-----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, SBrUyzJoJwIfthqsRvLlOyX1ZWThdV+Wa9AayeNkXw5BgtuUrlBgFPe2Yrw5HktG zhuJSJBQtgPGrmwfV3RwkA== 0000945723-96-000008.txt : 19960612 0000945723-96-000008.hdr.sgml : 19960612 ACCESSION NUMBER: 0000945723-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19960428 FILED AS OF DATE: 19960607 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: KASH N KARRY FOOD STORES INC CENTRAL INDEX KEY: 0000842913 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 954161591 STATE OF INCORPORATION: DE FISCAL YEAR END: 0730 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-25260 FILM NUMBER: 96578398 BUSINESS ADDRESS: STREET 1: 6422 HARNEY RD CITY: TAMPA STATE: FL ZIP: 33610 BUSINESS PHONE: 8136210276 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended April 28, 1996 Commission File No. 34-025260 KASH N' KARRY FOOD STORES, INC. (Exact name of registrant as specified in charter) Delaware 95-4161591 (State of Incorporation) (IRS Employer Identification Number) 6422 Harney Road, Tampa, Florida 33610 (Address of registrant's principal executive offices) (813) 621-0200 (Registrant's telephone number, including area code) The registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to such filing requirements for the past 90 days. The registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. As of June 6, 1996, there were 4,674,314 shares outstanding of the registrant's common stock, $0.01 par value. KASH N' KARRY FOOD STORES, INC. BALANCE SHEETS (Dollar Amounts in Thousands, Except Per Share Amounts) ASSETS April 28, July 30, 1996 1995 --------- -------- (Unaudited) Current assets: Cash and cash equivalents $ 3,181 $ 4,803 Accounts receivable 12,579 6,504 Inventories 88,460 86,840 Prepaid expenses and other current assets 4,891 4,310 -------- -------- Total current assets 109,111 102,457 Property and equipment, at cost, less accumulated depreciation 132,965 139,967 Favorable lease interests, less accumulated amortization of $2,650 and $1,152 27,304 28,802 Deferred financing costs, less accumulated amortization of $1,782 and $809 4,169 3,684 Excess reorganization value, less accumulated amortization of $14,056 and $6,627 87,263 94,692 Deferred tax asset 1,200 1,200 Other assets 2,412 2,770 -------- --------- Total assets $364,424 $373,572 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 5,610 $ 5,563 Accounts payable 44,808 39,231 Accrued expenses 32,226 44,499 --------- --------- Total current liabilities 82,644 89,293 Long-term debt, less current obligations 213,712 218,131 Other long-term liabilities 15,194 16,510 Stockholders' equity: Common Stock of $.01 par value. Authorized 5,500,000 shares; 4,674,314 and 4,649,943 shares outstanding. 46 46 Capital in excess of par value 46,692 46,449 Retained earnings 6,136 3,143 ---------- ---------- Total stockholders' equity 52,874 49,638 ---------- ---------- Total liabilities & stockholders' equity $364,424 $373,572 ========== ========== See accompanying notes to financial statements. - 2- KASH N' KARRY FOOD STORES, INC. CONDENSED STATEMENTS OF OPERATIONS (In Thousands) (Unaudited) Thirteen Thirteen Weeks Ended Weeks Ended April 28, April 30, 1996 1995 -------- -------- Sales $256,410 $269,927 Cost of sales 198,885 211,722 -------- -------- Gross profit 57,525 58,205 Selling, general and administrative expenses 38,175 38,896 Depreciation and amortization 6,270 6,457 -------- -------- Operating income 13,080 12,852 Interest expense 6,469 6,942 -------- -------- Income before income taxes 6,611 5,910 Provision for income taxes 2,963 3,189 -------- -------- Net income $ 3,648 $ 2,721 ======== ======== Net income per common share $ 0.77 $ 0.58(A) ======== ======== (A) Restated to reflect the 3-for-2 stock split effected in the form of a stock dividend paid on July 17, 1995. See accompanying notes to financial statements. -3- KASH N' KARRY FOOD STORES, INC. CONDENSED STATEMENTS OF OPERATIONS (In Thousands) (Unaudited) Reorganized Predecessor Company Company ----------------------- -------- Thirty-nine Seventeen Twenty-Two Weeks Ended Weeks Ended Weeks Ended April 28, April 30, January 1, 1996 1995 1995 -------- -------- -------- Sales $788,132 $356,281 $426,681 Cost of sales 625,184 280,662 340,802 -------- -------- -------- Gross profit 162,948 75,619 85,879 Selling, general and administrative expenses 117,844 51,122 68,819 Depreciation and amortization 18,598 8,436 10,234 -------- -------- -------- Operating income 26,506 16,061 6,826 Interest expense 19,458 9,344 13,719 -------- -------- -------- Income (loss) before reorganization items, income taxes, extraordinary item and change in accounting principle 7,048 6,717 (6,893) Reorganization items -- -- (4,869) -------- -------- -------- Income (loss) before income taxes, extraordinary item and change in accounting principle 7,048 6,717 (11,762) Provision for income taxes 4,055 3,189 -- Income (loss) before extra- -------- -------- -------- ordinary item and change in accounting principle 2,993 3,528 (11,762) Extraordinary item - gain on debt discharge -- -- 70,166 Cumulative effect of change in accounting principle - postretirement medical benefits -- -- (2,000) -------- -------- -------- Net income $ 2,993 $ 3,528 $56,404 ======== ======== ======== Net income per common share $ 0.63 $ 0.75(A) (B) ======== ======== ======== (A) Restated to reflect the 3-for-2 stock split effected in the form of a stock dividend paid on July 17, 1995. (B) Net income per common share is not meaningful prior to January 1, 1995 due to the significant change in the capital structure in connection with the Restructuring. See accompanying notes to financial statements. -4- KASH N' KARRY FOOD STORES, INC. STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited) Reorganized Predecessor Company Company ----------------------- -------- Thirty-Nine Seventeen Twenty-Two Weeks Ended Weeks Ended Weeks Ended April 28, April 30, January 1, 1996 1995 1995 -------- -------- -------- Net cash flow from operating activities: Net income $ 2,993 $ 3,528 $ 56,404 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization, excluding deferred financing costs 18,598 8,436 10,234 Amortization of deferred financing costs 978 494 1,152 Provision for income taxes 4,055 3,189 -- Issuance of additional senior notes in lieu of cash interest 16,630 -- -- Reorganization items -- -- 4,869 Change in accounting principle -- -- 2,000 Gain on discharge of debt -- -- (70,166) (Increase) decrease in assets: Accounts receivable (6,075) (983) 2,322 Inventories (1,620) 3,908 (5,917) Prepaid expenses and other assets (483) (403) (194) Increase (decrease) in liabilities: Accounts payable 5,577 4,192 1,800 Accrued expenses and other liabilities (13,740) 3,309 9,083 -------- -------- -------- Net cash provided by operating activities 26,913 25,670 11,587 -------- -------- -------- Cash used by investing activities: Additions to property and equipment (25,888) (1,509) (665) Leased asset additions (3,019) -- -- -------- -------- -------- Net cash used by investing activities (28,907) (1,509) (665) -------- -------- -------- See accompanying notes to financial statements. -5- KASH N' KARRY FOOD STORES, INC. STATEMENTS OF CASH FLOWS (Continued) (In Thousands) (Unaudited) Reorganized Predecessor Company Company ----------------------- -------- Thirty-Nine Seventeen Twenty-Two Weeks Ended Weeks Ended Weeks Ended April 28, April 30, January 1, 1996 1995 1995 -------- -------- -------- Cash provided (used) by financing activities: Borrowings under credit loan facility $ 21,592 $ 4,200 $50,800 Sale of common stock -- -- 10,000 Proceeds from exercise of common stock options 243 -- -- Proceeds from sale-leaseback 26,110 -- -- Additions to obligations under capital leases 3,019 -- -- Repayments of credit loan facility (29,043) (19,918) (60,928) Repayments of other long-term liabilities (20,118) (1,937) (7,363) Other financing activities (1,431) (251) (9,294) -------- -------- -------- Net cash provided (used) by financing activities 372 (17,906) (16,785) -------- -------- -------- Net increase (decrease) in cash and cash equivalents (1,622) 6,255 (5,863) Cash and cash equivalents at beginning of period 4,803 989 6,852 -------- -------- -------- Cash and cash equivalents at end of period $ 3,181 $ 7,244 $ 989 ======== ======== ======== See accompanying notes to financial statements. -6- KASH N' KARRY FOOD STORES, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (In Thousands) (Unaudited) 1. The condensed financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the fiscal 1995 Form 10-K filed by the Company. The accompanying condensed financial statements have not been audited by independent accountants in accordance with generally accepted auditing standards, but in the opinion of management such condensed financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to summarize fairly the Company's financial position and results of operations. The condensed financial statements as of and for the periods subsequent to January 1, 1995 were prepared according to the principles of fresh start reporting contained in American Institute of Certified Public Accountants' Statement of Position 90-7 "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code." As a result of the implementation of fresh start accounting, the Company's condensed financial statements as of July 30, 1995 and as of and for the period ended April 28, 1996 are not comparable to the Company's condensed financial statements of periods prior to January 1, 1995. Therefore, where applicable, the condensed financial statements for the "Reorganized Company" have been separately identified from those of the "Predecessor Company." Results for the period ended April 28, 1996 are not necessarily indicative of the results to be attained for the full year. 2. Inventories consist of merchandise held for resale and are stated at the lower of cost or market; cost is determined using average cost, which approximates the first-in, first-out (FIFO) method. 3. Long-term debt consists of the following: April 28, July 30, 1996 1995 Term loan and revolving -------- -------- credit facilities $ 25,692 $ 33,143 Senior Floating Rate Notes 23,942 22,953 Senior Fixed Rate Notes 136,803 121,162 Mortgages payable 17,867 33,108 Capital lease obligations and other 15,018 13,328 Long-term debt including -------- -------- current portion 219,322 223,694 Less current portion (5,610) (5,563) -------- -------- Long-term debt $213,712 $218,131 ======== ========= -7- KASH N' KARRY FOOD STORES, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (In Thousands) (Unaudited) 4. SFAS No. 121, "Accounting for the Impairment of Long Lived Assets and for Long Lived Assets to be Disposed Of," is effective for years beginning after December 15, 1995. This statement requires that long-lived assets and certain intangibles to be held and used by the Company be reviewed for impairment. This pronouncement is not expected to have a material impact on the financial statements of the Company. 5. In October 1995, the Financial Accounting Standards Board issued SFAS No. 123, "Accounting for Stock Based Compensation." With respect to stock options granted to employees, SFAS No. 123 permits companies to continue using the accounting method promulgated by the Accounting Principles Board Opinion No. 25 ("APB No. 25"), "Accounting for Stock Issued to Employees," to measure compensation or to adopt the fair value based method prescribed by SFAS No. 123. If APB No. 25's method is continued, pro forma disclosures are required as if SFAS No. 123 accounting provisions were followed. Management has determined not to adopt SFAS No. 123's accounting recognition provisions. In the opinion of management, SFAS No. 123 is not expected to have a material impact on the Company's financial statements. -8- KASH N' KARRY FOOD STORES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION This analysis should be read in conjunction with the condensed financial statements. Results of Operations The discussion below compares the results of operations for the thirteen weeks ended April 28, 1996 (the "1996 Three-Month Period") with the thirteen weeks ended April 30, 1995 (the "1995 Three Month Period"); and the thirty-nine weeks ended April 28, 1996 (the "1996 Nine-Month Period") with the thirty-nine weeks ended April 30, 1995 (the "1995 Nine-Month Period"). Except as specifically acknowledged below, management believes that the impact of the Restructuring and the implementation of fresh start reporting did not significantly affect the results of operations for the 1995 Nine-Month Period, and that the combined operating results of the individual seventeen week period and twenty-two week period ended April 30, 1995 and January 1, 1995, respectively, are indicative of the results of operations of the thirty-nine week period ended April 30, 1995. The following table compares certain income and expense line items as a percentage of sales: 1996 1995 1996 1995 Three- Three- Nine- Nine- Month Month Month Month Period Period Period Period --------- --------- --------- ---------- Sales 100.00% 100.00% 100.00% 100.00% Gross profit 22.44% 21.56% 20.67% 20.63% Selling, general and administrative expenses 14.89% 14.41% 14.95% 15.32% Depreciation and amortization 2.45% 2.39% 2.36% 2.38% Operating income 5.10% 4.76% 3.36% 2.93% Interest expense 2.52% 2.57% 2.47% 2.95% Income (loss) before income taxes and "fresh start" accounting adjustments 2.58% 2.19% 0.89% (0.02)% "Fresh start" accounting adjustments, net -- -- -- 8.08% Provision for income taxes 1.16% 1.18% 0.51% 0.41% Net income (loss) 1.42% 1.01% 0.38% 7.65% Sales. Sales for the 1996 Three-Month Period were $256.4 million, or $13.5 million less than the 1995 Three Month Period. Reduced promotional activity, combined with an increase in new -9- KASH N' KARRY FOOD STORES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION store and remodel activity of traditional as well as non- traditional competitors, are the primary reasons for the decrease in sales. In addition, Company stores under remodel experienced sales decreases during the remodel period. Sales for the 1996 Nine-Month Period were $788.1 million compared to $783.0 million for the 1995 Nine-Month Period. Same store sales increased 0.1% for the 1996 Nine-Month Period despite a same store sales decrease of 5.6% for the 1996 Three-Month Period. Gross Profit. The improvement in gross profit, as a percentage of sales, for the 1996 Three-Month Period was primarily due to the abovementioned reduced investment in promotional activities combined with improved sales distributions of higher margin perishable departments, which resulted from the Company's store remodeling program and marketing emphasis on perishables. The improvement in gross profit, as a percentage of sales, for the 1996 Nine-Month Period is primarily the result of the improvement in sales distributions of the higher margin perishable departments. Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased from $38.9 million for the 1995 Three-Month Period to $38.2 million for the 1996 Three-Month Period. However, due to the sales decrease from the prior year, selling, general and administrative expenses, as a percentage of sales, increased for the 1996 Three-Month Period. Improvements in store labor, group insurance, casualty insurance and utilities were partially offset by increased advertising, systems and floor care expenses and lower recycling income due to significantly lower cardboard prices. Selling, general and administrative expenses were 14.95% of sales for the 1996 Nine- Month Period compared to 15.32% of sales for the 1995 Nine-Month Period, or a decrease of $2.1 million. Depreciation and Amortization. The decrease in depreciation and amortization for the 1996 Three-Month Period and the 1996 Nine-Month Period are primarily attributable to the sale and simultaneous leaseback of certain fee-owned store properties partially offset by depreciation of assets associated with new stores and remodels. Interest Expense. Interest expense decreased $0.5 million for the 1996 Three-Month Period, primarily due to sale-leaseback transactions of certain store properties completed during the year. Interest expense for the 1996 Nine-Month Period was $19.5 million, or $3.6 million less than the 1995 Nine-Month Period. The decrease was primarily the result of converting $105 million of 14% Subordinated Debentures into equity in connection with the financial restructuring completed in December 1994 and the impact of the sale-leaseback transactions noted above, partially offset -10- KASH N' KARRY FOOD STORES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION by an interest moratorium on the Subordinated Debentures, old Fixed Rate Notes, and old Floating Rate Notes during the financial restructuring period of the prior year. Financial Condition The Company's existing credit agreement provides for a term loan facility of $9.9 million and a revolving credit facility of $50.0 million for working capital requirements and letters of credit. As of June 6, 1996 the Company had borrowed $9.9 million under the term loan and $21.3 million under the working capital line and had $10.8 million of letters of credit issued against the revolving credit facility. For the 1996 fiscal year, the Company expects to spend approximately $28.0 million of cash for capital expenditures. Two new stores were opened in the current fiscal year and approximately forty stores are expected to be remodeled. In August, the Company completed a sale-leaseback of three of its fee-owned store properties and applied the net proceeds of $9.1 million to the outstanding balance of the term loan. In December, the Company amended its existing credit agreement with The CIT Group/Business Credit, Inc., to effectively increase the credit facility by $5.0 million, to provide more favorable terms and to extend the term of the agreement through December 1998. As amended, the credit facility consists of a $9.9 million term loan due in December 1998 and a $50.0 million revolving credit facility for working capital and letters of credit. In January, the Company completed a sale-leaseback of four fee-owned store properties, sold its beneficial interest in three real estate trusts to a third party and applied the aggregate net proceeds of $12.7 million to repay a mortgage encumbering eight store properties. In March, the Company completed a subsequent sale- leaseback of three additional fee-owned store properties, and is marketing its beneficial interest in the three real estate trusts to a third party. The Company is still actively pursuing transactions on its two remaining fee-owned store properties, the sale-leaseback of a store facility that is operating as a ground lease, and the sale of two unimproved real estate sites, the total of which could provide up to an additional $8.0 million of net cash proceeds. In addition, the Company exercised its option of paying interest in kind on its Senior Floating Rate Notes in August and on its Senior Fixed Rate Notes in August and February. In November, the Company signed a five year agreement with Gooding's Supermarkets, Inc. to supply groceries to the 17-store chain, and estimates that shipments to Gooding's could approximate $75.0 million a year. -11- KASH N' KARRY FOOD STORES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Based upon the Company's ability to generate working capital through its operations and its existing credit facility, the Company believes that it has the financial resources necessary to pay its capital obligations and implement its business plan. Effects of Inflation The Company's primary costs, inventory and labor, are affected by a number of factors that are beyond its control, including availability and price of merchandise, the competitive climate and general and regional economic conditions. As is typical of the supermarket industry, the Company has generally been able to maintain margins by adjusting its retail prices, but competitive conditions may from time to time render it unable to do so while maintaining its market share. -12- PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company is engaged in various legal actions and claims arising in the ordinary course of business, including products liability actions and suits charging violations of certain civil rights laws and Florida's RICO Act. Management believes, after discussions with legal counsel, that the ultimate outcome of such litigation and claims will not have a material adverse effect on the Company's financial position. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits: Exhibit No. Description - ------- --------------------------------------------------------- 2 First Amended Plan of Reorganization filed by the Company with the United States Bankruptcy Court of the District of Delaware on November 9, 1994, as amended by notices of technical modifications thereto filed on November 9, 1994, and December 12, 1994 (previously filed as Exhibit 2 to the Company's Quarterly Report on Form 10-Q for the period ended October 30, 1994, which exhibit is hereby incorporated by reference). 3(i)(a) Restated Certificate of Incorporation filed with the Delaware Secretary of State on December 29, 1994 (previously filed as Exhibit 3(i) to the Company's Quarterly Report on Form 10-Q for the period ended January 29, 1995, which exhibit is hereby incorporated by reference). 3(i)(b) Certificate of Designations of Series A Junior Participating Preferred Stock filed with the Secretary of State of the State of Delaware on April 26, 1995 (previously filed as Exhibit 3(i)(b) to the Company's Registration Statement on Form S-1, Registration No. 33- 58999, which exhibit is hereby incorporated by reference). 3(ii)(a) Bylaws adopted October 12, 1988 (previously filed as Exhibit 3(ii)(a) to the Company's Quarterly Report on Form 10-Q for the period ended January 29, 1995, which exhibit is hereby incorporated by reference). 3(ii)(b) First Amendment to Bylaws adopted July 30, 1991 (previously filed as Exhibit 3(ii)(b) to the Company's -13- Exhibit No. Description - ------- --------------------------------------------------------- Quarterly Report on Form 10-Q for the period ended January 29, 1995, which exhibit is hereby incorporated by reference). 3(ii)(c) Second Amendment to Bylaws adopted December 29, 1994 (previously filed as Exhibit 3(ii)(c) to the Company's Quarterly Report on Form 10-Q for the period ended January 29, 1995, which exhibit is hereby incorporated by reference). 3(ii)(d) Third Amendment to Bylaws adopted April 13, 1995 (previously filed as Exhibit 3(ii)(d) to the Company's Quarterly Report on Form 10-Q for the period ended April 30, 1995, which exhibit is hereby incorporated by reference). 3(ii)(e) Fourth Amendment to Bylaws adopted March 8, 1996 (filed herewith). 4.1 Indenture dated as of December 29, 1994, between the Company and Shawmut Bank Connecticut, N.A., as Trustee, relating to 11.5% Senior Fixed Rate Notes due 2003 (previously filed as Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the period ended January 29, 1995, which exhibit is hereby incorporated by reference). 4.2 Indenture dated as of December 29, 1994, between the Company and IBJ Schroder Bank & Trust Company, as Trustee, relating to Senior Floating Rate Notes due 2003 (previously filed as Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q for the period ended January 29, 1995, which exhibit is hereby incorporated by reference). 4.3(a) Rights Agreement dated as of April 13, 1995 between the Company and Shawmut Bank Connecticut, N.A., as Rights Agent (previously filed as Exhibit 1 to the Company's Current Report on Form 8-K dated April 13, 1995, which exhibit is hereby incorporated by reference). 4.3(b) First Amendment to Rights Agreement dated as of June 13, 1995 (previously filed as Exhibit 4.3(b) to the Company's Quarterly Report on Form 10-Q for the period ended April 30, 1995, which exhibit is hereby incorporated by reference). -14- Exhibit No. Description - ------- --------------------------------------------------------- 4.4 Specimen form of Common Stock certificate (previously filed as Exhibit 4.4 to the Company's Registration Statement on Form S-1, Registration No. 33-58999, which exhibit is hereby incorporated by reference). 10.1(a) Credit Agreement dated as of December 29, 1994, among the Company, certain lenders, The CIT Group/Business Credit, Inc., as administrative agent, and Bank of America National Trust and Savings Association, as co-agent (previously filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended January 29, 1995, which exhibit is hereby incorporated by reference). 10.1(b) Amended and Restated Credit Agreement dated as of December 19, 1995, among the Company, certain lenders, and The CIT Group/Business Credit, Inc., as administrative agent (previously filed as Exhibit 10.1(b) to the Company's Quarterly Report on Form 10-Q for the period ended January 28, 1996, which exhibit is hereby incorporated by reference). 10.1(c) First Amendment to Amended and Restated Credit Agreement dated as of March 28, 1996, among the Company, certain lenders and The CIT Group/Business Credit, Inc., as administrative agent (filed herewith). 10.2 Mortgage, Fixture Filing, Security Agreement and Assignment of Rents between the Company, as mortgagor, and Sun Life Insurance Co. of America, as mortgagee, dated as of September 7, 1989 (previously filed as Exhibit 28.1(a) to the Company's Quarterly Report on Form 10-Q for the period ended October 29, 1989, which exhibit is hereby incorporated by reference). 10.3 Mortgage between the Company, as mortgagor, and Ausa Life Insurance Company, as mortgagee, dated as of November 21, 1989 (mortgage satisfied in January 1996) (previously filed as Exhibit 28.2(a) to the Company's Quarterly Report on Form 10-Q for the period ended October 29, 1989, which exhibit is hereby incorporated by reference). 10.4 Trademark License Agreement dated as of October 12, 1988 between the Company and Lucky Stores, Inc. (previously filed as Exhibit 10.11 to the Company's Registration Statement on Form S-1, Registration No. -15- Exhibit No. Description - ------- --------------------------------------------------------- 33-25621, which exhibit is hereby incorporated by reference). 10.5(a) Services Agreement dated as of March 1, 1995 between the Company and GSI Outsourcing Corporation (previously filed as Exhibit 10.5(a) to the Company's Registration Statement on Form S-1, Registration No. 33-58999, which exhibit is hereby incorporated by reference). 10.5(b) First Amendment to Services Agreement between the Company and GSI Outsourcing Corporation (previously filed as Exhibit 10.5(b) to the Company's Registration Statement on Form S-1, Registration No. 33-58999, which exhibit is hereby incorporated by reference). 10.5(c) Guaranty of Payment, Nondisturbance and Attornment Agreement dated as of June 1995 among the Company, GSI Outsourcing Corporation and IBM Credit Corporation (previously filed as Exhibit 10.5(c) to the Company's Annual Report on Form 10-K for the fiscal year ended July 30, 1995, which exhibit is hereby incorporated by reference). 10.5(d) Addendum to Services Agreement between the Company and GSI Outsourcing Corporation dated as of July 1995 (previously filed as Exhibit 10.5(d) to the Company's Annual Report on Form 10-K for the fiscal year ended July 30, 1995, which exhibit is hereby incorporated by reference). 10.6 Form of Indemnity Agreement between the Company and its directors and certain of its officers (previously filed as Exhibit 10.3 to the Company's Registration Statement on Form S-1, Registration No. 33-25621, which exhibit is hereby incorporated by reference). 10.7(a) 1995 Non-Employee Director Stock Option Plan adopted on March 9, 1995 (previously filed as Exhibit 10.7(a) to the Company's Registration Statement on Form S-1, Registration No. 33-58999, which exhibit is hereby incorporated by reference). 10.7(b) Form of Non-Qualified Stock Option Agreement entered into between the Company and certain directors, as optionees, pursuant to the 1995 Non-Employee Director Stock Option Plan (previously filed as Exhibit 10.7(b) to the Company's Registration Statement on Form S-1, -16- Exhibit No. Description - ------- --------------------------------------------------------- Registration No. 33-58999, which exhibit is hereby incorporated by reference). 10.8 Non-Qualified Stock Option Agreement dated as of January 17, 1995, between the Company and Green Equity Investors, L.P. (previously filed as Exhibit 10.8 to the Company's Registration Statement on Form S-1, Registration No. 33-58999, which exhibit is hereby incorporated by reference). 10.9 Management Services Agreement dated as of December 29, 1994, by and between the Company and Leonard Green & Partners (previously filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the period ended January 29, 1995, which exhibit is hereby incorporated by reference). 10.10(a) Employment Agreement dated as of January 24, 1995, between the Company and Ronald Johnson (previously filed as Exhibit 10.10 to the Company's Registration Statement on Form S-1, Registration No. 33-58999, which exhibit is hereby incorporated by reference). 10.10(b) Letter agreement dated as of May 22, 1996, amending Employment Agreement with Ronald Johnson (filed herewith). 10.11 Employment Agreement dated as of March 6, 1995, between the Company and Gary M. Shell (previously filed as Exhibit 10.11 to the Company's Registration Statement on Form S-1, Registration No. 33-58999, which exhibit is hereby incorporated by reference). 10.12(a) Employment Agreement dated as of March 16, 1995, between the Company and Clifford C. Smith, Jr. (previously filed as Exhibit 10.12 to the Company's Registration Statement on Form S-1, Registration No. 33- 58999, which exhibit is hereby incorporated by reference). 10.12(b) Letter agreement dated as of May 23, 1996, amending Employment Agreement with Clifford C. Smith, Jr. (filed herewith). 10.13(a) Employment Agreement dated as of July 8, 1995, between the Company and BJ Mehaffey (previously filed as Exhibit 10.13 to the Company's Annual Report on Form -17- Exhibit No. Description - ------- --------------------------------------------------------- 10-K for the fiscal year ended July 30, 1995, which exhibit is hereby incorporated by reference). 10.13(b) Letter agreement dated as of May 23, 1996, amending Employment Agreement with BJ Mehaffey (filed herewith). 10.14 Incentive Compensation Plan adopted on October 26, 1994 (previously filed as Exhibit 10.13 to the Company's Registration Statement on Form S-1, Registration No. 33- 58999, which exhibit is hereby incorporated by reference). 10.15 Amended and Restated Kash n' Karry Retirement Estates and Trust (401(k) Plan) dated October 14, 1993, effective as of January 1, 1992 (previously filed as Exhibit 10.5 to the Company's Annual Report on Form 10- K for the period ended August 1, 1993, which exhibit is hereby incorporated by reference). 10.16(a) Form of Deferred Compensation Agreement dated as of December 21, 1989 between the Company and key employees and a select group of management (KESP) (previously filed as Exhibit 28.3(a) to the Company's Quarterly Report on Form 10-Q for the period ended January 28, 1990, which exhibit is hereby incorporated by reference). 10.16(b) Master First Amendment to Deferred Compensation Agreements, dated as of November 11, 1991 between the Company and the key employees party thereto (previously filed as Exhibit 28.3 to the Company's Quarterly Report on Form 10-Q for the period ended November 3, 1991, which exhibit is hereby incorporated by reference). 10.16(c) Master Second Amendment to Deferred Compensation Agreements, dated as of December 30, 1993 between the Company and the key employees party thereto (previously filed as Exhibit 10.13(d) to the Company's Quarterly Report on Form 10-Q for the period ended January 30, 1994, which exhibit is hereby incorporated by reference). 10.16(d) Master Third Amendment to Deferred Compensation Agreements, dated as of September 2, 1994, between the Company and the key employees party thereto (previously filed as Exhibit 10.2 to the Company's Quarterly Report -18- Exhibit No. Description - ------- --------------------------------------------------------- on Form 10-Q for the period ended January 29, 1995, which exhibit is hereby incorporated by reference). 10.17(a) 1995 Key Employee Stock Option Plan (previously filed as Exhibit 10.16(a) to the Company's Registration Statement on Form S-1, Registration No. 33-58999, which exhibit is hereby incorporated by reference). 10.17(b) Non-Qualified Stock Option Agreement dated March 9, 1995 between the Company and Ronald E. Johnson (previously filed as Exhibit 10.16(b) to the Company's Registration Statement on Form S-1, Registration No. 33- 58999, which exhibit is hereby incorporated by reference). 10.17(c) Form of Non-Qualified Stock Option Agreement entered into between the Company and certain key employees, as optionees, pursuant to the 1995 Key Employee Stock Option Plan (previously filed as Exhibit 10.16(b) to the Company's Registration Statement on Form S-1, Registration No. 33-58999, which exhibit is hereby incorporated by reference). 10.18 Employment and Consulting Agreement dated September 1, 1994 between the Company and Anthony R. Petrillo (previously filed as Exhibit 10.18 to the Company's Annual Report on Form 10-K for the fiscal year ended July 30, 1995, which exhibit is hereby incorporated by reference). 10.19 Form of Bonus Deferred Compensation Agreement dated as of July 28, 1995 between the Company and certain key employees (previously filed as Exhibit 10.19 to the Company's Annual Report on Form 10-K for the fiscal year ended July 30, 1995, which exhibit is hereby incorporated by reference). 10.20 Supply Agreement dated as of November 29, 1995 between the Company and Gooding's Supermarkets, Inc. (previously filed as Exhibit 10.20 to the Company's Quarterly Report on Form 10-Q for the period ended October 29, 1995, which exhibit is hereby incorporated by reference). 10.21 Separation, Waiver and Release Agreement dated as of January 31, 1996 between the Company and Raymond P. Springer (previously filed as Exhibit 10.21 to the -19- Exhibit No. Description - ------- --------------------------------------------------------- Company's Quarterly Report on Form 10-Q for the period ended January 28, 1996, which exhibit is hereby incorporated by reference). 10.22(a) Employment Agreement dated as of January 26, 1996 between the Company and Richard D. Coleman (filed herewith). 10.22(b) Letter Agreement dated as of May 23, 1996, amending Employment Agreement with Richard D. Coleman (filed herewith). 11 Statement re computation of per share earnings (filed herewith). 21 Subsidiaries of the Company (filed herewith). 27 Financial Data Schedule (filed herewith). (b) Reports on Form 8-K: None -20- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. KASH N' KARRY FOOD STORES, INC. Date: June 7, 1996 By:/s/ Richard D. Coleman ______________________________ Richard D. Coleman Senior Vice President, Administration Date: June 7, 1996 By:/s/ Marvin H. Snow, Jr. ______________________________ Marvin H. Snow, Jr. Vice President, Controller EX-3.II(E) 2 FOURTH AMENDMENT TO BYLAWS OF KASH N' KARRY FOOD STORES, INC., a Delaware corporation The following amendment to the Bylaws of Kash n' Karry Food Stores, Inc. (the "Corporation") was adopted on March 8, 1996, at a regular meeting of the Board of Directors of the Corporation, as permitted by Article XIV of the Bylaws: 1. The following shall be added to Article IV, Section 2, of the Bylaws of the Corporation: "In addition, the Board may empower the President to appoint any officer of the Corporation named in Section 1 of this Article, except for the Chairman of the Board, the President and any Vice President having the duties of Chief Financial Officer. Any such officer appointed by the President shall serve at the pleasure of the President, and shall hold office until his resignation, removal or other disqualification from service, or until his successor shall be appointed." 2. The first sentence of Article IV, Section 10, of the Bylaws is hereby amended to read as follows: "The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, and shall send or cause to be sent to the stockholders of the Corporation such financial statements and reports as are by law or these Bylaws required to be sent to them." 3. The foregoing amendment became effective on March 8, 1996. DATED: June 6, 1996. /s/ Richard D. Coleman ___________________________________ Richard D. Coleman, Secretary of Kash n' Karry Food Stores, Inc. 14/knk/amd-byl4 EX-10.1(C) 3 FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the "Amendment"), dated as of March 28, 1996, is entered into by and among KASH N' KARRY FOOD STORES, INC., a Delaware corporation (the "Company"), each of the lenders that is a signatory to this Amendment (collectively, the "Lenders") and THE CIT GROUP/BUSINESS CREDIT, INC., as administrative agent for the Lenders (in such capacity, the "Administrative Agent"), and amends that certain Amended and Restated Credit Agreement dated as of December 19, 1995 among the Company, the Lenders and the Administrative Agent (as the same is in effect immediately prior to the effectiveness of this Amendment, the "Existing Credit Agreement" and as the same may be amended, supplemented or modified and in effect from time to time, the "Credit Agreement"). Capitalized terms used and not otherwise defined in this Amendment shall have the same meanings in this Amendment as set forth in the Credit Agreement, and the rules of interpretation set forth in Section 1.05 of the Credit Agreement shall be applicable to this Amendment. RECITAL The Company has request that the Lenders amend certain covenants and consent to certain actions under the Existing Credit Agreement, and the Lenders are willing to agree to so amend the Existing Credit Agreement and to give such consent all on the terms and subject to the conditions set forth below. AGREEMENT NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements set forth below and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: SECTION 1. Amendments. On the terms of this Amendment and subject to the satisfaction of the conditions precedent set forth below in Section 3, the Existing Credit Agreement shall be amended as follows: (a) Section 8.12 of the Existing Credit Agreement is amended by inserting the parenthetical phrase "(or $36,000,000 solely with respect to the Company's fiscal year ending in July of 1996)" immediately following the figure $30,000,000 in clause (a) of Section 8.12. (b) Section 8.13 of the Existing Credit Agreement is amended to read in its entirety as follows: "8.13 Lease Obligations. The aggregate obligations of the Company and its Consolidated Subsidiaries for the payment of rent for any Property under operating leases or agreements to lease (including pursuant to any such arrangements with the Trusts) shall not exceed $32,000,000 during any fiscal year of the Company." SECTION 2. Consent. On the terms hereof and subject to the satisfaction of the conditions precedent set forth below in Section 3, the Lenders consent and agree that, for purposes of Section 2.10(c) of the Credit Agreement: (a) the Commitments shall not be subject to automatic reduction as otherwise set forth in such section upon the Disposition by the Company pursuant to Section 8.05 of