SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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[ ] Preliminary Proxy Statement. [ ] Confidential, For Use of the
Commission Only as permitted
[ ] Definitive Proxy Statement. by Rule 14a-6(e)(2))
[X] Definitive Additional Materials.
[ ] Soliciting Material Pursuant to Rule 14a-12.
FOODARAMA SUPERMARKETS, INC.
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(Name of Registrant as Specified in Its Charter)
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May 1, 2002
Dear Fellow Shareholders:
It has come to our attention that some of you may have received a letter
dated April 23, 2002, together with a voting authorization form (which closely
resembles a proxy card), from Melvin Jules Bukiet, a shareholder of the Company,
asking you to vote against the two proposals described in our proxy materials.
We have been advised by legal counsel that Mr. Bukiet's mailing violates the
proxy rules of the Securities and Exchange Commission in several respects
because, among other things, he has failed to file his letter or any other proxy
materials with the Commission and his letter contains materially false and
misleading statements. Please be assured that we are considering every legal
means available to address this alleged violation in order to ensure a fair
referendum at our upcoming Annual Meeting of Shareholders scheduled for May 8,
2002.
Your Board of Directors urges you to disregard the claims and accusations
contained in Mr. Bukiet's letter. Your Board is very pleased with the financial
and other achievements of the Company. Our results from operations and financial
condition in fiscal 2001 continued to improve for the fourth consecutive year.
Sales for 2001 increased approximately 9% to a record $945.3 million from $866.4
million in the prior year. In addition, income from operations as well as
earnings before interest, taxes, depreciation and amortization for 2001 improved
over the prior fiscal year.
In addition, according to a letter of recognition from Salvatore F.
Sodano, Chairman and Chief Executive Officer of the American Stock Exchange,
Foodarama stock was one of the top performing securities listed on the American
Stock Exchange in 2001. In his letter, Mr. Sodano wrote "I am sure your stock's
performance reflects the success your company is achieving". During the
five-year period beginning November 2, 1996, the cumulative total return on
Foodarama's common stock outperformed the AMEX Wholesale & Retail Trade Index,
the Standard & Poor's 500 Composite Stock Price Index and the AMEX Composite
Index by significant margins. The fact of the matter is, if you bought shares of
common stock of Foodarama in January 2001 and still held them today, your
investment would have increased by more than 188%.
Mr. Bukiet's letter completely misrepresents the compensation paid to
Joseph J. Saker, Sr., our Chairman of the Board and Chief Executive Officer, and
to Richard J. Saker, our President and Chief Operating Officer, during 2001. Mr.
Bukiet's letter conveniently includes the projected annual benefits payable to
our two top officers upon their retirement from the Company under their
Supplemental Executive Retirement Plans ("SERPs") in their total compensation.
As the Company's proxy statement distributed to you earlier clearly indicates,
these amounts do not reflect cash payments actually made to the Sakers during
2001 but are SEC-required disclosures that the Company must include in the
Summary Compensation Table. Actually, Joseph J. Saker's salary and bonus for
2001 were $395,553 and $122,176, respectively, and Richard J. Saker's were
$437,118 and $132,188, respectively. This compensation was approved by the
Company's independent directors and is well within the range of compensation
paid to our competitors' top executives. Moreover, this compensation does not
reflect the fact that the Sakers each personally guarantees the Company's
indebtedness for current charges incurred to Wakefern Food Corporation, which
totaled approximately $36 million as of November 3, 2001. We believe that this
is a completely unique arrangement for officers of a publicly traded corporation
and is symbolic of the major contributions made by the Sakers to the Company and
its shareholders.
In addition, Mr. Bukiet's letter completely ignores the fact that stock
options granted to the Sakers vest quarterly over a five-year period from the
date of grant (subject to the occurrence of certain events that accelerate
vesting, including death or disability or certain events that could result in a
change of control of the Company). Thus, the option recipients are at risk with
respect to most of their options if the market value of the Company's stock
declines below the exercise price and, by the same token, are encouraged to
enhance the Company's performance so that the value of their options increases.
As such, the option recipients have a commonality of interest with all the
Company shareholders in working to improve the Company's performance and
results. Again, these options were awarded to the Sakers by a committee of
independent directors based on their many contributions to the Company over the
years and to encourage them to keep up their good work. Moreover, the Company
had not awarded stock options or other equity incentives to senior officers for
a significant period of time prior to 2001. Mr. Bukiet's letter fails to
recognize that the Company operates in a highly competitive environment and that
incentives such as stock options encourage superior performance and are critical
to the future success of the Company.
The Board of Directors is proud to stand behind its record of achievement
and its delivery of value to shareholders. Despite what Mr. Bukiet may want you
to believe, we firmly stand by our belief that our proposals to amend the
Company's Certificate of Incorporation to classify the Board of Directors into
five classes and to amend the Company's 2001 Stock Incentive Plan to increase
the number of shares available for awards thereunder by 65,000 are in the best
interest of the Company and its shareholders.
If you have already voted FOR the three proposals on our proxy card, we
thank you for your support. If you have not yet voted, or want to change your
vote, simply follow the instructions on the enclosed form. For your convenience,
arrangements have been made so that you may vote by telephone or internet. We
encourage you to take advantage of this service.
If you have any questions or require assistance in voting, you may call
MacKenzie Partners, Inc. toll-free at (800) 322-2885 or collect at (212)
929-5500 or you may email them at proxy@mackenziepartners.com.
We thank you for your continued support.
Very truly yours,
/S/Richard J. Saker
RICHARD J. SAKER
President and Chief Operating Officer