NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 21, 1995
Dear Shareholder:
You are hereby invited to attend the Annual Meeting of Shareholders of Eagle
Food Centers, Inc. which will be held on Wednesday, June 21, 1995, at 9:00
a.m., Central Daylight Time, at the Milan Community Center, Rt.67 & 92nd
Avenue, Milan, Illinois. The matters to be considered and voted upon at the
Annual Meeting of Shareholders are:
1. The election of ten persons to serve as directors of the Company until
the 1996 Annual Meeting of Shareholders or until their successors shall
have been elected and shall have qualified.
2. A proposal to ratify the 1995 Stock Incentive Plan.
3. A proposal to ratify the appointment of Deloitte & Touche LLP as
independent public accountants for the current fiscal year.
4. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on May 12, 1995, as
the record date for determining the shareholders entitled to notice of and to
vote at the meeting or any adjournment or postponements thereof.
All shareholders of record at the close of business on May 12, 1995, are
invited to attend the meeting in person. However, to ensure your shares will
be voted in the event you are not able to attend, please fill in, sign, and date
the enclosed proxy, and return it in the enclosed envelope as soon as possible.
The attached Proxy Statement contains more detailed information with respect
to the business to be transacted at the meeting.
Herbert T. Dotterer
Secretary
May 22, 1995
Milan, Illinois
<PAGE>
May 22, 1995
EAGLE FOOD CENTERS, INC.
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Eagle Food Centers, Inc.
(the "Company"), to be voted at the Annual Meeting of Shareholders to
be held on June 21, 1995, at 9:00 a.m., Central Daylight Time at the Milan
Community Center, Rt. 67 & 92nd Avenue, Milan, Illinois. Proxies are
solicited to give all shareholders of record at the close of business on
May 12, 1995, an opportunity to vote upon the items listed on the accompanying
proxy card. This Proxy Statement, the Notice of Annual Meeting, and the proxy
card are intended to be mailed to shareholders commencing on May 22, 1995.
Only holders of record of the Company's Common Stock, $.01 par value per
share, at the close of business on May 12, 1995, are entitled to notice of
and to vote at the annual meeting. On that date, the Company had outstanding
11,051,994 shares of Common Stock each of which is entitled to one vote on
each proposal presented. A majority of the outstanding shares of Common
Stock will constitute a quorum for the transaction of business at the meeting.
In the election of directors, a plurality of votes cast shall elect. Each other
proposal requires a majority of the votes cast on the proposal to approve.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. Abstentions
are counted in tabulations of the votes cast on proposals presented to the
shareholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
All proxies delivered pursuant to this solicitation may be revoked at any time
at the option of the shareholder by giving written notice to the Secretary of
the Company, by submitting a later dated proxy, or by voting in person at the
meeting.
Upon timely receipt of each properly signed proxy card, the shares
represented thereby will be voted in accordance with the directions
indicated on the proxy card. If no instructions are indicated, they will be
voted for the election of the nominated directors, for the ratification
of the selection of auditors, and for the ratification of the 1995 Stock
Incentive Plan.
The cost of soliciting proxies will be borne by the Company. Officers,
directors, and regular employees of the Company may solicit proxies
personally, by mail, or by telephone and telegraph for which they will not
receive additional compensation.
The Eagle Food Centers, Inc. 1994 Annual Report and financial statements
for the fiscal year ended January 28, 1995, with comparative figures for prior
periods accompanies this Proxy Statement. The Annual Report and the financial
statements included therein are incorporated in this Proxy Statement by
reference.
The mailing address of the principal executive offices of the Company is Rt.
67 and Knoxville Road, Milan, Illinois, 61264.
THE COMPANY
Eagle Food Centers, Inc. (the "Company" or "Eagle"), is a regional
supermarket chain which owns and operates 96 supermarkets in the Quad Cities
area of Illinois and Iowa, northern Illinois, central Illinois, eastern
Illinois, eastern Iowa, and the Chicago/Fox Valley and northwestern Indiana
area. The Company's supermarkets of business under the trade names "Eagle
Food Centers", "Eagle Country Markets", "Eagle Country Warehouse", and
"BOGO's." Eagle supermarkets offer a full line of groceries, meats, fresh
produce, dairy products, delicatessen and bakery products, health and beauty
aids and other general merchandise, as well as video rental and floral service.
PROPOSALS TO SHAREHOLDERS
ELECTION OF DIRECTORS
Proposal 1
The Board of Directors currently consists of seven members, all of whom have
been nominated to be elected at the 1995 Annual Meeting Shareholders
to serve until the 1996 Annual Meeting of Shareholders or until their
successors have been elected and qualified. In addition, the Board of
Directors has nominated Robert J. Kelly, Alain M. Oberrotman and Marc C.
Particelli to be elected to the Board of Directors. Mr. Kelly became the
President and Chief Executive Officer of the Company on May 22, 1995. Mr.
Oberrotman and Mr. Particelli are Principals with Odyssey Partners, L.P. The
table below sets forth certain information regarding the nominees. It is
intended that the accompanying proxy will be voted for the election of the
following ten persons unless the authority to vote is withheld.
If any nominee is unwilling or unable to serve, favorable and uninstructed
proxies will be voted for a substitute nominee designated by the Board of
Directors.
The Board of Directors recommends a vote "FOR" each of the ten
nominees listed below.
<TABLE>
<CAPTION>
Name Age Position(s) Held
<S> <C> <C>
Martin J. Rabinowitz 63 Chairman of the Board and Director
Robert J. Kelly 50 Chief Executive Officer and President
Pasquale V. Petitti 65 Director
Herbert T. Dotterer 50 Senior Vice President--Finance and
Administration, Chief Financial Officer,
Secretary and Director
Steven M. Friedman 40 Director
Peter B. Foreman 59 Director
Michael J. Knilans 68 Director
Alain M. Oberrotman 44
Marc C. Particelli 50
William J. Snyder 52 Director
</TABLE>
The business experience of each of the directors and executive
officers during the past five years is as follows:
Mr. Rabinowitz served as Chairman of the Board from November
1987 to June 1990 and resumed the position as of May 1992. Mr.
Rabinowitz has been a Limited Partner of Odyssey Partners, L.P. since
January 1993 and was a General Partner of Odyssey Partners from February 1984
through December 1992. Prior to joining Odyssey Partners, Mr. Rabinowitz was a
senior tax partner with the law firm of Weil, Gotshal & Manges. Mr.
Rabinowitz also serves as Chairman of the Board of Thackeray Corporation and a
director of Long Lake Energy Corporation.
