Notice of Annual Meeting of Shareholders
of
WEIS MARKETS, INC.
April 6, 1999
TO OUR SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of the Shareholders of Weis
Markets, Inc. (the "Corporation"), will be held on Tuesday, April 6, 1999, at
10:00 a.m., Eastern Standard Time, at the principal office of the Corporation,
1000 South Second Street, Sunbury, Pennsylvania 17801-0471, for the following
purposes:
1. To elect seven directors to serve, subject to provisions of the by-laws,
until the next Annual Meeting of shareholders or until their respective
successors have qualified.
2. To approve the appointment of independent public accountants for the current
fiscal year.
3. To approve an amendment to the current 1995 Stock Option Plan.
4. To act upon such other business as may properly come before such meeting, or
any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on February 5, 1999, as
the record date for the meeting. Only holders of shares of stock of record at
that time will be entitled to vote at the meeting or any adjournments or
postponements thereof.
To assure your representation at the meeting, please sign and mail promptly the
enclosed proxy, which is being solicited on behalf of the Corporation.
Reference is made to the attached Proxy Statement for further information with
respect to the business to be transacted at the meeting.
By order of the Board of Directors,
WILLIAM R. MILLS
Secretary of the Corporation
March 4, 1999
Sunbury, Pennsylvania
<PAGE>
WEIS MARKETS, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 6, 1999
This Proxy Statement is submitted with the Notice of the Annual Meeting of
Shareholders of Weis Markets, Inc. (the "Corporation"), to be held Tuesday,
April 6, 1999, at 10:00 a.m., Eastern Standard Time, at the principal office of
the Corporation, 1000 South Second Street, Sunbury, Pennsylvania 17801-0471,
and the form of proxy enclosed with such notice.
SOLICITATION OF PROXIES
The proxy form, which accompanies this statement, is being solicited on
behalf of the Corporation. Subject to the conditions hereinafter set forth, the
shares represented by each proxy executed in the accompanying form of proxy will
be voted at the meeting, or any adjournments or postponements thereof, in
accordance with the specifications therein made. Where there is no contrary
choice specified, the proxy will be voted "FOR" each of the proposals as
therein specified. Proxy material will be first sent to shareholders on or
about March 4, 1999.
A proxy executed in the form enclosed may be revoked by the person signing
the same at any time before the authority thereby granted is exercised. The
revocation may be exercised at any time before the annual meeting by indicating
the revocation in writing. This revocation should be directed to the Judge of
Elections, Weis Markets, Inc., 1000 South Second Street, Sunbury, Pennsylvania
17801-0471. The proxy may also be revoked by voting in person at the annual
meeting or by voting a later dated proxy.
The Corporation will provide, without charge, on written request from
security holders, copies of Form 10-K annual report.
Expenses related to the solicitation of the proxies for the meeting and the
handling and tabulation of proxies received, estimated at $27,000 in total, will
be paid by the Corporation. Officers, directors, and regular employees of the
Corporation may solicit proxies personally, by telephone or otherwise, from some
shareholders, if proxies are not promptly received, for which they will not
receive additional compensation. The Corporation may reimburse charges of
banks, brokers, and other custodians, nominees, and fiduciaries to send proxy
material to the beneficial owners and to secure their voting instructions, if
necessary. It is estimated that such costs will be nominal.
YEAR 2000 SHAREHOLDER PROPOSALS
Shareholders who intend to submit a proposal to be presented at the next
annual meeting, which if appropriate, will be included in the Corporation's next
annual Proxy Statement, must submit a concise written text of the proposal and
the reasons therefore to the Secretary at the executive offices on or before
November 1, 1999.
MATTERS TO BE ACTED UPON AT THE MEETING
As the notice of the meeting indicates, the following are the matters to be
acted upon at the meeting:
1. Seven directors will be elected at the meeting to hold office, subject to
the Corporation by-laws, until the next annual meeting of shareholders or
until their respective successors have qualified.
2. A request for shareholder approval of the appointment of Ernst & Young LLP
as the independent public accountants for the Corporation and its wholly
owned subsidiaries.
