PRELIMINARY PROXY STATEMENT
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 30, 1999
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(A) of the
Securities Exchange Act Of 1934 [AMENDMENT NO. ].
Filed by the Registrant [__]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X]Preliminary Proxy Statement [_]Confidential, For Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WEIS MARKETS, INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
JANET C. WEIS
SUSAN WEIS MINDEL
JOEL S. MINDEL
NANCY WEIS WENDER
ELLEN WEIS GOLDSTEIN
JOSEPH I. GOLDSTEIN
SIDNEY APFELBAUM
MICHAEL M. APFELBAUM
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(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[_]Fee paid previously with preliminary materials:
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[_]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:
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PRELIMINARY PROXY MATERIALS DATED NOVEMBER 30, 1999
SUBJECT TO COMPLETION
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[The information included herein is as it is expected to be when the definitive
proxy statement is mailed to shareholders of Weis Markets, Inc. This proxy
statement will be revised to reflect actual facts at the time of the filing of
the definitive proxy statement.]
No GOLD Proxy Card is included with these materials.
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PROXY STATEMENT OF
THE
WEIS MARKETS SHAREHOLDERS COMMITTEE
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SPECIAL MEETING OF THE SHAREHOLDERS
OF
WEIS MARKETS, INC.
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We are sending this proxy statement to you as one of the holders of the common
stock, no par value, of Weis Markets, Inc., a Pennsylvania corporation. This
proxy statement relates to the solicitation of proxies by a Shareholders
Committee of Weis Markets shareholders, consisting of Janet C. Weis, Susan Weis
Mindel, Joel S. Mindel, Nancy Weis Wender, Ellen Weis Goldstein, Joseph I.
Goldstein, Sidney Apfelbaum and Michael M. Apfelbaum, for use at a Special
Meeting of shareholders scheduled for [_____], local time, [_______]
[_________], 2000, at [_______], or any adjournments or postponements thereof.
We are soliciting proxies to remove the current Board of Directors of Weis
Markets and to reconstitute it to include those nominees to the Board of
Directors set forth in this proxy statement as four of its seven members and to
amend the By-Laws of Weis Markets to ensure that shareholders continue to have a
meaningful opportunity to influence the management of Weis Markets.
On November 30, 1999, members of the Shareholders Committee filed a statement on
Schedule 13D on the basis that certain actions they intended to
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take, including the solicitation of proxies by this proxy statement, might be
sufficient to have such persons be deemed a "group" for purposes of Section 13
of the Securities Exchange Act of 1934. Also on November 30, 1999, members of
the Shareholders Committee gave notice of a call of the Special Meeting and of
an intent to present business and nominations at that meeting to Weis Markets.
The Shareholders Committee also issued a press release concerning these events,
a copy of which is attached to this proxy statement as Annex X. The contents of
each of the Schedule 13D, the Special Meeting Notice and the Press Release are
incorporated into this proxy statement by reference.
The principal executive offices of Weis Markets, according to its Quarterly
Report on Form 10-Q for the period ended September 25, 1999, are located at 1000
South Second Street, P.O. Box 471, Sunbury, Pennsylvania 17801-0471.
[THIS PROXY STATEMENT AND THE ACCOMPANYING GOLD PROXY CARD ARE FIRST BEING
FURNISHED TO SHAREHOLDERS ON OR ABOUT ______ , 1999.]
WE URGE YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF THE SPECIAL
MEETING PROPOSALS DESCRIBED HEREIN.
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SUMMARY
This summary highlights selected information from this document, and may not
contain all of the information that is important to you. To understand better
why we are asking for your vote, you should read this entire document carefully.
Q: WHO ARE THE MEMBERS OF THE SHAREHOLDERS COMMITTEE?
A: We are fellow shareholders of Weis Markets who believe that we are
collectively missing an opportunity to increase the returns on our investment
in Weis Markets because Weis Markets is unwilling to pursue all available
strategies to do so, such as a merger or other business combination
transaction. We believe that in the current environment of rapid
consolidation and technological change in the retail grocery industry, Weis
Markets has an obligation to protect our collective investment by looking at
all reasonably available alternatives to increase shareholder value.
In the aggregate, we beneficially own approximately 41% of the outstanding
common stock of Weis Markets. Janet C. Weis was married to the late Sigfried
Weis, who served as the President of Weis Markets from 1961 through 1994 and
as Co-Chairman of the Board of Directors until January 6, 1995. Sigfried Weis
was the son of Sigmund Weis, one of two brothers who co-founded Weis Markets.
Susan Weis Mindel, Nancy Weis Wender and Ellen Weis Goldstein are Janet
Weis's daughters. Joel S. Mindel is Susan Weis Mindel's husband, and Joseph
I. Goldstein is Ellen Weis Goldstein's husband and a director of Weis
Markets.
Sidney Apfelbaum is a co-trustee of the Charles B. Degenstein Charitable
Foundation, which holds approximately 5.8% of the outstanding common stock of
Weis Markets. His son, Michael M. Apfelbaum, is a co-trustee of the Claire
Gross Weis Deed of Trust, which holds approximately 9% of the outstanding
common stock of Weis Markets for the benefit of Susan Weis Mindel, Nancy Weis
Wender and Ellen Weis Goldstein, and is a director of Weis Markets. Claire
Gross Weis was the wife of Sigmund Weis and the mother of Sigfried Weis.
Q: WHAT ARE WE ASKING YOU TO DO?
A: We are asking you to vote to reconstitute the Board of Directors of Weis
Markets to better reflect the shareholder base of Weis Markets, and to
approve certain resolutions and amendments to the By-Laws designed to
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allow the shareholders to continue to have a meaningful opportunity to
influence the management of Weis Markets.
Q: WHY ARE WE ASKING YOU TO RECONSTITUTE THE BOARD OF DIRECTORS?
A: We believe that Weis Markets is not sufficiently committed to exploring all
reasonably available alternatives to maximize shareholder value and increase
the liquidity of the market for the common stock. Certain members of the
Shareholders Committee have from time to time in the past and in their
individual capacity expressed this sentiment to Weis Markets. However, the
Shareholders Committee believes that Weis Markets has taken no affirmative
steps in response (other than informal overtures by representatives of Weis
Markets concerning the possibility that Weis Markets might be willing to
purchase a portion of their shares at an indeterminate price that was
generally suggested to be approximately equal to the then-market price).
These individuals have chosen not to pursue such overtures and instead have,
from time to time, continued to urge representatives of Weis Markets to
consider steps to maximize shareholder value, including by engaging in
discussions with industry participants who on occasion have expressed an
interest in pursuing a strategic transaction with Weis Markets.
We believe that Weis Markets should vigorously pursue such alternatives,
including considering a potential sale of Weis Markets. After consultation
with our financial advisors, Salomon Smith Barney:
- We believe that the retail grocery industry is currently experiencing a
substantial amount of consolidation. Based upon the advice we have
received from Salomon Smith Barney, we believe that the value that
shareholders could receive in a sale or merger transaction involving
Weis Markets is likely to be substantially in excess of the current
trading range of Weis Markets common stock and that there would likely
be strong interest by potential acquirors in Weis Markets. Salomon
Smith Barney has advised us that, based upon a preliminary analysis of
Weis Markets using only publicly available information, and without
having conducted any solicitation of third-party interest and relying
upon recent merger and acquisition precedents in the retail grocery
industry, it believes that a per share acquisition price in the range
of $45 to $55 should reasonably be obtainable in the current market
environment. However, we do
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not believe that Weis Markets is willing to entertain any such
proposals absent pressure from its shareholders.
- It is our view that, over the past 5 years, the common stock has
underperformed both the S&P 500 and a composite index of multi-regional
grocery retailers (Albertson's, Ahold, Safeway, and Kroger).
Moreover, these multi-regional grocery retailers presently enjoy higher
firm value to earnings before interest, taxes, depreciation and
amortization ("EBIDTA") multiples and on average higher price earnings
multiples than regional food retailers. We believe, as evidenced by
the stronger stock price appreciation and higher multiples earned by
these multi-regionals over regional retailers, investors broadly
recognize the benefits of economies of scale in the grocery retailing
industry.
We also believe that the current environment in which Weis Markets operates,
in addition to being marked by significant consolidation, is growing
increasingly competitive as larger competitors exploit efficiencies resulting
from operational scale and increased capital and applied technology
investments. In addition, the retail grocery industry has seen increased
competition from non-traditional food retailers, led by Wal-Mart's aggressive
expansion of its supercenter concept. While we believe that Weis Markets
remains an attractive asset based on its established market presence and
operational performance, we are concerned that Weis Markets has not
adequately articulated a strategy to protect its franchise and shareholders
in light of the proliferation of larger and stronger competitors.
We also believe that Weis Markets has not demonstrated a strong commitment to
those corporate governance principles that would assure that the interests of
all shareholders are fully and adequately represented by the Board of
Directors. The current Board of Directors does not adequately reflect the
full shareholder base and its interests. Four of the seven members of the
Board of Directors are "insiders" who are employed by Weis Markets. This
composition is inconsistent with the interests of the broad shareholder base
of Weis Markets, which includes holders owning a substantial majority of the
outstanding common stock of Weis Markets whose interests are not directly
aligned with those of the inside directors. We believe that a Board of
Directors consisting of a majority of non-management directors would better
be able to represent the interests of all shareholders.
We believe Weis Markets should undertake measures to ensure that the
composition of the Board of Directors better reflects all shareholder
constituencies, that the full value of the common stock is reflected in its
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market price and greater liquidity is available to all shareholders. These
measures include the following:
- Changing the composition of the Board of Directors such that the
Board of Directors contains equal representation of all members of
the Weis family as well as a strong base of non-management directors
who can represent the interests of all shareholders, and
- Establishing a special committee of directors to consider and
evaluate the strategic options available to Weis Markets for
maximizing shareholder value and providing enhanced liquidity to
shareholders, including through possible business combination and
merger transactions.
We propose that Weis Markets retain Salomon Smith Barney to assist it and the
special committee in its examination and pursuit of such strategic
alternatives.
Q: WHY SHOULD YOU VOTE FOR OUR NOMINEES FOR THE RECONSTITUTED BOARD OF
DIRECTORS?
