UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
KASH N' KARRY FOOD STORES, INC.
(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
48577P106
(CUSIP Number)
R. William McCanless
Senior Vice President and Chief Administrative Officer
Food Lion, Inc.
2110 Executive Drive
Salisbury, North Carolina 28145-1330
(704) 633-8250
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
October 31, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box { }.
Check the following box if a fee is being paid with this
statement { }.
CUSIP No. 48577P106
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Food Lion, Inc.
IRS Employer Identification No. 56-0660192
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) { }
(b) { }
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
BK
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) { }
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
North Carolina
NUMBER OF SHARES (7) SOLE VOTING POWER
BENEFICIALLY OWNED 0
BY EACH REPORTING (8) SHARED VOTING POWER
PERSON WITH 3,134,942
(9) SOLE DISPOSITIVE POWER
3,134,942*
(10) SHARED DISPOSITIVE POWER
0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,134,942*
(12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES { }
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
67.1%**
(14) TYPE OF REPORTING PERSON
CO
* Beneficial ownership of these shares is being reported
as a result of the Stockholders Agreement and the Irrevocable
Proxies, both of which are described in Items 4 and 6 hereof.
The option(the "Option")granted to KK Acquisition Corp., a
wholly-owned indirect subsidiary of Food Lion, Inc., pursuant
to the Stockholders Agreement is not yet exercisable. Food Lion, Inc.
disclaims beneficial ownership of these shares pursuant to Rule 13d-4
under the Securities Exchange Act of 1934, as amended. See
Item 5 hereof.
** Gives effect to the exercise of the Option by KK Acquisition
Corp. for the purchase of shares of Kash n' Karry Food
Stores, Inc. Common Stock pursuant to the Stockholders
Agreement.
CUSIP No. 48577P106
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FLI Holding Corp.
IRS Employer Identification No. 56-1997227
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) { }
(b) { }
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
AF
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) { }
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES (7) SOLE VOTING POWER
BENEFICIALLY OWNED 0
BY EACH REPORTING (8) SHARED VOTING POWER
PERSON WITH 3,134,942*
(9) SOLE DISPOSITIVE POWER
3,134,942*
(10) SHARED DISPOSITIVE POWER
0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,134,942*
(12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES { }
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
67.1%**
(14) TYPE OF REPORTING PERSON
CO
* Beneficial ownership of these shares is being reported
as a result of the Stockholders Agreement and the Irrevocable Proxies,
both of which are described in Items 4 and 6 hereof. The option
(the "Option") granted to KK Acquisition Corp., a wholly-owned
subsidiary of FLI Holding Corp., pursuant to the Stockholders Agreement
is not yet exercisable. FLI Holding Corp. disclaims beneficial
ownership of these shares pursuant to Rule 13d-4 under the
Securities Exchange Act of 1934, as amended. See Item 5
hereof.
** Gives effect to the exercise of the Option by KK Acquisition
Corp. for the purchase of shares of Kash n' Karry Food
Stores, Inc. Common Stock pursuant to the Stockholders
Agreement.
CUSIP No. 48577P106
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KK Acquisition Corp.
IRS Employer Identification No. 56-1997232
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) { }
(b) { }
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
AF
(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) { }
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES (7) SOLE VOTING POWER
BENEFICIALLY OWNED 0
BY EACH REPORTING (8) SHARED VOTING POWER
PERSON WITH 3,134,942*
(9) SOLE DISPOSITIVE POWER
3,134,942*
(10) SHARED DISPOSITIVE POWER
0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,134,942*
(12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES { }
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
67.1%**
(14) TYPE OF REPORTING PERSON
CO
* Beneficial ownership of these shares is being reported
as a result of the Stockholders Agreement and Irrevocable Proxies,
both of which are described in Items 4 and 6 hereof. The option
(the "Option") granted to KK Acquisition Corp. pursuant to the
Stockholders Agreement is not yet exercisable. KK Acquisition Corp.
disclaims beneficial ownership of these shares pursuant to Rule 13d-4
under the Securities Exchange Act of 1934, as amended. See
Item 5 hereof.
** Gives effect to the exercise of the Option by KK Acquisition
Corp. for the purchase of shares of Kash n' Karry Food
Stores, Inc. Common Stock pursuant to the Stockholders
Agreement.
Item 1. Security and Issuer.
This Schedule 13D relates to the common stock, $0.01 par
value per share (the "Kash n' Karry Common Stock"), of Kash n'
Karry Food Stores, Inc. ("Kash n' Karry"), a Delaware
corporation. The principal executive offices of Kash n' Karry
are located at 6422 Harney Road, Tampa, Florida 33610.
Item 2. Identity and Background.
This Schedule 13D is being filed jointly by Food Lion, Inc.
("Food Lion"), a North Carolina corporation, FLI Holding Corp., a
Delaware corporation and a wholly owned subsidiary of Food Lion
("FLI Holding"), and KK Acquisition Corp., a Delaware corporation
and a whollyowned subsidiary of FLI Holding ("Sub" and together
with Food Lion and FLI Holding, the "Reporting Persons"). The
agreement among the Reporting Persons relating to joint filing of
this statement is attached as Exhibit 1 hereto.
Food Lion operates a chain of retail food supermarkets
principally in the southeastern United States. Food Lion's
principal executive offices are located at 2110 Executive Drive,
Salisbury, North Carolina 28145-1330. The name, business
address, present principal occupation and citizenship of each
executive officer and director of Food Lion are set forth in
Exhibit 2 to this Schedule 13D which is incorporated herein by
this reference.
FLI Holding is a holding company engaged solely in holding
all of the capital stock of Sub. FLI Holding's principal
executive offices are located at 2110 Executive Drive, Salisbury,
North Carolina 28145-1330. The name, business address, present
principal occupation and citizenship of each executive officer
and director of FLI Holding are set forth in Exhibit 3 to this
Schedule 13D which is incorporated herein by this reference.
Sub is a corporation that has been specially formed for the
purpose of the Merger (as more particularly described in Items 4
and 6). Sub's principal executive offices are located at
2110 Executive Drive, Salisbury, North Carolina 28145-1330. The
name, business address, present principal occupation and
citizenship of each executive officer and director of Sub are set
forth in Exhibit 4 to this Schedule 13D which is incorporated
herein by this reference.
As of October 11, 1996 Etablissements Delhaize Freres et
Cie "Le Lion" S.A.("Delhaize"),a Belgian corporation, and its wholly
owned subsidiary, Delhaize The Lion America, Inc., a Delaware
corporation ("DETLA"),owned in the aggregate 39.5% and 51.7%, respectively,
of the outstanding Class A Common Stock and the Class B Common Stock of
Food Lion. Delhaize is engaged primarily in the operation of supermarkets
located in Belgium and supplied by its own warehouse facilities,
the operation of other retail food outlets and the packaging,
distribution and sale of wine, food and food products.
