SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED APRIL 29, 1995
Commission file number 0-16900
RICHFOOD HOLDINGS, INC.
Incorporated under the laws I.R.S. Employer
of Virginia No. 54-1438602
P. O. Box 26967
Richmond, Virginia 23261
Telephone Number (804) 746-6000
Explanatory Note: This Amendment is filed, pursuant to General Instruction G(3)
to Form 10-K, to include information required by Part III of Form 10-K, as the
Registrant has determined that its definitive proxy statement will not be filed
with the Commission within 120 days after the end of the fiscal year covered by
the report. For purposes of this amendment, "Richfood" shall mean Richfood
Holdings, Inc.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
NOMINEES FOR ELECTION TO THE RICHFOOD BOARD
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR DIRECTOR
NAME EMPLOYMENT DURING LAST FIVE YEARS CONTINUOUSLY SINCE AGE
<S> <C> <C> <C>
Donald D. Bennett Chairman of the Board (since June 1995) and Chief Executive Officer of 1990 59
Richfood; former President of Richfood; Director, Best Products Co., Inc.
Roger L. Gregory Managing Partner, Wilder & Gregory Law Office, a law firm. 1994 42
Grace E. Harris Provost and Vice President for Academic Affairs, Virginia Commonwealth 1994 62
University.
John C. Jamison Chairman, Mallardee Associates, a corporate financial advisory service, and 1990 61
Limited Partner, Goldman, Sachs & Co., an investment banking and brokerage
firm; former President and Chief Executive Officer, The Mariner's Museum,
an international maritime museum (1990-1992), and Dean, School of Business
Administration, College of William and Mary (1985-1990); Director, Hershey
Foods Corporation and Best Products Co., Inc.
Michael E. Julian, Jr. Chairman, President and Chief Executive Officer, Farm Fresh, Inc., a retail 1988 45
grocery chain.
G. Gilmer Minor, III Chairman of the Board (since 1994), President and Chief Executive Officer, 1988 54
Owens & Minor, Inc., a wholesale distributor of medical, pharmaceutical and
surgical supplies; Director, Crestar Financial Corporation.
Claude B. Owen, Jr. Chairman of the Board and Chief Executive Officer, DIMON Incorporated 1988 50
(successor to Dibrell Brothers, Incorporated), an importer and exporter of
leaf tobacco and fresh cut flowers; former Chairman of the Board, Chief
Executive Officer and, since 1993, President, Dibrell Brothers,
Incorporated; Director, American National Bankshares, Inc.
John F. Rotelle Chairman (since July 1995) and former President of Rotelle, Inc. 1994 59
Albert F. Sloan Former Director (until April 1995), Chairman of the Board (1990), and 1990 65
President and Chief Executive Officer (1976-1990), Lance, Inc., a
manufacturer of cookies, crackers and snack foods; Director, Basset
Furniture Industries, Inc., Cato Corporation and PCA International, Inc.
John E. Stokely President and Chief Operating Officer of Richfood (since June 1995); former 1995 42
Executive Vice President Finance and Administration (August 1993-June
1995), Senior Vice President Finance and Chief Financial Officer (April
1991-August 1993), Vice President - Finance and Chief Financial Officer
(August 1990-April 1991), and also Secretary (August 1990-January 1991) of
Richfood.
George H. Thomazin President, Thomazin Enterprises, a business investment firm; former Chief 1990 55
Executive Officer, Continental Brokers Co., a food brokerage firm
(1989-1992).
James E. Ukrop Vice-Chairman and Chief Executive Officer, Ukrop's Super Markets, Inc., a 1987 58
retail grocery chain; former President and Chief Executive Officer, Ukrop's
Super Markets, Inc.; Director, Legg Mason, Inc. and Owens & Minor, Inc.
Edward Villaneuva Financial Consultant; former Acting President and Chief Financial Officer 1990 60
of Richfood (1989-1990); Director, Circuit City Stores, Inc.
</TABLE>
RICHFOOD BOARD AND COMMITTEES
The Richfood Board meets regularly every quarter and following each annual
meeting of Richfood shareholders. During fiscal 1995, there were five meetings
of the Richfood Board.
The Richfood Board has standing Executive, Audit, Executive Compensation
and Nominating Committees. Members of the Executive Committee are Messrs.
Bennett (Chairman), Owen, Sloan and Thomazin. Mr. Bennett succeeded Mr. Owen as
Chairman of the Executive Committee in June 1995. During fiscal 1995, there were
no meetings of the Executive Committee. The Executive Committee reviews various
matters and submits proposals or recommendations to the Richfood Board. The
Executive Committee is empowered to and does act for the Richfood Board on
certain matters.
Members of the Audit Committee are Messrs. Jamison (Chairman), Gregory,
Minor and Villanueva. During fiscal 1995, there were three meetings of the Audit
Committee. The Audit Committee recommends an independent public accounting firm
to be selected by the Richfood Board for the upcoming fiscal year. The Audit
Committee reviews and approves various audit functions including the annual
audit performed by Richfood's independent auditors. Periodically, Richfood's
internal auditors and independent auditors report directly to the Audit
Committee.
