SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Village Super Market, Inc.
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VILLAGE SUPER MARKET, INC.
733 MOUNTAIN AVENUE
SPRINGFIELD, NEW JERSEY 07081
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 9, 2005
------------------------
The Annual Meeting of the shareholders of Village Super Market, Inc. will
be held at the offices of the Company, 733 Mountain Avenue, Springfield, New
Jersey 07081 on Friday, December 9, 2005 at 10:00 A.M. for the following
purposes:
(1) To elect eight directors for the ensuing year;
(2) To ratify the appointment of KPMG LLP as our independent registered
public accounting firm ("independent auditors") for the 2006 fiscal
year; and
(3) To transact any other business which may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on October 7, 2005
as the record date for the determination of the shareholders entitled to notice
of and to vote at the meeting and any adjournment thereof.
By order of the Board of Directors,
ROBERT SUMAS,
Secretary
November 4, 2005
VILLAGE SUPER MARKET, INC.
733 MOUNTAIN AVENUE
SPRINGFIELD, NEW JERSEY 07081
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PROXY STATEMENT
DECEMBER 9, 2005
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement and the accompanying form of proxy are being mailed to
shareholders of Village Super Market, Inc. (the "Company") in connection with
the solicitation by and on behalf of the Board of Directors of the Company (the
"Board") of proxies to be voted at the Annual Meeting of Shareholders (the
"Annual Meeting") to be held at the offices of the Company, 733 Mountain Avenue,
Springfield, New Jersey on December 9, 2005 at 10:00 a.m. and at all
postponements or adjournments thereof.
At the close of business on October 7, 2005, the Company had outstanding
and entitled to vote 1,641,813 shares of Class A common stock, no par value, and
1,594,076 shares of Class B common stock, no par value. The holders of the
outstanding shares of Class A Stock are entitled to one vote per share and the
holders of Class B Stock are entitled to ten votes per share. Shareholders of
record at the close of business on October 7, 2005 are entitled to vote at this
meeting.
All shares of Common Stock represented by properly executed proxies will be
voted at the Annual Meeting, unless such proxies previously have been revoked.
Unless the proxies indicate otherwise, the shares of Common Stock represented by
such proxies will be voted for the election of the Board of Directors' nominees
for directors and to ratify the selection of KPMG LLP as independent auditors.
Management does not know of any other matter to be brought before the Annual
Meeting.
Directors are elected by a plurality of the number of votes cast. With
respect to each other matter to be voted upon, a vote of a majority of the
number of votes cast is required for approval. Abstentions and proxies submitted
by brokers with a "not voted" direction will not be counted as votes cast with
respect to each matter.
The Company's address is 733 Mountain Avenue, Springfield, New Jersey and
its telephone number is (973) 467-2200. This notice, proxy statement and
enclosed form of proxy are being mailed to shareholders on or about November 4,
2005.
Any shareholder who executes and delivers a proxy may revoke it at any time
prior to its use by: (a) delivering written notice of such revocation to
Secretary of the Company at its office; (b) delivering to the Secretary of the
Company a duly executed proxy bearing a later date; or (c) appearing at the
Meeting and requesting the return of his or her proxy.
YOU ARE REQUESTED TO COMPLETE AND SIGN THE ACCOMPANYING PROXY AND RETURN IT
PROMPTLY IN THE ENVELOPE PROVIDED FOR THAT PURPOSE.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's capital stock by: (i) persons known by the
Company to own beneficially more than 5% of its Class A Stock or Class B Stock;
(ii) each director of the Company; and (iii) all directors and executive
officers of the Company collectively:
CLASS A STOCK(1) CLASS B STOCK(1)
---------------------------------------- ----------------------------------
PERCENTAGE PERCENTAGE
SHARES OF SHARES OF
OWNED CLASS(3) OWNED CLASS(4)
NAME ------ ---------- ------ ----------
Perry Sumas(2)................. 113,443(5)(6)(11)(12) 6.9 510,896(7)(12)(20) 32.0
James Sumas(2)................. 58,479(5)(6)(14) 3.6 311,116(7)(8) 19.5
Robert Sumas(2)................ 41,305(5)(6)(15) 2.5 160,180(9) 10.0
William Sumas(2)............... 77,923(11) 4.7 164,011(20) 10.3
John Sumas(2).................. 93,177(10)(11) 5.7 151,307(20) 9.5
John J. McDermott.............. 3,000 .2 -- --
Steven Crystal................. 24,500 1.5 800 .1
David C. Judge................. 7,500(17) .5 -- --
All directors and executive
officers as a group (9
persons)..................... 231,945(13) 14.1 1,167,764 73.3
Sumas Family Group(2).......... 177,645 10.8 1,166,964 73.2
Franklin Resources, Inc. ...... 115,175(16) 7.0 -- --
Wistar Morris III.............. 111,545(19) 6.8 -- --
AXA Financial, Inc............. 90,256(18) 5.5 -- --
Norman Crystal................. 221,800 13.5 109,280 6.9
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(1) Except as noted, each person has sole investment power and sole voting
power with respect to the shares beneficially owned.
