<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14A-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
DELHAIZE AMERICA, INC.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies: Not
Applicable
2) Aggregate number of securities to which transaction applies: Not
Applicable
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): Not
Applicable
4) Proposed maximum aggregate value of transaction: Not Applicable
5) Total fee paid: Not Applicable
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: _______________________________________
(2) Form, Schedule or Registration Statement No.: ______________________
(3) Filing Party: ________________________________________________________
(4) Date Filed: ________________________________________________________
<PAGE> 2
DELHAIZE AMERICA, INC.
2110 EXECUTIVE DRIVE
P.O. BOX 1330
SALISBURY, NORTH CAROLINA 28145-1330
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------------
To the Shareholders of Delhaize America, Inc.:
The Annual Meeting of the Shareholders of Delhaize America, Inc. (the
"Company") will be held at 9:00 a.m. on Thursday, May 4, 2000 at the Radisson
Riverwalk Hotel, 200 North Ashley Drive, Tampa, Florida, for the following
purposes, all as more fully described in the accompanying Proxy Statement:
1. To elect ten members to the Board of Directors;
2. To consider and vote on certain amendments to the bylaws of the
Company;
3. To consider and vote on a proposal to adopt the Delhaize America,
Inc. 2000 Stock Incentive Plan;
4. To consider and vote on a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants for the fiscal
year ending December 30, 2000; and
5. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on March 27, 2000 as
the record date for the determination of shareholders entitled to vote at the
meeting and, accordingly, only shareholders who are otherwise entitled to vote
and who are holders of record at the close of business on that date will be
entitled to notice of, and to vote at, the meeting. The transfer books of the
Company will not be closed.
A Proxy Statement and proxy card are enclosed herewith. You are urged to
date, sign and return the proxy card promptly in the envelope provided.
LESTER C. NAIL
Secretary
March 31, 2000
SHAREHOLDERS MAY REVOKE A PROXY UPON DELIVERY TO THE SECRETARY OF THE COMPANY OF
A WRITTEN NOTICE OF REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE.
SHAREHOLDERS MAY ALSO REVOKE A PROXY BY ATTENDING THE ANNUAL MEETING OF
SHAREHOLDERS AND VOTING IN PERSON.
<PAGE> 3
DELHAIZE AMERICA, INC.
2110 EXECUTIVE DRIVE
P.O. BOX 1330
SALISBURY, NORTH CAROLINA 28145-1330
---------------------
MARCH 31, 2000
---------------------
PROXY STATEMENT
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Delhaize America, Inc. (the "Company") for use at the Annual
Meeting of Shareholders to be held at 9:00 a.m. on Thursday, May 4, 2000 at the
Radisson Riverwalk Hotel, 200 North Ashley Drive, Tampa, Florida, and at any
adjournment or postponement thereof (the "Annual Meeting"). The entire cost of
such solicitation will be borne by the Company. In addition to solicitation by
mail, arrangements will be made with brokerage houses and other custodians,
nominees and fiduciaries to send proxy materials to their principals, and the
Company may reimburse them for their expenses in doing so. Personal
solicitations may be conducted by directors, officers and employees of the
Company. This Proxy Statement and accompanying proxy card will be mailed to
shareholders on or about March 31, 2000.
The shares represented by the accompanying proxy and entitled to vote will
be voted if the proxy card is properly signed and received by the Company prior
to the meeting. Where a choice is specified on any proxy card as to the vote on
any matter to come before the meeting, the proxy will be voted in accordance
with such specification. If the proxy card is properly signed and returned, but
no choice is specified, the proxy will be voted (i) for the election of the
persons nominated to serve as the directors of the Company named in this Proxy
Statement, (ii) for the proposal to approve the amendments to the bylaws of the
Company described in this Proxy Statement, (iii) for the proposal to adopt the
Delhaize America, Inc. 2000 Stock Incentive Plan, (iv) for the proposal to
ratify the appointment of PricewaterhouseCoopers LLP as independent accountants
for the fiscal year ending December 30, 2000 and (v) in such manner as the
persons named on the enclosed proxy card in their discretion determine upon such
other business as may properly come before the Annual Meeting.
VOTING SECURITIES OF THE COMPANY
The Company has outstanding (i) non-voting shares of Class A Common Stock,
par value $.50 per share ("Class A Common Stock"), and (ii) voting shares of
Class B Common Stock, par value $.50 per share ("Class B Common Stock")
(collectively, the "Common Stock"). Holders of record of the Class B Common
Stock at the close of business on March 27, 2000 (the "Record Date") are
entitled to vote at the Annual Meeting and are entitled to one vote for each
share held. At the close of business on the Record Date, there were 75,290,542
shares of Class B Common Stock issued and outstanding and 79,931,607 shares of
Class A Common Stock issued and outstanding. Shares of Class A Common Stock have
no voting rights other than as provided by North Carolina law.
The laws of North Carolina, under which the Company is incorporated,
provide that, in connection with the election of directors, the persons
receiving a vote of a plurality of the shares of Class B Common Stock
represented and entitled to vote at the Annual Meeting will be elected as
directors. The proposals to amend the bylaws, to adopt the Delhaize America,
Inc. 2000 Stock Incentive Plan and to ratify the appointment of
<PAGE> 4
independent accountants will require the affirmative vote of the holders of a
majority of the Class B Common Stock voting on each such proposal. Abstentions
will be counted in determining the existence of a quorum for the Annual Meeting.
An abstention, a broker non-vote or a failure to return a signed proxy card will
not be counted as votes in favor of or against the proposals described above.
Etablissements Delhaize Freres et Cie "Le Lion" S.A. ("Delhaize") and its
wholly owned subsidiary, Delhaize The Lion America, Inc., a Delaware corporation
("Detla"), own, in the aggregate, more than 50% of the outstanding shares of the
Company's Class B Common Stock. See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT -- Principal Shareholder." The affirmative vote by
Delhaize and Detla will guarantee the passage of all of the proposals described
herein (and any other proposals that require the affirmative vote of a majority
of the outstanding shares of Class B Common Stock for passage). The Company has
been informed that Delhaize and Detla intend to vote FOR the election of the ten
nominees for director proposed herein under "Proposal (1) -- Election of
Directors"; FOR the proposal to approve the amendments to the bylaws described
under "Proposal (2) -- Amendments to Bylaws"; FOR the adoption of the Delhaize
America, Inc. 2000 Stock Incentive Plan described under "Proposal
(3) -- Approval of 2000 Stock Incentive Plan"; and FOR the ratification of the
appointment of PricewaterhouseCoopers LLP as independent accountants for the
fiscal year ending December 30, 2000 described under "Proposal (4) --
Appointment of Independent Accountants."
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
PRINCIPAL SHAREHOLDER
The following information is furnished for each person known by management
of the Company to be the beneficial owner of more than 5% of the outstanding
shares of the Company's Class B Common Stock, the only voting security of the
Company, as of March 27, 2000:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
NAME AND ADDRESS OWNERSHIP PERCENT OF CLASS
- ---------------- ----------------------- ----------------
<S> <C> <C>
Etablissements Delhaize Freres et Cie............... 41,862,086(1) 55.6%
"Le Lion" S.A.
rue Osseghem, 53
1080 Brussels, Belgium
</TABLE>
- ---------------
(1) Includes 21,117,593 shares held of record by Delhaize's wholly owned
subsidiary, Detla. Detla's address is Suite 2160, Atlanta Plaza, 950 East
Paces Ferry Road, Atlanta, Georgia 30326. Delhaize, Detla and the Company
are parties to a shareholders agreement, dated March 27, 2000 which governs
the voting of the shares held by Delhaize and Detla in the election of
directors and other matters. See "-- Shareholders Agreement" below.
OWNERSHIP OF MANAGEMENT
The following information with respect to beneficial ownership of shares of
the Company's Class A Common Stock and Class B Common Stock as of March 27, 2000
is furnished for each director, nominee for director, the Chief Executive
Officer, the four other most highly compensated executive officers of the
Company, the former Chief Executive Officer and for all directors, nominees for
director, and executive
2
<PAGE> 5
officers of the Company as a group. The number of shares of Common Stock set
forth in the table below includes shares that may be acquired within 60 days
after March 27, 2000, but does not include shares of Common Stock beneficially
owned by Delhaize, as to which Messrs. Beckers, Coppieters, Dumont, Raquez and
McCanless are associated as further described herein. As of March 27, 2000,
Delhaize and Detla collectively owned 37,216,152 shares of Class A Common Stock.
See "-- Principal Shareholder" above for more information relating to the
ownership of Class B Common Stock by Delhaize and Detla. Unless otherwise noted,
each person has sole voting and investment power of the shares beneficially
owned by such person.
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK COMMON STOCK
--------------------- ---------------------
AMOUNT AND AMOUNT AND
NAME OF INDIVIDUAL NATURE OF PERCENT NATURE OF PERCENT
OR NUMBER OF BENEFICIAL OF BENEFICIAL OF
PERSONS IN GROUP OWNERSHIP CLASS OWNERSHIP CLASS
- ------------------ ---------- ------- ---------- -------
<S> <C> <C> <C> <C>
Pierre-Olivier Beckers............................ -- -- -- --
A. Edward Benner, Jr. ............................ 3,532(1) * 195 *
Jacqueline Kelly Collamore........................ 763 * 333 *
Jean-Claude Coppieters 't Wallant................. -- -- -- --
W. Bruce Dawson................................... 22,294(2) * 4,196(2) *
Pierre Dumont..................................... -- -- -- --
William G. Ferguson............................... 763 * -- --
Bernard W. Franklin............................... 904 * -- --
Joseph C. Hall, Jr................................ 86,758(3) * 20,677(3) *
Laura C. Kendall.................................. 16,194(4) * -- --
Margaret H. Kluttz................................ 863 * 349 *
Bill McCanless.................................... 52,346(5) * -- --
Dominique Raquez.................................. -- -- -- --
Tom E. Smith(6)................................... 366,529 * 309,754 *
All directors, nominees for director, and
executive officers as a group (32 persons)...... 668,476(7) * 340,070 *
</TABLE>
- ---------------
* Indicates less than 1%.
(1) Effective January 1, 2000, A. Edward Benner, Jr., retired as Vice President
of Information Technology and Chief Information Officer of the Company.
(2) Includes (a) 400 shares of Class A Common Stock held by Mr. Dawson's wife;
(b) 300 shares of Class A Common Stock and 800 shares of Class B Common
Stock held by Mr. Dawson's children; (c) 500 shares of Class A Common Stock
held by a trust for his children; (d) 6,197 restricted shares of Class A
Common Stock held pursuant to the 1996 Employee Stock Incentive Plan of Food
Lion, Inc. (the "1996 Plan"); (e) 6,981 shares of Class A Common Stock that
may be acquired upon the exercise of options granted under the 1996 Plan;
and (f) 424 shares of Class A Common Stock represented by 787 units in the
Profit Sharing Retirement Plan of Food Lion, Inc.
(3) Includes (a) 2,310 shares of Class A Common Stock and 360 shares of Class B
Common Stock held by Mr. Hall as custodian for his children; (b) 99 shares
of Class A Common Stock held by Mr. Hall's wife as custodian for their
children; (c) 1,800 shares of Class A Common Stock and 1,800 shares of Class
B Common Stock held by Mr. Hall's children; (d) 21,771 restricted shares of
Class A Common Stock held pursuant to the 1996 Plan; (e) 30,384 shares of
Class A Common Stock that may be acquired upon
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<PAGE> 6
exercise of options granted under the 1996 Plan; and (f) 424 shares of Class
A Common Stock represented by 787 units in the Profit Sharing Retirement
Plan of Food Lion, Inc.
(4) Includes (a) 8,810 restricted shares of Class A Common Stock held pursuant
to the 1996 Plan; (b) 5,458 shares of Class A Common Stock that may be
acquired upon the exercise of options granted under the 1996 Plan; and (c)
424 shares of Class A Common Stock represented by 787 units in the Profit
Sharing Retirement Plan of Food Lion, Inc.
(5) Includes (a) 599 shares of Class A Common Stock held by Mr. McCanless' wife;
(b) 24,262 restricted shares of Class A Common Stock held pursuant to the
1996 Plan; (c) 22,529 shares of Class A Common Stock that may be acquired
upon exercise of options granted under the 1996 Plan; and (d) 424 shares of
Class A Common Stock represented by 787 units in the Profit Sharing
Retirement Plan of Food Lion, Inc.
(6) On April 7, 1999, Tom E. Smith retired as President and Chief Executive
Officer of the Company. On that date, Bill McCanless was appointed President
and Chief Executive Officer to fill the vacancies resulting from Mr. Smith's
retirement.
(7) Includes (a) 140,116 restricted shares of Class A Common Stock held pursuant
to the 1996 Plan; (b) 208,250 shares of Class A Common Stock that may be
acquired upon exercise of options granted under the 1996 Plan; and (c)
shares represented by 66,723 units in the Profit Sharing Retirement Plan of
Food Lion, Inc. allocated to Class A Common Stock. The number of shares per
unit in such plan fluctuates based in part on the allocation of cash to the
fund. As of March 27, 2000, the 66,723 units held by all directors and
executive officers as a group represented 35,963 shares of Class A Common
Stock.
SHAREHOLDERS AGREEMENT
On March 27, 2000, Delhaize, Detla and the Company entered into an
agreement (the "2000 Shareholders Agreement" or "Shareholders Agreement")
containing provisions regarding, among other things, the nomination of
candidates for election to the Board of Directors, the voting of securities
beneficially owned by the parties to the Shareholders Agreement for the election
of directors and the voting requirements applicable to specified actions by the
Board of Directors. The 2000 Shareholders Agreement is effective until April 30,
2007, unless Delhaize and Detla's aggregate ownership of voting shares of the
Company is reduced below 10%, in which case the Shareholders Agreement would
terminate at that time.
The 2000 Shareholders Agreement provides for, subject to the fiduciary
duties of directors under North Carolina law or except as the Board of Directors
by the affirmative vote of at least 70% of the directors may otherwise direct, a
Nominating Committee of the Board of Directors to nominate the slate of
directors to be submitted to the shareholders for election to the Board and
persons to fill any vacancies on the Board of Directors that arise from time to
time. See "THE BOARD OF DIRECTORS." The 2000 Shareholders Agreement provides
that the Nominating Committee shall consist of three persons, one of whom will
be designated by Delhaize and Detla, collectively, one of whom will be the Chief
Executive Officer of the Company or his designee from among the members of the
Board of Directors, and one of whom will have no affiliation (other than Board
of Directors or Committee membership) with either Delhaize, Detla or the
Company. The 2000 Shareholders Agreement specifies that, at all times after the
closing of the acquisition of Hannaford Bros. Co. ("Hannaford") by the Company,
the slate to be proposed for election to the Board of Directors shall consist of
twelve persons, six proposed by the Chief Executive Officer of Delhaize, two
proposed by the Chief Executive Officer of the Company, and four to have no
affiliation (other than Board of Directors or Committee membership) with either
Delhaize, Detla or the Company. The 2000 Shareholders Agreement requires persons
nominated to fill vacancies on the Board to be selected in a corresponding
manner.
4
<PAGE> 7
The 2000 Shareholders Agreement also contains a voting agreement between
Delhaize and Detla to vote in favor of the slate of directors proposed by the
Nominating Committee and approved by the Board of Directors, and not to
participate directly or indirectly in any effort to cause cumulative voting to
be in effect for any election of directors of the Company.
PROPOSAL (1)
ELECTION OF DIRECTORS
Article 3, Section 2 of the bylaws of the Company provides for a minimum of
eight and a maximum of fourteen directors, as such number is established from
time to time by the shareholders or the Board of Directors of the Company. The
Board of Directors has set the number of directors at ten. The ten persons who
receive the highest number of votes at the meeting (assuming a quorum is
present) shall be elected as directors of the Company. The ten persons named
below are nominated to serve on the Board of Directors until the 2001 Annual
Meeting of Shareholders and until their successors are elected and qualified.
Each nominee is currently a director of the Company. The Board of Directors
unanimously recommends that each shareholder vote FOR the election of each of
the nominees named below as a director of the Company.
Each nominee for director has indicated that he or she is willing and able
to serve as a director if elected. However, if any nominee should become unable
to serve or will not serve, the persons named on the enclosed proxy card will
vote for such substitute nominees as designated by the Board of Directors.
The age and brief biographical description of each of the ten nominees for
director are set forth below:
PIERRE-OLIVIER BECKERS (39) -- Mr. Beckers is a director of Delhaize
and has been for more than five years a member of the Executive Committee
of Delhaize. Since January 1, 1999, Mr. Beckers has served as Chief
Executive Officer and President of the Executive Committee of Delhaize. Mr.
Beckers also serves as Chairman, Chief Executive Officer and President of
Detla. From January 1, 1998 to December 31, 1998, Mr. Beckers served as
Executive Vice President of the Executive Committee of Delhaize. He has
been a manager of Delhaize since 1986. Mr. Beckers was first elected as a
director of the Company in 1992 and is a member of the Nominating, Senior
Management Compensation and Stock Option Committees. Mr. Beckers was
elected Chairman of the Board of Directors of the Company on April 7, 1999,
following the retirement of Tom E. Smith as Chairman on that date.
DR. JACQUELINE KELLY COLLAMORE (40) -- Dr. Collamore manages a
corporate consulting practice in Chevy Chase, Maryland. Between 1993 and
1996, she held the positions, variously, of Associate with Credit Suisse,
NA, Head of Strategic Planning of Credit Suisse, NA for North America, Vice
President and Chief of Staff of Credit Suisse Asset Management, Inc., and
Associate and Chief of Staff of Credit Suisse Private Banking. Dr.
Collamore was a consultant with Arthur D. Little from 1991 to 1992, and was
an independent business consultant from 1986 to 1991. She was a Lecturer of
Marketing from 1989 to 1992 at various colleges and universities. Dr.
