EXECUTION COPY
2000 SHAREHOLDERS' AGREEMENT
This 2000 Shareholders' Agreement ("Agreement"), dated
as of the 27th day of March, 2000, is among ETABLISSEMENTS
DELHAIZE FRERES ET CIE "LE LION" S.A., a Belgian corporation
("Delhaize"), DELHAIZE THE LION AMERICA, INC., a Delaware
corporation and wholly owned subsidiary of Delhaize
("Detla"), and DELHAIZE AMERICA, INC., a North Carolina
corporation (the "Company").
STATEMENT OF PURPOSE
Delhaize and Detla (hereinafter collectively referred
to as the "Shareholders") own, in the aggregate,
approximately 46.6% percent of the issued and outstanding
nonvoting Class A common stock, par value $.50 per share,
and 55.6% percent of the issued and outstanding voting Class
B common stock, par value $.50 per share, of the Company.
The Company recognizes the expertise and experience of the
Shareholders in the retail food business and desires to
ensure that the Company will continue to benefit from such
expertise and experience. The Company and the Shareholders
recognize the importance of retaining the current management
of the Company, and desire that management should continue
to have full responsibility for the day to day management of
the Company, subject to the authority of the Board of
Directors. The Shareholders and the Company recognize that
they have had a mutually beneficial relationship of long-
standing (in part by reason of the corporate governance
provisions of certain past agreements among the Shareholders
and other past and present management shareholders of the
Company) and believe that the continuation of such
relationship on a long-term basis is in the best interest of
the Company. The Shareholders and the Company further
recognize that provision must be made for the nomination of
independent and certain other directors. The Shareholders
and the Company desire to achieve their purposes by entering
into this Agreement relating to certain corporate governance
matters affecting the Company, including the voting of stock
or other securities of the Company now or hereafter owned by
the Shareholders.
AGREEMENT
l. Nomination and Election of Directors. Subject to
the fiduciary duties of directors under North Carolina law
or except as the Board of Directors of the Company by
Special Vote (as defined in Section 3 hereof) shall
otherwise direct:
(a) Simultaneously with the consummation of the
transactions contemplated by that certain Agreement and Plan
of Merger, dated as of August 17, 1999, by and between the
Company and Hannaford Bros. Co. (the "Merger Agreement"),
the Company's Board of Directors shall cause the bylaws of
the Company with respect to the Nominating Committee of the
Board of Directors to be consistent with the provisions set
forth in this paragraph 1. Subject to the consummation of
such transactions, the composition of the Nominating
Committee, the composition of each slate of directors to be
nominated and the other responsibilities of the Nominating
Committee shall be as set forth below:
(i) The Nominating Committee shall consist
of three directors, one of whom shall have been
designated by the Shareholders, one of whom shall be
the Chief Executive Officer of the Company (or his
designee from among the members of the Board of
Directors of the Company) and one of whom shall be an
independent director;
(ii) The slate of directors nominated by the
Nominating Committee shall consist of twelve (12)
persons, six (6) of whom shall have been proposed by
the Chief Executive Officer of Delhaize (hereinafter
the "Delhaize Designees"), two (2) of whom shall have
been proposed by the Chief Executive Officer of the
Company (hereinafter the "CEO Designees"), and four (4)
of whom shall be independent directors;
(iii) In the event that any director
ceases to be a director of the Company, then the
Nominating Committee shall nominate an appropriate
person to fill such vacancy, selected in the same
manner as the director who ceased being director.
Thus, in the event a Delhaize Designee ceases to be a
director, the vacancy left thereby shall be filled by a
new Delhaize Designee; in the event a CEO Designee
ceases to be a director, the vacancy left thereby shall
be filled by a new CEO Designee; and in the event an
independent director ceases to be a director, the
vacancy left thereby shall be filled by a new
independent director.
(iv) The Nominating Committee shall meet at
least once a year to determine the proposed slate of
directors to be submitted to the annual meeting of
shareholders for election. In addition, it shall meet
each time a meeting of the shareholders is called for
the purpose of electing one or more directors. It
shall also meet within thirty (30) days of notice of
any vacancy occurring in the Board of Directors to
nominate a director to fill such vacancy. It may
solicit the views of shareholders of the Company for
suggestions with regard to possible independent
directors. It will assess the independence of each
such candidate (which shall at a minimum require that
the candidate not be currently or previously employed,
nor currently paid as a consultant, by the Company or
its affiliates or officers or by either of the
Shareholders or their respective affiliates or
officers) and will consider any other potential for
conflict of interest of each such candidate. It will
determine the appropriate qualifications for
directorship and will evaluate candidates against the
requisite qualifications;
(v) The Nominating Committee shall recommend
its slate of directors or any individual nominee to the
Board of Directors of the Company. Approval of any
such nomination(s) by the Board of Directors shall be
by Special Vote. In the event that the Board of
Directors fails to approve a slate or any individual
nominee proposed by the Nominating Committee, the
Nominating Committee shall meet to propose another
slate, or nominee, as the case may be, acceptable to
the Board of Directors; and
(vi) Meetings of the Nominating Committee
shall be held at such place as may from time to time be
fixed by the Chairman thereof in the Notice of Meeting.
