<PAGE>
CERTIFIED GROCERS OF CALIFORNIA, LTD.
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:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(m)(2))
[X] 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:
<PAGE>
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 9, 1998. 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 14, 1998, 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 18 persons, 12 of whom are
incumbent directors and three of whom have been designated as representing
Northern California shareholders. Of the three representing Northern
California shareholders, the Nominating Committee will nominate for election
at least two of these persons whether or not they are among the 12 persons
receiving the highest number of votes on the Advisory Ballot. The two to be
nominated will be those receiving the highest number of votes from among the
three persons designated in the Advisory Ballot as representing Northern
California shareholders. 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, 1997, the Company had outstanding 47,200 Class A Shares
held 100 shares each by 472 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".
Louis A. Amen* Jay McCormack*
John Berberian* Morrie Notrica*
Marc Claypool (N) Michael A. Provenzano*
Edmund Kevin Davis Edward J. Quijada
John T. Fujieki* Gail Gerrard Rice*
Darioush Khaledi* Bijan H. Rodd
Mark Kidd* (N) Mimi R. Song
Michael Leum James R. Stump*
Willard R. MacAloney* Kenneth Young* (N)
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 JANUARY 30, 1998.
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, 1997, 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 Co., Bay Area Warehouse Stores, Inc. and Ralphs Grocery Company, 1100
West Artesia Boulevard, Compton, California 90220 (20,361 Class B Shares or
approximately 5.28% of the outstanding Class B Shares) (Cala Co. 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 (19,413 Class B Shares or approximately 5.03% 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, 1997, by each director
or his or her affiliated company, including the directors elected by the
holders of the Company's Class B Shares, by each person or his or her
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........................... 100 0.21% 9,509 2.46%
Super A Foods, Inc.
John Berberian.......................... 100 0.21% 7,615 1.97%
Berberian Enterprises, Inc.
Michael Bonfante........................ 100 0.21% 12,614 3.27%
Nob Hill General Store, Inc.(1)
Marc Claypool........................... 100 0.21% 0 0.00%
One Stop Supermarkets
Edmund Kevin Davis...................... 100 0.21% 485 0.13%
Bristol Farms Markets
Harley J. DeLano........................ 100 0.21% 20,361 5.28%
Cala Foods, Inc.(1)(2)
John T. Fujieki......................... 100 0.21% 8,380 2.17%
Star Markets
Roger K. Hughes......................... 100 0.21% 19,413 5.03%
Hughes Markets, Inc.(1)
Darioush Khaledi........................ 100 0.21% 15,967 4.14%
K. V. Mart Co.
Mark Kidd............................... 100 0.21% 1,950 0.51%
Mar-Val Food Stores, Inc.
Michael Leum............................ 100 0.21% 3,150 0.82%
Pioneer Foods, Inc.
Willard R. MacAloney.................... 100 0.21% 2,933 0.76%
Mac Ber, Inc.
Jay McCormack........................... 100 0.21% 732 0.19%
Alamo Market(3)
Morrie Notrica.......................... 100 0.21% 9,520 2.47%
Joe Notrica, Inc.
Michael A. Provenzano................... 100 0.21% 982 0.25%
Pro & Son's, Inc.
Edward J. Quijada....................... 100 0.21% 2,567 0.67%
Tresierras Brothers Corp
Gail Gerrard Rice....................... 100 0.21% 1,414 0.37%
Gerrards Markets
Bijan H. Rodd........................... 100 0.21% 2,737 0.71%
Koshan, Inc.(4)
James R. Stump.......................... 100 0.21% 2,131 0.55%
Stump's Market, Inc.
Mimi R. Song............................ 100 0.21% 16,214 4.20%
Super Center Concepts, Inc.
Kenneth Young........................... 100 0.21% 2,660 0.69%
Jack Young's Supermarkets(5)
----- ----- ------- ------
2,100 4.45% 141,334 36.62%
===== ===== ======= ======
</TABLE>
- --------
(1) Elected by holders of Class B Shares.
(2) These shares are owned by Ralphs Grocery Company and its affiliates, Cala
Co. and Bay Area Warehouse Stores, Inc.
(3) Mr. McCormack also is affiliated with Glen Avon Food, Inc. which owns 100
Class A Shares and 390 Class B Shares (0.10% of the outstanding Class B
Shares) and Yucaipa Trading Co., Inc. which owns 100 Class A Shares and
276 Class B Shares (0.07% of the outstanding Class B Shares).
(4) Mr. Rodd also is affiliated with Rodbin, Inc. which owns 100 Class A
Shares and 1,946 Class B Shares (0.50% of the outstanding Class B Shares).
(5) 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. (0.09% of
the outstanding Class B Shares).
3
<PAGE>
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>
AGE AS YEAR
OF FIRST PRINCIPAL OCCUPATION
NAME 12/31/97 ELECTED DURING LAST 5 YEARS
---- -------- ------- --------------------
<C> <C> <C> <S>
Louis A. Amen (Chairman of the Board).. 68 1974 President, Super A
Foods, Inc.
John Berberian......................... 46 1991 President, Berberian
Enterprises, Inc.,
operating Jons Markets
Michael Bonfante(1).................... 56 1995 Chairman, President and
Chief Executive Officer,
Nob Hill General Store,
Inc.
Marc Claypool.......................... 35 -- Vice President, One Stop
Supermarkets
Edmund Kevin Davis..................... 44 -- President, Chairman and
CEO, Bristol Farms,
previously Sr. Vice
President of Marketing,
Ralphs Grocery Company.
Harley J. DeLano(1).................... 60 1995 President, Cala Foods,
Inc., Division of Ralphs
Grocery Company
John T. Fujieki........................ 48 1997 President and COO, Star
Markets, Ltd. since
1995; formerly Senior
Vice President
Roger K. Hughes(1)..................... 63 1985 Chairman and Chief
Executive Officer,
Hughes Markets, Inc.
Darioush Khaledi....................... 51 1993 Chairman of the Board
and Chief Executive
Officer, K. V. Mart Co.,
operating Top Valu
Markets and Valu Plus
Food Warehouse
Mark Kidd.............................. 47 1992 President, Mar-Val Food
Stores, Inc.
Michael Leum........................... 35 -- Vice President, Pioneer
Foods, Inc.
Willard R. "Bill" MacAloney............ 62 1981 President and Chief
Executive Officer, Mac
Ber, Inc., operating Jax
Market
Jay McCormack.......................... 47 1993 Owner-Operator, Alamo
Market; Co-owner, Glen
Avon Market
Morrie Notrica......................... 68 1988 President and Chief
Operating Officer, Joe
Notrica, Inc., operating
The Original 32nd Street
Market
Michael A. Provenzano.................. 55 1986 President, Pro & Son's,
Inc., operating
Southland Market;
President, Provo Inc.
and President Pro and
Family Inc., formerly
President, Carlton's
Market, Inc.
Edward J. Quijada...................... 50 -- Executive Vice
President, Tresierras
Brothers Corp.; formerly
Assistant Division
Manager, Procurement &
Material, TRW, Inc.
Gail Gerrard Rice...................... 49 1997 Executive Vice
President, Gerrards
Markets, operating
Gerrards Cypress Center
Bijan H. Rodd.......................... 43 -- Chairman and Chief
Executive Officer,
Koshan, Inc., Chairman
and Chief Executive
Officer, Rodbin, Inc.,
operating Payless
Mimi R. Song........................... 40 -- President and Chief
Executive Officer, Super
Center Concepts, Inc.
James R. Stump......................... 59 1982 President, Stump's
Market, Inc.
Kenneth Young.......................... 53 1994 Vice President, Jack
Young's Supermarkets;
Vice President,
Bakersfield Food City,
Inc. dba Young's Markets
</TABLE>
- --------
(1) Elected by holders of Class B Shares.
4
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of nine meetings during
the fiscal year ended August 30, 1997. 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 director
Kenneth Young, Committee Chairman, and directors Darioush Khaledi and Gail
Gerrard Rice. Louis A. Amen, Chairman of the Board of Directors, is an ex-
officio member of the Committee. This Committee, which met two 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 an Executive Compensation Committee which presently consists
of director Darioush Khaledi, Committee Chairman, and directors Roger K.
Hughes, Mark Kidd, Willard R. "Bill" MacAloney, Jay McCormack and James R.
Stump. Louis A. Amen, Chairman of the Board of Directors, is an ex-officio
member of this Committee. This Committee, which met three 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 director
Morrie Notrica, Committee Chairman, and directors John Berberian, Mark Kidd,
Jay McCormack, Gail Gerrard Rice and James R. Stump. Louis A. Amen, Chairman
of the Board of Directors, and Alfred A. Plamann, President and CEO, are ex-
officio members of this Committee. This Committee, which met two 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
Executive Compensation Committee presently consists of directors Darioush
Khaledi, Roger K. Hughes, Mark Kidd, Willard R. "Bill" MacAloney, Jay
McCormack and James R. Stump, as well as ex-officio member and Chairman of the
Board, Louis A. Amen.
As Chairman of the Board, Mr. Amen 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.
In the course of its business, the Company has made loans and loan
guaranties, and has entered into lease guarantees and subleases, involving its
patrons. As described below, the Company has entered into such transactions
with certain patrons with which members of the Executive Compensation
Committee are affiliated.
5
<PAGE>
Loans and Loan Guarantees:
<TABLE>
<CAPTION>
AGGREGATE LOAN BALANCES AT AUGUST 30, 1997 MATURITY
DIRECTOR (DOLLARS IN THOUSANDS) DATE
-------- ------------------------------------------ ---------
<S> <C> <C>
Darioush Khaledi.......... $2,107 1998-1999
Mark Kidd................. 768 1997-2003
Willard R. "Bill"
MacAloney................ 648 2002
Jay McCormack............. 495 1998-2001
James R. Stump............ 303 1999-2001
</TABLE>
The Company has guaranteed 10% of the principal amount of two third party
loans to K.V. Mart Co., of which director Darioush Khaledi is an affiliate.
The loans mature in 2002. At December 1, 1997, the maximum principal amount of
this guarantee was $607,000.
Lease Guarantees and Subleases:
<TABLE>
<CAPTION>
NO. OF TOTAL CURRENT ANNUAL RENT MATURITY
DIRECTOR STORES (DOLLARS IN THOUSANDS) DATE
-------- ------ ------------------------- ---------
<S> <C> <C> <C>
Darioush Khaledi.................... 3 $975 2004-2016
Willard R. "Bill" MacAloney......... 3 385 2002-2011
James R. Stump...................... 3 143 1998-2002
Mark Kidd........................... 1 121 2008
</TABLE>
In the course of its business, the Company has also entered into supply
agreements with members of the Company. These agreements require the member to
purchase certain agreed amounts of its merchandise requirements from the
Company and obligate the Company to supply such merchandise under agreed terms
and conditions relating to such matters as pricing, delivery, discounts and
allowances. The Company has entered into supply agreements with members with
which certain directors on the Company's Executive Compensation Committee are
affiliated. Members affiliated with directors Khaledi, Kidd, MacAloney and
McCormack have entered into supply agreements with the Company. These supply
agreements vary in terms and length, and expire at various dates through 2002,
but are subject to earlier termination in certain events. Fiscal 1997
purchases totaled approximately $87,452,000, $8,436,000, $12,651,000 and
$4,700,000, respectively.
Since transactions of the foregoing type are only entered into with patrons
of the Company, it is not possible to assess whether transactions with
patrons, including patrons with which directors are affiliated, are less
favorable to the Company than similar transactions with unrelated third
parties. However, management believes such transactions are on terms which are
consistent with terms available to other patrons similarly situated.
REPORT OF 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
The Committee reviews and discusses the salary recommendations made by the
CEO for each officer, in closed session and without management personnel other
than the CEO being present. This process is subjective and centers on the
Committee's consideration of the CEO's evaluation of individual officers based
on various subjective criteria. The criteria includes the CEO's perception of
officer performance against individual officer responsibilities and goals, the
relative value and importance of individual officer contribution toward
organizational success, relative levels of officer responsibilities, changes
in the scope of officer responsibilities, and officer accomplishments and
contributions during the preceding fiscal year. The Committee sets the CEO's
salary based on its assessment of the CEO's performance in light of the
foregoing policies and considerations.
6
<PAGE>
The salaries as approved by the Committee are submitted to the Board of
Directors, which made no changes in the salaries submitted for 1997.
In providing for calendar year 1997 increases in officer salaries, including
that of the CEO, 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 continuing efforts made under
the CEO's leadership toward restructuring of Company operations. 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, during fiscal year 1996, the
Company recorded strong volume gains, produced major improvement in patronage
dividends, and better positioned itself to compete for more new business in
the future.
ANNUAL BONUSES
In recognition of the relationship between Company performance and
enhancement of shareholder value, Company officers may be awarded annual cash
bonuses. For Company officers other than the CEO, bonuses for fiscal year 1997
are awarded pursuant to an annual executive incentive plan. The plan uses a
performance matrix to determine an earned incentive, expressed as a percent of
base salary. The performance measures are pre-patronage dividend income and
revenue growth. The earned incentive determined by these performance measures,
as may be adjusted at the discretion of the CEO, is awarded as a bonus. The
CEO may raise or lower the bonus, up to a maximum of twenty-five percent of
the earned incentive, based on individual contributions to the overall
performance of the Company. For fiscal year 1997, the largest bonus awarded in
the senior officer group was 25% of base salary, while the largest bonus
awarded to all other officers was 20% of base salary.
The CEO's bonus is determined by the Committee's score of Company
performance and CEO performance against specified criteria and performance
targets. The criteria and performance targets are established by the Board of
Directors at the beginning of the fiscal year. Company performance is
determined by the weighted average of certain objective criteria (pre-
patronage dividend income, capital adequacy and asset utilization), and scored
against specified performance targets. CEO performance is scored based on the
weighted average of certain subjective criteria (CEO leadership with the
Board, CEO leadership with senior management, CEO impact on industry and
community and performance of senior management as a team). The scores for
Company performance and CEO performance comprise sixty percent and forty
percent, respectively, of the overall CEO score. The CEO is eligible for a
maximum annual bonus of forty-eight percent of base salary.
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.
7
<PAGE>
Executive Compensation Committee Members
Darioush Khaledi, Chairman
Louis A. Amen
Roger K. Hughes
Mark Kidd
Willard R. "Bill" MacAloney
Jay McCormack
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.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------
FISCAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION($)
- --------------------------- ------ ------------ -------- ---------------
<S> <C> <C> <C> <C>
Alfred A. Plamann 1997 383,750 168,000 31,919(2)
President & CEO 1996 352,500 100,000 27,895
1995 322,150 50,000 24,290
Daniel T. Bane 1997 235,000 60,000 16,137(3)
Senior Vice President & CFO 1996 215,000 55,000 14,446
1995 200,000 20,000 1,231
Charles J. Pilliter 1997 195,000 49,500 15,733(4)
Senior Vice President 1996 183,000 46,500 14,459
1995 172,000 15,000 13,174
Robert M. Ling, Jr.(6) 1997 184,000 37,400 5,466(5)
Vice President--General Counsel 1996 65,962 35,000 20,000
and Secretary
Corwin J, Karaffa(6) 1997 159,750 32,400 11,083(7)
Vice President--Distribution 1996 151,000 30,600 6,458
1995 89,231 7,000
</TABLE>
- --------
(1) 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 $8,961 Company contribution to the Company's Employees'
Sheltered Savings Plan, a $20,432 Company contribution to the Company's
Employees' Excess Benefit Plan and Supplemental Deferred Compensation
Plan, and $2,526 representing the economic benefit associated with the
Company paid premium on the Executive Life Plan.
(3) Consists of a $9,344 Company contribution to the Company's Employees'
Sheltered Savings Plan, a $5,814 Company contribution to the Company's
Employees' Excess Benefit Plan and Supplemental Deferred Compensation
Plan, and $979 representing the economic benefit associated with the
Company paid premium on the Executive Life Plan.
(4) Consists of a $9,358 Company contribution to the Company's Employees'
Sheltered Savings Plan, a $5,578 Company contribution to the Company's
Employees' Excess Benefit Plan and Supplemental Deferred Compensation
Plan, and $797 representing the economic benefit associated with the
Company paid premium on the Executive Life Plan.
(5) Consists of a $5,466 Company contribution to the Company's Employees'
Sheltered Savings Plan.
(6) Messrs. Ling and Karaffa became officers of the Company in fiscal 1996 and
1995, respectively.
(7) Consists of a $10,200 Company contribution to the Company's Employees'
Sheltered Savings Plan, a $493 Company contribution to the Company's
Employee Excess Benefit and Supplemental Deferred Compensation Plan, and
$390 representing the economic benefit associated with the Company paid
premium on the Executive Life Plan.
8
<PAGE>
The Company has a defined benefit pension plan which covers its non-union
and executive employees. Benefits under this plan are based on formulas using
compensation and employee service periods and are subject to the appropriate
IRS tables and limitations. The Company's Executive Salary Protection Plan II
("ESPP II"), provides additional post-termination retirement income based upon
the participant's salary and years of service. The funding for this benefit is
facilitated through the purchase of life insurance policies, the premiums for
which are paid by the Company.
ESPP II is targeted to provide eligible executives with a retirement
benefit, including the defined benefit, of up to 65% of a participant's final
salary, based on formulas which include years of service and salary.
Executives become eligible for ESPP II after three years of service as an
executive officer of the Company. Upon eligibility, executives vest at a rate
of 5% per year (with all years of continuous service credited) up to a maximum
of 13 years. The ESPP II benefit is limited to a maximum amount payable per
year based on the year in which the executive retires. That amount for persons
retiring in 1997 is $89,888. This limitation is subject to increase based on
amounts approved by the Board of Directors. Payments under ESPP II are
discounted for executives who retire prior to age sixty-five. At August 30,
1997, credited years of service for named officers are: Mr. Plamann, 8 years;
Mr. Bane, 3 years; Mr. Pilliter, 21 years; Mr. Karaffa, 2 years; and Mr. Ling,
1 year.
The following table illustrates the estimated annual benefits under the
combined defined benefit plan and ESPP II plan. The amounts shown represent
annual compensation for qualifying executives with selected years of service
as if such executives had retired on August 30, 1997 at age sixty-five.
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.................. $ 26,088 $ 52,176 $ 68,264 $ 69,352 $ 70,440 $ 72,181
125,000.................. 32,610 65,220 85,330 86,690 88,049 90,225
150,000.................. 39,132 78,264 102,395 104,027 105,659 108,270
160,000.................. 41,741 83,481 109,222 110,962 112,703 115,487
175,000.................. 44,766 89,531 116,797 117,812 118,828 120,452
200,000.................. 51,016 102,031 120,315 130,458 135,078 136,702
225,000.................. 57,266 110,173 120,315 130,458 140,600 152,952
250,000.................. 63,516 110,173 120,315 130,458 140,600 156,828
300,000.................. 76,016 110,173 120,315 130,458 140,600 156,828
350,000.................. 88,516 110,173 120,315 130,458 140,600 156,828
400,000 and above........ 100,030 110,173 120,315 130,458 140,600 156,828
</TABLE>
EXECUTIVE EMPLOYMENT, TERMINATION AND SEVERANCE AGREEMENTS
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 2000. The contract is renewed annually at
the end of each year for one additional year unless notice is given prior to
year end by either party of intent to terminate. After the fifth year, such
notice is to be given prior to the end of the second year of the then existing
term and unless given, the contract is extended for one year. Under the
contract, Mr. Plamann serves as the Company's President and Chief Executive
Officer and receives a base salary, currently $390,000, subject to annual
review and upward adjustment at the discretion of the Board of Directors. Mr.
Plamann is also eligible for annual bonuses, up to a maximum of 48% of base
salary, based on performance criteria established by the Board of Directors at
the beginning of each fiscal year. 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
9
<PAGE>
base salary during the previous three years, plus an annual bonus equal to the
average of 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.
The Company has executed Severance Agreements with Senior Vice Presidents
Daniel T. Bane and Charles J. Pilliter. The agreements extend for three years
until April 2, 2000 and contain provisions for annual extensions subject to
certain parameters. Among other provisions, the agreements provide for the
payment of one year's salary plus bonus upon termination, as defined in the
agreements.
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. 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.
[LINE CHART APPEARS HERE]
<TABLE>
<CAPTION>
DATE S&P 500 PEER ISSUERS COMPANY
- ---- ------- ------------ -------
<S> <C> <C> <C>
1993 112.0 106.3 100.7
1994 114.8 113.6 100.4
1995 135.7 123.3 102.1
1996 157.5 115.5 103.4
1997 217.2 120.9 107.9
</TABLE>
10
<PAGE>
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 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.
As described below, the Company has made loans and loan guarantees and has
entered into lease guarantees and subleases with patrons with which certain
directors and nominees of the Company are affiliated.
Loans and Loan Guarantees:
<TABLE>
<CAPTION>
MATURITY
DIRECTOR AGGREGATE LOAN BALANCES AT AUGUST 30, 1997 DATE
-------- ------------------------------------------ ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Mimi R. Song.............. $3,750 2002
Bijan H. Rodd............. 1,566 2004
John Berberian............ 429 1999-2000
Marc Claypool............. 183 2003
Michael A. Provenzano..... 282 1997-2000
Edward J. Quijada......... 12 1999
</TABLE>
Lease Guarantees and Subleases:
<TABLE>
<CAPTION>
NO. OF EXPIRATION
DIRECTOR STORES TOTAL CURRENT ANNUAL RENT DATE(S)
-------- ------ ------------------------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Michael A. Provenzano.............. 2 $351 2016-2017
Harley DeLano...................... 2 327 2009
John Berberian..................... 1 120 2004
Bijan H. Rodd...................... 1 10 1999
</TABLE>
The Company proposes to guarantee a lease of market premises to be
constructed and leased by Bristol Farms Markets, with which nominee Edmund
Kevin Davis is affiliated. The guarantee will have a term of ten years, with
the Company's exposure being capped at approximately $1.9 million initially
and declining to approximately $880,000 during the guarantee term. The
Company's exposure could be further reduced or eliminated based upon the
store's achievement of certain annual sales levels.
The Company leases its produce warehouse to Joe Notrica, Inc., with which
director Morrie Notrica is affiliated. The lease is for an initial 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.
Rent during the option period will be the lesser of fair rental value or the
current rent adjusted to reflect the change in the Consumer Price Index.
The Company has entered into supply agreements with members with which
certain directors and nominees are affiliated. These agreements require the
member to purchase certain agreed amounts of its merchandise requirements from
the Company and obligate the Company to supply such merchandise under agreed
terms and conditions relating to such matters as pricing, delivery, discounts
and allowances. Member affiliated with directors Bonfante, DeLano and
Provenzano and nominee Song have entered into supply agreements with the
Company. These supply agreements vary in terms and length, and expire at
various dates through 2004, but are
11
<PAGE>
subject to earlier termination in certain events. Fiscal 1997 purchases
totaled approximately $72,003,000, $47,007,000, $7,019,000, and $89,418,000,
respectively.
In August 1997, the Company entered into an agreement with Ralphs Grocery
Company ("Ralphs") providing for the dissolution of Golden Alliance
Distribution, a joint venture partnership previously formed for the purpose of
providing for the shared use of the Company's general merchandise warehouse
located in Fresno, California. The dissolution agreement provides that certain
amounts owed by Ralphs to the Company at August 30, 1997 will be offset by
future redemption of excess Class B Shares held by Ralphs and its affiliates.
If redemptions of Class B Shares are insufficient to satisfy the remaining
obligation at December 31, 2000, Ralphs will satisfy the shortfall with a cash
payment.
Since transactions of the foregoing type are only entered into with patrons
of the Company, it is not possible to assess whether transactions with
patrons, including patrons with which directors or nominees are affiliated,
are less favorable to the Company than similar transactions with unrelated
third parties. However, management believes such transactions are on terms
which are consistent with terms available to other patrons similarly situated.
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 bore interest at 8% per annum and was
secured by a second deed of trust on the home. The loan had a term of eight
years, with interest only payable during the first five years. This loan was
repaid in December 1997.
Certain other transactions involving other directors of the Company are
described beginning at page 5 under the caption "Compensation Committee
Interlocks and Insider Participation."
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 October 21, 1998. 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
Robert M. Ling, Jr., Corporate
Secretary
Dated: January 9, 1998
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K TO THE SECURITIES AND
EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED AUGUST 30, 1997, 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.
12
<PAGE>
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)
[_]Marc Claypool (N)
[_]Edmund Kevin Davis
[_]John T. Fujieki (Incumbent)
[_]Darioush Khaledi (Incumbent)
[_]Mark Kidd (N) (Incumbent)
[_]Michael Leum
[_]Willard "Bill" MacAloney (Incumbent)
[_]Jay McCormack (Incumbent)
[_]Morrie Notrica (Incumbent)
[_]Michael A. Provenzano (Incumbent)
[_]Edward J. Quijada
[_]Gail Gerrard Rice (Incumbent)
[_]Bijan H. Rodd
[_]Mimi R. Song
[_]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 January 30, 1998.
<PAGE>
1998
ADVISORY BALLOT
================================================================================
Candidates' Statements
================================================================================
[LOGO OF CERTIFIED]
CERTIFIED GROCERS OF CALIFORNIA, LTD.
<PAGE>
================================================================================
Candidates' Statements
================================================================================
LOUIS A. AMEN
[PHOTO APPEARS HERE] (Incumbent)
Super A Foods, Inc.
Los Angeles & Orange Counties
For the past 23 years, Mr. Amen has served on the board of directors of
Certified Grocers and is the current chairman of the board. As chairman, Mr.
Amen is an ex-officio member of all board committees and ex-officio director of
all Certified's subsidiaries. Mr. Amen is also a director and past chairman of
California Grocers Association.
Mr. Amen is the owner-operator of Super A Foods with 10 stores. He has
been actively involved in the food industry for over 54 years and a Certified
member of 45 years.
JOHN BERBERIAN
[PHOTO APPEARS HERE] (Incumbent)
Berberian Enterprises, Inc.
dba
Jons Markets
Los Angeles
Mr. Berberian is currently a member of Certified's Board of Directors where
he serves on the Nominating Committee. Mr. Berberian also serves as a member of
the board of Grocers Specialty Company and Grocers General Merchandise Company,
two of Certified's subsidiaries.
Mr. Berberian is the owner and president of Jons Markets which operates 11
successful independent stores. Because it is a family-owned chain, Mr.
Berberian has acquired experience in all phases of retail operation.
Since 1977 when he opened his first store, Mr. Berberian has been an active
member of Certified and has worked closely with them. As Jons Markets grew to
11 stores, Mr. Berberian has learned how valuable Certified is to its members
and is sensitive to the many problems facing independents today.
Mr. Berberian believes that his past experience as a Certified board member
will enable him to make a positive contribution to the Certified membership.
<PAGE>
================================================================================
Candidates' Statements
================================================================================
MARC CLAYPOOL
[PHOTO APPEARS HERE] One Stop Supermarkets
Ione
Mr. Claypool is the vice president of One Stop Supermarkets in Ione,
California. He joined the business in 1977 and has been involved in all aspects
of store management since.
Mr. Claypool believes that tools such as: Preferred Customer Card; DSD
Receiving; POS System; Interface to Certified Cost-Change Report; Interactive
Ordering; Price Reservation; and a Strong Ad Group are what the independents
need to compete in today's marketplace. He believes that all of these tools are
in place and available through Certified. As a board member, Mr. Claypool would
search for a solution to better educate the membership and increase awareness as
to the various tools available to them.
Mr. Claypool understands that many members have questions and needs in
order to operate, and he believes that Certified has the means to satisfy the
needs of independent retailers. Mr. Claypool is a firm believer that Certified
is abreast or ahead of its competition, and that the opportunity is in creating
awareness among its membership that such tools exist. As a board member, Mr.
Claypool would positively promote Certified and its programs.
EDMUND KEVIN DAVIS
[PHOTO APPEARS HERE] Bristol Farms Markets
Los Angeles
Mr. Davis is chairman of the board, president and CEO of Bristol Farms, the
preeminent specialty food store in Southern California. In the past 18 months,
Bristol Farms Company has doubled in size and plans to grow to as many as 25
stores over the next five years.
Mr. Davis started in the food industry in 1970. He joined Ralphs in 1974
and worked all store level jobs through promotion to store manager in 1980 and,
subsequently, managed several high volume Ralphs stores before being promoted to
district manager, vice president of sales and advertising and eventually senior
vice president of marketing at Ralphs.
Mr. Davis is a member of C.I.E.S. (International Chain Store Executives)
Young Executives Congress, board member of Western Association of Food Chains
(WAFC), executive vice president of the Food Industry Circle for the City of
Hope and serves on charity committees with California Hospital, Boy Scouts of
Orange County and the Juvenile Diabetes Foundation.
Supported by scholarships from the Western Association of Food Chains, Mr.
Davis graduated from the USC Food Industry Management Program in 1978 and from
USC School of Business in 1979. He later graduated as class president of the
executive program in the Anderson Graduate School of Business at UCLA.
In 1986, Mr. Davis was named by Business Week Magazine as one of the 50
"Fast Track Kids" in American business and in 1997, he was named again by the
Los Angeles Business Journal as one of their 30 "Up and Comers" in Los Angeles
business.
Mr. Davis believes that Southern California is ripe for significant growth
by independents who are flexible in meeting changing consumer expectations and
who work together to compete efficiently in this diverse market. Mr. Davis is
committed to innovation, leadership and the Southern California Food Industry.
<PAGE>
================================================================================
Candidates' Statements
================================================================================
JOHN T. FUJIEKI
[PHOTO APPEARS HERE] (Incumbent)
Star Markets, Ltd.
Honolulu, Hawaii
Mr. Fujieki is currently a member of Certified's Board of Directors where
he serves on the Retail Development Committee. Mr. Fujieki also serves as a
member of the board of Grocers General Merchandise Company, Grocers Equipment
Company and Grocers Specialty Company, three of Certified's subsidiaries.
Mr. Fujieki is president and COO of Star Markets, Ltd., headquartered in
Honolulu, Hawaii. Star Markets is a successful family run business that has
been in operation in Hawaii since 1927. Currently, there are eight Star Markets
stores. A ninth store is scheduled to open in fall 1998.
It is Mr. Fujieki's belief that retailers in Hawaii have had to re-think
nearly everything they do because of increased competition from large national
discount chains. He also believes they have had to constantly evaluate and re-
evaluate their operations to maintain a competitiveness in their marketplace.
Mr. Fujieki feels strongly that shipping and lead time, systems technology and
ECR are major components in their business processes, and that these processes
are integrally connected to all of their creative strategies.
By being part of the esteemed governing body, Mr. Fujieki will continue to
strive for equitable competitive services and resources for all members of the
Certified Grocers family.
DARIOUSH KHALEDI
[PHOTO APPEARS HERE] (Incumbent)
K.V. Mart Co.
dba
Top Valu Markets &
Valu Plus Food Warehouses
Mr. Khaledi, chairman and chief executive officer of K.V. Mart Co., opened the
first Top Valu Market in Torrance in 1977, and has been a member of Certified
Grocers from that time forward. Mr. Khaledi now operates 11 Top Valu Markets
and 7 Valu Plus Warehouse Markets.
Mr. Khaledi was elected to the board for a sixth time last year, and plays
a major role in the re-engineering of Certified Grocers. He is the chairman of
Grocers Capital Company, chairman of the Finance and Personnel and Executive
Compensation Committees and an active member of the Administrative, Audit and
Retail Development Committees. Mr. Khaledi also serves as a member of the board
of Grocers Equipment Company.
Mr. Khaledi was honored five times by the Progressive Grocers Magazine, and
serves on the board of directors for the Food Marketing Institute, California
Grocers Association, and the Western Association of Food Chains. He served as
the chairman of the board of directors of the California Grocers Association,
for the 1996-97 term. Mr. Khaledi maintains a high visibility in the industry
and is very involved in industry issues, at the local, state and national
levels.
Mr. Khaledi graduated with a Masters Degree in Civil Engineering from
Tehran Polytechnic in 1968. He also graduated from the University of Southern
California's Effective Management Program in 1981 and the Cornell University
Food Executive Program in July 1995. In July 1996, Mr. Khaledi won the National
Entrepreneur of the Year Award in the Retail/Wholesale Distribution Division.
<PAGE>
PAGE>
================================================================================
Candidates' Statements
================================================================================
MARK KIDD
[PHOTO APPEARS HERE] (Incumbent)
Mar-Val Food Stores, Inc.
Central Valley
Mr. Kidd is the owner and president of Mar-Val Food Stores, a family run
company in the Central Valley.
Mr. Kidd is presently the 2nd vice chairman on the Certified Board and
serves as a member of the Administrative, Personnel & Executive Compensation,
Finance, Nominating and Retail Development Committees. He is the chairman of
Grocers Equipment Company, Grocers and Merchants Insurance Service and
Springfield Insurance Company - CA, and a director of Springfield Insurance
Company - Ltd. He is actively involved in all aspects of the grocery industry.
Mr. Kidd has been involved in the grocery business for 27 years, beginning in
his high school years. He then went on to graduate from Bringham Young
University and returned to California to begin to build onto the company
business.
Mr. Kidd currently serves on the board of directors of California Grocers
Association. Mr. Kidd has served on the board of directors of Northern
California Grocers Association, becoming chairman in 1984. He also served on the
board of directors of National Grocers Association. He is active in his
community and church affairs. Mr. Kidd feels that independent grocers need to
work together in combating the competition of the major chains and the co-op is
the best forum to do that successfully.
Mr. Kidd welcomes your ideas and asks for your support.
MICHAEL LEUM
[PHOTO APPEARS HERE] Pioneer Foods, Inc.
Los Angeles
As a new director, Mr. Leum believes that he would bring a youthful
perspective to the board. He is a former director of the Southern California
Grocers Association and the California Grocers Association. Serving on those
boards, Mr. Leum was the voice of youth in meetings with seasoned veterans. Mr.
Leum also served on the California Grocers Association's shopping cart and
emergency preparedness committees.
Mr. Leum holds a business degree from Pepperdine University, but believes
the true classroom is working in the store six days a week. He has grown up
within the grocery industry, working for the family business since his teen
years, and feels that he has been taught by the best. Mr. Leum has weathered
strikes (clerks and teamsters), floods, earthquakes, riots, store openings,
remodels, store closures, hirings and lay-offs.
Mr. Leum has worked every shift and performed almost every job description
within the grocery store. He believes that titles should be taken lightly
because his own job description can go from vice president to janitor in a
moments notice when a clerk calls for a "wet clean-up with broken glass on aisle
twelve".
<PAGE>
================================================================================
Candidates' Statements
================================================================================
WILLARD "BILL" MacALONEY
[PHOTO APPEARS HERE] (Incumbent)
Mac Ber, Inc.
dba
Jax Markets
Orange, Los Angeles & Riverside Counties
Mr. MacAloney is currently a member of Certified's Board of Directors, and
is a past chairman of the board. Presently, Mr. MacAloney is a member of the
Administrative and Personnel & Executive Compensation Committees, and serves as
a member of the board for Grocers and Merchants Insurance Service, Grocers
Specialty Company and Springfield Insurance Company - CA, three of Certified's
subsidiaries. He participates in all Certified programs.
In addition to his Certified responsibilities, Mr. MacAloney is vice
chairman of the Food Marketing Institute (FMI) of Washington, D.C., and a board
member of the California Grocers Association (CGA) and Western Association of
Food Chains (WAFC).
Mr. MacAloney is the president of Mac Ber, Inc., which operates three Jax
Markets and two Apple Markets. Mr. MacAloney was the first member of Certified
to convert one of his markets into an Apple Market, which is Certified's banner
store program.
Mr. MacAloney believes the board of directors should be the driving force
in establishing Certified's future for the success of the independents. A
strong co-op is fundamental to the survival of independent grocers in our
changing marketplace. Mr. MacAloney is accustomed to getting results even
through the most difficult times; he feels that this is the time to have board
members who can do the same.
JAY McCORMACK
[PHOTO APPEARS HERE] (Incumbent)
Alamo Market, 29 Palms
Glen Avon Apple Market,
Glen Avon
Mr. McCormack is the owner-operator of the Alamo Market since 1986, and is
co-owner of Glen Avon Market which opened in 1993. Glen Avon Market was recently
converted to an Apple Market, which is Certified's banner store program. He
worked for Certified Grocers from 1975 to 1986, acquiring a working knowledge of
the co-op and its members.
Mr. McCormack has served you on Certified's Board since July 1992, and is
the 1st vice chairman. Mr. McCormack chairs the Retail Development Committee,
and serves on the Administrative, Personnel & Executive Compensation, Finance
and Nominating Committees. Mr. McCormack is a director of Grocers Capital
Company and Grocers Equipment Company, two of Certified's subsidiaries. He is
also Chairman of the Board of Banner Marketing, Inc., a subsidiary of Grocers
Equipment Company.
Mr. McCormack believes the board is ultimately responsible for the
successful operation of Certified Grocers. He believes the company should focus
on four major objectives:
1. Control and reduce Certified's gross
margin, which translates into the
retailers cost of goods;
2. Control and reduce Certified's expenses
as a percentage of sales;
3. Increase volume through Retail
Development; and
4. Provide a satisfactory patronage dividend
return to members.
Mr. McCormack welcomes the opportunity to serve you. Please call him with
comments or concerns at 760-367-7216.
<PAGE>
================================================================================
Candidates' Statements
================================================================================
MORRIE NOTRICA
[PHOTO APPEARS HERE] (Incumbent)
Joe Notrica, Inc.
dba
The Original 32nd Street Market
Los Angeles
Mr. Notrica is president and sole operating officer of one of the largest
independent markets in Los Angeles. Under his direction, The Original 32nd
Street Market has expanded from 1,800 to 50,000 square feet and is still
growing. In addition, he has opened four additional stores.
In his more than 46 years in the food industry, Mr. Notrica has been active
in every phase of the business from the buying of produce and other department
commodities, to the complex areas of accounting, payroll and other corporate
functions. Mr. Notrica is an innovator whose 16 checkstand scanning registers
have attracted interest from retailers as far away as New Zealand, Japan and
Finland.
Mr. Notrica has received resolutions from the Los Angeles City Council and
the California State Assembly for his civic affairs activity. He has also
received the Progressive Grocers Merchandising Award for 1985-1986 and the
Mexican American Grocers Association Retailer of the Year Award for 1987. A
member of the Certified Board of Directors, he serves as chairman of the
Nominating Committee, and is a member of the Credit and Finance Committees, and
the boards of Grocers and Merchants Insurance Service, Grocers General
Merchandise Company, Grocers Specialty Company and the Springfield Insurance
Companies. He is also a director of California Grocers Association, and serves
on the board of directors for the Mexican American Grocers Association. He
believes that the retail food industry is a "people business" and he's involved.
MICHAEL A. PROVENZANO
[PHOTO APPEARS HERE] (Incumbent)
Pro & Son's, Inc.
dba
Southland Market, Delano Ranch & Arvin Ranch Markets
Ontario, Delano and Arvin
Mr. Provenzano has worked for 39 years in the grocery industry. He is a
graduate of Cal Poly Pomona, where he majored in business. He received a food
industry scholarship to USC, and was nominated to the roster of Outstanding
Young Men of America.
Mr. Provenzano serves on the Finance and Retail Development Committees, and
is a director for Grocers and Merchants Insurance Service, Grocers General
Merchandise Company, Grocers Equipment Company, Grocers Specialty Company and
the Springfield Insurance Companies, six of Certified's subsidiaries. He is
past chairman of the California Grocers Association and was again selected to
serve as director on that board. Representing the independents, Mr. Provenzano
serves as a committee member to the Food Marketing Institute (FMI).
Mr. Provenzano owns Southland Market along with Arvin and Delano Ranch
Markets. In 1987 Southland Market was voted as one of the top independents
across the United States.
As an independent he recognizes the needs of retail operators in our
changing marketplace and will offer his best efforts to represent you on the
board. He welcomes your questions. You may call him at 909-984-8711.
<PAGE>
================================================================================
Candidates' Statements
================================================================================
EDWARD J. QUIJADA
[PHOTO APPEARS HERE] Tresierras Brothers Corporation
an Fernando and Santa Clarita and
Santa Clara River Valleys
Mr. Quijada has over 25 years of management experience and holds an MBA
from Loyola Marymount University. He also has over 26 years of service with the
U.S. Navy and is currently a Supply Corps Captain and a commanding officer of a
40 person unit in the Naval Reserve.
As the executive vice president of Tresierras Bros. Corporation (aka
Tresierras Markets) for the past four and a half years, Mr. Quijada has been
instrumental in the company achieving its operational and growth objectives.
The company has recently opened its fifth market, a beautiful 24,000 sq. ft.
supermarket in the City of Santa Paula. As a result of Mr. Quijada's experience
at Tresierras Brothers Corporation, he believes he has gained a good
understanding of the problems and concerns that the small independent members
face everyday, and how Certified can better serve them.
Mr. Quijada believes his leadership, management and strategic planning
expertise would definitely be an asset to Certified's Board of Directors.
GAIL GERRARD RICE
[PHOTO APPEARS HERE] (Incumbent)
Gerrards Markets, Inc.
Redlands, San Bernardino County
Ms. Rice is co-owner and executive vice-president of Gerrards Markets in
Redlands, a family-owned business with 66 years of successful operation. She
joined the business in 1974 and has been involved in all aspects of store
management since.
Ms. Rice is currently a member of Certified's Board of Directors where she
serves on the Audit, Nominating and Retail Development Committees. Ms. Rice
also serves as a member of the board of Grocers Specialty Company, a subsidiary
of Certified.
Ms. Rice served as president of the Redlands Chamber of Commerce from 1992
to 1994, was named Business Woman of the Year in 1993 by the Redlands Chapter of
ABWA and was a 1995 honoree of the University of Redlands Town and Gown for
contributions to the business community. She is a graduate of Chapman College
(now Chapman University) in Orange.
Ms. Rice's two stores have supported Certified Grocers throughout the years
in all departments. She understands that the future of the independent operator
in California is tied to the success of Certified and that the core value of a
cooperative wholesaler is to provide product at the lowest possible cost to keep
its members competitive. Additionally, Certified must continue with its
aggressive support of independent stores by offering the latest in technology,
such as the new Certi-Net program now being offered.
<PAGE>
================================================================================
Candidates' Statements
================================================================================
BIJAN H. RODD
[PHOTO APPEARS HERE] Koshan, Inc.
Rodbin, Inc.
dba
Payless Foods Warehouse
Los Angeles
Mr. Rodd is the chairman and chief executive officer of Payless Foods
Warehouse (formerly Bargain Foods). Payless Foods Warehouse presently operates
five high volume warehouse type food stores located in primarily Hispanic areas
of Southern California. Mr. Rodd was the driving force behind the building of
this highly successful five store operation from its inception with a single
store in Carson in 1984. Present plans include two additional units within the
next 18 months.
Mr. Rodd received his Associate of Arts Degree in Business Administration
from El Camino College, his Bachelors Degree in Civil Engineering from CSULB,
and his Masters Degree in Environmental Engineering from CSULB.
Mr. Rodd believes strongly that the opportunities for the independent
market operation will increase significantly during the next decade, and that
Certified Grocers will need strong leadership in order to keep pace. He further
believes that the energy, passion, and innovative approach which he has employed
to continue the sales and profit increases of Payless Food Stores (during a
down turn in the general food market place) would be beneficial to Certified
Grocers in an effort to maintain that pace.
