SCHEDULE 14A INFORMATION
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CERTIFIED GROCERS OF CALIFORNIA, LTD.
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CERTIFIED GROCERS OF CALIFORNIA, LTD.
STATEMENT REGARDING ADVISORY BALLOT
The enclosed Advisory Ballot is solicited by the Nominating Committee of the
Board of Directors of Certified Grocers of California, Ltd. (the "Company").
This Statement, and the enclosed Advisory Ballot and Candidates' Statements,
were first mailed to shareholders on or about January 2, 1996. The address of
the principal executive office of the Company is 2601 South Eastern Avenue, Los
Angeles, California 90040.
FUNCTION AND PURPOSE OF THE ADVISORY BALLOT
At the Company's Annual Meeting of Shareholders, presently scheduled for
April 2, 1996, the 15 members of the Company's Board of Directors will be
elected. Twelve directors will be elected by the holders of the Company's Class
A Shares, and three directors will be elected by the holders of the Company's
Class B Shares.
In connection with the Annual Meeting, the Board of Directors will solicit
proxies. However, the enclosed Advisory Ballot is not a proxy, and at this time
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Pursuant to the Company's Bylaws, the Board of Directors annually appoints a
Nominating Committee to select the 15 persons who will be nominated by the Board
of Directors for election by the shareholders to the Board of Directors. The
enclosed Advisory Ballot is being solicited by the Nominating Committee from the
holders of the Company's Class A Shares to assist the Nominating Committee in
selecting the 12 persons who will be submitted as nominees for election as
directors by the holders of such shares. This Advisory Ballot is not being used
by the Nominating Committee in connection with its selection of the three
persons who will be submitted as nominees for election as directors by the
holders of the Company's Class B Shares.
The Advisory Ballot contains the names of 22 persons, 13 of whom are
incumbent directors and four of whom have been designated as representing
Northern California shareholders. Of the four representing Northern California
shareholders, the Nominating Committee will nominate for election at least two
of these persons whether or not they are among the 12 persons receiving the
highest number of votes on the Advisory Ballot. The two to be nominated will be
those receiving the highest number of votes from among the four persons
designated in the Advisory Ballot as representing Northern California
shareholders. With this exception, it is the policy of the Nominating Committee
to abide by the results of the vote on the Advisory Ballot and to select as
nominees for election to the Board of Directors the 12 persons receiving the
highest number of votes. However, such results are advisory only and are not
binding on the Nominating Committee, and the Nominating Committee may in its
discretion disregard the results, in whole or in part, in making its selection
of nominees.
The Nominating Committee will consider the recommendations of shareholders
concerning persons to be included in the Advisory Ballot, and concerning persons
to be nominated for election by the holders of the Company's Class B Shares. The
Company's Bylaws require that a director be either an employee of the Company, a
shareholder, or that the director be a member of a partnership which is a
shareholder, or an employee of a corporation which is a shareholder. Persons
recommended to the Nominating Committee can be considered ONLY if they satisfy
these requirements. All recommendations must be in writing and must be submitted
to the Nominating Committee on or before September 1 of each year.
Recommendations should be submitted to the Nominating Committee at the address
of the Company's principal executive office set forth above.
1
ADVISORY BALLOT VOTING RIGHTS AND SOLICITATION
As of December 11, 1995, the Company had outstanding 50,300 Class A Shares
held 100 shares each by 503 shareholders. If you were the holder of record of
Class A Shares on that date, you may vote on the enclosed Advisory Ballot. Set
forth below are the persons named in the Advisory Ballot, all of whom have
consented to being named in the Advisory Ballot. Incumbent directors are denoted
by an asterisk and persons designated as representing Northern California
shareholders are denoted by the parenthetical letter "N".
Louis A. Amen* Jay McCormack*
William Andronico (N) Louis Melillo
John Berberian* Morrie Notrica*
William C. Evans (N) Michael A. Provenzano*
Gene A. Fulton* Gail Gerrard Rice
Scott Hair Allan Scharn*
Lyle A. Hughes* Farid (Mike) Shalabi
Darioush Khaledi* James R. Stump*
Mark Kidd* (N) Milt Thaler
Richard L. London Daniel W. Vengler
Willard R. MacAloney* Kenneth Young* (N)
In voting on the Advisory Ballot, you are entitled to cast one vote each for
up to 12 of the persons named in the Advisory Ballot. While you may vote for
fewer than 12 of the persons named in the Advisory Ballot, if you vote for more
than 12 of the persons named, your Advisory Ballot will be invalidated. In
addition, if you cast more than one vote for any person named in the Advisory
Ballot, only one vote will be counted for that person and the additional votes
will be disregarded.
The return envelope accompanying the enclosed Advisory Ballot is marked with
a control number. THE ADVISORY BALLOT WILL NOT BE VALID UNLESS IT IS RETURNED IN
THE ENVELOPE PROVIDED AND THE CONTROL NUMBER IS LEGIBLE. TO BE VALID, THE
ADVISORY BALLOT MUST BE RECEIVED ON OR BEFORE JANUARY 19, 1996.
The Company's independent accountants, Coopers & Lybrand, L.L.P., will
tabulate the vote on the Advisory Ballot.
The cost of soliciting the Advisory Ballots, consisting of the preparation,
printing, handling, mailing and tabulation of the Advisory Ballots, this
Statement and related material, will be paid by the Company.
PRINCIPAL STOCKHOLDERS
As of December 11, 1995, no person is known by the Company to own
beneficially more than five percent (5%) of the outstanding Class A Shares of
the Company, and the only shareholders known by the Company to own beneficially
more than 5% of the outstanding Class B Shares of the Company are Cala Co.,
Alpha Beta Company, Bay Area Warehouse Stores, Inc. and Ralphs Grocery Company,
777 South Harbor Boulevard, La Habra, California 90631 (28,620 Class B Shares or
approximately 7.83% of the outstanding Class B Shares) (Cala Co., Alpha Beta
Company and Bay Area Warehouse Stores, Inc. are wholly owned by Ralphs Grocery
Company which is in turn wholly owned by The Yucaipa Companies, 10000 Santa
Monica Boulevard, Los Angeles, California 90067); and Hughes Markets, Inc.,
14005 Live Oak Avenue, Irwindale, California 91706 (26,106 Class B Shares or
approximately 7.14% of the outstanding Class B Shares).
2
SECURITY OWNERSHIP AND OTHER INFORMATION CONCERNING
MANAGEMENT AND PERSONS NAMED IN THE ADVISORY BALLOT
The following table sets forth the beneficial ownership of the Company's
Class A Shares and Class B Shares, as of December 11, 1995, by each director or
his affiliated company, including the directors elected by the holders of the
Company's Class B Shares, by each person or his affiliated company named in the
Advisory Ballot who is not a director, and by all directors and such persons as
a group. No officer of the Company owns shares of any class of the Company's
stock.
SHARES OWNED
------------------------------------------------
CLASS A SHARES CLASS B SHARES
-------------------- -------------------------
NAME AND NO. % OF TOTAL NO. % OF TOTAL
AFFILIATED COMPANY SHARES OUTSTANDING SHARES OUTSTANDING
---------------------------------------- ------ ----------- ----------- -----------
Louis A. Amen
Super A Foods, Inc..................... 100 0.20% 9,718 2.66%
William Andronico
Park and Shop Market, Inc. ........... 100 0.20% 3,395 0.93%
John Berberian
Berberian Enterprises, Inc............ 100 0.20% 7,615 2.08%
William C. Evans
Twain Harte Market, Inc. ............. 100 0.20% 395 0.11%
Gene A. Fulton
Jensen's Complete Shopping, Inc. ..... 100 0.20% 1,555 0.43%
Scott Hair
Green Frog Market..................... 100 0.20% 395 0.11%
Lyle A. Hughes
Yucaipa Trading Co., Inc.(1)(2)....... 100 0.20% 0 --
Roger K. Hughes
Hughes Markets, Inc.(1)(3)............ 100 0.20% 26,106 7.14%
Darioush Khaledi
K. V. Mart Co. ....................... 100 0.20% 13,796 3.77%
Mark Kidd
Mar-Val Food Stores, Inc. ............ 100 0.20% 1,787 0.49%
Richard L. London
Major Market, Inc. ................... 100 0.20% 1,579 0.43%
Willard R. MacAloney
Mac Ber, Inc.......................... 100 0.20% 2,523 0.69%
Jay McCormack
Alamo Market(4)....................... 100 0.20% 732 0.20%
Louis Melillo
Louis Foods, Inc...................... 100 0.20% 855 0.23%
Morrie Notrica
Joe Notrica, Inc. .................... 100 0.20% 8,148 2.23%
Michael A. Provenzano
Pro & Son's, Inc. .................... 100 0.20% 672 0.18%
Gail Gerrard Rice
Gerrard's, Inc. ...................... 100 0.20% 1,414 0.39%
Allan Scharn
Gelson's Markets(5)................... 100 0.20% 7,123 1.95%
Farid (Mike) Shalabi
R-Ranch Markets, Inc.................. 100 0.20% 2,438 0.67%
3
SHARES OWNED
------------------------------------------------
CLASS A SHARES CLASS B SHARES
-------------------- -------------------------
NAME AND NO. % OF TOTAL NO. % OF TOTAL
AFFILIATED COMPANY SHARES OUTSTANDING SHARES OUTSTANDING
---------------------------------------- ------ ----------- ----------- -----------
James R. Stump
Stump's Market, Inc. ................. 100 0.20% 1,866 0.51%
Milt Thaler
T./R. Foods, Inc. .................... 100 0.20% 2,402 0.66%
Daniel W. Vengler
Oak Creek Market, Inc................. 100 0.20% 3,107 0.85%
Michael A. Webb
SavMax Foods, Inc.(3)................. 100 0.20% 8,410 2.30%
Kenneth Young
Jack Young's Supermarkets(6).......... 100 0.20% 2,660 0.73%
------ --- ----------- -----
2,400 4.77% 109,046 29.83%
------ --- ----------- -----
------ --- ----------- -----
<FN>
- ------------------------
(1) Messrs. Lyle A. Hughes and Roger K. Hughes are unrelated.
(2) Mr. Lyle Hughes is also affiliated with Yucaipa Food Fair, Inc. which owns
546 Class B Shares (0.15% of the outstanding Class B Shares).
(3) Elected by holders of Class B Shares.
(4) Mr. McCormack also is affiliated with Glen Avon Food, Inc. which owns 100
Class A Shares and 336 Class B Shares (0.01% of the outstanding Class B
Shares) and Yucaipa Trading Co., Inc. which owns 100 Class A Shares and no
Class B Shares.
(5) These shares are owned by Arden Mayfair, Inc., the parent company of
Gelson's Markets.
(6) Mr. Young also is affiliated with Bakersfield Food City, Inc. dba Young's
Markets which owns 100 Class A Shares and 355 Class B Shares. (0.01% of the
outstanding Class B Shares).