Any meeting may be held without notice if all members
are present or if notice is waived in writing either
before or after the meeting by those not present. Two
members of the Nominating Committee shall constitute a
quorum and all decisions of the Nominating Committee
shall require the affirmative vote of at least two
members. The Nominating Committee may take action
without a meeting upon unanimous written consent signed
by all members of the Nominating Committee. Meetings
of the Nominating Committee may be held by means of
conference telephone or similar communications
equipment and participation in such a meeting shall
constitute presence in person at such meeting.
(b) Notwithstanding any provision in this
paragraph 1 to the contrary, if at any time it is determined
that the composition of the Company's Board of Directors
does not comply with applicable corporate governance rules
contained in Section 3 of the New York Stock Exchange Listed
Company Manual or similar rules of any national securities
exchange or automated quotation system on which the
Company's securities may be listed (the "Requirement"), the
Nominating Committee shall meet to determine the action
necessary to comply with the Requirement and shall recommend
such action, including the nomination of an additional
director or additional directors and the removal of any
director or directors. The Board of Directors, by Special
Vote, shall take such actions as are necessary to comply
with the Requirement, but which to the extent possible shall
be consistent with the intentions of the parties as set
forth in this Agreement.
(c) In the event that the Merger Agreement is
terminated prior to consummation of the transactions
contemplated thereunder, the Company's Board of Directors
shall amend the bylaws of the Company with respect to the
Nominating Committee of the Board of Directors to be
consistent with the provisions set forth in this paragraph
1, except that the following provision shall be included in
lieu of paragraph 1(a)(ii) above: "The slate of directors
nominated by the Nominating Committee shall consist of ten
(10) persons, four (4) of whom shall have been proposed by
the Chief Executive Officer of Delhaize (hereinafter the
"Delhaize Designees"), two (2) of whom shall have been
proposed by the Chief Executive Officer of the Company
(hereinafter the "CEO Designees"), and four (4) of whom
shall be independent directors";
2. Voting Agreement. At each election of directors
of the Company, the Shareholders shall vote their voting
shares as follows:
(i) In the event cumulative voting is not in
effect for such election, to elect the slate of
directors proposed by the Nominating Committee and
approved by the Board of Directors; and
(ii) In the event cumulative voting is in effect for such
election of directors, first, to the extent necessary, to
elect the Delhaize Designees and thereafter to retain or
remove any such Delhaize Designees as the Shareholders shall
direct; second, to the extent possible, to elect the CEO
Designees and thereafter to retain or remove any such CEO
Designees as the CEO shall direct; and third, to the extent
possible, to elect the independent directors nominated by
the Nominating Committee and thereafter to retain or remove
any such independent directors as the Nominating Committee
shall direct. The Shareholders agree not to participate,
directly or indirectly, in any effort to cause cumulative
voting to be in effect for any election of directors of the
Company.
3. Bylaws.
(a) During the term of the Agreement, the
Company's bylaws shall provide that the Board of
Directors may not, without an affirmative vote of at
least 70 percent of the directors ("Special Vote"):
(A) Approve the nomination of any
person or persons for election to the Board of
Directors or elect a chief executive officer;
(B) Authorize any contract involving
payment by the Company of cash or property valued in
excess of $500,000, including, without limitation, the
purchase, sale or leasing of property or the incurring
of indebtedness, except transactions relating to the
leasing or construction of stores, warehouses and
related facilities or any other transaction in the
ordinary course of business;
(C) Approve or authorize capital
expenditures of more than $500,000 in any one instance
or $1,000,000 in the aggregate in any fiscal year,
except expenditures relating to the leasing or
construction of stores, warehouses and related
facilities or any other transaction in the ordinary
course of business;
(D) Authorize the issuance or sale of
stock or other securities of the Company or any
subsidiary of the Company, or options or warrants for
or obligations convertible into such stock or
securities, except the issuance of stock options or
stock or both, as the case may be, pursuant to the
Company's 1996 Employee Stock Incentive Plan (and, upon
adoption, the Company' 2000 Stock Incentive Plan),
Employee Stock Purchase Plan and Employee Stock
Ownership Plan and other employee benefit plans
approved by the Board of Directors;
(E) Sell or otherwise dispose of a
substantial part of the Company's assets other than in
the ordinary course of business;
(F) Amend the charter or the bylaws of
the Company; or
(G) Approve for submission to the
shareholders of the Company for their approval a
proposal for the amendment of the Company's charter or
the merger or consolidation of the Company with or into
any other corporation or the reorganization,
recapitalization or liquidation of the Company;
provided, that any Special Vote approving any action
set forth in this paragraph 3(a) may specify other
limitations which shall not be exceeded without a
further Special Vote.