Delhaize's principal executive offices are located at rue
Osseghem, 53, 1080 Brussels, Belgium.
The name, business address, present principal occupation and
citizenship of each executive officer and director of Delhaize
are set forth in Exhibit 5 to this Schedule 13D which is
incorporated herein by this reference.
DETLA is a holding company engaged solely in holding shares
of Food Lion and Super Discount Markets, Inc., a corporation that
owns and operates Cub Foods, a grocery chain of 13 supermarkets
in the Atlanta, Georgia, area. As of October 11,1996, DETLA held
60% of the issued and outstanding common stock of
Super Discount Markets, Inc. DETLA's principal executive offices
are located at Atlanta Plaza, Suite 2160, 950 East Paces Ferry
Road, Atlanta, Georgia 30326.
The name, business address, present principal occupation and
citizenship of each executive officer and director of DETLA are
set forth in Exhibit 6 to this Schedule 13D which is incorporated
herein by this reference.
Other than Delhaize, DETLA and the executive officers and
directors of Food Lion, Delhaize and DETLA, there are no persons
or corporations controlling or ultimately in control of Food
Lion.
During the last five years, to the best
knowledge of the Reporting Person, none of the Reporting Persons,
DETLA or their respective
executive officers or directors, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors)
or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of
which any of such corporations or such persons was or is subject
to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws, and which judgment, decree or final order was not
subsequently vacated.
Item 3 Source and Amount of Funds or Other Consideration.
Pursuant to a Stockholders Agreement (the "Stockholders
Agreement"), dated as of October 31, 1996, among Food Lion, Sub,
Kash n' Karry and BankAmerica Capital Corporation, Citicorp
North America, Inc., Landmark Equity Partners III, L.P., Landmark
Equity Partners IV, L.P., The Prudential Insurance Company of
America, Prudential Property & Casualty Company, Pruco Life
Insurance Company of Arizona, PaineWebber Capital Inc., UBS
Capital LLC, High Yield Portfolio, IDS Bond Fund, Inc., IDS Life
Advantage Fund,Pruco Life Insurance Company and Wells, Fargo & Company
(collectively, the "Certain Stockholders"), the Certain
Stockholders granted to Sub an irrevocable option (the "Option")
to purchase, under certain circumstances and subject to certain
adjustments, up to 3,134,942 shares of the issued and outstanding
Kash n' Karry Common Stock, at a price of $26.00 per share or any
higher price per share paid in a tender offer (within the meaning
of Rule 14d-2 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) by Sub (the "Offer"), payable in
cash. The shares of Kash n' Karry Common Stock subject to the
Option equal approximately 67.1% of the outstanding Kash n' Karry
Common Stock. The Option was granted by the Certain Stockholders
as a condition of and in consideration for Food Lion and Sub
entering into the Merger Agreement, dated as of October 31, 1996,
among Food Lion, Sub and Kash n' Karry. A copy of the Merger
Agreement was filed as Exhibit 2 to the Current Report on Form 8-
K filed by Food Lion on November 4, 1996, and is incorporated
herein by reference.
The exercise of the Option for the number of shares covered
by the Stockholders Agreement would require aggregate funds of
at least $81,508,492, subject to increase if the price per share
of Kash n'Karry Common Stock in an offer is greater than $26.00.
It is anticipated that, should the Option become exercisable and
should Sub determine to exercise
the Option, Sub would obtain the funds for purchase from Food
Lion in the form of a capital contribution or loan. Food Lion
has engaged Chase Securities, Inc. to arrange for borrowings in
the event that the Option should become exercisable and Sub
determines to exercise the Option.
The Stockholders Agreement was filed as Exhibit 10 to the
Current Report on Form 8-K filed by Food Lion on November 4,
1996, and is incorporated herein by this reference. The
foregoing description of the Stockholders Agreement is qualified
in its entirety by reference to the Stockholders Agreement.
Item 4. Purpose of Transaction.
In connection with the execution of the Stockholders
Agreement, Food Lion, Sub and Kash n' Karry entered into the
Merger Agreement, pursuant to which, among other matters and
subject to the terms and conditions set forth in the Merger
Agreement, Sub will merge (the "Merger") with and into Kash n'
Karry. The Option was granted by the Certain Stockholders as a
condition of and in consideration for Food Lion and Sub entering
into the Merger Agreement. As more fully described in Item 6
hereof, consummation of the Merger is subject to certain
conditions, including: (i) receipt of the approval of the Merger
Agreement by the holders of a majority of the outstanding shares
of Kash n' Karry Common Stock; (ii) expiration or termination of
all waiting periods applicable to the consummation of the Merger
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"); and (iii) satisfaction of certain
other conditions set forth in the Merger Agreement. Pursuant to
the Merger Agreement, (a) the officers of the surviving
corporation in the Merger will be the officers of Sub, (b) the
directors of the surviving corporation in the Merger will be the
directors of Sub, (c) each issued and outstanding share of
Kash n' Karry Common Stock will be converted into the right to
receive $26.00 or any higher price per share paid in the Offer,
(d) the certificate of incorporation of the surviving corporation
shall be as set forth in Exhibit B to the Merger Agreement, and
(e) the bylaws of Sub as in effect immediately prior to the
Effective Time (as defined in the Merger Agreement) shall be the
bylaws of the surviving corporation until thereafter amended.
The foregoing description of the Merger Agreement is
qualified in its entirety by reference to the Merger Agreement
filed as Exhibit 2 to the Current Report on Form 8-K filed by
Food Lion on November 4, 1996.
Prior to the execution of the Merger Agreement and the
Stockholders Agreement, the Rights Agreement, dated as of April
13, 1995, between Kash n'Karry and Fleet National Bank (successor
in interest to Shawmut Bank Connecticut,N.A.), as Rights Agent,as
amended by the First Amendment to Rights Agreement dated June 13, 1995,
was amended by a Second Amendment to Rights Agreement dated as of
October 30, 1996 (as amended, the "Rights Agreement"), to enable Food Lion
and Sub (but no other third party) to enter into the Merger Agreement and
consummate the transactions contemplated thereby without
triggering the issuance of Rights under the Rights Agreement to
the shareholders of Kash n' Karry and thereby substantially
diluting Food Lion's or Sub's holdings of shares of Kash n' Karry
Common Stock.
Depending upon the number of shares of Kash n' Karry Common
Stock ("Shares") purchased pursuant to the Offer, the Shares may
no longer meet the requirements of the National Association of
Securities Dealers (the "NASD") for continued listing on the
NASDAQ National Market. The NASDAQ National Market's published
guidelines require that an issuer have at least 200,000 publicly
held shares, held by at least 400 shareholders or 300
shareholders of round lots, with a market value of at least
$1,000,000 and have net tangible assets of at least $1,000,000,
$2,000,000 or $4,000,000, depending on profitability levels
during the issuer's four most recent fiscal years. If these
standards are not met, the Shares might nevertheless continue to
be included in the NASDAQ Stock Market (the "NASDAQ Stock
Market") with quotations published in the NASDAQ "additional
list" or in one of the "local lists," but if the number of
holders of the Shares were to fall below 300, or if the number of
publicly held Shares were to fall below 100,000, or there were
not at least two registered and active market makers for the
Shares, the NASD's rules provide that the Shares would no longer
be "qualified" for NASDAQ Stock Market reporting, and the NASDAQ
Stock Market would cease to provide any quotations. Shares held
directly or indirectly by directors, officers or beneficial
owners of more than 10% of the Shares are not considered as being
publicly held for this purpose. According to information
provided by Kash n' Karry, as of October 11, 1996, there were
approximately 22 holders of record of Shares and 4,674,314 Shares
were outstanding.
Item 5. Interest in Securities of Issuer.
Although the Option does not allow Sub to purchase any
shares of Kash n' Karry Common Stock pursuant thereto unless the
conditions to exercise specified in the Stockholders Agreement
occur, assuming for purposes of this Item 5 that such conditions
are satisfied and Sub is entitled to purchase shares of Kash n'
Karry Common stock pursuant to the Option, Sub would be entitled
to purchase 3,134,942 shares of Kash n' Karry Common Stock, or
approximately 67.1% of the outstanding Kash n' Karry Common Stock
after giving effect to the exercise of the Option.
Sub does not currently have the right to acquire any shares
of Kash n' Karry Common Stock under the Option unless certain
events specified in the Stockholders Agreement occur.
Accordingly, none of the Reporting Persons has sole voting
or dispositive power with respect to any shares of Kash n' Karry
Common Stock, and the Reporting Persons expressly disclaim beneficial
ownership of Kash n' Karry Common Stock subject to the Option
until such events occur. Assuming for purposes of this Item 5
that events occurred that would enable Sub to exercise the Option
and Sub exercised the Option, Sub would have sole voting power
and sole dispositive power with respect to the shares acquired
pursuant to the Option.
The foregoing description of certain terms of the
Stockholders Agreement is qualified in its entirety by reference
to the Stockholders Agreement filed as Exhibit 10 to the Current
Report on Form 8-K filed by Food Lion on November 4, 1996.
The Reporting Persons may be deemed to have shared voting power
with respect to the 3,134,942 shares of Kash n' Karry Common Stock
covered by the Irrevocable Proxies, a form of which is filed as Exhibit
9 to this Schedule 13D and which is incorporated herein by this
reference. The Irrevocable Proxies empower Sub to vote such shares
of Kash n' Karry Common Stock with respect to certain limited matters
relating to the Merger and certain other extraordinary events. See
Item 6.
To the best knowledge of the Reporting Persons,none of DETLA,
Delhaize or the persons listed on Exhibits 2, 3, 4, 5 or 6
hereto beneficially owns any shares of Kash n' Karry Common
Stock, and (except for the issuance of the Option) no
transactions in Kash n' Karry Common Stock have been effected
during the past 60 days by the Reporting Persons or,to the best knowledge of
the Reporting Persons, by Delhaize, DETLA or any person
listed on Exhibits 2, 3, 4, 5 or 6 hereto. In addition, no other
person is known by the Reporting Persons to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds
from the sale of, the securities covered by this Schedule 13D.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
THE STOCKHOLDERS AGREEMENT.
Set forth below is a description of selected provisions of
the Stockholders Agreement. Such description is qualified in its
entirety by reference to the Stockholders Agreement filed as
Exhibit 10 to the Current Report on Form 8-K filed by Food Lion
on November 4, 1996, and is incorporated herein by reference.
The Stockholders Agreement provides, among other matters,
that each Certain Stockholder shall vote all of the shares of
Kash n' Karry Common Stock owned by the Certain Stockholder (the
"Option Shares"): (i) in favor of the Merger and the Merger
Agreement, (ii) against any action, any failure to act, or
agreement that would result in a breach by Kash n' Karry of the
terms of the Merger Agreement or the Stockholders Agreement,
(iii) against any extraordinary corporate transaction other than
the Merger and the transactions contemplated by the Merger
Agreement and the Shareholders Agreement, such as a merger,
consolidation or other business combination involving Kash n'
Karry, (iv) against a sale, lease or transfer of a material
amount of assets of Kash n' Karry, or a reorganization,
recapitalization, dissolution or liquidation of Kash n' Karry,
(v) against any change in a majority of the persons who
constitute the board of directors of Kash n' Karry, (vi) against
any change in the present capitalization of Kash n' Karry or any
amendment of the Certificate of Incorporation or Bylaws of Kash
n' Karry, (vii) against any other material change in Kash n'
Karry's corporate structure or business, and (viii) against any
other action involving Kash n' Karry which is intended, or could
reasonably be expected, to impede, interfere with, delay,
postpone, or materially adversely affect the Merger and the
transactions contemplated by the Stockholders Agreement and the
Merger Agreement.
Under the Stockholders Agreement, each Certain Stockholder
granted to Sub an irrevocable option (the "Stock Option") to
purchase the Option Shares at a cash purchase price per share
equal to $26.00 or such higher price per share as is paid by Sub
for Kash n' Karry Common Stock in the Merger, the Offer, or
otherwise. The Option is exercisable when all waiting periods
under the HSR Act required for the purchase of the Option Shares
upon such exercise shall have expired or been waived, unless
there shall then be in effect any preliminary or final injunction
or other order issued by any court or governmental agency
prohibiting the exercise of the Option.
Under the Stockholders Agreement, each Certain Stockholder
agreed, in the event that the Offer is commenced and not amended
in a manner adverse to the Certain Stockholder, to tender the
Option Shares owned by it pursuant to and in accordance with the
terms of the Offer.
Each Certain Stockholder agreed under the Stockholders
Agreement that it would not transfer the Option Shares owned by
it except in compliance with the Stockholders Agreement.
THE IRREVOCABLE PROXIES.
In connection with the execution of the Stockholders
Agreement, each Certain Stockholder granted and delivered to Sub
an Irrevocable Proxy dated as of October 31, 1996 (collectively,
the "Irrevocable Proxies"), a form of which is filed as Exhibit 9 to
this Schedule 13D and which is incorporated herein by reference.
Set forth below is a description of selected provisions of the Irrevocable
Proxies. Such description is qualified in its entirety by reference to the
form of Irrevocable Proxy filed as Exhibit 9 to this Schedule 13D.
