-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, o77bvTfFnLadmu9UwcpvFE/RxDXw/6AMcC5Qy0O6aKjQukeGjnNZIOYlTHHfvGhW +ksI7nR3+43cp2BJmUXb+g== 0000045379-95-000019.txt : 19950814 0000045379-95-000019.hdr.sgml : 19950814 ACCESSION NUMBER: 0000045379-95-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19950701 FILED AS OF DATE: 19950811 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANNAFORD BROTHERS CO CENTRAL INDEX KEY: 0000045379 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 010085930 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07603 FILM NUMBER: 95561355 BUSINESS ADDRESS: STREET 1: 145 PLEASANT HILL RD CITY: SCARBOROUGH STATE: ME ZIP: 04074 BUSINESS PHONE: 2078832911 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 1, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-7603 HANNAFORD BROS. CO. (Exact name of Registrant as specified in its charter) Maine 01-0085930 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 145 Pleasant Hill Road, Scarborough, Maine 04074 (Address of principal executive offices; Zip Code) Registrant's telephone number, including area code: (207) 883-2911 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . As of July 24, 1995, there were 42,122,347 outstanding shares of Common Stock, $.75 par value, the only authorized class of common stock of the Registrant. INDEX PART I - FINANCIAL INFORMATION Page No. Item 1. Financial Statements Consolidated Balance Sheets, July 1, 1995 and December 31, 1994 3-4 Consolidated Statements of Earnings, Three Months Ended July 1, 1995 and July 2, 1994 5 Consolidated Statements of Earnings, Six Months Ended July 1, 1995 and July 2, 1994 6 Consolidated Statements of Cash Flows, Six Months Ended July 1, 1995 and July 2, 1994 7-8 Notes and Schedules to Consolidated Financial Statements 9-10 Item 2. Management's Discussion and Analysis of Second Quarter 1995 Results 11-14 PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 15-16 Item 5. Other Information 16 Item 6. Exhibits and Reports on Form 8-K 17-18 Signatures 19 HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Dollars in thousands) (UNAUDITED) July 1, December 31, 1995 1994 Current assets: Cash and cash items $ 65,714 $ 40,955 Accounts receivable, net 12,475 14,240 Inventories 134,644 132,423 Prepaid expenses 4,443 6,210 Deferred income taxes 8,035 7,519 Total current assets 225,311 201,347 Property, plant and equipment, net 519,647 503,941 Leased property under capital leases, net 56,622 58,821 Investment in financing leases 1,735 1,753 Other assets: Deferred charges, net 105,557 101,548 Computer software costs, net 9,412 8,382 Notes receivable 1,142 1,229 Miscellaneous assets 613 584 Total other assets 116,724 111,743 $920,039 $877,605 See accompanying notes to consolidated financial statements. HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY (Dollars in thousands) (UNAUDITED) July 1, December 31, 1995 1994 Current liabilities: Current maturities of long-term debt $ 14,802 $ 14,409 Obligations under capital leases 1,380 1,382 Accounts payable 103,145 89,927 Accrued payroll 19,680 19,017 Other accrued expenses 29,711 29,738 Income taxes 2,793 4,167 Total current liabilities 171,511 158,640 Deferred income tax liabilities 21,811 21,886 Other liabilities 21,171 19,365 Long-term debt 150,671 153,687 Obligations under capital leases 68,531 69,552 Shareholders' equity Class A Serial Preferred stock, no par, authorized 2,000,000 shares - - Class B Serial Preferred stock, par value $.01 per share, authorized 28,000,000 shares - - Common stock, par value $.75 per share: Authorized 110,000,000 shares; issued and outstanding 42,103,612 shares at July 1, 1995, and 41,779,342 shares at December 31, 1994 31,578 31,335 Additional paid-in capital 117,529 110,669 Preferred stock purchase rights 421 418 Retained earnings 336,816 312,053 Total shareholders' equity 486,344 454,475 $920,039 $877,605 See accompanying notes to consolidated financial statements. HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands except per share data) (UNAUDITED) THREE MONTHS ENDED July 1, July 2, 1995 1994 Sales and other revenues $634,798 $538,216 Cost of sales 481,743 404,084 Gross margin 153,055 134,132 Selling, general and administrative expenses 116,241 103,089 Operating profit 36,814 31,043 Interest expense, net 4,892 5,210 Earnings before income taxes 31,922 25,833 Income taxes 12,897 10,424 Net earnings $ 19,025 $ 15,409 Per share of common stock: Net earnings $ .45 $ .37 Cash dividends $ .105 $ .095 Weighted average number of common shares outstanding 42,049 41,463 See accompanying notes to consolidated financial statements. HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Amounts in thousands except per share data) (UNAUDITED) SIX MONTHS ENDED July 1, July 2, 1995 1994 Sales and other revenues $1,233,594 $1,057,294 Cost of sales 934,585 797,417 Gross margin 299,009 259,877 Selling, general and administrative expenses 232,397 205,485 Operating profit 66,612 54,392 Interest expense, net 10,287 9,945 Earnings before income taxes 56,325 44,447 Income taxes 22,736 17,979 Net earnings $ 33,589 $ 26,468 Per share of common stock: Net earnings $ .80 $ .64 Cash dividends $ .21 $ .19 Weighted average number of common shares outstanding 41,969 41,389 See accompanying notes to consolidated financial statements. HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (UNAUDITED) SIX MONTHS ENDED July 1, July 2, 1995 1994 Cash flows from operating activities: Net income $ 33,589 $ 26,468 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 33,741 29,198 (Increase) Decrease in inventories (2,221) 10,519 Decrease in receivables and prepayments 3,618 1,429 Increase (Decrease) in accounts payable and accrued expenses 14,713 (7,174) Increase (Decrease) in income taxes payable (1,375) 1,888 Decrease in deferred taxes (591) (418) Other operating activities (50) (1,719) Net cash provided by operating activities 81,424 60,191 Cash flows from investing activities: Acquisition of property, plant and equipment (47,841) (31,629) Sale of property, plant and equipment, net 1,894 1,431 Increase in deferred charges (2,473) (4,415) Increase in computer software costs (2,343) (1,252) Decrease in short-term investments -- 19,851 Net cash used in investing activities (50,763) (16,014) Cash flows from financing activities: Principal payments under capital lease obligations (709) (679) Issuance of common stock 7,103 5,944 Payments of long-term debt (3,474) (8,278) Dividends paid (8,822) (7,946) Net cash used for financing activities (5,902) (10,959) Net Increase in cash and cash items 24,759 33,218 Cash and cash items at beginning of period 40,955 77,496 Cash and cash items at end of period $ 65,714 $110,714 See accompanying notes to consolidated financial statements. HANNAFORD BROS. CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Supplemental disclosures of cash flow information (Dollars in thousands) (UNAUDITED) SIX MONTHS ENDED July 1, July 2, Cash paid during the first half for: 1995 1994 Interest (net of amount capitalized, $839 in 1995 and $1,013 in 1994) $11,667 $11,496 Income taxes $24,702 $16,509 Supplemental disclosure of non-cash investing and financing activity Capital lease obligations of $5,383,000 were incurred during the six month period ended July 2, 1994. Disclosure of accounting policy For the purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash items. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the amounts shown reflect all adjustments necessary to present fairly the financial position and results of operations for the periods presented. All such adjustments are of a normal recurring nature. Earnings per share of common stock have been determined by dividing net earnings available to common shareholders by the weighted average number of shares of common stock outstanding. The assumed exercise of existing employee stock options has been excluded since it does not result in any material dilution. Net earnings available to common shareholders is equal to net earnings reduced by preferred stock dividends of $27,000 for the three months ended July 2, 1994 and $74,000 for the six months ended July 2, 1994. All of the remaining outstanding shares of preferred stock were redeemed in the second quarter of 1994, so there were no preferred dividends paid in 1995. It is suggested that the financial statements be read in conjunction with the financial statements and notes thereto included in the Company's latest annual report. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 2. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consists of the following: (In thousands) (Unaudited) July 1, December 31, 1995 1994 Land and improvements $ 82,867 $ 81,667 Buildings 208,206 203,645 Furniture, fixtures & equipment 312,417 294,792 Leasehold interests & improvements 170,918 169,178 Construction in progress 21,606 6,193 796,014 755,475 Less accumulated depreciation and amortization 276,367 251,534 $519,647 $503,941 3. LEASED PROPERTY Leased property under capital leases consists of the following: (in thousands) (Unaudited) July 1, December 31, 1995 1994 Real property $75,309 $76,552 Less accumulated amortization 18,687 17,731 $56,622 $58,821 4. ACQUISITION On July 20, 1995 the Company announced it had reached an agreement to purchase eight supermarket locations owned and operated by Farm Fresh, Inc., for approximately $25 million in cash. The purchase will include six stores located in Richmond, Virginia, and one in Charlottesville, Virginia. Another store is currently under construction in Richmond. The Company expects to complete this asset purchase in the fall. The purchase will have no material impact on Hannaford earnings for the year. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF SECOND QUARTER 1995 RESULTS RESULTS OF OPERATIONS Sales and other revenues rose 16.7% for the first half of 1995, to $1,233.6 million, an increase of $176.3 million over the first half of 1994. Retail sales increased $177.0 million or 17.7% to $1,192.0 million, reflecting an increase of $15.0 million or 1.5% in sales from supermarkets that were open in both periods presented ("same store sales") and additional sales of $162.0 million from the net impact of new, expanded, and closed stores as well as the acquisition of Wilson's Supermarkets in July, 1994. Other sales and revenues, which include trucking, wholesale, real estate and miscellaneous retail operations, decreased $0.7 million. In the second quarter of 1995, sales and other revenues were $634.8 million, an increase of $96.6 million or 17.9% over those reported for the same period of 1994. Retail sales increased $96.8 million or 18.7% to $613.5 million, reflecting an increase of $15.9 million or 3.2% in same store sales and additional sales of $80.9 million from the net impact of new, expanded and closed stores as well as the acquisition of Wilson's Supermarkets in July, 1994. Other sales and revenues decreased $0.2 million. Due to sales and other revenues from the Easter holiday occurring in the first quarter last year and the second quarter this year, same store sales were up 3.2% for the quarter. Adjusting for estimated Easter sales, same store sales increases in the second quarter were 1.9%. This increase sustains a positive trend that started in 1993 and is slightly higher than the adjusted increase of 1.2% reported for the first quarter of 1995. Since sales have improved in the second quarter and initial summer sales have been strong, it appears that the trend in same store sales increases for the second half of 1995 is somewhat better than the 1.6% reported for 1994. Excluding the sales and other revenues from Wilson's Supermarkets, the Company's sales and other revenues were up 7.4% for the quarter and 6.3% for the first half of 1995. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) MANAGEMENT'S DISCUSSION AND ANALYSIS OF SECOND QUARTER 1995 RESULTS Gross margins decreased in the first half of 1995 to 24.2% of sales and other revenues in comparison to 24.6% in the first half of 1994. For the second quarter of 1995, gross margins were 24.1% versus 24.9% for the second quarter of 1994. These decreases in margins continue a trend that began in the second half of 1993. These decreases reflect the ongoing competitive pressures throughout the Company's marketing territories. The Company continues to focus on maintaining a competitive pricing strategy in its marketing areas by passing operating efficiencies on to its customers in the form of lower prices. The decreases also reflect lower gross margins earned by Wilson's Supermarkets. Selling, general and administrative expenses decreased to 18.8% of sales and other revenues in the first half of 1995 as compared to 19.4% in the first half of 1994. This continues a significant downward trend that began in 1992 when first half selling, general and administrative expenses were 20.3% of sales and other revenues. For the second quarter of 1995, selling, general and administrative expenses were 18.3% of sales and other revenues versus 19.2% for the second quarter of 1994. Payroll and payroll related expenses, which exceeded 50% of total selling, general and administrative expenses in all periods presented, were primarily responsible for this decrease. This resulted from cost containment efforts coupled with positive synergies resulting from the acquisition of Wilson's Supermarkets. These reductions were also favorably impacted by the lower operating cost structure of Wilson's Supermarkets. Net earnings increased 26.9% in the first half of 1995 to $33.6 million or 2.7% of sales and other revenues, an increase of $7.1 million from 1994 first half earnings of $26.5 million or 2.5% of sales and other revenues. Second quarter 1995 net earnings were $19.0 million or 3.0% of sales and other revenues as compared to $15.4 million or 2.9% of sales and other revenues in the second quarter of 1994. These improvements reflect the impact of reduced selling, general and administrative expenses expressed as a percentage of sales, offset by a reduction in gross margins. HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) MANAGEMENT'S DISCUSSION AND ANALYSIS OF SECOND QUARTER 1995 RESULTS Management does not expect earnings increases of this magnitude for the second half of fiscal 1995. The Company's 1995 store opening schedule is heavily weighted toward the latter part of the year, and it will be entering new markets in the Southeastern region. Management expects those factors to impact the quarterly mix of earnings in 1995 from that of prior years. CAPITAL RESOURCES AND LIQUIDITY The current ratio (FIFO basis) on July 1, 1995 was 1.40 while working capital (FIFO basis) was $68.6 million or 7.5% of total assets. On December 31, 1994, the current ratio (FIFO basis) was 1.36 while working capital (FIFO basis) was $57.1 million, or 6.5% of total assets. The Company values the majority of its inventories using the LIFO method. The current cost of inventories exceeded the LIFO valuation by approximately $14.8 million on July 1, 1995 and $14.3 million on December 31, 1994. The Company's liquidity position is stronger than indicated by stated working capital and current ratios because of available unused lines of revolving credit of $50 million and available unused lines of short-term credit of $58 million on July 1, 1995. Cash and cash items increased $24.7 million to $65.7 million at July 1, 1995 from $41.0 million at December 31, 1994. This increase is primarily the result of cash provided by operating activities partially reduced by cash used in investing activities. Cash provided by operating activities was $81.4 million in the first half of 1995, an increase of $21.2 million over the $60.2 million provided in the first half of 1994. This increase is primarily attributable to improved results of operations, higher depreciation and amortization and a decreased investment in working capital. Accounts payable increased $13.2 million in the first half of 1995 due primarily to seasonal buying patterns and their associated payment terms. Cash used in investing activities increased $34.8 million during the first half of 1995 to $50.8 million from $16.0 million during the HANNAFORD BROS. CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) MANAGEMENT'S DISCUSSION AND ANALYSIS OF SECOND QUARTER 1995 RESULTS first half of 1994. This increase is the result of increased capital expenditures during the 1995 period coupled with proceeds on investments totaling $19.9 million in the first half of 1994. These funds were used to finance the acquisition of Wilson's Supermarkets. Total capital expenditures totaled $52.7 million in the first half of 1995 and were composed of $47.9 million in additions to property, plant and equipment and $4.8 million in deferred charges and computer software costs. These capital expenditures are primarily composed of costs incurred in meeting the Company's 1995 capital program. In June 1995, the Company opened a new supermarket in Brunswick, Maine, with approximately 32,000 square feet of retail selling space, which replaced a smaller, outdated facility. Excluding the acquisition (Note 4), during the second half, the Company expects to open 13 supermarkets, including 7 stores in four new southeastern markets, and 3 new stores, as well as three relocations, in the Northeast. Excluding the acquisition (Note 4), the Company expects to spend in the range of $150 million in 1995 for capital expenditures. This program is subject to continuing change and review as conditions warrant. Net square footage of retail selling space is expected to increase by approximately 12% by year-end 1995. The 1995 capital program is expected to be financed by cash and cash items, internally generated funds and leases. Cash used in financing activities was $5.9 million in the first half of 1995 as compared to $11.0 million in the first half of 1994. The Company continues to maintain a strong capital structure. Management believes that maintaining such financial flexibility provides a significant competitive advantage and allows the Company to be opportunistic in terms of acquisitions and expansions. PART II - OTHER INFORMATION Item 4: Submission of Matters to a Vote of Security Holders (a) The Annual Meeting of Shareholders was held on May 24, 1995. (b) Not applicable. (c) The following issues were voted upon by shareholders. All matters were approved as indicated: 1. ELECTION OF FOUR CLASS II DIRECTORS TO SERVE UNTIL THE ANNUAL MEETING OF SHAREHOLDERS IN 1998. WITHHOLD AUTHORITY BROKER FOR FOR TOTAL NON-VOTES Hugh G. Farrington 34,212,118 117,319 34,329,437 0 Walter J. Salmon 34,227,064 102,373 34,329,437 0 David F. Sobey 34,220,973 108,464 34,329,437 0 Robert L. Strickland 34,227,791 101,646 34,329,437 0 2. RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 30, 1995. BROKER FOR AGAINST ABSTAIN NON-VOTES TOTAL 34,198,812 43,134 87,491 0 3. ADOPTION OF A PROPOSED STOCK OWNERSHIP PLAN FOR OUTSIDE DIRECTORS. BROKER FOR AGAINST ABSTAIN NON-VOTES TOTAL 32,665,712 1,067,732 595,993 0 4. APPROVAL OF CERTAIN AMENDMENTS TO THE 1988 STOCK PLAN TO REMOVE A LIMITATION ON THE NUMBER OF SHARES OF COMMON STOCK THAT MAY BE ISSUED UNDER THE PLAN, TO INCREASE THE NUMBER OF SHARES THAT MAY BE ISSUED UNDER INCENTIVE STOCK OPTIONS, TO LENGTHEN THE POTENTIAL VESTING PERIOD FOR RESTRICTED STOCK, AND TO ALLOW TRANSFERS OF STOCK OPTIONS TO FAMILY MEMBERS UNDER CERTAIN CONDITIONS. BROKER FOR AGAINST ABSTAIN NON-VOTES TOTAL 33,043,935 620,274 665,228 0 5. APPROVAL OF AN AMENDMENT TO THE EMPLOYEE STOCK PURCHASE PLAN TO REMOVE THE SIX-MONTH SERVICE REQUIREMENT FOR ELIGIBILITY. BROKER FOR AGAINST ABSTAIN NON-VOTES TOTAL 33,292,374 392,146 644,917 0 (d) Not applicable Item 5: Other Information A limited review was made of the results of the three-month and six-month periods ended July 1, 1995, by Coopers & Lybrand. Under an Asset Purchase Agreement dated as of July 31, 1995, the Registrant has agreed to purchase certain supermarket properties from Farm Fresh, Inc. for approximately $25 million plus the cost of inventories. The transaction involves six supermarkets in and around Richmond, Virginia, one supermarket under construction in Richmond, and one supermarket in Charlottesville, Virginia. As part of the transaction, the Registrant will also be acquiring two other sites in Richmond that will be discontinued as supermarkets and held for resale to third parties. In addition, the Registrant will receive rights of first refusal on four other Farm Fresh supermarket locations in Richmond. Consummation of the transaction with Farm Fresh is subject to various conditions. The Registrant anticipates that the transaction will likely be completed this fall. Item 6: Exhibits and Reports on Form 8-K (a) Exhibits required by Item 601 of Regulation SK 10.1 First Amendment to the Hannaford Bros. Co. Employee Stock Purchase Plan, approved by shareholders May 24, 1995 and effective February 7, 1995. 