Members of the Executive Compensation Committee are Messrs. Sloan
(Chairman), Julian, Thomazin and Ukrop and Dr. Harris. During fiscal 1995, there
were four meetings of the Executive Compensation Committee. The Executive
Compensation Committee recommends to the Richfood Board the compensation of
Richfood's Chief Executive Officer, approves the compensation of Richfood's
other executive officers and administers Richfood's annual and long-term
incentive plans.
Members of the Nominating Committee are Messrs. Minor (Chairman), Bennett
and Ukrop. During fiscal 1995, there was one meeting of the Nominating
Committee. The Nominating Committee recommends to the full Richfood Board
persons to serve as directors of Richfood and establishes such procedures as it
deems proper to receive and review information concerning potential candidates
for election or reelection to the Richfood Board. Shareholders entitled to vote
for the election of directors may nominate candidates for consideration by the
Nominating Committee. Notice of nominations made by shareholders with respect to
the 1996 annual meeting must be received in writing by the Secretary of Richfood
no earlier than June 18, 1996, and no later than July 13, 1996. For procedures
with respect to shareholder nominations of directors, see "Comparison of
Shareholder Rights -- Notice of Shareholder Nominations of Directors and
Shareholder Proposals." In connection with the extension of Mr. Bennett's
employment with Richfood, effective May 21, 1993, Richfood entered into an
employment and severance benefits agreement with Mr. Bennett which provides,
among other things, that the Richfood Board will nominate Mr. Bennett for
election to the Richfood Board at each annual meeting of shareholders during the
term of the agreement, and will use its best efforts to cause Mr. Bennett to be
duly elected to the Richfood Board at each such meeting. In connection with Mr.
Stokely's employment as President and Chief Operating Officer of Richfood,
effective June 8, 1995, Richfood entered into an employment and severance
benefits agreement with Mr. Stokely which provides, among other things, that the
Richfood Board will nominate Mr. Stokely for election to the Richfood Board at
each annual meeting of shareholders during the term of the agreement, and will
use its best efforts to cause Mr. Stokely to be duly elected to the Richfood
Board at each such meeting.
Persons who are employees of Richfood or of any subsidiary of Richfood
receive no compensation for their services as directors of Richfood. During
fiscal 1995, other directors received an annual retainer of $12,000 for their
services and fees of $1,000 for each meeting of the Richfood Board and $750 for
each meeting of a Richfood Board committee attended. Chairmen of each Richfood
Board committee who are not employees of Richfood or of any subsidiary of
Richfood also receive an additional annual retainer of $2,500. In addition,
pursuant to Richfood's Non-Employee Directors' Stock Option Plan, which was
approved by the shareholders of Richfood at the 1994 annual meeting, each year
each director who is not an employee of Richfood or of any subsidiary of
Richfood is granted an option to purchase 1,000 shares of Richfood Common Stock
for a per share exercise price equal to the fair market value of one share of
Richfood Common Stock on the date of grant.
SECTION 16(a) COMPLIANCE
Section 16(a) of the Exchange Act requires Richfood's executive officers
and directors, and persons who own more than 10% of Richfood Common Stock, to
file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Commission and the NASD. Executive officers, directors and owners of more than
10% of Richfood Common Stock are required by regulation to furnish Richfood with
copies of all Forms 3, 4 and 5 they file.
Based solely on Richfood's review of the copies of such forms it has
received and written representations from certain reporting persons who were not
required to file a Form 5 for fiscal 1995, Richfood believes that all of its
executives officers, directors and owners of more than 10% of Richfood Common
Stock complied with all Section 16(a) filing requirements applicable to them
with respect to transactions during fiscal 1995, except that Mr. Rotelle filed a
late report with respect to two purchase transactions during such fiscal year.
Mr. Rotelle reported such purchase transactions on his Form 5 for fiscal 1995,
which was filed on a timely basis.
See also "Executive Officers" at the end of Part I of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
RICHFOOD EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Committee of the Richfood Board (the
"Committee") is delegated the power to administer the compensation programs of
Richfood applicable to its executive officers. The Committee, which is comprised
of five outside directors, recommends to the Richfood Board the compensation of
Richfood's Chief Executive Officer, approves the compensation of Richfood's
other executive officers and administers Richfood's annual and long-term
incentive plans.
The purposes of Richfood's compensation plans and the objectives of the
Committee are to:
(Bullet) provide a competitive compensation program to enable Richfood
to attract and retain qualified top management personnel;
(Bullet) emphasize the relationship between pay and performance by
placing variable compensation at risk subject to the
achievement of specific and measurable goals and objectives;
(Bullet) balance Richfood's short-term and long-term objectives
appropriately; and
(Bullet) align the financial interests of the executive officers with
those of Richfood's shareholders by encouraging and promoting
executive ownership of Richfood Common Stock.
The Committee believes that compensation programs should enable management
to understand clearly what potential rewards are and what performance must be
achieved to earn such awards. An independent consultant is used to recommend
compensation structures for Richfood. To further the objectives stated above,
the compensation programs for all executive officers include three components:
(i) base salary; (ii) annual cash incentive compensation; and (iii) long-term
incentives in the form of stock options, restricted stock, stock appreciation
rights ("SARs") and/or performance shares. The Committee's policy on the tax
deductibility of compensation for the Chief Executive Officer and other
executive officers is to maximize the deductibility thereof, to the extent
possible, while preserving the Committee's flexibility to maintain competitive
compensation programs. All executive compensation paid or awarded during fiscal
1995 is considered to be fully deductible by Richfood under the Revenue
Reconciliation Act of 1993.
