the award is granted, owns (as defined in Section
424(d) of the Internal Revenue Code, as amended (the "Code")) stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company, its parent or any subsidiary, unless the option price for such
Incentive Stock Option is at least 110% of the fair market value of the Class A
Stock subject to such Incentive Stock Option on the date of grant and such
Option is not exercisable after the date five years from the date such Option is
granted.
4. INCENTIVE STOCK OPTIONS.
It is intended that Incentive Stock Options granted under the Plan shall
constitute Incentive Stock Options within the meaning of Section 422 of the
Code. Incentive Stock Options may be granted under the Plan for the purchase of
shares of Class A Stock. Incentive Stock Options shall be in such form and upon
such conditions as the Board shall from time to time determine, subject to the
following
(a) Option Prices. The option price of each Incentive Stock Option shall
be at least 100% of the fair market value of the Class A Stock subject to such
Incentive Stock Option on the date of grant.
(b) Terms of Options. No Incentive Stock Option shall be exercisable prior
to the date one year, or after the date ten years, from the date such Incentive
Stock Option is granted.
(c) Limitation on Amounts. The aggregate fair market value (determined
with respect to each Incentive Stock Option as of the time such Incentive Stock
Option is granted) of the capital stock with respect to which Incentive Stock
Options are exercisable for the first time by a key employee during any calendar
year (under this Plan or any other plan of the Company or the parent or any
subsidiary of the Company) shall not exceed $100,000.
(d) Exercise. Incentive Stock Options shall be subject to such terms and
conditions, shall be exercisable at such time or times, and shall be evidenced
by such form of written option agreement between the optionee and the Company,
as the Board shall determine; provided, that such determinations are not
inconsistent with the other provisions of the Plan, and with Section 422 of the
Code or regulations thereunder.
(e) Manner of Exercise of Options and Payment for Common Stock. Incentive
Stock Options may be exercised by an optionee by giving written notice to the
Secretary of the Company stating the number of shares of Class A Stock with
respect to which the Incentive Stock Option is being exercised and tendering
payment therefor. At the time that an Incentive Stock Option granted under the
Plan, or any part thereof, is exercised, payment for the Class A Stock issuable
thereupon shall be made in full in cash or by certified check or, if the Board
in its discretion agrees to accept, in shares of Class A Stock of the Company
(the number of such shares paid for each share subject to the Incentive Stock
Option, or part thereof, being exercised shall be determined by dividing the
option price by the fair market value per share of the Class A Stock on the date
of exercise). As soon as reasonably possible following such exercise, a
certificate representing shares of Class A Stock purchased, registered in the
name of the optionee shall be delivered to the optionee.
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<PAGE> 15
(f) Cancellation of Stock Appreciation Rights. The exercise of any
Incentive Stock Option shall cancel that number, if any, of Stock Appreciation
Rights (as defined in Section 6) included in such Incentive Stock Option, which
is equal to the excess of (i) the number of shares of Class A Stock subject to
Stock Appreciation Rights included in such Incentive Stock Option, over (ii) the
number of shares of Class A Stock which remain subject to such Incentive Stock
Option after such exercise.
5. NON-STATUTORY STOCK OPTIONS.
Non-Statutory Stock Options (i.e., options which do not constitute
Incentive Stock Options within the meaning of Section 422 of the Code) may be
granted under the Plan for the purchase of Class A Stock. Non-Statutory Stock
Options shall be in such form and upon such conditions as the Board shall from
time to time determine and further shall be subject to the provisions of Section
4 of this Plan except there shall be no limit on amount (subject only to the
overall limit of the shares available under the Plan for option grant).
6. STOCK APPRECIATION RIGHTS.
(a) Award. If deemed by the Board to be in the best interest of the
Company, any Incentive Stock Option granted under the Plan may include a stock
appreciation right ("Stock Appreciation Right"), either at the time of grant or
thereafter while the Incentive Stock Option is outstanding.
(b) Terms of Rights. Stock Appreciation Rights shall be subject to such
terms and conditions not inconsistent with the other provisions of the Plan as
the Board shall determine, provided that:
(i) Limitations. A Stock Appreciation Right shall be exercisable to
the extent, and only to the extent, the Incentive Stock Option in which it
is included is exercisable and shall be exercisable only for such period as
the Board may determine (which period may expire prior to, but not later
than, the expiration date of such Incentive Stock Option). Notwithstanding
the preceding sentence, a Stock Appreciation Right is exercisable only when
the fair market value of a share of Class A Stock exceeds the option price
specified in such Incentive Stock Option.
