<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by Registrant [X]
Filed by Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Uni-Marts, Inc.
- ----------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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[ ] 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
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<PAGE> 2
UNI-MARTS, INC.
477 East Beaver Avenue
State College, Pennsylvania 16801-5690
January 24, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Uni-Marts, Inc. The meeting will be held at the Days Inn Penn State, 240 South
Pugh Street, State College, Pennsylvania, on Thursday, February 20, 1997,
commencing at 10:00 A.M.
At the meeting, you will be asked to vote on the following proposals:
1. Election of three directors who will serve until the Annual Meeting of
Stockholders in 2000.
2. Ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending September 30,
1997.
Your vote is important. Whether or not you plan to attend the meeting,
please sign, date and mail your proxy in the enclosed postpaid envelope
promptly.
Sincerely,
/S/ HENRY D. SAHAKIAN
HENRY D. SAHAKIAN
Chairman of the Board
and Chief Executive Officer
<PAGE> 3
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------
UNI-MARTS, INC.
477 East Beaver Avenue
State College, Pennsylvania 16801-5690
---------
TO THE STOCKHOLDERS:
You are hereby notified that the Annual Meeting of Stockholders of
Uni-Marts, Inc., a Delaware corporation, will be held at the Days Inn Penn
State, 240 South Pugh Street, State College, Pennsylvania, at 10:00 A.M. on
Thursday, February 20, 1997, for the following purposes:
1. To elect three directors who will serve until the Annual Meeting of
Stockholders in 2000;
2. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending September 30, 1997; and
3. To transact such other business as may properly come before the
meeting. The Board of Directors is not aware of any other business to
be presented to a vote of the stockholders at the Annual Meeting.
Information relating to the above matters is set forth in the attached Proxy
Statement. Only stockholders of record at the close of business on January 2,
1997 are entitled to receive notice of and to vote at the Annual Meeting and
any adjournment thereof.
/S/ HARRY A. MARTIN
HARRY A. MARTIN
Secretary
State College, Pennsylvania
January 24, 1997
PLEASE READ THE ATTACHED PROXY STATEMENT AND THEN PROMPTLY COMPLETE, EXECUTE AND
RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE. YOU
CAN SPARE YOUR COMPANY THE EXPENSE OF FURTHER PROXY SOLICITATION BY RETURNING
YOUR PROXY CARD PROMPTLY.
<PAGE> 4
UNI-MARTS, INC.
477 East Beaver Avenue
State College, PA 16801-5690
-------------
PROXY STATEMENT
-------------
This Proxy Statement is furnished to the stockholders of Uni-Marts, Inc. (the
"Company") in connection with the solicitation by the Board of Directors of the
Company of proxies to be voted at the Annual Meeting of Stockholders on February
20, 1997 (the "Annual Meeting") and any adjournment thereof. This Proxy
Statement and the accompanying proxy card are first being mailed to stockholders
on or about January 24, 1997. The expense of preparing, printing and mailing
the Proxy Statement will be paid by the Company. In addition to the use of the
mail, proxies may be solicited personally or by telephone by regular employees
of the Company without additional compensation. The Company will reimburse
banks, brokers and other custodians, nominees and fiduciaries for their costs in
sending the proxy materials to the beneficial owners of the Company's stock.
Shares represented by valid proxies will be voted in accordance with
instructions contained therein or, in the absence of such instructions, in
accordance with the recommendations of the Board of Directors. A proxy may be
revoked by a stockholder by written notice of such revocation or by a later
dated proxy delivered to the Secretary of the Company at any time prior to the
shares represented by such proxy being voted.
Holders of record of the Company's Common Stock, par value $.10, at the close
of business on January 2, 1997 are entitled to notice of, and to vote at, the
Annual Meeting. As of such date, there were outstanding 6,636,450 shares of the
Company's Common Stock. Each stockholder has one vote per share on all items of
business properly presented at the Annual Meeting. Under the Amended and
Restated By-laws of the Company, the presence of a quorum is required for the
transaction of business at the Annual Meeting. The presence at the Annual
Meeting, in person or by proxy, of a majority of the total number of shares
issued and outstanding and entitled to vote thereat and a majority of the voting
power of the shares issued and outstanding shall constitute a quorum for the
transaction of business. Action on all matters scheduled to come before the
Annual Meeting will be authorized by the affirmative vote of the majority of
shares present in person or represented by proxy and entitled to vote on such
matters. Abstentions and broker nonvotes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions are counted in tabulations of the votes cast on proposals presented
to the stockholders, whereas broker nonvotes are not counted for purposes of
determining whether a proposal has been approved. Votes cast by stockholders
will be counted by ChaseMellon Shareholder Services, L.L.C., the Company's
transfer agent. The Company does not have any policy with respect to
maintaining the confidentiality of proxies, ballots or vote tabulations.
A copy of the 1996 Annual Report, which includes financial statements for the
fiscal year ended September 30, 1996, is enclosed.
1
<PAGE> 5
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is composed of three classes. Class II and Class III
Directors will serve until the Annual Meetings of Stockholders in 1998 and 1999,
respectively, and thereafter for terms of three years until their successors
have been elected and qualified. The Directors comprising Class I will be
elected at the Annual Meeting and will serve until the Annual Meeting of
Stockholders in 2000 and thereafter for terms of three years until their
successors have been elected and qualified. Class I and Class III are each
composed of three Directors and Class II is composed of four Directors.
The proxy agents of the Board of Directors intend to vote, unless instructed
otherwise, for election of the nominees named below. If for any reason any of
the nominees become unable or are unwilling to serve, at the time of the Annual
Meeting the persons named in the enclosed proxy card will have discretionary
authority to vote for a substitute nominee or nominees. It is not anticipated
that any nominee will be unavailable for election. Directors shall be elected
by a majority of the votes cast.
The following sets forth information as to each nominee for election as a
Director at the Annual Meeting, each Director continuing in office and an
Executive Officer who is not a Director, including their ages, present principal
occupations, other business experience for at least the last five years and
memberships on committees of the Board of Directors.
Nominees for election at the Annual Meeting with terms expiring in 2000:
Name Age Position
- ---- --- --------
Henry D. Sahakian (3)(4)(5) 60 Chairman of the Board and Chief
Executive Officer
Bruce K. Heim (2)(3)(4) 55 Director
Michael J. Serventi (1)(5) 46 Director
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ABOVE
NOMINEES.
Directors whose present terms continue until 1998:
Name Age Position
- ---- --- --------
J. Kirk Gallaher 50 Executive Vice President, Chief
Financial Officer and Director
G. David Gearhart (3)(4)(5)(6) 44 Director
Jeremiah A. Keating (1)(5) 57 Director
Charles R. Markham 61 President, Chief Operating Officer
and Director
Directors whose present terms continue until 1999:
Name Age Position
- ---- --- --------
Joseph V. Paterno (1)(3)(5) 70 Director
Charles C. Pearson, Jr. (2)(3)(6) 57 Director
Daniel D. Sahakian (2)(3)(4) 64 Director
2
<PAGE> 6
Executive Officer:
Name Age Position
- ---- --- --------
Howard D. Romines 62 Executive Vice President
- --------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Executive Committee.
(4) Member of the Nominating Committee.
(5) Member of the Strategic Planning Review Committee.
(6) Member of the Stock Option Committee.
Henry D. Sahakian is the founder of the Company and has served as Chairman of
the Board since the Company's inception. He also served as the Company's
President until 1994.
J. Kirk Gallaher joined the Company in April 1980 and has served as Executive
Vice President and Chief Financial Officer since 1994. From 1987 to 1994, Mr.
Gallaher served as the Company's Senior Vice President and Chief Financial
Officer. Mr. Gallaher became a Director of the Company in October 1986.
G. David Gearhart became Senior Vice President and Managing Director of
Grenzebach Glier & Associates, Inc. in 1995. He was Senior Vice President for
Development and University Relations of The Pennsylvania State University for
the preceding ten years. Mr. Gearhart became a Director of the Company in
October 1994.
Bruce K. Heim has served for the past 14 years as Chairman of the Board and
President of Keystone Real Estate Group, Inc., a property management and
investment company located in State College, Pennsylvania. Mr. Heim became a
Director of the Company in November 1977.
Jeremiah A. Keating has been President of Jet Aviation Business Jets, Inc., a
company providing charter aircraft services located in Teterboro, New Jersey,
since February 1990. Mr. Keating became a Director of the Company in September
1987.
Charles R. Markham joined the Company in February 1975 and has served as
President and Chief Operating Officer since 1994. From 1981 to 1994,
Mr. Markham served as the Company's Executive Vice President. Mr. Markham
became a Director of the Company in January 1978.
Joseph V. Paterno has been the head coach of The Pennsylvania State
University football team for the past 29 years. Mr. Paterno became a Director
of the Company in December 1986.
Charles C. Pearson, Jr. has been Market President and Chief Executive Officer
of PNC Bank, Central PA, a subsidiary of PNC Bank, Pittsburgh, PA, since 1994.
From 1988 to 1994 he was President and Chief Executive Officer of United Federal
Bancorp, Inc. until its acquisition by PNC Bank, National Association.
Mr. Pearson became a Director of the Company in October 1994.
3
<PAGE> 7
Howard D. Romines joined the Company in March 1979 and has served as
Executive Vice President since 1994. Mr. Romines served as the Company's Vice
President of Operations from 1985 to 1994.
Daniel D. Sahakian has served for the past 16 years as President and Chief
Executive Officer of HFL Corporation and for the past nine years as President of
Unico Corporation, both of which are controlled by him and Henry D. Sahakian.
HFL Corporation and Unico Corporation are commercial real estate companies. Mr.
Sahakian became a Director of the Company in October 1981. He is Henry D.
Sahakian's brother.
Michael J. Serventi has been President and Chief Executive Officer of
Lew-Mark Baking Co., Inc. and Garden State Cookies, Inc. for the past 13 years.
Mr. Serventi became a Director of the Company in December 1986.
For information with respect to the share ownership of the Company's
Directors, see "Principal Stockholders."
The Board of Directors met five times during the last fiscal year. The Board
of Directors has an Audit Committee, a Compensation Committee, an Executive
Committee, a Nominating Committee, a Strategic Planning Review Committee and a
Stock Option Committee. The Audit Committee communicates with and receives
information directly from the Company's independent auditors. The Audit
Committee met two times during the last fiscal year. The Compensation Committee
periodically reviews, implements and administers the compensation policies and
programs for and performance of the Company's executive officers and establishes
guidelines for the compensation of other personnel. The Compensation Committee
met two times during the last fiscal year. The Executive Committee meets as
needed between full board meetings to discuss and act upon certain significant
matters affecting the Company. The Nominating Committee considers nominees
recommended by security holders pursuant to procedures set forth in the
Company's By-laws. The Strategic Planning Review Committee meets periodically
to review and make recommendations regarding the Company's strategic plan. The
Executive Committee, the Nominating Committee and the Strategic Planning Review
Committee did not meet during the last fiscal year. The Stock Option Committee
will administer the Company's 1996 Equity Compensation Plan which became
effective November 1, 1996. Each incumbent director attended more than 75% of
the meetings of the Board of Directors and the meetings of Board Committees on
which each Director served.
4
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth the total annual
compensation paid or accrued by the Company to or for each executive officer of
the Company for the periods listed below.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------------
Awards Payouts
-------------------------- -------
Securities
Annual Compensation Underlying Performance All
------------------------- Options/SARs Unit Plan Other
Name and Principal Position Year Salary($) Bonus($) (# of Shares) (# of Units) $ Comp.($)
- --------------------------- ---- --------- -------- ------------- ------------ ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Henry D. Sahakian, 1996 288,900 0 14,940 1,500 57,221 61,133(a)(b)(c)
Chairman of the Board 1995 270,000 167,832 13,000 1,650 0 61,342(a)(b)(c)
and Chief Executive 1994 270,000 115,735 13,100 1,572 0 20,175(a)(b)(c)
Officer
Charles R. Markham, 1996 160,500 0 10,320 1,030 34,046 50,638(a)(b)(c)
President, Chief 1995 150,000 105,894 8,500 1,120 0 50,733(a)(b)(c)
Operating Officer 1994 136,500 94,035 7,960 955 0 51,132(a)(b)(c)
and Director
J. Kirk Gallaher, 1996 139,100 0 7,430 740 29,601 24,804(a)(b)(c)
Executive Vice President, 1995 130,000 93,906 6,500 840 0 24,879(a)(b)(c)
Chief Financial Officer 1994 122,250 79,570 5,960 715 0 25,283(a)(b)(c)
and Director
Howard D. Romines, 1996 107,000 0 3,070 310 0 21,931(a)(b)(c)
Executive Vice 1995 100,000 31,968 2,500 335 0 21,958(a)(b)(c)
President 1994 85,000 20,000 2,500 0 0 21,534(a)(b)(c)
</TABLE>
- ----------
(a) Includes premiums paid by the Company on split-dollar insurance policies on
the lives of Henry D. Sahakian, Charles R. Markham, J. Kirk Gallaher and
Howard D. Romines in the amounts of $54,188, $44,605, $18,851 and $15,751,
respectively, for the fiscal year ended September 30, 1996, $54,365,
$44,605, $18,851 and $15,751, respectively, for the fiscal year ended
September 30, 1995 and $12,132, $44,605, $18,851 and $15,752, respectively,
for the fiscal year ended September 30, 1994.
