SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 15,
1994.
FOOD LION, INC.
(Exact name of registrant as specified in its charter)
North Carolina 0-6080
56-0660192
(State or other (Commission file
(I.R.S. Employer
jurisdiction of Number)
Identification No.)
incorporation of
organization)
P.O. Box 1330, 2110 Executive Drive, Salisbury, NC 28145-1330
(704)633-8250
(Address and telephone number of principal executive
offices and principal place of business)
Former name of former address, if changed since last report
Item 5. Other Events
On September 22, 1994, Food Lion (the "Company") announced
the appointment of Margaret Kluttz to it Board of Directors. Mrs.
Kluttz has served as Mayor of the City of Salisbury since 1991, on
the North Carolina Board of Transportation since 1993 and was
recently named to chair the North Carolina Rail Commission. She
replaced Dan A. Boone, Chief Financial Officer of the Company, who
voluntarily resigned as a member of the Board to complete Food
Lion's plan to increase the number of directors on the Board not
affiliated with Food Lion or Etablissements Delhaize Freres et Ce
"Le Lion" S.A. ("Delhaize `Le Lion'") and as further reflected in
the provisions of a new shareholders agreement ("1994 Shareholders
Agreement" or "Agreement"), described further below. Mr. Boone
will continue as Chief Financial Officer of the Company and
advisor to the Board.
The 1994 Shareholders Agreement among Delhaize "Le Lion,"
Delhaize The Lion America, Inc. ("Detla") and the Company
supersedes a previous Shareholders Agreement entered into in 1988.
Section 1 of the 1994 Shareholders Agreement provides for a
Nominating Committee of the Board of Directors for the purpose of
nominating the slate of directors to be submitted to the
shareholders for election to the Board and filling any vacancy
that may arise from time to time. The composition of the
Nominating Committee, of each slate of directors and the other
responsibilities of the Nominating Committee are set forth in the
Agreement. Section 2 of the Agreement reflects a voting agreement
between Delhaize and Detla with respect to the election of
directors of the Company and related matters.
Section 3 of the 1994 Shareholders Agreement provides, among
other things, that the By-Laws of the Company shall be modified so
as to require an affirmative vote of at least 70 percent of the
directors to approve certain actions, including to elect a chief
executive officer other than Tom Smith, sell or otherwise dispose
of a substantial part of the Company's assets other than in the
ordinary course of business, and for the merger or consolidation
of the Company with and into any other corporation. Until the
required shareholders vote is obtained to render such provision
effective, subparagraph 3(a) of the 1988 Shareholders Agreement
remains in full force and effect. The foregoing description of
the Shareholders Agreement is qualified in its entirety by the
Agreement itself which is attached hereto as an exhibit.
Item 7. Financial Statements and Exhibits
(b) Exhibits
Exhibit No. Description
10 1994 Shareholders Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
FOOD LION, INC.___________
REGISTRANT
BY: ______________________
Dan A. Boone
Chief Financial Officer
and Secretary
(Duly Authorized Officer)
DATE: __________________
1994 SHAREHOLDERS' AGREEMENT
This 1994 Shareholders' Agreement ("Agreement), dated as of
the 15th day of September, 1994, is among ETABLISSEMENTS DELHAIZE
FRERES ET CIE "LE LION" S.A., a Belgian corporation ("Delhaize"),
DELHAIZE THE LION AMERICA, INC., a Delaware corporation and wholly
owned subsidiary of Delhaize ("Detla"), and FOOD LION, INC., a
North Carolina corporation (the "Company").
STATEMENT OF PURPOSE
Delhaize and Detla (hereinafter collectively referred to as
the "Shareholders") own, in the aggregate, approximately 38.5
percent of the issued and outstanding nonvoting Class A common
stock, par value $.50 per share, and 50.3 percent of the of the
issued and outstanding voting Class B common stock, par value $.50
per share, of the Company. The Company recognizes the expertise
and experience of the Shareholders in the retail food supermarket
business and desires to ensure that the Company will continue to
benefit from such expertise and experience. The Company and the
Shareholders recognize the importance of retaining the current
management of the Company, including, without limitation, Tom E.