the Credit Agreement of (i) the Company's fee interest in Store Nos. 702, 878, 886 and 891, (ii) the beneficial interest of the Company in the Trusts that are or become the fee owners of Store Nos. 702, 886 and 891 in connection with any Disposition referred to in clause (i) above, (iii) improvements relating to the Company's Store No. 722 and (iv) certain raw land owned by the Company in Hillsborough County, Florida that the Company commonly refers to as the "Dale Mabry/Lambright Land" or "Store No. 734" (and the Company agrees that the Net Available Proceeds of all such Dispositions shall promptly be paid to the Administrative Agent and applied to the prepayment of the Revolving Credit Loans as set forth in Section 2.10(d)(i) of the Credit Agreement); and (b) the Net Available Proceeds of any such Disposition referred to in clause (a) above as well as any Dispositions made by the Company during the period after the Restatement Effective Date and prior to the Amendment Effective Date (collectively, the "Designated Dispositions") shall be deemed to be zero solely for purposes of determining whether Commitment reductions (but not prepayments) are required to be made pursuant to Section 2.10(c) of the Credit Agreement in connection with Dispositions other than the Designated Dispositions. SECTION 3. Conditions to Effectiveness. The amendments and consent set forth in Sections 1 and 2 of this Amendment shall become effective only upon the satisfaction of all of the following conditions precedent on or prior to March 29, 1996 (the date of satisfaction of all such conditions being referred to as the "Amendment Effective Date"): (a) On or before the Amendment Effective Date, the Company shall deliver to the Administrative Agent, on behalf of the Lenders, the following described documents (each of which shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel): 2 (i) This Amendment, duly executed and delivered by the Company, the Lenders and the Administrative Agent; (ii) Any and all documents and instruments required to be delivered on or before the Amendment Effective Date pursuant to Section 8.18 of the Credit Agreement; and (iii) Such other documents, instruments, approvals or opinions as the Administrative Agent, any Lender or special counsel to the Administrative Agent may reasonably request. (b) On or before the Amendment Effective Date, all corporate and other proceedings taken or to be taken in connection with the transactions contemplated by this Amendment, and all documents incidental thereto, shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel, and the Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents, opinions, certificates and evidence as they may reasonably request. (c) All governmental actions or filings necessary for the execution, delivery and performance of this Amendment shall have been made, taken or obtained, and no order, statutory rule, regulation, executive order, decree, judgment or injunction shall have been enacted, entered, issued, promulgated or enforced by any court or other governmental entity which prohibits or restricts the transactions contemplated by this Amendment nor shall any action have been commenced or threatened seeking any injunction or any restraining or other order to prohibit, restrain, invalidate or set aside the transactions contemplated by this Amendment. (d) The representations and warranties set forth in this Amendment shall be true and correct as of the Amendment Effective Date. SECTION 4. The Company's Representations and Warranties. In order to induce the Lenders to enter into this Amendment and to give the consent and to amend the Existing Credit Agreement in the manner provided in this Amendment, the Company represents and warrants to each Lender as of the Amendment Effective Date as follows: (a) Power and Authority. The Company has all requisite corporate power and authority to enter into this Amendment and to carry out the transactions contemplated by, and perform its obligations under, the Existing Credit Agreement as amended by this Amendment (hereafter referred to as the "Amended Credit Agreement"). 3 (b) Authorization of Agreements. The execution and delivery of this Amendment by the Company, and the performance of the Amended Credit Agreement by the Company have been duly authorized by all necessary action, and this Amendment has been duly executed and delivered by the Company. (c) Enforceability. The Amended Credit Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights in general. The enforceability of the Company's obligations hereunder is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (d) No Conflict. The execution and delivery by the Company of this Amendment and the performance by the Company of the Amended Credit Agreement do not and will not (i) contravene, in any material respect, any provision of any law, regulation, decree, ruling, judgment or order that is applicable to the Company or its properties or other assets, (ii) result in a breach of or constitute a default under the charter or bylaws of the Company or any material agreement, indenture, lease or instrument binding upon it, or its properties or other assets or (iii) result in the creation or imposition of any Liens on its Properties or Collateral other than as permitted under the Credit Agreement. (e) Governmental Consents. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Company of this Amendment. (f) Representations and Warranties in the Credit Agreement. The Company confirms that as of the Amendment Effective Date the representations and warranties contained in Section 7 of the Credit Agreement are (before and after giving effect to this Amendment) true and correct in all material respects (except to the extent any such representation and warranty is expressly stated to have been made as of a specific date, in which case it shall be true and correct as of such specific date) and that no Default has occurred and is continuing. SECTION 5. Miscellaneous. (a) Reference to and Effect on the Existing Credit Agreement and the Other Basic Documents. (i) Except as specifically amended by this Amendment and the documents executed and delivered in connection herewith, the Existing Credit Agreement and the 4 other Basic Documents shall remain in full force and effect and are hereby ratified and confirmed. (ii) The execution and delivery of this Amendment and performance of the Amended Credit Agreement shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Lenders under, the Existing Credit Agreement or any of the other Basic Documents. (iii) Upon the conditions precedent set forth herein being satisfied, this Amendment shall be construed as one with the Existing Credit Agreement, and the Existing Credit Agreement shall, where the context requires, be read and construed throughout so as to incorporate this Amendment. (b) Fees and Expenses. The Company acknowledges that all costs, fees and expenses incurred in connection with this Amendment will be paid in accordance with Section 11.03 of the Existing Credit Agreement. (c) Headings. Section and subsection headings in this Amendment are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect. (d) Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. (e) Governing Law. This Amendment shall be governed by and construed according to the laws of the State of New York. 5 IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first above written. KASH N' KARRY FOOD STORES, INC., a Delaware corporation By:/s/ Richard D. Coleman _______________________________ Title: Sr. V-P, Administration LENDERS THE CIT GROUP/BUSINESS CREDIT, INC. By:/s/ Guy Fuchs _______________________________ Title: V.P. HELLER FINANCIAL, INC. By:/s/ Dwayne L. Coker _______________________________ Title: Vice President NATWEST BANK, N.A. By:/s/ Therese M. Earley _______________________________ Title: V.P. ADMINISTRATIVE AGENT THE CIT GROUP/BUSINESS CREDIT, INC., as Administrative Agent By:/s/ Guy Fuchs _______________________________ Title: V.P. 6 EX-10.10(B) 4 May 22, 1996 Personal and Confidential Mr. Ronald Johnson 17802 Osprey Pointe Place Tampa, Florida 33647 Re: Employment Agreement Modification Dear Ron: I am pleased to advise you that the Compensation Committee of Kash N' Karry Food Stores, Inc., (the "Company") has determined to modify your employment agreement, dated as of January 24, 1995, with the Company (the "Employment Agreement") to (i) provide enhanced base salary continuation protection in the event your employment with the Company is terminated Without Cause (as defined in Section 7.2 of the Employment Agreement) within a specified period after the occurrence of a change in ownership of the Company, and (ii) clarify the application of Section 7.4(f) to the stock option granted to you on May 1, 1996. Accordingly, the Employment Agreement, in accordance with Section 10.5 of the Employment Agreement, is hereby modified, effective as of May 1, 1996, as follows: 1. Section 2.1 of the Employment Agreement is hereby amended by adding thereto a new last sentence to read as follows: "Notwithstanding the above, if, prior to the Scheduled Termination Date, a Change in Control (as defined in Section 7.4 below); occurs the Term shall expire upon the later to occur of (i) the Scheduled Termination Date, and (ii) the second anniversary of the date on which any such Change of Control occurred (the "CIC Anniversary Date")." - 2 - 2. Section 7.4(c) of the Employment Agreement is hereby deleted in its entirety and replaced with a new Section 7.4(c) to read as follows: "(c) Subject to Section 7.5 and except in the case of a termination Without Cause under Section 7.2(d), the Employee shall be entitled to receive all amounts of salary as would have been payable under Section 3.1 hereof through the Scheduled Termination Date (the "Salary Continuation Period"), which amounts shall be paid as and when the same would have been payable under the Agreement had it not been terminated; provided, however, in the case of a termination Without Cause pursuant to Section 7.2(c), the Employee is entitled to elect to receive all salary due under this Section 7.4(c) in a lump sum, discounted to reflect the present value of that salary over the Salary Continuation Period (as defined in Section 7.5); provided, further, however, that if (x) there occurs within one year after the occurrence of a Change in Control (as defined below) a termination Without Cause (other than one under Section 7.2(d), the Salary Continuation Period shall not be less than two years from the date of termination;, or (y) there occurs within the one year period commencing immediately upon the termination of the one year period described in (x) above (the "Second One Year Period") a termination Without Cause (other than one under Section 7.2(d)), the Salary Continuation period, after the date of termination, shall not be less than twenty-four months less the number of whole or partial months transpired in the Second One Year Period as of the date of the Employee's termination of employment;" 3. Section 7.4 of the Employment Agreement is hereby amended by adding a new paragraph at the end thereof to read as follows: "For purposes of Section 7.4(c) above, (i)"Change in Control" shall mean and be deemed to have occurred if, after May 1, 1996, any Person (as defined below) becomes the beneficial owner (as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of (a) securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company in any transaction, including without limitation, any recapitalization, reorganization or bankruptcy proceeding) representing more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities, or (b) all or substantially all of the assets of the Company, and (ii) "Person" shall have the meaning ascribed thereto in Section 3(a)(9) of the Exchange Act, as - 3 - modified, applied and used in Sections 13(d) and 14(d) thereof; provided, however, that a Person shall not include (A) the Company or any of its subsidiaries or any of the Original Stockholders (as defined in the Company's 1995 Key Employee Stock Option Plan), (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries (in its capacity as such), (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same character and proportions as their ownership of stock of the Company, or (E) any entity or individual acquiring securities or assets of the Company in connection with any bankruptcy proceeding. In addition, the Employee's employment (if in fact terminated) shall be deemed to have been terminated following a Change of Control by the Company Without Cause if the Employee's employment was terminated Without Cause within six months demonstrates that such termination, or the circumstance(s)or event(s) constituting such a termination, occurred (1) at the request of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control (or who has taken other steps reasonably calculated to effect a Change in Control) or (2) otherwise in connection with, as a direct result of or in anticipation of a Change in Control." 