(b) The parties acknowledge that the
provisions of subparagraphs 3(a)(B), (C), (E), (F) and
(G) are currently set forth in the bylaws of the
Company. Subparagraphs 3(a)(A) and 3(a)(D) shall be
submitted to the shareholders of the Company at the
next annual meeting of the shareholders for approval in
accordance with the requirements of North Carolina law
as an amendment to, and restatement of, Article 4,
Sections 6(a) and (d), respectively, of the bylaws of
the Company, and shall not be effective until such
approval is granted. The Shareholders shall vote each
share of common stock of the Company beneficially owned
by them in favor of such approval. Until such time as
such amendment and restatement of the bylaws is
approved by the requisite shareholder vote of the
Company, the current provisions of such sections in the
bylaws shall remain in full force and effect.
4. Term. This Agreement shall be effective for a
term commencing on the date hereof and ending April 30,
2007; provided that this Agreement shall terminate in the
event that the Shareholders' aggregate ownership of voting
shares of the Company shall be reduced to less than 10% of
the aggregate outstanding voting shares of the Company.
5. Binding Nature. This Agreement shall be binding
upon and shall inure to the benefit of the Company, Delhaize
and Detla and their respective successors and assigns until
the expiration of the term of this Agreement. Any successor
(whether direct or indirect by purchase, merger,
consolidation or otherwise) to all or substantially all of
the business and/or assets of Delhaize, Detla or the Company
shall expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the
respective parties would be required to perform it if no
such succession had taken place.
6. Assignment. Neither this Agreement nor any rights
hereunder may be assigned without the prior written consent
of the other parties hereto and prior to any assignment the
assignee must agree in writing to be bound by the terms and
conditions of this Agreement.
7. Governing Law. This Agreement shall be construed
in accordance with the laws of the State of North Carolina
applicable to contracts made and to be performed entirely
within such state.
8. Amendment. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended only by
a written instrument executed by the parties hereto and, in
the case of the Company, approved by a Special Vote of its
Board of Directors.
9. Notices. Any notice or communication given
pursuant hereto by any of the parties hereto to the other
parties shall be in writing and personally delivered or
mailed by registered or certified mail or by telegraphic
means as follows:
If to Delhaize:
Etablissements Delhaize
Freres et Cie "Le Lion" X.X.
xxx Xxxxxxxx, 00
0000 Xxxxxxxx, Xxxxxxx
With a copy to:
Xxxx X. Xxxx III, Esq.
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Detla:
Delhaize The Lion America, Inc.
Xxxxx 0000
Xxxxxxx Xxxxx
000 Xxxx Xxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
With a copy to:
Xxxx X. Xxxx III, Esq.
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Company:
Delhaize America, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
With a copy to:
Xxxxxxx X. Xxxxx, Xx.
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxx Xxxxxxxxx Xxx., X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
or to such other address as hereafter shall be furnished in
writing by any Shareholder to the other Shareholders.
10. Entire Agreement. This Agreement sets forth the
entire understanding and agreement among the parties hereto
with respect to the subject matter hereof and supersedes all
prior agreements, arrangements and understandings, written
or oral, relating to the subject matter hereof, including
but not limited to the 1994 Shareholders' Agreement, dated
as of September 15, 1994, by and among Delhaize, Detla, and
the Company, which 1994 Shareholders' Agreement is hereby
terminated.
11. No Employment. Nothing contained in this
Agreement shall be construed to constitute an employment
agreement with regard to any person.
12. Headings. The headings in the Agreement are
solely for convenience of reference and shall be given no
effect in the construction or interpretation of this
Agreement.
13. Severability. If any provision of this Agreement
is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the balance of this Agreement shall
remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby.
14. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which
shall be deemed an original, but all of such together shall
constitute one and the same instrument.
[The next page is the signature page]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date
first above written.
ETABLISSEMENTS DELHAIZE FRERES
ET CIE "LE LION" S.A.
By: Gui de Vaucleroy
By: Xxxxxx-Xxxxxxx Xxxxxxx
DELHAIZE THE LION AMERICA, INC.
By: Xxxxxx-Xxxxxxx Xxxxxxx
Its:
DELHAIZE AMERICA, INC.
By: R.Xxxxxxx XxXxxxxxx
Its:
