SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FOOD LION, INC.
(Exact name of issuer as specified in its charter)
NORTH CAROLINA 56-0660192
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 1330
2110 Executive Drive
Salisbury, NC 28145-1330
(Address of principal executive offices) (Zip Code)
1996 EMPLOYEE STOCK INCENTIVE PLAN OF FOOD LION, INC.
(Full title of the plan)
Dan A. Boone
Vice President-Finance
Food Lion, Inc.
P.O. Box 1330
2110 Executive Drive
Salisbury, NC 28145-1330
(704)633-8250
(Name, address and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share(1) price(1) fee
Class A Common
Stock, $.50 par 7,000,000 shs(2) $7.34375 $51,406,250 $17,726
value per share
(1) Pursuant to Rule 457(c), based on the average of the high
and low prices of the registrant's Class A Common Stock on May
13, 1996 as reported on the NASDAQ National Market System.
(2) Section 4 of the 1996 Employee Stock Incentive Plan of Food
Lion, Inc. (the "Plan") authorized the issuance of up to
10,000,000 shares of Class A Common Stock. The Plan is an
amendment to and restatement of the 1991 Employee Stock Option
Plan of Food Lion, Inc. (the "1991 Plan"). Food Lion, Inc. (the
"Company") filed a Registration Statement on July 21, 1992 to
register 3,000,000 of Class A Common Stock under the 1991 Plan.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item #3. Incorporation of Documents by Reference.
The following documents filed with the Securities and
Exchange Commission (the "Commission") are incorporated
herein by reference:
(a) The Annual Report on Form 10-K of Food Lion, Inc. (the
"Company") for the year ended December 30, 1995.
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 23,1996.
(c) The description of the Company's Class A Common Stock,
$.50 par value per share, included under the heading
"Description of Common Stock" on pages 1-3 of the Company's
Registration Statement on Form 8-A dated February 27, 1984 filed
with the Commission on March 1, 1984, and in any amendment or
report filed for the purpose of updating such description.
All reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") prior to the
filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities remaining unsold, shall be deemed to be incorporated
by reference herein and to be a part hereof from the date of the
filing of such reports and documents.
Item #4. Description of Securities.
Not applicable.
Item #5. Interests of Named Experts and Counsel.
Not applicable.
Item #6. Indemnification of Directors and Officers.
Sections 55-8-50 through 55-8-58 of the North Carolina
Business Corporation Act contain specific provisions relating to
indemnification of directors and officers of North Carolina
corporations. In general, the statutes provide that (i) a
corporation must indemnify a director or officer who is wholly
successful in his defense of proceeding to which he is a party
because of his status as such, unless limited by the articles of
incorporation, and (ii) a corporation may indemnify a director or
officer if he is not wholly successful in such defense, if it is
determined as provided by statute that the director or officer
meets certain standards of conduct, provided when a director or
officer is liable to the corporation or is adjudged liable on the
basis that personal benefit was improperly received by him, the
corporation may not indemnify him. A director of officer of a
corporation who is a party to a proceeding may also apply to the
courts for indemnification, unless the articles of incorporation
provide otherwise, and the court may order indemnification under
certain circumstances set forth in the statute. A corporation
may, in its articles of incorporation or bylaws or by contract or
resolution, provide indemnification in addition to that provided
by statute, subject to certain conditions.
The Company's bylaws provide for the indemnification of any
director or officer of the Company against liabilities and
litigation expenses arising out of his or her status as such,
excluding (i) any liabilities or litigation expenses relating to
activities which were at the time taken known or believed by such
person to be clearly in conflict with the best interests of the
Company and (ii) that portion of any liabilities or litigation
expenses with respect to which such person is entitled to receive
payment under any insurance policy other than a directors' and
officers' insurance policy maintained by the Company.
The Company's articles of incorporation provide for the
elimination of the personal liability of each director of the
Company to the fullest extent permitted by law.
The Company maintains directors' and officers' liability
insurance, under which any controlling person, director or
officer of the Company is insured or indemnified against certain
liabilities which he or she may incur in his or her capacity as
such.
Item #7. Exemption from Registration Claimed.
Not applicable.
Item #8. Exhibits.
The following exhibits are filed as a part of this
Registration Statement:
Number Description
4.1 Copy of the 1996 Employee Stock Incentive Plan of Food
Lion, Inc.
