SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 [_] Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RICHFOOD HOLDINGS, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] 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:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
<PAGE>
[logo]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
July 20, 1998
To the Shareholders of
Richfood Holdings, Inc.:
We are pleased to invite you to attend the annual meeting of
shareholders of Richfood Holdings, Inc. (the "Company") to be held at the
Crestar Bank Auditorium, 4th Floor, 919 East Main Street, Richmond, Virginia, on
Thursday, August 20, 1998, at 10:00 A.M. for the following purposes:
(1) to elect 11 directors of the Company to serve until the next
annual meeting of shareholders;
(2) to ratify the appointment by the Board of Directors of Ernst &
Young LLP to serve as independent public accountants for the
current fiscal year; and
(3) to transact such other business as may properly come before
the meeting, or any adjournments thereof.
Only shareholders of record at the close of business on July 10, 1998,
are entitled to notice of, to vote at and to participate in the meeting.
You are requested to mark, date, sign and return the enclosed form of
proxy in the enclosed envelope whether or not you expect to attend the meeting
in person.
By order of the Board of Directors
John C. Belknap
Executive Vice President, Chief Financial Officer
and Secretary
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
[logo]
GENERAL INFORMATION
Solicitation of the enclosed proxy is made by the Board of Directors of
the Company for use at the annual meeting of shareholders to be held at the
Crestar Bank Auditorium, 4th Floor, 919 East Main Street, Richmond, Virginia, on
Thursday, August 20, 1998, at 10:00 A.M. and at any adjournments of such
meeting. An annual report, including consolidated financial statements for the
fiscal year ended May 2, 1998 ("fiscal 1998"), is enclosed with this proxy
statement.
The expenses of this solicitation will be paid by the Company.
Officers, directors and employees of the Company may make solicitations of
proxies by telephone or telegraph or by personal calls. Brokerage houses,
nominees and fiduciaries have been requested to forward proxy soliciting
material to the beneficial owners of the stock held of record by them, and the
Company will reimburse them for their charges and expenses.
The Company's charter authorizes the issuance of up to 90,000,000
shares of Common Stock, without par value ("Common Stock"), and 5,000,000 shares
of Preferred Stock, without par value. Only shareholders of record at the close
of business on July 10, 1998, are entitled to notice of, to vote at and to
participate in the meeting. On the record date, 47,665,446 shares of Common
Stock were issued and outstanding. Holders of Common Stock will vote as a single
class at the annual meeting. Each outstanding share of Common Stock will entitle
the holder to one vote on all matters submitted to a vote of shareholders at the
annual meeting. All shares of Common Stock represented by properly executed and
delivered proxies will be voted at the meeting or any adjournments.
A majority of the votes entitled to be cast on matters to be considered
at the meeting constitutes a quorum. If a share is represented for any purpose
at the meeting, it is deemed to be present for quorum purposes for all other
matters as well. Abstentions and shares held of record by a broker or its
nominee ("Broker Shares") that are voted on any matter are included in
determining the number of votes present or represented at the meeting. Broker
Shares that are not voted on any matter at the meeting will not be included in
determining whether a quorum is present at such meeting. Directors are elected
by a plurality of the votes cast by holders of Common Stock at a meeting at
which a quorum is present. Votes that are withheld and Broker Shares that are
not voted in the election of directors will not be included in determining the
number of votes cast.
This proxy statement and the enclosed form of proxy were first mailed
to shareholders on July 20, 1998.
1
<PAGE>
ELECTION OF DIRECTORS
(Proposal 1)
At the annual meeting, 11 directors are expected to be elected to hold
office until the next annual meeting of shareholders and until their respective
successors are duly elected and qualified. John F. Rotelle, a director of the
Company, has elected to retire effective as of the annual meeting and has
declined to be nominated for reelection. Unless authority to do so is withheld,
shares of Common Stock represented by properly executed proxies in the enclosed
form will be voted for the election of the persons named below. Each of the
nominees is currently a director and has served continuously since the year he
or she joined the Board. If any of the nominees should become unavailable, the
Board of Directors may designate substitute nominees for whom the proxies on the
enclosed form will be voted. In the alternative, the Board of Directors may
reduce the size of the Board to the number of remaining nominees for whom the
proxies will be voted.
Nominees for Election to the Board of Directors
<TABLE>
<CAPTION>
Principal Occupation or Director
Name Employment During Last Five Years Continuously Since Age
---- --------------------------------- ------------------ ---
<S> <C>
Donald D. Bennett Chairman Emeritus of the Board of the Company (1998); 1990 62
former Chairman of the Board (1995-1998), Chief
Executive Officer (1995-1996) and President and
Chief Executive Officer (1990-1995) of the Company.
Roger L. Gregory Managing Partner, Wilder & Gregory Law Office. 1994 45
Grace E. Harris Provost and Vice President for Academic Affairs, 1994 65
Virginia Commonwealth University.
John C. Jamison Chairman, Mallardee Associates, a corporate financial 1990 64
advisory service, and 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); Director, Hershey Foods Corporation.
G. Gilmer Minor, III Chairman of the Board (since 1994), President and 1988 57
Chief Executive Officer, Owens & Minor, Inc., a
wholesale distributor of medical and surgical
supplies; Director, Crestar Financial Corporation.
Claude B. Owen, Jr. Chairman of the Board and Chief Executive Officer, 1988 53
DIMON Incorporated (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 President, Dibrell
Brothers, Incorporated; Director, American National
Bankshares Inc.
Albert F. Sloan Former Chairman of the Board, Lance, Inc., a 1990 68
manufacturer of cookies, crackers and snack foods;
Director, Basset Furniture Industries, Inc., Cato
Corporation and PCA International, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation or Director
Name Employment During Last Five Years Continuously Since Age
---- --------------------------------- ------------------ ---
<S> <C>
John E. Stokely Chairman of the Board (1998), President (since 1995) 1995 45
and Chief Executive Officer (since 1996) of the
Company; former President and Chief Operating Officer
(1995-1996), Executive Vice President - Finance and
Administration (1993-1995) and Senior Vice President
- Finance and Chief Financial Officer (1991-1993) of
the Company; Director, Performance Food Group
Company, Trak Auto Corporation and Crown Books
Corporation.
