<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
MARSH SUPERMARKETS INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
P. LAWRENCE BUTT
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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> 2
[MARSH LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 2, 1994
TO THE SHAREHOLDERS OF
MARSH SUPERMARKETS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Marsh
Supermarkets, Inc. (the "Corporation") will be held at the principal executive
offices of the Corporation, 9800 Crosspoint Boulevard, Indianapolis, Indiana, on
Tuesday, August 2, 1994, at 10 o'clock A.M. (Eastern Standard Time), for the
following purposes:
1. To elect three directors for terms of three years each and until
their successors are duly elected and qualified; and
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on Monday, June 6,
1994, as the record date for determining the shareholders entitled to notice of,
and to vote at, the meeting and at any adjournment thereof.
You are cordially invited to attend this meeting. Whether or not you expect
to attend the meeting, we encourage you to vote your shares by dating and
signing the enclosed proxy and returning it as promptly as possible in the
accompanying postage guaranteed envelope.
By order of the Board of Directors.
MARSH SUPERMARKETS, INC.
By: /s/ P. Lawrence Butt
---------------------------
P. Lawrence Butt, Secretary
Indianapolis, Indiana
June 23, 1994
<PAGE> 3
MARSH SUPERMARKETS, INC.
9800 CROSSPOINT BOULEVARD
INDIANAPOLIS, INDIANA 46256-3350
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 2, 1994
This Proxy Statement and the accompanying proxy are being mailed to
shareholders of Marsh Supermarkets, Inc. (the "Corporation") in connection with
the solicitation of the enclosed proxy by and on behalf of the Board of
Directors of the Corporation for use at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held pursuant to the accompanying Notice of Annual
Meeting, and at any adjournment of such meeting. This Proxy Statement and the
accompanying proxy are being first mailed to shareholders on or about June 23,
1994.
VOTING SECURITIES
At June 1, 1994, the Corporation had outstanding 3,932,598 shares of Class
A Common Stock and 4,509,404 shares of Class B Common Stock. Each share of Class
A Common Stock entitles its owner to one vote upon each matter to come before
the Annual Meeting. Shares of Class B Common Stock are non-voting with respect
to the matters before the Annual Meeting. Only Class A Common Stock shareholders
of record at the close of business on Monday, June 6, 1994, will be entitled to
vote at the Annual Meeting and at any adjournment thereof.
PROXY, VOTING AND METHOD OF COUNTING VOTES
When the enclosed proxy is properly executed and returned, the shares it
represents will be voted at the Annual Meeting and at any adjournment thereof as
directed by the shareholder executing the proxy, unless it is earlier revoked.
If no directions are given on the proxy with respect to any particular matter to
be acted upon at the Annual Meeting, the shares represented by the proxy will be
voted in favor of such matter. Shares represented by proxies which are marked
"abstain" with respect to any matter before the Annual Meeting will be
considered only for the purpose of determining the presence of a quorum at the
meeting, but will neither be counted nor have any effect on the vote with
respect to such matter. Similarly, shares beneficially owned by persons who do
not provide voting instructions on a matter before the Annual Meeting with
respect to which a broker is prohibited from exercising discretionary authority
will be deemed present at the meeting for quorum purposes, but will not be
included in the vote total with respect to such matter. Brokers are not
prohibited from exercising discretionary authority with respect to the election
of directors. Any shareholder executing and delivering a proxy has the right to
revoke it at any time before the authority granted thereby is exercised by the
due execution of another proxy bearing a later date or by written notice to the
Secretary of the Corporation. Shareholders who are present in person at the
Annual Meeting may revoke their proxy and vote in person if they so desire.
<PAGE> 4
SOLICITATION OF PROXIES
This solicitation of proxies is being made by the Board of Directors of the
Corporation and the expenses thereof will be borne by the Corporation. The
principal solicitation is being made by mail; however, additional solicitations
may be made by telephone, telegraph, telecopier or personal interview by
officers of the Corporation who will not be additionally compensated therefor,
and by D.F. King & Co., Inc., which has been engaged to distribute proxies and
solicit votes for a fee estimated not to exceed $3,000, plus reimbursement of
out-of-pocket expenses. The Corporation expects to reimburse brokerage houses,
banks and other fiduciaries for reasonable expenses of forwarding proxy material
to beneficial owners.
ELECTION OF DIRECTORS
The Corporation's Board of Directors consists of nine members, each of whom
is elected to serve for a term of three years. Three directors will be elected
at the Annual Meeting to serve until the Annual Shareholders Meeting in 1997 and
until their successors are duly elected and qualified. Proxies representing
shares of Class A Common Stock held on the record date which are returned duly
executed will be voted, unless otherwise specified, in favor of the three
nominees for the Board of Directors named below. All such nominees are members
of the present Board of Directors and were elected as directors at the 1991
Annual Shareholders Meeting. All nominees have consented to serve if elected,
but should any nominees be unavailable to serve (which event is not
anticipated), the persons named in the proxy intend to vote for such substitute
nominee as the Board of Directors may recommend. The nominees shall be elected
by a plurality of the votes cast in the election by the holders of the Class A
Common Stock represented and entitled to vote at the Annual Meeting, assuming
the existence of a quorum.
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<PAGE> 5
Biographical and other information for each nominee and for each incumbent
director is set forth below:
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION DIRECTOR
AND BUSINESS EXPERIENCE SINCE
---------------------------------------------------------------------------- --------
<S> <C>
NOMINEES FOR DIRECTOR TO SERVE UNTIL THE 1997 ANNUAL MEETING:
DON E. MARSH, 56............................................................ 1959
Chairman of the Board, President and Chief Executive Officer of the
Corporation; son of Garnet R. Marsh and brother of C. Alan Marsh and
William L. Marsh; director, Indiana Energy Incorporated, Indianapolis,
Indiana (gas utility company); director, National City Bank, Indiana. See
Notes (1), (2) and (4).
