SCHEDULE 14A
INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the
Registrant [ X ]
Filed by a Party other than the
Registrant [ ]
Check the appropriate box:
[ ] | Preliminary Proxy Statement |
[ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
[ X ] | Definitive Proxy Statement |
[ ] | Definitive Additional Materials |
[ ] | Soliciting Material Pursuant to Section 240.14a-12 |
Weis Markets,
Inc.
(Name of Registrant
as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ X ] | No fee required. |
[ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
1.) Title of each class of securities to which transaction applies: | |
2.) Aggregate number of securities to which transaction applies: | |
3.) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |
4.) Proposed maximum aggregate value of transaction: | |
5.) Total fee paid: | |
[ ] | Fee paid previously with preliminary materials. |
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1.) Amount Previously Paid: | |
2.) Form, Schedule or Registration Statement No.: | |
3.) Filing Party: | |
4.) Date Filed: |
Notice of Annual Meeting of
Shareholders
of
WEIS MARKETS, INC.
To Be Held On
APRIL 23, 2008
TO OUR SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the 2008 Annual Meeting of the Shareholders (the "Annual Meeting") of Weis Markets, Inc. (the "Company"), will be held on Wednesday, April 23, 2008, at 10:00 a.m., Eastern Daylight Time, at the principal executive offices of the Company, 1000 South Second Street, Sunbury, Pennsylvania 17801, for the following purposes:
and to act upon such other business as may properly come before such meeting, or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 5, 2008, as the record date for the Annual Meeting. Only holders of shares of Common Stock of record at that time will be entitled to receive notice and vote at the Annual Meeting, and may vote by proxy (i) on the Internet, (ii) by telephone or (iii) by signing and dating a proxy card and returning it to the Company.
This summary is qualified in its entirety by the detailed information contained within the Proxy Statement.
By Order of the Board of Directors,
Jonathan H. Weis
Secretary
March 10, 2008
Sunbury, Pennsylvania
WEIS MARKETS,
INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
This
Proxy Statement is being furnished to all shareholders of
record as of March 5, 2008, the record date of the Company, in
connection with the solicitation of proxies by the Board of
Directors (the "Board") for use at the 2008 Annual Meeting. The
Annual Meeting will be held on Wednesday, April 23, 2008, at
10:00 a.m. Eastern Daylight Time, at the principal executive
offices of the Company, 1000 South Second Street, Sunbury,
Pennsylvania 17801.
INFORMATION CONCERNING THE SOLICITATION
The Company is
sending an "Important Notice of Availability of Proxy Materials
for the Annual Meeting of Shareholders of Weis Markets, Inc.,"
(the "Notice") to our shareholders on or about March 10, 2008.
The Company is providing access to its proxy materials over the
Internet under new rules adopted by the Securities and Exchange
Commission (the "SEC") in 2007. All shareholders have the
ability to access the proxy materials on the website identified
in the Notice or to request a printed copy of proxy materials.
The Notice provides instructions on how to access the proxy
materials over the Internet, and how to request a printed copy
of the proxy materials. This Proxy Statement, the form of proxy
card, the Notice and the Company's Annual Report on Form 10-K
are available at
"http://weismarkets.com/financial_info.php."
Subject
to the conditions hereinafter set forth, the shares represented
by each proxy executed will be voted at the Annual Meeting, or
any adjournments or postponements thereof, in accordance with
the specifications therein made. Where there is no contrary
choice specified, the proxy will be voted "FOR" each of the
proposals as therein specified.
An
executed proxy may be revoked by the person signing the same at
any time before the authority thereby granted is exercised. The
revocation may be exercised at any time before the Annual
Meeting by indicating the revocation in writing. This
revocation should be directed to the Judge of Elections, Weis
Markets, Inc., 1000 South Second Street, Sunbury, Pennsylvania
17801. The proxy may also be revoked by voting in person at the
Annual Meeting or by voting a later dated proxy.
VOTING SECURITIES, RECORD DATE AND VOTING RIGHTS
As of
March 5, 2008, the record date for the Annual Meeting, the
number of outstanding shares of Common Stock was 26,967,165.
The presence, in person or by proxy, of at least 13,483,583
shares will constitute a quorum.
Only
holders of Common Stock of the Company of record at the close
of business March 5, 2008 will be entitled to notice of and to
vote on all matters at the Annual Meeting and at any
adjournment thereof. Each holder of Common Stock will be
entitled to one vote for each share of stock so held and to
cumulative voting rights in the election of directors. Under
cumulative voting, a shareholder, or the shareholder's proxies,
may vote the number of shares of stock owned by the shareholder
for as many persons as there are directors to be elected, or
may cumulate such votes and give to one or distribute among two
or more nominees as many votes as shall equal the number of
directors to be elected multiplied by the number of the
shareholder's shares of stock.
Directors are
elected by a plurality vote of all votes cast at the Annual
Meeting. The ratification of the appointment of our independent
registered public accounting firm ("independent auditors")
requires the affirmative vote of a majority of all votes cast
at the Annual Meeting. Abstentions and broker "non-votes" will
be treated as present for purposes of determining a quorum, but
will not affect the election of directors or other matters
submitted to the vote of shareholders. A broker "non-vote"
occurs when a shareholder has not provided voting instructions
to its broker for a non-routine item because the New York Stock
Exchange ("NYSE") precludes brokers from giving a proxy to vote
on a non-routine item. No non-routine items are currently
proposed to be voted on at the Annual Meeting.
The Company's by-laws specify that notice of any matter to be brought before an annual meeting by a shareholder must be received at the principal executive offices of the Company no later than the notice deadline described under the caption "Shareholders' Proposals for Next Annual Meeting." Management does not intend to bring any other matters before the Annual Meeting, and does not know of any other matter that is eligible for action at the Annual Meeting.
2
PROPOSAL NO.
1
ELECTION OF DIRECTORS
The Company
believes that the proposed nominees for election as directors
are willing to be elected as such, and it is intended that the
persons named in the accompanying form of proxy or their
substitutes will vote for the election of these nominees,
unless specifically instructed to the contrary on the form of
proxy. However, if any nominee, at the time of the election, is
unable or unwilling to serve, or is otherwise unavailable for
election, and in consequence other nominees are designated, the
persons named in the proxy or their substitutes shall have
discretion or authority to vote or refrain from voting in
accordance with their judgment on the other
nominees.
The Board
recommends a vote "FOR" the election of the nominees named
below, each of whom has consented to be named as a nominee and
to serve if elected. All of the nominees were elected to the
Board at the 2007 Annual Meeting. The following table and
accompanying footnotes sets forth information about each Board
nominee as of March 5, 2008:
Principal Occupation and any | |||||
Position with the Company; | Director | ||||
Name | Other Reporting Company Directorships | Age | Since | ||
Robert F. Weis | (1) | Chairman of the Board | 88 | 1947 | |
Jonathan H. Weis | (2) | Vice Chairman and Secretary | 40 | 1996 | |
Norman S. Rich | (3) | Chief Executive Officer | 70 | 1991 | |
William R. Mills | (4) | Senior Vice President, Treasurer and | 51 | 1996 | |
Chief Financial Officer | |||||
Matthew Nimetz | (5) | Managing Director | 68 | 2007 | |
General Atlantic LLC | |||||
Richard E. Shulman | (6) | President | 68 | 1994 | |
Industry Systems Development Co. | |||||
Steven C. Smith | (7) | President and Chief Executive Officer | 50 | 2001 | |
K-VA-T Food Stores, Inc. |
(1) Robert F. Weis. The Company
has employed Mr. Weis since 1946. Mr. Weis served as
Chairman and Treasurer from 1995 until April 2002, at
which time he was appointed Chairman of the Board
("Chairman"). Robert F. Weis is the father of Director
Jonathan H. Weis, brother of Ellen W. P. Wasserman who is
also a beneficial owner of more than 5% of the Company's
Common Stock and the uncle of Kathryn J. Zox, Thomas H.
Platz and James A. Platz who control more than 5% of the
Company's Common Stock through EKTJ Management
LLC.
(2)
Jonathan H. Weis. The
Company has employed Mr. Weis since 1989. Mr. Weis served
the Company as Vice President Property Management and
Development from 1996 until April 2002, at which time he
was appointed as Vice President and Secretary. In January
of 2004, the Board appointed Mr. Weis as Vice Chairman
and Secretary ("Vice Chairman"). Jonathan H. Weis is the
son of Director Robert F. Weis.
(3)
Norman S. Rich. The Company
has employed Mr. Rich since 1964. Mr. Rich served as
President from 1994 until April 2002, at which time he
was appointed President and Chief Executive Officer of
the Company ("CEO"). In anticipation of Mr. Rich's
retirement on December 31, 2008, a successor President
was hired in February 2008. Mr. Rich will continue to
serve the Company as CEO until his retirement. Mr. Rich
serves on the Board of Trustees of Evangelical Community
Hospital, as a Director of the Food Marketing Institute,
on the Board of Governors of the Academy of Food
Marketing at St. Joseph's University and as Chairman of
the Susquehanna Valley United Way.
(4)
William R. Mills. The
Company has employed Mr. Mills since 1992. Mr. Mills
served as Vice President Finance & Secretary from
1995 until April 2002, at which time he was appointed
Senior Vice President, Treasurer and Chief Financial
Officer of the Company ("CFO").
3
(5) Matthew Nimetz. Mr. Nimetz serves as a
Managing Director of General Atlantic LLC, a private
equity firm that invests in global growth companies and
IT-enabled businesses on a global basis. Mr. Nimetz has
been with General Atlantic since 2000, and from 1980 to
2000, was a partner of the New York based law firm of
Paul, Weiss, Rifkind, Wharton & Garrison. He
previously served in several governmental capacities
including Counselor of the State Department and Under
Secretary of State.
(6) Richard E. Shulman. Mr. Shulman has
served as President of Industry Systems Development Co.,
a consulting firm, since 1974. He has expertise in the
application of technology to retailing with a specific
focus on food retailing and distribution.
(7) Steven C. Smith. Mr. Smith has served
as President and Chief Executive Officer of K-VA-T Food
Stores, Inc., a regional supermarket chain headquartered
in Abingdon, VA, since 2001. Mr. Smith serves as a
Director on the Board of the National Grocers
Association. Mr. Smith also serves as Chairman of the
Food Marketing Institute, and on its Executive, Board
Planning and Public Affairs Committees.
Independence of Directors
The Board has
determined that Directors Nimetz, Shulman and Smith are
independent within the meaning of the listing standards of the
NYSE. An independent director is defined as a director who has
no material relationship with the Company, either directly or
as a partner, shareholder or officer of an organization that
has a relationship with the Company.
Companies
listed on the NYSE must comply with certain standards regarding
corporate governance, as codified in Section 303A of the Listed
Company Manual of the NYSE, with some exceptions. A company of
which more than 50% of the voting power is held by an
individual, a group or another company is not required by the
NYSE to comply with the requirements of Sections 303A.01
Independent Directors, 303A.04 Nominating/Corporate Governance
Committee or 303A.05 Compensation Committee. Robert F. Weis,
Chairman, and Ellen W. P. Wasserman, his sister, control 53.3%
of the voting power. They have agreed to act together for the
purpose of voting their shares of Common Stock and thus
constitute a group within the meaning of these
rules.
The Company
does not have a majority of independent directors. The
Company's Audit Committee is comprised of all independent
directors, and the Compensation Committee is comprised of three
independent directors and one non-independent
director.
Board Committees and Meeting Attendance
Board of
Directors. The Company's
Board held four regular meetings and one special meeting
during fiscal 2007. No director attended fewer than 75%
of the aggregate meetings of the Board and all Board
committees on which the director served. All directors
attended the 2007 Annual Meeting.
Under the
policies of the Board, directors are expected to attend regular
Board meetings, Board committee meetings, the Annual Meeting
and any special meetings of the shareholders. Participation is
permissible by means of conference telephone or similar
communications equipment.
Audit
Committee. The Audit Committee is composed of
three independent non-employee directors, as required by
the NYSE listing standards. The Audit Committee acts
independently to review the scope and engagement results
of the independent auditors and the adequacy of the
Company's internal and financial controls. Information
regarding the functions performed by the Audit Committee
is set forth in the "Audit Committee Report" included in
this Proxy Statement. The Audit Committee is governed by
a written charter approved by the Board. A copy of this
charter is available on the Company's corporate
governance website at
http://weismarkets.com/governance_info.php or by request
to the Corporate Secretary at the Company's address set
forth in "Shareholder or Interested Parties
Communications."
The 2007 Audit Committee was composed of Directors Nimetz, Shulman and Smith. Mr. Shulman served as Chairman of the Audit Committee. The Audit Committee held four regular meetings and five special meetings during fiscal 2007.
4
The Board has
determined that all Audit Committee members are financially
literate under the listing standards of the NYSE. The Board
also determined that the Chairman of the Audit Committee, Mr.
Shulman, is an "audit committee financial expert," as defined
in Item 401(h) of Regulation S-K, and all members of the Audit
Committee are "independent" for purposes of Section 10A(m)(3)
of the Securities Exchange Act of 1934 and the listing
standards of the NYSE.
Compensation
Committee. The Compensation Committee is composed
of three independent non-employee directors and one
non-independent employee director. The Compensation
Committee is responsible for developing policies and
programs, and making recommendations about compensation
arrangements for senior management to the Board. The
Compensation Committee is governed by a written charter
approved by the Board, which is available on the
Company's corporate governance website at
http://weismarkets.com/governance_info.php or by request
to the Corporate Secretary at the Company's address set
forth in "Shareholder or Interested Parties
Communications."
The 2007
Compensation Committee was composed of Directors
Nimetz, Shulman, Smith and Jonathan H. Weis. Mr.
Weis served as Chairman of the Compensation Committee.
The Compensation Committee held four regular meetings
during fiscal 2007. The Company's Chairman and the CEO
are not members of the Compensation
Committee; however, the Compensation Committee seeks
input from them regarding the performance of the other
executive and operating officers. The executive
management team and the Compensation Committee have at
various times sought assistance from consulting firms
specializing in labor benefits.
Corporate Governance Matters
The Company has
adopted Corporate Governance Guidelines which are available on
the Company's corporate governance website at
http://weismarkets.com/governance_info.php or by request to the
Corporate Secretary at the Company's address set forth in
"Shareholder or Interested Parties
Communications."
Code of
Business Conduct and Ethics. The Company has adopted a
"Code of Business Conduct and Ethics" that applies to all of
its directors, officers and employees. Separately, the Company
also adopted a "Code of Ethics for CEO and CFO" specific to its
chief executive officer, chief financial officer, controller
and any person performing similar functions. The Company has
made both documents available on its corporate governance
website at http://weismarkets.com/governance_info.php or by
request to the Corporate Secretary at the Company's address set
forth in "Shareholder or Interested Parties
Communications."
Non-Management
Independent Directors. To empower non-management
independent directors to serve as a more effective check on
management, the non-management independent directors of the
Company have met at regularly scheduled executive sessions
without management. The non-management independent directors
are Directors Nimetz, Shulman and Smith. Mr. Smith presided at
the four meetings held during fiscal 2007. Shareholders or
interested parties wishing to communicate directly with the
non-management independent directors as a group may do so as
set forth in "Shareholder or Interested Parties
Communications."
Board
Nominations. Based upon the
stock ownership of the principal shareholders, the
Company determined it would be better served by having
the full Board review nominating and corporate governance
issues rather than establishing separate committees.
Therefore, there is no nominating committee
charter.
If the Board
determines there is a need to add or replace a director,
the following criteria are considered for each
recommended candidate. The candidate (a) has the highest
personal and professional ethics, integrity and values;
(b) consistently exercises sound and objective business
judgment; (c) has significant appropriate senior
management and leadership experience; (d) is able and
willing to devote the required amount of time to the
Company's affairs, including attendance at Board
meetings, Board committee meetings and annual shareholder
meetings and (e) will be committed to building sound,
long-term Company growth. Chosen candidates are extended
invitations to join the Board. If a candidate accepts, he
or she is formally nominated.
The Board will
consider nominees brought to the attention of the Board
by an eligible shareholder, a non-management independent
director, the CEO, any other executive officer or other
appropriate sources. Any eligible shareholder who desires
to have an individual considered for nomination by the
Board must submit a recommendation in writing to the
Secretary of the Company, at the Company's address set
forth on page 1, not less than 120 calendar days before
the date of the Company's Proxy Statement released to
shareholders in connection with the previous year's
Annual Meeting. The notice should include the name and
address of both the eligible
5
shareholder and the candidate and the
qualifications of the candidate being
recommended.
The Board does
not have a formal process for identifying and evaluating
candidates for director. It is not anticipated that the
process for evaluating a nominee would differ based on
whether the nominee is recommended by an eligible
shareholder.
Board Recommendation and Vote Required
The seven
candidates receiving the highest numbers of votes cast by
the holders of Common Stock voting in person or by proxy
will be elected as directors. The Board of Directors
recommends a vote "FOR" the election of the seven
nominees named above.
The Company's
by-laws require that any shareholder intending to
nominate a candidate for election as a director must give
written notice, containing specified information, to the
Secretary of the Company not later than the notice
deadline specified in the by-laws, which is 120 calendar
days before the date of the Company's Proxy Statement
released to shareholders in connection with the previous
year's Annual Meeting. No such notices were received with
respect to the 2008 Annual Meeting. Therefore, only the
seven nominees named above, or a substitute nominee of
the Board, will be eligible for election at the Annual
Meeting. A copy of the by-law provision concerning
shareholder nominations will be furnished to any
shareholder upon written request to the Secretary of the
Company at the Company's address set forth on page
1.
EXECUTIVE
COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
This is a
report by the Company's executive officers; however, the
Compensation Committee oversees the executive
compensation programs for the executive and operating
officers. Throughout this Proxy Statement, the
individuals who served as the Company's CEO and CFO
during fiscal 2007, as well as the other individuals
included in the "Summary Compensation Table," are
referred to as the "Named Officers."
Compensation Philosophy and Objectives
Executive
management and the Compensation Committee recognize the
fact that the Company is engaged in a highly competitive
industry and thus annually examines market compensation
levels and trends in the labor market. The primary
objective of the Company's executive compensation program
is to attract and retain qualified executives, which is
critical to the ongoing success of the Company. This
primary objective is achieved by providing appropriate
base compensation, annual incentives, health and welfare
benefits, retirement benefits and perquisites competitive
with executives at selected peer companies of comparable
size and position in the retail business, while keeping
compensation in line with the financial objectives of the
Company. To achieve this objective, the executive
management team and the Compensation Committee
regularly review commercially available
survey data related to general industry executive
compensation, peer company compensation programs through
a review of proxy statements and have at various times
sought assistance from consulting firms specializing in
labor benefits. Because the Company competes with many
larger companies for top executive-level talent, it
generally sets compensation for Named Officers between
the 50th and 75th percentile of
compensation paid to similarly situated executives.
Variations to the base salary component may occur because
of the individual's experience level, job
responsibilities and market factors. The Compensation
Committee also realizes a significant difference between
the Company's executive compensation program and some of
its peers is the absence of an equity-based incentive
plan. This fact is strongly considered when evaluating
discretionary contributions to the Supplemental Executive
Retirement Plan ("SERP") for the Named Officers.
2007 Executive Compensation Components
The Compensation Committee subjectively evaluates the performance of executive and operating officers with the Chairman and CEO. The Compensation Committee relies upon written and verbal evaluations of each officer's performance for the most recent fiscal year. The Vice Chairman and the CEO meet with the executive and operating officers to discuss their efforts and accomplishments throughout the period from information deemed relevant both internally and in light of the competitive position of the Company in the industry. These evaluations include qualitative factors such as the individual's decision-making responsibilities, the professional experience required to perform given tasks, and their leadership and team-building skills. Although executive base compensation is not specifically related to corporate performance, the overall performance of the Company is a consideration in determining executive compensation.
6
Compensation for Named Officers is comprised
of the following:
·
Base
Salary
·
Non-Equity
Incentive Plan
·
Retirement
Plans
·
Perquisites
Base
Salary: The base salary component of the executive
compensation program provides the foundation for a fair and
competitive compensation package. Base salaries are compared to
the grocery industry by reference to peer companies that
participate in an industry compensation survey conducted by an
independent consulting firm. In 2007, the Compensation
Committee used the Food Marketing Institute's "2006-2007
Management Compensation Study for Retailers and Wholesalers" to
benchmark base salaries for the Named Officers. The study
benchmarks compensation and benefits for management employees
for 56 retailers and wholesalers nationwide without citing
specific participants by company name. The Compensation
Committee does maintain flexibility to deviate from the
50th and 75th
percentile of the compensation guide in
certain circumstances. The determination
of base salaries is generally independent of the
decisions regarding other elements of compensation, but
some of the other elements of the compensation program
are dependent on base salary, to the extent they are
expressed as percentages of base salary. In 2006 and
2007, the Chairman and the CEO received total
compensation, which was approximately twice the total
compensation received by the other Named Officers. The
Committee took into account the Named Officers' job
responsibilities, their value-added contributions to the
Company and their tenure. Based on these factors, the
Compensation Committee determined the internal
compensation differential is appropriate due to the
difference in responsibilities, contributions and tenure
among the Chairman, the CEO and the other Named
Officers.
Based on
subjective and qualitative considerations, which include the
overall financial and operational success of the Company, the
Committee approved a 9.8% increase in base salary for the
Chairman and a 9.9% increase in base salary for the CEO in
fiscal 2007. The base salaries for the Chairman and CEO were
115.7% and 114.7%, respectively, of the 75% base salary
quartile for similarly situated executives. The Vice Chairman
received a 10.0% increase in base salary in 2007. There was not
a similar executive position defined within the compensation
study provided to the Company for this position. However, using
this study for the CEO position, the Vice Chairman earned 72.4%
of the 75% quartile for CEOs. The CFO received a 4.4% increase
in base salary in 2007 and earned 98.6% of the 75% quartile for
similarly situated executives. The Vice President Operations
received a 4.4% increase in base salary in 2007 and earned
70.7% of the 75% quartile for similarly situated
executives.