Smith as President and Chief Executive Officer, and desire that
management should continue to have full responsibility for the day
to day management of the Company, subject to the authority of the
Board of Directors. The Shareholders and the Company recognize
that they have had a mutually beneficial relationship of
longstanding (in part by reason of the corporate governance
provisions of certain past agreements among the Shareholders and
other past and present management shareholders of the Company) and
believe that the continuation of such relationship on a long-term
basis is in the best interest of the Company. The Shareholders
and the Company further recognize that provision must be made for
the nomination of independent directors, requiring certain changes
from the corporate governance provisions of such past agreements.
The Shareholders and the Company desire to achieve their purposes
by entering into this Agreement relating to certain corporate
governance matters affecting the Company, including the voting of
stock or other securities of the Company now or hereafter owned by
the Shareholders.
AGREEMENT
1. Nomination and Election of Directors. Subject
to the fiduciary duties of directors under North Carolina law or
except as the Board of Directors of the Company by Special Vote
(as defined in subparagraph 3(b) below) shall otherwise direct:
(a) The Company's Board of Directors shall
establish a Nominating Committee of the Board of Directors for the
purpose of nominating the slate of directors to be submitted to
the shareholders for election at the annual meeting or any meeting
of the shareholders at which a director or directors are to be
elected and filling any vacancies that may arise from time to
time. The composition of the Nominating Committee, the
composition of each slate of directors to be nominated and the
other responsibilities of the Nominating Committee shall be as set
forth below:
(i) The Nominating Committee shall
consist of three directors, one of whom shall have
been designated by the Shareholders, one of whom shall
be the Chief Executive Officer of the Company (or his
designee from among the members of the Board of
Directors of the Company) and one of whom shall be an
independent director;
(ii) The slate of directors nominated
by the Nominating Committee shall consist of ten (10)
persons, four (4) of whom shall have been proposed by
the Chief Executive Officer of Delhaize (hereinafter
the "Delhaize Designees"), two (2) of whom shall have
been proposed by the Chief Executive Officer of the
Company (hereinafter the "CEO Designees") and four (4)
of whom shall be independent directors;
(iii) In the event that any director
ceases to be a director of the Company, then the
Nominating Committee shall nominate an appropriate
person to fill such vacancy, selected in the same
manner as the director who ceased being director.
Thus, in the event a Delhaize Designee ceases to be a
director, the vacancy left thereby shall be filled by
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a new Delhaize Designee, in the event a CEO Designee
ceases to be a director, the vacancy left thereby
shall be filled by a new CEO Designee, and in the
event an independent director ceases to be a director,
the vacancy left thereby shall be filled by a new
independent director.
(iv) The Nominating Committee shall
meet at least once a year to determine the proposed
slate of directors to be submitted to the annual
meeting of shareholders for election. In addition, it
shall meet each time a meeting of the shareholders is
called for the purpose of electing one or more
directors. It shall also meet within thirty (30) days
of notice of any vacancy occurring in the Board of
Directors to nominate a director to fill such vacancy.
It may solicit the views of other Shareholders of the
Company for suggestions with regard to possible
independent directors. It will assess the
independence of each such candidate (which shall at a
minimum require that the candidate not be currently or
previously employed, nor currently paid as a
consultant, by the Company or its affiliates or
officers or by either of the Shareholders or their
respective affiliates or officers) and will consider
any other potential for conflict of interest of each
such candidate. It will determine the appropriate
qualifications for directorship and will evaluate
candidates against the requisite qualifications;
(v) The Nominating Committee shall
recommend its slate of directors or any individual
nominee to the Board of Directors of the Company.