(b) Includes Company contributions to the Company's Deferred Compensation Plan
in the amount of $5,000 for each executive officer listed.
(C) Includes Company contributions to the Company's Retirement Savings and
Incentive Plan (the "Savings Plan") for Messrs. Sahakian, Markham, Gallaher
and Romines in the amounts of $1,945, $1,033, $953 and $1,180,
respectively, for the fiscal year ended September 30, 1996, $1,977, $1,128,
$1,028 and $1,207, respectively, for the fiscal year ended September 30,
1995 and $3,043, $1,527, $1,432 and $782, respectively, for the fiscal year
ended September 30, 1994.
5
<PAGE> 9
GRANTS OF STOCK OPTIONS. The following table sets forth incentive stock
options granted to executive officers during the fiscal year ended September 30,
1996:
<TABLE>
<CAPTION>
Options/SAR Grants Table
Option/SAR Grants in Last Fiscal Year
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants For Option Terms
--------------------------------------------------- ------------------
% of Total
Options/SARs
Options/ Granted to Exercise
SARs Employees in Price Expiration
Name Granted(#) Fiscal Year ($/Share) Date 5% ($) 10% ($)
- ---- ---------- ----------- -------- ----------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Henry D. Sahakian 14,940 22.7% 7.70 10-01-00 18,436 53,389
Charles R. Markham 10,320 15.7% 7.00 10-01-05 45,431 115,132
J. Kirk Gallaher 7,430 11.3% 7.00 10-01-05 32,709 82,891
Howard D. Romines 3,070 4.7% 7.00 10-01-05 13,515 34,250
</TABLE>
STOCK OPTION EXERCISES AND FISCAL YEAR-END STOCK OPTION VALUES. The
following table sets forth information concerning stock options exercised during
the 1996 fiscal year and the value of stock options held at the end of the
fiscal year ended September 30, 1996 by each of the Company's executive
officers.
<TABLE>
<CAPTION>
Aggregated Options/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-The-Money
Options/SARs at Options/SARs
Shares FY-End (#) at FY-End ($)
Acquired Value --------------- ----------------
on Realized Exercisable/ Exercisable/
Name Exercise ($) Unexercisable Unexercisable
- ---- ------- -------- --------------- ----------------
<S> <C> <C> <C> <C>
Henry D. Sahakian 60,000 287,500 26,100/14,940 61,009/8,217
Charles R. Markham 42,695 104,686 24,500/10,320 126,313/12,900
J. Kirk Gallaher 12,100 35,598 31,095/7,430 85,323/9,288
Howard D. Romines 14,550 65,701 11,615/3,070 32,202/3,838
</TABLE>
All options held by the named individuals were fully exercisable at September
30, 1996 except options granted on October 2, 1995.
6
<PAGE> 10
LONG-TERM INCENTIVE PLAN--AWARDS IN THE LAST FISCAL YEAR. The following
table sets forth certain information concerning awards made under the Company's
Performance Unit Plan (the "Performance Plan") to the named executives during
the fiscal year ended September 30, 1996.
<TABLE>
<CAPTION>
Long-Term Incentive Plan--Awards in the Last Fiscal Year
Performance Estimated Future-Payouts Under
Number of or Other Non-Stock Price-Based Plans
Shares, Units Period Until ------------------------------
or Other Maturation Date Threshold Target Maximum
Name Rights (#) Payout ($ or #) ($ or #) ($ or #)
- ---- ------------- --------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Henry D. Sahakian 1,500 3 Years $ 0 $75,000 $87,500
Charles R. Markham 1,030 3 Years $ 0 $51,500 $64,000
J. Kirk Gallaher 740 3 Years $ 0 $37,000 $49,500
Howard D. Romines 310 3 Years $ 0 $15,500 $28,000
</TABLE>
Units shown in this table represent performance units under the Performance
Plan. The Performance Plan determines the amount of compensation over three-
year periods based upon the performance of the Company as well as upon each
executive officer meeting individual goals consistent with that officer's
position with the Company. The actual value of a performance unit at the end of
the performance period is dependent 50% upon the Company achieving its cash flow
target during the period and 50% upon the individual achieving the personal
goals set for him.