Each Irrevocable Proxy provides, among other matters, that,
as of the date of the Irrevocable Proxy,
each Certain Stockholder irrevocably appoints Sub the attorney
and proxy of such Certain Stockholder with respect to the Option
Shares owned by such stockholder until the termination date
specified in the Stockholders Agreement. Pursuant to the
Irrevocable Proxies, Sub is empowered at any time prior to the
termination of the Irrevocable Proxies to exercise all voting and
other rights with respect to the Option Shares of each Certain
Stockholder at every annual, special or adjourned meeting of
shareholders of Kash n' Karry and in every written consent in
lieu of such a meeting, or otherwise: (i) in favor of the Merger
and the Merger Agreement, (ii) against any action, any failure to
act, or agreement that would result in a breach by Kash n' Karry
of the terms of the Merger Agreement or the Stockholders
Agreement, (iii) against any extraordinary corporate transaction
other than the Merger and the transactions contemplated by the
Merger Agreement and the Shareholders Agreement, such as a
merger, consolidation or other business combination involving
Kash n' Karry, (iv) against a sale, lease or transfer of a
material amount of assets of Kash n' Karry, or a reorganization,
recapitalization, dissolution or liquidation of Kash n' Karry,
(v) against any change in a majority of the persons who
constitute the board of directors of Kash n' Karry other than as
contemplated by the Merger Agreement, (vi) against any change in
the present capitalization of Kash n' Karry or any amendment of
the Certificate of Incorporation or Bylaws of Kash n' Karry other
than as contemplated by the Merger Agreement, (vii) against any
other material change in Kash n' Karry's corporate structure or
business, and (viii) against any other action involving Kash n'
Karry which is intended, or could reasonably be expected, to
impede, interfere with, delay, postpone, or materially adversely
affect the Merger and the transactions contemplated by the
Stockholders Agreement and the Merger Agreement.
Subject to the Irrevocable Proxies, the Certain Stockholders
in the aggregate have voting power over approximately 67.1% of
the outstanding shares of Kash n' Karry Common Stock, based upon
4,674,314 shares of Kash n' Karry Common Stock outstanding as of
October 31, 1996, as represented by Kash n' Karry.
THE MERGER AGREEMENT.
Set forth below is a description of selected provisions of
the Merger Agreement. The description is qualified in its
entirety by reference to the Merger Agreement filed as Exhibit 2
to the Current Report on Form 8-K filed by Food Lion on November
4, 1996.
THE OFFER. At any time after November 7, 1996, and prior to
December 2, 1996, Kash n' Karry has the right to require Sub to
commence the Offer. The obligation of Sub to accept for payment
or pay for shares of Kash n' Karry Common Stock ("Shares")
tendered pursuant to the Offer is subject to the satisfaction of
the condition that Shares representing at least a majority of the
number of Shares outstanding on a fully diluted basis shall have
been validly tendered and not properly withdrawn prior to the
expiration of the Offer and certain other conditions set forth in
the Merger Agreement. Sub has reserved the right to modify any
of the terms and conditions of the Offer, except that neither
Food Lion nor Sub will decrease the consideration, or change the
form of consideration, payable in the Offer, decrease the number
of Shares sought pursuant to the Offer, change the conditions to
the Offer, impose additional conditions to the Offer, change the
expiration date of the Offer, or amend any term of the Offer in
any manner adverse to holders of the Shares. However, the Offer
may be extended (i) for any period to the extent required by law
or by any rule, regulation, interpretation or position of the
Securities and Exchange Commission or its staff applicable to the
Offer and (ii) for one or more periods of not more than five (5)
business days each, but in no event for more than a total of twenty
(20) business days if, following the satisfaction or waiver of each
of the conditions to the Merger, shares constituting less than 90%
of the Shares outstanding have been validly tendered and not properly
withdrawn pursuant to the Offer; provided that the closing of the
Offer shall occur on or before December 12, 1996, if all of the
conditions to the Merger have been satisfied or waived prior to
such date. If Sub is unable to consumate the Offer on or prior
to the expiration date of the Offer due to the failure of any
condition to the Merger, Sub shall extend the Offer until the
earlier of (A) February 28, 1997 and (B) such time as such condition
is satisfied or waived; provided that Sub may but is not obligated to
extend the Offer if either (x) Kash n' Karry is in material breach
of its covenants, agreements, representations or warranties contained
in the Merger Agreement or (y) there is a reasonable likelihood that
one or more of the conditions to the Merger cannot be satisfied on or
before February 28, 1997.
BOARD RECOMMENDATION. The Board of Directors of Kash n'
Karry (at a meeting duly called and held) has, based upon, among
other things, a fairness opinion of PaineWebber, its financial
advisor, that the proposed consideration to be paid in the Offer
and the Merger is fair from a financial point of view to the
holders of Shares, (i) determined that the Offer and the Merger
are fair to, and in the best interests of, the stockholders of
Kash n' Karry (the "Stockholders"), (ii) taken all actions to
approve the Offer, the Merger and the Stockholders Agreement for
purposes of Section 203 of the Delaware General Corporation Law
("DGCL"), and (iii) resolved to recommend acceptance of the Offer
and approval and adoption of the Merger Agreement by the Stockholders.
BOARD REPRESENTATION. The Merger Agreement provides that,
promptly upon the payment by Sub for shares of Common Stock
acquired pursuant to the Offer or the Stockholders Agreement, Food Lion
will be entitled to designate such number of directors, rounded
up to the next whole number, equal to the product of the number
of directors on the Board of Directors of Kash n' Karry and the
percentage that such number of Shares so purchased bears to the
number of Shares outstanding, and Kash n' Karry shall,
upon request by Food Lion, promptly increase the size of
the Board of Directors of Kash n' Karry or exercise its best
efforts to secure the resignations of such number of directors as
is necessary to enable Food Lion's designees to be elected to the
Board of Directors of Kash n' Karry and shall cause Food Lion's
designees to be so elected. Kash n' Karry shall take all actions
necessary to effect any such election, including mailing to its
Stockholders the information required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder.