(ii) Surrender or Exchange. A Stock Appreciation Right shall entitle
the optionee to surrender to the Company unexercised the Incentive Stock
Option, or portion thereof, to which it is related, or any portion thereof,
and to receive from the Company in exchange therefor that number of shares
of Class A Stock having an aggregate fair market value equal to the excess
of the fair market value on the date of exercise of one share of Class A
Stock over the option price per share specified in such Incentive Stock
Option multiplied by the number of shares of Class A Stock subject to the
Incentive Stock Option, or portion thereof, which is so surrendered. The
Board shall be entitled to elect to settle any part or all of the Company's
obligation arising out of the exercise of a Stock Appreciation Right by the
payment of cash or by check equal to the aggregate fair market value on the
date on which the Stock Appreciation Right is exercised of that part or all
of the shares of Class A Stock the Company would otherwise be obligated to
deliver.
(c) Cash Settlement Restriction.
(i) Notwithstanding Section (b), so long as the grantee of a Stock
Appreciation Right is an officer or director of the Company, the Company's
right to elect to settle any part or all of its obligation arising out of
the exercise of a Stock Appreciation Right by the payment of cash or by
check shall not apply unless such exercise occurs no less than six months
after the date of grant of the Right and either: (1) pursuant to the
provisions of subsection (ii) below, or (2) during the period beginning on
the third business day following the date of release by the Company for
publication of its quarterly or annual summary statements of sales and
earnings and ending on the twelfth business day following such date.
(ii) In the event that, pursuant to Section 9, the Company shall
cancel all unexercised Incentive Stock Options as of the effective date of
a merger or other transaction provided therein, or in the case of
dissolution of the Company, then each Stock Appreciation Right held by an
executive officer or director of the Company shall be automatically
exercised for cash on such date within 30 days prior to the
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<PAGE> 16
effective date of such transaction or dissolution as the Board shall
determine and, in the absence of such determination, on the last business
day immediately prior to such effective date.
7. TRANSFERABILITY.
No Incentive Stock Option, Non-Statutory Stock Option, or Stock
Appreciation Right may be transferred, assigned, pledged or hypothecated
(whether by operation of law or otherwise), except as provided by will or the
applicable laws of descent or distribution, and no Incentive Stock Option,
Non-Statutory Stock Option, or Stock Appreciation Right shall be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of an Incentive Stock Option, Non-
Statutory, Stock Option, or Stock Appreciation Right, or levy of attachment or
similar process upon the Incentive Stock Option or Stock Appreciation Right not
specifically permitted herein shall be null and void and without effect. An
Incentive Stock Option, Non-Statutory Stock Option, or Stock Appreciation Right
may be exercised only by a key employee during his or her lifetime, or pursuant
to Section 11(c), by his or her estate or the person who acquires the right to
exercise such Incentive Stock Option, Non-Statutory Stock Option or Stock
Appreciation Right upon his or her death by bequest or inheritance.
8. ADJUSTMENT PROVISIONS.
The aggregate number of shares of Class A Stock with respect to which
Incentive Stock Options, Non-Statutory Stock Options and Stock Appreciation
Rights may be granted, the aggregate number of shares of Class A Stock subject
to each outstanding Incentive Stock Option, Non-Statutory Stock Option and Stock
Appreciation Right, and the option price per share of each may all be
appropriately adjusted as the Board may determine for any increase or decrease
in the number of shares of issued Class A Stock resulting from a subdivision or
consolidation of shares, whether through reorganization, recapitalization, stock
split-up, stock distribution or combination of shares, or the payment of a share
dividend or other increase or decrease in the number of such shares outstanding
effected without receipt of consideration by the Company. Adjustments under this
Section 8 shall be made according to the sole discretion of the Board, and its
decisions shall be binding and conclusive.
9. DISSOLUTION, MERGER AND CONSOLIDATION.
Except as otherwise provided in Section 6(c)(ii), upon the dissolution or
liquidation of the Company, or upon a merger or consolidation of the Company in
which the Company is not the surviving corporation, each Incentive Stock Option
and Stock Appreciation Right granted hereunder shall expire as of the effective
date of such transaction; provided, however, that the Board shall give at least
30 days' prior written notice of such event to each optionee during which time
he or she shall have a right to exercise his or her wholly or partially
unexercised Incentive Stock Option (without regard to installment exercise
limitations, if any) or Stock Appreciation Right and, subject to prior
expiration pursuant to Section 11(b) or (c), each Incentive Stock Option and
Stock Appreciation Right shall be exercisable after receipt of such written
notice and prior to the effective date of such transaction.
