SEAWAY FOOD TOWN, INC.
1020 Ford Street - P. O. Box 892 - Maumee, Ohio 43537-0892
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_______________________
TO THE SHAREHOLDERS OF SEAWAY FOOD TOWN, INC.:
Notice is hereby given that the ANNUAL MEETING of the shareholders of
Seaway Food Town, Inc., an Ohio corporation, will be held at the Brandywine
Country Club, Fireside Room, 6904 Salisbury Road, Maumee, Ohio, on
Thursday, the 4th of January, 1996, at 2:00 p.m., Eastern Standard Time,
for the purpose of considering and acting upon:
(1) The election of three (3) Directors to serve as members of Class II
during the ensuing three years and until their successors are elected and
qualified.
(2) A proposal to ratify the selection of Ernst & Young LLP as
independent auditors of the Company for the fiscal year ending August 31,
1996.
(3) The transactions of such other business as may properly come before
the meeting or any adjournment thereof.
Only shareholders of record at the close of business November 17, 1995
will be entitled to vote at the meeting or any adjournment thereof.
Accompanying this notice is a copy of the Annual Report of the Company
reflecting operations for the 1994-1995 fiscal year.
By the Order of the Board of Directors
GARY D. SIKKEMA
Secretary
Maumee, Ohio
December 8, 1995
Shareholders who do not expect to be present in person on January 4, 1996
are requested to sign, date and return the attached proxy as promptly as
possible.
<PAGE>
PROXY STATEMENT
of
SEAWAY FOOD TOWN, INC.
1020 Ford Street, P. O. Box 892, Maumee, Ohio 43537-0892
December 8, 1995
THE ACCOMPANYING PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SEAWAY
FOOD TOWN, INC., for use at the Annual Meeting of Shareholders to be held
January 4, 1996, and at any adjournment thereof. This proxy statement and
the accompanying form of proxy are being mailed to security holders on or
about December 8, 1995. Any shareholder giving a proxy may revoke it by
giving written notice to the Secretary of the Company, or in open meeting,
at any time before it is voted. The Company will bear the cost of the
solicitation and will reimburse brokers or other persons holding Common
Shares of the Company in their names, or in the name of their nominees, for
reasonable expenses in forwarding the proxy and proxy statement to the
beneficial owners of such shares.
VOTING SECURITIES
At the close of business on November 17, 1995, the record date for the
determination of shareholders entitled to vote at the Annual Meeting, there
were outstanding 2,193,352 shares of Common Stock, without par value
(stated value $2 per share). The voting power of the shareholders of the
Company is vested exclusively in the holders of such Common Shares. The
presence in person or by proxy of the holders of a majority of the
outstanding shares will constitute a quorum at the Annual Meeting of
Shareholders. Holders of Common Shares of record at the close of business
on November 17, 1995 will be entitled to one vote per share on all business
which is conducted at the meeting, except that shareholders have cumulative
voting rights in the election of directors. Cumulative voting means that
each shareholder is entitled to multiply the number of shares he is
entitled to vote by the number of directors to be elected and to allocate
the resulting aggregate votes among the nominees for election in such
manner as desired. In order to exercise the right to vote cumulatively
upon the election of directors, a shareholder must give notice in writing
to the President, the Treasurer or the Secretary of the Company, which
notice must be given on or before 2:00 P.M., January 2, 1996, and shall
state the desire of the shareholder to exercise cumulative voting rights in
the election of directors. Announcement thereof must be given at the
meeting, as provided by Section 1701.55(C) of the Ohio Revised Code, and
thereupon all shareholders shall have the right to vote cumulatively. The
Chairman of the meeting or the Secretary will make an announcement at the
meeting of any such notice that may be received.
ELECTION OF DIRECTORS
(Proposal 1)
The total number of Directors on the Board of Directors of the Company
fixed under the Code of Regulations is twelve (12). However, the Board of
Directors is operating with nine (9) members.
The Board of Directors of the Company is divided into three (3) Classes,
each consisting of three (3) Directors. The terms of office for the
members of Class II of the Board of Directors will expire with this Annual
Meeting and until their successors are elected and qualified. The terms of
office of the nominees for Class II, if elected, will expire with the
Annual Meeting held subsequent to the close of the fiscal year ending
August 29, 1998, and until their successors are elected and qualified.
It is presently intended that the shares represented by management
proxies will, unless a contrary intent is expressed, be voted for the
election of the nominees listed below, each to serve as a member of Class
II for a three-year term and to hold office until a successor is elected
and qualified.
All nominees have consented to being named in this Proxy Statement and to
serve if elected. Should any nominee subsequently decline or be unable to
accept such nomination to serve as a Director, an event which the
management does not now expect, the persons voting the shares represented
by management proxies will vote for such substitute nominee as may be named
by the Board of Directors.
An affirmative vote of the holders of a majority of the shares
represented at the Annual Meeting is required to elect a nominee unless
cumulative voting rights are exercised. Proxies cannot be voted for a
greater number of persons than the number of nominees named in Class II to
be elected at the Annual Meeting. The holders of management proxies will
have discretionary authority to cumulate votes.
<PAGE>
INFORMATION CONCERNING NOMINEES AND DIRECTORS
The following table sets forth certain information as of November 17,
1995 with respect to those persons who are Directors and/or nominees for
election as Directors:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Year Common Stock
Name and Age Director Term Beneficially Percent
of Director Principal Occupation Since Expires Owned (1)(2)(3) Of Class
- ----------- ----------------------- --------- -------- -------------- ---------
CLASS II DIRECTORS (NOMINEES FOR ELECTION)
Waldo E. Yeager Chief Financial Officer, 1987 1996 5,949 (6)(7) *
Age 59 Treasurer
Richard B. Iott President of the Company 1987 1996 178,906 (6)(8) 8.16%
Age 44
Eugene R. Wos ** Owner, Crosswinds One-Stop NEW --- 0 *
Age 64 Travel, Inc., Maumee, Ohio;
former Managing Partner
Ernst & Young, Certified Public
Accountants, Toledo, Ohio. (5)
CLASS III DIRECTORS (CONTINUING IN OFFICE)
Wallace D. Iott Chairman of the Board 1957 1997 445,169 (6)(9) 20.30%
Age 80 and Chief Executive
Officer of the Company
Paul L. Pope Director of the Company 1957 1997 124,122 (11) 5.66%
Age 84 and Former Vice President
and Secretary of the Company
David J. Walrod Executive Vice President-- 1987 1997 30,191 (6) 1.38%
Age 48 Operations of the Company
CLASS I DIRECTORS (CONTINUING IN OFFICE)
Thomas M. O'Donnell Chairman of the Board, 1970 1998 4,800 (10) *
Age 58 McDonald & Company Invest-
ments, Inc., Investment
Bankers, Cleveland, Ohio
Richard K. Ransom President, Ransom Consulting 1989 1998 2,000 *
Age 76 Partnership; Former Chairman
of the Board and President of
Hickory Farms of Ohio, Inc.
Joel A. Levine Of Counsel, Spengler 1995 1998 0 *
Age 57 Nathanson,
Attorneys at Law (4)
* Less than 1%
** Mr. Wos is running in place of Mr. Kirk, who is retiring from the Board
of Directors and whose term of office expires with the January 4, 1996
Annual Meeting.
</TABLE>
The Board of Directors has appointed an Audit Committee whose members
for the fiscal year ended August 26, 1995 were Robert J. Kirk, Thomas M.
O'Donnell, Richard K. Ransom, and Joel A. Levine. The Committee's purpose
is to recommend outside auditors and to review the scope of audit
procedures, audit reports and other matters with respect to the Company's
financial reporting. This Committee met two (2) times during the fiscal
year.
The Board of Directors appointed an Executive Compensation Committee
whose members for the fiscal year ended August 26, 1995 were Wallace D.