Following the election of designees of Food Lion and prior
to the effective time of the Merger as set forth in the Merger
Agreement (the "Effective Time"), any amendment of the Merger
Agreement or the Certificate of Incorporation or Bylaws of Kash
n' Karry, any termination of the Merger Agreement by Kash n'
Karry, any extension by Kash n' Karry of the time for the
performance of any of the obligations or other acts of Food Lion
or Sub or waiver of any of Kash n' Karry's rights thereunder
shall require the concurrence of a majority of the directors of
Kash n' Karry then in office who neither were designated by Food
Lion nor are employees of Kash n' Karry or any of its
subsidiaries (the "Independent Directors"). If the number of
Independent Directors shall be reduced below two for any reason
whatsoever, the remaining Independent Director shall designate a
person to fill such vacancy who shall be deemed to be an
Independent Director for purposes of this Agreement or, if no
Independent Directors then remain, the other directors shall
designate two persons to fill such vacancies who shall not be
officers or affiliates of Kash n' Karry or any of its
subsidiaries, or officers or affiliates of Food Lion or any of
its subsidiaries, and such persons shall be deemed to be
Independent Directors for purposes of the Merger Agreement. The
Independent Directors shall have the authority to retain such
counsel and other advisors at the expense of Kash n' Karry as are
reasonably appropriate to the exercise of their duties in
connection with the Merger Agreement, subject to approval by Kash
n' Karry of the terms of such retention, which approval shall not
be unreasonably withheld. In addition, the Independent Directors
shall have the authority to institute any action, on behalf of
Kash n' Karry, to enforce performance of the Merger Agreement.
THE MERGER. The Merger Agreement provides that, upon the
terms and subject to the provisions thereof, and in accordance
with the relevant provisions of the DGCL, Sub shall be merged
with and into Kash n' Karry. Following the Merger, Kash n' Karry
shall continue as the surviving corporation (the "Surviving
Corporation") and shall continue its existence under the laws of
Delaware, and the separate corporate existence of Sub shall
cease. The Merger Agreement further provides that (i) the
certificate of incorporation of the Surviving Corporation after
the Effective Time shall be as set forth in Exhibit B to the
Merger Agreement, and the bylaws of Sub as in effect immediately
prior to the Effective Time shall be the bylaws of the Surviving
Corporation until thereafter amended, (ii) the directors of Sub
immediately prior to the Effective Time shall become the
directors of the Surviving Corporation until their successors are
duly elected and qualified, and (iii) the officers of Sub
immediately prior to the Effective Time shall become the officers
of the Surviving Corporation until their successors are duly
elected and qualified.
CONSIDERATION TO BE PAID IN THE MERGER. The Merger
Agreement provides that, at the Effective Time, each Share
outstanding immediately prior to the Effective Time (other than
Shares owned by Sub or any affiliate of Sub or held in the
treasury of Kash n' Karry or by any subsidiary of Kash n' Karry,
all of which shall be cancelled and no payment shall be made with
respect thereto, and other than Dissenting Shares (as defined
below under "Dissenters' Rights")) shall, by virtue of the Merger
and without any action on the part of the holder thereof, be
converted into a right to receive in cash an amount per Share
equal to the highest price that may be paid pursuant to the
Offer, payable to the holder thereof, without interest thereon,
upon surrender of the certificate representing such Share. Each
share of common stock of Sub issued and outstanding immediately
prior to the Effective Time will by virtue of the Merger and
without any action on the part of the holder thereof, be
converted into and exchanged for one share of common stock of the
Surviving Corporation.
STOCKHOLDERS' MEETING. In the Merger Agreement, Kash n'
Karry has agreed, if required by Sub, through its Board of
Directors, to duly call, give notice of, convene and hold a
meeting of its stockholders, or solicit consents from a
sufficient number of Stockholders, as soon as practicable
following the expiration of the Offer, for the purpose of
adopting the Merger Agreement. In connection with any vote to
approve the Merger Agreement, all Shares acquired by Food Lion,
Sub or any other affiliate of Sub, pursuant to the Offer, the
Stockholders Agreement or otherwise will be voted in favor of the
Merger. The Board of Directors of Kash n' Karry will recommend
that Stockholders of the Company vote in favor of the approval
and adoption of the Merger Agreement.
DISSENTERS' RIGHTS. Holders of Shares will not have
appraisal rights as a result of the Offer. If the Merger is
consummated, however, persons who hold Shares at such time will
have the right to appraisal of their Shares in accordance with
Section 262 of the DGCL ("Dissenters' Rights").
AGREEMENTS WITH RESPECT TO THE CONDUCT OF BUSINESS PENDING
THE MERGER. The Merger Agreement provides that, except as
specifically contemplated by the Merger Agreement, during the
period from the date of the Merger Agreement to the time when
designees of Food Lion control the Board of Directors of Kash n'
Karry, Kash n' Karry will, and will cause each of its
subsidiaries to, conduct their respective businesses only in, and
not take any action except in, the ordinary and usual course of
business and consistent with past practice, and use their best
efforts to preserve intact their respective business
organizations and goodwill, keep available the services of their
respective present officers and key employees and preserve the
goodwill and business relationships with suppliers, distributors,
customers and others having business relationships with them. In
addition, subject to certain exceptions, during such period, Kash
n' Karry will not, and will not permit any of its subsidiaries to
(i) make or propose any change or amendment to their respective
certificates of incorporation or bylaws; (ii) split, combine or
reclassify their outstanding capital stock or declare, set aside
or pay any dividend or distribution payable in cash, stock,
property or otherwise, (iii) authorize the issuance of, or issue,
sell, pledge or dispose of, or agree to issue, sell, pledge or
dispose of, any additional shares of or any options, warrants or
rights of any kind to acquire any shares of, its capital stock of
any class or any debt or equity securities convertible into or
exchangeable for such capital stock, (iv) sell, pledge, dispose
of, license or encumber any material assets, or any interests
therein, other than in the ordinary course of business and
consistent with past practice, (v) redeem, purchase, or acquire
any shares of its capital stock, (vi) make any changes in the
kinds of business in which Kash n' Karry is engaged, (vii) assume
or incur any indebtedness for borrowed money or issue or sell
debt securities, voluntarily prepay any debt obligations, (viii)
adopt, enter into or amend any bonus, profit sharing, severance,
termination, stock option, pension, retirement, deferred
compensation, health care, change in control agreement,
restricted stock, employment or other employee benefit plan,
agreement, trust, fund or arrangement for the benefit or welfare
of any employee, director, officer or retiree, (ix) enter into
any contract out of the ordinary course of business if such
contract or a series of related contracts calls for payments in
excess of $500,000, (x) make any capital expenditures out of the
ordinary course of business, (xi) permit any material change in
(A) any pricing, marketing, purchasing, investment, accounting,
financial reporting inventory, credit, allowance or tax
procedure, or (B) any method of calculating any bad debt,
contingency or other reserve for accounting, financial reporting
or tax purposes, or make any material tax election or settle or
compromise any material income tax liability with any
governmental authority, (xii) acquire all or any substantial part
of the business and properties or capital stock of any person,
whether by merger, purchase of assets, tender offer or otherwise,
or (xiii) agree in writing, or otherwise, to take any of the
foregoing actions or any other action which would make any
representation or warranty contained in the Merger Agreement
untrue or incorrect in any material respect. In addition, Kash
n' Karry shall and shall cause each of its subsidiaries to (i)
confer on a regular and frequent basis with one or more
representatives of Food Lion to discuss operational matters of
materiality and the general status of ongoing operations and (ii)
promptly notify Food Lion of any significant changes in the
business, financial condition or results of operations of Kash n'
Karry or its subsidiaries taken as a whole. In addition, Kash n'
Karry has agreed to use its reasonable best efforts to (a) exempt
Kash n' Karry, the Offer, the Stockholders Agreement and the
Merger from the requirements of any state takeover law by action
of Kash n' Karry's Board of Directors or otherwise and (b) assist
in any challenge by Sub to the validity or applicability to the
Offer or the Merger of any state takeover law.
