STOCKHOLDERS AGREEMENT
AGREEMENT dated October 31, 1996, among FOOD LION, INC., a
corporation organized under the laws of North Carolina ("Parent"),
KK ACQUISITION CORP., a Delaware corporation and an indirect wholly
owned subsidiary of Parent ("Sub"), KASH N' ▇▇▇▇▇ FOOD STORES,
INC., a Delaware corporation (the "Company"), and the other parties
signatory hereto (individually a "Stockholder" and collectively,
the "Stockholders").
WITNESSETH:
WHEREAS, concurrently herewith, Parent, Sub and the Company,
are entering into an Agreement and Plan of Merger (as such
agreement may hereafter be amended from time to time, the "Merger
Agreement"), pursuant to which Sub will be merged with and into the
Company (the "Merger"); and
WHEREAS, as an inducement and a condition to entering into the
Merger Agreement, Parent has required that the Company and
Stockholders agree, and the Company and Stockholders have agreed,
to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual premises, representations, warranties, covenants and
agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Definitions. For purposes of this Agreement:
1.1 "Company Common Stock" shall mean at any time the
Common Stock, $.01 par value, of the Company.
1.2 "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization, limited liability company or other entity.
1.3 Capitalized terms used and not defined herein have
the respective meanings ascribed to them in the Merger Agreement.
2. Provisions Concerning Company Common Stock. Each
Stockholder hereby agrees that, during the period commencing on the
date hereof and continuing until the first to occur of the
Effective Time or termination of this Agreement, at any meeting of
the holders of Company Common Stock, however called, or in
connection with any written consent of the holders of Company
Common Stock, such Stockholder shall vote (or cause to be voted)
the number of shares of Company Common Stock (collectively with the
associated Company Rights, the "Shares") set forth opposite such
Stockholder's name on Schedule 1 hereto (collectively with the
associated Company Rights, the "Existing Shares") and any Shares
acquired by such Stockholder after the date hereof (collectively
with the Existing Shares, the "Option Shares"): (i) in favor of the
Merger, the execution and delivery by the Company of the Merger
Agreement and the approval of the terms thereof and each of the
other actions contemplated by the Merger Agreement and this
Agreement and any actions required in furtherance thereof and
hereof; (ii) against any action, any failure to act, or agreement
that would result in a breach in any respect of any covenant,
representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement or this Agreement (before
giving effect to any materiality or similar qualifications
contained therein); and (iii) except as otherwise agreed to in
writing in advance by Parent, against the following actions (other
than the Merger and the transactions contemplated by the Merger
Agreement): (A) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the
Company or its Subsidiaries; (B) a sale, lease or transfer of a
material amount of assets of the Company or its Subsidiaries, or a
reorganization, recapitalization, dissolution or liquidation of the
Company or its Subsidiaries; (C) (1) any change in a majority of
the persons who constitute the board of directors of the Company;
(2) any change in the present capitalization of the Company or any
amendment of the Company's Certificate of Incorporation or Bylaws;
(3) any other material change in the Company's corporate structure
or business; or (4) any other action involving the Company or its
Subsidiaries which is intended, or could reasonably be expected, to
impede, interfere with, delay, postpone, or materially adversely
affect the Merger and the transactions contemplated by this
Agreement and the Merger Agreement. Each Stockholder agrees that
it shall not enter into any agreement or understanding with any
person or entity the effect of which would be to violate the
provisions and agreements contained in this Section 2.
3. Purchase Right.
3.1 Option Shares. In order to induce Parent and Sub
to enter into the Merger Agreement, each Stockholder hereby grants
to Sub an irrevocable option (the "Stock Option") to purchase the
Option Shares at a cash purchase price per share equal to $26.00 or
such higher price as is paid by Sub for Shares in the Offer, the
Merger or otherwise (other than pursuant to Section 3.01(d) of the
Merger Agreement and other than in the settlement or other
resolution of litigation) (the "Purchase Price"). The Stock
Options shall become exercisable, in whole but not in part as to
all then outstanding Stock Options, when all waiting periods under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), required for the purchase of the Option
Shares upon such exercise shall have expired or been waived, unless
there shall then be in effect any preliminary or final injunction
or other order issued by any court or governmental, administrative
or regulatory agency or authority prohibiting the exercise of the
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Stock Option pursuant to this Agreement, and shall remain
exercisable, in whole but not in part as to all then outstanding
Stock Options, until termination of this Agreement in accordance
with Section 8.15 hereof. In the event that Sub wishes to exercise
the Stock Options, Sub shall send a written notice (the "Notice")
to the Stockholders identifying the place for the closing of such
purchase (the "Closing") at least three (3) but not more than five
(5) business days prior to the Closing.
3.2 Payment of Purchase Price. The payment of the
Purchase Price shall be made by wire transfer in immediately
available funds on the date of Closing; provided, however, that, in
the event the Purchase Price is increased pursuant to Section 3.1
to more than $26.00 per Share, the amount of such increase per
Share shall be paid to each Stockholder in immediately available
funds within one business day after the Effective Time.
4. Other Covenants, Representations and Warranties. Each
Stockholder hereby represents and warrants to Parent with respect
to such Stockholder as follows:
4.1 Ownership of Shares. Stockholder is the record or
beneficial owner of the number of Shares set forth opposite such
Stockholder's name on Schedule I hereto. On the date hereof, the
Existing Shares set forth opposite such Stockholder's name on
Schedule I hereto constitute all of the Shares owned of record by
such Stockholder. Stockholder has sole voting power and sole power
to issue instructions with respect to the matters set forth in this
Agreement and the Proxy (as defined below), sole power of
disposition, sole power of conversion, sole power to demand
appraisal rights and sole power to agree to all of the matters set
forth in this Agreement and Proxy, in each case with respect to all
of the Existing Shares set forth opposite Stockholder's name on
Schedule I hereto, with no limitations, qualifications or
restrictions on such rights, subject to applicable securities laws
and the terms of this Agreement and the Proxy. Following the date
hereof, Stockholder will cooperate with Parent and use its
reasonable best efforts as soon as possible to become the record
owner of any Shares referred to on Schedule I hereto as to which
Stockholder is the beneficial owner and to cause certificates
representing the Shares to be affixed with a legend reasonably
satisfactory to Parent referencing this Agreement and the
Stockholder's obligations hereunder.
4.2 Power; Binding Agreement. Stockholder has the
legal capacity, power and authority to enter into and perform all
of Stockholder's obligations under this Agreement and the Proxy.
The execution, delivery and performance of this Agreement and the
Proxy have been duly authorized by such Stockholder and do not and
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will not violate any other agreement to which Stockholder is a
party including, without limitation, any voting agreement,
stockholders agreement or voting trust. This Agreement and the
Proxy have been duly and validly executed and delivered by
Stockholder and constitute valid and binding agreements of such
Stockholder, enforceable against such Stockholder in accordance
with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and
by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
There is no beneficiary or holder of a voting trust certificate or
other interest of any trust of which Stockholder is trustee whose
consent is required for the execution and delivery of this
Agreement, the Proxy or the consummation by the Stockholder of the
transactions contemplated hereby and thereby.
4.3 No Conflicts. Except for filings under the HSR
Act, the Exchange Act and any applicable state antitrust laws (i)
no filing with, and no permit, authorization, consent or approval
of, any state or federal public body or authority or any other
person is necessary for the execution of this Agreement and the
Proxy by Stockholder and the consummation by Stockholder of the
transactions contemplated hereby and thereby and (ii) none of the
execution and delivery of this Agreement and the Proxy by
Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby and thereby or compliance by
Stockholder with any of the provisions hereof or thereof shall (A)
conflict with or result in any breach of any applicable
organizational documents applicable to Stockholder, (B) result in
a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party
right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or
obligation of any kind to which Stockholder is a party or by which
such Stockholder or any of such Stockholder's properties or assets
may be bound, or (C) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to
Stockholder or any of Stockholder's properties or assets.
