SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended: September 10, 1994
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______ to ______
Commission file No.: 33-48862
HOMELAND HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 73-1311075
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 N.E. 36th Street
Oklahoma City, Oklahoma 73125
(Address of principal executive offices) (Zip Code)
(405) 557-5500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of October 21, 1994.
Class A Common Stock, including redeemable common stock: 34,743,200 shares
Class B Common Stock: None
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
ASSETS
September 10,January 1,
1994 1994
-----------------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 1,701 $ 2,194
Receivables, net of allowance for uncollectible
accounts of $1,543 and $2,034 9,614 11,750
Inventories 91,745 93,145
Prepaid expenses and other current assets 10,611 3,697
Deferred tax assets 3,997 3,997
-------- --------
Total current assets 117,668 114,783
Property, plant and equipment:
Land 12,077 12,486
Buildings 30,361 30,335
Fixtures and equipment 61,422 60,043
Land and leasehold improvements 32,522 31,045
Software 17,915 17,410
Leased assets under capital leases 51,289 51,321
Construction in progress 3,691 2,564
-------- --------
209,277 205,204
Less accumulated depreciation
and amortization 78,229 67,509
-------- --------
Net property, plant and equipment 131,048 137,695
Excess of purchase price over fair
value of net assets acquired, net
of amortization of $795 and $717 3,737 3,815
Other assets and deferred charges 12,165 13,919
-------- --------
Total assets $264,618 $270,212
======== ========
Continued
The accompanying notes are an integral part
of these financial statements.
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, Continued
(In thousands, except share and per share amounts)
LIABILITIES AND STOCKHOLDERS' EQUITY
September 10,January 1,
1994 1994
-----------------------
(Unaudited)
Current liabilities:
Accounts payable - trade $ 31,939 $ 33,800
Salaries and wages 1,887 2,746
Taxes 8,199 4,724
Accrued interest payable 690 3,366
Other current liabilities 4,834 6,548
Current portion of long-term debt 750 6,000
Current portion of obligations under capital
leases 3,088 3,334
-------- --------
Total current liabilities 51,387 60,518
Long-term obligations:
Long-term debt 143,000 135,750
Obligations under capital leases 15,694 17,807
Other noncurrent liabilities 7,861 9,709
-------- --------
Total long-term obligations 166,555 163,266
Commitments and contingencies - -
Redeemable common stock, Class A, $.01 par value,
3,864,211 shares at September 10, 1994 and 3,970,211
shares at January 1, 1994, at redemption value 9,313 9,568
Stockholders' equity:
Common stock
Class A, $.01 par value, authorized - 40,500,000
shares, issued - 31,604,989 shares at September 10,
1994 and 31,498,989 shares at January 1, 1994
outstanding - 30,878,989 shares 316 315
Additional paid-in capital 46,612 46,358
Accumulated deficit (7,822) (7,753)
Minimum pension liability adjustment - (572)
Treasury stock, 726,000 shares at September 10, 1994
and 620,000 shares at January 1, 1994, at cost (1,743) (1,488)
-------- --------
Total stockholders' equity 37,363 36,860
-------- --------
Total liabilities and stockholders' equity $264,618 $270,212
======== ========
The accompanying notes are an integral part
of these financial statements.
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
12 weeks 12 weeks
ended ended
September 10,September 11,
1994 1993
--------------------------
Sales, net $ 174,264 $ 180,866
Cost of sales 128,443 136,145
---------- ----------
Gross profit 45,821 44,721
Selling and administrative 43,962 41,050
---------- ----------
Operating profit 1,859 3,671
Interest expense 4,140 4,025
---------- ----------
Loss before income taxes (2,281) (354)
Income tax expense - 465
---------- ----------
Net loss $ (2,281) $ (819)
========== ==========
Net loss per common share $ (.07) $ (.02)
========== ==========
Weighted average shares outstanding 34,743,200 34,970,164
========== ==========
The accompanying notes are an integral part
of these financial statements.
