FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-7603
HANNAFORD BROS. CO.
(Exact name of Registrant as specified in its charter)
Maine 01-0085930
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
145 Pleasant Hill Road, Scarborough, Maine 04074
(Address of principal executive offices; Zip Code)
Registrant's telephone number, including area code: (207) 883-2911
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X . No .
As of October 27, 1995, there were 42,260,465 outstanding shares of
Common Stock, $.75 par value, the only authorized class of common stock
of the Registrant.<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements:
Consolidated Balance Sheets, September 30, 1995 and
December 31, 1994 3-4
Consolidated Statements of Earnings, Three Months
Ended September 30, 1995 and October 1, 1994 5
Consolidated Statements of Earnings, Nine Months
Ended September 30, 1995 and October 1, 1994 6
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1995
and October 1, 1994 7-8
Notes and Schedules to Consolidated Financial
Statements 9-10
Item 2. Management's Discussion and Analysis of
Third Quarter 1995 Results 11-16
PART II - OTHER INFORMATION
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8K 17
Signatures 18
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Dollars in thousands)
(UNAUDITED)
September 30, December 31,
1995 1994
Current assets:
Cash and cash items $ 31,647 $ 40,955
Accounts receivable, net 11,056 14,240
Inventories 146,603 132,423
Prepaid expenses 5,897 6,210
Deferred income taxes 7,935 7,519
Total current assets 203,138 201,347
Property, plant and equipment, net 550,340 503,941
Leased property under capital leases, net 55,668 58,821
Other assets:
Goodwill, net 94,859 78,075
Deferred charges, net 24,384 23,473
Computer software costs, net 10,166 8,382
Miscellaneous assets 2,795 3,566
Total other assets 132,204 113,496
$941,350 $877,605
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
(Dollars in thousands)
(UNAUDITED)
September 30, December 31,
1995 1994
Current liabilities:
Current maturities of long-term debt $ 14,953 $ 14,409
Obligations under capital leases 1,411 1,382
Accounts payable 108,293 89,927
Accrued payroll 20,108 19,017
Other accrued expenses 33,523 29,738
Income taxes 1,399 4,167
Total current liabilities 179,687 158,640
Deferred income tax liabilities 21,843 21,886
Other liabilities 21,251 19,365
Long-term debt 146,425 153,687
Obligations under capital leases 68,153 69,552
Shareholders' equity:
Class A Serial Preferred stock, no par,
authorized 2,000,000 shares - -
Class B Serial Preferred stock,
par value $.01 per share,
authorized 28,000,000 shares - -
Common stock, par value $.75 per share:
Authorized 110,000,000 shares;
issued and outstanding 42,213,670
shares at September 30, 1995, and
41,779,342 shares at December 31, 1994 31,660 31,335
Additional paid-in capital 119,811 110,669
Preferred stock purchase rights 422 418
Retained earnings 352,098 312,053
Total shareholders' equity 503,991 454,475
$941,350 $877,605
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands except per share data)
(UNAUDITED)
THREE MONTHS ENDED
September 30, October 1,
1995 1994
Sales and other revenues $653,879 $622,554
Cost of sales 498,469 470,942
Gross margin 155,410 151,612
Selling, general and administrative
expenses 118,392 114,326
Operating profit 37,018 37,286
Interest expense, net 4,199 5,392
Earnings before income taxes 32,819 31,894
Income taxes 13,105 12,792
Net earnings $ 19,714 $ 19,102
Per share of common stock:
Net earnings $ .47 $ .46
Cash dividends $ .105 $ .095
Weighted average number of common shares
outstanding 42,168 41,655
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands except per share data)
(UNAUDITED)
NINE MONTHS ENDED
September 30, October 1,
1995 1994
Sales and other revenues $1,887,473 $1,679,848
Cost of sales 1,433,054 1,268,359
Gross margin 454,419 411,489
Selling, general and administrative expenses 350,789 319,811
Operating profit 103,630 91,678
Interest expense, net 14,486 15,337
Earnings before income taxes 89,144 76,341
Income taxes 35,841 30,771
Net earnings $ 53,303 $ 45,570
Per share of common stock:
Net earnings $ 1.27 $ 1.10
Cash dividends $ .315 $ .285
Weighted average number of common shares
outstanding 42,035 41,478
See accompanying notes to consolidated financial statements.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(UNAUDITED)
NINE MONTHS ENDED
September 30, October 1,
1995 1994
Cash flows from operating activities:
Net income $ 53,303 $ 45,570
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 50,653 45,894
(Increase) decrease in inventories (10,402) 5,488
Decrease in receivables and prepayments 3,450 293
Increase in accounts payable
and accrued expenses 23,779 230
Increase (decrease) in income taxes
payable (2,768) 1,616
Decrease in deferred taxes (458) (287)
Other operating activities 854 (2,208)
Net cash provided by operating
activities 118,411 96,596
Cash flows from investing activities:
Acquisition of Farm Fresh supermarkets (23,850) -
Acquisition of Wilson's Supermarkets,
net of cash acquired - (110,007)
Acquisition of property, plant and
equipment (86,868) (53,672)
Sale of property, plant and
equipment, net 1,892 2,351
Increase in goodwill and deferred
charges (2,825) (1,800)
Increase in computer software costs (3,657) (1,825)
Decrease in short-term investments - 19,855
Net cash used in investing activities (115,308) (145,098)
Cash flows from financing activities:
Principal payments under capital
lease obligations (1,057) (705)
Proceeds from issuance of long-term debt - 3,800
Issuance of common stock 9,467 8,035
Payments of long-term debt (7,568) (9,549)
Dividends paid (13,253) (11,909)
Net cash used for financing activities (12,411) (10,328)
Net decrease in cash and cash items (9,308) (58,830)
Cash and cash items at beginning of period 40,955 77,496
Cash and cash items at end of period $ 31,647 $ 18,666
See accompanying notes to consolidated financial statements.<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplemental disclosures of cash flow information
(in thousands)
(UNAUDITED)
NINE MONTHS ENDED
September 30, October 1,
1995 1994
Cash paid during the first three quarters for:
Interest (net of amount capitalized,
$1,647 in 1995 and $1,307 in 1994) $15,287 $16,294
Income taxes $39,067 $29,442
Supplemental disclosure of non-cash investing and financing activity
Capital lease obligations of $5,383,000 were incurred during the nine
month period ended October 1, 1994 when the Company entered into
leases for certain improved real estate.
Disclosure of accounting policy
For the purposes of the Consolidated Statements of Cash Flows, the
Company considers all highly liquid debt instruments purchased with
maturities of three months or less at time of purchase to be cash
items.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
The interim consolidated financial statements included herein have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. In the
opinion of management, the amounts shown reflect all adjustments
necessary to present fairly the financial position and results of
operations for the periods presented. All such adjustments
are of a normal recurring nature. The year-end consolidated balance
sheet was derived from audited financial statements, but does not
include all disclosures required by generally accepted accounting
principles.
Earnings per share of common stock have been determined by dividing
net earnings available to common shareholders by the weighted average
number of shares of common stock outstanding. The assumed exercise of
existing employee stock options has been excluded since it does not
result in any material dilution. Net earnings available to common
shareholders is equal to net earnings reduced by preferred stock
dividends of $74,000 for the nine months ended October 1, 1994.
All of the remaining outstanding shares of preferred stock were
redeemed in the second quarter of 1994, so there have been no
preferred dividends paid since the second quarter of 1994.
It is suggested that the financial statements be read in conjunction
with the financial statements and notes included in the
Company's latest annual report.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
2. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
(in thousands)
(Unaudited)
September 30, December 31,
1995 1994
Land and improvements $ 83,376 $ 81,667
Buildings 211,817 203,645
Furniture, fixtures & equipment 320,835 294,792
Leasehold interests & improvements 173,263 169,178
Construction in progress 37,188 6,193
826,479 755,475
Less accumulated depreciation and
amortization 276,139 251,534
$550,340 $503,941
3. LEASED PROPERTY
Leased property under capital leases consists of the following:
(in thousands)
(Unaudited)
September 30, December 31,
1995 1994
Real property $74,732 $76,552
Less accumulated amortization 19,064 17,731
$55,668 $58,821
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1995
RESULTS
RESULTS OF OPERATIONS
SALES
Sales and other revenues rose 12.4% for the first three quarters of
1995, to $1,887.4 million, an increase of $207.6 million over the first
three quarters of 1994. Retail sales increased $209.3 million or 12.9%
to $1,823.9 million, reflecting an increase of $37.5 million or 2.4% in
sales from supermarkets that were open in both periods presented ("same
store sales") and additional sales of $171.8 million from the net
impact of new, expanded, acquired and closed stores. Other sales and
revenues, which include trucking, wholesale, real estate and
miscellaneous retail operations, decreased $1.7 million.
In the third quarter of 1995, sales and other revenues were $653.9
million, an increase of $31.3 million or 5.0% over those reported for
the same period in 1994. Retail sales increased $32.3 million or 5.4%
to $631.8 million, reflecting an increase of $22.4 million or 3.9% in
same store sales and additional sales of $9.9 million from the net
impact of new, expanded, acquired and closed stores. Other sales and
revenues decreased $1.0 million during the quarter.
The same store sales increases of 3.9% for the third quarter and 2.4%
for the first nine months continue a positive trend that started in
1993. The Company expects this positive trend to continue in the
fourth quarter of 1995.
GROSS MARGIN
Gross margin decreased in the first nine months of 1995 to 24.1% of
sales and other revenues in comparison to 24.5% in the first nine
months of 1994. For the third quarter of 1995, gross margin was 23.8%
versus 24.4% for the third quarter of 1994. These decreases in margins
continue a trend that began in the second half of 1993. The Company
continues to focus on maintaining a competitive pricing strategy in its
marketing areas by passing operating efficiencies on to its customers
in the form of lower prices. The decreases also reflect lower gross
margins earned by the Company's southeastern operations.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1995 RESULTS
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses decreased to 18.6% of
sales and other revenues in the first nine months of 1995 as compared
to 19.0% in the comparable period of 1994. This continues a
significant downward trend that began in 1992 when first nine months'
selling, general and administrative expenses were 20.0% of sales and
other revenues. For the third quarter of 1995, selling, general and
administrative expenses were 18.1% of sales and other revenues versus
18.4% for the third quarter of 1994. Payroll and payroll related
expenses, which exceeded 50% of total selling, general, and
administrative expenses in all periods presented, decreased as a
percentage of sales and other revenues when comparing the first nine
months of 1995 with the first nine months of 1994 and when comparing
the third quarter of 1995 with the third quarter of 1994. This
resulted from cost containment efforts coupled with positive synergies
resulting from the Company's acquisition of Wilson's Supermarkets and
resulting sales growth.
INTEREST EXPENSE, NET
Net interest expense expressed as a percentage of sales and other
revenues was 0.8% for the first nine months of 1995 versus 0.9% for the
first nine months of 1994, and 0.6% for the third quarter of 1995
versus 0.9% for the third quarter of 1994. These decreases are
primarily the result of a decrease in average debt levels coupled with
an increase in average invested funds.
INCOME TAXES
The combined federal and state income tax rate was 40.2% for the first
nine months of 1995, compared to 40.3% for the first nine months of
1994. The income tax rate was 39.9% in the third quarter of
1995 versus 40.1% in the third quarter of 1994. The lower income
tax rates in the 1995 reporting periods were primarily due to a
reduction in the overall effective state tax rate.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1995 RESULTS
NET EARNINGS AND EARNINGS FOR COMMON SHARE
Net earnings increased 17.0% in the first nine months of 1995 to $53.3
million or 2.8% of sales and other revenues, an increase of $7.7
million from 1994 first nine months earnings of $45.6 million or 2.7%
of sales and other revenues. This increase is the result of increased
sales and reduced selling, general and administrative expenses
expressed as a percentage of sales, offset by a reduction in gross
margin percentage.
Third quarter 1995 net earnings were $19.7 million or 3.0% of sales and
other revenues as compared to $19.1 million or 3.1% of sales and other
revenues in the third quarter of 1994. The third quarter 1995 increase
of 3.2%, although substantially lower than the previously reported
first half increase of 26.9%, is in line with Company expectations.
During the first half of 1995, the Company announced that it did not
expect earnings increases of that magnitude in the second half of 1995
due to a store opening schedule that was heavily weighted toward the
latter part of the year and the fact that it was entering new markets
in the southeastern region. The Company expects these factors to
further impact its fourth quarter results when compared to prior years.
Net earnings per common share increased 15.5% in the first nine months
of 1995 to $1.27 as compared to $1.10 for the same period of 1994. Net
earnings per common share for the third quarter this year were $.47, as
compared to $.46 last year, an increase of 2.2%. These increases are
in line with the net earnings increases and reflect a slight dilution
due to the issuance of shares under various stock plans.
CAPITAL RESOURCES AND LIQUIDITY
GENERAL
The current ratio (FIFO basis) at September 30, 1995, was 1.21 while
working capital (FIFO basis) was $38.3 million or 4.1% of total assets.
On December 31, 1994, the current ratio (FIFO basis) was 1.36 while
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1995 RESULTS
working capital (FIFO basis) was $57.1 million or 6.5% of total assets.
These reductions are primarily the result of the Company's acquisition
and store construction activities. The Company values the majority of
its inventories using the LIFO method. The current cost of the
inventories exceeded the LIFO valuation by $14.8 million on September
30, 1995 and $14.3 million on December 31, 1994. The Company's
liquidity position is stronger than indicated by stated working capital
and current ratios because of available unused lines of revolving
credit of $50 million and available unused lines of short-term credit
of $48 million on September 30, 1995. Cash and cash items decreased
$9.3 million to $31.7 million on September 30, 1995 from $41.0 million
on December 31, 1994. This decrease is primarily the result of cash
used in investing and financing activities offset by cash provided by
operating activities.
CASH FLOWS FROM OPERATING ACTIVITIES
Cash provided by operating activities was $118.4 million in the first
nine months of 1995, an increase of $21.8 million over the $96.6
million provided in the first nine months of 1994. This increase is
primarily attributable to increased net income, higher depreciation and
amortization and a decreased investment in net working capital.
Accounts payable and accrued expenses increased $23.8 million when
comparing September 30, 1995 with December 31, 1994. This increase is
primarily attributable to the overall expansion of the Company's retail
operations coupled with buying patterns and their associated payment
terms. Inventories increased $14.2 million over the same period. The
acquisition of supermarkets from Farm Fresh accounted for $3.8 million
of the increase. The remaining increase of $10.4 million is primarily
attributable to higher warehouse levels needed to meet the Company's
retail expansion.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1995 RESULTS
CASH FLOWS FROM INVESTING ACTIVITIES
Cash used in investing activities decreased $29.8 million during the
first nine months of 1995 to $115.3 million from $145.1 million during
the first nine months of 1994. This decrease is primarily attributable
to the acquisition of Wilson's Supermarkets in July 1994. Excluding
the acquisition of Wilson's Supermarkets, as well as the acquisition
of supermarkets from Farm Fresh in September 1995, cash used in
investing activities increased $56.4 million. This increase is the
result of higher capital expenditures during the 1995 period coupled
with proceeds on investments totaling $19.9 million in the first nine
months of 1994. These funds were used to finance the acquisition of
Wilson's Supermarkets. Total capital expenditures totaled $113.8
million in the first nine months of 1995 and were composed of $86.9
million in additions to property, plant and equipment, $20.4 million
(exclusive of inventory) in the acquisition of the Farm Fresh
supermarkets and $6.5 million in deferred charges and computer software
costs. The Company expects to commit as much as $170 million on new
and relocated supermarkets to open in 1995 and 1996, as well as
improvements necessary to maintain current facilities and systems.
The Company opened new supermarkets in Brunswick and Skowhegan, Maine,
each with approximately 33,000 square feet of retail selling space.
Both of these stores replaced smaller, outdated facilities. In
September 1995, the Company acquired six supermarkets operating under
the name "The Grocery Store" in Richmond, Virginia, with retail selling
space ranging from approximately 26,000 to 38,000 square feet.
Over time, the Company plans to convert these stores to "Hannaford Food
and Drug Superstores". This acquisition gave the Company an immediate
presence in the Richmond market, augmenting the Hannaford Food and Drug
Superstore being planned or under construction in the market. Also, in
September 1995, the Company opened a new supermarket in West Peabody,
Massachusetts, with approximately 33,000 square feet of retail selling
space.
<PAGE>
HANNAFORD BROS. CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THIRD QUARTER 1995 RESULTS
During the fourth quarter, the Company expects to open 11 supermarkets,
including 7 stores in the Southeast, and 2 new stores as well as 2
relocations in the Northeast. The stores expected to open in the
Southeast will be located in Charlotte, High Point, Fayetteville, and
Raleigh (2 stores), North Carolina, and Richmond and Virginia Beach,
Virginia. The Company will be operating these new stores in the
Southeast under the Hannaford Food and Drug Superstore name. Net
square footage of retail selling space is expected to increase by
approximately 17% in 1995. Also, during the remainder of the year,
construction will commence on a number of new stores to open in 1996
with an emphasis on additional stores in the Southeast markets entered
in 1995. The 1995 capital program (including the acquisition) is being
financed by cash and cash items, internally generated funds and leases.
CASH FLOWS FROM FINANCING ACTIVITIES
Cash used in financing activities was $12.4 million in the first nine
months of 1995 as compared to $10.3 million in the first nine months of
1994. The Company continues to maintain a strong capital structure.
Management believes that maintaining such financial flexibility
provides a significant competitive advantage and allows the Company to
be opportunistic in terms of acquisitions and expansions.
<PAGE>
PART II
Item 5: Other Information
A limited review was made of the results of the three-month and
nine-month periods ended September 30, 1995, by Coopers & Lybrand.
On September 25, 1995, the Registrant consummated a previously
announced acquisition of supermarket properties from Farm Fresh, Inc.
The Registrant acquired six supermarkets in and around Richmond, Virginia
and one supermarket under construction in Richmond. The Registrant
assigned to The Kroger Co. its purchase rights for a Farm Fresh
supermarket in Charlottesville, Virginia. As part of the transaction,
the Registrant also acquired two other sites in Richmond that have been
discontinued as supermarkets. In addition, the Registrant received
rights of first refusal on four other Farm Fresh supermarket locations in
Richmond. The net purchase price (inclusive of liabilities assumed and
inventories but less amounts paid by Kroger for the Charlottesville
store) was approximately $24 million.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation SK
10.1 Second Amendment to the Hannaford Bros. Co. Employee Stock
Purchase Plan, effective August 20, 1995.
10.2 Fourth Amendment to the Hannaford Northeast Savings and
Investment Plan, effective August 20, 1995.
10.3 Third Amendment to the Hannaford Bros. Co. Employees'
Retirement Plan, effective on or after January 1, 1995.
10.4 Second Amendment to the Hannaford Bros. Co. Supplemental
Retirement Plan, effective June 30, 1995.
15 Letter of Coopers & Lybrand L.L.P. furnished pursuant to
Regulation SX.
23 Letter of Coopers & Lybrand L.L.P. regarding incorporation
by reference to certain Forms S-8 of the Registrant
27 Financial Data Schedule
(b) There were no reports on Form 8-K filed during the quarter ended
September 30, 1995.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
HANNAFORD BROS. CO.
Date November 6, 1995 s/Blythe J. McGarvie
Blythe J. McGarvie
Senior Vice President
(Chief Financial Officer)
Date November 6, 1995 s/Charles H. Crockett
Charles H. Crockett
Assistant Secretary
Exhibit 10.1
SECOND AMENDMENT
TO THE
HANNAFORD BROS. CO. EMPLOYEE STOCK PURCHASE PLAN
The Hannaford Bros. Co. Employee Stock Purchase Plan (the "Plan") was
last amended and restated effective October 19, 1994. The Plan was
thereafter amended effective February 7, 1995. The Plan is hereby
further amended in the following respects:
1. The terms used in this Amendment shall have the meanings set forth in
the Plan unless the context indicates otherwise.
2. Subsection (f) of Section 2 is hereby amended to read as follows:
"(f) Compensation' shall mean the base salary or wages
paid to an Employee by the Corporation or any Subsidiary,
before any reduction pursuant to a deferral election under a
Code Section 401(k) plan or a benefit election under a Code
Section 125 plan sponsored by the Corporation or any
Subsidiary, including compensation for incentive hours and
excluding unguaranteed overtime pay, bonuses and other
irregular payments."
3. Section 9 is hereby amended to read as follows:
"9. Retirement. In the event an Employee retires from the
Corporation or any Subsidiary and is no longer employed by
any of them, after attaining age 55 and completing five years
of service, such Employee may exercise an Option at any time
within the three (3) month period following retirement, but
not later than the Exercise Date, provided such exercise
shall be limited to the maximum number of Shares (including
fractional Shares) determined by dividing the amounts
withheld prior to retirement, plus any interest, by the
option price per Share. Alternatively, such exercise may be
for a lesser number of whole Shares specified by such
Employee at the time of exercise. The amounts withheld, plus
any interest, not used to purchase Shares shall be paid to
the retired Employee in a lump sum in accordance with the
Option Agreement."
4. This Amendment shall be effective August 20, 1995.
Exhibit 10.2
FOURTH AMENDMENT
TO THE
HANNAFORD NORTHEAST SAVINGS AND INVESTMENT PLAN
The Hannaford Northeast Savings and Investment Plan (the "Plan") was
last amended and restated effective generally January 1, 1993. The Plan
was thereafter amended on three occasions and is hereby further amended
in the following respects:
1. The terms used in this Amendment shall have the meanings set forth in
the Plan unless the context indicates otherwise.
2. The first paragraph of Section 2.11 of the Plan is hereby amended to
read as follows 2:
"2.11 Compensation' shall mean the basic compensation paid,
before any reduction pursuant to a Deferral Election or a benefit
election under an Employer's Code Section 125 plan, by an Employer
to an Employee for services rendered while a Participant,
including compensation for incentive hours and excluding
reimbursements or other expense allowances, fring benefits (cash
and noncash), moving expenses, deferred compensation and welfare
benefits, unguaranteed overtime pay, bonuses, and other irregular
payments."
3. This Amendment shall be effective August 20, 1995.
Exhibit 10.3
THIRD AMENDMENT
TO THE
HANNAFORD BROS. CO. EMPLOYEES' RETIREMENT PLAN
The Hannaford Bros. Co. Employees' Retirement Plan (the "Plan") was
last amended and restated effective generally January 1, 1993. The Plan
was thereafter amended on two occasions and is hereby further amended in
the following respects:
1. The terms used in this Amendment shall have the meanings set
forth in the Plan unless the context indicates otherwise.
2. Section 1.04 is hereby amended to read as follows:
"1.04 `Annual Benefit' shall mean a benefit which is payable
annually in the form of a straight-life annuity, excluding any
benefits attributable to contributions by Employees, rollover
contributions and assets transferred from a qualified plan not
maintained by the Employer. For purposes of applying the
limitations of Article XIII, a benefit payable in any form other
than a straight-life annuity shall, except as hereinafter provided,
be adjusted to a straight-life annuity using the mortality table
specified in Section 12.03(b)(ii) and an interest assumption of 5
percent or the rate specified in Section 26.11 for determining
Actuarial Equivalence, whichever is greater; provided, however,
effective for Limitation Years beginning in 1995, the interest rate
specified in Section 12.03(b)(I) shall be substituted for 5 percent
for purposes of adjusting any form of benefit subject to Section
417(e)(3) of the Code. No actuarial adjustment shall be made,
however, for (i) the value of a qualified joint and survivor
annuity (as defined in Section 10.05), (ii) the value of benefits
that are not directly related to retirement benefits (such as
qualified disability benefits, pre-retirement death benefits and
post-retirement medical benefits) and (iii) the value of post-
retirement cost of living increases, if any, made in accordance
with Section 415(d) of the Code and Section 1.415-3(c)(2)(iii) of
the Treasury Regulations."
<PAGE>
3. The first paragraph of Section 1.11 is hereby amended to read
as follows:
"1.11 `Compensation' shall mean the basic compensation paid,
before any reduction pursuant to a deferral election under a Code
Section 401(k) plan or a benefit election under a Code Section 125
plan sponsored by an Employer, to a Participant by an Employer,
including compensation for incentive hours and excluding
reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, deferred compensation, welfare
benefits, unguaranteed overtime pay, bonuses and other irregular
payments."
4. Section 3.01 is hereby amended to read as follows:
"3.01 NORMAL RETIREMENT DATE. Except as hereinafter
provided, effective January 1, 1988, the Normal Retirement Date of
each Participant shall be the later of the date he or she attains
age 65 or the fifth anniversary of his or her Employment
Commencement Date. The Normal Retirement Date of each Driver
Participant hired before January 1, 1995, and each Warehouse
Participant shall be the date he or she attains age 62."
5. The first clause of Section 4.01 is hereby amended to read as
follows:
"4.01 BENEFITS FOR PARTICIPANTS OTHER THAN CERTAIN WAREHOUSE
AND DRIVER PARTICIPANTS. Effective January 1, 1995, the benefits
payable to or in respect of Participants other than Driver
Participants hired before January 1, 1995, and Warehouse
Participants shall be determined as follows:"
6. Section 4.03 is hereby amended to read as follows:
"4.03 BENEFITS FOR CERTAIN DRIVER PARTICIPANTS. The benefits
payable to or in respect of Driver Participants who were hired
before January 1, 1995, and who retire or separate from service on
or after such date shall be determined as follows:
(a) NORMAL RETIREMENT BENEFIT. A Driver Participant
who retires or is deemed to retire on his or her Normal
Retirement Date shall be entitled to receive a monthly
<PAGE>
retirement benefit (`Normal Retirement Benefit') equal to the
sum of x and y where:
x is the amount determined by multiplying the
number of his or her Years of Benefit Service
determined as of December 31, 1994, by $30; and
y is his or her Accrued Benefit based on Average
Annual Compensation, Covered Compensation and
Years of Benefit Service (disregarding Years of
Benefit Service prior to January 1, 1995),
determined under the benefit formula set forth in
Section 4.01(a).
(b) EARLY RETIREMENT BENEFIT. A Driver Participant
who retires on an Early Retirement Date shall be entitled to a
monthly retirement benefit (`Early Retirement Benefit') equal
to the sum of x and y where:
x is the amount determined by multiplying the
number of his or her Years of Benefit Service
determined as of December 31, 1994, by $30,
provided that such amount shall be reduced by
0.5952 of 1 percent for each month by which the
commencement of such Driver Participant's Early
Retirement Benefit precedes the first day of the
month coinciding with or next following his or
her Normal Retirement Date; and
y is his or her Accrued Benefit based on Average
Annual Compensation, Covered Compensation and
Years of Benefit Service (disregarding Years of
Benefit Service prior to January 1, 1995),
determined under the benefit formula set forth in
Section 4.01(b).
(c) DEFERRED RETIREMENT BENEFIT. A Driver
Participant who retires or is deemed to retire on a Deferred
Retirement Date shall be entitled to a monthly retirement benefit
(`Deferred Retirement Benefit') equal to the sum of x and y where:
<PAGE>
x is the amount determined by multiplying the
number of his or her Years of Benefit Service
determined as of December 31, 1994, by $30; and
y is his or her Accrued Benefit based on Average
Annual Compensation, Covered Compensation and
Years of Benefit Service (disregarding Years of
Benefit Service prior to January 1, 1995),
determined under the benefit formula set forth in
Section 4.01(c).
(d) VESTED BENEFIT. Effective January 1, 1989, a
Terminated Driver Participant who is credited with at least 5 Years
of Vesting Service shall be entitled to a monthly retirement
benefit (`Vested Benefit') equal to the sum of x and y where:
x is the amount determined by multiplying the
number of his or her Years of Benefit Service
determined as of December 31, 1994, by $30,
provided that such amount shall be reduced by
0.5952 of 1 percent for each month by which the
commencement of such Driver Participant's Vested
Benefit precedes the first day of the month
coinciding with or next following his or her
Normal Retirement Date; and
y is his or her Accrued Benefit based on Average
Annual Compensation, Covered Compensation and
Years of Benefit Service (disregarding Years of
Benefit Service prior to January 1, 1995),
determined under the benefit formula set forth in
Section 4.01(d).
(e) Notwithstanding the preceding subsections of this
Section to the contrary, the Normal Retirement Benefit, Early
Retirement Benefit, Deferred Retirement Benefit or Vested Benefit,
as the case may be, of a Driver Participant who was hired before
January 1, 1995, and who retires or separates from service on or
after such date shall not be less than such benefit determined
under the terms of the Plan in effect on December 31, 1994,
disregarding Years of Benefit Service thereafter."
<PAGE>
7. Subsection (c)(I) of Section 9.01 is hereby amended to read as
follows:
"(c) If a Participant dies after terminating
employment, then
(i) If such Participant has not attained age 55
and is survived by a spouse to whom he or she has been
legally married for a period of at least one year, his
or her surviving spouse shall be entitled to receive a
death benefit in an amount determined in accordance
with Section 9.01(a)(i). Such death benefit shall be
in the form of an annuity, computed on an Actuarially
Equivalent basis and payable monthly for the life of
the surviving spouse, commencing with the first day of
the month following the month in which the Participant
dies; unless such surviving spouse elects in writing to
be paid in a lump sum, in which case such death benefit
shall be paid in a lump sum as soon as practicable
following receipt by the Retirement Committee of such
written election."
8. Section 11.01 is hereby amended to read as follows:
"11.01 EARLY RETIREMENT BENEFIT - OPTIONAL LUMP SUM. In
lieu of receiving an Early Retirement Benefit in the manner
described in Section 6.02 or 6.03, a Participant entitled to an
Early Retirement Benefit may, with the consent of his or her
spouse, if married, elect to receive an optional lump sum benefit
if he or she commenced employment with an Employer prior to
January 1, 1981 or, at the time of making such election, he or she
is a Driver Participant who was hired before January 1, 1995, or a
Warehouse Participant. For purposes of the preceding sentence, in
determining the time when an Employee commenced employment with an
Employer, any service which is disregarded under Section 1.57 shall
not be taken into account. Such election and, if required, spousal
consent, shall be effective upon delivery of a written instrument
to the Retirement Committee within the applicable election period
described in Section 10.01. If an electing Participant dies prior
to his or her Annuity Starting Date, such election shall be void,
and any death benefit payable with respect to such Participant
<PAGE>
shall be determined in accordance with the applicable provisions of
Article IX. A Participant who receives a benefit pursuant to this
Section and is thereafter reemployed by an Employer shall not be
eligible to receive a further benefit under this Section.
The amount of the optional lump sum benefit for a Driver
Participant shall be equal to 2 percent of his or her Average
Annual Compensation determined as of the earlier of December 31,
1994, or his or her Early Retirement Date, multiplied by the number
of his or her Years of Benefit Service as of such date, not
exceeding 25. The amount of the optional lump sum benefit for a
Warehouse Participant shall be equal to 2 percent of his or her
Average Annual Compensation determined as of his or her Early
Retirement Date, multiplied by the number of his or her Years of
Benefit Service as of such date, not exceeding 25. The amount of
the optional lump sum benefit for any other eligible Participant
shall be equal to 2 percent of his or her Average Annual
Compensation determined as of the earlier of December 31, 1988, or
his or her Early Retirement Date, multiplied by the number of his
or her Years of Benefit Service as of such date not exceeding 25.
In the event a Participant elects an optional lump sum
benefit as provided in this Section 11.01 and the present value of
his or her Early Retirement Benefit exceeds the amount of his or
her optional lump sum benefit, he or she shall, in addition to his
or her optional lump sum benefit, be entitled to receive an
actuarially reduced Early Retirement Benefit. Such actuarially
reduced Early Retirement Benefit shall be paid at the time and in
the manner which the retired Participant's Early Retirement Benefit
would have been paid if he or she had not elected an optional lump
sum benefit under this Section 11.01 and shall be calculated in
such a manner that the present value of his or her actuarially
reduced Early Retirement Benefit when added to the amount of his or
her optional lump sum benefit equals the present value of his or
her Early Retirement Benefit.
Effective January 1, 1996, the present value of a
Participant's Early Retirement Benefit shall be calculated using
the interest rate and mortality table set forth in Section
12.03(b). In the event the present value of such Participant's
<PAGE>
actuarially reduced Early Retirement Benefit is $10,000 or less,
the Retirement Committee shall, with the written consent of such
Participant and, if married, his or her spouse, distribute the
present value of such actuarially reduced Early Retirement Benefit
in a single sum payment at the time such Participant's optional
lump sum benefit is distributed. In the event that a Participant
dies after receiving an optional lump sum benefit and before the
Annuity Starting Date of his or her actuarially reduced Early
Retirement Benefit, any death benefit payable with respect to such
Participant shall be determined in accordance with the applicable
provisions of Article IX and shall reflect only such Participant's
actuarially reduced Early Retirement Benefit."
9. Section 11.02 is hereby amended to read as follows:
"11.02 VESTED BENEFIT - OPTIONAL LUMP SUM. In lieu of
receiving a Vested Benefit in the manner described in Section 8.03
or 8.04, a Participant entitled to a Vested Benefit may, with the
consent of his or her spouse, if married, elect to receive an
immediate optional lump sum benefit if he or she commenced
employment with an Employer prior to January 1, 1981, or at the
time of making such election, he or she is a Driver Participant who
was hired before January 1, 1995, or a Warehouse Participant. For
purposes of the preceding sentence, in determining the time when an
Employee commenced employment with an Employer, any service which
is disregarded under Section 1.57 shall not be taken into account.
Such election and, if required, spousal consent, shall be effective
upon delivery of a written instrument to the Retirement Committee
within the applicable election period described in Section 10.01.
If an electing Participant dies prior to his or her Annuity
Starting Date, such election shall be void and any death benefit
payable with respect to such Participant shall be determined in
accordance with the applicable provisions of Article IX.
A Participant who receives a benefit pursuant to this Section and
is thereafter reemployed by an Employer shall not be eligible to
receive a further benefit under this Section.
The amount of the optional lump sum benefit for a Driver
Participant shall be equal to 2 percent of his or her Average
Annual Compensation determined as of the earlier of December 31,
1994, or his or her Termination of Employment Date, multiplied by
<PAGE>
the number of his or her Years of Benefit Service as of such date,
not exceeding 25. The amount of the optional lump sum benefit for
a Warehouse Participant shall be equal to 2 percent of his or her
Average Annual Compensation determined as of his or her Termination
of Employment Date, multiplied by the number of his or her Years of
Benefit Service as of such date, not exceeding 25. The amount of
the optional lump sum benefit for any other eligible Participant
shall be equal to 2 percent of his or her Average Annual
Compensation determined as of the earlier of December 31, 1988, or
his or her Termination of Employment Date, multiplied by the
number of his or her Years of Benefit Service as of such date, not
exceeding 25.
In the event a Participant elects an optional lump sum
benefit as provided in this Section 11.02 and the present value of
his or her Vested Benefit exceeds the amount of his or her optional
lump sum benefit, he or she shall, in addition to his or her
optional lump sum benefit, be entitled to receive an actuarially
reduced Vested Benefit. Such actuarially reduced Vested Benefit
shall be paid at the time and in the manner which such
Participant's Vested Benefit would have been paid if he or she had
not elected an optional lump sum benefit under this Section 11.02
and shall be calculated in such a manner that the present value of
his or her actuarially reduced Vested Benefit when added to the
amount of his or her optional lump sum benefit equals the actuarial
value of his or her Vested Benefit.
Effective January 1, 1996, the present value of a
Participant's Vested Benefit shall be calculated using the interest
rate and mortality table set forth in Section 12.03(b). In the
event the present value of such Participant's actuarially reduced
Vested Benefit is $10,000 or less, the Retirement Committee shall,
with the written consent of such Participant and, if married, his
or her spouse, distribute the present value of such actuarially
reduced Vested Benefit in a single sum payment at the time such
optional lump sum benefit is distributed. In the event that a
Participant dies after receiving an optional lump sum benefit and
before the Annuity Starting Date of his or her actuarially reduced
Vested Benefit, any death benefit payable with respect to such
Participant shall be determined in accordance with the applicable
provisions of Article IX and shall reflect only such Participant's
actuarially reduced Vested Benefit.
<PAGE>
Notwithstanding any provision of the Plan to the contrary, a
Participant who is entitled to elect an immediate lump sum payment
may elect within the applicable election period to receive payment
in the normal form prescribed in Section 8.03 or 8.04, commencing
on the date such lump sum payment would be made."
10. The first paragraph of Section 11.03 is hereby amended to
read as follows:
"11.03 CONTINGENT ANNUITANT OPTION. In lieu of receiving
the normal form of benefit described in Section 5.02, 6.02, 7.02 or
8.03, or the qualified joint and survivor annuity described in
Section 10.05, a Participant may, with the consent of his or her
spouse, if married, elect to have his or her benefit paid in the
form of an Actuarially Equivalent contingent annuity."
11. The first paragraph of Section 11.04 is hereby amended to
read as follows:
"11.04 FIVE YEAR CERTAIN AND LIFE ANNUITY OPTION. In lieu
of receiving the normal form of benefit described in Section 5.02,
6.02, 7.02 or 8.03, or the qualified joint and survivor annuity
described in Section 10.05, a Participant may elect an Actuarially
Equivalent Five Year Certain and Life Annuity Option which will
provide for an actuarially reduced benefit payable to the
Participant during his or her lifetime with the guarantee that 60
monthly benefit payments will be made."
12. Section 12.03 is hereby amended to read as follows:
"12.03 SMALL INSTALLMENTS AND CASH OUTS.
(a) In the event that any payment under the Plan would
be $50 or less if paid monthly and the present value of all
such payments as of the date distribution is to commence
would exceed $3,500, the Retirement Committee shall, with the
written consent of the Participant (if living) and the
Participant's spouse (if married) within the 90 day period
<PAGE>
ending on the distribution date, direct the Trustee to pay
such benefit in a lump sum. The present value of such
benefit shall be calculated in the manner set forth in
subsection (b) of this Section.
(b) Notwithstanding any provision of the Plan to the
contrary, if the present value of the entire nonforfeitable
benefit payable with respect to a Participant does not exceed
$3,500 as of the date distribution of such benefit is to
commence (or the date of any prior distribution), the
Retirement Committee shall direct the Trustee to pay such
benefit in a lump sum as soon as practicable following the
Participant's retirement date, Termination of Employment Date
or death, as the case may be. Effective January 1, 1996, the
present value of such benefit shall be calculated:
(i) using the annual rate of interest on 30 year
Treasury securities for the second full calendar month
preceding the first day of the Plan Year that contains
the Annuity Starting Date, with such rate remaining
constant for the Plan Year; and
(ii) using the 1983 Group Annuity Mortality
Table, as blended in accordance with Revenue Ruling
95-6.
In no event, however, shall the present value of such benefit
be less than the present value of the Participant's Accrued
Benefit as of December 31, 1995, calculated under the terms
of the Plan in effect on such date. A lump sum payment may
be made after the Annuity Starting Date only with the written
consent of the Participant (if living) and the Participant's
spouse (if married) within the 90 day period ending on the
distribution date.
(c) If the present value of the entire nonforfeitable
benefit payable with respect to a Participant exceeds $3,500,
but does not exceed $10,000, as of the date distribution is
to commence such Participant may, at any time prior to the
<PAGE>
Annuity Starting Date, elect to receive payment in the form
of an immediate lump sum (in lieu of the form prescribed in
Sections 5.02, 6.02, 7.02, 8.03 or 10.05); provided, if the
Participant is married, his or her spouse must consent in
writing to such election within the 90 day period ending on
the date of distribution. The present value of such benefit
shall be calculated in the manner set forth in subsection (b)
of this Section. Notwithstanding any provision of the Plan
to the contrary, a Participant who is entitled to elect an
immediate lump sum payment may elect within such ninety 90
day period, payment in the normal form prescribed in Articles
V, VI, VII or VIII, as the case may be, commencing on the
date such lump sum payment would be made.
(d) In the event a benefit is payable to an alternate
payee (other than the surviving spouse of a Participant)
pursuant to a qualified domestic relations order, following
the death of the Participant and after his or her Annuity
Starting Date, such benefit shall be paid in a lump sum as
soon as practicable following the Participant's death. If
such alternate payee is the Participant's surviving spouse,
such payment shall be made only with his or her written
consent within the 90 day period ending on the date of
distribution. In no event shall the aggregate amount of such
death benefit payable to all alternate payees exceed the
present value of the benefits payable following the
Participant's death under the form in which the Participant's
retirement benefit was being paid. Present value shall be
determined in the manner set forth in subsection (b) of this
Section.
(e) Any election pursuant to this Section shall be in
writing and shall be effective upon receipt by the Retirement
Committee. A spouse's consent under this Section must meet
the applicable requirements of Section 10.06."
<PAGE>
13. Section 13.02 is hereby amended to read as follows:
"13.02 ADJUSTMENTS. The limitation in Section 13.01 shall
be subject to the following adjustments:
(a) If payment of benefits commences before age 62,
the limitation under Section 13.01(a), as reduced pursuant to
Section 13.03, if applicable, shall be the Actuarial
Equivalent of such limitation (as adjusted pursuant to
Section 13.02(b)) beginning at age 62, actuarially reduced
for each month by which benefits commence before the month in
which the Participant attains age 62. For purposes of making
the adjustments required under this subsection, Actuarial
Equivalence shall be determined by using the mortality table
specified in Section 12.03(b)(ii) and an interest rate
assumption of 5 percent or the rate specified in Section
26.11 of the Plan, whichever is greater; provided, however,
effective for Limitation Years beginning in 1995, the
applicable interest rate (as defined in Section 417(e)(3) of
the Code and as determined under Section 12.03(b)(i)) shall
be substituted for 5 percent with respect to any benefits
payable in a form subject to Section 417(e)(3) of the Code.
Any decrease in the limitation under Section 13.01(a)
determined in accordance with this subsection shall not
reflect the mortality decrement to the extent that benefits
will not be forfeited upon the death of the Participant.
(b) If payment of benefits commences before Social
Security Retirement Age and on or after age 62, the
limitation under Section 13.01(a), as reduced pursuant to
Section 13.03, if applicable, shall be determined as follows:
(i) If the Participant's Social Security
Retirement Age is 65, by reducing such limitation by
5/9 of 1 percent for each month by which benefits
commence before the month in which the Participant
attains age 65; or
<PAGE>
(ii) if the Participant's Social Security
Retirement Age is greater than 65, by reducing such
limitation by 5/9 of 1 percent for each of the first 36
months and 5/12 of 1 percent for each additional month,
up to 24 months, by which benefits commence before the
month in which the Participant attains Social Security
Retirement Age.
(c) If payment of benefits commences after Social
Security Retirement Age, the limitation under Section
13.01(a), as reduced pursuant to Section 13.03, if
applicable, shall be adjusted so that such limitation is the
Actuarial Equivalent of a $90,000.00 Annual Benefit beginning
at Social Security Retirement Age. For purposes of making
the adjustment required under this subsection, Actuarial
Equivalence shall be determined by using the mortality table
specified in Section 12.03(b)(ii) and an interest rate
assumption of 5% or the rate specified in Section 26.11 of
the Plan, whichever is less.
Notwithstanding the foregoing to the contrary, a
Participant's Accrued Benefit shall not be reduced below his or her
Accrued Benefit as of December 31, 1994.
If the benefit which a Participant would otherwise accrue in
a Limitation Year would produce an Annual Benefit in excess of the
limitation prescribed by this Section, the rate of accrual shall be
reduced to the extent necessary to comply with said limitation.
If a Participant is or has ever been covered under more than
one qualified defined benefit plan maintained by an Employer, the
sum of the Participant's benefits from all such plans, when
expressed as an Annual Benefit, shall not exceed the limitation
prescribed by this Section. If the sum of the benefits which a
Participant would otherwise accrue would exceed the limitation
prescribed by this Section, the rate of accrual under this Plan
shall be reduced to the extent that if the rate of accrual under
each such other plan was reduced proportionately the limitation
prescribed by this Section would be satisfied.
<PAGE>
In the case of an individual who was a Participant in the
Plan or in one or more other qualified defined benefit plans of an
Employer as of the first day of the first limitation year beginning
after December 31, 1986, the limitation prescribed by this Section
shall not be less than the individual's accrued benefit, when
expressed as an Annual Benefit, under this Plan and all such other
qualified defined benefit plans as of the end of the last
limitation year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the plans after May 5, 1986,
and any cost of living adjustments occurring after May 5, 1986.
The preceding sentence shall apply only if the Plan and all such
other qualified defined benefit plans met the requirements of
Section 415 of the Code, as in effect for all limitation years
beginning before January 1, 1987."
14. This Amendment shall be effective generally as of January 1,
1995; provided, however, that Part 3 shall be effective August 20, 1995.
Exhibit 10.4
SECOND AMENDMENT
TO THE
HANNAFORD BROS. CO. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Hannaford Bro.s Co. Supplemental Executive Retirement Plan (the
"Plan") was last amended and restated effective January 1, 1993. The
Plan was thereafter amended effective June 1, 1993, and is hereby amended
in the following respects:
1. The terms used in this Amendment shall have the meanings set forth in
the Plan unless the context clearly indicates otherwise.
2. Section 3.1 is hereby amended by adding at the end thereof the
following paragraph:
"In addition to the annual benefit described in this section,
Norman E. Brackett shall be entitled to:
(i) a lump sum payment equal to the supplemental pension
benefit described in Part 2; and
(ii) a lump sum payment equal to the present value of the
retiree medical coverage described in Part 3, fo a certain letter
agreement dated June 30, 1995, setting forth benefits the Company
shall provide to Mr. Brackett in lieu of benefits he would have
received under the Company's Early Retirement Incentive Porgram,
if he had retired in 1992."
3. Schedule A to the Plan is hereby amended to read as follows:
"SCHEDULE A
HANNAFORD BROS. CO.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Arthur A. Aleshire James J. Jermann
Richard A. Anicetti Everett F. Johnson
Garrett D. Bowne IV Kenneth C. Johnson
Norman E. Brackett Bruce D. Kay
Steven H. Brinn Blythe J. McGarvie
Douglas H. Brown Karen L. Mank
Albert F. Carville, Jr. Amos E. Merrow
Robert E. Dunton James L. Moody, Jr.
Hugh G. Farrington Larry A. Plotkin
Paul A. Fritzson Michael J. Strout
Andrew P. Geoghegan Andrew N. Westlund
Steven G. Hitchcock Charles F. Wilson
Ronald C. Hodge Lawrence A. Wilson, Jr.
Roger W. Hoyt Edward F. Yetto
4. This Amendment shall be effective June 30, 1995.
Exhibit 15
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Hannaford Bros. Co.:
We have reviewed the accompanying consolidated balance sheet of Hannaford
Bros. Co. and Subsidiaries as of September 30, 1995, and the related
consolidated statements of earnings for the three month and nine month periods
ended September 30, 1995, and October 1, 1994 and the consolidated statements
of cash flows for the nine month periods then ended. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
We previously audited and expressed an unqualified opinion on the Company's
consolidated financial statements for the year ended December 31, 1994 (not
presented herein). In our opinion, the information set forth in the
accompanying balance sheet as of December 31, 1994, is fairly stated in all
material respects, in relation to the statement of financial position from
which it has been derived.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
s/Coopers & Lybrand L.L.P.
Portland, Maine
October 18, 1995
Exhibit 23
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: Hannaford Bros. Co.
Registrations on Form S-8
We are aware that our report dated October 18, 1995 on our review of interim
financial information of Hannaford Bros. Co. and Subsidiaries as of September
30, 1995 and for the three month and nine month periods ended September 30,
1995 and October 1, 1994, and included in this Form 10-Q is incorporated by
reference in the Company's registration statements on Form S-8 (Numbers
2-77902, 2-77903, 2-98387, 33-1281, 33-22666, 33-31624, 33-45273, 33-60119,
33-60655 and 33-60691). Pursuant to rule 436(c) under the Securities Act of
1933, this report should not be considered a part of the Registration
Statements prepared or certified by us within the meaning of Sections 7 and 11
of that Act.
s/Coopers & Lybrand L.L.P.
Portland, Maine
November 6, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 31,647
<SECURITIES> 0
<RECEIVABLES> 11,269
<ALLOWANCES> 213
<INVENTORY> 146,603
<CURRENT-ASSETS> 203,138
<PP&E> 826,479
<DEPRECIATION> 276,139
<TOTAL-ASSETS> 941,350
<CURRENT-LIABILITIES> 179,687
<BONDS> 214,578
<COMMON> 31,660
0
0
<OTHER-SE> 472,331
<TOTAL-LIABILITY-AND-EQUITY> 941,350
<SALES> 1,887,473
<TOTAL-REVENUES> 1,887,473
<CGS> 1,433,054
<TOTAL-COSTS> 1,433,054
<OTHER-EXPENSES> 350,789
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,486
<INCOME-PRETAX> 89,144
<INCOME-TAX> 35,841
<INCOME-CONTINUING> 53,303
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,303
<EPS-PRIMARY> 1.27
<EPS-DILUTED> 1.27
</TABLE>