(2) As reported in a Schedule 13D/A dated January 21, 2004, these five persons
comprise the Sumas Family Group. The Sumas Family Group beneficially owns
177,645 shares of Class A Stock and 1,166,964 shares of Class B Stock, or
67.4% of the combined voting power. By virtue of the existence of this
"group", the Company is a controlled company under the corporate governance
rules of NASDAQ. The address of each of these five persons is in care of
the Company, 733 Mountain Avenue, Springfield, New Jersey 07081.
(3) Based upon 1,641,813 shares of Class A Stock outstanding.
(4) Based upon 1,594,076 shares of Class B Stock outstanding.
(5) Includes 25,680 shares held by the Company's pension trust of which Perry
Sumas, James Sumas and Robert Sumas are trustees.
(6) Includes 4,994 shares held by a charitable trust of which Perry Sumas,
James Sumas and Robert Sumas are trustees.
(7) Includes 63,172 shares as to which Perry Sumas and James Sumas have agreed
to share the power to vote pursuant to a Voting Agreement dated March 4,
1987.
(8) Includes 2,940 shares owned jointly by Mr. and Mrs. James Sumas; 9,955
shares owned by Mrs. James Sumas; 3,280 shares held by Mr. and Mrs. James
Sumas as custodians for their children; and 24,555 shares owned by a child
living with James Sumas.
(9) Includes 49,643 shares owned by Mrs. Robert Sumas.
(10) Includes 100 shares owned by Mrs. John Sumas.
(11) Includes 70,167 shares held in the name of Perry Sumas, William Sumas and
John Sumas as Co-Trustees of a Trust for the benefit of the grandchildren
of Perry Sumas.
(12) Includes 9,384 Class A shares and 3,368 Class B shares owned by a child
living with Perry Sumas.
(13) Includes 5,000 shares represented by options exercisable by all officers
and directors under the Company's Stock Option Plan.
(14) Includes 3,842 shares owned by Mrs. James Sumas and 10,324 shares owned by
a child living with James Sumas.
(15) Includes 3,008 shares owned by Mrs. Robert Sumas.
(16) As reported in a Schedule 13G dated December 31, 2004, Franklin Resources,
Inc. may be deemed to be the beneficial owner of 115,175 shares of the
Company. Franklin's address is One Franklin Parkway, San Mateo, California
94404.
(17) Includes 5,000 shares represented by options exercisable by him under the
Company's Stock Option Plan.
(18) As reported in a Schedule 13G dated December 31, 2004, AXA Financial, Inc.
may be deemed to be the beneficial owners of 90,256 shares of the Company.
The address of AXA Financial, Inc. is 1290 Avenue of the Americas, New
York, New York 10104.
(19) As reported in a Schedule 13D dated July 22, 2003, Wistar Morris III may be
deemed to be the beneficial owner of 111,545 shares of the Company. Mr.
Morris address is c/o Boenning & Scattergood, Inc., 4 Tower Bridge, Suite
300, 200 Barr Harbor Drive, West Conshohocken, PA 19428.
(20) Includes 33,687 shares held in the name of Perry Sumas, William Sumas and
John Sumas as Co-Trustees of a Trust for the benefit of the grandchildren
of Perry Sumas.
The aggregate number of shares of Class B Stock owned by Perry Sumas and
his sons, William Sumas and John Sumas, exceeds the aggregate number of shares
of Class B Stock owned by James Sumas and
2
Robert Sumas (the "Excess Shares"). Perry Sumas and James Sumas have entered
into an agreement whereby the Excess Shares will be voted pursuant to the mutual
agreement of James Sumas and Perry Sumas. The voting agreement will be
automatically cancelled if Perry Sumas either: (i) converts the Excess Shares
into shares of Class A Stock; or (ii) exchanges 50% of the Excess Shares for
shares of Class A Stock owned by James Sumas.
ELECTION OF DIRECTORS
The following eight persons will be nominated by the Board of Directors of
the Company for election as directors at the Annual Meeting. If elected, they
will serve until their successors are duly elected and qualified. Directors
shall be elected by a plurality of the votes cast. All of the nominees are now
directors of the Company.