COMPENSATION OF DIRECTORS. During the 1996 fiscal year, each Director who
was not an employee of the Company received a retainer of $7,500, of which
$5,000 was paid in shares of Common Stock. Each nonemployee Director also
received grants of stock options to purchase 1,000 shares and 4,000 shares of
the Company's Common Stock (250 shares and 2,500 shares for Messrs. Gearhart and
Pearson) at exercise prices of $7.00 and $8.50, respectively, for serving as a
Director during fiscal year 1996. Each nonemployee Director also received
$1,000 for each board or committee meeting attended. Committee chairmen
received $2,000 for each meeting they chaired.
EMPLOYMENT AGREEMENTS. The Company has entered into a change-in-control
agreement with each of Messrs. Henry D. Sahakian, Markham, Gallaher and Romines
which provides for, among other things, the payment of an amount equal to 2.99
times the officer's base compensation if such officer's employment is
terminated in connection with a change in control of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Company's Board of Directors
are Messrs. Heim, Pearson and Daniel D. Sahakian. Mr. Heim is a director of
Unico Corporation ("Unico"), formerly the Company's parent, the majority of the
stock of which is beneficially owned or controlled by Henry D. Sahakian and
Daniel D. Sahakian.
In fiscal year 1996, the Company paid land rent of $40,000 to Nicholas, Heim
and Kissinger Associates, a partnership in which Bruce K. Heim is a partner.
This vacant property was leased by the Company for future development. The
Company has also signed a commitment to purchase this property for $1,500,000 if
certain conditions are met.
The Company leases one store location from Daniel D. Sahakian which Mr.
Sahakian purchased from HFL Corporation in fiscal year 1995. The lease has a
remaining term of 11 years with two five-year and one four-year renewal options,
7
<PAGE> 11
with the rent increasing by 2% each year. Rent paid to Daniel D. Sahakian under
this lease during fiscal year 1996 was $27,100.
During fiscal year 1996, the Company leased five store locations and four
other locations from Unico. Certain directors, executive officers and
stockholders of the Company are also directors, executive officers and
stockholders of Unico. Effective October 1, 1992, the leases for five of these
locations are for terms of 15 years with two five-year and one four-year renewal
options. Annual rental increases are limited to a maximum of 2% each year. The
leases for the remaining four locations are for one-year periods, with rents
increasing by 2% each year, and are cancelable only at the option of the Company
at the end of any year upon six months' written notice. Aggregate rent paid
under these leases during fiscal year 1996 was $219,600.
In fiscal year 1996, the Company purchased a store location from Unico at
fair market value for $116,200.
The Company leases its corporate headquarters, certain storage facilities and
three of its store locations from HFL Corporation, all of the stock of which is
beneficially owned or controlled by Henry D. Sahakian and Daniel D. Sahakian.
The leases for the corporate headquarters and storage facilities were entered
into in years 1991 to 1996, expire in 1996 to 2000 and provide for a current
aggregate rent of $385,700. Some of the leases are renewable annually subject
to increases of 2% to 4%. The aggregate rent paid to HFL Corporation for the
corporate headquarters and storage facilities was $364,700 for fiscal year 1996.
The three leases of store locations from HFL Corporation were entered into from
October 1992 to September 1995, are for terms of five years with renewal options
and provide for annual rents aggregating $72,800. The aggregate rent paid under
these leases to HFL Corporation during fiscal year 1996 was $82,000.
During fiscal year 1996, the Company received from HFL Corporation $11,100 as
reimbursement for certain general and administrative expenses. The Company
intends to continue to provide some administrative services for HFL Corporation
and expects to be reimbursed therefor.
On February 26, 1993, the Company made a one-time, special grant of
nonqualified stock options to Henry D. Sahakian and Daniel D. Sahakian each to
purchase 150,000 share of Common Stock at a price of $4.50 per share in exchange
for their relinquishment of effective voting control of the Company as a result
of the elimination of the super-majority voting provisions of the Company's
Class B Common Stock. Henry D. Sahakian exercised his option in fiscal year
1996.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for implementing and administering the Company's compensation
policies and programs for its executive officers. A separate committee
administers the Company's Stock Option Plan (the "Stock Option Committee"). The
Committee and the Stock Option Committee both are composed entirely of
nonemployee directors. The Company's compensation policy, effectuated by the
Committees, is to provide a comprehensive structure that will (i) motivate the
officers to implement and achieve the Company's strategic and financial goals,
(ii) attract and retain key executive personnel and (iii) align a significant
portion of the compensation of management with the interests of the stockholders
through stock options and other long-term incentives that are designed to
provide additional compensation only when the Company achieves good financial
results and all stockholders benefit. The Company and the Committee are
strongly committed to maximizing stockholder value through consistent growth and
profitability.
