SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
(Rule 13d-101)
Amendment No. 15
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT
RULE 13d-2(a)
HANNAFORD BROS. CO.
(Name of Issuer)
Common Stock, $0.75 par value
(Title of Class of Securities)
510550 10 7
(CUSIP Number)
EMPIRE COMPANY LIMITED
115 King Street
Stellarton, Nova Scotia
BOK 1S0
902-755-4440
Attn: Allan D. Rowe,
Senior Vice President,
Chief Financial Officer and Secretary
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Milton G. Strom, Esq.
Skadden, Arps, Slate,
Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
August 17, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this Schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box: [ ]
CUSIP No. 510550 10 7
1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
EMPIRE COMPANY LIMITED
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)[ ]
(b)[ X ]
3. SEC USE ONLY
4. SOURCE OF FUNDS:
WC, AF, BK
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e):
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Canada (Nova Scotia)
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH
7. SOLE VOTING POWER
5,550,461
8. SHARED VOTING POWER
4,868,104*
9. SOLE DISPOSITIVE POWER
5,550,461
10. SHARED DISPOSITIVE POWER
4,868,104*
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,799,812*
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.6%*
14. TYPE OF REPORTING PERSON
CO
- --------------------
* See Item 5 of Amendment No. 14 to this statement on Schedule 13D.
CUSIP No. 510550 10 7
1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
E.C.L. INVESTMENTS LIMITED
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)[ ]
(b)[ X ]
3. SEC USE ONLY
4. SOURCE OF FUNDS:
WC, OO, AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e):
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Canada (Nova Scotia)
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
4,868,104*
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
4,868,104*
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,868,104*
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.5%*
14. TYPE OF REPORTING PERSON
CO
- --------------------
* See Item 5 of Amendment No. 14 to this statement on Schedule 13D.
CUSIP No. 510550 10 7
1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
PAULJAN LIMITED
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)[ ]
(b)[ X ]
3. SEC USE ONLY
4. SOURCE OF FUNDS:
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e):
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Canada (Nova Scotia)
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
36,109*
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
36,109*
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
36,109*
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%*
14. TYPE OF REPORTING PERSON
CO
- --------------------
* See Item 5 of Amendment No. 14 to this statement on Schedule 13D.
CUSIP No. 510550 10 7
1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
PENSION PLAN FOR EMPLOYEES OF SOBEYS INC.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)[ ]
(b)[ X ]
3. SEC USE ONLY
4. SOURCE OF FUNDS:
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e):
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Canada (Nova Scotia)
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH
7. SOLE VOTING POWER
366,428*
8. SHARED VOTING POWER
0
9. SOLE DISPOSITIVE POWER
366,428*
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
366,428*
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.9%*
14. TYPE OF REPORTING PERSON
EP
- --------------------
* See Item 5 of Amendment No. 14 to this statement on Schedule 13D.
CUSIP No. 510550 10 7
1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
SOBEYS INC. MASTER TRUST INVESTMENT FUND
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)[ ]
(b)[ X ]
3. SEC USE ONLY
4. SOURCE OF FUNDS:
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e):
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Canada (Nova Scotia)
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH
7. SOLE VOTING POWER
14,819*
8. SHARED VOTING POWER
0
9. SOLE DISPOSITIVE POWER
14,819*
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,819*
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.04%*
14. TYPE OF REPORTING PERSON
EP
- --------------------
* See Item 5 of Amendment No. 14 to this statement on Schedule 13D.
CUSIP No. 510550 10 7
1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON:
DAVID F. SOBEY
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)[ ]
(b)[ X ]
3. SEC USE ONLY
4. SOURCE OF FUNDS:
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e):
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Canada (Nova Scotia)
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
36,109*
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
36,109*
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
36,109*
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.01%*
14. TYPE OF REPORTING PERSON
IN
- --------------------
* See Item 5 of Amendment No. 14 to this statement on Schedule 13D.
This Amendment No. 15 (the "Amendment") to the statement on Schedule
13D amends and supplements the statement on Schedule 13D originally filed
on October 1, 1979 (the "Schedule 13D") and the amendments thereto filed by
the Reporting Persons with respect to the common stock, par value $.75 per
share (the "Hannaford Common Stock"), of Hannaford Bros. Co. ("Hannaford").
Capitalized terms used but not defined herein shall have the meaning set
forth in Amendment No. 14 to the statement on Schedule 13D filed by the
Reporting Persons.
