FOODARAMA SUPERMARKETS, INC.
922 Highway 33
Building 6, Suite 1
Howell, New Jersey
----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 15, 1997
----------
The Annual Meeting of Shareholders (the "Meeting") of Foodarama
Supermarkets, Inc. (the "Company") will be held at the offices of the Company,
922 Highway 33, Building 6, Suite 1, Howell, New Jersey, on April 15, 1997 at
10:30 A.M.
(local time), for the following purposes:
1. To elect a Board of four Directors; and
2. To transact such other business as may properly come before the Meeting
and any adjournment thereof.
The Board of Directors has fixed the close of business on March 5, 1997 as
the record date for determining the shareholders entitled to notice of and to
vote at the Meeting or any adjournment thereof. A list of shareholders as of the
record date will be available to shareholders at the Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. SHAREHOLDERS WHO DO NOT
EXPECT TO BE ABLE TO ATTEND THE MEETING ARE REQUESTED TO FILL IN, DATE, SIGN AND
RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH DOES NOT REQUIRE
ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES. THIS WILL NOT PREVENT YOU
FROM VOTING IN PERSON IF YOU CAN BE PRESENT AT THE MEETING.
By Order of the Board of Directors,
/s/ Richard J. Saker
--------------------
Richard J. Saker,
Secretary
Howell, New Jersey
March 14, 1997
<PAGE>
FOODARAMA SUPERMARKETS, INC.
922 Highway 33
Building 6, Suite 1
Howell, New Jersey
---------------
PROXY STATEMENT
---------------
GENERAL INFORMATION
This Proxy Statement and the accompanying form of proxy are being mailed to
shareholders of Foodarama Supermarkets, Inc. (the "Company") in connection with
the solicitation, by and on behalf of the management of the Company, of proxies
to be voted at the Annual Meeting of Shareholders (the "Annual Meeting") to be
held at the offices of the Company, 922 Highway 33, Building 6, Suite 1, Howell,
New Jersey, on April 15, 1997 at 10:30 A.M. (local time) and at all
postponements or adjournments thereof.
The securities entitled to vote at the Annual Meeting consist of shares of
Common Stock of the Company with each share of Common Stock entitling its owner
to one vote on an equal basis. The number of outstanding shares of Common Stock
on March 5, 1997 was 1,118,150. Only shareholders of record on the books of the
Company at the close of business on that date will be entitled to vote at the
meeting. The holders of a majority of the outstanding shares of Common Stock,
present in person or by proxy and entitled to vote, will constitute a quorum at
the meeting. The affirmative vote of a plurality of the shares present in person
or represented by proxy and entitled to vote is required for the election of
Directors. The proxy card provides space for a shareholder to withhold votes for
any or all nominees for the Board of Directors. All votes will be tabulated by
the inspector of election appointed for the Annual Meeting who will separately
tabulate affirmative votes, authority withheld for any nominee for Director and
any abstentions or broker non-votes. Authority withheld will be counted toward
the tabulation of total votes cast in the election of Directors and will have
the same effect as a negative vote. Any proxy submitted and containing an
abstention or a broker non-vote is not counted as a vote cast on any matter to
which it relates and will only be counted for purposes of determining whether a
quorum is present at the meeting.
All shares of Common Stock represented by properly executed proxies will be
voted at the Annual Meeting, unless such proxies have previously been revoked.
Unless otherwise instructed, the shares of Common Stock represented by such
proxies will be voted "for" the election of management's nominees for director.
Management does not know of any other matter to be brought before the Annual
Meeting, but it is intended that, as to any such other matter, votes may be cast
pursuant to the proxies in accordance with the judgment of the person or persons
acting thereunder.
The Company's address is 922 Highway 33, Building 6, Suite 1, Howell, New
Jersey and its telephone number is (908) 462-4700. The notice, proxy statement
and enclosed form of proxy are being mailed to shareholders on or about March
14, 1997.
Any shareholder who executes and delivers a proxy may revoke it at any time
prior to its use by (a) delivering written notice of such revocation to the
Secretary of the Company at its offices; (b) delivering to the Secretary of the
Company a duly executed proxy bearing a later date; or (c) appearing at the
Annual Meeting and requesting the return of his or her proxy.
YOU ARE REQUESTED TO COMPLETE AND SIGN THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ENVELOPE PROVIDED FOR THAT PURPOSE.
<PAGE>
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
================================================================================
PRINCIPAL
SHAREHOLDERS
The following table shows, as of February 28, 1997, the persons known to the
Company who owned directly or beneficially more than 5% of the outstanding
Common Stock of the Company:
<TABLE>
<CAPTION>
Amount
Beneficially Percent of
Name of Beneficial Owner Owned Class
----------------------- ---------- --------
<S> <C> <C> <C> <C> <C>
Joseph J. Saker (1) (2) (3)......................................... 346,376 31.0
Estate of Mary Saker (1) (3)........................................ 73,296 6.6
Richard J. Saker (1) (2)............................................ 78,539 7.0
Dimensional Fund Advisors, Inc. (4)................................. 59,100 5.3
Arthur N. Abbey (5)................................................. 108,000 9.7
</TABLE>
- ---------------
(1) The address of the foregoing person is c/o Foodarama Supermarkets, Inc.,
922 Highway 33, Building 6, Suite 1, Freehold, New Jersey 07728.
(2) Includes 10,428 shares held by his wife and 36,648 shares willed to him by
Mary Saker. Does not include an aggregate of 136,967 shares owned by
Richard J. Saker and the other children of Joseph J. Saker in their own
names, of which Mr. Joseph J. Saker disclaims beneficial ownership.
(3) Mary Saker, deceased, was the mother of Joseph J. Saker. One-half or 36,648
of her shares have been willed to Joseph J. Saker.
(4) The address of Dimensional Fund Advisors, Inc. ("Dimensional"), a
registered investment advisor, is 1299 Ocean Avenue, 11th Floor, Santa
Monica, California 90401. Based upon a copy of Amendment No. 1 to Schedule
13G dated February 5, 1997 and filed with the Securities and Exchange
Commission, Dimensional is deemed to have beneficial ownership of 59,100
shares, all of which shares are held in portfolios of DFA Investment
Dimensions Group Inc. (the "Fund"), a registered open-end investment
company, or in series of the DFA Investment Trust Company, a Delaware
business trust, the DFA Group Trust or the DFA Participation Group Trust,
(collectively the "Trusts") investment vehicles for qualified employee
benefit plans, all of which Dimensional serves as investment manager.
Dimensional has sole voting power with respect to 34,400 shares and persons
who are officers of Dimensional also serve as officers of the Fund and
Trusts and in such capacity such persons vote the remaining 24,700 shares.
Dimensional disclaims beneficial ownership of all such shares.
(5) The address of Arthur N. Abbey is 212 East 39th Street, New York, N.Y.
10016. Based upon a copy of schedule 13D dated October 8, 1996 and filed
with the Securities and Exchange Commission. Mr. Abbey has sole voting
power.
3
<PAGE>
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
================================================================================
SECURITIES OWNED
BY MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of February 28, 1997, by each
director of the Company, the executive officers of the Company on such date and
the executive officers and directors as a group. Except as set forth in the
footnotes to this table, the shareholders have sole voting and investment power
over such shares.
<TABLE>
<CAPTION>
Amount
Beneficially Percent of
Name of Beneficial Owner Owned Class
----------------------- ---------- ---------
<S> <C> <C>
Joseph J. Saker(1)(2)................................................. 346,376 31.0
Richard J. Saker(1)(2)................................................ 78,539 7.0
Albert A. Zager(1).................................................... 1,500 *
Charles T. Parton(1).................................................. 2,200 *
Michael Shapiro(1)(3)................................................. 2,000 *
Emory A. Altobelli(1)................................................. 25 *
Carl L. Montanaro(1).................................................. 15 *
Robert V. Spires(1) 1,000 *
Joseph C. Troilo(1)(4) 1,652 *
Directors and Executive Officers as a group (9 persons) (2)(3)(4)(5).. 433,307 38.7
</TABLE>
(*) Less than one percent.
(1) The address of the foregoing person is c/o Foodarama Supermarkets, Inc.,
922 Highway 33, Building 6, Suite 1, Freehold, New Jersey 07728.
(2) Includes 10,428 shares held by his wife and 36,648 shares willed to him by
Mary Saker. Does not include an aggregate of 136,967 shares owned by
Richard J. Saker and the other children of Joseph J. Saker in their own
names, of which Mr. Joseph J. Saker disclaims beneficial ownership.
(3) Owned jointly with Mr. Shapiro's wife.
(4) Does not include an aggregate of 250 shares held by Mr. Troilo's wife and
son, of which shares he disclaims beneficial ownership.
(5) Of the 433,307 shares, 428,615 are owned by the directors of the Company.
Joseph J. Saker has obtained loans in connection with personal investments and
other obligations and has pledged 227,500 shares of the Company's Common Stock,
beneficially owned by him, to secure such loans. All of such loans were made for
varying terms and interest rates by the respective lenders pursuant to routine
promissory notes and agreements, under which the only material event of default
consists of nonpayment of principal or interest when due.
The Company's Revolving Credit and Term Loan Agreement (the "Loan Agreement"),
provides that an event of default shall occur if Messrs. Joseph J. Saker and
Richard J.Saker together, do not own, beneficially and all voting rights with
respect to at least 35% of all of the issued and outstanding capital Common
Stock of the Company.
On February 16, 1993, the Company sold to Wakefern Food Corporation ("Wakefern")
136,000 shares of 8% Cumulative Convertible Preferred Stock (the "Preferred
Stock") par value of $12.50 per share for a total of $1,700,000. The Preferred
Stock, which is non-voting, is redeemable at any time in whole or in part at its
par value plus accrued and unpaid dividends, and must be redeemed at such price
by June 8, 1999 or earlier in the event of a "change of control" as defined or
other specified extraordinary events. The dividend rate of the Preferred Stock
increases at the rate of 2% per annum beginning in March, 1997. Unpaid dividends
are cumulative and compound from the date of issuance of the Preferred Stock,
and no dividends may be paid on the Common Stock unless the Registrant is
current in payment of dividends on the Preferred Stock. The Company has paid the
quarterly dividends which have accrued on the Preferred Stock since its issuance
through the quarter ending January 31, 1997. The Preferred Stock is convertible
at any time after March 31, 1997 into shares of the Common Stock of the Company,
at the then market value of such Common Stock, at a conversion value of $12.50
per share of Preferred Stock, with the proviso that no more than 1,381,850
shares (representing the total of the Company's unissued and treasury shares)
may be issued on conversion of all of the Preferred Stock. Based on a market
price of the Company's Common Stock as of February 21, 1997, the Preferred Stock
was convertible into a total of 110,569 shares. Although there can be no
assurance, the Company intends to redeem the Preferred Stock prior to the date
on which it becomes convertible. The agreement pursuant to which the Preferred
Stock was sold to Wakefern provides that Messrs. Joseph J. Saker and Richard J.
Saker, each a
4
<PAGE>
director and executive officer of the Company, both have an option at any time
before an applicable conversion date to purchase all, but not less than all, of
the then outstanding shares of Preferred Stock at the par value thereof plus
accrued and unpaid dividends. Messrs. Joseph J. Saker and Richard J. Saker have
agreed with the Company that they will not exercise such right except with the
approval of the Board of Directors of the Company and will not convert any
shares of the Preferred Stock so acquired into Common Stock except with the
approval of a majority of the independent directors of the Company. The Company
knows of no other contractual arrangements which may at a subsequent date result
in a change in control of the Company.
================================================================================
NOMINEES AS
DIRECTORS
OF THE COMPANY
It is intended that the shares of the Company's Common Stock represented by
proxies solicited hereby will be voted for the four nominees listed below. If
for any reason any of the said nominees should be unable or unwilling to serve,
which is not now anticipated, the proxies will be voted for a substitute nominee
who will be designated by the Board of Directors. The Directors will be elected
to hold office until the next annual meeting and until their respective
successors are duly elected and qualified.
<TABLE>
<CAPTION>
Year First
Elected a
Name and Age Principal Occupation Director
------------- ------------------ --------
<S> <C> <C>
Joseph J. Saker (68)............................. Chairman of the Board and 1958
President of the Company
Richard J. Saker (45)............................ Executive Vice President - 1987
Operations and Secretary
of the Company
Charles T. Parton (55)........................... Executive Vice President 1995
and Treasurer - The Parton
Corporation
Albert A. Zager, Esquire (48).................... Partner - Carton, Witt, 1995
Arvanitis & Bariscillo,
Attorneys
</TABLE>
Mr. Joseph J. Saker has been President of the Company since its incorporation in
1958 and Chairman since 1971. In addition to his responsibilities with the
Company, he serves on the Board of Governors of the Food Marketing Educational
Foundation of St. Joseph's University (Philadelphia); is a member of the Board
of Directors of Wakefern Food Corporation, and is active in other community
affairs.
Mr. Richard J. Saker, a graduate of St. Joseph's University, has been employed
by the Company since 1969, and has served as Senior Vice President - Operations
from 1984 until 1995 at which time he assumed the position of Executive Vice
President of Operations. He is the son of Joseph J. Saker.
Mr. Parton has been a financial executive, consultant and Certified Financial
Planner for the last five years. He is the Executive Director of Jersey Shore
Medical Center Foundation. He is also a Director of Kuehne Chemical Co., Inc.
(chlorine and caustic soda products), and a Director of Concorde Science &
Technology, Inc., import brokers.
Mr. Zager has been a member of Carton, Witt, Arvanitis & Bariscillo since 1977.
He is President of the Board of Directors of the Center for Holocaust Studies of
Brookdale College and General Counsel for Jersey Shore Medical Center.
5
<PAGE>
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
================================================================================
DIRECTORS MEETINGS
AND COMMITTEES
The Company held seven meetings of its Board of Directors during the fiscal year
ended November 2, 1996.
The Board of Directors of the Company has appointed Executive, Audit and Stock
Option Committees. The Board of Directors performs the functions of a board
compensation committee. The Executive Committee, which consists of Messrs.
Joseph J. Saker and Richard J. Saker, generally holds weekly meetings. The Audit
and Stock Option Committees both consist of Messrs. Parton and Zager. The Audit
Committee is responsible for recommending a firm of independent auditors for the
Company each year and reviews the results of the annual audit with the auditors.
During the fiscal year ended November 2, 1996, the Audit Committee held two
meetings and there were no meetings of the Stock Option Committee.
================================================================================
EXECUTIVE OFFICERS
OF THE COMPANY
The executive officers of the Company are as set forth below:
<TABLE>
<CAPTION>
Name Age Capacities in Which Served
----- --- --------------------------
<S> <C> <C>
Joseph J. Saker (1)........................... 68 Chairman of the Board and President
Richard J. Saker (1).......................... 45 Executive Vice President - Operations,
and Secretary
Michael Shapiro (2)........................... 55 Senior Vice President, Chief Financial
Officer and Treasurer
Emory A. Altobelli (3)........................ 56 Senior Vice President - Corporate
Subsidiaries and Services
Carl L. Montanaro (4)......................... 55 Senior Vice President - Sales and
Merchandising
Robert V. Spires (5).......................... 43 Senior Vice President - Human
Resources and Labor Relations
Joseph C. Troilo (6).......................... 63 Senior Vice President - Financial
Administration, Assistant Secretary
and Assistant Treasurer
</TABLE>
- ---------------
(1) See Nominees as Directors of the Company.
(2) Mr. Shapiro joined the Company on August 15, 1994 as Senior Vice President,
Chief Financial Officer and Treasurer. Prior to that he was Vice President,
Finance and Operations of Apex One, Inc. from January 1992 to April 1994.
From August 1989 to January 1992 he was Vice President Finance of Fidelity
Land Development Corporation.
(3) Mr. Altobelli has served as Senior Vice President - Corporate Subsidiaries
and Services since June 21, 1995. Prior to such date he served as Senior
Vice President - Administration since June 1990.
(4) Mr. Montanaro was promoted to Senior Vice President on June 21, 1995. From
March 1988 to such date he served as Vice President of Sales and
Merchandising.
(5) Mr. Spires was promoted to Senior Vice President on June 21, 1995. From
August 1991 to such date, he served as Vice President of Human Resources
and Labor Relations.
(6) Mr. Troilo has served as Senior Vice President - Financial Administration
since August 1994. From 1974 to such date, he served as Senior Vice
President - Finance.
6
<PAGE>
================================================================================
EXECUTIVE
COMPENSATION
The aggregate compensation paid or accrued by the Company during the last three
fiscal years ended October 29, 1994, October 28, 1995 and November 2, 1996 to
the Chief Executive Officer of the Company and to the four most highly
compensated executive officers (other than the Chief Executive Officer) whose
compensation in salary and bonus exceeded $100,000 in the last fiscal year is
set forth in the following table.
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Annual Compensation All Other
------------------
Name and Principal Position Year Salary Bonuse Compensation
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Joseph J. Saker 1996 $275,090 $ 54,400(2)
President and Chief Executive Officer 1995 224,900 $45,000(1) 54,500(2)
1994 159,893 25,800(2)
Richard J. Saker 1996 254,808 159,200(2)
Executive Vice President, 1995 227,453 40,000(1) 176,000(2)
Chief Operating Officer and Secretary 1994 137,850 103,400(2)
Michael Shapiro 1996 161,066 --
Senior Vice President, Chief Financial Officer 1995 144,977 --
and Treasurer 1994 30,672 --
Carl L. Montanaro 1996 128,680 400(2)
Senior Vice President - 1995 117,388 1,400(2)
Sales and Merchandising 1994 96,986 17,100(2)
Emory A. Altobelli............................. 1996 122,157 21,000(2)
Senior Vice President - 1995 115,328 21,600(2)
Corporate Subsidiaries and Services 1994 109,836 34,500(2)
</TABLE>
(1) Bonuses of $45,000 and $40,000 were paid to Joseph J. Saker and Richard J.
Saker, respectively, pursuant to a fiscal 1995 bonus program adopted by the
Board of Directors of the Company on May 30, 1995 for the Company's
President and Chief Executive Officer and Executive Vice President and
Chief Operating Officer (the "Bonus Program"). Under the Bonus Program,
Joseph J. Saker and Richard J. Saker were awarded $22,500 and $20,000,
respectively, contemporaneously with the Board's adoption of the Bonus
Program in recognition of their efforts in connection with the Company's
refinancing of its outstanding institutional indebtedness in February,
1995. The remaining bonus amounts of $22,500 and $20,000 were earned based
upon the achievement of certain corporate goals specified in the Bonus
Program.
(2) The amount set forth in this column represents compensation accrued for,
but not paid to, the applicable named executive officer under the Company's
Deferred Compensation Plan, which was approved by the Board of Directors on
January 17, 1989. This Plan covers six executive officers and other key
employees and is intended to supplement the Company's Pension Plan. Amounts
payable under the Deferred Compensation Plan are not payable until the
earlier of the death or retirement of the covered employee. The Company
anticipates paying for benefits as they become due out of current operating
income, but expects over the long term that such payments will be recouped
out of proceeds of life insurance purchased by the Company on the lives of
the Deferred Compensation Plan's beneficiaries. The current annual premiums
for all employees covered by this plan are approximately $55,000.
Amounts payable at retirement under the Deferred Compensation Plan range
from 40% to 50% of the employee's highest average salary, together with
bonuses over a five-year period less primary Social Security and pension
plan benefits, and are payable until death, but for a minimum of 120
months.
The Deferred Compensation Plan provides for a pre-retirement death benefit
of one-half the amount payable upon retirement, actuarially computed,
payable to the employee's beneficiary over 120 months. If the employee dies
after retirement, such employee's beneficiary will receive the same benefit
the employee would have received if the employee had lived for 120 months.
7
<PAGE>
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
================================================================================
PENSION PLAN
The Company maintains a defined benefit pension plan for eligible employees.
Full vesting occurs after five years of service. Benefits upon retirement prior
to age 65 are reduced actuarially. Benefits under the plan are determined by a
formula equal to .6% times the highest five consecutive year average of the
regular or base salary of a participant together with bonuses and other
compensation times the total years of service. The following sets forth the
estimated annual benefits payable upon normal retirement at age 65. The plan
also provides for lump sum payments.
<TABLE>
<CAPTION>
Years of Service
--------------------------------------------------
Remuneration 15 20 25 30 35
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$100,000................................... $ 7,500 $10,000 $12,500 $15,000 $17,500
125,000................................... 9,375 12,500 15,625 18,750 21,875
150,000................................... 11,250 15,000 18,750 22,500 26,250
175,000................................... 13,125 17,500 21,875 26,250 30,625
200,000................................... 15,000 20,000 25,000 30,000 35,000
225,000................................... 16,875 22,500 28,125 33,750 39,375
250,000................................... 18,750 25,000 31,250 37,500 43,750
275,000................................... 20,625 27,500 34,375 41,250 48,125
300,000................................... 22,500 30,000 37,500 45,000 52,500
</TABLE>
For purposes of vesting benefits under the Pension Plan, the Company has
credited Joseph J. Saker with 38 years of service; Richard J. Saker with 22
years of service; Michael Shapiro with 2 years of service; Emory A. Altobelli
with 13 years of service; and Carl L. Montanaro with 34 years of service.
Mr. Joseph J. Saker received a lump sum distribution of $403,878 in January
1995, representing the amount of his vested interest in the Pension Plan.
================================================================================
DIRECTORS COMPENSATION
All non-employee directors receive, in addition to reimbursement for their
reasonable expenses associated with attendance at Board Meetings, an annual
retainer fee of $10,000 payable quarterly in advance, and a participation fee of
$1,000 for each meeting of the Board attended. All non-employee members of the
Audit Committee receive, in addition to reimbursement for their reasonable
expenses associated with attendance at Audit Committee Meetings, a fee of $1,000
for each Audit Committee meeting attended if held on a day other than a day on
which a Board meeting is held. All non-employee members of the Stock Option
Committee receive, in addition to reimbursement for their reasonable expenses
associated with attendance at Stock Option Committee Meetings, a fee of $500 for
each Stock Option Committee meeting attended if held on a day other than a day
on which a Board Meeting is held.
The Company paid a total of $27,750 during the fiscal year ended November 2,
1996 to directors who are not employees of the Company.
8
<PAGE>
================================================================================
COMPLIANCE WITH
REPORTING
REQUIREMENTS
The Company believes that, during the fiscal year ended November 2, 1996, all
filing requirements under Section 16(a) of the Securities Exchange Act of 1934,
as amended, applicable to its officers, directors and greater than ten percent
beneficial owners were complied with on a timely basis.
================================================================================
COMPENSATION
COMMITTEE
INTERLOCKS AND
INSIDER PARTICIPATION
IN COMPENSATION
DECISIONS
For the fiscal year ended November 2, 1996, the Board of Directors performed the
functions of a board compensation committee. Executive Officers who served on
the Board of Directors were Mr. Joseph J. Saker, Chairman of the Board,
President and Chief Executive Officer, and Mr. Richard J. Saker, Executive Vice
President, Chief Operating Officer, and Secretary.