MIMI R. SONG
[PHOTO APPEARS HERE] Superior Super Warehouse
Los Angeles
Nearly 20 years ago, Ms. Song began her career in the retail food industry.
She began her career working hands-on in the store, from cashiering to
department manager, to store director. From there Ms. Song moved into corporate
operations and has served as president of Superior Super Warehouses since
August, 1995. When Ms. Song began with Superior in 1981, Superior operated only
one store. Presently, Superior has seven supermarkets with the eighth store
opening by the end of the year.
Ms. Song believes that the face of the supermarket industry in California
is changing. She also believes that a co-op of independent stores, supported by
Certified Grocers, must be prepared to meet the challenges ahead. Ms. Song
feels her experience uniquely qualifies her to help direct Certified toward the
21st century. Ms. Song believes that if she were to serve on the board of
directors of Certified Grocers, the independent retailers of California would
continue their challenge to stay ahead and be on the leading edge of the retail
grocery industry.
<PAGE>
================================================================================
Candidates' Statements
================================================================================
JAMES R. STUMP
[PHOTO APPEARS HERE] (Incumbent)
Stump's Market, Inc.
San Diego
Currently, Mr. Stump is a member of Certified's Board of Directors and
serves on the Administrative, Personnel and Executive Compensation, Nominating
and Retail Development Committees. He is also a member of the board for Grocers
Capital Company, Grocers Equipment Company, Grocers and Merchants Insurance
Service and the Springfield Insurance Companies, five of Certified's
subsidiaries.
Mr. Stump has worked in the grocery industry for 43 years, 22 of them with
a chain operation where he rose to the post of district manager responsible for
22 stores. He has spent the past 21 years developing and operating his own
stores. He is president of Stump's Market, Inc., San Diego.
Mr. Stump believes because of his experience in both chain store and
single-store operations he can relate to the problems and opportunities of each.
He feels strongly that areas as large as San Diego and Imperial Counties should
have representation on the board.
KENNETH YOUNG
[PHOTO APPEARS HERE] (Incumbent)
Jack Young's Supermarkets
dba
Young's Markets
Visalia
Mr. Young is vice president and a stockholder of Young's Markets, a family
run company that has been a member of Certified Grocers since 1950 (47 years).
Young's Markets operates five supermarkets and one convenience store located in
Visalia and Bakersfield. Mr. Young has been involved in food retailing since
1960. Mr. Young is experienced in all phases of the business including
operations, purchasing, advertising, personnel, accounting, data processing, and
real estate.
Mr. Young holds a Masters Degree in Accounting from UCLA and a B.S. Degree
from USC's Food Distribution Program (1967-1968). Mr. Young is a supporter of
Future Business Leaders of America in high school and is now a professional
member of FBLA. Mr. Young is married and has a son and a daughter (twins) both
20 years old.
Mr. Young currently serves as a member of Certified's Board of Directors
and is the chairman of the Audit Committee and Grocers Specialty Company, a
subsidiary of Certified.
Mr. Young feels that an aggressive, efficient wholesaler is tantamount to
the survival of the independent operators and vice-versa. The wholesaler must
provide products and services at competitive prices. Independent operators must
support their wholesaler to maintain or increase the wholesaler's sales volume
so that the wholesaler can operate more efficiently. A co-op must be run like
any other business, it must be run efficiently as possible to produce profits
for its members.
<PAGE>
[LETTERHEAD OF JONS MARKETPLACE]
JOHN BERBERIAN
Fellow Certified Member:
As you already know, I am campaigning for reelection to Certified's Board of
Directors. I began in the retail grocery industry in 1977 and have developed my
company into a successful eleven-store supermarket chain.
Over the past few years, I have made significant contributions toward several
positive modifications at Certified in response to your overwhelming concerns.
I am and will continue to be actively involved with Certified's policies and
programs that will benefit all of us as members to enable ourselves to stay
competitive during these difficult economic times. I believe that with your
support and my past experience as a Board member, we can help keep Certified a
strong wholesaler. Therefore, if you support a strong Certified organization,
then I respectfully request that you vote for my reelection to the Board of
Directors of Certified Grocers of California, Ltd.
Thank you.
Sincerely,
/s/ John Berberian
John Berberian
President
/sm
<PAGE>
[LETTERHEAD OF JONS MARKETPLACE]
JOHN BERBERIAN
Fellow Certified Member:
I am currently a member of Certified's Board of Directors where I serve on the
Nominating Committee. I also serve as a member of the Board of Grocers
Specialty Company and Grocers General Merchandise Company, two of Certified's
subsidiaries.
I am the owner and president of Jons Marketplace which operates 11 successful
stores. Because it is a family-owned chain, I have acquired experience in all
phases of retail operation.
Since my first store was opened in 1977, I have been an active member of
Certified and have worked closely with them. As Jons Marketplace grew to 11
stores, I have learned how valuable Certified is to its members and am sensitive
to the many problems facing independents today.
I believe that my past experience as a Certified Board member will enable me to
make a positive contribution to the Board. If reelected to the Board, I promise
to continue to help maintain Certified as a strong wholesaler especially during
these challenging economic times. I feel that with a strong organization we
will be able to effectively compete in this market.
If you concur that Certified has the potential to become a stronger
organization, then I solicit you to support me for election to the Board of
Directors of Certified Grocers of California, Ltd.
Sincerely,
/s/ John Berberian
John Berberian
<PAGE>
CERTIFIED MEMBERSHIP WINS!!!
[PHOTO APPEARS HERE]
[X] VOTE FOR MARC CLAYPOOL
This January to be your representative on Certified Grocers Advisory Board
. I am serious about making sure the Independent Retailer is healthy and
competitive.
. I believe Certified Grocers is the place to be for the independent grocer
because of the many programs Certified has to offer.
. Many of the members have not identified and taken advantage of many of
these programs.
. As a member of the Advisory Board I want to help educate the membership on
ways of participating, as well as developing more of these programs.
[X] Current owner of One Stop Supermarkets and Total Value Foods.
[X] 35 years old, wife Christy, son Austin.
[X] Over 20 years grocery experience.
[X] Member of Certified Grocers for eight years.
[X] Employee of Certified Grocers for a period of one and half years.
[X] Expert on Certified programs.
MAKE SURE YOU VOTE IN JANUARY
If I am elected I will be available to all members, call me at 209-274-4747
Fax number: 209-274-4342
Home phone: 209-296-1691
<PAGE>
[LETTERHEAD OF STAR MARKETS]
JOHN T. FUJIEKI
CAMPAIGN MATERIAL FOR 1998 ADVISORY BALLET
CERTIFIED GROCERS
----------------------------------------------------
Dear :
It has been a great honor and privilege to serve on Certified's Board of
Directors as well as Certified's subsidiaries board of Grocers General
Merchandise Co., Grocers Equipment Co. and Grocers Specialty Co. I thank you for
bestowing your trust in me.
The endless challenges we face today will continue in 1998. Thus, I will
continue to work for the future of our industry with bold new approaches to make
our business more viable.
I ask for your vote of confidence so I can continue my efforts to ensure
equitable and competitive services and resources for all members of the
Certified Grocers family.