Mr. Kelly joined the Company as President and Chief Executive Officer in
May 1995. Prior to May 1995, Mr. Kelly was Executive Vice President,
Retailing for The Vons Companies, Inc. and was employed by that Company
since 1963. Mr. Kelly has 32 years of experience in the supermarket industry.
Mr. Petitti served as a director from June 1989 until April
1993 and President and Chief Executive Officer from September 1989
through April 1992 when he retired as an officer of the Company. Mr. Petitti
resumed the positions of Director, President and Chief Executive Officer in
April 1994 and was replaced as President and Chief Executive Officer on May 22,
1995. Previously, Mr. Petitti had been with the Company or its
predecessor since 1957.
Mr. Dotterer, who was named Secretary and a director of the Company in
February 1992, served as Controller from August 1988 until June 1990 when he
became Vice President-Finance, Chief Financial Officer. He became Senior Vice
President-- Finance and Administration, Chief Financial Officer in January
1994. Prior to August 1988, Mr. Dotterer held various positions with The
Kroger Co. and Jewel Companies, Inc. Mr. Dotterer has 33 years of
experience in the supermarket industry.
Mr. Friedman is a General Partner of Eos Partners, L.P., a private
investment firm. Mr. Friedman has served as a director of the Company since
November 1987 and was a General Partner of Odyssey Partners from April 1,
1988 until December 1993. Mr. Friedman also serves as a director of
Forstmann & Company, Inc.; a director of The Caldor Corporation; a director
of The Leslie Fay Companies, Inc.; a director of Gundle Environmental
Systems, Inc.; a director of Black Box Corporation; a director of MICOM
Communications Corporation; a director and Chairman of JPS Textile Group,
Inc. and a director of Rickel Home Centers, Inc.
Mr. Foreman is President of Sirius Corporation, a private investment
management firm. Mr. Foreman also serves as a director of Glacier Water
Services, Inc.; a director of PCA International, Inc.; and a director of
National Picture and Frame Company. Mr. Foreman has been a director of the
Company since June 1989.
Mr. Knilans served as the President of Big Bear, Inc., a supermarket
chain in Ohio, from June 1983 to June 1989. Mr. Knilans has been a director of
the Company since June 1989. Mr. Knilans also serves as a director of the
Cardinal Fund, Columbus, Ohio, director of the Bureau of Workers'
Compensation, State of Ohio, and director and member of the Audit and
Compensation Committee of the Golub Corporation.
Mr. Oberrotman is a Principal of Odyssey Partners, L.P. Prior to joining
Odyssey Partners in July 1992, he was a Principal of Hambro International
Equity Partners, a venture capital firm , from September 1990 to October 1992.
Prior to September 1990, Mr. Oberrotman was the President of TVI Group,
Inc., an interim management consulting firm. He also serves as a director of
JPS Textile Group, Inc. and Forstmann & Company, Inc.
Mr. Particelli is a Principal and Director of Operations of Odyssey
Partners, L.P. Prior to joining Odyssey Partners in October 1994, he was the
worldwide Consumer Products Practice Leader as well as a Senior Partner of
Booz, Allen & Hamilton, a large management consulting firm beginning in 1973.
Mr. Snyder is a senior partner in the law firm of Snyder & Schwarz, P.C.,
Rock Island, Illinois. Mr. Snyder and the firm have performed legal services
in the past for the Company and the Company expects such services to
continue in the future. Mr. Snyder has been a director of the Company since
June 1989.
JPS Textile Group, Inc. and Black Box Corporation, formerly MB
Communications, Inc., referred to above, were restructured pursuant to so-
called "prepackaged" or negotiated plans of reorganization under chapter 11,
title 11 of the United States Code during the periods February 7, 1991 to April
2, 1991 and December 10, 1991 to January 15, 1992, respectively.
The Company's directors are elected annually to serve until the next
annual meeting of shareholders and until their successors have been elected
and qualified. None of the directors or executive officers listed herein is
related to any other director or executive officer.
COMPENSATION OF DIRECTORS
The Company's nonemployee directors receive an annual retainer of
$15,000 and fees of $750 for each board meeting and $500 for each committee
meeting attended plus reimbursement of travel expenses. Mr. Snyder does
not receive director's fees, but does receive legal fees for his services as a
board and committee member.
Former director Robert C. Grayson resigned from the Board on May 5,
1994. Robert C. Grayson & Associates was a party to a consulting agreement
with the Company as described under "Certain Transactions".
CERTAIN TRANSACTIONS
Snyder & Schwarz, P.C., the law firm of which Mr. Snyder, a director of
the Company is a member, serves as counsel to the Company. The Company
paid that law firm $353,613 $215,556, and $281,034 for services rendered in
fiscal 1994, fiscal 1993, and fiscal 1992, respectively. These amounts include
remuneration for Mr. Snyder's services as a director of the Company.
Robert C. Grayson & Associates of which Mr. Grayson is President and
Chief Executive Officer has performed consulting services for the Company in
the amount of $20,571 for fiscal 1994. The Board has determined that the fees
paid for services rendered from Snyder & Schwarz, P. C. and Robert C.
Grayson & Associates were fair and competitive.
BOARD OF DIRECTORS AND COMMITTEES MEETINGS
The Board of Directors is responsible for establishing broad corporate
policies and for overseeing the overall performance of the Company. The
directors are kept informed of the Company's business through discussions
with the Chairman, President and Chief Executive Officer, and other directors
and officers, by reviewing reports and analyses, and by participating in board
and committee meetings. In addition, from time to time, members of the Board
of Directors and committees act by unanimous written consent pursuant to
Delaware law.
The Board of Directors held five meetings during fiscal 1994. All directors
attended at least 75% of all board and committee meetings held during the
periods for which they were directors. Mr. Petitti was elected to the Board
April 13, 1994.
The Board of Directors has an Audit Committee and a Compensation
Committee. The Board has no nominating committee. The Board of Directors
acts as a committee of the whole with respect to functions that would be
performed by a nominating committee.
The Audit Committee is composed of Mr. Snyder, Mr. Foreman, and Mr.
Knilans, all of whom are non-employee directors. The Committee met twice
during fiscal 1994. The Committee recommends the engagement of an
independent auditor and reviews the scope and results of the Company's
audits, the Company's internal accounting controls, and the professional
services rendered by the Company's independent auditors.
The Compensation Committee is composed of Mr. Rabinowitz, Mr. Friedman
and Mr. Foreman. The Committee met once during fiscal 1994. The Committee
reviews and approves all salary arrangements and other remuneration for
officers of the Company.
