UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 23, 2003
FOODARAMA SUPERMARKETS, INC.
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(Exact name of registrant as specified in charter)
New Jersey 1-5745-1 21-0717108
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
922 Highway 33, Building 6, Suite 1, Freehold, New Jersey 07728
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 462-4700
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On July 23, 2003, the Superior Court of New Jersey, Middlesex County (the
"Court"), approved the settlement of a pending shareholder derivative action
filed in the Court by Melvin Bukiet, et. al. against Foodarama Supermarkets,
Inc. (the "Company"), as nominal defendant, and the members of the Company's
Board of Directors. Pursuant to the terms of the settlement, 1) the Company's
five-year classified board has been eliminated and the defendants have agreed
not to submit any proposal to the shareholders of the Company in connection with
the implementation of a classified board for a five year period ending on July
22, 2008; 2) the Company's 2001 Stock Incentive Plan (the "2001 Plan") will be
amended so that the maximum number of shares of the Company's common stock that
can be awarded to any individual thereunder shall be 50,000; and 3) the 2001
Plan will be amended to require that the exercise price of any options or other
stock based compensation granted thereunder shall be equal to the closing market
price of the Company's common stock on the date of grant. In addition, Joseph J.
Saker, Chairman and Chief Executive Officer of the Company, will return to the
Company 10,000 stock options previously awarded to him under the 2001 Plan.
The plaintiffs have applied to the Court for an award of attorneys' fees
in the amount of $975,000. The Company believes that the amount of the award of
attorneys' fees sought by the plaintiffs is unreasonable based upon the outcome
of the litigation, and the Company will vigorously contest the plaintiffs' fee
application. The Company's directors and officers liability insurance carrier
has reserved its rights under the Company's directors and officers liability
insurance policy with respect to the claims made in the derivative action,
including claims for the plaintiffs' attorneys' fees and costs of defense, and
has preliminarily advised the Company that certain of the claims made in the
derivative action and related legal expenses are not, in the insurance carrier's
view, covered by the policy. It is not possible, at this juncture, to predict
the amount of fees that may be awarded to plaintiffs or whether or to what
extent any such fees and the Company's legal expenses for defending the
derivative action will be covered by its directors and officers liability
insurance policy.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
FOODARAMA SUPERMARKETS, INC.
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(Registrant)
By: /S/ Michael Shapiro
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Michael Shapiro
Senior Vice President and Chief Financial
Officer
Date: August 4, 2003