4.2 The Company's Articles of Incorporation, as amended,
which is incorporated by reference to Exhibit 3(i)
of the Company's Quarterly Report on Form 10-Q for the
quarter ended July 4,1981, and Exhibit (4)(a) to Amendment No. 1
to the Company's Registration Statement on Form
S-3 filed on September 22, 1983
5.1 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. as
to the legality of the Common Stock being registered
23.1 The consent of Akin, Gump, Strauss, Hauer & Feld,
L.L.P. (included in its opinion filed as Exhibit 5.1)
23.2 The consent of Coopers & Lybrand L.L.P., independent
accountants of the Company
24.1 Power of Attorney (contained on the signature page hereof)
Item #9. Undertakings.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement to include any material information with
respect to the plan of distribution not previously disclosed in
this Registration Statement or any material change to
such information in this Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933 (the "Securities
Act"), each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each
filing of the Company's annual report pursuant to Section 13(a)
or Section 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with
the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act 1933, the
Company certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Salisbury, State of North Carolina, on this 13th day of May,
1996.
FOOD LION, INC.
By: Tom E. Smith
Tom E. Smith
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
Each officer or director whose signature appears below
hereby appoints Dan A. Boone and Carol Herndon, or either of
them, his or her true and lawful attorney-in-fact to sign on his
or her behalf, as an individual and in the capacity stated
below, any amendment or post-effective amendment to this
Registration Statement which said attorney-in-fact may deem
appropriate or necessary.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities indicated on May 13, 1996.
Date:May 13, 1996 By Tom E. Smith
Tom E. Smith
Chairman of the Board,
President, Chief Executive
Officer and Director
Date:May 13, 1996 By Pierre-OlivierBeckers
Pierre-Olivier Beckers
Director
Date:May 13, 1996 By Dan A. Boone
Dan A. Boone
Vice President of Finance,
Chief Financial Officer,
Principal Financial
Officer
Date:May 13, 1996 By Jacqueline K.Collamore
Dr. Jacqueline K. Collarmore
Director
Date: May 13,1996 By Jean-Claude Coppieters 't Wallant
Jean-Claude Coppieters 't Wallant
Director
Date: May 13, 1996 By William G. Ferguson
William G. Ferguson
Director
Date:May 13, 1996 By Bernard Franklin
Dr. Bernard Franklin
Director
Date:May 13, 1996 By Joseph C. Hall
Joseph C. Hall
Director
Date:May 13, 1996 By Carol Herndon
Carol Herndon
Corporate Controller and
Director of Accounting
Date:May 13, 1996 By Margaret H. Kluttz
Margaret H. Kluttz
Director
Date:May 13, 1996 By Philippe Stroobant
Philippe Stroobant
Director
Date: May 13, 1996 By Gui de Vaucleroy
Gui de Vaucleroy
Director
EXHIBIT INDEX
to
Registration Statement on Form S-8 of
Food Lion, Inc.
Sequential
Exhibit No. Description Page No.
4.1 Copy of the 1996 Employee Stock Incentive Plan of
Food Lion, Inc.
4-2 The Company's Articles of Incorporation *
5.1 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. as
to the legality of the Common Stock being registered
23.1 The consent of Akin, Gump, Strauss, Hauer & Feld,L.L.P.
(included in Exhibit 5.1)
23.2 The consent of Coopers & Lybrand L.L.P., independent
accountants of the Company
24.1 Power of Attorney (contained on the signature page hereof)
*Incorporated by reference
1996 EMPLOYEE STOCK INCENTIVE PLAN
OF
FOOD LION, INC.1
1. Purpose.
The purpose of the 1996 Employee Stock Incentive Plan
of Food Lion, Inc. (the "Plan") is to encourage and enable
selected key employees of Food Lion, Inc. (the "Corporation") to
acquire or to increase their holdings of Class A common stock of
the Corporation (the "Common Stock") in order to promote a closer
identification of their interests with those of the Corporation
and its shareholders, thereby further stimulating their efforts
to enhance the efficiency, soundness, profitability, growth and
shareholder value of the Corporation. This purpose will be
carried out through the granting of incentive stock options
("Incentive Options"), nonqualified stock options ("Nonqualified
Options") and Restricted Stock (herein so called). Incentive
Options and Nonqualified Options shall be referred to herein
collectively as "Options."