3. A request for shareholder approval to amend the 1995 Stock Option Plan (the
"Plan"), increasing the aggregate number of shares allocable to any one
employee, pursuant to one or more options, from 5,000 to 20,000 shares in
any one calendar year, allowing for nonstatutory stock options to be granted
under the Plan, and to make certain other conforming changes necessary to
reflect current law as applicable to the Plan.
4. Transact such other business as may properly come before the meeting or any
adjournments or postponements thereof.
2
<PAGE>
The Corporation's by-laws specify that any matter to be brought before an
annual meeting by a shareholder must be received at the principal executive
offices of the Corporation not later than the close of business on the sixtieth
day prior to the anniversary date of the immediately preceding annual meeting of
shareholders. Management does not intend to bring any other matters before the
meeting, and does not know of any matter, which is eligible for action at the
meeting.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The holders of Common Stock of the Corporation of record at the close of
business February 5, 1999 will be entitled to vote on all matters at the
meeting. Each holder of Common Stock will be entitled to one vote for each
share of stock so held and to cumulative voting rights in the election of
directors. Under cumulative voting, a stockholder, or the stockholder's
proxies, may vote the number of shares of stock owned by the stockholder for as
many persons as there are directors to be elected, or may cumulate such votes
and give to one or distribute among two or more nominees as many votes as shall
equal the number of directors to be elected multiplied by the number of the
stockholder's shares of stock.
Directors are elected by a plurality vote of all votes cast at the meeting.
Abstentions and broker non-votes will be treated as present for purposes of
determining a quorum, but will not affect the election of directors or other
matters submitted to the vote of shareholders.
The number of outstanding shares of common stock is 41,755,813. The
presence, in person or by proxy, of at least 20,877,907 shares will constitute
a quorum.
The following persons are known by the Corporation to be the beneficial
owners of more than 5% of its Common Stock, which is its only class of voting
securities, on February 5, 1999.
Name and Address Amount and Nature Percent
of of Beneficial of
Beneficial Owner Ownership Class
-------------------------- --------------------- -------
Robert F. Weis 12,764,142 (1) (6) 30.6
c/o Weis Markets, Inc.
1000 South Second Street
Sunbury, PA 17801-0471
Michael M. Apfelbaum 6,771,863 (2) (6) 16.2
43 South Fifth Street
Sunbury, PA 17801
Janet C. Weis 4,088,908 (3) 9.8
c/o Weis Markets, Inc.
1000 South Second Street
Sunbury, PA 17801-0471
Ellen W. P. Wasserman 3,584,424 (4) 8.6
c/o Weis Markets, Inc.
1000 South Second Street
Sunbury, PA 17801-0471
Sidney Apfelbaum 2,584,414 (5) (6) 6.2
43 South Fifth Street
Sunbury, PA 17801
Mellon Bank Corporation 16,972,201 (6) 40.6
One Mellon Bank Center
Pittsburgh, PA 15258
1. 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 Bank Corporation and Robert
F. Weis as co-trustees.
3
<PAGE>
2. Of the total 6,771,863 shares listed, Michael M. Apfelbaum has sole voting
power as to 23,976, sole voting and investment power as to 88, and shared
voting and investment power as to 6,747,887. The aggregate amount includes
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 in the
Residuary Trust of Claire Elizabeth Degenstein.
3. Of the total 4,088,908 shares listed, Janet C. Weis has sole voting and
investment power as to 3,219,580, and shared voting and investment power as
to 869,328.
4. Of the total 3,584,424 shares listed, Ellen W. P. Wasserman has sole voting
and investment power as to all.
5. Of the total 2,584,414 shares listed, Sidney Apfelbaum has sole voting power
as to 37, shared voting power as to 2,565,877, sole investment power as to
787, and shared investment power as to 2,583,627. The aggregate amount
includes 2,435,497 shares held in the Charles B. Degenstein Foundation
Charitable Deed of Trust, with Mellon Bank Corporation and Sidney Apfelbaum
as co-trustees.