Certain information is given below with respect to each nominee for
election as a director. The table below and the following paragraphs list their
respective ages, positions and offices held with the Company, the period served
as a director and business experience during the past 5 years. Perry Sumas is
the father of William Sumas and John Sumas. Perry Sumas is the uncle of James
Sumas and Robert Sumas, who are brothers. The other nominees are not related.
NOMINEES
The following table sets forth information concerning the nominees for
director:
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
James Sumas.......................... 72 Chief Executive Officer, Chief
Operating Officer and Chairman of
the Board of Directors
Perry Sumas.......................... 90 President and Director
Robert Sumas......................... 64 Executive Vice President, Secretary
and Director
William Sumas........................ 58 Executive Vice President and Director
John Sumas........................... 56 Executive Vice President and Director
John J. McDermott.................... 80 Director
Steven Crystal....................... 49 Director
David C. Judge....................... 44 Director
James Sumas was elected Chairman of the Board in 1989. He was named Chief
Executive Officer in 2002. He also serves as the Company's Chief Operating
Officer. He has served as variously Vice President, Treasurer and a Director of
the Company since its incorporation in 1955. James Sumas is Vice Chairman of
Wakefern Food Corporation and is a member of its Board of Directors. Mr. Sumas
also is the Chairman of Wakefern's Grocery Committee and its Advertising
Committee. In addition, he is Vice Chairman of Wakefern's Sales and
Merchandising Committee and of ShopRite Supermarkets, Inc., Wakefern's
supermarket operating subsidiary. Mr. Sumas also is a member of Wakefern's
Finance, Trade Name and Trademark and Strategic Planning Committees.
Perry Sumas, together with Nicholas Sumas, founded the Company in 1937. He
has served as a Director of the Company since its incorporation in 1954 and has
served as President since 1973.
Robert Sumas has served as Vice President, Secretary and a Director of the
Company since 1969. Since 1989, he has served as an Executive Vice President. He
has responsibility for finance and administration matters, construction of new
stores and remodels and retail automation. Robert Sumas is Chairman of
Wakefern's Health and Beauty Aids Committee and is a member of Wakefern's
Communications, Sales and Merchandising and Property Management Committees.
William Sumas has served as Vice President and a Director of the Company
since 1980. Since 1989, he has served as an Executive Vice President. He has
responsibility for real estate development. William Sumas
3
is Chairman of Wakefern's Commercial Bakery Committee and is a member of
Wakefern's Loss Prevention Policy Committee. He also serves as Chairman of the
New Jersey Food Council.
John Sumas has served as Vice President and a Director of the Company since
1982. Since 1989, he has served as an Executive Vice President. He has
responsibility for the Company's frozen food, dairy, appetizing and fresh bakery
operations. John Sumas is a member of Wakefern's Frozen Food, Dairy/Deli and
Fresh Bakery Committees.
John J. McDermott has served as a Director of the Company since 1982. Mr.
McDermott is the President of John J. McDermott Enterprises, a bank consulting
firm. Prior to his retirement in 1989, Mr. McDermott served as President of the
commercial lending subsidiaries of three bank holding companies. Mr. McDermott
previously served as General Counsel to the Company from 1982 to 1983.
Steven Crystal has served as a Director of the Company since 2001. Mr.
Crystal owns and manages four AC Delco auto parts stores, one of the nations
largest Honda motorcycle dealerships and an ACE hardware store. Since 1980, he
has been a member of the New York Mercantile Exchange and NY Commodity Exchange,
where he serves on numerous committees, including finance, and actively trades
commodities. In addition, Mr. Crystal manages and owns residential and
commercial real estate. Steven Crystal is the son of Norman Crystal, a major
shareholder of the Company.
David C. Judge has served as a Director of the Company since June 2003. Mr.
Judge is a Managing Director and Group Executive for The Bank of New York. He is
responsible for six corporate banking Divisions, including the Retailing
Industry & Apparel Division, which handle over 700 client relationships. In
addition, Mr. Judge is responsible for the Corporate Credit Analysis &
Monitoring Group, a primary source of financial analysis for corporate credit
transactions. He also serves as a Director for Contemporary Guidance Services.
The Certificate of Incorporation includes a provision that no director
shall be personally liable for monetary damages to the Company or its
shareholders for a breach of any fiduciary duty except for: (i) breach of a
director's duty of loyalty; (ii) acts and omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; and (iii) any
transaction from which a director derived an improper personal benefit.