George H. Thomazin Chief Executive Officer, Thomazin Enterprises, Inc., 1990 58
a business investment firm; former Chief Executive
Officer, Continental Brokers Co., a food brokerage
firm (1989-1992).
James E. Ukrop Chairman of the Board (1998), Ukrop's Super Markets, 1987 61
Inc., a retail grocery chain; former Vice-Chairman
and Chief Executive Officer (1994-1998) and President
and Chief Executive Officer (1975-1994), Ukrop's
Super Markets, Inc.; Director, Legg Mason, Inc. and
Owens & Minor, Inc.
Edward Villanueva Financial Consultant; Director, Circuit City Stores, 1990 63
Inc.
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 1 TO
ELECT THE FOREGOING NOMINEES TO THE BOARD OF DIRECTORS TO SERVE UNTIL THE NEXT
ANNUAL MEETING OF SHAREHOLDERS.
3
<PAGE>
Board of Directors and Committees
The Board of Directors meets regularly every quarter and following each
annual meeting of shareholders. During fiscal 1998, there were four meetings of
the Board.
The Board has standing Executive, Audit, Executive Compensation and
Nominating Committees. Members of the Executive Committee are Messrs. Bennett
(Chairman), Owen, Sloan, Stokely and Thomazin. During fiscal 1998, there was one
meeting of the Executive Committee. The Executive Committee reviews various
matters and submits proposals or recommendations to the Board of Directors. The
Executive Committee is empowered to and does act for the Board of Directors on
certain matters.
Members of the Audit Committee are Messrs. Jamison (Chairman), Gregory
and Villanueva. During fiscal 1998, there were three meetings of the Audit
Committee. The Audit Committee recommends an independent public accounting firm
to be selected by the Board of Directors for the upcoming fiscal year. The Audit
Committee reviews and approves various audit functions including the annual
audit performed by the Company's independent public accountants. Periodically,
the Company's internal auditors and independent public accountants report
directly to the Audit Committee.
Members of the Executive Compensation Committee are Messrs. Sloan
(Chairman), Minor, Owen and Thomazin and Dr. Harris. During fiscal 1998, there
were four meetings of the Executive Compensation Committee. The Executive
Compensation Committee recommends to the Board of Directors the compensation of
the Company's Chief Executive Officer, approves the compensation of the
Company's other executive officers and administers the Company's annual and
long-term incentive plans.
Members of the Nominating Committee are Messrs. Minor (Chairman),
Bennett and Ukrop. During fiscal 1998, there was one meeting of the Nominating
Committee. The Nominating Committee recommends to the full Board of Directors
persons to serve as directors of the Company and establishes such procedures as
it deems proper to receive and review information concerning potential
candidates for election or reelection to the Board of Directors. 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 1999 annual meeting must be received in writing
by the Secretary of the Company no earlier than May 6, 1999, and no later than
May 31, 1999, and must set forth (i) the name, age, business address and, if
known, residence address of each nominee proposed in such notice, (ii) the
principal occupation or employment of each such nominee and (iii) the number and
class of capital shares of the Company beneficially owned by each such nominee.
The Company's employment and severance benefits agreements with Mr. Bennett and
Mr. Stokely include provisions related to their election to the Board of
Directors. See "Employment Continuity Agreements."
Persons who are employees of the Company or of its subsidiaries receive
no compensation for their services as directors of the Company. During fiscal
1998, directors who were not employees of the Company or of its subsidiaries
received an annual retainer of $25,000 and fees of $1,200 for each meeting of
the Company's Board attended, $750 for each meeting of a Board committee
attended and $500 for participation in a telephonic meeting of the Board or a
Board committee. In addition, chairmen of each Board committee who were not
employees of the Company or of its subsidiaries received an additional annual
retainer of $2,500. Pursuant to the Company's Non-Employee Directors' Stock
Option Plan, each year each director who is not an employee of the Company or of
its subsidiaries is granted an option to purchase 1,500 shares of Common Stock
for a per share exercise price equal to the fair market value of one share of
Common Stock on the date of grant.
During fiscal 1998, all directors except Mr. Bennett attended at least
75% of the meetings of the Board of Directors and the committees to which they
were assigned. Mr. Stokely, Chairman of the Board, President and Chief Executive
Officer, and Mr. John C. Belknap, Executive Vice President, Chief Financial
Officer and Secretary of the Company, were each elected to the board of
directors of Crown Books Corporation ("Crown") in May 1998 in connection with
the Company's acquisition of Dart Group Corporation, Crown's parent company.
Crown filed for protection under Chapter 11 of the U.S. Bankruptcy Code on July
14, 1998.
4
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table shows, as of June 22, 1998 (except as provided
below), the direct and indirect beneficial ownership of shares of Common Stock
by (i) all directors of the Company, (ii) each executive officer named in the
Summary Compensation Table, (iii) all directors and executive officers of the
Company as a group and (iv) each person known by the Company to beneficially own
more than 5% of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
Sole Voting
and Investment Percentage
Name Power (1) Other (2) Total Ownership (3)
---- -------------- --------- ----- -------------
<S> <C>
Donald D. Bennett 190,210 28,335 218,545
Roger L. Gregory 2,250 0 2,250
Grace E. Harris 2,175 0 2,175
John C. Jamison 17,250 0 17,250
G. Gilmer Minor, III 4,875 0 4,875
Claude B. Owen, Jr. 32,400 0 32,400
Albert F. Sloan 8,250 6,250 14,500
John E. Stokely 176,567 699 177,266
George H. Thomazin 10,125 0 10,125
James E. Ukrop 20,400 1,041,131 1,061,531 2.22%
Edward Villanueva 111,270 10,000 121,270
John C. Belknap 166 0 166
Alec C. Covington 33,111 151 33,262
John D. Ryder 92,604 2,390 94,994
All Directors and
Executive Officers as a Group
(18 persons) 702,144 1,088,956 1,791,100 3.76
FMR Corp.(4)
82 Devonshire Street
Boston, Massachusetts 02109 0 3,054,550 3,054,550 6.42
T. Rowe Price Assoc., Inc.(5)
100 E. Pratt Street
Baltimore, Maryland 21202 218,700 2,267,307 2,486,007 5.23
</TABLE>
- ----------------------------
(1) Includes the following number of shares of Common Stock that may be
acquired within sixty days of June 22, 1998, under one or more of the Company's
stock-based incentive plans by the following directors, executive officers and
group: Mr. Bennett - 52,500; Mr. Gregory - 2,250; Mr. Jamison - 2,250; Mr. Owen
- - 2,100; Mr. Sloan - 2,250; Mr. Stokely - 74,750; Mr. Ukrop - 2,250; Mr.