================================================================================
COMPENSATION
REPORT OF THE
BOARD OF DIRECTORS
The Board of Directors has acted as a Compensation Committee of the Board and
has acted upon the compensation paid to the Company's Chairman, President and
Chief Executive Officer and its Executive Vice President and Chief Operating
Officer. After evaluation of several factors, including compensation paid for
like positions in comparable companies and the minimal level of salary increases
for these positions over several years, the independent members of the Board of
Directors approved an increase in the salary paid to each of Mr. Joseph J.
Saker, President and Chief Executive Officer of the Company, and Mr. Richard J.
Saker, Executive Vice President and Chief Operating Officer of the Company, in
fiscal 1996. See "Executive Compensation--Summary Compensation Table." The
independent members of the Board of Directors believe that the compensation paid
to these executive officers was below that for like positions in comparable
companies. No bonuses were paid to the Company's executive officers for fiscal
1996.
9
<PAGE>
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
================================================================================
PERFORMANCE
ANALYSIS
Set forth below is a line graph comparing the cumulative total return of the
Company, the AMEX Market Value Index and the AMEX Market Value Retail Index for
the five years commencing November 2, 1991 and ended November 2, 1996.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL]
AMEX AMEX
Foodarama Market Retail
--------- ------ ------
1991 100 100 100
1992 92 99 82
1993 90 124 105
1994 70 118 96
1995 70 135 107
1996 83 147 111
10
<PAGE>
================================================================================
CERTAIN
TRANSACTIONS
(a) Certain Business Relationships and Related Party Transactions
As required by the By-Laws of Wakefern, a retailer-owned food distribution
corporation which provides purchasing, warehousing and distribution services to
the Company as well as other retail supermarket chains, the obligations owed by
the Company to Wakefern are personally guaranteed by Joseph J. Saker and Richard
J. Saker. As of February 22, 1997 the Company was indebted to Wakefern in the
amount of approximately $18,258,000 for current charges in the ordinary course
of business. Wakefern presently requires each of its shareholders to invest up
to $450,000 in Wakefern's non-voting capital stock for each store operated by
it, computed in accordance with a formula based on the volume of such store's
purchases from Wakefern.
As of November 2, 1996 the Company had a 13% interest in Wakefern of $8,427,000.
As a shareholder member of Wakefern, the Company earns a share of an annual
Wakefern patronage dividend. The dividend is based on the distribution of
operating profits on a pro rata basis in proportion to the dollar volume of
business transacted by each member with Wakefern during each fiscal year.
As of November 2, 1996, the Company was indebted in connection with an
investment in Wakefern. The debt of $809,000 was non-interest bearing and
payable in scheduled installments over a period of up to six years. Additional
information with respect to the Company's relationship with Wakefern is
contained in the Company's 1996 Annual Report on Form 10-K and in the notes to
the Company's 1996 financial statements.
The Company also has an investment in Insure-Rite, Ltd., another company
affiliated with Wakefern, which was $788,000 at November 2, 1996 and October 28,
1995. Insure-Rite, Ltd. provides the Company with its general liability and
property insurance coverage. The Company paid $2,738,000 for such insurance
coverage in fiscal 1996 and believes that such amount is comparable to the
amount that would be charged by a similarly situated unaffiliated general
liability and property insurer.
The Company leases from Joseph J. Saker, the President of the Company, and his
wife, doing business as Saker Enterprises, a 57,000 square foot supermarket in
Freehold, New Jersey, under a lease terminating in 2003. The Company also leases
from Saker Enterprises a 5,200 square foot garden center building and 5,000
square feet of yard area on a month to month basis and 9,000 square feet of
space for its liquor store under a lease expiring December 31, 2003, both of
which are located in the same shopping center as the supermarket. During the
fiscal year ended November 2, 1996, aggregate amounts for rent (including taxes
and insurance) of $600,000, $42,000 and $145,000 were paid by the Company to
Saker Enterprises for the supermarket, garden center and liquor store,
respectively.
The Company believes that the terms of the foregoing transactions are comparable
to those available for non-affiliated persons in the respective localities.
See "Securities Owned by Management" for information with respect to the sale of
Preferred Stock to Wakefern Food Corporation and certain options granted to
Joseph J. Saker and Richard J. Saker with respect thereto.
(b) Indebtedness of Management
Joseph J. Saker, President of the Company, and doing business as Saker
Enterprises, is indebted to the Company for advances made for construction on
the South Freehold shopping center and other advances, which in total aggregated
$737,293 as of November 2, 1996 including accrued interest at 9% per annum. A
portion of this outstanding indebtedness was prepaid by Mr. Saker, and as of
February 1, 1997, the balance has been reduced to $247,255. The remaining
indebtedness is evidenced by notes payable in equal quarterly installments of
$25,232, which payments include interest at nine percent per annum.
11
<PAGE>
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
================================================================================
INDEPENDENT
CERTIFIED PUBLIC
ACCOUNTANTS
The firm of Amper, Politziner & Mattia, Independent Certified Public
Accountants, was retained as auditors to the Company for the year ended November
2, 1996, as recommended by the Audit Committee. The selection of the independent
public accountants for the Company is made by the Board of Directors. A
representative of Amper, Politziner & Mattia will be present at the meeting to
make a statement, if desired, and to respond to appropriate questions.
================================================================================
ANNUAL REPORT
The Company's Annual Report to shareholders for the fiscal year ended November
2, 1996, including financial statements, which Annual Report is not part of this
proxy solicitation material, is being mailed to shareholders with the proxy
solicitation. On written request, the Company will provide without charge to
each record or beneficial holder of the Company's Common Stock, a copy of the
Company's Annual Report on Form 10-K as filed with the Securities and Exchange
Commission for the fiscal year ended November 2, 1996. Requests should be
addressed to Mr. Joseph C. Troilo, Senior Vice President-Financial
Administration, Foodarama Supermarkets, Inc., 922 Highway 33, Building 6, Suite
1, Freehold, New Jersey 07728.
================================================================================
OTHER BUSINESS
Management is not aware at this time of any other matters to be presented for
action. If however, any other matters properly come before the Annual Meeting,
unless otherwise directed, the persons named on the proxy intend to vote in
accordance with their judgment on the matters presented.
================================================================================
PROXY
SOLICITATION
The cost of solicitation of proxies will be borne by the Company. Such
solicitation will be made by mail and may also be made by the Company's
directors, officers, or regular employees personally or by telephone or
telegraph. Brokerage houses, nominees, fiduciaries and other custodians will be
requested to forward soliciting materials to beneficial owners of shares and
will be reimbursed by the Company for their reasonable expenses. The Company
does not expect to pay any compensation to third parties for the solicitation of
proxies, unless such solicitation has been requested by the Company.
================================================================================
SHAREHOLDER
PROPOSALS
A shareholder of the Company who wishes to present a proposal for action at the
Company's 1998 annual meeting of shareholders must submit such proposal to the
Company and such proposal must be received by the Company by November 14, 1997.
By Order of the Board of Directors,
/s/Richard J. Saker
-------------------
Howell, New Jersey Richard J. Saker,
March 14, 1997 Secretary
12
<PAGE>
================================================================================
[LOGO] SHOP RITE
FOODARAMA SUPERMARKETS, INC.
Annual Report 1996
All statements, other than statements of historical fact, included in this
Annual Report To Shareholders (the "Annual Report"), including without
limitation the statements under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" are, or may be deemed to be,
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such
forward-looking statements involve assumptions, known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements contained in this Annual Report. Such potential risks
and uncertainties, include without limitation, competitive pressures from other
supermarket operators and warehouse club stores, economic conditions in the
Company's primary markets, consumer spending patterns, availability of capital,
cost of labor, cost of goods sold, and other risk factors detailed herein and in
other of the Company's Securities and Exchange Commission filings. The
forward-looking statements are made as of the date of this Annual Report and the
Company assumes no obligation to update the forward-looking statements or to
update the reasons actual results could differ from those projected in such
forward-looking statements.
13
<PAGE>
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
================================================================================
THE COMPANY
Operating 20 supermarkets in central New Jersey, Foodarama Supermarkets, Inc. is
a member of the ShopRite group. In addition, the Company operates two liquor
stores and two garden centers. The Company also operates meat and bakery
commissaries.
Foodarama stores offer shoppers a wide assortment of food and non-food items, in
modern, attractive stores with ample parking immediately adjacent. Chief
products sold include groceries, meat, fish, poultry, produce, dairy products,
fresh fruits and vegetables, bakery products, frozen foods, delicatessen,
prepared foods and appetizer goods. Non-foods include health and beauty aids and
housewares. Stores stock nationally advertised brands as well as products sold
under the ShopRite label.
================================================================================
ROSTER OF
STORES
Aberdeen (Matawan) Edison (Oak Tree Road) Middletown
Belmar Franklin Montgomery
Bricktown Freehold Neptune
Brielle Hazlet (Keyport) Piscataway
East Brunswick Hightstown Sayreville
Edison Lakewood West Long Branch
Marlboro Woodbridge
================================================================================
STOCK PRICE
AND DIVIDEND
INFORMATION
The Common Stock of Foodarama Supermarkets, Inc. is traded on the American Stock
Exchange under the ticket symbol "FSM." High and low stock prices were as
follows:
<TABLE>
Fiscal Quarter Ended High Low
- -------------------- ---- ---
<S> <C> <C>
January 28, 1995.................................. 12 10
April 29, 1995.................................... 10-7/8 10
July 29, 1995..................................... 11 9-3/4
October 28, 1995.................................. 13 10-3/4
January 27, 1996.................................. 13-5/8 10
April 27, 1996.................................... 18-1/4 13-3/8
July 27, 1996..................................... 21-1/2 17
November 2, 1996.................................. 17-1/2 14-1/4
</TABLE>
No dividends have been declared or paid since October 1979.
================================================================================
5 YEAR
SUMMARY OF
OPERATIONS
<TABLE>
<CAPTION>
Fiscal Years Ended
---------------------------------------------------------------------------
November 2, October 28, October 29, October 30, October 31,
1996 1995 1994 1993 1992
---------------------------------------------------------------------------
(000's omitted except per share data)
<S> <C> <C> <C> <C> <C>
Sales ................... $ 601,143 $ 586,477 $ 611,074 $ 674,675 $ 700,578
Cost of sales ........... 449,077 438,222 462,407 516,095 526,351
----------- ----------- ----------- ----------- -----------
Gross profit ............ 152,066 148,255 148,667 158,580 174,227
Operating expenses ...... 146,992 142,849 145,244 166,158 166,123
Interest, net ........... 3,339 4,146 4,666 6,479 6,876
Gain on sale of stores .. -- (474) (549) (11,199) --
Extraordinary item ...... -- 1,848 -- -- --
Change in accounting .... -- 236 -- -- --
----------- ----------- ----------- ----------- -----------
150,331 148,605 149,361 161,438 172,999
----------- ----------- ----------- ----------- -----------
Income (loss) before
income taxes .......... 1,735 (350) (694) (2,858) 1,228
Income taxes (provision)
benefit ............... (339) 159 181 893 (516)
----------- ----------- ----------- ----------- -----------
Net earnings(loss) income $ 1,396 $ (191) $ (513) $ (1,965) $ 712
=========== =========== =========== =========== ===========
Earnings (loss) per
common share .......... $ 1.13 $ (.29) $ (.58) $ (1.84) $ .64
=========== =========== =========== =========== ===========
Weighted average number
of common shares
outstanding ........... 1,118,150 1,118,150 1,118,150 1,118,150 1,118,150
=========== =========== =========== =========== ===========
</TABLE>
14
<PAGE>
ANNUAL REPORT 1996
FOODARAMA SUPERMARKETS, INC. AND SUBSIDIARIES
================================================================================
OFFICERS AND
DIRECTORS
DIRECTORS
+ Joseph J. Saker
Chairman of the Board and President
Foodarama Supermarkets, Inc.
+ Richard J. Saker
Executive Vice President
Foodarama Supermarkets, Inc.
* Albert A. Zager
Partner
Carton, Witt, Arvanitis and Bariscillo, Attorneys
* Charles T. Parton
Executive Vice President,
The Parton Corporation
* Member, Audit and Stock Option Committees
+ Member, Executive Committee
EXECUTIVE OFFICERS
Joseph J. Saker
Chairman of the Board and President
Richard J. Saker
Executive Vice President Operations,
and Secretary
Michael Shapiro
Senior Vice President,
Chief Financial Officer and Treasurer
Emory A. Altobelli
Senior Vice President,
Corporate Subsidiaries and Services
Carl L. Montanaro
Senior Vice President,
Sales and Merchandising
Robert V. Spires
Senior Vice President,
Human Resources and Labor Relations
Joseph C. Troilo
Senior Vice President,
Financial Administration,
Assistant Secretary and
Assistant Treasurer
GENERAL COUNSEL
Giordano, Halleran & Ciesla, PC
125 Half Mile Road
Middletown, N.J. 07748
AUDITORS
Amper, Politziner & Mattia
2015 Lincoln Highway
P.O. Box 988
Edison, N.J. 08818-0988
TRANSFER AGENT AND REGISTRAR
American Stock Transfer Company
40 Wall Street
New York, N.Y. 10005
CORPORATE OFFICES
922 Highway 33
Building 6, Suite 1
Howell, New Jersey 07731
(908) 462-4700
FORM 10-K REPORT
A copy of the Company's Form 10-K Annual Report, as filed with the Securities
and Exchange Commission, is available to shareholders without charge upon
written request to Mr. Joseph C. Troilo, Senior Vice President, Foodarama
Supermarkets, Inc., 922 Highway 33, Building 6, Suite 1, Freehold, New Jersey
07728.
15