Non-Equity Incentive
Plan: The Company's executive compensation program
includes an annual non-equity incentive plan designed to reward
certain key employees, including the Named Officers, for
meeting specific financial objectives. The Compensation
Committee administers the non-equity incentive plan for
management to provide the short-term incentive compensation
element of the executive compensation program. This short-term
incentive is a cash based performance incentive program
designed to motivate and reward key employees for their
contributions to factors and business goals that the Company
believes drive its earnings and create shareholder value.
Incentive payout potentials are established by job level within
the Company as a percentage of base salary, and actual payouts
are based on achievement of sales and operating profit targets
as approved by the Board annually. Prior to implementation of
this non-equity incentive plan in 2002, the Compensation
Committee hired an independent compensation consulting firm to
provide guidance on the basic plan structure. Based upon its
most recent review, the Compensation Committee concluded the
plan remains consistent with plans offered by other retail
organizations. Actual non-equity incentive plan compensation
amounts earned by the Named Officers are reflected in the
"Summary Compensation Table" for the year earned. The amounts
which each Named Officer could have earned for 2007 based on
performance at the threshold, target and maximum levels are
shown in the "Grants of Plan-Based Awards" table
below.
The Chairman
and CEO can earn up to 50% of their base salary, and the other
Named Officers can earn up to 35% of their base salary in the
non-equity incentive plan. For fiscal 2007, 50% of the
incentive award was based upon achievement of the budgeted
total company sales growth and 50% of the incentive award was
based upon achievement of the budgeted total company operating
profit growth as compared to fiscal 2006 for the Named
Officers. Threshold, target and maximum hurdles were
established for the budgeted sales and operating profit
categories, which allowed each Named Officer to earn 30%, 70%
or 100% of his total incentive award for achieving the
specified results within the sales category and 30%, 70% or
125% within the profit category. The threshold, target and
maximum hurdles for the sales increase in fiscal 2007 were
0.7%, 2.3% and 3.8%, as compared to fiscal 2006. The threshold,
target and maximum hurdles for the operating profit increase in
fiscal 2007 were 0%, 3.1% and 13.4%, as compared to fiscal
2006. The Named Officers earned 41.3% of their total bonus
potential in 2007 based
7
upon total company performance as compared to
0% of their total bonus potential in 2006.
Retirement
Plans: The Company has a contributory retirement
savings plan ("401(k)") covering substantially all full-time
associates, a noncontributory profit-sharing plan covering
eligible associates, and a noncontributory employee stock bonus
plan covering eligible associates, all of which are qualified
defined contribution plans. The Named Officers along with other
highly compensated employees have limited participation in the
401(k) plan and are excluded from participation in the
qualified profit sharing and employee stock bonus plans because
of limitations imposed by the Internal Revenue Code and the
Regulations implemented by the Internal Revenue
Service.
Supplemental
Executive Retirement Plan: Company contributions normally
made to the qualified plans for the Named Officers are credited
instead to the SERP, an unfunded, nonqualified deferred
compensation plan. The SERP account for each Named Officer is
credited annually with the amount, if any, that would have been
allocated to the participant's qualified plans if he or she had
not been excluded from participation in these qualified plans.
Although the SERP is primarily a replacement retirement
plan, the
Compensation Committee may at any time recommend to the Board
discretionary amounts to be credited to the account(s) of one
or more SERP participants. Substantial risk
of benefit forfeiture does exist for participants in the
SERP.
Contributions
to the SERP are determined in the same manner as contributions
to participants in the Company's qualified plans except for
discretionary contributions. Contribution allocations and
earnings for the four components of the SERP are computed as
follows:
a. 401(k)
Plan: The allocation of the employer 401(k)
contribution is equal to 25% of the participant's
contribution for the allocation period, up to 4% of the
participant's compensation. Base salary is the only
element of compensation that is used in determining the
amount of contributions permitted under the Company's
401(k) plan. By law, compensation in excess of $225,000
(as indexed upward under federal law) cannot be counted.
SERP participants can defer up to 50% of their base
salary between the 401(k) plan and the SERP. Each amount
credited to a participant's SERP account for replacement
of Company contributions normally made for 401(k)
deferrals are adjusted in the same manner as if such
amount had been invested for the participant in the
401(k) plan Aggressive Equity Fund, except that amounts
are only credited to the SERP account annually rather
than quarterly as in the qualified plan.
b. Profit
Sharing Plan: The allocation of the employer's
contribution to the profit sharing plan is based on the
number of allocation units credited to each eligible
participant in proportion to the total number of
allocation units credited to all eligible participants
for the plan year. A participant is credited with one
allocation unit for each full $100 of compensation for
the plan year plus 1.5 units for each year of service. By
law, compensation in excess of $225,000 (as indexed
upward under federal law) cannot be counted. Each amount
credited to a participant's SERP account for replacement
of Company contributions normally made to the profit
sharing plan is adjusted annually in the same manner as
if the amount had been invested for the participant in
the profit sharing plan Diversified Fund.
c. Employee Stock Bonus Plan: The Weis Markets,
Inc. Employee Stock Bonus Plan was terminated as of
December 31, 2006, and all contributions under the Weis
Markets, Inc. Employee Stock Bonus Plan ceased as of the
same date. However, interest earnings and fund value
increases or decreases are allocated in proportion to
each participant's account balance. Each amount credited
to a participant's SERP account for replacement of
interest earnings and fund value increases or decreases
normally made to the employee stock bonus plan is
adjusted annually in the same manner as if the amount had
been invested for the participant in the profit sharing
plan Diversified Fund.
d. Discretionary: The Compensation Committee may
at any time recommend to the Board discretionary amounts
to be credited to the account(s) of one or more SERP
participants. Amounts credited to a participant's SERP
account for discretionary Company contributions are
adjusted annually in the same manner as if the amount had
been invested for the participant in the profit sharing
plan Diversified Fund.
The Aggressive Equity Fund in the 401(k) plan and the Diversified Fund in the profit sharing plan are managed by independent investment advisors. For more information regarding the Company's retirement plans, please refer to the "Pension Benefits" and "Nonqualified Deferred Compensation" tables below and Note 6 in the 2007 Annual Report on Form 10-K.
8
Deferred
Compensation Agreement: The Company maintains an unfunded,
nonqualified deferred compensation agreement with Robert F.
Weis for the payment of specific amounts of annual retirement
benefits to him or his spouse over their lifetime, with a
guaranteed payment for their actuarially computed life
expectancies. The benefits are determined through actuarial
calculations dependent on the age of the recipient, as
specified in the plan document, using the 1971 Group Annuity
Mortality Table (Plus 5 for Males) and an assumed discount rate
of 7.5%. The benefit payable on an annual basis to Robert F.
Weis would be $963,320 if he had retired as of the date of this
Proxy Statement. For more information regarding this deferred
compensation agreement, refer to the "Pension Benefits" table
below and Note 6 in the Company's 2007 Annual Report on Form
10-K.
Perquisites:
The Company provides the Named Officers with perquisites the
Compensation Committee believes are reasonable and consistent
with its overall executive compensation program. The Named
Officers are provided use of Company automobiles. For security
purposes and benefit to the Company, the Named Officers may use
the corporate aircraft for business, and the top four Named
Officers may use it for limited personal travel. In addition,
the Company pays for tax filing assistance for the Chairman.