CONDITIONS TO THE MERGER. The respective obligations of
each party to effect the Merger are subject to the satisfaction
or waiver, where permissible, prior to the Effective Time, of the
following conditions: (a) the Merger Agreement shall have been
adopted by the requisite vote of the Stockholders in accordance
with applicable law, if such vote is required by applicable law;
(b) no statute, rule, regulation, executive order, decree or
injunction shall have been enacted, entered, promulgated or
enforced by any federal or state court or governmental authority
which is in effect and has the effect of making the acquisition
of Shares pursuant to the Merger illegal or otherwise prohibiting
the consummation of the Merger; and (c) the waiting period, if
any, applicable to the consummation of the Merger under the HSR
Act shall have expired or been terminated.
The obligations of Food Lion and Sub to effect the Merger
are also subject to each of the following conditions: (i) the Merger
Agreement shall have been adopted by the requisite vote of the
Stockholders under the DGCL, unless such approval is not required
under the DGCL; (ii) any waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired or been terminated;
(iii) all governmental and regulatory and other consents and approvals
shall have been obtained; (iv) there shall not have been any law or
order enacted or issued which (A) prohibits or imposes any material
limitations on Food Lion's or Sub's ownership or operation of Kash n'
Karry's businesses or assets, (B) prohibits, restrains or makes illegal
the Merger, (C) imposes material limitations on the ability of Food Lion
or Sub to acquire, hold or to exercise the full rights of ownership of the
Shares, (D) imposes limitation on the ability of Food Lion or Sub to
effectively control the businesses or assets of Kash n' Karry, or (E)
has the effect of making illegal or otherwise restricting or prohibiting
comsummation of the Merger or other transactions contemplated by the
Merger Agreement; (v) there shall be no action or proceeding before any
governmental or regulatory authority which seeks to have any effect set
forth in item (iv) immediately above; (vi) there shall be no extraordinary,
adverse market conditions (as described in the Merger Agreement); (vii) the
representations and warranties of Kash n' Karry shall be true and correct;
and (viii) Kash n' Karry shall have performed its obligations under the
Merger Agreement.
The obligation of Kash n' Karry to effect the Merger is also
subject to each of the following conditions: (i) the Merger Agreement
shall have been adopted by the requisite vote of the Stockholders under
the DGCL, unless such approval is not required under the DGCL; (ii) any
waiting period applicable to the consummation of the Merger under the
HSR Act shall have expired or been terminated; (iii) there shall not
have been any law or order enacted or issued which prohibits, restrains
or makes illegal the Merger and (iv) there shall be no action or proceeding
by any governmental or regulatory authority seeking to have any effect set
forth in item (iii) immediately above.
Item 7. Material to be Filed as Exhibits.
The following exhibits are filed as part of this Schedule
13D:
Exhibit 1 Joint Filing Agreement, dated as of November
11, 1996, among Food Lion, Inc., FLI Holding Corp.
and KK Acquisition Corp.
Exhibit 2 Name, Business Address, Present Principal
Occupation and Citizenship of each Executive
Officer and Director of Food Lion.
Exhibit 3 Name, Business Address, Present Principal
Occupation and Citizenship of each Executive
Officer and Director of FLI Holding Corp.
Exhibit 4 Name, Business Address, Present Principal
Occupation and Citizenship of each Executive
Officer and Director of KK Acquisition Corp.
Exhibit 5 Name, Business Address, Present Principal
Occupation and Citizenship of each Executive
Officer and Director of Etablissements Delhaize
Freres et Cie, "Le Lion" S.A.
Exhibit 6 Name, Business Address, Present Principal
Occupation and Citizenship of each Executive
Officer and Director of Delhaize The Lion America,
Inc.
Exhibit 7 Stockholders Agreement, dated as of October
31, 1996, among Food Lion, Inc., KK Acquisition
Corp., Kash n' Karry Food Stores, Inc.,
BankAmerica Capital Corporation, Citicorp North
America, Inc., Landmark Equity Partners III, L.P.,
Landmark Equity Partners IV, L.P., The Prudential
Insurance Company of America, Prudential Property &
Casualty Company, Pruco Life Insurance Company of
Arizona, PaineWebber Capital Inc., UBS Capital
LLC, High Yield Portfolio, IDS Bond Fund, Inc.,
IDS Life Advantage Fund, Pruco Life Insurance Company,
and Wells, Fargo & Company (incorporated by
reference to Exhibit 10 of Food Lion, Inc.'s
Current Report on 8-K dated November 4, 1996).
Exhibit 8 Agreement and Plan of Merger, dated as of
October 31, 1996, among Food Lion, Inc., KK
Acquisition Corp. and Kash n' Karry Food Stores,
Inc. (incorporated by reference to Exhibit 2 of
Food Lion, Inc.'s Current Report on 8-K dated
November 4, 1996).
Exhibit 9 Form of Irrevocable Proxy, dated October 31,
1996, of each of BankAmerica Capital Corporation,
Citicorp North America, Inc., Landmark Equity
Partners III, L.P., Landmark Equity Partners IV,
L.P., The Prudential Insurance Company of America,
Prudential Property & Casualty Company, Pruco Life
Insurance Company of Arizona, PaineWebber Capital
Inc., UBS Capital LLC, High Yield Portfolio, IDS
Bond Fund, Inc., IDS Life Advantage Fund, Pruco
Life Insurance Company, and Wells, Fargo &
Company.
SIGNATURE
After reasonable inquiry and to the best of knowledge of the
undersigned, the undersigned hereby certifies that the
information set forth in this statement is true, complete and
correct.
Dated: November 12, 1996
FOOD LION, INC.
By: /s/ R. William McCanless
Name: R. William McCanless
Title: Senior Vice President and
Chief Administrative Officer
FLI HOLDING CORP.
By: /s/ R. William McCanless
Name: R. William McCanless
Title: Vice President
KK ACQUISITION CORP.