Iott, Robert J. Kirk, Thomas M. O'Donnell, and Joel A. Levine. This
Committee's purpose is to review compensation paid to the members of the
Board of Directors and the corporate officers of the Company and recommend
changes in their compensation. This Committee met one (1) time during the
fiscal year.
The Board of Directors appointed a Nominating Committee for the fiscal
year ended August 26, 1995 whose members were Wallace D. Iott, Richard B.
Iott, Robert J. Kirk, Thomas M. O'Donnell, and Paul L. Pope. This
Committee's purpose is to review the desirability of new members of the
Board of Directors and to seek out and recommend candidates for positions
on the Board of Directors. Shareholders who desire to have an individual
considered by the Nominating Committee for the next vacant position on the
Board of Directors should submit the recommendation in writing to the
Secretary of the Company before the September 1 preceding the next Annual
Meeting of the Shareholders and include biographical information and
qualifications for service as a director. The Nominating Committee met
one (1) time during the fiscal year.
<PAGE>
During the fiscal year ended August 26, 1995, the Board of Directors
met a total of four (4) times. All Directors attended at least 75% of the
aggregate of the meetings of the Board of Directors and the committees on
which they served, except for Mr. Pope.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth, as of November 17, 1995, the names
and addresses of beneficial owners, amounts beneficially owned, and the
percentage of common shares owned beneficially by those persons (including
any "group" as the term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934) known to management to be the beneficial owner of
more than 5% of the Company's Common Shares:
<TABLE>
<CAPTION>
Name and address Amount Beneficially Percent of
of Beneficial Owner Owned (1)(2)(3) Class
<S> <C> <C>
Wallace D. Iott 445,169 (6) (9) 20.30%
3402 Chapel Drive
Toledo, Ohio 43615
Lieber & Company 134,000 (12) 6.11%
2500 Westchester
Purchase, New York 10577
Key Trust Co. of Ohio N.A., Trustee 206,120 (13) 9.40%
P. O. Box 10099
Toledo, Ohio 43699-0099
Richard B. Iott 178,906 (6) (8) 8.16%
5245 Kenner Road
Monclova, Ohio 43542
Constance J. Heider 150,793 (14) 6.88%
6744 Sweet Bush
Sylvania, Ohio 43560
Paul L. Pope 124,122 (12) 5.66%
4532 Sanderling Lane
Quail Ridge No. 73
Boynton Beach, Florida 33436
All executive officers and directors 794,337 (6) 36.22%
as a group (9 persons)
</TABLE>
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
The Company leases supermarkets in Temperance, Michigan and Sylvania,
Ohio and a Floral Operations Center in Toledo, Ohio, from MS Associates, a
limited partnership controlled by members of the Wallace D. Iott family.
The primary term for the Temperance supermarket lease expires in the year
2002; $128,217 in rent was paid during the fiscal year for the Temperance
location. The primary term for the Sylvania supermarket lease expires in
the year 2004; $306,821 in rent was paid during the fiscal year for the
Sylvania location. The primary term for the Toledo Floral Operations
Center lease expires in the year 1997; $17,500 in rent was paid during the
fiscal year for the Floral Operation Center.
The Company believes that the terms of the foregoing leases and other
transactions are at least as favorable as those that could have been
obtained from non-affiliated parties for comparable properties or goods.
EXECUTIVE COMPENSATION
Summary Compensation Table
The Summary Compensation Table shows certain compensation information
for the Chief Executive Officer and the three other most highly
compensated executive officers for services rendered in all capacities
during the fiscal years ended August 28, 1993, August 27, 1994, and August
26, 1995. This information includes the dollar value of base salaries and
certain other compensation. The Company does not award bonuses or Stock
Appreciation Rights ("SARs"). In addition, the Company's stock option plan
expired in 1993 and there are no unexercised options outstanding.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
-------------------------
Annual Compensation Awards Payouts
--------------------------- ----------------- ------
Other Ann. Restricted All Other
Compen- Stock Option LTIP Compen-
Name and Principal Salary Bonus sation Award(s) SARs Payouts sation
Position Year ($) ($) ($) (A) ($) (#) ($) ($)(B)(D)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wallace D. Iott,
Chairman of the Board 1995 $310,000 $ 0 $ -- $ 0 0 $ 0 $60,150
and Chief Executive 1995 310,000 (C) 0 -- 0 0 0 63,716
Officer 1994 310,000 (C) 0 -- 0 0 0 62,163
Richard B. Iott, 1995 185,471 0 -- 0 0 0 12,187
President 1994 180,500 0 -- 0 0 0 13,512
1993 179,539 0 -- 0 0 0 12,245
David J. Walrod,
Executive 1995 176,000 0 -- 0 0 0 12,870
Vice- President 1994 171,300 0 -- 0 0 0 13,913
--Operations 1993 170,627 0 -- 0 0 0 12,767
Waldo E. Yeager,
Chief Financial Officer 1995 161,529 0 -- 0 0 0 19,466
& Treasurer 1994 157,100 0 -- 0 0 0 20,460
1993 156,658 0 -- 0 0 0 19,223
</TABLE)
(A) Perquisites and other benefits for each executive officer amount to less
than 10% of salary and bonus.
(B) Includes amounts paid by the Company on behalf of the executive for some
or all of the following: Matching 401(k) Contributions ("401(k)"), ESOP
Contributions ("ESOP"); insurance premiums on life insurance for the
executive paid by the Company and fully included on the executive's W-2
("Premiums"); insurance premiums paid by the Company pursuant to a
"split-dollar" arrangement with the executive ("Insurance").
</TABLE>
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Wallace D. Iott:
401(k) $4,500 $ 4,620 $ 4,497
ESOP $3,750 $ 7,196 $ 5,766
Premiums $51,900 $51,900 $51,900
Richard B. Iott:
401(k) $4,937 $ 4,289 $ 4,363
ESOP $3,750 $ 5,723 $ 4,382
Insurance $3,500 $ 3,500 $ 3,500
David J. Walrod
401(k) $4,920 $ 4,299 $ 4,270
ESOP $3,750 $ 5,414 $ 4,297
Insurance $4,200 $ 4,200 $ 4,200
Waldo E. Yeager
401(k) $4,716 $ 4,497 $ 4,278
ESOP $3,750 $ 4,963 $ 3,945
Insurance $11,000 $11,000 $11,000
</TABLE>
(C) Mr. Iott's salary for 1993 was previously reported as $321,635 as a
result of the erroneous inclusion of a pay period that should have been
applied to his 1994 compensation. The figures contained in the current
Summary Compensation Table have been adjusted and are accurate.
(D) Under the terms of a split-dollar insurance arrangement between the
Company and the executive, upon surrender of the policy, the executive
is entitled to the cash surrender value in excess of premiums paid by the
Company. Currently, premiums paid by the Company exceed the cash
surrender value.
<PAGE>
Option/SAR Grants in Last Fiscal Year
The Company does not currently sponsor any program through which
options or SARs are granted.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The Company has not awarded and does not award SARs and has no
unexercised options outstanding.
Long-Term Incentive Plans/Awards in Last Fiscal Year
The Company does not maintain any long-term incentive plans. No
long-term incentive awards were made in the last fiscal year.
COMPENSATION COMMITTEE REPORT
The fundamental philosophy of the Company's compensation program is to
retain and reward executives who are capable of leading the Company in
achieving its business objectives in an industry characterized by
complexity, competitiveness and change.
The compensation of the Company's top executives is reviewed and
approved annually by the Compensation Committee. The Company does not
maintain any long or short-term incentive programs for its executives.
Base Salary
The Committee annually reviews and establishes an overall salary
structure at a competitive level with the industry that applies to all
salaried employees, including officers. Salary levels for executives are
determined by the individual's experience level, scope and complexity of
the position held, comparability within the supermarket industry and within
the area, length of service, and contributions toward the Company's success
and continuing operation. While there is no specific weighting of these
factors, competitive positioning is the primary consideration in
establishing the budget for salary expenditures. Business and other
economic factors such as net income and estimates of inflation are
secondary considerations.