The following table sets forth the present directors of the Company,
including the directors elected by the holders of the Company's Class B Shares,
the year such directors were first elected to the Board of Directors, those
persons named in the Advisory Ballot who are not directors of the Company, and
certain other information.
YEAR
AGE AS OF FIRST PRINCIPAL OCCUPATION
NAME 12/31/95 ELECTED DURING LAST 5 YEARS
- ------------------------------ --------- ------- ---------------------------------------------
Louis A. Amen 66 1974 President, Super A Foods, Inc.
William Andronico 38 -- President, Park and Shop Market, Inc.,
Operating Andronico's Market
John Berberian 44 1991 President, Berberian Enterprises, Inc.,
operating Jons Markets
William C. Evans 63 -- President, Twain Harte Market, Inc.
Gene A. Fulton 56 1994 President-Owner, Jensen's Complete Shopping,
Inc., operating Jensen's Finest Foods
Scott Hair 40 -- Managing Director, Green Frog Market
Lyle A. Hughes (1) 58 1987 General Manager, Yucaipa Trading Co., Inc.,
operating Super Penny Mart
Roger K. Hughes (1)(2) 61 1985 Chairman of the Board and Director, Hughes
Markets, Inc.
4
YEAR
AGE AS OF FIRST PRINCIPAL OCCUPATION
NAME 12/31/95 ELECTED DURING LAST 5 YEARS
- ------------------------------ --------- ------- ---------------------------------------------
Darioush Khaledi 49 1993 Chairman of the Board and Chief Executive
Officer, K. V. Mart Co., operating Top Valu
Markets and Valu Plus Food Warehouse
Mark Kidd 45 1992 President, Mar-Val Food Stores, Inc.
Richard L. London 60 -- President and Chief Executive Officer, Major
Market, Inc.
Willard R. MacAloney 60 1981 President and Chief Executive Officer, Mac
Ber, Inc., operating Jax Market
Jay McCormack 45 1993 Owner-Operator, Alamo Market; Co-owner, Glen
Avon Market
Louis Melillo 69 -- President-Owner, Louis Foods Supermarket;
President-Owner Fiesta Farms Market
Morrie Notrica 66 1988 President and Chief Operating Officer, Joe
Notrica, Inc., operating The Original 32nd
Street Market
Michael A. Provenzano 53 1986 President, Pro & Son's, Inc., operating
Southland Market; formerly President,
Carlton's Market, Inc.
Gail Gerrard Rice 47 -- Executive Vice President, Gerrard's, Inc.,
operating Gerrard's Cypress Center
Allan Scharn 60 1988 President, Gelson's Markets
Farid (Mike) Shalabi 35 -- President and Chief Executive Officer,
R-Ranch Markets, Inc.
James R. Stump 57 1982 President, Stump's Market, Inc.
Milt Thaler 70 -- President, T./R. Foods, Inc., operating City
Foods
Daniel W. Vengler 50 -- President, Oak Creek Market, Inc.
Michael A. Webb (2) 38 1992 President and Chief Executive Officer, SavMax
Foods, Inc.
Kenneth Young 51 1994 Vice President, Jack Young's Supermarkets;
Vice President, Bakersfield Food City, Inc.
dba Young's Markets
<FN>
- ------------------------
(1) Messrs. Lyle A. Hughes and Roger K. Hughes are unrelated.
(2) Elected by holders of Class B Shares.
5
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of six meetings during
the fiscal year ended September 2, 1995. Each incumbent director who was in
office during such year attended more than 75% of the aggregate of the total
number of meetings of the board and the total number of meetings held by those
committees of the board on which he served.
The Company has an Audit Committee which presently consists of Gene Fulton,
Lyle Hughes and Kenneth Young, who are directors of the Company. Willard R.
MacAloney, Chairman of the Board of Directors, is an ex-officio member of the
Committee. This Committee, which met two times during the Company's last fiscal
year, is primarily responsible for approving and reviewing the services
performed by the Company's independent auditors, reviewing the annual results of
their audit, and reviewing the Company's accounting practices and system of
internal accounting controls.
The Company has a Personnel and Executive Compensation Committee which
presently consists of Louis A. Amen, Roger Hughes, Darioush Khaledi, James R.
Stump and Michael A. Webb, who are directors of the Company. Willard R.
MacAloney, Chairman of the Board of Directors, is an ex-officio member of this
Committee. This Committee, which met two times during the Company's last fiscal
year, is responsible for reviewing salaries and other compensation arrangements
of all officers and for making recommendations to the Board of Directors
concerning such matters.
The Company has a Nominating Committee which presently consists of Gene A.
Fulton, Mark Kidd, Jay McCormack and Morrie Notrica who are directors of the
Company. Willard R. MacAloney, Chairman of the Board of Directors, and Alfred A.
Plamann, President and CEO, are ex-officio members of this Committee. This
Committee, which met two times during the Company's last fiscal year, is
responsible for selecting nominees to be submitted by the Board of Directors to
the shareholders for election to the Board of Directors.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted under the caption "Board Meetings and Committees", the Company's
Personnel and Executive Compensation Committee (presently consisting of
Directors Louis A. Amen, Roger Hughes, Darioush Khaledi, James R. Stump, Michael
A. Webb, and ex-officio member and Chairman of the Board, Willard R. MacAloney)
is responsible for reviewing salaries and other compensation arrangements of the
officers of the Company and for making recommendations to the Board of Directors
concerning such matters.
Except for Mr. MacAloney, no member of the Personnel and Executive
Compensation Committee is, or has been at any time in the past, an officer or
employee of the Company or any of its subsidiaries. As Chairman of the Board,
Mr. MacAloney is an officer under the Bylaws of the Company, although he is not
an employee and does not receive any compensation or expense reimbursement
beyond that to which other directors are entitled.
The Company guarantees annual rent and certain other obligations of Mr.
MacAloney as lessee under a lease of store premises located in La Puente,
California. Annual rent under the lease is $62,487, and the lease term expires
in April 1997. The Company also guarantees annual rent and certain other
obligations of G & M Company, Inc., of which Mr. MacAloney is a shareholder,
under a lease of store premises located in Santa Fe Springs, California. Annual
rent under the lease is $82,544, and the lease term expires in October 1997. In
consideration of its guarantees, the Company receives a monthly fee from G & M
Company, Inc. equal to 5% of the base monthly rent under each lease.
Grocers Capital Company ("GCC"), a subsidiary, guarantees a portion of a
loan made by National Consumer Cooperative Bank ("NCCB") to K.V. Mart Co., of
which director Darioush Khaledi is the President and a shareholder, and KV
Property Company, of which director Darioush Khaledi is a general partner. The
term of the loan is eight years, maturing January 1, 2002, and the loan bears
interest at a floating rate based on the commercial loan base rate of NCCB. The
loan is collateralized by certain real and
6
personal property. The guarantee by GCC is limited to 10% of the $2.1 million
principal amount of the loan. In consideration of its guarantee, GCC will
receive an annual fee from K.V. Mart Co. equal to approximately 5% of the
guarantee amount.
GCC has guaranteed a portion of a $5,000,000 revolving loan made by NCCB to
K.V. Mart Co. in November 1995. The loan has an initial maturity of two years,
with the outstanding balance then converting to a five year term loan. The loan
bears interest at a floating rate based on the commercial loan rate of NCCB. The
loan is collateralized by certain real and personal property of K.V. Mart Co.
The guaranty of GCC is limited to 10% of the outstanding principal amount of the
loan. In consideration of its guaranty, GCC will receive an annual fee from K.V.
Mart Co. equal to 5% of the guaranty amount.
The Company is proposing to enter into a guaranty of rent and certain other
obligations of K.V. Mart Co. under a lease of store premises to be constructed
in Lynwood, California. The guaranty would be for a term of seven years. Annual
rent under the lease will be $408,000. In consideration of its guaranty, the
Company will receive an annual fee from K.V. Mart Co. equal to 5% of the annual
rent.
GCC is proposing to purchase 10% of the common stock of K.V. Mart Co. for a
purchase price of approximately $3,000,000. In connection with this purchase,
K.V. Mart Co., GCC, Mr. Khaledi and the other shareholders of K.V. Mart Co. will
agree that GCC will have certain preemptive rights to acquire additional common
shares, rights to have its common shares included proportionately in any
transfer of common shares by the other shareholders, and rights to have its
common shares included in certain registered public offerings of common stock
which may be made by K.V. Mart Co. In addition, GCC will have certain rights, at
its option, to require that K.V. Mart Co. repurchase GCC's shares, and K.V. Mart
Co. will have certain rights, at its option, to repurchase GCC's shares. In
connection with these transactions, K.V. Mart Co. will enter into a seven year
supply agreement with the Company whereunder K.V. Mart Co. will be required to
purchase a substantial portion of its merchandise requirements from the Company.
The supply agreement will be subject to earlier termination in certain
situations.
The Company guarantees annual rent and certain other obligations of Stump's
Market, Inc., of which director James R. Stump is the President and a
shareholder, as leasee under a lease of store premises located in San Diego,
California. Annual rent under the lease is $26,325, and the lease term expires
in May 1998. The Company also guaranteed annual rent and certain other
obligations of Stump's Market, Inc. as lessee under a lease of store premises at
a second location in San Diego, California. Annual rent under this lease was
$16,350, and the lease term expired in April 1995.
In fiscal 1994, GCC acquired 25,000 shares of preferred stock of SavMax
Foods, Inc. ("SavMax"), of which director Michael A. Webb is the President and a
shareholder. The purchase price was $100 per share. At the time, GCC owned
40,000 shares of preferred stock of SavMax which it acquired in fiscal 1992. As
part of the new purchase of preferred stock, the annual cumulative dividend on
the 65,000 shares of preferred stock owned by GCC was increased from $8.25 per
share to $8.50 per share, payable quarterly. Mandatory partial redemption of
this stock at a price of $100 per share began in 1994 and will continue annually
thereafter for eight years, at which time the stock is to be completely retired.
GCC also purchased from Mr. Webb and another member of his immediate family, 10%
of the common stock of SavMax for a price of $2.5 million. In connection with
this purchase, Mr. Webb, SavMax and GCC agreed that GCC will have certain
preemptive rights to acquire additional common shares, rights to have its common
shares included proportionately in any transfer of common shares by Mr. Webb,
and rights to have its common shares included in certain registered public
offerings of common stock which may be made by SavMax. In addition, GCC has
certain rights, at its option, to require that SavMax repurchase GCC's shares,
and SavMax has certain rights, at its option, to repurchase GCC's shares. In
connection with these transactions, SavMax entered into a seven year supply
agreement with the Company (to replace an existing supply agreement) whereunder
SavMax is required to purchase a substantial portion of its merchandise
requirements from the Company. The supply agreement is subject to earlier
termination in certain situations.
The Company guarantees certain obligations of SavMax under three leases of
market premises located in Sacramento, San Jose and San Leandro, California.