Collamore was first elected as a director in 1994 and is Chairperson of the
Audit Committee.
JEAN-CLAUDE COPPIETERS 'T WALLANT (54) -- Mr. Coppieters is and has
been for more than five years the Secretary of the Board of Directors and a
member of the Executive Committee of Delhaize. Since January 1, 1998, he
has been the Group Chief Financial Officer of Delhaize. He is also a
director, Vice President, Treasurer and Assistant Secretary of Detla. Mr.
Coppieters was first elected as a director of the Company in 1996.
5
<PAGE> 8
PIERRE DUMONT (62) -- Mr. Dumont has been the Secretary of the
Executive Committee of Delhaize since 1995 and the Group Human Resources
Development Officer of Delhaize since 1998. He was the Human Resources
Manager of Delhaize from 1971 to 1997. Mr. Dumont was first elected as a
director of the Company in 1999.
WILLIAM G. FERGUSON (72) -- Mr. Ferguson has been a director of Snow
Aviation International, Inc. since 1988 and the Executive Vice President
since 1989. Mr. Ferguson is Chairman of the Board of Directors of Pyrocap
International Corporation. Mr. Ferguson was Chairman and Chief Executive
Officer of TTI Systems, Inc. from 1977 through the sale thereof to Transco
Energy Company in 1986 and until he retired from Transco in 1989. Mr.
Ferguson was first appointed to the Board of Directors in 1993. He is a
member of the Audit and Stock Option Committees and is Chairperson of the
Senior Management Compensation Committee.
DR. BERNARD W. FRANKLIN (47) -- Dr. Franklin has been the President of
Virginia Union University in Richmond, Virginia since July 1999. Dr.
Franklin was the President of St. Augustine's College in Raleigh, North
Carolina from March 1995 to June 1999. From July 1989 until March 1995, Dr.
Franklin served as President of Livingstone College and Hood Theological
Seminary in Salisbury, North Carolina. Dr. Franklin was first elected as a
director in 1993 and is a member of the Audit Committee and Chairperson of
the Stock Option Committee. Dr. Franklin also is a member of the board of
directors of Centura Bank, Inc.
JOSEPH C. HALL, JR. (50) -- Mr. Hall is President and Chief Operating
Officer of the Food Lion Division and has held those positions since
September 1999. Mr. Hall was the Senior Vice President and Chief Operating
Officer of the Company from July 1, 1995 to September 1999. Mr. Hall joined
the Company in 1976 and has served as a Vice President since 1988. Mr. Hall
previously held the positions of Vice President of Purchasing, Vice
President of Marketing, Vice President of Operations -- Southern Division
and Vice President of Operations -- Central Division before assuming his
current position. Mr. Hall was first appointed to the Board of Directors in
1995.
MARGARET H. KLUTTZ (56) -- Mrs. Kluttz has been a member of the North
Carolina Board of Transportation since 1993. She was appointed Chairperson
of the North Carolina Rail Council in 1994 and served in such position
until 1997. Mrs. Kluttz served as Mayor of the City of Salisbury, North
Carolina from 1991 until 1997. She was appointed to the Board of Directors
of the North Carolina Railroad Company in 1999. Mrs. Kluttz is a member of
the Board of Advisors of the National Trust for Historic Preservation. She
was first appointed to the Board of Directors in 1994. Mrs. Kluttz is a
member of the Audit Committee and is Chairperson of the Nominating
Committee.
BILL MCCANLESS (42) -- Mr. McCanless is the President and Chief
Executive Officer of the Company, and has held those positions since April
7, 1999. Mr. McCanless was elected by the Board of Directors to fill those
positions upon the retirement of Tom E. Smith as the President and Chief
Executive Officer of the Company. Prior to that time, Mr. McCanless was
Senior Vice President of Administration and Chief Administrative Officer
from 1995 to April 7, 1999 and was Vice President of Legal Affairs from
1993 to 1995. Mr. McCanless also was Secretary from 1994 to April 7, 1999.
Mr. McCanless was appointed to the Board of Directors on April 7, 1999, to
fill the vacancy created by the retirement of Tom E. Smith and is a member
of the Nominating Committee.
DOMINIQUE RAQUEZ (40) -- Mr. Raquez is, and has been since 1995, a
Member of the Executive Committee of Delhaize. He serves, and has served
since January 1, 1998, as the Financial Planning, Control and Development
Officer of Delhaize. He was the Secretary of the Executive Committee of
6
<PAGE> 9
Delhaize from 1990 until 1994. He has been a manager of Delhaize since
1985. Mr. Raquez was first elected to the Board of Directors in 1998. He is
a member of the Senior Management Compensation Committee.
In connection with the acquisition of Hannaford by the Company, the Company
has agreed to expand the number of directors of the Company from ten to twelve
and to cause Hugh G. Farrington, the Chief Executive Officer of Hannaford Bros.
Co., and Paul D. Sobey, a representative of Empire Company Limited (Hannaford's
largest shareholder), to be appointed to the Board of Directors of the Company.
These appointments will occur at the time of the closing of the acquisition of
Hannaford, which the Company expects to occur during its second quarter ending
June 17, 2000. Hugh G. Farrington was elected President of Hannaford in 1984 and
designated as Chief Executive Officer of Hannaford in 1992. He held the position
of Chief Operating Officer of Hannaford from 1984 to 1992. He was Executive Vice
President from 1981 until his election as President. He has been employed by
Hannaford in various operating, supervisory and executive capacities since 1968.
Paul D. Sobey is the President and Chief Executive Officer of the Empire Company
Limited and serves as a director of Nova Scotia Power Incorporated, Sobeys Inc.,
The Bank of Nova Scotia, Wajax Limited, Atlantic Shopping Centers Limited and
Sobey Leased Properties Limited.
THE BOARD OF DIRECTORS
The business of the Company is managed under the direction of the Board of
Directors, as provided by North Carolina law and the Company's bylaws. The Board
of Directors has established an Audit Committee, Nominating Committee, Senior
Management Compensation Committee and Stock Option Committee.
The Audit Committee recommends to the Board of Directors the appointment of
the Company's outside accountants and reviews the scope and results of the
audits by the Company's outside accountants. The Audit Committee also reviews
the scope and results of audits by the Company's Internal Audit Department and
other matters pertaining to the Company's accounting and financial reporting
functions. The members of the Audit Committee, which met four times during the
fiscal year ended January 1, 2000, are presently Jacqueline Kelly Collamore
(Chairperson), William G. Ferguson, Bernard W. Franklin and Margaret H. Kluttz.
Under the Company's bylaws, the Nominating Committee must consist of three
directors, one director designated by Delhaize and Detla, collectively, one
director designated by the Company's Chief Executive Officer and one director
who has no affiliation (other than Board of Directors or Committee membership)
with either Delhaize, Detla or the Company. See "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT -- Shareholders Agreement." The Nominating
Committee is responsible for nominating the slate of directors to be submitted
to the shareholders for election, if approved by the Board of Directors, and for
nominating persons to fill vacancies that arise on the Board of Directors. Under
the current bylaws, the slate of directors nominated by the Nominating Committee
will consist of ten persons, four of whom are proposed by Delhaize, two of whom
are proposed by the Chief Executive Officer of the Company and four of whom have
no affiliation (other than Board or Committee membership of the Company) with
either Delhaize, Detla or the Company. If any director ceases to be a director
of the Company, the Nominating Committee, subject to the approval of the Board
of Directors, shall nominate an appropriate person to fill the vacancy, selected
in a corresponding manner (e.g., if a director proposed by Delhaize ceases to be
a director, then Delhaize shall propose the person to fill the vacancy). The
members of the Nominating Committee are presently Margaret H. Kluttz
(Chairperson), Bill McCanless and Pierre-Olivier Beckers. The Nominating
Committee will consider candidates suggested by shareholders in accor-
7
<PAGE> 10
dance with the procedures set forth in the Company's bylaws. The Nominating
Committee met one time during the fiscal year ended January 1, 2000.
The Senior Management Compensation Committee, which consists of three
non-employee directors, is responsible for reviewing and approving compensation
for senior management of the Company, including amounts allocated to
participants under the Company's Annual Incentive Bonus Plan and the Key
Executive Annual Incentive Bonus Plan, both of which are described below under
the caption "REPORT OF THE SENIOR MANAGEMENT COMPENSATION COMMITTEE, STOCK
OPTION COMMITTEE AND BOARD OF DIRECTORS -- REPORT ON EXECUTIVE
COMPENSATION -- Incentive Compensation." The members of the Senior Management
Compensation Committee, which met two times during the fiscal year ended January
1, 2000, are presently Pierre-Olivier Beckers, William G. Ferguson (Chairperson)
and Dominique Raquez.
The Stock Option Committee administers the 1996 Plan. This Committee
selects the individuals who will be awarded options and restricted stock and
establishes terms of options and the restrictions on restricted stock awarded
under the 1996 Plan. See "REPORT OF THE SENIOR MANAGEMENT COMPENSATION
COMMITTEE, STOCK OPTION COMMITTEE AND BOARD OF DIRECTORS -- REPORT ON EXECUTIVE
COMPENSATION -- Incentive Compensation." The members of the Stock Option
Committee, which met one time during the fiscal year ended January 1, 2000, are
presently Pierre-Olivier Beckers, William G. Ferguson and Bernard W. Franklin
(Chairperson).
The Board of Directors met eight times during the fiscal year ended January
1, 2000. During that period, each incumbent director attended at least 75% of
the aggregate of (i) the total number of meetings of the Board of Directors and
(ii) the total number of meetings held by all committees on which the director
served.
COMPENSATION OF DIRECTORS
The Company has agreed to pay Dr. Jacqueline Kelly Collamore, Dr. Bernard
W. Franklin, William G. Ferguson and Margaret H. Kluttz a quarterly fee of
$6,500 and a fee of $1,000 per board meeting, and to reimburse them for all
related travel expenses for their service on the Board of Directors. The $6,500
quarterly fee is paid in cash in each of the first three quarters of the year.
The Board of Directors has approved the payment of the $6,500 fourth quarter
fees in the form of Class A Common Stock, until such time as the aggregate
number of shares of Class A Common Stock issued in payment of such director's
fees is 8,333 shares. There are no other arrangements pursuant to which
directors of the Company are compensated for services as directors.
8
<PAGE> 11
PROPOSAL (2)
AMENDMENTS TO BYLAWS
In connection with the entering into of the 2000 Shareholders' Agreement,
the Board of Directors has unanimously approved, subject to shareholder
approval, amendments to Article 4, Section 6(a) and (d) of the bylaws of the
Company. See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT -- Shareholders Agreement."
Article 4, Section 6(a) and (d) currently provide as follows:
Section 6. Special Vote. The board of directors may not, without
an affirmative vote of at least 70% of the number of directors fixed
pursuant to these bylaws ("Special Vote"), be empowered to authorize the
corporation to:
(a) Approve the nomination of any person or persons for election
to the board of directors or elect a chief executive officer other
than Tom E. Smith;
* * *
(d) Authorize the issuance or sale of stock or other securities
of the corporation or any subsidiary of the corporation, or options
or warrants or obligations convertible into such stock or securities,
except the issuance of stock options or stock or both, as the case
may be, pursuant to the corporation's 1981 Employee Stock Option
Plan, 1983 Employee Stock Option Plan, 1991 Employee Stock Option
Plan, Employee Stock Purchase Plan and Employee Stock Ownership Plan
and other employee benefit plans approved by the board of directors;
* * *
The Board of Directors has proposed that Article 4, Section 6(a) and (d) of
the bylaws be amended, in keeping with the 2000 Shareholders Agreement, to
provide as follows:
Section 6. Special Vote. The board of directors may not, without an
affirmative vote of at least 70% of the number of directors fixed
pursuant to these bylaws ("Special Vote"), be empowered to authorize the
corporation to:
(a) Approve the nomination of any person or persons for election
to the board of directors or elect a chief executive officer;
* * *
(d) Authorize the issuance or sale of stock or other securities
of the corporation or any subsidiary of the corporation, or options
or warrants or obligations convertible into such stock or securities,
except the issuance of stock options or stock or both, as the case
may be, pursuant to the corporation's 1996 Employee Stock Option
Plan, Employee Stock Purchase Plan and Employee Stock Ownership Plan
and other employee benefit plans approved by the board of directors;
* * *
Pursuant to Article 9, Section 9 of the bylaws and the requirements of
North Carolina law, shareholder approval of the proposed amendments to Article
4, Section 6(a) and (d) of the bylaws is required because the bylaw section
proposed to be amended previously was approved by the holders of Class B Common
Stock. In
9
<PAGE> 12
the 2000 Shareholders Agreement, Delhaize and Detla have agreed to vote the
securities beneficially owned by them in favor of these proposed amendments to
the bylaws. The proposed amendments will be approved if they receive the
affirmative vote of the holders of a majority of the shares of Class B Common
Stock voting on such proposal. Since Delhaize and Detla own, in the aggregate,
more than 50% of the outstanding shares of the Class B Common Stock, these
proposed amendments to the bylaws will be approved upon the affirmative vote of
Delhaize and Detla for the proposal. It is the opinion of the Board of Directors
that it is in the best interest of the Company and its shareholders to amend the
bylaws as proposed.
The accompanying proxy card, when properly dated and executed, will be
voted in the manner directed therein by the shareholder. If no direction is
made, the proxy will be voted for Proposal (2). The Board of Directors
recommends that each shareholder vote FOR this proposal.
PROPOSAL (3)
APPROVAL OF 2000 STOCK INCENTIVE PLAN
On March 27, 2000, the Board of Directors approved a new stock incentive
plan entitled the 2000 Stock Incentive Plan of Delhaize America, Inc. (the "2000
Plan"), subject to shareholder approval. Upon approval of the 2000 Plan by
shareholders, the 1996 Plan will effectively be frozen and will govern only
those options and awards of restricted stock then outstanding under the 1996
Plan.
The principal provisions of the 2000 Plan are summarized below. The
following summary of the material provisions of the 2000 Plan does not purport
to be complete and is qualified in its entirety by the terms of the 2000 Plan, a
complete copy of which is attached hereto as Exhibit A and incorporated herein
by reference. All defined terms used herein shall have the same meanings set
forth in the 2000 Plan, unless otherwise indicated herein.
The 2000 Plan is administered by the Board of Directors or a committee (the
"Committee") appointed by the Board. With respect to Options or Awards that: (i)
are intended to qualify as "performance-based" under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), and/or (ii) are granted
to individuals who qualify as "insiders" under Section 16 of the Exchange Act,
(A) any Committee members who do not qualify as "Outside Directors" and/or
"Nonemployee Directors," as the case may be, shall have no authority to act and
shall automatically be recused from any action with respect to Options or
Awards, and (B) the remaining qualifying directors shall be authorized to act
independently without further approval. Notwithstanding the foregoing, if the
Committee does not exist, or for any other reason determined by the Board, the
Board may take any action under the Plan that would otherwise be the
responsibility of the Committee; provided, however, that if any members of the
Board of Directors do not qualify as Outside Directors only the Committee may
grant Options or Awards that are intended to be performance-based under Section
162(m). For grants to individuals who are neither Section 16 insiders nor
covered under Code Section 162(m), the Board or Committee may delegate grant
making and certain other responsibilities under the 2000 Plan to the Company's
executive officers or any other person designated by the Board (collectively,
"Designees"). Pursuant to the 2000 Plan, the Board, Committee or Designees, as
applicable, shall select participants to whom Options and Restricted Stock are
to be granted; determine the type, size, terms and conditions of grants,
including the per share purchase price and vesting provisions of Options and the
restrictions or performance criteria relating to Restricted Stock; and
administer and interpret the 2000 Plan.
10
<PAGE> 13
PURPOSE OF THE 2000 PLAN
The Board believes that it is important that directors, executives and
employees have a significant financial stake in the growth of the value of the
Company so as to align their interests with those of the Company's shareholders.
The Board also believes that in the future it will be easier to attract highly
qualified individuals if the Company can offer them a meaningful opportunity and
incentive to participate in the growth of the value of the Company.
SECURITIES TO BE OFFERED
The Common Stock subject to grants of Options and Restricted Stock to be
reserved for the purposes of the 2000 Plan shall be such number of shares of
Class A Common Stock ("Shares") as shall be determined by the Board. An
aggregate of 8,000,000 Shares may be issued or transferred pursuant to the 2000
Plan plus the number of Shares that have not been awarded under the 1996 Plan
(including those that may be forfeited or cancelled under the 1996 Plan after
the effective date of this plan).
No employee shall be granted in any calendar year Options to purchase more
than 400,000 Shares. No employee may be awarded more than 150,000 Shares of
performance-based Restricted Stock in any calendar year. No more than 8,000,000
Shares shall be granted pursuant to Incentive Stock Options over the term of
this plan.
In the event of a Change in Capitalization, the Board or Committee shall
conclusively determine the appropriate adjustments, if any, to (i) the maximum
number and class of Shares with respect to which Options and Restricted Stock
may be granted, (ii) the maximum number and class of Shares or other stock or
securities with respect to which Options or Restricted Stock may be granted in
any calendar year, (iii) the maximum number of Shares which may be granted
pursuant to Incentive Stock Options, (iv) the number and class of Shares or
other stock or securities which are subject to outstanding Options or awards of
Restricted Stock and the purchase price therefor, if applicable, and (v) the
Performance Objectives. In addition, if any Option or award of Restricted Stock
expires or terminates without having been exercised, the Shares subject to that
Option or award again become available for grant under the 2000 Plan.