2. Administration of the Plan.
(a) The Plan shall be administered by those members of
the Stock Option Committee of the Board of Directors of the
Corporation (the "Committee"), but not less than two, who (1) are
eligible to administer the Plan pursuant to the disinterested
administration requirements of Rule 16b-3(c)(2)(i) (or any
successor rule) under the Securities Exchange Act of 1934 and (2)
qualify as "outside directors," as such term is used for purposes
of Section 162(m) of the Internal Revenue Code of 1986 and any
rules and regulations promulgated thereunder (the "Code"). Any
action taken by the Committee may be taken by a written
instrument signed by all of the members of the Committee and any
such action so taken by written consent shall be as fully
effective as if it had been taken by a majority of the members at
a meeting duly held and called. Subject to the provisions of the
Plan, the Committee shall have full and final authority in its
discretion to take any action with respect to the Plan including,
without limitation, the following: (i) to prescribe the form or
forms of the investments or agreements evidencing any Options or
Restricted Stock granted under the Plan; (ii) to establish, amend
and rescind rules, regulations and guidelines for the
administration of the Plan; (iii) to construe and interpret the
Plan and the instruments or agreements evidencing Options or
Restricted Stock granted under the Plan; (iv) to establish and
interpret rules, regulations and guidelines for administering the
Plan; and (v) to make all other determinations deemed necessary
or advisable for administering the Plan.
(b) In the case of an individual who is a Section 16
Insider, the Committee shall have full and final authority in its
discretion to determine which of such individuals shall receive
Options or Restricted Stock, the nature of each Option as an
Incentive Option or a Nonqualified Option, the times or effective
dates when Options or Restricted Stock shall be granted, the
number of shares of Common Stock to be granted as Restricted
Stock or to be subject to each Option, the Option Price
(determined in accordance with Section 6) and the time or times
when, and the conditions, if any, upon the happening of which
each Option shall be exercisable including determining whether or
not to accelerate the exercise date of an Option as provided in
Section 6(b).
(c) Except as otherwise determined by the Committee in
accordance with Section 2(d), an individual who is not a Section
16 Insider and who is promoted to one of the positions or salary
grade levels set forth in Exhibit A to the Plan or who is
employed by the Corporation in one of the positions or salary
grade levels set forth in Exhibit A for a period of service set
forth in Exhibit A shall be granted, effective as of the date of
such promotion or of completion of such period of service, the
number of Incentive Options specified in Exhibit A. The
recipient of Options granted pursuant to this Section 2(c) shall
be entitled to exercise such Options during the period ending on
the fifth anniversary of the date the grant is effective and
beginning (i) in the case of 1/3 of the Options, on the third
anniversary of the date the grant is effective, (ii) in the case
of an additional 1/3 of the Options, on the fourth anniversary of
the date the grant is effective, and (iii) in the case of the
final 1/3 of the Options, on the date that is four years and six
months from the date the grant is effective. Any Option granted
pursuant to this section 2(c) that is not exercised by the fifth
anniversary of the date the grant is effective shall terminate.
In the event an employee of the Corporation receives a grant of
Options pursuant to this Section 2(c) as a result of promotion to
or completion of a period of service in a position and then is
demoted from that position, any of such Options that have not
been exercised prior to the effective date of the demotion shall
be forfeited. The exercise price of each Option granted pursuant
to this Section 2(c) shall be the fair market value (determined
in accordance with Section 6(a)(ii)) of the Common Stock on the
date the grant is effective. The Committee shall have full and
final authority in its discretion to modify Exhibit A, including,
without limitation, adding positions or salary grade levels to or
deleting positions or salary grade levels from the list of those
eligible for awards, increasing or decreasing the number of
Options granted upon promotion to a position or salary grade
level or completion of a period of service in a position or
salary grade level , and increasing or decreasing the period of
service in a position or salary grade level required for grant of
Options; provided that, no such modification by the Committee
shall affect the rights of a Participant under any Option granted
prior to the date of the Committee's action.
(d) In the case of an individual who is not a Section
16 Insider and who is a "key employee" as determined by the
Committee in accordance with Section 5(b), the Committee shall
have full and final authority in its discretion to grant Options
or Restricted Stock in addition to those Options granted pursuant
to Section 2(c), and to determine which of such individuals shall
receive such Options or Restricted Stock, the nature of each such
Option as an Incentive Option or a Nonqualified Option, the times
or effective dates when such Options shall be granted, the number
of shares of Common Stock to be subject to each such Option, the
Option Price (determined in accordance with Section 6) and the
time or times when, and the conditions, if any, upon the
happening of which each such Option shall be exercisable,
including determining whether or not to accelerate the exercise
date of an Option as provided in Section 6(b). Notwithstanding
the provisions of Section 2(c), the Committee shall have full and
final authority in its discretion to determine that an individual
who would otherwise be entitled, pursuant to Section 2(c), to be
granted Options upon a promotion or completion of a period of
service, shall not receive such a grant or shall be granted a
reduced number of Options; provided that, no such determination
by the Committee shall be effective unless it is made before the
date on which the grant of Options pursuant to Section 2(c) would
otherwise be effective.