BASE SALARY
Richfood seeks to maintain executive compensation at levels competitive
with other corporations in Richfood's market and industry in accordance with
information, including survey data, available to Richfood. Corporations
considered included the companies included in Richfood's Peer Group, as defined
below, as well as other companies in the grocery industry. Periodic increases in
base salary are based on evaluations of each executive's past and current
performance, competitive market conditions and Richfood's performance. As
discussed below, the base salary of the Chief Executive Officer, Mr. Bennett,
for fiscal 1995 was established pursuant to an employment agreement executed in
May 1993 in connection with the extension of Mr. Bennett's employment with
Richfood. The base salary of Richfood's other executive officers is determined
by Richfood's Chief Executive Officer, subject to the approval of the Committee.
ANNUAL CASH INCENTIVE COMPENSATION
It is the Committee's policy that a significant portion of total
compensation be "at risk" based on performance criteria. The Committee believes
that this approach relates compensation levels to performance and is in the best
interests of the shareholders. Richfood's Executive Officer Performance Plan is
designed to reward certain officers and other key employees for Richfood's
operating performance as measured by established earnings criteria and for
individual and departmental performance. Under this Plan, an incentive
compensation pool is funded based on predetermined threshold, target and maximum
levels of Richfood's adjusted pre-tax FIFO earnings. A participant shares in the
incentive compensation pool, up to a predetermined maximum percentage of annual
base salary. Awards, established as a percentage of base salary, vary by
management level. Adjustments to awards and flexibility for special awards are
available to reflect individual performance. Each year the Committee approves
the threshold, target and maximum levels of Richfood's earnings and
corresponding percentages of annual base salary in conjunction with its review
of Richfood's annual fiscal plan. All executive officers other than Mr. Bennett
participated in this Plan for fiscal 1995. As discussed below, the formula for
determining Mr. Bennett's incentive compensation for fiscal 1995 was established
under the terms of his May 1993 employment agreement.
LONG-TERM INCENTIVES
Richfood's Omnibus Stock Incentive Plan, which was approved by the
shareholders in fiscal 1992, permits the Committee, in its discretion, to grant
options to purchase shares of Richfood Common Stock, SARs, shares of restricted
stock and performance shares to any employee of Richfood or its subsidiaries who
the Committee believes has contributed significantly or can be expected to
contribute significantly to the profits or growth of Richfood. The Committee
determines the amount of the grant, the term of the options, SARs, restricted
stock or performance shares and the requisite conditions for exercise and
vesting. The Committee does not take into account stock ownership of plan
participants in determining the amount or terms of grants under the Omnibus
Stock Incentive Plan. The granting or award of stock-based compensation is
intended to encourage executives to take a longer view of the impact of their
individual contributions to Richfood. As with base pay and annual incentive
compensation, the Committee reviews survey data to establish competitive
long-term compensation structures.
During fiscal 1995, 54 employees, including each of the executive officers
named in the Summary Compensation Table, received grants of options under the
Omnibus Stock Incentive Plan. Options granted during fiscal 1995 were granted at
the fair market value of Richfood Common Stock on the date of grant;
accordingly, the market value of Richfood Common Stock must increase before the
employee receives any benefit from the grant. All but one of the options granted
during fiscal 1995 become exercisable in installments over a four-year period.
No shares of restricted stock, performance shares or SARs were granted during
fiscal 1995. During fiscal 1995, one executive officer received an award of
Richfood Common Stock under the Omnibus Stock Incentive Plan. In addition,
during fiscal 1995, all awards of performance shares made during fiscal year
1994 were canceled.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Effective May 21, 1993, Richfood and Mr. Bennett entered into a four-year
employment agreement that provided for an annual salary of $350,000. In June
1995, Mr. Bennett's employment agreement was amended to increase his annual
salary for fiscal years 1996 and 1997 to $425,000. Mr. Bennett's agreement also
provides for annual incentive compensation equal to a predetermined percentage
(up to a maximum of 150%) of Mr. Bennett's annual salary based on the same
threshold, target and maximum levels of adjusted pre-tax FIFO earnings of
Richfood established for Richfood's other executive officers under Richfood's
Executive Officer Performance Plan. During fiscal 1995, Richfood achieved the
maximum level of adjusted pre-tax FIFO earnings established by the Committee,
resulting in Mr. Bennett earning the maximum amount of annual incentive
compensation permitted under his employment agreement. In addition, Mr. Bennett
was awarded a special bonus for fiscal 1995 of $105,000, as a result of his role
in directing Richfood to its fifth consecutive year of record net earnings. Mr.
Bennett also is entitled to participate in Richfood's long-term incentive plans
generally applicable to its executive officers. In determining Mr. Bennett's
compensation, the Committee considered his exemplary performance and
contribution to the growth and success of Richfood and his outstanding
leadership in bringing about the achievement of nonfinancial goals as well as
financial results clearly exceeding those of industry competitors. In addition,
the Committee reviewed compensation of other chief executive officers in the
wholesale and retail grocery industry, including those employed by companies in
the Peer Group used in the performance graph set forth below. The Committee
considered Richfood's financial performance during Mr. Bennett's tenure to be
superior relative to the companies in the industry. During Mr. Bennett's tenure
as Chief Executive Officer, the total market capitalization of Richfood
(determined by multiplying share price by number of shares outstanding) has
risen from approximately $55 million to approximately $428 million at the end of
fiscal 1995.
