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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 16, 1996
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DART GROUP CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-1946 53-0242973
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3300 75th Avenue, Landover, Maryland 20785
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301) 731-1200
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(Former name or former address, if changed since last report).
The exhibit index appears on page 4.
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Item 5. Other Events
On December 16, 1996, Dart Group Corporation (the "Company") delivered
to Kenneth M. Herman and Robert N. Herman the letter attached hereto as Exhibit
10.2, which is incorporated herein by reference (the "Buy/Sell Offer Letter").
Previously, the Company entered into a letter agreement, dated December 9,
1996, between the Company and Kenneth M. Herman, Shoppers Food Warehouse Corp.
and Robert N. Herman, which is attached hereto as Exhibit 10.1 and incorporated
herein by reference. The press release issued by the Company upon delivery of
the Buy/Sell Offer Letter on December 16, 1996 is attached hereto as Exhibit
99.1 and incorporated herein by reference.
There can be no assurance as to which of the offers included in the
Buy/Sell Offer Letter will be accepted. Nor can there be any assurance that
either of the transactions contemplated by the Buy/Sell Offer Letter will in
fact be consummated, or as to the timing or terms of any possible sale by the
Company of its 50% equity interest in Shoppers Food Warehouse Corp.
("Shoppers") or any possible purchase by the Company of the other 50% equity
interest in Shoppers. If the Company sells its 50% equity interest in
Shoppers, no assurance can be given as to the use of the net proceeds from that
sale. If the Company purchases the other 50% equity interest in Shoppers, Dart
expects to raise the necessary financing and, subject to any limitations that
might be judicially imposed, may thereafter sell all or part of the
interest in Shoppers it then would hold, but there can be no assurance as to
whether or not, or as to when or at what price, any such sale would occur.
Item 7. Financial Statements and Exhibits
Exhibit 10.1 Letter Agreement, dated December 9, 1996,
between Dart Group Corporation and Kenneth M.
Herman, Shoppers Food Warehouse Corp. and
Robert N. Herman
Exhibit 10.2 Letter, dated December 16, 1996, from Dart
Group Corporation to Kenneth M. Herman and
Robert N. Herman
Exhibit 99.1 Press Release, dated December 17, 1996, of
Dart Group Corporation
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DART GROUP CORPORATION
By: /s/ MARK A. FLINT
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Mark A. Flint
Senior Vice President and
Chief Financial Officer
Date: December 17, 1996
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DART GROUP CORPORATION
Form 8-K
Exhibit Index
Exhibit 10.1 Letter Agreement, dated December 9, 1996,
between Dart Group Corporation and Kenneth M.
Herman, Shoppers Food Warehouse Corp. and
Robert N. Herman
Exhibit 10.2 Letter, dated December 16, 1996, between Dart
Group Corporation to Kenneth M. Herman and
Robert N. Herman
Exhibit 99.1 Press Release, dated December 17, 1996, of
Dart Group Corporation
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Exhibit 10.1
December 11, 1996
Dart Group Corporation
3300 75th Avenue
Landover, MD 20785
Gentlemen:
Reference is hereby made to Section 7 of that certain Stockholders'
Agreement, dated June 30, 1988, as amended, by and among Dart Group Corporation
("Dart"), Kenneth M. Herman ("Herman"), "Jumbo Food Stores, Inc." (the name of
which is now Shoppers Food Warehouse Corp.) and Robert N. Herman (the
"Stockholders' Agreement"), pursuant to which either Dart, on the one hand, or
Herman and any Permitted Transferees (as defined in the Stockholders'
Agreement) (collectively, the "Herman Group"), may make an offer to sell all of
the securities of Shoppers Food Warehouse Corp. ("Shoppers") that it holds and
an offer to buy all of the securities of Shoppers that it does not hold (a
"Buy/Sell Offer").
We hereby agree that for purposes of any Buy/Sell Offer pursuant to
Section 7 of the Stockholders' Agreement that is delivered at any time during
the seven-day period beginning at 12:01 a.m. on December 10 and ending at 11:59
p.m. on December 16, 1996 (the "Seven-Day Period"), the Stockholders' Agreement
shall hereby be amended to reduce the one hundred twenty (120) day period
specified in the preamble and clause (iii) of Section 7(B) of the Stockholders'
Agreement to a period of sixty (60) days. The effect of this letter shall be
that for purposes of any Buy/Sell Offer delivered by Dart or Herman pursuant to
Section 7 of the Stockholders' Agreement at any time during the Seven-Day
Period (but not for purposes of any other offers pursuant to said Section 7),
Section 7(B) of the Stockholders' Agreement shall be deemed to read as set
forth in Exhibit A to this letter.