A: Our nominees are committed to seeking ways to maximize shareholder value,
enhance the liquidity of the trading market for the common stock and provide
a Board of Directors structure that makes it more likely that those goals
will be actively pursued.
If our nominees are elected, we believe that a majority of the Board of
Directors would, subject to their fiduciary duties, be committed to promptly
seeking a sale of Weis Markets or other transaction that would increase
shareholder value in a comparable manner. As indicated above, based on our
consultations with our financial advisor, Salomon Smith Barney, we believe
that Weis Markets is an attractive asset and that a number of companies are
likely to be interested in acquiring Weis Markets at a value that is likely
to be well in excess of current trading values for the common stock. We also
believe that Weis Markets' strong balance sheet (which is largely free of
debt and includes approximately $400 million in cash and marketable
securities on hand) can be used to provide shareholders with tangible
short-term value--without adversely affecting Weis Markets' previously
announced capital investment program--in the event a sales process is not
completed.
Q: WHO ARE OUR NOMINEES?
A: Our nominees are Michael M. Apfelbaum, John S. Furst, Joseph I.
Goldstein and Jeffrey E. Perelman. Mr. Apfelbaum and Mr. Goldstein are
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members of the Shareholders Committee and currently serve as directors of
Weis Markets. John S. Furst and Jeffrey E. Perelman are independent
businessmen with exceptional backgrounds who have agreed at the request of
the Shareholders Committee to serve as additional directors of Weis Markets.
You can find additional information about these nominees in the Annexes to
this proxy statement.
The Shareholders Committee's interest is in a Board of Directors structure
that gives each shareholder constituency adequate representation on the
Board, and accordingly we do not oppose the re-election of Robert F. Weis,
Norman S. Rich and Jonathon H. Weis, or Richard E. Shulman as an alternate in
place of one of the preceding, to fill the remaining three vacancies on the
Board of Directors and serve alongside our four nominees.
Q: HOW MANY VOTES DOES IT TAKE TO RECONSTITUTE THE BOARD?
A: Under the applicable requirements of Pennsylvania law, and the Articles of
Incorporation and By-Laws of Weis Markets, the first step in reconstituting
the Board of Directors is the removal of the entire Board of Directors, which
requires that a majority of the votes cast by all shareholders entitled to
vote at the Special Meeting be affirmatively voted in favor of removal. With
respect to the second step in reconstituting the Board of Directors, electing
new directors to the Board of Directors, because Weis Markets has cumulative
voting for directors, you have the right to vote an aggregate number of votes
equal to the number of shares of common stock you are entitled to vote
multiplied by the number of directors to be elected. You may cast all of
these votes for a single candidate or distribute them among some or all of
the candidates as you see fit, and the nominees receiving the most votes cast
will be elected, up to the number of directors to be elected at the Special
Meeting.
Given the existence of cumulative voting and a seven member Board of
Directors, the Shareholders Committee has sufficient voting power to cause
the election of three nominees to the Board of Directors without any
additional votes being cast in their favor by any other shareholders of Weis
Markets, a step we intend to take at such time as directors are again
elected, whether at the Special Meeting or any subsequent annual meeting. As
noted above, the Shareholders Committee has sufficient voting power to cause
the election of three directors at any election of directors and requires
only such number of shares as is equal to approximately (x) [__] million
shares minus (y) 50% of the total number of shares outstanding which are
either absent or are otherwise not voted at the Special Meeting in favor of
any director nominee, voting in favor of our nominees in order to have a
majority of votes cast at the meeting and
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accordingly be able to elect a fourth nominee to the Board of Directors in an
election of directors.
Q WHOM SHOULD YOU CALL IF YOU HAVE QUESTIONS ABOUT GIVING YOUR PROXY OR NEED
ASSISTANCE IN VOTING YOUR SHARES?
A: MacKenzie Partners, Inc. at (212) 929-5500 (collect) or call Toll Free (800)
322-2885.
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IMPORTANT
Please review this document and the enclosed materials carefully. It does not
matter how many shares of common stock you own. YOUR PROXY IS VERY IMPORTANT. If
you are unable to attend the Special Meeting in person, your proxy is the ONLY
means available for you to vote. Please vote FOR each of the proposals,
including the amendments to the By-Laws, the removal of the current Board of
Directors and the election of the nominees of the Shareholders Committee to the
Board of Directors, by signing, marking, dating and mailing the enclosed GOLD
Proxy as soon as possible.
Unless you indicate otherwise, the GOLD Proxy authorizes the persons named in
the proxy to vote, and such persons will vote, properly executed and duly
returned proxies FOR the amendments to the By-Laws described in this document,
FOR the removal of the current Board of Directors, FOR the election of the
Shareholders Committee's nominees to the Board of Directors, FOR the Shareholder
Value Resolution, and FOR the Omnibus Resolution described in this document that
requires the proposals at the Special Meeting to be considered in a specified
order. We are not presently aware of any other matters to be brought before the
Special Meeting.
If you own shares of common stock but your stock certificate is held for you by
a brokerage firm, bank or other institution, it is very likely that the stock
certificate is actually in the name of the brokerage firm, bank or other
institution. If so, only that brokerage firm, bank or other institution can
execute the GOLD Proxy and vote your shares of common stock. The brokerage firm,
bank or other institution holding the shares for you is required to forward
proxy materials to you and solicit your instructions with respect to the
granting of proxies; it cannot vote your shares unless it receives your specific
instructions.
If you have any questions about the proxy or need assistance in voting your
shares, please call:
[LOGO OF MACKENZIE PARTNERS APPEARS HERE]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Collect)
or call Toll Free
(800) 322-2885
YOU MAY VOTE FOR THE AMENDMENTS TO THE BY-LAWS, FOR THE REMOVAL OF THE CURRENT
BOARD OF DIRECTORS, FOR THE ELECTION OF NOMINEES OF THE SHAREHOLDERS COMMITTEE
FOR THE SHAREHOLDER VALUE RESOLUTION AND FOR THE OMNIBUS RESOLUTION BY SIGNING
THE GOLD PROXY CARD, AND
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MARKING, DATING AND RETURNING IT IN THE ENCLOSED POSTAGE PAID ENVELOPE. IF YOU
HAVE ALREADY SUBMITTED A PROXY TO THE BOARD OF DIRECTORS, YOU MAY CHANGE YOUR
VOTE BY SIGNING, MARKING, DATING AND RETURNING THE GOLD PROXY, WHICH MUST BE
DATED AFTER THE PROXY YOU SUBMITTED TO WEIS MARKETS.
Only shareholders of record at the close of business on the record date, [_____
____], 2000, are entitled to vote at the Special Meeting. We believe that as of
the close of business on the record date, there were approximately [__________]
shares of common stock issued and outstanding and entitled to vote. Shareholders
have one vote for each share of common stock they own with respect to all
matters to be considered at the Special Meeting, other than the election of
directors, as described below. The entire Board of Directors can be removed by a
vote of a majority of the votes cast. Once the Board of Directors is removed,
shareholders can cumulate their votes for new directors and the nominees
receiving the highest number of votes cast will be elected, up to the number of
directors to be elected at the Special Meeting. As noted above, the Shareholders
Committee has sufficient voting power to cause the election of three directors
at any election of directors and requires only such number of shares as is equal
to approximately (x) [__] million shares minus (y) 50% of the total number of
shares outstanding which are either absent or are otherwise not voted at the
Special Meeting in favor of any director nominee, voting in favor of our
nominees in order to have a majority of votes cast at the meeting and
accordingly be able to elect a fourth nominee to the Board of Directors in an
election of directors. In addition to soliciting your proxy to elect our
nominees, we are also soliciting your proxy to cumulate the votes represented by
the shares with respect to which you execute a proxy, except for nominees with
respect to which you withhold authority to vote your shares.
We are asking you to return your completed, signed and dated GOLD Proxy Card as
soon as possible.
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REASONS FOR THE SOLICITATION
We believe that Weis Markets is not taking sufficient steps to enhance the value
and liquidity of the common stock and to protect shareholder interests against
rapidly developing trends in retail grocery industry. Certain of us have, from
time to time in the past in our own individual capacity, expressed this
sentiment to Weis Markets, but we believe that Weis Markets has taken no
affirmative steps in response (other than informal overtures to certain of us
from time to time by representatives of Weis Markets concerning the possibility
that Weis Markets might be willing to purchase a portion of their shares at an
indeterminate price that was generally suggested to be approximately equal to
the then-market price). Such individuals have chosen not to pursue such
overtures and instead have, from time to time, urged representatives of Weis
Markets to consider steps to maximize shareholder value including by engaging in
discussions with industry participants who have on occasion expressed an
interest in pursuing a possible strategic transaction with Weis Markets.
We believe that the trends toward larger, more efficient competitors and new
delivery and customer service channels have significant competitive implications
for Weis Markets that these trends could affect the future performance of the
common stock, and are concerned that Weis Markets has not adequately articulated
a strategy for maximizing shareholder value in view of these challenges and
opportunities.
We have recently engaged Salomon Smith Barney to act as our financial advisor
and to assist us in obtaining increased liquidity and value for our shares.
After consultation with Salomon Smith Barney, we believe that the retail grocery
industry is currently experiencing a substantial amount of consolidation.
Based upon the advice we have received from Salomon Smith Barney, we believe
that the value that shareholders could receive in a sale or merger transaction
involving Weis Markets is likely to be substantially in excess of the current
trading range of Weis Markets common stock and that there would likely be strong
interest by potential acquirors in Weis Markets. Salomon Smith Barney has
advised us that, based upon a preliminary analysis of Weis Markets using only
publicly available information, and without having conducted any solicitation of
third-party interest and relying upon recent merger and acquisition precedents
in the retail grocery industry, it believes that a per share acquisition price
in the range of $45 to $55 should reasonably be obtainable in the current market
environment.
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We do not believe that Weis Markets will pursue actions that are likely to
result in the shareholders receiving this or equivalent value for their shares
absent direct pressure from us and other shareholders.
We are also concerned that Weis Markets has not demonstrated a strong commitment
to those corporate governance principles that would ensure that the interests of
all shareholders are fully and adequately represented by the Board of Directors.
We believe that the current configuration of the Board of Directors, which
includes four members out of seven who are management employees of Weis Markets,
is inconsistent with the interests of the broader shareholder base that includes
holders owning a substantial majority of the outstanding common stock and whose
interests are not directly aligned with those of the employee directors.