3. Effective Date.
The effective date of the Plan, as amended, shall be
February 8, 1996 (the "Effective Date"). Options may be granted
under the Plan on and after the effective date, but not after
February 8, 2006.
4. Shares of Common Stock Subject to the Plan.
The number of shares of Common Stock that may be issued
pursuant to the exercise of Options granted hereunder and the
grant of Restricted Stock shall not exceed in the aggregate Ten
Million (10,000,000) shares of either authorized but unissued
shares of Common Stock of the Corporation, or shares of Common
Stock held in the Corporation's treasury, including shares
purchased on the open market. The Corporation hereby reserves
sufficient authorized shares of Common Stock to meet the exercise
of Options granted hereunder or the grant of Restricted Stock
hereunder. Any shares subject to an Option or a Restricted Stock
grant which for any reason expires or is terminated unexercised
as to such shares may again be the subject of a grant under the
Plan of an Option or Restricted Stock. If there is any change in
the shares of Common Stock because of a merger, consolidation or
reorganization involving the Corporation or a related
corporation, or if the Board of Directors of the Corporation
declares a stock dividend or stock split distributable in shares
of Common Stock, or if there is a change in the capital stock
structure of the Corporation or a related corporation affecting
the Common Stock, the number of shares of Common Stock reserved
for issuance under the Plan shall be correspondingly adjusted,
and the Committee shall make such adjustments to Options,
Restricted Stock grants or to any provisions of this Plan as the
Committee deems equitable to prevent dilution or enlargement of
Options. The maximum aggregate number of shares of Common Stock
with respect to which Options may be granted and that may be
granted as Restricted Stock (or any combination of grants of
Options and Restricted Stock) to any employee in any calendar
year during the term of this Plan shall be three hundred thousand
(300,000) shares.
5. Eligibility.
An Option or shares of Restricted Stock may be granted
only to an individual who satisfies the following eligibility
requirements on the date of grant.
(a) The individual is an employee of the Corporation or a
related corporation. For this purpose, an individual shall be
considered to be an "employee" only if there exists between the
individual and the Corporation or a related corporation the legal
and bona fide relationship of employer and employee. In
determining whether such a relationship exists, the regulations
of the United States Treasury Department relating to the
determination of the employment relationship for the purpose of
collection of income tax on wages at the source shall be applied.
(b) The individual falls within the classification of key
employees of the Corporation or a related corporation. For this
purpose, "key employees" are those employees who are in a
position materially to affect the profits of the Corporation or
such related corporation by reason of the nature and extent of
each such employee's duties, responsibilities, personal
capabilities, performance and potential. Each individual who is
employed by the Corporation in one of the positions or salary
grade levels set forth in Exhibit A, as such Exhibit A may be
modified by the Committee in accordance with Section 2(c), shall
be a key employee for purposes of the Plan. The Committee shall
determine which employees, in addition to those described in the
preceding sentence, qualify as key employees.
(c) The individual, being otherwise eligible to receive an
Option or Restricted Stock under this Section 5, is granted an
Option pursuant to Section 2(c) or is selected by the Committee
as an individual to whom an Option shall be granted (an
"Optionee") or to whom Restricted Stock shall be granted.
(d) With respect to Incentive Options, the individual does
not own, immediately before the time that the Incentive Option is
granted, stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Corporation.
For this purpose, an individual will be deemed to own stock which
is attributable to him under Section 424(d) of the Code.
6. Options.
(a) Option Price.
Both Incentive Options and Nonqualified
Options may be granted under the Plan. The price per share
at which an Option may be exercised (the "Option Price")
shall be the fair market value per share of the Common Stock
on the date the Option is granted. For this purpose, the
following rules shall apply:
(i) An Option granted pursuant to paragraph (c) of Section
2 shall be deemed to be granted on the date specified in that
paragraph. Any other Option shall be deemed to be granted on the
date that the Committee acts to grant the Option, or on any later
date specified by the Committee as the effective date of the
Option.
(ii) The fair market value of the Common Stock on the date
the option is granted shall be determined in good faith by the
Committee, and shall mean the closing sales price of such Common
Stock as reported on the NASDAQ National Market System on the
date the Option is granted, or if the Option is not granted on a
trading date, on the trading date immediately preceding the date
the Option is granted; provided, that if the Common Stock is not
included in the NASDAQ National Market System on the date the
Option is granted, the fair market value of the Common Stock
shall be determined in accordance with the applicable provisions
of Section 20.2031-2 of the Federal Estate Tax Regulations, or in
any other manner consistent with the Code and accompanying
regulations.
