-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JZIjri73gxNVx7tbtfTHScb9jz0/yRz1PqMwgDZidhe57TrgaeLiRUnz04r5AC+2 oLxp+j5ODSBu3Cg44W03cA== 0000912057-97-024134.txt : 19970715 0000912057-97-024134.hdr.sgml : 19970715 ACCESSION NUMBER: 0000912057-97-024134 CONFORMED SUBMISSION TYPE: SC 14D9 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19970714 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DELCHAMPS INC CENTRAL INDEX KEY: 0000729970 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 630245434 STATE OF INCORPORATION: AL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 14D9 SEC ACT: 1934 Act SEC FILE NUMBER: 005-34753 FILM NUMBER: 97640092 BUSINESS ADDRESS: STREET 1: 305 DELCHAMPS DR STREET 2: P O BOX 1668 CITY: MOBILE STATE: AL ZIP: 36602 BUSINESS PHONE: 2054330431 MAIL ADDRESS: STREET 1: 305 DELCHAMPS DR STREET 2: PO BOX 1668 CITY: MOBILE STATE: AL ZIP: 36602 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DELCHAMPS INC CENTRAL INDEX KEY: 0000729970 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 630245434 STATE OF INCORPORATION: AL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 14D9 BUSINESS ADDRESS: STREET 1: 305 DELCHAMPS DR STREET 2: P O BOX 1668 CITY: MOBILE STATE: AL ZIP: 36602 BUSINESS PHONE: 2054330431 MAIL ADDRESS: STREET 1: 305 DELCHAMPS DR STREET 2: PO BOX 1668 CITY: MOBILE STATE: AL ZIP: 36602 SC 14D9 1 14D9 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-9 SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------------ DELCHAMPS, INC. (Name of Subject Company) DELCHAMPS, INC. (Name of Person(s) Filing Statement) COMMON STOCK, $.01 PAR VALUE AND ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS (Title of Class of Securities) 246615 10 8 (CUSIP Number of Class of Securities) ------------------------ TIMOTHY E. KULLMAN SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER DELCHAMPS, INC. 305 DELCHAMPS DRIVE MOBILE, ALABAMA 36602 (334) 433-0431 (Name, address and telephone number of person authorized to receive notice and communications on behalf of the person(s) filing statement) ------------------------ WITH A COPY TO: L. R. MCMILLAN, II JONES, WALKER, WAECHTER, POITEVENT, CARRERE & DENEGRE, L.L.P. 201 ST. CHARLES AVENUE NEW ORLEANS, LOUISIANA 70170-5100 (504) 582-8000 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ITEM 1. SECURITY AND SUBJECT COMPANY. The name of the subject company is Delchamps, Inc., an Alabama corporation (the "Company"). The address of the principal executive offices of the Company is 305 Delchamps Drive, Mobile, Alabama 36602. The title of the class of equity securities to which this statement relates is the common stock, par value $0.01 per share, of the Company (the "Common Stock") and the associated Preferred Share Purchase Rights ("Rights") issued pursuant to the Rights Agreement described below. The Common Stock and associated Rights are referred to herein as the "Shares." ITEM 2. TENDER OFFER OF THE BIDDER. This statement relates to a tender offer by Delta Acquisition Corporation, an Alabama corporation ("Offeror"), and a wholly-owned subsidiary of Jitney-Jungle Stores of America, Inc., a Mississippi corporation ("Parent"), disclosed in a Tender Offer Statement on Schedule 14D-1, dated July 14, 1997 (the "Schedule 14D-1"), to purchase all outstanding Shares at a price of $30 per share (the "Offer Price"), net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated July 14, 1997 (the "Offer to Purchase") and the related Letter of Transmittal (which together constitute the "Offer"). The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of July 8, 1997 (the "Merger Agreement"), among Parent, Offeror and the Company. The Merger Agreement provides, among other things, that as soon as practicable after the consummation of the Offer and the satisfaction or waiver of the other conditions set forth in the Merger Agreement, Offeror will be merged with and into the Company (the "Merger"), and the Company will continue as the surviving corporation (the "Surviving Corporation"). At the time of the consummation of the Merger (the "Effective Time"), each then outstanding Share (other than Shares owned by the Company, Parent, the Offeror, any other wholly owned subsidiary of Parent, or by shareholders, if any, who are entitled to and who properly exercise dissenters' rights under the Alabama Business Corporation Act (the "ABCA")) will be converted automatically into the right to receive $30.00 in cash without interest. The Merger Agreement has been filed herewith as Exhibit (c)(1) and is incorporated herein by reference. As set forth in the Schedule 14D-1, the principal executive offices of Offeror and Parent are located at 1770 Ellis Avenue, Suite 200, Jackson, Mississippi 39204. ITEM 3. IDENTITY AND BACKGROUND. (a) The name and address of the Company, which is the person filing this statement, are set forth in Item 1 above. (b) Each material contract, agreement, arrangement and understanding and actual or potential conflict of interest between the Company or its affiliates and (i) its executive officers, directors or affiliates or (ii) Offeror, its executive officers, directors or affiliates, is set forth below. CERTAIN AGREEMENTS Certain contracts, arrangements, agreements and undertakings between the Company and certain of its directors and executive officers are described in "Compensation of Directors," "Summary of Executive Compensation," "Employment, Indemnity and Change of Control Agreements," "Director Compensation Plan" and "Compensation Committee Report on Executive Compensation" in the Company's Information Statement Pursuant to Section 14(f) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 14f-1 thereunder, which appears as Schedule I hereto. Information regarding the Company's Directors' Stock Option Plan, the 1993 Stock Incentive Plan and the 1987 Restricted Stock Plan appears below under the caption "The Merger Agreement--Company Stock Plans." 2 THE MERGER AGREEMENT A copy of the Offer to Purchase is enclosed with this Schedule 14D-9. The summary of the Merger Agreement contained in the Offer to Purchase is incorporated herein by reference. Such summary should be read in its entirety for a more complete description of the terms and provisions of the Merger Agreement, which has been filed as Exhibit (c)(1) hereto and is incorporated herein by reference. The following is a summary of certain portions of the Merger Agreement that relate to arrangements among the Company, Offeror, Parent, and the Company's executive officers and directors. BOARD REPRESENTATION. The Merger Agreement provides that promptly upon payment by Offeror for the Shares pursuant to the Offer, Offeror shall be entitled to designate such number of directors, rounded up to the next whole number, as will give Offeror representation on the Board of Directors of the Company (the "Board") equal to the percentage of Shares held by Offeror, and the Company shall, at such time, use its best efforts to cause the appropriate number of directors who are currently members of the Board to resign and Offeror's designees to be appointed or elected; provided, however, that until the Effective Time there shall be, to the extent they are willing to continue to serve, at least three directors on the Board who are currently directors and who are not designees nor officers, directors, employees or affiliates of Parent or Offeror nor are employees of the Company or any of its subsidiaries (the "Independent Directors"). The Merger Agreement provides that if the number of Independent Directors shall be reduced below three for any reason, the Board shall, subject to the approval of the remaining Independent Directors, if any, designate a person or persons to fill the vacancy or vacancies who are directors on the date of the Merger Agreement and not an officer, director, employee or affiliate of Parent or Offeror nor an employee of the Company. Any vacancies that cannot be filled in the foregoing manner shall be filled by the Board at its discretion. Information required pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder with respect to the foregoing appears as Schedule I hereto. COMPANY STOCK PLANS. The Merger Agreement provides that prior to the Effective Time the Company may elect to accelerate the exercisability of options granted and outstanding prior to the date of the Merger Agreement under the Directors' Stock Option Plan and the 1993 Stock Incentive Plan and the vesting of restricted shares granted and outstanding prior to the date of the Merger Agreement under the 1987 Restricted Stock Plan and may waive the two-year holding period for stock issued pursuant to the Director Compensation Plan. In addition, the Company has the right prior to the Effective Time to pay to any holder of an outstanding option to purchase Shares an amount equal to the difference between the Offer Price and the per Share exercise price of a stock option held by such holder multiplied by the number of Shares then subject to such option (whether or not then exercisable), less any amounts required to be withheld for taxes, in exchange for the surrender and cancellation of such stock option. Prior to the Effective Time, the Company may adopt any amendments to its Directors' Stock Option Plan, 1993 Stock Incentive Plan or 1987 Restricted Stock Plan or any agreements thereunder as may be necessary or appropriate to effectuate the foregoing, provided that no such amendment may reduce the per Share exercise price of such options. In accordance with the Merger Agreement, the Company has amended the Director Compensation Plan to eliminate future issuances of Shares thereunder. As of July 8, 1997, non-employee directors of the Company as a group held options granted on July 29, 1996 under the Directors' Stock Option Plan to purchase an aggregate of 30,000 Shares at an exercise price of $23.00 per Share. By their terms, the options become exercisable in one-third annual increments beginning July 29, 1997, but the plan provides that the options become exercisable immediately in the event of a change of control of the Company, and that the Compensation Committee may accelerate the exercisability of any option at any time in its discretion. Pursuant to the Company's Director Compensation Plan, non-employee directors of the Company may use compensation received as a director to purchase Shares at a discount. Shares issued through the plan are subject to a two-year holding period requirement, which may be waived by the Compensation Committee. 3 As of July 8, 1997, executive officers of the Company as a group held options granted under the Company's 1993 Stock Incentive Plan to purchase an aggregate of 319,000 Shares, of which 233,333 were vested. By their terms, the options automatically become exercisable in the event of a change of control of the Company and the Compensation Committee has the right to accelerate the exercisability of the options in its discretion. As of July 8, 1997, three executive officers of the Company held an aggregate of 8,400 restricted Shares issued under the 1987 Restricted Stock Plan. The plan provides for the automatic acceleration of vesting of the restricted Shares as of the effective date of any transaction that has a reasonable likelihood of causing the Shares to cease to be registered under Section 12 of the Exchange Act or neither be listed on any national securities exchange nor be authorized to be quoted on an inter-dealer quotation system of any registered national securities association. The Compensation Committee has the authority to accelerate the expiration of the restrictions on the restricted Shares. It is a condition to the consummation of the Offer that prior to the expiration of the Offer all of the Company's directors and substantially all of the holders of the options who are employees of the Company shall have exercised such options or shall have entered into agreements with the Company to exercise such options prior to the Effective Time (or such later time as may be specified by Parent) or otherwise permit the Company to "cash-out" the options as described above. The Company has agreed to use its commercially reasonable best efforts to cause all options to be exercised prior to the Effective Time. The Company has been advised by its directors that they will exercise all options held by them prior to the consummation of the Offer. The Company anticipates that the Compensation Committee will accelerate the exercisability of all options and the vesting of all restricted Shares and that the two-year holding period for Shares issued under the Director Compensation Plan will be waived so that all options may be exercised or "cashed-out" and all related Shares may be tendered in connection with the Offer. DIRECTOR AND OFFICER INDEMNIFICATION AND INSURANCE. The Merger Agreement provides that the Company, and from and after the Effective Time the Surviving Corporation, shall indemnify, defend and hold harmless each director or officer or former director or officer of the Company or any of its subsidiaries against all losses, claims, damages, costs and expenses (including attorneys' fees), liabilities, judgments and settlement amounts that are paid or incurred in connection with any claim, action, suit, proceeding or investigation that arises out of the fact that such person is or was a director or officer of the Company or any of its subsidiaries and (i) arises out of any action or omission occurring or