6. Of the total 16,972,201 shares listed, Mellon Bank Corporation has sole
voting power as to 724,668, shared voting power as to 9,461,697, sole
investment power as to 745,987, and shared investment power as to 16,216,764.
This amount includes 6,649,087 shares held in trust under the Will of Harry
Weis, with Mellon Bank Corporation and Robert F. Weis as co-trustees
(footnote 1), 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 with Mellon Bank
Corporation and Michael M. Apfelbaum as co-trustees, and 1,228,798 shares
in the Residuary Trust of Claire Elizabeth Degenstein (footnote 2) and
2,435,497 shares held in the Charles B. Degenstein Foundation Charitable
Deed of Trust, with Mellon Bank Corporation and Sidney Apfelbaum as co-
trustees (footnote 5).
ELECTION OF DIRECTORS
The following is a concise statement of information concerning directors
proposed by the Corporation as nominees, together with certain other information
with respect to such nominees:
<TABLE>
<CAPTION>
Shares of Stock
of the
Period Corporation Percent
of Principal Beneficially Owned of
Name Age Directorship Occupation on February 5, 1999 Class
-------------------- --- ------------ -------------------------- ------------------- -------
<S> <C> <C> <C> <C> <C>
Robert F. Weis 79 1947 Chairman of the 12,764,142 30.6
to date Board & Treasurer
Norman S. Rich 61 1991 President 22,373 *
to date
William R. Mills 42 1996 Vice President Finance 2,000 *
to date & Secretary
Jonathan H. Weis 31 1996 Vice President Property 87,563 *
to date Management and Development
Michael M. Apfelbaum 38 1996 Partner, Apfelbaum 6,771,863 16.2
to date Apfelbaum & Apfelbaum
Attorneys at Law
Joseph I. Goldstein 56 1995 Partner, Crowell & Moring 10,097 *
to date Attorneys at Law
Richard E. Shulman 59 1994 President 216 *
to date Industry Systems
Development Co.
All 14 Directors and
Officers as a Group 19,710,770 47.2
<FN>
* Owns less than 1% of class.
</TABLE>
4
<PAGE>
Robert F. Weis. The Corporation has employed Mr. Weis since 1946. Mr. Weis
served as Vice President-Treasurer from 1961 through August of 1994 at which
time he was appointed Co-Chairman & Treasurer. In January of 1995, Mr. Weis
was appointed Chairman & Treasurer. Robert F. Weis is the father of Director,
Jonathan H. Weis. Mr. Weis has been a member of the Board of Directors since
1947. Mr. Weis also serves as a member of the Board of Trustees of the Sunbury
Community Hospital.
Norman S. Rich. The Corporation has employed Mr. Rich since 1964. Mr. Rich
served as Vice President-Store Operations from 1980 until April 5, 1992, when
he became Vice President-Secretary of the Corporation. During the year 1994,
Mr. Rich became President of the Corporation. Mr. Rich has been a member of
the Board of Directors since 1991. Mr. Rich also serves as a Chairman of the
Board of Trustees of Evangelical Community Hospital.
William R. Mills. The Corporation has employed Mr. Mills since 1992. Mr.
Mills served as Vice President Finance from 1992 through January 26, 1995, at
which time he became Vice President Finance & Secretary of the Corporation.
Mr. Mills has been a member of the Board of Directors since 1996.
Jonathan H. Weis. The Corporation has employed Mr. Weis since 1989. Mr.
Weis served the Corporation in various capacities, including Director of
Property Management and Development, until July 8, 1996, at which time he was
appointed as Vice President Property Management and Development. Jonathan H.
Weis is the son of Director, Robert F. Weis. Mr. Weis has been a member of
the Board of Directors since 1996.
Michael M. Apfelbaum. Mr. Apfelbaum is engaged in the private practice of
law as a Partner with the firm of Apfelbaum, Apfelbaum & Apfelbaum. Mr.
Apfelbaum serves as 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.
Joseph I. Goldstein. Mr. Goldstein is engaged in the private practice of
law as a Partner with the firm of Crowell & Moring, Washington, D.C. Prior to
joining the firm 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.