4. Prior to the occurrence of a "Change of Control" (as defined in Section 3 of this Agreement), Section 7.4(f) shall not apply to the stock option granted to you on May 1, 1996 to acquire (when vested and exercised) 25,378 shares of the Company's common stock at an exercise price equal to $22.00 per share. 5. Section 7.5 of the Employment Agreement shall be amended by deleting the first sentence thereof and replacing it with a new first sentence to read as follows: "In the event of termination of employment hereunder, the Employee shall be under no obligation to seek alternative employment or other gainful occupation during the period from the termination of this Agreement through the later to occur of (a) the CIC Anniversary Date, and (b) the Scheduled Termination Date (the "Unexpired Term") by way of mitigation of amounts payable to the Employee under this Article 7; provided however, that, except in the case of Employee's Termination Without Cause under Section 7.2(c), if the Employee provides, directly or indirectly (including through any personal service entity), any services (whether as employee, consultant, independent contractor or otherwise) to any person - 4 - engaged in a business similar to the business of the company as then conducted (a "Third Party") during the Unexpired Term, all amounts paid or payable to the Employee by or on behalf of such Third Party in respect thereof (exclusive of any fringe benefits, profit sharing and deferred compensation arrangement customarily offered to senior management of the Third Party) ("Offset Amounts") shall reduce any amounts payable thereafter by the Company to the Employee under Sections 7.4(c), (d) and (e) hereof on a dollar- for-dollar basis." 6. Except as expressly modified herein, the Employment Agreement shall remain in full force and effect in accordance with its terms and provisions as the same are set forth on the date hereof. Please indicate your acceptance of and agreement to the above modifications by dating and signing this modification agreement in the space provided below. KASH N' KARRY FOOD STORES, INC. By: /s/ Peter Zurkow ____________________________ Name: Peter Zurkow Title: Member, Compensation Committee AGREED TO AND ACCEPTED: /s/ Ronald E. Johnson ________________________ Ronald Johnson Date: May 30, 1996 _________________ EX-10.12(B) 5 May 23, 1996 Personal and Confidential Mr. Cliff Smith Senior Vice President-Perishables 8029 Long Nook Lane Charlotte, NC 28277 Re: Employment Agreement Modification Dear Mr. Smith: I am pleased to advise you that the Compensation Committee of Kash N' Karry Food Stores, Inc., (the "Company") has determined to modify your employment agreement, dated as of March 16, 1995, with the Company (the "Employment Agreement") to provide enhanced base salary continuation protection in the event your employment with the Company is terminated Without Cause (as defined in Section 7.2 of the Employment Agreement) within one year after the occurrence of a change in ownership of the Company. Accordingly, the Employment Agreement, in accordance with Section 10.5 of the Employment Agreement, is hereby modified, effective as of May 1, 1996, as follows: 1. Section 2.1 of the Employment Agreement is hereby amended by adding thereto a new last sentence to read as follows: "Notwithstanding the above, if, prior to the Scheduled Termination Date, a Change in Control (as defined in Section 7.4 below); occurs the Term shall expire upon the later to occur of (i) the Scheduled Termination Date, and (ii) the first anniversary of the date on which any such Change of Control occurred (the "CIC Anniversary Date")." 2. Section 7.4(c) of the Employment Agreement is hereby deleted in its entirety and replaced with a new Section 7.4(c) to read as follows: "(c) Subject to Section 7.5 and except in the case of a termination Without Cause under Section 7.2(d), the Employee shall be entitled to receive all amounts of salary as would have been payable under Section 3.1 hereof through the Scheduled Termination Date (the "Salary Continuation Period"), which amounts shall be paid as and when the same would have been payable under the Agreement had it not been terminated; provided, however, that if there occurs within one year after the occurrence of a Change in Control (as defined below) a termination Without Cause (other than one under Section 7.2(d), the Salary Continuation Period shall not be less than one year from the date of termination;" 3. Section 7.4 of the Employment Agreement is hereby amended by adding a new paragraph at the end thereof to read as follows: For purposes of Section 7.4(c) above, (i)"Change in Control" shall mean and be deemed to have occurred if, after May 1, 1996, any Person (as defined below) becomes the beneficial owner (as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of (a) securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company in any transaction, including without limitation, any recapitalization, reorganization or bankruptcy proceeding) representing more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities, or (b) all or substantially all of the assets of the Company, and (ii) "Person" shall have the meaning ascribed thereto in Section 3(a)(9) of the Exchange Act, as modified, applied and used in Sections 13(d) and 14(d) thereof; provided, however, that a Person shall not include (A) the Company or any of its subsidiaries or any of the Original Stockholders (as defined in the Company's 1995 Key Employee Stock Option Plan), (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries (in its capacity as such), (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same character and proportions as their ownership of stock of the Company, or (E) any entity or individual acquiring securities or assets of the Company in connection with any bankruptcy proceeding. In addition, the Employee's employment (if in fact terminated) shall be deemed to have been terminated following a Change of Control by the Company Without Cause if the Employee's employment was terminated Without Cause within six months demonstrates that such termination, or the circumstance(s)or event(s) constituting such a termination, occurred (1) at the request of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control (or who has taken other steps reasonably calculated to effect a Change in Control) or (2) otherwise in connection with, as a direct result of or in anticipation of a Change in Control." 4. Section 7.5 of the Employment Agreement shall be amended by deleting the first sentence thereof and replacing it with a new first sentence to read as follows: "In the event of termination of employment hereunder, the Employee shall be under no obligation to seek alternative employment or other gainful occupation during the period from the termination of this Agreement through the later to occur of (a) the CIC Anniversary Date, and (b) the Scheduled Termination Date (the "Unexpired Term") by way of mitigation of amounts payable to the Employee under this Article 7; provided however, that, except in the case of Employee's Termination Without Cause under Section 7.2(c), if the Employee provides, directly or indirectly (including through any personal service entity), any services (whether as employee, consultant, independent contractor or otherwise) to any person engaged in a business similar to the business of the company as then conducted (a "Third Party") during the Unexpired Term, all amounts paid or payable to the Employee by or on behalf of such Third Party in respect thereof (exclusive of any fringe benefits, profit sharing and deferred compensation arrangement customarily offered to senior management of the Third Party) ("Offset Amounts") shall reduce any amounts payable thereafter by the Company to the Employee under Sections 7.4(c), (d) and (e) hereof on a dollar-for- dollar basis." 5. Except as expressly modified herein, the Employment Agreement shall remain in full force and effect in accordance with its terms and provisions as the same are set forth on the date hereof. Please indicate your acceptance of and agreement to the above modifications by dating and signing this modification agreement in the space provided below. KASH N' KARRY FOOD STORES, INC. By:/s/ Ronald Johnson ______________________________ Name: Ronald Johnson Title: Chief Executive Officer AGREED TO AND ACCEPTED: /s/ Cliff Smith _______________________ Mr. Cliff Smith Senior Vice President-Perishables Date: May 23, 1996 EX-10.13(B) 6 May 23, 1996 Personal and Confidential Mr. BJ Mehaffey Senior Vice President-Operations 15002 Hickory Grove Place Midlothian, VA 23112 Re: Employment Agreement Modification Dear Mr. Smith: I am pleased to advise you that the Compensation Committee of Kash N' Karry Food Stores, Inc., (the "Company") has determined to modify your employment agreement, dated as of July 8, 1995, with the Company (the "Employment Agreement") to provide enhanced base salary continuation protection in the event your employment with the Company is terminated Without Cause (as defined in Section 7.2 of the Employment Agreement) within one year after the occurrence of a change in ownership of the Company. Accordingly, the Employment Agreement, in accordance with Section 10.5 of the Employment Agreement, is hereby modified, effective as of May 1, 1996, as follows: 1. Section 2.1 of the Employment Agreement is hereby amended by adding thereto a new last sentence to read as follows: "Notwithstanding the above, if, prior to the Scheduled Termination Date, a Change in Control (as defined in Section 7.4 below); occurs the Term shall expire upon the later to occur of (i) the Scheduled Termination Date, and (ii) the first anniversary of the date on which any such Change of Control occurred (the "CIC Anniversary Date")." 2. Section 7.4(c) of the Employment Agreement is hereby deleted in its entirety and replaced with a new Section 7.4(c) to read as follows: "(c) Subject to Section 7.5 and except in the case of a termination Without Cause under Section 7.2(d), the Employee shall be entitled to receive all amounts of salary as would have been payable under Section 3.1 hereof through the Scheduled Termination Date (the "Salary Continuation Period"), which amounts shall be paid as and when the same would have been payable under the Agreement had it not been terminated; provided, however, that if there occurs within one year after the occurrence of a Change in Control (as defined below) a termination Without Cause (other than one under Section 7.2(d), the Salary Continuation Period shall not be less than one year from the date of termination;" 3. Section 7.4 of the Employment Agreement is hereby amended by adding a new paragraph at the end thereof to read as follows: For purposes of Section 7.4(c) above, (i)"Change in Control" shall mean and be deemed to have occurred if, after May 1, 1996, any Person (as defined below) becomes the beneficial owner (as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of (a) securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company in any transaction, including without limitation, any recapitalization, reorganization or bankruptcy proceeding) representing more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities, or (b) all or substantially all of the assets of the Company, and (ii) "Person" shall have the meaning ascribed thereto in Section 3(a)(9) of the Exchange Act, as modified, applied and used in Sections 13(d) and 14(d) thereof; provided, however, that a Person shall not include (A) the Company or any of its subsidiaries or any of the Original Stockholders (as defined in the Company's 1995 Key Employee Stock Option Plan), (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries (in its capacity as such), (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same character and proportions as their ownership of stock of the Company, or (E) any entity or individual acquiring securities or assets of the Company in connection with any bankruptcy proceeding. In addition, the Employee's employment (if in fact terminated) shall be deemed to have been terminated following a Change of Control by the Company Without Cause if the Employee's employment was terminated Without Cause within six months demonstrates that such termination, or the circumstance(s)or event(s) constituting such a termination, occurred (1) at the request of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control (or who has taken other steps reasonably calculated to effect a Change in Control) or (2) otherwise in connection with, as a direct result of or in anticipation of a Change in Control." 4. Section 7.5 of the Employment Agreement shall be amended by deleting the first sentence thereof and replacing it with a new first sentence to read as follows: "In the event of termination of employment hereunder, the Employee shall be under no obligation to seek alternative employment or other gainful occupation during the period from the termination of this Agreement through the later to occur of (a) the CIC Anniversary Date, and (b) the Scheduled Termination Date (the "Unexpired Term") by way of mitigation of amounts payable to the Employee under this Article 7; provided however, that, except in the case of Employee's Termination Without Cause under Section 7.2(c), if the Employee provides, directly or indirectly (including through any personal service entity), any services (whether as employee, consultant, independent contractor or otherwise) to any person engaged in a business similar to the business of the company as then conducted (a "Third Party") during the Unexpired Term, all amounts paid or payable to the Employee by or on behalf of such Third Party in respect thereof (exclusive of any fringe benefits, profit sharing and deferred compensation arrangement customarily offered to senior management of the Third Party) ("Offset Amounts") shall reduce any amounts payable thereafter by the Company to the Employee under Sections 7.4(c), (d) and (e) hereof on a dollar-for- dollar basis." 