By: /s/ R. William McCanless
Name: R. William McCanless
Title: Vice President
EXHIBIT INDEX
Exhibit No. Description Page
1 Joint Filing Agreement, dated
as of November 11, 1996,
among Food Lion, Inc.,
FLI Holding Corp. and KK
Acquisition Corp.
2 List of Directors and
Executive Officers of
Food Lion, Inc.
3 List of Directors and Executive
Officers of FLI Holding
Corp.
4 List of Directors and
Executive Officers of KK
Acquisition Corp.
5 List of Directors and
Executive Officers of
Delhaize "Le Lion"
6 List of Directors and
Executive Officers of
DETLA
7 Stockholders Agreement, dated
as of October 31, 1996, among
Food Lion, Inc., KK Acquisition
Corp., Kash n' Karry Food Stores,
Inc., BankAmerica Capital
Corporation, Citicorp North
America, Inc., Landmark Equity
Partners III, L.P., Landmark
Equity Partners IV, L.P., The
Prudential Insurance Company of
America, Prudential Property &
Casualty Company, Pruco Life
Insurance Company of Arizona,
PaineWebber Capital Inc., UBS
Capital LLC, High Yield Portfolio,
IDS Bond Fund, Inc., IDS Life
Advantage Fund,
Pruco Life Insurance Company, and
Wells, Fargo & Company
(incorporated by reference to
Exhibit 10 of Food Lion, Inc.'s
Current Report on 8-K dated
November 4, 1996).
8 Agreement and Plan of Merger,
dated as of October 31, 1996,
among Food Lion, Inc., KK
Acquisition Corp. and Kash n'
Karry Food Stores, Inc.
(incorporated by reference to
Exhibit 2 of Food Lion, Inc.'s
Current Report on 8-K dated
November 4, 1996).
9 Form of Irrevocable Proxies, dated
October 31, 1996, of each of
BankAmerica Capital
Corporation, Citicorp North
America, Inc., Landmark Equity
Partners III, L.P., Landmark
Equity Partners IV, L.P., The
Prudential Insurance Company
of America, Prudential Property
& Casualty Company, Pruco Life
Insurance Company of Arizona,
PaineWebber Capital Inc., UBS
Capital LLC, High Yield
Portfolio, IDS Bond Fund,
Inc., IDS Life Advantage Fund,
Pruco Life
Insurance Company, and Wells,
Fargo & Company.
EXHIBIT 1
JOINT FILING AGREEMENT
The undersigned signatories of the statement on Schedule 13D
to which this Agreement is attached hereby agree that such
statement is, and any amendments thereto filed by any of us will
be, filed on behalf of each of us. This Agreement is dated as of
the 12th day of November, 1996.
FOOD LION, INC.
By: /s/ R. William McCanless
Name: R. William McCanless
Title: Senior Vice President and Chief
Administrative Officer
FLI HOLDING CORP.
By: /s/ R. William McCanless
Name: R. William McCanless
Title: Vice President
KK ACQUISITION CORP.
By: /s/ R. William McCanless
Name: R. William McCanless
Title: Vice President
EXHIBIT 2
The directors and executive officers of Food Lion, Inc.
("Food Lion") are as follows:
Name,Title and Business or Present Principal Occupation or
Residential Address Employment/Citizenship
Pierre-Olivier Beckers, President and Chief Operating
Director Officer, DETLA/Belgian
rue Osseghem, 53
1080 Brussels, Belgium
Dr. Jacqueline Kelly Collamore, Associate, Credit Suisse/U.S.
Director
[Address]
Jean-Claude Coppieters 't Wallant, Chief Financial Officer,
Director Delhaize/Belgian
rue Osseghem, 53
1080 Brussels, Belgium
William G. Ferguson, Director Executive Vice President,
[Address] Snow Aviation International,
Inc./U.S.
Dr. Bernard W. Franklin, President, St. Augustine's
Director College, Raleigh, North
[Address] Carolina/U.S.
Joseph C. Hall, Jr., Director Senior Vice President of
2110 Executive Drive Operations and Chief Operating
Salisbury, North Carolina Officer, Food Lion, Inc./U.S.
28145-1330
Margaret H. Kluttz, Director Mayor, Salisbury, North
[Address] Carolina/U.S.
Tom E. Smith, Chairman of the Board, President
2110 Executive Drive and Chief Executive Officer,
Salisbury, North Carolina Food Lion, Inc./U.S.
Philippe Stroobant, Director Director and Executive
rue Osseghem, 53 Committee Member, Delhaize/
1080 Brussels, Belgium Belgian
Gui de Vaucleroy,Director Chairman of the Executive
rue Osseghem, 53 Committee and Chief Executive
1080 Brussels, Belgium Officer, Delhaize/Belgian
R. William McCanless, Officer Senior Vice President of
2110 Executive Drive Administration and Assistant
Salisbury, North Carolina Secretary/U.S.
EXHIBIT 3
The directors and executive officers of FLI Holding Corp.
("FLI Holding") are as follows:
Name,Title and Business or Present Principal Occupation or
Residential Address Employment/Citizenship
Joseph C. Hall, Jr., Director Senior Vice President of
and Vice President Operations and Chief Operating
2110 Executive Drive Officer, Food Lion, Inc./U.S.
Salisbury, North Carolina
28145-1330
Tom E. Smith, Director Chairman of the Board, President
and President and Chief Executive Officer,
2110 Executive Drive Food Lion, Inc./U.S.
Salisbury, North Carolina
28145-1330
R. William McCanless, Director Senior Vice President of
and Vice President Administration, Chief Administrative Officer
2110 Executive Drive and Secretary, Food Lion, Inc. /U.S.
Salisbury, North Carolina
28145-1330
EXHIBIT 4
The directors and executive officers of KK Acquisition Corp.
("Sub") are as follows:
Name,Title and Business or Present Principal Occupation or
Residential Address Employment/Citizenship
Joseph C. Hall, Jr., Director Senior Vice President of
and Vice President Operations and Chief Operating
2110 Executive Drive Officer, Food Lion, Inc./U.S.
Salisbury, North Carolina
28145-1330
Tom E. Smith,Director Chairman of the Board, President
and President and Chief Executive Officer,
2110 Executive Drive Food Lion, Inc./U.S.
Salisbury, North Carolina
28145-1330
R. William McCanless, Director Senior Vice President of
and Vice President Administration, Chief Administrative Officer
2110 Executive Drive and Secretary, Food Lion, Inc. /U.S.
Salisbury, North Carolina
28145-1330
EXHIBIT 5
The directors and executive officers of Etablissements
Delhaize Freres et Cie, "Le Lion" S.A. ("Delhaize 'Le Lion'") are
as follows:
Name, Title and Business or Present Principal Occupation or
Residential Address Employment/Citizenship*
Charles de Cooman d'Herlinckhove
Director
rue Osseghem, 53
1080 Brussels, Belgium
Marcel Degroof, Director Partner, Bank Degroof
rue de l' Industrie '44
1000 Brussels, Belgium
Gui de Vaucleroy, Director President and Chief Executive
rue Osseghem, 53 Officer, Delhaize "Le Lion"
1080 Brussels, Belgium
Frans Vreys, Director Director of Companies
boulevard Emile Jacqumain, 112
1000 Brussels, Belgium
Jacques Le Clercq, Director
Atlanta Plaza - Suite 2160
950 East Paces Ferry Road
Atlanta, Georgia 30326
Jacques Boel, Director Executive Director, Usines G.