We hereby further agree that if Dart and the Herman Group each
delivers a Buy/Sell Offer during the Seven-Day Period, then the Buy/Sell Offer
delivered first in time shall be valid and effective and the Buy/Sell Offer
delivered second in time shall be null and void.
Section 9 of the Stockholders' Agreement shall hereby be amended and
restated to read in its entirety as set forth in Exhibit B to this letter.
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Dart Group Corporation
December 9, 1996
Page 2
This letter constitutes a valid, binding and enforceable amendment of
the Stockholders' Agreement.
If you are in agreement with the foregoing, please have this letter
executed by your authorized representative and return a copy to the
undersigned, as follows:
Mr. Kenneth M. Herman
Shoppers Food Warehouse Corporation
4600 Forbes Blvd.
Lanham, Maryland 20785
This letter shall be null and void, and of no force and effect, unless it is
signed on behalf of Dart and actually delivered (by hand delivery or by
courier) to the address specified in the preceding sentence prior to 5:30 p.m.
(E.S.T.) on December 11, 1996.
Very truly yours,
/s/ KENNETH M. HERMAN
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Kenneth M. Herman
SHOPPERS FOOD WAREHOUSE CORP.
/s/ KENNETH M. HERMAN
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By: Kenneth M. Herman
President
/s/ ROBERT N. HERMAN
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Robert N. Herman
Accepted and Agreed to:
DART GROUP CORPORATION
By: /s/ L. G. SCHAFRAN
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Date: 12 . 11 . 96
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Exhibit A
(B) Within sixty (60) days after the First Party
Stockholder's offer, the Second Party Stockholder shall have the nonassignable
right to respond to the First Party Stockholder in one of the following ways:
(i) accept in writing the offer to purchase all the
First Party Stockholder's securities of Stores at the price
stated in such offer;
(ii) accept in writing the offer to sell all the
securities of Stores it holds to the First Party Stockholder
at the price stated in such offer;
(iii) reject both offers, either in writing or by
not responding within such 60-day period, in which case the
First Party Stockholder shall purchase, and the Second Party
Stockholder shall sell, for cash at the price in the offer,
all the securities of Stores held by the Second Party
Stockholder.
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Exhibit B
Section 9. Notices.
Any notices required or permitted to be given under this Agreement
(including, without limitation, any offer pursuant to Section 7(A) or any
acceptance or rejection pursuant to Section 7(B)) shall be in writing and shall
be deemed to have been duly given if delivered by mail, by courier, by
telefacsimile or by hand delivery, as follows: (1) if to Dart, to Dart Group
Corporation, 3300 75th Avenue, Landover, Maryland, 20785, Attention: Chief
Financial Officer (Telefax No. 301-772-3910), with a copy to Kenneth J. Ayres,
Esq., Jones, Day, Reavis & Pogue, 1450 G Street, N.W., Washington, D.C. 20005
(Telefax No. 202-737-2832); (ii) if to Herman or to Stores, to Robert N.
Herman, Shoppers Food Warehouse Corp., 4600 Forbes Blvd., Lanham, Maryland
20785 (Telefax No. 301-306-4274), with a copy to Dennis J. Block, Esq., Weil,
Gotshal & Manges, 767 5th Avenue, New York, NY 10153 (Telefax No.
212-310-8007), or at any other address or to the attention of any other person
designated by Dart, Herman or Stores, respectively, in a written notice given
to the other parties pursuant to the provisions of this Section. Any notice
pursuant to this Section shall be deemed given when it is actually delivered at
the address (or telefax number) set forth in the preceding sentence.
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Exhibit 10.2
[DART GROUP LETTERHEAD]
December 16, 1996
Mr. Kenneth M. Herman Mr. Robert N. Herman
Shoppers Food Warehouse Corp. Shoppers Food Warehouse Corp.
