As filed with the Securities and Exchange Commission on
October 1, 1996
Registration No. 33-58999
[Marked to show changes
to prior draft]
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 ON FORM S-3
TO FORM S-1 ON FORM S-3
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KASH N' KARRY FOOD STORES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 5411 95-4161591
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation) Classification Code Number) Identification
Number)
6422 Harney Road
Tampa, Florida 33610
(813) 621-0200
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive office)
RICHARD D. COLEMAN
Senior Vice President, Chief Financial Officer, and Secretary
Kash n' Karry Food Stores, Inc.
6422 Harney Road
Tampa, Florida 33610
(813) 621-0200
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
with copies to:
ROBERT S. BOLT, ESQ. LAWRENCE LEDERMAN, ESQ.
Barnett, Bolt, Kirkwood & Long Milbank, Tweed, Hadley & McCloy
601 Bayshore Boulevard, Suite 700 1 Chase Manhattan Plaza
Tampa, Florida 33606 New York, New York 10005
(813) 253-2020 (212) 530-5000
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this
Registration Statement, as determined by the Selling
Stockholders.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box: / /
(continues on following page)<PAGE>
(continuation of cover page)
If any of the securities being registered on this Form
are to be offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. /x/
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration number of the earlier registration statement for the
same offering. / /
If this Form is a post-effective amendment filed pursuant
to Rule 462(c) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering. / /
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. / /
<PAGE>
KASH N' KARRY FOOD STORES, INC.
COMMON STOCK
Up to 4,649,943 shares of Common Stock, par value $.01
per share (the "Common Stock"), of Kash n' Karry Food Stores,
Inc. (the "Company"), may be offered from time to time by certain
holders of the Common Stock (collectively, the "Selling
Stockholders"). See "Selling Stockholders." The Common Stock
offered hereby is listed on the Nasdaq National Market under the
symbol "KASH."
The Company will not receive any of the proceeds from any
sale of Common Stock offered from time to time by the Selling
Stockholders. Any or all of such Common Stock may be sold by the
Selling Stockholders from time to time (i) to or through
underwriters or dealers, (ii) directly to one or more other
purchasers, (iii) through agents on a best-efforts basis, or (iv)
through a combination of any such methods of sale. If required,
the names of any underwriters or agents and the applicable
commissions or discounts, along with pricing information, will be
set forth in an accompanying Prospectus Supplement. See "Plan of
Distribution."
See "Risk Factors" beginning at Page 3 of this Prospectus
for a discussion of certain factors that should be considered by
prospective investors in connection with an investment in the
Common Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is October 1, 1996 <PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information filed by the
Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street N.W.,
Washington, D.C. 20549, and at certain of the following regional
offices: 7 World Trade Center, Suite 1300, New York, New York
10048, and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be
obtained from the Public Reference Section of the Commission, 450
Fifth Street N.W., Washington, D.C. 20549, at prescribed rates.
The Common Stock is listed on the Nasdaq National Market;
accordingly, such reports and other information concerning the
Company may also be inspected at the offices of Nasdaq, 1735 K
Street N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration
Statement under the Securities Act of 1933 (the "Securities Act")
with respect to the Common Stock offered hereby. This Prospectus,
which forms a part of the Registration Statement, does not
contain all of the information set forth in the Registration
Statement and the exhibits thereto, certain parts of which have
been omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company
and the offering of Common Stock, reference is made hereby to
such Registration Statement and exhibits.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by the Company
with the SEC and are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year
ended July 30, 1995;
(2) The Company's Proxy Statement for the annual meeting of
stockholders held on December 6, 1995; and
(3) The Company's Quarterly Reports on Form 10-Q for the
periods ended October 29, 1995, January 28, 1996 and
April 28, 1996.
All documents filed pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the
Common Stock shall be deemed to be incorporated by reference in
this Prospectus and to be part hereof from the date of filing of
such documents; provided, however, that the documents enumerated
above or subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act in each year
during which the offering made hereby is in effect prior to the
filing with the SEC of the Company's Annual Report on Form 10-K
covering such year shall not be incorporated by reference herein
or be a part hereof from and after the filing of such Annual
Report on Form 10-K. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
COPIES OF THE ABOVE DOCUMENTS AND THE COMPANY'S 1995
ANNUAL REPORT TO STOCKHOLDERS MAY BE OBTAINED UPON REQUEST
WITHOUT CHARGE FROM THE SECRETARY OF THE COMPANY, P.O. BOX 11675,
TAMPA, FLORIDA 33680 (TELEPHONE: (813) 621-0200).
RISK FACTORS
An investment in the shares of Common Stock offered hereby
involves a high degree of risk. Prospective investors should
carefully consider the following matters, in addition to the
other information set forth in this Prospectus, in connection
with an investment in the Common Stock offered hereby.
History of Net Losses; Reorganization
The Company experienced a net loss of approximately
$37.9 million for the 1994 fiscal year, $11.9 million for the
1993 fiscal year, $7.3 million for the 1992 fiscal year, and
$39.0 million for the 1991 fiscal year. See "Selected Financial
Information."
On November 9, 1994, the Company sought relief pursuant
to a "prepackaged" plan of reorganization under Chapter 11 of the
U.S. Bankruptcy Code to reduce its debt service requirements and
overall level of indebtedness, to realign its capital structure
and to provide the Company with greater liquidity. See "The
Restructuring." Subsequent to the Restructuring, the Company
reported net income of $3.1 million for the 30 weeks ended July
30, 1995. For the 1996 fiscal year, although the Company reported
a net loss of $1.8 million for its traditionally slow first
quarter, it reported net income of $1.2 million and $3.6 million
for its second and third quarters, respectively, and expects to
report net income for the fiscal year. However, there can be no
assurance that the Company will continue to operate profitably in
its reorganized form.
Tax Considerations
As a result of the Restructuring (as defined in "The
Restructuring"), an ownership change within the meaning of Code
section 382(g) occurred with respect to the Company on December
29, 1994 (the "Change Date"). Accordingly, the Company's ability
to carry forward all of the net operating losses (and "recognized
built-in losses," if any), to taxable years beginning after the
Change Date within the meaning of Code section 382(j) (and a
portion of the taxable year which includes the Change Date) will
become subject to an annual limitation under Code sections 382
and 383.
The Company intends to determine the annual limitation under
the provisions of Code section 382(l)(6), which deals with a loss
corporation that exchanges stock for debt and undergoes an
ownership change in a proceeding under Chapter 11. The amount of
income that may be offset by the net operating loss carryovers
should generally be limited to an amount (subject to a proration
rule for the taxable year that includes the Effective Date) equal
to the product of (i) the value of the stock of the Company,
determined immediately prior to the Restructuring but increased
to take into account the effect on such value of the issuance of
Common Stock to the holders of Old Subordinated Debentures (as
defined in "The Restructuring") and (ii) the long-term tax-exempt
rate, within the meaning of Code section 382(f). This annual
limitation will be increased by "recognized built-in gain," if
any. The annual limitation on the Company's ability to carry
forward its net operating losses (and "reorganized built-in
losses," if any) may be substantial.