(iii) In no event shall there first become exercisable
by the Optionee in any one calendar year Incentive Options
granted by the Corporation or any related corporation with
respect to shares having an aggregate fair market value
(determined at the time an option is granted) greater than
$100,000; provided, that to the extent that an Incentive Option
granted under this Plan exceeds the foregoing limitation, it
shall be treated for all purposes under the Plan as a
Nonqualified Option.
(b) Option Period and Limitations on the Right to Exercise Options.
(i) The period during which an Option granted pursuant to
paragraph (c) of Section 2 may be exercised shall be the period
specified in that paragraph. The period during which any other
Option may be exercised (the "Option Period") shall be determined
by the Committee at the time the Option is granted. Such period
shall not extend more than ten years from the date on which the
Option is granted. Any Option or portion thereof not exercised
before expiration of the Option Period shall terminate.
(ii) An Option may be exercised by giving written notice of
at least ten days to the Committee at such place as the Committee
shall direct. Such notice shall specify the number of shares of
Common Stock to be purchased pursuant to the Option and the
aggregate purchase price to be paid therefor, and shall be
accompanied by the payment of such purchase price. Such payment
shall be in the form of cash or shares of Common Stock owned by
the Optionee at the time of exercise, or in any combination of
cash and shares. Shares of Common Stock tendered in payment on
the exercise of an Option shall be valued at their fair market
value on the date of exercise, as determined by the Committee by
applying the provisions of Section 6(a)(ii).
(iii) No Option shall be exercised unless the Optionee
is, at the time of exercise, an employee as described in Section
5(a), and has been an employee continuously since the date the
Option was granted, subject to the following:
(A) An Option shall not be affected by any change in
the terms, conditions or status of the Optionee's employment,
provided that the Optionee continues to be an employee of the
Corporation or a related corporation.
(B) The employment relationship of an Optionee shall
be treated as continuing intact for any period that the Optionee
is on military or sick leave or other bona fide leave of absence,
provided that the period of such leave does not exceed ninety
days or, if longer, as long as the Optionee's right to
reemployment is guaranteed either by statue or by contract. The
employment relationship of an Optionee shall also be treated as
continuing intact while the Optionee is not in active service
because of such disability under Section 422. For purposes of
this Section 6(b)(iii)(B), "disability" shall mean the inability
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death, or which has lasted or can be
expected to last for a continuous period of not less than twelve
months. The Committee shall determine whether there is a
disability within the meaning of this section.
(C) If the employment of an Optionee is terminated
because of retirement (herein, "retirement") as provided in
Section 1.20 (or any successor provision) of the Profit Sharing
Retirement Plan of Food Lion, Inc. or any successor plan thereto
applicable to the Optionee, or if the Optionee dies while he is
an employee or after his termination of employment because of
retirement, the Option may be exercised only to the extent
exercisable on the date of the Optionee's retirement or death
(the "termination date"), except that the Committee, in its sole
and absolute discretion, may accelerate the date that any Option
which was not otherwise exercisable on the termination date shall
be exercisable in whole or in part, without any obligation to
accelerate such date with respect to other Options granted to the
Optionee or to accelerate such date with respect to Options
granted to any other Optionee, or to treat all Optionees
similarly situated in the same manner. The Option must be
exercised, if at all, prior the earlier of: (1) the close of the
period of twelve months (three months in the case of an Incentive
Option) next succeeding the termination date; or (2) the close of
the Option Period. In the event of the Optionee's death, such
Option shall be exercisable by such person or persons as shall
have acquired the right to exercise the Option by will or by the
laws of intestate succession.
(D) If the employment of the Optionee is terminated
for any reason other than as provided in subparagraph (C)
immediately preceding, his Option may be exercised only to the
extent exercisable on the date of such termination of employment,
except that the Committee, in its sole and absolute discretion,
may accelerate the date that any Option which was not otherwise
exercisable on the date of such termination of employment shall
be exercised in whole or in part, without any obligation to
accelerate such date with respect to other Options granted to the
Optionee or to accelerate such date with respect to Options
granted to any other Optionee, or to treat all Optionees
similarly situated in the same manner. The Option must be
exercised, if at all, prior to the earlier of: (1) the close of
the period of three months less one day next succeeding the date
of termination of employment; or (2) the close of the Option
Period. If the Optionee dies following such termination of
employment and prior to the earlier of the dates specified in (1)
and (2) in the immediately preceding sentence, the Optionee shall
be treated as having died while employed under subparagraph (C)
immediately preceding (treating for this purpose the Optionee's
date of termination of employment as the termination date).
