<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Delchamps, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Delchamps, Inc.
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
- - - --------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
(LOGO OF DELCHAMPS APPEARS HERE)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on November 10, 1994
----------------
To the Shareholders of Delchamps, Inc.:
The annual meeting of shareholders of Delchamps, Inc. (the "Company") will be
held in the Alabama Ballroom of the Adam's Mark Riverview Plaza Hotel, 64 South
Water Street, Mobile, Alabama, at 10:00 a.m., Central Daylight Time, on
Thursday, November 10, 1994 for the purpose of considering and voting upon the
following matters:
1. The election of three directors for a three-year term expiring in
1997,
2. A proposal to approve the Delchamps, Inc. Director Compensation Plan,
3. A proposal to ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the fiscal year ending July 1, 1995, and
4. The transaction of such business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on September 29, 1994
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting and at any adjournment or adjournments thereof.
All shareholders are cordially invited to attend the meeting in person.
However, if you are unable to attend in person and wish to have your stock
voted, PLEASE FILL IN, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. Your proxy may be revoked by
appropriate notice to the Secretary of the Company at any time prior to the
voting thereof.
BY ORDER OF THE BOARD OF DIRECTORS
(SIGNATURE OF HEIDI E. FINCHEM
APPEARS HERE)
HEIDI E. FINCHEM
Vice President and Secretary
Mobile, Alabama
October 10, 1994
DELCHAMPS, INC. . 305 DELCHAMPS DRIVE . P.O. BOX 1668 . MOBILE, ALA. 36633-1668
. (205) 433-0431
<PAGE>
DELCHAMPS, INC.
305 DELCHAMPS DRIVE
P.O. BOX 1668
MOBILE, ALABAMA 36633-1668
October 10, 1994
----------------
PROXY STATEMENT
----------------
This proxy statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Delchamps, Inc. (the "Company") for use
at the annual meeting of shareholders of the Company to be held on November 10,
1994 and at any adjournment thereof. It is anticipated that this proxy
statement and the accompanying form of proxy will be mailed to shareholders
commencing on or about October 10, 1994.
Only shareholders of record at the close of business on September 29, 1994
are entitled to notice of and to vote at the annual meeting. On that date, the
Company had outstanding 7,113,581 shares of Common Stock, each of which is
entitled to one vote.
A shareholder who has given a proxy may revoke it by voting in person at the
meeting, by giving written notice of revocation to the Secretary of the Company
or by giving a later dated proxy at any time before voting.
The cost of soliciting proxies in the enclosed form will be borne by the
Company. In addition to the use of the mails, proxies may be solicited
personally, or by telephone and facsimile transmission, by directors, officers
and regular employees of the Company who will not receive additional
compensation therefor. Additionally, banks, brokerage houses and other
institutions, nominees and fiduciaries will be requested to forward the
soliciting material to their principals and to obtain authorization for the
execution of proxies. The Company will, upon request, reimburse such
institutions for their reasonable expenses in forwarding proxy materials to
their principals.
ELECTION OF DIRECTORS
GENERAL
The Company's by-laws authorize the Board of Directors to fix the size of the
Board. Pursuant thereto, the Board has fixed the number of directors at nine.
The terms of two directors, J. Thomas Arendall, Jr. and E. E. Bishop, will
expire at the 1994 Annual Meeting. Both of these directors are being nominated
for re-election to the Board for a three-year term. A third director, Jesse A.
Lewis, whose term would have expired at the 1994 annual meeting, resigned from
the Board effective October 29, 1993. David W. Morrow is being nominated for
election to the Board for the first time to fill the seat formerly held by Mr.
Lewis. The terms of office of the other six directors will not expire until the
1995 or 1996 annual meetings. Accordingly, proxies cannot be voted for more
than three persons. Unless authority to vote for the election of directors is
withheld, all shares represented by the enclosed form of proxy will be voted in
favor of the election of each of the three nominees listed below. Under the
Company's by-laws, directors are elected by plurality vote. If any nominee
becomes unavailable for election, proxies in the enclosed form will be voted
for such person, if any, as may be designated by the Board of Directors.
Management has no reason to believe that any nominee will be unavailable. Under
the Company's by-laws, a shareholder may nominate one or more persons for
election as directors only if written notice of such shareholder's intent to
make such nomination, together with certain other information, has been given
to the Secretary of the Company at least 90 days in advance of the annual
meeting. Because no shareholder has given such notice to the Secretary, no
other nominations will be accepted at the 1994 annual meeting.
<PAGE>
INFORMATION WITH RESPECT TO DIRECTORS
Set forth below is information regarding the age and principal occupation or
employment of each director. Unless otherwise indicated, each director has been
engaged in the principal occupation shown for more than the past five years.
<TABLE>
<CAPTION>
FIRST NOMINATED
NAME, AGE, PRINCIPAL OCCUPATION AND ELECTED FOR TERM
DIRECTORSHIPS IN OTHER PUBLIC COMPANIES DIRECTOR EXPIRING
--------------------------------------- -------- ---------
<S> <C> <C>
NOMINEES FOR ELECTION:
J. Thomas Arendall, Jr., 53(1)(2)(3)....................... 1991 1997
President Arendall and Associates, Inc. (professional and
business services provider)
E. E. Bishop, 64(1)(2)4)................................... 1989 1997
Chairman of the Board of Directors, Morrison Restaurants
Inc. (cafeteria and specialty restaurant company);
Director, Dravo Corp. (natural resources)
David W. Morrow, 63(5)..................................... 1997
Retired President and Chief Executive Officer of Pueblo
International, Inc. (supermarket chain)
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE THREE NOMINEES NAMED
ABOVE.
<TABLE>
<CAPTION>
FIRST SERVING
NAME, AGE, PRINCIPAL OCCUPATION AND ELECTED TERM
DIRECTORSHIPS IN OTHER PUBLIC COMPANIES DIRECTOR EXPIRING
--------------------------------------- -------- --------
<S> <C> <C>
OTHER DIRECTORS:
Carl F. Bailey, 63(1)(2)(6).................................. 1987 1996
Retired President and Chief Executive Officer, South Central
Bell Telephone Company, Retired Vice Chairman, BellSouth
Telecommunications, Inc.