INFORMATION REGARDING THE BOARD AND ITS COMMITTEES
The Company is a "controlled company" under the corporate governance rules
of NASDAQ. Therefore the Company is not required to and does not have (1) a
majority of independent directors; (2) a nominating committee comprised solely
of independent directors to identify and recommend nominees to the Board of
Directors; and (3) a compensation committee comprised solely of independent
directors. The Company qualifies as a controlled company due to the ownership by
the Sumas Family Group of shares allowing it to cast more than 50% of the votes
eligible to be cast for the election of directors.
The Board held four meetings in fiscal 2005. All directors attended at
least 75% of the meetings of the Board, and meetings of Board committees on
which the director served, during the time such director served on the Board or
committee.
The Executive Committee, which consists of Perry Sumas, James Sumas, Robert
Sumas, William Sumas and John Sumas, meets on call and is authorized to act on
all matters pertaining to corporate policies and overall Company performance.
THE COMPENSATION COMMITTEE
The Compensation Committee, which consists of Perry Sumas, James Sumas and
John J. McDermott, reviews and approves the compensation paid to executive
officers of the Company. This includes base salary, bonus awards, employment
agreements, supplemental retirement plans, restricted share awards and stock
option grants. During fiscal 2005, the Compensation Committee met three times.
4
THE AUDIT COMMITTEE
The Audit Committee is comprised of three directors, John J. McDermott,
Steven Crystal and David C. Judge, each of whom is "independent" as defined by
the listing standards of NASDAQ. The Audit Committee: (1) monitors the integrity
of the Company's financial reporting process and systems of internal controls
regarding financial, accounting, regulatory and legal compliance; (2) retains
and monitors the independence and performance of the Company's independent
auditors; (3) provides an avenue of communication among the independent
auditors, management and the Board of Directors; and (4) approves in advance the
fees paid to the independent auditing firm for all services provided. The Audit
Committee operates under a charter adopted by the Board of Directors, which was
attached to the 2004 proxy statement as Appendix A. During fiscal 2005, the
Audit Committee met six times.
The Securities and Exchange Commission has adopted rules implementing
Section 407 of the Sarbanes Oxley Act of 2002 requiring public companies to
disclose information about Audit Committee financial experts. The Board of
Directors of the Company has concluded that none of the three independent audit
committee members meet the narrow SEC definition of Audit Committee financial
expert as none have served as a principal accounting officer or public
accountant, or have been responsible for actively supervising a principal
accounting officer. SEC rules do not require Audit Committees to have a
financial expert. However, the Board of Directors has determined that all three
independent members of the Audit Committee meet the NASDAQ requirements for
audit committee members. NASDAQ requires Audit Committee members be able to read
and understand financial statements. In addition, NASDAQ rules require one
member of the Audit Committee to have employment experience in finance or
accounting, or other comparable experience which results in financial
sophistication, including as a senior officer with financial oversight
responsibilities.
The current members of the Audit Committee include two individuals who have
diverse and extensive experience in the finance industry, including
responsibilities for analysis of financial statements in connection with
corporate lending to the supermarket industry. A third member of the Audit
Committee is CEO of several operating companies, including two retail companies.
The Board of Directors believes all three members of the Audit Committee have
the ability to read and understand financial statements and an understanding of
the retail industry appropriate to perform their Audit Committee duties. The
Company may consider the addition of an Audit Committee member in the future
meeting the narrow Audit Committee "financial expert" definition adopted by the
SEC.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee is comprised of three independent directors, as defined
by the listing standards of NASDAQ, and operates under a charter adopted by the
Board of Directors. The members of the Committee are John J. McDermott (Chair),
Steven Crystal and David C. Judge. The Committee appoints the Company's
independent auditors.
Management is responsible for the Company's internal controls and the
financial reporting process. The independent auditors are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States) and to issue a report thereon. The Audit
Committee's responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has met and held discussions with
management and the independent auditors. Management represented to the Audit
Committee that the Company's consolidated financial statements were prepared in
accordance with accounting principles generally accepted in the United States,
and the Audit Committee has reviewed and discussed the consolidated financial
statements with management and the independent auditors. The Audit Committee
discussed with the independent auditors matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).
5
The Company's independent auditors also provided to the Audit Committee the
written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Audit Committee
discussed with the independent auditors that firm's independence.
Based upon the Audit Committee's discussion with management and the
independent auditors and the Audit Committee's review of the representations of
management and the report of the independent auditors, the Audit Committee
recommended that the Board of Directors include the audited consolidated
financial statements in the Company's Annual Report on Form 10-K for the year
ended July 30, 2005 filed with the Securities and Exchange Commission.