Highly Leveraged Position
Even after the Restructuring, the Company remains highly
leveraged. As of April 28, 1996, the Company had total long-term
indebtedness (including current maturities) of $219.3 million,
including $160.7 million of aggregate principal amount of New
Senior Floating Rate Notes and New Senior Fixed Rate Notes (as
defined in "The Restructuring") (collectively, the "New Notes"),
which mature on February 1, 2003 (an increase of $16.6 million
since July 30, 1995 as a result of the exercise by the Company of
its payment-in-kind options on the New Senior Floating Rate Notes
through August 1, 1995 and on the New Senior Fixed Rate Notes
through February 1, 1996), $25.7 million of indebtedness under
the Restated Credit Agreement (as defined in "The
Restructuring"), $17.9 million of indebtedness under mortgages
maturing between 1999 and 2003, and $15.0 million of capital
lease and other obligations. If future cash provided by opera
tions is less than currently expected, the Company may experience
difficulty in meeting interest and principal payments due on
outstanding indebtedness and other obligations.
The degree to which the Company is leveraged could have
important consequences to holders of Common Stock of the Company,
including the following: (i) the Company's ability to obtain
additional financing in the future for working capital, capital
expenditures, acquisitions, general corporate purposes or other
purposes may be impaired; (ii) a substantial portion of the
Company's cash flow from operations must be dedicated to the
payment of the principal of and interest on its existing indebt
edness, which materially decreases the funds available to the
Company to finance its working capital, capital expenditures and
business operations generally; (iii) certain of the Company's
borrowings are at variable rates of interest, which, in the
absence of interest rate hedging arrangements, make the Company
vulnerable to increases in interest rates; (iv) the Company's
indentures and Restated Credit Agreement impose significant
financial and operating restrictions which, if violated, could
permit the Company's creditors to accelerate payments thereunder
(see "Risk Factors -- Restrictions Imposed Under Indebtedness");
(v) the Company is more highly leveraged than its principal
competitors, which may place the Company at a competitive
disadvantage (see "Risk Factors -- Competition" below); and (vi)
the Company's high degree of leverage may make it vulnerable to
economic downturns and may limit its ability to withstand compet
itive pressures and adverse changes in government regulation and
to capitalize on significant business opportunities.
Restrictions Imposed Under Indebtedness
The Restated Credit Agreement (as defined in "The
Restructuring") and the indentures governing the New Notes
contain numerous limitations, including restrictions on the
ability of the Company to (i) incur additional indebtedness, (ii)
place liens on assets, (iii) sell assets, (iv) engage in mergers
or consolidations, (v) pay dividends and (vi) engage in certain
transactions with affiliates. The Restated Credit Agreement also
requires the Company to maintain compliance with certain finan
cial covenants. These limitations and requirements may restrict
the ability of the Company to obtain additional financing for
working capital, capital expenditures, acquisitions, general
corporate purposes or other purposes.
The ability of the Company to comply with the covenants in
its debt agreements will be dependent on its future financial
performance, which will be subject to prevailing economic condi
tions and other factors, including factors beyond the control of
the Company. Failure to comply with any of these covenants could
result in a default or event of default under the relevant debt
agreements, permitting lenders to accelerate the maturity of the
indebtedness under such agreements and to foreclose upon any
collateral securing such indebtedness. Any such failure to comply
or any default, event of default or acceleration under any
particular indebtedness could also result in the acceleration of
other debt of the Company under agreements that contain cross-
default or cross-acceleration provisions.
Fresh-Start Reporting Presentation
The Company's Prepackaged Plan was confirmed by the U.S.
Bankruptcy Court on December 12, 1994, and consummated on
December 29, 1994. In accordance with the American Institute of
Certified Public Accountants' Statement of Position 90-7,
"Financial Reporting by Entities in Reorganization under the
Bankruptcy Code," the Company adopted "fresh-start reporting."
Accordingly, financial statements for periods subsequent to
December 29, 1994 have been prepared on a basis not comparable to
prior periods. The application and impact of "fresh-start
reporting" is set forth in greater detail in the notes to the
Company's financial statements, which are incorporated by
reference in this Prospectus.
Competition
The food retailing business is highly competitive. The
Company competes with several national, regional and local
supermarket chains, principally Publix, Winn-Dixie, Albertson's
and Food Lion. The Company is also in competition with conve
nience stores, stores owned and operated or otherwise affiliated
with large food wholesalers, unaffiliated independent food
stores, merchandise clubs, discount drugstore chains and discount
general merchandise chains and supercenters.
The Company's principal competitors have greater
financial resources than the Company and could use those
resources to take steps which could adversely affect the
Company's competitive position and financial performance. For
example, operating results generally and sales growth in
particular were adversely affected by competitive new store
openings and remodels, expansions, and replacement stores by the Company's
principal competitors, and it is anticipated that this activity will
continue.
Another example of the highly competitive nature of the
food retailing business is the practice of competitors to
reposition their pricing structure. Over the past several years,
each of the Company's major competitors has changed its pricing
practices in a manner that has adversely affected general retail
pricing in the market. The Company has had to deal with each of
these changes in a manner that has, in some instances, adversely
affected its operating results and may continue to do so in the
future.
In addition, the Company's ability to compete may be
adversely affected by its high leverage and the limitations
imposed by its debt agreements.
Anti-Takeover Provisions
The Company has adopted a preferred stock purchase rights
plan (the "Rights Plan"). See "Description of Capital Stock --
Certain Anti-Takeover and Charter Provisions." The Rights Plan
is designed to assure that all stockholders receive fair and
equal treatment in the event of any proposed takeover of the
Company. However, the Rights Plan could discourage certain
potential acquisition proposals and could delay or prevent a
change in control of the Company in certain circumstances. As a
result, the stockholders could receive less for their shares than
otherwise might be available in the event of a takeover attempt.
The Rights Plan could diminish the opportunities for a
stockholder to participate in tender offers, including tender
offers at a price above the then current market value of the
Common Stock, or proxy contests, and may also inhibit
fluctuations in the market price of the Common Stock that could
result from takeover attempts. In addition, the Board of
Directors, without further stockholder approval, may issue
Preferred Stock with such terms as the Board of Directors may
determine, and which could have the effect of delaying or
preventing a change in control of the Company. The issuance of
such Preferred Stock could also adversely affect the voting power
of the holders of Common Stock. See "Description of Capital Stock
- -- Preferred Stock." The Company is also afforded the
protections of Section 203 of the Delaware General Corporation
Law, which could delay or prevent a change in control of the
Company or could impede a merger, consolidation, takeover or
other business combination involving the Company or discourage a
potential acquirer from making a tender offer or otherwise
attempting to obtain control of the Company. See "Description of
Capital Stock -- Certain Anti-takeover and Charter Provisions."
Restrictions on Dividends
On June 14, 1995 the Company declared a 3-for-2 stock
split effected in the form of a stock dividend on its Common
Stock, paid on July 17, 1995 to stockholders of record on June
26, 1995. The Company presently does not intend to pay cash
dividends or make other distributions with respect to the Common
Stock for the foreseeable future. In addition, the Restated
Credit Agreement and the indentures governing the New Notes
contain limitations on the ability of the Company to pay cash
dividends. See "Description of Capital Stock."
Limited Public Market
On March 2, 1995 the Common Stock was listed for trading
on the Nasdaq Small Cap Market under the symbol "KASH" (since
March 4, 1996, the Common Stock has been listed for trading on
the Nasdaq National Market). Prior to such date, there was no
established public trading market for its Common Stock. There is
no assurance that an active trading market in the Common Stock
will continue. Accordingly, no assurance can be given as to the
price at which any holder may sell his Common Stock or whether a
liquid market in the Common Stock will exist at the time of any
given sale.