(iv) An Optionee or his legal representative, legatees
or distributees shall not be deemed to be the holder of any
shares of Common Stock subject to an Option unless and until
certificates for such shares are issued to him or them under the
Plan. Common Stock certificates shall be issued and distributed
as soon as practicable following the date of exercise of an
Option.
(c) Stock Option Agreement.
The grant of any Option under the Plan shall
be evidenced by the execution of a 1996 Employee Stock
Option Agreement of Food Lion, Inc. (the "Agreement")
between the Corporation and the Optionee. Such Agreement
shall set forth the date of grant of the Option, the number
of shares of Common Stock subject to the Option, the Option
Price, the Option Period and the time or times when and the
conditions upon the happening of which the Option shall
become exercisable. Such Agreement shall also designate the
Option as an Incentive Option or a Nonqualified Option, and
shall set forth any restrictions which shall apply to the
shares to be purchased thereunder, and any other terms and
conditions consistent with the provisions of the Plan and
applicable law and regulations to which the Option shall be
expressly made subject at the time the Option is granted.
(d) Nontransferability of Options and Shares.
No Option shall be transferable (including by
pledge or hypothecation) other than by will or the laws of
intestate succession or, if applicable, pursuant to a
qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder. An Option shall
be exercisable during the Optionee's lifetime only by him.
Shares of Common Stock acquired upon the exercise of an
Option shall not, without the consent of the Committee, be
disposed of until the expiration of six months after the
date the Option was granted.
7. Restricted Stock.
(a) Terms and Conditions.
Grants of Restricted Stock shall be subject
to the terms and conditions set forth in this Section 7 and
any additional terms and conditions, not inconsistent with
the express terms and provisions of the Plan, as the
Committee, in its sole discretion, shall set forth in a
grant instrument or agreement. Restricted Stock may be
granted alone or in addition to any grant of Options under
the Plan. Subject to the terms of the Plan, the Committee
shall determine the number of shares of Restricted Stock to
be granted to an individual and the Committee may impose
different terms and conditions on any particular Restricted
Stock grant made to any individual.
(b) Restrictions.
A grant of Restricted Stock is a grant of a
number of shares of Common Stock to a Participant, subject
to such restrictions, terms and conditions as the Committee
deems appropriate, including, without limitation, (a)
restrictions on the sale, assignment, transfer,
hypothecation or other disposition of such shares, (b) the
requirement that the Participant deposit such shares with
the Company while such shares are subject to such
restrictions, (c) the requirement that such shares be
forfeited upon termination of employment for specified
reasons within a specified period of time and
(d) restrictions on the vesting of such shares based on
service, the attainment of performance goals, a change of
control of the Corporation or a related corporation or other
factors.
(c) Restriction Period.
In accordance with Sections 7(a) and 7(b) of
the Plan, Restricted Stock shall only become unrestricted
and vest in the Participant in accordance with such vesting
schedule relating to the restriction applicable to such
Restricted Stock, if any, as the Committee may establish at
the time of the grant in the relevant grant instrument or
agreement (the period over which such stock vests being
referred to herein as the "Restriction Period"). During the
Restriction Period such stock shall be and remain unvested
and a Participant may not sell, assign, transfer, pledge,
encumber or otherwise dispose of or hypothecate such stock.
Upon satisfaction of the vesting schedule and any other
applicable restrictions, terms and conditions, the
Participant shall be entitled to receive payment of the
Restricted Stock or a portion thereof, as the case may be,
as provided in Section 7(d) of the Plan.
(d) Issuance of Restricted Stock Shares.
The actual issuance of any share of
Restricted Stock issued in connection with a grant hereunder
may be evidenced in such manner as the Committee, in its
sole discretion, shall deem appropriate including, without
limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock
certificate is issued in respect of Restricted Stock granted
hereunder, such certificate shall bear, among any other
required legends, the following legend:
The transferability of this certificate and the
shares of stock represented hereby are subject to the
terms and conditions (including, without limitation,
forfeiture events) contained in the 1996 Employee Stock
Incentive Plan of Food Lion, Inc. and a grant
instrument or agreement delivered or entered into
between the registered owner hereof and Food Lion, Inc.
Copies of such Plan and instrument or agreement are on
file in the office of the Secretary of Food Lion, Inc.,
and Food Lion, Inc. will furnish to the record holder
of the certificate, without charge, upon written
request at its principal place of business a copy of
such Plan and grant instrument or agreement.
The Committee may provide that the Corporation may retain,
at its option, the physical custody of any stock certificate
representing any grants of Restricted Stock during the
Restriction Period or require that the Restricted Stock be
placed in escrow or trust, along with a stock power endorsed
in blank, until all restrictions or vesting provisions are
satisfied or removed.