John A. Caddell, 64(1)(2).................................... 1977 1996
President and Chief Executive Officer, Caddell Construction
Company; Director, AmSouth Bank of Montgomery
James M. Cain, 61(1)(2)(7)................................... 1990 1995
Retired Vice Chairman, Entergy Corporation (electric and gas
utility holding company); Director, Whitney Holding
Corporation (bank holding company)
William W. Crawford, 66(1)(2)(8)............................. 1977 1995
Retired Senior Vice President and Secretary, Kraft, Inc.
(food, consumer and commercial products company)
Randy Delchamps, 51(1)(9).................................... 1978 1996
Chairman of the Board of Directors, President and Chief
Executive Officer of the Company; Director, South Trust Bank
of Mobile
T. W. Mitchell, 65(1)(2)..................................... 1992 1995
Chairman of the Board of Directors, Stuart Construction
Company, Inc.; Director South Trust Corporation (bank
holding company)
</TABLE>
- - - --------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(Notes continued on following page)
2
<PAGE>
(3) Mr. Arendall has served as President of Arendall and Associates, Inc. since
October 1992. From May 1992 until its incorporation in October 1992, Mr.
Arendall was a partner of Arendall and Associates. Prior to May 1992 he was
principally employed as President of Gulf Furniture Stores, Inc.
(4) Prior to June 1992, Mr. Bishop also served as Chief Executive Officer of
Morrison Restaurants, Inc.
(5) Mr. Morrow served as President and Chief Operating Officer of Pueblo
International, Inc. from 1983 until 1991. From 1991 until 1993, he served
as Chairman and Chief Executive Officer and, from 1993 until his retirement
in 1994, he served as President and Chief Executive Officer.
(6) In October, 1991, Mr. Bailey retired as President and Chief Executive
Officer of South Central Bell Telephone Company and Vice Chairman of
BellSouth Telecommunications, Inc.
(7) Mr. Cain retired September 1, 1993 as Vice Chairman of Entergy Corporation,
a position he had held since February 1991. Prior to that time he was
Chairman and Chief Executive Officer of Louisiana Power & Light Co. and New
Orleans Public Service, Inc., both subsidiaries of Entergy.
(8) Prior to September 1988, Mr. Crawford also served as Kraft's general
counsel. He retired from Kraft in December 1988.
(9) Mr. Delchamps was named to the position of Chairman of the Board of
Directors and Chief Executive Officer in October 1989. From March, 1974
until June, 1987, he served as Vice President, Real Estate. He served as
Vice President, Administration from June 1987 until his promotion to
Executive Vice President and Chief Operations Officer in June 1988. In June
1989, he was named President, and he continues to serve in that position.
----------------
During the Company's last fiscal year the Board of Directors held four
meetings. The Board of Directors has no Nominating Committee. The Board has a
Compensation Committee and an Audit Committee. The Audit Committee met one time
during the last fiscal year with the Company's internal auditor and with its
independent public accountants to review their accounting, financial and audit
reports and their recommendations for improvements in internal accounting
controls. The Compensation Committee, which met three times during the last
fiscal year, sets all officers' compensation and administers the Company's
incentive compensation plans. No director attended fewer than 75% of the total
number of meetings of the Board and the committees on which he served.
COMPENSATION OF DIRECTORS
During the last fiscal year each director not otherwise employed by the
Company received an annual retainer of $9,000 as well as a fee of $1,500 for
each Board meeting attended and $650 for each committee meeting attended.
During the last fiscal year, the Board considered an analysis of director
compensation paid by similar sized companies and other grocery store chains
prepared by an independent employee benefits consultant, which showed that the
compensation paid to the Company's directors was well below the median. For
that reason and in order to be able to continue to attract qualified Board
members, the Board has increased the annual retainer to $16,000 for fiscal 1995
and future years. The fees paid for attendance at Board and committee meetings
have not been changed.
SECURITY HOLDINGS OF DIRECTORS, EXECUTIVE OFFICERS AND
CERTAIN BENEFICIAL OWNERS
SECURITY HOLDINGS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning the beneficial
ownership of Common Stock of the Company by each director, by each nominee for
director, by each executive officer for whom compensation information is
disclosed under the heading "Summary of Executive Compensation" and by all
directors and executive officers of the Company as a group, as of September 29,
1994, determined in accordance with Rule 13d-3 of the Securities and Exchange
Commission. Unless otherwise indicated, the Common Stock shown is held with
sole voting and investment power.
3
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENT
NAME OF BENEFICIAL OWNER SHARES OF CLASS
------------------------ --------- --------
<S> <C> <C>
DIRECTORS
J. Thomas Arendall, Jr............................ 572 *
Carl F. Bailey.................................... 1,000 *
E. E. Bishop...................................... 500 *
John A. Caddell................................... 2,824 *
James M. Cain..................................... 600 *
William W. Crawford............................... 5,004(1) *
Randy Delchamps................................... 192,227(2) 2.7%
T. W. Mitchell.................................... 3,000 *
David W. Morrow................................... 0 *
NAMED EXECUTIVE OFFICERS WHO ARE NOT ALSO DIRECTORS
Larry S. Griffin.................................. 10,526(3)(4) *
Donald A. Mathews................................. 11,000(5) *
James H. McDonald, Jr............................. 9,000(5) *
Hugh Van Hooser................................... 9,206(4) *
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP... 329,166 4.6%
- - - --------
* Less than 1%.
(1) Includes 500 shares held of record by Mr. Crawford's wife.
(2) Includes 6,166 shares held of record by Mr. Delchamps' wife and 10,000
shares entitled to be acquired within 60 days upon the exercise of stock
options.
(3) Includes 40 shares held of record by Mr. Griffin's wife.
(4) Includes 1,166 shares entitled to be acquired within 60 days upon the
exercise of stock options.
(5) Includes 1,000 shares entitled to be acquired within 60 days upon the
exercise of stock options.
SECURITY HOLDINGS OF CERTAIN BENEFICIAL OWNERS
As of September 29, 1994, the following persons were known by the Company to
own beneficially more than 5% of its outstanding Common Stock. The information
set forth below is based upon information furnished by the persons listed.
Unless otherwise indicated, all shares shown as beneficially owned are held with
sole voting and investment power.
<CAPTION>
NUMBER OF PERCENT
NAME AND ADDRESS SHARES OF CLASS
---------------- --------- --------
<S> <C> <C>
First Alabama Bank
Trustee fbo Delchamps, Inc.
Employee Stock Ownership Trust(1)................. 1,606,066 22.58%
P.O. Box 2527
Mobile, Alabama 36622
GAMCO Investors, Inc., Gabelli Funds Inc.,
Gabelli & Company, Inc., Mario J. Gabelli(2)...... 968,878 13.62%
One Corporate Center
Rye, New York 10580-1434
Southeastern Asset Management, Inc.(3)............ 358,379 5.04%
6075 Poplar Avenue
Suite 900
Memphis, Tennessee 38119
</TABLE>
- - - --------
(1) Shares held by the trustee are voted according to the instructions of each
participating employee to the extent of the number of shares allocated to
his account on all matters submitted to a vote of shareholders. Unallocated
shares are required to be voted as a block in the same manner as a majority
of the allocated shares.
(2) As reported on Amendment No. 12 to Schedule 13D dated August 30, 1994 and
filed with the Securities and Exchange Commission. A total of 118,900 of
such shares are held with sole investment power only.
(3) As reported on Amendment No. 1 to Schedule 13G dated February 11, 1994 and
filed with the Securities and Exchange Commission.
4
<PAGE>
PROPOSAL TO APPROVE THE DELCHAMPS, INC.
DIRECTOR COMPENSATION PLAN
Effective October 3, 1994, the Board of Directors approved the Director
Compensation Plan (the "Plan") for non-employee directors of the Company (the
"Outside Directors") subject to shareholder approval of the Plan at the 1994
annual meeting. A complete copy of the Plan is set forth as Appendix A to this
proxy statement and the following description of the Plan is qualified in its
entirety by reference to the terms of the Plan.
PURPOSE OF THE PLAN
The purpose of the Plan is to encourage ownership of Common Stock by the
Outside Directors, upon whose judgment and ability Delchamps depends for its
long-term growth and development, and to provide a more effective and economic
manner of compensating Outside Directors. The Plan will give Outside Directors
an opportunity to receive their director compensation in Common Stock at a
discount from its fair market value as an alternative to receipt of the
compensation in cash. The Plan is intended to promote a close identity of
interests among the Company, the Outside Directors and shareholders, and to
provide a further means to attract and retain outstanding board members. In
addition, the Plan will allow the Outside Directors to choose to defer their
director compensation in order to assist them in their individual financial
planning.
PRINCIPAL FEATURES OF THE PLAN
General. The Plan will become effective on the date on which it is approved
by the sharheolders and will remain in effect until terminated by the Board of
Directors. All eight Outside Directors (all directors except Mr. Delchamps)
will be eligible to participate in the Plan.
The Plan will be administered by the Compensation Committee of the Board of
Directors (the "Committee"). Members of the Committee will be eligible to
participate in the Plan. The Committee will have authority to interpret the
Plan, adopt regulations relating to the Plan and take other action necessary
for the administration of the Plan.
The Board of Directors has the power to amend, modify or terminate the Plan
at any time, except that shareholder approval of an amendment may be required
if deemed to be necessary or advisable under securities, tax, or other
applicable laws or regulations. However, no amendment, modification or
termination of the Plan may adversely affect the rights of a participant with
respect to shares of Common Stock to which the participant has previously
become entitled or with respect to amounts previously credited to a deferred
compensation account without such person's consent.
Deferral of Compensation. The Plan permits Outside Directors to defer all or
a portion of their annual retainer and/or any meeting fees (in 25% increments)
to a deferred compensation account. Any portion of a director's compensation
allocated to the purchase of Common Stock, as described below, may not be
deferred. Deferred compensation accounts will be credited quarterly with an
assumed rate of income equal to that paid on 90-day U.S. Treasury bills, based
on the weighted average balance of that account during that fiscal quarter.
Amounts credited to a director's deferred compensation account will be
distributed following the earlier of (i) the date of the director's seventieth
birthday or (ii) the date the director ceases to be a member of the Board. Each
director is permitted to elect, at the time of the deferral election or
modification, whether his or her deferred compensation account will be
distributed in a lump sum on the date described in the preceding sentence or in
a series of not more than five annual installments beginning on the date
described in the preceding sentence. In the case of death, however, a lump sum
distribution will be made.
Stock Purchases. The Plan permits each Outside Director to elect that up to
100% (in 10% increments) of the annual retainer and meeting fees paid to him or
her by the Company be allocated to the purchase of Common Stock at a discount
from the current trading price.
5
<PAGE>
Stock purchase elections will not take effect until six months after the date
the election is filed with the Committee. An Outside Director may revoke or
modify his or her election to purchase Common Stock by filing a new election
that will take effect with respect to director compensation paid six months or
more after the modification or revocation is filed with the Committee. However,
the Committee may allow a stock purchase election, or a modification or
revocation of an election, to be effective on an earlier date, provided the
stock purchase election, modification or revocation would not result in short-
swing profit recovery pursuant to Section 16(b) of the Securities Exchange Act
of 1934 ("Section 16").
A 10% discount from the current trading price of the Common Stock purchased
is the maximum discount that may currently be offered to the Outside Directors,
based on Securities and Exchange Commission interpretations of the short-swing
trading liability rules under Section 16. Under recently proposed revisions to
the Section 16 rules, there would no longer be a restriction on the discount
offered on the Common Stock purchased. The Plan provides that at such time as
the Section 16 rules are amended to so permit, the retainer and meeting fees
could be used to purchase Common Stock at a 25% discount from the current
trading price.
Each Outside Director who has elected to purchase Common Stock under the Plan
will be issued the number of shares of Common Stock equal to the amount of the
compensation subject to the election, multiplied by 1.10 and divided by the
fair market value of a share of Common Stock. For example, if a director's
retainer for the year is $16,000 and that director has elected to allocate 50%
of his retainer for the purchase of Common Stock and the fair market value of a
share of Common Stock is $25, that director will be issued, at the time of
payment of the annual retainer, 352 shares of Common Stock ($8,000 X 1.10 /
$25). If the Section 16 rules are amended to permit the issuance of Common
Stock through the Plan at a 25% discount from the fair market value, the
Outside Director would receive 400 shares of Common Stock ($8,000 X 1.25 /
$25). Common Stock so purchased may not be transferred within two years of the
date of purchase, except in the event of death, disability, retirement on or
after age 70 or unless the Committee waives this restriction.
A total of 100,000 shares of Common Stock has been reserved for issuance
under the Plan (subject to adjustment for subsequent stock splits, stock
dividends and certain other changes in the Common Stock), which may be newly
issued shares or treasury shares. The closing sale price of a share of Common
Stock on the Nasdaq Stock Market on September 27, 1994 was $20.75.
TAX CONSEQUENCES
Directors generally will not be taxed on compensation deferred under the Plan
at the time it is deferred. To the extent that a director's compensation is
deferred to that director's deferred compensation account, the director will
recognize compensation taxable as ordinary income with respect to all
compensation allocated to his or her deferred compensation account and all
income credited thereto at the time it is paid or made available to him or her,
and the Company will then be entitled to a corresponding deduction.
To the extent that a director elects to purchase Common Stock, a director
will recognize compensation taxable as ordinary income upon receipt of the
Common Stock so issued in the amount of the fair market value of the stock
received. The Company will be entitled to a deduction in a like amount for
compensation paid to the director. A subsequent taxable disposition of the
shares of Common Stock held as a capital asset will result in capital gain or
loss measured by the difference between the fair market value of the Common
Stock on the date of transfer and the amount realized upon the later
disposition. Generally, the gain or loss will be long-term if such shares are
held for more than one year.
VOTE REQUIRED
Under the Company's By-law, the affirmative vote of the holders of a majority
of the voting power present or represented at the annual meeting is required
for the approval of the Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE DIRECTOR COMPENSATION PLAN.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation paid
by the Company for services rendered in all capacities during the fiscal years
ended June 27, 1992, July 3, 1993 and July 2, 1994 to the Chief Executive
Officer and to each of the four other most highly compensated executive
officers of the Company whose salary and bonus for the last fiscal year
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------- ----------------
NAME AND PRINCIPAL RESTRICTED STOCK ALL OTHER
POSITION YEAR(1) SALARY BONUS AWARDS(2) COMPENSATION(3)
- - - ------------------ ------- -------- -------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Randy Delchamps, Chair-
man.................... 1994 $348,920 -- -- $4,905
of the Board, President 1993 323,300 $201,739 -- 5,106
and Chief Executive Of-
ficer 1992 317,200 -- -- 5,468
Larry S. Griffin, Vice.. 1994 135,200 -- -- 4,016
President, Planning and 1993 132,500 57,876 -- 2,956
Development(4) 1992 130,000 -- -- 3,992
James H. McDonald, Jr.,. 1994 111,800 -- -- 3,122
Vice President and 1993 106,795 35,319 -- 2,382
General Counsel 1992 104,780 -- -- 3,044
Hugh Van Hooser, Senior. 1994 106,600 -- -- 3,122
Vice President, Retail 1993 99,558 43,487 -- 2,220
Operations 1992 97,680 -- -- 2,999
Donald A. Mathews, Vice. 1994 106,600 -- -- 2,903
President, Distribution 1993 104,675 32,985 -- 2,335
1992 102,700 -- -- 2,952
</TABLE>
- - - --------
(1) 1994 and 1992 were 52-week years. 1993 was a 53-week year.
(2) The executive officers included in the Summary Compensation Table were
granted shares of restricted stock during the fiscal year ended July 1,
1989. These shares vest in 20% annual increments beginning the sixth year
after grant. As of July 2, 1994, the value of the aggregate restricted
stock holdings of the persons included in the table (calculated by
multiplying the number of shares of restricted stock by the closing sale
price of Common Stock on July 1, 1994) was as follows: Mr. Delchamps,
$250,250; Mr. Griffin, $204,750; Mr. Van Hooser, $136,500; Mr. Mathews,
$182,000; and Mr. McDonald, $182,000.
(3) Consists of Company contributions under the Employee Stock Ownership Plan.
(4) Mr. Griffin assumed his present position April 24, 1994. Prior to that time
he was Senior Vice President, Merchandising.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- - - ---------------------------------------------------------------------
POTENTIAL REALIZED VALUE AT
NUMBER OF PERCENTAGE OF ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ---------------------------
NAME GRANTED(1) FISCAL YEAR PRICE DATE 5% 10%
---- ---------- ------------- -------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Randy Delchamps......... 30,000 41.0% $23.00 10/15/03 $433,937 $1,099,682
Larry S. Griffin........ 3,500 4.8% 23.00 10/15/03 50,626 128,296
James H. McDonald, Jr... 3,000 4.1% 23.00 10/15/03 43,394 109,968
Hugh Van Hooser......... 3,500 4.8% 23.00 10/15/03 50,626 128,296
Donald A. Mathews....... 3,000 4.1% 23.00 10/15/03 43,394 109,968
</TABLE>
- - - --------
(1) The options become exercisable in one-third annual increments, unless the
Committee elects to accelerate exercisability. In addition, the options
automatically become exercisable in the event of a change of control of the
Company.
CHANGE OF CONTROL AGREEMENTS
The Company has entered into change of control agreements with each of the
executive officers named in the Summary Compensation Table. The purpose of the
agreements is to diminish the inevitable distraction of executives by the
personal economic concerns and anxieties that are created by the possibility,
threat or occurrence of a change of control and, thereby, to encourage the
continued dedication of the executives to advancing the Company's business
interests during such periods of uncertainty.
The agreements do not constitute employment contracts and only apply in
circumstances following a change of control. The agreements provide that
certain employment and severance arrangements become effective if a change of
control, as defined in the agreements, occurs within three years from the date
of the agreements, with automatic annual extensions unless terminated after
notice by the Company.
If a change of control occurs during the term of the agreements, the
agreements provide for continued employment of the executives, in at least
comparable positions with at least comparable compensation and benefits, for
three years following the change of control. If the Company terminates an
executive's employment during such three-year period other than for cause or
disability or if the executive terminates employment for good reason, the
executive is entitled to receive, in addition to other accrued amounts such as
vacation pay, a lump sum in cash equal to three times his annual base salary
and bonus. An executive who continues employment for one year after a change of
control earns a special bonus equal to his annual salary and bonus. In
addition, an executive who continues employment for such one-year period may
terminate employment during the 30-day period immediately following without any
reason and receive the same benefits as if he had terminated for good reason.
The agreements further provide for payment to the executive of an amount equal
to the excise tax, if any, payable by the executive on his severance benefits.
Health and other welfare benefits continue, following termination, for the
remainder of the three-year period.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the last fiscal year, all members of the Board of Directors of the
Company, other than Randy Delchamps, served on the Compensation Committee. None
of the members of the Compensation Committee have been officers or employees of
the Company or any of its subsidiaries. No executive officer of the Company
served in the last fiscal year as a director or a member of the compensation
committee of another entity, one of whose executive officers served as a
director or on the Compensation Committee of the Company.
8
<PAGE>
The Company leases ten of its supermarkets under standard commercial leases
from ten partnerships in which T. W. Mitchell, a director who serves on the
Compensation Committee, owns general partnership interests ranging from 6.67%
to 20%. Each of these leases has an initial term of 20 years and several
renewal options. The Company paid an aggregate of $3,738,264 in rental payments
to these ten partnerships during the fiscal year ended July 2, 1994.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Philosophy
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for review and administration of the Company's executive
compensation program. The Committee's strategy is to develop and implement an
executive compensation program that allows the Company to attract and retain
highly qualified persons to manage the Company in order to enhance
shareholders' value. The objectives of this strategy are to provide a
compensation package that permits the recognition of individual contributions
and achievements as well as Company results. Within this strategy, the
Committee considers it essential to the vitality of the Company to maintain
levels of compensation opportunity that are competitive with similar companies
in the grocery industry. The Committee recommends to the entire Board salary
levels for the executive officers of the Company. The Committee also
administers the Company's annual incentive plan and the 1993 Stock Incentive
Plan. In its deliberations, the Committee takes into account the
recommendations of appropriate Company officials and independent professional
compensation consultants.
Under the Omnibus Budget Reconciliation Act ("OBRA") enacted in 1993,
publicly held companies may be prohibited from deducting as an expense for
federal income tax purposes total remuneration in excess of $1 million paid to
certain executive officers in a single year. However, OBRA provides an
exception for compensation that qualifies as "performance based." The Committee
has not taken any action to qualify executive compensation as performance based
because current executive compensation paid by the Company that would be
included under the $1 million limit on deductible compensation is well below $1
million. The Committee may in the future take action to ensure that all
executive compensation will remain deductible.
Base Salaries
Salaries for executive officers are based on evaluations of the executives'
performance, their contributions to the performance of the Company, their
responsibilities, experience and potential, and compensation practices for
comparable positions at other companies in the grocery industry. The base
salary opportunities are targeted at the 50th percentile of a large group of
both public and private supermarket chains. The comparison group includes the
companies that make up the Dow Jones Food Retailers Index but is weighted more
heavily toward supermarket chains more similar in size to the Company.
Incremental amounts may be earned above the 50th percentile for outstanding
performance. Increases in base salary were recommended by the Committee in
fiscal 1994 for the named executive officers other than the Chief Executive
Officer that ranged from 4% to 9% in order to maintain salary levels at
approximately the 50th percentile of the companies described above and to
reward individual performance. For the same reasons the Committee also
recommended to the Board a 10% increase in the salary of the Chief Executive
Officer. The Board followed the Committee's recommendations.
Annual Incentive Compensation
Executive officers are eligible for annual incentive awards. These awards are
not in addition to market level compensation but are designed to place a
significant part of an executive's annual compensation at risk. The Chief
Executive Officer's award is based on corporate performance measured against
pre-tax profit objectives set by the Committee at the beginning of the year.
Awards to other executive officers are based on the same corporate performance
measure and on individual achievement of specified objectives established by
the Chief Executive Officer at the beginning of the year. Targeted awards are a
percentage of the executive
9
<PAGE>
officer's base salary ranging from 25% to 60% based on the officer's position
and salary grade. Awards based on Company performance may range from 50% of
target for exceeding a threshold profit level to a maximum award of 75% greater
than target for achieving or exceeding a maximum pre-tax profit goal. At year-
end, individual performance of the other executive officers is evaluated
against pre-established objectives. The resulting performance evaluation
produces a multiplier that may increase or decrease an executive's incentive
compensation award by up to 15%. No bonuses were paid to executive officers for
1994 because the minimum pre-tax profit objectives set by the Committee were
not achieved.
The combination of base salary and an annual incentive award are intended to
provide an executive the opportunity to earn total compensation slightly above
the 50th percentile of the competitive marketplace if Company and individual
goals are achieved.
Long-Term Incentive Plan
To be consistent with the Company's executive compensation philosophy, the
Committee recommends that a significant portion of total executive compensation
be tied directly to shareholders' results. Toward that end, the Board of
Directors adopted the 1993 Stock Incentive Plan (the "Incentive Plan") and the
Incentive Plan was approved by the Company's shareholders at last year's
meeting. Stock options and other stock incentives are an integral part of the
Company's executive compensation program in order to align the interests of the
executive officers with the interests of the Company's shareholders. The
Committee granted stock options to the Company's executive officers in fiscal
1994 and intends to grant stock options annually through the Incentive Plan to
provide officers with the opportunity to buy and maintain an equity interest in
the Company, thereby encouraging them to direct their efforts toward
appreciation of the value of the Company's common shares. The number of options
that a particular executive officer receives is based upon the officer's base
salary and level of responsibility. The options granted have an exercise price
equal to the fair market value of the shares on the grant date and, to
encourage a long-term perspective, vest over three years and have a ten-year
term. Stock option compensation bears a direct relationship to corporate
performance in that, over the long term, share price appreciation depends upon
corporate performance, and without share price appreciation the options are of
no value.
Submitted by the Compensation Committee of the Board of Directors.
J. Thomas Arendall, Jr. James M. Cain
Carl F. Bailey William W. Crawford
E. E. Bishop T. W. Mitchell
John A. Caddell
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PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on Company
Common Stock for the last five fiscal years with the cumulative total return on
the S&P 500 Index and the Dow Jones Food Retailers Index, in each case assuming
the investment of $100 on July 1, 1989 at closing prices on June 30, 1989 and
the reinvestment of dividends. The Dow Jones Food Retailers Index consists of
the following eleven companies and is published periodically in the Wall Street
Journal: Albertson's, Inc., American Stores Company, Bruno's, Inc., Fleming
Companies Inc., Food Lion, Inc, Giant Food Inc., The Great Atlantic & Pacific
Tea Company, Inc., The Kroger Company, SUPERVALU INC., The Vons Companies, Inc.
and Winn-Dixie Stores, Inc.
COMPARISON OF DELCHAMPS, INC., S&P 500 AND
DOW JONES FOOD RETAILERS INDEX
<TABLE>
[GRAPH APPEARS HERE]
<CAPTION>
Dow Jones
Measurement period Food Retailers
(Fiscal year Covered) Delchamps S&P 500 Index
- - - --------------------- --------- ------- --------------
<S> <C> <C> <C>
Measurement PT -
06/30/89 $100 $100 $100
FYE 06/30/90 $100.5 $116.49 $120.92
FYE 06/30/91 $106.29 $125.1 $139.4
FYE 06/30/92 $ 77.14 $141.8 $127.98
FYE 06/30/93 $ 86.15 $161.22 $139.25
FYE 06/30/94 $ 97.63 $163.49 $132.61
</TABLE>
11
<PAGE>
CERTAIN TRANSACTIONS
Jesse A. Lewis, a former director of the Company, also served as Executive
Vice President and Chief Operating Officer from July 3, 1993 until October 29,
1993. In connection with the termination of Mr. Lewis' employment with the
Company, he received a severance payment of $106,672 payable over six months.
PROPOSAL TO RATIFY THE SELECTION OF
INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors has
approved the retention of KPMG Peat Marwick LLP ("Peat Marwick") as independent
auditors of the Company for the fiscal year ending July 1, 1995, which
selection will be submitted to the shareholders for ratification. Peat Marwick
was initially engaged as the Company's independent auditors in connection with
its initial public stock offering in late 1983 and has continued to serve in
that capacity. If shareholders do not ratify the Board of Directors' selection
of Peat Marwick by the affirmative vote of at least a majority of the shares of
Common Stock represented at the meeting in person or by proxy, the selection of
independent auditors will be reconsidered by the Board.
Representatives of Peat Marwick are expected to be present at the Annual
Meeting and will have an opportunity to make a statement if they desire to do
so. Such representatives will also be available at the meeting to respond to
appropriate questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
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OTHER MATTERS
SHAREHOLDER PROPOSALS
Any shareholder who desires to present a proposal qualified for inclusion in
the Company's proxy materials for the 1995 annual meeting must forward the
proposal in writing to the Secretary of the Company at the address shown on the
first page of this proxy statement in time to arrive at the Company no later
than June 12, 1995.
QUORUM AND VOTING OF PROXIES
The presence at the meeting, in person or by proxy, of the holders of a
majority of the Common Stock of the Company entitled to vote is necessary to
constitute a quorum. Shareholders voting, or abstaining from voting, by proxy
on any issue will be counted as present for purposes of constituting a quorum.
If a quorum is present, the election of directors is determined by plurality
vote; however the affirmative vote of a majority of the shares present or
represented by proxy and entitled to vote is required to approve the Plan and
to ratify the appointment of auditors. Abstentions will have the effect of a
vote against the proposal to approve the Plan and the proposal to ratify the
appointment of auditors. If brokers do not receive voting instructions from
beneficial owners, they may not exercise discretionary power to vote on the
proposal to approve the Plan with respect to such shares (a "broker non-vote").
Under Alabama law, broker non-votes with respect to the proposal to approve the
Plan will have no effect on the outcome of the proposal.
The Board of Directors does not know of any matters other than those
described in this proxy statement that will be presented for consideration at
the meeting. If any other matter should properly be so presented, it is
intended that the proxies in the accompanying form will be voted on the matter
in accordance with the judgment of the person or persons voting them.
BY ORDER OF THE BOARD OF DIRECTORS
(SIGNATURE OF HEIDI E. FINCHEM
APPEARS HERE)
HEIDI E. FINCHEM
Vice President and Secretary
Mobile, Alabama
October 10, 1994
YOUR VOTE IS IMPORTANT. PLEASE PROMPTLY COMPLETE AND
SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE
ACCOMPANYING POSTPAID ENVELOPE.
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<PAGE>
APPENDIX A
DELCHAMPS, INC.
DIRECTOR COMPENSATION PLAN
1. PURPOSE. The purpose of the Director Compensation Plan (the "Plan") of
Delchamps, Inc. ("Delchamps"), an Alabama corporation, is to (a) provide an
incentive to directors of Delchamps who are not also employees of Delchamps
(the "Directors") to concentrate their efforts in a manner that will provide
for the long-term growth and profitability of Delchamps; (b) encourage stock
ownership by Directors in order to promote an identity of interests with
Delchamps' shareholders; (c) provide a means of attracting and retaining
qualified Directors; and (d) provide the Directors with an opportunity to defer
their director compensation in order to assist in their individual financial
planning.
2. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on such
date as it is approved by the shareholders of Delchamps and shall remain in
effect until terminated by the Board of Directors of Delchamps (the "Board").
Elections under Sections 6 and 8 hereof may be made prior to the effective date
of the Plan.
3. STOCK SUBJECT TO THE PLAN. There are authorized for issuance and delivery
under the Plan an aggregate of 100,000 shares of common stock, $.01 par value
per share (the "Common Stock"), subject to adjustment as provided in Section 9
hereof. Such shares may be, in whole or in part, authorized but unissued
shares, whether now or hereafter authorized, or issued shares that have been
reacquired by Delchamps.
4. PLAN ADMINISTRATION. The Plan shall be administered by the Compensation
Committee (the "Committee") of the Board of Directors. The Committee shall have
full and final authority to interpret the Plan, adopt, amend and rescind rules
and regulations relating to the Plan, and make all other determinations and
take all other actions necessary and advisable for the administration of the
Plan. Decisions and determinations of the Committee on all matters relating to
the Plan shall be in its sole discretion and shall be conclusive. The Plan
shall be interpreted in view of the intention that the acquisition of shares of
Common Stock through the Plan is intended to qualify as an exempt transaction
under Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange
Act").
5. ELIGIBILITY. Any member of the Board of Directors who is not an employee
of Delchamps or a subsidiary of Delchamps may participate in the plan.
6. DEFERRAL OF COMPENSATION.
6.1 DEFERRAL ELECTIONS. Each Director may elect to defer his or her
Retainer Compensation, Nonretainer Compensation that is not used to
purchase Common Stock pursuant to Section 8 hereof or both, each in twenty-
five percent increments, to his or her Deferred Compensation Account. An
election to defer Compensation hereunder shall be made by means of a
Deferral Election Form and shall be effective only with respect to
Compensation earned on or after the date of the first annual meeting of
shareholders of Delchamps following the receipt of the Deferral Election
Form by the Committee. "Retainer Compensation" means the annual retainer
fee payable to a Director by Delchamps, but shall not include any meeting
fees or expense reimbursement paid to a Director. "Nonretainer
Compensation" means the meeting fees paid to a Director by Delchamps, but
does not include any Retainer Compensation or expense reimbursement paid to
a Director. "Compensation" means Nonretainer Compensation and Retainer
Compensation.
6.2 REVOCATION OF ELECTIONS. A Director may revoke or modify an election
made pursuant to Plan Section 6.1 with respect to deferrals of Compensation
to be earned in the future as of the date of the first annual meeting of
shareholders of Delchamps following receipt of the written revocation or
modification by the Committee and subject to such other rules as may be
established by the Committee.
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7. DEFERRED COMPENSATION ACCOUNTS.
7.1 ESTABLISHMENT OF ACCOUNTS. A Deferred Compensation Account shall be
established for each Director who executes a Deferral Election Form.
7.2 CREDITING OF DEFERRALS. A Director's Deferred Compensation Account
shall be credited with that portion of the Director's Compensation that the
Director has elected to defer to his or her Deferred Compensation Account
pursuant to Plan Section 6.1 as of the date such Compensation would
otherwise have been paid to the Director.
7.3 CREDITING INCOME. Each Deferred Compensation Account shall be
credited as of the last day of each fiscal quarter of Delchamps with an
assumed rate of income equal to the then prevailing rate payable with
respect to 90 day U.S. Treasury Bills, based on the weighted average
balance of such account during such fiscal quarter.
7.4 DISTRIBUTION OF ACCOUNTS. Amounts credited to a Director's Deferred
Compensation Account shall be distributed in either a single lump sum or
annual installments (not to exceed five) as designated by the Director in
his or her applicable Deferral Election Form. Distribution of a Deferred
Compensation Account shall be made (in the case of a lump sum payment) or
commence (in the case of installment payments) upon the January 15 or July
15 following the Director's seventieth birthday, or, if earlier, the
January 15 or July 15 following the date the Director ceases to be a member
of the Board of Directors, other than as a result of death. However, if the
Director elects in his or her Deferral Election Form, the distribution (in
the case of a lump sum payment) or the commencement of the distribution (in
the case of installment payments) of the Director's Deferred Compensation
Account shall occur on any subsequent January 15 or July 15. If a Director
elects to have his or her Deferred Compensation Account distributed in
installments, the amount of the first installment shall be a fraction of
the value of the Director's Deferred Compensation Account, the numerator of
which is one and denominator of which is the total number of installments
elected, and the amount of each subsequent installment shall be a fraction
of the value (including income credited pursuant to Section 7.3) on the
date preceding each subsequent payment, the numerator of which is one and
the denominator of which is the total number of installments elected minus
the number of installments previously paid.
7.5 DISTRIBUTION UPON DEATH. In the event of the death of a Director
prior to the distribution of his or her Deferred Compensation Account in
full, the value of such Deferred Compensation Account shall be determined
as of the day immediately following the Director's death and such amount
shall be distributed in a single lump sum payment to the Director's estate
as soon as administratively feasible thereafter.
7.6 STATEMENT OF ACCOUNT. At least once per year, each Director who has
executed a Deferral Election Form shall be provided with a statement of his
or her Deferred Compensation Account.
7.7 DIRECTOR'S RIGHTS UNSECURED. The right of any Director to receive
future distributions under the provisions of this Section 7 shall
constitute an unsecured claim against the general assets of the Company.
8. STOCK PURCHASES.
8.1 Each Director may make a stock purchase election directing that up to
one hundred percent of his or her Retainer Compensation, in ten percent
increments, be allocated to the purchase of Common Stock on his or her
behalf. At such time as the rules under Section 16 of the Exchange Act are
amended to permit a Director to elect to utilize both Retainer Compensation
and Nonretainer Compensation to purchase shares of Common Stock and still
qualify as a disinterested person for the purpose of administering other
employee benefit plans of Delchamps, then, if so elected by the Director,
all or a portion of Nonretainer Compensation may also be utilized to
purchase Common Stock on the terms described in this Section 8.
8.2 A stock purchase election will be effective on the first date that
Compensation subject to the election is paid that is at least six months
after the date the Stock Purchase Election Form is filed with
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<PAGE>
the Committee in the manner required by the Committee. Stock purchase
elections may be revoked or modified effective on the first date that
Compensation is paid that is at least six months following the date the
revocation or modified election is filed with the Committee in the manner
required by the Committee. Notwithstanding the preceding, a stock purchase
election, or a modification or revocation of a stock purchase election, may
be given effect on an earlier date, if the Committee, in its sole
discretion, permits, provided the Committee is satisfied such election,
modification or revocation would not trigger the recovery of short-swing
profits under Section 16 of the Exchange Act.
8.3 NUMBER OF SHARES ISSUED. If a Director has timely submitted a
satisfactory Stock Purchase Election Form, the Director shall be issued a
number of shares of Common Stock equal to the amount, if any, of the
Director's Compensation allocated to the purchase of Common Stock,
multiplied by 1.10 and divided by the Fair Market Value of a share of
Common Stock as of the issue date. A Director who timely submits a
satisfactory Stock Purchase Election Form shall be issued a number of
shares of Common Stock, multiplied by 1.25 rather than 1.10 and divided by
the Fair Market Value of a share of Common Stock as of the issue date, at
such time as the rules under Section 16 of the Exchange Act are amended to
allow a Director to receive such amount of Common Stock in lieu of cash
Compensation and continue to qualify as a disinterested person for the
purpose of administering other employee benefit plans of Delchamps. Any
Common Stock issued to a Director pursuant to this Section 8.3 may not be
transferred within two (2) years of the date of purchase, except in the
event of death, disability (as described in Section 22(e) of the Internal
Revenue Code of 1986, as amended), retirement on or after age 70 or unless
the Committee waives this restriction. "Fair Market Value" with regard to a
date means the closing price of the Common Stock on the last trading date
prior to that date as reported by the Nasdaq Stock Market (or, if
applicable, as reported by any other automated quotation system or national
securities exchange selected by the Committee that reports closing sale
prices for the Common Stock or on which the shares of Common Stock are then
actively traded).
9. CHANGES IN CAPITALIZATION. If the outstanding shares of Common Stock are
increased, decreased or exchanged for a different number or kind of shares or
other securities, or if additional shares or other property (other than
ordinary dividends) are distributed with respect to such shares of Common Stock
or other securities, through merger, consolidation, sale of all or
substantially all of the assets of Delchamps, reorganization, recapitalization,
reclassification, dividend, stock split, spin-off, split-off or other
distribution with respect to such shares of Common Stock, or other securities,
an appropriate and proportionate adjustment may be made in the maximum number
and kind of shares reserved for issuance under the Plan.
10. NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan nor any action taken
pursuant to the Plan, shall constitute evidence of any agreement or
understanding, express or implied, that Delchamps will retain a participant as
a Director for any period of time, or at any particular rate of compensation.
11. AMENDMENT, MODIFICATION, AND TERMINATION. The Board at any time may
terminate and in any respect amend or modify the Plan; provided, however, that
the Board of Directors shall condition any amendments on the approval of
shareholders if such approval is necessary or advisable with respect to
securities, tax or other applicable law. No amendment, modification or
termination of the Plan shall in any manner adversely affect the rights of any
participant with respect to shares of Common Stock to which he or she became
entitled prior to such amendment, modification or termination or with respect
to amounts that have been credited to a Deferred Compensation Account.
12. SHAREHOLDER APPROVAL. The Plan shall be submitted to the shareholders of
Delchamps for their approval at the 1994 Annual Meeting of Shareholders. If
such approval is not obtained, no shares of Common Stock may be purchased by
Directors through the Plan.
13. RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS. Each share of
Common Stock purchased through the Plan is subject to the condition that if at
any time the Committee, in its discretion, shall determine that the listing,
registration or qualification of such shares upon any securities exchange or
under any state or
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federal law is necessary or desirable as a condition of or in connection with
the purchase or delivery of shares thereunder, the delivery of any or all
shares may be withheld unless and until such listing, registration or
qualification shall have been effected. If a registration statement is not in
effect under the Securities Act of 1933 or any applicable state securities laws
with respect to the shares of Common Stock purchasable or otherwise deliverable
hereunder, the Director shall as a condition to any delivery of Common Stock
hereunder, represent, in writing, that the shares received are being acquired
for investment and not with a view to distribution and agree that the shares
will not be disposed of except pursuant to an effective registration statement,
unless Delchamps shall have received an opinion of counsel that such
disposition is exempt from such requirement under the Securities Act of 1993
and any applicable state securities laws. Delchamps shall include on
certificates representing shares delivered pursuant to the Plan such legends
referring to the foregoing representations or restrictions and any other
applicable restrictions on resale as the Committee, in its discretion, shall
deem appropriate.
14. NON-ALIENATION OF BENEFITS. Other than with regard to the death of a
Director, no benefit shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge and any
attempt to do so shall be void. No such benefit shall, prior to receipt by the
Director, be in any manner liable for or subject to the debts, contracts,
liabilities, engagements or torts of the Director.
15. CHOICE OF LAW. The laws of the State of Alabama shall govern the Plan, to
the extent not preempted by federal law.
DELCHAMPS, INC.
By:
----------------------------------
Title:
-------------------------------
ATTEST:
- - - -------------------------------------
Secretary
[CORPORATE SEAL]
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<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
DELCHAMPS, INC.
The undersigned hereby appoints Randy Delchamps and James H. McDonald, Jr.,
or any one of them, as proxies, each with the power to appoint his substitute,
and hereby authorizes each of them to represent and to vote, as designated
below, all the shares of common stock of Delchamps, Inc. (the "Company") held
of record by the undersigned on September 29, 1994, at the annual meeting of
shareholders to be held on November 10, 1994, or at any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
1.Election of Directors.
FOR [_] WITHHOLD AUTHORITY [_]
all nominees listed below (except to vote for all nominees listed below
as marked to the contrary below)
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
J. Thomas Arendall, Jr. E. E. Bishop David W. Morrow
2. Proposal to approve the Delchamps, Inc. Director Compensation Plan.
FOR [_] AGAINST [_] ABSTAIN [_]
3. Proposal to ratify the selection of KPMG Peat Marwick LLP as independent
auditors for the fiscal year ending July 1, 1995.
FOR [_] AGAINST [_] ABSTAIN [_]
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3. THE INDIVIDUALS DESIGNATED AS PROXIES ON THE
REVERSE SIDE HEREOF ARE AUTHORIZED TO VOTE IN THEIR DISCRETION ON ANY OTHER
MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
Date: _________, 1994
----------------------------------------------
Signature of Shareholder
----------------------------------------------
Signature if held jointly
Please sign exactly as name appears on the
certificate or certificates representing shares
to be voted by this proxy. When signing as
executor, administrator, attorney, trustee, or
guardian please give full title as such. If a
corporation, please sign full corporate name by
president or other authorized officer. If a
partnership, please sign in partnership name by
authorized persons.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
VOTING INSTRUCTIONS
The undersigned hereby instructs First Alabama Bank, as trustee of the
Delchamps, Inc. Employee Stock Ownership Trust, to vote in the manner
designated below all shares of Delchamps, Inc. Common Stock held by such Trust
for the account of the undersigned on September 29, 1994, at the annual meeting
of shareholders to be held on November 10, 1994, or at any adjournment thereof.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
1.Election of Directors.
FOR [_] WITHHOLD AUTHORITY [_]
all nominees listed below (except to vote for all nominees listed below
as marked to the contrary below)
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.
J. Thomas Arendall, Jr. E. E. Bishop David W. Morrow
2. Proposal to approve the Delchamps, Inc. Director Compensation Plan.
FOR [_] AGAINST [_] ABSTAIN [_]
3. Proposal to ratify the selection of KPMG Peat Marwick LLP as independent
auditors for the fiscal year ending July 1, 1995.
FOR [_] AGAINST [_] ABSTAIN [_]
UPON RECEIPT OF THESE INSTRUCTIONS PROPERLY EXECUTED, THE SHARES HELD FOR THE
ACCOUNT OF THE UNDERSIGNED WILL BE VOTED IN THE MANNER DIRECTED. IF THESE
INSTRUCTIONS ARE PROPERLY EXECUTED BUT NO DIRECTION IS GIVEN, SUCH SHARES WILL
BE VOTED FOR PROPOSALS 1, 2 AND 3. THE TRUSTEE IS AUTHORIZED TO VOTE ALL SHARES
HELD BY IT IN ITS DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE
THE MEETING.
Date: ________, 1994
----------------------------------------------
Signature of Participant
----------------------------------------------
Name: Please Print
PLEASE MARK, SIGN, DATE AND RETURN THESE INSTRUCTIONS PROMPTLY USING THE
ENCLOSED ENVELOPE.