rue Ducale, 21 Boel (steel manufacturing)
1000 Brussels, Belgium
Philippe Stroobant, Director Officer and Chairman of
rue Osseghem, 53 Management Committee, Delhaize
1080 Brussels, Belgium "Le Lion"
Roger Boin, Director Director, Delhaize "Le Lion"
rue Osseghem, 53
1080 Brussels, Belgium
Raymond-Max Boon, Director
rue Osseghem, 53
1080 Brussels, Belgium
Pierre-Olivier Beckers Officer and Member of
Director Management Committee,
rue Osseghem, 53 Delhaize "Le Lion"
1080 Brussels, Belgium
In addition, Claude Allard, Renaud Cogels, Michael
Eeckhout, Arthur Goethals and Paul Van Der Vliet,
whose business addresses are rue Osseghem,
53, 1080 Brussels, Belgium, are officers and members of the
Management Committee of Delhaize "Le Lion" and Jean-Claude
Coppieters 't Wallant, whose business address is rue Osseghem, 53, 1080
Brussels, Belgium, is Secretary to such Management
Committee.
* All of the persons listed in this Exhibit 5 are Belgian
unless otherwise indicated.
EXHIBIT 6
The directors and executive officers of Delhaize The Lion
America, Inc. ("DETLA") are as follows:
Name,Title and Business or Present Principal Occupation or
Residential Address Employment/Citizenship*
Gui de Vaucleroy, Director President and Chief Executive
rue Osseghem, 53 Officer, Delhaize "Le Lion"
1080 Brussels, Belgium
Jacques Le Clerq, Director
Atlanta Plaza - Suite 2160
950 East Paces Ferry Road
Atlanta, Georgia 30326
Gwynne H. Wales, Director Attorney, White & Case/U.S.
1155 Avenue of the Americas
New York, New York 10036
Pierre-Olivier Beckers, President and Chief Operating
Director Officer, DETLA
rue Osseghem, 53
1080 Brussels, Belgium
J.C. Coppieters 't Wallant, Member, Management Committee,
Officer Delhaize "Le Lion"; Vice
President and Treasurer, DETLA
* All of the persons listed in this Exhibit 6 are Belgian
unless otherwise indicated.
EXHIBIT 9
FORM OF IRREVOCABLE PROXY
EXHIBIT A
to Stockholders Agreement
IRREVOCABLE PROXY
The undersigned stockholder of Kash n' Karry Food Stores,
Inc., a Delaware corporation (the "Company"), hereby irrevocably
(to the fullest extent provided by law, but subject to automatic
termination and revocation as provided below) appoints KK Acquisition
Corp., a Delaware corporation (the "Sub"), the attorney and proxy of
the undersigned, with full power of substitution and resubstitution,
to the full extent of the undersigned's rights with respect to the
shares of capital stock of the Company owned beneficially or of record
by the undersigned, which shares are listed on the final page of this
Proxy, and any and all other shares or securities of the Company issued
or issuable with respect thereof or otherwise acquired by stockholder
on or after the date hereof, until the termination date specified in the
Stockholders Agreement referred to below (the "Shares"). Upon the
execution hereof, all prior proxies given by the undersigned with respect
to the Shares are hereby revoked and no subsequent proxies will be given
as to the matters covered hereby prior to the date of termination of the
Stockholders Agreement (the "Termination Date"). This proxy is
irrevocable (to the fullest extent provided by law, but subject to automatic
termination and revocation as provided below), coupled with an interest,
and is granted in connection with the Stockholders Agreement, dated as of
October 31, 1996, among the Company, Food Lion, Inc., a North Carolina
corporation ("Parent"), Sub and the Stockholders party thereto, including
the undersigned stockholder (the "Stockholders Agreement", capitalized terms
not otherwise defined herein being used herein as therein defined), and
is granted in consideration of the Company entering into the Merger
Agreement referred to therein.
The attorney and proxy named above will be empowered at any time prior
to the Termination Date to exercise all voting and other rights with
respect to the Shares (including, without limitation, the power to
execute and deliver written consents with respect to the Shares) of the
undersigned at every annual, special or adjourned meeting of shareholders
of the Company an in every written consent in lieu of such a meeting, or
otherwise: (i) in favor of the Merger, the execution and delivery by the
Company of the Merger Agreement and the approval of the terms thereof and
the Stockholders Agreement and each of the other actions contemplated by
the Merger Agreement and the Stockholders Agreement and any actions
required in furtherance thereof; (ii) against any action, any failure
to act, or agreement that would result in a breach in any respect of any
covenant, representation or warranty or any other obligation or agreement
of the Company under the Merger Agreement or the Stockholders Agreement
(before giving effect to any materiality or similar qualifications contained
therein); and (iii) against the following actions (other than the Merger
and the transactions contemplated by the Merger Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or
other business combination involving the Company or its Subsidiaries; (B)
a sale, lease or transfer of a material amount of assets of the Company or
its Subsidiaries, or a reorganization, recapitalization, dissolution or
liquidation of the Company or its Subsidiaries; (C) (1) any change in a
majority of the persons who constitute the board of directors of the
Company; (2) any change in the present capitalization of the Company or
any amendment of the Company's Certificate of Incorporation or Bylaws;
(3) any other material change in the Company's corporate structure or
business; or (4) any other action involving the Company or its Subsidiaries
which is intended, or could reasonably be expected, to impede, interfere
with, delay, postpone, or materially adversely affect the Merger and the
transactions contemplated by this Agreement and the Merger Agreement.
The attorney and proxy named above may only exercise this proxy to
vote the Shares subject hereto in accordance with the preceding paragraph,
and may not exercise this proxy in respect of any other matter. The
undersigned shareholder may vote the Shares (or grant one or more proxies
to vote the Shares) on all other matters.
Any obligation of the undersigned hereunder shall be binding
upon the successors and assigns of the undersigned.
This proxy is irrevocable, but shall automatically terminate
and be revoked and be of no further force and effect on and after
the Termination Date.
Dated: October 31, 1996 STOCKHOLDER
By:
Name:
Title:
Shares Owned:
