<PAGE> 1
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 (AMENDMENT NO. )
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-11(c) or
Section 240.14a-12
FLEMING COMPANIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(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):
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
(5) Total fee paid:
N/A
- --------------------------------------------------------------------------------
/ / 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:
N/A
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(2) Form, Schedule or Registration Statement No.:
N/A
- --------------------------------------------------------------------------------
(3) Filing Party:
N/A
- --------------------------------------------------------------------------------
(4) Date Filed:
N/A
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<PAGE> 2
6301 Waterford Boulevard
P.O. Box 26647
LOGO Oklahoma City, OK 73126-0647
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Fleming Companies, Inc. on Wednesday, May 1, 1996, at 10:00 a.m. at the National
Cowboy Hall of Fame, 1700 N.E. 63rd Street, Oklahoma City. The meeting is being
held for the following purposes:
1. To elect four directors for terms expiring in 1999.
2. To consider and act upon a proposal to approve the Fleming Companies,
Inc. 1996 Stock Incentive Plan, a copy of which is attached to the
accompanying Proxy Statement as Exhibit "A".
3. To consider a shareholder proposal.
4. To ratify the appointment of Deloitte & Touche LLP as independent
auditors for 1996.
5. To transact other business as may properly come before the meeting or
any adjournment.
The accompanying proxy statement contains complete details on the proposals
and other matters. Shareholders of record as of March 4, 1996, are entitled to
notice of, and to vote at, the meeting. The company's annual report, including
financial statements for the year ended December 30, 1995, is also enclosed.
We hope you can be with us for this year's meeting. Your participation in
the affairs of the company is important, regardless of the number of shares you
hold. To ensure your representation at the meeting whether or not you are able
to be present, please complete and return the enclosed proxy card as soon as
possible.
By Order of the Board of Directors
DAVID R. ALMOND
Senior Vice President
General Counsel and Secretary
Oklahoma City, March 12, 1996
<PAGE> 3
LOGO
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PROXY STATEMENT
This proxy statement, which is being mailed to shareholders on or about
March 12, 1996, is furnished in connection with the solicitation of proxies by
the board of directors for use at the annual meeting of shareholders on May 1,
1996, including any adjournments.
The annual meeting is called for the purposes stated in the accompanying
notice. All holders of the company's $2.50 par value common stock as of March 4,
1996, are entitled to vote. As of that date, 37,704,092 shares were outstanding.
On each matter coming before the meeting, a shareholder is entitled to one vote
for each share of stock held as of the record date.
If a proxy is properly signed and is not revoked by the shareholder, the
shares it represents will be voted according to the instructions of the
shareholder. If no specific instructions are given, the shares will be voted as
recommended by the board of directors.
A shareholder may revoke his or her proxy any time before it is voted at
the meeting. Any shareholder who attends the meeting and wishes to vote in
person may revoke his or her proxy at the meeting. Otherwise, a shareholder must
advise the senior vice president -- general counsel and secretary in writing of
revocation of his or her proxy.
The company will bear the cost of solicitation of proxies. Solicitations
will be made primarily by mail, but certain officers or associates of the
company may solicit proxies by telephone or in person without additional
compensation. The company has engaged Morrow & Co., Inc. to assist in the
solicitation of proxies for the annual meeting at an anticipated cost of
$10,000.
ELECTION OF DIRECTORS
The company's certificate of incorporation provides that members of the
board of directors will be divided into three classes with staggered three-year
terms. The certificate requires that at each annual meeting, successors to
directors whose terms expire at that meeting will be elected for three-year
terms.
The board of directors has nominated four persons for election as directors
to serve for three-year terms expiring in 1999 or until their successors are
elected and qualified. Mr. Werries, whose term expires in 1996, will not stand
for reelection after 41 years of dedicated service to the company, including 17
years as a member of the board of directors. Mr. Werries will, however, fulfill
his responsibilities under the last year of his consulting agreement. See "Board
of Directors -- Compensation of Directors." All nominees, with the exception of
Mr. Baker, are currently serving as directors and have consented to serve for
the
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<PAGE> 4
new term. The board of directors unanimously recommends a vote FOR the election
of each nominee.
The persons named on the accompanying proxy card intend to vote in favor of
the four nominees listed below. Should any one or more of these nominees become
unavailable for election, the proxy will be voted for substitute nominees. If
all nominees are elected, the board will be comprised of 10 members, of which
eight are nonmanagement directors, one is an officer of the company and one is
the chief executive of a division of the company.
The company's transfer agent will tabulate all votes received before the
date of the annual meeting. The company will appoint two inspectors of election
to receive the transfer agent's tabulation, tabulate all other votes and certify
the results of all matters voted upon. Neither the corporate law of the State of
Oklahoma, the state in which the company is incorporated, nor the company's
certificate of incorporation or bylaws has any specific provisions regarding the
treatment of abstentions and broker non-votes. It is the company's policy to
count abstentions and broker non-votes for purposes of determining the presence
of a quorum at the meeting. The company's bylaws provide that Item 1, the
election of directors, requires a plurality of the votes cast at the meeting.
The company's bylaws also provide that matters such as Item 2, adoption of the
1996 Stock Incentive Plan, Item 3, approval of the shareholder proposal, and
Item 4, ratification of the appointment of auditors, shall be decided by the
holders of a majority of the stock having voting power present in person or
represented by proxy at the meeting. Therefore, an abstention or broker non-vote
will have no effect on Item 1 and will have the same effect as a vote against
Items 2 and 4. Item 3 is not considered a matter for which brokers can vote, but
for which the vote must be passed through to the beneficial owner. Accordingly,
there can be no broker non-votes on this item. Abstentions with respect to this
item will have the same effect as a vote against the item.
NOMINEES FOR DIRECTOR TERMS EXPIRING IN 1999
Nominee (age), year first became a director
JACK W. BAKER (58)
Chief executive of Baker's Supermarkets, a family owned
independent retail chain acquired by Fleming in 1992. Mr. Baker
has been associated with Baker's for his entire business
career. He is president, chief executive officer and an owner
of PDM, Inc., an Omaha, Nebraska based real estate development
firm, and is chairman of the Board of Governors of the Nights
of Ak-Sar-Ben. He also served as chairman of the Greater Omaha
Chamber of Commerce in 1993 and vice chairman of the Food
Marketing Institute from 1993 to 1995.
3
<PAGE> 5
JAMES G. HARLOW, JR. (61), 1977
Chairman and chief executive officer of Oklahoma Gas &
Electric Co. Mr. Harlow has been associated with this electric
utility company since 1961 and has served as chairman since
1982. Mr. Harlow is a director of Massachusetts Mutual Life
Insurance Co. and AEGIS Insurance Services, Inc. He was
chairman of Edison Electric Institute in 1991. He is chairman
of the board of trustees of the University of Oklahoma
Foundation and is a trustee of Oklahoma City University.
Chairman of the compensation and organization committee and
member of the nominating/governance committee.
EDWARD C. JOULLIAN III (66), 1984
Chairman and chief executive officer of Mustang Fuel Corp.
(energy development and services) since 1976. Mr. Joullian is a
director of The LTV Corp. and American Fidelity Co. He is also
chairman of Joullian Vineyards, Ltd. and a trustee of the
Colonial Williamsburg Foundation.
Member of the audit and finance committee and the
nominating/governance committee.
HOWARD H. LEACH (65), 1974
President of Leach McMicking & Co. (private investment
banking firm) and Leach Capital Corporation, chairman of Hunter
Fan Company (manufacturer of ceiling fans) and a California
agri-business corporation. He is a member and past chairman of
the Board of Regents of the University of California and
chairman of Foley Timber Company, Inc., an owner and manager of
timber property. He is also a director of Frye Copysystems,
Inc.
Chairman of the nominating/governance committee and member
of the compensation and organization committee.
DIRECTOR WHOSE TERM EXPIRES IN 1996
Name (age), year first became a director
E. DEAN WERRIES (66), 1979
Mr. Werries has been associated with Fleming for 41 years.
He was named president and chief operating officer in 1981,
chief executive officer in 1988 and chairman of the board in
1989. Mr. Werries relinquished the position of president to
John E. Moll in 1989 but reassumed this position upon Mr.
Moll's retirement in 1992. Mr. Werries retired as president and
chief executive officer in 1993 and retired as chairman in
1994. Mr. Werries is past chairman and a director of the Food
Marketing Institute. He is chairman of the board of Sonic
Industries, Inc. and a director of Carr-Gottstein Foods Co. He
is a trustee of the Food Industry Crusade Against Hunger and
the Oklahoma School of Science and Mathematics. From February
1995 to August 1995, Mr. Werries served as Secretary of
Commerce for the State of Oklahoma.
Member of the audit and finance committee and the
nominating/governance committee.
4
<PAGE> 6
DIRECTORS WHOSE TERMS EXPIRE IN 1997
Name (age), year first became a director
CAROL B. HALLETT (58), 1993
President and chief executive officer of Air Transport
Association of America, Washington, D.C. Prior to joining the
Air Transport Association in April 1995, Mrs. Hallett served as
senior government relations advisor with Collier, Shannon, Rill
& Scott from February 1993 to March 1995. From November 1989
through January 1993, Mrs. Hallett served as the Commissioner
of the United States Customs Service. From September 1986 to
May 1989, she served as the U.S. Ambassador to The Commonwealth
of the Bahamas. From July 1983 to August 1986, Mrs. Hallett
served as the national vice chairman and field director of
Citizens for America. Mrs. Hallett also served three terms in
the California legislature and as minority leader in the State
Assembly. Mrs. Hallett is a director of Litton Industries, Inc.
and the American Association of Exporters and Importers. She is
a trustee for the Junior Statesmen of America. Mrs. Hallett
also serves on the President's Cabinet of California
Polytechnic State University.
Member of the audit and finance committee and the
nominating/governance committee.
LAWRENCE M. JONES (64), 1972
Retired chairman of the board of directors and chief
executive officer, The Coleman Co., Inc. (manufacturer of
outdoor recreational products and associated equipment). Prior
to rejoining Coleman in 1989, Mr. Jones served for 18 months as
Fleming's vice chairman and chief financial officer. Before
that, he was president of Coleman from 1976 to 1985, and
chairman of the executive committee from 1985 to 1987. Mr.
Jones continues to serve on the board of The Coleman Co., Inc.
and is a director of Union Pacific Resources Corp.
Member of the audit and finance committee and the
nominating/governance committee.
GUY A. OSBORN (60), 1992
Chairman and chief executive officer of Universal Foods
Corp. He joined that company in 1971, became president in 1984
and chairman in 1990. He serves on the boards of Firstar Corp.
(a bank holding company), Firstar Bank of Milwaukee, Wisconsin
Gas Co., WICOR, Inc. (a utility holding company), Milwaukee
Metropolitan Association of Commerce, Boys and Girls Club of
Greater Milwaukee, Greater Milwaukee Committee and Alverno
College and is a trustee of Northwestern Mutual Life Insurance
Company.
Member of the compensation and organization committee and
the nominating/governance committee.
5
<PAGE> 7
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Name (age), year first became a director
ROBERT E. STAUTH (51), 1993
Chairman and chief executive officer. Mr. Stauth has been
associated with Fleming for 22 years. He first joined the
company in 1966, and after leaving for a brief time to serve in
senior management positions at two retail chains, he rejoined
the company in 1977. In 1987, Mr. Stauth was elected vice
president, serving at the Phoenix division. In 1991, he was
promoted to senior vice president -- Western Region, and in
1992 was named executive vice president -- division operations.
In April 1993, Mr. Stauth was named president and chief
operating officer. He was elected to the board the following
June. In October of the same year, Mr. Stauth became the chief
executive officer and assumed the role of chairman at the 1994
shareholders' meeting. He relinquished the position of
president to William J. Dowd in July 1995. He serves as a
member of the board of directors of IGA, Inc.; the National
American Wholesale Grocers Association, for which he is vice
chairman and serves on the government relations and nominating
committees; the Food Marketing Institute, for which he serves
on the executive steering committee on Efficient Consumer
Response; the Oklahoma State Chamber of Commerce; the State
Fair Board of Oklahoma and the Oklahoma Business Roundtable.
Additionally, he is chairman of the advisory board of the
University of Oklahoma's College of Business Administration,
and he serves on the advisory board of Kansas State University.