ITEM 4. PURPOSE OF TRANSACTION
On August 17, 1999, Food Lion, Inc. a North Carolina corporation
("Food Lion"), FL Acquisition Sub, Inc., a Maine corporation and a wholly
owned subsidiary of Food Lion ("Acquisition"), and Hannaford entered an
Agreement and Plan of Merger (the "Merger Agreement"), which provides,
among other things and as stated in the Merger Agreement, for the merger of
Acquisition with and into Hannaford, with Hannaford as the surviving
corporation (the "Merger"), and that each outstanding share of Hannaford
Common Stock, other than those owned by Food Lion or dissenting
stockholders of Hannaford, will be converted into the right to receive,
subject to proration, (i) $79.00 in cash, (ii)(a) the number of shares of
Class A Common Stock, par value $.50 per share, of Food Lion (the "Food
Lion Common Stock") equal to $79.00 divided by the average per share sales
price of Food Lion Common Stock for the ten consecutive trading days prior
to the closing of the Merger (the "Average Price")or (b) $9.00, whichever
is higher, or (iii) a combination of cash and shares of Food Lion Common
Stock.
Simultaneously with the execution of the Merger Agreement, Empire
Company Limited ("Empire") and E.C.L. Investments Limited ("E.C.L." and,
collectively, with Empire, the "Selling Stockholders") entered into a Stock
Exchange Agreement (the "Exchange Agreement") and a Voting Agreement (the
"Voting Agreement") with Food Lion. A copy of the Exchange Agreement and
the Voting Agreement is contained in Exhibit 1 and 2, respectively, to this
Amendment.
Pursuant to the Exchange Agreement, the Selling Stockholders have
agreed, immediately prior to the closing of the Merger Agreement, to
exchange all of the 10,418,565 shares of Hannaford Common Stock owned by
them (the "Shares") for an aggregate consideration of $823,066,635 (the
"Total Consideration"), which will be payable, subject to certain
adjustments (including as described below), as follows: (i) $365,000,000
(the "Share Consideration") in Food Lion Common Stock, with the number of
such shares to be delivered being calculated by dividing 365,000,000 by the
greater of the Average Price or $9.00 and (ii) cash equal to the difference
between the Total Consideration and the Share Consideration. The Exchange
Agreement further provides that, five business days prior to the closing
date of the Merger, following notice from Food Lion of the number of
outstanding shares of Food Lion Common Stock (and shares issuable within
such five-day period as a result of outstanding options, rights or other
securities), the Selling Stockholders may elect to adjust, upwards or
downwards, the Share Consideration, provided that the Share Consideration
(i) cannot be less than $315,000,000 (subject to the right of the Selling
Stockholders to elect upwards adjustment to reflect the issuance (as
contained in a similar notice from Food Lion) of Hannaford Common Stock or
Food Lion Common Stock pursuant to the exercise of options since the date
of the Exchange Agreement, but in no event more than $321,717,524) and (ii)
nor more than $421,000,000.
Pursuant to the Voting Agreement, each of the Selling
Stockholders agreed to vote all of the Shares (i) in favor of the Merger
and approval and adoption of the Merger Agreement, (ii) against any action
or agreement that is reasonably likely to result in a breach of any
covenant, representation or warranty or any other obligation of Food Lion
under the Voting Agreement or the Merger Agreement, and (iii) except for
such actions as Hannaford is permitted under the Merger Agreement, against
(a) any extraordinary corporate transaction, such as a merger, rights
offering, reorganization, recapitalization or liquidation involving
Hannaford or any of its subsidiaries other than the Merger, (b) a sale or
transfer of a material amount of assets of Hannaford or any of its material
subsidiaries or the issuance of any securities of Hannaford or any
subsidiary, (c) any change in the Board of Directors of Hannaford other
than in connection with an annual shareholders meeting of Hannaford with
respect to the slate of directors proposed by the incumbent Board of
Directors of Hannaford (in which case they agreed to vote for the slate
proposed by the incumbent Board) or (d) any action that is reasonably
likely to materially impede, interfere with, delay, postpone or adversely
affect the Merger and the transactions contemplated by the Merger
Agreement.
Each of the Selling Stockholders also agreed under the Voting
Agreement, except as provided by the Exchange Agreement, not to (i) sell,
transfer, assign or otherwise dispose of, or enter into any contract,
arrangement or understanding with respect to, the sale, transfer,
assignment or other disposition of, the Shares or any interest contained
therein, (ii) grant any proxy or power of attorney or enter into any other
voting agreement or other arrangement with respect to the Shares or (iii)
except as provided by the Hannaford-Sobey Voting Trust Agreement, dated as
of February 4, 1988, as amended, deposit the Shares into a voting trust.