We believe Weis Markets should undertake measures that will ensure that the
composition of the Board of Directors better reflects all of the shareholder
constituencies and that the full value of the common stock is reflected in its
share price and that greater liquidity is available to all shareholders. These
measures include the following:
- Changing the composition of the Board of Directors such that the
Board of Directors contains equal representation of all members of
the Weis family and a strong base of non-management directors who
can represent the interests of all shareholders, and
- Establishing a special committee of directors representative of all
shareholder interests to consider and evaluate the strategic options
available to Weis Markets for maximizing shareholder value and
providing enhanced liquidity to shareholders, including through
possible business combination and merger transactions.
We intend to propose to the shareholders that Weis Markets retain Salomon Smith
Barney to assist Weis Markets and the special committee in its examination and
pursuit of these alternatives.
At the Special Meeting, we intend to present and have voted upon and approved by
the shareholders the following proposals (the "Special Meeting Proposals"), in
addition to other proposals incidental to the reconstitution of the current
Board of Directors:
1. To remove the current Board of Directors, including without
limitation, any of the following who are members of the Board as of
the Special Meeting: Robert F. Weis, Norman S. Rich, William R.
Mills, Jonathon H. Weis, Michael M. Apfelbaum,
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Joseph I. Goldstein and Richard E. Shulman (the "Director Removal
Resolution").
2. To elect Michael M. Apfelbaum, John S. Furst, Joseph I. Goldstein
and Jeffrey E. Perelman to fill four of the seven vacancies on the
Board of Directors created by the adoption of the Director Removal
Resolution. Biographical information on each of these nominees is
set forth under the caption "The Special Meeting Proposals" (the
"Election of Directors Resolution").
3. To amend the By-Laws to provide that a majority of the members of
the Board of Directors shall be persons who are not employees of
Weis Markets, and that the Board shall reflect as fully as possible
the composition of the shareholder base (the "Board Composition
Resolution").
4. To request that the Board of Directors establish a special committee
of directors representative of all shareholder interests to oversee
such process and report any overtures from such third parties that
may be received to the Board and the shareholders and that such
overtures be fully explored (the "Shareholder Value Resolution").
5. To amend the By-Laws to set the number of directors at seven (the
"Board Size Resolution").
6. To repeal any and all amendments made by the Board of Directors to
the By-Laws after November 30, 1999, other than amendments that were
duly approved by the shareholders, and to provide that, without
approval of the shareholders, the Board of Directors may not
thereafter amend any section of the By-Laws affected by such repeal
or adopt any new By-Law provision that would serve to reinstate any
repealed provision or any similar provision (the "By-Laws Repeal
Resolution").
Further, the shareholders will be asked at the Special Meeting to consider an
Omnibus Resolution (the "Omnibus Resolution") setting forth the following order
in which the Special Meeting Proposals will be voted on by the shareholders and
appointing CT Corporation System to act as sole judge of election:
1. The Omnibus Resolution;
2. The By-Laws Repeal Resolution;
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3. The Board Size Resolution;
4. The Board Composition Resolution;
5. The Shareholder Value Resolution;
6. The Director Removal Resolution; and
7. The Election of Directors Resolution.
EXECUTING A GOLD PROXY CARD WILL ENABLE YOU -- AS AN OWNER OF THE COMPANY -- TO
SEND A CLEAR MESSAGE THAT YOU SUPPORT THE SHAREHOLDERS COMMITTEE'S DESIRE TO
INCREASE SHAREHOLDER VALUE AND PROVIDE ENHANCED LIQUIDITY TO ALL SHAREHOLDERS
AND WANT TO ELECT A BOARD OF DIRECTORS THAT WILL SEEK TO DO SO AND THAT MORE
FULLY REFLECTS, WEIS MARKETS' SHAREHOLDER BASE. WE STRONGLY RECOMMEND THAT YOU
VOTE TO AMEND THE BY-LAWS, REMOVE THE CURRENT DIRECTORS, ELECT A RECONSTITUTED
BOARD OF DIRECTORS AND VOTE IN FAVOR OF THE SHAREHOLDER VALUE RESOLUTION AND THE
OMNIBUS RESOLUTION.
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BACKGROUND AND RECENT EVENTS
On November 30, 1999, the members of the Shareholders Committee filed a
Statement on Beneficial Ownership on Schedule 13D on the basis that certain
actions they intended to take, including the solicitation of proxies in this
proxy statement, might be sufficient to have the Shareholders Committee be
deemed a "group" for purposes of Section 13 of the Securities Exchange Act of
1934.
Also on that date, the members of the Shareholders Committee filed a notice of
call of a special meeting of shareholders and intent to present business and
nominations. The special meeting that was called is the one to which this
solicitation of proxies relates, and the business and nominations to be
presented at that special meeting are those that are described in this proxy
statement.
Simultaneously with these actions the Shareholders Committee issued a press
release calling on Weis Markets to voluntarily change the composition of the
Board of Directors to better represent the entire shareholder base of Weis
Markets and to establish a special committee of directors to evaluate the
strategic options that may be available to Weis Markets for maximizing
shareholder value, including through possible business combination and merger
transactions.
The members of the Shareholders Committee have indicated that, while they remain
hopeful that an amicable resolution can be reached with the current majority of
members of the Board of Directors, they are prepared to pursue a protracted
process, if necessary, to accomplish their desired goals on behalf of all
shareholders. Two of the seven directors of Weis Markets are presently members
of the Shareholders Committee.
A copy of the press release issued by the Shareholders Committee is attached to
this proxy statement as Annex X.
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THE SPECIAL MEETING PROPOSALS
At the Special Meeting, shareholders will be asked to consider and vote on the
Special Meeting Proposals set forth below. As discussed in more detail above, we
are disappointed that Weis Markets has not taken all possible steps to maximize
shareholder value are and concerned about the ability of Weis Markets to meet
the challenges posed by increasing industry consolidation and technological
evolution. We also do not believe that the current composition of the Board of
Directors, with a majority of directors who are management employees, adequately
represents the shareholder base of Weis Markets. The Special Meeting Proposals,
if approved, will remove the current Board of Directors and replace it with a
reconstituted Board of Directors with Michael M. Apfelbaum, John S. Furst,
Joseph I. Goldstein and Jeffrey E. Perelman filling four of the seven vacancies.
Presumably, Robert F. Weis, Norman S. Rich and Jonathon H. Weis, or Richard E.
Shulman as an alternate in place of one of the preceding, would be elected to
fill the remaining three vacancies on the Board of Directors. In addition, at
the Special Meeting, shareholders will be asked to consider certain resolutions
amending the By-Laws to ensure that shareholders are not unfairly or improperly
deprived of the ability to influence management of Weis Markets and calling on
the Board of Directors to establish a special committee of directors to consider
and evaluate the strategic options available to Weis Markets for maximizing
shareholder value and providing enhanced liquidity to shareholders, including
through possible business combination and merger transactions.
PROPOSAL NO. 1: THE DIRECTOR REMOVAL RESOLUTION
Our goal is to reconstitute the Board of Directors to more fully represent the
interests of all shareholders. We believe our nominees will be committed to our
goals of increasing shareholder value and liquidity. We are asking you to vote
at the Special Meeting to remove the entire Board of Directors to allow this
reconstitution.
Although the terms of the current Board of Directors expire at the 2000 Annual
Meeting, there can be no assurance that before the Special Meeting one or more
of the current Board of Directors will not have ceased to be a director (by
reason of resignation or otherwise) and have been succeeded by another person
appointed by the incumbent directors. Accordingly, the GOLD Proxy provides for
the removal of the current Board and all other persons who are serving as
directors when the removal becomes effective. Section 1726 of the Pennsylvania
Business Corporation Law authorizes these actions, with or without cause, by a
vote of a majority of the shares cast at the Special Meeting if at least a
majority of the shares of common stock entitled to vote at the Special Meeting
are represented at the meeting.
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The full text of the Director Removal Resolution is contained in Annex I to this
proxy statement.
WE STRONGLY RECOMMEND A VOTE FOR THE REMOVAL
OF THE CURRENT BOARD OF WEIS MARKETS
PROPOSAL NO. 2: THE ELECTION OF DIRECTORS RESOLUTION
As the second step of the reconstitution of the Board of Directors, we are
asking you to elect at the Special Meeting the nominees named below as directors
of Weis Markets, to serve until the next annual meeting of shareholders and
until their successors shall have been duly elected and qualified. Under
Pennsylvania law and the By-Laws, shareholders are permitted to cumulate their
votes in election of directors. Under cumulative voting, each shareholder may
cast a number of votes equal to the number of shares the shareholder holds of
record on the record date, multiplied by the number of directors to be elected.
The nominees receiving the greatest number of votes cast at the Special Meeting
will be elected to the Board of Directors, up to the number of director
positions to be filled at the Special Meeting. In addition to soliciting your
proxies to elect our nominees, we are also soliciting your proxy to cumulate the
votes represented by the shares with respect to which you execute a proxy,
except for nominees with respect to which you withhold authority to vote your
shares. We intend to vote the shares beneficially owned by us, together with any
shares with respect to which we receive proxies, in such a way as to obtain
maximum representation on the Board of Directors.
Our nominees include two of the existing seven directors: Michael M. Apfelbaum
and Joseph I. Goldstein, and two new distinguished nominees, John S. Furst and
Jeffrey E. Perelman. Mr. Apfelbaum and Mr. Goldstein are members of the
Shareholders Committee and share the concerns and goals of the Shareholders
Committee as outlined in this proxy statement. Mr. Furst and Mr. Perelman are
independent professional businessmen who have indicated to the members of the
Shareholders Committee that they are supportive of the platform enunciated in
this proxy statement, and will strive to represent the interests of all
shareholders through the exercise of their independent business judgment.
As noted above, Weis Markets allows cumulative voting of directors. Because of
cumulative voting, we have sufficient voting power to cause the election of
three directors to the Board of Directors at any election of directors and
require only such number of shares as is equal to approximately (x) [__] million
shares minus (y) 50% of the total number of shares outstanding which are either
absent or are otherwise not voted at the Special Meeting in favor of any
director nominee, voting in favor of our nominees in order to elect a
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fourth nominee to the Board of Directors in an election of directors. We intend
to vote all shares held by us and to ask all other shareholders who are
unaffiliated with the Weis Family to cumulate their votes for Messrs. Apfelbaum,
Furst, Goldstein and Perelman.