Limitation of Liability of Directors
As permitted by the Delaware General Corporation Law, the Company's
Certificate of Incorporation provides that a director of the Company will not
be personally liable to the Company or its shareholders for monetary damages for
breach of the fiduciary duty of care as a director, including breaches which
constitute gross negligence. By its terms and in accordance with the Delaware
General Corporation Law, however, this provision does not eliminate or limit
the liability of a director of the Company (i) for breach of the director's
duty of loyalty to the Company or its shareholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law (relating to unlawful payments of dividends or unlawful stock repurchases
or redemptions), or (iv) for any transaction from which the director derived an
improper personal benefit.
EXECUTIVE COMPENSATION
Summary Compensation
The Summary Compensation Table below shows compensation information
for each Chief Executive Officer of the Company during the last fiscal year,
the two other most highly compensated executive officers (the "named
executive officers") who were serving at the end of the last fiscal year,
and for certain other former executive officers of the Company, for the
fiscal years indicated. For discussion of the compensation to be paid to
Robert J. Kelly, the Company's President and Chief Executive Officer as of May
22, 1995, see the "Compensation Committee Report" under the heading "Chief
Executive Officer Compensation".
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Name and Principal Fiscal Other Annual Securities LTIP All Other
Position Year Salary Bonus Compensation Underlying Payouts Compensation
Options
($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Pasquale V. Petitti,(1) 1994 $168,976 $0 $26,408(6)(16) 10,000 $0 $0
Chief Executive Officer 1993 0 0 26,408(16) 0 0 0
and President 1992 74,116 0 16,655(6)(16) 0 0 232,998(14)
Gerald E. Barber, (2) 1994 54,923 0 (6) 0 0 279,900(10) Former Chief Executive
Former Chief Executive 1993 204,000 0 (6) 17,500 0 6,793(13)
Officer and President 1992 194,000 80,000 52,549(6)(7) 35,000 135,720(9) 5,095(13)
Herbert T. Dotterer, 1994 115,000 0 (6) 3,000 0 3,926(13)
Chief Financial Officer 1993 95,000 10,000 (6) 0 0 3,926(13)
and Senior Vice President-
Finance and Administration1992 90,000 40,000 (6) 0 158,676(9) 2,945(13)
Kenneth L. Martin, (3) 1994 68,115 0 2,971(6)(17) 5,000 0 0
Senior Vice President- 1993 0 0 1,486(17) 0 0 0
Operations 1992 0 0 0 0 0 0
Robert L. Jaynes (4) 1994 63,237 0 15,565(6)(15) 0 0 110,625(12)
Former Senior Vice 1993 69,141 35,000(8) (6) 0 0 0
President--Operations 1992 0 0 0 0 0 0
Philip B. Murphy, (5) 1994 81,669 0 (6) 0 0 139,784(11)
Former Senior Vice 1993 121,500 10,000 (6) 0 0 3,350(13)
President--Marketing 1992 115,500 40,000 43,967(6)(7) 0 81,200(9) 2,513(13)
</TABLE>
Notes:
(1) Mr. Petitti became Chief Executive Officer and President
on April 13, 1994, at which time his annual salary was
established at $204,000. In addition, Mr. Petitti receives
retirement benefits and deferred compensation payments
from his previous employment by the Company.
(2) Mr. Barber was Chief Executive Officer and President from
May 1992 until April 13, 1994 when he was succeeded by
Pasquale V. Petitti.
(3) Mr. Martin joined the Company on June 13, 1994 as Senior
Vice President, Operations. He was previously employed
by the Company as the Senior Vice President, Marketing.
Mr. Martin retired from that position in June 1991.
(4) Mr. Jaynes joined the Company as Senior Vice President,
Operations in September 1993 and resigned June 15, 1994.
(5) Mr. Murphy resigned as Senior Vice President, Marketing
September 30, 1994.
(6) Received other annual compensation consisting of perquisites and
personal benefits valued at less than ten percent of total annual
salary and bonus.
(7) Amounts represent moving expenses of $52,549 and $43,967 for Messrs.
Barber and Murphy.
(8) Amount represents cash incentives as part of initial signing agreement.
(9) Amounts represent payouts in respect of long-term awards
under the Performance Equity Plan.
(10) Amount represents severance paid by the Company upon the termination
of Mr. Barber's employment on April 13, 1994, accrued vacation and
the full dollar value of premiums paid by the Company on compensatory
split-dollar executive life insurance policies prorated for the period
within fiscal 1994 that Mr. Barber was employed.
(11) Amount represents severance paid by the Company upon the termination of
Mr. Murphy's employment on September 30, 1994, accrued vacation and the
full dollar value of premiums paid by the Company on compensatory split-
dollar executive life insurance policies prorated for the period within
fiscal 1994 that Mr. Murphy was employed.
(12) Amount represents severance and accrued vacation paid by the Company
upon the termination of Mr. Jaynes' employment on June 15, 1994.
(13) Amounts represent the full dollar value ofpremiums paid by the Company
on compensatory split-dollar executive life insurance policies for each
executive, respectively.
(14) Amount represents payment by the Company upon the retirement of Mr.
Petitti on April 30, 1992 and the full dollar value of insurance for
one year through April 30, 1993.
(15) Amount represents moving expense of $15,565 for Mr. Jaynes.
(16) Represents retirement benefits and deferred compensation
payments related to Mr. Petitti's previous employment with
the Company.
(17) Represents retirement benefits related to Mr. Martin's previous
employment with the Company.
Options/SAR Grants in Last Fiscal Year
The following table sets forth information concerning individual grants of
stock options during the last fiscal year to each of the named executive
officers. The Compensation Committee approved distribution of stock option
grants to the named executive officers at the option price of $3.375 per
share. The option price was based on the average closing stock price of
September 20th and 21st, 1994.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1994
Individual Grants Potential realizable
value at assumed
annual rates of stock
price appreciation
for option term
Number of Percent of Exercise
Securities total options or base
underlying granted to price
Options employees ($/Sh)
granted (#) in fiscal Expiration
Name (1) year Date 5%(2) 10%(2)
<S> <C> <C> <C> <C> <C> <C>
Pasquale V. Petitti 10,000 3.50% $3.375 9/22/2004 $21,225 $53,789
Herbert T. Dotterer 3,000 1.05% 3.375 9/22/2004 6,368 16,137
Kenneth L. Martin 5,000 1.75% 3.375 9/22/2004 10,613 26,894
</TABLE>
Notes:
(1) Options were granted for a term of ten years on September 22, 1994,
subject to earlier termination in certain events related to
termination of employment. Options become exercisable on the first
anniversary of the date of the grant of the option.
(2) Caution is recommended in interpreting the financial significance of
these figures. The amounts under the columns labeled "5%" and "10%"
are included pursuant to certain rules promulgated by the Securities
and Exchange Commission and are not intended to forecast future
appreciation, if any, in the price of the Company's common stock.
These amounts are based on the assumption that the named executives
hold the options granted for the full term of their options and that the
price of the Company's common stock appreciates at assumed rates of 5%
and 10%, respectively, compounded annually over the term of the
options. The actual value of the options will vary in accordance with
the market price of the Company's common stock.
Aggregated Option/SAR Exercises and Fiscal Year and Option/SAR Values
The following table shows information regarding the values of certain
unexercised options at the end of the last completed fiscal year. No stock
appreciation rights were granted during fiscal 1994. All stock appreciation
rights outstanding at the end of fiscal 1993 expired unexercised with Mr.
Barber's termination of employment in April 1994.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values Table
Number of Unexercised Value of Unexercised
Acquired Value Options at Jan. 28, 1995 in-the-Money Options
on at Jan. 28, 1995(1) Acquired On Value
Name Exercise Realized Exercisable Nonexercisable Exercisable Nonexercisable
<S> <C> <C> <C> <C> <C> <C>
Pasquale V. Petitti 0 0 0 10,000 0 0
Herbert T. Dotterer 0 0 0 3,000 0 0
Kenneth L. Martin 0 0 0 5,000 0 0
</TABLE>
Note:
(1) Market value of underlying securities at January 28, 1995 minus the
base price.
Compensation Committee Report
The Compensation Committee for fiscal 1994 was composed of three
nonemployee members from the Board of Directors. The members were Mr.
Rabinowitz, Mr. Friedman and Mr. Foreman. Mr. Petitti attended meetings as a
non-voting member. The Committee establishes objectives for the executive
compensation program and reviews and approves all salary and other
remuneration for the executive officers of the Company. The objectives of the
executive compensation program are to:
1. Promote the attainment of Company goals by placing a greater portion
of compensation subject to performance goals.
2. Attract and retain qualified talent.
3. Enhance shareholder value by providing opportunities for
equity ownership through performance-based programs.
The executive officer compensation program is comprised of salary, cash
incentive compensation and other benefits, including pension and medical
benefits which are available to other employees in the Company.
Base Salary
There is no formal Compensation Committee policy regarding the determination
of salaries; however, consideration is given to several factors including
individual work experience, performance, and comparable salaries within the
retail food industry. Based upon a 1992 study conducted Associates of fifteen
similar retail food chains, the Company's salary structure for executive
officers was approximately one-third below the industry median. Salary
adjustments for fiscal year 1994 reflect promotions and changes in
responsibility and did not include any annual adjustments.
The compensation peer group used in the Hewitt Study is not the same as the
S & P Retail Food peer group index used in the Comparison of Five Year
Cumulative Total Return graph included in this Proxy Statement. The group
with which the Company competes for executive talent does not necessarily
include all of companies which should be used to compare shareholder returns.
Annual Incentive Bonuses
In fiscal 1994, the bonus policy was based in part on upon specific
financial measures of performance and in part on a discretionary method. The
Company used the Hewitt study and other industry comparative data to determine
annual bonus potentials. Annual bonus potentials depend upon job levels and
are set at a stated percent of the base compensation. The entire annual
incentive bonus paid for 1993 was on a discretionary basis. No bonus payments
were awarded to the named executive officers for 1994 due to the Company's
results.
Long-Term Incentive
The Committee intends to develop a new long-term incentive program
providing stock and other incentives to provide a long-term focus for fiscal
1995 and later fiscal years. The Company's last program expired in January
1993.
Chief Executive Officer Compensation
Mr. Petitti's base salary for fiscal 1994 is based on an annual salary of
$204,000. Mr. Petitti received no bonus for fiscal 1994.
As of May 10, 1995, the Company retained Robert J. Kelly as its President
and Chief Executive Officer. Mr. Kelly is one of the nominees for the Board of
Directors. The Company and Mr. Kelly have entered into an Employment
Agreement which has a term of three years ending on May 22, 1998. The
Employment Agreement provides for a base salary at the rate of $350,000 per
year. In addition, the Company shall pay a signing bonus of $150,000 at the
commencement of his employment. Also, Mr. Kelly is eligible to receive bonus
compensation in an amount determined by the Board of Directors based upon
mutually acceptable performance targets and up to 100% of the base salary.
The bonus compensation in the first year of Mr. Kelly's employment will be not
less than $125,000. Mr. Kelly purchased 125,000 shares of common stock of the
Company at the time of the execution of the Employment Agreement by
delivering to the Company a promissory note with the purchase price of the
shares based upon the closing sale price of the Company's common stock on the
business day immediately preceding the date of the Employment Agreement.
The Company has also granted Mr. Kelly the option to purchase up to 600,000
shares of the Company's common stock. Under the terms of this option, up to
200,000 shares may be purchased by Mr. Kelly on or after the first anniversary
date of his employment at a price equal to $2.50 per share, up to an
additional 200,000 shares may be purchased on or after the second anniversary
of his employment at a price equal to $3.50 per share, and the balance of the
shares may be purchased on or after the third anniversary of Mr. Kelly's
employment at a price equal to $4.50 per share. This option becomes immediately
exercisable in the event of the termination of Mr. Kelly's employment by reason
of his death or permanent disability, by the Company for any reason other than
cause (as defined in the Employment Agreement), or by Mr. Kelly for good
reason (as defined in the Employment Agreement). The option also becomes
immediately exercisable in the event of a change of control of the Company.
The stock option provision of the Employment Agreement is subject to the
ratification of the 1995 Stock Incentive Plan by the shareholders. The
Company has agreed to pay Mr. Kelly's relocation expenses for moving to the
area of the Company's principal business office from California, and has agreed
to pay his interim expenses associated with commuting from California. The
Employment Agreement provides that Mr. Kelly is entitled to four weeks of
vacation per year.
Compensation Committee:
Martin J. Rabinowitz
Steven M. Friedman
Peter B. Foreman
Compensation Committee Interlocks and Insider Information
The Compensation Committee is comprised exclusively of directors who are
not and have never been Company employees. No Company executive officer
serves on the Compensation Committee or as a director of another company for
which any member of the Compensation Committee serves as a director or
executive officer.
Summary of Compensation Plans
Retirement Plan
The Company maintains a tax-qualified defined benefit pension plan covering
both salaried and non-union hourly employees. The benefit formula under
such plan is the sum of 1% of annual compensation for each year
up to the Social Security Wage Base for that year and 1.33% of annual
compensation over the Social Security Wage Base with a minimum benefit of $360
per year multiplied by years of credited service. There is full vesting of
benefits after five years of service. All contributions are made by the
Company. Effective October 1, 1990, the pension plans were amended to provide
for voluntary early retirement at age 55. Assuming continued employment with
the Company until retirement at age 65, the estimated annual benefits payable
beginning at age 65 to the named executive officers are as follows:
Mr. Petitti--$14,086; Mr. Dotterer- $28,351; and Mr. Martin--$14,894.
Mr. Petitti and Mr. Martin are currently receiving retirement benefits related
to their previous employment with the Company. These amounts are included in
the estimated annual retirement benefits payable beginning at age 65.
Stock Incentive Plan
The Company has a Stock Incentive Plan which was ratified by the
shareholders at the 1990 Annual Shareholders Meeting. The Plan provides the
Compensation Committee with the discretion to make grants until February 3,
1995 to all salaried employees of the Company who are not in a bargaining unit,
in the form of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Limited Stock Appreciation Rights, and Restricted Stock.
Grants of Stock Appreciation Rights, Limited Stock Appreciation Rights, and
Restricted Stock are intended to be confined to key employees in special
situations. Three hundred fifty thousand shares of Common Stock of the
Company are available for grant under the Plan, of which no more than 100,000
shares may be granted in the form of Restricted Stock. The plan terminated at
the end of fiscal 1994.
As of January 28, 1995, grants with respect to a total of 345,350 shares
were outstanding of which 285,475 shares had an option price of $3.375, 2,000
shares had an option price of $4.75, 28,550 shares had an option price of
$10.00 and 29,325 shares had an option price of $8.50.
A proposal to ratify the 1995 Stock Incentive Plan is before the
shareholders within this Proxy.
Performance Graph
Shown below is a line graph comparing a five-year cumulative total
shareholder return for the Company, the S & P Retail Stores (Food), and the
Russell 2000.
<TABLE>
<CAPTION>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
EAGLE FOOD CENTERS, S & P RETAIL STORES, AND RUSSELL 2000
1/90 1/91 1/92 1/93 1/94 1/95
<S> <C> <C> <C> <C> <C> <C>
Eagle 100 41.23 50 50.88 45.61 11.40
S&P Retail Stores 100 124.97 121.37 154.84 149.30 162.58
Russell 2000 100 96.14 139.26 157.69 187.04 175.80
</TABLE>
*Total return assumes reinvestment of dividends on a quarterly basis.
Note: Companies comprising the S & P Retail Stores (Food) Index include:
Albertson's, Inc.; American Stores Co.; Brunos Inc.; Giant Food Inc.; Great
Atlantic & Pacific Tea Co.; Kroger Co.; and Winn-Dixie Stores Inc.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
None of the named executive officers for the last fiscal year have
employment contracts with the Company. Robert J. Kelly, who was named as
President and Chief Executive Officer on May 22, 1995 has an employment
contract which is described above. In order to protect all of the participant's
rights in the event of a Change in Control (as defined below) of the Company,
the1995 Stock Incentive Plan provides for the immediate vesting of all
outstanding awards upon the occurrence of such an event. For purposes of such
Plan, a Change in Control of the Company is deemed to occur if: (i) any
person or entity (with the exception of Odyssey Partners) acquires 50% or
more of the voting securities of the Company; (ii) the shareholders approve a
plan of complete liquidation, an agreement for sale or disposition of
substantially all of the Company's assets, or a materially dilutive merger or
consolidation of the Company; or (iii) the Board of Directors agrees by a
two-thirds vote that a Change in Control has occurred or is about to occur and
within six months actually does occur. However, for purposes of such Plan, no
Change in Control would be deemed to occur with respect to any Plan
participant who is a material equity participant of the purchasing group that
consummates a Change in Control.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS
AND MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of shares of Common Stock by (a) each person or group that is
known to the Company to be the beneficial owner of more than 5% of the
outstanding shares, (b) each director and named executive officer of the
Company, and (c) all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
Amount
and Nature Percent
Name and Address of Beneficial of
of Beneficial Owner Ownership(1) Class(2)
<S> <C> <C>
Odyssey Partners, L.P.(3) 5,754,835 52.07
Stephen Berger(4) 5,754,835
Leon Levy(4) 5,754,835
Jack Nash(4) 5,754,835
Joshua Nash(4) 5,754,835
Martin J. Rabinowitz(5) 5,754,835
c/oOdyssey Partners, L.P.
31 West 52nd Street
New York, New York 10019
Steven M. Friedman(3) 267,345 2.42
Pasquale V. Petitti 250,000 2.26
Robert J. Kelly(7) 125,000 1.13
Herbert T. Dotterer 18,226 *
Kenneth L. Martin 78,061 *
Peter B. Foreman 151,022 1.37
Michael J. Knilans 500 *
William J. Snyder(6) 1,000 *
Directors and officers as a group 6,253,644 56.58
(9) persons including certain of
the persons listed above.
</TABLE>
(1)Unless otherwise noted, each person has sole investment and voting power
with respect to the shares indicated.
(2)11,051,994 shares of Common Stock were outstanding on April 21, 1995.
(3)Odyssey Partners, a private investment firm has beneficial ownership of
5,754,835 shares. This includes 267,345 shares in which Steven M. Friedman,
a former general partner of Odyssey Partners, L.P., and 29,670 shares in
which Salem D. Shuchman, a former associate of Odyssey Partners, L.P., has
an economic interest. Odyssey Partners retains sole voting and dispositive
power over Mr. Friedman's and Mr. Shuchman's shares.
(4)Represents shares owned by Odyssey Partners which may be deemed to be
beneficially owned by each of Messrs. Berger, Levy, Jack Nash, and Joshua
Nash by virtue of each being a General Partner of Odyssey Partners.
(5)Mr. Rabinowitz is a limited partner of Odyssey Partners. Mr. Rabinowitz
disclaims beneficial ownership of the shares of Common Stock owned by
Odyssey Partners because he does not have investment or dispositive power
with respect thereto.
(6)The profit sharing plan of Snyder & Schwarz, P.C., the law firm of which
Mr. Snyder is a member, owns 1,000 shares of Common Stock.
(7)Mr. Kelly purchased 125,000 shares f common stock of the Company at the
time of the execution of the Employment Agreement.
*Owns less than 1% of the total outstanding Common Stock of the Company.
Ownership of Principal Shareholders
Odyssey Partners currently holds the right to vote 52.07% of the issued and
outstanding shares of Common Stock of the Company. As long as Odyssey
Partners owns a majority of the outstanding voting stock of the Company,
Odyssey Partners will be able, acting alone, to elect the entire Board of
Directors of the Company and to approve any action requiring shareholder
approval.
Compliance With Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the
Company. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no
other reports were required, during the two fiscal years ended January 28,
1995, all Section 16(a) filing requirements applicable to its officers,
directors,and greater than ten-percent beneficial owners were complied with.
RATIFICATION OF THE
1995 STOCK INCENTIVE PLAN
Proposal 2
SUMMARY OF THE 1995 STOCK INCENTIVE PLAN
Subject to ratification by shareholders at the 1995 Annual Meeting, on June
21, 1995, the Board of Directors adopted the Eagle Food Centers, Inc. 1995
Stock Incentive Plan (the "Plan"). A copy of the Plan Document can be obtained
by written request to the Secretary of Eagle Food Centers, Inc. addressed
or directed to the Company's corporate offices as provided in the first page of
the Proxy statement. The Plan will provide an incentive for employees to
promote the success and enhance the value of the Company by linking the
personal interests of employees to those of Company shareholders. The
Board of Directors has appointed the Compensation Committee of the Board
as the Committee with the power to administer the Plan. The Plan will
provide flexibility to the Compensation Committee in its ability to
motivate, attract, and retain the services of key employees. The Stock Options
grantedto Robert J. Kelly, as described under "Chief Executive Officer
Compensation", are subject to ratification of the 1995 Stock Incentive Plan to
be ratified by the shareholders.
The Plan provides the Compensation Committee with the discretionto make
grants during the next ten years to all salaried employees and officers of the
Company who are not in a bargaining unit in the form of Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights, Limited
Stock Appreciation Rights and Restricted Stock.
The extent to which executive officers and non-executive officer
employees other than Mr. Kelly, will participate and receive benefits
under the Plan is not presently determinable. It is anticipated, however, that
participation and the number of shares subject to options received will be
similar to those granted under the previous plan. The following table
illustrates the benefits that would have been applicable to the individuals and
groups shown in 1994, had the Plan been in effect in 1994, and assuming
participation and number of options granted were in accordance with the
guidelines utilized in the previous plan:
<TABLE>
<CAPTION>
New Plan Benefits
1995 Stock Compensation Plan
Name and Position Dollar Value ($) Number of Shares
<S> <C> <C>
Pasquale V. Petitti, CEO $33,750 10,000
Herbert T. Dotterer, CFO, Sr. V.P.
Finance and Administration $10,125 3,000
Kenneth L. Martin, Sr. V.P.
Operations $16,875 5,000
</TABLE>
ADMINISTRATION
The Plan will be administered by the Compensation Committee of the Board of
Directors, which shall have the authority (i) to select employees to whom
awards are granted; (ii) to determine the size and type of awards; (iii) to
determine the terms and conditions of such awards in a manner consistent with
the Plan; (iv) to interpret the Plan and any instrument or agreement entered
into under the Plan; (v) to establish such rules and regulations relating to
the administration of the Plan as it deems appropriate; and (vi) to make all
other determinations which may be necessary or advisable for the administration
ofthe Plan.
With the approval of the Board, at any time and from time totime,
the Committee may terminate, amend, or modify the Plan in a manner consistent
with the Plan's provisions, provided such changes do not violate the federal or
state securities laws. For example, the following changes may not be made
without shareholder approval.
a. Increase the total amount of stock which may be issued under the
Plan except in the event of any merger, reorganization,
consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, share combination, or other change in the
corporate structure of the Company affecting the stock which
would cause a dilution or enlargement or rights; or
b. Change the class of employees eligible to participate in the Plan;
or
c. Materially increase the cost of the Plan or materially increase the
benefits to participants; or
d. Extend the maximum period after the date of grant during which
options or SARs may be exercised; or
e. Change the provisions of the Plan regarding option price.
SHARES SUBJECT TO THE PLAN
The Board has proposed that 2,000,000 shares of Common Stock be
established as the number of shares of Common Stock of the Company which
shall be available for grant under the Plan. If any award terminates, expires,
or lapses, the related stock shall again become available for grant. In the
event of a change in the Corporate structure that affects the shares (for
example, a merger, recapitalization, or stock dividend) the Committee shall
make adjustments to the number of shares available to the Plan and to the
number and/or price of outstanding awards to prevent dilution of enlargement
of rights.
STOCK OPTIONS
Stock options may be granted by the Committee in the form of Nonqualified
Stock Options ("NQSOs"), Incentive Stock Options ("ISOs"), or a combination
thereof. All grants of ISOs must be within the limitations of Section 422
of the Internal Revenue Code. The purchase price per share under
any option will be determined by the Committee, but shall not be less than 50%
(100% in the case of any ISO, and 110% in the case of an ISO granted to a ten-
percent shareholder)of the fair market value of a share of Company stock on
the date of grant. The term of each option shall be fixed by the Committee,
provided that no ISO shall have a term extending beyond ten years from the
date the option is granted. Options shall be subject to such terms and
conditions and shall be exercisable at such time or times as determined by the
Committee provided, however, that no option shall become exercisable any
earlier than 12 months after the date of grant, and generally will vest 33% on
each of the three anniversaries of the grant date unless the committee decides
otherwise. Options shall be exercised by payment of the purchase price in
cash, in previously acquired shares of Company stock, or a combination
thereof. Upon termination of employment, all options that have not yet become
exercisable shall be forfeited; vested options may remain exercisable for a
specified time period, the length of which is dependent upon the reason for the
employment termination.
STOCK APPRECIATION RIGHTS
Stock Appreciation Rights ("SARs") may be granted on a stand alone
basis, independent of any other award, with a grant price not less than 50% of
the fair market value of a share of Company stock on the date of grant. The
term of each SAR shall be fixed by the Committee, provided that no SAR shall
have a term extending beyond ten years from the date of grant. SARs shall be
subject to such terms and conditions and shall be exercisable at such time or
times as determined by the Committee. Upon exercise, the SAR holder is
entitled to receive for each SAR exercised the difference between the fair
market value of a share of Company's stock on the date of exercise over the
grant price of each SAR. Payment of this amount by the Company upon
exercise may be in cash, in shares of Company stock of equal value, or a
combination thereof, as the Committee shall determine. Upon termination of
employment, all SARs that have not yet become exercisable shall be forfeited.
Vested SARs may remain exercisable for a specified time period, the length of
which is dependent upon the reason for the employment termination.