Each of these guaranties relates to the obligation of SavMax to pay base rent,
common area maintenance charges, real estate taxes and insurance during the
7
initial 20 year terms of these leases. However, the guaranties are such that the
Company's obligation under each of them is limited to an amount equal to sixty
monthly payments (which need not be consecutive) of the obligations guaranteed.
Base rent is $40,482 per month under the Sacramento lease and $56,756 per month
under the San Jose lease, in each case subject to a 7 1/2% increase at the end
of each five years. Base rent is $42,454 per month under the San Leandro lease,
subject to a 10% increase at the end of each five years. In consideration of
these guaranties, the Company receives a monthly fee from SavMax equal to 5% of
the base monthly rent under these leases.
The Company guarantees certain obligations of SavMax under two leases of
market premises located in Ceres and Vacaville, California. The leases have
initial terms expiring in January 2005 and April 2007, respectively. Base
monthly rent under the Ceres lease is presently $32,175, increasing to $34,425
in January of 2000. Base monthly rent under the Vacaville lease is presently
$29,167, increasing by $25,000 per year in April of 1997 and 2002. In
consideration of these guaranties, the Company will receive a monthly fee from
SavMax equal to 5% of the base monthly rent under these leases.
The Company leases certain market premises located in Sacramento and
Vallejo, California, and in turn subleases these premises to SavMax. The
Sacramento sublease provides for a term of 20 years and the Vallejo sublease
provides for a term of 10 years. Neither sublease contains options to extend,
although SavMax has the option under each sublease to acquire the Company's
interest under its lease on the condition that the Company is released from all
further liability thereunder. The term of the Sacramento sublease commenced in
September of 1994. The Sacramento premises consist of approximately 50,000
square feet and annual base rent under the sublease is at the following per
square foot rates: $8.00 during years 1 and 2; $8.40 during years 3 through 5;
$8.82 during years 6 through 10; $9.26 during years 11 through 15; and, $9.72
during years 16 through 20. The term of the Vallejo sublease commenced in
September of 1995 and annual base rent under the sublease is $279,000. In
addition, under each of these subleases, the Company receives monthly an
additional amount equal to 5% of the base monthly rent.
The Company is proposing to lease certain market premises to be constructed
and located in Los Banos, California, which it in turn will sublease to Maxco
Foods, Inc. ("Maxco"), a corporation of which SavMax is a shareholder. The
sublease to Maxco would provide for a term of 20 years, without options to
extend, although Maxco will have the option to acquire the Company's interest
under its lease on the condition that the Company is released from all further
liability thereunder. The premises will consist of approximately 50,000 square
feet and annual base rental under the sublease is as follows: $390,000 during
years 1 through 5; $424,125 during years 6 through 10; $461,236 during years 11
through 15; and, $501,594 during years 16 through 20. In addition, the Company
will receive monthly an additional amount equal to 5% of the base monthly rent.
In connection with this transaction, Maxco will enter into a seven year supply
agreement with the Company whereunder Maxco would be required to purchase a
substantial portion of its merchandise requirements from the Company. The supply
agreement will be subject to earlier termination in certain situations.
With respect to the Los Banos sublease, GCC is proposing to make a seven
year equipment loan in the amount of $1,620,000, a five year inventory loan in
the amount of $675,000 and a five year deposit fund loan in the amount of
$350,000 to Maxco. The equipment and inventory loans will bear interest at prime
plus 3%, and the deposit fund loan will bear interest at prime plus 2%. The
loans will be secured by a security interest in all of the equipment, fixtures
and inventory at the Los Banos store and by personal guarantees. In addition, in
certain events, SavMax is required to assume the obligations of Maxco under the
loans, the sublease of the Los Banos premises and the obligations of Maxco under
its supply agreement with the Company.
8
REPORT OF PERSONNEL AND EXECUTIVE COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
The principal components of the Company's executive compensation program
consist of an annual salary, an annual cash bonus the payment of which is
dependent upon Company performance during the preceding fiscal year, and certain
pension, retirement and life insurance benefits.
SALARY
In determining officer salaries, including that of the Chief Executive
Officer (CEO), the Personnel and Executive Compensation Committee's policy is to
set salaries at levels which recognize officer performance, are commensurate
with the responsibilities assigned to the various officer positions, and will
enable the Company to attract and retain highly qualified executives for its
officer positions.
In considering officer salaries for calendar year 1994, the Committee took
note of the on-going cost reduction efforts implemented by the officer group
under the direction of the CEO. These efforts were undertaken in response to the
significant volume declines experienced by the Company as a result of a
reduction in purchases by certain large retailers who commenced
self-distribution programs or were acquired by chains already engaged in
self-distribution. These efforts resulted in the consolidation of Company
operations into fewer facilities and substantial savings in payroll expenses
through significant reductions in the number of employees.
The Committee's procedure in approving officers' salaries, including that of
the CEO, involves meeting in closed session and without the CEO or other
management personnel being present. In addition to the considerations mentioned
above, this process, which is subjective in nature, centers on the Committee's
consideration of the CEO's evaluation of each individual officer based on the
CEO's perception of their performance in accordance with individual officer
responsibilities as defined by personal and organizational goals and objectives,
the relative value and importance of individual officer contribution toward
organizational success, relative levels of officer responsibilities and changes
in the scope of officer responsibilities, and officer accomplishments and
contributions during the preceding fiscal year. The Committee also reviews and
discusses the salary recommendations made by the CEO for each officer. These
recommendations do not include any recommendation as to the CEO's salary, and
the Committee sets the CEO's salary based on its assessment of his performance
in light of the foregoing policies and considerations. The salaries as approved
by the Committee are submitted to the Board of Directors, which made no changes
in the salaries submitted for 1994.
ANNUAL BONUSES
In recognition of the relationship between Company performance and
enhancement of shareholder value, Company officers may be awarded annual cash
bonuses. Bonuses are paid from a bonus pool which is created if the Company has
achieved an established minimum level of net income for the preceding fiscal
year. The amount of the bonus pool is calculated as a percentage of net income,
with the percentage varying depending on the level of net income as a percentage
of net sales. Amounts in the bonus pool are allocated among the Company's
officers by the CEO, subject to the approval of the Board of Directors. The CEO
does not participate in the bonus pool. However, a bonus may be awarded to the
CEO in an amount determined by the Board of Directors based on its evaluation of
the CEO's performance during the preceding fiscal year.
As disclosed in the Summary Compensation Table, no bonuses have been awarded
to the CEO and the named executives during the periods reported, and no bonuses
have been awarded to the other officers of the Company during those periods.
BENEFITS
Consistent with the objective of attracting and retaining qualified
executives, the compensation program includes the provision of pension benefits
to Company employees, including officers, under the Company's defined benefit
pension plan, which is described in connection with the Pension Plan Table. In
addition, Company employees, including officers, may defer income from their
earnings through voluntary contributions to the Company's Employees' Sheltered
Savings Plan adopted pursuant to Section 401(k) of the Internal Revenue Code and
the Company's Employees' Excess Benefit Plan, which is a nonqualified plan. In
the case of those officers who elect to defer income under these plans, the
Company makes
9
additional contributions for their benefit. The amount of these additional
contributions made during fiscal year 1995 for the benefit of the CEO and the
other named executive officers is set forth in the footnotes to the Summary
Compensation Table. The Company also provides additional retirement benefits to
its officers pursuant to an Executive Salary Protection II, which is described
in connection with the Pension Plan Table.
Personnel and Executive Compensation Committee Members
Darioush Khaledi, Chairman
Louis A. Amen
Willard R. MacAloney
James R. Stump
Michael A. Webb
EXECUTIVE OFFICER COMPENSATION
The following table sets forth information respecting the compensation paid
during the Company's last three fiscal years to the President and Chief
Executive Officer (CEO) and to certain other executive officers of the Company.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
--------------------------------------------------
OTHER
FISCAL ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) COMPENSATION($)
- ------------------------------ ------ ------------ -------- --------------- ---------------
Alfred A. Plamann 1995 322,150 0 24,290(2)
President & CEO 1994 236,827 205 31,431
1993 164,800 310 25,419
Donald W. Dill(1) 1995 147,047 167 175,169(3)
Senior Vice President 1994 163,366 576 38,127
1993 153,346 1,016 37,392
Daniel T. Bane(1) 1995 200,000 195 1,231(4)
Senior Vice President & CFO 1994 21,539 0 0
1993 0 0 0
Charles J. Pilliter 1995 172,000 0 13,174(5)
Senior Vice President 1994 167,577 127 20,591
1993 151,924 188 18,241
Donald G. Grose 1995 147,000 357 11,232(6)
Senior Vice President 1994 143,760 438 31,700
1993 135,116 955 30,372
<FN>
- ------------------------
(1) Mr. Dill retired July 27, 1995 and Mr. Bane joined the Company July 26,
1994.
(2) Consists of a $6,392 Company contribution to the Company's Employees'
Sheltered Savings Plan, and a $17,898 Company contribution to the Company's
Employees' Excess Benefit Plan.
(3) Consists of $162,000 in severance benefits (representing 52 weeks of salary
paid in accordance with the Company's past practices), a $3,466 Company
contribution to the Company's Employees' Sheltered Savings Plan, and a
$9,703 Company contribution to the Company's Employees' Excess Benefit
Plan.
(4) Consists of a $385 Company contribution to the Company's Employees'
Sheltered Savings Plan, and a $846 Company contribution to the Company's
Employees' Excess Benefit Plan.
(5) Consists of a $3,467 Company contribution to the Company's Employees'
Sheltered Savings Plan, and a $9,707 Company contribution to the Company's
Employee Excess Benefit Plan.
(6) Consists of a $7,158 Company contribution to the Company's Employees'
Sheltered Savings Plan, and a $4,074 Company contribution to the Company's
Employees' Excess Benefit Plan.
10
In September 1994, the Board of Directors authorized a new supplemental
executive pension plan (effective January 4, 1995) which provides retirement
income based on each participant's final salary and years of service with the
Company. The plan, called the Company's Executive Salary Protection Plan II
("ESPP II"), provides additional post-termination retirement income based on
each participant's final salary and years of service with the Company. The
funding of this benefit will be facilitated through the purchase of life
insurance policies, the premiums of which will be paid by the Company and
participant contributions. The Company also has a defined benefit pension plan
covering its non-union and executive employees. Benefits under the defined
benefit plan are equal to credited service times the sum of 95% of earnings up
to the covered compensation amount plus 1.45% of earnings in excess of the
covered compensation amount. The covered compensation is based on IRS Tables.
ESPP II supersedes and replaces the Executive Salary Protection Plan I
("ESPP I"). Under ESPP I, Certified purchased life insurance policies for
certain officers. Upon reaching age 65 (or upon termination, if earlier), the
employee was given the cash surrender value of the policy, plus any additional
income taxes incurred by the employee as a result of such distribution.