Villanueva - 2,250; Mr. Covington - 31,875; Mr. Ryder - 7,500; and all directors
and executive officers as a group - 179,975.
(2) With respect to Mr. Bennett, reflects shares held by his wife and
shares held under the Company's 401(k) savings plans as of June 22,1998. Mr.
Bennett disclaims beneficial ownership of the shares held by his wife. 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 Mr. Villanueva, reflects shares held in trust for
Mr. Villanueva's children, with Mr. Villanueva as trustee. Mr. Villanueva
disclaims beneficial ownership of such shares. With respect to Mr. Stokely, Mr.
Covington, Mr. Ryder and all directors and executive officers as a group,
reflects shares held under the Company's 401(k) savings plans as of June 22,
1998.
(3) Except as indicated, each person or group beneficially owns less than
1% of the outstanding shares of Common Stock.
(4) As reported in a Form 13G dated February 14, 1998, as of December 31,
1997, Fidelity Management & Research Company ("Fidelity"), a subsidiary of FMR
Corp., beneficially owned 3,054,550 shares of the Company's Common Stock as a
result of acting as an investment adviser to several investment companies. The
ownership of one such investment company, Fidelity Contrafund, amounted to
2,534,750 shares of the Company's Common Stock. Edward C. Johnson 3d and FMR
Corp., through its control of Fidelity, each have the sole power to dispose of
the shares owned by the investment companies. The Boards of Trustees of the
individual investment companies have the sole power to vote shares owned by such
investment companies.
(5) As reported in a Form 13G dated February 12, 1998, as of December 31,
1997, T. Rowe Price Associates, Inc. ("Price Associates") served as an
investment advisor to individual and institutional investors that owned, in the
aggregate, 2,486,007 shares of the Company's Common Stock. Price Associates
disclaims beneficial ownership of all such shares.
5
<PAGE>
EXECUTIVE COMPENSATION
Executive Compensation Committee Report on Executive Compensation
The Executive Compensation Committee of the Board of Directors (the
"Committee") is delegated the power to administer the compensation programs of
the Company applicable to its executive officers. The Committee, which is
comprised of five outside directors, recommends to the Board the compensation of
the Company's Chief Executive Officer, approves the compensation of the
Company's other executive officers and administers the Company's annual and
long-term incentive plans.
The purposes of the Company's compensation plans and the objectives of
the Committee are to:
o provide a competitive compensation program to enable the
Company to attract and retain qualified top management
personnel;
o emphasize the relationship between pay and performance by
placing variable compensation "at risk" based on the
achievement of specific and measurable goals and objectives;
o balance the Company's short-term and long-term objectives
appropriately; and
o align the financial interests of the executive officers with
those of the Company's shareholders by encouraging and
promoting executive ownership of the Company's Common Stock.
The Committee believes that compensation programs should enable
management to understand clearly what the potential rewards are and what
performance must be achieved to earn such awards. An independent consultant is
used to recommend compensation structures for the Company. 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"), performance shares and/or
non-stock based compensation. 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.
Base Salary. The Company seeks to maintain executive compensation at levels
competitive with other corporations in the Company's market and industry in
accordance with information, including survey data, available to the Company.
Corporations considered include the companies included in the Company's Peer
Group, as defined below, as well as other companies in the food and distribution
industries. Periodic increases in base salary are based on evaluations of each
executive's past and current performance, competitive market conditions and the
Company's performance. As discussed below, the base salary of the Chairman
Emeritus of the Board, Mr. Bennett, for fiscal 1998 was established pursuant to
an employment agreement executed in April 1996. The base salary of the Chairman
of the Board, President and Chief Executive Officer, Mr. Stokely, for fiscal
1998 was established pursuant to an employment agreement executed in April 1996.
The base salary of the Company's other executive officers is determined by the
Company'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. The Company's
Executive Officer Performance Plan is designed to reward certain officers and
other key employees for the Company's operating performance, as measured by
established earnings criteria, and for individual and departmental performance.
Under this Plan as in effect for fiscal 1998, an incentive compensation pool was
funded based on predetermined threshold and target levels of the Company's
adjusted pre-tax FIFO earnings. A participant shared in the incentive
compensation pool up to a predetermined maximum percentage of annual base
salary. Awards, established as a percentage of base salary, varied by management
level. Adjustments to awards and flexibility for special awards were available
to reflect individual performance. The Committee approved the threshold and
target levels of the Company's adjusted pre-tax FIFO earnings and corresponding
percentages of annual base salary in conjunction with its review of the
Company's annual fiscal plan. All executive officers other than Mr. Bennett and
Mr. Stokely participated in this Plan for fiscal 1998. As discussed below, the
formulas for determining Mr. Bennett's and Mr. Stokely's incentive compensation
for fiscal 1998 were established under the terms of their respective employment
agreements.
6
<PAGE>
Long-Term Incentives. The Company's amended and restated Omnibus Stock
Incentive Plan was approved by the shareholders at the 1996 annual meeting and a
further amendment to such plan was approved by the shareholders at the 1997
annual meeting. The plan permits the Committee, in its discretion, to grant
options to purchase shares of the Company's Common Stock, SARs, shares of
restricted stock, performance shares and non-stock based incentive awards to any
employee of the Company or its subsidiaries who the Committee believes has
contributed significantly or can be expected to contribute significantly to the
profits or growth of the Company. The Committee determines the amount of the
grant, the term of the options, SARs, restricted stock, performance shares and
non-stock based incentive awards 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 the Company. As with base pay and annual incentive
compensation, the Committee reviews survey data to establish competitive
long-term compensation structures.