Richard E. Shulman. Mr. Shulman serves as President of Industry Systems
Development, Co., a consulting firm. He has expertise in the business of
supermarket chains, food wholesalers and technology companies. Mr. Shulman
has been a member of the Board of Directors since 1994.
The Corporation believes that the proposed nominees for election as
directors are willing to be elected as such, and it is intended that the person
named in the accompanying form of proxy or their substitutes will vote for the
election of these nominees, unless specifically instructed to the contrary.
However, if any nominee, at the time of the election, is unable or unwilling
to serve, or is otherwise unavailable for election, and in consequence other
nominees are designated, the persons in the proxy or their substitutes shall
have discretion or authority to vote or refrain from voting in accordance with
their judgment on the other nominees. The Corporation has no nominating
committee.
COMPENSATION OF DIRECTORS
Standard Arrangements: With respect to fiscal 1998, all non-employee Directors
received an annual retainer of $16,000, and an additional $1,000 for each
regular meeting attended. The Corporation's Board held four regular meetings
during 1998. Messrs. Michael M. Apfelbaum, Joseph I. Goldstein and Richard E.
Shulman attended all four of the regular meetings and each received $20,000 in
total compensation for their participation. All other directors attended the
regular meetings without remuneration.
The Audit Committee: The Audit Committee acts independently to review the
scope and results of the independent auditors' engagement and reviews the
adequacy of the Corporation's internal accounting controls. The 1998 Audit
Committee of the Board of Directors was composed of Messrs. Michael M.
Apfelbaum, Joseph I. Goldstein and Richard E. Shulman. Mr. Shulman served as
Chairman of the Audit Committee. Each non-employee member of the Audit
Committee receives $700 for each audit committee meeting attended. During
fiscal 1998, all three non-employee committee members attended all four of the
Audit Committee meetings held and were compensated $2,800 each for their
participation.
5
<PAGE>
The Compensation Committee: The Compensation Committee is responsible for
developing policies and making specific recommendations about compensation of
officers, including Robert F. Weis in his capacity as Chairman of the Board &
Treasurer. The 1998 Compensation Committee of the Board of Directors was
composed of Messrs. Michael M. Apfelbaum, Joseph I. Goldstein, Richard E.
Shulman and Robert F. Weis. Mr. Weis served as Chairman of the Compensation
Committee. Each non-employee Director of the Compensation Committee received
an annual retainer of $700 for their participation. The Compensation Committee
held one meeting during the fiscal year and all members attended.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The 1998 Compensation Committee of the Board of Directors was composed of
Messrs. Michael M. Apfelbaum, Joseph I. Goldstein, Richard E. Shulman and Robert
F. Weis. Robert F. Weis is an officer of the Corporation. Messrs. Apfelbaum,
Goldstein and Shulman were not officers or employees of the Corporation or had
any relationship with the Corporation requiring disclosure under the Securities
and Exchange Commission regulations.
Other Arrangements: Mr. Richard E. Shulman, a director of the Corporation, is
President of Industry Systems Development, Co. Upon management's request, Mr.
Shulman's firm provided consulting services to the Corporation during 1998. Mr.
Michael M. Apfelbaum, a director of the Corporation, is a partner in the legal
firm of Apfelbaum, Apfelbaum and Apfelbaum. Upon management's request, Mr.
Apfelbaum's firm provided legal services to the Corporation during 1998.
Remuneration received by Messrs. Apfelbaum and Shulman for services rendered
to the Corporation was not material to the registrant or to the directors'
firms.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Committee of the Board of Directors believes that
the primary objective of the Corporation's executive compensation policies
should be to attract and retain qualified executives, which is critical to the
on-going success of the Corporation. The executive compensation program is
based upon factors that are subjective in nature and are in the best interests
of the Corporation and ultimately the shareholders. The Committee's primary
objective is achieved by providing appropriate compensation and incentives
that are competitive with executives at selected peer companies of comparable
size and position in the retail business, while keeping compensation in line
with the financial objectives of the Corporation. The Committee recognizes
the fact that the Corporation is engaged in a highly competitive industry and
thus annually examines market compensation levels and trends in the labor
market.
