SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report: May 14, 1996
(Date of earliest event reported)
HANNAFORD BROS. CO.
(Exact name of registrant as specified in its charter)
Maine 1-7603 01-0085930
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File No.) Identification No.)
145 Pleasant Hill Road, Scarborough, Maine 04074
(Address of principal executive offices) (Zip code)
Registrant's telephone number: (207) 883-2911
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Item 5. Other Events.
Since 1981, Hannaford Bros. Co. ("Hannaford" or the "Registrant") and the
Sobey Parties have been parties to an agreement (as amended and extended from
time to time, the "Standstill Agreement") under which the Sobey Parties have
agreed not to increase their percentage ownership of Hannaford voting stock
above approximately 25.6%, and under which Hannaford has agreed to certain
restrictions on future issuances of securities to others. The Sobey Parties
include members of the Sobey family of Stellarton, Nova Scotia, Canada, and
certain corporations and other entities affiliated or associated with them.
As of May 14, 1996, Hannaford and the Sobey Parties entered into a Second
Amendment Agreement (the "Amendment") to the Standstill Agreement. The
Amendment extends the term of the Standstill Agreement to December 31, 1998,
subject to automatic renewals for successive one-year periods (but not beyond
December 31, 2001) unless by July 31 of a given year either Hannaford or any
of the Sobey Parties gives written notice of an intention not to further
extend the term of the Standstill Agreement.
Under the Standstill Agreement as amended as of February 4, 1988,
Hannaford had agreed to certain limits on the number of shares of Common Stock
it could issue to employees pursuant to the Registrant's employee benefit
plans. The Amendment makes technical changes in the method for calculating
the number of outstanding Employee Shares (as defined) and for calculating the
annual and cumulative limits on Employee Share issuances. The purpose of
these changes is to provide Hannaford with greater flexibility in the use of
Common Stock and stock options to compensate employees and directors.
The Amendment also provides that Hannaford may renew its Shareholder
Rights Plan through February 28, 2001. The Registrant's existing Shareholder
Rights Plan was adopted February 4, 1988 and has a term of ten years.
The Amendment also adds certain parties as Sobey Parties for purposes of
the Standstill Agreement, and provides consent to the transfer of Hannaford
Common Stock from two Sobey Party entities to a newly formed entity that is an
affiliate of the Sobeys.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following are filed with the Commission as exhibits to this
report.
1. Second Amendment Agreement, dated as of May 14, 1996, to the Amended
and Restated Agreement, dated as of February 4, 1988, among the Registrant and
various Sobey Parties.
2. Excerpt from press release of the Registrant, dated May 20, 1996,
pertaining to the above-described Amendment.
SIGNATURE
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, hereunto duly authorized.
HANNAFORD BROS. CO.
Date: May 20, 1996 By: /s/ Charles H. Crockett
Charles H. Crockett
Assistant Secretary
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HANNAFORD BROS. CO.
EXHIBIT INDEX
Exhibit
Number Description Page
1 Second Amendment Agreement, dated [5]
as of May 14, 1996, to the Amended
and Restated Agreement, dated as of
February 4, 1988, among the Registrant
and various Sobey Parties.
2 Excerpt from press release of the [11]
Registrant, dated May 20, 1996,
pertaining to the above-described
Amendment.
<PAGE>
Exhibit 1
SECOND AMENDMENT AGREEMENT
This SECOND AMENDMENT AGREEMENT, dated as of May 14, 1996, is entered
into by Hannaford Bros. Co. ("Hannaford"); each of Pauljan Limited, E.C.L.
Investments Limited, Empire Company Limited, Empire Holdings (U.S.) L.L.C.,
the Pension Plan for Employees of Sobeys Inc., and the Deferred Profit Sharing
Plan for Eligible Employees of Sobeys Inc. (collectively referred to as the
"Sobey Companies"); and each of David F. Sobey, Donald R. Sobey, and the
Estate of William M. Sobey (collectively referred to as the "Sobeys"). For
purposes of this Amendment, the Sobey Companies and the Sobeys are sometimes
collectively referred to as the "Sobey Parties."
WHEREAS the Sobey Parties (including certain predecessors thereof) and
Hannaford entered into an Amended and Restated Agreement dated as of February
4, 1988, which agreement was amended by an Amendment Agreement dated as of
January 1, 1992 and (as so amended) is hereinafter referred to as the
"Agreement"; and
WHEREAS, the Agreement provided for an initial termination date of
December 31, 1992, subject to not more than five one-year extensions; and
WHEREAS, the Sobey Parties and Hannaford wish to further extend the term
of the Agreement and to make other changes to the Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties hereto agree as follows:
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1. Sections 7.1 and 7.2 of the Agreement are hereby amended to read in
their entirety as follows:
7.1 TERMINATION DATE.
Unless extended as provided in Section 7.2, this Agreement shall
terminate on December 31, 1998, except that the provisions of Section
4.2, Section 4.9(a)(i)-(v), Article 6 and Article 13 shall survive any
termination of this Agreement.
7.2 EXTENSION.
This Agreement will be extended for up to two additional periods
of one year each (but not beyond December 31, 2000), subject to the
following conditions:
(a) Hannaford may notify the Sobey Parties, or any of the
Sobey Parties may notify Hannaford, at least seven months prior
to the scheduled termination hereof that the notifying party
desires to amend, modify or terminate this Agreement.
(b) If no such notice is given or if the parties are
unable to agree upon mutually acceptable amendments or
modifications, this Agreement will be extended for one year as
provided above without any amendment or modification, unless at
least five months prior to the termination hereof any of the
Sobey Parties shall notify Hannaford, or Hannaford shall notify
the Sobey Parties, that this Agreement shall not be extended.
2. The Estate of William M. Sobey, as successor-in-interest to William
M. Sobey, confirms its agreement to be bound by all the terms of the Agreement
and agrees to be included as one of the "Sobeys" for purposes thereof. Empire
Holdings (U.S.) L.L.C., as transferee of certain shares of Hannaford common
stock previously owned by one or more other Sobey Parties, confirms its
agreement to be bound by all the terms of the Agreement and agrees to be
included as one of the "Sobey Companies" for purposes thereof. Each of the
other parties to the Agreement confirms its consent to the foregoing.
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3. Section 1.11 of the Agreement is hereby amended to read in its
entirety as follows:
1.11 EMPLOYEE SHARES. The term "Employee Shares" shall mean
shares of Common Stock issued by Hannaford subsequent to September 18,
1985 (other than through a disposition of treasury shares subsequent to
December 31, 1995) pursuant to any employee benefit, stock purchase,
stock option, savings, or compensation plan or similar employee plan,
specifically including, without limitation, the Long Term Incentive
Plan, Employee Stock Purchase Plan, 1982 and 1985 Incentive Stock Option
Plans, Employees' Retirement Plan, Annual Incentive Plan, 1988 Stock
Plan and the Northeast and Southeast Savings and Investment Plans. For
purposes hereof, "treasury shares" means issued shares that have been
subsequently reacquired by Hannaford and have not been cancelled or
retired within the meaning of Section 102 of the Maine Business
Corporation Act; such shares are deemed under the Act to be issued
shares, but not to be outstanding for dividend, quorum, voting or any
other purpose.
4. The Sobey Parties acknowledge and agree that Hannaford, pursuant to
Section 2.4 of the Agreement, may hereafter amend its existing shareholder
rights plan (adopted February 4, 1988) to extend the initial termination date
thereof (February 4, 1998) to a date no later that February 28, 2001, or may
adopt a replacement plan on substantially the same terms but having a
termination date not later than February 28, 2001.
5. Section 4.5(d) is hereby amended to read in its entirety as follows:
(d) Hannaford agrees that the plans pursuant to which Employee
Shares will be issued will be typical of similar plans of other
corporations in both administration and number of options granted or
shares sold to or for the account of employees, both on an individual
basis and in the aggregate. Hannaford further agrees that the aggregate
number of Employee Shares outstanding and Employee Shares issuable in
respect of outstanding options or rights or otherwise under any such
plans (excluding Employee Shares issued prior to the Cutoff Date defined
below or issued in respect of options or rights granted prior to the
Cutoff Date) shall not represent more than 10% of the number of shares
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<PAGE>
of Voting Stock outstanding or then issuable in respect of such options
or rights. For purposes hereof, the "Cutoff Date" shall be the date
falling eight years prior to the date of the determination. In
addition, Hannaford agrees that in any given calendar year the number of
Employee Shares issued (excluding Employee Shares issued in respect of
options or rights granted in any prior calendar year) and the number of
Employee Shares issuable upon the exercise of outstanding options or
rights granted in such calendar year under such plans shall not
represent more than 3% of the number of shares of Voting Stock
outstanding or issuable in respect of such options or rights. Within 45
days after the end of each fiscal quarter during the term of this
agreement, Hannaford will provide the Sobey Parties with a schedule
setting forth (i) its calculation of the applicable 10% limit on
Employee Shares and the total number of Employee Shares outstanding or
issuable, in each case as of the end of the most recent quarter, (ii)
the number of treasury shares held by Hannaford as of quarter end, and
(iii) an estimate of the net number of shares of Common Stock to be
issued or delivered by Hannaford upon exercise of employee stock options
over the succeeding four quarters or otherwise to be issued or delivered
by Hannaford under employee benefit plans during such period.
6. Article 4 of the Agreement is hereby amended to add the following
new Section 4.12:
4.12 SHARES ISSUED TO NON-EMPLOYEE DIRECTORS.
Shares of Common Stock issued to non-employee directors of
Hannaford under the Stock Ownership Plan for Outside Directors (or other
new or amended director compensation plans adopted by Hannaford's Board
of Directors from time to time) shall give rise to the same notice and
purchase rights in favor of the Sobey Parties as do issuances of
Employee Shares. If more than 40,000 shares of Common Stock have been
issued by Hannaford to any one non-employee Director under one or more
director compensation plans (but not including treasury shares delivered
for such purpose) or are issuable under such plans in respect of
outstanding options or rights held by him or her, then the excess over
40,000 shall be treated as outstanding or issuable Employee Shares (as
the case may be) solely for purposes of calculating the 10% and 3%
limits set forth in Section 4.5(d) above.
7. Article 11 of the Agreement is hereby amended to change Hannaford's
address to the following:
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<PAGE>
Hannaford Bros. Co.
145 Pleasant Hill Road
Scarborough, ME 04074
Attn: Chief Executive Officer
[Telecopy No. (207) 885-2875]
and to change Goodwin, Procter & Hoar's address to the following:
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Attn: Stephen W. Carr, Esq.
[Telecopy No. (617) 523-1231]
8. The list of Mutually Acceptable Investment Bankers in Exhibit A of
the Agreement is hereby amended to read as follows:
Smith Barney, Harris Upham & Co. Incorporated
Lazard Freres & Co.
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Salomon Brothers Inc.
9. The parties ratify and confirm all of the other provisions of the
Agreement and further agree that this Second Amendment Agreement shall be
effective from and after January 1, 1996.
IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
date first above written.
HANNAFORD BROS. CO.
By: /s/ Hugh G. Farrington
Hugh G. Farrington, President
and Chief Executive Officer
PAULJAN LIMITED
By: /s/ David F. Sobey /s/ David F. Sobey
David F. Sobey , President DAVID F. SOBEY
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<PAGE>
E.C.L. INVESTMENTS LIMITED
/s/ Donald R. Sobey
DONALD R. SOBEY by James Gogan, his
By: /s/ James Gogan Power of Attorney
James Gogan ,Vice-President ESTATE OF WILLIAM M. SOBEY,
BY HIS EXECUTOR
EMPIRE COMPANY LIMITED
/s/ Frank Cameron Sobey
Frank Cameron Sobey
By: /s/ James Gogan
James Gogan , President
DEFERRED PROFIT SHARING PLAN
PENSION PLAN FOR EMPLOYEES FOR ELIGIBLE EMPLOYEES OF
OF SOBEYS INC. SOBEYS INC.
By: /s/ James Gogan By: /s/ James Gogan
James Gogan, Member Pension James Gogan, Member Deferred
Advisory Committee Profit Sharing Plan Committee
EMPIRE HOLDINGS (U.S.) L.L.C.
By: /s/ James Gogan
Its: Director, James Gogan
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<PAGE>
Exhibit 2
HANNAFORD ANNOUNCES EXTENSION OF SOBEY AGREEMENT
Scarborough, Maine - Hannaford Bros. Co. (NYSE-HRD), a multiregional food
retailer, announced today that its existing standstill agreement with certain
members of the Sobey Family of Stellarton, Nova Scotia, and certain related
companies and trusts (the "Sobey Parties"), Hannaford's largest shareholder,
has been amended and extended. The amendment extends the term of the
standstill agreement to December 31, 1998, subject to automatic renewals for
successive one-year periods (but not beyond December 31, 2000) unless by July
31 of a given year either Hannaford or any of the Sobey Parties gives written
notice of an intention not to further extend the term of the standstill
agreement.
The amendment also makes technical changes to the agreement which will allow
Hannaford greater flexibility in the use of Common Stock to compensate
employees and directors. The amendment maintains the Sobey Parties' ownership
limit at approximately 25.6% of Hannaford's voting stock, except in certain
circumstances specified by the agreement, and also allows Hannaford to renew
its Shareholder Rights Plan through February 28, 2001.
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