<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CERTIFIED GROCERS OF CALIFORNIA, LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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<PAGE>
PRELIMINARY COPY
ADVISORY BALLOT
Mark up to 12 names, but not more than 12.
The parenthetical letter "N" designates representatives for Northern
California shareholders.
/ / Louis A. Amen
(Incumbent)
/ / John Berberian
(Incumbent)
/ / John T. Fujieki
/ / Scott Hair
/ / Darioush Khaledi
(Incumbent)
/ / Mark Kidd (N)
(Incumbent)
/ / Yong H. Kim
/ / Richard L. London
/ / Willard "Bill" MacAloney
(Incumbent)
/ / Jay McCormack
(Incumbent)
/ / Morrie Notrica
(Incumbent)
/ / Michael A. Provenzano
(Incumbent)
/ / Edward J. Quijada
/ / Gail Gerrard Rice
/ / Farid (Mike) Shalabi
/ / Jim Stump
(Incumbent)
/ / Kenneth Young (N)
(Incumbent)
IMPORTANT!
This ballot is not a proxy. At this time we are not asking you for a proxy,
and request that you not send us a proxy.
This ballot is not valid unless returned in the envelope provided. It must be
received by February 7, 1997.
CERTIFIED GROCERS OF CALIFORNIA, LTD.
<PAGE>
PRELIMINARY COPY
CERTIFIED GROCERS OF CALIFORNIA, LTD.
STATEMENT REGARDING ADVISORY BALLOT
The enclosed Advisory Ballot is solicited by the Nominating Committee of the
Board of Directors of Certified Grocers of California, Ltd. (the "Company").
This Statement, and the enclosed Advisory Ballot and Candidates' Statements,
were first mailed to shareholders on or about January 6, 1997. The address of
the principal executive office of the Company is 2601 South Eastern Avenue, Los
Angeles, California 90040.
FUNCTION AND PURPOSE OF THE ADVISORY BALLOT
At the Company's Annual Meeting of Shareholders, presently scheduled for
April 15, 1997, the 15 members of the Company's Board of Directors will be
elected. Twelve directors will be elected by the holders of the Company's Class
A Shares, and three directors will be elected by the holders of the Company's
Class B Shares.
In connection with the Annual Meeting, the Board of Directors will solicit
proxies. However, the enclosed Advisory Ballot is not a proxy, and at this time
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Pursuant to the Company's Bylaws, the Board of Directors annually appoints a
Nominating Committee to select the 15 persons who will be nominated by the Board
of Directors for election by the shareholders to the Board of Directors. The
enclosed Advisory Ballot is being solicited by the Nominating Committee from the
holders of the Company's Class A Shares to assist the Nominating Committee in
selecting the 12 persons who will be submitted as nominees for election as
directors by the holders of such shares. This Advisory Ballot is not being used
by the Nominating Committee in connection with its selection of the three
persons who will be submitted as nominees for election as directors by the
holders of the Company's Class B Shares.
The Advisory Ballot contains the names of 17 persons, 10 of whom are
incumbent directors and two of whom have been designated as representing
Northern California shareholders. THE NOMINATING COMMITTEE WILL NOMINATE FOR
ELECTION THESE TWO PERSONS WHETHER OR NOT THEY ARE AMONG THE 12 PERSONS
RECEIVING THE HIGHEST NUMBER OF VOTES ON THE ADVISORY BALLOT. With this
exception, it is the policy of the Nominating Committee to abide by the results
of the vote on the Advisory Ballot and to select as nominees for election to the
Board of Directors the persons receiving the highest number of votes up to the
number of persons to be nominated. However, such results are advisory only and
are not binding on the Nominating Committee, and the Nominating Committee may in
its discretion disregard the results, in whole or in part, in making its
selection of nominees.
The Nominating Committee will consider the recommendations of shareholders
concerning persons to be included in the Advisory Ballot, and concerning persons
to be nominated for election by the holders of the Company's Class B Shares. The
Company's Bylaws require that a director be either an employee of the Company, a
shareholder, or that the director be a member of a partnership which is a
shareholder, or an employee of a corporation which is a shareholder. Persons
recommended to the Nominating Committee can be considered ONLY if they satisfy
these requirements. All recommendations must be in writing and must be submitted
to the Nominating Committee on or before September 1 of each year.
Recommendations should be submitted to the Nominating Committee at the address
of the Company's principal executive office set forth above.
1
<PAGE>
ADVISORY BALLOT VOTING RIGHTS AND SOLICITATION
As of December 23, 1996, the Company had outstanding 47,900 Class A Shares
held 100 shares each by 479 shareholders. If you were the holder of record of
Class A Shares on that date, you may vote on the enclosed Advisory Ballot. Set
forth below are the persons named in the Advisory Ballot, all of whom have
consented to being named in the Advisory Ballot. Incumbent directors are denoted
by an asterisk and persons designated as representing Northern California
shareholders are denoted by the parenthetical letter "N".
<TABLE>
<S> <C>
Louis A. Amen* Jay McCormack*
John Berberian* Morrie Notrica*
John T. Fujieki Michael A. Provenzano*
Scott Hair Edward J. Quijada
Darioush Khaledi* Gail Gerrard Rice
Mark Kidd* (N) Farid (Mike) Shalabi
Yong H. Kim James R. Stump*
Richard L. London Kenneth Young* (N)
Willard R. MacAloney*
</TABLE>
In voting on the Advisory Ballot, you are entitled to cast one vote each for
up to 12 of the persons named in the Advisory Ballot. While you may vote for
fewer than 12 of the persons named in the Advisory Ballot, if you vote for more
than 12 of the persons named, your Advisory Ballot will be invalidated. In
addition, if you cast more than one vote for any person named in the Advisory
Ballot, only one vote will be counted for that person and the additional votes
will be disregarded.
The return envelope accompanying the enclosed Advisory Ballot is marked with
a control number. THE ADVISORY BALLOT WILL NOT BE VALID UNLESS IT IS RETURNED IN
THE ENVELOPE PROVIDED AND THE CONTROL NUMBER IS LEGIBLE. TO BE VALID, THE
ADVISORY BALLOT MUST BE RECEIVED ON OR BEFORE FEBRUARY 7, 1997.
The Company's independent accountants, Deloitte & Touche, L.L.P., will
tabulate the vote on the Advisory Ballot.
The cost of soliciting the Advisory Ballots, consisting of the preparation,
printing, handling, mailing and tabulation of the Advisory Ballots, this
Statement and related material, will be paid by the Company.
PRINCIPAL STOCKHOLDERS
As of December 23, 1996 no person is known by the Company to own
beneficially more than five percent (5%) of the outstanding Class A Shares of
the Company, and the only shareholders known by the Company to own beneficially
more than 5% of the outstanding Class B Shares of the Company are Cala Foods,
Inc., Bay Area Warehouse Stores, Inc. and Ralphs Grocery Company, 1100 West
Artesia Boulevard, Compton, California 90220 (24,702 Class B Shares or
approximately 6.78% of the outstanding Class B Shares) (Cala Foods, Inc. and Bay
Area Warehouse Stores, Inc. are wholly owned by Ralphs Grocery Company which is
in turn wholly owned by The Yucaipa Companies, 10000 Santa Monica Boulevard, Los
Angeles, California 90067); and Hughes Markets, Inc., 14005 Live Oak Avenue,
Irwindale, California 91706 (22,739 Class B Shares or approximately 6.24% of the
outstanding Class B Shares).
2
<PAGE>
SECURITY OWNERSHIP AND OTHER INFORMATION CONCERNING
MANAGEMENT AND PERSONS NAMED IN THE ADVISORY BALLOT
The following table sets forth the beneficial ownership of the Company's
Class A Shares and Class B Shares, as of December 23, 1996, by each director or
his affiliated company, including the directors elected by the holders of the
Company's Class B Shares, by each person or his affiliated company named in the
Advisory Ballot who is not a director, and by all directors and such persons as
a group. No officer of the Company owns shares of any class of the Company's
stock.
<TABLE>
<CAPTION>
SHARES OWNED
------------------------------------------------
CLASS A SHARES CLASS B SHARES
-------------------- -------------------------
NAME AND NO. % OF TOTAL NO. % OF TOTAL
AFFILIATED COMPANY SHARES OUTSTANDING SHARES OUTSTANDING
---------------------------------------- ------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Louis A. Amen
Super A Foods, Inc..................... 100 0.21% 9,613 2.64%
John Berberian
Berberian Enterprises, Inc............ 100 0.21% 7,615 2.09%
Michael A. Bonfante
Nob Hill General Store, Inc. (1)...... 100 0.21% 12,465 3.42%
Harley J. DeLano
Cala Foods, Inc. (1)(2)............... 100 0.21% 24,702 6.78%
John T. Fujieki
Star Markets.......................... 100 0.21% 8,380 2.30%
Scott Hair
Green Frog Market..................... 100 0.21% 395 0.11%
Lyle A. Hughes
Yucaipa Trading Co., Inc.(3)(4)(5).... 100 0.21% 103 0.03%
Roger K. Hughes
Hughes Markets, Inc.(1)(4)............ 100 0.21% 22,739 6.24%
Darioush Khaledi
K. V. Mart Co. ....................... 100 0.21% 15,967 4.38%
Mark Kidd
Mar-Val Food Stores, Inc. ............ 100 0.21% 1,950 0.53%
Yong H. Kim
Koamex General Wholesale, Inc......... 100 0.21% 1,508 0.41%
Richard L. London
Major Market, Inc. ................... 100 0.21% 1,833 0.50%
Willard R. MacAloney
Mac Ber, Inc.......................... 100 0.21% 2,523 0.69%
Jay McCormack
Alamo Market(6)....................... 100 0.21% 732 0.20%
Morrie Notrica
Joe Notrica, Inc. .................... 100 0.21% 8,945 2.45%
Michael A. Provenzano
Pro & Son's, Inc. .................... 100 0.21% 697 0.19%
Edward J. Quijada
Tresierras Brothers Corp.............. 100 0.21% 2,567 0.70%
Gail Gerrard Rice
Gerrard's, Inc. ...................... 100 0.21% 1,414 0.39%
Allan Scharn
Gelson's Markets(3)(7)................ 100 0.21% 6,836 1.87%
Farid (Mike) Shalabi
R-Ranch Markets, Inc.................. 100 0.21% 2,592 0.71%
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SHARES OWNED
------------------------------------------------
CLASS A SHARES CLASS B SHARES
-------------------- -------------------------
NAME AND NO. % OF TOTAL NO. % OF TOTAL
AFFILIATED COMPANY SHARES OUTSTANDING SHARES OUTSTANDING
---------------------------------------- ------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
James R. Stump
Stump's Market, Inc. ................. 100 0.21% 2,131 0.58%
Kenneth Young
Jack Young's Supermarkets(8).......... 100 0.21% 2,660 0.73%
------ --- ----------- -----
2,200 4.59% 138,367 37.94%
------ --- ----------- -----
------ --- ----------- -----
</TABLE>
- ------------------------
(1) Elected by holders of Class B Shares.
(2) These shares are owned by Ralphs Grocery Company and its affiliates, Cala
Foods, Inc. and Bay Area Warehouse Stores, Inc.
(3) These directors will not stand for election at the Annual Meeting.
(4) Messrs. Lyle A. Hughes and Roger K. Hughes are unrelated.
(5) Mr. Lyle Hughes is also affiliated with Yucaipa Food Fair, Inc. which owns
429 Class B Shares (0.12% of the outstanding Class B Shares). Yucaipa
Trading Co., Inc. and Yucaipa Food Fair, Inc. are not affiliated with The
Yucaipa Companies.
(6) Mr. McCormack also is affiliated with Glen Avon Food, Inc. which owns 100
Class A Shares and 361 Class B Shares (0.10% of the outstanding Class B
Shares) and Yucaipa Trading Co., Inc. which owns 100 Class A Shares and 103
Class B Shares (0.03% of the outstanding Class B Shares).
(7) These shares are owned by Arden Mayfair, Inc., the parent company of
Gelson's Markets.
(8) Mr. Young also is affiliated with Bakersfield Food City, Inc. dba Young's
Markets which owns 100 Class A Shares and 355 Class B Shares. (0.10% of the
outstanding Class B Shares).
The following table sets forth the present directors of the Company,
including the directors elected by the holders of the Company's Class B Shares,
the year such directors were first elected to the Board of Directors, those
persons named in the Advisory Ballot who are not directors of the Company, and
certain other information.
<TABLE>
<CAPTION>
YEAR
AGE AS OF FIRST PRINCIPAL OCCUPATION
NAME 12/31/96 ELECTED DURING LAST 5 YEARS
- ------------------------------ --------- ------- ---------------------------------------------
<S> <C> <C> <C>
Louis A. Amen 67 1974 President, Super A Foods, Inc.
John Berberian 45 1991 President, Berberian Enterprises, Inc.,
operating Jons Markets
Michael A. Bonfante (1) 55 1995 Chairman, President and CEO, Nob Hill General
Store, Inc.
Harley J. DeLano (1) 59 1995 President, Cala Foods, Inc., Division of
Ralphs Grocery Company
John T. Fujieki 47 -- President and COO, Star Markets since 1995;
formerly Senior Vice President
Scott Hair 41 -- Managing Director, Green Frog Market
Lyle A. Hughes (2)(3) 59 1987 General Manager, Yucaipa Trading Co., Inc.,
operating Super Penny Mart
Roger K. Hughes (1)(3) 62 1985 Chairman of the Board and Director, Hughes
Markets, Inc.
Darioush Khaledi 50 1993 Chairman of the Board and Chief Executive
Officer, K. V. Mart Co., operating Top Valu
Markets and Valu Plus Food Warehouse
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
YEAR
AGE AS OF FIRST PRINCIPAL OCCUPATION
NAME 12/31/96 ELECTED DURING LAST 5 YEARS
- ------------------------------ --------- ------- ---------------------------------------------
<S> <C> <C> <C>
Mark Kidd 46 1992 President, Mar-Val Food Stores, Inc.
Yong H. Kim 55 -- President, Koamex General Wholesale, Inc.
Richard L. London 61 -- President and Chief Executive Officer, Major
Market, Inc.
Willard R. MacAloney 61 1981 President and Chief Executive Officer, Mac
Ber, Inc., operating Jax Market
Jay McCormack 46 1993 Owner-Operator, Alamo Market; Co-owner, Glen
Avon Market
Morrie Notrica 67 1988 President and Chief Operating Officer, Joe
Notrica, Inc., operating The Original 32nd
Street Market
Michael A. Provenzano 54 1986 President, Pro & Son's, Inc., operating
Southland Market; formerly President,
Carlton's Market, Inc.
Edward J. Quijada 49 -- Executive Vice President, Tresierras Brothers
Corp.; formerly Assistant Division Manager,
Procurement & Material, TRW, Inc.
Gail Gerrard Rice 48 -- Executive Vice President, Gerrard's, Inc.,
operating Gerrard's Cypress Center
Allan Scharn(2) 61 1988 President, Gelson's Markets
Farid (Mike) Shalabi 36 -- President and Chief Executive Officer,
R-Ranch Markets, Inc.
James R. Stump 58 1982 President, Stump's Market, Inc.
Kenneth Young 52 1994 Vice President, Jack Young's Supermarkets;
Vice President, Bakersfield Food City, Inc.
dba Young's Markets
<FN>
- ------------------------
(1) Elected by holders of Class B Shares.
(2) These directors will not stand for election at the Annual Meeting.
(3) Messrs. Lyle A. Hughes and Roger K. Hughes are unrelated.
</TABLE>
5
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of seven meetings during
the fiscal year ended August 31, 1996. Each incumbent director who was in office
during such year attended more than 75% of the aggregate of the total number of
meetings of the board and the total number of meetings held by those committees
of the board on which he served.
The Company has an Audit Committee which presently consists of Lyle A.
Hughes, Mark Kidd and Kenneth Young, who are directors of the Company. Willard
R. MacAloney, Chairman of the Board of Directors, is an ex-officio member of the
Committee. This Committee, which met three times during the Company's last
fiscal year, is primarily responsible for approving and reviewing the services
performed by the Company's independent auditors, reviewing the annual results of
their audit, and reviewing the Company's accounting practices and system of
internal accounting controls.
The Company has a Personnel and Executive Compensation Committee which
presently consists of Louis A. Amen, Roger K. Hughes, Darioush Khaledi, Jay
McCormack and James R. Stump, who are directors of the Company. Willard R.
MacAloney, Chairman of the Board of Directors, is an ex-officio member of this
Committee. This Committee, which met five times during the Company's last fiscal
year, is responsible for reviewing salaries and other compensation arrangements
of all officers and for making recommendations to the Board of Directors
concerning such matters.
The Company has a Nominating Committee which presently consists of Mark
Kidd, Jay McCormack, Morrie Notrica and James R. Stump who are directors of the
Company. Willard R. MacAloney, Chairman of the Board of Directors, and Alfred A.
Plamann, President and CEO, are ex-officio members of this Committee. This
Committee, which met five times during the Company's last fiscal year, is
responsible for selecting nominees to be submitted by the Board of Directors to
the shareholders for election to the Board of Directors.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted under the caption "Board Meetings and Committees", the Company's
Personnel and Executive Compensation Committee (presently consisting of
Directors Louis A. Amen, Roger K. Hughes, Darioush Khaledi, Jay McCormack, James
R. Stump, and ex-officio member and Chairman of the Board, Willard R. MacAloney)
is responsible for reviewing salaries and other compensation arrangements of the
officers of the Company and for making recommendations to the Board of Directors
concerning such matters.
As Chairman of the Board, Mr. MacAloney is an officer under the Bylaws of
the Company, although he is not an employee and does not receive any
compensation or expense reimbursement beyond that to which other directors are
entitled. Mr. McCormack was employed by the Company as a senior sales
representative from November 1975 to May 1986, but has not been employed by the
Company since that time. The Company's President and Chief Executive Officer,
Alfred A. Plamann, is a member of the Board of Directors of K.V. Mart Co., of
which Committee member and director Darioush Khaledi is Chairman and Chief
Executive Officer.
The Company guarantees annual rent and certain other obligations of Mr.
MacAloney as lessee under a lease of store premises located in La Puente,
California. Annual rent under the lease is $62,487, and the lease term expires
in April 1997. The Company also guarantees annual rent and certain other
obligations of G & M Company, Inc., of which Mr. MacAloney is a shareholder,
under a lease of store premises located in Santa Fe Springs, California. The
initial term of the lease expires in October 2007, but may be extended for one
option term expiring in October 2012. Annual rent under the lease is $100,000,
increasing to $110,000 in November 1997. Thereafter, annual rent increases by
$15,000 every five years during the balance of the term, including the extension
term. However, the Company's guaranty is such that the Company's obligation
6
<PAGE>
thereunder is limited to not exceed sixty monthly payments (which need not be
consecutive) of the obligations guaranteed. In consideration of its guarantees,
the Company receives a monthly fee from G & M Company, Inc. equal to 5% of the
base monthly rent under each lease.
The Company proposes to enter into a lease of store premises located in
Riverside, California, which it will in turn sublease on the same terms and
conditions to a corporation to be formed by Mr. MacAloney. The sublease will be
for an initial term of 15 years, but may be extended for three periods of 5
years each and one period of 4 years and 11 months. Monthly rent during the
initial term is $22,234, increasing to $24,457, $26,903, $29,596 and $32,561
during the extension terms. Under the sublease, the Company will also receive a
monthly fee from G & M Company equal to 5% of the monthly rent.
GCC guarantees a portion of a loan made by National Consumer Cooperative
Bank ("NCCB") to K.V. Mart Co., of which director Darioush Khaledi is the
President and a shareholder, and KV Property Company, of which director Darioush
Khaledi is a general partner. The term of the loan is eight years, maturing
January 1, 2002, and the loan bears interest at a floating rate based on the
commercial loan base rate of NCCB. The loan is collateralized by certain real
and personal property. The guarantee by GCC is limited to 10% of the $2.1
million principal amount of the loan. In consideration of its guarantee, GCC
receives an annual fee from K.V. Mart Co. equal to approximately 5% of the
guarantee amount.
GCC guarantees a portion of a $5,000,000 revolving loan made by NCCB to K.V.
Mart Co. in November 1995. The loan has an initial maturity of two years, with
the outstanding balance then converting to a five year term loan. The loan bears
interest at a floating rate based on the commercial loan rate of NCCB. The loan
is collateralized by certain real and personal property of K.V. Mart Co. The
guaranty of GCC is limited to 10% of the outstanding principal amount of the
loan. Since its inception, the highest outstanding principal amount of the loan
has been and is presently $785,000. In consideration of its guaranty, GCC
receives an annual fee from K.V. Mart Co. equal to 5% of the guaranty amount.
In April 1996, the Company guaranteed rent and certain other obligations of
K.V. Mart Co. for a period of seven years under a lease of store premises
located in Lynwood, California. Annual rent under the lease is $408,000. In
consideration of its guaranty, the Company will receive an annual fee from K.V.
Mart Co. equal to 5% of the annual rent.
In April 1996, the Company guaranteed rent and certain other obligations of
K.V. Mart Co. for a period of seven years under a lease of store premises under
construction in Canoga Park, California. The landlord under the lease is a
corporation in which a family trust established by Mr. Khaledi has an indirect
interest through certain partnerships which in turn have an interest in the
landlord corporation. Annual rent under the lease is $353,976. The lease term
will commence upon the earlier of the opening of the store for business or 180
days after occupancy. The guarantee will become effective upon the commencement
date of the lease. In consideration of its guaranty, the Company will receive an
annual fee from K.V. Mart equal to 5% of the annual rent.
The Company proposes to enter into a guaranty of rent and certain other
obligations of K.V. Mart Co. under a lease of store premises in Los Angeles,
California. The guaranty would be in place during the first fifteen years of the
lease term, which is thirty-four years and eight months. Annual rent under the
lease will be $212,664 during the first twenty months of the lease term;
$332,664 during the next thirty-eight months; $382,560, $439,944, and $505,944,
respectively, during the three succeeding sixty month periods; and thereafter
increasing by 15% every sixty months during the balance of the term. In
consideration of its guaranty, the Company will receive an annual fee from K.V.
Mart Co. equal to 5% of the annual rent.
In December 1995, GCC purchased 10% of the common stock of K.V. Mart Co. for
a purchase price, based upon appraised values, of approximately $3,000,000. In
connection with this purchase, K.V. Mart Co., GCC, Mr. Khaledi and the other
shareholders of K.V. Mart Co. agreed that GCC will have certain preemptive
rights to acquire additional common shares, rights to have its common shares
included proportionately in any transfer of common shares by the other
shareholders, and rights to have its common shares included in certain
registered public offerings of common stock which may be made by K.V. Mart Co.
In addition, GCC has the option to require the repurchase of its shares for any
reason after December 2000,
7
<PAGE>
and until that time has the option to require repurchase upon the occurrence of
certain specified events, including a material breach of the supply agreement
referred to below, changes in management or control, and noncompliance with
financial ratios. After December 1999, the repurchase price is fair market value
as determined by appraisal, and until that time is the greater of a declining
premium over fair market value or the original purchase price of the shares plus
an agreed annual compounded rate of return. K.V. Mart Co. has the option to
repurchase GCC's shares at any time and also in the event of a change in control
of GCC or the Company or a material breach by the Company under the supply
agreement referred to below. In the absence of a change in control or a material
breach under the supply agreement, and until December 1999, the repurchase price
is the greater of a declining premium over fair market value or the original
purchase price of the shares plus an agreed annual compounded rate of return,
and after December 1999 is fair market value. In the event of a change in
control or a material breach under the supply agreement, and until December
1999, the repurchase price is the lesser of a declining discount from fair
market value or the original purchase price of the shares, and after December
1999 is fair market value. In connection with these transactions, K.V. Mart Co.
entered into a seven year supply agreement with the Company whereunder K.V. Mart
Co. is required to purchase a substantial portion of its merchandise
requirements from the Company. Fiscal 1996 purchases totalled approximately
$75,300,000. The supply agreement is subject to earlier termination in certain
situations.
The Company guarantees annual rent and certain other obligations of Stump's
Market, Inc., of which director James R. Stump is the President and a
shareholder, as leasee under a lease of store premises located in San Diego,
California. Annual rent under the lease is $26,325, and the lease term expires
in May 1998. The Company also guarantees annual rent and certain other
obligations of Stump's Market, Inc. as lessee under a lease of store premises at
a second location in San Diego, California. Annual rent under this lease is
$36,075, and the lease term expires in November 1997. In consideration of these
guaranties, the Company receives a fee from Stump's Market, Inc. equal to 5% of
the base monthly rent under these leases.
Since the Company's retail and financial assistance programs are only
available to persons and entities which are patrons of the Company, it is not
possible to assess whether the foregoing transactions are less favorable to the
Company than similar transactions with unrelated third parties. However,
management believes that each such transaction is on terms no more favorable to
the patron than those which would be available to other similar patrons.
REPORT OF PERSONNEL AND EXECUTIVE COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
The principal components of the Company's executive compensation program
consist of an annual salary, an annual cash bonus the payment of which is
dependent upon the Company performance during the preceding fiscal year, and
certain pension, retirement and life insurance benefits.
SALARY
In providing for increases in officer salaries for calendar year 1996, the
Committee took note of continuing process improvements and cost control efforts
implemented by the officer team under the direction of the CEO. The Committee
also recognized the substantial efforts made under the CEO's leadership toward
restructuring of Company operations. Under the Company's newly launched
comprehensive strategic initiative, labeled "C(3)" for "Certified's Commitment
to Customers," an in-depth examination of Company operations, services and
business practices was begun, with a focus on commitment to growth, quality,
cost efficiency and superior service. These efforts resulted in the addition of
significant new customer volume, pricing efficiencies which were passed on to
the Company's membership, substantial savings in operating costs, improved cash
flow management, and improved efficiency of internal operations. As a result,
the Company recorded strong volume gains, produced major improvement in
patronage dividends, and is better positioned to compete for more new business
in the future.
The Committee's procedure in approving officers' salaries, including that of
the CEO, involves meeting in closed session and without the CEO or other
management personnel being present. In addition to the considerations mentioned
above, this process, which is subjective in nature, centers on the Committee's
consideration of the CEO's evaluation of each individual officer based on the
CEO's perception of their
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performance in accordance with individual officer responsibilities as defined by
personal and organizational goals and objectives, the relative value and
importance of individual officer contribution toward organizational success,
relative levels of officer responsibilities and changes in the scope of officer
responsibilities and officer accomplishments and contributions during the
preceding fiscal year. The Committee also reviews and discusses the salary
recommendations made by the CEO for each officer. These recommendations do not
include any recommendation as to the CEO's salary, and the Committee sets the
CEO's salary based on its assessment of his performance in light of the
foregoing policies and considerations. The salaries as approved by the Committee
are submitted to the Board of Directors, which made no changes in the salaries
submitted for 1996.
ANNUAL BONUSES
In recognition of the relationship between Company performance and
enhancement of shareholder value, Company officers may be awarded annual cash
bonuses. Bonuses are paid from a bonus pool which is created if the Company has
achieved an established minimum level of net income for the preceding fiscal
year. The amount of the bonus pool is calculated as a percentage of net income ,
with the percentage varying depending on the level of net income as a percentage
of net sales. Amounts in the bonus pool are allocated among the Company's
officers by the CEO, subject to the approval of the Board of Directors. The CEO
does not participate in the bonus pool. However, a bonus may be awarded to the
CEO in an amount determined by the Board of Directors based on its evaluation of
the CEO's performance during the preceding fiscal year.
Bonuses awarded to the CEO and the named executives are disclosed in the
Summary Compensation Table.
BENEFITS
Consistent with the objective of attracting and retaining qualified
executives, the compensation program includes the provision of pension benefits
to Company employees, including officers, under the Company's defined benefit
pension plan, which is described in connection with the Pension Plan Table. In
addition, Company employees, including officers, may defer income from their
earnings through voluntary contributions to the Company's Employees' Sheltered
Savings Plan adopted pursuant to Section 401(k) of the Internal Revenue Code and
the Company's Employee's Excess Benefit Plan which is a nonqualified plan. In
the case of those officers who elect to defer income under these plans, the
Company makes additional contributions for their benefit. The amount of these
additional contributions made during fiscal year 1995 for the benefit of the CEO
and other named executive officers is set forth in the footnotes to the Summary
Compensation Table. The Company also provides additional retirement benefits to
its officers pursuant to an Executive Salary Protection II, which is described
in connection with the Pension Plan Table.
Personnel and Executive Compensation Committee Members
Darioush Khaledi, Chairman
Louis A. Amen
Roger K. Hughes
Jay McCormack
Willard R. MacAloney
James R. Stump
EXECUTIVE OFFICER COMPENSATION
The following table sets forth information respecting the compensation paid
during the Company's last three fiscal years to the President and Chief
Executive Officer (CEO) and to certain other executive officers of the Company.
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<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C> <C>
ANNUAL COMPENSATION
--------------------------------------------------
OTHER
FISCAL ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION($) COMPENSATION($)
- ------------------------------ ------ ------------ -------- --------------- ---------------
Alfred A. Plamann 1996 352,500 100,000 840 27,895(2)
President & CEO 1995 322,150 50,000 24,290
1994 236,827 205 31,431
Daniel T. Bane 1996 215,000 55,000 605 14,446(3)
Senior Vice President & CFO 1995 200,000 20,000 195 1,231
1994 21,539
Charles J. Pilliter 1996 183,000 46,500 295 14,459(4)
Senior Vice President 1995 172,000 15,000 13,174
1994 167,577 127 20,591
Corwin J. Karaffa (6) 1996 151,000 30,600 150 6,458(5)
Vice President - Distribution 1995 89,231 7,000
Don W. Hawks (6) 1996 139,500 28,200 203 10,636(7)
Vice President - Marketing 1995 33,750 2,000 41,017
and Procurement
</TABLE>
- ------------------------
(1) It should be noted that while the table presents salary information on a
fiscal year basis, salary is determined by the Company on a calendar year
basis. Thus, salary information with respect to any given fiscal year
reflects salary attributable to portions of two calendar year salary periods
of the Company.
(2) Consists of a $9,135 Company contribution to the Company's Employees'
Sheltered Savings Plan, a $17,500 Company contribution to the Company's
Employees' Excess Benefit Plan and Supplemental Deferred Compensation Plan,
and $1,260 representing the economic benefit associated with the Company
paid premium on the Executive Life Plan.
(3) Consists of a $9,600 Company contribution to the Company's Employees'
Sheltered Savings Plan, a $4,303 Company contribution to the Company's
Employees' Excess Benefit Plan and Supplemental Deferred Compensation Plan,
and $543 representing the economic benefit associated with the Company paid
premium on the Executive Life Plan.
(4) Consists of a $9,300 Company contribution to the Company's Employees'
Sheltered Savings Plan, a $4,717 Company contribution to the Company's
Employees' Excess Benefit Plan and Supplemental Deferred Compensation Plan,
and $442 representing the economic benefit associated with the Company paid
premium on the Executive Life Plan.
(5) Consists of a $6,203 Company contribution to the Company's Employees'
Sheltered Savings Plan, and $255 representing the economic benefit
associated with the Company paid premium on the Executive Life Plan.
(6) Messrs. Karaffa and Hawks became officers of the Company in fiscal 1995.
(7) Consists of a $9,572 Company contribution to the Company's Employees'
Sheltered Savings Plan, a $759 Company contribution to the Company's
Employee Excess Benefit and Supplemental Deferred Compensation Plan, and
$305 representing the economic benefit associated with the Company paid
premium on the Executive Life Plan.
The Company has a supplemental executive pension plan (effective January 4,
1995) which provides retirement income based on each participant's final salary
and years of service with the Company. The plan, called the Company's Executive
Salary Protection Plan II ("ESPP II"), provides additional post-termination
retirement income based on each participant's final salary and years of service
with the Company. The funding of this benefit is facilitated through the
purchase of life insurance policies, the premiums of which
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<PAGE>
are paid by the Company and participant contributions. The Company also has a
defined benefit pension plan covering its non-union and executive employees.
Benefits under the defined benefit plan are equal to credited service times the
sum of 95% of earnings up to the covered compensation amount plus 1.45% of
earnings in excess of the covered compensation amount. The covered compensation
is based on IRS Tables.
The following table sets forth the estimated annual benefits under the
defined benefit plan and the ESPP II plan which qualifying officers with
selected years of service would receive if they had retired on August 31, 1996
at the age of 65.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------------------------
REMUNERATION 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 33 YEARS
- ---------------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$100,000.............................. $ 25,984 $ 51,968 $ 67,952 $ 68,936 $ 69,920 $ 71,495
125,000............................... 32,506 65,012 85,018 86,274 87,530 89,539
150,000............................... 39,028 78,056 102,084 103,611 105,139 107,584
175,000............................... 45,278 90,556 115,057 119,861 121,389 123,834
200,000............................... 51,528 103,056 115,057 125,242 135,428 140,084
225,000............................... 57,778 104,871 115,057 125,242 135,428 151,725
250,000............................... 64,028 104,871 115,057 125,242 135,428 151,725
300,000............................... 76,528 104,871 115,057 125,242 135,428 151,725
350,000............................... 89,028 104,871 115,057 125,242 135,428 151,725
400,000............................... 94,685 104,871 115,057 125,242 135,428 151,725
450,000............................... 94,685 104,871 115,057 125,242 135,428 151,725
</TABLE>
The Company's ESPP II is designed to provide a retirement benefit up to 65%
of a participant's final compensation, based on a formula which considers an
executive's final compensation and years of service. Remuneration under ESPP II
is based upon an executive's highest annual base wage during the previous three
completed years, which includes his or her annual salary as determined by the
Board of Directors plus an automobile allowance with a 4% annual increase. The
benefit is subject to an offset of the annual benefit which would be received
from the defined benefit plan, calculated as a single life annuity at age
sixty-two. To qualify for participation in the benefit, the executive must
complete three years of service as an officer elected by the Board of Directors
of the Company. Executives will vest at a rate of 5% per year with all years of
continuous service credited. The ESPP II maximum annual benefit upon retirement
for calendar 1996 shall not exceed $84,800 and will be paid over a 15-year
certain benefit. The benefit will increase annually thereafter at the rate of
6%. Lesser amounts are payable if the executive retires before age sixty-five.
The maximum annual amount payable by years of service is reflected within the
table at the compensation level of $450,000. As of August 31, 1996, credited
years of service for named officers are: Mr. Plamann, 7 years; Mr. Bane, 2
years; Mr. Pilliter, 20 years; Mr. Karaffa, 1 year; and Mr. Hawks, 12 years.
EXECUTIVE EMPLOYMENT AND TERMINATION AGREEMENT
The Company is a party to an employment contract with Alfred A. Plamann, the
Company's President and Chief Executive Officer. The contract has a three year
term, presently expiring in February 1999, but provides for annual extensions to
the contract if there is mutual agreement. Under the contract, Mr. Plamann
serves as the Company's President and Chief Executive Officer and receives a
base salary, currently $365,000, subject to annual review and upward adjustment
at the discretion of the Board of Directors. Mr. Plamann is also eligible for
annual bonuses at the discretion of the Board of Directors based upon a review
of his performance. The exact formula for future bonuses has not yet been
determined and will be added as an amendment to the contract at a later date.
Additionally, Mr. Plamann will receive employee benefits such as life insurance
and Company pension and retirement contributions.
The contract is terminable at any time by the Company, with or without
cause, and will also terminate upon Mr. Plamann's resignation, death or
disability. Except where termination is for cause or is due to Mr. Plamann's
resignation, death or disability, the contract provides that Mr. Plamann will be
entitled to receive his highest base salary during the previous three years,
plus an annual bonus equal to the average of
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the most recent three annual bonus payments, throughout the balance of the term
of the agreement. Mr. Plamann would also continue to receive employee benefits
such as life insurance and Company pension and retirement contributions
throughout the balance of the term of the agreement.
DIRECTOR COMPENSATION
Each director receives a fee of $500 for each regular board meeting
attended, $200 for each committee meeting attended and $200 for attendance at
each board meeting of a subsidiary of the Company on which the director serves.
Prior to April 3, 1996, directors received $300 for each regular board meeting,
$100 for each committee meeting, and $100 for each board meeting of a subsidiary
of the Company. In addition, directors are reimbursed for Company related
expenses.
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following graph sets forth the five year cumulative total shareholder
return on the Company's common stock as compared to the cumulative total return
for the same period of the S&P 500 Index and Peer Issuers consisting of Spartan
Stores, Inc. and Roundy's, Inc. Like the Company, Spartan Stores and Roundy's
are retailer-owned wholesale grocery distributors. While Spartan Stores pays a
dividend on its stock, the Company and Roundy's do not. The shares of the
Company and the Peer Issuers are not traded on any exchange and there is no
established public market for such shares. The price of the Company's shares
during each of its fiscal years is the book value of such shares as of the end
of the prior fiscal year.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG THE COMPANY, S&P 500 INDEX AND PEER ISSUERS**
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPANY S&P 500 PEER ISSUERS
<S> <C> <C> <C>
1991 100 100 100
1992 95.1 104.7 105.6
1993 95.7 117.2 112.3
1994 95.5 120.2 120
1995 97.1 142.1 130.2
1996 98.3 164.9 122
</TABLE>
<TABLE>
<S> <C>
Assumes $100 invested on August 30, 1991 in Company common
stock, S&P 500 Index and Peer Issuers common stock
* Total return assumes reinvestment of dividends
** Fiscal years ended August 29, 1992, August 28, 1993, September 3, 1994, September 2,
1995 and August 31, 1996
</TABLE>
TRANSACTIONS WITH MANAGEMENT AND PERSONS
NAMED IN THE ADVISORY BALLOT
All directors of the Company and all persons named in the Advisory Ballot
who are not directors (or the firms with which such directors and persons are
affiliated) purchase groceries, related products and store equipment from the
Company or its subsidiaries in the ordinary course of business at prices and on
terms
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<PAGE>
available to patrons generally. Except for Ralphs Grocery Company, which with
its affiliated companies accounted for approximately 5.5% of consolidated sales,
during the fiscal year ended August 31, 1996, no director of the Company or
person named in the Advisory Ballot who is not a director (nor the firms with
which such directors and persons are affiliated) accounted for in excess of 5%
of the Company's consolidated sales.
In September 1992, the Company guaranteed the obligations of Mar-Val Food
Stores, Inc., of which director Mark Kidd is the President and a shareholder,
under a lease of market premises located in Valley Springs, California. The
guarantee is of the obligations of Mar-Val Food Stores, Inc. to pay base rent,
common area costs, real estate taxes and insurance during the initial fifteen
year term of the lease. Base rent under the lease is $10,080 per month. The
Company's total obligation under the guarantee, however, is limited to the sum
of $736,800. In consideration of its guarantee, the Company receives a monthly
fee from Mar-Val Food Store, Inc. equal to 5% of the base monthly rent under the
lease.
The Company leases its produce warehouse to Joe Notrica, Inc., of which
director Morrie Notrica is the President and a shareholder. The lease is for a
term of five years expiring in November 1998 and contains an option to extend
for an additional five year period. Monthly rent during the initial term is
$24,000. If the option to extend is exercised, rent during the option period
will be the lesser of fair rental value or the monthly rent during the initial
term as adjusted to reflect the change in the Customer Price Index during the
initial term.
Cala Foods, Inc. (a patron affiliated with Ralphs Grocery Company) acquired
the stock of Bell Markets, Inc. in June 1989. In connection with the
acquisition, the Company guaranteed the lease obligations of Bell Markets, Inc.
during a 20-year period under a lease relating to two retail grocery stores
located in San Francisco, California. Annual rent under the lease is $327,019.
Grocers General Merchandise Company ("GM"), a subsidiary, and Food 4 Less
GM, Inc. ("F4LGM"), an indirect subsidiary of Food 4 Less Supermarkets, Inc.,
are parties to a joint venture agreement. Under the agreement, GM and F4LGM are
partners in a joint venture partnership known as Golden Alliance Distribution
("GAD"). The partnership was formed for the purpose of providing for the shared
use of the Company's general merchandise warehouse located in Fresno,
California, and each of the partners has entered into a supply agreement with
GAD providing for the purchase of general merchandise products from GAD. The
Company is currently in discussions with Ralphs regarding the future of the GAD
partnership.
The Company guarantees certain obligations under a sublease of market
premises located in Pasadena, California, and under which Berberian Enterprises,
Inc., of which Director John Berberian is the President and a shareholder, is
the sublessor. The guaranty is of the obligations of the sublessee to pay
minimum rent, common area costs, real estate taxes and insurance during the
first seven years of the term of the sublease, which commenced in September
1995. Minimum rent under the sublease is $10,000 per month. In consideration of
its guaranty, the Company receives a monthly fee from the sublessee equal to 5%
of the monthly amounts guaranteed.
The Company proposes to lease store locations in Arvin and Delano,
California, which it will in turn sublease on the same rental terms to a
corporation to be formed by director Michael A. Provenzano. The subleases will
have twenty year terms. Annual rent under the Arvin lease will be $165,088
during the first ten years and $166,448 during the balance of the term. Annual
rent under the Delano lease will be $183,334 during the first ten years and
$174,080 during the balance of the term. In addition, under each of these
subleases, the Company will receive an annual fee equal to 5% of the annual
rent.
In fiscal 1993, GCC acquired one hundred fifty (150) shares of preferred
stock and three hundred thousand (300,000) shares of common stock of Major
Market, Inc. ("MMI"), of which nominee Richard L. London is the President and a
shareholder, for a price of approximately $1.5 million. In December 1994, GCC
finalized an agreement with MMI whereunder MMI repurchased all of the preferred
stock and two hundred eighty-two thousand six hundred (282,600) shares of the
common stock for a price of $2.7 million, of which $2,580,000 is represented by
a seven-year promissory note from MMI to GCC. The promissory note bears interest
at prime plus two percent, adjusted quarterly, and is secured by the assets of
MMI. As
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<PAGE>
additional security, GCC received a guarantee from Mr. London and a pledge of
his shares in MMI. In connection with this repurchase, Mr. London, MMI, GCC and
certain other shareholders of MMI agreed that GCC will have certain preemptive
rights to acquire additional common shares, rights to have its common shares
included proportionately in any transfer of common shares by Mr. London, and
rights to have its common shares included in certain registered public offerings
of common stock which may be made by MMI. In addition, GCC will have certain
rights, at its option, to require that MMI repurchase GCC's shares, and MMI will
have certain rights, at its option, to repurchase GCC's shares. In connection
with these transactions, MMI entered into a seven-year supply agreement with the
Company (to replace an existing supply agreement) whereunder MMI is required to
purchase a substantial portion of its merchandise requirements from the Company.
The supply agreement is subject to earlier termination in certain situations.
In fiscal 1995, the Company leased certain market premises constructed and
located in Los Angeles, California, and which the Company subleases to Hafsa
Corporation, of which nominee Farid (Mike) Shalabi is the President and a
shareholder. The term of the lease is fifteen years, with three five-year
options and one four year and eleven month option to extend. The premises
contain approximately 20,500 square feet. Base rent during the initial term will
be $9.00 per square foot, increasing by 15% during the first option period and
5% during each of the three remaining option periods. In addition, during the
initial term there is additional rent of $1.75 per square foot for amortization
of leasehold improvements. In connection with its sublease of the premises, the
Company will receive monthly an additional rent equal to 5% of the base monthly
rent.
In June 1993, Grocers Specialty Company ("GSC"), a subsidiary, sold a former
cash and carry location in Los Angeles, California, to a group of purchasers,
including a trust of which Mr. Shalabi is a trustee. The total purchase price
was approximately $495,000, of which approximately $300,000 was paid by means of
a ten year promissory note bearing annual interest at 9 1/2%. The note is
secured by a deed of trust on the location. The balance presently outstanding
under the note is approximately $240,000. In September 1994, GSC also sold a
former cash and carry location in Los Angeles, California, to a group of
purchasers, including a trust of which Mr. Shalabi is a trustee. The total
purchase price was $550,000, of which $440,000 was paid by means of a seven year
promissory note bearing annual interest at 8%. The note is secured by a deed of
trust on the location. The balance presently outstanding under the note is
approximately $327,000.
Since the Company's retail and financial assistance programs are only
available to persons and entities which are patrons of the Company, it is not
possible to assess whether the foregoing transactions are less favorable to the
Company than similar transactions with unrelated third parties. However,
management believes that each such transaction is on terms no more favorable to
the patron than those which would be available to other similar patrons.
On February 1, 1995, GCC made a loan of $69,000 to Corwin J. Karaffa, the
Company's Vice President-Distribution. The loan was for the purpose of assisting
Mr. Karraffa in acquiring a home in connection with his becoming employed by the
Company. The loan bears interest at 8% per annum and is secured by a second deed
of trust on the home. The loan has a term of eight years, with interest only
payable during the first five years.
Certain other transactions involving other directors of the Company are
described beginning at page 6 under the caption "Compensation Committee
Interlocks and Insider Participation."
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<PAGE>
SHAREHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
Under the present rules of the Securities and Exchange Commission (the
"Commission"), and in view of the presently anticipated date of the Company's
Proxy Statement for this year's Annual Meeting of Shareholders, the deadline for
shareholders to submit proposals to be considered for inclusion in the Company's
Proxy Statement for next year's Annual Meeting of Shareholders is expected to be
December 4, 1997. Such proposals may be included in next year's Proxy Statement
if they comply with certain rules and regulations promulgated by the Commission.
Such proposals should be submitted to the Corporate Secretary of the Company at
the address of the Company's principal executive office shown on the first page
of this Statement.
BY ORDER OF THE NOMINATING
COMMITTEE OF THE BOARD OF
DIRECTORS
Dated: January 6, 1997
ROBERT M. LING, JR., CORPORATE
SECRETARY
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K TO THE SECURITIES AND
EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED AUGUST 31, 1996, EXCLUDING
EXHIBITS, MAY BE OBTAINED WITHOUT CHARGE BY WRITING TO THE CORPORATE SECRETARY
OF THE COMPANY AT THE ADDRESS OF THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE SHOWN
ON THE FIRST PAGE OF THIS STATEMENT.
15
