<PAGE> 1
Bruno's, Inc.
800 LAKESHORE PARKWAY
BIRMINGHAM, ALABAMA 35211
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
October 21, 1994
TO THE SHAREHOLDERS:
The annual meeting of shareholders of Bruno's, Inc. will be held at the
MEDICAL FORUM AUDITORIUM, BIRMINGHAM JEFFERSON CIVIC CENTER, 950 22ND STREET,
NORTH, BIRMINGHAM, ALABAMA 35203, on the 21st day of October, 1994, at 10:00
a.m., Central Daylight Time, for the following purposes:
(1) Election of a Board of Directors to serve until the next annual
meeting or until their successors are duly elected.
(2) Proposal to ratify the engagement of the accounting firm of Arthur
Andersen LLP as independent public accountants for the current fiscal year.
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
Details concerning those matters to come before the meeting are set forth
in the accompanying proxy statement for your inspection. Whether you plan to
attend the meeting or not, please execute the enclosed proxy and return it in
the return envelope which is enclosed for your convenience.
The annual report of your Company for the fiscal year ended July 2, 1994,
is enclosed. We hope you will find it informative.
Pursuant to a resolution adopted by the Board of Directors of the Company,
the close of business on September 7, 1994, has been fixed as the date for
determination of shareholders entitled to notice of this meeting and to vote at
the meeting.
/s/ Ronald G. Bruno
-------------------
Ronald G. Bruno,
Chairman
BY ORDER OF THE BOARD
OF DIRECTORS
Dated: September 16, 1994
<PAGE> 2
September 16, 1994
Bruno's, Inc.
800 LAKESHORE PARKWAY
BIRMINGHAM, ALABAMA 35211
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 21, 1994
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors for use at the annual meeting of Shareholders
of Bruno's, Inc. ("Bruno's" or the "Company") to be held October 21, 1994.
Please sign and return the proxy in the enclosed return envelope so the Common
Stock you own will be voted in accordance with your wishes. Proxies may be
solicited by personal interview, telephone or mail. Banks, brokerage houses and
other custodians, nominees or fiduciaries will be requested to forward
soliciting materials to their principals and to obtain authorization for the
execution of proxies, and will be reimbursed for their reasonable out-of-pocket
expenses incurred in that process. The Company will bear the cost of the
solicitation of proxies which is expected to be nominal.
PROXY IS REVOCABLE
If, after you send in your proxy, you desire to revoke your proxy for any
reason, you may do so by giving notification of such intent to the Secretary of
the Company in writing at any time prior to the commencement of the annual
meeting. Unmarked proxies received by the Company will be voted in favor of each
of the proposals herein specified and as directed by the attorneys-in-fact as to
any other matter which may come before the meeting.
DATE OF RECORD
The close of business on September 7, 1994, has been set as the record date
for the purpose of determining Shareholders entitled to vote at the annual
meeting. Each share of Common Stock is entitled to one vote on all matters.
OUTSTANDING SECURITIES
On July 27, 1994, there were issued and outstanding 78,096,941 shares of
Common Stock of the Company, which constitute all of the voting securities of
the Company.
<PAGE> 3
BUSINESS TO BE CONSIDERED AT ANNUAL MEETING OF SHAREHOLDERS
It is expected that the following business will be considered and action
taken thereon at the annual meeting:
(1) Election of a Board of Directors to serve until the next annual
meeting or until their successors are duly elected.
(2) Proposal to ratify the engagement of the accounting firm of Arthur
Andersen LLP as independent public accountants for the current fiscal year.
(3) To transact such other business as may properly come before the
meeting or any adjournment thereof.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The security ownership of certain beneficial owners (excluding officers and
Directors of the Company) of five percent or more of the Company's voting
securities as of July 27, 1994, is set forth in the table below.
<TABLE>
<CAPTION>
NAME AND
ADDRESS OF AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- - ---------------------------- --------------------- -------------------- --------
<S> <C> <C> <C>
Common Stock $.01 Par Value Estate of Lee J. 6,071,702(1) 7.77%
Bruno
P.O. Box 2486
Birmingham, AL 35201
</TABLE>
- - ---------------
(1) Includes 3,594,338 shares owned directly by the Estate; and in addition,
2,477,364 shares owned in the aggregate by the Executors of the Estate, as
to which they individually have sole or shared voting or investment power.
The security ownership of all Directors and nominees and certain officers
is set forth hereinafter.