Approval of any such nomination(s) by the Board of
Directors shall be by Special Vote. In the event that
the Board of Directors fails to approve a slate or
any individual nominee proposed by the Nominating
Committee, the Nominating Committee shall meet to
propose another slate, or nominee, as the case may be,
acceptable to the Board of Directors; and
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(vi) Meetings of the Nominating
Committee shall be held at such place as may from time
to time be fixed by the Chairman thereof in the Notice
of Meeting. Any meeting may be held without notice if
all members are present or if notice is waived in
writing either before or after the meeting by those
not present. Two members of the Nominating Committee
shall constitute a quorum and all decisions of the
Nominating Committee shall require the affirmative
vote of at least two members. The Nominating
Committee may take action without a meeting upon
unanimous written consent signed by all members of the
Nominating Committee. Meetings of the Nominating
Committee may be held by means of conference telephone
or similar communications equipment and participation
in such a meeting shall constitute presence in person
at such meeting.
(b) Notwithstanding any provision in this
paragraph 1 to the contrary, if at any time it is determined that
the composition of the Company's Board of Directors does not
comply with applicable corporate governance rules contained in
Part III, Section 5(c), of Schedule D to the By-Laws of the
National Association of Securities Dealers, Inc. or similar rules
of any national securities exchange on which the Company's
securities may be listed (the "Requirement"), the Nominating
Committee shall meet to determine the action necessary to comply
with the Requirement and shall recommend such action, including
the nomination of an additional director or additional directors
and the removal of any director or directors. The Board of
Directors, by Special Vote (as defined in subparagraph 3(b)
below), shall take such actions as are necessary to comply with
the Requirement, but which to the extent possible shall be
consistent with the intentions of the parties as set forth in this
Agreement.
2. Voting Agreement. At each election of directors of the
Company, the Shareholders shall vote their voting shares as
follows:
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(i) In the event cumulative voting is
not in effect for such election, to elect the slate of
directors proposed by the Nominating Committee and
approved by the Board of Directors; and
(ii) In the event cumulative voting is
in effect for such election of directors, first, to
the extent necessary, to elect the Delhaize Designees
and thereafter to retain or remove any such Delhaize
Designees as the Shareholders shall direct; second, to
the extent possible, to elect the CEO Designees and
thereafter to retain or remove any such CEO Designees
as the CEO shall direct; and third, to the extent
possible, to elect the independent directors nominated
by the Committee and thereafter to retain or remove
any such independent directors as the Committee shall
direct. The Shareholders agree not to participate,
directly or indirectly, in any effort to cause
cumulative voting to be in effect for any election of
directors of the Company.
3. By Laws.
(a) The Finance Committee of the Board of Directors
established pursuant to Article 5, Section 2 of the By-Laws of the
Company shall be abolished and such By-Law provision shall be
repealed.
(b) During the term of the Agreement, the Company's by-
laws shall provide that the Board of Directors may not, without an
affirmative vote of at least 70 percent of the directors ("Special
Vote"):
(A) Approve the nomination of any person
or persons for election to the Board of Directors or
elect a chief executive officer other than Tom E.
Smith;
(B) Authorize any contract involving
payment by the Company of cash or property valued in
excess of $500,000, including, without limitation, the
purchase, sale or leasing of property or the incurring
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of indebtedness, except transactions relating to the
leasing or construction of stores, warehouses and
related facilities or any other transaction in the
ordinary course of business;
(C) Approve or authorize capital
expenditures of more than $500,000 in any one instance
or $1,000,000 in the aggregate in any fiscal year,
except expenditures relating to the leasing or
construction of stores, warehouses and
related facilities or any other transaction in the
ordinary course of business;
(D) Authorize the issuance or sale of stock
or other securities of the Company or any subsidiary
of the Company, or options or warrants for or
obligations convertible into such stock or securities,
except the issuance of stock options or stock or both,
as the case may be, pursuant to the Company's 1981
Employee Stock Option Plan, 1983 Employee Stock Option
Plan, 1991 Employee Stock Option Plan, Employee Stock
Purchase Plan and Employee Stock Ownership Plan and
other employee benefit plans approved by the Board of
Directors;
(E) Sell or otherwise dispose of a
substantial part of the Company's assets other than in
the ordinary course of business;
(F) Amend the charter or the by-laws of the
Company; or
(G) Approve for submission to the
shareholders of the Company for their approval a
proposal for the amendment of the Company's charter
or the merger or consolidation of the Company with or
into any other corporation or the reorganization,
recapitalization or liquidation of the Company;
provided, that any Special Vote approving any action
set forth in this paragraph 3(b) may specify other
limitations which shall not be exceeded without a
further Special Vote.