ARCHIE R. DYKES (65), 1981
Chairman and chief executive officer of Capital City
Holdings, Inc. (a venture capital organization). He is a
director of Whitman Corp., Bradford Capital Partners and the
Employment Corporation. A former chancellor of the University
of Kansas and of the University of Tennessee, Mr. Dykes also
serves as a trustee of the Kansas University Endowment
Association and of the William Allen White Foundation.
Chairman of the audit and finance committee and member of
the nominating/governance committee.
JOHN A. McMILLAN (64), 1992
Member of the board of directors and executive committee of
Nordstrom, Inc. (specialty store chain). Mr. McMillan has been
associated with Nordstrom for over 38 years. He served as
co-chairman of the board from 1991 to 1995 and as a member of
the office of chief executive officer from 1971 to 1995. He is
a member of the board of directors of the Fred Hutchinson
Cancer Center and of the board of trustees of Seattle
University. He also serves on the board of the Seattle YMCA.
Member of the compensation and organization committee and
the nominating/governance committee.
6
<PAGE> 8
THE BOARD OF DIRECTORS
Meetings of Directors. During the past year, the board of directors had six
regular and one special meeting, which included one telephone meeting. Each
director attended 75% or more of the meetings of the board and of committees of
which he or she was a member.
Compensation of Directors. The company pays an annual retainer of $20,000
to nonmanagement directors, plus a fee of $1,000 for each board and committee
meeting attended and an additional $250 for each committee meeting chaired. Such
amounts together with the value of the stock equivalent units described below
yield actual annual compensation of approximately $40,000 for each director.
Directors are not compensated for participation in telephone meetings of the
board of directors or of its committees. In 1992, the company established the
Directors' Stock Equivalent Plan under which nonmanagement members of the board
may be awarded stock equivalent units within certain limits set forth in the
plan. These units represent the right to receive cash equal to the value of
shares of common stock when the director ceases to serve, according to the terms
of the grant. These units are not entitled to any voting rights. Upon payment of
the stock equivalent units, the company will also pay cash to the participant in
an amount equal to dividends or distributions which he or she would have
received if the stock equivalent units had been awarded as shares of common
stock rather than stock equivalent units. The board determined not to make any
awards of stock equivalent units for 1995; however, awards were made for 1996.
Upon his retirement as chairman in 1994, E. Dean Werries entered into a
three-year consulting agreement with the company for $200,000 per year plus
reimbursement of reasonable business, travel and other expenses in consideration
of his agreeing to provide advisory and consulting services to the company. In
addition, Mr. Werries also receives retirement benefits pursuant to the
company's defined benefit plan (the "Pension Plan") and Supplemental Retirement
Plan (the "SRP"). See "Pension Plan."
COMMITTEES OF THE BOARD
The board of directors has three standing committees. The principal
responsibilities of each are as follows.
Audit and Finance Committee. The committee focuses primarily on ethical and
regulatory matters and on the effectiveness of the company's accounting policies
and practices, financial reporting and internal controls, and the internal audit
function. The committee oversees company policies and programs with respect to
ethical standards and regulatory compliance. It annually reviews the selection
of independent auditors and, after consultation with management, recommends the
appointment of independent auditors for board approval and shareholder
ratification. It reviews and discusses the scope of the annual audit with
management and the independent auditors and may request additional review and
audit procedures. The committee reviews and discusses the annual report of the
auditors and the auditors' observations and suggestions regarding accounting and
control policies, procedures and organization, and their adequacy. The committee
makes recommendations, as appropriate, to management
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<PAGE> 9
based on the auditors' suggestions. The committee reports its findings to the
board at least annually. The committee met three times during 1995.
Compensation and Organization Committee. The committee oversees the
company's compensation and benefit policies and programs. The committee reviews
the objectives, structure, cost and administration of major compensation and
benefit policies and programs. It annually reviews officers' salaries, stock
options, and other management incentives, and administers the company's stock
option and management incentive plans. The stated policy of the committee is to
motivate the company's executive officers and other associates to enhance the
company's financial performance by focusing on specific business objectives. It
also makes recommendations regarding the selection of the chief executive
officer. The committee met twice during 1995.
Nominating/Governance Committee. The committee develops and recommends to
the board guidelines and criteria for selecting persons to serve as directors.
It recommends nominees for election at the annual meeting and candidates to fill
board vacancies. The committee considers and makes recommendations regarding the
composition of the board. It also considers matters relating to corporate
governance. The committee met once during 1995.
The committee will consider nominees recommended by shareholders if such
nomination is made pursuant to timely notice in writing in strict accordance
with the company's bylaws. A shareholder desiring to make a nomination should
contact the senior vice president -- general counsel and secretary to obtain a
copy of the bylaws.
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<PAGE> 10
SECURITY OWNERSHIP OF MANAGEMENT
The total number of shares of common stock beneficially owned as of
February 29, 1996 by each of the present directors, nominees, the chief
executive officer and each of the other four most highly compensated executive
officers, and all of the directors and executive officers as a group, are as
follows:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP(1)
-------------------------- --------------------
<S> <C>
Robert E. Stauth................................... 72,374(2)
Jack W. Baker...................................... 484,718(3)
Archie R. Dykes.................................... 4,105(4)
Carol B. Hallett................................... 595(5)
James G. Harlow, Jr................................ 1,981(6)
Lawrence M. Jones.................................. 4,936(7)
Edward C. Joullian III............................. 3,000(8)
Howard H. Leach.................................... 12,200(9)
John A. McMillan................................... 3,000(10)
Guy A. Osborn...................................... 1,000(11)
E. Dean Werries.................................... 44,010(12)
Gerald G. Austin................................... 54,185(13)
E. Stephen Davis................................... 54,193(14)
Harry L. Winn, Jr.................................. 14,050(15)
Thomas L. Zaricki.................................. 14,010(16)
All directors and executive officers as a group
(25)............................................. 933,779(17)
=======
</TABLE>
- ---------------
(1) Unless otherwise indicated, all shares are owned directly by the named
person and he or she has sole voting and investment power with respect to
such shares. The shares represent less than 1% of the total shares
outstanding for each person listed, except for Mr. Baker whose ownership
constitutes 1.28% of the total shares outstanding. The shares listed for
all directors and executive officers as a group constitute 2.47% of the
total shares outstanding. As indicated in the footnotes below, each
nonmanagement director also owns stock equivalent units awarded under the
Directors' Stock Equivalent Plan. See "The Board of Directors --
Compensation of Directors."
(2) Consists of 15,374 shares owned jointly by Mr. Stauth and his wife with
whom he shares voting and investment power, 33,000 shares under options
presently exercisable and 24,000 shares awarded under the 1990 Stock
Incentive Plan, subject to forfeiture, for which he has sole voting power.
(3) Consists of 413,518 shares owned directly by Mr. Baker, 66,700 shares held
by his wife, 2,100 shares under options presently exercisable and 2,400
shares awarded under the 1990 Stock Incentive Plan, subject to forfeiture,
for which he has sole voting power.
(4) Consists of 3,490 shares owned directly by Mr. Dykes for which he has sole
voting and investment power, and 615 shares owned jointly by Mr. Dykes and
his wife with whom he shares voting and investment power. Mr. Dykes also
owns 2,064 stock equivalent units awarded under the Directors' Stock
Equivalent Plan.
(5) Mrs. Hallett also owns 1,206 stock equivalent units awarded under the
Directors' Stock Equivalent Plan.
(6) Consists of 1,619 shares owned directly by Mr. Harlow for which he has sole
voting and investment power, and 362 shares owned jointly with his wife
with whom he shares voting and investment power. Mr. Harlow also owns 2,064
stock equivalent units awarded under the Directors' Stock Equivalent Plan.
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<PAGE> 11
(7) Mr. Jones also owns 2,064 stock equivalent units awarded under the
Directors' Stock Equivalent Plan.
(8) Owned by a limited partnership in which Mr. Joullian is a general partner
and for which he shares voting and investment power with the remaining
general partners. Mr. Joullian also owns 2,064 stock equivalent units
awarded under the Directors' Stock Equivalent Plan.
(9) Mr. Leach also owns 2,064 stock equivalent units awarded under the
Directors' Stock Equivalent Plan.
(10) Mr. McMillan also owns 2,064 stock equivalent units awarded under the
Directors' Stock Equivalent Plan.
(11) Mr. Osborn also owns 2,064 stock equivalent units awarded under the
Directors' Stock Equivalent Plan.
(12) Consists of 24,638 shares owned directly by Mr. Werries, and 19,372 shares
owned by a partnership in which Mr. Werries is the general partner, for
all of which he has sole voting and investment power. Mr. Werries also
owns 670 stock equivalent units awarded under the Directors' Stock
Equivalent Plan.
(13) Consists of 15,691 shares owned directly by Mr. Austin for which he has
sole voting and investment power, 30,000 shares under options presently
exercisable, 6,894 shares owned jointly by Mr. Austin and his wife with
whom he shares voting and investment power and 1,600 shares owned by his
wife. Mr. Austin retired effective as of December 31, 1995. See
"Termination of Employment and Change in Control Agreements -- Other
Arrangements."
(14) Consists of 7,193 shares owned directly by Mr. Davis for which he has sole
voting and investment power, 30,000 shares under options presently
exercisable, 9,000 shares owned jointly by Mr. Davis and his wife with
whom he shares voting and investment power and 8,000 shares awarded under
the 1990 Stock Incentive Plan, subject to forfeiture, for which he has
sole voting power.
(15) Consists of 1,100 shares owned directly by Mr. Winn for which he has sole
voting and investment power, 4,500 shares under options presently
exercisable, 350 shares owned by his wife and 100 shares owned by his son
with whom he shares voting and investment power and 8,000 shares awarded
under the 1990 Stock Incentive Plan, subject to forfeiture, for which he
has sole voting power.
(16) Consists of 6,510 shares owned directly by Mr. Zaricki for which he has
sole voting and investment power, 3,500 shares under options presently
exercisable and 4,000 shares awarded under the 1990 Stock Incentive Plan,
subject to forfeiture, for which he has sole voting power.
(17) Includes 528,479 shares for which directors and executive officers have
sole voting and investment power, 50,900 shares for which they share
voting and investment power with others, 66,700 shares for which
beneficial ownership is attributable to them, 184,500 shares under options
presently exercisable, and 103,200 shares awarded under the 1990 Stock
Incentive Plan, subject to forfeiture, for which they have sole voting
power.
10
<PAGE> 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the name and address of each known
shareholder of the company who beneficially owns more than 5% of the company's
common stock, the number of shares beneficially owned by each, and the
percentage of outstanding stock so owned according to information made available
to the company as of February 15, 1996.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OWNERSHIP OF CLASS
- ------------------------------------------ -------------------- --------
<S> <C> <C>
Sanford C. Bernstein & Co., Inc.
One State Street Plaza
New York, New York 10004.................. 3,431,469(1) 9.10%
INVESCO PLC
11 Devonshire Square
London EC2M 4YR
England................................... 2,889,900(2) 7.66%
Dodge & Cox
One Sansome St., 35th Floor
San Francisco, California 94104........... 2,243,050(3) 5.95%
</TABLE>
- ---------------
(1) Sanford C. Bernstein & Co., Inc. has shared power to vote 295,786 shares,
sole power to vote 1,922,216 shares and sole power to dispose of all shares.
(2) INVESCO PLC shares the power to vote and to dispose of all shares.
(3) Dodge & Cox has the sole power to vote and to dispose of all shares.
11
<PAGE> 13
SUMMARY COMPENSATION TABLE
The following summary compensation table sets forth the compensation
information for the chief executive officer and the four other most highly
compensated executive officers for services rendered in all capacities during
the fiscal years ended December 30, 1995, December 31, 1994 and December 25,
1993.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
AWARDS
ANNUAL COMPENSATION ----------------------
------------------------------------------------ RESTRICTED
OTHER ANNUAL STOCK ALL OTHER
NAME AND PRINCIPAL COMPENSATION AWARDS OPTIONS COMPENSATION
POSITION YEAR SALARY($) BONUS($) ($)(1) ($)(2) (#) ($)
- ------------------------ ---- --------- -------- ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert E. Stauth 1995 588,462 -- 288 -- -- --
Chairman and Chief 1994 501,328 311,531 288 598,500 90,000 --
Executive Officer 1993 325,186 -- 174 -- -- --
Gerald G. Austin 1995 325,200 -- 570 -- -- 42,000(3)
Executive Vice President 1994 315,583 154,282 570 199,500 30,000 --
Marketing 1993 257,432 -- 570 -- -- --
E. Stephen Davis 1995 283,846 -- 288 -- -- --
Executive Vice President 1994 242,135 118,013 288 199,500 30,000 --
Distribution 1993 212,751 -- 288 -- -- --
Harry L. Winn, Jr.4 1995 291,846 -- 120 -- -- --
Executive Vice President 1994 177,692 85,206 -- 198,500 30,000 --
and Chief Financial 1993 -- -- -- -- -- --
Officer
Thomas L. Zaricki 1995 243,743 91,098 288 -- -- --
Senior Vice President 1994 223,192 89,565 39,350 99,750 15,000 --
Retail Operations 1993 29,508 -- 19,278 -- -- --
</TABLE>
- ---------------
(1) The company provides term life insurance to all associates generally, and
there is no imputed income to the associate with respect to the first
$50,000 of coverage except for highly compensated associates. Accordingly,
the company is required to impute income to the named individuals with
respect to the first $50,000 of coverage and reimburses them for its tax
effect. The amounts shown in this column reflect such tax reimbursement
amounts. The amounts shown opposite Mr. Zaricki's name in 1993 and 1994
reflect the advancement of certain relocation expenses.
(2) The restricted stock awards reported in this column were made pursuant to
the company's 1990 Stock Incentive Plan. The listed awards were made on
February 16, 1994 and the market price per share on the date of grant was
$24.9375. These restricted shares vest in twenty percent (20%) increments
over a ten-year period (the "Performance Cycle") in the event the price of
the company's common stock reaches certain specified target prices. Unearned
restricted stock will be forfeited at the end of the Performance Cycle. If
and to the extent paid on the company's common stock generally, dividends
declared and paid by the company on the shares of restricted stock are
accrued and not paid until the vesting requirements are met. As of the last
day of fiscal 1995, there were held in escrow for Mr. Stauth 24,000
restricted shares with a value of $495,000, Mr. Austin 8,000 restricted
shares with a value of $165,000, Mr. Davis 8,000 restricted shares with a
value of $165,000, Mr. Winn 8,000 restricted shares with a value of $165,000
and Mr. Zaricki 4,000 restricted shares with a value of $82,500. Mr. Austin
forfeited his 8,000 restricted shares upon his retirement on December 31,
1995. See "Termination of Employment and Change in Control Agreements --
Other Arrangements."
12
<PAGE> 14
(3) Mr. Austin retired effective as of December 31, 1995. This amount represents
payments under a consulting agreement. See "Termination of Employment and
Change in Control Arrangements -- Other Arrangements."
(4) Mr. Winn became an executive officer of the Company in May 1994.
REPORT OF THE COMPENSATION COMMITTEE
EXECUTIVE OFFICERS
The policy of the compensation and organization committee (the
"Committee"), implemented through the compensation programs described below, is
to motivate executive officers and other associates to enhance the company's
financial performance by focusing attention on specific business objectives
emphasizing teamwork among associates and to reward such executive officers and
other associates based on corporate and individual performance.
Compensation for the company's executive officers is generally comprised of
base salary, bonus and awards of stock options or restricted stock. Decisions
with respect to compensation, except for that of the chief executive officer
(the "CEO"), are made by the Committee, composed of four nonmanagement
directors, upon the recommendation of the CEO. The Committee separately
determines the CEO's compensation. The Committee's decisions are submitted to
the full board of directors for its information and review only. Earnings of the
company and the market value of its stock are considered subjectively by the
members of the Committee in setting the CEO's and other executive officers' base
salaries. Also, some bonus awards are based in part on earnings performance. The
CEO, who is also a director, does not participate in the board's review of the
Committee's decisions regarding his compensation. Decisions about awards under
certain of the company's stock-based compensation plans are made solely by the
Committee in order for awards to comply with Securities and Exchange Commission
Rule 16b-3.
Salary. In determining salary for fiscal 1995, the Committee relied on the
company's salary administration program, the objectives of which are to attract,
retain and motivate productive executive officers and other management
associates. For each job classification, the program requires a written job
description, an evaluation of the job with assigned points based on the nature
of the job, its functions and the level of the position, and an assigned salary
range based on the total point value. Annual salaries are adjusted based on
individual performance. In addition, the Committee reviews the earnings of the
company and the market value of the company's common stock for the previous
fiscal year-end, and, based on these factors, the Committee makes a subjective
determination of the nature and extent of salary adjustments. The Committee
generally sets salaries in the high end of the assigned salary range. In order
to measure competitiveness, the Committee also considers salary surveys
comparing company jobs with similar jobs held by employees of companies included
in the company's peer group. See "Company Performance." The company believes its
executive salaries are generally higher than executive salaries of companies in
its peer group with the exception of SUPERVALU, Inc.
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<PAGE> 15
Bonuses. Bonus awards are determined, within the Committee's discretion,
with reference to the Economic Value Added Incentive Bonus Plan for Fleming
Companies and Its Subsidiaries (the "EVA Plan"), which was approved by the
shareholders at the 1995 annual meeting. The EVA Plan replaced the Fleming
Companies, Inc. Incentive Compensation Program (the "FICP") for the 25 executive
officers and other corporate officers currently participating in the EVA Plan.
The EVA plan is structured around an economic value added ("EVA") concept,
a financial measurement system or tool, expressed as a formula. EVA is the net
operating profit of the company or unit of the company after taxes ("NOPAT"),
less a charge for the capital employed by the company or unit in order to
produce such profit. NOPAT is net income as determined under generally accepted
accounting principles with adjustments. The capital charge is determined by
measuring all capital employed to produce the NOPAT and multiplying such capital
employed by a weighted average cost of capital rate or required return.
The EVA Plan is composed of the following components: (i) the Target Bonus,
to be established by the Committee for each participant at the beginning of each
Plan Period; (ii) an Actual EVA which is the economic value added performance
for a given year of the company or an Operating Unit to which the participant is
assigned and is based on actual performance, (iii) a Target EVA, which is
automatically set each year based on the average of the prior year's Actual EVA
and the prior year's Target EVA plus a fixed dollar amount known as the Expected
Improvement; and (iv) a Performance Multiple Factor which is also expressed as a
fixed dollar amount and is used to determine the extent to which a difference
between the Actual EVA and the Target EVA impacts the actual bonus awarded the
participants. The Performance Multiple Factor is fixed each year and reflects
the historical volatility of the company's business. The plan also utilizes a
Bonus Multiple, which is made up of the sum of the Performance Multiple (the
difference between the Actual EVA and the Target EVA divided by the Performance
Multiple Factor) and the Target Multiple (fixed at 1). The Initial Declared
Bonus is calculated by multiplying the Target Bonus by the Bonus Multiple. In
the case of some participants, such amount is divided into two parts: the Direct
Portion and the Individual Portion. The Individual Portion is multiplied by an
Individual Performance Factor ("IPF") ranging from 0-150%. The IPF for each
participant depends on the achievement by that participant of his stated
personal key business objectives.
For the executive officers and other corporate officers, the Final Declared
Bonus is deposited into a participant's Bonus Bank which is then added to the
Beginning Bonus Bank Balance to calculate the Available Bonus Bank Balance.
Bonus payments are then made to the executive officers from the Available Bonus
Bank Balance. During years one through four a participant is included in the EVA
Plan, the payout schedule will be: 67%, 50%, 40% and 33%, respectively, and will
remain 33% after year four. A Final Declared Bonus may be negative when Target
EVA is not attained. If negative declarations continue, a participant's Bonus
Bank will have a negative balance. This does not result in a cash cost to the
participant, but the participant will not be entitled to a bonus until the Bonus
Bank again has a positive balance.
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<PAGE> 16
Upon retirement, death or termination without Cause, the Bonus Bank Balance will
be paid to the participant or his estate, as applicable.
Pursuant to the terms of the EVA Plan, the Committee can reduce or
eliminate the payment of any bonus under the EVA Plan. Although a portion of the
Target Bonus for each of the executive officers was met for fiscal 1995, because
of overall poor results for the year and a reduced stock price, the Committee
determined that no bonuses would be paid to any executive officers except for
Mr. Zaricki and one other executive officer due to the outstanding performance
of the respective segments for which they are responsible. Two other executive
officers received special cash awards in recognition of their individual
achievements during the last fiscal year.
When the EVA Plan was originally adopted, it was the intention of the
Committee to use it to determine future bonuses for the executive officers and
other corporate officers and extend it to cover approximately 1225 other
associates. The Committee is still evaluating the EVA Plan and may retain the
FICP in order to determine future bonuses for the other associates. For fiscal
1996, the Committee has determined that regardless of results under the EVA
Plan, bonuses for the executive officers and other corporate officers will not
be paid unless the company has earnings per share of $1.20 or more.
Restricted Stock and Stock Options. As described in footnote two to the
Summary Compensation Table above, pursuant to the 1990 Stock Incentive Plan, the
Committee can award restricted stock to executive officers and other key
management associates which vests upon the attainment of targeted profit and/or
other performance criteria. The Committee believes that restricted stock awards
build stock ownership and provide a long-term focus since the stock is
restricted from being sold, transferred, or assigned until vested, and is
forfeitable. At February 1, 1996, there were 80,712 shares available for awards
under the 1990 Stock Incentive Plan. No awards of restricted stock were made to
any of the named executive officers in fiscal 1995.
The Committee can also award stock options to key associates pursuant to
the 1990 Stock Option Plan. The Committee believes that the granting of stock
options helps to retain and motivate key associates. Pursuant to the company's
1990 Stock Option Plan, at February 1, 1996 there were 208,400 options available
for grant to executive officers and other key management associates. No options
were granted to any named executive officers during fiscal 1995.
CHIEF EXECUTIVE OFFICER
The salary for the CEO was determined by the Committee in accordance with
the policies set forth above for all executive officers. In order to reflect his
increased responsibilities with respect to the company's reengineering efforts,
the CEO received a 14 percent merit increase in March 1995. However, 1995
results suffered due to unexpected high costs of re-engineering and the
completion of the consolidation of the Scrivner operations into the company,
leading to a depressed price of the company's stock. As a consequence, and
consistent with the CEO's
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<PAGE> 17
recommendation, the CEO did not receive a bonus for fiscal 1995 despite the fact
that calculations under the EVA Plan would have qualified him for a bonus.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Although no executive officer's salary for fiscal 1995 exceeded the
limitations on deductibility under Section 162(m) ("Section 162(m)") of the
Internal Revenue Code of 1986, as amended ("the Code"), the Committee has
adopted and the board of directors has ratified the following policy regarding
Section 162(m):
Section 162(m) limits the deductibility of certain compensation paid by the
company to certain of its executive officers. It is possible that future
circumstances may warrant compensation payments which will not qualify as a
tax deductible expense. It shall be the policy of the Committee to
compensate executive officers based on performance, and the Committee
recognizes that flexibility with respect to the payment of compensation
must be insured in order to maintain this policy. Accordingly, although the
Committee will to the extent possible attempt to qualify all compensation
payments for deductibility under Section 162(m), circumstances may arise
which require it to authorize compensation which is not deductible under
Section 162(m).
James G. Harlow, Jr., Chairman John A. McMillan
Howard H. Leach Guy A. Osborn
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<PAGE> 18
COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for the company, the S&P 500 composite index and an index of peer
companies selected by the company with the investment weighted based on market
capitalization at the beginning of each year.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG FLEMING, S&P 500 INDEX, & PEER INDEX
<TABLE>
<CAPTION>
FLEMING
MEASUREMENT PERIOD COMPANIES,
(FISCAL YEAR COVERED) INC. S&P 500 PEER INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 101 130 111
1992 96 140 120
1993 78 155 133
1994 77 157 107
1995 72 215 134
</TABLE>
The total cumulative return on investment (change in the year-end stock
price plus reinvested dividends) for each year for the company, the peer group
and the S&P 500 composite is based on the stock price or composite index at the
end of calendar 1990.
Companies in the peer group are as follows: Fleming Companies, Inc.,
SUPERVALU, Inc., Nash Finch Co., Super Food Services, Inc., Richfood Holdings,
Inc., and Super Rite Corp. Due to unavailable data, performance for Super Rite
Corp. in the peer index has been excluded for 1991. Super Rite Corp. was
acquired by Richfood Holdings, Inc. in November 1995.