During fiscal 1998, 191 employees received grants of options and/or
non-stock based incentive awards under the Omnibus Stock Incentive Plan,
including 50,000 options and a $203,000 target incentive opportunity granted to
Mr. Stokely. Options granted during fiscal 1998 were granted at the fair market
value of the Common Stock on the date of grant; accordingly, the market value of
the Common Stock must increase before the employee receives any benefit from the
grant. The options granted during fiscal 1998 become exercisable in installments
over a four-year period. For a description of non-stock based incentive awards
granted during fiscal 1998, see "Executive Compensation - Long-Term Incentive
Awards."
Compensation of the Chief Executive Officer. Effective April 28, 1996, the
Company entered into a five year employment and severance benefits agreement
with Mr. Stokely that provides for his continued employment by the Company, in
the capacity of President and Chief Executive Officer, through April 28, 2001.
The agreement sets Mr. Stokely's salary at $400,000 per year (subject to annual
review for possible increase in light of his performance), and provides for
annual incentive compensation, which is determined based on a formula that takes
into account the Company's pre-tax FIFO earnings. Mr. Stokely's incentive
compensation for fiscal 1998 was $550,000, approximately $316,000 of which was
awarded pursuant to his employment agreement, based on the Company's fiscal 1998
performance, and the balance of which represented a special bonus. Effective
April 22, 1998, the Company entered into a benefits continuation agreement with
Mr. Stokely which supercedes the benefits continuation provisions of his
employment and severance benefits agreement. See "Executive Compensation
Employment Continuity Agreements." In determining the increase in Mr. Stokely's
base salary over the amount set forth in his employment agreement, his special
bonus for fiscal 1998, and the number of options and the incentive opportunity
granted to him under the Omnibus Stock Incentive Plan, and in deciding to extend
Mr. Stokely's benefits pursuant to the benefits continuation agreement, the
Committee considered his exemplary performance and contribution to the growth
and success of the Company, including the completion during fiscal 1998 of the
acquisition of Farm Fresh, Inc., 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 the
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 the Company's
financial performance during Mr. Stokely's tenure to be superior relative to the
companies in the industry. For a more detailed discussion of Mr. Stokely's
employment agreement, see "Executive Compensation - Employment Continuity
Agreements."
In conclusion, the Committee believes that the compensation policies
and practices of the Company herein described are fair and equitable and are in
keeping with the best interests of the Company and its shareholders.
Executive Compensation Committee
Albert F. Sloan, Chairman
Grace E. Harris
G. Gilmer Minor, III
Claude B. Owen, Jr.
George H. Thomazin
7
<PAGE>
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended May 2, 1998, May
3, 1997, and April 27, 1996, the cash compensation paid, as well as certain
other compensation paid or accrued, by the Company to the Company's Chief
Executive Officer and its four other most highly compensated executive officers
(the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation(1) Compensation Awards
-------------------------- ------------------------
Securities
Name and Restricted Underlying
Principal Position Fiscal Stock Options/ All Other
at May 2, 1998 Year Salary Bonus(2) Awards(3) SARs(4) Compensation(5)
- -------------------------- ------- ------------ -------------- ------------- ----------- ----------------
<S> <C>
John E. Stokely 1998 $452,115 $ 550,000 50,000 $11,113
President & Chief 1997 396,155 500,000 $821,888 95,000 10,634
Executive Officer 1996 242,804 729,375 22,500 7,002
John C. Belknap(6) 1998 253,846 250,000 50,000 5,769
Executive Vice
President & CFO
Donald D. Bennett 1998 500,000 1,057
Chairman 1997 503,846 500,000 30,000 702
1996 417,794 1,329,375 45,000 6,671
Alec C. Covington 1998 254,730 200,000 20,000 7,367
President & COO, 1997 213,558 125,000 7,500 5,399
Wholesale Operations 1996 211,914 125,000 60,000
John D. Ryder 1998 269,630 125,000 7,500 2,696
President & COO, 1997 269,630 110,000 7,500 1,670
Retail Division 1996 255,845 33,000 11,250 1,680
</TABLE>
- -------------------
(1) None of the Named Executive Officers received 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.
(2) With respect to Messrs. Stokely and Bennett, consists of cash bonus, in
accordance with their respective Employment and Severance Benefits Agreement,
together with the following special bonus awards: in fiscal 1998, Mr. Stokely
was granted a special cash award of $234,000 as a result of his role in
completing the Company's acquisition of Farm Fresh, Inc. and in recognition of
the Company's exemplary performance during fiscal 1998; in fiscal 1997, Messrs.
Stokely and Bennett were granted special cash awards of $230,000 and $500,000,
respectively, as a result of their respective roles in completing the Company's
acquisition of Norristown Wholesale, Inc. and in recognition of the Company's
exemplary performance during fiscal 1997; in fiscal 1996, Messrs. Stokely and
Bennett were granted special cash awards of $350,000 and $562,500, respectively,
and special grants of Common Stock under the Omnibus Stock Incentive Plan with a
value of $129,375 each (based on the fair market value of the Common Stock on
the date of grant), as a result of their respective roles in completing the
Company's acquisition of Super Rite Corporation.
(3) Reflects 37,500 shares of restricted stock granted to Mr. Stokely on
May 16, 1996, based on the fair market value of the Common Stock on the date of
grant, which vest as follows: 3,750 shares on May 16, 1997, 1998, 1999 and 2000,
and 22,500 shares on May 16, 2001. As of May 2, 1998, Mr. Stokely held 33,750
shares of restricted stock with a value of $911,250. Dividends are paid on
restricted stock at the same rate and times as on all other shares of Common
Stock. No other Named Executive Officer held any shares of restricted stock as
of May 2, 1998.
(4) Reflects nonqualified stock options granted under the Company's Omnibus
Stock Incentive Plan.