The following table presents fees for professional services rendered by
KPMG LLP for the audit of the Company's annual consolidated financial statements
for fiscal 2005 and 2004, and fees billed for other services rendered by KPMG
LLP:
2005 2004
---- ----
Audit fees(1)............................................... $134,000 $ 90,000
Audit-related fees(2)....................................... 30,000 25,000
Tax fees(3)................................................. 41,000 46,000
All other fees.............................................. -- --
-------- --------
Total fees................................................ $205,000 $161,000
-------- --------
---------------
(1) Audit fees consist of audits of the annual consolidated financial
statements, quarterly reviews and services provided in connection with
statutory and regulatory filing engagements, including issuance of consents.
(2) Audit related fees consist of audits of financial statements of employee
benefit plans.
(3) Tax fees consist of fees for tax compliance and consultation services.
The Audit Committee has considered whether the providing of non-audit
services is compatible with maintaining the auditors' independence. The Audit
Committee pre-approves all services provided by the principal auditors.
Audit Committee
JOHN J. MCDERMOTT
STEVEN CRYSTAL
DAVID C. JUDGE
NOMINATION OF CANDIDATES TO THE BOARD OF DIRECTORS
The full Board of Directors acts on all matters concerning the
identification, evaluation and nomination of director candidates. The Board does
not utilize a charter in performing this function. As a matter of policy, the
Board will consider nominations of director candidates submitted by any
shareholder upon the submission of the names and biographical data of the
candidates (including any relationship to the proposing shareholder) in writing
to the Board of Directors at 733 Mountain Avenue, Springfield, New Jersey,
07081. Information regarding director candidates for election to the Board in
2006 must be submitted by July 1, 2006.
The Board's process for evaluating candidates recommended by any
shareholder is the same as for candidates recommended by the Board, management
or others. In searching for appropriate candidates, the Board adheres to
criteria established for the consideration and selection of candidates. The
Board views the candidate's qualifications in light of the needs of the Board
and the Company at that time given the then current mix of director attributes.
Among other criteria, the Board may consider the following skills, attributes
and competencies of a new member: (i) possessing the highest ethical standards
and integrity; (ii) a willingness to act on and be accountable for Board
decisions; (iii) an ability to provide prudent, informed and thoughtful counsel
to top management on a broad range of issues; (iv) relevant industry or business
knowledge; (v) senior management experience and demonstrated leadership; (vi)
financial literacy; (vii) individual backgrounds that provide a portfolio of
experience and knowledge commensurate with the Company's needs. Each director
will be considered without regard to gender, race, religion, national origin or
sexual orientation.
6
COMMUNICATION WITH THE BOARD OF DIRECTORS
Shareholders and other interested parties may communicate with the Board of
Directors by sending written communication to the directors c/o the Company's
Secretary, 733 Mountain Avenue, Springfield, New Jersey 07081. All such
communications will be reviewed by the Secretary to determine which
communications will be forwarded to the directors. All communications will be
forwarded except those that are related to Company products, are solicitations,
or otherwise relate to improper or irrelevant topics, as determined in the sole
discretion of the Secretary. The Secretary shall report to the Board of
Directors on the number and nature of communications that were determined not to
be forwarded.
The Company has a policy of requiring all directors standing for election
at the annual meeting of shareholders to attend such meeting, unless unforeseen
circumstances arise. All eight directors attended the 2004 annual meeting of
shareholders held on December 10, 2004.
DIRECTOR COMPENSATION
Non-employee directors currently are paid an annual retainer of $8,000 plus
fees of $1,000 for each Board meeting and $1,000 for each Committee meeting
attended. Directors who are employees of the Company receive no compensation for
service as directors. In addition, the Company in previous years granted to each
of its non-employee directors options to purchase 5,000 shares of class A common
stock at an option price equal to the fair value of the stock at the date of
grant. In fiscal 2005, the Company granted to each of its non-employee directors
2,500 restricted shares of Class A common stock, which vest in three years.
CODE OF ETHICS
The Company has a written Code of Ethics that applies to, among others, the
Chief Executive Officer, Chief Financial Officer and Principal Accounting
Officer. During fiscal 2005, there were no changes to, or waivers of, the Code
of Ethics. The Company will furnish a copy of the Code of Ethics, without
charge, to each person who forwards a written request to Mr. Robert Sumas,
Secretary, Village Super Market, Inc., 733 Mountain Avenue, Springfield, New
Jersey 07081.
7
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company during
the last three fiscal years to the Chief Executive Officer and the four most
highly compensated executive officers of the Company:
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
------------
RESTRICTED
STOCK ALL OTHER
ANNUAL COMPENSATION AWARDS(A)($) COMPENSATION(B)($)
--------------------- ------------ ------------------
NAME AND POSITION YEAR SALARY($) BONUS($)
----------------- ---- --------- --------
James Sumas.................. 2005 585,822 105,000 273,000 1,995
Chairman of Board, Chief 2004 567,503 80,000 -- 1,817
Executive Officer and 2003 529,980 40,000 -- 1,659
Chief Operating Officer
Robert Sumas................. 2005 471,423 90,000 273,000 3,075
Executive Vice President 2004 460,384 75,000 -- 3,000
and Secretary 2003 433,968 35,000 -- 2,587
William Sumas................ 2005 405,177 90,000 273,000 3,075
Executive Vice President 2004 360,610 75,000 -- 3,000
2003 334,537 35,000 -- 2,750
John Sumas................... 2005 402,724 90,000 273,000 1,977
Executive Vice President 2004 386,993 75,000 -- 1,805
2003 362,917 35,000 -- 1,651
Perry Sumas.................. 2005 340,415 -- -- --
President 2004 340,415 -- -- --
2003 340,415 -- -- --
---------------
(a) All restricted stock awards were valued at $42.00, the closing price of the
Company's Class A common stock on the date of grant. Restricted shares
convey to the holder the rights of a stockholder, including the right to
vote and receive dividends, but are subject to a three year vesting period.
The restricted shares are subject to forfeiture and may not be sold or
transferred during the vesting period. As of July 30, 2005, the last day of
the Company's fiscal year, the named executive officers held the following
number of restricted shares, with the value based on the closing price of
the Company's Class A common stock of $55.24 as follows: James Sumas (6,500
shares -- $359,060); Robert Sumas (6,500 shares -- $359,060); William Sumas
(6,500 shares -- $359,060); John Sumas (6,500 shares -- $359,060); and Perry
Sumas (none).
(b) Company paid 401K match
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND
FISCAL YEAR END OPTION VALUES
The following table sets forth information with respect to the exercise of
options during fiscal 2005 and the value of the unexercised options as of July
30, 2005.
SHARES NUMBER OF VALUE OF
ACQUIRED UNEXERCISED UNEXERCISED
ON VALUE OPTIONS AT IN-THE-MONEY
NAME EXERCISE(#) REALIZED JULY 30, 2005(#) AT JULY 30, 2005
---- ----------- -------- ---------------- ----------------
James Sumas.......................... -- $ -- -- $--
Robert Sumas......................... 7,000 $237,000 -- $--
William Sumas........................ -- $ -- -- $--
John Sumas........................... 6,000 $156,000 -- $--
Perry Sumas.......................... -- $ -- -- $--
8
BENEFIT PLANS
The Company maintains a defined benefit pension plan for employees not
covered by a collective bargaining agreement who have been employed with the
Company for more than six months and who are over the age of twenty-one. The
amount of the Company's contribution to this plan with respect to a specified
person cannot readily be separated or individually calculated by the actuaries
for the plan. For purposes of determining plan benefits, compensation is the
regular base pay of the participant plus bonuses, overtime pay and other
compensation. Effective January 1, 1989, the plan benefit formula was amended.
Retirement benefits are equal to the pension accrued to December 31, 1988 plus
1% of average compensation times each year of post-1988 service plus .75% of
average compensation in excess of Table II of the 1989 Covered Compensation
Table times each year of post-1988 service. Average compensation for post-1988
service is based on the five highest consecutive years' compensation. The
approximate annual retirement benefits at age 65, or in the case of James Sumas
his current age of 72, (computed as of January 1, 2005) are $83,328 to James
Sumas; $79,812 to Robert Sumas; $86,064 to William Sumas; and $91,068 to John
Sumas. Due to his age, Perry Sumas cannot participate in this plan.
In addition to the defined benefit pension plan described above, the
Company adopted a Supplemental Executive Retirement Plan (the "SERP") effective
January 1, 2004 for five executive officers. Each of the named executive
officers, except Perry Sumas, participates in the SERP. Participants vest in the
SERP benefit at a rate of 20% per year of service beginning in calendar 2004.
The retirement benefit at normal retirement date for the SERP is calculated as
50% of the individual's average compensation during his or her highest sixty
consecutive months in the last ten years before retirement, reduced by both the
benefit the participant is entitled to receive under the above defined benefit
plan and the amount of the participant's social security benefit. Normal
retirement is defined as the later of age 65 or five years of participation in
the SERP.