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
36 weeks 36 weeks
ended ended
September 10,September 11,
1994 1993
--------------------------
Sales, net $ 541,591 $ 561,329
Cost of sales 400,115 417,770
---------- ----------
Gross profit 141,476 143,559
Selling and administrative 128,309 128,922
---------- ----------
Operating profit 13,167 14,637
Interest expense 12,190 13,453
---------- ----------
Income before income taxes and
extraordinary items 977 1,184
Income tax expense 1,046 1,945
---------- ----------
Loss before extraordinary items (69) (761)
Extraordinary items net of applicable income
taxes of $785 - (3,139)
---------- ----------
Net loss $ (69) $ (3,900)
========== ==========
Loss before extraordinary items
per common share $ (.00) $ (0.02)
Extraordinary items per common share - (0.09)
---------- ----------
Net loss per common share $ (.00) $ (0.11)
========== ==========
Weighted average shares outstanding 34,756,672 34,977,236
========== ==========
The accompanying notes are an integral part
of these financial statements.
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share and per share amounts)
(Unaudited)
Minimum
Class A Additional Pension Total
Common Stock Paid-inAccumulatedLiabilityTreasury StockStockholders'
Shares Amount Capital DeficitAdjustmentShares Amount Equity
------ ------------- ----------------------- ------ ------
Balance, January 2, 199331,364,989$314$46,036$(8,035)$ -486,000$(1,165)$37,150
Purchase of treasury stock 19,500- 47 - - 19,500 (47) -
Net loss - - - (3,900) - - - (3,900)
---------- ---- --------------- ----- ---------------------
Balance, September 11, 199331,384,489$314$46,083$(11,935)$ -505,500$(1,212)$33,250
========== ==== =============== ===== =====================
Balance, January 1, 199431,498,989$315$46,358$ (7,753)$(572)620,000$(1,488)$36,860
Purchase of treasury stock106,0001 254 - - 106,000 (255) -
Adjustment to reduce
minimum liability - - - - 572 - - 572
Net loss - - - (69) - - - (69)
---------- ---- --------------- ----- ---------------------
Balance, September 10, 199431,604,989$316$46,612$ (7,822)$ -726,000$(1,743)$37,363
========== ==== =============== ===== =====================
<FN>
<F1>
The accompanying notes are an integral part
of these financial statements.
</FN>
/TABLE
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except share and per share amounts)
(Unaudited)
36 weeks 36 weeks
ended ended
September 10,September 11,
1994 1993
--------------------------
Cash flows from operating activities:
Net loss $ (69) $(3,900)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 11,399 11,152
Amortization of financing costs 998 1,039
Loss on disposal of assets 28 11
Amortization of beneficial interest in operating
leases 179 182
Write-off of financing costs on long-term
debt retired - 1,148
Provision for losses on accounts receivable 87 125
Change in assets and liabilities:
Decrease in receivables 2,049 4,733
Decrease in inventories 1,400 7,029
Increase in prepaid expenses and other current assets(6,914)(1,608)
(Increase) decrease in other assets and deferred charges107(89)
Increase (decrease) in accounts payable - trade(1,861) 980
Decrease in salaries and wages (859) (1,464)
Increase (decrease) in taxes 3,475 (720)
Decrease in accrued interest payable (2,676) (3,888)
Decrease in other current liabilities (1,142) (2,530)
Decrease in other noncurrent liabilities (1,768) (840)
------- -------
Net cash provided by operating activities 4,433 11,360
------- -------
Cash flows used in investing activities:
Capital expenditures (4,713) (3,893)
Cash received from sale of assets 401 298
------- -------
Net cash used in investing activities (4,312) (3,595)
------- -------
Cash flows used by financing activities:
Payments on subordinated debt - (47,750)
Net borrowings under revolving credit loans 3,000 13,250
Principal payments under notes payable (1,000) (1,250)
Principal payments under capital lease obligations(2,359) (2,178)
Payments to acquire treasury stock (255) (47)
Increase in book overdraft - 4,355
------- -------
Net cash used by financing activities (614) (33,620)
------- -------
Continued
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
(In thousands, except share and per share amounts)
(Unaudited)
36 weeks 36 weeks
ended ended
September 10,September 11,
1994 1993
--------------------------
Net decrease in cash and cash equivalents $ (493)$(25,855)
Cash and cash equivalents at beginning of period 2,194 25,855
------- --------
Cash and cash equivalents at end of period $ 1,701 $ -
======= ========
Supplemental information:
Cash paid during the period for interest $13,794 $ 16,389
======= ========
Cash paid during the period for income taxes $ 236 $ 135
======= ========
Supplemental schedule of noncash investing activities:
Capital lease obligations assumed $ - $ 3,017
======= ========
The accompanying notes are an integral part
of these financial statements.