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<PAGE> 19
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The company's Compensation and Organization Committee consists of James G.
Harlow, Jr., chairman, Howard H. Leach, John A. McMillan and Guy A. Osborn. No
executive officer of the company has any relationship reportable under the
Compensation Committee Interlock regulations.
OPTION EXERCISES
The following table sets forth information regarding the value as of the
fiscal year-end of any unexercised options. No stock options were exercised by
any of the named executive officers during the fiscal year ended December 30,
1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)1
------------- -------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- --------------------------------- --------------- ------------------ ------------- -------------
<S> <C> <C> <C> <C>
Robert E. Stauth................. -- -- 33,000/69,000 --
Gerald G. Austin................. -- -- 30,000/23,000 --
E. Stephen Davis................. -- -- 30,000/23,000 --
Harry L. Winn, Jr................ -- -- 4,500/25,500 --
Thomas L. Zaricki................ -- -- 3,500/11,500 --
</TABLE>
- ---------------
1 None of the options held at the end of the fiscal year was in-the-money. The
market price of the company's common stock at 1995 fiscal year-end was
$20.6250 per share.
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<PAGE> 20
PENSION PLAN
The following table illustrates estimated annual benefits payable under the
company's Pension Plan to the named executive officers upon retirement, assuming
retirement at age 65, including amounts attributable to the company's SRP which
provides benefits that would otherwise be denied participants due to certain
limitations on qualified benefit plans in the Code:
Pension Plan Table
Years of Service
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
REMUNERATION 10 15 20 25 30 35 40
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$250,000......... $ 125,000 $ 137,500 $ 150,000 $ 162,500 $ 175,000 $ 187,500 $ 200,000
300,000......... 150,000 165,000 180,000 195,000 210,000 225,000 240,000
350,000......... 175,000 192,500 210,000 227,500 245,000 262,500 280,000
400,000......... 200,000 220,000 240,000 260,000 280,000 300,000 320,000
450,000......... 225,000 247,500 270,000 292,500 315,000 337,500 360,000
500,000......... 250,000 275,000 300,000 325,000 350,000 375,000 400,000
550,000......... 275,000 302,500 330,000 357,500 385,000 412,500 440,000
600,000......... 300,000 330,000 360,000 390,000 420,000 450,000 480,000
650,000......... 325,000 357,500 390,000 422,500 455,000 487,500 520,000
700,000......... 350,000 385,000 420,000 455,000 490,000 525,000 560,000
750,000......... 375,000 412,500 450,000 487,500 525,000 562,500 600,000
800,000......... 400,000 440,000 480,000 520,000 560,000 600,000 640,000
850,000......... 425,000 467,500 510,000 552,500 595,000 637,500 680,000
</TABLE>
The estimated number of years of credited service for each of the named
executive officers is as follows: Mr. Stauth, 19; Mr. Austin, 36; Mr. Davis, 35;
Mr. Winn, 2; and Mr. Zaricki, 2.
Benefit amounts payable under the Pension Plan are (i) payable on a
straight life basis computed as a percentage of final average compensation
(consisting of salaries, wages, commissions and bonuses) for the five calendar
plan years during the last ten years of the associate's career for which such
average is the highest, (ii) subject to offset for Social Security and (iii)
limited by the Employee Retirement Income Security Act of 1974, as amended, and
by the Code.
The SRP is a defined benefit supplementary plan which provides retirement
benefits for each of the named executive officers with the exception of Messrs.
Winn and Zaricki who are not participants in the plan. Benefit amounts payable
under the SRP are intended to provide a retirement benefit which is offset by
amounts payable from other retirement plans, including the Pension Plan and
Social Security payments. The SRP benefit is based upon a percentage of the
participant's total highest annual compensation paid during the last three years
of employment. The percentage ranges from 50% to 80%. Retirement payments
commence upon retirement after age 65 (or with the consent of the company, after
age 55) or upon termination
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<PAGE> 21
of an eligible associate within three years after a change of control of the
company. See "Termination of Employment and Change in Control
Arrangements -- SRP and Trust Agreement."
TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
Employment Agreements. On March 2, 1995, the company entered into
employment agreements with all of the named executives. The provisions of the
employment agreements are effective upon a "change of control" of the company
(as defined in the agreements) and for a period of three years thereafter. Upon
a change of control, the executive is to receive an annual base salary equal to
the greater of (i) his base salary at the time of the change of control and (ii)
the highest average annual base salary paid to the executive during any of the
three out of the five fiscal years immediately preceding the change of control
which yield the highest annual base salary. In addition, the executive will
receive an annual bonus equal to the highest annual bonus paid to the executive
during any of the five fiscal years immediately preceding the change of control.
The executive will also be entitled to all of the benefits and to participate in
all of the plans in effect immediately preceding the change of control that are
available to other key management associates.
Pursuant to the terms of the employment agreements, in the event following
a change of control, or in anticipation of a change of control, the executive is
terminated for other than "cause" (as such term is defined in the agreements),
death or disability or he terminates his employment for "good reason" (as such
term is defined in the agreements), then the executive is to receive a lump sum
cash payment comprised of the following amounts: (i) his base salary through the
date of termination at the annual rate in effect on the date of termination or,
if higher, at the highest annual rate in effect at any time during the 36 month
period preceding the change of control date through the date of termination (the
"Highest Base Salary"); (ii) the prorated portion of his prior year's annual
bonus (the "Recent Bonus"); (iii) the product obtained by multiplying 2.99 times
the sum of the Highest Base Salary and the Recent Bonus; and (iv) any amounts
previously deferred by the executive (plus any accrued interest thereon) and any
accrued vacation pay. In addition, for the remainder of the employment period or
such longer period as any plan or policy may provide, the executive shall also
be entitled to participate in all plans and continue all benefits at least equal
to those he would have received had he not been terminated. Any such payments to
be received by the executive shall be "grossed up" to cover any excise tax,
interest or penalties imposed under the Code. The employment agreements also
provide for indemnification from the company to the executive and for officers'
and directors' insurance coverage for the executive for a period of five years
following the termination date. For a period of 30 days following the first year
after a change of control, the executive can terminate his employment for any
reason and receive all the benefits of the agreement as if he had terminated for
good reason. Under the employment agreements, assuming a change of control on
December 30, 1995, and termination of employment of the named executive for
other than cause, death or disability or if the executive should terminate for
good reason, the company would be required to pay the following amounts: Mr.
Stauth,
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<PAGE> 22
$3,154,300; Mr. Austin, $1,719,134; Mr. Davis, $1,487,324; Mr. Winn, $1,343,782;
and Mr. Zaricki, $1,206,624. Prior to entering into the employment agreements,
the foregoing officers, except for Mr. Winn, had been parties to severance
agreements with the company. The employment agreements replaced the severance
agreements.
SRP and Trust Agreement. The SRP provides for retirement benefits to be
paid to each of the named executive officers, except for Messrs. Winn and
Zaricki, upon retirement or in the event his employment is terminated for other
than "cause" (as such term is defined in the SRP), death or disability or he
terminates his employment for "good reason" (as such term is defined in the SRP)
within three years after a change in control of the company or in anticipation
of a change of control of the company. Assuming a change of control on December
30, 1995 and the termination of employment of the following persons within three
years after that, the company would be required under the SRP to pay the
following amounts annually for life to the following named executives: Mr.
Stauth, $445,489; Mr. Austin, $181,115; and Mr. Davis, $143,399.
The company has entered into a Supplemental Income Trust (the "Trust"). The
Trust agreement provides that within 60 days following a change of control of
the company, the company shall make an irrevocable contribution to the Trust of
an amount sufficient to satisfy the company's obligations to the participants
under the SRP assuming such participants had been terminated other than for
"cause" (as defined in the SRP), death or disability or the participants had
terminated their employment for "good reason" (as defined in the SRP). In
addition, the board of directors has empowered the Committee in its sole
discretion to fund the Trust as it deems appropriate from time to time in order
to satisfy the company's obligations to associates with respect to the SRP and
the employment agreements, as well as severance agreements and employment
agreements available to certain associates who are not named executive officers,
including obligations arising following a change in control of the company. The
Trust assets relating to company contributions are always subject to the claims
of general creditors of the company. No associate with any right to or interest
in any benefit or future payments under the Trust will have any right to or
security interest in any specific asset of the Trust or any right to assign any
benefits or rights which he or she may expect to receive from the Trust.
Other Arrangements. Pursuant to the provisions of the company's 1990 Stock
Incentive Plan, in the event of a change of control of the company, the
Committee, in its sole discretion, may accelerate the vesting and payment of any
award or may determine that a payment instead of an award may be made. Under
this plan, a participant is entitled to receive a cash payment equal to his
annual base salary if the event occurs in the first year of the performance
cycle, two-thirds of his annual base salary if the event occurs in the second
year of the performance cycle and one-third of his annual base salary if the
event occurs in the third year of the performance cycle. In addition, the
participant shall receive a "gross up" payment to cover any applicable excise
tax, interest or penalties imposed under the Code. Pursuant to the provisions of
the company's 1990 Stock Option Plan, in the event of a change of control of the
company, all options outstanding under the plan will become automatically fully
vested and immediately
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<PAGE> 23
exercisable with such acceleration to occur without requirement of any further
act by the company or any plan participant. All of the named executive officers
participate in the above-described plans.
Gerald G. Austin, who retired from his position as Executive Vice
President -- Operations effective as of December 31, 1995, has entered into an
agreement with the company pursuant to which he will serve the company as a
consultant until December 28, 1996. He will receive a consulting fee of $125,000
and be reimbursed for all reasonable business and travel expenses. Pursuant to
the terms of the agreement, he also received $42,000 representing a portion of
the amount of Social Security and retiree medical benefits he would not be
entitled to receive prior to retirement age 62. At his retirement, he commenced
receipt of his retirement benefits under the Pension Plan and the SRP. The
company has also agreed to pay $325,000 upon his death to a beneficiary
designated by Mr. Austin.
Glenn E. Mealman, Executive Vice President -- National Accounts, has
entered into a two year agreement with the company pursuant to which he has
agreed to act as a consultant following his retirement on March 1, 1996. He will
receive $100,000 for consulting services rendered during the first year
following his retirement and $80,000 for such services rendered during the
second year. He will also be reimbursed for all reasonable business and travel
expenses. Pursuant to the terms of the agreement, in addition to his retirement
benefits under the Pension Plan and the SRP, he received $33,750 representing a
portion of the amount of Social Security and retiree medical benefits he will
not be entitled to receive prior to retirement age 65. The company has also
agreed to pay $240,000 upon his death to a beneficiary designated by Mr.
Mealman.
William J. Dowd, who was elected president of the company in July 1995, is
not currently a participant in the SRP; however, the company has agreed to pay
him $162,000 per year as a supplemental retirement benefit if he retires at age
65. If he retires prior to age 65 but at or after age 59, he is entitled to a
reduced supplemental retirement benefit. Mr. Dowd is currently 53 years of age.
In addition, the company has agreed to pay him a severance payment equal to one
year's salary in the event he is terminated for any reason other than cause.
PDM, Inc., an Omaha, Nebraska based real estate development firm in which
Jack W. Baker serves as president and chief executive officer and is a 50
percent owner, leases 10 supermarket sites and a storage facility in Omaha,
Nebraska to the company. The company paid PDM approximately $2.9 million for
rent, taxes, and common area maintenance charges in respect to the 10
supermarket sites and the storage facility in 1995. Management of the company
believes that the lease payments and other sum paid to PDM for the lease of the
10 Baker's supermarket sites and storage facility is competitive with other
grocery stores and storage space in the Omaha market. The company expects to pay
a similar amount in 1996.
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<PAGE> 24
FLEMING COMPANIES, INC.