The cost to the Company of all perquisites are calculated as
prescribed by the Internal Revenue Service and charged to the
Named Officers.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed the "Compensation Discussion and Analysis" and has discussed it with the executive officers. Based upon its review and those discussions, the Compensation Committee recommended to the Board that the "Compensation Discussion and Analysis" be included in this Proxy Statement, which will be incorporated by reference in the Company's 2007 Annual Report on Form 10-K.
Jonathan
H. Weis, Chairman
Matthew
Nimetz
Richard
E. Shulman
Steven
C. Smith
COMPENSATION TABLES
Summary Compensation Table
The following
table shows the compensation of the Company's principal
executive officer, the principal financial officer and three
other officers with the highest total compensation paid or
earned for fiscal 2006 and 2007 (the "Named Officers"). The
Company has employment or benefit agreements with the Chairman,
the CEO and the CFO. The material terms of these agreements are
discussed under "Potential Payments upon Termination of
Employment or Change in Control" below.
Change in | |||||||
Pension | |||||||
Value and | |||||||
Non-Equity | Nonqualified | ||||||
Incentive Plan | Deferred | All Other | |||||
Name and | Salary | Bonus | Compensation | Compensation | Compensation | Total | |
Principal Position | Year | ($) | ($) (1) | ($) (2) | Earnings ($) (3) | ($) (4) | ($) |
Robert F. Weis | 2007 | 615,000 | 9,225 | 126,864 | 254,249 | 119,973 | 1,125,311 |
Chairman of the Board | 2006 | 560,000 | 8,400 | -- | 319,650 | 122,812 | 1,010,862 |
Norman S. Rich | 2007 | 610,000 | 9,150 | 125,833 | -- | 180,858 | 925,841 |
Chief Executive Officer | 2006 | 555,000 | 8,325 | -- | -- | 106,023 | 669,348 |
Jonathan H. Weis | 2007 | 385,000 | 5,775 | 55,593 | -- | 78,597 | 524,965 |
Vice Chairman | 2006 | 350,000 | 5,250 | -- | -- | 20,763 | 376,013 |
and Secretary | |||||||
William R. Mills | 2007 | 355,000 | 5,325 | 51,261 | -- | 20,793 | 432,379 |
Senior Vice President, | 2006 | 340,000 | 5,100 | -- | -- | 20,958 | 366,058 |
Treasurer and | |||||||
Chief Financial Officer | |||||||
Edward W. Rakoskie, Jr. (5) | 2007 | 240,000 | 3,600 | 34,656 | -- | 15,865 | 294,121 |
Vice President Operations | 2006 | 230,000 | 3,450 | 44,146 | -- | 16,031 | 293,627 |
(1) Represents the amount paid as a discretionary holiday bonus. A holiday bonus has been paid by the Company to all qualifying employees for over 50 years.
(2) Represents the amount earned under the annual non-equity incentive plan described in the "Compensation
9
Discussion and Analysis."
(3) Represents the amount of the increase in the actuarial present value of Robert F. Weis' accumulated benefits under the nonqualified deferred compensation agreement described under "Pension Benefits."
(4) "All Other Compensation" consists of contributions by the Company to the SERP and perquisite costs where applicable. Except for Robert F. Weis, the amounts shown are for SERP contributions only, since perquisites for the other Named Officers do not exceed $10,000. Perquisites of $16,269 included in the amount for Robert F. Weis consist of the cost for personal use of a Company car, the Company aircraft and tax filing assistance. The 2007 Company contribution amounts to the SERP were estimated for purposes of this table, and the 2006 amounts were adjusted to actual. Additional information concerning deferrals of earned compensation by the Named Officers to the SERP and other plan details are described under "Nonqualified Deferred Compensation."
(5) Edward W. Rakoskie, Jr. The Company has
employed Mr. Rakoskie since 1962 in various operational
positions. Mr. Rakoskie was promoted to Vice President
Operations in 1998.
Grants of Plan-Based Awards
The following
table shows the grants of plan-based awards made to the Named
Officers in fiscal 2007.
Estimated Possible Payouts | ||||
Under Non-Equity Incentive Plan Awards (1) | ||||
Grant | ||||
Name | Date | Threshold ($) | Target ($) | Maximum ($) |
Robert F. Weis | 12/31/2006 | 92,250 | 215,250 | 307,500 |
Norman S. Rich | 12/31/2006 | 91,500 | 213,500 | 305,000 |
Jonathan H. Weis | 12/31/2006 | 40,425 | 94,325 | 134,750 |
William R. Mills | 12/31/2006 | 37,275 | 86,975 | 124,250 |
Edward W. Rakoskie, Jr. | 12/31/2006 | 25,200 | 58,800 | 84,000 |
(1) Represents the amounts which could have
been earned by the Named Officers through fiscal 2007 for
performance at the threshold, target and maximum levels
under the annual non-equity incentive plan described in
the "Compensation Discussion and Analysis."
Outstanding Equity Awards at Fiscal Year-End
The Company's
1985 Incentive Stock Option Plan expired on December 31, 2004.
Under the terms of the plan, options were granted for shares of
the Company's Common Stock based on the market value at the
date of grant and may be exercised immediately. There are no
plan provisions for reload or tax-reimbursement features. The
closing price of the stock at the 2007 fiscal year end was
$39.90 as reported by the NYSE.
The following
table shows the outstanding equity awards held by the Named
Officers at December 29, 2007.
Number of Securities | Option | Option | |
Underlying Unexercised | Exercise | Expiration | |
Name | Options (#) Exercisable | Price ($) | Date |
Norman S. Rich | 20,000 | 35.1250 | 07/31/2010 |
William R. Mills | 3,000 | 37.9375 | 07/31/2009 |
3,000 | 35.1250 | 07/31/2010 |
Option Exercises and Stock Vested
The following
table shows the stock options exercised by the Named Officers
during fiscal 2007.
Number of Shares | Value Realized | |
Name | Acquired on Exercise (#) | on Exercise ($) |
Norman S. Rich | 27,211 | 274,590 |
William R. Mills | 4,000 | 44,405 |
Edward W. Rakoskie, Jr. | 1,000 | 8,043 |
10
Pension Benefits
The following
table provides information concerning the value of Robert F.
Weis' accumulated benefits under the Company's nonqualified
deferred compensation agreement.
Number | Present | Payments | ||
of Years | Value of | During Last | ||
Credited | Accumulated | Fiscal Year | ||
Name | Plan Name | Service | Benefit ($) (1) | ($) |
Robert F. Weis | Nonqualified Deferred | 61 | 5,696,218 | -- |
Compensation Agreement |
(1) Although the participant is not eligible to receive a
lump-sum payment, the pension benefit table is required
to show a lump-sum present value based upon applicable
interest rate and mortality assumptions.
Nonqualified Deferred Compensation
The Company
maintains a SERP for certain of its associates. The plan is
designed to provide retirement benefits and salary deferral
opportunities because of limitations imposed by the Internal
Revenue Code and the Regulations implemented by the Internal
Revenue Service. The plan is unfunded and accounted for on an
accrual basis. Participants in the plan are excluded from
participation in the qualified profit sharing and employee
stock bonus plans and have limited participation in the 401(k)
plan. Based upon recommendation from the Compensation
Committee, the Board annually determines the amount of the
allocation to the plan.
The allocation
among the various plan participants is made in relationship to
their compensation, years of service and job performance. Plan
participants are 100% vested in their accounts after six years
of service with the Company. In accordance with the lump-sum or
installment election made by the Named Officer prior to the
deferral of compensation, benefits are distributed to the
participant one year after the date of retirement, assuming the
participant has reached normal retirement age. Substantial risk
of benefit forfeiture does exist for participants in the plan.
The present value of accumulated benefits is included under
"Postretirement benefit obligations" in the Consolidated
Balance Sheets within the 2007 Annual Report on Form
10-K.
The following
table provides information concerning deferrals by the Named
Officers of their earned compensation under the Company's
SERP.
Executive | Company | Aggregate | Aggregate | 2006 | Aggregate | |
Contributions | Contributions | Earnings | Withdrawals/ | Proxy | Balance at | |
in 2007 | in 2007 | in 2007 | Distributions | Adjustments | 12/31/2007 | |
Name | ($) (1) | ($) (2) | ($) (3) | ($) | ($) (4) | ($) |
Robert F. Weis | -- | 103,704 | 30,788 | -- | 1,263 | 568,124 |
Norman S. Rich | 88,450 | 180,858 | (24,244) | -- | 34,481 | 2,133,301 |
Jonathan H. Weis | -- | 78,597 | 3,609 | -- | 2,388 | 271,588 |
William R. Mills | -- | 20,793 | 11,963 | -- | 2,883 | 373,499 |
Edward W. Rakoskie, Jr. | 34,080 | 15,865 | (7,359) | -- | 7,899 | 478,114 |
(1) These amounts are reported in the "Summary Compensation Table" as salary or non-equity incentive plan compensation, as applicable.
(2) These amounts are reported in the "Summary Compensation Table" under "All Other Compensation."
(3) Earnings on deferred compensation under the Company's SERP are not above market or preferential and are therefore not included in the "Summary Compensation Table." The aggregate earnings for 2007 are estimated.
(4) These amounts represent adjustments to the aggregate earnings estimates made in the 2006 Proxy Statement.
Potential Payments upon Termination of Employment or Change in Control
The Company has
entered into employment agreements with the Chairman, CEO and
CFO. These agreements provide for certain benefits for
involuntary termination of employment other than for cause, but
do not contain a change in control provision.
Chairman
of the Board. The Company has an agreement with its
Chairman, Robert F. Weis, which provides that in the event his
employment terminates for any reason, including but not limited
to retirement, disability or death, the Company will continue
to provide him and his spouse through December 31, 2023 with
medical, dental, accident, disability and life insurance
benefits substantially equivalent to those provided to
employees. If Mr. Weis had terminated his employment as of
December 31, 2007, the estimated cost to the Company of
providing these.
11
benefits through the date specified in the
agreement would have been $139,597.
Chief
Executive Officer and the Senior Vice President, Treasurer and
Chief Financial Officer. The Company has entered into
employment agreements with Norman S. Rich, CEO, and William R.
Mills, CFO. The current term of Mr. Rich's agreement expires
December 31, 2008, and the current term of Mr. Mills' agreement
expires December 31, 2010.
Both agreements
provide that if prior to the end of the term the officer's
employment is terminated without cause or the officer
terminates his employment for good reason, the officer will be
entitled to receive (1) continuation of base salary payments
through the end of the term at the rate then in effect and (2)
an incentive bonus for the year of termination and any
subsequent remaining year of the term equal to the highest
incentive bonus received by the officer for any of the three
years preceding termination. If prior to the end of the term
the officer's employment terminates due to death or disability,
the officer (or his spouse or estate) is entitled to receive
(1) continuation of base salary payments through the end of the
term at 50% of the rate then in effect and (2) a prorated bonus
for the year of termination only in the amount the Company in
good faith determines the officer would have received had his
employment continued. Mr. Rich would also be entitled to a
prorated incentive bonus for the year of termination only if
prior to the end of the term, his employment terminates due to
retirement. All salary continuation and incentive bonus
payments would be made at the same time as if employment had
continued.
In addition, in
the case of a termination without cause, for good reason or due
to disability, the agreements provide that in lieu of
contributions to the Company's SERP, the Company will pay to
the officer, for the remainder of the term and at the times
SERP contributions would otherwise have been made, $60,000 per
year in the case of Mr. Rich and $15,000 per year in the case
of Mr. Mills. Finally, the agreements provide that if the
officer's employment is terminated prior to the end of the term
without cause, for good reason or due to death, disability or
retirement, the Company will continue to provide the officer
and his spouse with medical, dental, accident, disability and
life insurance benefits substantially equivalent to those
provided to employees in the case of Mr. Rich through December
31, 2023 and in the case of Mr. Mills through December 31,
2010.
In the
agreements, the officers agree (1) to at all times maintain the
confidentiality of information pertaining to the Company's
business, and (2) until four years after termination of
employment, not to (A) hire any Company employee or solicit or
induce any employee, consultant, vendor or supplier of the
Company to terminate or reduce its relationship with the
Company or (B) except in the case of a termination by the
Company without cause or by the officer for good reason, engage
in any business which competes with the Company in the retail
grocery business (or in any other business which accounted for
more than 2% of the Company's consolidated revenues) in any
county in which the Company operates or any contiguous county.
The Company's obligations to make payments or provide benefits
to the officers under the agreements would cease upon any
violation of these covenants.
The following
table shows the benefits the officers would have received under
the agreements if their employment had terminated for the
reasons specified as of December 31, 2007.
Non-Equity | Nonqualified | |||
Executive Benefits | Salary | Incentive | Deferred | |
and Payments | Continuation | Compensation | Benefits | Compensation |
By Covered Circumstance | ($) (1) | Plan ($) (2) | ($) (3) | ($) (4) |
Without Cause or Good Reason: | ||||
Norman S. Rich
|
610,000 | 360,970 | 139,597 | 60,000 |
William R. Mills
|
1,065,000 | 331,518 | 7,142 | 45,000 |
Retirement: | ||||
Norman S. Rich
|
-- | 125,833 | 139,597 | -- |
Disability: | ||||
Norman S. Rich
|
305,000 | 125,833 | 139,597 | 60,000 |
William R. Mills
|
532,500 | 51,261 | 7,142 | 45,000 |
Death: | ||||
Norman S. Rich
|
305,000 | 125,833 | 139,597 | -- |
William R. Mills
|
532,500 | 51,261 | 7,142 | -- |
12
(1) Represents continuation of salary payments through the end of the agreement term at the rate of 100% in the case of a termination without cause or for good reason and 50% in the case of termination due to disability or death.
(2) In the case of a termination without cause or for good reason, the amount represents incentive bonuses for 2008 for Mr. Rich and for 2008, 2009 and 2010 for Mr. Mills in an amount equal to the highest incentive bonus received by the officer for any of the three years preceding 2007, and the amount earned for 2007, payable in 2008. In the case of retirement, disability or death, the amount shown is the officer's incentive bonus earned for fiscal 2007.
(3) Represents the estimated cost to the Company of continuing to provide the officer and his spouse with medical, dental, accident, disability and life insurance benefits for the term specified in the agreement.
(4) Represents payments to the officer in lieu of SERP contributions for the remaining term of the agreement.
Except as
provided in the table, the benefits under the Company's
nonqualified retirement plans would not differ from those
described under "Nonqualified Deferred Compensation"
above.
OTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS
Compensation of Directors
The following
table shows the compensation earned by the Company's
non-employee directors for services during fiscal
2007.