In conclusion, the Committee believes that the compensation policies and
practices of Richfood herein described are fair and equitable and are in keeping
with the best interests of Richfood and its shareholders.
EXECUTIVE COMPENSATION COMMITTEE
<TABLE>
<S> <C>
Albert F. Sloan, Chairman George H. Thomazin
Grace E. Harris James E. Ukrop
Michael E. Julian, Jr.
</TABLE>
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended April 29, 1995, April
30, 1994, and May 1, 1993, the cash compensation paid by Richfood, as well as
certain other compensation paid or accrued, to Richfood's Chief Executive
Officer and its four other most highly compensated executive officers (the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES
NAME AND OTHER RESTRICTED UNDERLYING
PRINCIPAL POSITION FISCAL ANNUAL STOCK OPTIONS/ ALL OTHER
AT JUNE 8, 1995 YEAR SALARY BONUS COMPENSATION(1) AWARDS(2) SARS(3) COMPENSATION(4)
<S> <C> <C> <C> <C> <C> <C> <C>
Donald D. Bennett 1995 $350,000 $630,000 30,000 $ 2,529
Chairman and Chief 1994 348,077 525,000 20,000 5,785
Executive Officer 1993 250,000 400,000 2,067
John E. Stokely 1995 174,433 160,000 $31,000 12,000 5,820
President and Chief 1994 169,846 150,000 10,000 3,852
Operating Officer 1993 162,000 120,300 $68,500 32,000 506
Edgar E. Poore 1995 161,000 110,000 12,000 4,025
Executive Vice 1994 160,942 104,650 10,000 5,525
President 1993 158,620 102,570 68,500 32,000 1,823
John F. Rotelle 1995 160,305 100,000 4,000 481
Chairman -- Rotelle,
Inc.(5)
Christopher A. Brown 1995 149,592 107,250 2,000 10,000 3,283
President and Chief 1994 114,962 78,000 6,000 10,000 1,707
Operating Officer -- 1993 95,077 42,200 6,000 34,250 16,000 1,155
Rotelle, Inc.
</TABLE>
(1) With respect to Mr. Stokely, reflects the dollar value of an award of
Richfood Common Stock under Richfood's Omnibus Stock Incentive Plan, based
on the fair market value of Richfood Common Stock on the date of grant. With
respect to Mr. Brown, reflects automobile allowance paid. None of the Named
Executive Officers received other perquisites or other personal benefits,
securities or property with an aggregate value in excess of the lesser of
$50,000 or 10% of the total of his salary and bonus shown above.
(2) Reflects the dollar value of awards of restricted stock under Richfood's
Omnibus Stock Incentive Plan, based on the fair market value of Richfood
Common Stock on the date of grant. The aggregate number of shares and value
of restricted stock held by the Named Executive Officers as of April 29,
1995, were as follows: Mr. Bennett - 20,000, $400,000; Mr. Stokely - 8,000,
$160,000; Mr. Poore - 8,000, $160,000; Mr. Rotelle - 0, $0; and Mr. Brown -
4,000, $80,000. None of such shares vest, in whole or in part, in less than
three years from the date of grant. Dividends are paid on restricted stock
at the same rate and times as on all other shares of Common Stock.
(3) Reflects nonqualified stock options granted under Richfood's Omnibus Stock
Incentive Plan.
(4) "All Other Compensation" for fiscal 1995 consists of: (i) Richfood's 25%
matching contributions under Richfood's Savings and Stock Ownership Plan to
the Named Executive Officers as follows: Mr. Bennett - $2,529; Mr. Stokely -
$435; Mr. Poore - $1,548; Mr. Rotelle - $481; and Mr. Brown - $1,379; and
(ii) the amounts awarded to the following Named Executive Officers under
Richfood's Vacation to Stock Conversion Plan (which amounts, net of
applicable withholdings, were distributed in the form of shares of Richfood
Common Stock based on the fair market value of the Common Stock as of the
plan's determination date): Mr. Stokely - $5,385; Mr. Poore - $2,477; and
Mr. Brown - $1,904.
(5) Mr. Rotelle became an executive officer of Richfood on August 23, 1994, as a
result of Richfood's acquisition of Rotelle, Inc.