1996 STOCK INCENTIVE PLAN
The board of directors has adopted, subject to shareholder approval, the
Fleming Companies, Inc. 1996 Stock Incentive Plan (the "Stock Incentive Plan"),
which will have the effect of authorizing the company through the Committee to
grant non-qualified stock options, incentive stock options and restricted stock
awards to key associates. The board of directors has reserved 1,200,000 shares
of common stock of the company for grant to participants designated by the
Committee under the Stock Incentive Plan. The primary reason for adopting the
Stock Incentive Plan is due to the decreased amount of shares available under
the 1990 Stock Incentive Plan and 1990 Stock Option Plan. See "Report of
Compensation Committee -- Executive Officers -- Restricted Stock and Stock
Options." A description of the Stock Incentive Plan appears below. A copy of the
Stock Incentive Plan is attached to this proxy statement as Exhibit "A" and the
description contained herein is qualified in its entirety by reference to the
complete text of the Stock Incentive Plan. Capitalized terms used below not
otherwise defined herein shall have the meaning ascribed to them in the Stock
Incentive Plan. The company's board of directors recommends a vote FOR this
proposal.
BACKGROUND
The purpose of the Stock Incentive Plan is to create incentives that are
designed to motivate key associates of the company to put forth maximum efforts
toward the success and growth of the company and to enable the company to
attract and retain experienced individuals who by their position, ability and
diligence are able to make important contributions to the company's success.
Toward these objectives, the Stock Incentive Plan provides for the granting of
options and restricted stock awards. The Stock Incentive Plan was designed to
enable the company to adapt the long-term incentive compensation of its key
associates to changing business conditions.
ADMINISTRATION
The Stock Incentive Plan provides for administration by the Committee.
Among the powers granted to the Committee are the powers to interpret the Stock
Incentive Plan, establish rules and regulations for its operation, select
associates of the company and its subsidiaries to receive awards, and determine
the timing, form, amount and other terms and conditions pertaining to any award.
ELIGIBILITY FOR PARTICIPATION
Any key associate of the company or any of its subsidiaries is eligible to
participate in the Stock Incentive Plan. The selection of participants from
among key associates is within the discretion of the Committee. Approximately
1,200 associates are eligible to participate in the Stock Incentive Plan. The
benefits or amounts to be received by or allocated to the participants in the
Stock Incentive Plan will be determined in the sole discretion of the Committee.
23
<PAGE> 25
TYPES OF AWARDS
The Stock Incentive Plan provides for the granting of any or all of the
following types of awards: (i) stock options, including non-qualified stock
options and stock options intended to qualify as "incentive stock options" under
Section 422 of the Code; and (ii) restricted stock. The awards may be granted
singly or in combination as determined by the Committee.
AMENDMENT OF THE STOCK INCENTIVE PLAN
The company, through the board, may amend the Stock Incentive Plan at any
time, but may not, without stockholder approval, adopt any amendment that would
materially increase the benefits accruing to participants, increase the maximum
number of shares that may be issued under the Stock Incentive Plan (except for
certain antidilution adjustments described below), or materially modify the
Stock Incentive Plan's eligibility requirements. In addition, the Stock
Incentive Plan provides for the automatic adjustment of the number and kind of
shares available thereunder and the number and kind of shares subject to
outstanding awards in the event the common stock is changed into or exchanged
for a different number or kind of shares of stock or other securities of the
company or another corporation, or if the number of shares of common stock is
increased through a stock dividend. The Stock Incentive Plan also provides that
an adjustment in the number of shares available thereunder and in the number of
shares subject to any outstanding awards may be made if the Committee determines
that any other change in the number or kind of shares of common stock equitably
requires such an adjustment.
OTHER COMPONENTS OF THE STOCK INCENTIVE PLAN
The Stock Incentive Plan authorizes the Committee to grant awards during
the period beginning February 27, 1996 and ending February 26, 2006. 1,200,000
shares of common stock have been reserved for issuance subject to awards under
the Stock Incentive Plan. Shares of common stock subject to awards that
terminate by expiration, forfeiture, cancellation or otherwise without the
issuance of shares, except for shares subject to Restricted Stock Awards which
have benefits of common stock ownership (including, but not limited to,
dividends), will again be available for issuance subject to awards under the
Stock Incentive Plan.
STOCK OPTIONS
Under the Stock Incentive Plan, the Committee may grant awards in the form
of options to purchase shares of common stock. The Committee will, with regard
to each option, determine the terms and conditions of each option, the number of
shares subject to the option and the manner and time of the option's exercise.
The exercise price of an option may not be less than the fair market value of
the common stock on the date of grant. The exercise price of an option may be
paid by a participant in cash, shares of common stock or a combination thereof.
Any option granted in the form of an incentive stock option will satisfy the
applicable requirements of Section 422 of the Code. Subject to the adjustment
provisions of the Stock
24
<PAGE> 26
Incentive Plan, the aggregate number of shares of common stock made subject to
the award of options to any participant in any fiscal year of the company may
not exceed 100,000.
RESTRICTED STOCK AWARDS
The Stock Incentive Plan authorizes the Committee to grant awards in the
form of restricted stock. Restricted stock awards will be subject to such terms,
conditions, restrictions and/or limitations as the Committee deems appropriate
including, but not limited to, restrictions on transferability and continued
employment. Subject to the adjustment provisions of the Stock Incentive Plan, in
no event shall more than 360,000 shares of common stock be awarded to
participants as restricted stock awards.
OTHER TERMS OF AWARDS
The Stock Incentive Plan provides for the forfeiture of awards under
certain circumstances as determined by the Committee. The Stock Incentive Plan
authorizes the Committee to promulgate administrative guidelines for the purpose
of determining what treatment will be afforded to a participant under the Stock
Incentive Plan in the event of the participant's death, disability, retirement
or termination for an approved reason.
Upon granting of any award, the Committee will, by way of an award
agreement, establish such other terms, conditions, restrictions and/or
limitations governing the granting of such awards as are not inconsistent with
the Stock Incentive Plan.
CHANGE OF CONTROL EVENT
Upon the occurrence of a Change of Control Event, the Committee can within
its discretion accelerate the vesting of any unvested portion of any outstanding
awards.
FEDERAL TAX TREATMENT
Under current federal tax law, the following are the federal tax
consequences generally arising with respect to awards under the Stock Incentive
Plan. A participant who is granted an incentive stock option does not realize
any taxable income at the time of the grant or at the time of exercise.
Similarly, the company is not entitled to any deduction at the time of grant or
at the time of exercise. If the participant makes no disposition of the shares
acquired pursuant to an incentive stock option before the later of two years
from the date of grant of such option and one year of the transfer of such
shares to the participant, any gain or loss realized on a subsequent disposition
of the shares will be treated as a long-term capital gain or loss. Under such
circumstances, the company will not be entitled to any deduction for federal
income tax purposes.
The participant who is granted a non-qualified stock option does not have
taxable income at the time of grant, but does have taxable income at the time of
exercise equal to the
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<PAGE> 27
difference between the exercise price of the shares and the market value of the
shares on the date of exercise. The company is entitled to a corresponding
deduction for the same amounts.
A participant who has been granted a restricted stock award will not
realize taxable income at the time of the grant, and the company will not be
entitled to a deduction at the time of the grant, assuming that the restrictions
constitute a substantial risk of forfeiture for federal income tax purposes.
When such restrictions lapse, the participant will receive taxable income in an
amount equal to the excess of the fair market value of the shares at such time
over the amount, if any, paid for such shares, and the company will be entitled
to a corresponding deduction.
NEW PLAN BENEFITS
Since no decisions have been made with respect to the grants of any awards
under the Stock Incentive Plan, it is not possible to determine the benefits or
dollar amounts to be received by either the named executive officers, the
executive group or the non-executive officer group. Since the non-executive
director group is not eligible to participate in the plan, they would not
receive any benefits thereunder. Had the Stock Incentive Plan been in place
during the last fiscal year, no member of the foregoing group would have
received any awards since no such awards were made during fiscal 1995 except to
William J. Dowd, who became president of the company in July 1995 and received
grants of options under the company's 1990 Stock Option Plan to purchase 60,000
shares of common stock (40,000 of which are tied to the achievement by the
company of targeted stock prices) at an exercise price of $26.4375 per share. He
also received an award of 16,000 shares of restricted stock pursuant to the 1990
Stock Incentive Plan with a value on the date of the award of $423,000.
26
<PAGE> 28
SHAREHOLDER PROPOSAL
A shareholder (name and address and common stock holdings of proponent will
be supplied upon oral or written request to the secretary of the company) has
submitted the following proposal for action at this annual meeting.
SHAREHOLDER PROPOSAL
RESOLVED: That the shareholders of Fleming Companies, Inc. urge the board of
directors redeem any shareholder rights plan unless the issue is approved by the
affirmative vote of a majority of the outstanding shares at a meeting of the
shareholders held as soon as possible.
SUPPORTING STATEMENT
Fleming adopted a "Rights Agreement" on July 7, 1986 that provided
formidable protection from acquirors who would seek to purchase the company
without board approval. This "poison pill" device was then strengthened on
August 22, 1989 with the addition of several amendments, including a so-called
"dead-man's trigger." Such a "trigger" means the "pill" goes into effect without
any board action, a rare and aggressive defensive tactic.
Generally, we believe "pills" depress a company's stock price and serve to
insulate management. In the case of the Fleming pill, especially as embellished
with the "dead-man's trigger," we believe the problem of management insulation
is prominent.
Fleming's stock price is well below a peak it reached in 1986. Its peak in
1995 trails the peak of 1994, which trailed the peak of 1993, which trailed
1992. Fleming trails the peers it selected for comparison in its proxy
statement. And while Fleming stock moves either down or sideways, the market as
a whole sets records.
Underlying these disappointing investment figures may be lack of trust that
management has devised a long-term plan to improve its operations. Instead,
management seems to move from one expensive initiative to another.
- The acquisition of Scrivner for $1.085 billion in cash led to credit
downgrades by Standard & Poors and Moody's.
- As earnings are trimmed in response to the costs associated with the
Scrivner purchase and the implementation of Vision 2000, concerns are
raised over the company's ability to maintain its present quarterly
dividend.
Now, senior management faces litigation from the Premium Sales Corp.
scandal. According to allegations, Fleming officials accepted bribes of $600,000
to falsify accounts permitting Premium to inflate its own revenue and defraud
stock investors.
The "pill" joins other management protection devices, including generous
golden parachutes, and consistent double-digit compensation increases, despite
disappointing results.
27
<PAGE> 29
Some companies have heeded shareholder concern and either redeemed their
current pills (Philip Morris), promised to replace pills only with a shareholder
vote (Consolidated Freightways), or at least engage in a dialogue with
shareholders regarding pills (Bank of America). Fleming, however, stated in an
October 25, 1995 letter: "The board believes that any action with respect to a
rights plan is the sole responsibility of the board; therefore, in the event it
should adopt a new rights plan, the board has no plans to submit it to a
shareholder vote." (We also note Fleming failed to respond to a Council of
Institutional Investors survey regarding "pills.")
In light of what we believe is Fleming's disappointing performance and
insulation from shareholder concern, we urge you to vote YES on this proposal.
COMPANY'S STATEMENT IN OPPOSITION TO PROPOSAL
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THE PROPOSAL FOR
THE FOLLOWING REASONS:
The Rights Agreement was adopted by the board in 1986 to protect the
company's shareholders against certain abusive takeover practices prevalent in
the market place and to ensure that all shareholders are treated fairly and
equally. The board believes the Rights Agreement does not make a company
takeover-proof, but encourages prospective acquirors to negotiate with the board
rather than to attempt a hostile takeover. For these reasons, the board at its
meeting on February 27, 1996, adopted a new Rights Agreement to be effective as
of the close of business on July 6, 1996 and to replace the current Rights
Agreement when it expires on July 6, 1996.
In response to the several statements made by the shareholder in its
supporting statement, the board of directors believe management compensation to
be well within the parameters of companies in its peer group, that the Scrivner
acquisition was vital and a major step toward achieving the company's objectives
of becoming a world-class marketing and distribution company and that the
company remains focused on completing its re-engineering effort as reflected in
Vision 2000.
The debate over rights agreements is divided between those who believe that
they serve to protect management and depress stock prices and those who believe
they are an effective negotiating tool for a responsible board of directors. The
board is of the latter view and, recently, many institutional investors have
come to share this view.
A 1994 study by Robert Comment and G. William Schwert, economists from the
University of Rochester, found that rights plan adoptions had "no price effect,"
and they found no evidence that having a rights plan deterred a company from
receiving a takeover offer. The board believes that rights plans serve their
principal objectives of (i) increasing a company's bargaining power resulting in
higher prices for shareholders and (ii) protecting against abusive takeover
practices. The board believes that the Rights Agreement strengthens its ability
to fulfill its fiduciary duties to obtain the best results for the shareholders
in the event of a hostile
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<PAGE> 30
takeover offer. It is for these reasons, the board urges the shareholders to
vote AGAINST the proposal.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the company's
directors and executive officers, and persons who own more than ten percent of
common stock, to file with the Securities and Exchange Commission and the New
York Stock Exchange initial reports of beneficial ownership and reports of
changes in beneficial ownership of common stock of the company. Such persons are
also required by applicable regulations to furnish the company with copies of
all Section 16(a) forms they file. To the company's knowledge, based solely on a
review of the copies of such reports furnished to the company and written
representations that no other reports were required to be filed, during 1995 all
Section 16(a) filing requirements were complied with.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon the recommendation of the audit and finance committee, the board of
directors has reappointed Deloitte & Touche LLP as independent auditors for 1996
and is requesting ratification by the shareholders. Deloitte & Touche LLP has
audited the consolidated financial statements since 1967.
Services performed by Deloitte & Touche LLP for the 1995 fiscal year
included, among others, the audit of annual financial statements and
consultations concerning various tax and accounting matters. Representatives of
Deloitte & Touche LLP will attend the meeting, have the opportunity to make a
statement if they so desire, and be available to answer questions.
Ratification of the appointment of independent auditors requires the
affirmative vote by the holders of a majority of the stock having voting power
present at the meeting. The board of directors unanimously recommends a vote FOR
the ratification of the appointment of Deloitte & Touche LLP.
SHAREHOLDER PROPOSALS
Any proposals of shareholders intended to be presented at the 1997 annual
meeting must be received not later than November 16, 1996, to be considered for
inclusion in the proxy statement and form of proxy relating to the meeting.
29
<PAGE> 31
OTHER BUSINESS
The board of directors knows of no business which will be presented for
action at the meeting other than that described in the notice of annual meeting.
If other matters come before the meeting, the proxies will be voted according to
the judgment of the persons named on the proxy card.
It is important that the proxies be returned promptly. Therefore,
shareholders who do not expect to attend the annual meeting in person are
requested to complete and return the proxy card as soon as possible.
By Order of the Board of Directors
DAVID R. ALMOND
Senior Vice President
General Counsel and Secretary
30
<PAGE> 32
EXHIBIT A
FLEMING COMPANIES, INC.
1996 STOCK INCENTIVE PLAN
<PAGE> 33
FLEMING COMPANIES, INC.
1996 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
ARTICLE I PURPOSE................................................... A-1
SECTION 1.1 Purpose..................................... A-1
SECTION 1.2 Establishment............................... A-1
SECTION 1.3 Shares Subject to the Plan.................. A-1
ARTICLE II DEFINITIONS............................................... A-1
ARTICLE III ADMINISTRATION............................................ A-5
SECTION 3.1 Administration by Committee................. A-5
Committee to Make Rules and Interpret
SECTION 3.2 Plan........................................ A-5
SECTION 3.3 Committee Members Ineligible................ A-6
ARTICLE IV GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN...............
SECTION 4.1 Committee to Grant Awards................... A-6
SECTION 4.2 Six-Month Holding Period.................... A-6
ARTICLE V ELIGIBILITY............................................... A-7
ARTICLE VI STOCK OPTIONS............................................. A-7
SECTION 6.1 Grant of Options............................ A-7
SECTION 6.2 Conditions of Options....................... A-7
ARTICLE VII RESTRICTED STOCK AWARDS................................... A-9
SECTION 7.1 Grant of Restricted Stock Awards............ A-9
SECTION 7.2 Conditions of Restricted Stock Awards....... A-9
ARTICLE VIII STOCK ADJUSTMENTS......................................... A-10
ARTICLE IX GENERAL................................................... A-11
SECTION 9.1 Amendment or Termination of Plan............ A-11
SECTION 9.2 Dividends and Dividend Equivalents.......... A-11
SECTION 9.3 Termination of Employment................... A-11
SECTION 9.4 Nonassignability............................ A-12
SECTION 9.5 Withholding Taxes........................... A-12
SECTION 9.6 Forfeiture.................................. A-12
SECTION 9.7 Change of Control........................... A-12
SECTION 9.8 Amendments to Awards........................ A-12
SECTION 9.9 Regulatory Approval and Listings............ A-12
SECTION 9.10 Right to Continued Employment............... A-13
SECTION 9.11 Reliance on Reports......................... A-13
SECTION 9.12 Construction................................ A-13
SECTION 9.13 Governing Law............................... A-13
</TABLE>
<PAGE> 34
ARTICLE I
PURPOSE
SECTION 1.1 Purpose. This Stock Incentive Plan is established by Fleming
Companies, Inc. (the "Company") to create incentives which are designed to
motivate participants to put forth maximum effort toward the success and growth
of the Company and to enable the Company to attract and retain experienced
individuals who by their position, ability and diligence are able to make
important contributions to the Company's success. Toward these objectives, the
Plan provides for the granting of Options and Restricted Stock Awards to
Participants on the terms and subject to the conditions set forth in the Plan.
SECTION 1.2 Establishment. The Plan is effective as of February 27, 1996
(the "Effective Date") and for a period of 10 years after such date. The Plan
shall continue in effect until all matters relating to the payment of Awards and
administration of the Plan have been settled.
The Plan shall be approved by the holders of a majority of the outstanding
shares of Common Stock, present, or represented, and entitled to vote at a
meeting called for such purposes, which approval must occur within the period
ending twelve months after the date the Plan is adopted by the Board. Pending
such approval by the shareholders, Awards under the Plan may be granted to
Eligible Associates, including persons who are, or within the preceding six
months have been, Insider Participants (as defined in Section 4.2), but no such
Awards may be exercised prior to receipt of shareholder approval. In the event
shareholder approval is not obtained within such twelve-month period, all such
Awards shall be void.
SECTION 1.3 Shares Subject to the Plan. Shares of stock covered by Options
and Restricted Stock Awards shall consist of One Million Two Hundred Thousand
(1,200,000) shares of Common Stock.
ARTICLE II
DEFINITIONS
SECTION 2.1 "Award" means, individually or collectively, any Option or
Restricted Stock Award granted under the Plan to a Participant by the Committee
pursuant to such terms, conditions, restrictions, and/or limitations, if any, as
the Committee may establish by the Award Agreement or otherwise.
SECTION 2.2 "Award Agreement" means any written instrument that
establishes the terms, conditions, restrictions, and/or limitations applicable
to an Award in addition to those established by this Plan and by the Committee's
exercise of its administrative powers.
SECTION 2.3 "Board" means the Board of Directors of the Company.
SECTION 2.4 "Change of Control Event" means each of the following:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the
A-1
<PAGE> 35
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more (the
"Triggering percentage") of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock") or
(ii) the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, in the event
the "Incumbent Board" (as such term is hereinafter defined) pursuant to
Section 7 of the Rights Agreement between the Company and Liberty Bank and
Trust Company of Oklahoma City, N.A. (the "Rights Agent") dated as of July
7, 1986 together with any additional amendments thereto (the "Current
Rights Agreement") lowers the threshold amounts set forth in Section 1(a)
or 3(a) of the Current Rights Agreement, or in the event the Company
pursuant to Section 27 of the Rights Agreement between the Company and the
Rights Agent dated as of February 27, 1996, but effective as of July 6,
1996 together with any additional Amendments thereto (the "New Rights
Agreement") shall lower the thresholds set forth in Sections 1(a) and 3(a)
of the New Rights Agreement, then in either such event, the Triggering
Percentage shall be automatically reduced to equal the threshold set
pursuant to Section 7 of the Current Rights Agreement or Section 27 of the
New Rights Agreement, as the case may be; and provided, further, however,
that the following acquisitions shall not constitute a Change of Control:
(i) any acquisition directly from the Company, (ii) any acquisition by the
Company; (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled
by the Company, (iv) any acquisition previously approved by at least a
majority of the members of the Incumbent Board, (v) any acquisition
approved by at least a majority of the members of the Incumbent Board (as
such term is hereinafter defined) within five (5) business days after the
Company has notice of such acquisition, or (vi) any acquisition by any
corporation pursuant to a transaction which complies with clauses (x), (y),
and (z) of subsection (c) of this Section 2.4; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, appointment or nomination for
election by the Company's shareholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for purposes of this definition, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(c) Approval by the shareholders of the Company of a reorganization,
share exchange, merger or consolidation (a "Business Combination"), in each
case, unless, following such Business Combination, (x) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company
A-2
<PAGE> 36
Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more
than 70% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
owns the Company through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (y) no Person (excluding any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination, and (z) at least a majority of the members of the
board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination or were elected, appointed or
nominated by the Board; or
(d) Approval by the shareholders of the Company of (x) a complete
liquidation or dissolution of the Company or, (y) the sale or other
disposition of all or substantially all of the assets of the Company, other
than to a corporation, with respect to which following such sale or other
disposition, (A) more than 70% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting power of
the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately prior to
such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) less than 20% of, respectively, the
then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by any Person (excluding any
employee benefit plan (or related trust) of the Company or such
corporation), except to the extent that such Person owned 20% or more of
the Outstanding Company Common Stock or Outstanding Company Voting
Securities prior to the sale or disposition, and (C) at least a majority of
the members of the board of directors of such corporation were members of
the Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such sale or other disposition
of assets of the Company or were elected, appointed or nominated by the
Board.
A-3
<PAGE> 37
SECTION 2.5 "Code" means the Internal Revenue Code of 1986, as amended.
References in the Plan to any Section of the Code shall be deemed to include any
amendments or successor provisions to such Section and any regulations under
such section.
SECTION 2.6 "Committee" means the Compensation and Organization Committee
of the Board, or such other committee designated by the Board, authorized to
administer the Plan under Article III hereof. The Committee shall consist of not
less than two members, each of whom is, and within the 12 months preceding his
or her appointment to the Committee has been, a "disinterested person" within
the meaning of Rule 16b-3 promulgated under Section 16 of the Exchange Act.
SECTION 2.7 "Common Stock" means the common stock, par value $2.50 per
share, of the Company, and after substitution, such other stock as shall be
substituted therefor as provided in Article VIII.
SECTION 2.8 "Date of Grant" means the date on which the granting of an
Award is authorized by the Committee or such later date as may be specified by
the Committee in such authorization.
SECTION 2.9 "Eligible Associate" means any key associate of the Company or
a Subsidiary.
SECTION 2.10 "Fair Market Value" means (A) during such time as the Common
Stock is listed upon the New York Stock Exchange or other exchanges or the
NASDAQ/National Market System, the closing price of the Common Stock on such
stock exchange or exchanges or the NASDAQ/National Market System on the day for
which such value is to be determined, or if no sale of the Common Stock shall
have been made on any such stock exchange or the NASDAQ/National Market System
that day, on the next preceding day on which there was a sale of such Common
Stock or (B) during any such time as the Common Stock is not listed upon an
established stock exchange or the NASDAQ/National Market System, the mean
between dealer "bid" and "ask" prices of the Common Stock in the over-
the-counter market on the day for which such value is to be determined, as
reported by the National Association of Securities Dealers, Inc.
SECTION 2.11 "Incentive Stock Option" means an Option within the meaning
of Section 422 of the Code.
SECTION 2.12 "Option" means an Award granted under Article VI of the Plan
and includes both non-qualified Options and Incentive Stock Options to purchase
shares of Common Stock.
SECTION 2.13 "Participant" means an Eligible Associate of the Company or a
Subsidiary to whom an Award has been granted by the Committee under the Plan.
SECTION 2.14 "Plan" means the Fleming Companies, Inc. 1996 Stock Incentive
Plan.
SECTION 2.15 "Restricted Stock Award" means an Award granted under Article
VII of the Plan.
A-4
<PAGE> 38
SECTION 2.16 "Subsidiary" shall have the same meaning set forth in Section
424 of the Code.
ARTICLE III
ADMINISTRATION
SECTION 3.1 Administration by Committee. The Committee shall administer
the Plan. Unless otherwise provided in the by-laws of the Company or the
resolutions adopted from time to time by the Board establishing the Committee,
the Board may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, however caused, shall be filled by the
Board. The Committee shall hold meetings at such times and places as it may
determine. A majority of the Committee shall constitute a quorum, and the acts
of a majority of the members present at any meeting at which a quorum is present
or acts reduced to or approved in writing by a majority of the members of the
Committee shall be the valid acts of the Committee.