BOARD OF DIRECTORS
The present Board of Directors consists of ten members, all of whom are
nominees for election to the Board of Directors at this meeting. All of the
nominees were elected to the Board of Directors at the Company's 1993 annual
meeting of Shareholders. Each nominee for the Board of Directors has expressed
the willingness to serve as a Director during the coming year. Each Director
elected to the Board of Directors will serve for a term of one year or until a
successor is duly elected and qualified. As provided in the Company's Bylaws,
the Board of Directors has fixed at 10 the present number of members to serve on
the Board. Proxies cannot be voted for a greater number of persons than the
number of nominees named. The ten nominees receiving the highest number of votes
at the annual meeting will be elected as directors. It is the intention of the
proxy holders to vote FOR the election of ALL of the nominees listed below in
the absence of contrary direction. Should any nominee become unavailable for
election to the Board of Directors for any presently unforeseen reason, the
Board of Directors of the Company will determine how the proxies will be voted.
During the last fiscal year, the Board of Directors met on four occasions.
No incumbent Director attended fewer than 75% of the aggregate number of Board
meetings and committee meetings on which such Board member served. The Company
currently pays each non-employee Director of the Company a Director's fee in the
amount of $2,000 per quarter plus $750 for each Board and committee meeting
attended. The Company's Audit Committee, consisting of Ronald G. Bruno, Benny M.
LaRussa, Jr., Judy M. Merritt, Richard Cohn, and J. Mason Davis, met on one
occasion during the last fiscal year. The Company's Compensation Committee,
consisting of Judy M. Merritt, Bart Starr, and Richard Cohn, met on two (2)
occasions during the last fiscal year. The Company does not have a Nominating
Committee.
2
<PAGE> 4
The Company has adopted a Non-Employee Director Stock Option Plan under
which options may be granted to directors who are not officers or employees of
the Company. During the last fiscal year, options for 10,000 shares of Common
Stock of the Company were granted to each of J. Mason Davis, Jr., Benny M.
LaRussa, Jr., Bart Starr, Judy Merritt, and Richard Cohn pursuant to the
Non-Employee Director Stock Option Plan. These options become exercisable at a
price of $7.00 per share one year from the date of the grant, and terminate ten
(10) years from the date of the grant.
The principal occupation or employment of each nominee for Director, the
year in which each became a Director, and the number of shares of Common Stock
of the Company beneficially owned by each as of July 25, 1994, are reflected in
the following table. Unless otherwise stated, the nominee exercises sole voting
and investment power over all shares of Common Stock beneficially owned.
<TABLE>
<S> <C> <C> <C>
Photo of Photo of Photo of Photo of
Joseph S. Bruno Ronald G. Bruno Paul F. Garrison Glenn J. Griffin
Photo of Photo of Photo of Photo of
Kenneth J. Bruno Benny M. LaRussa, Jr. Judy M. Merritt Richard Cohn
Photo of Photo of
J. Mason Davis, Jr. Bart Starr
</TABLE>
3
<PAGE> 5
NOMINEES
<TABLE>
<CAPTION>
APPROXIMATE PERCENT
PRINCIPAL BENEFICIAL OF TOTAL
OCCUPATION OWNERSHIP OUTSTANDING
FOR THE SERVED AS OF COMMON COMMON
PAST FIVE DIRECTOR STOCK OF STOCK OF
NAME OF NOMINEE YEARS AGE SINCE COMPANY COMPANY
- - ------------------------- ---------------------- --- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Joseph S. Bruno Chairman Emeritus of 81 04/01/59 4,289,826(1) 5.5%* *
the Company
Ronald G. Bruno Chairman of the Board 42 10/28/83 6,027,405(2) 7.7%* *
since December 1991;
Chief Executive
Officer since
October 1990;
President 1986-1994.
Paul F. Garrison President and Chief 65 07/30/70 102,570(3) *
Operating Officer
since April 1994;
Senior Executive
Vice President Human
Resources and
Distribution
7/91-4/94
Glenn J. Griffin Executive Vice 56 07/22/88 128,581(4) *
President; Chief
Financial Officer;
Treasurer
Kenneth J. Bruno Executive Vice 39 12/12/91 2,781,284(5) 3.6%
President --
Corporate Planning
and Development.
Benny M. LaRussa, Jr. Executive Vice 35 08/09/85 284,194(6) *
President of
Canterbury Trust
Company; Executive
Vice President of
First Commercial
Bank of Birmingham
from 1985 to 1992
</TABLE>
4
<PAGE> 6
<TABLE>
<CAPTION>
APPROXIMATE PERCENT
PRINCIPAL BENEFICIAL OF TOTAL
OCCUPATION OWNERSHIP OUTSTANDING
FOR THE SERVED AS OF COMMON COMMON
PAST FIVE DIRECTOR STOCK OF STOCK OF
NAME OF NOMINEE YEARS AGE SINCE COMPANY COMPANY
- - ------------------------- ---------------------- --- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Judy M. Merritt President of Jefferson 51 10/28/83 200 *
State Community
College
Richard Cohn Attorney, Sirote & 51 10/13/78 9,015(7) *
Permutt, P.C.(law
firm)
J. Mason Davis, Jr. Attorney, Sirote & 59 10/19/90 700 *
Permutt, P.C. (law
firm)
Bart Starr, Sr. Chairman of the Board 60 10/19/90 100 *
of Starr Sanders-
Johnson Properties
(healthcare real
estate development)
since 1990; Partner
in RAL Asset
Management Group
1984-1990 (real
estate development)
</TABLE>
- - ---------------
* Owns less than 1% of the total outstanding Common Stock of the Company.