Except as otherwise provided in an Agreement, in the event of (i) the
liquidation or dissolution of the Company or (ii) a merger or consolidation of
the Company (a "Transaction"), the 2000 Plan and the Options and awards of
Restricted Stock issued thereunder shall continue in effect in accordance with
their respective terms, except that following a Transaction each Optionee and
Grantee shall be entitled to receive in respect of each Share subject to any
outstanding Options or awards of Restricted Stock, as the case may be, upon
exercise of any Option or payment or transfer in respect of any awards of
Restricted Stock, the same number and kind of stock, securities, cash, property
or other consideration that each holder of a Share was entitled to receive in
the Transaction in respect of a Share; provided, however, that such stock,
securities, cash, property or other consideration shall remain subject to all of
the conditions, restrictions and performance criteria which were applicable to
the Options and Awards prior to such Transaction.
INDIVIDUALS WHO MAY PARTICIPATE IN THE 2000 PLAN
All of the Company's (and its subsidiaries') salaried employees and
officers together with its (and its subsidiaries') advisors and consultants who
receive cash compensation from the Company (or any of its subsidiaries) are
eligible to receive Options and Restricted Stock under the 2000 Plan. Options
and Restricted Stock under the 2000 Plan shall be granted at the sole discretion
of the Board, Committee or Designees. The granting of Options and Restricted
Stock does not confer upon the participant any right to continue in the
11
<PAGE> 14
employ of the Company or affect any right or power of the Company to terminate
the services of such participant at any time. Options and Restricted Stock may
also be awarded to nonemployee directors and to individuals who have accepted an
offer of employment with the Company or a subsidiary.
OPTIONS AND AWARDS
Options. The Committee may grant to participants Options to purchase
Shares. Subject to the provisions of the Code, Options may either be Incentive
Stock Options (within the meaning of Section 422 of the Code) or Nonqualified
Stock Options. The purchase price of each Share under each Option shall be
established at the time the Option is granted. The purchase price of an
Incentive Stock Option shall not be less than 100% of the Fair Market Value of a
Share on the date the Option is granted (110% in the case of an Incentive Stock
Option granted to a Ten-Percent Stockholder). Options are exercisable at such
times and in such installments as determined by the Committee; provided,
however, that no Incentive Stock Option shall be exercisable after the
expiration of ten years from its grant date (five years in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder). The Committee may
accelerate the exercisability of any Option at any time, before or after grant.
Option Agreements may contain terms and conditions not inconsistent with the
2000 Plan, including, but not limited to, provisions governing accelerated
vesting upon a change in control of the Company and provisions permitting the
grant of Reload Options upon the purchase of Shares under an Option with
previously owned Shares.
Unless otherwise provided in the applicable Agreement, Options are not
transferable by the Optionee other than by will or the laws of descent and
distribution and may be exercised during the Optionee's lifetime only by the
Optionee or the Optionee's guardian or legal representative. The purchase price
for Shares acquired pursuant to the exercise of an Option must be paid (i) in
cash, (ii) by transferring Shares to the Company, or (iii) a combination of the
foregoing, upon such terms and conditions as determined by the Committee.
Notwithstanding the foregoing, the Committee may establish cashless exercise
procedures which provide for the exercise of an Option and sale of the
underlying Share by a registered broker-dealer.
Restricted Stock. The terms of an award of Restricted Stock shall be
determined by the Committee at the time the award is made. Restricted Stock may
either vest over time or in accordance with Performance Objectives. Performance
Objectives for Restricted Stock may be expressed in terms of (i) earnings per
Share, (ii) Share price, (iii) pre-tax profits, (iv) net earnings, (v) return on
equity or assets, (vi) revenues, (vii) EBITDA, (viii) market share or market
penetration or (ix) any combination of the foregoing.
Agreements. Any Options or awards of Restricted Stock under the 2000 Plan
shall be evidenced by written Agreements which may contain such other terms and
conditions that the Board, Committee or Designees deem appropriate and not in
conflict with the express terms of the 2000 Plan.
ADDITIONAL INFORMATION
The 2000 Plan provides that in satisfaction of the federal, state and local
income taxes and other amounts as may be required by law to be withheld (the
"Withholding Taxes") with respect to an Option or Award, the Optionee or Grantee
may make a written election (the "Tax Election"), which may be accepted or
rejected in the discretion of the Committee, to have withheld a portion of the
Shares issuable to him or her having an aggregate fair market value equal to the
Withholding Taxes.
Amendment and Termination of 2000 Plan. The 2000 Plan shall terminate on
the day preceding the tenth anniversary of the date of its adoption by the Board
and no Option or award of Restricted Stock may be granted thereafter. The Board
may sooner terminate the 2000 Plan and the Board may at any time and from
12
<PAGE> 15
time to time amend, modify or suspend the 2000 Plan; provided, however, that:
(a) no such amendment, modification, suspension or termination shall impair or
adversely alter any Options or Awards theretofore granted under the 2000 Plan,
except with the consent of the Optionee or Grantee, nor shall any amendment,
modification, suspension or termination deprive any Optionee or Grantee of any
Shares which he or she may have acquired through or as a result of the 2000
Plan; and (b) only to the extent necessary under applicable law, no amendment
shall be effective unless approved by the shareholders of the Company.
FEDERAL INCOME TAX CONSEQUENCES RELATING TO OPTIONS
In general, an Optionee will not recognize taxable income upon grant or
exercise of an Incentive Stock Option and the Company will not be entitled to
any business expense deduction with respect to the grant or exercise of an
Incentive Stock Option. However, upon the exercise of an Incentive Stock Option,
the excess of the fair market value on the date of the exercise of the Shares
received over the exercise price of Shares will be treated as an adjustment to
the Optionee's alternative minimum taxable income. In order for the exercise of
an Incentive Stock Option to qualify for the foregoing tax treatment, the
Optionee generally must be an employee of the Company or a Subsidiary from the
date the Incentive Stock Option is granted through the date three months before
the date of exercise, except in the case of death or disability, where special
rules apply.
If the Optionee has held the Incentive Stock Option (or the Shares acquired
upon exercise thereof) for at least two years after the date of grant and the
Shares acquired upon exercise of the Options for at least one year after the
date of exercise, upon disposition of the Shares by the Optionee, the
difference, if any, between the sale price of the Shares and the exercise price
of the Option will be treated as long-term capital gain or loss. If the Optionee
does not satisfy these holding period requirements, the Optionee will recognize
ordinary income at the time of the disposition of the Shares, generally in an
amount equal to the excess of the fair market value of the Shares at the time
the Option was exercised over the exercise price of the Option. The balance of
gain realized, if any, will be long-term or short-term capital gain, depending
on whether or not the Shares were sold more than one year after the Option was
exercised. If the Optionee sells the Shares prior to the satisfaction of the
holding period requirements but at a price below the fair market value of the
Shares at the time the Option was exercised, the amount of ordinary income will
be limited to the excess of the amount realized on the sale over the exercise
price of the Option. If the Optionee includes the ordinary income in income or
the Company complies with applicable reporting requirements, it will be entitled
to a business expense deduction in the same amount and at the same time as the
Optionee recognizes ordinary income, subject to any deduction limitation under
Section 162(m).
In general, an Optionee to whom a Nonqualified Stock Option is granted will
recognize no income and the Company will not be entitled to any business expense
deduction at the time of the grant of the Option. Upon exercise of a
Nonqualified Stock Option, an Optionee will recognize ordinary income in an
amount equal to the amount by which the fair market value of the Shares on the
date of exercise exceeds the exercise price of the Option. If the Optionee
includes such amount in income or the Company complies with applicable reporting
requirements, it will be entitled to a business expense deduction in the same
amount and at the same time as the Optionee recognizes ordinary income, subject
to any deduction limitation under Section 162(m).
A participant who has been granted Restricted Stock will not realize
taxable income at the time of grant, and the Company will not be entitled to a
deduction at that time, assuming that the restrictions constitute a "substantial
risk of forfeiture" for federal income tax purposes. Upon the vesting of Shares
subject to an award of Restricted Stock, the Grantee will realize ordinary
income in an amount equal to the then fair market value of those Shares, and the
Company will be entitled to a corresponding deduction, subject to any deduction
limitation under Section 162(m). Gains or losses realized by the Grantee upon
disposition of such Shares will
13
<PAGE> 16
be treated as capital gains or losses, with the basis in such Shares equal to
the fair market value of the Shares at vesting. If dividends are paid to the
Grantee during the restricted period, they will be compensation income to the
Grantee and deductible as such by the Company. A Grantee may elect pursuant to
Section 83(b) of the Code to have the income recognized and measured as of the
date of grant of Restricted Stock and to have the applicable capital gain
holding period commence as of that date. If such an election is filed in a
timely manner, the Company will have a corresponding deduction, subject to any
deduction limitation under Section 162(m).
Section 162(m) of the Code and the regulations proposed thereunder
generally would disallow the Company a federal income tax deduction for
compensation paid to the chief executive officer and the four other most highly
compensated executive officers to the extent such compensation paid to any of
such individuals exceeds one million dollars in any year. Section 162(m)
generally does not disallow a deduction for payments of qualified
"performance-based compensation" the material terms of which have been disclosed
to and approved by shareholders. The Company intends that compensation
attributable to Options and Restricted Stock subject to Performance Objectives
granted under the 2000 Plan will be qualified "performance-based compensation."
Under certain circumstances, the accelerated vesting or the cashout or
exercise of Options or the accelerated lapse of restrictions on Restricted Stock
in connection with a change in control of the Company might be deemed an "excess
parachute payment" for purposes of the golden parachute tax provisions of
Section 280G of the Code. To the extent it is so considered, the Optionee may be
subject to a 20% excise tax and the Company may be denied a tax deduction.
The persons named on the accompanying proxy card intend to vote in favor of
the adoption of the 2000 Plan, unless a contrary choice is indicated on the
enclosed proxy card. The plan will be approved if it receives the affirmative
vote of the holders of a majority of the shares of Class B Common Stock voting
on such proposal. The Board of Directors unanimously recommends that each
shareholder vote FOR this proposal. The affirmative vote by Delhaize and Detla
will guarantee the passage of the 2000 Plan. The Company has been informed that
Delhaize and Detla intend to vote for the passage of the 2000 Plan.
PROPOSAL (4)
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP ("PricewaterhouseCoopers"),
Charlotte, North Carolina has, upon the recommendation of the Audit Committee of
the Board of Directors, been selected by the Board of Directors as independent
accountants for the fiscal year ending December 30, 2000, subject to
ratification of that appointment by the vote of the holders of a majority of the
shares of Class B Common Stock voting on such proposal. PricewaterhouseCoopers,
or its predecessors, has acted as independent accountants for the Company since
1973. Representatives of PricewaterhouseCoopers are expected to be present at
the Annual Meeting with the opportunity to make a statement if they so desire
and will also be available to respond to appropriate questions.
The persons named on the accompanying proxy card intend to vote in favor of
the ratification of the appointment of PricewaterhouseCoopers as independent
accountants for the fiscal year ending December 30, 2000, unless a contrary
choice is indicated on the enclosed proxy card. The Board of Directors
unanimously recommends that each shareholder vote FOR this proposal. The
affirmative vote of Delhaize and Detla will guarantee the ratification of the
appointment. The Company has been informed that Delhaize and Detla intend to
vote for the ratification of the appointment.
14
<PAGE> 17
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual and
long-term compensation earned by the Chief Executive Officer, the former Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company (the "Named Executives") for services rendered to the
Company in all capacities for the fiscal years ended January 1, 2000, January 2,
1999 and January 3, 1998.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION LONG-TERM
OTHER RESTRICTED COMPENSATION ALL
ANNUAL COMPENSATION ANNUAL STOCK OPTIONS/ OTHER
---------------------------- COMP. AWARD(S) SARS COMP.
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS(1) ($)(2) ($)(3) (#) (4)
- --------------------------- ---- ---------- -------- ------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Bill McCanless 1999 616,324 237,260 9,888 417,308 267,745/0 119,507
President and Chief 1998 425,132 166,845 7,239 151,195 24,710/0 85,586
Executive Officer 1997 368,983 139,037 6,615 108,498 27,155/0 97,658
Joseph C. Hall, Jr 1999 494,519 190,481 9,035 262,052 42,541/0 102,617
President of 1998 446,389 175,187 7,705 158,765 25,945/0 94,063
Food Lion Division 1997 441,577 166,845 8,362 153,177 38,336/0 130,218
Laura C. Kendall 1999 322,388 77,612 8,003 136,684 22,187/0 57,963
Chief Financial 1998 261,045 50,649 7,734 78,913 12,897/0 --
Officer 1997 223,106 -- 4,543 84,467 16,376/0 56,338
W. Bruce Dawson 1999 233,726 56,268 5,506 82,595 13,405/0 43,063
President of 1998 217,536 38,805 22,484 50,297 8,219/0 36,830
Kash n' Karry 1997 192,909 45,597 4,272 33,484 8,382/0 30,397
Tom E. Smith 1999 259,260 -- 8,910 -- 0/0 --
Former President and 1998 958,657 423,256 39,222 460,245 75,222/0 233,153
Chief Executive Officer(5) 1997 973,901 414,986 27,183 456,281 114,200/0 299,948
A. Edward Benner, Jr. 1999 253,732 65,970 9,592 96,832 15,716/0 47,228
Former Vice President 1998 249,181 61,120 11,298 75,340 12,311/0 46,108
of Information 1997 246,494 58,209 11,718 55,573 13,910/0 51,539
Technology and
Chief Information
Officer(6)
</TABLE>
- ---------------
(1) These amounts are awarded under the Key Executive Annual Incentive Bonus
Plan or the Incentive Bonus Plan, and are shown for the year earned.
(2) Includes amounts reimbursed for medical expenses, amounts deemed
compensation under the Company's Low Interest Loan Plan, amounts deemed
compensation in connection with an automobile furnished by the Company to
each of the Named Executives, amounts deemed compensation in connection with
life insurance policies for the Named Executives, and the value of certain
other personal benefits.
(3) The dollar values of the restricted stock awards shown in this column are
based on the closing market price of the Class A Common Stock on the date of
grant multiplied by the number of shares awarded. The number and value of
the aggregate restricted stock holdings for each of the Named Executives at
the
15
<PAGE> 18
end of the last completed fiscal year (January 1, 2000), representing shares
of restricted stock that had been granted under the 1996 Plan, are as
follows: for Mr. McCanless, 24,262 shares valued at $492,822; for Mr. Hall,
21,771 shares valued at $442,223; for Ms. Kendall, 9,496 shares valued at
$192,888; and for Mr. Dawson, 6,197 shares valued at $125,877. The value of
such shares, which were granted in 1996, 1997, 1998 and 1999, is based on
the closing stock price of the Class A Common Stock on December 31, 1999,
the last trading day in fiscal year 1999. The shares of restricted stock
were granted on May 3, 1996, May 1, 1997, May 7, 1998 and April 30, 1999 in
the following amounts: to Mr. McCanless, 3,284 shares in 1996, 5,408 shares
in 1997, 4,993 shares in 1998 and 13,571 shares in 1999; to Mr. Hall, 4,560
shares in 1996, 7,635 shares in 1997, 5,243 shares in 1998 and 8,522 shares
in 1999; to Ms. Kendall, 3,261 shares in 1997, 2,606 shares in 1998 and
4,445 shares in 1999; and to Mr. Dawson, 1,198 shares in 1996, 1,669 shares
in 1997, 1,661 shares in 1998 and 2,686 shares in 1999. The shares of
restricted stock granted in 1996 will vest one-fourth on May 3, 2000, and
one-fourth on May 3, 2001. The shares granted in 1997 will vest one-fourth
on May 1, 2000, one-fourth on May 1, 2001, and one-fourth on May 1, 2002.
The shares of restricted stock granted in 1998 will vest one-fourth on May
7, 2000, one-fourth on May 7, 2001, one-fourth on May 7, 2002, and
one-fourth on May 7, 2003. The shares of restricted stock granted in 1999
will vest one-fourth on April 30, 2001, one-fourth on April 30, 2002,
one-fourth on April 30, 2003, and one-fourth on April 30, 2004. No dividends
will be paid on the restricted stock during the period in which the shares
are subject to restrictions under the 1996 Plan.
(4) Includes $24,000 contributed by the Company on behalf of each of the Named
Executives under the Company's non-contributory qualified profit sharing
plan (the "Profit Sharing Plan") during 1999. Amounts set forth in this
column also include contributions to the Company's Profit Sharing
Restoration Plan on behalf of the Named Executives in lieu of additional
contributions that would have been made under the Profit Sharing Plan but
for certain limitations on such contributions in the Code. These payments
were, for Mr. McCanless, $93,475 in 1999, $60,625 in 1998 and $53,531 in
1997; for Mr. Hall, $76,456 in 1999, $67,985 in 1998 and $72,865 in 1997,
for Ms. Kendall, $33,963 in 1999, $0 in 1998 and $0 in 1997; for Mr. Dawson,
$19,063 in 1999, $12,830, in 1998 and $6,397 in 1997; for Mr. Smith,
$191,000 in 1999, $200,955 in 1998 and $206,957 in 1997; and for Mr. Benner,
$23,228 in 1999, $22,108 in 1988 and $24,339 in 1997. On May 4, 1995, the
Board of Directors adopted the Profit Sharing Restoration Plan, pursuant to
which excess profit sharing payments are credited to an account on behalf of
each participant. See "REPORT OF THE SENIOR MANAGEMENT COMPENSATION
COMMITTEE, STOCK OPTION COMMITTEE AND BOARD OF DIRECTORS -- REPORT ON
EXECUTIVE COMPENSATION -- Incentive Compensation" below. Amounts set forth
in this column also include, for Messrs. McCanless, Hall and Smith, the
economic value of premiums paid by the Company directly or, in the case of
Mr. Smith, paid by Mr. Smith and reimbursed by the Company to Mr. Smith, to
maintain split dollar life insurance policies on behalf of the executives.