(5) "All Other Compensation" for fiscal 1998 consists of: (i) the Company's
25% matching contributions under the Company's Savings and Stock Ownership Plan
to the Named Executive Officers as follows: Mr. Stokely - $2,480; Mr. Belknap -
$0; Mr. Bennett - $1,057; Mr. Covington - $1,983; and Mr. Ryder - $2,696; and
(ii) the amounts awarded to the following Named Executive Officers under the
Company's Vacation to Stock Conversion Plan (which amounts, net of applicable
withholdings, were distributed in the form of shares of Common Stock based on
the fair market value of the Common Stock as of the plan's determination date):
Mr. Stokely - $8,653; Mr. Belknap - $5,769; Mr. Bennett - $0; Mr. Covington -
$5,384; and Mr. Ryder - $0.
(6) Mr. Belknap joined the Company as an executive officer in July 1997.
8
<PAGE>
Stock Options and SARs
The following table contains information concerning the grants of
options made during fiscal 1998 under the Company's Omnibus Stock Incentive Plan
to the Named Executive Officers. No SARs were granted during fiscal 1998.
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
Number of Options/
Securities SARs
Underlying Granted to
Options/ Employees Exercise
SARs in Fiscal or Base Expiration
Name Granted (2) Year Price (3) Date 5% (4) 10% (4)
- -------------------------- ------------ ------------ ------------ -------------- --------------- --------------
<S> <C>
John E. Stokely 50,000 13.0% $24.0625 11/13/2007 $757,000 $1,917,500
John C. Belknap 25,000 6.5 24.3125 07/07/2007 382,500 968,750
25,000 6.5 24.0625 11/13/2007 378,500 958,750
Donald D. Bennett 0 0 - - - -
Alec C. Covington 20,000 5.2 24.0625 11/13/2007 302,800 767,000
John D. Ryder 7,500 2.0 24.0625 11/13/2007 113,550 287,625
</TABLE>
- ------------
(1) The potential realizable value is based upon assumed future prices for
the Common Stock that are derived from the specified assumed annual rates of
appreciation. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the actual future performance of the 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, 1998, 1999, 2000 and 2001.
(3) The exercise price was set at the fair market value of the Common Stock
on the date of the grant. The exercise price may be paid in cash or in Common
Stock valued at fair market value on the date preceding the date of exercise, or
a combination of cash and 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
Securities and Exchange Commission. The actual gains that will be realized, if
and when the Named Executive Officers exercise the options granted in fiscal
1998, will be dependent on the future performance of the Common Stock. The
following table 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>
Resulting stock price based on $24.0625 starting price $ 39.20 $ 62.41
Per share gain 15.14 38.35
Aggregate gain that would be realized by all shareholders (based on 719,494,980 1,822,498,843
47,522,786 shares outstanding on the November 13, 1997, grant date)
Aggregate hypothetical gain on all fiscal 1998 options granted to the Named 1,934,350 4,899,625
Executive Officers if $39.20 and $62.41 prices, respectively, are achieved
Hypothetical aggregate gains for the Named Executive Officers as a 0.27% 0.27%
percentage of all shareholders' gains
</TABLE>
9
<PAGE>
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
1998, and unexercised options and SARs held by them on May 2, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Fiscal Year-End(2) Fiscal Year-End(3)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise(1) Realized Unexercisable(4) Unexercisable(4)
- ---- ------------ -------- ---------------- ----------------
<S> <C>
John E. Stokely 0 $0 74,750/125,750 $809,558/$610,924
John C. Belknap 0 0 0/50,000 0/140,625
Donald D. Bennett 0 0 52,500/22,500 464,062/75,937
Alec C. Covington 0 0 31,875/55,625 301,348/372,754
John D. Ryder 0 0 7,500/18,750 61,171/95,859
</TABLE>
- -----------
(1) Represents only nonqualified stock options granted under the Company's
Omnibus Stock Incentive Plan.
(2) Represents only nonqualified stock options granted under the
Company's Long-Term Incentive Plan and/or Omnibus Stock Incentive Plan. Each
nonqualified stock option granted under the Company's Long-Term Incentive Plan
includes a tandem SAR.
(3) The value of unexercised in-the-money options represents the positive
spread between the May 2, 1998, closing price of Common Stock ($27.00) and the
exercise price of any unexercised options.
(4) The options represented could not be exercised by the Named Executive
Officer as of May 2, 1998, and future exercisability is subject to the executive
remaining employed by the Company or its subsidiaries, subject to acceleration
for death or total disability of the executive or a "change in control" of the
Company (as defined in the applicable option agreements).
Long-Term Incentive Awards
The following table contains information concerning non-stock based incentive
awards granted during fiscal 1998 under the Omnibus Stock Incentive Plan to the
Named Executive Officers for the fiscal 1998-2000 performance cycle.
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of Performance Estimated Future Payouts
Shares, Units or Other Period Under Non-Stock Price-Based
or Until Maturation Plans(2)
Other or
Name Rights(1) Payout(2) Threshold(3) Target(3) Maximum(3)
---- ------------- ---------------- ------------ --------- ----------
<S> <C>
John E. Stokely $203,000 Incentive 1998-2000 $101,500 $203,000 $507,500
Opportunity
John C. Belknap 105,000 Incentive 1998-2000 52,500 105,000 262,500
Opportunity
Alec C. Covington 79,000 Incentive 1998-2000 39,500 79,000 197,500
Opportunity
</TABLE>
- -------------------
(1) Incentive awards include target awards for each individual and
performance goals based 50% on the Company's three year average return on equity
("ROE") and 50% on the Company's three year cumulative earnings per share
("EPS"). Performance levels were established in each performance goal category
based on meeting or exceeding the goals, with no award earned if performance is
below the threshold goal for either ROE or EPS, the target award earned if
performance equals target levels for both ROE and EPS, and up to two times the
target award earned if the Company achieves certain superior levels of ROE and
EPS. In addition to the award earned based on the Company's performance, the
target awards may be adjusted based on the Company's performance relative to a
group of companies in the food and distribution industries designated by the
Committee at the time of the award. The Committee intends that any incentive
awards earned for the three fiscal year performance cycle that commenced May 4,
1997, will be settled 50% in cash and 50% in shares of the Company's Common
Stock. See "Executive Compensation - Executive Compensation Committee Report on
Executive Compensation - Long-Term Incentives." No other Named Executive
Officers received incentive awards for the 1998-2000 performance cycle during
fiscal 1998.