** Owns more than 5% of the total outstanding Common Stock of the Company. The
address for this beneficial owner of more than 5% of the Company's Common
Stock is c/o Bruno's, Inc., 800 Lakeshore Parkway, Birmingham, Alabama
35211.
(1) Includes (i) 3,031,176 shares owned directly by Joseph S. Bruno, (ii)
143,850 shares owned by the Joseph Bruno Foundation and 530,000 shares
owned by the Joseph S. Bruno Charitable Foundation, private charitable
foundations of which he is president and a director, with respect to which
he disclaims any beneficial interest but as to which he shares voting and
investment power, and (iii) 584,800 shares held in the name of his wife, as
to which he may be deemed to share voting and investment power.
(2) Includes (i) 1,028,030 shares owned directly by Ronald G. Bruno (of which
35,820 are represented by options exercisable within sixty days), (ii)
10,000 shares held jointly with his wife, as to which he shares voting and
investment power; (iii) 5,142 shares held in the name of his wife, as to
which he may be deemed to share voting and investment power; (iv) 3,892
shares held in his name as trustee for his minor child as to which he has
sole voting and investment power; (v) 2,634,018 shares owned by family
members as to which he has sole voting power through proxies held by him,
but as to which he has no investment power; (vi) 200,000 shares held as
co-executor of the Estate of Angelo J. Bruno; 1,775,196 shares held as
co-trustee of trusts for family members (1,173,096 of which are held as co-
trustee with Kenneth J. Bruno), as to which he shares voting and investment
power, (vii) 371,127 shares owned by the Ann and Angelo Bruno Foundation, a
private charitable foundation of which he is a
5
<PAGE> 7
Director (with Kenneth J. Bruno), with respect to which he disclaims any
beneficial interest but as to which he has sole voting power and shares
investment power.
(3) Includes (i) 68,820 shares owned directly by Paul F. Garrison (of which
35,820 are represented by options exercisable within sixty days); (ii)
4,050 shares held as trustee as to which he has sole voting and investment
power; (iii) 2,100 shares held jointly with his wife as to which he shares
voting and investment power; and (iv) 27,600 shares held in the name of his
wife, as to which he may be deemed to share voting and investment power.
(4) Includes (i) 128,581 shares owned directly by Glenn J. Griffin (of which
35,820 are represented by options exercisable within sixty days), (ii) 280
shares held in his name as custodian for his children as to which he has
sole voting and investment power; and (iii) 1,600 shares held in the name
of his wife, as to which he may be deemed to share voting and investment
power.
(5) Includes (i) 1,172,594 shares owned directly by Kenneth J. Bruno (of which
35,820 are represented by options exercisable within sixty days); (ii)
39,467 shares held as co-trustee of a trust for a family member as to which
he shares voting and investment power; (iii) 1,175,096 shares held as
co-trustee (with Ronald G. Bruno) of trusts for family members, as to which
he shares voting and investment power, (iv) 371,127 shares owned by the Ann
and Angelo Bruno Foundation, a private charitable foundation of which he is
a Director (with Ronald G. Bruno), with respect to which he disclaims any
beneficial interest but as to which he shares investment power; and (v)
23,000 shares owned by the Kenneth J. Bruno Foundation, a private
charitable foundation of which he is president and a director, with respect
to which he disclaims any beneficial interest but as to which he shares
voting and investment power.
(6) Includes (i) 278,244 shares owned directly by Benny M. LaRussa, Jr.; (ii)
5,800 shares held as trustee of trusts for his minor children as to which
he has sole voting and investment power; and (iii) 150 shares held in the
name of his wife, as to which he may be deemed to share voting and
investment power.
(7) Includes (i) 2,515 shares owned directly by Richard Cohn, and (ii) 6,500
shares held by a Cohn Family partnership, as to which he has sole voting
power. He also serves as co-trustee of certain trusts of which neither he
nor any member of his family is a beneficiary, which own in the aggregate
1,219,996 shares, as to which he may be deemed to share voting and
investment power and as to which he disclaims any beneficial ownership and
which are not included in the number shown as owned in the above chart.
Ronald G. Bruno and Kenneth J. Bruno are brothers and are nephews of Joseph
S. Bruno. Benny M. LaRussa, Jr. is the grandson of Joseph S. Bruno. As shown
above, Joseph S. Bruno owns 5.5% of the total outstanding Common Stock. Ronald
G. Bruno beneficially owns approximately 7.7%. Kenneth J. Bruno owns 3.6%, and
Benny M. LaRussa, Jr. owns .36%, for an aggregate of 13,382,709 shares,
constituting 17% of the total outstanding Common Stock.