Sincerely,
John T. Fujieki
12/9/97
<PAGE>
[LETTERHEAD OF TRESIERRAS BROTHERS CORPORATION]
- -------------------------------------------------------------------------------
December 18, 1997
Fellow Certified Member:
I am the Executive Vice President of Tresierras Bros. Corporation which recently
celebrated its 53rd anniversary. My responsibilities include managing all
aspects of this expanding family run business of five supermarkets and a bakery.
In October 1997, Tresierras opened a beautiful supermarket located in Santa
Paula.
I can bring to Certified over 24 years of management experience including 16
years with TRW, Inc. Space and Defense and over 26 years of U.S. Navy
experience. I am currently a Naval Reserve Supply Corps Captain (06) and the
Commmanding Officer of a 40 person Naval Reserve unit in San Diego which
provides aviation supply support to the U.S. Navy Pacific Fleet's aircraft
carrier and amphibious ready battle groups in the event of a contingency or war.
I have proven leadership skills plus the vision necessary to develop Certified's
long term goals and objectives. In addition, I understand how to do the
strategic planning necessary to achieve them. I have a Bachelors and Masters
Degree in Business Administration from Loyola Marymount University.
Excellence is needed form Certified for us to remain competitive and profitable.
Certified must be responsive and totally focused on satisfying the needs of all
---
its members.
I am confident my unique background, education and perspective can help make a
----------------- --------- -----------
difference in making Certified a stronger, more efficient and effective
organization. I firmly believe what we need on the Board are fresh ideas and new
- ------------ ----------- ---
ways of looking at problems and concerns. Finally, I am committed to helping
- ---- ---------
Certified grow, just as I have helped Tresierras, because I believe this is
----
necessary to ensure the members have an organization with the necessary strength
to support them into the next millennium.
Very Truly Yours,
Edward J. Quijada
Executive Vice President
<PAGE>
January X, XXXX
Dear Certified Grocers Member:
As a member of Certified Grocers, you are the reason for Certified Grocers'
existence. The Board of Directors is there to serve its members.
I am running for re-election to the Board of Directors of Cergro representing
Northern California.
My fourth year serving on the Board of Directors of Certified has been exciting
for me as well as for Certified. The programs to reduce costs, increase
efficiency and accountability are working. Certified is on track to becoming an
aggressive, efficient wholesaler. The future looks bright.
I feel that an aggressive, efficient wholesaler is tantamount to the survival of
the independent operators.
As a member of the Board of Directors of Certified, I will always work for you.
You are the reason that Certified Grocers exists. If you have any questions or
suggestions, please call me at (209) 625-9252.
Thank you for your support.
Sincerely,
Kenneth Young
Vice President
P.S. Please vote and send in your advisory ballot by February X, XXXX. You do
----------------------------------------------------------------
not have to cast all 12 votes. Just vote for people that you feel would do a
good job for you. You can send in your ballot even if you only vote for one
person.
<PAGE>
K E N N E T H Y O U N G
January X, XXXX
Mr. Young is Vice President and a stockholder of Young's Markets, a family run
company that has been a member of Certified Grocers since 1950 (47 Years).
Young's Markets operates five supermarkets and one convenience store located in
Visalia and Bakersfield. Mr. Young has been involved in food retailing since
1960. Mr. Young is experienced in all phases of the business including
operation, purchasing, advertising, personnel, accounting, data processing, and
real estate.
Mr. Young holds a Masters Degree in Accounting from U.C.L.A. and a B.S. Degree
from U.S.C.'s Food Distribution Program. (1967-1968) Mr. Young is a supporter
of Future Business Leaders of America in high school and is now a professional
member of FBLA. Mr. Young is married and has a son and daughter both 20 years
old (twins).
Mr. Young currently serves as a member of Certified's board of directors and is
Chairman of the Audit Committee and is Chairman of Grocers Specialty Company, a
subsidiary of Certified.
Mr. Young feels that an aggressive, efficient wholesaler is tantamount to the
survival of the independent operators and vice versa. The wholesaler must
provide products and services at competitive prices. Independent operators must
support their wholesaler to maintain or increase the wholesaler's sales volume
so that the wholesaler can operate more efficiently. A Co-op must be run like
any other business, it must be run efficiently as possible to produce profits
for its members.
<PAGE>
January 9, 1998
RE: ELECTION OF DIRECTORS'
Dear Certified Shareholder:
A Nominating Committee has been appointed by the Board of Directors of Certified
Grocers of California, Ltd., to select nominees for election as Directors for
the 1998 Board of Directors.
The enclosed Advisory Ballot is being solicited by the Nominating Committee from
the holders of Certified's Class A shares. This is being done to assist the
Nominating Committee in selecting the 12 persons who will be nominated by the
Board of Directors for election by the holders of the Class A shares. In
selecting candidates for the Advisory Ballot, the Nominating Committee has
reviewed names suggested by shareholders, as well as those provided by
Certified's management. The individuals appearing on the Advisory Ballot have
been contacted to determine their willingness to have their names placed on the
Advisory Ballot and each has consented.
The Nominating Committee and the Board of Directors took action in 1992 to
ensure that there will be Class A representation of Northern California
shareholders among those nominated for election to the Board of Directors.
Accordingly, the Nominating Committee will place in nomination for election to
the Board of Directors a minimum of two (2) names from the candidates
representing Northern California on the Advisory Ballot.
We are also enclosing an information statement regarding the Advisory Ballot as
well as individual statements by each of the persons named in the Advisory
Ballot. You should carefully review these materials before voting on the
Advisory Ballot.
The Advisory Ballot contains the names of 18 persons, 12 of whom are incumbent
Directors. In addition, 3 persons represent Northern California, 2 of whom are
incumbents. As the holder of Class A shares of Certified, you are entitled to
vote for up to 12 names on the Advisory Ballot -- one vote for each name
selected. While you may vote for fewer than 12 persons named in the Advisory
Ballot, your Advisory Ballot will be invalidated if you vote for more than 12 of
the named persons. 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.
Deloitte & Touche, L.L.P. an independent outside auditing firm, will tally the
votes.
To assure accuracy and accountability, Deloitte & Touche, L.L.P. has requested
that the control number appearing on the enclosed return envelope not be
removed.
<PAGE>
Certified Shareholder
January 9, 1998
Page Two
THE ADVISORY BALLOT WILL NOT BE VALID UNLESS IT IS RETURNED IN THE ENVELOPE
- ---------------------------------------------------------------------------
PROVIDED AND THE CONTROL NUMBER IS LEGIBLE. IN THE EVENT THAT YOU ABSOLUTELY
- -----------------------------------------------------------------------------
CAN NOT FIND THE RETURN ENVELOPE, WE ASK THAT YOU NOTIFY MARY KAY DELGADO AT
- ----------------------------------------------------------------------------
(213) 723-7476. EXT.4640.
- --------------------------
The Advisory Ballot is your opportunity to express your choice for nominees for
election as Directors by the holders of Class A shares. YOUR VOTE IS VERY
-----------------
IMPORTANT and we urge you to please vote your preference and return your
- ---------
Advisory Ballot so it is RECEIVED BY DELOITTE & TOUCHE, L.L.P. ON OR BEFORE
--------------------------------------------------
JANUARY 30, 1998.
- ------------------
THE NOMINATING COMMITTEE
Morrie Notrica, Chairman
John Berberian
Mark Kidd
Jay McCormack
Gail Gerrard Rice
Jim Stump
Lou Amen (Ex-Officio Member)
Alfred A. Plamann (Ex-Officio Member)
PLEASE NOTE: The 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.