allegedly occurring at or prior to the Effective Time, or (ii) arises out of the Merger Agreement or the transactions contemplated thereby, in each case to the full extent a corporation is permitted under applicable law to indemnify its own directors or officers. In addition, the Merger Agreement provides that the Company and the Surviving Corporation will pay expenses in advance of the final disposition of any such claim, action, suit, proceeding or investigation to each indemnified party to the full extent permitted by applicable law. The Merger Agreement also provides that Parent, Offeror and the Company will not take any action so as to amend, modify or repeal the provisions for exculpation of directors or indemnification of directors or officers contained in the articles of incorporation or bylaws of the Surviving Corporation and its subsidiaries in such a manner as would adversely affect in any material respect the rights of any individual who shall have served as a director or officer of the Company or any of its subsidiaries prior to the Effective Time to be exculpated or to be indemnified by such corporations in respect of their serving in such capacities prior to the Effective Time. The Company's articles of incorporation contain a provision that eliminates any liability of the Company's directors for monetary damages for breach of their fiduciary duty of care. In addition, the Company's bylaws contain a provision requiring the Company to indemnify any officer or director of the Company to the full extent permitted by the ABCA. In addition, the Merger Agreement provides that the Company will honor in accordance with their respective terms each of the indemnity agreements between the Company and each of its directors as in effect on the date of the Merger Agreement and will not terminate such agreements prior to the Effective Time. 4 The Merger Agreement further provides that the Company shall, and after the consummation of the Offer, Parent shall cause the Company to, until the sixth anniversary of the Effective Time and for so long thereafter as any claim asserted prior to such date has not been fully adjudicated by a court of competent jurisdiction, cause to be maintained in effect the policies of directors' and officers' liability insurance maintained by the Company and its subsidiaries as of the date of the Merger Agreement (or policies providing at least the same coverage amounts and containing terms that are no less advantageous to the insured parties) with respect to claims arising from facts or events that occurred or are alleged to have occurred at or prior to the Effective Time; provided, that the Company shall endeavor to obtain such coverage at the lowest premium cost reasonably available and that the Company shall not, and Parent shall not be obligated to cause the Surviving Corporation to, pay an aggregate premium (whether over time or on a one-time basis) in excess of $600,000. CHANGE OF CONTROL AGREEMENTS. The Merger Agreement provides that the Company shall, and after the consummation of the Offer Parent shall cause the Company to, honor in accordance with their respective terms each of the change of control agreements between the Company and its employees as in effect on the date of the Merger Agreement. CONFIDENTIALITY AGREEMENT The following is a summary of certain provisions of the Confidentiality and Standstill Agreement (the "Confidentiality Agreement") dated April 8, 1997 between the Company, on the one hand, and Parent and Bruckmann, Rosser, Sherrill & Co., Inc., an affiliate of Parent's majority shareholder ("BRS"), on the other hand, filed as Exhibit (c)(2) hereto and incorporated herein by reference. The summary is qualified in its entirety by reference to the Confidentiality Agreement. Pursuant to the Confidentiality Agreement, Parent and BRS agreed, among other things, to keep confidential certain nonpublic confidential or proprietary information of the Company furnished to Parent and BRS by or on behalf of the Company and to use the confidential information solely for the purpose of evaluating a possible transaction with the Company. Parent and BRS also agreed that for a period of two years from the date of the Confidentiality Agreement, none of Parent, BRS nor any of their affiliates shall, directly or indirectly, without the prior written invitation of the Board, (i) in any manner acquire, agree to acquire or make any proposal to acquire, any securities or property of the Company or any of its subsidiaries or (ii) otherwise seek, alone or in concert with others, to control or influence the management, Board or policies of the Company. The Merger Agreement provides that the standstill provision of the Confidentiality Agreement terminates if the Termination Fee and Expense Fee (as defined in the Merger Agreement) are, or are required to be, paid. ITEM 4. THE SOLICITATION OR RECOMMENDATION. (A) RECOMMENDATION OF THE BOARD OF DIRECTORS. The Board has unanimously approved the Offer, the Merger, and the Merger Agreement, has determined that the consideration to be paid for the Shares in the Offer and the Merger is fair to the shareholders of the Company and that the Offer and the Merger are otherwise in the best interests of the Company and its shareholders. The Board unanimously recommends that all shareholders accept the Offer and tender their Shares pursuant to the Offer and, if a shareholder vote on the Merger is required by the ABCA, vote in favor of the Merger. (B) BACKGROUND; REASONS FOR THE RECOMMENDATION. (1) BACKGROUND. From time to time over the past two years, Mr. Bruce C. Bruckmann, a director of Parent and a principal in Bruckmann, Rosser, Sherrill & Co., Inc. ("BRS"), an affiliate of Parent's majority shareholder, and Mr. Timothy E. Kullman, the Company's Chief Financial Officer, had general discussions regarding recent developments and trends in the supermarket industry and the strategic direction of Parent and the Company. In mid-January 1997, Mr. Bruckmann contacted Mr. Kullman to arrange a meeting between representatives of Parent and the Company to discuss the possibility of a friendly business combination between Parent and the Company. 5 On January 31, 1997, Mr. Bruckmann and Mr. Harold O. Rosser, II and Mr. Stephen C. Sherrill, also directors of Parent and principals in BRS, met with Mr. David W. Morrow, the Company's Chairman and Chief Executive Officer, Mr. Kullman and Mr. Richard W. LaTrace, the Company's President, to discuss generally the companies' businesses and philosophies and the framework for a potential transaction. During the meeting, Parent's representatives discussed generally the possibility of a strategic merger of the two companies in which the Company would acquire Parent for common stock under terms to be negotiated. Mr. Morrow indicated that the Company would review the matter and inform Parent if the Company wished to further pursue a possible transaction. At a regularly scheduled Board meeting in February 1997, management of the Company provided the Board with a comprehensive review of the Company's financial condition, results of operations and future prospects, and a review of current developments in the supermarket industry in the Company's market areas. Among other things, management reported that it was not optimistic that financial results could improve significantly over the next several years if the Company remained independent and made no major acquisitions. Management's view was based primarily on the substantial increase since 1994 in the number and quality of competitive stores opened in the Company's market areas by other well-financed and cost-efficient supermarket and food store chains, and the effect of those competitive openings on the Company's gross margins and same store sales. Management noted, however, that the Company's operations could provide a good fit with those of certain other supermarket chains that might wish to enter or expand their operations in the Company's market areas and that representatives of several chains, including Parent, had expressed an interest in acquiring the Company. After discussion of management's report, the Board concluded that it would be in the best interest of the Company's shareholders to explore the Company's strategic alternatives, including the possibility of a sale of the Company, and authorized management to interview one or more investment banking firms and explore their views concerning the Company's alternatives. On February 12, 1997, the Company retained Credit Suisse First Boston Corporation ("CSFB") as its exclusive financial advisor with respect to strategic alternatives available to the Company. In mid February, Mr. Kullman called Mr. Bruckmann and informed him that the Company had retained CSFB as its financial advisor to assist the Company in reviewing and evaluating its strategic alternatives and that the Company or CSFB would contact Parent if appropriate. In early April, at the Company's direction, CSFB contacted Mr. Bruckmann to ascertain whether Parent would be interested in pursuing the acquisition of the Company as part of a managed sale process. Mr. Bruckmann indicated that Parent would be interested in participating in the process. Additionally, over the course of the next several months, CSFB conducted an analysis of the Company and its financial and competitive situation, and, as directed by management of the Company, contacted ten other potential purchasers believed to be likely to have both an interest in and the capability of acquiring the Company. Four of the potential purchasers indicated that they were not interested in proceeding. Beginning in early April, CSFB and management provided detailed information about the Company to the seven remaining potential purchasers, including Parent, following the execution of confidentiality and standstill agreements with each of them. See "Item 3. Identity and Background-- Confidentiality Agreement." Members of management and representatives of CSFB also met with representatives of each potential purchaser to answer questions and provide additional information. In late April, Parent advised CSFB that it had been approached by representatives of another supermarket chain through Donaldson, Lufkin & Jenrette Securities Corporation (an affiliate of a shareholder of Parent) regarding the possibility of a joint acquisition of the Company and requested a waiver of the standstill provisions of the Confidentiality Agreement to enable Parent to pursue discussions with the other chain, which the Company granted. As part of the managed sale process, CSFB, on behalf of the Company, requested that the potential purchasers submit nonbinding indications of interest in acquiring the Company. In response to that request, in early May, Parent submitted a non-binding indication of interest in pursuing jointly with the other supermarket chain an acquisition of the Company for approximately $27 to $31 per Share in cash. In addition, three other potential purchasers submitted non-binding indications of interest. All such potential 6 purchasers were then given access to a data room containing financial and other records of the Company and access to the Company's stores and its Hammond, Louisiana, distribution center. At the Board's regularly scheduled meeting on April 29, 1997, management reported in detail on the preliminary contacts with potential purchasers. On June 2, CSFB, on behalf of the Company, requested that formal proposals be submitted by prospective purchasers on June 18, 1997 and provided prospective purchasers with the Company's draft of the proposed Merger Agreement. In early June, Parent advised CSFB that Parent had terminated its discussions with the other supermarket chain and wished to pursue on its own an acquisition of the Company. Only Parent responded by June 18 with a formal proposal. One other potential purchaser provided the Company with an indication of interest but did not submit a formal proposal until a subsequent date. Parent's June 18 proposal contemplated the acquisition of the Company in a cash merger for a price of $27 per Share. Shortly thereafter, CSFB advised Parent that its proposed price and the financing condition contained in Parent's proposal were unacceptable and that the transaction would have to be structured as a tender offer in order to accelerate the closing of the transaction. Following additional negotiations, Parent eliminated the financing condition and offered the Company a choice between a tender offer at $28.50 per Share or a merger transaction at $30 per Share, reflecting Parent's higher estimated costs to finance a tender offer. After further negotiations, Parent proposed a tender offer for all Shares at $30 per Share in cash, followed by a merger in which non-tendering shareholders would also receive $30 per Share in cash. Parent's proposal did not contain a financing condition but required a tender offer period of up to 60 calendar days to provide Parent with sufficient time to obtain permanent financing. Parent also advised the Company that the transaction would be subject to Parent's ability to obtain the consent of the holders of at least a majority in aggregate principal amount of its senior notes. In addition, Parent informed the Company that it was unwilling to proceed with further discussions unless the Company provided it with a five-day period to negotiate with the Company on an exclusive basis. The Board held a special meeting on June 27, 1997 to discuss Parent's revised proposal in light of current conditions and available alternatives. At the meeting, representatives of CSFB made a presentation to the Board regarding the status of discussions with Parent and other potential purchasers, including one such potential purchaser that had indicated its intention to submit a formal offer to the Company, as well as CSFB's preliminary valuation analyses of the Company. Representatives of the Company's management also made a presentation regarding the Company's historical financial performance and management's view of the Company's future financial prospects. After discussion, the Board authorized management, CSFB and Company counsel to continue their negotiations with Parent and authorized management to enter into a short-term exclusivity agreement if and when deemed advisable. On June 30, the Company provided Parent with a revised draft Merger Agreement and related documents reflecting the status of negotiations to date. Thereafter, representatives of Parent and the Company negotiated these documents and held discussions regarding various legal and business issues, and representatives of Parent continued due diligence activities. '] On July 2 and 3, representatives of Parent and the Company met to continue negotiations on the Merger Agreement. The principal issues discussed included the conditions to the Offer generally; the time periods and terms upon which Parent could or would be required to extend the Offer; the conditions upon which Parent would be required to pursue antitrust approval; the conditions upon which the Company could entertain third party offers for the Company after the execution of the Merger Agreement; the bases upon which the Company could modify its position with respect to the Offer or terminate the Merger Agreement as a result of certain third party offers; and the amount of the termination and expense fees and the circumstances under which they would be payable by the Company. 7 Over the next four days, representatives of the Company and Parent continued these discussions and finalized the Merger Agreement and related documentation. At a meeting of the Board held on July 7, 1997, Company counsel and representatives of CSFB reported on the status of negotiations with Parent and reviewed the terms of the Offer and the Merger. Representatives of CSFB also reviewed the terms of an offer, which were not equal in price or terms to those of the Offer and the Merger, that had been made by the other prospective purchaser. CSFB reviewed again its valuation analyses of the Company and delivered to the Board its written opinion dated July 7, 1997 that, as of such date and based upon and subject to the matters set forth therein, the consideration to be received by the holders of Shares in the Offer and the Merger was fair from a financial point of view to such holders. Following discussion, the Board unanimously approved the Merger Agreement and determined to recommend that shareholders accept the Offer and tender their Shares pursuant to the Offer. The Merger Agreement was executed and publicly announced on the morning of July 8, 1997. On July 14, 1997, Offeror commenced the Offer. (2) REASONS FOR THE RECOMMENDATION. In approving the Merger Agreement and the transactions contemplated thereby, and in recommending that all holders of Shares tender them pursuant to the Offer, the Board considered a number of factors, including: (i) the terms of the Merger Agreement; (ii) the financial condition, results of operations, business and prospects of the Company; (iii) the significant and continuing increase in competition in the Company's markets from other large, well-financed supermarket chains and other discount retailers, and the effects of such competition on the Company's margins and comparable same store sales; (iv) that the $30 per Share cash consideration to be received by the shareholders represented a premium of almost 50% over the trading price of the Shares in early February 1997, when the Board began the process of exploring strategic alternatives; (v) the opinion dated July 7, 1997 of CSFB that, as of such date and based upon and subject to the matters set forth therein, the consideration to be received by the holders of Shares in the Offer and the Merger was fair from a financial point of view to such holders; (vi) that the Merger Agreement, while not permitting the Company to continue to solicit or initiate discussions with other prospective purchasers, permits the Company to furnish information to, and negotiate or participate in discussions with, third parties that have not previously engaged in substantive discussions with the Company; (vii) that before recommending the Offer and Merger Agreement, CSFB solicited acquisition interest from third parties that did not result in alternative proposals on more favorable terms; (viii) the reasonableness of the termination fee and expense reimbursement requirements in the Merger Agreement; and (ix) the limited number of conditions to the obligations of Parent and Offeror to consummate the Offer and the Merger, including the absence of a financing condition of the Offer. The Board did not assign relative weights to the foregoing factors or determine that any factor was of more importance than other factors. Rather, the Board viewed its position and recommendation as being based on the totality of the information presented to and considered by it. A copy of the written opinion of CSFB, which sets forth the factors considered, assumptions made and limitations on the review conducted by CSFB, is attached as Exhibit (a)(6) to this Schedule 14D-9 and is 8 incorporated herein by reference. Shareholders are urged to read the opinion of CSFB carefully and in its entirety. ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. Pursuant to a letter agreement dated February 12, 1997 (the "Engagement Letter") between CSFB and the Company, the Company retained CSFB to act as its exclusive financial advisor with respect to strategic alternatives available to the Company, including the possible Sale (as defined in the Engagement Letter) of the Company. Under the terms of the Engagement Letter, the Company agreed to pay CSFB a financial advisory fee of $100,000 upon execution of the Engagement Letter and a transaction fee in an amount equal to 1% of the aggregate consideration, payable upon consummation of the Offer. In addition, the Engagement Letter provides that the Company will reimburse CSFB for its out-of-pocket expenses and will indemnify CSFB against certain liabilities, including liabilities arising under the federal securities laws. In the past, CSFB has performed certain investment banking services for Parent and has received customary fees for such services. With the consent of the Company, CSFB will act as an underwriter for the offering of debt securities proposed to be made by Parent in connection with the Offer and the Merger, and Credit Suisse First Boston, an affiliate of CSFB, may participate in the bridge financing for the Offer and the Merger, for which, in each case, CSFB and Credit Suisse First Boston will receive customary fees for their services. In the ordinary course of its business, CSFB and its affiliates may actively trade the equity securities of the Company and the debt securities of Parent for their own accounts and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities. ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES. (a) No transactions in Shares have been effected during the past 60 days by the Company or, to the best of the Company's knowledge, by any executive officer, director, affiliate or subsidiary of the Company, except for the issuance of Shares to certain non-employee directors under the Director Compensation Plan pursuant to elections, made by such directors more than one year ago, to receive Shares as compensation for services as a director. (b) To the best of the Company's knowledge, to the extent permitted by applicable securities laws, rules or regulations, each executive officer, director, affiliate and subsidiary of the Company currently intends to tender to Offeror all Shares held of record or beneficially by such persons. ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY. (a) Except as set forth in this Schedule 14D-9, no negotiation is being undertaken or is underway by the Company in response to the Offer which relates to or would result in (i) an extraordinary transaction, such as a merger or reorganization, involving the Company or any subsidiary of the Company; (ii) a purchase, sale or transfer of a material amount of assets by the Company or any subsidiary of the Company; (iii) a tender offer for or other acquisition of securities by or of the Company; or (iv) any material change in the present capitalization or dividend policy of the Company. (b) There are no transactions, board resolutions, agreements in principle, or signed contracts in response to the Offer, other than as described in Item 3(b) or in Item 8 of this Schedule 14D-9 (which is hereby incorporated herein by reference), which relate to or would result in one or more of the matters referred to in Item 7(a)(i), (ii), (iii) or (iv). 9 ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED. RIGHTS AGREEMENT The Board entered into a Rights Agreement (the "Rights Agreement") dated as of October 14, 1988, with First Alabama Bank, as Rights Agent (the "Agent"), which was amended by an Amendment dated as of October 16, 1992 between the Company and the Agent (the "First Amendment") and further amended by a Second Amendment dated July 8, 1997 between the Company and the Agent (the "Second Amendment"). The purpose of the Rights Agreement is to protect the shareholders of the Company against rapid accumulations of Shares by raiders and unsolicited coercive tender offers at inadequate prices by offerors who decline to negotiate with the Board as the representative of the shareholders. The Rights may cause substantial ownership dilution to a person or group who attempts to acquire the Company without the approval of the Board. Pursuant to the Rights Agreement, on October 14, 1988, the Board declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of Common Stock. Under certain conditions, each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock, no par value, (the "Preferred Shares"), of the Company at a price of $70 per one one-hundredth of a Preferred Share, subject to adjustment. The Rights, which do not have any voting privileges, expire on October 27, 1998, and may be redeemed by the Company at a price of $0.01 per Right at any time prior to the acquisition by a person or group of affiliated or associated persons of beneficial ownership of 50% or more of the outstanding Shares. The Rights may not be exercised until the earlier to occur of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") have acquired beneficial ownership of 15% or more of the outstanding Shares or (ii) 10 business days (or such later date as may be determined by action of the Board prior to such time as any Person becomes an Acquiring Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 15% or more of such outstanding Shares (the earlier of such dates being called the "Distribution Date"). The Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with the Shares. In the event that the Company is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are sold, proper provision will be made so that each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the then current exercise price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price of the Right. In the event that (i) any person or group of affiliated or associated persons becomes the beneficial owner of 15% or more of the outstanding Shares (unless such person first acquired 15% or more of the outstanding Shares by a purchase pursuant to a tender offer for all of the Shares for cash, which purchase increases such person's beneficial ownership to 80% or more of the outstanding Shares) or (ii) during such time as there is an Acquiring Person, there shall be a reclassification of securities or a recapitalization or reorganization of the Company or other transaction or series of transactions involving the Company which has the effect of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its subsidiaries beneficially owned by the Acquiring Person, proper provision shall be made so that 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 upon exercise that number of Shares having a market value of two times the exercise price of the Right. At any time after the acquisition by a person or group of affiliated or associated persons of beneficial ownership of 15% or more of the outstanding Shares and prior to the acquisition by such person or group of 50% or more of the outstanding Shares, the Board may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one Share, 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). 10 As of October 16, 1992, the Company entered into the First Amendment. The purpose of the First Amendment was to allow a bidder to require a shareholders' meeting under certain circumstances to vote on redemption of the Rights. Consistent with the Board's approval and adoption of the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, and its recommendation that all shareholders accept the Offer and tender their Shares in response to it, the Board approved on July 8, 1997 the Second Amendment exempting the Merger Agreement, the Offer and the Merger from the restrictions imposed on offerors generally by the Rights Agreement, rescinding the First Amendment and providing that the Rights will expire at the consummation of the Offer. ARTICLES OF INCORPORATION Article Eleven of the articles of incorporation of the Company contains provisions that are intended to protect shareholders against a second-step forced merger with a raider at an inadequate price following a successful unsolicited coercive tender offer. For the reasons described in the preceding paragraph, the Board voted on July 8, 1997 to exercise the authority conferred on it by Article Eleven of the Company's articles of incorporation to exempt the Merger Agreement and the transactions contemplated thereby from the restrictions imposed by Article Eleven. ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NO. - ------------ (a)(1)*+ Offer to Purchase dated July 14, 1997. (a)(2)*+ Letter of Transmittal. (a)(3) Press release issued by Parent and the Company dated July 8, 1997 (incorporated by reference to Exhibit (99) to the Company's Current Report on Form 8-K, dated July 8, 1997). (a)(4)* Letter to shareholders of the Company dated July 14, 1997. (a)(5)+ Form of Summary Advertisement dated July 14, 1997. (a)(6)* Opinion dated July 7, 1997 of Credit Suisse First Boston Corporation. (c)(1) Agreement and Plan of Merger dated as of July 8, 1997 by and among the Company, Parent and Offeror (incorporated by reference to Exhibit (2) to the Company's Current Report on Form 8-K, dated July 8, 1997). (c)(2) Confidentiality and Standstill Agreement dated April 8, 1997 between the Company, Bruckmann, Rosser, Sherrill & Co., Inc., and Parent. (c)(3) Employment Agreement dated as of January 1, 1997 between the Company and David W. Morrow (incorporated by reference to Exhibit 10 to the Company's Quarterly Report on Form 10-Q for the 13-week period ended March 29, 1997). (c)(4) 1993 Stock Incentive Plan (incorporated by reference to Exhibit 4.3 to the Company's Form S-8 filed on October 25, 1993 (Registration Number 33-70772)). (c)(5) Directors' Stock Option Plan (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on November 15, 1996, for the quarter ending September 28, 1996). (c)(6) Director Compensation Plan (incorporated by reference to Exhibit 4.3 to the Company's Form S-8 filed on November 14, 1994 (Registration Number 33-56447)). (c)(7) Form of Director Indemnity Agreement (incorporated by reference to Exhibit 10 to the Company's Form 10-Q filed on November 15, 1996, for the quarter ending September 28, 1996). (c)(8) Management Incentive Compensation Plan. (c)(9) 1987 Restricted Stock Plan. (c)(10) Form of Change of Control Agreement. (c)(11) Second Amendment dated July 8, 1997 to the Rights Agreement (incorporated by reference to Exhibit (4) to the Company's Form 8-A/A dated July 8, 1997)
- ------------------------ * Included in materials delivered to shareholders of the Company. + Filed as an exhibit to Offeror's Tender Offer Statement on Schedule 14D-1 dated July 14, 1997 and incorporated herein by reference. 11 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: July 14, 1997 DELCHAMPS, INC. By: /s/ DAVID W. MORROW ------------------------------------------ David W. Morrow CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD
12 EX-99.(A)(4) 2 LETTER TO SHAREHOLDERS [LOGO] DAVID W. MORROW CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD
July 14, 1997 Dear Shareholder: I am pleased to announce that on July 8, 1997, Delchamps, Inc. (the "Company"), Jitney-Jungle Stores of America, Inc. ("Parent") and Delta Acquisition Corporation ("Offeror"), a wholly owned subsidiary of Parent, entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which Offeror has agreed to acquire the Company. Pursuant to the Merger Agreement, Offeror has today commenced a tender offer (the "Offer") for all outstanding shares of the common stock, par value $.01 per share, of the Company ("Common Stock") at $30 cash per share. The shares of Common Stock not acquired in the Offer will be converted to the right to receive $30 per share in cash pursuant to the merger of Offeror with and into the Company (the "Merger"). The Offer is conditioned on, among other things, at least two-thirds of the shares of Common Stock outstanding on a fully diluted basis being validly tendered. The Board of Directors of the Company has unanimously approved the Offer, the Merger, and the Merger Agreement, has determined that the consideration to be paid for the shares of Common Stock in the Offer and the Merger is fair to the shareholders of the Company and that the Offer and the Merger are otherwise in the best interests of the Company and its shareholders. The Board of Directors unanimously recommends that all shareholders accept the Offer and tender their shares of Common Stock pursuant to the Offer and, if a shareholder vote on the Merger is required by the Alabama Business Corporation Law, vote in favor of the Merger. Enclosed for your consideration are copies of the Offer materials and the Company's Schedule 14D-9, which is being filed today with the Securities and Exchange Commission. These documents should be read carefully. In particular, I call your attention to Item 4 of the Schedule 14D-9, which describes the reasons for the Board's recommendation with respect to the Offer. Sincerely, /s/ DAVID W. MORROW ------------------------------- David W. Morrow CHIEF EXECUTIVE OFFICER AND Chairman of the Board DELCHAMPS, INC. - P.O. BOX 1668 - MOBILE, AL 36633-1668 - 305 DELCHAMPS DRIVE - MOBILE, AL 36602 - (334) 433-0431 EX-99.(A)(6) 3 FIRST BOSTON OPINION LETTER Credit Suisse First Boston Corporation Letterhead July 7, 1997 Board of Directors Delchamps, Inc. 305 Delchamps Drive Mobile, Alabama 36602 Members of the Board: You have asked Credit Suisse First Boston ("CSFBC") to advise you with respect to the fairness to the shareholders of Delchamps, Inc. ("Delchamps" or the "Company") from a financial point of view of the consideration to be received by such shareholders pursuant to the terms of the Agreement and Plan of Merger (the "Merger Agreement") among Jitney-Jungle Stores of America, Inc. ("Jitney-Jungle"), Delta Acquisition Corporation, a wholly-owned subsidiary of Jitney-Jungle ("Sub"), and the Company. The Merger Agreement provides for a tender offer (the "Tender Offer") by Sub for all of the outstanding shares of the Company's common stock, $.01 par value per share, and the associated preferred share purchase rights (together, the "Shares") at $30.00 per Share, net to the seller in cash, followed by the merger (the "Merger") of Sub with and into the Company pursuant to which the Company will become a wholly owned subsidiary of Jitney-Jungle and each outstanding Share (other than Shares owned by the Company as treasury stock and Shares owned by Jitney-Jungle, Sub or any other wholly-owned subsidiary of Jitney-Jungle) will be converted into the right to receive $30.00 in cash. In arriving at our opinion, we have reviewed certain publicly available business and financial information relating to the Company, as well as a draft dated July 6, 1997 of the Merger Agreement. We have also reviewed certain other information, including financial forecasts, provided to us by Delchamps and have met with the Company's management to discuss the business and prospects of Delchamps. We have also considered certain financial and stock market data of Delchamps, and we have compared those data with similar data for other publicly held companies in businesses similar to that of the the Company, and we have considered the financial terms of certain other business combinations and other transactions which have recently been effected. We also considered such other information, financial studies, analyses and investigations and financial, economic and market criteria which we deemed relevant. In connection with our review, we have not assumed any responsibility for independent verification of any of the foregoing information and have relied on its being complete and accurate in all material respects. With respect to the financial forecasts, we have assumed that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the Company's management as to the future financial performance of the Company. In addition, we have not been requested to make, and have not made, an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company, nor have we been furnished with any such evaluations or appraisals. Our opinion is necessarily based upon financial, economic, market and other conditions as they exist and can be evaluated on the date hereof. In connection with our engagement, we approached third parties to solicit indications of interest in the possible acquisition of the Company and held preliminary discussions with certain of these parties prior to the date hereof. We have acted as financial advisor to the Company in connection with the Tender Offer and the Merger and will receive a fee for our services, a significant portion of which is contingent upon the consummation of the Tender Offer. In the past, CSFBC has performed certain investment banking services for Jitney-Jungle and has received customary fees for such services. With the consent of the Company, CSFBC will act as an underwriter for the offering of high-yield securities proposed to be made by Jitney-Jungle in connection with the Tender Offer and the Merger, and Credit Suisse First Boston, an affiliate of CSFBC ("CSFB"), has committed to provide senior bank and bridge financing for the Tender Offer and the Merger for which, in each case, CSFBC and CSFB will receive customary fees for their services. In the ordinary course of CSFBC's business, CSFBC and its affiliates may actively trade the equity securities of Delchamps and the debt securities of Jitney-Jungle for their own accounts and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities. It is understood that this letter is for the information of the Board of Directors in connection with its consideration of the Tender Offer and the Merger, does not constitute a recommendation to any holder of Shares as to whether such holder should tender Shares pursuant to the Tender Offer or how such holder should vote with respect to the Merger and is not to be quoted or referred to, in whole or in part, in any disclosure document distributed in connection with the Tender Offer or any proxy statement or information statement distributed in connection with the Merger, or used for any other purposes, without our prior written consent. Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the consideration to be received by the holders of Shares in the Tender Offer and the Merger is fair from a financial point of view to such holders. Very truly yours, CREDIT SUISSE FIRST BOSTON CORPORATION EX-99.(C)(2) 4 CONFIDENTIALITY AND STANDSTILL AGREEMENT CONFIDENTIALITY AND STANDSTILL AGREEMENT April 8, 1997 Mr. Bruce C. Bruckmann Bruckmann, Rosser, Sherrill & Co., Inc. 126 East 56th Street New York, NY 10022 Dear Mr. Bruckmann: Delchamps, Inc. ("DLCH"), Bruckmann, Rosser, Sherrill & Co., Inc. and Jitney-Jungle Stores of America, Inc. (Bruckmann, Rosser, Sherrill & Co., Inc. and Jitney-Jungle Stores of America, Inc., together, "BRS") are prepared to engage in discussions with respect to a possible negotiated business combination involving BRS and DLCH (the "Transaction"), and during the course of such discussions DLCH may disclose and make available to BRS certain information concerning DLCH's business, prospects, financial condition, operations, assets and liabilities. All such information furnished to BRS or its Representatives (as defined below) by or on behalf of DLCH (irrespective of the form of communication and whether such information is so furnished on or after the date hereof), and all analyses, compilations, data, studies, notes, interpretations, memoranda or other documents prepared by BRS or its Representatives containing or based in whole or in part on any such furnished information are collectively referred to herein as the "Confidential Information." As a condition to being furnished with the Confidential Information, BRS agrees as follows: 1. Non-Disclosure of Confidential Information. (a) BRS shall (i) use the Confidential Information solely for the purpose of evaluating a possible Transaction and for no other competitive or other purpose; (ii) not disclose the Confidential Information to any third party, except for disclosures to its directors, officers, employees and representatives of its advisors (such as independent accountants, investment bankers, attorneys and financing sources) acting on its behalf (such directors, officers, employees and representatives being referred to hereinafter collectively as its "Representatives") who in each case, in its reasonable judgment, need to know such information for the purpose of evaluating a possible Transaction; (iii) inform its Representatives of the confidential nature of the Confidential Information and direct its Representatives to treat the Confidential Information confidentially; (iv) take all additional reasonable precautions necessary to prevent the disclosure of the Confidential Information by its Representatives to any third party; and (v) be responsible for any breach of this Agreement by its respective Representatives who have not entered into a written agreement with DLCH to be bound by the terms hereof. Mr. Bruce C. Bruckmann April 8, 1997 Page 2 (b) If BRS or its Representatives is requested (by interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, it is agreed that BRS will provide DLCH with prompt notice of such request so that DLCH may seek an appropriate protective order and/or waive BRS's compliance with the provisions of this Agreement. BRS and its Representatives may disclose without liability hereunder only that portion of the Confidential Information that BRS is advised by written opinion of counsel is legally required to be disclosed; provided that BRS gives to DLCH written notice of the information to be disclosed as far in advance of its disclosure as is practicable and, upon DLCH's request and at DLCH's expense, uses reasonable efforts to obtain assurances that confidential treatment will be accorded to such information. 2. Non-Disclosure of Negotiations or Agreements. Except as required by law, or in circumstances where the law is unclear as advisable in the written opinion of counsel in order to protect the disclosing party, neither BRS or its Representatives, on the one hand, nor DLCH or its Representatives, on the other hand, shall disclose to any person the existence, status or terms of any discussions, negotiations or agreements concerning a possible Transaction, including without limitation any offer, letter of intent, proposal, price, value or valuation, or any similar terms, agreements or understandings between BRS and DLCH with respect thereto, or that BRS has received from DLCH Confidential Information, without obtaining the prior written consent of DLCH or BRS, as the case may be, which consent will not be unreasonably withheld. 3. Return of Confidential Information. All written Confidential Information delivered by or on behalf of DLCH to BRS pursuant to this Agreement shall be and remain the property of DLCH, and upon the written request of DLCH, BRS shall (i) promptly return such Confidential Information and shall not retain any copies or other reproductions or extracts thereof, (ii) destroy or have destroyed all memoranda, notes, reports, analyses, compilations, studies, interpretations, or other documents derived from or containing Confidential Information, and all copies and other reproductions and extracts thereof, and (iii) provide a certificate to DLCH certifying that the foregoing materials have, in fact, been destroyed or returned, signed by an authorized officer supervising such destruction or return. Notwithstanding the return or destruction of the Confidential Information, BRS and its Representatives will continue to be bound by the confidentiality and other obligations hereunder. 4. Information Not Deemed Confidential Information. The term "Confidential Information" does not include information that (i) is or becomes generally available to the public other than as a result of a disclosure by BRS or its Representatives in violation of this Agreement; or (ii) was or becomes available to BRS on a non-confidential basis from a source other than DLCH or its Representatives, provided that such source is not known by BRS to be bound by an obligation of confidentiality to DLCH or its Representatives. Mr. Bruce C. Bruckmann April 8, 1997 Page 3 5. No Representations or Warranties. Neither DLCH nor any of its respective officers, directors, employees, representatives or agents makes any representation or warranty, express or implied, as to the accuracy and completeness of any Confidential Information provided by it, and no liability shall result to DLCH from its use, except as set forth in a definitive agreement for a Transaction. Only the representations and warranties that are made in a definitive agreement for a Transaction, when, as, and if it is executed, and subject to such limitations and restrictions as may be specified therein, shall have any legal effect. 6. No Agreement. DLCH has the absolute right to determine what information, properties and personnel it wishes to make available to BRS. Unless a definitive agreement regarding a Transaction between BRS and DLCH has been executed and delivered, neither DLCH, BRS nor any of their stockholders or affiliates will be under any legal obligation of any kind whatsoever with respect to such a Transaction by virtue of this letter Agreement or any other written or oral expression with respect to such Transaction except, in the case of this Agreement, matters specifically agreed to herein. Each party further acknowledges and agrees that each party reserves the right, in its sole discretion, to reject any and all proposals made by the other party or any of its Representatives with regard to a Transaction, and to terminate discussions and negotiations with the other party at any time. 7. Contact Persons; No Solicitation. All requests by BRS for Confidential Information, meetings with personnel or inspection of properties and all other communications regarding a possible Transaction shall be made only to the contacts designated by DLCH (the "Contact Persons"). BRS agrees that, for a period of two years from the date of this Agreement, it will not initiate contact (except in the ordinary course of business and except to the extent permitted by paragraph 9) with any director, officer, employee, distributor or customer of DLCH regarding its business operations, prospects or finances, except as may be permitted by the Contact Persons for due diligence purposes. It is expressly understood that this Agreement is not intended to preclude the ability of the companies to compete with one another in the ordinary course. BRS further agrees that, for a period of two years from the date hereof, it will not hire any of DLCH's officers, zone managers and/or district managers without DLCH's written consent and will not solicit for hire (other than by means of a general advertisement) any of DLCH's non-store level employees other than clerical and administrative employees. 8. Non-public Information. DLCH has outstanding publicly-held securities and the Confidential Information contains material non-public information. BRS acknowledges that it is (i) aware, and has advised or will advise its Representatives, that the United States securities laws prohibit any person in possession of material non-public information about a company from purchasing or selling securities of such company, and from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person may purchase or sell such securities and (ii) familiar with the Mr. Bruce C. Bruckmann April 8, 1997 Page 4 Securities and Exchange Act of 1934, as amended, and the rules and regulations thereunder, and BRS agrees that it will neither use nor permit any of its Representatives to use any Confidential Information in violation of such Act or rules or regulations, including without limitation, Rule 10b-5. 9. Standstill. BRS agrees that, until the expiration of two years from the date of this Agreement, without prior written invitation (on an unsolicited basis) of DLCH's Board of Directors, it and its affiliates will not (i) in any manner acquire, agree to acquire or make any proposal or offer or otherwise seek to acquire, directly or indirectly, any securities (or rights in respect thereof), assets or property of DLCH or any of its subsidiaries or of any successor thereto or person in control thereof, whether such agreements or proposals or offers are made with or to DLCH or any of its subsidiaries (or a successor thereto or person in control thereof) or a third party; (ii) enter into or agree, offer, seek or propose to enter into or otherwise be involved in or part of, directly or indirectly, any merger, acquisition transaction or other business combination relating to DLCH or any of its subsidiaries or any of their respective assets; (iii) make, or in any way participate in, directly or indirectly, any "solicitation" of "proxies" (as such terms are used in the proxy rules of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) to vote, or seek to advise or influence any person with respect to the voting of, any voting securities of DLCH or any of its subsidiaries or of any successor thereto or person in control thereof, (iv) form, join or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of DLCH or any of its subsidiaries or of any successor thereto or person in control thereof; (v) seek or propose, alone or in concert with others, to control or influence the management, Board of Directors or policies of DLCH; (vi) directly or indirectly enter into any discussions, negotiations, arrangements or understandings with any other person (except internal discussions and planning activities involving its Representatives) with respect to any of the foregoing activities or propose any of such activities to any other person (other than its Representatives); (vii) directly or indirectly advise, encourage, assist, act as a financing source for or otherwise invest in any other person in connection with any of the foregoing; (viii) publicly disclose any intention, plan or arrangement inconsistent with the foregoing. BRS also agrees that, during such two-year period, neither it nor any of its affiliates will: (i) request DLCH or its advisors, directly or indirectly, to (1) amend or waive any provision of this paragraph (including this sentence) or (2) otherwise consent to any action inconsistent with any provision of this paragraph (including this sentence); or (ii) take any initiative with respect to DLCH or any of its subsidiaries that could be reasonably be expected to require DLCH to make a public announcement regarding (1) such initiative, (2) any of the activities referred to in this paragraph, (3) the possibility of a Transaction or any similar transaction or (4) the possibility of BRS or any other person acquiring control of DLCH, whether by means of a business combination or otherwise. Additionally, BRS's Chief Executive Officer may contact DLCH's Chief Executive Officer for the purpose of expressing continuing or renewed interest in a Transaction or in any other business relationship, provided that, unless invited to do so by DLCH's Chief Executive Officer, no offer or proposal shall be made that would require Mr. Bruce C. Bruckmann April 8, 1997 Page 5 disclosure or formal consideration by DLCH or its Board of Directors. 10. Person. The term "person" as used in this Agreement will be interpreted broadly to include the media and any corporation, company, group, partnership, governmental body or other entity or individual. 11. No Waiver. No failure or delay by DLCH or BRS in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof, or the exercise of any right, power or privilege hereunder. 12. Remedies. It is understood and agreed that money damages would not be a sufficient remedy for any breach of this Agreement and that the non-breaking party shall be entitled to equitable relief, including specific performance and injunction, as a remedy for any such breach or threatened breach. Each party agrees to waive, and use its best efforts to cause its directors, officers, employees or agents to waive, any requirement for the securing or posting of any bond or other security in connection with such remedy. Such remedies shall not be deemed to be the exclusive remedies for a breach of this Agreement, but shall be in addition to all other remedies available at law or in equity, including remedies pursuant to applicable laws relating to trade secrets. 13. Benefits: Governing Law. This Agreement is for the benefit of DLCH and its respective directors, officers, employees, representatives and agents and its respective successors and assigns and shall be governed by and construed in accordance with the internal substantive laws and not the choice of law rules of the State of Alabama. 14. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all such counterparts together shall constitute but one and the same Agreement. 15. Severability. If any provision of this Agreement is invalid or unenforceable, such invalidity or unenforceability shall not be deemed to affect any other provision hereof or the validity of the remainder of this Agreement, and such invalid or unenforceable provision shall be deemed deleted herefrom to the minimum extent necessary to cure such invalidity or unenforceability. 16. Modifications. No provision of this Agreement may be waived, amended or modified except by the written agreement of BRS and DLCH. Mr. Bruce C. Bruckmann April 8, 1997 Page 6 Please confirm your agreement with the foregoing by signing and returning one copy of this letter to the undersigned, whereupon this letter Agreement shall become a binding agreement between us. DELCHAMPS, INC. By: /s/ Timothy E. Kullman ---------------------------------------- Timothy E. Kullman Senior Vice President and Chief Financial Officer Accepted and agreed to as of the day of April, 1997. - ---- BRUCKMANN, ROSSER, SHERRILL & CO., INC. By: /s/ Bruce C. Bruckmann ------------------------ Bruce C. Bruckmann Authorized Signatory and JITNEY-JUNGLE STORES OF AMERICA, INC. By: /s/ Roger P. Friou --------------------------------- Name: Roger P. Friou ----------------------------- Title: President ----------------------------- EX-99.(C)(8) 5 MANAGEMENT INCENTIVE COMPENSATION PLAN DESCRIPTION Exhibit (c)(8) MANAGEMENT INCENTIVE COMPENSATION PLAN DESCRIPTION Executive officers are eligible for incentive awards. These awards are not in addition to market level compensation but are designed to place a significant part of an executive's annual compensation at risk. The Chief Executive Officer's award is based on corporate performance measured against pre-tax profit objectives set by the Committee at the beginning of the year. Awards to other executive officers are based on the same corporate performance measure and on individual achievement of specified objectives established by the Chief Executive Officer at the beginning of the year. Targeted awards are a percentage of the executive officer's base salary ranging from 15% to 50% based on the officer's position and salary grade. Awards based on Company performance may range from 25% of target for exceeding a threshold profit level to a maximum award of 50% greater than target for achieving or exceeding a maximum pre-tax profit goal. At year-end, individual performance of the other executive officers is evaluated against pre-established objectives. Mr. Morrow was not eligible to receive an annual incentive award for fiscal year 1996. The combination of base salary and an annual incentive award are intended to provide an executive the opportunity to earn total compensation slightly above the 50th percentile of the competitive marketplace if Company and individual goals are achieved. EX-99.(C)(9) 6 RESTRICTED STOCK PLAN AMENDED AND RESTATED 1987 RESTRICTED STOCK PLAN OF DELCHAMPS, INC. 1. PURPOSE OF PLAN. The purpose of the Plan is to promote the best interests of Delchamps, Inc. and its shareholders by providing key employees of Delchamps, Inc. and its subsidiaries with an opportunity to acquire a proprietary interest in Delchamps, Inc. thereby providing a stronger incentive for them to exert maximum effort for the continued success and growth of Delchamps, Inc. In addition, the opportunity to acquire a proprietary interest in Delchamps, Inc. will aid in attracting and retaining key personnel. 2. DEFINITIONS. Unless the context otherwise requires, the following terms shall have the meanings set forth below: (a) 'Company" shall mean Delchamps, Inc., an Alabama Corporation. (b) 'Subsidiary' shall mean a subsidiary corporation of the Company as defined in Section 425(f) of the Internal Revenue Code of 1986. (c) 'Plan" shall mean the 1987 Restricted Stock Plan of the Company. (d) "Share" or "Shares" shall mean the $.01 par value Common Stock of the Company. (e) 'Purchase Right" shall mean a right to purchase Shares granted pursuant to Paragraph 6 of the Plan. (f) 'CER" shall mean a cash equivalent right granted in connection with a Purchase Right pursuant to Paragraph 7 of the Plan. (g) 'Employees" shall mean those individuals who are full-time employees of the Company or its Subsidiaries, from among whom the Committee may select the holders of Purchase Rights. (h) 'Holder" shall mean an Employee to whom a Purchase Right has been granted. (i) 'Purchaser" shall mean a Holder who has exercised a Purchase Right and purchased Shares pursuant thereto. (j) 'Committee" shall mean the Committee of the Board of Directors constituted as provided in Paragraph 4 of the Plan. (k) 'Purchase Right Agreement" shall mean the agreement between the Company and an Employee whereby a Purchase Right is granted to such Employee. 3. SHARES RESERVED UNDER PLAN. The aggregate number of Shares which may be sold under the Plan shall not exceed 150,000 Shares, which may be Treasury Shares or authorized but unissued Shares, or a combination of the two, subject to adjustment as provided in paragraph 12 hereof. Any Shares subject to a Purchase Right which expires or terminates for any reason (whether by voluntary surrender, lapse of time, termination of employment or otherwise) and is unexercised as to such Shares and any Shares repurchased by the Company pursuant to the restriction provisions set forth in Paragraph 6, may again be the subject of a Purchase Right under the Plan. No Employee shall be eligible to receive under this Plan Purchase Rights for Shares aggregating more than fifteen percent (15%) of the Shares reserved under the Plan. 4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Committee. The Committee shall consist of not fewer than two members of the Board of Directors of the Company, each of whom qualifies as a "non-employee" director under Rule 16b-3 under the Securities Exchange Act of 1934, as amended. The Committee shall have sole authority in its discretion, but always subject to the express provisions of the Plan, to determine the purchase price of the Shares covered by each Purchase Right, the Employees to whom and the time or times at which Purchase Rights shall be granted, the number of Shares to be subject to each Purchase Right, and the extent to which Purchase Rights may be exercised in installments; to interpret the Plan; to prescribe, amend, and rescind rules and regulations pertaining to the Plan; to determine the terms and provisions of the respective Purchase Right Agreements; and to make all other determinations and interpretations deemed necessary or advisable for the administration of the Plan. The Committee's determination of the foregoing matters shall be conclusive and binding on the Company, all Employees, all Holders, all Purchasers and all other persons. 5. ELIGIBILITY. Only Employees shall be eligible to receive Purchase Rights under the Plan. In determining the Employees to whom Purchase Rights shall be granted and the number of Shares to be covered by each Purchase Right, the Committee may take into account the nature of the services rendered by the respective Employees, their present and potential contributions to the success of the Company, and such other factors as the Committee in its discretion shall deem relevant. An Employee who has been granted a Purchase Right under the Plan may be granted additional Purchase Rights under the Plan if the Committee shall so determine. The Company shall effect the granting of Purchase Rights under the Plan by execution of Purchase Right Agreements in such form as shall be approved by the Committee. No Purchase Right may be granted under the Plan to any person who is then a member of the Committee. 6. PURCHASE RIGHTS. (a) Grant of Purchase Rights. The Committee may grant Purchase Rights under the Plan to such Employees as it may determine, and a Purchase Right Agreement shall be executed by the Company to effect each grant of a Purchase Right. Any Purchase Right granted under this Plan may include a cash equivalent right, which may be granted either at the time of grant of the Purchase Right or subsequent thereto, as provided in Paragraph 7. (b) Exercise. The Committee in its absolute discretion shall determine the period during which a Holder shall have the right to exercise a Purchase Right granted under this Plan; provided, however, that such period shall in no event exceed sixty (60) days after the date of grant of the Purchase Right by the Committee. A Holder may exercise a Purchase Right as to all or any part of the Shares subject to such Purchase Right. Shares sold pursuant to Purchase Rights shall sometimes be referred to hereinafter as "Restricted Shares." (c) Purchase Price. The purchase price at a which each Share shall be sold to employees pursuant to Purchase Rights granted hereunder shall be determined by the Committee, but shall not be less than par nor more than ten percent (10%) of the then fair market value per share, as determined by the Committee in conformity with applicable laws and regulations of the Securities and Exchange Commission. (d) Restrictions. All Shares sold pursuant to Purchase Rights shall be subject to the following restrictions: (1) In the event that a Purchaser shall sell, assign, convey, donate, bequeath, pledge, transfer or otherwise dispose of or encumber any Restricted Shares, the Company shall have the right and option, in addition to such other rights and remedies available to it (including the right to restrain or set aside such transfer), exercisable by written notice to the 2 transferee thereof at any time within ninety (90) days after its discovery of such transaction, to repurchase for cash all or any part of such Restricted Shares at an amount equal to the price paid for such Restricted Shares by the Purchaser (the "Repurchase Price"). (2) The nature and extent of any additional restrictions and the period for which shares shall be restricted shall be determined by the Committee; provided, however, that such periods of restriction shall not be less than one nor more than ten consecutive years measured from the day of the month in which such shares are purchased (the "Restricted Period"). Except as otherwise determined by the Committee, the Restricted Period shall be ten years and the restrictions imposed upon Restricted Shares shall automatically be removed as to one-fifth of the aggregate number of Restricted Shares so purchased upon the expiration of each of the sixth, seventh, eighth, ninth and tenth years after the date of purchase of such Restricted Shares. (3) In the event that a Purchaser's employment with the Company or a Subsidiary is terminated for any reason, the Company shall have the right for ninety (90) days following the termination of such employment to buy for cash all or any part of the Restricted Shares purchased hereunder by such terminating Purchaser which on the date of such termination of employment are subject to the restrictions imposed thereon by virtue of this Subparagraph (d) and such Restricted Shares shall be repurchased at the Repurchase Price. The right to repurchase Restricted Shares granted to the Company in this Subparagraph (d)(3) shall be exercisable by the Committee and it may decide whether or not to exercise each such right in its sole discretion. (4) In the event a Purchaser hereunder terminates his employment with the Company or a Subsidiary because of normal retirement (as defined in the Company's Retirement Plan), death, disability (as defined in Section 105 (d) (4) of the Internal Revenue Code), or early retirement with the consent of the Committee, then the Company shall not have the right to repurchase any of the Restricted Shares pursuant to Subparagraph (d) (3) and all such restrictions which would otherwise be in effect by virtue of this Subparagraph (d) shall immediately terminate. (5) Prior to the lapse, expiration or other termination of the Restricted Period, Purchasers shall have the right to vote Restricted Shares, the right to receive and retain all regular cash dividends (and such other distributions as the Committee may designate) paid or distributed on Shares and all other rights as a holder of Shares, except that the Company will retain custody of the stock certificates representing Restricted Shares during the Restricted Period. (6) Notwithstanding anything to the contrary herein contained, the restrictions provided in this Subparagraph 6(d) shall automatically cease as of the effective date of any dissolution of the Company or any merger or consolidation in which the Company is a party but not the surviving corporation, or any other transaction or series of transactions which has a reasonable likelihood or a purpose of causing the Shares to (a) cease to be registered under Section 12 of the Securities Exchange Act of 1934; or (b) neither be listed on any national securities exchange nor be authorized to be quoted on an inter-dealer quotation system of any registered national securities association; and as of the effective date or time of any such transaction all Restricted Shares shall be treated as ordinary Shares of the Company and the holders thereof shall be entitled to receive the same consideration thereupon payable to the holders of outstanding shares of the Company. 7. CASH EQUIVALENT RIGHTS. A cash equivalent right ("CER") may be granted by the Committee in connection with the award of Purchase Rights under the Plan. A CER granted under the Plan shall entitle a Purchaser of Restricted Shares to a cash payment in an amount and at such time as set forth under Subparagraph 7(a). The Committee may grant a CER at any time from the date of grant of a Purchase Right, through and including the time of the exercise of a Purchase Right, or at any time 3 thereafter up to, and including, any date thirty (30) days after the date of the lapse, expiration or other termination of the restrictions on Restricted Shares imposed under Subparagraph 6(d). (a) Amount and Time of Payment. Not later than ninety (90) days after the date of the lapse, expiration or other termination of the restrictions on Restricted Shares imposed under Subparagraph 6(d), or if a Purchaser shall make an election under Section 83(b) of the Internal Revenue Code as to Restricted Shares purchased hereunder, not later than ninety (90) days after the date of notice to the Company of such election, the holder of a CER shall be entitled to receive from the Company a cash amount up to 100% of the excess of the market price per Share on the Recognition Date over the price paid by the Purchaser, multiplied by the number of Restricted Shares so released from restrictions or as to which a Section 83(b) election is made. The "Recognition Date" shall be the date of the lapse, expiration or other termination of the restrictions on Restricted Shares purchased hereunder, except that in the case of an election by the Purchaser under Section 83(b) of the Internal Revenue Code the "Recognition Date" shall be the date of purchase of the Restricted Shares as to which such election is made. The market price per Share on the Recognition Date for a CER shall be the mean of the closing bid and asked prices of a Share in the over-the-counter market as quoted on NASDAQ for such Recognition Date, or such other market price as the Committee may determine in conformity with pertinent law and regulations of the Treasury Department. (b) Repurchase of Shares. In the event of a Purchaser's termination of employment with the Company or a Subsidiary which under the Plan shall entitle the Company to buy all or any part of the Restricted Shares purchased by the terminating Purchaser, and the Company's exercise of such right to repurchase such Restricted Shares, the CERs theretofore granted to such Purchaser with respect to such repurchased Restricted Shares shall automatically be canceled forthwith and have no further force or effect; provided, however, that any CER cash amounts paid prior to such termination as a result of a Section 83(b) election under the Internal Revenue Code by the Purchaser shall not be recoverable by the Company, and the Purchaser shall not be liable therefor. The filing by the Purchaser of an election under Section 83(b) as to Restricted Shares purchased under the Plan shall in no way affect or impair the Company's right to repurchase such Restricted Shares as provided in Subparagraph 6(d), above. (c) Notice of Election. If a Purchaser makes an election under Section 83(b) as to any of the Restricted Shares for which the purchaser has been granted a CER, such Purchaser shall be entitled to payment of such CER only if the Purchaser notified the Secretary of the Company of such election within thirty (30) days of such election. 8. TERMINATION OF EMPLOYMENT. (a) Any Holder whose employment with the Company or a Subsidiary is terminated due to retirement on such Holder's normal retirement date (as defined in the Company's Retirement Plan) or due to early retirement with the consent of the committee shall have: The continuing right to exercise any Purchase Right granted hereunder after the date of such termination of employment; provided, however, that no Purchase Right shall be exercisable subsequent to sixty (60) days after its date of grant, provided that on the date of termination of employment the Holder then had a present right to exercise such Purchase Right. (b) Any Holder whose employment with the Company or a Subsidiary is terminated due to disability (as defined in Section 105(d)(4) of the Internal Revenue Code) shall have: The continuing right to exercise any Purchase Right granted hereunder after the date of such termination of employment; provided, however, that no Purchase Right shall be exercisable subsequent to sixty (60) days after its date of grant, provided that on the date of termination of employment the Holder then had a present right to exercise such Purchase Right. 4 (c) In the event of the death of a Holder while in the employ of the Company of a Subsidiary, any Purchase Right theretofore granted to such Holder shall be exercisable: (1) For the remaining term of a Purchase Right, but in no event later than sixty (60) days from its date of grant; (2) Only by the personal representative, administrator or other representative of the estate of the deceased Holder or by the person or persons to whom the deceased Holder's rights under the Purchase Right shall pass by will or the laws of descent and distribution; and (3) Only to the extent that the deceased Holder would have been entitled to exercise such Purchase Right on the date of the Holder's death. (d) If a Holder's employment is terminated for a reason other than those specified above, to the extent a Purchase Right is not effectively exercised prior to such termination, it shall Lapse immediately upon termination. (e) The Plan shall not confer upon any Holder any right with respect to continuation of employment by the Company or a Subsidiary, nor shall it interfere in any way with the right of the Company or such Subsidiary to terminate any Holder's employment at any time. 9. TRANSFERABILITY. Purchase Rights and CERs granted to a Holder under this Plan shall be not transferable and during the lifetime of the Holder shall be exercisable only by the Holder. A Holder shall have the right to transfer Purchase Rights and CERs granted to such Holder upon such Holder's death, either by the terms of such Holder's will or under the laws of descent and distribution, subject to the limitations set forth in Paragraph 8, and all such distributees shall be subject to all terms and conditions of this Plan to the same extent as would the Holder if still alive, except as otherwise expressly provided herein. 10. EXERCISE. A Purchase Right Agreement may provide for exercise of the Purchase Right in such amounts and at such times as shall be specified therein; provided, however, except as provided in Paragraph 8, no Purchase Right may be exercised unless the holder is then in the employ of the Company or a Subsidiary and shall have been continuously so employed since its date of grant. A Purchase Right granted under the Plan shall not be exercisable at any time at which the purchase price (as provided in Subparagraph 6 (c)) is greater than ten percent (10%) of the then fair market value per Share, as determined by the Committee in conformity with applicable laws and regulations of the Securities and Exchange Commission. A Purchase Right shall be exercisable by a Holder's giving written notice of exercise to the Secretary of the Company accompanied by payment of the required purchase price. The Company shall have the right to delay the issue or delivery of any Shares under the Plan until (a) the completion of such registration or qualification of such Shares under any federal of state law, ruling or regulation as the company shall determine to be necessary or advisable, and (b) receipt from the Holder of such documents and information as the Committee may deem necessary or appropriate in connection therewith. 11. SECURITIES LAWS. Each Purchase Right Agreement shall contain such representations, warranties and other terms and conditions as shall be necessary in the opinion of counsel to the Company to comply with all applicable federal and state securities laws. 5 12. ADJUSTMENT PROVISIONS. If the Company shall effect a subdivision or consolidation of Shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction in the number of Shares outstanding, without receiving consideration therefor in money, services or property, the number of Shares then remaining subject to or available for Purchase Rights (including Shares as to which Purchase Rights have been granted but which remain unexercised, Restricted Shares and Shares reserved for Purchase Rights) and the amounts payable for CERs shall be appropriately adjusted by the Company's Board of Directors upon the recommendation of the Committee, subject to the express terms and conditions of this Plan. Subject to any required action by the Company's stockholders, if the Company shall be a party to any merger or consolidation in which the Company is not the surviving corporation or any other transaction or series of transactions which has a reasonable likelihood or a purpose of causing the Shares to be neither listed on any national securities exchange nor authorized to be quoted on an inter-dealer quotation system of any registered national securities association, or registered under Section12 of the Securities Exchange Act of 1934, each outstanding Purchase Right shall pertain to and apply to the securities which a Holder of the number of Shares subject to the Purchase Right would have been entitled to receive pursuant to such transaction, with any such adjustment in the exercise price as the Committee shall deem appropriate. A dissolution of the Company or a sale of all or substantially all of the assets and property of the Company shall cause each outstanding Purchase Right to terminate forthwith; provided, however, that the Holders of outstanding Purchase Rights may exercise such Purchase Rights to the extent exercisable immediately prior to such dissolution or sale. 13. TIME OF GRANTING. Nothing contained in the Plan or in any resolution adopted or to be adopted by the Board of Directors or the stockholders of the Company and no action taken by the Committee shall constitute the granting of any Purchase Right hereunder. The granting of a Purchase Right pursuant to the Plan shall take place only when a Purchase Right Agreement shall have been duly executed by and on behalf of the Company. 14. TAXES. The Company shall be entitled to pay or withhold the amount of any tax which it believes is required as a result of the grant or exercise of any Purchase Right or CER under the Plan, and the Company may defer making delivery with respect to cash and/or Shares obtained pursuant to exercise of any Purchase Right or CER until arrangements satisfactory to it have been made with respect to any such withholding obligations. At any time that an Employee is required to pay to the Company an amount required to be withheld under the applicable income tax laws in connection with the the lapse of restrictions on Restricted Shares issued under the Plan, the Employee may, subject to the Committee's right of disapproval, satisfy this obligation in whole or in part by electing (the "Election") to have the Company withhold Shares having a value equal to the amount required to be withheld. The value of the Shares withheld shall be based on the Fair Market Value of the Shares on the date that the amount of tax to be withheld shall be determined (the "Tax Date"). The Committee may disapprove of any Election or may suspend or terminate the right to make Elections. If a participant makes an election under Section 83(b) of the Internal Revenue Code with respect to Restricted Shares, an Election is not permitted to be made. An Employee may also satisfy his or her total tax liability related to Restricted Shares by delivering Shares that have been owned by the participant for at least six months. The value of the Restricted Shares delivered shall be based on the Fair Market Value of the Shares on the Tax Date. 6 15. EFFECTIVENESS OF THE PLAN. The Plan shall become effective, upon approval of the Company's Board of Directors, on September 1, 1987, subject to ratification of the Plan by the vote of the holders of a majority of Shares present or represented and entitled to vote at an annual or special meeting of the Company duly called and held. 16. TERMINATION AND AMENDMENT. Unless the Plan shall theretofore have been terminated as hereinafter provided, it shall terminate on, and no Purchase Right or CER hereunder shall be granted after August 31, 1997. The Plan may be terminated, modified or amended by the shareholders of the Company. The Board of Directors of the Company may also terminate the Plan or make such modifications or amendments thereof as it shall deem advisable, including such modifications or amendments as it shall deem advisable in order to conform to any law or regulation applicable thereto; provided, however, that the Board of Directors may not, unless otherwise permitted under the federal securities laws, without further approval of the holders of a majority of the Shares voted at any annual or special meeting at which a quorum is present and voting, adopt any amendment of the Plan which (a) materially increases the number of Shares which may be issued under the Plan, (b) materially increases the benefits accruing to Employees under the Plan, or (c) materially modifies the requirements for eligibility for participation in the Plan. No termination, modification or amendment of the Plan may, without the consent of the Holder, adversely affect the rights of such Holder under an outstanding Purchase Right then held by the Holder. 7 EX-99.(C)(10) 7 FORM OF CHANGE OF CONTROL CHANGE OF CONTROL AGREEMENT AGREEMENT by and between Delchamps, Inc., an Alabama corporation (the "Company"), and (the "Executives") dated as of the ----------------- day of 1994. - -------- --------- The Board of Directors of the Company (the "Board"), has determined that it is in the best interest of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. Certain Definitions. (a) The "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section l(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive's employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect the Change of Control or (ii) otherwise arose in connection with or anticipation of the Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment. (b) The "Change of Control Period" shall mean the period commencing on the date hereof and ending on the third anniversary of such date; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date"), the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to the Executive that the Change of Control Period shall not be so extended. 2. Change of Control. For the purposes of this Agreement, a "Change of Control" shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company or any of its subsidiaries, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries or (iv) any acquisition by any corporation with respect to which, following such acquisition, more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Company Voting Securities immediately prior to such acquisition in substantially the same proportions as their ownership, immediately prior to such acquisition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; provided further, however, that notwithstanding anything in the foregoing definition of beneficial ownership to the contrary, Outstanding Company Common Stock or Outstanding Company Voting Securities beneficially owned by any individual or entity who is a party to the Agreement Among Shareholders dated as of October 14, 1988 or any renewal or extension of such agreement (such agreements being referred to as the "Stockholders' Agreements") shall not be deemed to be beneficially owned by any other individual or entity who is a party to the Stockholders' Agreements by virtue of the terms of such Stockholders' Agreements; or (b) A development whereby the individuals who, as of the date hereof constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents; or (c) Approval by the shareholders of the Company of a reorganization, merger or consolidation, in each case, with respect to which all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be; or (d) Approval by the shareholders of the Company of (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, with respect to which following such sale or other disposition, more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be. 3. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company, for the period commencing on the Effective Date and ending on the third anniversary of such date (the "Employment Period"). 4. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at a time during the 90-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location. (ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to the Company. (b) Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary, payable in equal monthly installments, at least equal to twelve times the highest monthly base salary paid or payable to the Executive by the Company and its affiliated companies during the twelve-month period immediately preceding the month in which the Effective Date occurs ("Annual Base Salary"). During the Employment Period, the Annual Base Salary shall be reviewed at least annually and shall be increased at any time and from time to time as shall be substantially consistent with increases in base salary generally awarded in the ordinary course of business to other peer executives of the Company and its affiliated companies. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term "affiliated companies" shall include any company controlled by, controlling or under common control with the Company. (ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to the average annual bonus paid or payable to the Executive by the Company and its affiliated companies in respect of the three fiscal years (annualized for any fiscal year consisting of less than twelve full months or with respect to which the Executive has been employed by the Company for less than twelve full months) immediately preceding the fiscal year in which the Effective Date occurs (the "Recent Average Bonus"). Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus. (iii) Special Bonus. In addition to Annual Base Salary and Annual Bonus payable as hereinabove provided, if the Executive remains employed with the Company and its affiliated companies through the first anniversary of the Effective Date, the Company shall pay to the Executive a special bonus (the "Special Bonus") in recognition of the Executive's services during the crucial one-year transition period following the Change of Control in cash equal to the sum of (A) the Executive's Annual Base Salary and (B) the greater of (1) the Annual Bonus paid or payable to the Executive (and annualized for any fiscal year consisting of less than twelve full months or for which the Executive has been employed for less than twelve full months) for the most recently completed fiscal year during the Employment Period, if any, and (2) the Recent Average Bonus (such greater amount shall be hereinafter referred to as the "Highest Annual Bonus"). The Special Bonus shall be paid no later than 30 days following the first anniversary of the Effective Date. (iv) Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 90-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally to other peer executives of the Company and its affiliated companies at any time after the Effective Date. (v) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally to other peer executives of the Company and its affiliated companies at any time after the Effective Date. (vi) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally with respect to other peer executives of the Company and its affiliated companies at any time thereafter. (vii) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally with respect to other peer executives of the Company and its affiliated companies at any time thereafter. (viii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally with respect to other peer executives of the Company and its affiliated companies at any time thereafter. (ix) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally with respect to other peer executives of the Company and its affiliated companies at any time thereafter. 5. Termination of Employment. (a) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 12(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative (such agreement as to acceptability not to be withheld unreasonably). (b) Cause. The Company may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean (i) repeated violations by the Executive of the Executive's obligations under Section 4(a) of this Agreement (other than as a result of incapacity due to physical or mental illness) which are demonstrably willful and deliberate on the Executive's part, which are committed in bad faith or without reasonable belief that such violations are in the best interest of the Company and which are not remedied in a reasonable period of time after receipt of written notice from the Company specifying such violations or (ii) the conviction of the Executive of a felony involving moral turpitude. (c) Good Reason: Window Period. The Executive's employment may be terminated (i) during the Employment Period by the Executive for Good Reason or (ii) during the Window Period by the Executive without any reason. For purposes of this Agreement, the "Window Period" shall mean the 30-day period immediately following the first anniversary of the Effective Date. For purposes of this Agreement, "Good Reason" shall mean (i) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (ii) any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (iii) the Company's requiring the Executive to be based at any office or location other than that described in Section 4(a)(i)(B) hereof; (iv) any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or (v) any failure by the Company to comply with and satisfy Section ll(c) of this Agreement, provided that such successor has received at least ten days prior written notice from the Company or the Executive of the requirements of Section ll(c) of the Agreement. For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive. (d) Notice of Termination. Any termination by the Company for Cause, or by the Executive without any reason during the Window Period or for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder. (e) Date of Termination. "Date of Termination" means (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive during the Window Period or for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be. 6. Obligations of the Company upon Termination. (a) Good Reason or during the Window Period; Other Than for Cause. Death or Disability. If, during the Employment Period, the Company shall terminate the Executive's employment other than for Cause or Disability or the Executive shall terminate employment either for Good Reason or without any reason during the Window Period: (i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts (such aggregate shall be hereinafter referred to as the "Special Termination Amount"): A. the sum of (1) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the Highest Annual Bonus and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (3) the Special Bonus, if due to the Executive pursuant to Section 4(b)(iii) of this Agreement, to the extent not theretofore paid and (4) any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), (3) and (4) shall be hereinafter referred to as the "Accrued Obligations"); and B. the amount equal to the product of (l) three and (2) the sum of (x) the Executive's Annual Base Salary and (y) the Highest Annual Bonus; provided, however, that such amount shall be paid in lieu of, and the Executive hereby waives the right to receive, any other amount of severance relating to salary or bonus continuation to be received by the Executive upon such termination of employment under any severance plan, policy or arrangement of the Company; and (ii) for the remainder of the Employment Period, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(v) of this Agreement if the Executive's employment had not been terminated in accordance with the most favorable plans, practices, programs or policies of the Company and its affiliated companies applicable generally to other peer executives and their families during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally with respect to other peer executives of the Company and its affiliated companies and their families at any time thereafter, provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the end of the Employment Period and to have retired on the last day of such period; and (iii) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive pursuant to this Agreement and any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits"). (b) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. All Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Executive's family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Company and any of its affiliated companies to surviving families of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to family death benefits, if any, as in effect with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect on the date of the Executive's death with respect to other peer executives of the Company and its affiliated companies and their families. (c) Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. All Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Executive shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those generally provided by the Company and its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies and their families. (d) Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive Annual Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Executive, in each case to the extent theretofore unpaid, and the timely payment or provision of Other Benefits. If the Executive terminates employment during the Employment Period, excluding a termination either for Good Reason or without any reason during the Window Period, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or provision of Other Benefits; in such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. 7. Non-Exclusivity of Rights. Except as provided in Sections 6(a)(i)(B) and 6(a)(ii) of this Agreement, nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. 8. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and, except as provided in Section 6(a)(ii) of this Agreement, such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). 9. Certain Additional Payments by the Company. (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by Peat, Marwick Main & Co. (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive and the Company shall mutually appoint another accounting firm to make the determinations required hereunder. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm's determination. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on the Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. (c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (iii) cooperate with the Company in good faith in order effectively to contest such claim, and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 9(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 10. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 11. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representative. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. (c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 12. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representative. (b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Executive: At the home address reflected in the Company's personnel records. If to the Company: Delchamps, Inc. 305 Delchamps Drive P. O. Box 1668 Mobile, Alabama 36633 Attention: The President or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (d) The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. (e) The Executive's or the Company's failure to insist upon strict compliance with any provision hereof or any other provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. (f) The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and, prior to the Effective Date, may be terminated by either the Executive or the Company at any time. Moreover, if prior to the Effective Date the Executive's employment with the Company terminates, then the Executive shall have no further rights under this Agreement. IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written. --------------------------- [Executive] DELCHAMPS, INC. By: ------------------------ -----END PRIVACY-ENHANCED MESSAGE-----