STOCK OPTIONS AND SARS
The following table contains information concerning the grants of options
made during fiscal 1995 under Richfood's Omnibus Stock Incentive Plan to the
Named Executive Officers. No SARs were granted during fiscal 1995.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
% OF TOTAL 5%(4) 10%(4)
NUMBER OF OPTIONS/ (ASSUMES (ASSUMES
SECURITIES SARS A RICHFOOD A RICHFOOD
UNDERLYING GRANTED TO COMMON COMMON
OPTIONS/ EMPLOYEES EXERCISE STOCK STOCK
SARS IN FISCAL OR BASE EXPIRATION PRICE OF PRICE OF
NAME GRANTED(2) YEAR PRICE(3) DATE $25.25) $40.20)
<S> <C> <C> <C> <C> <C> <C>
Donald D. Bennett 30,000 15.64% $15.50 11/3/04 $292,500 $741,000
John E. Stokely 12,000 6.26 15.50 11/3/04 117,000 296,400
Edgar E. Poore 12,000 6.26 15.50 11/3/04 117,000 296,400
John F. Rotelle 4,000 2.09 15.50 11/3/04 39,000 98,800
Christopher A. Brown 10,000 5.21 15.50 11/3/04 97,500 247,000
</TABLE>
(1) The potential realizable value is based upon assumed future prices for
Richfood Common Stock that are derived from the specified assumed annual
rates of appreciation. Actual gains, if any, on stock option exercises and
Richfood Common Stock holdings are dependent on the actual future
performance of Richfood Common Stock. There can be no assurance that the
amounts reflected in this table will be achieved.
(2) All option grants consisted of nonqualified stock options granted under the
Omnibus Stock Incentive Plan. These grants become exercisable in one-fourth
installments on December 15 of 1995, 1996, 1997 and 1998.
(3) The exercise price was set at the fair market value of Richfood Common Stock
on the date of the grant. The exercise price may be paid in cash or in
Richfood Common Stock valued at fair market value on the date preceding the
date of exercise, or a combination of cash and Richfood Common Stock.
(4) The 5% and 10% assumed annual rates of stock price appreciation used to
calculate potential option gains shown above are required by the rules of
the Commission. The actual gains that will be realized, if and when the
Named Executive Officers exercise the options granted in fiscal 1995, will
be dependent on the future performance of Richfood Common Stock. The
following is provided to illustrate the relationship between the
hypothetical gain that would be realized by the Named Executive Officers
upon the exercise of such options and the hypothetical gain that would be
realized by all shareholders as a result of the assumed stock price
appreciation:
<TABLE>
<CAPTION>
ANNUAL RATE OF STOCK PRICE
APPRECIATION
5% 10%
<S> <C> <C>
Resulting stock price based on $15.50 starting price.......................................... $ 25.25 $ 40.20
Per share gain................................................................................ 9.75 24.70
Aggregate gain that would be realized by all shareholders (based on 21,409,287 shares
outstanding on the date of grant)........................................................... 208,740,548 528,809,389
Aggregate hypothetical gain on all fiscal 1995 options granted to the Named Executive Officers
if $25.25 and $40.20 prices, respectively, are achieved..................................... 663,000 1,679,600
Hypothetical aggregate gains for the Named Executive Officers as a percentage of all
shareholders' gains......................................................................... 0.32% 0.32%
</TABLE>
OPTION/SAR EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options and SARs during fiscal
1995, and unexercised options and SARs held by them on April 29, 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT FISCAL
FISCAL YEAR-END(2) YEAR-END(3)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(1) REALIZED UNEXERCISABLE(4) UNEXERCISABLE(4)
<S> <C> <C> <C> <C>
Donald D. Bennett 15,000 $104,063 5,000/45,000 $22,500/$202,500
John E. Stokely 84,750 837,766 2,500/41,750 11,250/354,734
Edgar E. Poore 0 0 87,250/41,750 1,254,953/354,734
John F. Rotelle 0 0 0/4,000 0/18,000
Christopher A. Brown 0 0 23,500/27,500 296,600/197,125
</TABLE>
(1) Represents only nonqualified stock options granted under Richfood's
Long-Term Incentive Plan and/or Omnibus Stock Incentive Plan.
(2) Represents only nonqualified stock options granted under Richfood's
Long-Term Incentive Plan and/or Omnibus Stock Incentive Plan. Each
nonqualified stock option granted under Richfood's Long-Term Incentive Plan
includes a tandem SAR.
(3) The value of unexercised in-the-money options represents the positive spread
between the April 29, 1995, closing price of Richfood Common Stock ($20.00)
and the exercise price of any unexercised options.
(4) The options represented could not be exercised by the named executive as of
April 29, 1995, and future exercisability is subject to the executive
remaining employed by Richfood or its subsidiaries for up to four years from
the date of grant, subject to acceleration for retirement, death or total
disability of the executive or a "change in control" of Richfood (as defined
in the applicable option agreements).
RICHFOOD PENSION PLAN TABLE
The table below illustrates the approximate aggregate retirement benefits
payable under Richfood's funded defined benefit pension plan for its salaried
employees and supplemental retirement plan for certain officers and other key
employees retiring at age 65. The amounts reflected in the table are stated in
payments in the form of a life annuity. Other actuarially equivalent forms of
benefit may be selected. The amounts reflected in the table are subject to
offset for Social Security and other benefits.
<TABLE>
<CAPTION>
ANNUAL YEARS OF CREDITED SERVICE(2)
COMPENSATION(1) 10 15 20 25
<S> <C> <C> <C> <C>
$100,000..................................................................... $ 60,000 $ 65,000 $ 70,000 $ 70,000
150,000..................................................................... 90,000 97,500 105,000 105,000
200,000..................................................................... 120,000 130,000 140,000 140,000
250,000..................................................................... 150,000 162,500 175,000 175,000
300,000..................................................................... 180,000 195,000 210,000 210,000
350,000..................................................................... 210,000 227,500 245,000 245,000
400,000..................................................................... 240,000 260,000 280,000 280,000
450,000..................................................................... 270,000 292,500 315,000 315,000
</TABLE>
(1) Annual compensation is the average of a participant's highest five
consecutive years' compensation (base salary plus overtime and commissions)
during the last ten years and approximates, in the case of the Named
Executive Officers, the amounts reported as salary in the Summary
Compensation Table.