4.4 No Encumbrances. Except pursuant to this
Agreement and the Proxy, Stockholder's Shares and the certificates
representing such Shares are now, and at all times during the term
hereof will be, held by such Stockholder, or by a nominee or
custodian for the benefit of such Stockholder, free and clear of
all Liens, hypothecations, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, except for any such encumbrances or
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proxies arising hereunder. The transfer by Stockholder of its
Shares to Sub in the Offer or otherwise hereunder shall pass to and
unconditionally vest in Sub good and valid title to the number of
Shares to be transferred by Stockholder thereunder or hereunder,
free and clear of all claims, Liens, restrictions, security
interests, pledges, hypothecations, limitations and encumbrances
whatsoever.
4.5 No Solicitation. Until the earlier of the
Effective Time or termination of this Agreement in accordance with
its terms, Stockholder shall not, in its capacity as such, directly
or indirectly, solicit (including by way of furnishing information)
or respond to any inquires or the making of any proposal by any
person or entity, or enter into any negotiations, agreements or
understandings with any Person (other than Parent, Sub or a person
designated by Parent) with respect to the Company that constitutes
an Alternative Proposal. If Stockholder receives any such inquiry
or proposal, then Stockholder shall promptly inform Parent of the
existence thereof.
4.6 Restriction on Transfer, Proxies and
Non-Interference. Beginning on the date hereof and ending on the
earlier of the Effective Time or termination of this Agreement,
except as required to comply with the provisions of this Agreement
or the Proxy, the Stockholder shall not (i) directly or indirectly,
offer for sale, sell, transfer, tender, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to or consent to the
offer for sale, sale, transfer, tender, pledge, encumbrance,
assignment or other disposition of, any or all of such
Stockholder's Shares or any interest therein; (ii) grant any
proxies or powers of attorney, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any shares;
or (iii) take any action that would make any representation or
warranty of such Stockholder contained herein untrue or incorrect
or have the effect of preventing or disabling Stockholder from
performing Stockholder's obligations under this Agreement or the
Proxy. Notwithstanding the foregoing, any Stockholder may sell
such Stockholder's Shares in a privately-negotiated transaction to
any person who, as a condition to such purchase, (i) becomes a
party to this Agreement with the same effect as though an original
signatory hereto by a written instrument in form and substance
satisfactory to Parent and (ii) delivers to Parent a Proxy (as
defined in Section 8.18) with respect to such Shares.
4.7 Waiver of Appraisal Rights. Stockholder hereby
waives any rights of appraisal or rights to dissent from the Merger
that Stockholder may have.
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4.8 Reliance by Parent. Stockholder understands and
acknowledges that Parent is entering into, and causing Sub to enter
into, the Merger Agreement in reliance upon Stockholder's execution
and delivery of this Agreement and the Proxy.
4.9 Further Assurances. From time to time, at any
other party's request and without further consideration, each party
hereto shall execute and deliver such additional documents and take
all such further lawful action as may be reasonably necessary or
desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement
and the Proxy.
4.10 No Finder's Fees. Other than existing financial
advisory and investment banking arrangements and agreements entered
into by the Company, no broker, investment banker, financial
adviser or other person is entitled to any broker's, finder's,
financial adviser's or other similar fee or commission in
connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of such Stockholder.