5. Except as expressly modified herein, the Employment Agreement shall remain in full force and effect in accordance with its terms and provisions as the same are set forth on the date hereof. Please indicate your acceptance of and agreement to the above modifications by dating and signing this modification agreement in the space provided below. KASH N' KARRY FOOD STORES, INC. By:/s/ Ronald Johnson _______________________________ Name: Ronald Johnson Title: Chief Executive Officer AGREED TO AND ACCEPTED: /s/ BJ Mehaffey _________________________ Mr. BJ Mehaffey Senior Vice President-Operations Date: May 23, 1996 EX-10.22(A) 7 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of January 26, 1996, between KASH N' KARRY FOOD STORES, INC., a Delaware corporation (the "Company"), and RICHARD D. COLEMAN (the "Employee"). WHEREAS, the Company and the Employee desire to enter into this Agreement to assure the Company of the services of the Employee for the benefit of the Company and to set forth the respective rights and duties of the parties hereto; WHEREAS, the Company is in the business of owning, operating and managing supermarkets and retail liquor, food, grocery and warehouse format stores in Florida and may, in the future, own, operate and manage additional supermarkets or retail liquor, food, grocery or warehouse format stores in or outside of Florida (such business, present and future, being hereinafter referred to as the "Business"); NOW, THEREFORE, in consideration of the premises and the mutual covenants, terms and conditions set forth herein, the Company and the Employee agree as follows: ARTICLE I. Employment 1.1 Employment and Title. The Company hereby employs the Employee, and the Employee hereby accepts such employment, as the 1 Senior Vice President - Administration, Chief Financial Officer and Secretary of the Company, upon the terms and conditions set forth herein. 1.2 Services. During the Term (as hereinafter defined) hereof, the Employee agrees to perform diligently and in good faith such duties and services for the Company under the direction of the Chief Executive Officer of the Company (the "CEO") as are consistent with the positions of Senior Vice President - Administration, Chief Financial Officer and Secretary of the Company. The Employee agrees to devote his best efforts and all of his full business time, energies and abilities to the services to be performed hereunder and for the exclusive benefit of the Company; provided, that this clause shall not be construed to prevent the Employee from personally, and for his own account, trading in stocks, bonds, securities, real estate, or other forms of investment for his own benefit, so long as any such activity does not materially interfere with the performance of his duties hereunder, and, provided, further, that Employee shall be entitled to engage in those further activities permitted under Section 1.4. The Employee shall be vested with such authority as is generally concomitant with the positions to which he is appointed. 1.3 Location. The principal place of employment and the location of the Employee's principal office and ordinary place of work shall be in Tampa, Florida; provided, however, the Employee shall, when requested by his superiors, or may, if he determines 2 it to be reasonably necessary, temporarily perform services outside said area as are reasonably required for the proper performance of his duties under this Agreement. 1.4 Exclusivity. The Employee shall not, without the prior written consent of the Company, directly or indirectly, during the term of this Agreement render services of a business, professional or commercial nature to any other person or entity, whether for compensation or otherwise. 1.5 Representations. Each party represents and warrants to the other that he/it has full power and authority to enter into and perform this Agreement and that his/its execution of and performance of this Agreement shall not constitute a default under or breach of any of the terms of any agreement to which he/it is a party or under which he/it is bound. Each party represents that no consent or approval of any third party is required for his or its execution, delivery and performance of this Agreement. The Employee further represents and warrants to the Company that he is free to accept this employment, and that he has no other obligations or commitments of any kind to any one which would in any way hinder or interfere with his acceptance of, full performance of his obligations under, or exercise of his best efforts with respect to, this Agreement. 3 ARTICLE 2 Term 2.1 Term. The term of the Employee's employment hereunder (the "Term") shall commence on January 26, 1996 (the "Commencement Date") and shall continue until (but not including) the second anniversary of the Commencement Date (the "Scheduled Termination Date") unless earlier terminated pursuant to the provisions of this Agreement. On or before July 24, 1997, the parties agree to begin negotiating the terms of the Employee's employment, if any, after the Scheduled Termination Date. ARTICLE 3 Compensation 3.1 Salary. As compensation for the services to be rendered by the Employee, the Company shall pay the Employee, during the Term of this Agreement, an annual salary in the amount of One Hundred Thirty-five Thousand Dollars ($135,000), which salary shall accrue weekly (prorated for periods less than a week) and shall be payable in equal weekly installments, in arrears. 3.2 Other Compensation. During the Term hereof, the Employee shall be entitled to participate, on a basis proportionate to the participation of the other executive officers of the Company, in any compensatory plan, contract or arrangement that is available to the Company's most senior executive officers from time to time during the Term hereof, including, but not 4 limited to (a) the Company's current bonus plan, generally referred to as the Incentive Compensation Plan, as in effect on the Commencement Date, and (b) the 1995 Key Employee's Stock Option Plan. Effective as of March 8, 1996, the Company will grant to the Employee options to purchase an additional 7,616 shares of the then outstanding common stock of the Company for an exercise price of $22 5/8 per share, and on such other terms and conditions as shall be approved by the Stock Option Committee pursuant to the Stock Option Plan. 3.3 Benefits and Perquisites. The Employee shall be entitled, during the Term hereof, to the same medical, hospital, dental and life insurance coverage and benefits, vacations, and other perquisites, as are available to the Company's most senior executive officers on the Commencement Date or benefits that are substantially comparable. 3.4 Withholding. Any and all amounts payable under this Agreement, including, without limitation, amounts payable in the event of the termination hereof under Sections 7.3 and 7.4 hereof, are subject to withholding for such federal, state and local taxes as the Company in its reasonable judgment determines to be required pursuant to any applicable law, rule or regulation. 3.5 Annual Review. No less frequently than annually, the Board of Directors shall review the Employee's performance of his duties and services under this Agreement, and may, commensurate with the Employee's and the Company's performance, increase, but not decrease, the salary, stock options, other compensation and 5 benefits payable to the Employee under this Agreement during the remaining Term. ARTICLE 4 Working Facilities, Expenses and Insurance 4.1 Working Facilities and Expenses. The Employee shall be furnished with an office at the principal office of the Company, or at such other location as may be agreed to by the Employee and the Board of Directors, and other working facilities and secretarial and other assistance suitable to his position and adequate for the performance of his duties hereunder. The Company shall reimburse the Employee for all the Employee's reasonable expenses incurred while employed and performing his duties under and in connection with the terms and conditions of the Agreement, subject to the Employee's full appropriate documentation, including, without limitation, receipts for all such expenses in the manner required pursuant to Company's policies and procedures and the Internal Revenue Code. 4.2 Insurance. The Company may secure in its own name or otherwise, and at its own expense, life, disability and other insurance covering the Employee or the Employee and others, and the Employee shall not have any right, title or interest in or to such insurance other than as expressly provided herein. The Employee agrees to assist the Company in procuring such insurance by submitting to the usual and customary medical and other examinations to be conducted by such physician(s) as the Company 6 or such insurance company may designate and by signing such applications and other written instruments as may be required by the insurance companies to which application is made for such insurance. ARTICLE 5 Illness or Incapacity 5.1 Right to Terminate. If, during the Term of this Agreement, the Employee shall be unable to perform in all material respects his duties hereunder for a period exceeding one hundred twenty (120) consecutive calendar days, or a total of one hundred eighty-six (186) non-consecutive calendar days, by reason of illness or incapacity, this Agreement may be terminated by the Company at its election pursuant to Section 7.2(b) hereof. 5.2 Right to Replace. If the Employee's illness or incapacity, whether by physical or mental cause, renders him unable for a minimum period of 30 consecutive calendar days to carry out his duties and responsibilities as set forth herein, the Company shall have the right to designate a person to temporarily succeed the Employee in the capacity described in Article 1 hereof; provided, however, that if the Employee returns to work from such illness or incapacity within the six (6) month period following his inability due to illness or incapacity, he shall be entitled to be reinstated in the capacity described in Article 1 hereof with all duties and privileges attendant thereto. 7 5.3 Rights Prior to Termination. The Employee shall be entitled to his full remuneration and benefits hereunder during such illness or incapacity unless and until an election is made by the Company to terminate this Agreement in accordance with the provisions of this Article. ARTICLE 6 Confidentiality 6.1 Confidentiality. During the Term of this Agreement and at all times thereafter, the Employee agrees to maintain the confidential nature of all trade secrets, including, without limitation, development ideas, acquisition strategies and plans, financial information, records, "know-how", methods of doing business, customer, supplier and distributor lists and all other confidential information of the Company. The Employee shall not be obligated to maintain the confidential nature of information the disclosure of which is required by law or which already is in the public domain. The Employee shall not use (other than in connection with his employment), in any way whatsoever, such trade secrets except as authorized in writing by the Company. The Employee shall, upon terminating his employment, deliver to the Company any and all records, books, documents or any other materials whatsoever (including all copies thereof) containing such trade secrets, which shall be and remain the property of the Company. 