All of the officers and Directors of the Company, as a group (11 persons),
beneficially owned, as of July 27, 1994, 13,692,488 shares, constituting
approximately 17.5% of the total outstanding Common Stock.
OFFICERS
The officers of the Company serve a term of one year or until their
successors are duly elected and qualified. The offices held by Ronald G. Bruno,
Paul F. Garrison, Glenn J. Griffin, and Kenneth J. Bruno are designated in the
Nominees chart appearing on page 4 of this Proxy Statement. R. Michael Conley,
age 43, has been employed by Bruno's since 1984, and was elected Assistant
Secretary on October 21, 1988, and Secretary on July 19, 1992.
6
<PAGE> 8
The following table presents information concerning the beneficial
ownership of the Company's Common Stock by certain of its executive officers on
July 27, 1994:
<TABLE>
<CAPTION>
STOCK BENEFICIALLY OWNED
---------------------------------
NAME AND ADDRESS TITLE OF CLASS # OF SHARES(1) % OF CLASS
-------------------------------------- -------------- -------------- ----------
<S> <C> <C> <C>
Joseph S. Bruno Common 4,289,826 5.5%
Birmingham, AL
Ronald G. Bruno Common 6,027,405 7.7%
Birmingham, AL
Glenn J. Griffin Common 128,581 .17%
Birmingham, AL
Paul F. Garrison Common 102,570 .13%
Birmingham, AL
Kenneth J. Bruno Common 2,781,284 3.6%
Birmingham, AL
</TABLE>
- - ---------------
(1) The amounts shown represent the total shares beneficially owned by such
individuals, together with shares which are issuable upon the exercise of
all stock options which are currently exercisable. Specifically, the
following individuals have the right to acquire the shares indicated after
their names, upon the exercise of such options: Ronald G. Bruno, 35,820;
Glenn J. Griffin, 35,820; Paul F. Garrison, 35,820; and Kenneth J. Bruno,
35,820.
7
<PAGE> 9
COMPENSATION TO EXECUTIVE OFFICERS
The following table is a summary of certain information concerning the
compensation earned by the Company's chief executive officer and each of the
other four most highly compensated executive officers during the last three
fiscal years.
COMPENSATION
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION ALL OTHER
---------------------------- AWARDS COMPENSATION
OTHER --------------------- ------------------
ANNUAL OPTIONS DEFERRED
COMPEN- RESTRICTED BY NO. PROFIT COMPEN-
SATION STOCK OF SHARING SATION
NAME/POSITION YEAR SALARY BONUS (1)(2) AWARDS SHARES (1)(3) (1)(4)
- - ---------------------- ---- -------- ------- ------- ----------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph S. Bruno 1994 $192,309 $ -0- $-0- -0- -0- $ 7,692 $ -0-
Chairman Emeritus 1993 254,808 -0- -0- -0- -0- 5,096 -0-
1992 250,000 -0- -- -0- -0- -- --
Ronald G. Bruno, 1994 300,000 45,000 -0- -0- 50,000 11,617 -0-
Chairman of Board 1993 305,769 45,000 -0- -0- 50,000 7,015 51,607
and CEO 1992 251,250 83,750 -- -0- -0- -- --
Paul F. Garrison, 1994 260,381 39,250 -0- -0- 25,000 10,709 38,624
President & Chief 1993 259,904 38,250 -0- -0- 25,000 5,963 235,841
Operating Officer 1992 204,750 68,250 -- -0- -0- -- --
Glenn J. Griffin, 1994 235,000 35,250 -0- -0- 25,000 10,122 7,838
Executive Vice 1993 239,520 35,250 -0- -0- 25,000 5,495 70,077
President, CFO, 1992 174,000 58,000 -- -0- -0- -- --
Treasurer
Kenneth J. Bruno, 1994 165,000 24,750 -0- -0- 25,000 7,590 4,090
Executive Vice 1993 150,000 22,500 -0- -0- 25,000 3,450 23,976
President 1992 99,000 33,000 -- -0- -0- -- --
William J. White 1994 245,000 -0- 20,000 -0- -0- 8,392 -0-
Executive Vice 1993 249,712 36,750 20,000 -0- 25,000 5,729 79,350
President(4) 1992 194,750 64,900 -0- -0- -0- -- --
</TABLE>
- - ---------------
(1) In accordance with the transitional provisions applicable to the revised
rules on executive compensation disclosure adopted by the Securities and
Exchange Commission, as informally interpreted by the Commission's Staff,
amounts of Other Annual Compensation and All Other Compensation are
excluded for the Company's 1992 fiscal year.
(2) The amounts listed in this column represent the Company's contributions
under its Profit Sharing Plan.
(3) The amounts listed in this column represent the amounts accrued by the
Company under Employment and Deferred Compensation Agreements to provide
future deferred compensation benefits for its executives.