RESTRICTED STOCK/STOCK BONUSES
A Restricted Stock award consists of a grant of Company stock that is
subject to a promise of continued performance by the recipient for a specific
period of time and is nontransferable by the recipient during this period.
This "Period of Restriction" is established by the Compensation Committee at
the time of grant and must extend for at least 12 months. During the Period of
Restriction, a restricted stockholder shall have the right to vote the shares
and to receive all dividends paid thereto. Upon fulfillment of the Period of
Restriction employment requirement, a recipient shall receive a clean,
completely transferable stock certificate. However, if a recipient's
employment is terminated for any reason before the Period of Restriction
ends, all nonvested restricted shares are forfeited, subject to the right
and the discretion of the Compensation Committee to waive the
forfeiture.
NON-EMPLOYEE DIRECTOR OPTIONS
The Plan contains a provision allowing non-employee Directors of the
Company to elect annually to receive payment of all or any portion of the fees
for their services as Directors in the form of options ("Non-Employee Director
Options") to acquire Company Common Stock. By allowing non-employee
Directors to receive Non-Employee Director Options in lieu of cash
compensation, the Plan further encourages stock ownership in the Company by
its non-employee Directors.
Under the Plan, non-employee Directors may elect annually to receive
the compensation for services as a Director for the following year (not
including reimbursement of expenses) in the form of Non-Employee Director
Options. The Non-Employee Director Options will be granted at the
commencement of the 12-month period for which the election has been made.
The number of Non-Employee Director Options granted to an electing non-
employee Director in any year shall be an amount whose value, as determined
by an independent valuation expert retained by the employee members of the
Board of Directors, is equivalent on the date of grant to the cash compensation
which the Director would otherwise have been entitled to receive for the year.
In general, Non-Employee Director Options become exercisable one year
after the date of grant (or such longer period as the employee members of the
Board of Directors may set) and are exercisable at a price equal to the market
price of the Company's Common Stock at the close of business on the day prior
to the date of grant. Non-Employee Director Options become immediately
exercisable upon a Director's death, disability or upon a Change in Control.
If a Director's tenure ends for a reason other than death, disability or Change
in Control, then the number of Non-Employee Director Options granted for the
year in which the tenure ends shall be reduced to reflect the amount of
compensation actually earned by the Director in that year and the remaining
Non-Employee Director Options granted in that year shall be immediately
exercisable. The tax treatment on Non-Employee Director Options will be the
same as the tax treatment of Nonqualified Stock Options.
Subject to shareholder approval of the Plan, non-employee Directors may
elect on June 21, 1995 to receive Non-Employee Director Options for the year
period commencing on that date.
AWARDS NONTRANSFERABLE
No award may be assigned, transferred, pledged, or otherwise encumbered by
a participant, other than by will or by the laws of descent and distribution.
Each award may be exercised during the participant's lifetime only by the
participant.
LOANS OR FORM OF PAYMENT
The Plan allows the Committee to accept payment for options in the form
of cash or shares of the Company. The Committee is also empowered to
withhold shares for the payment of income taxes on the exercise of options.
The Company may also make loans to Participants to allow them to exercise
options subject to specified terms, and secured by a pledge of shares.
CHANGE IN CONTROL
In order to protect all of the participant's rights in the event of a
Change in Control (as defined below) of the Company, the Plan provides for
the immediate vesting of all outstanding awards upon the occurrence of such an
event.
A Change in Control of the Company shall be deemed to have occurred if
any one or more of the following conditions are fulfilled: (i) any person or
entity (with the exception of Odyssey Partners) acquires 50% or more of the
voting securities of the Company; (ii) the stockholders approve a plan of
complete liquidation, an agreement for sale or disposition of substantially all
of the Company's assets, or a materially dilutive merger or consolidation of
the Company; or (iii) the Board of Directors agrees by a two-thirds vote that a
Change in Control has occurred or is about to occur and within six months
actually does occur. However, in no event shall a Change in Control be deemed
to occur with respect to a participant if that participant is a material equity
participant of the purchasing group that consummates a Change in Control.
Officers or employees of the Company granted Stock Options, Stock
Appreciation Rights, and Restricted Stock, particularly with terms such as
those regarding the effect of a Change of Control of the Company, may be able
to acquire control of the Company and may discourage potential acquirors from
making proposals which certain of the Company's shareholders might find
attractive due to the increased percentage of ownership of the Company by
management. Further, Odyssey Partners controls a majority of the
outstanding shares of Common Stock, thus any proposals to acquire control of
the Company would be subject to Odyssey Partners' approval. See "Control By
Majority Shareholder." Management is not aware of any proposal or attempt to
acquire control of the Company and has no intention of utilizing any of the
aforementioned items for specific purposes of contesting any proposed change
in control.
FEDERAL INCOME TAX CONSIDERATIONS
Under current law, the Federal income tax treatment of options, SARs,
and Restricted Stock granted under the Plan is summarized below.
Nonqualified Stock Options(NQSO). The grant of a NQSO will have no
immediate tax consequences to the Company or to the employee.
The exercise of a NQSO will require an employee to include in his gross income
the amount by which the fair market value of the acquired shares on the
exercise date exceeds the option price. Provided the applicable withholding
requirements are met, the Company will be entitled to a deduction at the same
time and in the same amount as the employee in receipt of income in connection
with the exercise of a NQSO. Upon a subsequent sale or taxable exchange
of shares acquired upon NQSO exercise, an employee will recognize long or
short-term capital gain or loss equal to the difference between the amount
realized on the sale and the tax basis of such shares. Under current law,
capital gains are taxed in the same rate as ordinary income, except that
long-term capital gains are subject to a maximum rate of 28%.
Incentive Stock Options(ISO). The grant of an ISO will have no
immediate tax consequences to the Company or the employee. If the employee
exercises an ISO and does not dispose of the acquired shares within two years
after the grant of the option nor within one year after the date of the
transfer of such shares to the employee (a "disqualifying disposition"), the
employee will realize no compensation income, and any gain or loss that is
realized on a subsequent disposition of such shares will be treated as long-term
capital gain or loss. However, for purposes of computing the employee's
alternative minimum tax, if any, the spread between the option price and the
stock's fair market value on the date of ISO exercise is a preference item.
If any employee causes a disqualifying disposition of the ISO-acquired
stock, the employee will be treated as having exercised a NQSO for tax
purposes (see above). The Company also will receive NQSO tax treatment
upon the disqualifying disposition. However, if the employee fulfills the
holding period requirements, and avoids a disqualifying disposition, a tax
deduction will not be available to the Company.