Under an agreement with Mr. Smith, Mr. Smith (or his assignee in the event
of assignment) has an interest in life insurance policies on his life in the
amount of $3,250,000. The Company has secured split dollar life insurance
policies for Messrs. McCanless and Hall in the face amount of three and
one-half times such officer's base salary, if death occurs prior to
retirement, and two times base salary if death occurs after retirement. The
life insurance policies are assigned to the Company as security for the
premiums paid by the Company and, upon the death of the executive (or
earlier termination of the policies), the Company is entitled to receive
directly from the insurance carrier an amount equal to the sums advanced.
(5) Only includes compensation Mr. Smith received through April 7, 1999. On
April 7, 1999, Mr. Smith retired as President and Chief Executive Officer of
the Company. On that date, the Board of Directors appointed Mr. McCanless as
President and Chief Executive Officer of the Company. See "Employment Plans
and Agreements -- Retirement Agreement with Tom E. Smith."
16
<PAGE> 19
(6) Effective January 1, 2000, A. Edward Benner, Jr., retired as Vice President
of Information Technology and Chief Information Officer. See "Employment
Plans and Agreements -- Employment Severance Agreement with A. Edward
Benner, Jr."
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table shows information for the Named Executives, concerning
(i) exercises of stock options during the year ended January 1, 2000 and (ii)
the amount and value of unexercised "in-the-money" options for the Class A
Common Stock, as of January 1, 2000. The value of stock options at January 1,
2000 was determined by the spread between the exercise price of such options and
the closing price of shares of the Class A Common Stock, as reported by the New
York Stock Exchange on December 31, 1999, the last trading day in fiscal year
1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END (#) FY-END ($)
---------------------- --------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---- --------------- -------------- ---------------------- --------------------
<S> <C> <C> <C> <C>
A. Edward Benner, Jr........... 3,727 $45,280 0/0 0/0
W. Bruce Dawson................ -- -- 1,000/8,382 4,000/2,096
Joseph C. Hall, Jr............. -- -- 1,667/38,336 5,730/9,584
Laura C. Kendall............... -- -- 0/5,269 0/1,317
Bill McCanless................. -- -- 1,723/27,433 5,610/7,588
Tom E. Smith................... -- -- 0/114,200 0/28,550
</TABLE>
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<PAGE> 20
PERFORMANCE GRAPHS
The graphs set forth below compare, for the five- and ten-year periods
indicated, the "cumulative shareholder return" to shareholders of the Company as
compared with the return of the Standard & Poor's 500 Stock Index and of a group
of five retail food chain stores consisting of Albertson's, Inc., Great Atlantic
& Pacific Tea Co., Kroger Co., Safeway, Inc., and Winn-Dixie Stores, Inc. (the
"Peer Group Index"). "Cumulative shareholder return" has been computed assuming
an investment of $100 at the beginning of the periods indicated in the Class A
Common Stock and the stock of the companies comprising the Standard & Poor's 500
Stock Index and the Peer Group Index, and assuming the reinvestment of
dividends.
The Peer Group Index in the Company's 1999 Proxy Statement included
American Stores Co. and Bruno's, Inc., in addition to the corporations included
in this 2000 Peer Group Index. The Peer Group Index has been restated to omit
American Stores Co. and Bruno's, Inc. since American Stores Co. was acquired and
Bruno's, Inc. went into bankruptcy and trading data for the full year ended
December 31, 1999 is not available.
FIVE YEAR PERFORMANCE
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P 500
(FISCAL YEAR COVERED) FOOD LION INDEX PEER GROUP
- --------------------- --------- ------- ----------
<S> <C> <C> <C>
1995 113.47 137.58 137.58
1996 196.96 169.16 167.40
1997 173.00 225.60 239.72
1998 221.15 290.08 375.79
1999 143.51 351.11 215.03
</TABLE>
TEN YEAR PERFORMANCE
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P 500
(FISCAL YEAR COVERED) FOOD LION INDEX PEER GROUP
- --------------------- --------- ------- ----------
<S> <C> <C> <C>
1990 121.98 96.89 78.45
1991 255.63 126.42 87.28
1992 111.82 136.05 112.42
1993 93.56 149.76 114.94
1994 74.92 151.74 127.98
1995 85.01 208.76 176.07
1996 147.56 256.69 214.23
1997 129.61 342.33 306.78
1998 165.68 440.16 480.92
1999 107.52 532.77 275.19
</TABLE>
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<PAGE> 21
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth the number of shares of the Class A Common
Stock for which stock options were granted to each of the Named Executives who
received options during the fiscal year ended January 1, 2000.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM(3)
- ------------------------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- ------------ ------------ -------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
A. Edward Benner, Jr.... 15,716 2.74(1) $ 30.75 4/30/09 304,029 770,530
W. Bruce Dawson......... 13,405 2.34(1) 30.75 4/30/09 259,322 657,226
Joseph C. Hall, Jr...... 42,541 7.41(1) 30.75 4/30/09 822,964 2,085,718
Laura C. Kendall........ 22,187 3.87(1) 30.75 4/30/09 429,212 1,087,793
Bill McCanless.......... 67,745 11.81(1) 30.75 4/30/09 1,310,541 3,321,430
Bill McCanless.......... 200,000(2) 34.85 26.625 4/07/09 3,348,864 8,486,679
</TABLE>
- ---------------
(1) These options vest and become exercisable for shares of Class A Common Stock
as follows: one-third on April 30, 2002, one-third on April 30, 2003 and the
remaining one-third on April 30, 2004.
(2) Options vest on or prior to April 7, 2002 if the closing market price of the
Company's Class A Common Stock is $60.00 or greater for 45 consecutive
trading days. If options have not vested by April 7, 2002, options will
automatically vest and become exercisable on April 7, 2006. See "Employment
Plans and Agreements -- Employment Agreement with Bill McCanless."
(3) As required by the Securities and Exchange Commission, potential net gain
from the exercise of stock options and SARs is based on the assumed annual
rates of stock appreciation of 5% and 10% over the ten-year term of each
option and SAR. At the exercise or base price of $30.75, the 5% and 10%
rates of appreciation would result in per share prices of $50.09 and $79.76,
respectively. At the exercise or base price of $26.625, the 5% and 10% rates
of appreciation would result in per share prices of $43.37 and $69.09,
respectively. Any actual net gains are dependent on the future performance
of the Company's common stock and general market conditions. There is no
assurance that the assumed rates of stock price appreciation utilized in
these calculations will be achieved. In order for these options and SARs to
have value for the executive, the stock price must increase above the
exercise price. Increases in the stock price will benefit all shareholders
commensurately.
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<PAGE> 22
REPORT OF THE SENIOR MANAGEMENT COMPENSATION COMMITTEE,
STOCK OPTION COMMITTEE AND BOARD OF DIRECTORS
REPORT ON EXECUTIVE COMPENSATION
The Company's policy with respect to executive compensation has been
designed to:
- reward executive officers for the achievement of short-term operating
goals and for the enhancement of the long-term shareholder value of the
Company;
- align the interests of executive officers with those of the Company's
shareholders with respect to short-term operating results; and
- adequately and fairly compensate executive officers in relation to their
responsibilities, capabilities, and contributions to the Company and in a
manner that is commensurate with compensation paid by companies of
comparable size within the Company's industry to enable the Company to
attract and retain highly skilled and qualified senior management.
As in prior years, the Company worked with Towers Perrin, an independent
compensation consulting firm, to establish estimated competitive compensation
opportunities for the Company's senior executives to ensure that the Company's
compensation structure is sufficiently competitive to attract and retain highly
qualified executives in all of its senior management positions. Towers Perrin's
competitive review and analysis of industry pay practices was based on a
compilation of competitive compensation and benefit information from published
surveys of the retail grocery industry, proxy statements for 9 specific
competitors in the grocery industry selected on the basis of their revenues and
multi-store operational formats (Albertson's Inc.; American Stores Co.; Fleming
Companies, Inc.; Great Atlantic & Pacific Tea Co.; Kroger Co.; Publix Super
Markets, Inc.; Safeway, Inc.; Supervalu, Inc.; and Winn-Dixie Stores, Inc.), as
well as Towers Perrin's own compensation and benefit data sources. This
compilation of competitive information is referred to herein as the "Towers
Perrin Competitive Data." According to the Towers Perrin Competitive Data, total
compensation (which included stock options and restricted stock) for the Named
Executives was competitive, and Towers Perrin so advised the Senior Management
Compensation Committee.
The primary components of compensation paid by the Company to executive
officers are base salary and incentive compensation, with incentive compensation
broken down further into incentive bonus payments, stock options, restricted
stock and profit sharing. The relationship of each principal component of
compensation to the Company's performance is discussed below.
BASE SALARY
Each year, the Senior Management Compensation Committee reviews and
approves the base salaries to be paid by the Company during the following year
to members of senior management. Annual adjustments to base salaries are
determined based on a number of factors, including the Company's business and
financial performance and the executives' contributions to the Company's
performance.
At its December 1999 meeting, the Senior Management Compensation Committee
reviewed the base salaries of the Named Executives taking into account their
roles and performance contributions, as well as the Company's overall
competitive pay positions, to determine appropriate increases to base salaries
for 2000. As a result of this review, such Committee increased the 2000 base
salary for each of the Named Executives in amounts ranging from 1.91% to 17.17%.
The Senior Management Compensation Committee believes that these increases and
the resulting new base salaries are consistent with overall Company and
individual
20
<PAGE> 23
performance and the Company's general strategy of paying base salaries
competitive within the industry to allow it to retain valued executives. These
salary actions are also consistent with such committee's strategy over the past
six years to bring the Company's executive compensation program more in line
with competitive industry practice.
Bill McCanless' terms of employment, including the level of his base
salary, are set forth in an April 7, 1999 Employment Agreement between Mr.
McCanless and the Company (the "McCanless Agreement"). The McCanless Agreement
provides that Mr. McCanless's base salary will be competitive within the
Company's industry as determined annually, but that Mr. McCanless's base salary
will not be reduced in connection with any annual review of industry practices.
The McCanless Agreement further provides that Mr. McCanless annually shall be
eligible to receive up to 45% of his base salary in the form of a bonus under
the Company's Key Executive Annual Incentive Bonus Plan and that Mr. McCanless
will be eligible to participate in the Company's stock option plans and other
compensation plans of the Company. In addition, the McCanless Agreement provides
that Mr. McCanless will be provided split dollar life insurance in specified
amounts. The McCanless Agreement additionally provides for a one-time grant to
Mr. McCanless of options to purchase 200,000 shares of Class A Common Stock.
Such options are exercisable within the first three years after the date of
grant only if the stock price of Class A Common Stock is $60 or greater for 45
consecutive trading days or, if not previously exercisable, on the seventh
anniversary of the date of grant. Except for the base salary, bonus, split
dollar life insurance and options, the McCanless Agreement does not address in
detail any component of Mr. McCanless's compensation. See also "Employment Plans
and Agreements" for discussion of employment agreements with Messrs. McCanless,
Dawson and Hall and Ms. Kendall.
INCENTIVE COMPENSATION
Incentive Bonus. A substantial portion of each executive officer's
compensation package is in the form of an incentive bonus designed to reward the
achievement of short-term operating goals and long-term increases in shareholder
value.
The Company's Incentive Bonus Plan, which was adopted by the Company in
1982, is designed to offer an incentive to those employees whose performance
most directly affects the Company's profitability, as determined by the Senior
Management Compensation Committee. Under the terms of the Incentive Bonus Plan,
each employee selected for participation in the plan is assigned a maximum
potential bonus award, which is computed by multiplying a predetermined
percentage rate ranging from 10% to 45%, depending on the participant's position
in the Company (the "Potential Percentage Rate"), by each participant's salary
(the "Potential Bonus"). Under the plan, the total bonus payable each year for
all participants (the "Total Bonus") may not exceed the lesser of (i) 2.1% of
the Company's net income before taxes and certain other adjustments in excess of
a 15% return on average shareholder's equity (the "ROE Bonus Amount") and (ii)
the aggregate of the Potential Bonus for all plan participants (the "Maximum
Bonus Amount"). A portion of each participant's bonus is determined by
multiplying one-half of such participant's Potential Percentage Rate by such
participant's salary (the "Objective Bonus"). All or any of the remaining Total
Bonus is determined and allocated among participants at the discretion of the
Senior Management Compensation Committee (the "Discretionary Bonus"). In
determining the Discretionary Bonus, the Senior Management Compensation
Committee considers a number of factors, including contributions of each
participant toward the accomplishment of business objectives during the year.
For the year ended January 1, 2000, each of the Named Executives received
his or her Potential Bonus, and the Total Bonus paid to participants under the
plan equaled the Maximum Bonus Amount. In
21
<PAGE> 24
determining the Discretionary Bonus awarded to each executive, the Senior
Management Compensation Committee sought to reward senior management for the
Company's financial performance during 1999 and for increasing long-term
shareholder value of the Company. The Senior Management Compensation Committee
found that the Company had substantially benefited during 1999 from improved
financial performance in a highly competitive industry, and the continued growth
of the Company. In addition, the Senior Management Compensation Committee
considered to what extent each participant met his or her personal goals
established at the beginning of the fiscal year by such participant and his or
her supervisor.
In December 1995, the Internal Revenue Service issued its final regulations
for Section 162(m) of the Code covering the non-deductibility of compensation in
excess of $1,000,000 for the Chief Executive Officer and the four highest-paid
officers (other than the Chief Executive Officer) named in the proxy statements
of public companies. Code Section 162(m) provides for deductibility of
"performance-based" compensation in excess of $1,000,000 so long as it meets the
requirements of Section 162(m), which include, among other things, that the
compensation be paid through application of a shareholder approved plan.
At the Annual Meeting of Shareholders in May 1996, shareholders approved
the Key Executive Annual Incentive Bonus Plan (the "Key Executive Plan"), which
was designed to provide annual incentive compensation opportunities that will
qualify as performance-based under the terms of Code Section 162(m). Under the
terms of the Key Executive Plan, the Senior Management Compensation Committee
may designate certain executive officers who may be affected by the terms of
Section 162(m) to participate in this plan. Executives who are designated for
participation in this plan may not simultaneously participate in the Company's
Incentive Bonus Plan.
Participants in the Key Executive Plan are eligible to receive bonuses if
and only to the extent that pre-established performance goals are met. The
potential maximum bonus that each participant in the Key Executive Plan is
eligible to receive will be set as a fixed percentage of profit in excess of a
return on average equity threshold as pre-determined by the Senior Management
Compensation Committee. The maximum bonus award that any participant may receive
in any single year under this plan is $750,000. At the discretion of such
Committee, actual bonuses paid may be lower than the amounts generated by the
formula, but in no case may they be higher. In 1999, Mr. McCanless was the only
executive designated to participate in the Key Executive Plan.
Stock Options. At the May 2, 1996 Annual Meeting, shareholders approved
amendments to the 1991 Employee Stock Option Plan of Food Lion, Inc. and renamed
the plan the 1996 Employee Stock Incentive Plan of Food Lion, Inc. Like the
Company's earlier stock option plans, the 1996 Plan provides the Stock Option
Committee full and final authority, in its discretion, to determine within the
terms of the plan the individuals to receive awards pursuant to the plan, the
times or effective dates when awards will be granted, the number of shares
subject to each award, the exercise price for any stock options granted and the
time(s) when, and the conditions, if any, under which each award may be vested
and/or exercisable.
The 1996 Plan provides for grants of stock options and restricted stock.
Under the terms of this plan, options to purchase shares of the Company's Class
A Common Stock, or awards of shares of Class A Common Stock subject to certain
vesting and other restrictions determined by the Stock Option Committee, may be
granted on an annual basis to key employees. Grants to the Named Executives of
stock options and restricted stock under this plan are made with reference to
competitive practice, the Company's overall goal of linking executive
compensation to the enhancement of long-term shareholder value, and individual
circumstances with respect to executive recruitment and retention. Towers
Perrin's recommendations to the Stock Option Committee contemplated annual
grants of stock options and restricted stock to the Named Executives
22
<PAGE> 25
in amounts comparable to the grants made in 1998, assuming satisfactory company
and individual performance. During 1999, options for 650,670 shares of Class A
Common Stock were granted under the 1996 Plan to 1,181 employees. Upon approval
of the 2000 Plan by the shareholders of the Company, the 1996 Plan will
effectively be frozen and will govern only those options and awards of
restricted stock then outstanding under the 1996 Plan.
Profit Sharing. The Company also maintains the Profit Sharing Plan for
employees pursuant to which the Company contributes annually an amount of
current or accumulated earnings as determined by the Board of Directors but not
exceeding the maximum amount deductible for income tax purposes. Each employee
of the Company is generally eligible to participate in the Profit Sharing Plan
as of the first day of the plan year in which he or she completes 1,000 or more
hours of service. The annual contribution each year under the Profit Sharing
Plan is determined by the Board of Directors but may not in any event exceed 15%
of the compensation paid or otherwise accrued during the taxable year for each
employee under the Profit Sharing Plan. The Board of Directors approved a
contribution to the Profit Sharing Plan for 1999 equal to 15% of the 1999 wages
of all eligible employees. The Board of Directors authorized one-third of the
total contribution to be allocated for investment in the Company's Class A
Common Stock.
Tax-deferred contributions by the Company for the benefit of highly
compensated employees to the Profit Sharing Plan are subject to certain limits
imposed by the Code. This limit was $30,000 during each of the last three fiscal
years. Contributions on behalf of executive officers in excess of these
limitations are credited to the executives' accounts under the Profit Sharing
Restoration Plan of Food Lion, Inc., which includes a credit of interest at a
variable rate equal to the 10-year Constant Maturity Treasury yield in effect on
the last day of the previous calendar quarter. Each participant in the Profit
Sharing Restoration Plan of Food Lion, Inc. will receive a single lump sum cash
distribution in the amount of his or her entire account balance on the first day
of the month next succeeding termination of employment with the Company.
Supplemental Executive Retirement Plan. The Company also sponsors a
Supplemental Executive Retirement Plan ("SERP") for certain key employees
including each of the Named Executives. This plan provides a supplemental
benefit that, combined with benefits from the Profit Sharing Plan and the Profit
Sharing Restoration Plan, deferred compensation agreements, and Social Security,
will provide estimated annual benefits at normal retirement (age 65) of up to
60% of the participant's final average compensation. A participant's "final
average compensation" means the annual average of the participant's annual cash
compensation (to include base salary and incentive bonus) paid to the
participant for the five completed calendar years that immediately precede the
year in which payments of benefits under the plan are to begin. A participant
who retires on or after his normal retirement date, and has completed 20 or more
years of service to the Company, will receive an annual retirement benefit under
the SERP payable as a single life annuity that is equal to the difference
between 60% of his final average compensation and certain "benefit offsets." The
benefit offsets are the sum of: (1) the participant's annuity under the Profit
Sharing Plan; (2) the participant's annuity under the Profit Sharing Restoration
Plan; (3) the participant's annuity under any deferred compensation agreement
with the Company; and (4) the participant's Social Security benefit. Any
participant who retires on or after his normal retirement date and has completed
fewer than 20 years of service to the Company will receive a reduced benefit in
proportion to the participant's years of service. A participant who retires
prior to normal retirement age may be entitled to reduced benefits under the
SERP, depending on the participant's age and years of service.
Based on currently available information and assumptions, the estimated
annual benefits under the SERP alone to the Named Executives are $130,000 for
Ms. Kendall, $9,431 for Mr. Hall and $0 for Messrs. Benner, Dawson and
McCanless. The projected SERP benefits to Messrs. Benner, Dawson and McCanless
are $0
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<PAGE> 26
because it is estimated that the benefit offsets will exceed 60% of the final
average compensation for each of these Named Executives. These estimates may
change from time to time depending on the projected final average compensation
and the projected value of the benefit offsets for each of the Named Executives.
This report is submitted by the Senior Management Compensation Committee,
the Stock Option Committee and the Board of Directors of the Company.
<TABLE>
<S> <C>
SENIOR MANAGEMENT
COMPENSATION COMMITTEE: STOCK OPTION COMMITTEE:
Pierre-Olivier Beckers Pierre-Olivier Beckers
William G. Ferguson, Chairperson William G. Ferguson
Dominique Raquez Bernard W. Franklin, Chairperson
BOARD OF DIRECTORS:
Pierre-Olivier Beckers, Chairman of the Board Bernard W. Franklin
Jacqueline K. Collamore Joseph C. Hall, Jr.
Jean-Claude Coppieters 't Wallant Margaret H. Kluttz
Pierre Dumont Bill McCanless
William G. Ferguson Dominique Raquez
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following persons served on the Senior Management Compensation
Committee during fiscal year 1999: William G. Ferguson (Chairperson),
Pierre-Olivier Beckers and Dominique Raquez. Messrs. Hall and McCanless, who are
executive officers of the Company, are members of the Company's Board of
Directors and participate in decisions by the Board of Directors with respect to
annual contributions made by the Company to or for the benefit of employees
(including the Named Executives) under the Profit Sharing Plan. In addition, on
January 1, 2000, Mr. McCanless was appointed to the Executive Committee of
Delhaize.
Mr. Raquez, who is a member of the Compensation Committee, and Mr. Beckers,
who is a member of the Compensation and Stock Option Committees, are affiliated
with Delhaize.
EMPLOYMENT PLANS AND AGREEMENTS
Employment Agreement with Bill McCanless. Effective April 7, 1999, Bill
McCanless entered into the McCanless Agreement with the Company providing for
his employment as President and Chief Executive Officer of the Company. The
McCanless Agreement expires on April 7, 2004, provides for Mr. McCanless to
receive a base salary of not less than $650,000 per year, and authorizes the
Board of Directors to increase such amount from time to time. Mr. McCanless is
also eligible to receive a bonus of up to 45% of his salary in any year at the
discretion of the Board of Directors. The McCanless Agreement also entitles Mr.
McCanless to participate in other compensation and benefit plans of the Company
and requires the Company to maintain split dollar life insurance for Mr.
McCanless in the face amount of three and one-half times his base salary if his
death occurs prior to retirement (subject to certain conditions), and two times
his last base salary if death occurs after retirement. Mr. McCanless may elect
to defer some or all of his bonus compensation and up to 50% of his base salary.
The McCanless Agreement also provides for the grant of options to purchase
200,000 shares of Class A Common Stock to Mr. McCanless (the "Jump Start
Options"). The Jump Start Options expire on April 7,
24
<PAGE> 27
2009. If the closing price per share of the Class A Common Stock is $60 or
greater for 45 consecutive trading days ending on or prior to April 7, 2002 and
Mr. McCanless is still the President and Chief Executive Officer of the Company
on such date, the Jump Start Options will vest on such date. Otherwise, the Jump
Start Options will vest on April 7, 2006, provided that Mr. McCanless remains
employed as the President and Chief Executive Officer of the Company on such
date. The exercise price of the Jump Start Options is $26.625 per share.
The Company may terminate Mr. McCanless' employment for Cause, as defined
in the McCanless Agreement. The McCanless Agreement defines Cause as (i) willful
failure (other than by reason of incapacity due to physical or mental illness)
by Mr. McCanless to perform his material duties thereunder and his inability or
unwillingness to correct such failure within 30 days after receipt of such
written notice, (ii) conviction of Mr. McCanless of a felony or plea of guilty
or no contest to a felony, or (iii) perpetration of a material dishonest act or
fraud against the Company or any affiliate thereof. The definition of "Cause"
expressly excludes any mistake of fact or judgment made by Mr. McCanless in good
faith with respect to the Company's business. If the Company terminates Mr.
McCanless' employment for Cause, or Mr. McCanless' employment terminates due to
death, the Company will no longer be required to make payments to Mr. McCanless
or his estate under the agreement, except for compensation earned prior to such
termination and pursuant to plans, arrangements or agreements providing for
payments after termination of employment, including, in the case of death,
payments pursuant to a salary continuation agreement with the Company. See
"-- Salary Continuation Agreements." The Company or Mr. McCanless may terminate
his employment upon Mr. McCanless' disability as specified in the McCanless
Agreement, in which case, the Company shall pay Mr. McCanless a lump sum payment
equal to 50 percent of the present value of the future base salary payable to
Mr. McCanless during the longer of the remainder of the term of employment under
his employment agreement or for a period of two years.
Mr. McCanless may terminate his employment without liability to the Company
for Good Reason, as defined in the McCanless Agreement. Good Reason is defined
as the occurrence of any of the following circumstances: (i) a material
diminution of the professional responsibilities of Mr. McCanless, (ii)
assignment of inappropriate duties to Mr. McCanless, (iii) failure of the
Company to provide compensation and benefits obligations to Mr. McCanless as set
forth in the McCanless Agreement, (iv) transfer of Mr. McCanless more than 50
miles from Salisbury, North Carolina, (v) a purported termination of the
McCanless Agreement by the Company other than in accordance with the terms
thereof or (vi) failure of the Company to require any successor to the Company
to assume and comply with the McCanless Agreement.
If Mr. McCanless terminates his employment for Good Reason or if the
Company terminates his employment (except for "Cause" as defined above, or by
reason of death or disability), the Company shall pay Mr. McCanless the full
amount of Mr. McCanless' base salary and other compensation earned prior to the
Date of Termination (as defined in the McCanless Agreement). In addition, the
Company shall pay Mr. McCanless an amount (the "Termination Payment") equal to
the product of Mr. McCanless' current annual base salary multiplied by the
greater of (i) three years, or (ii) the number of full years remaining in the
term of the McCanless Agreement.
If Mr. McCanless' employment is terminated by Mr. McCanless for Good Reason
prior to a Change in Control or by the Company without Cause, the Company shall
maintain in full force and effect for the continued benefit of Mr. McCanless and
his eligible dependents for three years after the Date of Termination (or for
the number of years remaining in the term of the agreement, whichever is
greater), the employee fringe benefit plans and programs relating to medical,
dental, health and life insurance in which
25
<PAGE> 28
Mr. McCanless was entitled to participate immediately prior to the Date of
Termination, if Mr. McCanless' continued participation is permitted under the
general terms and provisions of such plans and programs and applicable law, but
not including the Annual Incentive Bonus Plan, the Profit Sharing Plan and the
Profit Sharing Restoration Plan and any other bonus, retirement or similar
compensation plans.
If Mr. McCanless' employment is terminated by the Company without Cause in
contemplation of a Change in Control of the Company within six months prior to
such Change in Control or Mr. McCanless' employment is terminated by the Company
without Cause or by Mr. McCanless with Good Reason within one year following a
Change in Control of the Company, the Company shall pay Mr. McCanless the
compensation and benefits set forth in the two paragraphs above, and in
addition, for three years following the Date of Termination (or for the number
of years remaining in the term of the McCanless Agreement, whichever is
greater), Mr. McCanless shall be paid an annual amount equal to the amounts, if
any, which would have been payable to Mr. McCanless under the Key Executive
Annual Incentive Bonus Plan, the Profit Sharing Plan and the Profit Sharing
Restoration Plan (or such other plans in which Mr. McCanless was entitled to
participate as of the Date of Termination) assuming Mr. McCanless had remained
employed for such three years (or greater) period and received an annual salary
at the rate in effect on the Date of Termination.
The McCanless Agreement defines a "Change in Control" of the Company as a
change in control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); provided that a Change in
Control of the Company shall be deemed to have occurred if: (i) an acquisition
(other than directly from the Company) by a Person (as set forth in Sections
3(a)(2) and 13(d)(3) of the Exchange Act), excluding the Company or an employee
benefit plan of the Company or an entity controlled by the shareholders of the
Company results in the aggregate number of shares of the voting securities of
the Company beneficially owned by any other Person to exceed the number of
shares of the voting securities of the Company beneficially owned, in the
aggregate, by Delhaize and Detla; (ii) at any time during the term of the
McCanless Agreement there is a change in the composition of the Board of
Directors of the Company resulting in a majority of the directors of the Company
who are in office on the date of the McCanless Agreement ("Incumbent Company
Directors") no longer constituting a majority of the directors of the Company;
provided that, in making such determination, persons who are elected to serve as
directors of the Company and who are approved by all directors in office on the
date of such election (other than in connection with an actual or threatened
proxy contest) shall be treated as Incumbent Company Directors; (iii)
consummation of a complete liquidation or dissolution of the Company or a
merger, consolidation or sale of all or substantially all of the assets of the
Company (collectively, a "Business Combination") other than a Business
Combination in which all or substantially all of the beneficial holders of
voting securities of the Company receive or retain fifty percent or more of the
voting securities of the Company or entity resulting from the Business
Combination ("Resulting Company"), at least a majority of the board of directors
of the Resulting Company were Incumbent Company Directors, and after which no
person or entity owns twenty percent or more of the voting securities
("Beneficial Ownership Threshold") of the Resulting Company, who did not
beneficially own such stock immediately before the Business Combination; or (iv)
occurrence of any of the events described in (ii) or (iii) above to Delhaize, or
the acquisition by any Person of more than thirty percent of the stock of
Delhaize. Notwithstanding any other provision of this paragraph, for purposes of
the definition of "Change in Control" of the Company a change in control of
Delhaize shall not constitute a Change in Control of the Company unless it
involves an event contemplated by (iv) above. With respect to (iii) above as it
applies to Delhaize under (iv) above, the Beneficial Ownership Threshold shall
be thirty percent.
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<PAGE> 29
Upon a Change in Control, or if Mr. McCanless' employment terminates other
than for Cause, all of the rights granted to Mr. McCanless by the Company to own
or acquire stock of the Company (including stock options and restricted stock
granted under the 1996 Plan or other plans but excluding the Jump Start Options)
will automatically vest upon the date of such Change in Control or date of
termination, provided however, that (assuming no occurrence of a Change in
Control) such rights shall not vest if Mr. McCanless' employment is terminated
for his failure adequately to perform his duties under the McCanless Agreement
as determined by an affirmative vote of at least seventy percent of the Board of
Directors of the Company. If the Jump Start Options have not vested by April 7,
2002, they will not vest for any reason, including a Change in Control, until
April 7, 2006.
The McCanless Agreement prohibits Mr. McCanless, without the written
consent of the Board of Directors of the Company, from engaging in any retail or
wholesale grocery business which is directly competitive with the business of
the Company or its affiliates in any geographic area which the Company or its
affiliates operates on the Date of Termination. This prohibition applies to Mr.
McCanless during the term of the McCanless Agreement and for a period of two
years after his termination. The McCanless Agreement also places restrictions,
for a period of two years after termination of Mr. McCanless' employment, on the
recruitment or solicitation of employees or independent contractors of the
Company for the purpose of being employed by Mr. McCanless or an entity on
behalf of which Mr. McCanless is acting as agent, representative or employee.
If, however, Mr. McCanless' employment is terminated prior to the first
anniversary of the date on which a Change in Control occurs, the foregoing
restrictions on competition and solicitation by Mr. McCanless shall not apply.
Under the McCanless Agreement, the Company agreed to indemnify Mr.
McCanless to the fullest extent permitted under North Carolina law from and
against any losses, claims, damages, costs and expenses suffered by Mr.
McCanless as a result of the fact that he is or was an officer of the Company or
is or was serving at the request of the Company as an officer, employee or agent
of an affiliate of the Company. The McCanless Agreement also provides that in
the event that any payments to which Mr. McCanless is entitled are subject to
tax imposed by Section 4999 of the Code (the "Excise Tax"), the Company shall
pay Mr. McCanless an additional amount such that the net amount retained by Mr.
McCanless shall be equal to the amount to which Mr. McCanless is entitled prior
to deduction of the Excise Tax.
Employment Agreement with Tom E. Smith. Tom E. Smith, the former President
and Chief Executive Officer of the Company, retired on April 7, 1999. Mr.
Smith's terms of employment, including the level of his base salary, for the
period prior to his retirement on April 7, 1999, were set forth in an August 1,
1991 Employment Agreement between Mr. Smith and the Company (the "Smith
Employment Agreement"). The Smith Employment Agreement provided that Mr. Smith's
base salary would be competitive with the Company's industry as determined
annually based upon a consultant's report of industry practices, but that Mr.
Smith's base salary would not be reduced in connection with any annual review of
industry practices. The Smith Employment Agreement further provided that Mr.
Smith would be eligible to participate in compensation plans of the Company and
that he would be provided split dollar life insurance in specified amounts.
Except for the base salary and split dollar life insurance, the Smith Employment
Agreement did not address in detail any component of Mr. Smith's compensation.
See also "-- Senior Management Employment Agreements" for discussion of
employment agreements with Messrs. Hall and Dawson and Ms. Kendall.
Senior Management Employment Agreements. The Company is party to
employment agreements with each of the Named Executives (except for Messrs.
Dawson, Smith and Benner as discussed herein). Mr. Dawson is party to an
employment agreement with Kash n' Karry Food Stores, Inc. ("Kash n' Karry"), a
wholly owned subsidiary of the Company and references to the Company below refer
to Kash n' Karry in the
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<PAGE> 30
case of Mr. Dawson. These agreements are referred to herein as the "Employment
Agreements," and the executives are referred to as the "Executives," except
where referred to by name. The Employment Agreement with Mr. Dawson was entered
into on January 20, 2000, the Employment Agreement with Mr. Hall was entered
into on March 13, 2000, the Employment Agreement with Ms. Kendall was entered
into on March 14, 2000 and the Employment Agreement with Mr. Benner was entered
into on October 1, 1997. The Employment Agreements with Messrs. Hall and Benner
have five-year terms, and the Employment Agreements with Mr. Dawson and Ms.
Kendall have three year terms. Each Employment Agreement will automatically be
extended for additional periods of one year unless the Executive or the Company
gives the other party at least 90 days' written notice (180 days' written
notice, in the case of Mr. Benner) prior to the expiration of the term.
The Employment Agreement with Mr. Hall provides for his employment as
President of Food Lion, a division of the Company, and for payment to Mr. Hall
of a base salary of not less than $521,390 per year. The Employment Agreement
with Ms. Kendall provides for her employment as Vice President of Finance and
Chief Financial Officer of the Company, and for payment to Ms. Kendall of a base
salary of not less than $336,206 per year. The Employment Agreement with Mr.
Dawson provides for his employment as President of Kash n' Karry, and for the
payment to Mr. Dawson of a base salary of not less than $238,706 per year. The
Employment Agreement with Mr. Benner provided for his employment as Vice
President of Information Technology/Chief Information Officer of the Company,
and for payment to Mr. Benner of a base salary of not less than $232,836 per
year. Effective January 1, 2000, Mr. Benner retired from the Company. See "--
Employment Severance Agreement with A. Edward Benner, Jr." The Employment
Agreements authorize the Board of Directors of the Company to increase such
minimum amounts from time to time. The Employment Agreements also entitle the
Executives to participate in other compensation and benefit plans of the
Company. The Employment Agreement with Mr. Hall requires the Company to maintain
split dollar life insurance for Mr. Hall in the face amount of three and
one-half times Mr. Hall's base salary if his death occurs prior to retirement
(subject to certain conditions), and two times the Executive's last base salary
if death occurs after retirement.
The Company may terminate an Executive's employment for Cause, as defined
in the Employment Agreements. The Employment Agreements define Cause as (i)
willful failure (other than by reason of incapacity due to physical or mental
illness) by the Executive to perform his or her material duties thereunder and
his or her inability or unwillingness to correct such failure within 30 days
after receipt of such written notice, (ii) conviction of the Executive of a
felony or plea of guilty or no contest to a felony, (iii) perpetration of a
material dishonest act or fraud against the Company or any affiliate thereof or
(iv) except in the case of Mr. Benner's Employment Agreement, a material
violation of any Company policy or any state, federal or other governmental
statute or regulation. The Employment Agreements of Mr. Hall and Ms. Kendall
also define Cause to include (i) the termination of the Executive's employment
by the Company in conjunction with an assignment of the Executive's Employment
Agreement to a successor or subsidiary of the Company and (ii) subsequent
terminations of the Executive's employment in connection with subsequent
assignments of the Executive's Employment Agreement to the Company or its
successors or direct or indirect subsidiaries of the Company. Ms. Kendall's
Employment Agreement further defines Cause to include the termination of Ms.
Kendall's employment at either the Company or any direct or indirect subsidiary
so long as Ms. Kendall is also then employed by any direct or indirect
subsidiary of the Company or a successor to the Company. In Mr. Dawson's
Employment Agreement, Cause is also defined to include (i) the termination of
Mr. Dawson's employment by Kash n' Karry in connection with an assignment of his
Employment Agreement to the Company or a successor or subsidiary of Kash n'
Karry or the Company and (ii) subsequent terminations of Mr. Dawson's employment
in connection with subsequent assignments of his Employment Agreement to
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<PAGE> 31
Kash n' Karry or the Company or the successors or direct or indirect
subsidiaries of Kash n' Karry or the Company. The definition of "Cause"
expressly excludes any mistake of fact or judgment made by the Executive in good
faith with respect to the Company's business. If the Company terminates the
Executive's employment for Cause, or the Executive's employment terminates due
to death, the Company will no longer be required to make payments to the
Executive or his or her estate under his or her Employment Agreement, except for
compensation earned prior to such termination and pursuant to plans,
arrangements or agreements providing for payments after termination of
employment (including, in the case of the Executive's death, payments pursuant
to a salary continuation agreement with the Company. See "-- Salary Continuation
Agreements." The Company may terminate the Executive's employment upon the
Executive's disability as specified in the Employment Agreements, in which case,
the Company shall pay the Executive a lump sum payment equal to 50 percent of
the present value of the future base salary payable to the Executive during the
longer of the remainder of the term of employment under his or her Employment
Agreement or for a period of two years, in the case of Messrs. Hall and Benner,
or one year, in the case of Mr. Dawson and Ms. Kendall.
The Executive may terminate his or her employment without liability to the
Company for Good Reason, as defined in the Employment Agreements. The Employment
Agreements of Messrs. Hall and Dawson and Ms. Kendall define Good Reason as the
occurrence of any of the following circumstances without the Executive's
consent, provided that the Executive has provided notice to the Company of the
Executive's intention to terminate his or her employment for Good Reason within
30 days after the occurrence of such event and the Company has failed to cure
such circumstance, if curable, within 30 days after receipt of notice thereof:
(i) a material diminution of the professional responsibilities of the Executive
as such responsibilities existed on the date of the Executive's Employment
Agreement, (ii) assignment of duties to the Executive which are materially
adverse to and inconsistent with the Executive's position, (iii) failure of the
Company to provide compensation and benefits obligations to the Executive as set
forth in the Executive's Employment Agreement, (iv) transfer of the Executive
more than 50 miles from Salisbury, North Carolina (or Tampa, Florida in the case
of Mr. Dawson), without good business reasons, as determined by the Board of
Directors of the Company or (v) failure of the Company to require any successor
to the Company to assume and comply with the Executive's Employment Agreement.
If Messrs. Hall or Dawson or Ms. Kendall terminates his or her employment
for Good Reason or if the Company terminates his or her employment (except for
"Cause" as defined above, or by reason of the Executive's death or disability),
the Company shall pay the Executive the full amount of the Executive's base
salary and other compensation earned prior to the Date of Termination (as
defined in the Employment Agreements). In addition, the Company shall pay the
Executive an amount (the "Termination Payment") equal to the product of the
Executive's current monthly base salary multiplied by the greater of (i) twelve
months, in the case of Mr. Dawson and Ms. Kendall, and thirty-six months, in the
case of Mr. Hall, or (ii) the number of full months remaining in the term of the
Executive's Employment Agreement.
If the employment of Messrs. Hall or Dawson or Ms. Kendall is terminated by
the Executive for Good Reason prior to a Change in Control or by the Company
without Cause within six months prior to a Change in Control, the Company shall
maintain in full force and effect for the continued benefit of the Executive and
the Executive's eligible dependents for one year, in the case of Mr. Dawson and
Ms. Kendall, and three years, in the case of Mr. Hall, after the Date of
Termination (or for the number of years remaining in the term of the Executive's
Employment Agreement, whichever is greater), the employee fringe benefit plans
and programs relating to medical, dental, health and life insurance in which the
Executive was entitled to participate immediately prior to the Date of
Termination, if the Executive's continued participation is permitted under the
general terms and provisions of such plans and programs and applicable law, but
not including the Annual
29
<PAGE> 32
Incentive Bonus Plan, the Profit Sharing Plan and the Profit Sharing Restoration
Plan and any other bonus, retirement or similar compensation plans.
If the employment of Messrs. Hall or Dawson or Ms. Kendall is terminated by
the Company without Cause in contemplation of a Change in Control of the Company
within six months prior to such Change in Control or the Executive's employment
is terminated by the Company without Cause or by Employee with Good Reason
within one year following a Change in Control of the Company, the Company shall
pay Employee the compensation and benefits set forth in the two paragraphs
above, and in addition, for one year following the Date of Termination (or for
the number of years remaining in the term of the Executive's Employment
Agreement, whichever is greater). The Executive shall be paid an annual amount
equal to the amounts, if any, which would have been payable to the Executive
under the Annual Incentive Bonus Plan, the Profit Sharing Plan and the Profit
Sharing Restoration Plan (or such other plans in which the Executive was
entitled to participate as of the Date of Termination) assuming the Executive
had remained employed for such one year (or greater) period and received an
annual salary at the rate in effect on the Executive's Date of Termination.
The Employment Agreements define a "Change in Control" of the Company as a
change in control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); provided that a Change in
Control of the Company shall be deemed to have occurred if: (i) an acquisition
(other than directly from the Company) by a Person (as set forth in Sections
3(a)(2) and 13(d)(3) of the Exchange Act) excluding the Company or an employee
benefit plan of the Company or an entity controlled by the shareholders of the
Company results in the aggregate number of shares of the voting securities of
the Company beneficially owned by any other Person to exceed the number of
shares of the voting securities of the Company beneficially owned, in the
aggregate, by Delhaize and Detla; (ii) at any time during the term of the
Employment Agreement there is a change in the composition of the Board of
Directors of the Company resulting in a majority of the directors of the Company
who are in office on the date of the Employment Agreement ("Incumbent Company
Directors") no longer constituting a majority of the directors of the Company;
provided that, in making such determination, persons who are elected to serve as
directors of the Company and who are approved by at least 70% (100%, in the case
of Mr. Benner) of the Incumbent Company Directors in office on the date of such
election (other than in connection with an actual or threatened proxy contest)
shall be treated as Incumbent Company Directors; (iii) consummation of a
complete liquidation or dissolution of the Company or a merger, consolidation or
sale of all or substantially all of the assets of the Company (collectively, a
"Business Combination") other than a Business Combination in which all or
substantially all of the beneficial holders of voting securities of the Company
(the shareholders, in the case of Mr. Benner) receive or retain fifty percent or
more of the voting securities (stock, in the case of Mr. Benner) of the Company
or entity resulting from the Business Combination ("Resulting Company"), at
least a majority of the board of directors of the Resulting Company were
Incumbent Company Directors, and after which no person or entity owns twenty
percent or more of the voting securities (stock, in the case of Mr. Benner)
("Beneficial Ownership Threshold") of the Resulting Company, who did not
beneficially own such stock immediately before the Business Combination; or (iv)
occurrence of any of the events described in (ii) or (iii) above to Delhaize, or
the acquisition by any Person of more than thirty percent of the stock of
Delhaize. In the case of Messrs. Hall and Dawson and Ms. Kendall,
notwithstanding any other provision of this paragraph, for purposes of the
definition of "Change in Control" of the Company a change in control of Delhaize
shall not constitute a Change in Control of the Company unless it involves an
event contemplated by (iv) above. In the case of Messrs. Hall and Dawson and Ms.
Kendall, with respect to (iii) above as it applies to Delhaize under (iv) above,
the Beneficial Ownership Threshold shall be thirty percent.
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Upon a Change in Control, or if the Executive's employment terminates other
than for Cause, all of the rights granted to the Executive by the Company to own
or acquire stock of the Company (including stock options and restricted stock
granted under the 1996 Plan or other plans) will automatically vest upon the
date of such Change in Control or date of termination, provided however, that
(assuming no occurrence of a Change in Control) such rights shall not vest if
the Executive's employment is terminated for his or her failure adequately to
perform his or her duties under his or her Employment Agreement as determined by
an affirmative vote of at least seventy percent of the Board of Directors of the
Company.
The Employment Agreements of Messrs. Hall and Dawson and Ms. Kendall
prohibit the Executives, without the written consent of the Board of Directors
of the Company, from owning, operating, controlling or being employed as an
officer, director, manager or consultant, or as an employee with management or
executive level duties or responsibilities, in any case, for or by any business
engaged in, or any entity whose business or whose direct or indirect parent
entity's or direct or indirect subsidiary entity's business is, any retail or
wholesale grocery or supermarket business within 10 miles of any store operated
by the Company or any subsidiary thereof on the date on which the Executive's
employment with the Company ends; provided, however, that this restriction shall
not apply if the Executive works, consults or accepts employment with a business
that does not directly compete with the Company or any subsidiary thereof. These
prohibitions apply to the Executives during the term of the Employment
Agreements and for a period of two years after their termination. The Employment
Agreements also place restrictions, for a period of two years after termination
of an Executive's employment, on the recruitment or solicitation of employees or
independent contractors of the Company for the purpose of being employed by such
Executive or an entity on behalf of which such Executive is acting as agent,
representative or employee. If, however, an Executive's employment is terminated
prior to the first anniversary of the date on which a Change in Control occurs,
the foregoing restrictions on competition and solicitation by such Executive
shall not apply.
Under the Employment Agreements, the Company agrees to indemnify the
Executives to the fullest extent permitted under North Carolina law from and
against any losses, claims, damages, costs and expenses suffered by the
Executives as a result of the fact that they are or were officers of the Company
or are or were serving at the request of the Company as officers, employees or
agents of an affiliate of the Company. Each Employment Agreement also provides
that in the event that any payments to which the Executive is entitled are
subject to tax imposed by Section 4999 of the Code (the "Excise Tax"), the
Company shall pay the Executive an additional amount such that the net amount
retained by the Executive shall be equal to the amount to which the Executive is
entitled prior to deduction of the Excise Tax.
Retirement Agreement with Tom E. Smith. On April 7, 1999, Tom E. Smith
retired as President and Chief Executive Officer of the Company. In connection
with his retirement, Mr. Smith entered into a Retirement Agreement with the
Company, which provides for Mr. Smith to receive annual compensation of $960,700
through July 31, 2001, plus an additional annual bonus of $432,315 through April
7, 2002, and an annual "wellness" bonus of $36,950 through April 7, 2002. All
stock options that have been granted to Mr. Smith that vest on or before
December 31, 2000, will remain outstanding and vest on the same schedule as if
Mr. Smith had remained employed with the Company through December 31, 2000, and,
once such options are vested, will remain exercisable for three months following
the respective vesting dates of such options. Additionally, all restricted stock
under awards to Mr. Smith that vest on or before December 31, 2000, will remain
outstanding following his retirement and will vest on the same schedule as if
Mr. Smith had remained employed with the Company through December 31, 2000.
Following the date of his retirement, Mr. Smith will receive cash payments from
the Company in the amounts that would have been contributed to the Profit
Sharing Plan and the Profit Sharing Restoration Plan for Mr. Smith as if he
remained employed
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with the Company through April 7, 2002. The Company will continue to pay the
premiums on the split-dollar life insurance policies currently in effect with
respect to Mr. Smith through December 31, 2001. At that time, the life insurance
policies will be transferred to Mr. Smith, and the Company will waive its right
to receive reimbursement for premiums paid on such policies. Mr. Smith also will
be entitled to participate in certain benefit plans of the Company in which he
participated prior to his retirement, or receive substantially similar benefits,
for a period of three years following his retirement. Mr. Smith has agreed among
other things that, for three years following his retirement, (i) he will not,
directly or indirectly, own, manage, operate, control, be employed by, or
perform services for any business that engages in the retail or wholesale
grocery business and which is located anywhere within the continental United
States; and (ii) he will not, directly or indirectly, solicit the customers,
suppliers or employees of the Company or its affiliates to terminate their
relationship with the Company or its affiliates (or to modify such relationship
in a manner that is adverse to the interests of the Company or its affiliates),
or to violate any valid contracts they may have with the Company or its
subsidiaries.
Employment Severance Agreement with A. Edward Benner, Jr. Effective
January 1, 2000, A. Edward Benner, Jr., retired as Vice President of Information
Technology and Chief Information Officer. In connection with his retirement, Mr.
Benner entered into an Employment Severance Agreement and Mutual Release with
the Company, which provides for Mr. Benner to receive his weekly salary of
$5,075 from January 1, 2000 through June 4, 2000, plus an incentive bonus for
1999 in an amount determined by the Board of Directors on the same basis as
amounts are determined for vice presidents of the Company who were employed
through December 31, 1999, and an annual "wellness" bonus of $10,150 for 1999.
All stock options that have been granted to Mr. Benner that vested on or before
January 1, 2000, will remain exercisable for 89 days following January 1, 2000.
Mr. Benner's participation in the Profit Sharing Plan and Profit Sharing
Restoration Plan terminated as of January 1, 2000. Mr. Benner has agreed among
other things that, for one year following his retirement, (i) he will not
compete with the Company, directly or indirectly, by acting either individually
or as an advisor, representative, agent, employee, partner, shareholder,
investor, consultant, or in any other similar capacity, on behalf of any other
membership clubs selling groceries or other retail formats selling food products
in North Carolina, South Carolina, Virginia, Tennessee, Georgia, Florida,
Maryland, Delaware, Kentucky, West Virginia or Pennsylvania; and (ii) he will
not recruit, solicit or otherwise contact employees of the Company on behalf of
any other entity, either directly or as an agent, in order to solicit or induce
any employee of the Company to accept employment with another entity.
Salary Continuation Agreements. The Company has entered into salary
continuation agreements with each of the Named Executives providing for payments
to a named beneficiary in the event of such executive's death prior to attaining
the age of 65 while employed by the Company. The agreements are intended to
encourage participants to continue employment with the Company.
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Payments for the first 12 months following death are fixed. If death occurs
prior to attaining the age of 55, payments after the first 12 months following
death are made through the month the decedent would have attained the age of 65
or for a maximum period of 24 years, whichever is less. If death occurs at or
after 55 but prior to attaining the age of 65, payments after the first 12
months following death are made for a period of 9 years. Except as provided
above, all rights of the participant terminate upon his or her reaching age 65
or on the date he or she retires or, for reasons other than death, ceases to be
an active employee of the Company. The following table sets forth the amounts
payable to the Named Executives at January 1, 2000, pursuant to the arrangements
described above:
<TABLE>
<CAPTION>
MONTHLY SUBSEQUENT
PAYMENT MONTHLY PAYMENT
--------------- ----------------------------------
FIRST 24-YEAR 9-YEAR
NAME OF INDIVIDUAL TWELVE MONTHS PERIOD PERIOD
------------------ --------------- ------- OR -------------
<S> <C> <C> <C> <C>
A. Edward Benner, Jr.(1)................ $15,985 $ 7,993 $ 6,394
W. Bruce Dawson......................... 13,634 6,817 5,454
Joseph C. Hall, Jr...................... 28,847 14,423 11,539
Laura C. Kendall........................ 18,806 9,403 7,522
Bill McCanless.......................... 39,375 19,688 15,750
</TABLE>
- ---------------
(1) Effective January 1, 2000, Mr. Benner retired as Vice President of
Information Technology and Chief Information Officer. Based on such
retirement, no payments will be made to Mr. Benner under his salary
continuation agreement.
Low Interest Loan Plan. Until December 31, 1997, the Company maintained a
Low Interest Loan Plan to provide low interest unsecured demand loans to certain
officers and employees of the Company. The Board of Directors terminated the Low
Interest Loan Plan as of December 31, 1997 and no further loans were extended
under the plan as of that date. However, the terms of the plan apply to amounts,
if any, still outstanding thereunder. With minor exceptions, the total of all
loans outstanding to any one employee cannot exceed the following percentages of
the employee's annual salary: an amount equal to 25% during the first year of
participation in the Low Interest Loan Plan, 50% during the second year, 75%
during the third year and 100% thereafter. Interest is payable in monthly
installments and may be paid through bi-monthly payroll deductions from the
borrower's salary. The rate of interest charged is a rate equal to one half of
the prime rate of BankAmerica Corporation on the first business day of each
calendar quarter. Pursuant to the Low Interest Loan Plan, the principal amount
of a loan is payable on demand (or within 90 days after a borrower leaves
service with the Company). Participants must supply a financial statement before
receiving a loan under the Low Interest Loan Plan, although no collateral is
required.
Messrs. Dawson and Benner were the only Named Executives to have loans
outstanding under the plan in 1999. The largest amount outstanding under the
plan during the fiscal year ended January 1, 2000 for Mr. Dawson was $106,936
and for Mr. Benner was $177,700. The amounts outstanding as of March 27, 2000
for Mr. Dawson was $106,936 and for Mr. Benner was $177,700.
INFORMATION REGARDING DELHAIZE
Delhaize is the beneficial owner of approximately 46.6% and 55.6%
respectively, of the outstanding Class A Common Stock and Class B Common Stock.
Delhaize, a Belgian corporation founded in 1867, has its principal executive
offices at rue Osseghem, 53, 1080 Brussels, Belgium. Its shares are listed on
the Brussels Stock Exchange. Delhaize is engaged primarily in the operation of
supermarkets located in Belgium and
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<PAGE> 36
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. Although a precise determination cannot be made since its shares are
not registered, its management estimates that approximately 35% of the
outstanding stock of Delhaize is held by the descendants of the founders and
their relatives, including Messrs. Beckers and Raquez. Delhaize is the owner of
the lion logo, which the Company uses with its own trademarks pursuant to a
nonexclusive license agreement.
CERTAIN TRANSACTIONS
Tom E. Smith, who retired on April 7, 1999, as the President and Chief
Executive Officer of the Company, is the beneficial owner of 50% of the common
stock of SAFHI, Inc., a corporation which owns two Hampton Inn motels, one in
Salisbury, North Carolina, and one in Mount Pleasant, South Carolina. In 1999,
the Company paid a total of $98,035 to these two Hampton Inn motels, in
connection with lodging for various management trainees and other employees of
the Company and its subsidiaries. The Company believes that the rates paid for
such lodging were at least as favorable as would have been obtainable from an
unrelated party.
The Company has entered into a lease for the operation of Food Lion stores
with a real estate venture in which an indirect subsidiary of Delhaize owns a
one-half interest. On October 1, 1986, the Company entered into a 20-year lease
for the operation of a 20,000 square foot store in Orange Park, Florida. An
indirect subsidiary of Delhaize owns a one-half interest in Debarry Place Joint
Venture, which is involved in the development of the Orange Park, Florida,
shopping center. The store opened in September 1987. Under the terms of the
lease, the provisions of which the Company believes are no more favorable than a
lease with a third party lessor, the Company is expected to make annual payments
of $206,500 in fixed rent and $6,249 in common area maintenance fees for the
Food Lion store. In addition, the lease provides for an annual payment to the
lessor equal to the amount by which 1% of the annual gross receipts of the
leased premises exceeds the fixed rent for the lease year. The lease includes an
option to extend the lease for up to four five-year periods.
The Company has entered into a joint venture with Delhaize regarding
Bel-Thai Supermarket Co., Ltd. ("Bel-Thai"), a supermarket company based in
Thailand. On January 18, 2000, the Company acquired, through a wholly-owned
subsidiary, a 51% interest in Bel-Thai for approximately $3.9 million. Delhaize
owns the remaining 49% interest in Bel-Thai. Subsequent to the Company's
acquisition of its interest in Bel-Thai, the Company contributed additional
capital of approximately $5.6 million to Bel-Thai for operations and
acquisitions. The Company's investment in Bel-Thai was consummated pursuant to
arms-length negotiations and was approved by the Board of Directors of the
Company (by a vote of the directors unaffiliated with Delhaize). In addition,
the Company obtained a fairness opinion from Salomon Smith Barney, an investment
banking firm, as to the fairness of the transaction to the Company.
For other information relating to certain transactions, see "EXECUTIVE
COMPENSATION -- Compensation Committee Interlocks and Insider Participation."
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
One transaction for each of Thomas Robinson, Robert Brunory, and Darrell
Johnson, and two transactions for David Morgan (totaling two late reports) were
inadvertently reported untimely under Section 16(a) of the Securities Exchange
Act of 1934 on Forms 5. All of these transactions relate to transfers of stock
in the Company's Profit Sharing Plan, including minor adjustments made by the
plan trustee
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<PAGE> 37
following transactions in accounts other than the Company stock fund. Kyle
Mitchell reported one sale transaction untimely on Form 4.
PROPOSALS OF SHAREHOLDERS
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, under
certain conditions, shareholders may request the Company to include a proposal
for action at a forthcoming meeting of the shareholders of the Company in the
proxy material of the Company for such meeting. All proposals of shareholders
intended to be presented at the 2001 Annual Meeting of the Company must be
received by the Company no later than December 17, 2000 for inclusion in the
Proxy Statement and proxy card relating to such meeting. Subject to any rights
that a shareholder has, pursuant to Rule 14a-8, to have a proposal included in
the Proxy Statement, if a shareholder wishes to raise a matter at a
shareholders' meeting, or if a shareholder wishes to nominate a person for
election to the Board of Directors of the Company at an annual or special
meeting, the shareholder is required by the Company's bylaws to give written
notice to the Secretary of the Company at least 10 but no more than 60 days
before the meeting, unless fewer than 21 days' notice of the meeting is given to
shareholders. If fewer than 21 days' notice of the meeting is given to
shareholders, the notice by the shareholder must be received by the Secretary no
more than 10 days after the date on which the notice of the meeting is mailed to
shareholders. For any proposal that is not submitted for inclusion in the Proxy
Statement for the 2001 Annual Meeting of the Company but is instead sought to be
presented directly to the shareholders of the Company at the 2001 Annual
Meeting, management will be able to vote proxies in its discretion if the
Company (i) receives notice of the proposal before the close of business on
February 14, 2001 and advises shareholders in the proxy statement for the 2001
Annual Meeting about the nature of the proposal and how management intends to
vote on the proposal, or (ii) does not receive notice of the proposal before the
close of business on April 23, 2001. The Company's bylaws should be consulted
for the specific requirements for raising matters at shareholders' meetings and
for nominating persons to the Board of Directors.
OTHER MATTERS
The management of the Company knows of no other business that will be
presented for consideration at the meeting, except for the possible presentation
of a shareholder proposal that has been omitted from the Proxy Statement in
accordance with rules of the Securities and Exchange Commission. However, if
other matters, including the omitted shareholder proposal, are properly
presented at the meeting, it is the intention of the proxy holders named in the
accompanying proxy card to vote such proxies in accordance with their best
judgment.
By order of the Board of Directors.
LESTER C. NAIL
Secretary
March 31, 2000
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EXHIBIT A
DELHAIZE AMERICA, INC.
2000 STOCK INCENTIVE PLAN
(AS ADOPTED MARCH 27, 2000)
<PAGE> 39
DELHAIZE AMERICA, INC.
2000 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this Plan is to provide an incentive to the employees,
individuals who have accepted an offer of employment, officers, consultants and
eligible directors of Delhaize America, Inc., a North Carolina corporation (the
"Company"), and thereby encourage them to devote their abilities and industry to
the success of the Company's business enterprise. It is intended that this
purpose be achieved by extending to employees, individuals who have accepted an
offer of employment, officers, consultants and directors of the Company and its
Subsidiaries an added long-term incentive for high levels of performance and
unusual efforts through the grant of Incentive Stock Options, Nonqualified Stock
Options and Restricted Stock (as each term is herein defined).
2. DEFINITIONS
For purposes of the Plan:
2.1. "Agreement" means the written agreement between the Company and
an Optionee or Grantee evidencing the grant of an Option or Award and
setting forth the terms and conditions thereof.
2.2. "Award" means a grant of Restricted Stock.
2.3. "Board" means the Board of Directors of the Company.
2.4. "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change in
value) in the Shares or exchange of Shares for a different number or kind
of shares or other securities of the Company or another corporation, by
reason of a reclassification, recapitalization, merger, consolidation,
reorganization, reincorporation, spin-off, split-up, issuance of warrants
or rights or debentures, stock dividend, stock split or reverse stock
split, cash dividend, property dividend, combination or exchange of shares,
repurchase of shares, change in corporate structure or otherwise.
2.5. "Code" means the Internal Revenue Code of 1986, as amended.
2.6. "Committee" means the committee, as described in Section 3.1,
appointed by the Board from time to time to administer the Plan and to
perform the functions set forth herein.
2.7. "Company" means Delhaize America, Inc.
2.8. "Director" means a director of the Company.
2.9. "Disability" means:
(a) in the case of an Optionee or Grantee whose employment with the
Company or a Subsidiary is subject to the terms of an employment
agreement between such Optionee or Grantee and the Company or
Subsidiary, which employment agreement includes a definition of
"Disability," the term "Disability" as used in this Plan or any
Agreement shall have the meaning set forth in such employment agreement
during the period that such employment agreement remains in effect; and
<PAGE> 40
(b) in all other cases, the term "Disability" as used in this Plan
or any Agreement shall mean a physical or mental infirmity which impairs
the Optionee's or Grantee's ability to perform substantially his or her
duties for a period of one hundred eighty (180) consecutive days.
2.10. "Division" means any of the operating units or divisions of the
Company designated as a Division by the Committee.
2.11. "EBITDA" means earnings before interest, taxes, depreciation and
amortization.
2.12. "Eligible Director" means a director of the Company who is not
an employee of the Company or any Subsidiary.
2.13. "Eligible Individual" means any director (other than an Eligible
Director), officer, employee of the Company or a Subsidiary or individual
who has accepted an offer of employment from the Company or a Subsidiary,
or any consultant of the Company or a Subsidiary, designated by the
Committee as eligible to receive Options or Awards subject to the
conditions set forth herein.
2.14. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.15. "Fair Market Value" on any date means the closing sales price of
the Shares on such date on the principal national securities exchange on
which such Shares are listed or admitted to trading, or, if such Shares are
not so listed or admitted to trading, the average of the per Share closing
bid price and per Share closing asked price on such date as quoted on the
National Association of Securities Dealers Automated Quotation System or
such other market in which such prices are regularly quoted, or, if there
have been no published bid or asked quotations with respect to Shares on
such date, the Fair Market Value shall be the value established by the
Board in good faith and, in the case of an Incentive Stock Option, in
accordance with Section 422 of the Code.
2.16. "Grantee" means a person to whom an Award has been granted under
the Plan.
2.17. "Incentive Stock Option" means an Option satisfying the
requirements of Section 422 of the Code and designated by the Committee as
an Incentive Stock Option.
2.18. "Nonemployee Director" means a director of the Company who is a
"nonemployee director" within the meaning of Rule 16b-3 promulgated under
the Exchange Act.
2.19. "Nonqualified Stock Option" means an Option that is not an
Incentive Stock Option.
2.20. "Option" means a Nonqualified Stock Option or an Incentive Stock
Option or either or both of them.
2.21. "Optionee" means a person to whom an Option has been granted
under the Plan.
2.22. "Outside Director" means a director of the Company who is an
"outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.
2.23. "Parent" means any corporation that is a parent corporation
(within the meaning of Section 424(e) of the Code) with respect to the
Company.
2.24. "Performance Cycle" means the time period specified by the
Committee at the time a performance-based Award is granted during which the
performance of the Company, a Subsidiary or a Division will be measured.
2.25. "Performance Objectives" has the meaning set forth in Section
6.4(b) hereof.
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<PAGE> 41
2.26. "Plan" means the Delhaize America, Inc. 2000 Stock Incentive
Plan, as amended and restated from time to time.
2.27. "Reload Option" means an Option that may be granted when an
Optionee pays all or a portion of the purchase price and withholding taxes
of an Option with previously owned Shares.
2.28. "Restricted Stock" means Shares issued or transferred to an
Eligible Individual or Eligible Director pursuant to Section 6 hereof.
2.29. "Shares" means the Class A common stock, par value $0.50 per
share, of the Company.
2.30. "Subsidiary" means any corporation that is a subsidiary
corporation (within the meaning of Section 424(f) of the Code) with respect
to the Company, including any limited liability company that is disregarded
for Federal tax purposes or treated as a corporate subsidiary under the
Code.
2.31. "Ten-Percent Stockholder" means an Eligible Individual, who, at
the time an Incentive Stock Option is to be granted to him or her, owns
(within the meaning of Section 422(b)(6) of the Code) stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company, or of a Parent or a Subsidiary.
3. ADMINISTRATION
3.1. The authority to control and manage the operation and
administration of the Plan shall be vested in the Committee, which shall
hold meetings at such times as may be necessary for the proper
administration of the Plan. The Committee shall keep minutes of its
meetings. A quorum shall consist of a majority of the members of the
Committee, and a majority of a quorum may authorize any action. The
foregoing notwithstanding, with respect to Options or Awards that: (i) are
intended to qualify as "performance-based" under Section 162(m) of the
Code, and/or (ii) are granted to individuals who qualify as "insiders"
under Section 16 of the Exchange Act, (A) any Committee members who do not
qualify as "Outside Directors" and/or "Nonemployee Directors," as the case
may be, shall have no authority to act and shall automatically be recused
from any action with respect to Options or Awards, and (B) the remaining
qualifying directors shall be authorized to act independently without
further approval. No member of the Committee shall be liable for any
action, failure to act, determination or interpretation made in good faith
with respect to this Plan or any transaction hereunder, except for
liability arising from his or her own willful misfeasance, gross negligence
or reckless disregard of his or her duties. The Company hereby agrees to
indemnify each member of the Committee for all costs and expenses and, to
the extent permitted by applicable law, any liability incurred in
connection with defending against, responding to, negotiating for the
settlement of or otherwise dealing with any claim, cause of action or
dispute of any kind arising in connection with any actions in administering
this Plan or in authorizing or denying authorization to any transaction
hereunder. Notwithstanding the foregoing, if the Committee does not exist,
or for any other reason determined by the Board, the Board may take any
action under the Plan that would otherwise be the responsibility of the
Committee; provided, however, that if any members of the Board do not
qualify as Outside Directors, only the Committee appointed above may grant
Options or Awards that are intended to be performance-based under Section
162(m).
3.2. Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time to:
(a) determine those Eligible Individuals and Eligible Directors to
whom Options shall be granted under the Plan and the number of such
Options to be granted and to prescribe the terms and
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<PAGE> 42
conditions (which need not be identical) of each such Option, including
the purchase price per Share subject to each Option, and make any
amendment or modification to any Option Agreement consistent with the
terms of the Plan;
(b) select those Eligible Individuals and Eligible Directors to
whom Awards shall be granted under the Plan and determine the number of
Shares to be granted pursuant thereto, determine the terms and
conditions of each Award including the restrictions or Performance
Objectives relating to Shares, and to make any amendment or modification
to any Agreement consistent with the terms of the Plan;
(c) construe and interpret the Plan, Options and Awards granted
hereunder and to establish, amend and revoke rules and regulations for
the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the
extent it shall deem necessary or advisable so that the Plan complies
with applicable law including Rule 16b-3 under the Exchange Act and the
Code to the extent applicable, and otherwise to make the Plan fully
effective. All decisions and determinations by the Committee in good
faith in the exercise of this power shall be final, binding and
conclusive upon the Company, its Subsidiaries, the Optionees and
Grantees, and all other persons having any interest therein;
(d) determine the duration and purposes for leaves of absence which
may be granted to an Optionee or Grantee on an individual basis without
constituting a termination of employment or service for purposes of the
Plan;
(e) exercise its discretion with respect to the powers and rights
granted to it as set forth in the Plan;
(f) except to the extent prohibited by applicable law or the
applicable rules of a stock exchange, the Committee may allocate all or
any part of its responsibilities and powers to any one or more of its
members and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it, which allocation or
delegation may be revoked by the Committee at any time; and
(g) generally, to exercise such powers and to perform such acts as
are deemed necessary or advisable to promote the best interests of the
Company with respect to the Plan.
4. STOCK SUBJECT TO THE PLAN
4.1. The Shares subject to Options and Awards that shall be reserved
for the purposes of the Plan, shall be from the Company's authorized but
unissued Shares or out of Shares held in the Company's treasury, or partly
out of each, such number of Shares as shall be determined by the Board. An
aggregate of 8,000,000 Shares may be issued or transferred pursuant to this
Plan plus the number of Shares that have not been awarded under the 1996
Employee Stock Incentive Plan of Food Lion, Inc. (the "1996 Plan") as of
the Effective Date (including those that may be forfeited or cancelled
under the 1996 Plan after the effective date of this Plan).
No employee shall be granted in any calendar year Options to purchase
more than 400,000 Common Shares.
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<PAGE> 43
No Eligible Individual may be awarded more than 150,000 Shares of
Restricted Stock that are intended to be performance-based compensation in
any calendar year.
No more than 8,000,000 Shares shall be granted pursuant to Options
intended to be Incentive Stock Options.
In the event of a Change in Capitalization, the Board or Committee
shall conclusively determine the appropriate adjustments, if any, to (i)
the maximum number of Shares with respect to which Options and Awards may
be granted, (ii) the maximum number of Shares or other stock or securities
with respect to which Options or Awards may be granted in any calendar
year, (iii) the maximum number of Shares which may be granted pursuant to
Incentive Stock Options, (iv) the number of Shares or other stock or
securities which are subject to outstanding Options or Awards and the
purchase price therefor, if applicable, and (v) the Performance Objectives.
In connection with the grant of an Option or an Award, the number of
Shares available for grant under the Plan shall be reduced by the number of
Shares in respect of which the Option or Award is granted.
4.2. Whenever any outstanding Option or Award or portion thereof
expires, is canceled or is otherwise terminated for any reason without
having been exercised or without payment having been made in respect of the
entire Option or Award, the Shares allocable to the expired, canceled or
otherwise terminated portion of the Option or Award may again be the
subject of Options or Awards granted hereunder.
4.3. Whenever any portion of an Option under this Plan or the 1996
Plan is paid for with previously held Shares (by either actual delivery or
attestation), only the difference between (i) the number of Shares issued
upon exercise and (ii) the number of Shares transferred in payment of the
purchase price shall be counted for purposes of determining the maximum
number of Shares available for grant under the Plan.
5. OPTION GRANTS
5.1. Authority of Committee. Subject to the provisions of the Plan,
the Committee, or the persons to whom authority has been delegated under
Paragraph (f) of Section 3.2 hereof, shall have full and final authority to
select those Eligible Individuals and Eligible Directors who will receive
Options, and the terms and conditions that shall be set forth in the
applicable Agreements. Some terms and conditions that may, but are not
required to be included are: a provision allowing the issuance of a Reload
Option and a provision providing acceleration of exercisability under
certain conditions as may be determined by the Committee. Other terms and
conditions not inconsistent with this Plan may be included in Agreements in
the discretion of the Committee.
5.2. Purchase Price. The purchase price or the manner in which the
purchase price is to be determined for Shares under each Option shall be
determined by the Committee and set forth in the Agreement; provided,
however, that the purchase price per Share under each Incentive Stock
Option shall not be less than 100% of the Fair Market Value of a Share on
the date the Option is granted (110% in the case of an Incentive Stock
Option granted to a Ten-Percent Stockholder).
5.3. Maximum Duration. Options granted hereunder shall be for such
term as the Committee shall determine, provided that an Incentive Stock
Option shall not be exercisable after the expiration of ten (10) years from
the date it is granted (five (5) years in the case of an Incentive Stock
Option granted
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<PAGE> 44
to a Ten-Percent Stockholder) and a Nonqualified Stock Option shall not be
exercisable after the expiration of ten (10) years from the date it is
granted. The Committee may, subsequent to the granting of any Option,
extend the term thereof, but in no event shall the term as so extended
exceed the maximum term provided for in the preceding sentence.
5.4. Vesting. Each Option shall become exercisable in such
installments (which need not be equal) and at such times as may be
designated by the Committee and set forth in the Agreement. To the extent
not exercised, installments shall accumulate and be exercisable, in whole
or in part, at any time after becoming exercisable, but not later than the
date the Option expires. The Committee may accelerate the exercisability of
any Option or portion thereof at any time.
5.5. Modification. No modification of an Option shall adversely alter
or impair any rights or obligations under the Option without the Optionee's
consent.
5.6. Non-Transferability. Unless set forth in the Agreement
evidencing the Option (other than an Incentive Stock Option) at the time of
grant or at any time thereafter, an Option granted hereunder shall not be
transferable by the Optionee to whom granted except by will or the laws of
descent and distribution or pursuant to a domestic relations order (within
the meaning of Rule 16a-12 promulgated under the Exchange Act), and an
Option may be exercised during the lifetime of such Optionee only by the
Optionee or his or her guardian or legal representative. The terms of such
Option shall be final, binding and conclusive upon the beneficiaries,
executors, administrators, heirs and successors of the Optionee.
5.7. Method of Exercise. The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number
of Shares to be purchased and accompanied by payment therefor and otherwise
in accordance with the Agreement pursuant to which the Option was granted.
The purchase price for any Shares purchased pursuant to the exercise of an
Option shall be paid, as determined by the Committee in its discretion, in
either of the following forms (or any combination thereof): (i) cash or
(ii) the transfer or attestation of Shares that have been held at least six
months to the Company upon such terms and conditions as determined by the
Committee. In addition, Options may be exercised through a registered
broker-dealer pursuant to such cashless exercise procedures (other than
Share withholding) which are, from time to time, deemed acceptable by the
Committee, and the Committee may authorize that the purchase price payable
upon exercise of an Option may be paid by having Shares withheld that
otherwise would be acquired upon such exercise. Any Shares transferred to
the Company (or withheld upon exercise) as payment of the purchase price
under an Option shall be valued at their Fair Market Value on the date of
exercise of such Option. The value of the number of Shares that may be
withheld for the payment of taxes may not be in excess of the minimum
withholding requirements. At the Company's request, the Optionee shall
deliver the Agreement evidencing the Option to the Secretary of the Company
who shall endorse thereon a notation of such exercise and return such
Agreement to the Optionee. No fractional Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of Shares that
may be purchased upon exercise shall be rounded to the nearest number of
whole Shares. The Committee, in its discretion, may also permit
simultaneous sale of Shares upon exercise through a broker-dealer.
5.8. Rights of Optionees. Optionee shall not be deemed for any
purpose to be the owner of any Shares subject to any Option unless and
until (i) the Option shall have been exercised pursuant to the terms
thereof, (ii) the Company shall have issued and delivered Shares to the
Optionee, and (iii) the
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<PAGE> 45
Optionee's name shall have been entered as a stockholder of record on the
books of the Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such Shares, subject to
such terms and conditions as may be set forth in the applicable Agreement.
6. RESTRICTED STOCK
6.1. Grant. The Committee may grant Awards to Eligible Individuals
and Eligible Directors, which shall be evidenced by an Agreement between
the Company and the Grantee. Each Agreement shall contain such
restrictions, terms and conditions as the Committee may, in its discretion,
determine and (without limiting the generality of the foregoing) such
Agreements may require that an appropriate legend be placed on Share
certificates. Awards shall be subject to the terms and provisions set forth
below in this Section 6.
6.2. Rights of Grantee. Shares of Restricted Stock granted pursuant
hereunder shall be recorded in the name of the Grantee as soon as
reasonably practicable after the Award is granted provided that the Grantee
has executed an Agreement evidencing the Award and any other documents
which the Committee may require as a condition to the issuance of such
Shares. If a Grantee shall fail to execute the Agreement evidencing an
Award and any other documents which the Committee may require within the
time period prescribed by the Committee at the time the Award is granted,
the Award shall be null and void. Unless the Committee determines otherwise
and as set forth in the Agreement, the Grantee shall have no rights of a
stockholder with respect to such Shares, including no right to vote the
Shares or receive dividends or other distributions with respect to the
Shares, until the restrictions with respect to such Shares shall have
lapsed in the manner set forth in Section 6.4.
6.3. Non-transferability. Until all restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set
forth in Section 6.4, such Shares shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated,
nor shall they be delivered to the Grantee.
6.4. Lapse of Restrictions.
(a) Generally. Restrictions upon Shares of Restricted Stock
awarded hereunder shall lapse at such time or times and on such terms
and conditions as the Committee may determine. The Agreement evidencing
the Award shall set forth any such restrictions. The Board may
accelerate the lapse of all or a portion of the restrictions on an Award
at any time.
(b) Performance Objectives. If the Committee has determined that
the restrictions on Shares of Restricted Stock awarded shall only lapse
in accordance with Performance Objectives, the Performance Objectives
may be expressed in terms of (i) earnings per Share, (ii) Share price,
(iii) pre-tax profits, (iv) net earnings, (v) return on equity or
assets, (vi) revenues, (vii) EBITDA, (viii) market share or market
penetration or (ix) any combination of the foregoing. Performance
Objectives may be in respect of the performance of the Company and its
Subsidiaries (which may be on a consolidated basis), a Subsidiary or a
Division. Performance Objectives may be absolute or relative and may be
expressed in terms of a progression within a specified range. The
Performance Objectives with respect to a Performance Cycle shall be
established in writing by the Committee by the earlier of (i) the date
on which a quarter of the Performance Cycle has elapsed or (ii) the date
which is ninety (90) days after the commencement of the Performance
Cycle, and in any event while the performance relating to the
Performance Objectives remain substantially uncertain. At the time of
grant of a performance-base Award, and to the extent permitted under
Section 162(m) of
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<PAGE> 46
the Code and the regulations thereunder, the Committee may provide for
the manner in which the Performance Objectives will be measured to
reflect the impact of specified corporate transactions, extraordinary
events, accounting changes and other similar events. Prior to the
vesting, payment, settlement or lapsing of any restrictions with respect
to any Award that is intended to be performance-based compensation, made
to a Grantee who is subject to Section 162(m) of the Code, the Committee
shall certify in writing that the applicable Performance Objectives have
been satisfied.
6.5. Delivery of Shares. Upon the lapse of the restrictions on Shares
of Restricted Stock, the Committee shall cause a stock certificate to be
delivered to the Grantee with respect to such Shares, free of all
restrictions hereunder.
7. EFFECT OF A TERMINATION OF EMPLOYMENT
The Agreement evidencing the grant of each Option and each Award shall set
forth the terms and conditions applicable to such Option or Award upon a
termination or change in the status of the employment of the Optionee or Grantee
by the Company, a Subsidiary or a Division which shall be as the Committee may,
in its discretion, determine at the time the Option or Award is granted or
thereafter.
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
8.1. Adjustments to Incentive Stock Options. Any adjustment that may
be made pursuant to Section 4.1 hereof in the Shares or other stock or
securities subject to outstanding Incentive Stock Options upon a Change in
Capitalization, (including any adjustments in the purchase price) shall be
made in such manner as not to constitute a modification as defined by
Section 424(h)(3) of the Code and only to the extent otherwise permitted by
Sections 422 and 424 of the Code.
8.2. Terms of Adjusted Options and Awards. If, by reason of a Change
in Capitalization, a Grantee of an Award shall be entitled to, or an
Optionee shall be entitled to exercise an Option with respect to, new,
additional or different shares of stock or securities, such new, additional
or different shares shall thereupon be subject to all of the conditions,
restrictions and performance criteria which were applicable to the Shares
subject to the Award or Option, as the case may be, prior to such Change in
Capitalization.
9. EFFECT OF CERTAIN TRANSACTIONS
Except as otherwise provided in an Agreement, in the event of (i) the
liquidation or dissolution of the Company or (ii) a merger or consolidation of
the Company (a "Transaction"), the Plan and the Options and Awards issued
hereunder shall continue in effect in accordance with their respective terms,
except that following a Transaction each Optionee and Grantee shall be entitled
to receive in respect of each Share subject to any outstanding Options or
Awards, as the case may be, upon exercise of any Option or payment or transfer
in respect of any Award, the same number and kind of stock, securities, cash,
property or other consideration that each holder of a Share was entitled to
receive in the Transaction in respect of a Share; provided, however, that such
stock, securities, cash, property or other consideration shall remain subject to
all of the conditions, restrictions and performance criteria which were
applicable to the Options and Awards prior to such Transaction.
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10. INTERPRETATION
10.1. Rule 16b-3. The Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act, and the Committee shall interpret and
administer the provisions of the Plan or any Agreement in a manner
consistent therewith. Any provisions inconsistent with such Rule shall be
inoperative and shall not affect the validity of the Plan.
10.2. Section 162(m). Unless otherwise expressly stated in the
relevant Agreement, each Option and Award subject to Performance Objectives
granted to an Eligible Individual who may be a "covered employee" under
Section 162(m) of the Code is intended to be performance-based compensation
within the meaning of Section 162(m)(4)(C) of the Code. The Committee shall
not be entitled to exercise any discretion otherwise authorized hereunder
with respect to any such Options or Awards if the ability to exercise such
discretion or the exercise of such discretion itself would cause the
compensation attributable to such Options or Awards to fail to qualify as
performance-based compensation.
11. TERMINATION AND AMENDMENT OF THE PLAN
The Plan shall terminate on the day preceding the tenth anniversary of the
date of its adoption by the Board and no Option or Award may be granted
thereafter. The Board may sooner terminate the Plan and the Board may at any
time and from time to time amend, modify or suspend the Plan; provided, however,
that: (a) no such amendment, modification, suspension or termination shall
impair or adversely alter any Options or Awards theretofore granted under the
Plan, except with the consent of the Optionee or Grantee, nor shall any
amendment, modification, suspension or termination deprive any Optionee or
Grantee of any Shares which he or she may have acquired through or as a result
of the Plan; and (b) to the extent necessary under applicable law, no amendment
shall be effective unless approved by the stockholders of the Company in
accordance with applicable law.
12. NON-EXCLUSIVITY OF THE PLAN
The adoption of the Plan by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangement or as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such arrangements
may be either applicable generally or only in specific cases.
13. LIMITATION OF LIABILITY
As illustrative of the limitations of liability of the Company, but not
intended to be exhaustive thereof, nothing in the Plan shall be construed to:
(i) give any person any right to be granted an Option or Award
other than at the sole discretion of the Committee;
(ii) give any person any rights whatsoever with respect to Shares
except as specifically provided in the Plan;
(iii) limit in any way the right of the Company or any Subsidiary
to terminate the employment of any person at any time; or
9
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(iv) be evidence of any agreement or understanding, expressed or
implied, that the Company will employ any person at any particular rate
of compensation or for any particular period of time.
14. REGULATIONS AND OTHER APPROVALS; GOVERNING LAW
14.1. Except as to matters of federal law, the Plan and the rights of
all persons claiming hereunder shall be construed and determined in
accordance with the laws of the State of North Carolina without giving
effect to conflicts of laws principles thereof.
14.2. The obligation of the Company to sell or deliver Shares with
respect to Options and Awards granted under the Plan shall be subject to
all applicable laws, rules and regulations, including all applicable
federal and state securities laws, and the obtaining of all such approvals
by governmental agencies as may be deemed necessary or appropriate by the
Committee.
14.3. The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Individuals granted Incentive Stock
Options the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder.
14.4. Each Option and Award is subject to the requirement that, if at
any time the Committee determines, in its discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option
or Award or the issuance of Shares, no Options or Awards shall be granted
or payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or
obtained free of any conditions as acceptable to the Committee.
14.5. Notwithstanding anything contained in the Plan or any Agreement
to the contrary, in the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current registration
statement under the Securities Act of 1933, as amended (the "Securities
Act"), and is not otherwise exempt from such registration, such Shares
shall be restricted against transfer to the extent required by the
Securities Act and Rule 144 or other regulations thereunder. The Committee
may require any individual receiving Shares pursuant to an Option or Award
granted under the Plan, as a condition precedent to receipt of such Shares,
to represent and warrant to the Company in writing that the Shares acquired
by such individual are acquired without a view to any distribution thereof
and will not be sold or transferred other than pursuant to an effective
registration thereof under said Act or pursuant to an exemption applicable
under the Securities Act or the rules and regulations promulgated
thereunder. The certificates evidencing any of such Shares shall be
appropriately amended to reflect their status as restricted securities as
aforesaid.
15. MISCELLANEOUS
15.1. Multiple Agreements. The terms of each Option or Award may
differ from other Options or Awards granted under the Plan at the same
time, or at some other time. The Committee may also grant more than one
Option or Award to a given Eligible Individual or Eligible Director during
the term of the Plan, either in addition to, or in substitution for, one or
more Options or Awards previously granted to that Eligible Individual or
Eligible Director.
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15.2. Withholding of Taxes.
(a) At such times as an Optionee or Grantee recognizes taxable
income in connection with the receipt of Shares or cash hereunder (a
"Taxable Event"), the Optionee or Grantee shall pay to the Company an
amount equal to the federal, state and local income taxes and other
amounts as may be required by law to be withheld by the Company in
connection with the Taxable Event (the "Withholding Taxes") prior to the
issuance of such Shares or the payment of such cash. The Company shall
have the right to deduct from any payment of cash to an Optionee or
Grantee an amount equal to the Withholding Taxes in satisfaction of the
obligation to pay Withholding Taxes. In satisfaction of the obligation
to pay Withholding Taxes to the Company, the Optionee or Grantee may
make a written election (the "Tax Election"), which may be accepted or
rejected in the discretion of the Committee, to have withheld a portion
of the Shares then issuable to him or her having an aggregate Fair
Market Value equal to the Withholding Taxes.
(b) If an Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of
any Share or Shares issued to such Optionee pursuant to the exercise of
an Incentive Stock Option within the two-year period commencing on the
day after the date of the grant or within the one-year period commencing
on the day after the date of transfer of such Share or Shares to the
Optionee pursuant to such exercise, the Optionee shall, within ten (10)
days of such disposition, notify the Company thereof, by delivery of
written notice to the Company at its principal executive office.
15.3. Effective Date. The effective date of this Plan (the "Effective
Date") shall be March 27, 2000, subject only to the approval by the
affirmative vote of the holders of a majority of the securities of the
Company present, or represented, and entitled to vote at a meeting of
stockholders duly held in accordance with the applicable laws of the State
of North Carolina within twelve (12) months of the adoption of the Plan by
the Board.
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PROXY
Delhaize America, Inc.
This Proxy is Solicited on Behalf of the
Board of Directors of Delhaize America, Inc.
The undersigned, having received the Notice of Meeting and the Proxy
Statement, hereby appoints Bill McCanless and Joseph C. Hall, Jr., and each of
them, as proxies with full power of substitution, for and in the name of the
undersigned, to vote all shares of Class B Common Stock of Delhaize America,
Inc. owned of record by the undersigned on the matters listed on the reverse
side hereof and, in their discretion, on such other matters as may properly come
before the Meeting of Shareholders to be held at the Radisson Riverwalk Hotel,
200 North Ashley Drive, Tampa, Florida, on Thursday, May 4, 2000 at 9:00 a.m.,
and any adjournments or postponements thereof.
If you plan to attend the Meeting of Shareholders in person, please mark
the appropriate box on the reverse side of this card.
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The proxies cannot vote
your shares unless you sign and return this card.
SEE REVERSE SIDE
*FOLD AND DETACH HERE*
[X] Please mark your votes as in this example.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted "FOR" all of the Board of Directors' nominees and "FOR" Proposals 2, 3
and 4. The proxies are authorized to vote upon such other business as may
properly come before the Meeting unless otherwise specified herein.
The Board of Directors recommends a vote FOR all Proposals.
FOR WITHHELD
1. Election of Directors [ ] [ ] Pierre-Olivier Beckers, Dr.
Jacqueline Kelly Collamore,
Jean-Claude Coppieters 't Wallant,
Pierre Dumont, William G. Ferguson,
Dr. Bernard W. Franklin, Joseph C.
Hall, Jr., Margaret H. Kluttz, Bill
McCanless, Dominique Raquez
For, except vote withheld from the following nominee(s):
- ----------------------------
FOR AGAINST ABSTAIN
2. Approval of Bylaw Amendments [ ] [ ] [ ]
FOR AGAINST ABSTAIN
3. Approval of Delhaize America, Inc. [ ] [ ] [ ]
2000 Stock Incentive Plan
FOR AGAINST ABSTAIN
4. Appointment of PricewaterhouseCoopers LLP [ ] [ ] [ ]
as independent accountants for the fiscal year
ending December 30, 2000.
YES No
Do you plan to attend the Meeting of Shareholders in person? [ ] [ ]
SIGNATURE(S) ____________________ DATE _______________, 2000
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
* FOLD AND DETACH HERE*