Our nominees have furnished us with the following information concerning their
principal occupations, business addresses and certain other matters. All of our
nominees are citizens of the United States.
Shareholders Committee nominees
Michael M. Apfelbaum (39) is engaged in the private practice of law as a
Partner with the firm of Apfelbaum, Apfelbaum and Apfelbaum of Sunbury,
Pennsylvania. Mr. Apfelbaum serves as a Co-Counsel for the Charles B.
Degenstein Foundation and as City Solicitor to the City of Sunbury. Mr.
Apfelbaum has been a member of the Board of Directors since 1996. Mr.
Apfelbaum's business address is: Apfelbaum, Apfelbaum & Apfelbaum, 43 South
Fifth Street, Sunbury, PA 17801.
Joseph I. Goldstein (57) is engaged in the private practice of law as a
Partner with the firm of Kirkpatrick and Lockhart, LLP, Washington D.C. Until
October 1999, he was engaged in the private practice of law as a Partner with
the firm of Crowell & Moring, Washington, D.C. Prior to joining Crowell &
Moring in 1995, he was an Associate Director of the Division of Enforcement,
United States Securities and Exchange Commission. Mr. Goldstein has been a
member of the Board of Directors since 1995. Mr. Goldstein's business address
is: Kirkpatrick and Lockhart, LLP, 1800 Massachusetts Avenue, N.W.,
Washington, D.C. 20036-1800.
John S. Furst (68) has been President of Aluminum Tank and Truck Accessories
since 1996, President of Manufacturer's Leasing and Finance, Inc. since 1995
and President of S.F.K. Inc. since 1995. Until his retirement on February 1,
1993, Mr. Furst worked as a certified public accountant and was a partner for
25 years with Coopers & Lybrand, spending the final 12 years of his
employment as a member of the governing body of the firm. From November 1993
through March 1995, Mr. Furst was a consultant to the Chairman of Coopers &
Lybrand. Mr. Furst's business address is: 190 Shady Shores Drive, Mabank,
TX 75147-9133.
Jeffrey E. Perelman (50) has served as Chief Executive Officer of the
following companies for the last 5 years: DentalEZ Group, Columbia Dentoform,
Schiller-Pfeiffer, Inc., Newton Tool & Mfg. Company, General Machine
Corporation, United Ammunition Container and JEP Management, Inc. Mr.
Perelman has served as Chief Executive Officer of
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Den-Tal-Ez Alabama, Inc. since 1997 and as Chief Executive Officer of Mantis
Europe, Inc. since 1995. Mr. Perelman's business address is: JPE
Management, Inc., Plymouth Corporate Center, 625 Ridge Pike, Conshohocken, PA
19096.
Messrs. Furst and Perelman have consented to serve as directors with the current
incumbent directors who would be re-elected to the reconstituted Board of
Directors.
Weis Markets currently has seven Directors, all of whose terms will expire at
the next Annual Meeting of shareholders of Weis Markets in 2000. Each of the
nominees specified above, if elected, would hold office until the 2000 Annual
Meeting and until a successor has been elected and qualified or until his
earlier death, resignation or removal. Although we have no reason to believe
that any of our nominees will be unable to serve as directors we reserve the
right to nominate an additional person in his stead, including any other member
of the Shareholders Committee.
The full text of the Election of Directors Resolution is contained in Annex II
to this proxy statement.
WE STRONGLY RECOMMEND A VOTE FOR THE ELECTION
OF THE NOMINEES OF THE SHAREHOLDERS COMMITTEE
PROPOSAL NO. 3: THE BOARD COMPOSITION RESOLUTION
The Board Composition Resolution provides that a majority of the Board of
Directors shall consist of directors who are not employees of Weis Markets. This
provision would bring Weis Markets in line with "best practices" corporate
governance principles. We believe that having a majority of the Board of
Directors consist of directors who are also employees of Weis Markets is
inconsistent with the interests of the broad shareholder base. This shareholder
base includes holders of a substantial majority of the common stock whose
interests are not directly aligned with those of management.
The full text of the Board Composition Resolution is contained in Annex III to
this proxy statement.
WE STRONGLY RECOMMEND A VOTE
FOR THE BOARD COMPOSITION RESOLUTION
PROPOSAL NO. 4: THE SHAREHOLDER VALUE RESOLUTION
The Shareholders Committee believes that the value of the common stock would
likely be maximized through the merger or other business combination
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transaction of Weis Markets to or with an unaffiliated third party, and
recommends actions to be taken by the Board of Directors to enhance shareholder
value.
The Shareholder Value Resolution requests that the Board establish a special
committee consisting of directors representative of all shareholder interests to
consider and evaluate the strategic options available to Weis Markets for
maximizing shareholder value and providing enhanced liquidity to shareholders
including through possible business combination and merger transactions. The
Shareholder Value Resolution would require that any and all overtures (whether
formal or informal) by any unaffiliated third parties received by Weis Markets
or any of its officers or directors concerning such a possible sale or merger
are to be reported to the full Board of Directors, that all bona fide overtures
be explored in full and that offers from any such persons should be solicited
and not discouraged, with a full report of such matters to be made to the
shareholders of Weis Markets.
The Shareholders Committee intends to recommend that Weis Markets retain Salomon
Smith Barney to assist it and the special committee in its examination and
pursuit of these strategic alternatives.
The Shareholder Value Proposal makes clear those steps which the shareholders
believe the Board of Directors should take in order to fulfill their fiduciary
duties to the shareholders and maximize shareholder value.
The full text of The Shareholder Value Resolution is contained in Annex IV to
this proxy statement.
WE STRONGLY RECOMMEND A VOTE
FOR THE SHAREHOLDER VALUE RESOLUTION
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PROPOSAL NO. 5: THE BOARD SIZE RESOLUTION
The By-Laws of Weis Markets provide that the size of the Board of Directors
shall be fixed from time to time by resolution of the Board of Directors or the
shareholders and shall consist of not less than three directors. According to
the information made publicly available by Weis Markets as of the date of this
preliminary proxy statement, there are currently seven directors on the Board of
Directors. Adoption of the Board Size Resolution would fix the number of
directors at its present number of seven. This amendment would further provide
that such By-Law may not be amended, or any new By-Law provision which is in any
way inconsistent therewith, be adopted, without approval of the shareholders.
Section 1504(a) of the Pennsylvania Business Corporation Law authorizes this
action by a vote of a majority of the shares cast at the Special Meeting if at
least a majority of the shares of common stock are represented at the meeting.
The Board Size Resolution is designed to prevent the current Board of Directors
from frustrating the ability of the shareholders to elect seven persons to
constitute the entire Board of Directors.
We believe that the Board of Directors' ability to attempt to change the size of
the Board of Directors under the circumstances is limited by its fiduciary
duties. However, by fixing the number of Board of Directors seats at seven,
adoption of the Board Size Resolution will ensure that the election contest at
the Special Meeting will take place on a level playing field.
The full text of The Board Size Resolution is contained in Annex V to this proxy
statement.
WE STRONGLY RECOMMEND A VOTE FOR THE
BOARD SIZE RESOLUTION
PROPOSAL NO. 6: THE BY-LAWS REPEAL RESOLUTION
The By-Laws Repeal Resolution would repeal any and all amendments made by the
Board of Directors to the By-Laws following November 30, 1999, other than those
provisions, if any, which were duly approved by the shareholders. This
resolution also will provide that, without the approval of the shareholders, the
Board of Directors may not thereafter amend any section of the By-Laws affected
by such repeal or adopt any new By-Law provision in a manner which serves to
reinstate any repealed provision or any similar provision. Section 1504(a) of
the Pennsylvania Business Corporation Law authorizes this action by a vote of a
majority of the shares cast at the Special Meeting if at least a majority of the
shares of common stock are represented at the meeting.
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The By-Laws Repeal Resolution is designed to repeal any By-Law changes that the
Board of Directors may attempt to make prior to the Special Meeting. Although we
are currently unaware of any specific By-Law provisions which would be repealed
by adoption of the By-Laws Repeal Resolution, adoption of the By-Laws Repeal
Resolution would render ineffective any attempted modification of the By-Laws by
the Board of Directors, whether intended to frustrate the ability of the
shareholders to elect our nominees or adopt any of the other Special Meeting
Proposals or otherwise. The By-Laws Repeal Resolution is intended to guarantee
that any By-Law amendment adopted after November 30, 1999 will be repealed so as
to prevent the Board of Directors from altering the By-Laws prior to the Special
Meeting without shareholder approval and to prevent the Board of Directors after
the Special Meeting from amending any section of the By-Laws affected by such
repeal or adopting any new By-Law provision in a manner which serves to
reinstate any repealed provision or any similar provision.
Although adoption of the By-Laws Repeal Resolution would generally repeal
previously undisclosed By-Law amendments without considering the beneficial
nature, if any, of such amendments to the shareholders, it would not repeal any
such amendments that were approved by the shareholders.
The full text of the By-Laws Repeal Resolution is contained in Annex VI to this
proxy statement.
WE STRONGLY RECOMMEND A VOTE FOR THE
BY-LAWS REPEAL RESOLUTION
PROPOSAL NO. 7: THE OMNIBUS RESOLUTION
In addition, the shareholders will be asked at the Special Meeting to consider
the Omnibus Resolution which appoints CT Corporation System as sole judge of
election, so as to ensure that the various notes of the shareholders are
efficiently and accurately tallied, and sets forth the following order in which
the resolutions will be voted upon by the shareholders:
1. The Omnibus Resolution;
2. The Election Procedures Resolution;
3. The By-Laws Repeal Resolution;
4. The Board Composition Resolution;
5. The Shareholder Value Resolution;
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6. The Director Removal Resolution; and
7. The Election of Directors Resolution.
The full text of the Omnibus Resolution is contained in Annex VII to this proxy
statement.
WE STRONGLY RECOMMEND
A VOTE FOR THE OMNIBUS RESOLUTION
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INFORMATION ON THE SPECIAL MEETING
Based on currently available public information, a quorum will exist at the
Special Meeting if holders of not less than a majority of the shares of common
stock outstanding and entitled to vote at the Special Meeting are present in
person or by proxy. If a quorum is present at the Special Meeting, the
shareholders may remove the Board of Directors by a majority of the votes cast
at the Special Meeting. Once the current Board of Directors is removed,
shareholders may elect new directors to fill vacancies on the Board.
If the shareholders present at the Special Meeting in person or by proxy are
entitled to vote to elect new directors, they will be entitled to cumulate their
votes and the nominees receiving the greatest number of votes will be elected,
up to the number of nominees to be elected at the Special Meeting. Once elected
to the Board of Directors, each director will serve until the next annual
meeting and thereafter until his or her successor has been elected and qualified
or until his or her earlier death, resignation, retirement, disqualification or
removal.
The GOLD Proxy will be voted at the Special Meeting in accordance with your
instructions. You may vote FOR the By-Law amendments, FOR the removal of the
current directors, FOR the election of our nominees as directors of Weis
Markets, FOR the Shareholder Value Resolution and FOR the Omnibus Resolution, or
withhold authority to vote for the By-Law amendments, for the removal of for the
current directors, for the election of the nominees, and for the Omnibus
Resolution by marking the proper boxes on the GOLD Proxy. You also may withhold
your vote from any of the nominees by writing the name of such nominee in the
space provided on the GOLD Proxy Card. IF NO MARKING IS MADE, YOU WILL BE DEEMED
TO HAVE GIVEN A DIRECTION TO VOTE THE SHARES REPRESENTED BY THE GOLD PROXY FOR
THE SPECIAL MEETING PROPOSALS IN THEIR ENTIRETY, PROVIDED THAT YOU HAVE SIGNED
AND DATED THE PROXY CARD.
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PROXY PROCEDURES
In order for your views on the proposals to be heard by Weis Markets and
represented at the Special Meeting, please mark, sign and date the enclosed GOLD
Proxy and return it to MacKenzie Partners, Inc. at 156 Fifth Avenue, New York,
New York 10010, in the enclosed postage paid envelope in time to be voted at the
Special Meeting. Execution of the GOLD Proxy will not affect your right to
attend the Special Meeting and to vote in person.
You are eligible to execute a GOLD Proxy only if you owned the common stock on
the record date. If you own your shares of common stock "beneficially" (i.e.,
deriving the economic benefits of ownership thereof or having the power to vote
or dispose of such shares), but not "of record" (i.e., having one's name
recorded on the stock transfer records of Weis Markets), or if your ownership of
shares is through a broker, bank, other financial institution or other record
holder, you should contact your broker, bank, other financial institution or
other record holder and instruct such person or entity to execute the GOLD Proxy
on your behalf. If you acquired shares after the Record Date without a proxy,
you may not execute a GOLD Proxy to vote at the Special Meeting with respect to
such shares. You will retain the right to execute a proxy card in connection
with this proxy solicitation even if you sell your shares after the record date.
If you execute and deliver a proxy, it may subsequently be revoked by delivering
written notice of revocation to MacKenzie Partners, Inc. at 156 Fifth Avenue,
New York, New York 10010 or Weis Markets or by your vote at the Special Meeting.
A revocation may be in any written form validly signed and dated by you as long
as it clearly states that your prior proxy is no longer effective. Any validly
signed and dated revocation will supersede any previously dated or undated GOLD
Proxy. To be effective, your written notice of revocation must be signed, dated
and delivered prior to the Special Meeting.
If you sign, date and deliver a GOLD Proxy and thereafter, on one or more
occasions, sign, date and deliver a later-dated proxy, the latest-dated proxy
will be controlling as to your vote and will replace your prior proxy or
proxies. However, any later-dated proxy will be of no effect if it is delivered
after the Special Meeting. ONLY YOUR LATEST DATED PROXY FOR THE SPECIAL MEETING
WILL COUNT AT THE SPECIAL MEETING.
If Weis Markets chooses to oppose our proposals and if, in such instance, you
sign a proxy revocation card sent to you by Weis Markets, you may override that
revocation by returning to MacKenzie Partners, Inc. at 156 Fifth Avenue, New
York, New York 10010 a subsequently dated and signed GOLD Proxy.
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CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
The members of the Shareholders Committee, was well as Messrs. Apfelbaum,
Goldstein, Furst and Perelman in their capacity as nominees, may be deemed to be
"participants" (as defined in Instruction 3 to Item 4 of Rule 14a-101 of the
Exchange Act) in this proxy solicitation. Certain information relating to the
beneficial ownership of common stock by the participants in this solicitation
and certain other information is contained in Annex X to this Proxy Statement
and is incorporated in this proxy statement by reference.
OTHER REPRESENTATIVES OF THE SHAREHOLDERS
COMMITTEE WHO ALSO MAY ASSIST IN THE SOLICITATION OF PROXIES
In connection with Salomon Smith Barney's engagement as our financial advisor,
we anticipate that certain employees of Salomon Smith Barney may communicate in
person, by telephone or otherwise with a limited number of institutions, brokers
or other persons who are shareholders for the purpose of assisting in the proxy
solicitation. Salomon Smith Barney will not receive any fee for, or in
connection with, such solicitation activities apart from the fees they are
otherwise entitled to receive under their engagement. See "General Information"
below. The principal business address of Salomon Smith Barney is 388 Greenwich
Street, New York, New York, 10013. Additional information regarding Salomon
Smith Barney is contained in Annex X to this Proxy Statement and is incorporated
in this proxy statement by reference.
GENERAL INFORMATION
This proxy statement and the accompanying GOLD Proxy Card are first being
furnished to shareholders on or about [___________________]. Executed proxies
may be solicited by mail, advertisement, telephone, telecopier and in person.
Solicitation may be made by members of the Shareholders Committee, none of whom
will receive additional compensation for such solicitation. Proxies will be
solicited from individuals, brokers, banks, bank nominees and other
institutional holders. We have requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward all solicitation materials to
the beneficial owners of the shares they hold of record. We will reimburse these
record holders for their reasonable out-of-pocket expenses.
In addition, we have retained MacKenzie Partners, Inc. as our information agent
and to solicit proxies in connection with the Special Meeting. We have agreed
to reimburse MacKenzie Partners, Inc. for its reasonable expenses and to pay to
MacKenzie Partners, Inc. fees not to exceed $[_______].
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MacKenzie Partners, Inc. will employ approximately [__] people in its efforts.
Costs incidental to this solicitation include expenditures for printing,
postage, legal and related expenses and are expected to be approximately
$[__________].
The members of the Shareholders Committee also have retained Salomon Smith
Barney to provide certain financial advisory services in connection with our
solicitation of proxies for the Special Meeting. Salomon Smith Barney is engaged
in providing a full range of banking, securities trading, market making and
brokerage services to institutional and individual clients.
In connection with the engagement of Salomon Smith Barney as our financial
advisor, the members of the Shareholders Committee have entered into an
engagement letter agreement with Salomon Smith Barney. Pursuant to this
engagement letter, Salomon Smith Barney has agreed to perform such customary
financial advisory and investment banking services as are reasonably requested
in connection with a potential transaction, including the sale, transfer or
other disposition of, or special dividend with respect to, all or a significant
portion of the shares of common stock beneficially owned by the members of the
Shareholders Committee and certain members of those persons' families.
Salomon Smith Barney is entitled to receive fees for its services under this
engagement letter as follows: (a) $250,000 promptly upon execution of the
engagement letter; (b) $250,000 following successful completion of a proxy
solicitation, action by written consent, negotiated settlement or other event
pursuant to which designees of the Shareholders Committee represent a majority
of the Board of Directors of Weis Markets; (c) an additional fee determined by
multiplying the total amount of cash and the fair market value (on the date of
payment) of all other property paid or payable to the members of the
Shareholders Committee who become parties to this engagement letter in respect
of the shares of common stock held by them in connection with a transaction (the
applicable percentage will be based on the percentage premium of the transaction
value on a per-share basis over a base price of $35.375 (the closing price of
the common stock on November 26, 1999) and will vary from 0.25% for premiums to
the base price of 0% or less to 0.75% for premiums to the base price of 40% or
more); and (d) without duplication of the transaction fee, a fee of 0.25% of the
value of any special dividend that is paid to the members of the Shareholders
Committee. Amounts payable pursuant to clauses (c) or (d) of the preceding
sentence will be reduced, without duplication, by any amounts previously paid
under clauses (a) and (b) of the preceding sentence. Under this engagement
letter, Salomon Smith Barney is also entitled to reimbursement of its reasonable
expenses, including reasonable fees and expenses of Salomon Smith Barney's legal
counsel in connection with the engagement of up to $10,000.
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The members of the Shareholders Committee have also agreed to use reasonable
efforts, subject to the fiduciary duties of such persons, to cause Weis Markets
to retain Salomon Smith Barney as their exclusive financial advisor in
connection with a review of strategic alternatives and the execution thereof,
for which Salomon Smith Barney would be entitled to receive a normal and
customary fee from Weis Markets for such transaction in lieu of the payment by
the members of the Shareholders Committee of further fees under this engagement
letter.
In addition to the foregoing, the Reporting Persons who are parties to the
Engagement Letter have also entered into a customary indemnification agreement
with Salomon Smith Barney in connection with Salomon Smith Barney's engagement.
The total costs incurred to date in connection with this solicitation are not in
excess of $[__________]. If our nominees are elected, we may ask Weis Markets to
reimburse us for costs and expenses incurred in connection with this
solicitation.
ADDITIONAL INFORMATION
The principal executive offices of Weis Markets are at 1000 South Second Street,
Sunbury, Pennsylvania 17801. Except as otherwise noted herein, the information
concerning Weis Markets has been taken from or is based upon documents and
records on file with the Securities and Exchange Commission and other publicly
available information. Although we do not have any knowledge that would indicate
that any statement contained herein based upon such documents and records is
untrue, we do not take any responsibility for the accuracy or completeness of
the information contained in such documents and records, or for any failure by
Weis Markets to disclose events that may affect the significance or accuracy of
such information.
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For information regarding the security ownership of certain beneficial owners
and the management of Weis Markets, see Annex IX.
Janet C. Weis
Susan Weis Mindel
Joel Mindel
Nancy Weis Wender
Ellen Weis Goldstein
Joseph I. Goldstein
Sidney Apfelbaum
Michael M. Apfelbaum
IF YOUR SHARES OF COMMON STOCK ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK,
BANK NOMINEE OR OTHER INSTITUTION, ONLY IT CAN SIGN A PROXY WITH RESPECT TO YOUR
COMMON STOCK. ACCORDINGLY, PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR
ACCOUNT AND GIVE INSTRUCTIONS FOR A GOLD PROXY TO BE SIGNED REPRESENTING YOUR
SHARES OF COMMON STOCK.
IF YOU HAVE ANY QUESTIONS ABOUT GIVING YOUR PROXY OR REQUIRE ASSISTANCE, PLEASE
CONTACT MACKENZIE PARTNERS, INC. TOLL-FREE AT (800) 322-2885.
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ANNEX I
DIRECTOR REMOVAL RESOLUTION
RESOLVED, that the current Board of Directors be removed in its entirety,
including without limitation any of the following who are members of the Board
of Directors as of the Special Meeting: Robert F. Weis, Norman S. Rich, William
R. Mills, Jonathan H. Weis, Michael M. Apfelbaum, Joseph I. Goldstein and
Richard E. Shulman.
<PAGE>
ANNEX II
ELECTION OF DIRECTORS RESOLUTION
RESOLVED, that each of Michael M. Apfelbaum, John S. Furst, Joseph I. Goldstein
and Jeffrey E. Perelman be elected to fill four of the seven vacancies on the
Board of Directors resulting from the Director Removal Resolution for the
balance of the terms of the present directors and until their successors are
elected and qualified.
<PAGE>
ANNEX III
BOARD COMPOSITION RESOLUTION
RESOLVED, that the By-Laws of the Company be, and they hereby are, amended,
effective at the time this resolution is approved by the shareholders of the
Company, by adding the following after the last sentence of Section 4-01 of the
By-Laws:
No person who is an officer or employee of the Company shall be
appointed, or nominated for election, to the Board of Directors, and
no incumbent director shall become an officer or employee of the
Company (other than to the extent such person is deemed to be an
officer solely because such person is named Chairman of the Board of
Directors), if after giving effect to such nomination, appointment
or employment, a majority of the directors are persons who are or
would be officers or employees of the Company. The membership of the
Board of Directors shall reflect, as fully as possible, the
composition of the Company's shareholder base, including its
substantial shareholders, in proportion to the percentage of the
outstanding voting shares of the Company's capital stock held by
such shareholders. The Board of Directors may not amend or repeal
this Section or adopt any new By-Law provision that is inconsistent
in any manner with this Section.
<PAGE>
ANNEX IV
SHAREHOLDER VALUE RESOLUTION
RESOLVED, that the shareholders of the Company, hereby request that the Board of
Directors of the Company promptly (i) establish a committee of directors
representative of all shareholder interests to consider and evaluate the
strategic options available to the Company for maximizing shareholder value and
providing enhanced liquidity to shareholders, including through possible
business combination and merger transactions, and (ii) require that any and all
overtures (whether informal or formal) by any unaffiliated third parties
received by the Company or any of its officers or directors concerning such a
possible sale or merger are to be reported to the full Board of Directors of the
Company, that all such bona fide overtures should be explored in full and that
offers from any such persons should be solicited and not discouraged, with a
full report of such matters to be made to the shareholders of the Company.
<PAGE>
ANNEX V
BOARD SIZE RESOLUTION
RESOLVED, that the By-Laws of Weis Markets be and they hereby are amended,
effective at the time this resolution is approved by the shareholders of the
Company, by deleting the first two sentences of Section 4-01 in their entirety
and replacing them with the following sentence:
The business and affairs of the Company shall be managed and
controlled by a Board of Directors, which shall be fixed at seven
(7) members, who shall be persons of full age.
<PAGE>
ANNEX VI
BY-LAWS REPEAL RESOLUTION
RESOLVED, that any and all amendments made by the Board of Directors to the
By-Laws on or after November 30, 1999 be repealed, other than those provisions
that were duly approved by the shareholders of the Company, and that, without
the approval of the shareholders of the Company, the Board of Directors may not
thereafter amend any section of the By-Laws affected by such repeal or adopt any
new By-Law provision in a manner which serves to reinstate any repealed
provision or any similar provision.
<PAGE>
ANNEX VII
OMNIBUS RESOLUTION
RESOLVED, that each of the resolutions of the Proponents be voted upon by the
shareholders of the Company in the following order:
1. The Omnibus Resolution;
2. The By-Laws Repeal Resolution;
3. The Board Composition Resolution;
4. The Shareholder Value Resolution;
5. The Director Removal Resolution;
6. The Election of Directors Resolution;
and further, that, pursuant to Section 1765 of the Pennsylvania Business
Corporation Law and Section 3-11 of the Company's By-Laws, CT Corporation
System, and/or a representative thereof, be appointed as sole judge of election
at this meeting and that such judge of election shall promptly following the
closing of the polls make at this meeting a written report and execute a
certificate with respect to each resolution or other item of business considered
at this meeting, which report and certificate shall be made available for
inspection to each shareholder present at this meeting as promptly as
practicable following the casting of votes thereon, with respect to the number
of votes duly cast, in person of by proxy or otherwise, in favor or against, or
abstaining or withholding authority with respect to, each such resolution or
other items of business.
<PAGE>
ANNEX VIII
BENEFICIAL OWNERSHIP OF
SHARES BY PARTICIPANTS IN THE SOLICITATION
AND CERTAIN OTHER PERSONS
The principal business addresses of each of the members of the Shareholders
Committee and of Messrs. Furst and Perelman are set forth below.
NAME ADDRESS
------------------------------ -----------------------------------------------
Janet C. Weis................. c/o Michael M. Apfelbaum, Esq., Apfelbaum,
Apfelbaum & Apfelbaum, 43 South Fifth Street,
Sunbury, PA 17801
Michael M. Apfelbaum.......... Apfelbaum, Apfelbaum & Apfelbaum, 43 South
Fifth Street, Sunbury, PA 17801
Sidney Apfelbaum.............. Apfelbaum, Apfelbaum & Apfelbaum, 43 South
Fifth Street, Sunbury, PA 17801
Susan Weis Mindel............. c/o Michael M. Apfelbaum, Esq., Apfelbaum,
Apfelbaum & Apfelbaum, 43 South Fifth Street,
Sunbury, PA 17801
Joel Mindel................... c/o Michael M. Apfelbaum, Esq., Apfelbaum,
Apfelbaum & Apfelbaum, 43 South Fifth Street,
Sunbury, PA 17801
Nancy Weis Wender............. c/o Michael M. Apfelbaum, Esq., Apfelbaum,
Apfelbaum & Apfelbaum, 43 South Fifth Street,
Sunbury, PA 17801
Ellen Weis Goldstein.......... c/o Michael M. Apfelbaum, Esq., Apfelbaum,
Apfelbaum & Apfelbaum, 43 South Fifth Street,
Sunbury, PA 17801
Joseph I. Goldstein........... Kirkpatrick & Lockhart, LLP, 1800 Massachusetts
Avenue, N.W., Washington, DC 20036-1800
John S. Furst................. 190 Shady Shores Drive, Mabank, Texas 75147-9133
Jeffrey E. Perelman........... 1 Cherry Lane, Wynwood, Pennsylvania 19096
<PAGE>
As of the date of this proxy statement, each of the members of the Shareholders
Committee and Messrs. Furst and Perelman may be deemed to own beneficially (as
that term is defined in Rule 13d-3 under the Exchange Act, as amended) the
following number of shares of common stock of Weis Markets:
PERCENT OF
NAME SHARES OUTSTANDING*
-------------------------------------- ------------ -----------------
Janet C. Weis...................... 8,132,411(1) 19.5%
Michael M. Apfelbaum............... 3,809,009(2) 9.1
Sidney Apfelbaum................... 2,598,903(3) 6.2
Susan Weis Mindel.................. 3,490,216(4) 8.3
Joel Mindel........................ 12,150 0.03
Nancy Weis Wender.................. 3,381,463(5) 8.1
Ellen Weis Goldstein............... 3,473,761(6) 8.3
Joseph I. Goldstein................ 10,097 0.02
Shareholders Committee (in the 17,090,626 41.0
aggregate):........................
John S. Furst...................... 0 0
Jeffrey E. Perelman................ 0 0
(1)Includes 8,087,773 shares of common stock held by Weis Family Holdings,
L.P.
(2)Includes 3,781,945 shares held by the trusts under the Claire Gross Weis
Deed of Trust (the "Claire Weis Trusts") and 24,064 shares held by certain
Apfelbaum family trusts, each of which Michael M. Apfelbaum is co-trustee.
Michael M. Apfelbaum has shared voting and dispositive power over the shares
held in the Claire Weis Trusts, sole voting and dispositive power over 88 of
the shares, and sole voting and no dispositive power over 23,976 of the
shares, held in the Apfelbaum family trusts.
-----------
* Based on information regarding the total number of outstanding shares of
Company common stock set forth in the Company's Quarterly Report on Form 10-Q
for the period ended September 25, 1999 of Weis Markets.
<PAGE>
(3)Includes 2,408,526 shares held by the Charles Degenstein Charitable
Foundation, 82,364 shares held by the Lore Degenstein QTIP Trust, 65,520
shares held by the Lore Degenstein Charitable Remainder Unitrust, 7,500
shares held by the Zweifler Family Trust, 7,500 shares held by the Walter
Zweifler Trust and 3,000 shares held by the Jane Zweifler Trust, each of
which Sidney Apfelbaum is co-trustee. Sidney Apfelbaum has sole voting and
dispositive power over the 2,408,526 shares held by the Charles Degenstein
Charitable Foundation and shared voting and dispositive power over the shares
otherwise identified in this note 3.
(4)Includes 29,797 shares held by the Janet C. Weis 1997 Charitable Remainder
Unitrust, 28,600 shares held by the Janet C. Weis 1997 Charitable Lead
Unitrust, 26,184 shares held by the Janet C. Weis Grantor Retained Annuity
Trust #3, 43,081 held by the Janet C. Weis Grantor Retained Annuity Trust #4
(collectively, the "Janet Weis Trusts"), 1,512,778 shares held by certain of
the Claire Weis Trusts, 58,154 shares held by the Wendy Lynn Mindel 1998
Trust and 54,042 shares held by the Emily Beth Mindel 1998 Trust, each of
which Susan Weis Mindel is a co-trustee. Susan Weis Mindel has shared voting
and dispositive power over each of the shares identified in this note 4.
(5)Includes 29,797 shares held by the Janet C. Weis 1997 Charitable Remainder
Unitrust, 28,600 shares held by the Janet C. Weis 1997 Charitable Lead
Unitrust, 26,184 shares held by the Janet C. Weis Grantor Retained Annuity
Trust #3, 43,081 held by the Janet C. Weis Grantor Retained Annuity Trust #4
(collectively, the "Janet Weis Trusts"), and 1,512,778 shares held by certain
of the Claire Weis Trusts, each of which Nancy Weis Wender is a co-trustee.
Nancy Weis Wender has shared voting and dispositive power over each of the
shares identified in this note 5.
(6)Includes 29,797 shares held by the Janet C. Weis 1997 Charitable Remainder
Unitrust, 28,600 shares held by the Janet C. Weis 1997 Charitable Lead
Unitrust, 26,184 shares held by the Janet C. Weis Grantor Retained Annuity
Trust #3, 43,081 held by the Janet C. Weis Grantor Retained Annuity Trust #4
(collectively, the "Janet Weis Trusts"), 1,512,778 shares held by certain of
the Claire Weis Trusts, 58,154 shares held by the Laura Ann Goldstein 1999
Trust and 54,042 shares held by the Paul Weis Goldstein 1999 Trust, each of
which Ellen Weis Goldstein is a co-trustee. Ellen Weis Goldstein has shared
voting and dispositive power over each of the shares identified in this note
6.
<PAGE>
Joseph I. Goldstein and Michael M. Apfelbaum are existing directors of Weis
Markets and receive, with respect to Weis Markets' 1999 fiscal year, an annual
retainer of $16,000 and an additional $1,000 for each regular meeting attended.
In addition, Messrs. Goldstein and Apfelbaum are members of the Board of
Director's Audit and Compensation Committees and receive $700 for each meeting
of such committee they attend. Additionally, Michael M. Apfelbaum is a partner
in the law firm of Apfelbaum, Apfelbaum and Apfelbaum; at the request of the
management of Weis Markets, such firm provided legal services to Weis Markets
during 1999, the remuneration for which was not material to such firm.
Central Properties, Inc., a Pennsylvania corporation, owns the land under a Weis
Markets store and an adjacent parking lot in Lebanon, Pennsylvania. Central
Properties leases these properties to Weis Markets for rent payments which
totaled $79,969 in 1998. The stockholders of Central Properties include Robert
F. Weis and family members of Michael M. Apfelbaum, Joseph I. Goldstein and
Jonathan H. Weis.
Except as otherwise set forth in this Annex VIII, no member of the Shareholders
Committee or nominee or any associate of any of the foregoing persons or any
other person who may be deemed a "participant" in this solicitation is or was
within the past year a party to any contract, arrangement or understanding with
any person with respect to any shares of common stock. There have not been any
transactions since the beginning of the last fiscal year of Weis Markets and
there is not any currently proposed transaction to which Weis Markets or any of
its subsidiaries was or is to be a party, in which the members of the
Shareholders Committee or any associate or immediate family member of any of the
foregoing persons or any other person who may be deemed a "participant" in this
solicitation had or will have a direct or indirect material interest. Other than
the directorships contemplated by the Special Meeting Proposals and compensation
arrangements with Joseph I. Goldstein and Michael M. Apfelbaum in their
capacities as directors of Weis Markets, none of the members of the Shareholders
Committee or any associate of any of the foregoing persons or any other person
who may be deemed a "participant" in this solicitation has any arrangement or
understanding with any person with respect to any future employment by Weis
Markets or its affiliates, or with respect to any future transactions to which
Weis Markets or its affiliates may or will be a party.
In the ordinary course of its business, Salomon Smith Barney maintains customary
arrangements and may effect transactions in the securities of Weis Markets for
the accounts of its customers. As of November 29, Salomon Smith Barney did not
beneficially own any common stock, and held of record 365,667 shares of common
stock for customer accounts.
<PAGE>
ANNEX IX
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth share ownership information with respect to
persons known to be beneficial owners of more than 5% of the shares of common
stock of Weis Markets. With respect to Robert F. Weis, Ellen W.P. Wasserman and
Mellon Financial Corporation insofar as such information relates to the Will of
Harry Weis as described in note 6 below, such information was set forth in the
1999 Proxy Statement of Weis Markets. With respect to the Shareholders Committee
and its members and Mellon Financial Corporation as co-trustee of certain trusts
or foundations related to members of the Shareholders Committee, such
information is as of November 29, 1999. Unless otherwise indicated, each of the
shareholders has sole voting and investment power with respect to the shares of
common stock of Weis Markets beneficially owned.
NUMBER
OF SHARES PERCENT
BENEFICIALLY OF CLASS
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED (1) (3)
------------------------------------------ ------------ ---------
Shareholders Committee (in the aggregate) 17,090,626 41%
(2)....................................
c/o Michael M. Apfelbaum
Apfelbaum, Apfelbaum and Apfelbaum
43 South Fifth Street
Sunbury, PA 17801
Robert F. Weis ........................... 12,764,142 (4) 30.6
c/o Weis Markets, Inc. (6)
1000 South Second Street
Sunbury, PA 17801-0471
Ellen W.P. Wasserman ..................... 3,584,424 (5) 8.6
c/o Weis Markets, Inc.
1000 South Second Street
Sunbury, PA 17801-0471
Mellon Financial Corporation.............. 10,431,032 (6) 25.0
One Mellon Bank Center
Pittsburgh, PA 15258
-----------
(1) For purposes of this table, a person is deemed to have "beneficial
ownership" of any security that such person (a) has or shares "voting
power", which includes the power to dispose of, or to direct the
disposition of, such security or (b) has the right to acquire within 60
days
<PAGE>
after the date such information was set forth in the 1999 Proxy Statement
of Weis Markets, and November 29, 1999 with respect to the beneficial
ownership of the Shareholders Committee. More than one person may be
deemed to be a beneficial owner of the same securities, and a person may be
deemed to be a beneficial owner of securities as to which he has no
beneficial interest.
(2) Includes shares which may be deemed to be held by these individuals as a
"group" as such term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934 (the "Exchange Act"). Additional information regarding the
holdings by members of the Shareholders Committee is set forth on the
Schedule 13D (and amendments thereto) filed with the Securities and
Exchange Commission on November [30], 1999. See Annex X for additional
information with respect to beneficial ownership of the common stock of
Weis Markets by each of the members of the Shareholders Committee,
including information regarding sole or shared voting and dispositive power
with respect to the shares of common stock of Weis Markets beneficially
owned thereby.
(3) Based on 41,690,125 shares outstanding on September 25, 1999 as disclosed
by Weis Markets in its Quarterly Report on Form 10-Q for the quarter then
ended.
(4) Of the total 12,764,142 shares listed, Robert F. Weis has sole voting and
investment power as to all. This amount includes 6,649,087 shares held in
trust under the Will of Harry Weis, with Mellon Financial Corporation and
Robert F. Weis as co-trustees.
(5) Of the total 3,584,424 shares listed, Ellen W. P. Wasserman has sole voting
and investment power as to all.
(6) Includes 6,649,087 shares held in trust under the Will of Harry Weis, with
Mellon Financial Corporation and Robert F. Weis as co-trustees (note 4),
3,781,945 shares held in the Claire Weis Trusts as co-trustee and 2,408,526
shares held by the Charles B. Degenstein Foundation, with Mellon Financial
Corporation and Sidney Apfelbaum as co-trustees (note 2). Mellon Financial
Corporation has shared voting and dispositive power over the shares held in
the Claire Weis Trusts. See Annex IX.
<PAGE>
The following table sets forth, according to the 1999 Proxy Statement of Weis
Markets (except as otherwise noted below), the name of, and the total number of
shares of common stock (if any) beneficially owned (as defined in Rule 13d-3
under the Exchange Act) and the percentage of outstanding shares of common stock
beneficially owned by, (a) each director of Weis Markets, (b) the Chairman of
the Board and each of the executive officers of Weis Markets and (c) all
directors and officers as a group. The information presented below has been
taken from or is based upon documents and records on file with the Securities
and Exchange Commission and other publicly available information. Since the 1999
Proxy Statement of Weis Markets, the total outstanding number of shares of
common stock has increased to 41,690,125 (based on information provided in the
Quarterly Report on Form 10-Q for the quarter ended September 25, 1999 of Weis
Markets). Although we do not have any knowledge that would indicate that any
statement contained herein based upon such documents and records is untrue, we
do not take any responsibility for the accuracy or completeness of the
information contained in such documents and records, or for any failure by Weis
Markets to disclose events that may affect the significance or accuracy of such
information.
SHARES OF STOCK
OF THE
CORPORATION PERCENT
BENEFICIALLY OWNED OF
NAME ON FEBRUARY 5, 1999 CLASS
-------------------------------- ------------------- --------
Robert F. Weis............... 12,764,142 30.6%
Norman S. Rich............... 22,373 *
William R. Mills............. 2,000 *
Jonathan H. Weis............. 87,563 *
Michael M. Apfelbaum......... 6,771,863 (1) 16.2
Joseph I. Goldstein.......... 10,097 *
Richard E. Shulman........... 216 *
All 14 Directors and
Officers as a Group........ 19,710,770 47.2
--------
* Less than 1%.
(1) Including 1,717,705 shares held in the Residuary Trust of Sigmund Weis,
3,798,427 shares held in the Claire G. Weis Deed of Trust and 1,228,798
shares held in the Residuary Trust of Clare Elizabeth Degenstein.
<PAGE>
ANNEX X
PRESS RELEASE
ISSUED NOVEMBER 30, 1999
WEIS MARKETS SHAREHOLDERS COMMITTEE
NEWS RELEASE
FOR IMMEDIATE RELEASE Contact: Donald W. Schuster
The Torrenzano Group
(212) 681-1700 ext.103
MEMBERS OF WEIS FAMILY FILE 13-D SEEKING ENHANCED
SHAREHOLDER VALUE FOR SHARES OF WEIS MARKETS, INC.
SUNBURY, PA, November 30 -- Certain members of the Weis family and related
trusts and foundations (the Shareholders Committee) holding approximately 41% of
the outstanding shares of Weis Markets, Inc. (NYSE: WMK) filed a Schedule 13D/A
today seeking enhanced shareholder value and increased liquidity for all shares
of Weis Markets.
The Shareholders Committee has called upon the Company to change the composition
of its Board of Directors to better represent all members of the Weis family and
the entire shareholder base and to establish a special committee of directors to
evaluate the strategic options that may be available to the Company for
maximizing shareholder value, including through possible business combination
and merger transactions.
Members of the Shareholders Committee have also delivered a notice pursuant to
the Company's by-laws requesting that the Company call a special meeting of its
shareholders to consider the election of a reconstituted slate of directors
containing additional independent directors and to vote upon certain by-law
proposals relating to their stated platform. The Shareholders Committee is
filing a preliminary proxy statement today with the Securities and Exchange
Commission relating to the proposed special meeting.
John S. Furst and Jeffrey E. Perelman have agreed to serve as directors of the
Company in connection with such an election. John S. Furst has significant
corporate experience and is a certified public accountant who spent 25 years as
a partner at Coopers & Lybrand until 1993 and continues to serve as a senior
officer of several companies. Mr. Perelman is a Pennsylvania executive and
businessman with extensive experience as the chief executive officer of a number
of domestic and European companies and is active in various philanthropic
endeavors.
<PAGE>
The Shareholders Committee said that it has recently engaged Salomon Smith
Barney to act as its financial advisor and to assist it in obtaining
increased liquidity and value for the shares owned by its members. Based upon
advice received from Salomon Smith Barney, the Shareholders Committee believes
that the value that shareholders could receive in a sale or merger transaction
involving the Company is likely to be substantially in excess of the current
trading range of the Common Stock and that there would likely be strong interest
by potential acquirers in the Company. Salomon Smith Barney has advised the
Shareholders Committee that, based upon its preliminary analysis of the Company
using only publicly available information, and without having conducted any
solicitation of third-party interest and relying upon recent merger and
acquisition precedents in the retail grocery industry, it believes that a per
share acquisition price in the range of $45 to $55 should reasonably be
obtainable by the Company in the current market environment.
The Shareholders Committee also indicated that it believes that the Company's
strong balance sheet (free of debt and including approximately $400 million in
cash and marketable securities on hand) can be used to provide shareholders with
tangible short-term value without adversely affecting the Company's previously
announced capital investment program in the event such a sales process is not
consummated.
The Shareholders Committee has hired MacKenzie Partners, Inc. to aid in their
shareholder communications program.
The Shareholders Committee indicated that, while its members remained hopeful
that an amicable resolution can be reached with the majority of the members of
the Board, it is prepared to pursue a protracted process, if necessary, to
accomplish its desired goals on behalf of all shareholders. Two of the Company's
seven directors are presently affiliated with the Shareholders Committee.
Speaking on behalf of the family members, Janet Weis, wife of the late Sigfried
Weis, former Chairman and President of Weis Markets, stated: "Weis Markets has
been a family institution for 88 years and we are all proud of its great
heritage. Robert Weis, Norm Rich and the other members of management have done a
fine job running the Company day-to-day in recent years. It is now time,
however, for all of us, together, to pursue a change in the best interests of
the employees, public shareholders and the family. Holders of a significant
majority of the Weis Markets shares no longer participate in the day-to-day
management of the Company. We believe that it is time for the Company to chart a
new course and to ensure that all shareholders - as well as employees and the
community -- are treated fairly in that process."
<PAGE>
Sidney Apfelbaum, a long-time family friend and a trustee of a number of family
trusts and a family charitable foundation, added: "The situation to which we
respond today has been building for many years. As competitive conditions in the
industry continue to undergo dramatic change, we are all firmly united in our
belief that now is the right time for us to seek a strategic partner for Weis
Markets before industry developments pass us by.
"We are confident there is strong interest in the Weis Markets franchise and
that a strategic merger or acquisition of Weis Markets can be accomplished in a
manner attractive to all Weis Markets constituencies. I have lived in Sunbury
since 1923 and I have a strong friendship and professional association with Weis
Markets and all members of the Weis family going back a very long way. I am
particularly proud of the good works and contributions of the Weis and
Degenstein families that have helped build so many of our local institutions.
Janet Weis and the other members of her family have my full support in their
efforts to see that a fair and fitting next chapter to this great story is
written in the best interests of all of the members of the younger Weis
generations, the Weis Markets employees, Sunbury and all the communities that
the company serves."
Weis Markets, Inc. is based in Sunbury, Pennsylvania and operates approximately
164 stores in six states: Pennsylvania, Maryland, New Jersey, New York, Virginia
and West Virginia. The company was founded in 1912 by brothers Harry Weis and
Sigmund Weis. Weis Markets conducted its initial public offering in 1965.
Sigmund Weis's son, the late Sigfried Weis, was a member of the company's Board
of Directors from 1947 until 1995, became President of the Company in 1961 and
was Janet Weis's husband.
The Shareholders Committee is comprised of Janet C. Weis and descendants of
Janet and Sigfried Weis and their families, a family partnership and the
trustees of family trusts and foundations, including Michael M. Apfelbaum and
Joseph I. Goldstein, who also serve as directors of Weis Markets.
<PAGE>
PRELIMINARY COPY
(FRONT OF PROXY CARD)
PROXY SOLICITATION
WEIS MARKETS, INC.
THIS REVOCABLE PROXY IS SOLICITED BY
THE SHAREHOLDERS COMMITTEE
The undersigned shareholder of Weis Markets, Inc. (the "Company") hereby
appoints [___________________________________________________], and each of
them, proxies with full power of substitution and resubstitution, the proxies of
each of the undersigned (said proxies, together with each substitute appointed
by any of them, if any, collectively the "Proxies"), to vote all shares of
common stock of Weis Markets, no par value, that the undersigned is entitled to
vote if personally present at the Special Meeting of shareholders of Weis
Markets to be held on [____________________] at [___________] local time at
[______________ ______________________] and at any adjournment or postponement
thereof (the "Special Meeting"). The undersigned hereby revokes any previous
proxies with respect to the matters covered by this Proxy.
THE SHAREHOLDERS COMMITTEE RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS SET
FORTH BELOW.
(Please mark each proposal with an "X" in the appropriate box)
1. To remove the current Board of Directors in its entirety, including
without limitation, any of the following who are members of the Board of
Directors as of the Special Meeting: Robert F. Weis, Norman S. Rich,
William R. Mills, Jonathon H. Weis, Michael M. Apfelbaum, Joseph I.
Goldstein and Richard E. Shulman (the "Director Removal Resolution").
[_] FOR [_] AGAINST [_] ABSTAIN
2. To have elected Michael M. Apfelbaum, John S. Furst, Joseph I. Goldstein
and Jeffrey E. Perelman, (the "Nominees") to fill four of the seven
vacancies on the Board of Directors for the balance of the terms of the
current directors and until their successors are duly elected and
qualified. Biographical information on each nominee is set forth under the
caption "The Special Meeting Proposals" (the "Election of Directors
Resolution").
<PAGE>
[_] FOR [_] WITHHOLD AUTHORITY
all nominees for all nominees
(INSTRUCTION: To withhold authority to vote for one or more nominees, mark
FOR above and print the name(s) of the person(s) with respect to whom you
wish to withhold authority in the space provided below.)
-------------------------------------------------------------------
3. To amend the By-Laws to provide that a majority of the members of the
Board of Directors shall consist of persons who are not employees of Weis
Markets, and shall reflect the composition of the Company's shareholder
base (the "Board Composition Resolution").
[_] FOR [_] AGAINST [_] ABSTAIN
4. To request that the Board of Directors establish a special committee of
directors to consider and evaluate the strategic options available to the
Company for maximizing shareholder value and providing enhanced liquidity
to shareholders, including through possible business combinations and
merger transactions, and report any overtures from such third parties that
may be received to the Board of Directors and the shareholders of the
Company and that such overtures be fully explored (the "Shareholder Value
Resolution").
[_] FOR [_] AGAINST [_] ABSTAIN
5. To amend the By-Laws to set the size of the Board of Directors at seven
(the "Board Size Resolution").
[_] FOR [_] AGAINST [_] ABSTAIN
6. To repeal any and all amendments made by the Board of Directors to the
By-Laws after November 30, 1999, other than amendments that were duly
approved by the shareholders of the Company, and to provide that, without
approval of the shareholders of the Company, the Board of Directors may
not thereafter amend any section of the By-Laws affected by such repeal or
adopt any new By-Law provision that would serve to reinstate any repealed
provision or any similar provision (the "By-Laws Repeal Resolution").
<PAGE>
[_] FOR [_] AGAINST [_] ABSTAIN
7. To set forth the following order in which the Special Meeting Proposals
will be voted on by the shareholders of the Company, and to specify that
CT Corporation System be appointed the sole judge of election:
1. The Omnibus Resolution;
2. The Election Procedures Resolution;
3. The By-Laws Repeal Resolution;
4. The Board Composition Resolution;
5. The shareholder Value Resolution;
6. The Director Removal Resolution; and
7. The Election of Directors Resolution.
(the "Omnibus Resolution")
This proxy, when properly executed, will be voted in the manner marked herein by
the undersigned shareholder. IF NO MARKING IS MADE, THIS PROXY WILL BE DEEMED TO
BE A DIRECTION TO VOTE FOR THE FOREGOING PROPOSALS IN THEIR ENTIRETY. THE
SHAREHOLDERS COMMITTEE STRONGLY RECOMMENDS THAT YOU VOTE "FOR" THE PRECEDING
ACTIONS.
<PAGE>
(BACK OF REQUEST CARD)
Dated: _____________, 2000
Signature ______________________
Signature (if jointly held) _______________________
Title:
Please sign exactly as your name appears on your stock certificate. When shares
are held by joint tenants, both should sign. When signing as an attorney,
executor, administrator, trustee or guardian, give full title as such. If a
corporation, sign in full corporate name by president or other authorized
officer. If a partnership, sign in partnership name by authorized person. PLEASE
SIGN, DATE AND MAIL PROMPTLY IN THE POSTAGE-PAID ENCLOSED ENVELOPE.