The Committee, through a review process with the President's written
evaluation of executives other than the Chairman and the President, subjectively
evaluates the performance of senior management. The reports include a review
of each executive's performance for the most recent fiscal year. In addition,
senior management is orally evaluated by the President as to their efforts and
accomplishments throughout the period from information deemed relevant both
internally and in light of the competitive position of the Corporation in the
industry. These evaluations include qualitative factors such as the individuals
decision-making responsibilities, the professional experience required to
perform given tasks, and their leadership and team-building skills. Although
executive compensation is not specifically related to corporate performance,
the overall performance of the Corporation is a consideration in determining
executive compensation. The Chairman and President reported that the executives
substantially met their objectives during the most recent fiscal year. The
Committee determined the President's compensation based on subjective and
qualitative considerations, which include the overall financial and operational
success of the Corporation.
Employment and Severance Agreements. The Committee notes that the President
and Vice President Finance & Secretary have employment agreements with the
Corporation. These agreements specify the terms of employment, including pay
factors through the year 2004. The agreements provide that employment shall
be at will, but if employment is terminated without cause, or the officer
resigns for good reason, the officer shall receive his remaining salary and
all benefits payable under the agreement. The agreements include a covenant
not to compete clause, which is limited by time and geography. The Committee
believes that the employment agreements are in the best interest of both the
Corporation and the two officers, since it helps to assure continued leadership
for the Corporation and job security to the officers.
Respectfully submitted by the Executive Compensation Committee,
Robert F. Weis Michael M. Apfelbaum Joseph I. Goldstein Richard E. Shulman
Committee Chairman
6
<PAGE>
Executive Compensation - The following table sets forth, with respect to the
last three completed fiscal years, the compensation of the current Chairman of
the Board & Treasurer, the President of the Corporation and the next three
highest compensated executive officers of the Corporation in 1998. The
determination as to which executive officers to include in the table are based
upon total annual salary and bonus exceeding $100,000 in the last completed
fiscal year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
---------------------------------- ------------
Securities
Other Annual Underlying All Other
Name and Principal Salary Bonus Compensation Options / Compensation
Position Year ($) ($) ($) SARs (#) ($)
- -------------------- ---- ---------- -------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Weis 1998 500,000 -- -- -- / -- 4,824
Chairman of the 1997 460,000 -- -- -- / -- 5,319
Board & Treasurer 1996 460,000 -- -- -- / -- 5,282
Norman S. Rich 1998 380,000 5,700 17,833 2,789 / 7,500 26,349
President 1997 350,000 5,355 4,125 3,000 / 6,000 27,134
1996 312,500 4,779 10,500 3,000 / 3,000 19,193
Leslie H. Knox 1998 191,167 2,868 3,567 2,789 / 1,500 6,224
Vice President 1997 182,917 2,799 1,375 3,000 / 1,200 6,923
Merchandising 1996 177,083 2,738 3,500 3,000 / 1,000 4,715
William R. Mills 1998 175,500 2,633 8,917 2,000 / 3,000 13,239
Vice President 1997 160,500 2,456 2,750 2,000 / 3,000 13,719
Finance & Secretary 1996 128,000 1,958 5,250 1,000 / 2,000 12,912
Walter B. Bruce 1998 122,583 1,839 6,242 300 / 2,000 12,220
Vice President 1997 117,667 1,800 2,475 300 / 2,100 12,315
Private Label 1996 113,667 1,757 5,250 300 / 1,800 10,437
</TABLE>
"Other Annual Compensation" consists solely of payments on stock appreciation
rights. There are no perquisites to report. "All Other Compensation" consists
of the vested and non-vested benefits in the profit sharing, employee stock
bonus, supplemental retirement and retirement benefit savings plans. The
current year retirement amounts were estimated by outside actuaries for purposes
of this report.
Stock Appreciation Rights. The Corporation maintains a Stock Appreciation
Rights program for certain of its officers and other key executives. Under
this program, participants are granted rights equivalent to shares of
Corporation stock. The rights expire in one year, at which time the value of
any appreciation from the original date of issue is paid in cash to the
participant. No stock is distributed to the participant and there are no plan
provisions for reload or tax-reimbursement features.
Stock Options. The Corporation has an Incentive Stock Option Plan. Under the
terms of the plan, options are granted for shares of the Corporation's common
stock based on the market value at the date of grant and may be exercised
immediately. There are no plan provisions for reload or tax-reimbursement
features. The following table contains all material information concerning
stock options and stock appreciation rights granted to the named executives in
the fiscal year ended December 26, 1998.
7
<PAGE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Terms
- ---------------------------------------------------------------------- ---------------------
Number of % of Total
Securities Options/SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (#) Fiscal Year ($/Share) Date 5% ($) 10% ($)
- ------------------ ------------ ------------ --------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Norman S. Rich 2,789 18.0% 34.3125 8/01/2008 60,184 152,517
7,500 17.2% 34.3125 8/01/1999 12,867 25,734
Leslie H. Knox 2,789 18.0% 34.3125 8/01/2008 60,184 152,517
1,500 3.4% 34.3125 8/01/1999 2,573 5,147
William R. Mills 2,000 12.9% 34.3125 8/01/2008 43,158 109,371
3,000 6.9% 34.3125 8/01/1999 5,147 10,294
Walter B. Bruce 300 1.9% 34.3125 8/01/2008 6,474 16,406
2,000 4.6% 34.3125 8/01/1999 3,431 6,863
</TABLE>
The following table summarizes stock options and stock appreciation rights
exercised during 1998 and presents the value of unexercised options and stock
appreciation rights held by the named executives at fiscal year end. The
closing price of the stock at the fiscal year end was $37.3125.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name Type on Exercise (#) Realized ($) Unexercisable Unexercisable
- ------------------ ------- --------------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
Norman S. Rich Options 1,000 11,250 14,359 / 0 96,488 / 0
SARs 6,000 17,833 0 / 7,500 0 / 22,500
Leslie H. Knox Options - - 12,359 / 0 72,363 / 0
SARs 1,200 3,567 0 / 1,500 0 / 4,500
William R. Mills Options - - 6,000 / 0 31,500 / 0
SARs 3,000 8,917 0 / 3,000 0 / 9,000
Walter B. Bruce Options - - 2,150 / 0 17,303 / 0
SARs 2,100 6,242 0 / 2,000 0 / 6,000
</TABLE>
RETIREMENT PLANS
Profit Sharing Plan. The Corporation maintains, at its sole expense, a Profit
Sharing Plan for certain salaried employees, store management and administrative
support personnel. The purpose of the Plan is to enhance employee opportunities
for their dedication and loyal service to the Corporation. The Board of
Directors annually determines the amount of contribution to the Plan at its sole
discretion. The contribution is allocated among the various plan participants
in relationship to their compensation and years of service. Plan participants
are 100% vested in their
8
<PAGE>
accounts after 7 years of service with the Corporation and are entitled to
receive a distribution of their vested accounts upon termination of employment,
including retirement, disability or death.
Employee Stock Ownership Plan. The Corporation maintains, at its sole
expense, an Employee Stock Ownership Plan for certain salaried employees. The
purpose of the Employee Stock Ownership Plan is to give eligible employees the
pride of ownership in the Corporation. Eligible employees become participants
at the beginning of the plan year following the two-year anniversary date of
their employment, subject to break in service provisions. The Board of
Directors annually determines the amount of contribution to the Plan at its sole
discretion.
The entire contribution is applied toward the purchase of the Corporation's
stock and is distributed among participant accounts in relationship to their
compensation. Every participant is fully vested. Vested interests in plan
assets are distributed to participants upon reaching the applicable retirement
age.
Retirement Savings Plan. The Corporation maintains a Retirement Savings Plan
pursuant to Section 401(k) of the Internal Revenue Code. Employees become
eligible to participate once they complete one year of eligibility service and
attain the age of 21. On a semi-annual basis, the Corporation contributes into
the plan at the rate of 25% of the employees first 4% of elective deferral.