(2) The years of credited service for the Named Executive Officers as of April
29, 1995, were as follows: Mr. Bennett - 5; Mr. Stokely - 5; Mr. Poore - 9;
Mr. Rotelle - 1; and Mr. Brown - 5.
EMPLOYMENT AND SEVERANCE BENEFITS AGREEMENT
In connection with the extension of Mr. Bennett's employment as Chief
Executive Officer of Richfood, effective May 21, 1993, Richfood entered into an
employment and severance benefits agreement with Mr. Bennett. The agreement, as
amended by the Richfood Board effective in June 1995, provides for Mr. Bennett's
employment in his current capacity through May 1997 at a salary of $350,000 per
year for fiscal 1994 and 1995 and $425,000 per year for fiscal 1996 and 1997 and
provides for annual incentive compensation equal to a predetermined percentage
(up to a maximum of 150%) of Mr. Bennett's annual base salary based on
Richfood's adjusted pre-tax FIFO earnings. The agreement also provides that (i)
during the term of the agreement Richfood will pay Mr. Bennett's portion of the
premiums for coverage under Richfood's life, accident, medical and dental
benefits plans, and (ii) unless Mr. Bennett's employment is terminated during
the term of the agreement by Richfood for cause, or by Mr. Bennett other than
following a "change in control" of Richfood, Richfood will provide to Mr.
Bennett following his retirement (at Richfood's expense) medical and dental
benefits of the type generally provided from time to time to Richfood's
executive employees. In addition, the agreement provides for the payment of a
lump-sum severance benefit equal to one year's salary in the event Mr. Bennett
is terminated during the term of the agreement (i) by Richfood other than for
cause or upon his death or disability, (ii) by Richfood for any reason other
than death or disability within one year following a "change in control" of
Richfood or (iii) by Mr. Bennett within one year following a "change in control"
of Richfood if his job title or responsibilities are materially reduced. For
purposes of the agreement, a "change in control" of Richfood means, in general,
the occurrence of any of the following events: (i) any person or group becomes
the beneficial owner of securities representing more than 50% of the aggregate
voting power of all classes of Richfood's then-outstanding voting securities; or
(ii) the shareholders of Richfood approve (a) a plan of merger, consolidation or
share exchange between Richfood and any entity other than a subsidiary, or (b) a
proposal with respect to the sale, lease, exchange or other disposal of all, or
substantially all, of Richfood's property.
In connection with his employment as President and Chief Operating Officer
of Richfood, effective June 8, 1995, Richfood entered into an employment and
severance benefits agreement with Mr. Stokely. The agreement provides for Mr.
Stokely's employment in his current capacity through June 1998 at a salary of
$250,000 per year and provides for annual incentive compensation equal to a
pre-determined percentage (up to a maximum of 100%) of Mr. Stokely's annual base
salary based on Richfood's adjusted pre-tax FIFO earnings. The agreement also
provides that during the term of the agreement Richfood will pay Mr. Stokely's
portion of the premiums for coverage under Richfood's life, accident, medical
and dental benefits plans. In addition, the agreement provides for the payment
of a lump-sum severance benefit equal to one year's salary in the event Mr.
Stokely is terminated during the term of the agreement (i) by Richfood other
than for cause or upon his death or disability, (ii) by Richfood for any reason
other than death or disability within one year following a "change in control"
of Richfood or (iii) by Mr. Stokely within one year following a "change in
control" of Richfood if his job title or responsibilities are materially
reduced. For purposes of Mr. Stokely's agreement, a "change in control" of
Richfood has the same meaning as defined in Mr. Bennett's agreement.
In connection with Richfood's acquisition of Rotelle, Inc. in August 1994,
Richfood entered into an employment and severance benefits agreement with Mr.
Rotelle. The agreement provides for Mr. Rotelle's employment by Rotelle, Inc.
through August 1998 at a salary of $250,000 per year and provides for annual
incentive compensation equal to a pre-determined percentage (up to a maximum of
40%) of Mr. Rotelle's annual base salary based on Richfood's adjusted pre-tax
FIFO earnings. In addition, the agreement provides for the payment of a lump-sum
severance benefit equal to one year's salary in the event Mr. Rotelle is
terminated during the term of the agreement (i) by Richfood other than for cause
or upon his death or disability, (ii) by Richfood for any reason other than
death or disability within one year following a "change in control" of Richfood
or (iii) by Mr. Rotelle within one year following a "change in control" of
Richfood if his job title or responsibilities are materially reduced. For
purposes of Mr. Rotelle's agreement, a "change in control" of Richfood has the
same meaning as defined in Mr. Bennett's agreement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows, as of July 7, 1995 (except as provided below),
the direct and indirect beneficial ownership of shares of Richfood Common Stock
by (i) all directors of Richfood, (ii) each executive officer named in the
Summary Compensation Table, (iii) all directors and executive officers of
Richfood as a group and (iv) each person known by Richfood to beneficially own
more than 5% of the outstanding shares of Richfood Common Stock.