Subject to the provisions of the Plan, the Committee shall have exclusive
power to:
(a) Select the Eligible Associates to participate in the Plan.
(b) Determine the time or times when Awards will be made.
(c) Determine the form of an Award, whether an Option or a Restricted
Stock Award, the number of shares of Common Stock subject to the Award, all
the terms, conditions (including performance requirements), restrictions
and/or limitations, if any, of an Award, including the time and conditions
of exercise or vesting, and the terms of any Award Agreement, which may
include the waiver or amendment of prior terms and conditions or
acceleration or early vesting or payment of an Award under certain
circumstances determined by the Committee.
(d) Determine whether Awards will be granted singly or in combination.
(e) Accelerate the vesting, exercise or payment of an Award or the
performance period of an Award when such action or actions would be in the
best interest of the Company.
(f) Take any and all other action it deems necessary or advisable for
the proper operation or administration of the Plan.
SECTION 3.2 Committee to Make Rules and Interpret Plan. The Committee in
its sole discretion shall have the authority, subject to the provisions of the
Plan, to establish, adopt, or revise such rules and regulations and to make all
such determinations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan. The Committee's interpretation of the Plan
or any Awards granted pursuant thereto and all decisions and determinations by
the Committee with respect to the Plan shall be final, binding, and conclusive
on all parties.
A-5
<PAGE> 39
SECTION 3.3 Committee Members Ineligible. No Committee member shall be
eligible to participate in the Plan.
ARTICLE IV
GRANT OF AWARDS; SHARES
SUBJECT TO THE PLAN
SECTION 4.1 Committee to Grant Awards. The Committee may, from time to
time, grant Awards to one or more Eligible Associates, provided, however, that:
(a) Subject to Article VIII, the aggregate number of shares of Common
Stock made subject to the Award of Options to any Participant in any fiscal
year of the Company may not exceed 100,000.
(b) Subject to Article VIII, in no event shall more than 360,000
shares of Common Stock subject to the Plan be awarded to Participants as
Restricted Stock Awards (the "Restricted Stock Award Limit").
(c) Any shares of Common Stock related to Awards which terminate by
expiration, forfeiture, cancellation or otherwise without the issuance of
shares of Common Stock, or are exchanged in the Committee's discretion for
Awards not involving Common Stock, shall be available again for grant under
the Plan and shall not count against the Restricted Stock Award Limit so
long as the holder of any such Restricted Stock Award received no benefits
of Common Stock ownership (including, but not limited to, dividends) from
the shares of Common Stock related to such Award.
(d) Common Stock delivered by the Company in payment of any Award
under the Plan may be authorized and unissued Common Stock or Common Stock
held in the treasury of the Company or may be purchased on the open market
or by private purchase.
(e) The Committee shall, in its sole discretion, determine the manner
in which fractional shares arising under this Plan shall be treated.
(f) Separate certificates representing Common Stock to be delivered to
a Participant upon the exercise of any Option will be issued to such
Participant.
SECTION 4.2 Six-Month Holding Period. With respect to Awards granted
hereunder to any Participant who is, or within the preceding six months was,
subject to the provisions of Section 16 of the Exchange Act (an "Insider
Participant"), each such Award which is an equity security must be held and not
transferred by such Insider Participant for a period of six months from the Date
of Grant. Nothing in this Section 4.2 shall be deemed to prohibit the exercise
of Options within the six month period following the Date of Grant, but the
shares of Common Stock received by an Insider Participant pursuant to the
exercise of an Option must be held and not transferred for a period of six
months from the Date of Grant of the Option so exercised.
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ARTICLE V
ELIGIBILITY
Those persons who shall be eligible to receive Awards under the Plan shall
be such key associates (including officers, whether or not they are directors)
of the Company or its Subsidiaries as the Committee shall select from time to
time. Directors who are not Eligible Associates of the Company or its
Subsidiaries may not participate in the Plan. Subject to the provisions of the
Plan, the Committee shall, from time to time, select from the Eligible
Associates those to whom Awards shall be granted and shall determine the type or
types of Awards to be made and shall establish in the related Award Agreements
the terms, conditions, restrictions and/or limitations, if any, applicable to
the Awards in addition to those set forth in the Plan and the administrative
rules and regulations issued by the Committee.
ARTICLE VI
STOCK OPTIONS
SECTION 6.1 Grant of Options. The Committee may, from time to time,
subject to the provisions of the Plan and such other terms and conditions as it
may determine, grant Options to Eligible Associates. These Options may be
Incentive Stock Options or non-qualified Options, or a combination of both. Each
grant of an Option shall be evidenced by an Award Agreement executed by the
Company and the Participant, and shall contain such terms and conditions and be
in such form as the Committee may from time to time approve, subject to the
requirements of Section 6.2.
SECTION 6.2 Conditions of Options. Each Option so granted shall be subject
to the following conditions:
(a) Exercise Price. As limited by Section 6.2(e) below, each Option
shall state the exercise price which shall be set by the Committee at the
Date of Grant; provided, however, no Option shall be granted at an exercise
price which is less than the Fair Market Value of the Common Stock on the
Date of Grant.
(b) Form of Payment. The exercise price of an Option may be paid (i)
in cash or by check, bank draft or money order payable to the order of the
Company; (ii) in shares of Common Stock; or (iii) a combination of the
foregoing. In addition to the foregoing, subject to the discretion of the
Committee, any Option granted under the Plan may be exercised by a
broker-dealer acting on behalf of a Participant if (A) the broker-dealer
has received from the Participant or the Company a notice evidencing the
exercise of such Option and instructions signed by the Participant
requesting the Company to deliver the shares of Common Stock subject to
such Option to the broker-dealer on behalf of the Participant and
specifying the account into which such shares should be deposited, (B)
adequate provision has been made with respect to the payment of any
withholding taxes due upon such exercise or, in the case of an Incentive
Stock Option, upon the disposition of such shares and (C) the broker-dealer
and the Participant have otherwise
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complied with Section 220.3(e)(4) of Regulation T, 12 CFR, Part 220 and any
successor rules and regulations applicable to such exercise ("Cashless
Exercise"); provided, however, that an Insider Participant may not elect to
utilize a Cashless Exercise within six months of the date the Option is
granted (unless death or disability occurs prior to the expiration of such
six-month period), and any such election must be made during any period
beginning on the third business day following the date of release of a
summary statement of the Company's quarterly or annual sales and earnings
and ending on the twelfth business day following such date (the "Window
Period"). Common Stock used to exercise an Option shall be valued at its
then Fair Market Value.
(c) Exercise of Options. Options granted under the Plan shall be
exercisable, in whole or in such installments and at such times, and shall
expire at such time, as shall be provided by the Committee in the Award
Agreement. Exercise of an Option shall be by written notice stating the
election to exercise in the form and manner determined by the Committee.
Every share of Common Stock acquired through the exercise of an Option
shall be deemed to be fully paid at the time of exercise and payment of the
exercise price.
(d) Other Terms and Conditions. Among other conditions that may be
imposed by the Committee, if deemed appropriate, are those relating to (i)
the period or periods and the conditions of exercisability of any Option;
(ii) the minimum periods during which Participants must be employed by the
Company or its Subsidiaries, or must hold Options before they may be
exercised; (iii) the minimum periods during which shares acquired upon
exercise must be held before sale or transfer shall be permitted; (iv)
conditions under which such Options or shares may be subject to forfeiture;
(v) the frequency of exercise or the minimum or maximum number of shares
that may be acquired at any one time; and (vi) the achievement by the
Company of specified performance criteria.
(e) Special Restrictions Relating to Incentive Stock Options. Options
issued in the form of Incentive Stock Options shall, in addition to being
subject to all applicable terms, conditions, restrictions and/or
limitations established by the Committee, comply with the requirements of
Section 422 of the Code (or any successor Section thereto), including,
without limitation, the requirement that the exercise price of an Incentive
Stock Option not be less than 100% of the Fair Market Value of the Common
Stock on the Date of Grant, the requirement that each Incentive Stock
Option, unless sooner exercised, terminated or cancelled, expire no later
than 10 years from its Date of Grant, and the requirement that the
aggregate Fair Market Value (determined on the Date of Grant) of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under this Plan or
any other plan of the Company or any Subsidiary) not exceed $100,000.
(f) Application of Funds. The proceeds received by the Company from
the sale of Common Stock pursuant to Options will be used for general
corporate purposes.
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(g) Shareholder Rights. No Participant shall have a right as a
shareholder with respect to any share of Common Stock subject to an Option
prior to purchase of such shares of Common Stock by exercise of the Option.
ARTICLE VII
RESTRICTED STOCK AWARDS
SECTION 7.1 Grant of Restricted Stock Awards. The Committee may, from time
to time, subject to the provisions of the Plan and such other terms and
conditions as it may determine, grant a Restricted Stock Award to any Eligible
Associate. Restricted Stock Awards shall be awarded in such number and at such
times during the term of the Plan as the Committee shall determine. Each
Restricted Stock Award may be evidenced in such manner as the Committee deems
appropriate, including, without limitation, a book-entry registration or
issuance of a stock certificate or certificates, and by an Award Agreement
setting forth the terms of such Restricted Stock Award.
SECTION 7.2 Conditions of Restricted Stock Awards. The grant of a
Restricted Stock Award shall be subject to the following:
(a) Restriction Period. In addition to any vesting conditions
determined by the Committee, including, but not by way of limitation, the
achievement by the Company of specified performance criteria, vesting of
each Restricted Stock Award shall require the holder to remain in the
employment of the Company or a Subsidiary for a prescribed period (a
"Restriction Period"). The Committee shall determine the Restriction Period
or Periods which shall apply to the shares of Common Stock covered by each
Restricted Stock Award or portion thereof. At the end of the Restriction
Period, assuming the fulfillment of such other specified vesting
conditions, the restrictions imposed by the Committee shall lapse with
respect to the shares of Common Stock covered by the Restricted Stock Award
or portion thereof. The Committee may, in its sole discretion, modify or
accelerate the vesting of a Restricted Stock Award under such circumstances
as it deems appropriate.
(b) Restrictions. The holder of a Restricted Stock Award may not sell,
transfer, pledge, exchange, hypothecate, or otherwise dispose of the shares
of Common Stock represented by the Restricted Stock Award during the
applicable Restriction Period. The Committee shall impose such other
restrictions and conditions on any shares of Common Stock covered by a
Restricted Stock Award as it may deem advisable including, without
limitation, restrictions under applicable Federal or state securities laws,
and may legend the certificates representing Restricted Stock to give
appropriate notice of such restrictions.
(c) Rights as Shareholders. During any Restriction Period, the
Committee may, in its discretion, grant to the holder of a Restricted Stock
Award all or any of the rights of a shareholder with respect to said
shares, including, but not by way of limitation, the right to
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vote such shares and to receive dividends. If any dividends or other
distributions are paid in shares of Common Stock, all such shares shall be
subject to the same restrictions on transferability as the shares of
Restricted Stock with respect to which they were paid.
ARTICLE VIII
STOCK ADJUSTMENTS
In the event that the shares of Common Stock, as presently constituted,
shall be changed into or exchanged for a different number or kind of shares of
stock or other securities of the Company or of another corporation (whether by
reason of merger, consolidation, recapitalization, reclassification, stock
split, combination of shares or otherwise), or if the number of such shares of
Common Stock shall be increased through the payment of a stock dividend, or a
dividend on the shares of Common Stock or rights or warrants to purchase
securities of the Company shall be made, then there shall be substituted for or
added to each share available under and subject to the Plan, and each share
theretofore appropriated or thereafter subject or which may become subject to
Options or Restricted Stock Awards under the Plan, the number and kind of shares
of stock or other securities into which each outstanding share of Common Stock
shall be so changed or for which each such share shall be exchanged or to which
each such share shall be entitled, as the case may be, on a fair and equivalent
basis in accordance with the applicable provisions of Section 424 of the Code;
provided, however, with respect to Options, in no such event will such
adjustment result in a modification of any Option as defined in Section 424(h)
of the Code. In the event there shall be any other change in the number or kind
of the outstanding shares of Common Stock, or any stock or other securities into
which the Common Stock shall have been changed or for which it shall have been
exchanged, then if the Committee shall, in its sole discretion, determine that
such change equitably requires an adjustment in the shares available under and
subject to the Plan, or in any Award theretofore granted or which may be granted
under the Plan, such adjustments shall be made in accordance with such
determination, except that no adjustment of the number of shares of Common Stock
available under the Plan or to which any Award relates that would otherwise be
required shall be made unless and until such adjustment either by itself or with
other adjustments not previously made would require an increase or decrease of
at least 1% in the number of shares of Common Stock available under the Plan or
to which any Award relates immediately prior to the making of such adjustment
(the "Minimum Adjustment"). Any adjustment representing a change of less than
such minimum amount shall be carried forward and made as soon as such adjustment
together with other adjustments required by this Article VIII and not previously
made would result in a Minimum Adjustment. Notwithstanding the foregoing, any
adjustment required by this Article VIII which otherwise would not result in a
Minimum Adjustment shall be made with respect to shares of Common Stock relating
to any Award immediately prior to exercise, payment or settlement of such Award.