DIRECTOR COMPENSATION
Fees Earned or | ||
Name | Paid in Cash ($) | Total ($) |
Matthew Nimetz | 35,000 | 35,000 |
Richard E. Shulman | 35,000 | 35,000 |
Steven C. Smith | 35,000 | 35,000 |
In fiscal 2007,
the Company paid non-employee directors a retainer of $8,750
per quarter. In addition, each non-employee director is
entitled to reimbursement for out-of-pocket expenses to attend
meetings. There is no additional remuneration for services
rendered by directors serving on committees or for
participation in the non-management independent director
meetings.
In February
2008, the Board passed a resolution establishing new
compensation arrangements for non-management independent
directors effective after the 2008 Annual Meeting. Directors
who are not officers of the Company or any of its subsidiaries
will receive an annual retainer of $38,000 paid in quarterly
installments during the fiscal year. The Chairman of the Audit
Committee will receive an additional $6,000 annual retainer fee
paid in quarterly installments during the fiscal
year.
Compensation Committee Interlocks and Insider Participation
Directors
Nimetz, Shulman and Smith were not officers or employees of the
Company, nor have they had any relationship with the Company
requiring disclosure under the SEC regulations. Jonathan H.
Weis is a director, employee and officer of the Company and is
not considered independent by NYSE listing standards. None of
the Company's Named Officers have served on the board of
directors or compensation committee of any other entity, which
has or had one or more executive officers who served as a
member of the Company's Board or Compensation Committee during
fiscal 2007.
Review and Approval of Related Party Transactions
The Weis
Markets, Inc. Code of Business Conduct and Ethics requires any
potential conflict of interest to be reported immediately to
the Executive Committee of the Board. A member of the Executive
Committee with any potential conflict of interest must report
it immediately to the Audit Committee. The Executive Committee
reports to the Audit Committee, all related parties employed by
the Company and related parties employed by other companies the
Company had a material relationship with during the year, if
any. The Audit Committee is responsible for reviewing and
approving the terms and conditions of all related party
transactions in accordance with its charter.
Central Properties, Inc. ("Central Properties") owns the land under a Company store and an adjacent parking lot in Lebanon, Pennsylvania. The Company leased these properties from Central Properties for $82,609 in fiscal 2007. The shareholders of Central Properties include Directors Jonathan H. Weis and Robert F. Weis.
13
David Rich, the
son of Director Norman S. Rich, is the President of Store
Insight, Inc., d/b/a ICC Decision Services, provides the
Company with a range of quantitative and qualitative research
through its mystery shopping programs in fiscal 2007. The
Company paid ICC Decision Services $190,876 for these services
in fiscal 2007.
Shareholder or Interested Parties Communications
Weis Markets,
Inc. shareholders or interested parties may communicate with
the Board by sending a letter to: Weis Markets, Inc. Board of
Directors, c/o Corporate Secretary, 1000 South Second Street,
Sunbury, PA 17801-0471. The Board has instructed the Secretary
to review all communications received, and to exercise his
discretion not to forward to the Board correspondence that is
inappropriate such as business solicitations, frivolous
communications and advertising, routine business matters (i.e.
business inquiries, complaints or suggestions) and personal
grievances. However, any director may at any time request the
Secretary to forward any and all communications received by the
Secretary but not forwarded to the directors.
Shareholders or
interested parties wishing to communicate directly with the
non-management independent directors as a group may do so by
sending a letter to Weis Markets, Inc., c/o Non-Management
Independent Directors, 1000 South Second Street, Sunbury, PA
17801-0471 or via their email address at nonmanagement
@weismarkets.com.
Shareholders
or interested parties who have concerns regarding
accounting, improper use of Company assets, or ethical
improprieties may report these concerns to the Audit
Committee by sending a letter to Weis Markets, Inc., c/o
Audit Committee Chairman, 1000 South Second Street,
Sunbury, PA 17801-0471 or via its email address at
audit@weismarkets.com.
Submissions to
the non-management independent directors or the Audit
Committee will remain confidential and can be made
anonymously without fear of reprisal.
AUDIT COMMITTEE REPORT
The Audit
Committee oversees the Company's financial reporting process on
behalf of the Board. Management has the primary responsibility
for the financial statements and the reporting process
including the systems of internal controls. Management
represented to the Audit Committee the Company's consolidated
financial statements were prepared in conformity with
accounting principles generally accepted in the United States
and the SEC disclosure requirements. In fulfilling its
oversight responsibilities, the Audit Committee reviewed the
audited financial statements in the 2007 Annual Report on Form
10-K with management including a discussion of the quality, not
just the acceptability, of the accounting principles, the
reasonableness of significant judgments, and the clarity of
disclosures in the financial statements.
The Audit
Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of
those audited financial statements with accounting principles
generally accepted in the United States, their judgments as to
the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to
be discussed with the Committee in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). The Audit Committee has received from the
independent auditors written disclosures pursuant to Statement
on Auditing Standards No. 61, Communication with Audit
Committees, and has discussed those matters with the
independent auditors. The Audit Committee has also received the
written disclosure and the letter from the independent auditors
required by Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committee, and has
discussed with the independent auditors their
independence.
The Audit
Committee discussed with the Company's Chief Internal Auditor
and the independent auditors the overall scope and plans for
their respective audits. The Audit Committee meets with the
Chief Internal Auditor and the independent auditors, with and
without management present, to discuss the results of their
examinations, their evaluations of the Company's internal
controls and the overall quality of the Company's financial
reporting. In performance of its oversight function, the Audit
Committee also monitored Company management's compliance with
the Sarbanes-Oxley Act of 2002 by discussing with management,
the Chief Internal Auditor and the independent auditors
management's assessment of the effectiveness of the Company's
internal control over financial reporting as of December 29,
2007.
In reliance on
the reviews and discussions referred to above, the Audit
Committee recommended to the Board (and the Board has approved)
that the audited financial statements be included in the 2007
Annual Report on Form 10-K for filing with the SEC. The Audit
Committee recommended to the Board, the appointment of Grant
Thornton
14
LLP as the Company's independent auditors for
fiscal 2008, subject to shareholder ratification.
Richard
E. Shulman, Committee Chairman
Matthew
Nimetz
Steven
C. Smith
STOCK OWNERSHIP
Under
regulations of the SEC, a person is considered the "beneficial
owner" of a security if the person has or shares with others
the power to vote the security (voting power), the power to
dispose of the security (investment power) or the ability to
acquire the security within 60 days. In the tables below,
"beneficial ownership" of the Company's Common Stock is
determined in accordance with these regulations and does not
necessarily indicate that the person listed as a "beneficial
owner" has an economic interest in the shares indicated as
"beneficially owned."
Beneficial Ownership of Directors and Management
The following
table sets forth information regarding the amount and nature of
beneficial ownership of the Company's Common Stock as of March
5, 2008 by each director, each Named Officer listed in the
"Summary Compensation Table," and for all executive officers,
operating officers and directors as a group. Except as
otherwise indicated in the footnotes to the table, each person
named or a member of the group has sole voting and investment
power with respect to the shares listed. No shares have been
pledged as security by the directors or Named
Officers.
Name of | Amount and Nature | Percent |
Directors and | of Beneficial | of |
Management | Ownership | Class (1) |
Robert F. Weis | 12,622,047 | 46.8 |
Jonathan H. Weis | 110,585 | * |
Norman S. Rich | 32,322 | * |
William R. Mills | 5,994 | * |
Edward W. Rakoskie, Jr. | 5,564 | * |
Matthew Nimetz | 1,000 | * |
Richard E. Shulman | 293 | * |
Steven C. Smith | 215 | * |
All executive officers, operating | ||
officers and directors as a group | ||
(16 persons) | 12,785,453 | 47.4 |
* Owns less than 1% of
class.
(1) Based on 26,967,165 shares outstanding on
March 5, 2008.
5% Beneficial Owners
The following
table sets forth information about shareholders who are known
by the Company to be the beneficial owners of more than 5% of
its Common Stock, which is its only class of voting securities,
on March 5, 2008. Information contained in the table and
footnotes below was derived from filings made with the SEC by
the beneficial owners.
Name and Address | Amount and Nature | Percent | |
of | of Beneficial | of | |
5% Beneficial Owner | Ownership | Class (1) | |
Robert F. Weis | 12,622,047 | (2), (4) | 46.8 |
c/o Weis Markets, Inc. | |||
1000 South Second Street | |||
Sunbury, PA 17801 | |||
Ellen W. P. Wasserman | 1,746,424 | (3), (4) | 6.5 |
c/o Weis Markets, Inc. | |||
1000 South Second Street | |||
Sunbury, PA 17801 | |||
15
(5% Beneficial Owners continued) |
Name and Address | Amount and Nature | Percent | |
of | of Beneficial | of | |
5% Beneficial Owner | Ownership | Class (1) | |
EKTJ Management LLC | 1,400,000 | (5) | 5.2 |
c/o George Cox | |||
4 North Park Drive | |||
Suite 121 | |||
Hunt Valley, MD 21030 |
(1) Based on 26,967,165 shares outstanding on March 5, 2008.
(2) Robert F. Weis has sole voting and dispositive power as to all 12,622,047 shares listed. This amount includes 6,649,087 shares held in trust under the Will of Harry Weis, with Mellon Bank, N.A. and Robert F. Weis as co-trustees.
(3) Ellen W. P. Wasserman has sole voting and investment power as to all 1,746,424 shares listed.
(4) Robert F. Weis and Ellen W.P. Wasserman have agreed to act together for the purpose of voting their shares of Common Stock and thus constitute a group holding voting power over the sum of the shares listed for each of them individually in the table.
(5) EKTJ Management LLC has sole voting and dispositive power as to all 1,400,000 shares listed. The Class A members of EKTJ Management LLC have the exclusive authority to manage and control the business and affairs of EKTJ Management LLC. The three Class A Members, Kathryn J. Zox, Thomas H. Platz and James A. Platz, are the children of Ellen W. P. Wasserman.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a)
of the Securities Exchange Act of 1934 requires that directors
and officers of the Company and beneficial owners of more than
10% of its Common Stock file reports with the SEC with respect
to changes in their beneficial ownership of equity securities
of the Company. Based solely upon a review of the copies of
such reports furnished to the Company and written
representations by certain persons that reports on Form 5 were
not required, the Company believes that its directors, officers
and greater-than-10% beneficial owners complied with all
applicable 2007 Section 16(a) filing
requirements.
PROPOSAL NO.
2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Grant Thornton
LLP has served as the independent auditors for the Company
since 2004. The Audit Committee appointed Grant Thornton LLP as
the independent auditors of the Company with respect to its
operations for fiscal 2008, subject to ratification by the
holders of Common Stock of the Company. The Board and its
Audit Committee recommend that shareholders approve the
selection of Grant Thornton LLP as the Company's independent
auditors by voting "FOR" proposal number two. If the
shareholders do not approve the ratification of Grant Thornton
LLP, the selection of such firm as independent auditors for the
Company will be reconsidered by the Audit Committee. Even if
the selection is ratified, the Audit Committee in its
discretion may direct the appointment of a different
independent auditor at any time during the year if it
determines that such a change would be in the best interests of
the Company and its shareholders.
Representatives of
Grant Thornton LLP will be present at the Annual Meeting with
the opportunity to make a statement, if they so desire, and to
be available to respond to appropriate questions.
According to its Charter, the Audit Committee, comprised of independent members of the Board, is responsible for approving all audit engagement fees, terms and non-audit engagements with the independent auditors on behalf of the Company in advance of providing any service. In fiscal 2007, all audit fees associated with the independent auditors services were pre-approved by the Audit Committee. No non-audit or tax services were provided by the independent auditors in 2007.
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The following
table sets forth Grant Thornton LLP fees billed to the Company
for professional services related to 2007 and
2006:
2007 | 2006 | |
Services Provided | ($) | ($) |
Audit (1) (2) | 433,289 | 449,292 |
Tax (3) | -- | 26,500 |
Subtotal | 433,289 | 475,792 |
Out of Pocket Expenses | 46,230 | 54,845 |
Total | 479,519 | 530,637 |
(1) Represents the fees charged to the Company by Grant Thornton LLP for professional services provided in conjunction with the audit of the Company's 2007 and 2006 financial statements, review of the Company's quarterly financial statements and attestation services normally provided in connection with statutory and regulatory filings and engagements.
(2) Fees of $4,500 charged to the Company by Ernst & Young LLP for workpaper review preparation for the successor auditor in 2006 are not included in the table above.
(3) Tax fees consisted of tax compliance and tax filing advisory services.
OTHER MATTERS
As of the date
of this Proxy Statement, the Board is not informed of any
matters, other than those stated above, that may be brought
before the meeting. The persons named in the enclosed form of
proxy or their substitutes will vote with respect to any other
matters brought before the Annual Meeting in accordance with
their best judgment.
ANNUAL REPORT ON FORM 10-K
The Company
will provide, without charge, on written request from security
holders, copies of the Company's Annual Report on Form 10-K.
Written requests should be sent to the Secretary of the Company
at the Company's address set forth on page 1, by telephoning
1-866-999-WEIS (9347), or via email at
financial_reports@weismarkets.com. The 2007 Annual Report on
Form 10-K is also available for viewing or printing from the
Company's website at
http://weismarkets.com/financial_info.php.
SHAREHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
The Company's
by-laws require that any shareholder intending to present a
proposal for action at an Annual Meeting must give written
notice of the proposal, containing specified information, so
that it is received by the Company not later than the notice
deadline under the by-laws. This notice deadline will not be
less than 120 calendar days before the date of the Company's Proxy
Statement released to shareholders in connection with the
previous year's Annual Meeting, or
November 10, 2008 for the Company's Annual Meeting in
2009.
The by-law
described above does not affect the right of a shareholder to
request inclusion of a shareholder proposal in the Company's
Proxy Statement pursuant to SEC Rule 14a-8 or to present for
action at an Annual Meeting any proposal so included. Rule
14a-8 requires that written notice of a shareholder proposal
requested to be included in the Company's proxy materials
pursuant to the Rule must also be received by the Company not
less than 120 calendar days before the date of the Company's Proxy
Statement released to shareholders in connection with the
previous year's Annual Meeting. For
the Company's Annual Meeting in 2009, this deadline would
also be November 10, 2008.
The notices of shareholder proposals described under this caption must be given to the Secretary of the Company at the Company's address set forth on page 1. A copy of the by-law provision described above will be furnished to any shareholder upon written request to the Secretary at the same address.
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EXPENSES OF SOLICITATION
All expenses
related to the solicitation of the proxies by the Board will be
paid by the Company. If proxies are not promptly received,
officers, directors and regular employees of the Company may
solicit proxies personally by telephone or otherwise, for which
they will not receive additional compensation. The Company may
reimburse charges of banks, brokers, other custodians, nominees
and fiduciaries to send proxy material to the beneficial owners
and to secure their voting instructions, if necessary. It is
estimated that such costs will be nominal.
By Order of the Board of Directors,
Jonathan
H. Weis
Secretary
Dated: March 10, 2008
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