SARs. There are no tax consequences to the Company or the employee
upon the grant of a SAR. Upon exercise of the SAR, the employee will be
deemed to have received taxable ordinary income in the amount of any cash
plus the fair market value of any shares issued or transferred. The Company
will receive tax deduction in the same amount, at the same time.
Restricted Stock. The Company will receive a deduction at the time that
restrictions lapse. The deduction will be in the amount of the fair market
value of the stock upon vesting. For the employee, since the stock is
subject to a substantial risk of forfeiture (the requirement that employment
be continued for the restriction period), the employee has no taxable income
until the restrictions lapse.
ACCOUNTING TREATMENT
Under present accounting rules, the grant or exercise of NQSOs or ISOs
may result in a charge against the Company's earnings. The excess, if any, of
the fair market value of the Common Stock over the exercise price of SARs will
be charged against the Company's earnings each accounting period. The
amount of the charge will increase or decrease based on changes in the market
value of he Common Stock during the particular accounting period. NQSOs or
ISOs also may result in a charge against earnings, depending upon the terms of
the options.
For Restricted Stock, upon grant, the Company must amortize the fair
market value of the restricted shares over the restriction period. Changes in
the market value of the Common Stock will not affect the amount of this charge
(future appreciation in the value of the restricted shares will not cause a
charge to earnings).
RECOMMENDATION OF THE BOARD
The Board of Directors unanimously recommends the adoption of the
proposal to adopt the Eagle Food Centers, Inc. 1995 Stock Incentive Plan and
your proxy is solicited for that purpose. Shareholders are urged to vote in
favor of this proposal by marking "FOR" in the appropriate box on the
accompanying proxy and signing and returning the proxy to the Company as
indicated thereon. If no direction is given the proxy will be voted FOR the
proposal to adopt the 1995 Stock Incentive Plan.
RATIFICATION OF THE SELECTION OF AN INDEPENDENT AUDITOR
Proposal 3
Deloitte & Touche LLP, 101 W. Second Street, Davenport, Iowa, independent
certified public accountants, have performed an examination of
the financial statements of the Company for the fiscal year ended January 28,
1995. Services provided by Deloitte & Touche LLP included work related to the
examination of the annual financial statements, reviews of unaudited quarterly
financial information and preparation of state and federal income tax returns.
The Reorganization Services Group of Deloitte & Touche LLP performed
consulting work for the Company beginning in January 1995 in order to assist
the Company in its cash management and liquidity planning.
The Board of Directors, upon recommendation of its Audit Committee,
has appointed Deloitte and Touche LLP to audit the books and accounts of the
Company for the fiscal year ending February 3, 1996 and is seeking ratification
of this appointment by the Shareholders. It is intended that the shares
represented by the proxy will be voted (unless the proxy indicates to the
contrary) for ratification of the appointment.
A representative of Deloitte & Touche LLP will be attending the meeting
and provided the opportunity to make a statement, if desired, and will be
available to respond to appropriate questions.
The Board of Directors recommends a vote "FOR" the ratification of the
selection of an independent auditor.
1996 SHAREHOLDER PROPOSALS
Any shareholder who desires to present a proposal qualified for inclusion
in the Company's proxy materials for the 1996 Annual Shareholders Meeting
must forward the proposal in writing to the Secretary of the Company at the
address shown on the first page of this proxy statement in time to arrive at
the Company no later than January 22, 1996.
ADDITIONAL INFORMATION
Included with this Proxy Statement is the Company's Annual Report
indicating the general scope and nature of such business together with a
summary of the activities and financial results of the Company for fiscal 1994.
Shareholders may upon written request and without charge, obtain a copy of
the Company's Securities and Exchange Commission Annual Report on Form 10-
K. Exhibits to the Form 10-K are also available. The Company will require
payment of a fee covering its reasonable expenses in furnishing such exhibits.
Address any request to Mr. Herbert T. Dotterer, Eagle Food Centers, Inc.,
Rt. 67 and Knoxville Rd., Milan, Illinois, 61264.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters which
may come before the meeting. However, if any matters other than those
referred to above should properly come before the meeting, it is the intent of
the persons named in the enclosed proxy to vote such proxy in accordance with
their discretion.
BY ORDER OF THE BOARD OF DIRECTORS
Dated May 22, 1995 Herbert T. Dotterer, Secretary
PROXY CARD
Eagle Food Centers, Inc. Proxy/Voting Instruction Card
Milan, Illinois
This Proxy is solicited on behalf of the Board of Directors for the Annual
Meeting on June 21, 1995.
The undersigned hereby appoints Pasquale V. Petitti and Herbert T. Dotterer
as true and lawful proxies each with the power to appoint substitutes, and to
vote the shares of common stock of the Company held on record by the
undersigned on May 12, 1995, at the Annual Shareholders Meeting of Eagle
Food Centers, Inc. to be held on June 21, 1995 at 9:00a.m., Central Daylight
Time, at the Milan Community Center, Rt. 67 & 92nd Avenue, Milan, Illinois,
and at any adjournments thereof, on all the matters coming before said meeting
including any matters which the Board of Directors is not aware of on May 22,
1995. IF NO DIRECTION AS TO THE MANNER OF VOTING THE PROXY IS MADE, THE PROXY
WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR PROPOSAL 2 AND FOR PROPOSAL 3
AS INDICATED ON THE REVERSE SIDE HEREOF.
Election of Directors:
Nominees: Martin J. Rabinowitz, Robert J. Kelly, Pasquale V.Petitti, Herbert
T. Dotterer, Steven M. Friedman, Peter B. Foreman, Michael J.Knilans, Alain
M. Oberrotman, Marc C. Particelli, William J. Snyder
You are encouraged to specify your choice by marking appropriate boxes on
the reverse side. However, you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The Proxy
Committee cannot vote your shares unless you sign, date and return this card.
[See Reverse Side]
[X] Please mark your vote as in this example.
This proxy will be voted in accordance with the instructions set forth below.
If no selection is made, this proxy will be voted FOR the election of the Board
of Directors, FOR proposal 2 and FOR proposal 3.
The Board of Directors recommends a vote FOR proposal 2.
1. Election of Directors. FOR []
(See opposite Side). WITHHELD AS TO ALL NOMINEES []
2. Ratification of the 1995 Stock Incentive Plan. FOR [] AGAINST [] ABSTAIN[]
3. Ratification of the selection of Deloitte & Touche asIndependent Auditors.
FOR [] AGAINST [] ABSTAIN[]
Signature(s) Date
Note: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please indicate your full title as such. If the signer is a Corporation,
please sign full Corporate name by duly authorized officer. If a
Partnership, please sign in Partnership by authorized person.