8
<PAGE> 12
The Company's overall compensation program for its executive officers is
comprised of the following elements:
A. Base Salary;
B. Annual Bonus Plan; and
C. Stock Option Plan.(1)
BASE SALARY AND BENEFITS
The Committee reviews the base salary and benefits provided to each executive
officer on an annual basis and evaluates the compensation against available data
for other businesses. The Committee monitors base salary studies prepared by
independent consulting firms, proxy information and other similar data to
attempt to ensure that the Company continues to provide competitive levels of
compensation. The Committee believes that the compensation provided to the
officers is competitive with that generally offered by comparable convenience
store operators and other similarly sized businesses.
BONUSES
For the fiscal year ended September 30, 1996, no bonuses were awarded to the
executive officers based on the terms of the Annual Bonus Plan, as administered
by the Committee. The plan rewards the executive officers based on the amount
of increase in the Company's pre-tax earnings over the previous fiscal year
(without regard to extraordinary items). When pre-tax earnings do not equal or
exceed that of the previous fiscal year, as was the case for the year ended
September 30, 1996, no bonuses are earned under the plan by any executive
officer. The Committee believes that the plan is designed to relate executive
compensation directly to Company performance so that such bonuses will provide a
financial reward only for the achievement of substantial business results. For
the fiscal year ending September 30, 1997, the Committee changed the measure for
bonuses under the plan. The new standard is increases in earnings per share
which the Committee believes is a measure of performance better related to
stockholders' return.
STOCK OPTIONS
The Committee and the Stock Option Committee believe that stock ownership by
executive officers is important in order that a portion of each executive's
compensation is directly aligned with the economic interest of the stockholders
of the Company. The Stock Option Committee believes that stock option grants
provide opportunities for capital accumulation, promote long-term retention and
foster an executive officer's proprietary interest in the Company. Under the
Stock Option Plan, options are issued at a price equal to the fair market value
of a share on the date of grant and the options generally expire after ten
years. Although the grant of stock options and the number of shares subject to
options are discretionary with the Stock Option Committee, executives have
annually received stock options in order to increase their stock ownership. In
addition, the Committee takes the number of shares subject to options and the
potential long-term benefit to the executives into account in setting each
executive's overall compensation targets. Because the Company and the Stock
Option Committee believe that stock options are a valuable incentive, in
recent years, stock option grants have been extended to many other individuals
employed by the Company.
- -----------------------
(1) As discussed below, in prior years the Company made three-year grants
under a Performance Unit Plan pursuant to which payments were made in the fiscal
year ended September 30, 1996. Payments may also be made in the next two fiscal
years as prior grants mature.
9
<PAGE> 13
PERFORMANCE UNIT PLAN
The Committee decided not to make further grants under the Performance Unit
Plan in the current fiscal year although payments were made for the fiscal year
ended September 30, 1996 pursuant to grants made to executive officers in 1994.
Under the plan, the amount of compensation is determined over succeeding three-
year periods of time based upon the performance of the Company as well as upon
each executive officer meeting individual goals consistent with that officer's
position with the Company. Each Performance Unit has an initial value of $50
and the performance period ends three years following grant. The actual value
of the performance unit at the end of the performance period is dependent (50%)
upon the Company achieving its cash flow target during the period and (50%) on
the individual achieving the personal goals set for him. The actual value of a
performance unit at the end of the period may vary from 0% to in excess of 100%
of the $50 nominal value.
CHIEF EXECUTIVE OFFICER COMPENSATION
The salary, bonus and stock option awards of the Chief Executive Officer are
determined by the Committee and the Stock Option Committee, in conformity with
the policies described above. Mr. Sahakian was paid a base salary for the
fiscal year ended September 30, 1996 of $288,900. In order to keep
Mr. Sahakian's base salary in line with the Committee's philosophy for the
future, Mr. Sahakian's base salary was increased for the fiscal year commencing
October 1, 1996 to $294,500 (a smaller percentage increase than that granted to
other executive officers even though Mr. Sahakian had not received an increase
in two of the last three fiscal years). Mr. Sahakian will continue to
participate and receive potential rewards under the incentive based plans
established for that purpose. In this way, the Committee is acting consistently
with its philosophy of making much of an executive's total compensation
dependent upon the Company's performance.