5. Tender of Shares.
5.1 Tender Requirement. Each Stockholder hereby
agrees to validly tender (and not to withdraw) pursuant to and in
accordance with the terms of the Offer (provided that the Offer is
commenced and not amended in a manner adverse to Stockholder), not
later than the tenth business day after commencement of the Offer
pursuant to Section 10.1 of the Merger Agreement and Rule 14d-2
under the Exchange Act, the Option Shares owned by it. Each
Stockholder hereby acknowledges and agrees that the obligation of
Parent or Sub to accept for payment and pay for Company Common
Stock in the Offer, including the Shares, is subject to the terms
and conditions of the Offer. Each Stockholder shall be entitled to
receive the highest price paid by Sub pursuant to the Offer, the
Merger or otherwise (other than pursuant to Section 3.01(d) of the
Merger Agreement and other than in the settlement or other
resolution of litigation).
5.2 Permission to Disclose. Each Stockholder hereby
agrees to permit Parent and Sub to publish and disclose in any
documents filed with any Governmental or Regulatory Authority in
connection with the Merger, including, if Company Stockholders'
Approval is required under applicable law, the Proxy Statement
(including all documents and schedules filed with the SEC), its
identity and ownership of Company Common Stock and the nature of
its commitments, arrangements and understandings under this
Agreement.
6. Stop Transfer; Changes in Shares. Each Stockholder
agrees with, and covenants to, Parent that beginning on the date
hereof and ending on the date of termination of the Agreement, such
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Stockholder shall not request that the Company, and the Company
hereby agrees with, and covenants to, Parent that beginning on the
date hereof and ending on the date of termination of this Agreement
it will not, register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of such
Stockholder's Shares, unless such transfer is made in compliance
with this Agreement. In the event of a dividend or distribution,
or any change in the Company Common Stock by reason of any
dividend, split-up, recapitalization, combination, exchange of
shares or the like, the term "Shares" shall be deemed to refer to
and include the Shares as well as all such dividends and
distributions and any shares into which or for which any or all of
the Shares may be changed or exchanged and the Purchase Price shall
be appropriately adjusted.
7. Conduct as a Director. Notwithstanding anything in this
Agreement to the contrary, the covenants and agreements set forth
herein shall not prevent any of the Stockholders' designees serving
on the Company's Board of Directors from taking any action, subject
to the applicable provisions of the Merger Agreement, while acting
in such designee's capacity as a director of the Company; provided
that, such action shall not in any manner affect Stockholder's
obligations under this Agreement or the Proxy.
8. Miscellaneous.
8.1 Entire Agreement. This Agreement, the Proxy and
the Merger Agreement constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all
other prior agreements and understandings, both written and oral,
among any of the parties with respect to the subject matter hereof.
8.2 Certain Events. Each Stockholder agrees that this
Agreement and the Proxy and the obligations hereunder and
thereunder shall attach to such Stockholder's Shares and shall be
binding upon any person or entity to which legal or beneficial
ownership of such Shares shall pass, whether by operation of law or
otherwise, including, without limitation, such Stockholder's heirs,
guardians, administrators or successors. Notwithstanding any
transfer of Shares, the transferor shall remain liable for the
performance of all obligations of the transferor under this
Agreement.
8.3 Assignment. This Agreement shall not be assigned
without the prior written consent of the other parties hereto and
no rights, or any direct or indirect interest herein, shall be
transferable hereunder without the prior written consent of the
other parties hereto; provided, that, Parent and Sub may assign or
transfer their rights hereunder to any wholly-owned subsidiary of
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Parent, which assignment shall not relieve Parent or Sub of any of
their respective obligations hereunder.
8.4 Amendments, Waivers, Etc.. This Agreement may not
be amended, changed, supplemented, waived or otherwise modified or
terminated, except upon the execution and delivery of a written
agreement executed by the parties to be bound thereby.
8.5 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly received if so given)
by hand delivery, telegram, telex or telecopy, or by mail
(registered or certified mail, postage prepaid, return receipt
requested) or by any courier services, such as Federal Express,
providing proof of delivery. All communications hereunder shall be
delivered to the respective parties at the following addresses:
If to Stockholders: At the addresses set forth on Schedule
1 hereto
with a copy to: Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Parent or Sub: Food Lion, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Akin, Gump, Strauss, ▇▇▇▇▇
& ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., P.C.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may
have previously furnished to the others in writing in the manner
set forth above.