WILLIAM L. MARSH, 50........................................................ 1991
Vice President -- General Manager, Property Management, of the
Corporation; son of Garnet R. Marsh and brother of Don E. Marsh and C.
Alan Marsh.
STEPHEN M. HUSE, 51......................................................... 1985
President and Chief Executive Officer, Huse Food Group, Incorporated,
Bloomington, Indiana (a retail restaurant management company); director,
Society National Bank, Central Indiana District, Indianapolis, Indiana.
See Notes (1), (2) and (3).
INCUMBENT DIRECTORS PREVIOUSLY ELECTED TO SERVE UNTIL THE 1995 ANNUAL MEETING:
JACK E. BUCKLES, 67......................................................... 1972
Partner, Beasley Gilkison Retherford Buckles & Clark, Attorneys at Law,
Muncie, Indiana. See Note (3).
K. CLAY SMITH, 56........................................................... 1989
President and Chief Executive Officer, Underwood Machinery Transport,
Inc., Indianapolis, Indiana (a heavy equipment transport company);
director, Bindley-Western Industries, Inc., Indianapolis, Indiana (a
wholesale pharmaceutical distributor). See Notes (1) and (2).
GARNET R. MARSH, 83......................................................... 1977
Widow of Ermal W. Marsh, founder of the Corporation; mother of Don E.
Marsh, C. Alan Marsh and William L. Marsh.
INCUMBENT DIRECTORS PREVIOUSLY ELECTED TO SERVE UNTIL THE 1996 ANNUAL MEETING:
CHARLES R. CLARK, 60........................................................ 1978
Partner, Beasley Gilkison Retherford Buckles & Clark, Attorneys at Law,
Muncie, Indiana. See Note (1).
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NAME, AGE, PRINCIPAL OCCUPATION DIRECTOR
AND BUSINESS EXPERIENCE SINCE
---------------------------------------------------------------------------- --------
<S> <C>
C. ALAN MARSH, 52........................................................... 1968
Vice Chairman of the Board and Senior Vice-President, Corporate Planning,
of the Corporation; son of Garnet R. Marsh and brother of Don E. Marsh and
William L. Marsh. See Note (1).
JAMES K. RISK, III, 52...................................................... 1986
President and Chief Executive Officer, Kirby Risk Supply Co., Inc.,
Lafayette, Indiana (a wholesale electrical equipment distributor);
director, Bindley-Western Industries, Inc., Indianapolis, Indiana (a
wholesale pharmaceutical distributor). See Note (3).
</TABLE>
- - ---------------
(1) Member of the Audit Committee.
(2) Member of the Executive Committee.
(3) Member of the Salary Committee.
(4) Since March 28, 1993, the largest aggregate amount of indebtedness
outstanding and owed by Don E. Marsh to the Corporation was $234,915, which
is the principal amount of, and accrued interest at the rate of 6% per
annum on, a loan which the Salary Committee authorized the Corporation to
make to Mr. Marsh as well as other optionees under the 1980 Marsh Stock
Plan in order to provide funds with which to exercise options granted under
such plan which would have expired on May 31, 1993. The loan is due May 28,
1995.
COMMITTEES OF THE BOARD
The Board of Directors has standing Executive, Audit and Salary committees,
membership in which is indicated in the preceding table, but does not have a
nominating committee. During the fiscal year ended April 2, 1994, the Board of
Directors held four meetings, the Audit Committee held two meetings and the
Salary Committee held three meetings. The Executive Committee did not hold any
formal meetings during the fiscal year. All directors, other than Garnet R.
Marsh, attended at least 75% of the aggregate of all Board meetings and
committee meetings of which they were members during the fiscal year.
The Executive Committee is empowered to exercise the authority over the
affairs of the Corporation during intervals between meetings of the Board of
Directors. The Audit Committee reviews matters involving the work of independent
auditors and is responsible for their selection, subject to the approval of the
Board of Directors.
The Salary Committee, composed entirely of directors who are not employees
of the Corporation, reviews and approves the compensation policies and actions
affecting officers, employment and severance arrangements, benefits awarded
under the Corporation's incentive plans, such as the Management Incentive Plan
and the 1991 Employee Stock Incentive Plan, and determines participation in the
Executive Life Insurance Plan and the Supplemental Retirement Plan.
COMPENSATION OF DIRECTORS
Each member of the Board of Directors who is not an employee of the
Corporation or any of its subsidiaries (an "Outside Director") received an
annual retainer of $20,000 during the fiscal year. The Chairman of each standing
committee of the Board of Directors who is an Outside Director also received an
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<PAGE> 7
additional fee of $5,000 for serving in that capacity. A director may elect to
have all or a portion of the foregoing fees deferred under a deferred
compensation plan offered by the Corporation.
Each Outside Director who was serving on the Board of Directors on August
4, 1992, or who is first elected to the Board of Directors thereafter, is
entitled to a one-time grant of 500 shares of restricted Class B Common Stock of
the Corporation under the 1992 Stock Option Plan for Outside Directors approved
by the shareholders at the 1992 Annual Shareholders Meeting. The 1992 Stock
Option Plan also provides for the granting of non-qualified stock options for
1,500 shares of Class B Common Stock upon each election of an Outside Director
to the Board of Directors during the term of the Plan, which expires in 2002.
A director who is not an Outside Director does not receive any fee for
serving as a director, Chairman of the Board, or Chairman of any standing
committee and is not eligible to receive grants of either restricted stock or
options under the 1992 Stock Option Plan for Outside Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. C. Alan Marsh owns 45% of the equity securities of Jorjess, Inc. which
supplied the Corporation with $112,697 of bakery products in the ordinary course
of business during fiscal year 1994. See succeeding paragraph for information
regarding other relationships and related transactions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Jack E. Buckles is a director of the Corporation and a partner in the
law firm of Beasley Gilkison Retherford Buckles & Clark which the Corporation
has retained and intends to continue to retain.
Mr. James K. Risk, III is a director of the Corporation and President and
Chief Executive Officer of Kirby Risk Supply Co., Inc., a wholesale electrical
equipment distributor from whom the Corporation purchased $297,784 of electrical
supplies in the ordinary course of business during fiscal year 1994.
5
<PAGE> 8
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
BENEFICIAL OWNERS
MANAGEMENT'S STOCK OWNERSHIP
The following table sets forth, as of June 1, 1994, certain information
regarding the beneficial ownership of the Corporation's Class A Common Stock and
Class B Common Stock by all directors and nominees, by the named executive
officers, and by all directors and executive officers as a group. Except as
otherwise indicated, each person has sole voting and investment power over the
shares of Class A Common Stock and the Class B Common Stock listed as
beneficially owned by such person.
<TABLE>
<CAPTION>
NUMBER AND NATURE OF PERCENT OF CLASS
BENEFICIAL OWNERSHIP OUTSTANDING(1)
--------------------- ---------------------
NAME CLASS A CLASS B CLASS A CLASS B
- - --------------------------------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C>
Jack E. Buckles.............................. 2,125 2,375(9)
Charles R. Clark............................. 375 1,000
Stephen M. Huse.............................. 589 874
C. Alan Marsh................................ 218,868(5) 231,882(5) 5.6% 5.1%
Don E. Marsh................................. 345,081(3) 346,294(3) 8.8% 7.7%
Garnet R. Marsh.............................. 285,912(2) 333,010(2) 7.3% 7.4%
William L. Marsh............................. 336,025(4) 314,330(4) 8.5% 7.0%
James K. Risk................................ 225 725
K. Clay Smith................................ 500 1,750(9)
Ronald R. Walicki............................ 26,289(7) 33,127(7)
David M. Redden.............................. 16,826(8) 21,353(8)
All directors and executive officers as a
group
(14 persons)............................... 768,492(6) 829,522(6) 19.5% 18.4%
</TABLE>
- - ---------------
(1) Percentages less than 1% of the outstanding shares of Class A Common Stock
and Class B Common Stock are not shown.
(2) Includes 267,993 shares owned by three trusts of which Garnet R. Marsh is
either the life tenant or income beneficiary. Don E. Marsh, C. Alan Marsh
and William L. Marsh each has a one-third remainder interest in each of the
foregoing trusts, subject to the life estate of Garnet R. Marsh in two of
the trusts, and share voting and investment powers with respect to 113,343
shares in one of such trusts with Garnet R. Marsh as co-trustees. William
L. Marsh is a co-trustee of one of the other trusts. Also includes options
to acquire 750 shares of Class B Common Stock which are currently
exercisable.
(3) Includes 5,466 shares of Class A Common Stock and 3,312 shares of Class B
Common Stock owned by members of immediate family, 9,878 shares of Class A
Common Stock and 1,140 shares of Class B Common Stock with respect to which
Don E. Marsh is trustee and 113,343 shares owned by one of the trusts
described in Note (2) above with respect to which Don E. Marsh is a
co-trustee. Also includes options to acquire 35,250 shares of Class A
Common Stock and 49,750 shares of Class B Common Stock which are currently
exercisable.
(4) Includes 959 shares of Class A Common Stock and 129 shares of Class B Common
Stock owned by members of immediate family and 253,743 shares owned by two
of the trusts described in Note (2) above, with respect to which William L.
Marsh is a co-trustee. Also includes options to acquire 11,725 shares of
Class A Common Stock and 16,525 shares of Class B Common Stock which are
currently exercisable.
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<PAGE> 9
(5) Includes 113,343 shares owned by one of the trusts described in Note (2)
above with respect to which C. Alan Marsh is a co-trustee. Also includes
options to acquire 20,525 shares of Class A Common Stock and 28,475 shares
of Class B Common Stock which are currently exercisable.
(6) Includes options to acquire 101,600 shares of Class A Common Stock and
148,150 shares of Class B Common Stock which are currently exercisable.
(7) Includes options to acquire 17,350 shares of Class A Common Stock and 24,300
shares of Class B Common Stock which are currently exercisable.
(8) Includes options to acquire 8,325 shares of Class A Common Stock and 14,125
shares of Class B Common Stock which are currently exercisable.
(9) Includes options to acquire 750 shares of Class B Common Stock which are
currently exercisable.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the knowledge of the Corporation, as of June 1, 1994, other than Garnet
R. Marsh*, Don E. Marsh*, C. Alan Marsh* and William L. Marsh* whose security
ownership is listed in the preceding table, the only other beneficial owner of
more than 5% of the outstanding shares of Class A Common Stock is set forth in
the following table:
<TABLE>
<CAPTION>
PERCENT OF
CLASS A
NAME AND ADDRESS OF AMOUNT AND NATURE OF COMMON STOCK
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
- - ---------------------------- --------------------- ------------
<S> <C> <C>
GREAT AMERICAN INSURANCE 706,844 shares (1) 18.0%
COMPANY,
c/o American Financial
Corporation
One East Fourth Street
Cincinnati, Ohio
</TABLE>
- - ---------------
* Mailing address is 9800 Crosspoint Boulevard, Indianapolis, Indiana
(1) As reflected in Schedule 13D, dated March 18, 1983, as amended by Amendment
No. 1 thereto, dated March 23, 1983, Amendment No. 2 thereto, dated July
30, 1986, Amendment No. 3 thereto, dated November 1, 1991, and Amendment
No. 4 thereto, dated January 14, 1992, filed by American Financial
Corporation and Carl H. Lindner with the Securities and Exchange
Commission.
7
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF THE SALARY COMMITTEE OF THE BOARD OF DIRECTORS
Compensation Philosophy
The Salary Committee of the Board of Directors (the "Committee") believes
that the primary objective of the Corporation's executive compensation policies
should be:
- To attract and retain talented executives by providing compensation that
is, overall, competitive with the compensation provided to executives at
selected peer companies of comparable size and position in the retail or
other businesses, as appropriate, while maintaining compensation within
levels that are consistent with the Corporation's business plan, financial
objectives and operating performance;
- To provide appropriate incentives for executives to work toward the
achievement of the Corporation's annual budgetary targets established in
the Corporation's business plan; and
- To align more closely the interests of executives with those of
shareholders and the long-term interest of the Corporation by providing
long-term incentive compensation in the form of stock options, restricted
stock or other equity-based long-term incentive compensation.
The Committee believes that the Corporation's executive compensation
policies should be reviewed each year following the time when the financial
results of the Corporation's prior fiscal year become available. The policies
are reviewed in light of their consistency with the Corporation's financial
performance, its business plan and its position within the retail industry, as
well as the compensation policies of similar companies in the retail business.
The compensation of individual executives is reviewed at least annually by the
Committee in light of its executive compensation policies for that year.
In reviewing the comparability of the Corporation's executive compensation
policies, the Committee looks to executive compensation for other companies with
businesses reasonably related to the Corporation's business, but may also
consider factors which are unique to the Corporation. The Committee believes
that for the current year and for the foreseeable future, the companies included
in the retail industry are generally appropriate for comparison, particularly
after taking into account differences in size and factors which might affect
limited segments of such industry. The Committee will continue to review
compensation information from the performance peer group and may supplement such
information with data from other organizations in the industry or geographic
area in which the Corporation operates.
The Committee believes that, in addition to corporate performance and
specific business unit performance, it is appropriate to consider, in setting
and reviewing executive compensation, the personal contributions a particular
individual may make to the success of the corporate enterprise. This includes
quantitative measures against objectives as well as qualitative factors such as
leadership skills, planning initiatives, development and morale skills, public
affairs and civic involvement. No relative weight is assigned to these
qualitative factors, which are applied subjectively by the Committee.
The Committee believes that the above philosophy furthers the shareholders'
interest since a significant part of executive compensation is based on
obtaining results that are beneficial to all shareholders. At the same time, the
Committee believes the philosophy encourages responsible management of the
Corporation in the short term. The Committee regularly reviews its philosophy so
that the overall philosophy is as effective as practicable in furthering
shareholder interest. The Committee bases its review on the experience of its
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<PAGE> 11
members, on information requested from management, and on discussions with and
information compiled by independent compensation consultants.
COMPENSATION OF EXECUTIVES OTHER THAN THE CHIEF EXECUTIVE OFFICER
The Committee believes that the compensation of executive officers (other
than the Chief Executive Officer) for fiscal year 1994 should be comprised of
base compensation, annual incentive compensation and long-term incentive
compensation and has applied the policies described herein as set forth below.
Base Compensation. Base compensation for executive officers of the
Corporation is currently set at approximately the fiftieth to seventy-fifth
percentile of the base compensation of executive officers with similar
responsibilities at other selected peer group companies included in the
performance graph. These compensation levels have enabled the Corporation
to attract and retain talented executives while keeping compensation in
line with the financial objectives of the Corporation. Accordingly, the
Committee believes that the current policy concerning base compensation
should be continued. In determining whether an increase in base
compensation was appropriate for fiscal year 1994, the Committee reviewed
the salary ranges recommended by management and consulted with the Chief
Executive Officer. The Committee subjectively determined on the basis of
discussions with the Chief Executive Officer and its experience in business
generally and with the Corporation specifically the levels of base
compensation it deemed appropriate for each executive officer after taking
into consideration their respective contributions. As a result of this
analysis, increases averaging 7.5% (4.1% of which was attributable to
increases in responsibility) in the base salaries of executive officers,
other than the Chief Executive Officer, were made during fiscal year 1994,
with specific increases for executive officers who did not assume greater
responsibilities of up to 10.5%, reflecting the Committee's subjective
judgment as to individual contributions to the success of meeting the
Corporation's budgetary or other targets and to the Corporation's overall
performance. The Committee did not assign any relative weight to the
quantitative and qualitative factors that it applied subjectively in
reaching its base compensation decisions.
Annual Incentive Compensation. The Committee believes that
compensation should be in part directly linked to operating performance. To
achieve this link with regard to short-term performance, the Committee has
relied on cash bonuses. Generally, bonuses have been awarded under the
Management Incentive Plan under which cash awards equal to a percentage of
a fiscal year base salary can be granted to officers and key employees
based on the extent to which actual earnings of the Corporation during a
fiscal year are 80% or more of the earnings target approved by the
Committee for such fiscal year. The amount of any award varies with level
of responsibility and the percentage of actual earnings to target earnings,
with a maximum bonus predicated on 150% of the target bonus percentage for
each responsibility level. The Committee also has awarded periodically
discretionary bonuses to officers and other employees based on
recommendations from management and consultations with the Chief Executive
Officer. Based on discussions with the Chief Executive Officer and the
members' experience in business generally, the Committee determined
subjectively the amount of each such bonus after taking into consideration
the employee's past and potential for future contributions to the
Corporation. During fiscal year 1994, no bonuses were awarded under the
Management Incentive Plan, but discretionary bonuses aggregating $52,000
were awarded to executive officers other than the Chief Executive Officer.
Long-Term Incentive Compensation. Stock options are currently the
principal vehicle for payment of long-term incentive compensation. The
Committee believes that an integral part of the Corporation's executive
compensation policies is equity-based compensation plans which encourage
and create
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<PAGE> 12
ownership of the Corporation's stock by its executives, thereby aligning
executives' long-term interests with those of the shareholders. These
long-term incentive programs are principally reflected in the Marsh
Equity Ownership Plan, the 1987 Stock Option Plan and the 1991 Employee
Stock Incentive Plan. The Committee believes that significant stock
ownership is a major incentive in building shareholder value and reviews
awards of options with that goal in mind.
The Corporation has no set policy as to when stock options should be
awarded, although historically stock options generally have been awarded
during or near the period between the end of the fiscal year and the next
succeeding annual meeting of shareholders. The Committee believes that the
Corporation should make it a part of its regular executive compensation
policies to grant periodic awards of stock options to executive officers
and other key employees as part of the compensation package that is
reviewed annually for each executive officer. This grant should be made
within guidelines established at the time of the annual review. The
Committee's policy is that the material terms of stock options should not
be amended after grant and that the Committee should take into account the
number of shares and options held by each executive officer. No stock
options were granted during fiscal year 1994.
The Committee believes that greater reliance can be placed on
long-term incentive compensation, with a view to setting the overall values
of the Corporation's compensation package for executive officers at
approximately the fiftieth to seventy-fifth percentile of total
compensation packages for executives of the selected peer group companies
if the Corporation achieves the annual earnings target, with maximum total
compensation at the 75th to 90th percentile. The long-term awards may be
composed of vehicles in addition to stock options, such as restricted
stock, phantom stock, or stock appreciation rights, still keeping within
the target and maximum total compensation levels.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Committee believes that the compensation package for the Chief
Executive Officer is consistent with its general policies concerning executive
compensation and is appropriate in light of the Corporation's financial
objectives and performance. Awards of long-term incentive compensation to the
Chief Executive Officer are considered concurrently with awards to other
executive officers and follow the same general policies as such other long-term
incentive awards.
1994 Compensation of the Chief Executive Officer. In setting the salary
and incentive compensation levels of the Chief Executive Officer for fiscal year
1994, the Committee reviewed his performance in moving the Corporation towards
its desired strategic direction. Although these strategic moves in conjunction
with competitive conditions have caused earnings dilution in the short term, the
Committee considered these strategic moves to be in the best long term interests
of the Corporation and its shareholders. Based on these factors, and considering
the leadership skills and individual efforts of the Chief Executive Officer in
guiding overall performance in light of significant past and future competitive
changes, as well as recognizing his continuing active leadership role in local,
state, and industry matters, the Committee awarded the Chief Executive Officer
an increase of 8.2% in base compensation which the Committee determined on a
subjective basis to be appropriate considering the contributions of the Chief
Executive Officer and the performance of the Corporation. The Chief Executive
Officer was not awarded any cash bonus or stock options during fiscal year 1994.
10
<PAGE> 13
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended, enacted as
a part of the Omnibus Budget Reconciliation Act of 1993, generally disallows a
tax deduction to public companies for compensation paid to any named executive
officer in excess of $1,000,000 annually. Under proposed IRS regulations,
qualifying performance-based compensation is excluded from the calculation of
the deduction limit if certain requirements are met. Because the regulations
have not been finalized and none of the Corporation's named executive officers
are compensated in excess of the deduction limitation, the Committee has not
determined whether it will approve any compensation arrangements that will cause
the deduction limit to be exceeded in the future.
Stephen M. Huse, Chairman
Jack E. Buckles
James K. Risk, III
11
<PAGE> 14
SUMMARY COMPENSATION TABLE
The following table sets forth the annual and long-term compensation paid
or distributed by the Corporation for services in all capacities for fiscal
years ended April 2, 1992, March 27, 1993, and April 2, 1994, to the Chief
Executive Officer and each of the other four (4) most highly compensated
executive officers of the Corporation whose compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------------
AWARDS PAYOUT
ANNUAL COMPENSATION ------------------------------ ---------
------------------------------------ RESTRICTED LONG-TERM ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS OTHER ANNUAL STOCK OPTIONS/SARS INCENTIVE COMPENSATION
POSITION YEAR ($)(F) ($)(A) COMPENSATION($) AWARDS($)(C) (#) (C) PAYOUTS(C) (B) (D)($)
- - ----------------------- ------- -------- -------- --------------- ------------ ---------------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Don E. Marsh, 1994 $516,635 $ 0 $ 7,408(e) $0 Class A 0 $ 0 $23,247
Chairman of the Class B 0
Board; Director; 1993 $485,000 $ 84,875 $ 6,539(e) $0 Class A 0 $ 0 $27,430
President & Chief Class B 0
Executive Officer 1992 $400,000 $ 0 * $0 Class A 0 $ 0 *
Class B 29,000
C. Alan Marsh, 1994 $301,442 $ 0 $ 6,550(e) $0 Class A 0 $ 0 $17,973
Director; Vice Class B 0
Chairman of the 1993 $275,000 $ 48,125 $ 5,782(e) $0 Class A 0 $ 0 $25,926
Board and Senior Class B 0
Vice President, 1992 $250,000 $ 0 * $0 Class A 0 $ 0 *
Corporate Development Class B 15,900
Ronald R. Walicki, 1994 $254,808 $ 27,885 $ 7,361(e) $0 Class A 0 $ 0 $18,658
Executive Vice Class B 0
President, 1993 $250,000 $122,089 $ 6,497(e) $0 Class A 0 $ 0 $24,714
Supermarket Class B 0
Division 1992 $240,000 $ 0 * $0 Class A 0 $ 0 *
Class B 13,900
David M. Redden, 1994 $231,731 $ 0 $ 1,873(e) $0 Class A 0 $ 0 $13,101
President & Chief Class B 0
Operating Officer, 1993 $200,000 $ 35,000 $ 1,653(e) $0 Class A 0 $ 0 $10,771
Marsh Village Class B 0
Pantries, Inc. 1992 $146,000 $ 0 * $0 Class A 0 $ 0 *
Class B 11,600
William L. Marsh, 1994 $204,808 $ 0 $ 2,443(e) $0 Class A 0 $ 0 $ 7,301
Director; Vice Class B 0
President-General 1993 $190,000 $ 28,500 $ 2,156(e) $0 Class A 0 $ 0 $ 7,238
Manager, Property Class B 0
Management 1992 $165,000 $ 1,525 * $0 Class A 0 $ 0 *
Class B 9,600
</TABLE>
- - ---------------
* Pursuant to Securities and Exchange Commission rules, information for fiscal
year 1992 is not shown.
(a) Performance based awards under the Management Incentive Plan or, with
respect to Mr. Walicki, an award under the Village Pantry Bonus Plan in
fiscal year 1992 and added incentive payments in fiscal years 1993 and 1994
authorized by the Salary Committee.
12
<PAGE> 15
(b) Perquisites or other personal benefits, securities or property received did
not exceed the lesser of $50,000 or 10% of salary and bonus.
(c) No awards of restricted stock, stock appreciation rights or benefits
pursuant to long-term incentive plans, other than stock options, were
granted, issued or paid, respectively, during the last three years.
(d) Includes for fiscal year 1994: (i) contributions to the Marsh Equity
Ownership Plan in the amount of $1,071 each; (ii) Executive Life Insurance
Plan premiums of $11,996, $10,607, $11,920, $3,033 and $3,956,
respectively; (iii) Supplemental Long-Term Disability Plan premiums of
$10,180, $5,264, $3,159, $6,816, and $2,274, respectively; and (iv)
contributions to the Corporation's 401(k) plan in the amount of $1,031,
$2,508, and $2,181 for C. Alan Marsh, Ronald R. Walicki and David M.
Redden, respectively.
(e) Represents reimbursement for income taxes applicable to premiums paid under
the Executive Life Insurance Plan.
(f) Includes salary earned in 53rd week of fiscal year 1994.
OPTIONS/SAR EXERCISES AND FISCAL YEAR END VALUES TABLE
The following table sets forth information with respect to the exercise of
options and SARs during, and the unexercised options and SARs held at the end
of, the fiscal year ended April 2, 1994, by the named executive officers. No
options or SARs were granted during the fiscal year ended April 2, 1994.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
FISCAL YEAR-END(#) AT FISCAL YEAR END($)(A)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME CLASS ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - -------------------- ------ --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Don E. Marsh........ A 13,500 $67,095 35,250 0 $ 0 $ 0
B 13,500 $53,595 49,750 14,500 $ 0 $ 0
C. Alan Marsh....... A 8,438 $41,937 20,525 0 $ 0 $ 0
B 0 28,475 7,950 $ 0 $ 0
Ronald R. Walicki... A 0 17,350 0 $ 0 $ 0
B 0 24,300 6,950 $ 0 $ 0
David M. Redden..... A 0 8,325 0 $ 0 $ 0
B 0 14,125 5,800 $ 0 $ 0
William L. Marsh.... A 3,375 $14,774 11,725 0 $ 0 $ 0
B 3,375 $13,399 16,525 4,800 $ 0 $ 0
</TABLE>
- - ---------------
(a) Value of unexercised options based on fiscal year end per share price of
$10.50 for Class A Common Stock and $10.50 for Class B Common Stock.
13
<PAGE> 16
RETIREMENT PLANS
The following table illustrates the estimated annual pension benefits under
the Employees' Pension Plan of Marsh Supermarkets, Inc. and Subsidiaries (taking
Social Security benefits into account, but without regard to any survivorship
benefit to an eligible spouse) (the "Pension Plan") payable for a single
straight life annuity upon normal retirement age at the compensation levels and
years of benefit service shown, as well as under the supplemental retirement
plan which provides benefits that would otherwise be denied to participants by
reason of certain Internal Revenue Code limitations on qualified plan benefits.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT
AVERAGE ANNUAL BENEFITS AT VARIOUS YEARS OF
COMPENSATION BENEFIT SERVICE
DURING LAST ----------------------------------
4 YEARS OF SERVICE 10 YEARS 20 YEARS 30 YEARS
- - ------------------ -------- -------- --------
<S> <C> <C> <C>
$200,000 $ 86,236 $ 86,236 $ 86,236
280,000 126,236 126,236 126,236
360,000 166,236 166,236 166,236
440,000 206,236 206,236 206,236
520,000 246,236 246,236 246,236
600,000 286,236 286,236 286,236
680,000 326,236 326,236 326,236
760,000 366,236 366,236 366,236
</TABLE>
Under the Pension Plan, monthly retirement benefits are computed on the
basis of highest average monthly earnings during any 48 consecutive months of
the last 120 months preceding retirement. The compensation covered by the
Pension Plan includes all monthly earnings, but excludes amounts paid under the
Management Incentive Plan or similar plans prior to January 1, 1985. Benefits
payable under the supplemental plan exclude the sum of benefits payable under
(i) the Pension Plan, (ii) Social Security, and (iii) any other qualified
defined benefit plan of any prior employer.
As of April 2, 1994, Don E. Marsh, C. Alan Marsh, Ronald R. Walicki, David
M. Redden and William L. Marsh had 36, 29, 30, 24 and 28 years of benefit
service, respectively. Assuming that the named executive officers continue in
their present positions at their current salaries until retirement at age 65,
their estimated annual pensions under the Pension Plan and the supplemental
retirement plan would be $244,736, $136,736, $113,736, $102,236 and $88,736,
respectively.
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Corporation has employment agreements with Don E. Marsh, C. Alan Marsh
and William L. Marsh, which were amended and restated as of December 31, 1992,
for a term of three years, subject to termination or extension as provided in
the agreements. Under the agreements, the base annual salaries for Don E. Marsh,
C. Alan Marsh and William L. Marsh are $440,000, $275,000 and $165,000,
respectively, subject to periodic review and increase, but not decrease, by the
Salary Committee or the Board of Directors. The agreements also provide that, in
the event of a "Change of Control" of the Corporation and the subsequent
severance of employment, the employee shall receive severance pay in an amount
equal to three times the sum of the employee's highest base salary during the
last 12 months and the highest cash bonus during the last 24 months, together
with certain other limited employee benefits, as described in the agreements. In
addition, the Corporation has severance agreements with Ronald R. Walicki, David
M. Redden and thirteen other employees who, under such severance agreements, are
entitled to certain payments in the event of a "Change of Control" of the
Corporation and subsequent severance of employment as described in those
agreements.
14
<PAGE> 17
PERFORMANCE GRAPH
MARSH SUPERMARKETS, INC., RUSSELL 2000, AND PEER GROUP
COMPARISON OF TOTAL RETURN TO SHAREHOLDERS(1)
<TABLE>
<CAPTION>
MARSH MARSH
MEASUREMENT PERIOD SUPERMARKETS, INC. SUPERMARKETS, INC. RUSSELL PEER GROUP
(FISCAL YEAR COVERED) (CLASS A) (3) (CLASS B) (3) 2000 (3) (2)(3)
<S> <C> <C> <C> <C>
1989 100 100 100 100
1990 112 112 118 106
1991 126 126 146 113
1992 110 97 139 136
1993 92 93 132 157
1994 70 92 120 174
</TABLE>
Notes:
(1) Assumes $100 investment on March 31, 1989, in Marsh Supermarkets, Inc.,
Russell 2000, and Peer Group. Total returns are calculated on dividends
reinvested basis. Indices are weighted by market capitalization. Total
returns for Marsh Supermarkets, Inc. include returns on Marsh Supermarkets,
Inc. Common Stock prior to the recapitalization in May 1991 creating the
Class A and Class B Common Stock.
15
<PAGE> 18
(2) Peer Group comprised of the following companies:
<TABLE>
<S> <C>
Bruno's Inc. Quality Food Centers Inc.
Casey's General Stores, Inc. Riser Foods, Inc. (Class A)
Delchamps, Inc. Seaway Food Town, Inc.
Eagle Food Centers, Inc. Smith's Food and Drug Centers, Inc.*
Foodarama Supermarkets, Inc. Stop and Shop Companies, Inc.*
Giant Foods, Inc. Uni-Marts, Inc. (Class A)
Hannaford Bros. Company Village Supermarkets, Inc.
Ingles Markets Inc. The Vons Companies, Inc.
The Penn Traffic Company Weis Markets, Inc.
* Five years of data were not available. Includes four years of data for Smith's and
two years of data for Stop and Shop
</TABLE>
(3) Data for Marsh Supermarkets, Inc. and Peer Group was provided by Standard &
Poor's Computer Services, Inc. Russell 2000 data was provided by Frank
Russell Company.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers, directors, and persons who own more than 10% of the outstanding shares
of a registered class of a corporation's equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and to furnish the corporation with copies of all Section 16(a) forms they file.
Based solely on a review of the Forms 3, 4 and 5 and amendments thereto and
certain written representations furnished to the Corporation, the Corporation
believes that, during fiscal year 1994, its executive officers, directors, and
greater than 10% beneficial owners complied with all applicable filing
requirements of Section 16(a).
INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee, the firm of Ernst & Young,
which audited the Corporation's financial statements for the past fiscal year,
has been appointed by the Board of Directors as the Corporation's independent
auditors to audit the consolidated financial statements for the fiscal year to
end April 1, 1995. A representative of Ernst & Young will be present at the
Annual Meeting, and will have an opportunity to make a statement and respond to
appropriate questions.
16
<PAGE> 19
OTHER MATTERS
The Board of Directors is not aware presently of any matters to be
presented at the Annual Meeting other than the election of directors. If,
however, other matters are properly brought before the Annual Meeting, the
enclosed proxy gives discretionary authority to the persons named therein to act
in accordance with their best judgment on such matters. Shareholder proposals,
intended to be included in the proxy material relating to the Annual Meeting of
Shareholders to be held August 1, 1995, must be received by the Corporation not
later than March 3, 1995. Such proposals should be addressed to the Corporate
Secretary.
By order of the Board of Directors.
MARSH SUPERMARKETS, INC.
By: /s/ P. Lawrence Butt
---------------------------
P. Lawrence Butt, Secretary
Indianapolis, Indiana
June 23, 1994
17
<PAGE> 20
MARSH SUPERMARKETS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints C. Alan Marsh, Charles R. Clark and K. Clay
Smith, or any one of them, as proxies, each with the power of substitution, and
authorizes them to represent the undersigned, and to vote as indicated on the
reverse side hereof all shares of Class A Common Stock of Marsh Supermarkets,
Inc. held of record by the undersigned on June 6, 1994, at the Annual Meeting of
Shareholders to be held August 2, 1994, and at any adjournment thereof.
1. The election of three (3) directors. NOMINEES ARE: Don E. Marsh, William
L. Marsh and Stephen M. Huse, for three-year terms.
<TABLE>
<CAPTION>
<S> <C> <C>
/ / FOR ALL NOMINEES LISTED ABOVE / / WITHHOLD AUTHORITY TO VOTE FOR
EXCEPT THOSE WHOSE NAMES ARE ALL NOMINEES.
WRITTEN BELOW:
</TABLE>
- - ------------------------------------------------------------
2. In their discretion with respect to such other business as may properly
come before the meeting.
(PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN THIS PROXY IN THE ACCOMPANYING
ENVELOPE PROMPTLY.)
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR
DIRECTOR.
Receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement,
dated June 23, 1994, and the 1994 Annual Report is hereby acknowledged.
Please sign exactly as your name(s) appear hereon. When shares are owned
jointly, all owners should sign. When signing as attorney, executor,
administrator, trustee, guardian, corporate officers or other representative
capacity, please give full title as such.
Dated: , 1994
Signature
Signature
<PAGE> 21
MARSH SUPERMARKETS, INC.
MARSH EQUITY OWNERSHIP PLAN
INSTRUCTION CARD
The undersigned hereby authorizes the Trustee of the Marsh Equity Ownership
Plan ("Plan") to appoint C. Alan Marsh, Charles R. Clark and K. Clay Smith, or
any one of them, as attorneys-in-fact and proxies, each with the power of
substitution, and authorize such persons to represent the undersigned, and to
vote as indicated below all shares of Class A Common Stock of Marsh
Supermarkets, Inc. credited to the undersigned's account in the Plan as of June
6, 1994, at the Annual Meeting of Shareholders to be held August 2, 1994, and at
any adjournment thereof.
1. The election of three (3) directors. NOMINEES ARE: Don E. Marsh, William
L. Marsh and Stephen M. Huse, for three-year terms.
<TABLE>
<CAPTION>
<S> <C> <C>
/ / FOR ALL NOMINEES LISTED ABOVE / / WITHHOLD AUTHORITY TO VOTE FOR
EXCEPT THOSE WHOSE NAMES ARE ALL NOMINEES.
WRITTEN BELOW:
</TABLE>
- - -------------------------------------------------------
2. In their discretion with respect to such other business as may properly
come before the meeting.
(PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN THIS INSTRUCTION CARD IN THE
ACCOMPANYING ENVELOPE PROMPTLY.)
UNLESS OTHERWISE SPECIFIED, THIS INSTRUCTION CARD WILL BE VOTED FOR ALL
NOMINEES FOR DIRECTOR.
Receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement,
dated June 23, 1994, and the 1994 Annual Report is hereby acknowledged.
Please sign Instruction Card exactly as your name appears below.
Dated: , 1994
Signature
THIS INSTRUCTION CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
<PAGE> 22
MARSH SUPERMARKETS, INC.
401(K) PLAN
INSTRUCTION CARD
The undersigned hereby authorizes the Trustee of the Marsh Supermarkets,
Inc. 401(k) Plan ("Plan") to appoint C. Alan Marsh, Charles R. Clark and K. Clay
Smith, or any one of them, as attorneys-in-fact and proxies, each with the power
of substitution, and authorize such persons to represent the undersigned, and to
vote as indicated below all shares of Class A Common Stock of Marsh
Supermarkets, Inc. credited to the undersigned's account in the Plan as of June
6, 1994, at the Annual Meeting of Shareholders to be held August 2, 1994, and at
any adjournment thereof.
1. The election of three (3) directors. NOMINEES ARE: Don E. Marsh, William
L. Marsh and Stephen M. Huse, for three-year terms.
<TABLE>
<CAPTION>
<S> <C> <C>
/ / FOR ALL NOMINEES LISTED ABOVE / / WITHHOLD AUTHORITY TO VOTE FOR
EXCEPT THOSE WHOSE NAMES ARE ALL NOMINEES.
WRITTEN BELOW:
</TABLE>
- - -------------------------------------------------------
2. In their discretion with respect to such other business as may properly
come before the meeting.
(PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN THIS INSTRUCTION CARD IN THE
ACCOMPANYING ENVELOPE PROMPTLY.)
UNLESS OTHERWISE SPECIFIED, THIS INSTRUCTION CARD WILL BE VOTED FOR ALL
NOMINEES FOR DIRECTOR.
Receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement,
dated June 23, 1994, and the 1994 Annual Report is hereby acknowledged.
Please sign Instruction Card exactly as your name appears below.
Dated: , 1994
Signature
THIS INSTRUCTION CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