4600 Forbes Blvd. 4600 Forbes Blvd.
Lanham, Maryland 20706 Lanham, Maryland 20706
Gentlemen:
The following offers are made pursuant to Section 7 of that certain
Stockholders' Agreement, dated June 30, 1988, as amended, by and among Dart
Group Corporation, Kenneth M. Herman, "Jumbo Food Stores, Inc." (the name of
which is now Shoppers Food Warehouse Corp.) and Robert N. Herman (the
"Stockholders' Agreement"):
Offer to Sell. Dart Group Corporation hereby offers to sell to
Kenneth M. Herman, his personal representative and any Permitted
Transferees (as that term is defined in the Stockholders' Agreement)
(collectively, the "Hermans"), all of the securities of Shoppers Food
Warehouse Corp. that it holds (specifically, 5,000 shares of Class B
voting stock and 11,666 2/3 shares of Class A non-voting stock of
Shoppers Food Warehouse Corp.),(1) for a price of Two Hundred and Ten
Million Dollars ($210,000,000).
Offer to Buy. Dart Group Corporation hereby offers to buy from the
Hermans, all (but not less than all) of the securities of Shoppers
Food Warehouse Corp. that the Hermans hold (specifically, 5,000 shares
of Class B voting stock and 11,666 2/3 shares of Class A non-voting
stock of Shoppers Food Warehouse Corp.), for a price of Two Hundred
and Ten Million Dollars ($210,000,000).
At the closing pursuant to either the foregoing Offer to Buy or Offer
to Sell, as the case may be, the purchaser shall be entitled to receive
delivery of the following from each seller:
(1) Stock certificates for all of the shares being sold by such
seller, properly and fully endorsed for transfer
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(1) If and to the extent that Dart Group Corporation's subsidiary,
Dart/SFW Corp., has any interest in these shares, this offer to sell is made
on behalf of Dart/SFW Corp. as well as on behalf of Dart Group Corporation.
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Mr. Kenneth M. Herman
Mr. Robert N. Herman
December 16, 1996
Page 2
to the purchaser so as to immediately effect such transfer;
(2) A written representation and warranty, signed by each seller,
that such seller has full power and authority to sell, assign
and transfer the shares being sold thereby and that at the
closing the purchaser will acquire good and unencumbered title
to such shares, free and clear of all liens, restrictions,
charges, security interests, encumbrances and adverse claims;
and
(3) Any additional documents or instruments reasonably deemed by
the purchaser to be necessary or desirable to assure the valid
and effective sale, assignment and transfer to the purchaser
of the shares being sold by such seller, free and clear of all
liens, restrictions, charges, security interests, encumbrances
and adverse claims.
Very truly yours,
DART GROUP CORPORATION
By: /s/ HERBERT H. HAFT
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Herbert H. Haft, Chairman of
the Board of Directors and
Chief Executive Officer
By: /s/ L. G. SCHAFRAN
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Larry G. Schafran,
Chairman of the Executive
Committee of the Board of
Directors
cc: Dennis J. Block, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153-0119
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Exhibit 99.1
NEWS RELEASE [DART GROUP LOGO]
FOR IMMEDIATE RELEASE
Contact: Marina Ein
(202) 223-2922
DART GROUP CORPORATION
ANNOUNCES BUY/SELL OFFERS FOR SHOPPERS FOOD WAREHOUSE
Landover, Maryland, December 16, 1996 . . . Dart Group Corporation (NASDAQ:
DARTA), announced today that it has delivered to Kenneth M. Herman an offer to
sell Dart's 50% equity interest in Shoppers Food Warehouse Corp. or to purchase
the 50% equity interest in Shoppers owned by Herman and his family. In either
case the price offered is $210 million in cash.
Under a stockholders' agreement, as amended, between Dart and Herman, Herman
must accept either Dart's offer to sell or offer to purchase within 60 days,
and the transaction is to close 60 days after acceptance.
Shoppers Food Warehouse Corp. is a regional supermarket chain with 34 stores
operating in the greater Washington, D.C. metropolitan area. For its fiscal
year ending June 29, 1996, Shoppers reported total sales of $836 million and
net income of $18.9 million.
For responses to questions concerning the foregoing, please communicate with
L.G. Schafran, Chairman of the Executive Committee, Dart Group Corporation or
Mark Flint, Chief Financial Officer of Dart Group Corporation (301.731.1502).