(4) William J. White ceased to be employed by the Company prior to the end of
the 1994 fiscal year.
8
<PAGE> 10
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Company, whose members are listed below,
is composed entirely of non-employee Directors. The Committee reviews and
approves all compensation arrangements for executive officers and, in that
regard, has developed compensation policies for the executives which seek to
enhance the profitability of the Company with an appropriate balance between
long-term and short-term profitability goals and to assure the ability of the
Company to attract and retain executive employees with competitive compensation.
Actions by the Committee are reported to the Board and, in appropriate cases,
ratified by the Board prior to implementation.
The compensation program of the Company seeks specifically to motivate the
executives of the Company to achieve objectives which benefit the Company within
their respective areas of responsibility, with particular emphasis on continued
growth in revenues, expense control, operating efficiency, and the ultimate
realization of profits for the Company, approximately equal weight being given
to each of these criteria in evaluating performance.
The Company has sought to align the interests of the executives with the
interests of the shareholders through a stock option plan, a restricted stock
bonus plan, and an incentive bonus plan based on the Company's profitability.
Base salary levels for the Company's executive officers, including the
Chief Executive Officer, are set so that the overall cash compensation package
for executive officers, including bonus opportunity, compares favorably to
companies with which the Company competes for executive talent. In determining
salaries, the Compensation Committee also takes into account a number of
factors, which primarily include individual experience and performance, the
officer's level of responsibility, the cost of living and historical salary
levels. The measures of individual performance considered include, to the extent
applicable to an individual executive officer, a number of quantitative and
qualitative factors such as the Company's historical and recent financial
performance, the individual's achievement of particular nonfinancial goals
within his or her responsibility, and other contributions made by the officer to
the Company's success. The Compensation Committee has not found it practicable
to, and has not attempted to, assign relative weights to the specific factors
considered in determining base salary levels, and the specific factors used may
vary among officers. As is typical for most companies, payment of base salary
amounts generally is not conditioned upon the achievement of any specific,
pre-determined performance targets.
In addition to base salary, each executive, including the CEO, may earn an
incentive equal to approximately 50% of base pay under the Company's incentive
bonus plan under which bonuses are based on the degree to which the Company
achieves earnings per share objectives established by the Committee at the
beginning of each year. Except for the incentive bonus program, the compensation
policies of the Company are general and subjective both as to salary and as to
the other components of the compensation program.
The Company's compensation program also includes benefits typically offered
to executives of similar businesses to promote management stability, consisting
of a profit sharing plan, deferred compensation agreements, and control change
agreements.
The fiscal 1994 compensation of Ronald G. Bruno, the Company's Chief
Executive Officer, was based on factors applicable to the Company's executive
officers, discussed above, as well as certain subjective factors, including the
leadership provided by him in his role as CEO. The salaries of all of the
executives are set based on a review of salaries paid by other retail
supermarket chains of a similar size to that of the Company for executives of
similar experience and skills. It uses compensation surveys of supermarket
retailers (including
9
<PAGE> 11
12 of the companies currently included in the peer index group described under
the Shareholder Return Performance caption) as a competitive reference but does
not determine its compensation practices according to survey salaries.
Legislation enacted in 1993 imposes new limits on the tax deductibility of
executive compensation. The Committee's policy is to maximize the tax
deductibility of executive compensation to the extent consistent with its
responsibility to effectively compensate executives based on performance.
COMPENSATION COMMITTEE
Richard Cohn
Bart Starr
Judy Merritt
10
<PAGE> 12
SHAREHOLDER RETURN PERFORMANCE
The following graph provides a comparison of the five-year cumulative total
return for the Company, the Standard & Poor's 500 Index, and a peer group of 17
companies(1). The comparison covers the five year period from the last trading
day prior to the end of Bruno's 1989 fiscal year to the last trading day prior
to the end of Bruno's 1994 fiscal year and assumes that $100 was invested at the
beginning of the period. The returns of each company have been weighted
according to the companies' respective stock market capitalization.
[CRC Performance Chart]
(1) The selected peer group consists of the following companies:
Albertson's, Inc., American Stores Co., Buttery Food and Drug Co., Delchamps,
Inc., Eagle Food Centers, Food Lion, Inc., Giant Food, Inc., Great Atlantic and
Pacific Tea Co., Ingles Markets, Kroger Co., Marsh Supermarkets, Safeway, Inc.,
Seaway Food Town, Smith's Food & Drug Centers, Inc., Village Supermarkets, Inc.,
Weis Markets, Inc., and Winn Dixie Stores, Inc.
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Bruno's.................................... $100 $131.91 $165.62 $117.73 $ 83.32 $ 66.16
S&P 500.................................... 100 116.49 125.10 141.88 161.22 162.84
Peer Group................................. 100 121.23 140.41 126.77 138.06 138.76
</TABLE>
11
<PAGE> 13
STOCK OPTION GRANTS
The following table shows information concerning options to purchase
Company Common Stock granted with respect to fiscal 1994 to the named executive
officers pursuant to the Company's Employee Incentive Stock Option Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
% OF TOTAL AT ASSUMED ANNUAL
OPTIONS RATES OF
GRANTED TO EXERCISE STOCK PRICE
EMPLOYEES OR BASE APPRECIATION
OPTIONS IN PRICE EXPIRATION FOR OPTION TERMS(2)
NAME GRANTED(#)(1) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- - ------------------------- ------------- ------------ --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ronald Bruno 50,000 16.4% $7.50 05/05/04 $236,000 $597,500
Paul F. Garrison 25,000 8.2% 7.50 05/05/04 118,000 298,750
Glenn J. Griffin 25,000 8.2% 7.50 05/05/04 118,000 298,750
Kenneth J. Bruno 25,000 8.2% 7.50 05/05/04 118,000 298,750
Joseph Bruno 0 0 -- -- -- --
William J. White 0 0 -- -- -- --
</TABLE>
- - ---------------
(1) All options outstanding were issued under the Company's Employee Incentive
Stock Option Plan. Options for Ronald Bruno are exercisable 11,940 in 6/94,
11,940 in 1/95, 11,940 in 1/96, 11,940 in 1/97, and 2,240 in 1/98; and for
all others 11,940 in 6/94, 11,940 in 1/95, and 1,120 in 1/96.
(2) Based upon the market price on the date of grant and an annual appreciation
at the rate stated of such market price through the expiration date of such
options. The dollar amounts under these columns are the result of
calculations at the 5% and 10% rates set by the SEC and therefore are not
intended to forecast possible future appreciation, if any, of the Company's
stock price. The Company did not use an alternative formula for a grant
date valuation, as the Company is not aware of any formula which will
determine with reasonable accuracy a present value based on future unknown
or volatile factors.
AGGREGATED OPTION EXERCISES AND OPTION VALUES
The following table shows information concerning the exercise of stock
options during fiscal year 1994 by each of the named executive officers and the
fiscal year-end value of unexercised options. No options were exercised by the
named executive officers during the 1994 fiscal year.
12
<PAGE> 14
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF VALUE OF
NUMBER OF NUMBER OF UNEXERCISED UNEXERCISED
SHARES UNEXERCISED UNEXERCISED IN-THE-MONEY IN-THE-MONEY
ACQUIRED VALUE OPTIONS AT OPTIONS AT OPTIONS AT OPTIONS AT
ON EXERCISE REALIZED FY-END (#) FY-END (#) FY-END ($) FY-END ($)
NAME (NUMBER) (DOLLARS) (EXERCISABLE)(1) UNEXERCISABLE(1) EXERCISABLE UNEXERCISABLE
- - ------------------------ ----------- --------- ---------------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Ronald G. Bruno 0 0 35,820 64,180 $-0- $-0-
Paul F. Garrison 0 0 35,820 14,180 -0- -0-
Glenn J. Griffin 0 0 35,820 14,180 -0- -0-
Kenneth J. Bruno 0 0 35,820 14,180 -0- -0-
Joseph S. Bruno 0 0 -0- -0- -0- -0-
William J. White 0 0 -0- -0- -0- -0-
-------- ------- ---------------- ---------------- ------ ------
Total 0 0 143,280 106,720 $-0- $-0-
======== ======= ============ ============ ========= =========
</TABLE>
- - ---------------
(1) All options outstanding were issued under the Company's Employee Incentive
Stock Option Plan.
PROFIT SHARING AND 401(K) RETIREMENT PLAN
The Company maintains a profit sharing and deferred retirement plan
pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. All
employees who are not eligible to participate in a union-sponsored or
co-sponsored qualified retirement plan will participate after one year of
service and attainment of age 21.
A separate salary reduction account and matching employer contribution
account are maintained for each plan participant. Participants make
contributions to their salary reduction account on a payroll deduction basis.
The Company makes matching contributions, on a dollar-for-dollar basis, up to
two percent (2%) of compensation, to the employee's matching employer
contribution account. The Company may also make contributions to the employees'
discretionary contribution account on a discretionary basis in an amount
determined annually by the Board of Directors.
All contributions are paid to AmSouth Bank of Alabama, N.A., as Trustee, to
hold, invest and reinvest the funds. All accounts are vested at death,
retirement or disability. Upon termination of service, discretionary accounts
are not vested until the fifth year of service. Subject to certain time and
amount restrictions and tax penalties, participants may make early withdrawals
from their salary reduction accounts. The total of employer and employee
contributions for each participant, annually, cannot exceed the lesser of 25% of
compensation or $30,000.
A participant will be entitled to receive a distribution of his vested
accounts upon termination of employment, including retirement, disability or
death. Payment will be made in the form of either a lump sum or installments
paid over a period of 15 years. A participant's interest in the Company's
discretionary contributions begins to vest in the fourth year and becomes 100%
vested after the participant completes five (5) years of service or upon death,
disability or normal retirement. All other contributions (whether made by the
Company or the participant) are fully vested at all times.