On August 20, 1999, Empire notified Hannaford that it has
terminated, the Amended and Restated Agreement, dated as of February 4,
1998, as amended by the Amendment Agreement, dated January 1, 1992, and the
Second Amendment Agreement, dated as of May 14, 1996, among Empire, certain
of its affiliates and Hannaford, as permitted by Section 7.5(ii) thereof.
Except as set forth above, the Reporting Persons currently do not
have any plans or proposals which may relate to or would result in:
(a) The acquisition of additional securities of Hannaford, or
the disposition of securities of Hannaford;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving Hannaford or any of
its subsidiaries;
(c) A sale or transfer of a material amount of assets of
Hannaford or of any of its subsidiaries;
(d) Any change in the present board of directors or management
of Hannaford, including any plans or proposals to change the
number or term of directors or to fill any existing
vacancies on the board of directors;
(e) Any material change in the present capitalization or
dividend policy of Hannaford;
(f) Any other material change in Hannaford's business or
corporate structure;
(g) Any changes in Hannaford's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of Hannaford by any person;
(h) Causing a class of securities of Hannaford to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system
of a registered national securities association;
(i) A class of equity securities Hannaford becoming eligible for
termination or registration pursuant to Section 12(g)(4) of
the Exchange Act; or
(j) Any action similar to any of those enumerated above.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
See Item 4 above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(1) Stock Exchange Agreement, dated as of August 17, 1999, among Food
Lion, Inc., Empire Company Limited and E.C.L. Investment Limited.
(2) Voting Agreement, dated as of August 17, 1999, among Food Lion,
Inc., Empire Company Limited and E.C.L. Investment Limited.
SIGNATURE
After reasonable inquiry and to the best of the undersigneds'
knowledge and belief, the undersigned certify that the information set
forth in this Amendment is true, complete and correct.
Date: August 20, 1999
EMPIRE COMPANY LIMITED
By: /s/Paul D. Sobey
----------------------------
Name: Paul D. Sobey
Title: President and Chief Executive
Officer
E.C.L. INVESTMENTS LIMITED
By: -----------------------------
Name: Paul D. Sobey
Title: Secretary
PAULJAN LIMITED
By: /s/Paul D. Sobey
-----------------------------
Name: Paul D. Sobey
Title: Secretary
PENSION PLAN FOR EMPLOYEES
OF SOBEYS INC.
By: /s/Paul D. Sobey
-----------------------------
Name: Paul D. Sobey
Title: Member of the Pension Committee
SOBEYS INC. MASTER TRUST INVESTMENT FUND
By: /s/Paul D. Sobey
------------------------------
Name: Paul D. Sobey
Title: Trustee
*
---------------------------------
David F. Sobey
---------------------------------
* By Paul D. Sobey, as
attorney-in-fact
/s/ Paul D. Sobey
--------------------------------
Paul D. Sobey
EXHIBIT 1
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement (this "Agreement") is entered into as of
the 17th day of August, 1999, by and among Food Lion, Inc., a North
Carolina corporation ("Food Lion" or the "Company"), and each of the other
parties listed on the signature page hereof or their respective assigns
(the "Selling Stockholders").
RECITALS
WHEREAS, the Selling Stockholders desire to exchange the outstanding
shares of common stock, par value $0.75 per share (the "Hannaford Common
Stock"), of Hannaford Brothers Co., a Maine corporation ("Hannaford"),
owned by them as set forth on Schedule 1 hereof, on the terms and subject
to the conditions set forth in this Agreement.
WHEREAS, the Company, FL Acquisition Sub, Inc., a wholly-owned
subsidiary of the Company, and Hannaford have agreed to enter into an
Agreement and Plan of Merger dated the date hereof attached hereto as
Exhibit A (the "Merger Agreement").
WHEREAS, the Selling Stockholders have agreed, pursuant to a Voting
Agreement dated the date hereof, to vote the Hannaford Common Stock in
favor of the Merger (as defined in the Merger Agreement).
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Selling Stockholders have required that the Company enter
into this Agreement.
WHEREAS, capitalized terms used but not otherwise defined herein shall
have the meaning ascribed to such terms in the Merger Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and subject
to the conditions hereinafter set forth, the parties agree as follows:
1. EXCHANGE.
1.1 Exchange. Subject to the terms and conditions of this Agreement,
immediately prior to Closing, the Selling Stockholders will exchange their
Hannaford Common Stock for aggregate consideration of $823,066,635 (the
"Total Consideration") determined and payable as follows:
(a) $365,000,000 (the "Share Consideration") payable in Class A
common stock, par value $.50 per share, of the Company (the "Food Lion
Common Stock"), with the number of such Food Lion Common Stock to be
delivered by the Company to the Selling Stockholders being calculated as
365,000,000 divided by the Average Parent Price or $9.00, whichever is
greater; and
(b) an amount (the "Cash Consideration") equal to the difference
between the Total Consideration and the Share Consideration, payable by
bank draft drawn upon a major money center bank.
1.2 Payment. At the closing, the Selling Stockholders shall deliver
to the Company certificates for the Common Stock duly endorsed in blank, or
accompanied by a stock power or stock powers duly executed in blank, in
proper form for transfer, and Food Lion shall issue and deliver to the
Selling Stockholders the cash set forth in Section 1.2 and the Share
Consideration.
1.3 Taxes. The Selling Stockholders will be responsible for all
sales and similar transfer taxes which may be due by the Selling
Stockholders as a result of the exchange of the Common Stock or any
reconveyance as set forth in Section 5 herein.
1.4 Adjustment.
(a) The Total Consideration shall be adjusted to reflect fully
the effect of any stock split, reverse split, stock dividend (including any
dividend or distribution of securities convertible into Food Lion Common
Stock), reorganization, recapitalization or other like change with respect
to Food Lion Common Stock occurring after the date hereof and having a
record or effective date prior to the Effective Time.
(b) The Company agrees to give the Selling Stockholders written
notice five Business Days prior to the Closing of the number of shares of
Food Lion Common Stock outstanding as of the date of such notice and the
number of shares of Food Lion Common Stock which may be issuable under any
outstanding options, rights or other securities during such five-day
period. Upon receipt of such notice, the Selling Stockholders may elect to
adjust, upwards or downwards, the consideration set forth in Section 1.1(a)
hereof provided that:
(i) the Share Consideration shall in no event be less than
$315,000,000, subject to adjustment as set forth in subparagraph 1.4(d)
below; and
(ii) the Share Consideration shall in no event exceed
$421,000,000.
(c) The Company agrees that if the Selling Stockholders give the
Company prior written notice at least five Business Days prior to the
Effective Date, the Company will adjust the manner in which the
consideration provided for in Paragraph 1.1, for some or all of the shares
of Hannaford Common Stock is paid so that the number of shares of Hannaford
Common Stock or fractions thereof acquired by the Company for cash and the
number of shares of Hannaford Common Stock or fractions thereof acquired by
the Company for Selling Stockholders' Shares should be as the Selling
Stockholders so direct.
(d) The Company shall notify the Selling Stockholders five
Business Days prior to the Closing of the number of options to acquire
shares of either Hannaford or the Company which have been exercised since
the date of this Agreement, whereupon the minimum Share Consideration set
forth in subparagraph (b)(i) above shall be adjusted upwards to reflect the
issuance of stock upon such exercise, provided that the Minimum Share
Consideration shall in no event exceed $321,717,524.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder represents, warrants and covenants to the Company as
follows:
2.1 Authority. Such Selling Stockholder has the capacity to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. Such Selling Stockholder has duly and validly executed and
delivered this Agreement and this Agreement constitutes a legal, valid and
binding obligation of such Selling Stockholder, enforceable against the
Selling Stockholder in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally
and by general equitable principles (regardless of whether enforceability
is considered in a proceeding in equity or at law). Neither the execution
and delivery of this Agreement, nor the compliance with any of the
provisions hereof, in each case by such Selling Stockholder will (i)
require any consent, approval, authorization or permit of, registration,
declaration or filing with or notification to, any U.S. or Canadian
Governmental Authority, except for filings on Schedule 13D under the
Exchange Act and under the HSR Act, (ii) result in a default (or an event
which, with notice or lapse of time or both, would become a default) or
give rise to any right of termination by any third party, cancellation,
amendment or acceleration under any contract or understanding, or result in
the creation of a Lien with respect to any of the shares of Hannaford
Common Stock, (iii) require any material consent, authorization or approval
of any Person or Governmental Authority which has not been obtained, or
(iv) violate or conflict with any order or law applicable to such Selling
Stockholder or the shares of Hannaford Common Stock.
2.2 Ownership. The shares of Hannaford Common Stock owned by such
Selling Stockholder are validly issued, fully paid and non-assessable and
owned beneficially and of record by such Selling Stockholder. Such Selling
Stockholder will convey good and valid title to the shares of Hannaford
Common Stock, free and clear of any Liens.
2.3 Investment Representation. Such Selling Stockholder is acquiring
the shares of Food Lion Common Stock for its own account, for investment
purposes only and not with a view to the distribution of the shares of Food
Lion Common Stock, except in compliance with the Securities Act of 1933, as
amended.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to the Selling Stockholders as follows:
3.1 Authority. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of North
Carolina and has full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of the Company, and no other
corporate proceedings on the part of the Company are necessary to authorize
the execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated hereby. The Company
has duly and validly executed this Agreement and this Agreement constitutes
a legal, valid and binding obligation of Food Lion, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights generally and by general equitable
principles (regardless of whether enforceability is considered in a
proceeding in equity or at law). Neither the execution and delivery of
this Agreement, the consummation by the Company of the transaction
contemplated hereby, nor the compliance by the Company with any of the
provisions hereof will (i) conflict with or result in a breach of any
provision of its Articles of Incorporation or Bylaws, (ii) require any
consent, approval, authorization or permit of, registration, declaration or
filing with, or notification to, any Governmental Authority except for
filings on Schedule 13D under the Exchange Act and under the HSR Act, (iii)
result in a default (or an event which, with notice or lapse of time or
both, would become a default) or give rise to any right of termination by
any third party, cancellation, amendment or acceleration under any contract
or understanding, (iv) require any material consent, authorization or
approval of any Person or Governmental Authority which has not been
obtained, or (v) violate or conflict with any order or law applicable to
the Company.
3.2 Ownership. The shares of Food Lion Common Stock to be issued to
the Selling Stockholders hereunder upon issuance will be validly issued,
fully paid and nonassessable. As of the close of business on August 16,
1999, 239,853,031 shares of Food Lion Common Stock are issued and
outstanding, 4,048,781 shares of Food Lion Common Stock are reserved for
additional grants under option and other stock-based plans and 4,083,203
shares of Food Lion Common Stock are reserved for issuance pursuant to
options previously granted pursuant to Food Lion options plans.
4. CONDITIONS TO CLOSING. The obligations of the parties hereto to
consummate the transactions contemplated hereby are subject to the parties
to the Merger Agreement having satisfied or waived the conditions set forth
in the Merger Agreement and the parties thereto agreeing that they are
ready, willing and able to close the Merger immediately following the
Closing of the transaction contemplated hereto.
5. RECONVEYANCE. If the transactions contemplated by this Agreement are
consummated and the Merger is not consummated, the parties hereto agree to
use their best efforts to take all actions necessary to unwind the
transactions so that the Parties are in the same position they were in
prior to the closing of the transactions contemplated hereby.
6. BOARD SEAT. The Company agrees to take all necessary action to cause
a representative of Empire Company Limited to be appointed a member of the
Board of Directors of the Company.
7. MISCELLANEOUS.
7.1 All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given when so delivered
in person, one business day after delivery to an overnight courier, upon
facsimile transmission (with receipt confirmed by telephone or by automatic
transmission report) or two business days after being sent by registered or
certified mail (postage prepaid, return receipt requested), as follows:
(a) If to the Company, to:
Food Lion, Inc.
2110 Executive Drive
Salisbury, NC 28147
Attn: Lester C. Nail
Telephone: (704) 633-8250 x2305
Facsimile: (704) 639-1353
(b) If to Selling Stockholders, to:
Skadden, Arps, Slate, Meagher
& Flom LLP
919 Third Avenue
New York, NY 10022
Attn: Milton G. Strom
Fax: (212) 735-2000
-and-
Stewart McKelvey Stirling Scales
1959 Upper Water Street
Suite 900, P.O. Box 997
Halifax, NS Canada
B3J 2X2
Attn: James M. Dickson
Facsimile No.: (902) 420-1417
Any party may by notice given in accordance with this Section 7.1 to the
other party designate another address or person for receipt of notices
hereunder.
7.2 This Agreement shall be construed in accordance with and governed
by the internal laws of the State of Maine. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of any state or federal court in
the State of Maine or the State of Maine with respect to any suit, action,
proceeding or judgment relating to or arising out of this Agreement.
7.3 This Agreement may be amended, modified or supplemented only by
written agreement of the parties hereto.
7.4 This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, heirs, estates and permitted assigns. This Agreement is not
assignable without the prior written consent of the other party hereto;
provided, however, that a party hereto may assign its rights to a direct or
indirect wholly-owned subsidiary of either of the Selling Stockholders.
7.5 This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
7.6 This Agreement contains the entire agreement between the parties
in respect of the subject matter contained herein, and supersedes all prior
agreements, written or oral, with respect thereto.
7.7 If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with
its terms.
7.8 The parties hereto each acknowledge that, in view of the
uniqueness of the subject matter hereof, the parties hereto would not have
an adequate remedy at law for money damages in the event that this
Agreement were not performed in accordance with its terms, and therefore
agree that the parties hereto shall be entitled to specific enforcement of
the terms hereof in addition to any other remedy to which the parties
hereto may be entitled at law or in equity.
[The next page is the signature page]
IN WITNESS WHEREOF, the undersigned or each of their respective duly
authorized officers or representatives have executed this Agreement
effective as of the date first set forth above.
FOOD LION, INC.
By:_____________________________________
Name: __________________________________
Title:__________________________________
EMPIRE COMPANY LIMITED
By:____________________________________
Name: _________________________________
Title: ________________________________
E.C.L. INVESTMENTS LIMITED
By:____________________________________
Name:__________________________________
Title:_________________________________
SCHEDULE 1
STOCKHOLDERS HOLDINGS
Name of Stockholder Number of Shares
------------------- ----------------
Empire Company Limited 5,550,461
E.C.L. Investment Limited
Empire Company Limited 4,868,104
EXHIBIT 2
VOTING AGREEMENT
This VOTING AGREEMENT (this "Agreement"), dated as of August 17, 1999,
is entered into by and among Food Lion, Inc., a North Carolina corporation
(the "Parent"), and the other parties listed on the signature page hereof
or their respective assigns (the "Stockholders").
RECITALS:
A. The Parent, FL Acquisition Sub, Inc., a Maine corporation and a
wholly owned subsidiary of Parent ("Merger Sub"), and Hannaford Brothers
Co., a Maine corporation (the "Company"), have entered into an Agreement
and Plan of Merger of even date herewith (the "Merger Agreement"), pursuant
to which the parties thereto have agreed, upon the terms and subject to the
conditions set forth therein, to merge the Merger Sub with and into the
Company Sub (the "Merger").
B. As of the date hereof, each Stockholder is the owner of the
number of shares of Company Common Stock (the "Shares") set forth opposite
such Stockholder's name on Schedule 1 attached hereto.
C. As of the date hereof, the stockholders and the Company have
entered into a Stock Exchange Agreement with respect to the Shares.
D. In consideration of the Parent's agreement to enter into the
Merger Agreement, each of the Stockholders agrees to vote in favor of the
Merger the Shares.
E. Capitalized terms used but not otherwise defined herein and
defined in the Merger Agreement shall have the meanings given such terms in
the Merger Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parent and
the Stockholders, intending to be legally bound, hereby agree as follows:
8. Voting of Shares.
8.1 Voting Agreement.
Each Stockholder hereby agrees to vote (or cause to be
voted) the Shares, at any annual, special or other meeting of the
stockholders of the Company, and at any adjournment or adjournments
thereof, or pursuant to any consent in lieu of a meeting or otherwise:
(i) in favor of the Merger and the approval and adoption of
the terms contemplated by the Merger Agreement and any actions required in
furtherance thereof;
(ii) against any action or agreement that is reasonably
likely to result in a breach in any material respect of any covenant,
representation or warranty or any other obligation of the Parent under this
Agreement or the Merger Agreement; and
(iii) except for all such actions which may be permitted
to the Company under Section 5.01 of the Merger Agreement, against (a) any
extraordinary corporate transaction, such as a merger, rights offering,
reorganization, recapitalization or liquidation involving the Company or
any of its subsidiaries other than the Merger, (b) a sale or transfer of a
material amount of assets of the Company or any of its material
subsidiaries or the issuance of any securities of the Company or any
subsidiary, (c) any change in the Board of Directors of the Company other
than in connection with an annual meeting of the shareholders of the
Company with respect to the slate of directors proposed by the incumbent
Board of Directors of the Company (in which case they agree to vote for
the slate proposed by the incumbent Board) or (d) any action that is
reasonably likely to materially impede, interfere with, delay, postpone or
adversely affect in any material respect the Merger and the transactions
contemplated by the Merger Agreement.
9. Representations and Warranties of Stockholders. Each Stockholder
represents and warrants to the Parent as follows in each case as of the
date hereof:
9.1 Binding Agreement. Each Stockholder has the capacity to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. Each Stockholder has duly and validly executed and delivered this
Agreement and this Agreement constitutes a legal, valid and binding
obligation of each Stockholder, enforceable against the Stockholder in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by general equitable principles
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
9.2 No Conflict. Neither the execution and delivery of this
Agreement, nor the compliance with any of the provisions hereof, in each
case by each Stockholder will (i) require any consent, approval,
authorization or permit of, registration, declaration or filing with, or
notification to, any Governmental Authority, except for filings on Schedule
13D under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (ii) result in a default (or an event which, with notice or lapse of
time or both, would become a default) or give rise to any right of
termination by any third party, cancellation, amendment or acceleration
under any contract or understanding, or result in the creation of a Lien
with respect to any of the Shares, (iii) require any material consent,
authorization or approval of any Person or Governmental Authority which has
not been obtained, or (iv) violate or conflict with any order or law
applicable to such Stockholder or the Shares.
9.3 Ownership of Shares. Each Stockholder is the record and
beneficial owner of such Stockholder's Shares free and clear of any Liens
on the right to vote such Shares. Each Stockholder holds exclusive power
to vote such Stockholder's Shares, subject to the limitations set forth in
Section 1 of this Agreement. The number of Shares set forth opposite each
Stockholder's name on Schedule 1 represents all of the shares of capital
stock of the Company beneficially owned by each Stockholder.
9.4 Absence of Certain Agreements. None of the Stockholders nor any
of their representatives has entered into any agreement, letter of intent
or similar agreement (whether written or oral) with any party other than
the Parent whereby such Stockholder has agreed to support, directly or
indirectly, any proposal or offer (whether or not in writing and whether or
not delivered to the stockholders of the Company generally) for a merger or
other business combination involving the Company or to acquire in any
matter, directly or indirectly, a material equity interest in, any voting
securities of, or a substantial portion of the assets of the Company, other
than the transactions contemplated by the Merger Agreement.
10. Representations and Warranties of the Parent. The Parent represents
and warrants to each Stockholder as follows, in each case as of the date
hereof:
10.1 Binding Agreement. The Parent is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of North Carolina and has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
Merger Agreement by the Parent and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by
the Board of Directors of the Parent, and no other corporate proceedings on
the part of the Parent are necessary to authorize the execution, delivery
and performance of this Agreement and the Merger Agreement by the Parent
and the consummation of the transactions contemplated hereby and thereby.
The Parent has duly and validly executed this Agreement and this Agreement
constitutes a legal, valid and binding obligation of the Parent,
enforceable against the Parent in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally
and by general equitable principles (regardless of whether enforceability
is considered in a proceeding in equity or at law).
10.2 No Conflict. Neither the execution and delivery of this
Agreement, the consummation by the Parent of the transactions contemplated
hereby, nor the compliance by the Parent with any of the provisions hereof
will (i) conflict with or result in a breach of any provision of its
Articles of Incorporation or Bylaws, (ii) require any consent, approval,
authorization or permit of, registration, declaration or filing with, or
notification to, any Governmental Authority, (iii) result in a default (or
an event which, with notice or lapse of time or both, would become a
default) or give rise to any right of termination by any third party,
cancellation, amendment or acceleration under any contract or
understanding, (iv) require any material consent, authorization or approval
of any Person or Governmental Authority which has not been obtained, or (v)
violate or conflict with any order or law applicable to the Company.
11. Transfer and Other Restrictions. For so long as the Merger Agreement
is in effect:
11.1 Certain Prohibited Transfers. Except for the Stock Exchange
Agreement between the parties hereto entered into as of the date hereof,
each Stockholder agrees not to:
(i) sell, transfer, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, assignment or other disposition of, such
Stockholder's Shares or any interest contained therein, other than sales,
transfers, assignments or other dispositions by a Stockholder to a direct
or indirect wholly-owned subsidiary of either Stockholder;
(ii) except as contemplated by this Agreement, grant any
proxy or power of attorney or enter into a voting agreement or other
arrangement with respect to such Stockholder's Shares, other than this
Agreement; or
(iii) except as provided in the Hannaford-Sobey Voting
Trust Agreement, dated as of February 4, 1988, as amended, deposit such
Stockholder's Shares into a voting trust.
11.2 Additional Shares. Without limiting the provisions of the Merger
Agreement, in the event (i) of any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of shares of
capital stock of the Company on, of or affecting the Shares or (ii) any
Stockholder shall become the beneficial owner of any additional shares of
Company Common Stock or other securities entitling the holder thereof to
vote or give consent with respect to the matters set forth in Section 1
hereof, then the terms of this Agreement shall apply to the shares of
capital stock or other securities of the Company held by any Stockholder
immediately following the effectiveness of the events described in clause
(i) or the Stockholder becoming the beneficial owner thereof, as described
in clause (ii), as though they were Shares hereunder. Each Stockholder
hereby agrees, while this Agreement is in effect, to promptly notify the
Parent of the number of any new shares of Company Common Stock acquired by
the Stockholder, if any, after the date hereof.
12. Specific Enforcement. Each of the parties hereto acknowledges and
agrees that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with the
terms hereof or were otherwise breached and that each party shall be
entitled to seek specific performance of the terms hereof, in addition to
any other remedy that may be available at law or in equity.
13. Termination. This Agreement shall terminate on the earlier of (i) the
termination of the Merger Agreement, (ii) the agreement of the parties
hereto to terminate this Agreement, (iii) consummation of the Merger and
(iv) the date such Stockholder ceases to own any Shares.
14. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including telecopy or similar writing) and
shall be given:
If to the Parent, to:
Food Lion, Inc.
2110 Executive Drive
Salisbury, North Carolina 28147
Attention: R. William McCanless
Facsimile No.: (704) 637-8803
With a copy to (such copy shall not constitute notice):
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1333 New Hampshire Avenue, N.W.
Suite 400
Washington, D.C. 20036
Attention: Richard L. Wyatt, Jr.
Facsimile No.: (202) 887-4288
If to the Stockholders, to:
Empire Company Limited
115 King Street
Stellarton, Nova Scotia B0K 1S0
Attention: President
Facsimile No.: (902) 755-6477
With a copy to (such copy shall not constitute notice):
Skadden, Arps, Slate, Meagher
& Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Milton G. Strom
Facsimile No.: (212) 735-2000
Stewart McKelvey Stirling Scales
1959 Upper Water Street
Suite 900, P.O. Box 997
Halifax, NS Canada
B3J 2X2
Attn: James M. Dickson
Facsimile No.: (902) 420-1417
or such other address or telecopy number as such party may hereafter
specify for the purpose by notice to the other parties hereto. Each such
notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section 7 and the appropriate telecopy confirmation is
received or (ii) if given by any other means, when delivered at the address
specified in this Section 7.
15. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof.
16. Consideration. This Agreement is granted in consideration of the
execution and delivery of the Merger Agreement by the Parent.
17. Amendment. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
18. Successors and Assigns. Except as provided in Section 4.1 hereof,
this Agreement shall not be assigned by operation of law or otherwise
without the prior written consent of the other parties hereto. This
Agreement will be binding upon, inure to the benefit of and be enforceable
by each party and such party's respective heirs, beneficiaries, executors,
representatives and permitted assigns.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
20. Governing Law. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Maine without giving effect to the provisions thereof relating to conflicts
of law.
21. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to
be unenforceable such provision shall be interpreted to be only so broad as
is enforceable.
22. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
23. Stockholder Capacity. No Stockholder or designee of any Stockholder
who is or becomes during the term hereof a director or officer of the
Company makes any agreement or understanding herein in his or her capacity
as such director or officer. Each Stockholder signs solely in such
Stockholder's capacity as the record holder and beneficial owner of such
Stockholder's Shares and nothing herein shall limit or affect any actions
taken by a Stockholder or any designee of any Stockholder in his or her
capacity as an officer or director of the Company.
24. Further Assurances. Each party hereto shall execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
25. Third Party Beneficiaries. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties
hereto any legal or equitable right, remedy or claim under by reason of
this Agreement or any provision contained herein.
[The next page is the signature page.]
IN WITNESS WHEREOF, the undersigned or each of their respective duly
authorized officers or representatives have executed this Agreement
effective as of the date first set forth above.
FOOD LION, INC.
By:_______________________________________
Name: ____________________________________
Title:____________________________________
EMPIRE COMPANY LIMITED
By:_______________________________________
Name:_____________________________________
Title:____________________________________
E.C.L. INVESTMENTS LIMITED
By:______________________________________
Name:____________________________________
Title:___________________________________
SCHEDULE 1
STOCKHOLDINGS
Name of Stockholder Number of Shares
------------------- ----------------
Empire Company Limited 5,550,461
E.C.L. Investment Limited
Empire Company Limited 4,868,104