In addition to the foregoing, the following factors are also
considered in determining the compensation for Wallace D. Iott, the
Company's CEO: comparable executive compensation within the supermarket
industry, Mr. Iott's 37-year tenure with the Company, his present and
cumulative contributions to the Company, the sales and gross profit margin
of the Company and its various subsidiaries and affiliates, and other
intangible criteria.
Based on the criteria described above, the Committee approved an
increase for Mr. Iott in 1995, however, Mr. Iott declined to accept the
increase. His base salary for 1995 of $310,000 is shown under the
caption "Salary" in the Summary Compensation Table.
Stock Option Plan
The Company does not presently sponsor a stock option plan.
Summary
The Compensation Committee has the responsibility for ensuring that
the Company's compensation program adequately compensates its executives
while also being mindful of the interest of its shareholders.
The Company has had, and continues to have, an appropriate and
competitive compensation program. While the Compensation Committee is
constantly reviewing incentive programs and other forms of compensation
that may be implemented to develop and maintain strong management and,
therefore, Company growth and profitability, the current compensation
program supports a performance-oriented environment that rewards
performance, not only with respect to Company goals, but also Company
performance as compared to that of industry performance levels.
<PAGE>
Share Investment Performance
The following graph compares the yearly percentage change in the
cumulative total shareholder return, including reinvested dividends, of
Seaway Food Town, Inc. Common Stock, with two other indexes.
SEE GRAPH DESCRIPTION BELOW
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
8/90 8/91 8/92 8/93 8/94 8/95
<S> <C> <C> <C> <C> <C> <C>
Seaway Food Town, Inc. 100 80 74 70 63 106
Peer Group 100 111 90 91 84 80
NASDAQ Stock Market 100 142 154 203 211 284
</TABLE>
The peer group companies are: Buttrey Food & Drug Stores (went public in
1991), Delchamps, Inc., Eagle Food Centers, Inc., Foodarama Supermarkets,
Inc., Ingles Markets, Inc., Marsh Supermarkets, Inc. and Village
Supermarket, Inc. These are moderately capitalized companies engaged in
the same line of business as the Company.
Compensation Committee Interlocks and Insider Participation
One member of the Compensation Committee, Wallace D. Iott, is an
Executive Officer of the Company. Mr. Iott is the Chairman of the Board
and Chief Executive Officer.
<PAGE>
COMPENSATION OF DIRECTORS
Members of the Board of Directors who have not previously served and who
are not currently serving as employees of the Company are paid an annual
fee of $4,000 for service as a Director of the Company. Non-employee
Directors are paid $1,500 for each Board meeting attended and $600 for
each day Committee meetings are attended on a day other than a day the
entire Board of Directors meets. No fees for services as a Director or
Secretary of the Company were paid to Mr. Sikkema. Legal fees are paid to
Spengler Nathanson as compensation for his services in connection with
Board and Committee activities. Paul Pope receives supplemental pension
payments of $15,000 per year for life, attributable solely to service
rendered during his employment with the Company. These payments were
originally scheduled to expire in 1990. By agreement dated October 12,
1989, these payments were extended through the year 2000, but terminating
at the death of both Mr. Pope and his wife, if earlier.
EXECUTIVE OFFICERS
Effective October 21, 1994, Gary D. Sikkema was appointed Company
Secretary. Mr. Sikkema is a partner of the law firm of Spengler Nathanson.
Mr. Sikkema has been a partner of Spengler Nathanson for the most recent
five (5) year period. David J. Walrod has served as an executive officer
of the Company since 1979. Waldo E. Yeager has served as an executive
officer of the Company since 1974. Wallace D. Iott has been the Chief
Executive Officer of the Company since it was founded in 1957. Richard B.