8.6 Severability. Whenever possible, each provision or
portion of any provision of this Agreement and the Proxy will be
interpreted in such manner as to be effective and valid under
applicable law but if any provision or portion of any provision of
this Agreement or the Proxy is held to be invalid, illegal or
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unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability
will not affect any other provision or portion of any provision in
such jurisdiction, and this Agreement and the Proxy will be
reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.
8.7 Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or
agreements contained in this Agreement or the Proxy will cause the
other parties to sustain damages for which it would not have an
adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the
aggrieved parties shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and
other equitable relief in addition to any other remedy to which
they may be entitled, at law or in equity.
8.8 Remedies Cumulative. All rights, powers and
remedies provided under this Agreement or the Proxy or otherwise
available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
8.9 No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this Agreement
or the Proxy or otherwise available in respect hereof at law or in
equity, or to insist upon compliance by any other party hereto with
its obligations hereunder or thereunder, and any custom or practice
of the parties at variance with the terms hereof or thereof, shall
not constitute a waiver by such party of its right to exercise any
such or other right, power or remedy or to demand such compliance.
8.10 No Third Party Beneficiaries. This Agreement is
not intended to be for the benefit of, and shall not be enforceable
by, any person or entity who or which is not a party hereto.
8.11 Governing Law. This Agreement and the Proxy shall
be governed and construed in accordance with the laws of the State
of Delaware, without giving effect to the principles of conflicts
of law thereof.
8.12 Jurisdiction. Each party hereby irrevocably
submits to the exclusive jurisdiction of the United States District
Court for the District of Delaware or any court of the State of
Delaware located in the City of Wilmington in any action, suit or
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proceeding arising in connection with this Agreement or the Proxy,
and agrees that any such action, suit or proceeding shall be
brought only in such court (and waives any objection based on forum
non conveniens or any other objection to venue therein); provided,
however, that such consent to jurisdiction is solely for the
purpose referred to in this Section 8.12 and shall not be deemed to
be a general submission to the jurisdiction of said Courts or in
the State of Delaware other than for such purposes.
8.13 Descriptive Headings. The descriptive headings
used herein are inserted for convenience of reference only and are
not intended to be part of or to affect the meaning or
interpretation of this Agreement.
8.14 Counterparts; Effectiveness. This Agreement may be
executed in counterparts, each of which shall be deemed to be an
original, but all of which, taken together, shall constitute one
and the same Agreement. Notwithstanding the foregoing, this
Agreement shall not be effective as to any Stockholder until
executed by all Stockholders.
8.15 Termination. This Agreement may be terminated, and
the transactions contemplated hereby may be abandoned, by any
Stockholder at any time prior to the exercise of the Stock Option
as to such Stockholder's Option Shares (such date being referred to
herein as the "Termination Date"):
8.15.1 At any time after the Merger Agreement is
terminated in accordance with its terms by the Company due to the
material breach of any representation, warranty, covenant or
agreement on the part of Parent or Sub set forth in the Merger
Agreement; or
8.15.2 At any time after the earlier of (x) 5:00
p.m. Eastern Time on the date which is five (5) business days after
the date of termination of the Merger Agreement for any reason not
specified in Section 8.15.1 above and (y) 5:00 p.m. Eastern Time on
March 7, 1997.
8.16 Obligation to Effect Merger. If the Closing occurs
and the Merger Agreement is terminated other than due to a breach
of any representation, warranty, covenant or agreement on the part
of the Company set forth in the Merger Agreement or the failure to
satisfy any of the conditions set forth in Article VIII or Section
10.02 of the Merger Agreement, then Parent and Sub shall use
commercially reasonable efforts to effect the Merger at a price per
Share equal to the Merger Price as soon as reasonably practicable.
8.17 Certification. Each Stockholder hereby agrees that
its Option Shares, whether now owned or hereafter acquired, shall
be certificated by the Company, and that the Company shall place
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the following legend on any certificate representing its Option
Shares:
"Transfer and Voting of the Securities
represented by this Certificate are subject to
restrictions set forth in a Stockholders
Agreement dated October 31, 1996, a copy of
which may be obtained from the Company at its
principal executive offices."
8.18 Irrevocable Proxy. Each Stockholder acknowledges
that, concurrently with the execution of this Agreement, it has
executed and delivered to Parent an Irrevocable Proxy, the form of
which is attached hereto as Exhibit A hereto (the "Proxy").
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
FOOD LION, INC. KK ACQUISITION CORP. KASH N' ▇▇▇▇▇ FOOD
STORES, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇ By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------- ------------------ ---------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President/Chief Title: President/Chief Title: President/Chief
Executive Officer Executive Officer Executive Officer
STOCKHOLDERS
BANKAMERICA CAPITAL CITICORP NORTH AMERICA, LANDMARK EQUITY
CORPORATION INC. PARTNERS III, L.P.
By: Landmark Partners
III, L.P., its
general partner
By: Landmark Advisors,
Inc., its general
partner
By:/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------- ----------------------- ---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director Title: Vice President Title: Vice President
LANDMARK EQUITY PRUDENTIAL PROPERTY & PAINEWEBBER CAPITAL
PARTNERS IV, L.P. CASUALTY COMPANY INC.
By: Landmark Partners
IV, L.P., its By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇
general partner ------------------ ------------------
By: Landmark Advisors, Name: ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇
Inc., its general Title: Managing Director Title: President
partner
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
UBS CAPITAL LLC HIGH YIELD PORTFOLIO IDS BOND FUND, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------- ---------------------- ---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director Title: Vice President- Title: Vice President-
Investments Investments
IDS LIFE INCOME THE PRUDENTIAL PRUCO LIFE INSURANCE
ADVANTAGE FUND INSURANCE COMPANY OF COMPANY
AMERICA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------- -------------------- --------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President- Title: Vice President Title: Assistant Vice
Investments President
▇▇▇▇▇, FARGO & COMPANY THE PRUDENTIAL PRUCO LIFE INSURANCE
INSURANCE COMPANY OF COMPANY OF ARIZONA
AMERICA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------ ------------------ ------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: SVP-Treasurer Title: Managing Director Title: Managing Director
SCHEDULE 1 TO
STOCKHOLDERS AGREEMENT
Name and Address
of Stockholder Number of Shares Owned
----------------------------------- ----------------------
BankAmerica Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 129,988
Citicorp North America, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 145,076
Landmark Equity Partners
III, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 174,091
Landmark Equity Partners
IV, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 9,285
The Prudential Insurance Company
of America
Two Gateway Center
Floor 7
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 585,904
Prudential Property & Casualty Company
c/o The Prudential Insurance Company
of America
Two Gateway Center
Floor 7
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 27,855
Pruco Life Insurance Company of Arizona
c/o The Prudential Insurance Company
of America
Two Gateway Center
Floor 7
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 14,869
-13-
Name and Address
of Stockholder Number of Shares Owned
------------------------------------ ----------------------
PaineWebber Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 533,601
UBS Capital LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 145,076
High Yield Portfolio
c/o American Express Financial
Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ 822,430
IDS Bond Fund, Inc.