13
<PAGE> 15
OTHER AGREEMENTS WITH OFFICERS AND DIRECTORS
EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENTS
The Company has Employment and Deferred Compensation Agreements (the
"Agreements") with its corporate officers, Paul F. Garrison, Glenn J. Griffin,
Ronald G. Bruno, Kenneth J. Bruno and R. Michael Conley, which provide
retirement benefits to be paid to such persons upon retirement after age 65 or
25 years of service or in the event of disability or death. Monthly benefits of
5% of the average annual compensation for the three fiscal years ended
immediately prior to the initial payment date are payable for a period of 180
months after retirement. In the event of death, the Company will make remaining
payments to the spouse or heirs. The Company accrues the present value of such
retirement benefits from the date of such agreement to the normal retirement
date.
EMPLOYMENT CONTINUITY AGREEMENTS
Five of the executive officers of the Company, Messrs. Ronald G. Bruno,
Paul F. Garrison, Glenn J. Griffin, Kenneth J. Bruno, and R. Michael Conley,
executed Employment Continuity Agreements in 1994.
Under the terms of the Employment Continuity Agreements, a participating
executive will generally become entitled to receive benefits if the executive's
employment is terminated by the executive for "Good Reason," or by the Company
without "Cause," within one year following a "Change of Control." For purposes
of the Agreements, a "Change of Control" is deemed to include (i) any
acquisition of stock if the acquiring person would thereafter be the beneficial
owner of 50% or more of the Company's voting stock, (ii) a merger or
consolidation of the Company resulting in the holders of the Company's voting
stock immediately prior to such transaction holding less than 50% of the total
voting common stock of the surviving corporation after such transaction, (iii) a
sale or exchange of all or substantially all of the property and assets of the
Company, or (iv) any change over a two-year period or less in a majority of the
Board of Directors that is not approved by 2/3 of the Directors either in office
at the commencement of such two-year period or who were elected with the
approval of a majority of Directors in office at the commencement of such
two-year period. The term "Cause" is defined to mean the commission of certain
crimes or a willful breach of duty if such neglect is not cured within 30 days
of notice. An executive's termination of employment is deemed for "Good Reason"
if any of the following occurred within one year of such termination: (i) a
substantial change in the nature, or diminution in the status, of the
individual's duties or position, (ii) a reduction in the annual base salary
provided to the individual, (iii) removal from the then current executive
position, (iv) a failure to provide substantially the same support staff, (v) a
material reduction in other benefits, (vi) relocation of the executive's
principal place of business outside Birmingham, Alabama, or (vii) a failure to
assume the Employment Continuity Agreement. The Company considers it unlikely
that the employment of all of the executives anticipated to be covered under
these Agreements would be terminated following a Change of Control.
The benefits payable under these Employment Continuity Agreements consist
of a lump sum cash payment equal to three times, for Ronald G. Bruno, and two
times, for the other covered executives, the sum of the executive's annual base
salary at the time of termination and his incentive compensation bonus for the
year preceding termination. Other benefits provided include the continuation of
certain health, disability, and life insurance benefits for three years. These
agreements continue in force for the duration of the executive's employment with
the Company until he reaches the age of 68.
14
<PAGE> 16
STOCK REDEMPTION AGREEMENT
The Company has an agreement with Joseph S. Bruno pursuant to which the
Company will purchase at death, if requested, up to $500,000 of the Company's
Common Stock held by him or his spouse at the then prevailing market value. In
accordance with the terms of such agreement, the Company carries life insurance
to provide funds for this commitment, the annual premium on which was $48,560
during the fiscal year ended July 2, 1994.
INTERESTS OF OFFICERS, DIRECTORS AND OTHERS IN CERTAIN TRANSACTIONS
Richard Cohn and J. Mason Davis, Jr. are members of the law firm of Sirote
& Permutt, P.C., which serves as general counsel of the Company. Joseph S.
Bruno, Chairman Emeritus of the Company, is a director of Big B, Inc., as is
Richard Cohn. During the last fiscal year, the Company received lease payments
for 14 drug store locations and one home health care store location from Big B,
Inc. under standard commercial leases. Payments by Big B, Inc. to the Company
under all of such leases for the fiscal year ended July 2, 1994, totaled
$701,500 and for the current fiscal year will total at least $564,000. In the
opinion of Management of the Company, the terms of each of these leases are no
less favorable than terms that could have been obtained from unaffiliated
parties. Future minimum lease payments under operating leases having initial or
remaining non-cancelable lease terms in excess of one year payable to the
Company by Big B, Inc. are $3,003,000.
During the last fiscal year, the Company purchased $288,635 of inventory
from C&M Food Distributors, Inc., a corporation which is owned by Benny M.