Iott was elected to executive officer status in 1984 and has been employed
by the Company since 1971 in a variety of capacities. Prior to his
election to the office of President he was employed primarily in the
marketing and merchandising areas. Richard B. Iott is the son of Wallace D.
Iott, Chairman of the Board and Chief Executive Officer of the Company.
The term of office for all executive officers is one (1) year.
FOOTNOTES:
(1) Based in part on information furnished by the nominees and
directors or their agents, and in part on Company records.
(2) The inclusion of shares owned by the spouse or any of the minor
children of any of the nominees or directors as being beneficially
owned shall not be construed as an admission of beneficial ownership
by such director or nominee.
(3) No shares reported hereunder are owned of record but not
owned beneficially.
(4) Spengler Nathanson has served as general counsel to the Company
since incorporation in 1957 and will remain as such in the current
fiscal year. Fees paid to said firm by the Company for legal
services amounted to $339,182 during the Company's fiscal year ended
August 26, 1995.
(5) Mr. Wos is also a member of the Board of Directors of General
Alum Corporation.
(6) Includes the number of shares allocated as of the record date
under the Seaway Food Town, Inc. Employee Stock Ownership Plan.
(7) Includes 300 shares owned by Mr. Yeager's children.
(8) Includes 29,264 shares owned by Richard B. Iott as custodian for
his minor children and 9,625 shares owned by his wife.
(9) Includes 199,200 shares owned by Wallace D. Iott's wife.
(10) Includes 400 shares owned by Mr. O'Donnell's wife and 1,200
shares owned by his daughter .
(11) Includes 31,786 shares owned independently by Mr. Pope's wife.
(12) Based on information in Schedule 13G filed with the Securities
and Exchange Commission on or about June 25, 1987, and any
amendments thereto and information provided by the beneficial owner.
(13) Held as Trustee for Seaway Food Town, Inc. Employee Stock
Ownership Plan.
(14) Includes 9,185 shares owned by Constance J. Heider as custodian
for her minor child.
<PAGE>
RATIFICATION OF SELECTION OF AUDITORS
(Proposal 2)
At the Annual Meeting, shareholders will consider and act upon the
approval of auditors for the Company's fiscal year ending August 31, 1996.
The Board of Directors, upon recommendation of its Audit Committee and
subject to such approval, has selected the independent certified public
accounting firm of Ernst & Young LLP as such auditors. Ernst & Young LLP
have been auditors for the Company for many years through one of its
predecessor entities, Arthur Young & Company. Representatives of Ernst &
Young LLP are expected to be present at the annual meeting and will have an
opportunity to make a statement if they desire to do so and are expected
to be available to respond to appropriate questions.
The Board of Directors of the Corporation recommends a vote for
approval of the selection of Ernst & Young LLP. Unless otherwise
specified, shares represented by proxies will be voted for approval of
Ernst & Young LLP as auditors. Although the submission of this matter for
approval by shareholders is not required legally, the Board of Directors
believes that such submission follows sound corporate practice and is in
the best interests of shareholders. If approval of Ernst & Young LLP by an
affirmative vote by the holders of a majority of the shares presented is
not received, the selection of a firm as auditors for the Corporation will
be considered by the Audit Committee and the Board of Directors.
SHAREHOLDER PROPOSALS
Shareholders may submit proposals for consideration at a meeting of
the shareholders if the shareholder desiring to do so complies with the
proxy solicitation rules of the Securities and Exchange Commission. In
order for such proposal to be included in the proxy statement for the
Annual Meeting in 1997, the proposal must be received by the Secretary no
later than September 1, 1996.
OTHER MATTERS
At the date of this proxy statement the Management knows of no other
business to be presented at the meeting. However, if any other business
should come before the meeting, the persons named in the accompanying proxy
will vote in accordance with their best judgment.
By Order of the Board of Directors
Gary D. Sikkema, Secretary
SEAWAY FOOD TOWN, INC.
December 8, 1995
Maumee, Ohio