No fractional shares of Common Stock or units of other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share.
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ARTICLE IX
GENERAL
SECTION 9.1 Amendment or Termination of Plan. The Board may suspend or
terminate the Plan at any time. In addition, the Board may, from time to time,
amend the Plan in any manner, but may not without shareholder approval adopt any
amendment which would:
(a) increase the aggregate number of shares of Common Stock available
under the Plan (except by operation of Article VIII);
(b) materially increase the benefits accruing to Insider Participants
under the Plan; or
(c) materially modify the requirements as to eligibility for
participation in the Plan;
provided, that any amendment to the Plan shall require approval of the
shareholders if, in the opinion of counsel to the Company, such approval is
required by Section 16(b) or any other Section of the Exchange Act, or any other
Federal or state law or any regulations or rules promulgated thereunder.
SECTION 9.2 Dividends and Dividend Equivalents. The Committee may choose,
at the time of the grant of any Award or any time thereafter up to the time of
payment of such Award, to include as part of such Award an entitlement to
receive dividends or dividend equivalents subject to such terms, conditions,
restrictions, and/or limitations, if any, as the Committee may establish.
Dividends and dividend equivalents granted hereunder shall be paid in such form
and manner (i.e., lump sum or installments), and at such time as the Committee
shall determine. All dividends or dividend equivalents which are not paid
currently may, at the Committee's discretion, accrue interest or be reinvested
into additional shares of Common Stock.
SECTION 9.3 Termination of Employment. If a Participant's employment with
the Company or a Subsidiary terminates for a reason other than death,
disability, retirement, or any approved reason, all unexercised, unearned,
and/or unpaid Awards, including, but not by way of limitation, Awards earned,
but not yet paid, all unpaid dividends and dividend equivalents, and all
interest accrued on the foregoing shall be cancelled or forfeited, as the case
may be, unless the Participant's Award Agreement provides otherwise. The
Committee shall have the authority to promulgate rules and regulations to (i)
determine what events constitute disability, retirement, or termination for an
approved reason for purposes of the Plan, and (ii) determine the treatment of a
Participant under the Plan in the event of his or her death, disability,
retirement, or termination for an approved reason. Such rules and regulations
may include, without limitation, the method, if any, for accelerating the
vesting or exercisability of any Options or Restricted Stock Award, or providing
for the exercise of any unexercised Options in the event of a Participant's
death, disability, retirement, or termination for an approved reason.
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SECTION 9.4 Nonassignability. No Award shall be subject in any manner to
alienation, anticipation, sale, transfer, assignment, pledge, or encumbrance,
except for transfer by will or the laws of descent and distribution. Any attempt
to transfer, assign, pledge, hypothecate or otherwise dispose of, or to subject
to execution, attachment or similar process, any Award contrary to the
provisions hereof, shall be void and ineffective, shall give no right to any
purported transferee, and may, at the sole discretion of the Committee, result
in forfeiture of the Award involved in such attempt.
SECTION 9.5 Withholding Taxes. Unless otherwise paid by the Participant,
the Company shall be entitled to deduct from any payment under the Plan,
regardless of the form of such payment, the amount of all applicable income and
employment taxes required by law to be withheld with respect to such payment or
may require the Participant to pay to it such tax prior to and as a condition of
the making of such payment. In accordance with any applicable administrative
guidelines it establishes, the Committee may allow a Participant to pay the
amount of taxes required by law to be withheld from an Award by withholding from
any payment of Common Stock due as a result of such Award, or by permitting the
Participant to deliver to the Company, shares of Common Stock, having a Fair
Market Value, on the date of payment, equal to the amount of such required
withholding taxes; provided, however, that in the event the Participant is, or
within the preceding six months has been an Insider Participant, such an
election may not be made within six months of the date the Award is granted
(unless death or disability of the Participant occurs prior to the expiration of
such six-month period), and must be made either six months prior to the date of
payment or during the Window Period.
SECTION 9.6 Forfeiture. If the employment of a Participant is terminated
on account of any act of fraud, intentional misrepresentation, embezzlement,
misappropriation, or conversion of assets or opportunities of the Company or any
of its Subsidiaries, any unvested or unexercised Award shall automatically be
forfeited as of the date of termination of such employment.
SECTION 9.7 Change of Control. Awards granted under the Plan to any
Participant may, in the discretion of the Committee, provide that such Awards
shall be immediately vested, fully earned and exercisable upon the occurrence of
a Change of Control Event.
SECTION 9.8 Amendments to Awards. The Committee may at any time
unilaterally amend the terms of any Award Agreement, whether or not presently
exercisable, earned, paid or vested, to the extent it deems appropriate;
provided, however, that any such amendment which is adverse to the Participant
shall require the Participant's consent.
SECTION 9.9 Regulatory Approval and Listings. The Company shall use its
best efforts to file with the Securities and Exchange Commission as soon as
practicable following the Effective Date, and keep continuously effectively and
usable, a Registration Statement on Form S-8 with respect to shares of Common
Stock subject to Awards hereunder. Notwithstanding anything contained in this
Plan to the contrary, the Company shall have no obligation to issue or deliver
certificates representing shares of Common Stock evidencing Restricted Stock
Awards prior to:
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<PAGE> 46
(a) the obtaining of any approval from, or satisfaction of any waiting
period or other condition imposed by, any governmental agency which the
Committee shall, in its sole discretion, determine to be necessary or
advisable;
(b) the admission of such shares to listing on the stock exchange on
which the Common Stock may be listed; and
(c) the completion of any registration or other qualification of such
shares under any state or Federal law or ruling of any governmental body
which the Committee shall, in its sole discretion, determine to be
necessary or advisable.
SECTION 9.10 Right to Continued Employment. Participation in the Plan
shall not give any Eligible Associate any right to remain in the employ of the
Company or any Subsidiary. The Company or, in the case of employment with a
Subsidiary, the Subsidiary reserves the right to terminate any Eligible
Associate at any time. Further, the adoption of this Plan shall not be deemed to
give any Eligible Associate or any other individual any right to be selected as
a Participant or to be granted an Award.
SECTION 9.11 Reliance on Reports. Each member of the Committee and each
member of the Board shall be fully justified in relying or acting in good faith
upon any report made by the independent public accountants of the Company and
its Subsidiaries and upon any other information furnished in connection with the
Plan by any person or persons other than himself. In no event shall any person
who is or shall have been a member of the Committee or of the Board be liable
for any determination made or other action taken or any omission to act in
reliance upon any such report or information or for any action taken, including
the furnishing of information, or failure to act, if in good faith.
SECTION 9.12 Construction. Masculine pronouns and other words of masculine
gender shall refer to both men and women. The titles and headings of the
sections in the Plan are for the convenience of reference only, and in the event
of any conflict, the text of the Plan, rather than such titles or headings,
shall control.
SECTION 9.13 Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Oklahoma except as superseded by
applicable Federal law.
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================================================================================
PROXY
FLEMING COMPANIES, INC.
ANNUAL MEETING OF SHAREHOLDERS, MAY 1, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TO: BANCOKLAHOMA TRUST CO., TRUSTEE FOR THE FLEMING COMPANIES, INC., EMPLOYER
STOCK OWNERSHIP PLAN AND FIDELITY MANAGEMENT TRUST COMPANY, TRUSTEE FOR THE
FLEMING COMPANIES, INC. CONSOLIDATED SAVINGS PLUS PLAN.
I hereby instruct the Trustees to vote all shares of Fleming Companies, Inc.
Common Stock, which are credited to my account at the Annual Meeting of
Shareholders of said Corporation to be held May 1, 1996 and any adjournments
thereof, on the matters specified below and on the reverse side of this form,
as indicated thereon.
The FSOP Trustee shall in its sole discretion vote shares of company stock for
which it has received no directions from the participant. The Consolidated
Savings Plus Trustee shall not vote shares of company stock for which no
direction has been received from the participant. Your instructions to the
Trustees will not be divulged or revealed to anyone at Fleming Companies, Inc.
WHEN PROPERLY EXECUTED THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE SIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, IT WILL BE VOTED "FOR" THE
ELECTION OF THE DIRECTORS, "FOR" ITEMS 2 AND 4, AND AGAINST ITEM 3. THE BOARD
OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF ITEMS 1, 2, AND 4 AND AGAINST ITEM
3.
1. Election of Directors, Nominees:
Jack W. Baker, James G. Harlow, Jr., Edward C. Joullian III and Howard H.
Leach (for three-year terms)
PLEASE MARK, DATE, SIGN AND RETURN THIS FORM IN THE ENCLOSED BUSINESS REPLY
ENVELOPE.
-----------
SEE REVERSE
SIDE
-----------
WITHHOLD
FOR AUTHORITY TO VOTE
ALL NOMINEES FOR ALL NOMINEES
LISTED BELOW LISTED BELOW
1. Election of Directors [ ] [ ]
(see reverse)
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below. )
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of the 1996 Stock Incentive Plan [ ] [ ] [ ]
for Fleming Companies, Inc.
3. Approval of Shareholder Proposal regarding [ ] [ ] [ ]
Rights Agreement.
4. Ratification of Deloitte & Touche as [ ] [ ] [ ]
independent auditors for 1996.
5. In their discretion, on such other business as may properly come before the
meeting or any adjournment thereof.
I RESERVE THE RIGHT TO REVOKE THIS PROXY AT ANY TIME BEFORE THE EXERCISE
THEREOF.
SIGNATURE(S)_____________________________________________________ DATE__________
Please sign exactly as name appears above, indicating official position or
representative capacity.
<PAGE> 48
PROXY
FLEMING COMPANIES, INC.
ANNUAL MEETING OF SHAREHOLDERS
Robert E. Stauth, Harry L. Winn, Jr. or David R. Almond is hereby constituted
the proxy of the undersigned with full power of substitution to represent and
vote all shares of stock of the undersigned at the annual meeting of
shareholders of Fleming Companies, Inc., or any adjournment thereof, to be held
May 1, 1996, at 10:00 a.m.
1. Election of Directors, Nominees:
Jack W. Baker, James G. Harlow, Jr., Edward C. Joullian III and Howard H.
Leach (for three-year terms)
PLEASE SIGN, DATE AND RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE.
-----------
SEE REVERSE
SIDE
-----------
[X] Please mark your
votes as in this
example. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
WITHHOLD
FOR authority to vote
all nominees for all nominees
listed below listed below
1. Election of Directors [ ] [ ]
(see reverse)
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below. )
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of the 1996 Stock Incentive Plan for [ ] [ ] [ ]
Fleming Companies, Inc.
3. Approval of Shareholder Proposal regarding [ ] [ ] [ ]
Rights Agreement.
4. Ratification of Deloitte & Touche LLP as [ ] [ ] [ ]
independent auditors for 1996.
5. In their discretion, on such other business as may properly come before the
meeting or any adjournment thereof.
The shares represented by this proxy will be voted as specified, or if no
direction is indicated, they will be voted FOR the election of the directors
nominated by the board, FOR Items 2 and 4 and AGAINST Item 3. The board of
directors recommends a vote FOR each of Items 1, 2, and 4 and AGAINST Item 3.
I RESERVE THE RIGHT TO REVOKE THIS PROXY AT ANY TIME BEFORE THE EXERCISE
THEREOF.
SIGNATURE(S)_____________________________________________________ DATE__________
SIGNATURE(S)_____________________________________________________ DATE__________
Please sign exactly as name appears above, indicating official position or
representative capacity. for joint accounts each owner should sign.