LaRussa, Jr., a Director of the Company, and his minor children, which
manufactures a line of food products. In the opinion of Management of the
Company, the terms of purchase of this product are no less favorable than terms
that could have been obtained from unaffiliated parties.
SHAREHOLDERS LIST
A complete list of the Shareholders entitled to vote at the annual meeting
of Shareholders to be held October 21, 1994, will be available for inspection
during normal business hours at the principal office of the Company for a period
of at least 10 days prior to the meeting, upon written request to the Company by
a Shareholder, and at all times during the annual meeting at the place of the
meeting.
SELECTION OF AUDITORS
Arthur Andersen LLP independent certified public accountants, have audited
the financial statements of the Company for the fiscal year ended July 2, 1994.
Services provided by Arthur Andersen LLP included work related to the audit of
the financial statements, reviews of unaudited quarterly financial information
and preparation of state and federal income tax returns.
Arthur Andersen LLP, Suite 1500, 417 North 20th Street, Birmingham,
Alabama, is recommended for selection as independent certified public
accountants of the Company for the current fiscal year.
A representative of Arthur Andersen LLP is expected to attend this meeting.
He will be afforded the opportunity to make a statement, if he desires, and will
be available to respond to appropriate questions.
15
<PAGE> 17
OTHER BUSINESS
As of the date of this Proxy Statement, Management knows of no other
business which will be presented for consideration at the meeting.
BRUNO'S, INC. WILL PROVIDE WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON
FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, FOR ITS
FISCAL YEAR ENDED JULY 2, 1994, TO ANY BENEFICIAL OWNER OF BRUNO'S, INC. COMMON
STOCK AS OF SEPTEMBER 7, 1994, WHO REQUESTS IN WRITING A COPY OF SUCH FROM ITS
ASSISTANT SECRETARY, GLENN J. GRIFFIN, C/O BRUNO'S, INC., POST OFFICE BOX 2486,
BIRMINGHAM, ALABAMA 35201.
SHAREHOLDER PROPOSALS
SHAREHOLDER PROPOSALS TO BE PRESENTED FOR CONSIDERATION AT THE NEXT ANNUAL
MEETING OF SHAREHOLDERS OF THE COMPANY MUST BE RECEIVED BY THE COMPANY NO LATER
THAN MAY 26, 1995.
BRUNO'S, INC.
By /s/ Ronald G. Bruno
-------------------
Ronald G. Bruno
Chairman
16
<PAGE> 18
BRUNO'S, INC.
BIRMINGHAM, ALABAMA
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS FOR THE ANNUAL MEETING
OF SHAREHOLDERS ON THE 21ST DAY OF OCTOBER, 1994.
The undersigned hereby appoints Ronald G. Bruno and Joseph S. Bruno, and
each of them, each with the power to appoint his substitute, attorneys with the
powers the undersigned would possess if personally present to vote all of the
Common Stock of Bruno's, Inc. held of record by the undersigned on September 7,
1994, at the annual meeting of the Shareholders to be held on the 21st day of
October, 1994, at the Medical Forum Auditorium, Birmingham Jefferson Civic
Center, 950 22nd Street, North, Birmingham, Alabama 35203, at 10:00 o'clock
a.m., and at any adjournments thereof, upon the matters set forth below and
described in the notice and proxy statement for said meeting, copies of which
have been received by the undersigned; and, in their discretion, upon all other
matters which may come before the meeting. Without otherwise limiting the
general authorization hereby given, said attorneys are instructed to vote as
follows on the matters set forth below:
(1) ELECTION OF DIRECTORS
<TABLE>
<S> <C> <C>
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
</TABLE>
INSTRUCTION -- TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
Joseph S. Bruno, Ronald G. Bruno, Paul F. Garrison, Glenn J. Griffin, Kenneth J.
Bruno, Judy M. Merritt, Benny M. LaRussa, Jr., Richard Cohn, J. Mason Davis,
Jr. and Bart Starr.
(2) Proposal to ratify the engagement of the accounting firm of Arthur Andersen
LLP as independent public accountants for the current fiscal year.
FOR / / AGAINST / / ABSTAIN / /
(3) In their discretion, upon such other matters as may properly come before the
meeting.
AUTHORIZED / / NOT AUTHORIZED / /
The shares represented by this proxy will be voted in accordance with the
specifications made by the undersigned herein. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 and 2.
Please mark, sign, date and return this proxy in the enclosed envelope as
soon as possible, even though you plan to attend this meeting.
To help our preparations for the meeting, please check here if you plan to
attend. / /
SIGN HERE EXACTLY AS NAME(S)
APPEAR(S) ABOVE
_____________________ Date: ________
_____________________ Date: ________
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If
a corporation, please sign in full
corporate name by president or
other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
If your address has changed,
please note new address:
________________________________________________________________________________
_________________________________________________ Zip Code _____________________