(e) Payment of Restricted Stock Grants.
After the satisfaction and/or lapse of
the restrictions, terms and conditions established by
the Committee in respect of a grant of Restricted
Stock, a certificate (without the legend set forth in
Section 7(d) above) for the number of shares of Common
Stock which are no longer subject to such restrictions,
terms and conditions shall, as soon as practicable
thereafter, be delivered to the Participant.
(f) Shareholder Rights.
Except as may otherwise be provided in
the relevant grant instrument or agreement, an
individual shall have, during the Restriction Period
with respect to the shares of Common Stock received
under a grant of Restricted Stock, all of the rights of
a shareholder of the Corporation, including, without
limitation, the right to vote the shares and to receive
any cash dividends. Stock dividends issued with
respect to such Restricted Stock shall be treated as
additional Restricted Stock grants and shall be subject
to the same restrictions and other terms and conditions
that apply to the shares of Restricted Stock with
respect to which such stock dividends are issued.
8. Withholding.
The Committee shall require any Optionee or recipient
of Restricted Stock hereunder to timely pay the Corporation in
cash the amount of any tax or other amount required by any
governmental authority to be withheld and paid over by the
Corporation to such authority for the account of such recipient.
Notwithstanding the foregoing, the Committee may provide at the
time of grant that the Optionee or recipient shall, or that the
Optionee or recipient may, satisfy such obligation in whole or in
part, and any other local, state, or federal income tax
obligations resulting from the exercise or surrender of a
Nonqualified Option or the vesting of Restricted Stock by
electing (such election being referred to herein as the
"Election") to deliver to the Corporation shares of Common Stock
owned by the Optionee at the time of exercise, or to have the
Corporation withhold from the shares of Common Stock to which the
recipient is entitled. The number of shares to be delivered or
withheld shall have a fair market value (determined in accordance
with Section 6(a)(ii) hereof) as of the date that the amount of
tax to be withheld is determined (the "Tax Date") as nearly equal
as possible to (but not exceeding) the amount of such obligations
being satisfied. Except to the extent the Committee determines
otherwise, the following additional rules shall apply with
respect to Elections:
(a) Each Election must be made in writing to the Committee
prior to the Tax Date. The Committee may reject any Election, or
may suspend or terminate the right to make an Election. An
Election, once made by the recipient and accepted by the
Committee, shall be irrevocable.
(b) Notwithstanding the foregoing, if a recipient is an
officer or director of the Corporation within the meaning of
Section 16 of the Securities Exchange Act of 1934, then, unless
approved by the Committee, (i) no Election shall be made as of a
Tax Date which occurs within six months of the date of grant of a
Nonqualified Option, and (ii) the Election, as well as the
withholding of shares, must occur during a period beginning on
the third business day following the date or release for
publication of the Corporation's quarterly or annual summary
statements of revenues and earnings and ending on the twelfth
business day following such date.
9. No Right or Obligation of Continued Employment.
Nothing contained in the Plan shall require the
Corporation or a related corporation to continue to employ the
recipient of an Option or Restricted Stock, nor shall any such
individual be required to remain in the employment of the
Corporation or a related corporation. Options granted under the
Plan shall not be affected by any change in the duties or
position of the Optionee, as long as such individual remains an
employee of the Corporation or a related corporation (taking into
account the provisions of Section 6(b)(iii)(B) hereof). A change
in the duties or position of a recipient of Restricted Stock
shall have such effect, if any, on such grant of Restricted Stock
as may be provided in the relevant grant instrument or agreement.
10. Retirement Plans.
In no event shall any amounts accrued, distributable or
payable under the Plan be treated as compensation for the purpose
of determining the amount of contributions or benefits to which
any person shall be entitled under any retirement plan sponsored
by the Corporation or a related corporation that is intended to
be a qualified plan within the meaning of Section 401(a) of the
Code.
11. Certain Definitions.
For purposes of the Plan, the following terms shall
have the meaning indicated:
(a) "Related corporation" shall mean any parent, subsidiary
or predecessor of the Corporation.
(b) "Parent" or "parent corporation" shall mean any
corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation if each corporation
other than the Corporation owns stock possessing fifty percent or
more of the total combined voting power of all classes of stock
in another corporation in the chain.
(c) "Subsidiary" or "subsidiary corporation" shall mean any
corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation of each corporation
other than the past corporation in the unbroken chain owns stock
possessing fifty percent or more of the total combined voting
power of all classes of stock in another corporation in the
chain.
(d) "Predecessor" or "predecessor corporation" shall mean a
corporation which was a party to a transaction described in
Section 424(a) of the Code (or which would be so described if a
substitution or assumption under that Section had occurred) with
the Corporation, or a corporation which is a parent or subsidiary
of the Corporation, or a predecessor of any such corporation.