Plan participants are 100% vested in their accounts after 7 years of service
with the Corporation and are entitled to receive a distribution of their vested
accounts upon termination of employment, including retirement, disability or
death.
Supplemental Retirement Plans. The Corporation maintains a non-qualified
supplemental retirement plan for certain of its officers. The benefits are
determined through actuarial calculations dependent on the age of the recipient.
The benefit payable on an annual basis to Robert F. Weis would be $408,542 if he
had retired as of the date of this Proxy.
The Corporation also maintains a second non-qualified supplemental retirement
plan for certain of its employees. This Plan is designed to provide retirement
benefits and salary deferral opportunities because of the limitations imposed by
the Internal Revenue Code and the Regulations implemented by the Internal
Revenue Service. Participants in this plan are excluded from participation in
the qualified Profit Sharing or Employee Stock Ownership plans. The Board of
Directors annually determines the amount of the allocation to the Plan at its
sole discretion. The allocation among the various plan participants is made in
relationship to their compensation, years of service and job performance. Plan
participants are 100% vested in their accounts after 7 years of service with the
Corporation. Benefits are distributed among participants upon reaching the
applicable retirement age. Substantial risk of benefit forfeiture does exist
for participants in this Plan.
SHAREHOLDER RETURN PERFORMANCE
The following line graph compares the yearly percentage change in the
cumulative total shareholder return on the Corporation's Common Stock against
the cumulative total return of the S&P Composite-500 Stock Index and the
cumulative total return of a published group index for the Retail Grocery Stores
Industry, (Peer Group), provided by Value Line, Inc., for the period of five
fiscal years. The graph depicts $100 invested at the close of trading on the
last trading day preceding the first day of the fifth preceding fiscal year in
Weis Markets, Inc., common stock, S&P 500, and the Peer Group. The cumulative
total return assumes reinvestment of dividends.
COMPARATIVE FIVE-YEAR TOTAL RETURNS
Note: A graph is inserted in this area of the actual
Proxy Statement mailed to our shareholders, which
depicts the five-year total return described above.
9
<PAGE>
1993 1994 1995 1996 1997 1998
------ ------ ------ ------ ------ ------
Weis Markets 100.00 92.01 110.96 128.82 145.66 166.33
S&P 500 100.00 101.60 139.71 172.18 229.65 294.87
Peer Group 100.00 108.92 141.29 195.29 274.54 417.81
The following line graph, generated from information provided by Value Line,
Inc., compares net income as a percentage of sales, between the Corporation and
its Peer Group. This graph highlights the ability of management to generate
more income per sale than the average grocery chain over the years, thus
increasing net worth for its shareholders.
COMPARATIVE TEN-YEAR INCOME PERCENTAGES
Note: A graph is inserted in this area in the actual Proxy
Statement mailed to our shareholders depicting the ten-
year comparative income percentages described above.
The table below represents the numerical presentation
of the graph. The numerical table is not included in
the actual Proxy Statement mailed to our shareholders.
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Weis Markets 6.97% 6.82% 6.23% 5.64% 5.06% 4.90% 4.82% 4.50% 4.30% 4.48%
Peer Group .78% 1.19% 1.15% .85% 1.09% 1.45% 1.78% 1.88% 1.20% 1.70%
APPROVAL OF AMENDMENTS TO 1995 STOCK OPTION PLAN
The Board of Directors approved amendments to the 1995 Stock Option Plan
(the "Plan") on October 19, 1998. The affirmative vote of a majority of the
votes cast at the Annual Meeting, in person or by proxy, is required for
approval of the amendments to the Plan. The Board recommends that the
shareholders vote "FOR" ratification of proposal number three.
The principal features of the Plan amendments are summarized below. The full
text of the amended and restated Plan is set forth as Exhibit 10-D in the annual
Form 10-K filing with the Securities and Exchange Commission.