<TABLE>
<CAPTION>
SOLE
VOTING
AND
INVESTMENT PERCENTAGE
NAME POWER (1) OTHER(2) TOTAL OWNERSHIP(3)
<S> <C> <C> <C> <C>
Donald D. Bennett 125,049 660 125,709
Roger L. Gregory 250 0 250
Grace E. Harris 450 0 450
John C. Jamison 10,250 0 10,250
Michael E. Julian, Jr. 4,250 0 4,250
G. Gilmer Minor, III 5,250 0 5,250
Claude B. Owen, Jr. 20,450 0 20,450
John F. Rotelle 82,200 58 82,258
Albert F. Sloan 4,250 3,000 7,250
John E. Stokely 62,703 211 62,914
George H. Thomazin 5,700 0 5,700
James E. Ukrop 20,250 1,142,684 1,162,934 5.43%
Edward Villanueva 104,250 0 104,250
Edgar E. Poore 185,230 495 185,725
Christopher A. Brown 27,773 1,532 29,305
All Directors and Executive Officers
as a Group (24 persons) 742,781 1,150,993 1,893,774 8.76
FMR Corp.(4)
82 Devonshire Street
Boston, Massachusetts 02109 0 2,234,600 2,234,600 10.43
Robert Fleming Inc.(5)
1285 Avenue of the Americas
New York, New York 10019 1,485,260 0 1,485,260 6.93
GeoCapital Corporation(5)
767 Fifth Avenue
New York, New York 10153 1,234,300 0 1,234,300 5.76
Ukrop's Super Markets, Inc.
600 Southlake Boulevard
Richmond, Virginia 23236 1,142,684 0 1,142,684 5.33
</TABLE>
(1) With respect to each of Messrs. Gregory, Jamison, Julian, Minor, Owen,
Sloan, Thomazin, Ukrop and Villanueva and Dr. Harris, includes 250 shares of
Richfood Common Stock that may be acquired within sixty days of July 7,
1995, under Richfood's Non-Employee Directors' Stock Option Plan. Also
includes the following number of shares of Richfood Common Stock that may be
acquired within sixty days of July 7, 1995, under Richfood's Long-Term
Incentive Plan and/or Omnibus Stock Incentive Plan by the following
executive officers and group: Mr. Stokely - 2,500; Mr. Poore - 87,250; Mr.
Brown - 23,500; and all directors and executive officers as a group -
179,350.
(2) With respect to Mr. Sloan, reflects shares held by his wife. Mr. Sloan
disclaims beneficial ownership of such shares. With respect to Mr. Ukrop,
reflects shares held by Ukrop's Super Markets, Inc. Mr. Ukrop disclaims
beneficial ownership of such shares. With respect to Messrs. Bennett,
Stokely, Poore, Rotelle and Brown, and all directors and executive officers
as a group, reflects shares held under Richfood's Savings and Stock
Ownership Plan as of March 31, 1995. With respect to FMR Corp. ("FMR"), see
footnote 4 below.
(3) Except as indicated, each person or group beneficially owns less than 1% of
the outstanding shares of Richfood Common Stock.
(4) As reported in a Form 13G dated August 7, 1995, as of July 31, 1995,
Fidelity Management & Research Company ("Fidelity"), a subsidiary of FMR,
beneficially owned 2,234,600 shares, or 10.43% of the
outstanding Richfood Common Stock as a result of acting as an investment
adviser to several investment companies. The ownership of one investment
company, Fidelity Contrafund Inc., amounted to 1,746,800 shares, or 8.15% of
the outstanding Richfood Common Stock. Edward C. Johnson and FMR, through
its control of Fidelity, each has sole power to dispose of the shares owned
by the investment companies. Fidelity Contrafund Inc. has sole power to
dispose of the shares owned by it. The Boards of Trustees of the individual
investment companies have sole power to vote the shares owned by such
investment companies.
(5) Based solely on information provided to Richfood by such shareholder as of
the following dates: July 3, 1995, with respect to Robert Fleming Inc.; and
July 1, 1995, with respect to GeoCapital Corporation.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS OF RICHFOOD
During fiscal 1995, Richfood sold products and services to, and engaged in
certain other transactions with, entities affiliated with Messrs. Julian and
Ukrop. See "Richfood Compensation Committee Interlocks and Insider
Participation."
During fiscal 1994, Richfood entered into a lease for a 29,460 square foot
grocery store in Warsaw, Virginia, and an equipment lease for the related
personal property, and subleased the store and related equipment to Northern
Neck Grocers, Inc. ("Northern"), a corporation whose President and sole
stockholder is David D. Bennett, the son of Donald D. Bennett, Richfood's
Chairman and Chief Executive Officer. The store sublease extended through
November 29, 2003, at an annual base rental of $131,375. The equipment sublease
extended through November 29, 2000, at an annual rental of $29,385. The
aggregate rental paid by Northern to Richfood during fiscal 1995 under the store
sublease was $131,375 and under the equipment sublease was $29,385. In addition,
during fiscal 1995, Northern paid $3,842,674 to Richfood for products and
services purchased from Richfood. Also, during fiscal 1995, Richfood made
secured loans to Northern at a rate of interest equal to Crestar Bank's prime
lending rate plus two percent. The largest amount outstanding under such loans
during fiscal 1995, including accrued interest, was $575,329, and the unpaid
balance thereof on July 1, 1995 was $16,268. In May 1995,
Northern sold the assets of the store to an unaffiliated third party which
entered into subleases for the store and related equipment.