(e) "Section 16 Insider" shall mean an individual who
is serving as a director (including a director who is an
employee), any individual who is serving in a position designated
as an "executive officer" by the Board of Directors of the
Corporation, or any individual required to file pursuant to Rule
16a-3 under Section 16 of the Securities Exchange Act of 1934
(the "Exchange Act") as an "officer" within the meaning of Rule
16a-1(f) of the Exchange Act, as such Act and Rules may
hereinafter be amended from time to time.
12. Amendment and Termination of the Plan.
The Plan may be amended or terminated at any time by
the Board of Directors of the Corporation; provided that such
amendment or termination shall not, without the consent of an
Optionee or grantee of Restricted Stock, adversely affect the
Optionee's or grantee's rights with respect to an Option or
shares of Restricted Stock previously granted; and provided
further, that approval by the shareholders of the Corporation
shall be required for any amendment which would (i) increase the
number of shares of Common Stock which may be issued under the
Plan, except to the extent of adjustments pursuant to Section 4,
or (ii) materially change the requirements for eligibility to be
an Optionee or grantee of Restricted Stock. Notwithstanding the
foregoing, shareholder approval shall be required for any other
amendments which require such approval in order to secure an
exemption from Section 16(b) of the Securities Exchange Act of
1934.
13. Restrictions on Shares.
The Committee may impose such restrictions on any
shares of Common Stock acquired pursuant to grants hereunder as
it may deem advisable, including without limitation restrictions
under the Securities Act of 1933, as amended, and under any Blue
Sky or securities laws applicable to such shares. The Committee
may cause a restrictive legend to be placed on any certificate
issued pursuant to an Option hereunder in such form as may be
prescribed from time to time by applicable laws and regulations
or as may be advised by legal counsel.
14. Applicable Law.
The Plan shall be governed by and construed in
accordance with the laws of the State of North Carolina, except
to the extent federal law may be applicable.
15. Shareholder Approval.
The Plan is subject to approval by the shareholders of
the Corporation on or before June 1, 1996. Options and
Restricted Stock granted prior to such shareholder approval shall
be conditioned upon and shall be effective only upon approval of
the Plan by such shareholders on or before such date.
16. Predecessor Plans.
The Food Lion, Inc. 1983 Employee Stock Option Plan, as
amended, and the 1991 Employee Stock Option Plan of Food Lion,
Inc. (together, the "Predecessor Plans") shall continue in effect
following the effective date of this Plan, and shall be
applicable with respect to all options issued under the
Predecessor Plans before the effective date of this Plan.
EXHIBIT A
TO
1996 EMPLOYEE STOCK INCENTIVE
PLAN OF FOOD LION, INC.
Salary Grade I, II 0 Minimum
0 Discretionary after five years of service
Salary Grade III 50 Minimum
50 Discretionary after five years of service
Salary Grade IV 100 Minimum
100 Discretionary after five years of service
Salary Grade V 100 Minimum
150 Discretionary after five years of service
Salary Grade VI 250 Minimum
250 Discretionary after five years of service
Salary Grade VII 500 Minimum
500 Discretionary after five years of service
Salary Grade VIII, IX, X 1000 Minimum
0 Discretionary after five years of service
1 1991 Plan as Amended in 1994 and 1996.
May 13, 1996
Food Lion, Inc.
P.O. Box 1330
2110 Executive Drive
Salisbury, NC 28145-1330
Ladies & Gentlemen:
We have acted as counsel to Food Lion, Inc., a North
Carolina corporation (the "Company"), in connection with the
registration of 7,000,000 shares of Class A Common Stock, par
value $.50 per share (the "Class A Common Stock"), of the
Company, pursuant to a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as
amended. The Registration Statement relates to shares of Class A
Common Stock issuable pursuant to the Company's 1996 Stock
Incentive Plan (the "Plan").
In our opinion, the shares of Class A Common Stock to be
registered under the Registration Statement have been duly
authorized for issuance by the Company, and, upon issuance
pursuant to the terms of the Plan, will be validly issued, fully
paid and nonassessable.
We consent to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on
Form S-8 (1996 Employee Stock Incentive Plan of Food Lion, Inc.)
of our report dated Febuary 7, 1996, on our audits of the
financial statements and financial statement schedules of Food
Lion, Inc. as of December 30, 1995 and December 31,1994, and for
the years ended December 30, 1995, December 31, 1994 and January
1, 1994.
Coopers & Lybrand L.L.P.
May 13, 1996