Covered compensation under the SERP includes all salary and bonuses,
whether paid in cash or deferred, and as to individuals identified in the
Summary Compensation Table, would be the amount set forth in that table under
the headings "Salary" and "Bonus". The approximate annual retirement benefits at
normal retirement date computed at January 1, 2005 (and the normal retirement
date if greater than age 65) payable from the SERP assuming full vesting are as
follows: James Sumas (age 75) -- $215,000; Robert Sumas (age 67) -- $141,000;
William Sumas -- $157,000; and John Sumas -- $179,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Perry Sumas, who is an executive
officer of the Company serving as the President; James Sumas, who is an
executive officer of the Company serving as the Chairman of the Board of
Directors, Chief Executive Officer and Chief Operating Officer; and John J.
McDermott, who is a former executive officer of the Company, having resigned as
General Counsel in 1983. As noted elsewhere in the Proxy Statement under
"Certain Transactions", Perry Sumas and James Sumas, through Sumas Realty
Associates, have certain business relationships with the Company. There are no
other compensation committee interlocks between the Company and other entities
involving the Company's executive officers and the Company's Board members who
serve as executive officers of such other entities.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Company's compensation policies, as applicable to its executive
officers, are administered by its Compensation Committee of the Board of
Directors (the "Committee"). The Chief Executive Officer and each of the other
executive officers named in this proxy statement own substantial amounts of the
Company's common stock and thus have a direct and substantial interest in the
long-term growth of shareholder's wealth. In light of this ownership, there is
less need to directly relate executive compensation to long-term Company
performance.
The basic criteria used in making determinations concerning compensation
for executive officers is the level of compensation paid to comparable
executives in the industry, in particular to corporate executives of
9
other ShopRite members and at competing supermarket chains, the financial
performance of the Company and other achievements during the most recently
completed fiscal year, time devoted to Company affairs, reputation in the
industry, record of accomplishments and efforts on the Company's behalf.
The Committee decided to grant performance bonuses in 2005 based on the
efforts of those executives in achieving improved financial performance in the
areas of sales, operating income, EBITDA and net income, despite challenging
conditions in the supermarket industry.
The Compensation Committee bases the compensation of the Chief Executive
Officer on the same criteria as mentioned above for other executive officers.
The Committee notes that compensation tables required by the rules of the
Securities and Exchange Commission are based upon fiscal year totals, which in
the case of the Company are July to July periods of 52 or 53 weeks. Executive
compensation decisions are implemented, in part, on a calendar year basis. Thus,
minor apparent year to year variations in compensation levels appearing in the
tables may not be reflective of actual Committee actions.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
PERRY SUMAS
JAMES SUMAS
JOHN J. MCDERMOTT
10
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total return on the
Company's Class A Common Stock against the cumulative total return of the S&P
500 Composite Stock Index and the NASDAQ Retail Index for the Company's last
five fiscal years.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG VILLAGE SUPER MARKET, INC., THE S&P 500 INDEX
AND THE NASDAQ RETAIL INDEX
[PERFORMANCE GRAPH]
VILLAGE SUPER NASDAQ RETAIL
MARKET, INC. S&P 500 TRADE
------------- ------- -------------
7/00 100.00 100.00 100.00
7/01 149.615 85.712 110.389
7/02 207.308 65.483 109.233
7/03 197.923 72.538 128.18
7/04 250.375 82.143 159.043
7/05 432.257 93.685 201.755
EQUITY COMPENSATION PLAN INFORMATION
------------------------------------------------------------------------------------------------------
Number of securities re-
maining available for
future issuance under
equity compensation
Number of securities to Weighted-average plans (excluding
be issued upon exercise exercise price of securities reflected in
Plan category of outstanding options outstanding options column(a))
------------------------------------------------------------------------------------------------------
(a) (b) (c)
------------------------------------------------------------------------------------------------------
Equity compensation
plans approved by
security holders 118,100 $33.67 165,000
Equity compensation
plans not approved by
security holders -- -- --
------------------------------------------------------------------------------------------------------
The information in the above table is as of July 30, 2005. All data relates
to the 1997 Incentive and Non-Statutory Stock Option Plan and the Village Super
Market, Inc. 2004 Stock Plan as described in the Notes to the 2005 Consolidated
Financial Statements.
11
CERTAIN TRANSACTIONS
The Company's supermarket in Chatham, New Jersey is leased from Hickory
Square Associates, a limited partnership. The lease is dated April 1, 1986 and
expires March 31, 2006. The annual rent under this lease is $549,000. Sumas
Realty Associates is a 30% limited partner in Hickory Square Associates. Sumas
Realty Associates is a general partnership among Perry Sumas, James Sumas,
Robert Sumas, William Sumas and John Sumas.