Richfood believes that all of the transactions described above were made on
terms comparable to those that would have been agreed to with unaffiliated third
parties in similar transactions.
During fiscal 1994, Richfood made a secured personal loan to Mr. Bennett in
the amount of $125,000 at a rate of interest equal to 4.51% per annum. The
largest aggregate amount of indebtedness outstanding under such loan during
fiscal 1995, including accrued interest, was $125,940. Such loan was repaid in
June 1994. In addition, during fiscal 1995, Richfood made a secured personal
loan to Mr. Bennett in the amount of $60,000 at a rate of interest equal to 6.0%
per annum. The largest aggregate amount of indebtedness outstanding under such
loan during fiscal 1995, including accrued interest, was $61,825, and the
aggregate unpaid balance thereof on July 1, 1995, was $62,426.
During fiscal 1994, Richfood made a $73,938 secured loan to Mr. John E.
Stokely, President and Chief Operating Officer of Richfood. Such loan carries a
rate of interest equal to 3.68% per annum. The largest aggregate amount of
indebtedness outstanding under such loan during fiscal 1995, including accrued
interest, was $74,288, and the unpaid balance thereof on July 1, 1995, was
$75,294. In addition, in June 1994, Richfood made to Mr. Stokely a $264,572
secured personal loan and a $192,555 secured personal loan. Such loans carry a
rate of interest equal to 5.56% per annum. The largest aggregate amount of
indebtedness outstanding under such loans during fiscal 1995, including accrued
interest, was $460,400, and the aggregate unpaid balance thereof on July 1, 1995
was $61,635.
During fiscal 1994, Richfood made a $348,750 secured personal loan to Mr.
Edgar E. Poore, Executive Vice President of Richfood. Such loan carries a rate
of interest equal to 5.07% per annum. Also during fiscal year 1994, Richfood
made a $220,000 secured personal loan to Mr. Poore at a rate of interest equal
to 4.51% per annum. The largest aggregate amount of indebtedness outstanding
under such loans during fiscal 1995, including accrued interest, was $580,630,
and the aggregate unpaid balance thereof on July 1, 1995, was $435,875.
RICHFOOD COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee of the Richfood Board is composed of
Messrs. Albert F. Sloan (Chairman), Michael E. Julian, Jr., George H. Thomazin
and James E. Ukrop and Dr. Grace E. Harris.
Mr. Julian is Chairman, President and Chief Executive Officer of Farm
Fresh, Inc. ("Farm Fresh"). During fiscal 1995, Farm Fresh and its affiliates
paid $402,197,030 to Richfood for products and services purchased from Richfood.
During fiscal 1993, Richfood assisted Marketplace Acquisition Corp. ("MAC"), an
affiliate of Farm Fresh, in its purchase of seven retail grocery stores operated
under the "Gene Walter's Marketplace" format and related assets from Marketplace
Foods, Inc. During fiscal year 1993, a Richfood subsidiary made a secured
purchase money bridge loan to MAC at a rate of interest equal to Crestar Bank's
prime lending rate plus two percent. The largest amount outstanding under such
loan since the beginning of fiscal 1995 was $1,115,348. The outstanding
principal balance of such loan on July 1, 1995, was $1,113,000. Mr. Julian
formerly was Executive Vice President and Chief Operating Officer of Richfood
(1987) and Richfood, Inc. (1986-1987). In addition, Richfood leases ten retail
grocery store sites and subleases such sites to Farm Fresh and its affiliates.
Such subleases require Farm Fresh and its affiliates to pay and perform all
obligations of Richfood under such leases. The aggregate base rental for such
stores during fiscal 1995, all of which was paid by Farm Fresh and its
affiliates, was $2,406,137. Also during fiscal 1995, Richfood agreed to
guarantee certain of Farm Fresh's obligations under two retail grocery store
leases. In the first year of the guarantees' effectiveness, Farm Fresh's
aggregate rental obligations under these two leases will be $807,050. Such
guarantees had not yet become effective during fiscal 1995.
Mr. Ukrop is Vice-Chairman and Chief Executive Officer of Ukrop's Super
Markets, Inc. ("Ukrop's"). During fiscal 1995, Ukrop's paid $198,339,850 to
Richfood for products and services purchased from Richfood. In addition, Ukrop's
subleases from Richfood approximately 32,000 square feet of warehouse space in
Richfood's Chester, Virginia, facility at an annual rental of $108,969. The
sublease permits Ukrop's to extend the term for three additional two-year
renewal options, subject to certain conditions. The aggregate rental paid by
Ukrop's to Richfood under the sublease during fiscal 1995 was $108,537.
Richfood believes that all of the transactions with affiliates described
above were made on terms comparable to those that would have been agreed to with
unaffiliated third parties in similar transactions.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
RICHFOOD HOLDINGS, INC.
(Registrant)
August 28, 1995 By /s/ Donald D. Bennett
Donald D. Bennett
Chairman of the Board and
Chief Executive Officer