8 6.2 Non-Removal of Records. All documents, papers, materials, notes, books, correspondence, drawings and other written and graphical records relating to the Business of the Company which the Employee shall prepare or use, or come into contact with, shall be and remain the sole property of the Company and shall not be removed from their respective premises without the Company's prior written consent. ARTICLE 7 Termination 7.1 Termination For Cause. This Agreement and the employment of the Employee may be terminated by the Company "For Cause" in any of the following circumstances: (a) The Employee has committed any act or acts of fraud or misappropriation that result in or are intended to result in his personal enrichment at the expense of the Company; (b) The Employee is in default in a material respect in the performance of his obligations, services or duties hereunder, which shall include, without limitation, the Employee's disregarding the written instructions (in the Company's minutes or otherwise) from the Company's Board of Directors or his superiors concerning the conduct of his duties hereunder, the Employee's acting in a manner materially inconsistent with the published policies of the Company or its affiliates, as promulgated from time to time and which are generally applicable to all employees 9 and/or senior executives of the Company, the Employee's acting in a manner materially inconsistent with the customary standards of performance applicable to persons in similar positions in the supermarket industry in the United States, or if the Employee has breached any other material provision of this Agreement; provided that if, and only if, such default or breach is curable, the Employee shall not be in default hereunder unless he shall have failed to cure such default or breach within 15 days of written notice thereof by the Company to the Employee; (c) The Employee is grossly negligent, which causes substantial damage or loss to the Company, or engages in willful misconduct in the performance of his duties hereunder; provided, however, that the Employee may be terminated under this paragraph 7.1(c) only if the disinterested directors of the Company's Board of Directors first unanimously approve of the termination; or (d) The Employee has engaged in illegal activities which, individually, or in the aggregate, reflect materially adversely upon, or have a materially adverse impact on, the Company. A termination For Cause under this Section 7.1 shall be effective upon the date set forth in a written notice of termination delivered to the Employee. 7.2 Termination Without Cause. This Agreement and the employment of the Employee may be terminated "Without Cause" as follows: 10 (a) by mutual agreement of the parties hereto; (b) at the election of the Company at any time by its giving at least thirty (30) days advance written notice to the Employee; (c) at the election of the Employee by his giving written notice to the Company in the event that the Company shall default in or breach the performance of any of its obligations under this Agreement, or in the event that the Company shall effect a material diminution or material adverse change in the Employee's title, responsibilities or duties; provided, that if, and only if, such default, breach, diminution or change is curable, the Employee may not elect to give notice under this Section 7.2 (c), unless the Company shall have failed to cure such default, breach, diminution or change within fifteen (15) days of written notice thereof provided by the Employee to the Company; or (d) upon the Employee's death. A termination Without Cause under this Section 7.2 shall be effective upon the date set forth in a written notice of termination delivered hereunder, which shall be not less than thirty (30) days nor more than 45 days after the giving of such notice, except for a termination pursuant to Section 7.2(d) hereof, which shall be automatically effective upon the occurrence of the event described therein. 7.3 Effect of Termination For Cause. If the Employee's employment is terminated For Cause: 11 (a) The Employee shall be entitled to accrued salary through the date of termination; (b) The Employee shall be entitled to reimbursement for expenses accrued through the date of termination in accordance with the provisions of Section 4.1 hereof; and (c) Except as provided in Article 11, this Agreement shall thereupon be of no further force and effect. 7.4 Effect of Termination Without Cause. If the Employee's employment is terminated Without Cause: (a) The Employee shall be entitled to accrued salary through the date of termination; (b) The Employee shall be entitled to reimbursement for expenses accrued through the date of termination in accordance with the provisions of Section 4.1 hereof; and (c) Subject to Section 7.5 and except in the case of a termination Without Cause under Section 7.2(d), the Employee shall be entitled to receive all amounts of salary as would have been payable under Section 3.1 hereof through the Scheduled Termination Date, which amounts shall be paid as and when the same would have been payable under the Agreement had it not been terminated; provided, however, in the case of a termination Without Cause pursuant to Section 7.2 (c), then Employee is entitled to elect to receive all salary due under this Section 7.4 (c) in a lump sum, discounted to reflect the present value of that salary over the Unexpired Term(as defined in section 7.5); 12 (d) Subject to Section 7.5 and except in the case of a termination Without Cause under Section 7.2(d), the Employee shall be entitled to receive all medical, hospital and dental coverage and benefits as would have been payable under Section 3.3 hereof through the Scheduled Termination Date, which amounts shall be paid as and when the same would have been payable under the Agreement had it not been terminated, and if the Employee is not entitled to participate in any such benefit plan under the terms thereof following the termination, then the Company shall provide the Employee with substantially identical coverage and benefits; (e) Subject to Section 7.5, if the Employee is participating in a Company bonus plan as of the date of termination, he shall be entitled to an accrued bonus through the date of termination, computed on a per diem basis based upon the bonus which would have otherwise been payable to the Employee for the fiscal year during which the date of termination falls had the Agreement not been terminated, computed on the same basis as in effect immediately prior to the date of termination, which bonus shall be paid as and when the same would have otherwise been payable under the bonus plan had the Agreement not been terminated; and (f) Except as provided in Article 11, this Agreement shall be of no further force or effect. 7.5 Mitigation and Offset. In the event of a termination of employment hereunder, the Employee shall be under no obligation to seek alternative employment or other gainful occupation during 13 the period from the termination of this Agreement through the Scheduled Termination Date (the "Unexpired Term") by way of mitigation of amounts payable to the Employee under this Article 7; provided, however, that, except in the case of Employee's Termination Without Cause under Section 7.2 (c), if the Employee provides, directly or indirectly (including through any personal service entity), any services (whether as employee, consultant, independent contractor or otherwise) to any person engaged in a business similar to the business of the Company as then conducted (a "Third Party") during the Unexpired Term, all amounts paid or payable to the Employee by or on behalf of such Third Party in respect thereof (exclusive of any fringe benefits, profit sharing and deferred compensation arrangements customarily offered to senior management of the Third Party) ("Offset Amounts") shall reduce any amounts payable thereafter by the Company to the Employee under Sections 7.4(c), (d) and (e) hereof on a dollar- for-dollar basis. Upon the request of the Company, from time to time, the Employee shall certify in writing to the Company all Offset Amounts received or receivable by him and shall provide the Company with true copies of all written agreements and a summary of the terms of all oral agreements pursuant to which such Offset Amounts are paid or payable to the Employee. 7.6 Full Settlement. The payments provided for in Article 7 of this Agreement are in full settlement of any claims the Employee may have against the Company arising out of his termination, including, but not limited to, any claims for 14 wrongful discharge; provided, however, that nothing herein shall limit any rights or obligations of the parties under any other agreement with the Company or any pension, severance, retirement, stock option, deferred compensation or other benefit plans of the Company which are applicable to the Employee and which provide for specified rights and obligations in the event of a termination of the Employee's employment with the Company. ARTICLE 8 Non-Competition And Non-Interference 8.1 Non-Competition. The Employee agrees that during the Term hereof and for a period of one year thereafter, except in the case of a Termination Without Cause, the Employee will not, directly, indirectly or as an agent on behalf of or in conjunction with any person, firm, partnership, corporation or other entity, own, manage, control, join, or participate in the ownership, management, operation, or control of, or be financially interested in or advise, lend money to, or be employed by or provide consulting services to, or be connected in any manner with (a) any supermarket, retail food store, grocery store, liquor store, warehouse store or any similar business located in market areas where the Company operates; or (b) any company, entity or business with which Company was in active negotiation for the purchase of a supermarket, retail food store, grocery store, liquor store or warehouse store at the time of termination of the Employee's 15 employment, or with any other company which shall acquire such supermarket, retail food store, grocery store, liquor store or warehouse store. The Employee acknowledges that the business of the Company is presently conducted throughout the counties in Florida listed on Exhibit A attached hereto and any county contiguous thereto and that such counties constitute the present market area of the Company. Ownership of less than 1% of the stock in a publicly-held company shall not be deemed a violation of this Section 8.1. 8.2 Non-Interference. The Employee agrees that during the Term hereof and for a period of one year thereafter, the Employee will not, directly, indirectly or as an agent on behalf of or in conjunction with any person, firm, partnership, corporation or other entity, induce or entice any employee of the Company to leave such employment or cause anyone else to do so. 8.3 Severability. If any covenant or provision contained in Section 8.1 is determined to be void or unenforceable in whole or in part, it shall not be deemed to affect or impair the validity of any other covenant or provision. The parties intend that the covenants contained in Section 8.1 shall be deemed to be a series of separate covenants, one for each county referenced therein. Except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant contained in such Section. If, in any arbitration or judicial proceeding, a court shall refuse to enforce all of the separate covenants deemed included in such Section, then such unenforceable 16 covenants shall be deemed eliminated from the provisions hereof for the purpose of such proceedings to the extent necessary to permit the remaining separate covenants to be enforced in such proceedings. ARTICLE 9 Remedies 9.1 Equitable Remedies. The Employee and the Company agree that the services to be rendered by the Employee pursuant to this Agreement, and the rights and interests granted and the obligations to be performed by the Employee to the Company pursuant to this Agreement, are of a special, unique, extraordinary and intellectual character, which gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in any action at law, and that a breach by the Employee of any of the terms of the Agreement will cause the Company great and irreparable injury and damage. In the event of a breach or threatened breach of Article 6, Section 8.1 or Section 8.2, the Employee hereby expressly agrees that the Company shall be entitled to the remedies of injunction, specific performance and other equitable relief to prevent a breach of the Agreement, both pendente lite and permanently, against the Employee, as such breach would cause irreparable injury to the Company and a remedy at law would be inadequate and insufficient. Therefore, the Company may, in addition to pursuing its other remedies, obtain an injunction from any court having jurisdiction in the matter restraining any further violation. The Employee 17 agrees that a bond in the amount of $5,000 shall be adequate security for issuance of any temporary injunction. The Company shall also be entitled to such damages as it can show it has sustained, directly or indirectly, by reason of said breach. 9.2 Rights and Remedies Preserved. Nothing in this Agreement except Sections 7.6 and 10.11 shall limit any right or remedy the Company or the Employee may have under this Agreement or pursuant to law for any breach of this Agreement by the other party. Except as set forth in Sections 7.6 and 10.11, the rights granted to the Company and the Employee herein are cumulative and the election of one shall not constitute a waiver of such party's right to assert all other legal remedies available under the circumstances. ARTICLE 10 Miscellaneous 10.1 No Waivers. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver of any such provision, nor prevent such party thereafter from enforcing such provision or any other provision of this Agreement. 10.2 Notices. Any notice to be given to the Company and the Employee under the terms of this Agreement may be delivered personally, by telecopy, telex or other form of written electronic transmission, or by registered or certified mail, postage prepaid, and shall be addressed as follows: 18 If to the Company: Ronald E. Johnson Chief Executive Officer Kash n' Karry Food Stores, Inc. 6422 Harney Road Tampa, Florida 33610 Telecopier: (813) 626-9550 With a copy to: Robert S. Bolt, Esq. Barnett, Bolt, Kirkwood & Long 601 Bayshore Boulevard Suite 700 Tampa, Florida 33606 Telecopier: (813) 251-6711 If to the Employee: Richard D. Coleman 5005 Garrick Court Tampa, FL 33624 Either party may hereafter notify the other in writing of any change in address. Any notice shall be deemed duly given (i) when personally delivered, or (ii) on the third day after it is mailed by registered or certified mail, postage prepaid, as provided herein. 10.3 Severability. The provisions of this Agreement are severable and if any provision of this Agreement shall be held to be invalid or otherwise unenforceable, in whole or in part, the remainder of the provisions, or enforceable parts thereof, shall not be affected thereby. 10.4 Successors and Assigns. The rights and obligations of the Company under this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company, including the survivor upon any merger, consolidation or 19 combination of the Company with any other entity. The Employee shall not have the right to assign, delegate or otherwise transfer any duty or obligation to be performed by him hereunder to any person or entity, nor to assign or transfer any rights hereunder. 10.5 Entire Agreement. With respect to the terms of Employee's employment, this Agreement supersedes all prior agreements and understandings between the parties hereto, oral or written, and may not be modified or terminated orally. No modification, termination or attempted waiver shall be valid unless in writing, signed by the party against whom such modification, termination or waiver is sought to be enforced. This Agreement was the subject of negotiation by the parties hereto and their counsel. The parties agree that no prior drafts of this Agreement shall be admissible as evidence (whether in any arbitration or court of law) in any proceeding which involves the interpretation of any provisions of this Agreement. 10.6 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Florida without reference to the conflict of law principles thereof. 10.7 Section Headings. The section headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of said sections. 10.8 Further Assurances. Each party hereto shall cooperate and shall take such further action and shall execute and deliver such further documents as may be reasonably requested by any other 20 party in order to carry out the provisions and purposes of this Agreement. 10.9 Gender. Whenever the pronouns "he" or "his" are used herein they shall also be deemed to mean "she" or "hers" or "it" or "its" whenever applicable. Words in the singular shall be read and construed as though in the plural and words in the plural shall be read and construed as though in the singular in all cases where they would so apply. 10.10 Counterparts. This Agreement may be executed in counterparts, all of which taken together shall be deemed one original. 10.11 Arbitration. The parties hereto agree that any dispute concerning or arising out of the provisions of the Agreement shall be resolved by arbitration in accordance with the rules of the American Arbitration Association. Such arbitration shall be held in Tampa, Florida and the decision of the arbitrator(s) shall be conclusive and binding on the parties and shall be enforceable by either party in any court of competent jurisdiction. The arbitrator may, in his or her discretion, award attorneys' fees and costs to such party as he or she sees fit in rendering his or her decision. Notwithstanding the foregoing, if any dispute arises hereunder as to which the Company desires to exercise any rights or remedies under Section 9.1 hereof, the Company may, in its discretion, in lieu of submitting the matter to arbitration, bring an action thereon in any court of competent jurisdiction in Hillsborough County, Florida, which court may 21 grant any and all relief available in equity or at law. In any such action, the prevailing party shall be entitled to reasonable attorneys' fees and costs as may be awarded by the court. ARTICLE 11 Survival 11.1 Survival. The provisions of Article 6, 8, 9 and 10, and Sections 7.3, 7.4, 7.5 and 7.6 of this Agreement shall survive the termination of this Agreement whether upon, or prior to, the Scheduled Termination Date hereof. IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first above written. KASH N' KARRY FOOD STORES, INC., a Delaware corporation /s/ Julie Hicks By: /s/ Ronald E. Johnson _________________________ __________________________ Name: Ronald E. Johnson /s/ BJ Mehaffey Title: Chairman, _________________________ President & CEO As to the Company /s/ Julie Hicks /s/ Richard D. Coleman _________________________ _______________________________ RICHARD D. COLEMAN /s/ BJ Mehaffey ______________________ As to the Employee rsb\KnK\Coleman employment agreement dated January 26, 1996 22 EX-10.22(B) 8 May 23, 1996 Personal and Confidential Mr. Richard D. Coleman Senior Vice President-Administration and CFO 5005 Garrick Court Tampa, FL 33624 Re: Employment Agreement Modification Dear Mr. Smith: I am pleased to advise you that the Compensation Committee of Kash N' Karry Food Stores, Inc., (the "Company") has determined to modify your employment agreement, dated as of January 26, 1996, with the Company (the "Employment Agreement") to provide enhanced base salary continuation protection in the event your employment with the Company is terminated Without Cause (as defined in Section 7.2 of the Employment Agreement) within one year after the occurrence of a change in ownership of the Company. Accordingly, the Employment Agreement, in accordance with Section 10.5 of the Employment Agreement, is hereby modified, effective as of May 1, 1996, as follows: 1. Section 2.1 of the Employment Agreement is hereby amended by adding thereto a new last sentence to read as follows: "Notwithstanding the above, if, prior to the Scheduled Termination Date, a Change in Control (as defined in Section 7.4 below); occurs the Term shall expire upon the later to occur of (i) the Scheduled Termination Date, and (ii) the first anniversary of the date on which any such Change of Control occurred (the "CIC Anniversary Date")." 2. Section 7.4(c) of the Employment Agreement is hereby deleted in its entirety and replaced with a new Section 7.4(c) to read as follows: "(c) Subject to Section 7.5 and except in the case of a termination Without Cause under Section 7.2(d), the Employee shall be entitled to receive all amounts of salary as would have been payable under Section 3.1 hereof through the Scheduled Termination Date (the "Salary Continuation Period"), which amounts shall be paid as and when the same would have been payable under the Agreement had it not been terminated; provided, however, that if there occurs within one year after the occurrence of a Change in Control (as defined below) a termination Without Cause (other than one under Section 7.2(d), the Salary Continuation Period shall not be less than one year from the date of termination;" 3. Section 7.4 of the Employment Agreement is hereby amended by adding a new paragraph at the end thereof to read as follows: For purposes of Section 7.4(c) above, (i)"Change in Control" shall mean and be deemed to have occurred if, after May 1, 1996, any Person (as defined below) becomes the beneficial owner (as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of (a) securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company in any transaction, including without limitation, any recapitalization, reorganization or bankruptcy proceeding) representing more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities, or (b) all or substantially all of the assets of the Company, and (ii) "Person" shall have the meaning ascribed thereto in Section 3(a)(9) of the Exchange Act, as modified, applied and used in Sections 13(d) and 14(d) thereof; provided, however, that a Person shall not include (A) the Company or any of its subsidiaries or any of the Original Stockholders (as defined in the Company's 1995 Key Employee Stock Option Plan), (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries (in its capacity as such), (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same character and proportions as their ownership of stock of the Company, or (E) any entity or individual acquiring securities or assets of the Company in connection with any bankruptcy proceeding. In addition, the Employee's employment (if in fact terminated) shall be deemed to have been terminated following a Change of Control by the Company Without Cause if the Employee's employment was terminated Without Cause within six months demonstrates that such termination, or the circumstance(s)or event(s) constituting such a termination, occurred (1) at the request of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control (or who has taken other steps reasonably calculated to effect a Change in Control) or (2) otherwise in connection with, as a direct result of or in anticipation of a Change in Control." 4. Section 7.5 of the Employment Agreement shall be amended by deleting the first sentence thereof and replacing it with a new first sentence to read as follows: "In the event of termination of employment hereunder, the Employee shall be under no obligation to seek alternative employment or other gainful occupation during the period from the termination of this Agreement through the later to occur of (a) the CIC Anniversary Date, and (b) the Scheduled Termination Date (the "Unexpired Term") by way of mitigation of amounts payable to the Employee under this Article 7; provided however, that, except in the case of Employee's Termination Without Cause under Section 7.2(c), if the Employee provides, directly or indirectly (including through any personal service entity), any services (whether as employee, consultant, independent contractor or otherwise) to any person engaged in a business similar to the business of the company as then conducted (a "Third Party") during the Unexpired Term, all amounts paid or payable to the Employee by or on behalf of such Third Party in respect thereof (exclusive of any fringe benefits, profit sharing and deferred compensation arrangement customarily offered to senior management of the Third Party) ("Offset Amounts") shall reduce any amounts payable thereafter by the Company to the Employee under Sections 7.4(c), (d) and (e) hereof on a dollar-for- dollar basis." 5. Except as expressly modified herein, the Employment Agreement shall remain in full force and effect in accordance with its terms and provisions as the same are set forth on the date hereof. Please indicate your acceptance of and agreement to the above modifications by dating and signing this modification agreement in the space provided below. KASH N' KARRY FOOD STORES, INC. By: /s/ Ronald Johnson ______________________________ Name: Ronald Johnson Title: Chief Executive Officer AGREED TO AND ACCEPTED: /s/ Richard D. Coleman ______________________ Mr. Richard D. Coleman Senior Vice President- Administration and CFO Date: May 23, 1996 EX-11 9 EXHIBIT 11 KASH N' KARRY FOOD STORES, INC. COMPUTATION OF EARNINGS PER COMMON SHARE PRIMARY FULLY DILUTED EARNINGS EARNINGS ---------- ---------- Thirteen Weeks Ended April 28, 1996: Net income $3,648,000 $3,648,000 ========== ========== Common shares outstanding at beginning of period 4,649,943 4,649,943 Stock option plans: Shares under option at end of period 252,243 252,243 Treasury shares which could be purchased (169,177) (169,177) ---------- ---------- Average number of shares outstanding 4,733,009 4,733,009 =========== =========== Income per share $0.77 $0.77 =========== =========== PRIMARY FULLY DILUTED EARNINGS EARNINGS ---------- ---------- Thirty-nine Weeks Ended April 28, 1996 Net income $2,993,000 $2,993,000 ========== ========== Common shares outstanding at beginning of period 4,649,943 4,649,943 Stock option plans: Shares under option at end of period 252,243 252,243 Treasury shares which could be purchased (157,311) (157,311) ----------- ----------- Average number of shares outstanding 4,744,875 4,744,875 =========== =========== Loss per share $ 0.63 $ 0.63 =========== =========== EX-21 10 EXHIBIT 21 KASH N' KARRY FOOD STORES, INC. SUBSIDIARIES SUBSIDIARY STATE OF ORGANIZATION - - - - - - - - - - - - - - - - - - - - - - - - - - - - KNK 702 DELAWARE BUSINESS TRUST DELAWARE KNK 886 DELAWARE BUSINESS TRUST DELAWARE KNK 891 DELAWARE BUSINESS TRUST DELAWARE EX-27 11
5 THIS SCHEDULE CONTAINS SUMMARY INFORMATION DERIVED FROM THE CONDENSED FINANCIAL STATEMENTS OF KASH N' KARRY FOOD STORES, INC. AS OF AND FOR THE PERIOD ENDED APRIL 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONDENSED FINANCIAL STATEMENTS. 1,000 9-MOS JUL-28-1996 JUL-31-1995 APR-28-1996 3,181 0 12,579 0 88,460 109,111 160,420 27,455 364,424 82,644 213,712 0 0 46 52,828 364,424 788,132 788,132 625,184 761,626 0 0 19,458 7,048 (4,055) 2,993 0 0 0 2,993 $0.63 $0.63
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