The following table sets forth the estimated annual benefits under the
defined benefit plan and the ESPP II plan which qualifying officers with
selected years of service would receive if they had retired on September 2, 1995
at the age of 65.
PENSION PLAN TABLE
YEARS OF SERVICE
----------------------------------------------------------------
REMUNERATION 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 33 YEARS
- ------------------------------------------------ --------- --------- --------- --------- --------- ---------
$100,000...................................... $ 26,008 $ 52,016 $ 68,024 $ 69,032 $ 70,040 $ 71,653
125,000....................................... 32,530 65,060 85,090 86,370 87,650 89,697
150,000....................................... 39,052 78,104 89,455 91,007 92,559 95,042
175,000....................................... 45,302 87,904 89,455 91,007 92,559 95,042
200,000....................................... 51,552 87,904 89,455 91,007 92,559 95,042
225,000....................................... 57,802 87,904 89,455 91,007 92,559 95,042
250,000....................................... 64,052 87,904 89,455 91,007 92,559 95,042
300,000....................................... 76,552 87,904 89,455 91,007 92,559 95,042
350,000....................................... 86,352 87,904 89,455 91,007 92,559 95,042
400,000....................................... 86,352 87,904 89,455 91,007 92,559 95,042
450,000....................................... 86,352 87,904 89,455 91,007 92,559 95,042
The Company's ESPP II is designed to provide a retirement benefit up to 65%
of a participant's final compensation, based on a formula which considers an
executive's final compensation and years of service. Remuneration under ESPP II
is based upon an executive's highest annual base wage during the previous three
completed years, which includes his or her annual salary as determined by the
Board of Directors plus an automobile allowance with a 4% annual increase. The
benefit is subject to an offset of the annual benefit which would be received
from the defined benefit plan, calculated as a single life annuity at age
sixty-two. To qualify for participation in the benefit, the executive must
complete three years of service as an officer elected by the Board of Directors
of the Company. Executives will vest at a rate of 5% per year with all years of
continuous service credited. The ESPP II maximum annual benefit upon retirement
for calendar 1995 shall not exceed $84,800 and will be paid over a 15-year
certain benefit. This maximum benefit will increase annually thereafter at the
rate of 6%. Lesser amounts are payable if the executive retires before age
sixty-five. The maximum annual amount payable by years of service is reflected
within the table at the compensation level of $450,000. As of September 2, 1995,
credited years of service for named officers are: Mr. Plamann, 6 years; Mr.
Bane, 1 year; Mr. Dill, 37 years; Mr. Gross, 14 years; and Mr. Pilliter, 19
years.
11
DIRECTOR COMPENSATION
Each director receives a fee of $300 for each regular board meeting
attended, $100 for each committee meeting attended and $100 for attendance at
each board meeting of a subsidiary of the Company on which the director serves.
In addition, directors are reimbursed for Company related expenses.
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following graph sets forth the five year cumulative total shareholder
return on the Company's common stock as compared to the cumulative total return
for the same period of the S&P 500 Index and Peer Issuers consisting of Spartan
Stores, Inc. and Roundy's, Inc. Like the Company, Spartan Stores and Roundy's
are retailer-owned wholesale grocery distributors. While Spartan Stores pays a
dividend on its stock, the Company and Roundy's do not. The shares of the
Company and the Peer Issuers are not traded on any exchange and there is no
established public market for such shares. The price of the Company's shares
during each of its fiscal years is the book value of such shares as of the end
of the prior fiscal year.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG THE COMPANY, S&P 500 INDEX AND PEER ISSUERS**
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMPANY S&P 500 PEER ISSUERS
1990 100 100 100
1991 94.1 122.6 104.9
1992 89.5 128.4 110.8
1993 90.1 143.7 117.8
1994 89.9 147.4 125.9
1995 91.4 174.2 136.6
Assumes $100 invested on August 31, 1990 in Company
common stock, S&P 500 Index and Peer Issuers common
stock
* Total return assumes reinvestment of dividends
** Fiscal years ended August 31, 1991, August 29,
1992, August 28, 1993, September 3, 1994 and
September 2, 1995
TRANSACTIONS WITH MANAGEMENT AND PERSONS
NAMED IN THE ADVISORY BALLOT
All directors of the Company and all persons named in the Advisory Ballot
who are not directors (or the firms with which such directors and persons are
affiliated) purchase groceries, related products and store equipment from the
Company or its subsidiaries in the ordinary course of business at prices and on
terms available to patrons generally. During the fiscal year ended September 2,
1995, no director of the Company or person named in the Advisory Ballot who is
not a director (nor the firms with which such directors and persons are
affiliated) accounted for in excess of 5% of the Company's consolidated sales.
12
In September 1992, the Company guaranteed the obligations of Mar-Val Food
Stores, Inc., of which director Mark Kidd is the President and a shareholder,
under a lease of market premises located in Valley Springs, California. The
guarantee is of the obligations of Mar-Val Food Stores, Inc. to pay base rent,
common area costs, real estate taxes and insurance during the initial fifteen
year term of the lease. Base rent under the lease is $10,080 per month. The
Company's total obligation under the guarantee, however, is limited to the sum
of $736,800. In consideration of its guarantee, the Company receives a monthly
fee from Mar-Val Food Store, Inc. equal to 5% of the base monthly rent under the
lease.
The Company leases its produce warehouse to Joe Notrica, Inc., of which
director Morrie Notrica is the President and a shareholder. The lease is for a
term of five years expiring in November 1998 and contains an option to extend
for an additional five year period. Monthly rent during the initial term is
$24,000. If the option to extend is exercised, rent during the option period
will be the lesser of fair rental value or the monthly rent during the initial
term as adjusted to reflect the change in the Customer Price Index during the
initial term.
Cala Co. (a patron affiliated with Alpha Beta Company) acquired the stock of
Bell Markets, Inc. in June 1989. The Company guaranteed the payment by Cala Co.
of certain promissory notes in favor of the selling shareholders. The promissory
notes mature in June 1996 and total $8 million; however, the Company's guaranty
obligation is limited to $4 million. In addition, and in connection with the
acquisition, the Company guaranteed the lease obligations of Bell Markets, Inc.
during a 20-year period under a lease relating to two retail grocery stores
located in San Francisco, California. Annual rent under the lease is $327,019.
In the event the Company's guaranty is ever called upon, the Company has the
right to receive an assignment of the lease relating to the locations.
Concurrently with the foregoing transactions, Bell Markets, Inc. entered into a
5-year agreement to purchase a substantial portion of its merchandise
requirements from the Company.
Grocers General Merchandise Company ("GM"), a subsidiary, and Food 4 Less
GM, Inc. ("F4LGM"), an indirect subsidiary of Ralphs Grocery Company, are
parties to a joint venture agreement. Under the agreement, GM and F4LGM are
partners in a joint venture partnership known as Golden Alliance Distribution
("GAD"). The partnership was formed for the purpose of providing for the shared
use of the Company's general merchandise warehouse located in Fresno,
California, and each of the partners has entered into a supply agreement with
Golden Alliance Distribution providing for the purchase of general merchandise
products from Golden Alliance Distribution.
The Company guarantees certain obligations under a sublease of market
premises located in Pasadena, California, and under which Berberian Enterprises,
Inc., of which Director John Berberian is the President and a shareholder, is
the sublessor. The guaranty is of the obligations of the sublessee to pay
minimum rent, common area costs, real estate taxes and insurance during the
first seven years of the term of the sublease, which commenced in September
1995. Minimum rent under the sublease is $10,000 per month. In consideration of
its guaranty, the Company receives a monthly fee from the sublessee equal to 5%
of the monthly amounts guaranteed.
On February 1, 1995, GCC made a loan of $69,000 to Corwin J. Karaffa, the
Company's Vice President-Distribution. The loan was for the purpose of assisting
Mr. Karaffa in acquiring a home in connection with his becoming employed by the
Company. The loan bears interest at 8% per annum and is secured by a second deed
of trust on the home. The loan has a term of eight years, with interest only
payable during the first five years.
In fiscal 1993, GCC acquired one hundred fifty (150) shares of preferred
stock and three hundred thousand (300,000) shares of common stock of Major
Market, Inc. ("MMI"), of which nominee Richard L. London is the President and a
shareholder, for a price of approximately $1.5 million. In December 1994, GCC
finalized an agreement with MMI whereunder MMI repurchased all of the preferred
stock and two hundred eighty-two thousand six hundred (282,600) shares of the
common stock for a price of $2.7 million, of which $2,580,000 is represented by
a seven-year promissory note from MMI to GCC. The promissory note bears interest
at prime plus two percent, adjusted quarterly, and is secured by the assets of
MMI. As additional security, GCC received a guarantee from Mr. London and a
pledge of his shares in MMI. In connection with this repurchase, Mr. London,
MMI, GCC and certain other shareholders of MMI agreed
13
that GCC will have certain preemptive rights to acquire additional common
shares, rights to have its common shares included proportionately in any
transfer of common shares by Mr. London, and rights to have its common shares
included in certain registered public offerings of common stock which may be
made by MMI. In addition, GCC will have certain rights, at its option, to
require that MMI repurchase GCC's shares, and MMI will have certain rights, at
its option, to repurchase GCC's shares. In connection with these transactions,
MMI entered into a seven-year supply agreement with the Company (to replace an
existing supply agreement) whereunder MMI is required to purchase a substantial
portion of its merchandise requirements from the Company. The supply agreement
is subject to earlier termination in certain situations.
In fiscal 1995, the Company leased certain market premises to be constructed
and located in Los Angeles, California, and which the Company subleases to Hafsa
Corporation, of which nominee Farid (Mike) Shalabi is the President and a
shareholder. The term of the lease is fifteen years, with four five-year options
to extend. The premises are expected to contain approximately 20,000 square
feet. Base rent during the initial term will be $9.00 per square foot,
increasing by 15% during the first option period and 5% during each of the three
remaining option periods. In connection with its sublease of the premises to
R-Ranch Markets, the Company would receive monthly an additional rent equal to
5% of the base monthly rent.
In June 1993, Grocers Specialty Company ("GSC"), a subsidiary, sold a former
cash and carry location in Los Angeles, California, to a group of purchasers,
including a trust of which Mr. Shalabi is a trustee. The total purchase price
was approximately $495,000, of which approximately $300,000 was paid by means of
a ten year promissory note bearing annual interest at 9 1/2%. The note is
secured by a deed of trust on the location. The balance presently outstanding
under the note is approximately $352,000. In September 1994, GSC also sold a
former cash and carry location in Los Angeles, California, to a group of
purchasers, including a trust of which Mr. Shalabi is a trustee. The total
purchase price was $550,000, of which $440,000 was paid by means of a seven year
promissory note bearing annual interest at 8%. The note is secured by a deed of
trust on the location. The balance presently outstanding under the note is
approximately $275,000.
In July 1995, GCC entered into an agreement with Park and Shop Market, Inc.