(2) Payouts on fiscal 1998 awards will be made pursuant to a three year
performance cycle, which is based on the Company's fiscal year. The fiscal 1998
three year performance cycle commenced May 4, 1997.
(3) Awards also may be increased (0-25%) or decreased (0-50%) based on
performance relative to the Company's peer group. No such adjustment is shown in
the case of threshold and target awards. Estimated maximum awards reflect a
positive 25% adjustment.
10
<PAGE>
Pension Plan Table
The table below illustrates the approximate aggregate retirement benefits
payable under the Company'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.
Annual Years of Credited Service(2)
Compensation (1) 10 15 20 25
- ---------------- -----------------------------------------------
$100,000 . . . . . $ 60,000 $ 65,000 $ 70,000 $ 70,000
200,000 . . . . . 120,000 130,000 140,000 140,000
300,000 . . . . . 180,000 195,000 210,000 210,000
400,000 . . . . . 240,000 260,000 280,000 280,000
500,000 . . . . . 300,000 325,000 350,000 350,000
600,000 . . . . . 360,000 390,000 420,000 420,000
- ------------
(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
May 2, 1998, were as follows: Mr. Stokely - 8; Mr. Belknap - 0; Mr. Bennett - 8;
Mr. Covington - 2; and Mr. Ryder - 2. With respect to Mr. Bennett's benefits
under the Company's Supplemental Executive Retirement Plan, see "Employment
Continuity Agreements."
Employment Continuity Agreements
Mr. Stokely. The Company entered into an employment and severance
benefits agreement with Mr. Stokely, effective April 28, 1996, which extends his
employment with the Company in the capacity of President and Chief Executive
Officer through April 28, 2001. The agreement also provides that the Board of
Directors will nominate Mr. Stokely for election to the Board of Directors 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 Board at
each such meeting.
The agreement sets Mr. Stokely's salary at $400,000 per year (subject
to annual review for possible increase in light of his performance), and
provides for annual incentive compensation equal to the sum of (i) 50% of his
base salary if the Company achieves target pre-tax FIFO earnings, plus (ii) 1%
of the amount by which the Company's pre-tax FIFO earnings exceed target pre-tax
FIFO earnings. The agreement also provides that during its term, the Company
will pay Mr. Stokely's portion of the premiums for coverage under the Company'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 the Company other than for cause or upon his death or disability, (ii) by
the Company for any reason other than death or disability within one year
following a "change in control" of the Company (as defined below) or (iii) by
Mr. Stokely within one year following a "change in control" of the Company. The
agreement also provides that upon any "change in control" of the Company, Mr.
Stokely shall be entitled to receive a lump-sum payment in an amount equal to
the actuarial equivalent of the benefit he otherwise would be entitled to
receive under the Company's Supplemental Executive Retirement Plan (the "SERP")
upon retirement. In addition, if a "change in control" of the Company occurs
during the term of the agreement and Mr. Stokely becomes liable for any excise
tax with respect to any payment or benefit under this agreement or any of the
Company's benefit plans, the Company shall pay Mr. Stokely an amount equal to
(i) such excise tax, plus (ii) the federal, state and local income taxes, and
federal hospitalization tax, for which Mr. Stokely is liable on account of the
payment described in clause (i) of this sentence and the additional payments
described in this clause (ii).
11
<PAGE>
The Company entered into a benefits continuation agreement with Mr.
Stokely, effective April 22, 1998, which supercedes the benefits continuation
provisions of his employment and severance benefits agreement. The new benefits
continuation agreement provides that, unless Mr. Stokely's employment is
terminated for cause, the Company will provide to Mr. Stokely following the
termination of his employment (at the Company's expense, subject to mitigation
to the extent that substantially similar coverage is provided by any successor
employer) coverage under life insurance policies consistent with those currently
provided by the Company for his benefit through age 65, and medical and dental
benefits of the type generally provided from time-to-time to the Company's
executive employees until his death.
Mr. Bennett. The Company entered into an employment and severance
benefits agreement with Mr. Bennett, effective April 28, 1996, to ensure his
continued service to the Company through his retirement. The agreement provides
for Mr. Bennett's employment in his current capacity of Chairman Emeritus
through December 1998. The agreement further provides that, prior to its
expiration in December 1998, the Company and Mr. Bennett will enter into a
consulting agreement which will provide for his continued service to the Company
through age 65. The agreement also provides that the Board of Directors will
nominate Mr. Bennett for election to the 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 Board at each such meeting.
The agreement sets Mr. Bennett's salary at $500,000 per year through
1998, and provides that (i) during the term of the agreement, the Company will
pay Mr. Bennett's portion of the premiums for coverage under the Company's life,
accident, medical and dental benefits plans, and (ii) unless Mr. Bennett's
employment is terminated during the term of the agreement by the Company for
cause or by Mr. Bennett (other than upon his disability or following a "change
in control" of the Company), the Company will provide to Mr. Bennett following
the termination of his employment (at the Company's expense) coverage under life
insurance policies consistent with those currently provided by the Company for
his benefit through age 65, and medical and dental benefits of the type
generally provided from time-to-time to the Company's executive employees until
his death. 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 the Company other than for
cause or upon his death or disability, (ii) by the Company for any reason other
than death or disability within one year following a "change in control" of the
Company or (iii) by Mr. Bennett within one year following a "change in control"
of the Company. The agreement also provides that Mr. Bennett is entitled to a
vested benefit under the SERP based upon his having attained age 65 and having
completed 20 years of credited service, with credited monthly compensation to be
based upon the base salary contemplated in the agreement. In addition, the
agreement provides that, upon any "change in control" of the Company, Mr.
Bennett shall be entitled to receive a lump-sum payment in an amount equal to
the actuarial equivalent of the benefit he otherwise would be entitled to
receive under the SERP upon retirement. In addition, if a "change in control" of
the Company occurs during the term of the agreement and Mr. Bennett becomes
liable for any excise tax with respect to any payment or benefit under this
agreement or any of the Company's benefit plans, the Company shall pay Mr.
Bennett an amount equal to (i) such excise tax, plus (ii) the federal, state and
local income taxes, and federal hospitalization tax, for which Mr. Bennett is
liable on account of the payment described in clause (i) of this sentence and
the additional payments described in this clause (ii).