The Company continues to monitor the applicability of Section 162(m) of the
Internal Revenue Code of 1986, as amended, which restricts the federal income
tax deduction that may be claimed by a "public company" for compensation paid
the Chief Executive Officer and the four most highly compensated other officers
to $1 million each except to the extent that any amount in excess of such limit
is paid pursuant to a plan containing a performance standard or a stock option
plan that meets certain requirements. The Company's current stock option plan
meets the requirements of Section 162(m). In light of this, the Committee does
not believe that Section 162(m) will have any adverse effect on the Company but
continues to evaluate the Company's compensation program in light of that
restriction.
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Bruce K. Heim, Chairman Charles C. Pearson, Jr., Chairman
Charles C. Pearson, Jr. G. David Gearhart
Daniel D. Sahakian
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PERFORMANCE GRAPH
The graph set forth below compares the cumulative total stockholder return on
the Company's Common Stock for the last five years with the cumulative total
return on the Standard and Poor's 500 Index, an old peer group index based on
the common stock of the following three companies: Casey's General Stores, Inc.,
Dairy Mart Convenience Stores, Inc. and Uni-Marts, Inc., and a new peer group
index based on the common stock of the following four companies: Southland
Corporation, Casey's General Stores, Inc., Dairy Mart Convenience Stores, Inc.
and Uni-Marts, Inc. Southland Corporation has been added to the peer group to
more accurately represent a true peer group. A five-year history of Southland
Corporation was not available until this year. The cumulative total stockholder
return set forth in the graph assumes the investment of $100 in the Company's
Common Stock and each index on September 30, 1991, and reinvestment of all
dividends.
9/30/91 9/30/92 9/30/93 9/30/94 9/30/95 9/30/96
------- ------- ------- ------- ------- -------
Uni-Marts, Inc. 100 87 166 165 236 282
S & P 500 100 111 125 130 169 203
Old Peer Group 100 108 142 154 284 230
New Peer Group 100 162 225 246 171 161
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CERTAIN TRANSACTIONS
The Company received commissions of $445,000 in fiscal year 1996 from
Coinfone Telecommunications, Inc. ("CTI") for coin-operated telephones installed
at certain of the Company's convenience store locations. The majority of the
stock of CTI is beneficially owned or controlled by persons related to Henry D.
Sahakian.
The foregoing transaction and those described under "Compensation Committee
Interlocks and Insider Participation" were or are, as the case may be, on terms
which are at least as favorable as could have been obtained with or from a third
party. All such transactions were approved by a majority of the independent
directors of the Board.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of January 2, 1997, information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person known to the Company to own 5% or more of the outstanding shares of
Common Stock, (ii) each of the Company's Directors and Executive Officers and
(iii) all of the Directors and Executive Officers as a group. As of such date,
there were 6,636,450 shares of Common Stock outstanding.
Common Stock
Beneficial Ownership (1)
----------------------------
Name and Address of Beneficial Owner (2) Shares Percentage
- ----------------------------------------- -------------- ----------
Henry D. Sahakian 574,627 (3) 8.6%
Daniel D. Sahakian 949,459 (4) 14.0
J. Kirk Gallaher 88,147 (5) 1.3
G. David Gearhart 9,728 (6) 0.1
Bruce K. Heim 43,640 (7) 0.7
Jeremiah A. Keating 11,566 (8) 0.2
Charles R. Markham 52,531 (9) 0.8
Joseph V. Paterno 42,836 (10) 0.6
Charles C. Pearson, Jr. 13,562 (11) 0.2
Howard D. Romines 16,972 (12) 0.3
Michael J. Serventi 248,250 (13) 3.7
All Directors and Executive Officers as a
Group (11 persons) 2,051,318 29.5
Alexander Sahakian Trust 423,500 6.4
- -----------
(1) Includes options to purchase Common Stock granted pursuant to the Company's
Equity Compensation Plan and certain nonqualified stock options which are
exercisable within 60 days.
(2) Addresses of all beneficial owners listed are in care of the Company.
(3) Includes 92,400 shares held by Henry D. Sahakian jointly with his wife,
36,500 shares owned by his wife, 7,330 shares held in the Savings Plan and
options to purchase 41,040 shares of Common Stock. Henry D. Sahakian is
one of two trustees for two trusts for the benefit of Daniel D. Sahakian's
children. Henry D. Sahakian disclaims beneficial ownership of, and the
beneficial ownership in the table above does not include, the stock held by
these two trusts.