THE COMPANY
The Company is a Delaware corporation, formed as a
vehicle for the October 1988 leveraged acquisition of 121 food
and 25 liquor stores in two separate transactions from Lucky
Stores, Inc., a subsidiary of American Stores Company, and Superx
Drugs Corporation, a subsidiary of The Kroger Co. The Company's
original equity capitalization was provided by The Fulcrum III
Limited Partnership and The Second Fulcrum III Limited Partner
ship (collectively, the "Fulcrum Partnerships") (the Fulcrum
Partnerships are investment funds managed by Gibbons, Goodwin,
van Amerongen, L.P. ("GGvA") (formerly known as Gibbons, Green,
van Amerongen, L.P.)), certain affiliates of Merrill Lynch & Co.,
Inc. and members of management. In November 1991, Green Equity
Investors, L.P. ("GEI"), an investment fund managed by Leonard
Green & Partners, L.P., invested $27.7 million in cash in
exchange for an equity interest in the Company. At the same time,
the Fulcrum Partnerships invested an additional $2.3 million and
exchanged certain preferred stock of the Company for common stock
of the Company. After the November 1991 equity infusion, and
until the Restructuring was consummated, GEI owned approximately
60.9%, and the Fulcrum III Partnerships owned approximately
33.8%, of the outstanding Common Stock of the Company. As of
September 5, 1996, 70.5% of the outstanding Common Stock of the
Company was beneficially owned by four holders: GEI (27.5%), IDS
Extra Income Fund, Inc. (17.6%), PaineWebber Capital, Inc.
(11.9%), and The Prudential Insurance Company of America
(13.5%).
The principal executive offices of the Company are
located at 6422 Harney Road, Tampa, Florida 33610, and its
telephone number is (813) 621-0200. The Company's symbol for
trading on the Nasdaq National Market is "KASH."
THE RESTRUCTURING
On November 9, 1994 (the "Petition Date") the Company filed
with the U.S. Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court") a voluntary petition for reorganization under
Chapter 11 of the Bankruptcy Code and a "prepackaged" plan of
reorganization (the "Prepackaged Plan"). During the pendency of
the bankruptcy case, the Company, with the approval of the
Bankruptcy Court, operated its business in the ordinary course,
and paid all pre-petition and post-petition claims of its general
unsecured creditors, trade creditors and employees in full. The
Prepackaged Plan was confirmed by the Bankruptcy Court on
December 12, 1994, and the Company emerged from bankruptcy on
December 29, 1994 (the "Effective Date").
Pursuant to the Prepackaged Plan, on the Effective Date:
(1) Each $1,000 principal amount of the Company's $85.0
million Senior Floating Rate Notes due August 2, 1996 (the "Old
Senior Floating Rate Notes") was exchanged for (a) new Senior
Floating Rate Notes due February 1, 2003 (the "New Senior Float
ing Rate Notes") in an original principal amount equal to $1,000
plus 100% of the accrued interest under the Old Senior Floating
Rate Notes from and including February 3, 1994, through but not
including the Petition Date, or, at such holder's election, (b)
new 11.5% Senior Fixed Rate Notes due February 1, 2003 (the "New
Senior Fixed Rate Notes") in the same original principal amount,
or, at such holder's election, (c) an amount of New Senior
Floating Rate Notes and an amount of New Senior Fixed Rate Notes
equal, in the aggregate, to 100% of such claim;
(2) Each $1,000 principal amount of the Company's $50.0
million 12 3/8% Senior Fixed Rate Notes due February 1, 1999 (the
"Old Senior Fixed Rate Notes") was exchanged for (a) New Senior
Floating Rate Notes in an original principal amount equal to
$1,000 plus 100% of the accrued interest under the Old Senior
Fixed Rate Notes from and including February 2, 1994, through but
not including the Petition Date, or, at such holder's election,
(b) New Senior Fixed Rate Notes in the same original principal
amount, or, at such holder's election, (c) an amount of New
Senior Floating Rate Notes and an amount of New Senior Fixed Rate
Notes equal, in the aggregate, to 100% of such claim;
(3) the Company's $105.0 million 14% Subordinated
Debentures due February 1, 2001 (the "Old Subordinated
Debentures") were exchanged for the aggregate amount of 2,634,973
(3,952,443 after giving effect to the 3-for-2 stock split in July
1995) shares of newly-issued Common Stock, representing 85
percent of the Common Stock outstanding on the Effective Date;
(4) GEI invested $10.0 million cash in exchange for 465,000
(697,500 after giving effect to the 3-for-2 stock split in July
1995) shares of newly-issued Common Stock, representing 15
percent of the Common Stock outstanding on the Effective Date;
and
(5) all of the existing preferred stock, common stock, and
options and warrants to purchase common stock of the Company were
extinguished.
Pursuant to the Prepackaged Plan, the Company was
required within four months after the Effective Date, or such
longer time as may be required to prepare the necessary financial
statements, to take the necessary steps to register the newly-
issued shares of Common Stock in a "shelf registration," to be
effective for a period of three years, pursuant to the
appropriate requirements of the Securities and Exchange
Commission. The Registration Statement, of which this Prospectus
is a part, was filed to satisfy that requirement.
Also pursuant to the Prepackaged Plan, the Company
refinanced its principal bank indebtedness on the Effective Date
by entering into a new Credit Agreement with The CIT
Group/Business Credit, Inc., as administrative agent for itself
and certain other lenders (the "New Credit Agreement"). The New
Credit Agreement provided the Company with a 3-year $35.0 million
term loan facility and a 3-year $50.0 million revolving credit
facility, and is secured by liens upon substantially all of the
Company's real and personal property. As a result of such
refinancing, the obligations of the Company under the Credit
Agreement dated October 12, 1988, as restated on September 14,
1989, and thereafter amended, with Bank of America National Trust
and Savings Association (as successor by merger to Security
Pacific National Bank), as administrative agent, and certain
other senior lenders (the "Old Credit Agreement"), were
satisfied, and the Old Credit Agreement was terminated. In
December 1995, the Company amended and restated the New Credit
Agreement (the New Credit Agreement, as amended and restated, is
referred to herein as the "Restated Credit Agreement") to
effectively increase the credit facility by $5.0 million, to
provide more favorable terms and to extend the term of the
agreement through December 1998.
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Authorized Capital Stock
The authorized capital stock of the Company consists of
5,500,000 shares of Common Stock, par value $.01 per share, and
1,000,000 shares of Preferred Stock, par value $.01 per share.
The authorized Preferred Stock includes 35,000 shares of Series A
Junior Participating Preferred Stock (the "Series A Preferred").
As of September 5, 1996, 4,674,314 shares of Common Stock and no
shares of Preferred Stock were outstanding, an additional 323,326
shares of Common Stock were reserved for issuance pursuant to
outstanding options granted to GEI and to certain directors and
executive officers pursuant to the Director Plan and Key Employee
Option Plan, and all 35,000 shares of Series A Preferred were
reserved for issuance to the holders of Rights. See "-- Certain
Anti-Takeover and Charter Provisions; Rights Plan."
The following description of those terms and provisions
of the capital stock of the Company which are deemed material to
an investment in the Common Stock is intended to be a summary
thereof and does not purport to be a complete description of the
terms and conditions of such capital stock. Reference is made to
the Company's Restated Certificate of Incorporation, the
Certificate of Designations of the Series A Preferred, and the
Rights Agreement dated as of April 13, 1995, as amended June 13,
1995 (as amended, the "Rights Agreement") between the Company and
Fleet National Bank, formerly known as Shawmut Bank Connecticut,
N.A., as Rights Agent (the "Rights Agent"). Copies of each of the
foregoing documents have been filed as exhibits to the
Registration Statement of which this Prospectus is a part.
Common Stock
Each holder of Common Stock is entitled to one vote per
share on all matters to be voted on by the stockholders,
including elections of directors, and, except as otherwise
provided by law or as may be provided with respect to any series
of Preferred Stock created by the Board of Directors from time to
time, the holders of such shares of Common Stock exclusively
possess all voting power. See "Description of Capital Stock --
Preferred Stock." Holders of Common Stock are not entitled to
cumulate their votes.
Subject to certain preferential rights of any outstanding
series of Preferred Stock created by the Board of Directors from
time to time, holders of Common Stock are entitled to dividends
and other distributions as and when declared by the Board of
Directors out of assets legally available therefor, and upon the
liquidation, dissolution or winding up of the Company, the
holders of Common Stock would be entitled to share equally in the
distribution of all of the Company's assets. The holders of
Common Stock have no preemptive rights to purchase shares of
Common Stock of the Company.
The transfer agent and registrar for the Company's Common
Stock is Fleet National Bank, formerly known as Shawmut Bank
Connecticut, N.A., of 777 Main Street, MSN 238, Hartford,
Connecticut 06115.
The Common Stock is listed on the Nasdaq National Market
under the symbol "KASH."
Preferred Stock
Blank check authority
The Board of Directors has the authority, without action by
the stockholders, to issue shares of Preferred Stock in one or
more series and, within certain limitations, to determine the
dividend rights, dividend rate, rights and terms of redemption,
liquidation preferences, sinking fund terms, conversion rights
and voting rights of any series of Preferred Stock, the number of
shares constituting any such series, the designation thereof, and
the price therefor.
As of September 5, 1996, the Board of Directors had not
authorized the issuance of any Preferred Stock other than the
Series A Preferred. See "-- Series A Preferred."
The Company believes that the ability of its Board of
Directors to issue one or more series of Preferred Stock will
provide the Company with flexibility in structuring possible
future financings and acquisitions, and in meeting other
corporate needs which might arise. The authorized shares of
Preferred Stock, as well as Common Stock, will be available for
issuance without further action by the Company's stockholders,
unless such action is required by applicable law or the rules of
any exchange or automated quotation system on which the Company's
securities may be listed or traded.
Series A Preferred
There are 35,000 authorized shares of Series A Preferred.
As of September 5, 1996, none of the Series A Preferred is
outstanding, but all of such shares are reserved for issuance
pursuant to an exercise of Rights. See "-- Certain Anti-Takeover
and Charter Provisions; Rights Plan."
The Series A Preferred is not redeemable and has no
sinking fund. Each share of Series A Preferred will be entitled
to a minimum preferential quarterly dividend payment of $1 per
share but will be entitled to an aggregate dividend equal to the
dividends on 150 shares of Common Stock. In addition, each share
of Series A Preferred will have a liquidation preference of $150
per share but will be entitled to an aggregate payment of 150
times the payment made per share of Common Stock. Each share of
Series A Preferred will have 150 votes, voting together with the
shares of Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of Common
Stock are exchanged, each share of Series A Preferred will be
entitled to receive 150 times the amount received per share of
Common Stock. These rights are protected by customary anti-
dilution provisions.
Restrictions on Dividends
The indentures governing the New Senior Fixed Rate Notes and
the New Senior Floating Rate Notes (the "Indentures") provide
that the Company will not, directly or indirectly, (i) declare or
pay any dividend on or make any distributions in respect of the
capital stock of the Company or any Subsidiary thereof (except
for (x) dividends or distributions payable solely to the Company
or any Subsidiary of the Company and (y) dividends or
distributions of a Subsidiary of the Company solely on the
capital stock of such Subsidiary), or purchase, redeem or retire
for value, or make any payment on account of the purchase,
redemption or other acquisition or retirement for value of, any
capital stock or warrants, rights or options to purchase such
capital stock, (ii) make any principal payment on, or redeem,
repurchase or defease, or otherwise acquire or retire for value,
Subordinated Debt (as defined in the Indentures), prior to any
scheduled principal payment, scheduled sinking fund payment or
maturity thereof, or (iii) make any loan or advance to, or any
other Investment (as defined in the Indentures) in, any of its
Affiliates other than a Subsidiary of the Company (such payments
or any other actions described in (i), (ii) and (iii),
collectively, "Restricted Payments") unless (1) at the time of
and after giving effect to the proposed Restricted Payment, no
Event of Default (as defined in the Indentures) or event that,
after notice or lapse of time or both would become an Event of
Default, shall have occurred and be continuing, and (2) at the
time of and after giving effect to the proposed Restricted
Payment (the amount of any such payment, if other than cash, to
be determined by the Board of Directors, whose determination
shall be conclusive and evidenced by a Board Resolution (as
defined in the Indentures)) (A) the Consolidated Net Worth (as
defined in the Indentures) of the Company shall be at least
$75,000,000 and (B) the aggregate amount of all Restricted
Payments after January 29, 1995 shall not exceed 50% of
Cumulative Net Available Cash (as defined in the Indentures) of
the Company and (C) the Fixed Charge Coverage Ratio (as defined
in the Indentures) calculated on a pro forma basis for the full
twelve-month period ending on the last day of the Company's
fiscal quarter immediately preceding such proposed Restricted
Payment shall be at least 1.50 to 1. Notwithstanding the
foregoing, this provision will not prohibit the redemption, by
the Company, of its common stock (on a fully diluted basis) from
time to time under the terms and conditions of management equity
subscription agreements or stock option agreements and related
exhibits, so long as such redemption does not otherwise result in
an Event of Default or event that, after notice or lapse of time
or both, would become an Event of Default.
The foregoing provisions shall not be deemed to prohibit (1)
the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such declaration
complied with the provisions of the Indentures, or (2) the
redemption, repurchase or other acquisition or retirement (a
"retirement") of any shares of any class of capital stock of the
Company or of any Subsidiary thereof in exchange for (including
any such exchange pursuant to the exercise of a conversion right
or privilege in connection with which cash is paid in lieu of the
issuance of fractional shares or scrip), or out of the proceeds
of a substantially concurrent issue and sale (other than to a
Subsidiary of the Company) of, other shares of capital stock of
the Company, or (3) the retirement of Subordinated Debt out of
the proceeds of a substantially concurrent sale (other than to a
Subsidiary of the Company) of shares of capital stock of the
Company or issuance other than to a Subsidiary of the Company of
new Indebtedness which has a weighted average life to maturity at
least as long as the Stated Maturity of the New Notes and no
sinking fund or scheduled principal payments prior to the
maturity of the New Notes and the payment of which is
subordinated in right of payment and otherwise to the New Notes
at least to the same extent as such Subordinated Debt, or (4) the
payment of dividends or the making of distributions on shares of
capital stock of the Company solely in shares of capital stock of
the Company.
The Restated Credit Agreement provides that the Company
will not, nor will it permit any Subsidiary (as defined in the
Restated Credit Agreement) to, declare or make any Dividend
Payment (as defined in the Restated Credit Agreement) at any time
(other than (a) Dividend Payments in respect of the Company's
obligations to repurchase capital stock or Equity Rights (as
defined in the Restated Credit Agreement) of the Company of
retired, terminated or deceased directors, officers or employees
of the Company, provided that (i) the aggregated amount of such
payments in any fiscal year of the Company shall not exceed the
sum of (A) $500,000 plus (B) for each fiscal year of the Company
beginning after the Restatement Effective Date, an amount equal
to the excess (if any) of $500,000 over the amount of such
payments made by the Company in its immediately preceding fiscal
year and (ii) no such Dividend Payments may be made after the
occurrence and during the continuance of any Default (as defined
in the Restated Credit Agreement) and (b) any Subsidiary of the
Company may make Dividend Payments to the Company).
Certain Anti-Takeover and Charter Provisions
Delaware General Corporation Law
The Company is subject to Section 203 of the Delaware
General Corporation Law, as amended ("Section 203"). Section 203
provides that, subject to certain exceptions specified therein,
an "interested stockholder" of a Delaware corporation shall not
engage in any business combination, including mergers or
consolidations or acquisitions of additional shares of the
corporation, with the corporation for a three-year period
following the date that such stockholder becomes an "interested
stockholder" unless (i) prior to such date, the board of
directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder
becoming an "interested stockholder," (ii) upon consummation of
the transaction which resulted in the stockholder becoming an
"interested stockholder," the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at
the time the transaction commenced (excluding certain shares), or
(iii) on or subsequent to such date, the business combination is
approved by the board of directors of the corporation and
authorized at an annual or special meeting of stockholders by the
affirmative vote of at least 66-2/3% of the outstanding voting
stock which is not owned by the "interested stockholder." Except
as otherwise specified in Section 203, an "interested
stockholder" is defined to include (x) any person that is the
owner of 15% or more of the outstanding voting stock of the
corporation, or is an affiliate or associate of the corporation
and was the owner of 15% or more of the outstanding voting stock
of the corporation at any time within three years immediately
prior to the relevant date and (y) the affiliates and associates
of any such person.
Under certain circumstances, Section 203 makes it more
difficult for a person who would be an "interested stockholder"
to effect various business combinations with a corporation for a
three-year period, although the stockholders may elect to exclude
a corporation from the restrictions imposed thereunder. The
Certificate of Incorporation does not exclude the Company from
the restrictions imposed under Section 203. The provisions of
Section 203 may encourage companies interested in acquiring the
Company to negotiate in advance with the Board of Directors,
since the stockholder approval requirement would be avoided if a
majority of the directors then in office approve either the
business combination or the transaction which results in the
shareholder becoming an interested shareholder. Such provisions
also may have the effect of preventing changes in the management
of the Company. It is possible that such provisions could make it
more difficult to accomplish transactions which stockholders may
otherwise deem to be in their best interests.
Severance arrangements
Certain executive officers of the Company have severance
arrangements with the Company, which may have the effect of
increasing the costs of acquiring the Company in a hostile
takeover.
Rights Plan
On April 13, 1995, the Company adopted a preferred stock
purchase rights plan (the "Rights Plan"). Under the Rights Plan,
the Board declared a dividend in the form of one right (a "Right"
and, collectively, the "Rights") for each outstanding share of
Common Stock. The dividend was payable on April 27, 1995 (the
"Record Date") and was declared with respect to both the shares
then outstanding and shares that shall become outstanding between
the Record Date and the earliest of the Distribution Date (as
defined below) and the date on which the Rights are redeemed or
expire. The certificates representing any such shares of Common
Stock so issued will bear a legend to the effect that the
certificates also evidence the Rights.
Subject to adjustment upon the occurrence of certain
events described below, each Right initially entitled the holder
thereof to purchase one one-hundredth of a share of Series A
Preferred (the "Preferred Shares") for $76.00 (the "Purchase
Price"), ten days after a person or group (an "Acquiring Person")
acquires 25% or more of the Company's Common Stock (or, subject
to the terms of the Rights Agreement, more than 29% in the case
of Leonard Green & Partners, L.P., now known as Leonard Green &
Associates, L.P. ("LGA") or any person or entity which at any
time purchases all of the shares of Common Stock owned by LGA),
or certain actions are taken in respect of such acquisition. The
first date on which the right to purchase Preferred Shares could
be exercised is referred to herein as the Distribution Date.
The Purchase Price payable, and the number of Preferred
Shares or other securities issuable, upon exercise of the Rights
shall be adjusted in the event (i) of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Shares, (ii) of a grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred
Shares at a price, or securities convertible into Preferred
Shares with a conversion price, less than the then-current market
price of the Preferred Shares or (iii) of a distribution to
holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-
hundredths of a Preferred Share issuable upon exercise of each
Right are also subject to adjustment in the event of a stock
split of the shares of Common Stock or a stock dividend on the
shares of Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of shares of the
Common Stock occurring, in any such case, prior to the
Distribution Date. As a result of the 3-for-2 stock split
effected in the form of a stock dividend paid on July 17, 1995 to
the stockholders of record on June 26, 1995, the number of one-
hundredths of a Preferred Share issuable upon exercise of each
Right has been adjusted from one to 0.6667.
In the event any person or group becomes an Acquiring
Person, each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereafter be void),
will thereafter have the right to receive (subject to adjustment)
upon exercise that number of shares of Common Stock having a
market value of two times the exercise price of the Right. In
addition, if there is a merger or other business combination
between the Company and an Acquiring Person, or if certain other
events occur involving an Acquiring Person, each Right (if not
previously exercised) would entitle the holder to purchase that
number of shares of common stock of the Acquiring Person which at
the time of such transaction will have a market value of two
times the exercise price of the Right.
Prior to the Distribution Date, the Rights cannot be
transferred apart from the Common Stock and will be represented
solely by the Common Stock certificates. If the Distribution Date
occurs, separate certificates representing the Rights will be
mailed to holders of the Common Stock as of such date, and the
Rights could then begin to trade separately from the Common
Stock.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of
50% or more of the outstanding shares of Common Stock, the
Company may exchange the Rights (other than Rights owned by an
Acquiring Person, which will have become void), in whole or in
part, at an exchange ratio of one share of Common Stock, or one
one-hundredth of a Preferred Share (or of a share of a class or
series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
The Rights are redeemable by the Company at $.01 per Right
at any time prior to the occurrence of the Distribution Date. In
the event the Company receives a written notice from the holder
or holders of at least ten percent of the shares of Common Stock
then outstanding directing the Board of Directors to submit to a
vote of stockholders at the Company's next annual meeting of
stockholders a resolution authorizing the redemption of all the
then outstanding Rights at the Redemption Price (the
"Resolution") and the written notice complies with certain
procedural requirements, then the Board of Directors is required
to take such actions as are necessary or desirable to cause the
Resolution to be so submitted to a vote of stockholders,
including by including a proposal relating to the adoption of the
Resolution in the Board of Directors' proxy materials relating to
such annual meeting of stockholders. Subject to the requirements
of applicable law, the Board of Directors of the Company may take
a position in favor of or opposed to the adoption of the
Resolution, or no position with respect to the Resolution, as it
deems appropriate. If at the annual meeting the Resolution
receives the affirmative vote of a majority of the shares of
Common Stock outstanding as of the record date for such annual
meeting, and provided that no person or entity has become an
Acquiring Person prior to the redemption date, then all of the
Rights will be redeemed by such stockholder action at the
Redemption Price, effective as of the close of business on the
tenth business day following the date on which the results of the
vote on the Resolution at the annual meeting are certified as
official. The Rights will automatically expire on April 13, 2000
(the "Final Expiration Date"), unless the Final Expiration Date
is extended or unless the Rights are earlier redeemed or
exchanged by the Company.
The Rights will not have any voting rights and will not be
entitled to dividends. The terms of the Rights may be amended
without the consent of the holders of the Rights, provided that
after the Distribution Date the amendment does not adversely
affect the interest of the holders.
The Preferred Shares are not redeemable and have no sinking
fund. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of $1 per share but will
be entitled to an aggregate dividend equal to the dividends on
150 shares of Common Stock. In addition, each Preferred Share
will have a liquidation preference of $150 per share but will be
entitled to an aggregate payment of 150 times the payment made
per share of Common Stock. Each Preferred Share will have 150
votes, voting together with the shares of Common Stock. Finally,
in the event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged, each Preferred Share
will be entitled to receive 150 times the amount received per
share of Common Stock. These rights are protected by customary
anti-dilution provisions, and the foregoing amounts reflect the 3-
for-2 stock split effected in the form of a stock dividend paid
on July 17, 1995.
The Rights may have certain anti-takeover effects, which
could result in the Company being less attractive to a potential
acquirer. The Rights will cause substantial dilution to any
person or group which becomes an Acquiring Person or if an
Acquiring Person attempts to merge with, or engage in certain
other transactions with, the Company, as a result of which the
stockholders could receive less for their shares than otherwise
might be available in the event of a takeover attempt. The Rights
should not, however, interfere with any merger or other business
combination approved by the Company's Board of Directors prior to
the occurrence of a Distribution Date because the Rights may be
redeemed prior to such time.
Limitation of Liability of Directors
The Certificate of Incorporation provides that a director of
the Company will not be personally liable to the Company or its
shareholders for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its shareholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, which
concerns unlawful payments of dividends, stock purchases or
redemptions, or (iv) for any transaction from which the director
derived an improper personal benefit.
While the Certificate of Incorporation provides directors
with protection from awards for monetary damages for breaches of
their duty of care, it does not eliminate such duty. Accordingly,
the Certificate of Incorporation will have no effect on the
availability of equitable remedies such as an injunction or
rescission based on a director's breach of his or her duty of
care. The provisions of the Certificate of Incorporation
described above apply to an officer of the Company only if he or
she is a director of the Company and is acting in his or her
capacity as director, and do not apply to officers of the Company
who are not directors.
SELLING STOCKHOLDERS
Certain holders of Common Stock (the "Selling Stockholders")
may offer such securities hereby on a continuous or delayed basis
pursuant to Rule 415 promulgated under the Securities Act.
The following table sets forth certain information as of
September 5, 1996 with respect to each Selling Stockholder for
whose account Common Stock may be sold pursuant to this
Prospectus, which information has been furnished to the Company
by the Selling Stockholders and other sources that the Company
has not certified. Because the Selling Stockholders may sell,
pursuant to this Prospectus, all or some part of the Common Stock
that they hold, no estimate can be given as to the amount of
Common Stock that will be held by the Selling Stockholders at any
time subsequent to the date of this Prospectus. See "Plan of
Distribution."
As of September 5, 1996 none of the Selling Stockholders
except Green Equity Investors, L.P. ("GEI") and PaineWebber
Capital, Inc. has had a material relationship within the past
three years with the Company, other than as a result of the
ownership of securities of the Company. During fiscal 1994,
1993, and 1992, respectively, as consideration for the provision
of financial advisory services, the Company agreed to pay an
annual fee of $554,000, plus related out-of-pocket expenses, to
Leonard Green & Associates, L.P., formerly known as Leonard Green
& Partners, L.P. ("LGA"). From September 1993 through December
1994, the Company did not pay the annual fees to LGA, but
reimbursed LGA for out-of-pocket expenses billed to the Company.
Pursuant to the Prepackaged Plan, on December 29, 1994 the
Company entered into a Management Services Agreement with LGA,
pursuant to which LGA agreed to provide management, consulting,
financial planning and financial advisory services for a two year
term, in consideration for an annual fee of $200,000. LGA is not
required to spend a fixed number of hours of service to the
Company pursuant to the Management Services Agreement. The amount
of the annual fee payable to LGA was determined in the course of
negotiations among LGA, the Company and the Bondholders Committee
during the Restructuring. The Company believes that the fee is
not in excess of the fee that would be charged by an unrelated
third party in an arms-length transaction for similar services.
LGA is the sole general partner of GEI. Jennifer Holden Dunbar,
who is a director of the Company, is the controlling shareholder
of a general partner of LGA, and John G. Danhakl, also a director
of the Company, is a general partner of LGA.
From time to time, PaineWebber Incorporated provides
financial advisory services to the Company. As of September 5,
1996, PaineWebber Capital, Inc. owned approximately 11.9% of the
outstanding Common Stock of the Company. PaineWebber Capital,
Inc. is an affiliate of PaineWebber Incorporated, and Peter
Zurkow, who is a director of the Company, is a former Managing
Director of the Principal Transactions Group of PaineWebber
Incorporated. <PAGE>
Beneficial Ownership
Prior
to Offering (1)
Percent Shares Beneficial
Number of age of Offered Ownership
Name of Selling Stockholder Shares Class Hereby After
Offering
(1),(2)
American Express Company 972,000(3) 20.8% 972,000(3) -0-
American Express Financial 972,000(3) 20.8% 972,000(3) -0-
Corporation
Eugene Aspy and Helen 15 * 15 -0-
Breland, as joint tenants
Marilynn S. Baggerly 10 * 10 -0-
Michael W. Bourlier 37 * 37 -0-
Cede & Co. 4,669,045(4) 99.89% 4,644,674(4) 24,371
Virginia Root Cummings 20 * 20 -0-
Jennifer Holden Dunbar, as 376 * 376 -0-
Trustee u/a dated June 23,
1994
Mary J. Eichhorn, as Trustee 753 * 753 -0-
u/a dated May 21, 1991 f/b/o
Walter J. Eichhorn, Sr.
Revocable Trust
John D. Evans and Doris D. 100 * 100 -0-
Evans, as joint tenants
Ruth E. Geniesse 75 * 75 -0-
Green Equity Investors, 1,304,067 27.8% 1,286,067 18,000
L.P.
Kathy J. Hodges 75 * 75 -0-
IDS Bond Fund 149,570(3) 3.2% 149,570(3) -0-
IDS Extra Income Fund 822,430(3) 17.6% 822,430(3) -0-
Barton Leasoff 526 * 526 -0-
John N. Lobo and Valerie 200 * 200 -0-
M. Lobo, as Trustees of the
John N. Lobo Money Purchase
Pension Plan
Leon Mastromarchi and Robert 125 * 125 -0-
Bradley, as joint tenants
Malcom W. Morris, Jr. 264 * 264 -0-
PaineWebber Capital, Inc. 553,601 11.9% 553,601 -0-
Philadep & Co. 246 * 246 -0-
The Prudential Insurance 628,628 13.4% 628,628 -0-
Company of America
Clement Ramdin 1,000 * 1,000 -0-
Richard H. Rohlwing and Linda 940 * 940 -0-
Rohlwing, as joint tenants
Harry H. Root, III and 20 * 20 -0-
Marlene Root, as joint
tenants
Mary Sue Rothenberg 500 * 500 -0-
Ellen M. Skaggs and Delois V. 187 * 187 -0-
Skaggs, as joint tenants
Southeast Frozen Foods Co. LP 10 * 10 -0-
James R. Underhill 16 * 16 -0-
Meredyth E. Williams 150 * 150 -0-
* Less than 1%
(1) Information with respect to beneficial ownership was
obtained from the Selling Stockholders. Except to the extent
otherwise provided herein, the persons named in the table
have sole voting and dispositive power with respect to all
shares of Common Stock shown as beneficially owned by them.
(2) Assumes sale of all, and no other purchases of, Common
Stock. See "Plan of Distribution."
(3) American Express Company, American Express Financial
Corporation and IDS Extra Income Fund share dispositive
power over 822,430 shares, over which IDS Extra Income Fund
has sole voting power. American Express Company and American
Express Financial Corporation also share dispositive power
with IDS Bond Fund over an additional 149,570 shares over
which IDS Bond Fund has sole voting power. American Express
Company has indicated that it disclaims beneficial ownership
with respect to all 972,000 shares.
(4) Includes 1,286,067 shares beneficially owned by Green
Equity Investors, L.P., 822,430 shares and 149,570 shares
beneficially owned by IDS Extra Income Fund and IDS Bond
Fund, respectively, over which American Express Company and
American Express Financial Corporation share dispositive
power, 628,628 shares beneficially owned by The Prudential
Insurance Company of America, 553,601 shares beneficially
owned by PaineWebber Capital, Inc., and 376 shares
beneficially owned by Jennifer Holden Dunbar.
All of the shares offered hereby were acquired by the
Selling Stockholders (or their authorized assignors) pursuant to
the Prepackaged Plan. The shares of Common Stock are being
registered to satisfy a condition set forth in the Prepackaged
Plan. Pursuant to the Prepackaged Plan, the Company is required
to use its best efforts to keep such Registration Statement
continuously effective until the third anniversary of its
original effectiveness. However, there can be no assurance that
the Selling Stockholders will sell any or all of the shares of
Common Stock which may be offered pursuant to this Prospectus.
PLAN OF DISTRIBUTION
The Company will not receive any of the proceeds from the
sale by the Selling Stockholders of the Common Stock offered by
this Prospectus. Any or all of such Common Stock may be sold by
the Selling Stockholders from time to time (i) to or through
underwriters or dealers, (ii) directly to one or more other
purchasers, (iii) through agents on a best-efforts basis, or (iv)
through a combination of any such methods of sale. The Selling
Stockholders and any such underwriters, dealers or agents that
participate in the distribution of the Common Stock may be deemed
to be underwriters within the meaning of the Securities Act, and
any profit on the sale of the Common Stock by them, and any
discounts, commissions or concessions received by them, may be
deemed to be underwriting discounts and commissions under the
Securities Act. The Common Stock may be sold from time to time in
one or more transactions at a fixed offering price, which may be
changed, or at varying prices determined at the time of sale or
at negotiated prices. Such prices will be determined by the
Selling Stockholders or by agreement between the Selling
Stockholders and underwriters or dealers. Brokers or dealers
acting in connection with the sale of Common Stock contemplated
by this Prospectus may receive fees or commissions in connection
therewith.
At the time a particular offer of Common Stock is made, to
the extent required, a supplement to this Prospectus will be
distributed which will identify and set forth the aggregate
number of shares of Common Stock being offered and the terms of
the offering, including the name or names of any underwriters,
dealers or agents, the purchase price paid by any underwriter for
Common Stock purchased from the Selling Stockholders, any
discounts, commissions and other items constituting compensation
from the Selling Stockholders and/or the Company and any
discounts, commissions or concessions allowed or reallowed or
paid to dealers, including the proposed selling price to the
public. Each supplement to this Prospectus and, if necessary, a
post-effective amendment to the Registration Statement of which
this Prospectus is a part, will be filed with the Commission to
reflect the disclosure of additional information with respect to
the distribution of Common Stock.
The outstanding Common Stock is, and the Common Stock
offered hereby will be, listed on the Nasdaq National Market.
Under applicable rules and regulations under the Exchange
Act, any person engaged in a distribution of Common Stock may not
simultaneously engage in market making activities with respect to
the Common Stock for a period of nine business days prior to the
commencement of such distribution. In addition and without
limiting the foregoing, the Selling Stockholders and any person
participating in the distribution of the Common Stock will be
subject to applicable provisions of the Exchange Act and the
rules and regulations thereunder, including, without limitation,
Rules 10b-6 and 10b-7, which provisions may limit the timing of
purchases and sales of the Common Stock by the Selling
Stockholders or any such other person.
In order to comply with certain states' securities laws, if
applicable, the Common Stock will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In
certain states the Common Stock may not be sold unless it has
been registered or qualified for sale in such state, or unless an
exemption from registration or qualification is available.
The Registration Statement, of which the Prospectus is a
part, is being filed by the Company to satisfy a condition set
forth in the Prepackaged Plan. Pursuant to the Prepackaged Plan,
the Company is required to use its best efforts to keep such
Registration Statement continuously effective until the third
anniversary of its original effectiveness.
Pursuant to the Prepackaged Plan, the Company has paid or
will pay any and all expenses incident to the performance of or
compliance with its registration obligations, including, among
other things, registration and filing fees, fees and expenses
incurred in connection with compliance with securities or blue
sky laws of the applicable states, fees and disbursements of
counsel and independent public accountants for the Company, but
excluding underwriting discounts and commissions, the fees and
expenses of counsel to the Selling Stockholders and transfer
taxes, if any.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been
passed upon by Milbank, Tweed, Hadley & McCloy.
EXPERTS
The financial statements of the Company as of July 30,
1995 and for the 30 weeks ended July 30, 1995 and the 22 weeks
ended January 1, 1995, included in the Company's Annual Report on
Form 10-K for the fiscal year ended July 30, 1995, have been
incorporated herein by reference in reliance upon the report of
Coopers & Lybrand L.L.P., independent certified public
accountants, and upon the authority of said firm as experts in
accounting and auditing. The financial statements of the Company
as of July 31, 1994 and for the 52 weeks ended July 31, 1994 and
August 1, 1993, included in the Company's Annual Report on Form
10-K for the fiscal year ended July 30, 1995 have been
incorporated herein by reference in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants,
and upon the authority of said firm as experts in accounting and
auditing.
<PAGE>
No dealer, salesperson or any
other person has been
authorized to give any
information or to make any
representations in connection
with this offering other than
those contained in this KASH N' KARRY
Prospectus, and, if given or FOOD STORES, INC.
made, such information or
representations must not be
relied upon as having been so
authorized. This Prospectus Common Stock
does not constitute an offer to
sell or a solicitation of an
offer to buy by anyone in any
jurisdiction in which such PROSPECTUS
offer or solicitation is not
authorized or in which such
person making such offer or
solicitation is not qualified
to do so or to any person to October 1, 1996
whom it is unlawful to make
such offer or solicitation.
Neither the delivery of this
Prospectus nor any sale
hereunder shall, under any
circumstances, create any
implication that there has been
no change in the affairs of the
Company since the date hereof
or that the information
contained herein is correct as
of any time subsequent to its
date.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the fees and expenses payable
in connection with the sale of the Common Stock being registered.
The Company will pay all such fees and expenses. All amounts are
estimates except for the registration fee.
SEC Registration Fee $ 34,072.84
Accounting fees and expenses 32,000.00
Legal fees and expenses 65,000.00
Printing fees and expenses 650.00
--------------
Total $131,722.84
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("DGCL")
permits a Delaware corporation to indemnify any person who is or
was a director, officer, employee and agent of the corporation,
or who is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or
enterprise, against actual and reasonable expenses (including
attorneys' fees) incurred by such person in connection with any
action, suit or proceeding if (i) he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and (ii) in the case of a criminal
proceeding, he had no reasonable cause to believe his conduct was
unlawful. Except as ordered by a court, no indemnification shall
be made in connection with any proceeding brought by or in the
right of the Company where the person involved is adjudged to be
liable to the Company.
Article XV of the Bylaws of the Company provides for
indemnification of the officers and directors of the Company to
the full extent permitted by law, as now in effect or later
amended.
The Company has entered into indemnity agreements with each
of its directors and executive officers. The indemnity agreements
generally indemnify such persons against liabilities arising out
of their service in their capacities as directors, officers,
employees or agents of the Company. The Company may from time to
time enter into indemnity agreements with additional individuals
who become officers and/or directors of the Company.
Section 145 of the DGCL further authorizes a corporation to
purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or
enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would otherwise
have the power to indemnify him under Section 145. The Company
maintains policies insuring the Company's directors and executive
officers against certain liabilities for actions taken in such
capacities, including liabilities under the Securities Act.
Article Seventh of the Company's Restated Certificate of
Incorporation limits under certain circumstances the liability of
the Company's directors for a breach of their fiduciary duty as
directors. These provisions do not eliminate the liability of a
director (i) for a breach of the director's duty of loyalty to
the Company or its shareholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL
(relating to the declaration of dividends and purchase or
redemption of shares in violation of the DGCL), or (iv) for any
transaction from which the director derived an improper personal
benefit.
At present, there is no pending litigation or proceeding
involving a director or officer of the Company as to which
indemnification is being sought nor is the Company aware of any
threatened litigation that may result in claims for
indemnification by any officer, director or employee of the
Company.
Item 16. Exhibits and Financial Statement Schedules
(a) The following exhibits are filed as part of this
Registration Statement:
Exhibit No. Description
2 First Amended Plan of Reorganization filed by the
Company with the United States Bankruptcy Court of the
District of Delaware on November 9, 1994, as amended by
notices of technical modifications thereto filed on
November 9, 1994, and December 12, 1994 (previously
filed as Exhibit 2 to the Company's Quarterly Report on
Form 10-Q for the period ended October 30, 1994, which
exhibit is hereby incorporated by reference).
4.1 Indenture dated as of December 29, 1994, between the
Company and Shawmut Bank Connecticut, N.A., as Trustee,
relating to 11.5% Senior Fixed Rate Notes due 2003
(previously filed as Exhibit 4.1 to the Company's
Quarterly Report on Form 10-Q for the period ended
January 29, 1995, which exhibit is hereby incorporated
by reference).
4.2 Indenture dated as of December 29, 1994, between the
Company and IBJ Schroder Bank & Trust Company, as
Trustee, relating to Senior Floating Rate Notes due
2003 (previously filed as Exhibit 4.2 to the Company's
Quarterly Report on Form 10-Q for the period ended
January 29, 1995, which exhibit is hereby incorporated
by reference).
4.3(a) Rights Agreement dated as of April 13, 1995 between the
Company and Shawmut Bank Connecticut, N.A., as Rights
Agent (previously filed as Exhibit 1 to the Company's
Current Report on Form 8-K dated April 13, 1995, which
exhibit is hereby incorporated by reference).
4.3(b) First Amendment to Rights Agreement dated as of June
13, 1995 (previously filed as Exhibit 4.3(b) to the
Company's Quarterly Report on Form 10-Q for the period
ended April 30, 1995, which exhibit is hereby
incorporated by reference).
4.4 Specimen form of Common Stock certificate (previously
filed as Exhibit 4.4 to the Company's Registration
Statement on Form S-1, Registration No. 33-58999, which
exhibit is hereby incorporated by reference).
5 Opinion of Milbank, Tweed, Hadley & McCloy re:
legality (previously filed herewith as Exhibit 5 to
Amendment No. 2 to the Company's Registration Statement
on Form S-1, Registration No. 33-58999, which exhibit
is hereby incorporated by reference).
23.1 Consent of Milbank, Tweed, Hadley & McCloy (included in
Exhibit 5).
23.2 Consent of KPMG Peat Marwick LLP (filed herewith).
23.3 Consent of Coopers & Lybrand, L.L.P. (filed herewith).
24 Power of Attorney (included in signature page to the
Company's Registration Statement on Form S-1,
Registration No. 33-58999, which exhibit is hereby
incorporated by reference).
Item 17. Undertakings
1. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrant pursuant to its
Certificate of Incorporation, Bylaws or otherwise, the registrant
has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
2. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement to include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
3. The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. <PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Post-Effective Amendment No. 1 on Form S-
3 to this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Tampa, State of
Florida, on September 30, 1996.
KASH N' KARRY FOOD STORES, INC.
By: /s/ Ronald E. Johnson
---------------------------------
Ronald E. Johnson
Chairman of the Board,
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 on Form S-3 to the Registration Statement
has been signed by the following persons in the capacities and on the
dates indicated.
Signature Capacity Date
Chairman of the Board, September 30, 1996
/s/ Ronald E. Johnson President and Chief
- ----------------------- Executive Officer
Ronald E. Johnson (principal executive
officer)
Senior Vice President, September 30, 1996
/s/ Richard D. Coleman Chief Financial
- ----------------------- Officer
Richard D. Coleman (principal financial
officer)
Vice President, September 30, 1996
/s/ Marvin H. Snow, Jr. Controller
- ----------------------- (principal accounting
Marvin H. Snow, Jr. officer)
* Director September 30, 1996
- -----------------------
Everett L. Buckardt<PAGE>
- ----------------------- Director September __, 1996
John G. Danhakl
* Director September 30, 1996
- -----------------------
John J. Delucca
- ----------------------- Director September __, 1996
Jennifer Holden Dunbar
- ----------------------- Director September __, 1996
Ben Evans
* Director September 30, 1996
- -----------------------
Thomas W. Harberts
* Director September 30, 1996
- -----------------------
Robert Spiegel
* Director September 30, 1996
- -----------------------
Peter Zurkow
*By:/s/Ronald E. Johnson
- -----------------------
Ronald E. Johnson,
pursuant to Power
of Attorney
EXHIBIT 23.2
The Board of Directors
Kash n' Karry Food Stores, Inc.:
We consent to the use of our report incorporated by reference herein, and
to the reference to our firm under the heading "Experts" in the prospectus.
Our report dated September 16, 1994, except with respect to Note 1, which
is as of November 9, 1994, contains an explanatory paragraph that states
that "the Company has suffered recurring losses from operations and has a
net capital deficiency. As discussed in Note 1 to the financial statements,
Kash n' Karry Food Stores, Inc. filed a pre-packaged petition under Chapter
11 of the United States Bankruptcy Code on November 9, 1994 and these
matters raise substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty."
/s/ KPMG Peat Marwick LLP
- --------------------------
Tampa, Florida
September 30, 1996
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Kash n' Karry Food Stores, Inc. (the Company) on Form S-3 (File No. 33
58999) of our report, which includes explanatory paragraphs discussing the
Company's emergence from bankruptcy on December 29, 1994, and the Company's
adoption of Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 106 as of January 1, 1995, dated September 15,
1995, on our audit of the financial statements of Kash n' Karry Food
Stores, Inc. as of July 30, 1995 and for the thirty weeks ended July 30,
1995 and the twenty-two weeks ended January 1, 1995, which report is
included in the Annual Report on Form 10K. We also consent to the reference
to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
- --------------------------
Tampa, Florida
September 30, 1996