Definition of "Change in Control." For purposes of the foregoing
employment and severance benefits agreements, a "change in control" of the
Company 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 the Company's
then-outstanding voting securities; or (ii) the shareholders of the Company
approve (a) a plan of merger, consolidation or share exchange between the
Company 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
the Company's property.
12
<PAGE>
Performance Graph
The following graph compares the cumulative total return for the
Company's Common Stock to the cumulative total returns for the Standard & Poor's
500 Composite Index and an index of peer companies (the "Peer Group") selected
by the Company for the Company's last five fiscal years. Companies in the Peer
Group are as follows: Fleming Companies Inc., Nash-Finch Company, Super Food
Services, Inc. and Supervalu Inc. The graph assumes an investment of $100 in the
Company's Common Stock and in each index as of April 30, 1993, and that all
dividends were reinvested.
[graph]
<TABLE>
<CAPTION>
April 1993 April 1994 April 1995 April 1996 May 1997 May 1998
<S> <C>
Richfood Holdings 100 125 150 249 235 316
S&P 500 100 105 124 161 201 284
Peer Group 100 97 87 90 93 128
</TABLE>
13
<PAGE>
Certain Relationships and Related Transactions
During fiscal 1998, the Company sold products and services to, and
engaged in certain other transactions with, entities affiliated with Mr.
James E. Ukrop. Mr. Ukrop is Chairman of Ukrop's Super Markets, Inc.
("Ukrop's"). During fiscal 1998, Ukrop's paid $208,764,299 to the Company
for products and services purchased from the Company.
Effective August 3, 1997, the Company entered into a new long-term
supply agreement with Ukrop's. The supply agreement provides that, in
consideration of an incentive payment, Ukrop's will continue to use the Company
as its principal source of wholesale supply and commits Ukrop's to purchase $1.2
billion of goods from the Company over a term of approximately five years.
The Company believes that the transactions with Ukrop's were made on
terms comparable to those that would have been agreed to with unaffiliated third
parties in similar transactions.
During fiscal 1996, the Company made secured loans to Mr. Donald D.
Bennett, Chairman Emeritus of the Company, in the aggregate amount of $110,000
at rates of interest equal to 5.90% and 5.79% per annum. The largest aggregate
amount of indebtedness outstanding under such loans during fiscal 1998,
including accrued interest, was $126,212, and the aggregate unpaid balance
thereof on June 22, 1998, was $110,000.
During fiscal 1994, the Company made a $73,938 secured loan to Mr. John
E. Stokely, Chairman of the Board, President and Chief Executive Officer of the
Company, at a rate of interest equal to 3.68% per annum. In addition, in June
1994 the Company made secured loans to Mr. Stokely in the aggregate amount of
$457,127, at a rate of interest equal to 5.56% per annum. The largest aggregate
amount of indebtedness outstanding under such loans during fiscal 1998,
including accrued interest, was $149,684, and the aggregate unpaid balance
thereof on June 22, 1998, was $131,064.
During fiscal 1998, the Company made a secured loan to Mr. John C.
Belknap, Executive Vice President, Chief Financial Officer and Secretary of the
Company, in an amount equal to $113,050 at a rate of interest equal to 5.54% per
annum. The largest aggregate amount outstanding under such loan during fiscal
1998, including accrued interest, was $114,442, and the aggregate unpaid balance
thereof on June 22, 1998, was $115,329.
Compensation Committee Interlocks and Insider Participation
The Executive Compensation Committee of the Board is composed of
Messrs. Albert F. Sloan (Chairman), G. Gilmer Minor, III, Claude B. Owen,
Jr., George H. Thomazin and Dr. Grace E. Harris. No member of the Committee
had relationships, or engaged in transactions, with the Company during
fiscal 1998 of the type required to be disclosed above under the caption
"Certain Relationships and Related Transactions."
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who own
more than 10% of the Common Stock, to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission and
the New York Stock Exchange. Executive officers, directors and owners of more
than 10% of the Common Stock are required by regulation to furnish the Company
with copies of all Forms 3, 4 and 5 they file.
Based solely on the Company'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 1998, the Company believes that all of its
executive officers, directors and owners of more than 10% of the Common Stock
complied with all Section 16(a) filing requirements applicable to them with
respect to transactions during fiscal 1998.
14
<PAGE>
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
(Proposal 2)
On September 6, 1996, the Company selected Ernst & Young LLP ("Ernst &
Young") to serve as its independent public accountants for fiscal 1997 and,
accordingly, dismissed KPMG Peat Marwick LLP, its former independent public
accountants ("Peat Marwick"). The decision to engage Ernst & Young and dismiss
Peat Marwick was approved by the Audit Committee of the Board of Directors of
the Company on September 6, 1996.
Peat Marwick's reports on the Company's consolidated financial
statements for the two most recent fiscal years prior to their dismissal did not
contain an adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope or accounting principles. During the two
most recent fiscal years prior to and through the date of their dismissal, there
was no disagreement with Peat Marwick regarding any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreement, if not resolved to the satisfaction of Peat
Marwick, would have caused Peat Marwick to make reference thereto in its
reports.
The Board of Directors has appointed Ernst & Young to serve as
independent publc accountants for the Company and its subsidiaries for fiscal
1999. Shareholders are requested to ratify this appointment. Representatives of
Ernst & Young are expected to be present at the annual meeting and will be given
an opportunity to make a statement and to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 2 TO
RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP TO SERVE AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR FISCAL 1999.
15
<PAGE>
PROPOSALS FOR 1999 ANNUAL MEETING
Any proposal submitted by a shareholder for inclusion in the proxy
materials for the next annual meeting of shareholders must be delivered to the
Company at its principal office not later than March 22, 1999.
In addition to any other applicable requirements, for business to be
properly brought before the 1999 annual meeting by a shareholder, even if the
proposal is not to be included in the Company's proxy statement, the Company's
bylaws provide that the shareholder must give notice in writing to the Secretary
of the Company not later than May 21, 1999. As to each such matter, the notice
must contain (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name, record address of, and class, series and number
of shares beneficially owned by, the shareholder proposing such business and
(iii) any material interest of the shareholder in such business.
OTHER MATTERS
As of the date of this statement, management knows of no business that
will be presented for consideration at the annual meeting other than that stated
in this notice. As to other business, if any, and matters incident to the
conduct of the annual meeting that may properly come before the meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the judgment of the person or persons voting the proxies.
Shareholders, whether or not they expect to attend in person, are
requested to mark, date and sign the enclosed proxy and return it to the
Company. Please sign exactly as your name appears on the accompanying proxy.
Shareholders may revoke their proxy by delivering a written notice of revocation
to the Company at its principal office to the attention of John C. Belknap,
Executive Vice President, Chief Financial Officer and Secretary, at any time
before the proxy is exercised.
John C. Belknap
Executive Vice President, Chief Financial Officer
and Secretary
July 20, 1998
16
<PAGE>
NOTICE
AND
PROXY STATEMENT
for the
ANNUAL MEETING
of
SHAREHOLDERS
To Be Held
August 20, 1998
[logo]
<PAGE>
RICHFOOD HOLDINGS, INC.
Richmond, Virginia 23060
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John E. Stokely and John C. Belknap and
each of them proxies (and if the undersigned is a proxy, as substitute proxies)
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all of the shares of Common Stock of
the Company held of record by the undersigned on July 10, 1998, at the annual
meeting of shareholders to be held at 10:00 a.m. on August 20, 1998, or any
adjournments thereof.
PROXY VOTE AUTHORIZATION FOR RICHFOOD HOLDINGS, INC.
ANNUAL MEETING AUGUST 20, 1998 CUSIP 763408101-RICHFOOD HOLDINGS, INC.
The Board of Directors unanimously recommends a vote "FOR" each of the
following proposals:
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary) for all nominees listed
Donald D. Bennett, Roger L. Gregory, Grace E. Harris, John C. Jamison,
G. Gilmer Minor, III, Claude B. Owen, Jr., Albert F. Sloan, John E. Stokely,
George H. Thomazin, James E. Ukrop, Edward Villanueva
To withhold authority to vote for any individual nominee, write that name
on the line below.
- ------------------------------------------------------------------------------
2. To ratify the appointment by the Board of Directors of Ernst & Young LLP to
serve as independent public accountants for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AND MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENTS THEREOF.
Please sign exactly as your name appears
hereon. When shares are held by joint
tenants, only one of such persons need sign.
When signing as attorney, executor,
administrator, trustee or guardian, please
give full title as such. If a corporation,
please sign in full corporate name by the
president or other authorized officer. If a
partnership, please sign in partnership name
by an authorized person. Please mark, sign,
date and return the proxy card promptly,
using the enclosed envelope.
--------------------------------------------
Signature
Date _________________________________, 1998
<PAGE>
RICHFOOD HOLDINGS, INC.
SAVINGS AND STOCK OWNERSHIP PLAN
Voting Procedure
TO: PARTICIPANTS IN THE RICHFOOD HOLDINGS, INC.
SAVINGS AND STOCK OWNERSHIP PLAN, THE SUPER
RITE CORPORATION EMPLOYEE INVESTMENT OPPORTUNITY
PLAN, AND THE SUPER RITE FOODS, INC. INVESTMENT
OPPORTUNITY PLAN AND TRUST FOR RETAIL UNION
EMPLOYEES (collectively, the "Savings Plans")
As a participating employee in one or more of the Savings Plans, you have the
right to direct the Trustees of your Savings Plan (the "Trustees") to vote the
shares of Common Stock of Richfood Holdings, Inc. ("Common Stock") represented
by your interest in the Trust Fund under the applicable Savings Plan at the
annual meeting of shareholders of Richfood Holdings, Inc. to be held on August
20, 1998. For your information, copies of the Notice of Annual Meeting and Proxy
Statement are forwarded herewith.
If the Trustees do not receive your instructions by August 17, 1998, (i) they
will not vote the shares of Common Stock held in your Pre-tax Contribution and
Rollover Accounts under the applicable Savings Plan at the annual meeting, and
(ii) they will vote the shares of Common Stock held in your Employer Matching
Contribution and Employer Discretionary Matching Contribution Accounts under the
applicable Savings Plan at the annual meeting in accordance with the
recommendations of management. Please indicate your instructions on the
accompanying card and return the card promptly to the Trustees in the enclosed
envelope.
<PAGE>
TO: THE TRUSTEES OF THE RICHFOOD HOLDINGS, INC.
SAVINGS AND STOCK OWNERSHIP PLAN, THE SUPER
RITE CORPORATION EMPLOYEE INVESTMENT OPPORTUNITY
PLAN, AND THE SUPER RITE FOODS, INC. INVESTMENT
OPPORTUNITY PLAN AND TRUST FOR RETAIL UNION
EMPLOYEES (collectively, the "Savings Plans")
With respect to the shares of Common Stock of Richfood Holdings, Inc.
represented by my interest in the Trust Fund for one or more of the Savings
Plans, you are directed to sign and forward a proxy in the form being solicited
by the Board of Directors of Richfood Holdings, Inc. to instruct the person
named therein, or their substitutes, to vote in accordance with the proxy
statement as designated below:
PROXY VOTE AUTHORIZATION FOR RICHFOOD HOLDINGS, INC.
ANNUAL MEETING AUGUST 20, 1998 CUSIP 763408101-RICHFOOD HOLDINGS,INC.
The Board of Directors unanimously recommends a vote "FOR" each of
the following proposals:
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary) for all nominees listed
Donald D. Bennett, Roger L. Gregory, Grace E. Harris, John C. Jamison,
G.Gilmer Minor, III, Claude B. Owen, Jr., Albert F. Sloan, John E. Stokely,
George H. Thomazin, James E. Ukrop, Edward Villanueva
To withhold authority to vote for any individual nominee, write that name on
the line below.
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2. To ratify the appointment by the Board of Directors of Ernst & Young
LLP to serve as independent public accountants for the current fiscal
year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IN ITS DISCRETION, THE TRUSTEES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AND MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS
THEREOF.
Please sign and return promptly
to the Trustees in the enclosed
envelope.
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Dated _____________________, 1998