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(c) Subparagraph 3(b) above shall be submitted to the
shareholders of the Company for approval in accordance with the
requirements of North Carolina law and shall not be effective
until such approval is granted. The Shareholders shall vote each
share of common stock of the Company beneficially owned by them in
favor of such approval. Until such time as subparagraph 3(b) is
approved by the requisite shareholder vote of the Company,
subparagraph 3(a) of the 1988 Shareholders Agreement dated as of
September 22, 1988 among the Shareholders and Messrs. Tom Smith
and Ralph Ketner (the "1988 Shareholders Agreement") shall remain
in full force and effect.
4. Term. This Agreement shall be effective for a term
commencing on the earlier of (i) the termination of the 1988
Shareholders Agreement and (ii) September 22nd, 1994, and ending
April 30, 2001; provided that this Agreement shall terminate in
the event that the Shareholders' aggregate ownership of voting
shares of the Company shall be reduced to less than 10% of the
aggregate outstanding voting shares of the Company.
5. Binding Nature. This Agreement shall be binding upon and
shall inure to the benefit of the Company, Delhaize and Detla and
their respective successors and assigns until the expiration of
the term of this Agreement. Any successor (whether direct or
indirect by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of Delhaize,
Detla or the Company shall expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
respective parties would be required to perform it if no such
succession had taken place.
6. Assignment. Neither this Agreement nor any rights
hereunder may be assigned without the prior written consent of the
other parties hereto and prior to any assignment the assignee must
agree in writing to be bound by the terms and conditions of this
Agreement.
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7. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of North Carolina applicable
to contracts made and to be performed entirely within such state.
8. Amendment. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended only by a written
instrument executed by the parties hereto and, in the case of the
Company, approved by a Special Vote of its Board of Directors.
9. Notices. Any notice or communication given pursuant
hereto by any of the parties hereto to the other parties shall be
in writing and personally delivered or mailed by registered or
certified mail or by telegraphic means as follows:
If to Delhaize:
Etablissements Delhaize Freres
et Cie "Le Lion" S.A.
rue Osseghem, 53
1080 Brussels Belgium
With a copy to:
Gwynne H. Wales, Esq.
White & Case
1155 Avenue of the Americas
New York, New York 10036
If to Detla:
Delhaize The Lion America, Inc.
Suite 2160
Atlanta Plaza
950 East Pace Ferry Road
Atlanta, Georgia 30326
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With a copy to:
Gwynne H. Wales, Esq.
White & Case
1155 Avenue of the Americas
New York, New York 10036
If to the Company:
Food Lion, Inc.
Post Office Box 1330
Salisbury, North Carolina 28145-1330
With a copy to:
Richard Wyatt, P.C.
Akin, Gump, Strauss, Hauer
& Feld, L.L.P.
1333 New Hampshire Ave., N.W.
Suite 400
Washington, D.C. 20036
or to such other address as hereafter shall be furnished in
writing by any Shareholder to the other Shareholders.
10. Entire Agreement. This Agreement sets forth the entire
understanding and agreement among the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the
subject matter hereof.
11. No Employment. Nothing contained in this Agreement
shall be construed to constitute an employment agreement with
regard to any person.
12. Headings. The headings in the Agreement are soley for
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
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13. Severability. If any provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void or
unenforceable, the balance of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated thereby.
14. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of such together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first
above written.
ETABLISSEMENTS DELHAIZE FRERES
ET CIE "LE LION" S.A.
___________________________________
By:
___________________________________
By:
DELHAIZE THE LION AMERICA, INC.
___________________________________
By:
Its:
FOOD LION, INC.
___________________________________
By:
Its:
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