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<PAGE> 16
(4) Includes 423,500 shares owned by Daniel D. Sahakian's wife, 44,000 shares
held jointly with his wife, 70,115 shares held for two trusts and options
to purchase 157,000 shares of Common Stock. The beneficial ownership in
the table above does not include 635,250 shares held by two trusts for the
benefit of Daniel D. Sahakian's children.
(5) Includes 48,457 shares held by Mr. Gallaher with his wife, 1,165 shares
held in the Savings Plan and options to purchase 38,525 shares of Common
Stock.
(6) Includes 3,036 shares held by Mr. Gearhart jointly with his wife and
options to purchase 4,750 shares of Common Stock.
(7) Includes 30,142 shares owned by Mr. Heim's wife and options to purchase
7,000 shares of Common Stock.
(8) Includes 1,100 shares held by Mr. Keating jointly with his wife and options
to purchase 7,000 shares of Common Stock.
(9) Includes 1,317 shares held in the Savings Plan and options to purchase
34,820 shares of Common Stock.
(10) Includes 32,350 shares held by Mr. Paterno jointly with his wife and
options to purchase 7,000 shares of Common Stock.
(11) Includes options to purchase 4,750 shares of Common Stock.
(12) Includes 1,825 shares held in the Savings Plan and options to purchase
14,685 shares of Common Stock.
(13) Includes options to purchase 7,000 shares of Common Stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than ten percent of
its Common Stock to file with the Securities Exchange Commission and the
American Stock Exchange initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to it and written representations that no other reports were
required during or with respect to the fiscal year ended September 30, 1996, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent shareholders were complied with.
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<PAGE> 17
PROPOSAL II
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The firm of Deloitte & Touche LLP, Philadelphia, Pennsylvania, has acted as
the Company's independent auditors for the fiscal year ended September 30, 1996.
The Company intends to utilize the services of Deloitte & Touche LLP for the
fiscal year ending September 30, 1997. A member of that firm will be present at
the Annual Meeting to respond to appropriate questions from stockholders. He
may also make a statement. The proxy agents of the Board of Directors intend to
vote, unless instructed otherwise, for the ratification of the appointment of
the firm of Deloitte & Touche LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF THE ABOVE-NAMED INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS
For the next annual meeting of stockholders, stockholder proposals must be
received by the Secretary of the Company no later than September 26, 1997 to be
considered for inclusion in the Company's proxy materials for the Annual Meeting
to be held in 1998.
OTHER MATTERS
The Board of Directors is not aware of any other matters to be presented
for action, but, if any other matter properly comes before the Annual Meeting,
it is intended that the persons voting the accompanying proxy will vote the
shares represented thereby in accordance with their best judgment.
By Order of the Board of Directors,
/S/ HARRY A. MARTIN
Harry A. Martin
Secretary
State College, Pennsylvania
January 24, 1997
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<PAGE> 18
APPENDIX
UNI-MARTS, INC.
PROXY
This Proxy is solicited on behalf of the Board of Directors for the Annual
Meeting of Stockholders on February 20, 1997 and any adjournment thereof.
This Proxy will be voted as specified on the reverse side hereof. If no
specific direction is given, it will be voted for the election of Directors and
for the ratification of the appointment of the independent auditors.
The undersigned appoints Henry D. Sahakian and J. Kirk Gallaher, or any one
or more of them acting in the absence of others, proxies, each with full power
of substitution, to vote all shares of Common Stock of the Company which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company to be held on Thursday, February 20,
1997, at 10:00 A.M., and any adjournment thereof, as set forth below.
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1. - ELECTION OF DIRECTORS Henry D. Sahakian, Bruce K.
Heim, Michael J. Serventi
FOR ALL NOMINEES WITHHOLD (Instruction: To withhold
LISTED ABOVE AUTHORITY TO authority to vote for any
(except as VOTE FOR ALL nominee, write that nominee's
marked to the NOMINEES LISTED name on the line below.)
contrary below) ABOVE
/ / / /
------------------------------------
2. - PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP
AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING SEPTEMBER 30, 1997.
For Against Abstain
/ / / / / /
Date: , 1997
-----------------------------------
------------------------------------------------
------------------------------------------------
Signature(s)
IMPORTANT: Please sign your name or names
exactly as printed on this proxy. When signing
as attorney, executor, administrator,
trustee or guardian, give title as such.
2