10. EFFECTIVE DATE AND PERIOD FOR GRANTS.
The Plan shall become effective on the date of the approval of the Plan by
the holders of a majority of the shares of Common Stock of the Company. No grant
or award shall be made under the Plan more than 10 years from December 5, 1997,
provided, however, that the Plan and all Stock Options and Stock Appreciation
Rights granted under the Plan prior to such date shall remain in effect and
subject to adjustment and amendment as herein provided until they have been
satisfied or terminated in accordance with the terms of the respective grants or
awards and the related agreements.
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<PAGE> 17
11. TERMINATION OF EMPLOYMENT OR PARTICIPATION.
(a) Each Incentive Stock Option, Non-Statutory Stock Option and Stock
Appreciation Right shall, unless sooner expired pursuant to Section 11(b) or (c)
below, expire on the first to occur of the tenth anniversary of the date of
grant thereof and the expiration date set forth in the applicable option
agreement.
(b) An Incentive Stock Option, a Non-Statutory Stock Option or a Stock
Appreciation Right shall expire on the first to occur of the applicable date set
forth in paragraph (a) next above and the date three (3) months following the
date that the employment or participation of the person with the Company
terminates for any reason other than death or disability.
(c) If the employment of an employee or participation of another
participant with the Company terminates by reason of disability (as defined in
Section 422(c)(9) of the Code as determined by the Board) or by reason of death,
his or her Stock Options and Stock Appreciation Rights, if any, shall expire no
later than the first to occur of the date set forth in paragraph (a) of this
Section 11 and the first anniversary of such termination of employment.
12. MISCELLANEOUS.
(a) Legal and Other Requirements. The obligation of the Company to sell
and deliver Class A Stock under the Plan shall be subject to all applicable
laws, regulations, rules and approvals, including, but not by way of limitation,
the effectiveness of a registration statement under the Securities Act of 1933
if deemed necessary or appropriate by the Company. Certificates for shares of
Class A Stock issued hereunder may be legended as the Board shall deem
appropriate.
(b) No Obligation To Exercise Options. The granting of a Stock Option
shall impose no obligation upon an optionee to exercise such Stock Option.
(c) Termination and Amendment of Plan. The Board, without further action
on the part of the shareholders of the Company, may from time to time alter,
amend or suspend the Plan or any Stock Option or Stock Appreciation Right
granted hereunder or may at any time terminate the Plan, except that it may not,
without the approval of the shareholders of the Company (except to the extent
provided in Section 8 hereof):
(i) Materially increase the total number of shares of Class A Stock
available for grant under the Plan except as provided in Section 8;
(ii) Materially modify the class of eligible employees or participants
under the Plan; or
(iii) Effect a change relating to Incentive Stock Options granted
hereunder which is inconsistent with Section 422 of the Code or regulations
issued thereunder.
No action taken by the Board under this Section, either with or without the
approval of the shareholders of the Company, may materially and adversely affect
any outstanding Stock Option or Stock Appreciation Right without the consent of
the holder thereof.
(d) Application of Funds. The proceeds received by the Company from the
sale of Class A Stock pursuant to Stock Options will be used for general
corporate purposes.
(e) Withholding Taxes.
(i) Upon the exercise of any Stock Option or Stock Appreciation Right,
the Company shall have the right to require the optionee to remit to the
Company an amount sufficient to satisfy all federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for shares of Class A Stock.
(ii) Upon the disposition of any Class A Stock acquired by the
exercise of a Stock Option, the Company shall have the right to require the
optionee to remit to the Company an amount sufficient to satisfy all
federal, state and local withholding tax requirements as a condition to the
registration of the transfer of such Class A Stock on its books. Whenever
under the Plan payments are to be made by the
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<PAGE> 18
Company in cash or by check, such payments shall be net of any amounts
sufficient to satisfy all federal, state and local withholding tax
requirements.
(f) Right To Terminate Employment. Nothing in the Plan or any agreement
entered into pursuant to the Plan shall confer upon any key employee or other
optionee the right to continue in the employment of the Company or any
subsidiary or affect any right which the Company or any subsidiary may have to
terminate the employment of such key employee or other optionee.
(g) Rights as a Shareholder. No optionee shall have any right as a
shareholder unless and until certificates for shares of Class A Stock are issued
to him or her.
(h) Leaves of Absence and Disability. The Board shall be entitled to make
such rules, regulations and determinations as it deems appropriate under the
Plan in respect of any leave of absence taken by or disability of any key
employee or other participant. Without limiting the generality of the foregoing,
the Board shall be entitled to determine (i) whether or not any such leave of
absence shall constitute a termination of employment within the meaning of the
Plan, and (ii) the impact, if any, of any such leave of absence on awards under
the Plan theretofore made to any key employee who takes such leave of absence.
(i) Fair Market Value. Whenever the fair market value of Class A Stock is
to be determined under the Plan as of a given date, such fair market value shall
be:
(i) If the Class A Stock is traded on the over-the-counter market, the
average of the mean between the bid and the asked price for the Class A
Stock at the close of trading for the 10 consecutive trading days
immediately preceding such given date;
(ii) If the Class A Stock is listed on a national securities exchange,
the average of the closing prices of the Class A Stock on the Composite
Tape for the 10 consecutive trading days immediately preceding such given
date; and
(iii) If the Class A Stock is neither traded on the over-the-counter
market nor listed on a national securities exchange, such value as the
Board, in good faith, shall determine.
Notwithstanding any provision of the Plan to the contrary, no determination
made with respect to the fair market value of Class A Stock subject to an
Incentive Stock Option shall be inconsistent with Section 422 of the Code or
regulations thereunder.
(j) Notices. Every direction, revocation or notice authorized or required
by the Plan shall be deemed delivered to the Company (1) on the date it is
personally delivered to the Secretary of the Company at its principal executive
offices or (2) three business days after it is sent by registered or certified
mail, postage prepaid, addressed to the Secretary at such offices, and shall be
deemed delivered to an optionee (1) on the date it is personally delivered to
him or her or (2) three business days after it is sent by registered or
certified mail, postage prepaid, addressed to him or her at the last address
shown for him or her on the records of the Company.
(k) Applicable Law. All questions pertaining to the validity, construction
and administration of the Plan and Stock Options and Stock Appreciation Rights
granted hereunder shall be determined in conformity with the laws of the state
of New Jersey, to the extent not inconsistent with Section 422 of the Code and
regulations thereunder.
(l) Elimination of Fractional Shares. If under any provision of the Plan
which requires a computation of the number of shares of Class A Stock subject to
an Incentive Stock Option or Stock Appreciation Right, the number so computed is
not a whole number of shares of Class A Stock, such number of shares of Class A
Stock shall be rounded down to the next whole number.
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<PAGE> 19
VILLAGE SUPER MARKET, INC.
733 MOUNTAIN AVENUE, SPRINGFIELD, NEW JERSEY 07081
PROXY SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
The undersigned hereby appoints Perry Sumas and Robert Sumas, and each of
them, proxies for the undersigned, with full power of substitution, to vote as
if the undersigned were personally present at the Annual Meeting of the
Shareholders of Village Super Market, Inc. (the "Company"), to be held at the
offices of the Company, 733 Mountain Avenue, Springfield, New Jersey on Friday,
December 5, 1997 at 10:00 A.M. and at all adjournments thereof, the shares of
stock of said Company registered in the name of the undersigned. The undersigned
instructs all such proxies to vote such shares as indicated below upon the
following matters, which are described more fully in the accompanying proxy
statement.
I authorize and instruct my Proxy to:
1. [ ] VOTE FOR all nominees for the Company's Board of Directors listed
below: except that I WITHHOLD AUTHORITY for the following nominees (if
any)
Perry Sumas, James Sumas, Robert Sumas, William Sumas, John Sumas, George
J. Andresakes, John J. McDermott, and Norman Crystal.
[ ] VOTE WITHHELD from all nominees.
2. VOTE FOR [ ] AGAINST [ ] ABSTAIN [ ] approval of KPMG Peat Marwick LLP,
to be the independent auditors of the Company for the fiscal year ending
July 25, 1998.
3. VOTE FOR [ ] AGAINST [ ] ABSTAIN [ ] approval of the Company's 1997
Incentive and Non-Statutory Stock Option Plan.
(Continued and to be signed, on the other side)
(see other side)
4. In their discretion, to vote upon such other business as may properly
come before the meeting and all adjournments thereof.
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 Proposals 1 through 4.
Please sign exactly as your name appears below. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
------------------------
Signature
------------------------
Signature, if held
jointly
Dated 1997
PLEASE MARK, SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE.