c/o American Express Financial
Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ 149,570
IDS Life Advantage Fund
c/o American Express Financial
Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ 20,000
The Prudential Insurance
Company of America
c/o Prudential Capital Group -
Corporates
Four ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 220,515
Pruco Life Insurance Company
c/o Prudential Capital Group -
Corporates
Four ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 11,606
▇▇▇▇▇, Fargo & Company
MAC 0195-171
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 145,076
-14-
EXHIBIT A
to Stockholders Agreement
IRREVOCABLE PROXY
The undersigned stockholder of Kash n' ▇▇▇▇▇ Food Stores,
Inc., a Delaware corporation (the "Company"), hereby irrevocably
(to the fullest extent provided by law, but subject to automatic
termination and revocation as provided below) appoints KK
Acquisition Corp., a Delaware corporation (the "Sub"), the attorney
and proxy of the undersigned, with full power of substitution and
resubstitution, to the full extent of the undersigned's rights with
respect to the shares of capital stock of the Company owned
beneficially or of record by the undersigned, which shares are
listed on the final page of this Proxy, and any and all other
shares or securities of the Company issued or issuable with respect
thereof or otherwise acquired by stockholder on or after the date
hereof, until the termination date specified in the Stockholders
Agreement referred to below (the "Shares"). Upon the execution
hereof, all prior proxies given by the undersigned with respect to
the Shares are hereby revoked and no subsequent proxies will be
given as to the matters covered hereby prior to the date of
termination of the Stockholders Agreement (the "Termination Date").
This proxy is irrevocable (to the fullest extent provided by law,
but subject to automatic termination and revocation as provided
below), coupled with an interest, and is granted in connection with
the Stockholders Agreement, dated as of October 31, 1996, among the
Company, Food Lion, Inc., a North Carolina corporation ("Parent"),
Sub and the Stockholders party thereto, including the undersigned
stockholder (the "Stockholders Agreement", capitalized terms not
otherwise defined herein being used herein as therein defined), and
is granted in consideration of the Company entering into the Merger
Agreement referred to therein.
The attorney and proxy named above will be empowered at any
time prior to the Termination Date to exercise all voting and other
rights with respect to the Shares (including, without limitation,
the power to execute and deliver written consents with respect to
the Shares) of the undersigned at every annual, special or
adjourned meeting of shareholders of the Company and in every
written consent in lieu of such a meeting, or otherwise: (i) in
favor of the Merger, the execution and delivery by the Company of
the Merger Agreement and the approval of the terms thereof and the
Stockholders Agreement and each of the other actions contemplated
by the Merger Agreement and the Stockholders Agreement and any
actions required in furtherance thereof; (ii) against any action,
any failure to act, or agreement that would result in a breach in
any respect of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger
Agreement or the Stockholders Agreement (before giving effect to
A-1
any materiality or similar qualifications contained therein); and
(iii) against the following actions (other than the Merger and the
transactions contemplated by the Merger Agreement): (A) any
extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company
or its Subsidiaries; (B) a sale, lease or transfer of a material
amount of assets of the Company or its Subsidiaries, or a
reorganization, recapitalization, dissolution or liquidation of the
Company or its Subsidiaries; (C) (1) any change in a majority of
the persons who constitute the board of directors of the Company;
(2) any change in the present capitalization of the Company or any
amendment of the Company's Certificate of Incorporation or Bylaws;
(3) any other material change in the Company's corporate structure
or business; or (4) any other action involving the Company or its
Subsidiaries which is intended, or could reasonably be expected, to
impede, interfere with, delay, postpone, or materially adversely
affect the Merger and the transactions contemplated by this
Agreement and the Merger Agreement.
The attorney and proxy named above may only exercise this
proxy to vote the Shares subject hereto in accordance with the
preceding paragraph, and may not exercise this proxy in respect of
any other matter. The undersigned shareholder may vote the Shares
(or grant one or more proxies to vote the Shares) on all other
matters.
Any obligation of the undersigned hereunder shall be binding
upon the successors and assigns of the undersigned.
This proxy is irrevocable, but shall automatically terminate
and be revoked and be of no further force and effect on and after
the Termination Date.
Dated: October 31, 1996 STOCKHOLDER
By:_______________________
Name:_____________________
Title:____________________
Shares Owned:___________________
A-2