("Park and Shop"), of which nominee William Andronico is the President and a
shareholder, under which GCC agreed to provide advances to Park and Shop of up
to $2,500,000. The advances are available until December 31, 2000, and must be
in minimum amounts of $500,000. Each advance must be repaid within five years of
the date of the advance and bears interest at the rate of prime plus 1 1/2%,
payable quarterly in arrears. Advances are available to finance new store
expansion. Amounts advanced by GCC are subordinated to specified bank debt not
to exceed $8,500,000 in amount. Advances totaling $1,500,000 have been made and
are presently outstanding. In connection with this transaction, Park and Shop
entered into a supply agreement providing for the purchase by Park and Shop of a
substantial portion of its merchandise requirements from the Company. The term
of the supply agreement if five years, subject to extension each time an advance
is made.
GCC guarantees a portion of a line of credit between NCCB and Park and Shop.
The line consists of a $3,300,000 term loan and a $3,800,000 advancing term loan
each maturing on October 1, 2002. Until October 1, 2000, the term loan bears
interest at a fixed rate based on U.S. Treasury Security yields, at which time
it converts to a floating rate based on LIBOR. Advances under the advancing term
loan are available until September 20, 1996. Advances are at a fixed or floating
rate, at the option of Park and Shop, but convert to a floating rate of interest
on October 1, 2000. GCC has agreed to subordinate its loan to Park and Shop
described in the preceding paragraph to the loans from NCCB. The loans are
collateralized by certain leasehold improvements and personal property. The
guaranty by GCC is limited to 10% of the outstanding principal balance of the
loans, but the guaranty does not become effective so long as the principal
amount of GCC's loan to Park and Shop discussed in the preceding paragraph is
$500,000 or more. In consideration of its guaranty, GCC will receive an annual
fee from Park and Shop equal to 3.75% of the guaranty amount.
Certain other transactions involving other directors of the Company are
described beginning at page 6 under the caption "Compensation Committee
Interlocks and Insider Participation."
14
SHAREHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
Under the present rules of the Securities and Exchange Commission (the
"Commission"), and in view of the presently anticipated date of the Company's
Proxy Statement for this year's Annual Meeting of Shareholders, the deadline for
shareholders to submit proposals to be considered for inclusion in the Company's
Proxy Statement for next year's Annual Meeting of Shareholders is expected to be
October 5, 1996. Such proposals may be included in next year's Proxy Statement
if they comply with certain rules and regulations promulgated by the Commission.
Such proposals should be submitted to the Corporate Secretary of the Company at
the address of the Company's principal executive office shown on the first page
of this Statement.
BY ORDER OF THE NOMINATING
COMMITTEE OF THE BOARD OF
DIRECTORS
Dated: January 2, 1996
DAVID A. WOODWARD, CORPORATE SECRETARY
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K TO THE SECURITIES AND
EXCHANGE COMMISSION FOR THE FISCAL YEAR ENDED SEPTEMBER 2, 1995, EXCLUDING
EXHIBITS, MAY BE OBTAINED WITHOUT CHARGE BY WRITING TO THE CORPORATE SECRETARY
OF THE COMPANY AT THE ADDRESS OF THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE SHOWN
ON THE FIRST PAGE OF THIS STATEMENT.
15
ADVISORY BALLOT
Mark up to 12 names, but not more than 12.
The parenthetical letter "N" designates representatives for Northern
California shareholders.
/ / Louis A. Amen
(Incumbent)
/ / William Andronico (N)
/ / John Berberian
(Incumbent)
/ / William C. Evans (N)
/ / Gene A. Fulton
(Incumbent)
/ / Scott Hair
/ / Lyle A. Hughes
(Incumbent)
/ / Darioush Khaledi
(Incumbent)
/ / Mark Kidd (N)
(Incumbent)
/ / Richard L. London
/ / Willard "Bill" MacAloney
(Incumbent)
/ / Jay McCormack
(Incumbent)
/ / Louis Melillo
/ / Morrie Notrica
(Incumbent)
/ / Michael A. Provenzano
(Incumbent)
/ / Gail Gerrard Rice
/ / Allan Scharn
(Incumbent)
/ / Farid (Mike) Shalabi
/ / Jim Stump
(Incumbent)
/ / Milt Thaler
/ / Daniel W. Vengler
/ / Kenneth Young (N)
(Incumbent)
IMPORTANT!
This ballot is not a proxy. At this time we are not asking you for a proxy,
and request that you not send us a proxy.
This ballot is not valid unless returned in the envelope provided. It must be
received by January 19, 1996.
CERTIFIED GROCERS OF CALIFORNIA, LTD.
CERTIFIED [LOGO]
CERTIFIED GROCERS OF CALIFORNIA, LTD.
CANDIDATES' STATEMENTS
1996 ADVISORY BALLOT
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
LOUIS A. AMEN
(INCUMBENT)
SUPER A FOODS, INC.
LOS ANGELES AND ORANGE COUNTIES
For the past 21 years, Mr. Amen has served on the board of directors of
Certified and is a past chairman of the board. Currently, Mr. Amen is a member
of the Finance, Administrative, and Personnel and Executive Compensation
Committees. In addition, Mr. Amen is chairman of Grocers Specialty Company and
a director for Springfield Insurance Company, Ltd., two of Certified's
subsidiaries. Mr. Amen is also a director and past chairman of California
Grocers Association.
Mr. Amen is the owner-operator of Super A Foods which operates 10 stores. He
has been actively involved in the food industry for over 52 years and a
Certified member for 43 years.
[PHOTO]
BILL ANDRONICO
ANDRONICO'S PARK AND SHOP
BERKELEY AND SAN FRANCISCO
Mr. Andronico attended U.C. Berkeley earning a B.A. degree in Economics in
1979. In 1982, he received his MBA at the University of Southern California,
completing the curriculum within the Food Industry Management Program. Mr.
Andronico began his food retail career as a courtesy clerk at the family's four
store company in 1975 and was exposed to many functions at store level
thereafter.
In the 1980's, Mr. Andronico assumed increasing levels of corporate
responsibility, including personnel, MIS, merchandising and store planning. In
1985 he became vice president and chief operating officer of Andronico's and in
1988 he rose to become president, where he remains today. Working alongside
his father, Mr. Andronico has assembled a top-flight management team to help
grow the business. Currently operating four stores in Berkeley and one in San
Francisco, Andronico's is preparing to open three new stores in 1996 in Palo
Alto, Los Altos and San Anselmo. Community involvement has always been
critical to Andronico's and Mr. Andronico has spent much time helping schools,
churches and hospices raise funds and develop programs.
Mr. Andronico views the cooperative wholesaler as a vital partner in the
independent grocers' struggle to be competitive while maintaining or expanding
the business. Important programs must be sustained or improved to keep pace
with the industry. Finding ways to continually better wholesaler efficiencies
is critical to Certified Grocers' long-term survival.
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
JOHN BERBERIAN
(INCUMBENT)
BERBERIAN ENTERPRISES, INC.
DBA
JONS MARKETS
LOS ANGELES
Mr. Berberian is currently a member of Certified's Board of Directors where
he serves on the Finance and Retail Development Committees. Mr. Berberian also
serves as a member of the board of Grocers Specialty Company, Grocers General
Merchandise Company and Grocers Equipment Company, three of Certified's
subsidiaries.
Mr. Berberian is the owner and president of Jons Markets which operates 11
successful independent stores. Because it is a family-owned chain, Mr.
Berberian has acquired experience in all phases of retail operation.
Since 1977, when he opened his first store, Mr. Berberian has been an active
member of Certified and has worked closely with them. As Jons Markets grew to
11 stores in a relatively short time, Mr. Berberian has learned how valuable
Certified is to its members and is sensitive to the many problems facing
independents today.
Mr. Berberian believes that his past experience as a Certified board member
will enable him to make a positive contribution to the Certified membership.
[PHOTO]
WILLIAM (CHUCK) EVANS
TWAIN HARTE MARKET, INC.
TWAIN HARTE, CALIFORNIA
Mr. Chuck Evans is president and co-owner with his wife of Twain Harte
Market, in Twain Harte, California. He started in the grocery industry in 1946
with Purity Stores. After four years in the U.S.A.F., he worked with Safeway
Stores for a total of 23 years, managing for 20 years.
In 1979, he and his wife purchased a small 4,000 sq. ft. grocery store in
Twain Harte. In 1982, they opened a new 20,000 sq. ft. market in a new
shopping center in that city.
Mr. Evans is very involved in community organizations. He has been the
past president of the Rotary Club and the Chamber of Commerce. He currently
serves on the board of El Capitan National Bank and is Financial Chairman for
Outreach, through Young Life International, to high-school-age young people in
Russia.
Mr. Evans is very active in the grocery industry, and was selected as an
Outstanding Independent Grocer for nine years straight by Progressive Grocer
Magazine. He currently serves as a director on the boards of NCGA and CGA.
Mr. Evans states, "I'm excited about what is happening at Certified.
Many good changes are going on, and I hope I continue to be a part of that. I
think the board needs a one store operator that is involved."
Mr. Evans is a past director of Certified where he served on the Retail
Development Committee. He also served as a director of Grocers Capital Company
and Grocers Specialty Company, two of Certified's subsidiaries.
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
GENE FULTON
(INCUMBENT)
JENSEN'S COMPLETE SHOPPING, INC.
DBA
JENSEN'S FINEST FOODS
BLUE JAY
Mr. Fulton currently serves as a member of Certified's Board of Directors.
He is also chairman of the Nominating Committee and a member of the Audit
Committee. He serves as a director of Grocers and Merchants Insurance Service,
Grocers General Merchandise Company, Grocers Specialty Company, Springfield
Insurance Company and Springfield Insurance Co., Ltd., five of Certified's
subsidiaries. Times such as these are truly tough for all of us, and it is
imperative that we keep our product costs as low as possible. This is his
number one goal.
Mr. Fulton started his grocery industry career in 1957 as a box boy,
advancing to the post of General Manager in 1971. Ten years later, he
purchased the original Jensen's Finest Foods in Blue Jay.
As president of Jensen's Finest Foods, Mr. Fulton now operates markets in
Blue Jay, Palm Desert, Palm Springs and Wrightwood. He also operates
convenience stores in Lake Arrowhead and Rancho Mirage, dba Jensen's Minute
Shoppe.
He is active in community affairs and is a firm believer that the independent
has a strong future in California. Mr. Fulton welcomes your ideas and
support.
[PHOTO]
SCOTT HAIR
GREEN FROG MARKET
BAKERSFIELD
Mr. Hair has operated Green Frog Market, a second generation family store,
since its founder's death in 1988. He is a graduate of Cal State Bakersfield,
where he majored in biology. He has successfully administrated over the
succession of a family business from the founding generation to its second
generation owners.
Mr. Hair is a past president and current director of the Kern County
Independent Grocers Association, in addition, he has chaired the local AFL-CIO
roundtable for labor and management. Mr. Hair currently serves as chairman of
the Business Retention Committee of the Kern County Council on Competitiveness,
and as a director of the Cal State Bakersfield Roadrunner Club.
Mr. Hair believes the current board has done a good job of directing the
reorganization of Certified. He feels Certified is on track when they
acknowledged the majority of their business is derived from smaller volume
stores, and encourages management in their pursuit of resolving smaller store
issues. Mr. Hair thinks the technological advancement of the company and its
members is the best remedy for the loss of sales support to the independents.
Mr Hair welcomes your support of his candidacy, and for any questions or
comments you may have please call him at 805-322-8420.
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
LYLE A. HUGHES
(INCUMBENT)
YUCAIPA TRADING CO., INC.
DBA
SUPER PENNY MART
YUCAIPA
At present, Mr. Hughes is a Certified board member and serves on the Audit,
Finance and Retail Development Committees. He serves as Chairman of Grocers
Equipment Company and is a director of Grocers Specialty Company, two of
Certified's subsidiaries.
Mr. Hughes has worked in the grocery industry for the past 42 years. He
is now a partner-owner and general manager of Super Penny Mart in Yucaipa,
California.
Mr. Hughes feels there is a definite future for independent operators
provided Certified is able to remain strong and continues to be a low-cost
supplier of product. He also believes Certified must foster a climate in which
current and new operations can thrive and grow. With your help he will work
toward these goals.
[PHOTO]
DARIOUSH KHALEDI
(INCUMBENT)
K.V. MART CO.
DBA
TOP VALU MARKETS &
VALU PLUS FOOD WAREHOUSES
Mr. Khaledi, Chairman and Chief Executive Officer of K.V. Mart Co., opened
the first Top Valu Market in Torrance in 1977, and has been a member of
Certified from that time forward. Mr. Khaledi now operates nine Top Valu
Markets and five Valu Plus Warehouse Markets.
Mr. Khaledi was elected to the board for a fourth time last year, and plays a
major role in the re-engineering of Certified. He is the 2nd Vice Chairman and
an active member of the Finance, Personnel and Executive Compensation,
Administrative and Retail Development Committees, as well as, a director of
Grocers Equipment Company, Grocers Capital Company and Grocers Specialty
Company, three of Certified's subsidiaries.
Darioush was honored five times by the Progressive Grocer Magazine, and
serves on the board of directors for the Food Marketing Institute, California
Grocers Association, and the Food Industry Insurance Association. Darioush
maintains a high visibility in the industry and is very involved in industry
issues, at the local, state, and national levels.
Mr. Khaledi graduated with a Masters Degree in Civil Engineering from Tehran
Polytechnic in 1968. He also graduated from the University of Southern
California's Effective Management Program in 1981 and the Cornell University
Food Executive Program in July 1995.
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
MARK KIDD
(INCUMBENT)
MAR-VAL FOOD STORES, INC.
CENTRAL VALLEY
Mr. Kidd is the owner and president of Mar-Val Food Stores, a family run
company in the Central Valley.
Mr. Kidd is presently a director on the Certified Board and serves as a
member of the Retail Development and Nominating Committees. He is the chairman
of both the Grocers and Merchants Insurance Service and Springfield Insurance
Company, and a director of Grocers Equipment Company. He is actively involved
in all aspects of the grocery industry. Mr. Kidd has been involved in the
grocery business for 28 years, beginning in his high school years. He then
went on to graduate from Bringham Young University and returned to California
to begin to build onto the family business.
Mr. Kidd has served on the board of directors of Northern California Grocers
Association, becoming chairman in 1984. He has served on the board of
directors of CGA, and has served on the board of directors of National Grocers
Association. He is active in his community and church affairs. Mr. Kidd feels
that independent grocers need to work together in combating the competition of
the major chains.
Mr. Kidd welcomes your ideas and asks for your support.
[PHOTO]
RICHARD L. LONDON
MAJOR MARKET, INC.
ESCONDIDO
As president and chief executive officer of Major Market, Mr. London put
together an aggressive and talented team and started the highly successful
company seven years ago in North San Diego County. Currently they have two
high volume stores, one in Fallbrook and the other in Escondido. Extensive
expansion plans are scheduled concentrating on North San Diego County. The
Escondido store was designed by Mr. London and features a full service french
bakery, food service "court" complete with Chinese and Mexican kitchens and a
barbecue mesquite grill. The store is very unique in concept and design from
the fresh fruits and vegetables to the fresh service seafood and butcher shop.
Beginning his grocery career with Vons Companies in 1952, Mr. London
progressed through the ranks to senior vice president in 1983; third in command
of approximately 180 stores. He served on the board of directors and the
executive, real estate and store planning committees while at Vons. He
currently serves on the board of directors for Major Market.
He was recently elected to serve on the board of directors for California
Grocers Association.
As Certified moves further into the challenging 90's, his commitment to
excellence and innovative contributions will be an invaluable asset to the
entire Certified organization.
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
WILLARD "BILL" MacALONEY
(INCUMBENT)
MAC BER, INC.
DBA
JAX MARKETS
ORANGE COUNTY
Mr. MacAloney is the current chairman of the board for Certified and, as
chairman, he is an ex-officio member of all board committees and ex-officio
director of all Certified subsidiaries. He participates in all Certified
programs.
In addition to his Certified responsibilities and the operation of his four
successful Jax Markets, Mr. MacAloney is a vice chairman of the Food Marketing
Institute (FMI) of Washington, D.C., and a board member for California Grocers
Association (CGA) and Western Association of Food Chains (WAFC).
Mr. MacAloney believes the board of directors should be the driving force in
establishing Certified's future for the success of the independents. A strong
co-op is fundamental to the survival of independent grocers in our changing
marketplace. Mr. MacAloney is accustomed to getting results even through the
most difficult times, and he feels that this is the time to have board members
who can do the same.
[PHOTO]
JAY McCORMACK
(INCUMBENT)
ALAMO MARKET, 29 PALMS
GLEN AVON MARKET, GLEN AVON
Mr. McCormack is the owner-operator of the Alamo Market since 1986, and co-
owner of Glen Avon Market which opened in 1993. He worked for Certified from
1975 to 1986, acquiring a working knowledge of the co-op and its members.
Mr. McCormack has served you on Certified's board since July 1992, chairs the
Retail Development Committee, serves on the Finance and Nominating Committees,
and is a director of Grocers Equipment Company, Grocers Capital Company and
Hawaiian Grocery Stores, three subsidiaries of Certified.
Mr. McCormack believes the board is ultimately responsible for the successful
operation of Certified Grocers. He believes the company should focus on 4
major objectives:
1. Control and reduce Certified's gross margin, which translates into the
retailers cost of goods;
2. Control and reduce Certified's expenses as a percentage of sales;
3. Increase volume through Retail Development; and
4. Provide a satisfactory patronage dividend return to members.
Mr. McCormack welcomes the opportunity to serve you. Please call him with
comments or concerns at 619-367-7216.
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
LOUIS MELILLO
LOUIS FOODS, INC.
PASADENA
Mr. Melillo began his grocery career in a family store outside of Boston, at
a very young age. His move to California brought him to Boys Market, and a
clerks job. His many years and many positions brought him to the top position
of executive vice president. In 1979 he left the corporate world to become an
Independent store owner.
During his many years in the grocery industry, Mr. Melillo was heavily
involved in Food Industry Associations, and was elected chairman of the board
of the Southern California Grocers Association (1978-1979).
Prior to opening his own store, Mr. Melillo taught marketing and management
classes for many years at the UCLA School of Business.
Mr. Melillo has been through the many cycles of the grocery business. He has
a strong commitment to Certified, and believes that his contribution can
strengthen Certified's future, as well as the members. He enjoys challenges
and knows how to survive throughout the toughest times, and competition. To
remain strong through the tough times is insurance for a successful future.
[PHOTO]
MORRIE NOTRICA
(INCUMBENT)
JOE NOTRICA, INC.
DBA
THE ORIGINAL 32ND STREET MARKET
LOS ANGELES
Mr. Notrica is president and sole operating officer of one of the largest
independent markets in Los Angeles. Under his direction, The Original 32nd
Street Market has expanded from 1,800 to 50,000 square feet and is still
growing. In addition, he has opened four additional stores.
In his more than 44 years in the food industry, Mr. Notrica has been active
in every phase of the business from the buying of produce and other department
commodities, to the complex areas of accounting, payroll and other corporate
functions. Mr. Notrica is an innovator whose 16 checkstand scanning registers
have attracted interest from retailers as far away as New Zealand, Japan and
Finland.
Mr. Notrica has received resolutions from the Los Angeles City Council and
the California State Assembly for his civic affairs activity. He has also
received the Progressive Grocers Merchandising Award for 1985-1986 and the
Mexican American Grocers Association Retailer of the Year Award for 1987. A
member of the Certified board of directors, he serves on the Finance,
Nominating and Retail Development Committees, and the boards of Grocers and
Merchants Insurance Service, Grocers General Merchandise Company, Grocers
Specialty Company, Hawaiian Grocery Stores, and the Springfield Insurance
Companies. He is also a director of California Grocers Association, a member
of the Public Affairs Assembly of the Food Marketing Institute, and serves on
the board of directors for the Mexican American Grocers Association. He
believes that the retail food industry is a "people business" and he's
involved.
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
MICHAEL A. PROVENZANO
(INCUMBENT)
PRO & SON'S, INC.
DBA
SOUTHLAND MARKET
ONTARIO
Mr. Provenzano has worked for 38 years in the grocery industry. He is a
graduate of Cal Poly Pomona, where he majored in business. He received a food
industry scholarship to USC, and was nominated to the roster of Outstanding
Young Men of America.
Mr. Provenzano serves on the Finance and Retail Development Committees, and
is a director for Grocers and Merchants Insurance Service, Grocers General
Merchandise Company, Grocers Specialty Company, and the Springfield Insurance
Companies, five of Certified's subsidiaries. He is past chairman of the
California Grocers Association and was again selected to serve as director on
that board. Representing the independents, Mr. Provenzano serves as a
committee member to the Food Marketing Institute (FMI).
Mr. Provenzano purchased Southland Market in 1979. In 1987 it was voted as
one of the top independents across the United States.
As an independent he recognizes the needs of retail operators in our changing
marketplace and will offer his best efforts to represent you on the board. He
welcomes your questions. You may call him at 909-984-8711.
[PHOTO]
GAIL GERRARD RICE
GERRARDS MARKETS, INC.
REDLANDS, SAN BERNARDINO COUNTY
Gail Gerrard Rice is co-owner and executive vice-president of Gerrards
Markets in Redlands, a family owned business with 65 years of successful
operation. She joined the business in 1974 and has been involved in all
aspects of store management since.
Ms. Rice served as President of the Redlands Chamber of Commerce from 1992 to
1994, was named Business Woman of the Year in 1993 by the Redlands Chapter of
ABWA, and was a 1995 honoree of the University of Redlands Town and Gown for
contributions to the business community. She is a graduate of Chapman College
(now Chapman University) in Orange.
Ms. Rice's two stores have supported Certified throughout the years in all
departments. She understands that the future of the independent operator in
California is tied to the success of Certified and that the core value of a
cooperative wholesaler is to provide product at the lowest possible cost to
keep its members competitive. As a potential board member, she believes that
Certified is the only viable alternative for the independent operator today and
that our strength must be enhanced through results-oriented management.
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
ALLAN SCHARN
(INCUMBENT)
GELSON'S MARKETS
MAYFAIR MARKETS
ENCINO
Allan Scharn is currently a member of Certified's Board of Directors. As a
director, he is the chairman of Grocers General Merchandise Company, a
subsidiary of Certified.
Following six years with Serber's Foods, a three store independent grocer,
Mr. Scharn joined Gelson's Markets in 1960 as a grocery clerk. He has
subsequently served as assistant manager, grocery manager, store manager,
grocery, frozen food and general merchandise buyer, vice president and general
manager and is currently, president of Gelson's Markets.
Mr. Scharn believes that the independent food retailer's survival and ability
to grow in today's competitive marketplace can be assured only if we position
Certified Grocers to provide the lowest cost goods and the highest quality
services required by its members.
[PHOTO]
FARID (MIKE) SHALABI
R RANCH MARKETS, INC.
LOS ANGELES AND ORANGE COUNTY
Farid (Mike) Shalabi is president and CEO of a group of successful, growth-
oriented independent grocery stores, the R-Ranch Markets. He represents an
aggressive, retail and wholesale operation and is highly qualified both in
knowledge and ability to cope with over-all operations and problem solving that
are necessary functions in today's business climate.
In the grocery business since 1973, Mr. Shalabi has acquired the experience
to creatively convey his ideas and wisdom to the functioning of ongoing growth
and continued success. He is cognizant of the important daily issues, as well
as the long range goals of his associates and peers, and evinces the inherent
qualifications to be a leader.
Mr. Shalabi has much to contribute to the organizational development and
functioning of Certified Grocers.
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
JIM STUMP
(INCUMBENT)
STUMP'S MARKET, INC.
SAN DIEGO
Currently, Mr. Stump is a member of Certified's Board of Directors and serves
on the Personnel and Executive Compensation, Finance and Retail Development
Committees. He is the chairman of Grocers Capital Company and a director for
Grocers Equipment Company and Hawaiian Grocery Stores, three of Certified's
subsidiaries.
Mr. Stump has worked in the grocery industry for 41 years, 22 of them with a
chain operation where he rose to the post of district manager responsible for
22 stores. He has spent the past 19 years developing and operating his own
stores. He is president of Stump's Market, Inc., San Diego.
Mr. Stump believes that because of his experience in both chain store and
single-store operations he can relate to the problems and opportunities of
each. He feels strongly that areas as large as San Diego and Imperial Counties
should have representation on the board.
[PHOTO]
MILT THALER
CITY FOODS
LOS ANGELES
Mr. Thaler has been a Certified member for over 40 years. He has extensive
experience in market construction, remodeling and management.
At present, he operates five markets in the Los Angeles area. He knows what
the market operator needs from Certified, and if elected, he will do his best
to see that Certified remains a strong and viable organization that serves its
membership well.
CANDIDATES' STATEMENTS
- -------------------------------------------------------------------------------
[PHOTO]
DANIEL W. VENGLER
OAK CREEK MARKET, INC.
SUN VALLEY MARKET, RAMONA DEL MAR VILLAGE MARKET
ALPINE CREEK MARKET, ALPINE DANIEL'S MARKET, BONSALL
VILLAGE STATION MARKET, LA MESA DANIEL'S LIQUOR, RAMONA
DANIEL'S MARKET, DEL MAR
Mr. Vengler began working in the grocery business in 1965. After becoming a
manager with a local chain, Mr. Vengler purchased his own market in 1972.
Since that time his company has grown from the first market, Sun Valley Market,
to now include six others. With 30 Years of experience, Mr. Vengler has gained
a considerable amount of insight and knowledge in all areas of marketing.
Mr. Vengler has been honored with Southern California Grocer of the Year for
San Diego County. Mr. Vengler is also involved in local service organizations
and is past president of the Ramona Chamber of Commerce. He is presently
serving on the Chamber's board of directors. He has also served on special
committees for Certified.
As an independent grocer with over 30 years of experience, Mr. Vengler is
sensitive to the need of the independents and the importance that Certified
plays in our future.
[PHOTO]
KENNETH YOUNG
(INCUMBENT)
JACK YOUNG'S SUPERMARKETS
DBA
YOUNG'S MARKETS
VISALIA
Mr. Young is vice president and a stockholder of Young's Markets, a family
run company that has been a member of Certified since 1950 (45 years). Young's
Markets operates six supermarkets located in Visalia and Bakersfield. Mr.
Young has been involved in food retailing since 1960. Mr. Young is experienced
in all phases of the business including operations, purchasing, advertising,
personnel, accounting, data processing, and real estate.
Mr. Young holds a Masters Degree in Accounting from UCLA and a B.S. Degree
from USC's Food Distribution Program (1967-1968). Mr. Young is a supporter of
Future Business Leaders of America in high school and is now a professional
member of FBLA. Mr. Young is married and has a son and a daughter (twins) both
18 years old.
Mr. Young currently serves as a member of Certified's Board of Directors and
is the chairman of the Audit Committee.
Mr. Young feels that an aggressive, efficient wholesaler is tantamount to the
survival of the independent operators and vice-versa. The wholesaler must
provide products and services at competitive prices. Independent operators
must support their wholesaler to maintain or increase the wholesaler's sales
volume so that the wholesaler can operate more efficiently. A co-op must be
run like any other business, it must be run efficiently as possible to produce
profits for its members.
[LOGO] CERTIFIED GROCERS OF CALIFORNIA, LTD.
January 2, 1996
RE: ELECTION OF DIRECTORS'
Dear Certified Shareholder:
A Nominating Committee has been appointed by the Board of Directors of Certified
Grocers of California, Ltd., to select nominees for election as Directors for
the 1996 Board of Directors.
The enclosed Advisory Ballot is being solicited by the Nominating Committee from
the holders of Certified's Class A shares. This is being done to assist the
Nominating Committee in selecting the 12 persons who will be nominated by the
Board of Directors for election by the holders of the Class A shares. In
selecting candidates for the Advisory Ballot, the Nominating Committee has
reviewed names suggested by shareholders, as well as those provided by
Certified's management. The individuals appearing on the Advisory Ballot have
been contacted to determine their willingness to have their names placed on the
Advisor Ballot and each has consented.
The Nominating Committee and the Board of Directors, in recognition that member
patrons in Northern California represent 30% of Certified's sales, took action
in 1992 to ensure that there will be representation of Northern California
shareholders among those nominated for election to the Board of Directors.
Accordingly, the Nominating Committee will place in nomination for election to
the Board of Directors a minimum of two (2) names from the candidates
representing Northern California on the Advisory Ballot.
We are also enclosing an information statement regarding the Advisory Ballot as
well as individual statements by each of the persons named in the Advisory
Ballot. You should carefully review these materials before voting on the
Advisory Ballot.
The Advisory Ballot contains the names of 22 persons, 13 of whom are incumbent
Directors. In addition, 4 persons represent Northern California, 2 of whom are
incumbents. As the holder of Class A shares of Certified, you are entitled to
vote for up to 12 names on the Advisory Ballot -- one vote for each name
selected. While you may vote for fewer than 12 of the persons named in the
Advisory Ballot, your Advisory Ballot will be invalidated if you
Certified Shareholder
January 2, 1996
Page Two
vote for more than 12 of the named persons. In addition, if you cast more than
one vote for any person named in the Advisory Ballot, only one vote will be
counted for that person and the additional votes will be disregarded.
Coopers & Lybrand, L.L.P., an independent outside auditing firm, will tally the
votes.
To assure accuracy and accountability, Coopers & Lybrand, L.L.P. has requested
that the control number appearing on the enclosed return envelope not be
removed.
THE ADVISORY BALLOT WILL NOT BE VALID UNLESS IT IS RETURNED IN THE ENVELOPE
PROVIDED AND THE CONTROL NUMBER IS LEGIBLE.
The Advisory Ballot is your opportunity to express your choice for nominees
for election as Directors by the holders of Certified's Class A shares. YOUR
VOTE IS VERY IMPORTANT and we urge you to please vote your preference and
return your Advisory Ballot so it is received by Coopers & Lybrand, L.L.P.,
on or before January 19, 1996.
THE NOMINATING COMMITTEE
Gene Fulton, Chairman
Mark Kidd
Jay McCormick
Morrie Notrica
Bill MacAloney (Ex-Officio Member)
Alfred A. Plamann (Ex-Officio Member)
PLEASE NOTE: The Advisory Ballot is not a proxy, and at this time we are not
asking you for a proxy and you are requested not to send us a
proxy.
ANDRONICO'S MARKET
[LOGOS]
To Certified Grocers Members:
I am running for a seat on the Board of Directors at the upcoming election. As
a Cergro member of almost eight years and having been a member of the former
Richmond, CA-based United Grocers Cooperative Wholesaler, we at Andronico's
Market are convinced that well-run, member-owned wholesalers are most beneficial
to the independent grocer. There is a greater sense of attention to and concern
for the retailer in the co-op environment. It seems, as well, that retailer
ideas and suggestions are more likely to be heard and acted upon.
It is critical that all voices be represented at Certified Grocers, particularly
those of both the single-store operator and the mid-size grocer. My Company
will have expanded from three stores in 1989 to seven stores by 1996, and while
some of our needs have changed, basic programs remain essential to our growth:
overall competitive pricing, price reservation, pallet programs, and strong
private label. These programs must continue to improve for retailers to
effectively compete in today's marketplace.
In addition to excellent pricing and promotional programs, we must continue to
highly prioritize technological advances that streamline processes, link
wholesaler with retailer, provide more useful information quicker, and create
cost efficiencies. I am also fully committed to seeing these changes happen in
my Company and Cergro must position itself as a leader in this regard if we
members expect to grow our business and our profitability. Additionally, but
too numerous to mention here, I think there are many service and support
functions that can be enhanced.
For the above reasons, I have a keen interest in seeing Certified Grocers
thrive. I believe I can offer a perspective on the Board of Directors, if
elected, that aptly represents the needs of the independent grocer. Thank you
for your consideration.
ANDRONICO'S MARKET
/s/ Bill Andronico
- ----------------------------
Bill Andronico
President
[JONS MARKETPLACE-LETTERHEAD]
JOHN BERBERIAN
Fellow Certified Member:
I am currently a member of Cergro's board of directors where I serve on the
Finance and Retail Development Committees. I also serve as a member of the
board of Grocers Specialty Company, Grocers General Merchandise Company and
Grocers Equipment Company, three Cergro subsidiaries.
I am the owner and president of Jons Marketplace which operates 11 successful
independent stores. Because it is a family-owned chain, I have acquired
experience in all phases of retail operation.
Since 1977 when I opened by first store, I have been an active member of Cergro
and have worked closely with them. As Jons Marketplace grew to 11 stores in a
relatively short time, I have learned how valuable Cergro is to its members and
am sensitive to the many problems facing independents today.
I believe that my past experience as a Cergro board member will enable me to
make a positive contribution to the Cergro membership. If reelected to the
board I promise to continue to help maintain Cergro as a strong wholesaler
especially during these challenging economic times. I feel that with a strong
organization we will be able to compete in this market.
If you concur that Cergro has the potential to become a stronger organization
then I solicit you to support me for the board of directors of Certified Grocers
of California, Ltd.
Sincerely,
/s/ John Berberian
John Berberian
President
[JONS MARKETPLACE-LETTERHEAD]
JOHN BERBERIAN
Fellow Certified Member:
As you already know, I am campaigning for reelection to Cergro's Board of
Directors. I began in the retail grocery industry in 1977 and have developed my
company into a successful eleven-store supermarket chain.
Over the past few years, I have made significant contributions toward several
positive modifications at Certified in response to your overwhelming concerns.
I am and will continue to be actively involved with Cergro's policies and
programs that will benefit all of us as members to enable ourselves to stay
competitive during these difficult economic times. I believe that with your
support and my past experience as a Board member, we can help keep Cergro a
strong wholesaler. Therefore, if you support a strong Certified organization
then I respectfully request that you vote for my reelection to the Board of
Directors of Certified Grocers of California, Ltd.
Thank you.
Sincerely,
/s/ John Berberian
John Berberian
President
[MAR-VAL FOOD STORES-LETTERHEAD]
November 10, 1995
TO: Certified Grocers Members
FROM: Mark Kidd - President of Mar-Val Food Stores
Hello, my name is Mark Kidd and I am also a member of Certified Grocers.
I have been serving as a Board of Director of Certified Grocers for the past 4
years. I am on the Nominating and Retail Development Committees, as well as
Chairman of the Grocers & Merchants Insurance Services, and the Springfield
Insurance Company. I am also a Director of the Grocers Equipment Company. As
you know, we as members, have a right to elect our Board of Directors. I am
asking for your support in that election.
My family has been in the grocery business for over forty years. I have been in
the business for the past 28 years. I am a graduate of Brigham Young
University, and have served on the N.C.G.A. Board of Directors, the C.G.A.
Board, and the N.G.A. Board of Directors.
I feel as an independent, we have some unique problems that must be addressed.
Being involved in a co-op can help us in solving our problems. It has been
said, "as the Independent Grocers goes, so goes the co-op".
I feel we must continue to keep our cost of product down as low as possible if
we are to survive.
These are my beliefs and goals as I ask for your support in remaining another
year as a Certified Board of Director.
Sincerely,
/s/ Mark Kidd
Mark Kidd
President
[R RANCH MARKET - LETTERHEAD]
Dear Fellow Member of Certified Grocers:
I, Mike Shalabi, have been nominated to run for office as a member of the
Certified Grocers Board of Directors. This letter is to ask for your vote.
Most of you already know me, or have heard of me; as a Member of Certified
Grocers, as past President of Modern Independent Grocers (MIG), as an active
member of MAGA, among other business oriented activities that give me the sense
of values and understanding of your functions and problems and their ultimate
and caring solutions.
However, it is your duty, your responsibility, to express yourself as an
individual in voting for the person of your choice, and not allow someone else
to substitute and usurp your rights by voting a proxy. I am asking for your
vote so that I may represent and accurately reflect your needs and attitudes.
For a better and brighter future, I am asking you to mark your Ballot selecting
Mike Shalabi as a Member of the Certified Grocers Board of Directors.
I sincerely thank you in advance for the privilege of being elected to serve you
in this important office.
/s/ Farid Shalabi
Farid (MIKE) Shalabi, President/CEO
R-Ranch Markets Corporate Group
December, 1995
[CITY FOODS-LETTERHEAD]
December 11, 1995
Dear Certified Member:
I am writing to you to ask for your support in my bid to be elected to the Board
of Directors. I have been a member of Certified Grocers for over 40 years and
have been an independent market owner during that time. I am acquainted with
all facets of the supermarket business, and how they relate to Certified.
As a member of the Board of Directors, I can serve our interests as independent
grocers and members of Certified. Your vote for me would be greatly
appreciated, and if elected, I will do my utmost to serve you.
Sincerely,
Milt Thaler
Kenneth Young
Young's Markets
1313 S. Mooney Blvd.
Visalia, CA 93277
Dear Member:
As a member of Cergro, you are the reason for Certified Grocers' existence. The
Board of Directors should always remember that the members are number one. The
Board is there to serve its members.
I am running for re-election to the Board of Directors of Cergro representing
Northern California.
My second year serving on the Board of Directors of Certified has been exciting
for me as well as for Certified. The programs to reduce costs, increase
efficiency and accountability are working. Certified is on track to becoming an
aggressive, efficient wholesaler. The future looks bright.
I feel that an aggressive, efficient wholesaler is tantamount to the survival of
the independent operators.
As a member of the Board of Directors of Cergro, I will always work for you.
You are the reason that Certified Grocers exists. If you have any questions or
suggestions, please call me at (209) 625-9252.
I thank you for your support.
Sincerely,
Kenneth Young
Vice President
P.S. PLEASE VOTE AND SEND IN YOUR ADVISORY BALLOT. You do not have to cast all
12 votes. just vote for people that you feel would do a good job for you.
You can send in your ballot even if you only vote for one person.
[GREEN FROG MARKET-LETTERHEAD]
Dear Certified Member,
As a candidate for the Certified Grocers board of directors I felt it was
necessary for me to write to you concerning my candidacy. The 200 words allowed
in the candidates statement does not provide an ample opportunity for me to
introduce myself or my objectives in running for the Certified board, so that's
the purpose of this letter. I think before you cast a vote for me or any other
candidate for the board you deserve to know, why they are running, what their
qualifications are, and what their ideology is, in relationship to Certified
Grocers and the grocery industry. So, before you throw this letter in the trash
can, whether you vote for me or not please take a minute to consider the
following information and ideas when you cast your ballot for the Certified
board.
I started working in the grocery industry in 1978 and have operated the
Green Frog Market as managing director since it's founder, Charlie Everett, died
in July of 1988. During that time I have been active within the industry and
have had the opportunity to meet many people and deal with many situations
regarding the business. Since 1992 I've been asked by many of my industry
associates to consider running for the board at Certified. In 1994 the
nominating committee selected me to run for the Certified Board. I declined
that nomination because I was involved in a project that was extremely
demanding, but promised when I had the time to fully devote to the board I would
accept their nomination. My candidacy fulfills that promise.
I am 40 years old, a fourth generation Californian, and through marriage to
my wife Mary Charles, represent a second generation grocery family in
Bakersfield. I attended Kern County Schools and in 1984 I graduated from Cal
State Bakersfield with a Bachelors of Science degree in biology. In 1988
Charlie Everett selected me to manage all of his businesses and after his death
I managed the succession of our families' businesses to the next generation. I
am a past president of, and currently on the board of directors for the Kern
County Independent Grocers Association. I currently chair the business
retention committee for the Kern County Council on Competitiveness for the
county board of supervisors. As the owner of a union shop I was selected to
serve and later chair the AFL-CIO round table for labor and management in Kern
County. I am on the board of directors of the Cal State Bakersfield Roadrunners
club. Our store is a member of the California Grocers Association, and the
Northern California Grocers Association.
I feel the current board has done a good job of navigating Certified
through some very difficult times. The new company management is right on track
when it acknowledges that the smaller stores represent a significant and
necessary part of
Certifieds' volume, but our smaller stores don't necessarily represent the
trends of the industry or even all of the independents. Certified as a
wholesaler must compete against companies that are using larger formats of
stores to drive their volume and profitability at their store owned warehouse
level. Certified must be able to supply both the larger independents seeking
growth and the smaller independents who are satisfied with their market
position. We as retail owners of Certified must, in return, have high volume
cost effective stores or lower volume highly efficient stores. For the smaller
stores the only way this efficiency can be achieved is through improved
technology and understanding at both the wholesale and, most importantly, the
retail levels.
We as owners of Certified Grocers have to do our part at the retail level
to make our company a more profitable entity. Certified should be the catalyst
that brings the high volume multi-store, and the smaller volume single store
independents into a profitable partnership and equilibrium. As a member of the
board of directors at Certified Grocers, and a small grocer myself, I will work
to bring that partnership and equilibrium between the diverse interests of the
Certified membership. Above all please use your advisory ballot to select the
people who are going to direct your company, and should you feel that I am one
of those people I welcome your comments and support.
Sincerely yours,
Scott Hair
[LOGO]
TWAIN HARTE MARKET, INC.
POST OFFICE BOX 155
TWAIN HARTE, CALIFORNIA 95383
(209) 586-6100
WILLIAM (CHUCK) EVANS
Twain Harte Market, Inc.
Twain Harte, California
Mr. Chuck Evans is president and co-owner with his wife of Twain Harte Market,
in Twain Harte, California. He started in the grocery industry in 1946 with
Purity Stores. After four years in the U.S.A.F., he worked with Safeway Stores
for a total of 23 years, managing for 20 years.
In 1979, he and his wife purchased a small 4,000 sq. ft. grocery store in Twain
Harte. In 1982, they opened a new 20,000 sq. ft. market in a new shopping
center in that city.
Mr. Evans is very involved in community organizations. He has been the past
president of the Rotary Club and the Chamber of Commerce. He currently serves
on the board of El Capitan National Bank and is Financial Chairman for Outreach,
through Young Life International, to high-school-age young people in Russia.
Mr. Evans is very active in the grocery industry and was selected as an
Outstanding Independent Grocer for nine years straight by Progressive Grocer
Magazine. He currently serves as a director on the boards of NCGA and CGA.
Mr. Evans states, "I'm excited about what is happening at Certified. Many good
changes are going on, and I hope I continue to be a part of that. I think the
board needs a one-store operator that is involved."
Mr. Evans is past director of Certified where he served on the Retail
Development Committee. He also served as a director of Grocers Capital Company
and Grocers Specialty Company, two of Certified's subsidiaries.
"Being a one-store owner, I feel I can be a great help to all small-store, one-
store operators, as well as the large multi-store owners. I have been through
the problems of large store competition moving in and know how to adjust to
these problems. I know how important it is to have groceries and goods
delivered at the very lowest cost possible, not only to the big store chains but
to the small-store and one-store members. I will appreciate your vote - because
I care."
/s/ Chuck Evans
Chuck Evans