Amendments to the 1995 Plan: The Plan was amended to provide for the grant of
nonstatutory stock options, which are stock options that do not qualify under
Section 422 of the Internal Revenue Code of 1986. The tax consequences of
nonstatutory stock options are described below. The option price for each
stock option will be the fair market value of the Common Stock on the date the
stock option is granted. Fair market value, for this purpose, will generally
be the mean between the publicly reported high and low sale prices per share
of the Common Stock for the date as of which fair market value is to be
determined. Options may be exercised immediately after grant, but may not be
exercised after the expiration of ten years from the date of grant. The
nonstatutory stock options may be granted to employees, including officers and
directors who are employees, at the discretion of the Committee administering
the Plan. The exercise price and the number of shares that may be purchased
will be subject to adjustment to protect against dilution in certain events.
The Plan was also amended to provide that no more than 20,000 shares may be
granted to any one individual during any calendar year, increased from the prior
limit of 5,000 shares. Additionally, certain conforming changes were made
throughout the Plan, generally to reflect changes in the law since the Plan
was adopted.
Federal Income Tax Consequences: The following is a brief summary of the
principal Federal income tax consequences of the grant and exercise of
nonstatutory stock options under present law.
An optionee will not recognize any taxable income for Federal income tax
purposes upon receipt of a nonstatutory stock option. Upon the exercise of a
nonstatutory stock option, the amount by which the fair market
10
<PAGE>
value of the shares received exceeds the option price will be treated as
compensation received by the optionee in the year of exercise. The fair market
value of the shares received is determined as of the date of exercise.
The Corporation generally will be entitled to a deduction for compensation
paid in the same amount treated as compensation received by the optionee.
Plan Benefits Table
The following numbers of options were granted to the following persons or
groups of persons under the Plan in 1998.
Name Granted (#)
------------------------------------ -----------
Norman S. Rich 2,789
Leslie H. Knox 2,789
William R. Mills 2,000
Walter B. Bruce 300
Executive Group 9,378
Non-Executive Directors 0
Non-Executive Officer Employee Group 6,100
APPROVAL OF AUDITORS
Subject to ratification by the shareholders, the Board of Directors of the
Corporation has appointed Ernst & Young LLP, independent public accountants, to
audit the financial statements of the Corporation for the fiscal year 1999.
Representatives of the firm of Ernst & Young LLP will be on premise during the
Annual Meeting of Shareholders, but will not be present at the meeting to
answer questions. The Audit Committee and the Board of Directors recommend that
the shareholders vote "FOR" such ratification of proposal number two.
By order of the Board of Directors,
WILLIAM R. MILLS
Secretary of the Corporation
Dated: March 4, 1999
11
<PAGE>
APPENDIX A
PROXY CARD
FRONT SIDE OF PROXY CARD:
- ------------------------------------------------------------------------------
1. Election of Directors Nominees Robert F. Weis
Norman S. Rich
Richard E. Shulman
Joseph I. Goldstein
Jonathan H. Weis
Michael M. Apfelbaum
William R. Mills
2. Proposal to approve the appointment of Ernst & Young LLP as the independent
public accountants of the corporation.
- ------------------------------------------------------------------------------
REVERSE SIDE OF PROXY CARD:
- ------------------------------------------------------------------------------
WEIS MARKETS, INC.
1000 South Second Street
Sunbury Pennsylvania 17801
THIS PROXY IS SOLICITED ON BEHALF OF THE ISSUER
The undersigned hereby appoints Robert F. Weis and Norman S. Rich, and each
of them, with the power of substitution, the proxies, to vote as designated
on the reverse side, all the shares which the undersigned held on record
February 5, 1999 at the Annual Meeting of the stockholders at the above
address at 10:00 a.m. on April 6, 1999 and any adjournment thereof.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any postponement or
adjournment thereof.
The shares represented by this proxy, duly executed, will be voted. In the
event instructions are given in the spaces provided, they will be voted in
accordance therewith; If no direction is made, this proxy will be voted FOR
all the nominees listed and proposals 2 and 3. If necessary, cumulative
voting rights will be exercised to secure the election of as many as possible
of the Board of Directors' nominees.