10.2 Second Amendment to the Amended and Restated Savings and Investment Plan of the Registrant, approved by shareholders May 24, 1995 and generally effective January 1, 1993. 10.3 Third Amendment to the Amended and Restated Savings and Investment Plan of the Registrant generally effective July 1, 1995. 10.4 There is incorporated herein by reference the Hannaford Southeast Savings and Investment Plan, a copy of which was filed as Exhibit 4.5 to the Registrant's Form S-8, dated June 8, 1995 (SEC Registration No. 033-60119). 10.5 There is incorporated herein by reference the Amended and Restated Hannaford Bros. Co. 1988 Stock Plan, approved by shareholders May 24, 1995 and effective February 6, 1995, a copy of which was filed as Exhibit 4.5 to the Registrant's Form S-8, dated June 27, 1995 (SEC Registration No. 033-60655). 10.6 There is incorporated herein by reference the Hannaford Bros. Co. Stock Ownership Plan for Outside Directors, approved by shareholders May 24, 1995 and effective January 1, 1996, a copy of which was filed as Exhibit 4.5 to the Registrant's Form S-8, dated June 27, 1995 (SEC Registration No. 033-60691). 10.7 Letter Agreement between the Registrant and Norman E. Brackett, dated June 30, 1995. 10.8 Consulting Agreement between the Registrant and Norman E. Brackett, dated June 30, 1995. 15 Letter of Coopers & Lybrand L.L.P. furnished pursuant to Regulation SX. 23 Letter of Coopers & Lybrand L.L.P. regarding incorporation by reference to certain forms S-8 of the Registrant. 27 Financial Data Schedule (b) There were no reports on Form 8-K filed during the quarter ended July 1, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HANNAFORD BROS. CO. Date August 11, 1995 s/Blythe J. McGarvie Blythe J. McGarvie Senior Vice President (Chief Financial Officer) Date August 11, 1995 s/Charles H. Crockett Charles H. Crockett Assistant Secretary EX-10 2 Exhibit 10.1 FIRST AMENDMENT TO THE HANNAFORD BROS. CO. EMPLOYEE STOCK PURCHASE PLAN The Hannaford Bros. Co. Employee Stock Purchase Plan (the "Plan") was last amended and restated effective October 19, 1994. The Plan is hereby further amended in the following respects: 1. The terms used in this Amendment shall have the meanings set forth in the Plan unless the context indicates otherwise. 2. Subsection (a) of Section 5 is hereby amended to read as follows: "(a) REQUIREMENT. Each Employee of a corporation, the Employees of which are offered Options, shall be eligible to participate in such offering if he or she is employed by such corporation on the Offering Date. Options shall be granted only to Employees." 3. Section 13 is hereby amended to read as follows: "13. AMENDMENT AND TERMINATION. (a) AMENDMENT. The Committee, without further approval of the stockholders of the Corporation, may amend the Plan from time to time in such respects as the Committee may deem advisable, provided that no amendment shall become effective prior to ratification by the Board and approval of the stockholders of the Corporation which: (i) increases the maximum number of Shares for which Options may be granted; or (ii) changes the provisions relating to Employees eligible to receive Options under the Plan. (b) TERMINATION. The Committee, without further approval of the stockholders of the Corporation, may at any time terminate the Plan." 4. This Amendment shall be effective February 7, 1995. EX-10 3 Exhibit 10.2 SECOND AMENDMENT TO THE HANNAFORD BROS. CO. SAVINGS AND INVESTMENT PLAN The Hannaford Bros. Co. Savings and Investment Plan (the "Plan") was last amended and restated effective generally January 1, 1993, and has been further amended by a First Amendment effective generally January 1, 1994. The Plan is hereby further amended in the following respects: 1. The terms used in this Amendment shall have the meanings set forth in the Plan unless the context indicates otherwise. 2. Sections 2.02, 2.31, 2.35 and 2.39 are hereby amended by replacing "402(a)(8)" with "402(e)(3)". 3. Section 2.02 is hereby amended to read as follows: "2.02 `Actual Deferral Percentage' for any Plan Year shall mean, except as otherwise provided in Section 2.39, the average of the ratios, calculated separately for each Eligible Employee, of the amount of Elective Contributions made on behalf of such Employee for such year and, at the election of the Employer, the amount of Matching Contributions made on behalf of such Employee for such year to such Employee's compensation for such year (whether or not the Employee was a Participant for the entire Plan Year). For purposes of this Section, "compensation" shall mean compensation as defined in Section 7.05 and may, at the election of the Employer, include amounts excludable from gross income under Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code." 4. Subsection (b) of Section 2.35 is hereby amended to read as follows: "(b) A person owning (or considered as owning within the meaning of Section 318 of the Code) more than a one-half percent interest, as well as one of the ten (10) largest interests in an Employer, and having annual compensation (within the meaning of Section 7.05) from such Employer of more than the limitation in effect under Section 415(c)(1)(A) of the Code for any Plan Year;" 5. Section 2.39 is hereby amended to read as follows: "2.39 `Matching Contribution Percentage' shall mean for any Plan Year the average of the ratios, calculated separately for each Eligible Employee, of the amount of Matching Contributions (excluding the Matching Contributions, if any, taken into account under Section 2.02) made on behalf of such Employee for such year and, at the election of the Employer, the amount of Elective Contributions made on behalf of such Employee for such year to such Employee's compensation for such year. For purposes of this Section, "compensation" shall mean compensation as defined in Section 7.05 and may, at the election of the Employer, include amounts excludable from gross income under Sections 125, 402(e)(3) and 402(h)(1)(B) of the Code. Notwithstanding the foregoing provisions of this Section or Section 2.02 to the contrary, no Elective Contributions may be taken into account in calculating the Matching Contribution Percentage for any Eligible Employee unless the requirement of Section 5.03(a) is satisfied both with and without the exclusion of such Elective Contributions in calculating the Employee's Actual Deferral Percentage." 6. Subsection (b) of Section 4.01 is hereby amended to read as follows: "(b) The Matching Contributions, if any, to be made on behalf of each Participant in its employ during such year at the rate determined by the Human Resources Committee of the Board of Directors; provided, however, no Matching Contribution may be made with respect to any Excess Deferral or Excess Elective Contribution or any Elective Contribution which is returned to the Participant pursuant to Section 7.04(b)." 7. Subsection (f) of Section 4.07 is hereby amended to read as follows: "(f) Any Matching Contribution which is attributable to an Excess Deferral or Excess Elective Contribution shall be forfeited and shall be disregarded for purposes of subsection (a) of this Section. Forfeitures shall be used to reduce Matching Contributions." 8. The last sentence of the first paragraph of Section 4.08 is hereby amended to read as follows: "Notwithstanding the foregoing to the contrary, an Employee who has received an eligible rollover distribution (as hereinabove defined) solely by reason of the death of his or her spouse or a distribution from an individual retirement account (as hereinabove defined), which account is attributable solely to a rollover contribution (as hereinabove defined) from an employee's trust described in Section 401(a) of the Code which is exempt from tax under Section 501(a) of the Code of amounts received by reason of the death of his or her spouse, may not transfer any portion of such distribution to the Trust." 9. The first paragraph of Section 4.09 is hereby amended by adding the following new sentence at the end thereof: "Notwithstanding the foregoing provisions of this Section to the contrary, this Plan shall not accept any direct or indirect transfers after December 31, 1984, from a plan which is subject to Section 401(a)(11) of the Code." 10. The next to the last paragraph of Section 5.03 is hereby deleted and replaced by the following two new paragraphs: "For purposes of this Section, Elective Contributions and Matching Contributions must be made before the last day of the twelve (12) month period immediately following the Plan Year to which such contributions relate. Any Elective Contributions returned to a Participant pursuant to Section 7.04(b) shall be disregarded. If an Employee is a family member within the meaning of Section 2.31 of a Five Percent Owner or one of the ten (10) Highly Compensated Employees receiving the greatest compensation from an Employer during the Plan Year, then the individual Actual Deferral Percentage attributable to such Employee shall be treated as if it were attributable to the Five Percent Owner or Highly Compensated Employee. An Employee who is a family member with respect to a Five Percent Owner or one of the ten (10) Highly Compensated Employees receiving the greatest compensation from an Employer shall not be considered a separate Employee for purposes of determining the Actual Deferral Percentage for Highly Compensated Eligible Employees and the Actual Deferral Percentage for all other Eligible Employees." 11. The last paragraph of Section 5.04 is hereby amended to read as follows: "In the event that the sum of the Actual Deferral Percentage for Highly Compensated Eligible Employees and the Matching Contribution Percentage for Highly Compensated Eligible Employees for any Plan Year exceeds the limitations prescribed in Section 5.03(b), the Administrative Committee shall, within two and one-half months after the end of such year, reduce the Matching Contribution Percentage for Highly Compensated Employees in the manner prescribed in subsection (h) through (k) of Section 4.07." 12. Section 7.05 is hereby amended to read as follows: "7.05 Definition of Compensation. For purposes of applying the limitations of this Article, the term 'compensation' shall mean, with respect to a Limitation Year, the total compensation paid by an Employer to an Employee for services rendered while an Employee that constitutes wages as defined in Section 3401(a) of the Code and all other payments by an Employer to an Employee for services rendered while an Employee for which an Employer is required to furnish the Employee a written statement under Sections 6041(d), 6051(a)(3) and 6052 of the Code without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or services performed. For Limitation Years beginning after December 31, 1991, for purposes of applying the limitations of this Article 'compensation' for a Limitation Year shall mean the compensation actually paid or includable in gross income during such Limitation Year. Notwithstanding the preceding sentence 'compensation' with respect to a Participant who is permanently and totally disabled (within the meaning of Section 22(e)(3) of the Code) shall mean the compensation such Participant would have received for the Limitation Year if he or she had been paid at the rate in effect immediately before becoming permanently and totally disabled; provided, such imputed compensation may be taken into account only if the Participant is not a Highly Compensated Employee and contributions made on behalf of such Participant are nonforfeitable when made. Notwithstanding the foregoing to the contrary, for purposes of Sections 2.02, 2.39 and 10.03(b), effective January 1, 1989, the annual `compensation' of any Employee in excess of Two Hundred Thousand Dollars ($200,000.00) (or such higher amount as the Secretary of the Treasury may prescribe) shall not be taken into account, and, effective January 1, 1994, the annual `compensation' of any Employee in excess of One Hundred Fifty Thousand Dollars ($150,000.00) (or such higher amount as the Secretary of the Treasury may prescribe) shall not be taken into account. In the event `compensation' is determined based on a period of time which contains fewer than twelve (12) calendar months, the annual compensation limit shall be an amount equal to the annual compensation limit for the Limitation Year in which the period begins multiplied by a fraction, the numerator of which is the number of full calendar months in the period and the denominator of which is twelve (12). For purposes of the annual compensation limit, any `compensation' paid to an Employee who is the spouse or lineal descendant (who has not attained age nineteen (19) by the close of the Plan Year) of an Employee who is a Five Percent Owner or one of the ten (10) Highly Compensated Employees paid the highest `compensation' for the Plan Year shall be treated as paid to or on behalf of such Five Percent Owner or Highly Compensated Employee. If the annual compensation limit is exceeded as a result of the application of the preceding sentence, then the limit shall be prorated among the affected Employees' `compensation' as determined prior to the application of the annual compensation limit. If `compensation' for a prior Limitation Year is taken into account for any Limitation Year, such compensation shall be subject to the annual compensation limit in effect for such prior Limitation Year." 13. Subsection (b)(i) of Section 9.01 is hereby amended to read as follows: "(i) the termination of the Plan by the Participant's Employer, without the establishment or maintenance of another defined contribution plan (other than an employee stock ownership plan as defined in Section 4975(e)(7) of the Code);" 14. Subsection (c) of Section 9.01 is hereby amended to read as follows: "(c) Notwithstanding the foregoing provisions of this Section to the contrary, if the value of a Participant's Account does not exceed Three Thousand Five Hundred Dollars ($3,500.00) as of the Valuation Date following the date he or she ceases to be employed by an Employer or a Related Employer and is no longer employed by any of them (and did not exceed Three Thousand Five Hundred Dollars ($3,500.00) as of the date of any prior distribution), his or her Account shall be distributed in a lump sum as soon as practicable after such Valuation Date." 15. Subsection (b) of Section 10.03 is hereby amended to read as follows: "(b) the percentage of such Eligible Employee's compensation (as defined in Section 7.05) which is equal to the largest percentage determined by dividing the sum of the Elective Contributions and Matching Contributions allocated to the Account of each Key Employee by such Key Employee's compensation (as so defined)." 16. The next to the last paragraph of Section 10.03 is hereby amended by adding the following sentence at the end thereof: "The preceding sentence shall be applied by substituting `three percent ' for `two percent' in Section 416(c)(1)(B)(i) of the Code and by increasing (but not by more than ten percentage points) the percentage provided in Section 416(c)(1)(B)(ii) of the Code for each Plan Year in which: (i) the Plan is included in a Required Aggregation Group or a Permissive Aggregation Group which includes a qualified defined benefit plan and the Top Heavy Ratio does not exceed ninety percent; and (ii) the limitation set forth in Section 7.02 would be exceeded if 1.0 is substituted for 1.25 wherever 1.25 appears in said limitation." 17. Except as otherwise provided herein, this Amendment shall be effective January 1, 1993; provided, however, that Part 6 shall be effective January 1, 1994. EX-10 4 Exhibit 10.3 THIRD AMENDMENT TO THE HANNAFORD BROS. CO. SAVINGS AND INVESTMENT PLAN The Hannaford Bros. Co. Savings and Investment Plan (the "Plan") was last amended and restated effective generally January 1, 1993. The Plan has been further amended by a First Amendment, effective generally January 1, 1994, and a Second Amendment, effective generally January 1, 1993. The Plan is hereby further amended in the following respects: 1. The terms used in this Amendment shall have the meanings set forth in the Plan unless the context indicates otherwise. 2. The first sentence of Article I is hereby amended to read as follows: "The purpose of this Plan is to encourage Eligible Employees to provide for their financial security through regular savings." 3. Section 2.03 is hereby amended to read as follows: "2.03 `Administrative Committee' shall mean the Committee appointed in accordance with Section 13.01." 4. Section 2.07(a)(iii) is hereby amended to read as follows: "(iii) Failure to return to the employ of an Employer or a Related Employer prior to the expiration of the period entitling such Employee to reemployment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 or any other applicable federal law after military service in the Armed Forces of the United States;" 5. Section 2.07(b)(iii) is hereby amended to read as follows: "(iii) Failure to return to the employ of an Employer or a Related Employer prior to the expiration of the period entitling such Employee to reemployment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 or any other applicable federal law after military service in the Armed Forces of the United States;" 6. The first sentence of Section 2.11 is hereby amended to read as follows: "2.11 `Compensation' shall mean the basic compensation paid, before any reduction pursuant to a Deferral Election or a benefit election under an Employer's Code Section 125 plan, by an Employer to an Employee for services rendered while a Participant, excluding reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation, welfare benefits, unguaranteed overtime pay, bonuses, and other irregular payments." 7. Section 2.19 is hereby amended to read as follows: "2.19 `Employee' shall mean any individual who is employed by the Company or one of its subsidiaries in its Northeast Division, excluding Leased Employees." 8. Section 2.21 is hereby amended to read as follows: "2.21 `Employer Contribution' shall mean any Elective Contribution, Matching Contribution or such additional contribution as may be required under Section 4.09 made by an Employer in accordance with the terms of the Plan." 9. The last sentence of Section 2.32 is hereby amended to read as follows: "The Hours of Service described in this paragraph shall be credited in the computation period in which the absence begins, if the Employee would be prevented from incurring a Break in Service in such period solely because the Employee is credited with such Hours of Service, or, in all other cases, in the immediately following computation period." 10. Section 2.40 is hereby amended to read as follows: "2.40 `Named Fiduciary' or `Named Fiduciaries' shall mean, with respect to the operation and administration of the Plan, the Administrative Committee, and with respect to the management of the Trust Fund, the Finance Committee and the Trustee." 11. Section 2.43 is hereby amended to read as follows: "2.43 `Participant' shall mean an Eligible Employee who elects to participate in the Plan in accordance with Section 3.01, or who has made a Rollover Contribution or on whose behalf a direct transfer has been made in accordance with Section 4.09." 12. Section 2.45 is hereby amended to read as follows: "2.45 `Plan' shall mean the Hannaford Northeast Savings and Investment Plan." 13. Section 2.57 is hereby amended to read as follows: "2.57 `Valuation Date' shall mean the last day of each calendar month; provided, however, when such term is used in the context of Article X, such term shall mean the last day of each Plan Year." 14. Section 3.03 is hereby amended to read as follows: "3.03 Reemployed Eligible Employee. An Eligible Employee who is reemployed by an Employer shall again be eligible to participate in the Plan as of his or her Reemployment Commencement Date." 15. Section 3.04 is hereby amended to read as follows: "3.04 Change of Employment Status. (a) An Employee whose employment status changes by reason of being transferred from the employ of a Related Employer that has not adopted the Plan to the employ of an Employer (or by reason of being transferred within the Company to its Northeast Division) shall be eligible to participate in the Plan as of the later of the first day of the second month following the date his or her employment status changes or the first day of the second month following the month in which he or she meets the requirements of Section 3.02. Notwithstanding the preceding sentence to the contrary, (i) if such Employee is an eligible employee (but not a participant) under the Hannaford Southeast Savings and Investment Plan as of the date his or her employment status changes, he or she shall be eligible to participate in this Plan as of such date; and (ii) if such individual is a participant in the Hannaford Southeast Savings and Investment Plan as of the date his or her employment status changes, he or she shall be eligible to participate in the Plan as of such date, and his or her deferral election and investment direction in effect under the Hannaford Southeast Savings and Investment Plan as of such date shall be deemed a Deferral Election under Section 5.01 and an investment direction under Section 11.05 of this Plan. (b) A Participant whose employment status changes by reason of being transferred to the employ of a Related Employer that has not adopted the Plan (or by reason of being transferred within the Company to its Southeast Division) shall nevertheless continue to participate in the Plan, but without the right to make a Deferral Election or share in an allocation of Employer Contributions occurring after the date his or her employment status changes, until the earlier of the date the assets credited to his or her Account are transferred pursuant to Section 4.09 to the Hannaford Southeast Savings and Investment Plan or any other plan of a Related Employer and the date he or she ceases to be employed by the Company and any other Related Employer." 16. Section 4.01(b) is hereby amended to read as follows: "(b) The Matching Contributions, if any, to be made on behalf of each Participant in its employ during such year who has made a Deferral Election for such year at the rate determined by the Human Resources Committee of the Board of Directors; provided, however, no Matching Contributions may be made with respect to any Excess Deferral or Excess Elective Contribution or any Elective Contribution which is returned to the Participant pursuant to Section 7.04(b)." 17. The first sentence of Section 4.07(g) is hereby amended to read as follows: "(g) For purposes of this Section, Matching Contributions shall be treated as made for a Plan Year to which they relate if such contributions are made no later than the end of the twelve (12) month period beginning on the day after the close of the Plan Year." 18. The last sentence of Section 4.07(k) is hereby amended to read as follows: "The determination of the amount of Excess Matching Contributions with respect to the Plan shall be made after first determining the amount of Excess Deferrals under Article VI and then determining the amount of Excess Elective Contributions under Section 5.03." 19. Section 4.09 is hereby amended to read as follows: "4.09 Direct Transfers. The Administrative Committee may direct the Trustee to transfer the assets credited to the Account of a Participant or Former Participant to another employer's retirement plan, provided immediately prior to the transfer, the transferee plan contains a provision permitting such transfer and is qualified under Section 401(a) of the Code and the related trust is exempt under Section 501(a) of the Code. Notwithstanding the preceding sentence to the contrary, in the case of a Participant whose employment status changes by reason of being transferred to the employ of a Related Employer that has adopted the Hannaford Southeast Savings and Investment Plan (or by reason of being transferred within the Company to its Southeast Division), the Administrative Committee shall direct the Trustee to transfer the assets credited to the Account of such Participant to the Hannaford Southeast Savings and Investment Plan as of the date of such change in employment status or as soon as practicable thereafter. In the case of a Participant whose employment status changes prior to July 1, 1995, by reason of being transferred to the employ of a Related Employer that has adopted the Hannaford Southeast Savings and Investment Plan (or by reason of being transferred within the Company to its Southeast Division), the Administrative Committee shall direct the Trustee to transfer the assets credited to the Account of such Participant to the Hannaford Southeast Savings and Investment Plan as of July 1, 1995, or as soon as practicable thereafter. The assets of another profit sharing plan may, with the prior consent of the Administrative Committee, be directly transferred to the Plan, provided immediately prior to the transfer, the transferor plan contains provision permitting such transfer and is qualified under Section 401(a) of the Code and the related trust is exempt under Section 501(a) of the Code. Upon receipt, the Administrative Committee shall credit the Account of each Employee who participated in the transferor plan with the portion of the transferred assets standing to the credit of such Employee under the transferor plan immediately prior to such transfer, provided such amount shall be separately accounted for in accordance with Section 8.01. With respect to a Participant who has an outstanding loan balance under the transferor plan at the time of the transfer, the promissory note evidencing such loan shall be transferred to this Plan and the outstanding loan balance shall be treated in accordance with the provisions of Section 9.07 as an outstanding loan balance under this Plan. Except as hereinafter provided, each elective, matching or other type of contribution comprising the Transfer Account of any Employee or Participant shall be administered, invested and distributed in accordance with the provisions of this Plan applicable to such type of contribution. An Employee or Participant may direct the investment of each type of contribution comprising his or her Transfer Account only to the extent provided for in the transferor plan. The portion of the Transfer Account invested in Company Stock at the time of the transfer and not subject to participant investment direction under the transferor plan shall remain invested in Company Stock. Each type of contribution comprising the Transfer Account which was not fully vested under the transferor plan as of the date of the transfer shall remain subject to the vesting schedule set forth in the transferor plan; provided, however, when a Participant attains Normal Retirement Age he or she shall have a fully vested right to his or her Transfer Account. Each type of contribution comprising the Transfer Account which was fully vested under the transferor plan as of the date of the transfer shall remain fully vested under this Plan. Notwithstanding the foregoing provisions of this Section to the contrary, this Plan shall not accept any direct or indirect transfers after December 31, 1984, from a Plan which is subject to Section 401(a)(11) of the Code. Notwithstanding the foregoing provisions of this Section and Section 9.01 to the contrary, this Plan may accept a direct or indirect transfer of assets from the Hannaford Southeast Savings and Investment Plan, and the following provisions shall apply to such transfer. (a) If a Participant is not vested in any portion of his or her Transfer Account which is attributable to matching contributions and discretionary contributions at the time he or she ceases to be employed by an Employer or a Related Employer and is no longer employed by any of them, the balance of such sub-accounts shall be forfeited as of the date he or she ceases to be employed by an Employer or a Related Employer and is no longer employed by any of them. If such Participant is reemployed by an Employer or any Related Employer prior to incurring five (5) consecutive Breaks in Service, the balance of his or her matching contributions and discretionary contributions sub-accounts under the Transfer Account as of the Valuation Date coinciding with or next following the date he or she ceased to be employed shall be restored. Restoration shall be made by the end of the Plan Year following the Plan Year in which the Participant is reemployed by an Employer or any Related Employer. Restoration shall first be made out of forfeitures and to the extent forfeitures are insufficient, then out of Employer Contributions. The amounts forfeited by Participants in any Plan Year shall be used to make restoration in accordance with this Section and, to the extent forfeitures exceed the amounts required to make restoration, to reduce Employer Contributions. The amount, if any, by which forfeitures occurring during a Plan Year exceed the sum of the amounts required to make restoration and the amount required to be contributed by an Employer for such Plan Year shall be credited to an excess forfeiture account, which shall be adjusted for the income, expenses, gains and losses attributable thereto in the same manner provided for adjustment of Accounts. On the Valuation Date coinciding with the last day of the next succeeding Plan Year, the excess forfeiture account shall be closed and treated as a forfeiture occurring in such Plan Year. This procedure shall be repeated for each Plan Year in which forfeitures occurring during such year exceed the sum of the amount required to make restoration and the amount required to be contributed by an Employer for such year, subject, however, to such modification as may be required by the Section governing termination of the Plan. (b) Once each calendar month, a Participant or Former Participant may elect to reinvest the balance of his or her Transfer Account attributable to elective contributions, matching contributions and rollover contributions allocated under the Hannaford Southeast Savings and Investment Plan in any one or more of the Investment Funds, provided the portion of such Participant's or Former Participant's Transfer Account attributable to such contributions invested in any Investment Fund must be one percent, or any multiple thereof, of such balance. Such election shall be made by such written, telephonic or electronic means as shall be prescribed by the Administrative Committee and shall be effective as of the first business day of the calendar month following receipt by the Administrative Committee or as soon as practicable thereafter." 20. The last sentence of the first paragraph of Section 5.01 is hereby amended to read as follows: "A Deferral Election shall be made by such written, telephonic or electronic means as shall be prescribed by the Administrative Committee." 21. The first sentence of Section 5.02 is hereby amended to read as follows: "A Participant may amend his or her Deferral Election to increase or decrease the deferral percentage within the limits of Section 5.01 or may terminate his or her Deferral Election by such written, telephonic or electronic means as shall be prescribed by the Administrative Committee." 22. The last sentence of the second paragraph of Section 5.01 is hereby deleted and replaced with the following two sentences: "A deemed Deferral Election pursuant to Section 3.04(a) shall be effective as soon as practicable on or after the date of the affected individual's change in employment status. A Deferral Election shall remain in effect until amended or terminated in accordance with Section 5.02." 23. Section 8.02 is hereby amended to read as follows: "8.02 Adjustments. The Administrative Committee shall adjust the Participants' Accounts as of each Valuation Date as follows: (a) First, determine the net fair market value of each Investment Fund as of the close of business on such date or, if that date is not a business day, as of the close of business on the last preceding business day. (b) Second, allocate the income, expenses, gains and losses of each Investment Fund among the Accounts in proportion to the Account balances (to the extent invested in such fund) as of the preceding Valuation Date, increased by one-half (1/2) of the sum of the contributions and periodic loan repayments invested on behalf of the Participant in such fund since the preceding Valuation Date and by that portion of any lump sum loan repayment invested in such fund since the preceding Valuation Date. (c) Third, reduce the separate Account of each Participant to reflect distributions, loans and withdrawals made from such Account since the preceding Valuation Date. (d) Fourth, credit each Participant's Account with the contributions made on his or her behalf, the assets transferred from another qualified plan in accordance with Section 4.09, and the Participant's loan repayments since the preceding Valuation Date. (e) Fifth, adjust each Participant's Account to reflect transfers among the Investment Funds. (f) Notwithstanding the foregoing provisions of this Section to the contrary, the Administrative Committee may debit in a uniform and nondiscriminatory manner the Account of any Participant or Former Participant as of any Valuation Date in the amount of any reasonable expense attributable to such Participant's or Former Participant's exercise of control over his or her Account since the preceding Valuation Date. The Administrative Committee shall establish, in writing, reasonable procedures to inform Participants and Former Participants that such expenses may be charged to their Accounts pursuant to this Section 8.02(f), to inform each Participant or Former Participant at least annually of the actual expenses incurred with respect to his or her Account, and to otherwise carry out this subsection. A Participant's or Former Participant's "exercise of control over his or her Account" shall include but not be limited to the following: (i) a request for a loan pursuant to Section 9.07; (ii) a request for a hardship withdrawal distribution pursuant to Section 9.08; and (iii) an investment direction pursuant to Section 11.05 or Section 11.06." 24. Section 9.01 is hereby amended to read as follows: "9.01 Distribution to Participants. Except as otherwise provided in Section 4.09, each Participant shall have a fully vested and nonforfeitable interest in his or her Account. (a) Subject to the provisions of subsections (c), (d), (e), (f) and (g) below, a Participant may elect to receive distribution of the vested portion of his or her Account as of any Valuation Date which occurs after the date he or she ceases to be employed by an Employer or a Related Employer and is no longer employed by any of them. (b) With respect to any Plan Year commencing after December 31, 1984, a Participant shall be entitled to a distribution of the vested portion of his or her Account upon the occurrence of any of the following events: (i) the termination of the Plan by the Participant's Employer, without the establishment or maintenance of another defined contribution plan (other than an employee stock ownership plan as defined in Section 4975(e)(7) of the Code); (ii) the sale or other disposition by an Employer to an unrelated corporation of substantially all of the assets (within the meaning of Section 409(d)(2) of the Code) used by such Employer in a trade or business of the Employer, if the Participant continues employment with the corporation acquiring such assets; or (iii) the sale or other disposition by an Employer of such Employer's interest in a subsidiary (within the meaning of Section 409(d)(3) of the Code), to an unrelated entity if the Participant continues employment with such subsidiary. Subject to the provisions of subsections (c), (d), (e), (f) and (g) below, a Participant may elect to receive distribution of the vested portion of his or her Account as of any Valuation Date following the occurrence of such event. An election pursuant to subsections (a) or (b) above shall be made by delivering a written election, on such form as the Administrative Committee may prescribe, to the Administrative Committee at least fifteen (15) days in advance of the Valuation Date, specified in the election, as of which distribution is to be made. The Participant's Account shall be valued as of the Valuation Date elected by the Participant and distribution shall be made in a lump sum as soon as practicable thereafter. (c) Notwithstanding the foregoing provisions of this Section to the contrary, if the value of the vested portion of a Participant's Account does not exceed Three Thousand Five Hundred Dollars ($3,500.00) as of the Valuation Date following the date he or she ceases to be employed by an Employer or a Related Employer and is no longer employed by any of them (and did not exceed Three Thousand Five Hundred Dollars ($3,500.00) as of the date of any prior distribution), his or her Account shall be distributed in a lump sum as soon as practicable after such Valuation Date. (d) Notwithstanding the foregoing provisions of this Section to the contrary, distribution to a Participant shall be made not later than the sixtieth (60th) day after the later of the close of the Plan Year in which the Participant attains the Normal Retirement Age or in which the Participant ceases to be employed by an Employer or a Related Employer and is no longer employed by any of them. (e) Notwithstanding the foregoing provisions of this Section to the contrary, a Participant may elect to receive or commence receiving distribution of the vested portion of his or her Transfer Account, if any, which is attributable to his or her account balance under the Hannaford Southeast Savings and Investment Plan as of June 30, 1995, at such time and in such manner as provided in Exhibit A to this Plan; provided, however, this subsection (e) shall not apply if such vested portion does not exceed Three Thousand Five Hundred Dollars ($3,500.00) as of such date (and did not exceed Three Thousand Five Hundred Dollars ($3.500.00) as of the date of any prior distribution). (f) Notwithstanding the foregoing provisions of this Section to the contrary, effective January 1, 1989, distribution to a Participant shall be made or commence not later than April 1 of the calendar year following the calendar year in which the Participant attains age seventy and one-half. (g) Notwithstanding the foregoing provisions of this Section to the contrary, distribution to a Participant who has attained age seventy and one-half before January 1, 1988, and is not a Five Percent Owner, shall be made not later than April 1 of the calendar year following the later of the calendar year in which the Participant attains age seventy and one-half or the calendar year in which the Participant retires. For purposes of this subsection (g), a Five Percent Owner shall mean a Participant who is a Five Percent Owner at any time during the Plan Year ending with or within the calendar year in which such Participant attains age sixty-six and one-half or any subsequent Plan Year." 25. Section 9.02 and Section 9.03 are hereby amended by replacing "Section 9.01(e)" with "Section 9.01(f)." 26. The last sentence of the first paragraph of Section 9.04 is hereby amended to read as follows: "A Participant's Account shall be valued as of the Valuation Date next following the date of his or her death and shall be distributed to his or her surviving spouse or Beneficiary in a lump sum as soon as practicable thereafter, but not later than sixty (60) days after the close of the Plan Year in which the Participant's death occurs." 27. Section 9.04 is hereby amended by adding the following paragraph at the end thereof: "Notwithstanding the foregoing provisions of this Section to the contrary, a surviving spouse or Beneficiary may elect to receive or begin receiving distribution of the portion of the Participant's Transfer Account balance, if any, which was allocated to such Participant's account under the Hannaford Southeast Savings and Investment Plan as of June 30, 1995, at such time and in such manner as provided in Exhibit A to this Plan; provided, however, this paragraph shall not apply if such portion does not exceed Three Thousand Five Hundred Dollars ($3,500.00) as of such date (and did not exceed Three Thousand Five Hundred Dollars ($3,500.00) as of the date of any prior distribution)." 28. The first three lines of Section 9.07 are hereby amended to read as follows: "9.07 Loans. The Administrative Committee may direct the Trustee to make a loan or loans from the vested portion of a Participant's Account to a Participant or beneficiary who is a `Party in Interest' as defined in Section 3(14) of ERISA, subject to the following:" 29. The first sentence of Section 9.07(c) is hereby amended to read as follows: "(c) No loan shall be made in an amount less than Five Hundred Dollars ($500.00)." 30. Section 9.07 is hereby amended by adding the following subsection (l) at the end thereof: "(l) In the event a loan is to be made to a Participant or Beneficiary with a Transfer Account, notwithstanding Section 9.07(e) to the contrary, not more than fifty percent of a Participant's vested interest in his or her Account may be used as collateral for the loan, and `fifty percent of the Participant's vested interest in his or her Account' shall be substituted for `fifty percent of the Participant's Account' in subparagraph 9.07(d)(ii)." 31. Section 9.08(c)(i)(cc) is hereby amended to read as follows: "(cc) Payment of tuition, related educational fees and room and board expenses for the next twelve (12) months of post-secondary education for the Participant, his or her spouse or dependent (within the meaning of Section 152 of the Code); and" 32. Section 9.08 is hereby amended by adding the following subsection (h) at the end thereof: "(h) For purposes of this Section 9.08, the vested portion of a Participant's Transfer Account, if any, attributable to matching contributions and discretionary contributions which were allocated to his or her account under the Hannaford Southeast Savings and Investment Plan as of June 30, 1995, shall be deemed part of his or her Elective Contributions." 33. Section 10.02 is hereby amended to read as follows: "10.02 Minimum Vesting Requirements. The vested percentage of each Participant in the portion of his or her Transfer Account which was not fully vested under the transferor plan as of the date of the transfer shall be determined in accordance with the following schedule: Number of Participant's Years of Service Vested Percentage Less than 3 0% 3 or more 100% For purposes of this Section, a `Year of Service' shall have the meaning given such term in Section 15.01." 34. Section 11.05 is hereby amended to read as follows: "11.05 Investment of Elective Contributions. Each Participant may direct that Elective Contributions made on his or her behalf shall be invested in any one or more of the Investment Funds, provided the percentage of Elective Contributions to be invested in any Investment Fund must be one percent, or any multiple thereof. An investment direction should be made by such written, telephonic, or electronic means as shall be prescribed by the Administrative Committee. A Participant's investment direction, if received by the Administrative Committee prior to the date he or she commences participation, shall be effective as of said date. If a Participant does not make an investment direction or an investment direction is not received by the Administrative Committee before he or she commences participation, the Elective Contributions on behalf of such Participant shall be invested in the fund which presents the least risk of loss as determined by the Trustee. An investment direction received by the Administrative Committee after the date a Participant commences participation shall be effective as of the first business day of the calendar month following receipt by the Administrative Committee or as soon as practicable thereafter. A deemed investment direction pursuant to Section 3.4(a) shall be effective as of the date of the affected individual's change in employment status. Once each calendar month, a Participant may elect to have future Elective Contributions on his or her behalf invested in the Investment Funds in proportions other than those previously elected, but in multiples of one percent. An election modifying a previous investment direction shall be made by such written, telephonic or electronic means as shall be prescribed by the Administrative Committee and shall be effective as of the first business day of the calendar month following receipt by the Administrative Committee or as soon as practicable thereafter." 35. Section 11.06 is hereby amended to read as follows: "11.06 Reinvestment of Elective Contributions Account. Once each calendar month, a Participant, Former Participant, surviving spouse or Beneficiary may elect to reinvest the balance of his or her Elective Contributions Account in any one or more of the Investment Funds, provided the portion of such Elective Contributions Account invested in any Investment Fund must be one percent, or any multiple thereof, of such balance. An election to reinvest an Elective Contributions Account shall be made by such written, telephonic or electronic means as shall be prescribed by the Administrative Committee and shall be effective as of the first business day of the calendar month following receipt by the Administrative Committee or as soon as practicable thereafter." 36. Article XIII is hereby amended by adding the following Section 13.11 at the end thereof: "13.11 Confidentiality of Participant Decisions Relating to Company Stock. The Administrative Committee shall establish procedures designed to safeguard the confidentiality of information relating to the purchase, holding and sale of Company Stock, and the exercise of voting, tender and similar rights with respect thereto, by Participants, Former Participants, surviving spouses and Beneficiaries. The Administrative Committee shall be responsible for ensuring that such procedures meet the requirements of ERISA Reg. Section 2550.404c-1(d)(2). In the event the Administrative Committee determines that a particular situation involves a potential for undue Employer or Related Employer influence upon Participants, Former Participants, surviving spouses and Beneficiaries within the meaning of ERISA Reg. Section 2550.404c-1(d)(2), the Administrative Committee shall promptly appoint an independent fiduciary to perform the role of the Administrative Committee and carry out activities with respect to such situation. Such independent fiduciary shall not be a person affiliated with an Employer within the meaning of ERISA Reg. Section 2550.404c-1(e)(3)." 37. Section 12.01 is hereby amended by deleting subsection (f) and by redesignating existing subsections (g) through (i) as (f) through (h). 38. Section 18.02(a)(v) is hereby amended to read as follows: "(v) The fiduciaries, including but not limited to, the Trustee, the Finance Committee, the Administrative Committee and any Investment Manager shall have no responsibility for the investment elections made by Participants, Former Participants, surviving spouses or Beneficiaries or for the exercise of voting, tender or similar rights by Participants, Former Participants, surviving spouses or Beneficiaries, except as otherwise provided by applicable law." 39. This Amendment shall be effective July 1, 1995; provided, however, that Part 36 shall be effective January 1, 1995. EX-10 5 Exhibit 10.7 June 30, 1995 Norman E. Brackett 13 Pillsbury Drive Scarborough, ME 04074 RE: RETIREMENT Dear Norm: This letter confirms the terms of the agreement between you and Hannaford Bros. Co. (the "Company") regarding your retirement from the Company and the implementation of certain retirement benefits as outlined in a letter to you from Hugh Farrington dated September 9, 1992 (the "Prior Letter"). 1. Your last day of work as an employee of the Company will be June 30, 1995 (your "Retirement Date"). 2. On or about June 30, 1995, the Company will pay you out of the Supplemental Executive Retirement Plan ("SERP") a "lump sum" supplemental pension benefit in the gross amount of $83,503. This payment represents the value of the enhanced pension benefit you would have received had you elected to participate in the Early Retirement Incentive Program offered in 1992, pursuant to paragraph 2 of the Prior Letter. 3. In addition, on or about June 30, 1995, the Company will pay you out of the SERP the lump sum of $101,300. This amount is in lieu of retiree medical benefits and is intended to equal the present value of retiree medical coverage for you and your wife which you would have had available to you had you participated in the Early Retirement Incentive Program in 1992. 4. Upon retirement, you will be eligible to continue to participate in the Long-Term and Short-Term Incentive Plans provided by the Company for award periods commencing with, or prior to, the Company's current fiscal year. Accordingly, you will be entitled to receive payment from each Plan in accordance with its terms. 5. Upon retirement, you will no longer be eligible to receive awards under the Company's stock option plan. Any qualified stock options you then hold must be exercised, under the terms of the plan, within ninety (90) days after your retirement. In the event that you elect to exercise any such options which contain a reload provision and were granted to you after 1990 by tendering shares of the Company's stock before your Retirement Date, you will receive a nonqualified "reload" option for a number of shares equal to those tendered and having a term equal to the remainder of the term of the options being exercised (but in no event longer than three years following your Retirement Date). 6. All other accrued Company benefits (401(k), Pension Plan, SERP, Deferred Compensation Plan, etc.) will be paid to you in accordance with the provisions of those plans. After your Retirement Date, except as provided by the applicable plans, you will have no further accrual of Company benefits. 7. In consideration of the benefits extended to you under this agreement to which you would not otherwise be entitled, your signature below constitutes your agreement to hereby waive, release and forever discharge the Company, its subsidiaries and affiliates, and their respective shareholders, directors, officers, employees, agents, successors and assigns of and from any and all claims or causes of actions which you ever had or may hereafter claim to have and which are connected in any way, directly or indirectly, with your employment by the Company or its affiliates, including but not limited to claims arising out of the Prior Letter, but expressly excluding claims arising out of the failure of the amount paid in lieu of retiree medical benefits to adequately cover the cost of medical coverage as intended hereunder. This letter sets forth the entire agreement between you and the Company regarding your retirement from the Company (it being understood that you and the Company intend to negotiate and execute a separate Consulting Agreement relating to certain other matters, including the provisions of consulting services by you as an independent contractor). This agreement may be amended only by a written document signed by both you and the Company and will be governed by the laws of the State of Maine. If this letter sets forth our understanding and agreement accurately, would you please sign both copies, return one to me, and keep one for your files. Sincerely yours, s/Hugh G. Farrington Hugh G. Farrington President and Chief Executive Officer Seen and agreed to this 30th day of June, 1995. s/Norman E. Brackett Norman E. Brackett EX-10 6 Exhibit 10.8 July 1, 1995 Norman E. Brackett 13 Pillsbury Drive Scarborough, ME 04074 RE: CONSULTING AGREEMENT Dear Norm: Hannaford Bros. Co. (the "Company") and you have executed a letter agreement dated June 30, 1995, outlining our mutual understanding regarding certain matters, including supplemental retirement benefits which the Company provided to you upon your retirement. This letter sets forth our further understanding regarding certain consulting services that you will provide to the Company following your retirement. 1. CONSULTING SERVICES. Beginning on July 1, 1995, and for so long as this agreement remains in effect, you agree to provide the Company with consulting services relating to supermarket information systems and such other topics as may be requested by the Company's CEO. In no event will such services exceed a total of twenty five (25) consulting sessions, none of which shall exceed one day in length. 2. COMPENSATION; EXPENSES. As compensation for your consulting services hereunder, the Company will pay you the sum of Sixty One Thousand Dollars ($61,000), payable as follows: Eleven Thousand Dollars ($11,000) on July 31, 1995, and Ten Thousand Dollars ($10,000) on the last day of each calendar month thereafter until December 31, 1995. The Company will also reimburse you for all reasonable out-of-pocket expenses incurred by you in connection with such services, and upon request by the Company, you agree to provide reasonable written documentation supporting such expenditures. 3. INDEPENDENT CONTRACTOR STATUS. Any services rendered by you pursuant to this paragraph shall be rendered as an independent contractor and not as an employee, partner, joint venturer, or agent of the Company. You further agree that the Company shall have no responsibility to furnish any workers' compensation insurance and that you will provide reasonable amounts of automobile and liability insurance coverage of your own expense. You acknowledge that, in your capacity as an independent contractor, you will not be entitled to any of the employee benefits available to Hannaford associates nor will the Company supply you with an office, secretary, or any other technical or personnel support. 4. TERMINATION. This agreement shall terminate on December 31, 1995. The Company shall have the right to terminate this agreement earlier for cause if it determines, in good faith, that you have breached any provision hereof. In the event the Company elects to terminate this agreement for cause, it will provide you with seven (7) days written notice. 5. MISCELLANEOUS. Upon the written request of either you or the Company, the other party agrees to execute such other documents as you, the Company, and our respective counsel reasonably deem necessary or advisable to implement the terms of this letter. This agreement sets forth the entire agreement between you and the Company regarding any services you may render to the Company hereafter. This agreement may be amended only by a written document signed by both you and the Company and will be governed by the laws of the State of Maine. If this letter accurately sets forth our understanding and agreement, would you please sign both copies, return one to me, and keep one for your records. Sincerely yours, s/Hugh G. Farrington Hugh G. Farrington President and Chief Executive Officer Seen and agreed to this 7th day of July, 1995. s/Norman E. Brackett Norman E. Brackett EX-15 7 Exhibit 15 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Hannaford Bros. Co.: We have reviewed the accompanying consolidated balance sheet of Hannaford Bros. Co. and Subsidiaries as of July 1, 1995, and the related consolidated statements of earnings for the three month and six month periods ended July 1, 1995, and July 2, 1994 and the consolidated statements of cash flows for the six month periods then ended. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We previously audited and expressed an unqualified opinion on the Company's consolidated financial statements for the year ended December 31, 1994 (not presented herein). In our opinion, the information set forth in the accompanying balance sheet as of December 31, 1994, is fairly stated in all material respects, in relation to the statement of financial position from which it has been derived. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. s/Coopers & Lybrand L.L.P. Portland, Maine July 19, 1995 EX-23 8 Exhibit 23 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 RE: Hannaford Bros. Co. Registrations on Form S-8 We are aware that our report dated July 19, 1995 on our review of interim financial information of Hannaford Bros. Co. and Subsidiaries as of July 1, 1995 and for the six month periods ended July 1, 1995 and July 2, 1994, and included in this Form 10-Q is incorporated by reference in the Company's registration statements on Form S-8 (Numbers 2-77902, 2-77903, 2-98387, 33-1281, 33-22666, 33-31624, 33-45273, 33-60119, 33-60655 and 33-60691). Pursuant to rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the Registration Statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. s/Coopers & Lybrand L.L.P. Portland, Maine August 7, 1995 EX-27 9
5 1,000 6-MOS DEC-30-1995 JAN-01-1995 JUL-01-1995 65,714 0 12,700 225 134,644 225,311 796,014 276,367 920,039 171,511 219,202 31,578 0 0 454,766 920,039 1,233,594 1,233,594 934,585 934,585 232,397 0 10,287 56,325 22,736 33,589 0 0 0 33,589 0.80 0.80
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