All obligations of the Company to Wakefern Food Corporation are personally
guaranteed by members of the Sumas family.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's executive officers and directors to file with the SEC reports of
ownership and reports of changes in ownership of Class A common stock and Class
B common stock. Copies of these reports must also be furnished to the Company.
Based solely on a review of these filings and written representations from
reporting persons, the Company believes that all filing requirements applicable
to its executive officers and directors were complied with during fiscal 2005.
SELECTION OF INDEPENDENT AUDITORS
The appointment by the Audit Committee of KPMG LLP as independent auditors
to audit the consolidated financial statements of the Company for the fiscal
year ending July 29, 2006, is to be submitted at the meeting for ratification or
rejection. The consolidated financial statements of the Company for the 2005,
2004 and 2003 fiscal years were audited by KPMG LLP.
Representatives of KPMG LLP are expected to be present at the 2005 Annual
Meeting of Shareholders and will be given the opportunity to make a statement if
they wish to do so and will be available to respond to appropriate questions.
Although ratification by the stockholders of the appointment of independent
auditors is not required, the Audit Committee will reconsider its appointment of
KPMG LLP if such ratification is not obtained. Ratification shall require a
majority of the votes cast.
SHAREHOLDER PROPOSALS FOR 2006 ANNUAL MEETING
Any proposal that a shareholder intends to present at the Company's 2006
Annual Meeting of Shareholders, presently scheduled to be held on December 8,
2006, and requests to be included in the Company's Proxy Statement for the 2006
Annual Meeting, must be received by the Company no later than August 1, 2006.
Such requests should be made in writing and sent to the Secretary of the
Company, Robert Sumas, Village Super Market, Inc., 733 Mountain Avenue,
Springfield, New Jersey 07081.
OTHER MATTERS
The Company will furnish a copy of its Annual Report on Form 10-K for the
year ended July 30, 2005, without exhibits, without charge to each person who
forwards a written request, including a representation that he was a record or
beneficial holder of the Company's Common Stock on October 7, 2005. Requests are
to be addressed to Mr. Robert Sumas, Secretary, Village Super Market, Inc., 733
Mountain Avenue, Springfield, New Jersey 07081.
All expenses incurred in connection with the preparation and circulation of
this Proxy Statement in an amount that would normally be expended in connection
with an Annual Meeting in the absence of a contest will be paid by the Company.
No solicitation expenses will be incurred. Management does not know of any other
business that will be presented at the Annual Meeting.
By order of the Board of Directors,
ROBERT SUMAS,
Secretary
November 4, 2005
12
VILLAGE SUPER MARKET, INC.
733 MOUNTAIN AVENUE, SPRINGFIELD, NEW JERSEY 07081
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Perry Sumas and Robert Sumas and each of
them, proxies for the undersigned, with full power of substitution, to vote as
if the undersigned were personally present at the Annual Meeting of the
Shareholders of Village Super Market, Inc. (the "Company"), to be held at the
offices of the Company, 733 Mountain Avenue, Springfield, New Jersey on Friday,
December 9, 2005, at 10:00 A.M. and at all adjournments thereof, the shares of
stock of said Company registered in the name of the undersigned. The undersigned
instructs all such proxies to vote such shares as indicated on the reverse side
upon the following matters, which are described more fully in the accompanying
proxy statement.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
ANNUAL MEETING OF SHAREHOLDERS OF
VILLAGE SUPER MARKET, INC.
DECEMBER 9, 2005
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE /x/
FOR AGAINST ABSTAIN
1. Election of Directors for the Company's 2. Approval of KPMG LLP, to be the independent [ ] [ ] [ ]
Board of Directors listed below: auditors of the Company for fiscal 2006
NOMINEES:
[ ] FOR ALL NOMINEES O James Sumas 3. In their discretion, to vote upon such other business as may
O Perry Sumas properly come before the meeting and all adjournments thereof.
[ ] WITHHOLD AUTHORITY O Robert Sumas
FOR ALL NOMINEES O William Sumas This proxy, when properly executed, will be voted in the manner
O John Sumas directed herein by the undersigned stockholder. If no direction
[ ] FOR ALL EXCEPT O John J. McDermott is made, this proxy will be voted for Proposal 1 and 2.
(See instructions O Steven Crystal
below) O David C. Judge
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), mark "FOR ALL EXCEPT" and fill in the
circle next to each nominee you wish to withhold,
as shown here:
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To change the address on your account, please check the box at
right and indicate your new address in the address space above.
Please note that changes to the registered name(s) on the
account may not be submitted via this method. / /
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Signature of Shareholder _____________________ Date: _____________ Signature of Shareholder _____________________ Date: ____________
NOTE: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer
is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.