HOMELAND HOLDING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Preparation of Consolidated Financial Statements.
The accompanying unaudited consolidated financial statements
of Homeland Holding Corporation and Subsidiary (the
"Company") reflect all adjustments consisting only of normal
and recurring adjustments which are, in the opinion of
management, necessary to present fairly the consolidated
financial position and the consolidated results of
operations and cash flows for the periods presented. These
unaudited consolidated financial statements should be read
in conjunction with the consolidated financial statements of
the Company for the period ended January 1, 1994 and the
notes thereto.
2. Accounting Policies.
The policies of the Company are summarized in the
consolidated financial statements of the Company for the 52
weeks ended January 1, 1994 and the notes thereto.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Comparison of Twelve and Thirty-Six Weeks Ended
September 10, 1994 with Twelve and Thirty-Six Weeks Ended
September 11, 1993.
Sales. Net sales for the 12 weeks and 36 weeks ended
September 10, 1994 decreased 3.7% and 3.5%, respectively, over
the net sales of the corresponding periods of 1993. The
decreases in net sales were primarily attributable to increased
competition in the Company's market area resulting primarily from
additional store openings of Wal-Mart Stores, Inc. ("Wal-Mart")
supercenter stores and Albertson's Inc. stores during late 1993
and 1994. (Five Wal-Mart supercenter stores and one Albertson's
store opened in the Company's market area during the first three
quarters of 1994). Although the Company does not know how many
stores Wal-Mart ultimately will open in the Company's market area
and the Company is taking steps to respond competitively,
including increased promotions (see Cost and Expenses below),
Wal-Mart's entry into the Company's market area may continue to
have an adverse effect on the Company's operations in the future.
Net sales for the 12 weeks and 36 weeks ended September
10, 1994 for the Company's continuing stores decreased 2.8% and
3.0%, respectively, over the comparable prior periods due
primarily to competitors' store openings in the Company's market
area.
Cost and Expenses. Gross profit as a percentage of
sales for the 12 weeks ended September 10, 1994 increased to
26.3% compared to 24.7% for the corresponding period of 1993.
Gross profit as a percentage of sales for the 36 weeks ended
September 10, 1994 increased to 26.1% compared to 25.6% for the
corresponding period of 1993. The increase in the gross profit
margin for the 12 weeks and 36 weeks ended September 10, 1994 was
due in part to higher vendor retail allowances than in the
corresponding periods of 1993. During the first three quarters
of 1994, additional emphasis was placed on obtaining vendor
retail allowances, which resulted in the Company's receiving more
such allowances during this period than in the first three
quarters of 1993. The increase in vendor retail allowances was
offset in part by increased markdowns which were taken in
response to the increased competition in the Company's market
area in an effort to remain price competitive and retain market
share. The increased markdowns occurred primarily in the first
quarter of 1994. The increase in gross profit margin for the 12
weeks ended September 10, 1994 was also due to above normal store
inventory losses which were recognized during the corresponding
period of the prior year.
Gross profit without regard to warehouse and
transportation costs as a percentage of sales increased to 28.8%
for the 12 weeks ended September 10, 1994 compared to 27.1% for
the comparable prior period, and increased to 28.5% for the 36
weeks ended September 10, 1994 compared to 27.8% for the same
period last year. This increase is due to the higher vendor
retail allowances during 1994 compared to the corresponding
period of 1993 and the above normal inventory losses experienced
at the Company's stores during the third quarter of 1993, offset
in part by increased markdowns (which occurred primarily in the
first quarter of 1994) in response to the increased competition.
Selling and administrative expenses increased to 25.2%
for the 12 weeks ended September 10, 1994 compared to 22.7% for
the comparable prior period. Selling and administrative expenses
as a percentage of sales increased to 23.7% for the 36 weeks
ended September 10, 1994 from 23.0% for the comparable prior
period on a total sales decline of $19.7 million. The increase
in selling and administrative expenses as a percentage of sales
was due in large part to the decrease in sales for the 36 weeks
ended September 10, 1994 as compared to the prior year. Selling
and administrative expenses decreased $613,000 for this period
compared to the prior year. Expenses have decreased during the
12 weeks and 36 weeks ended September 10, 1994 due to a reduction
in retail wages and benefits resulting from the modified
collective bargaining agreement entered into with the United Food
and Commercial Workers of North America in December 1993. In
addition, during the 12 weeks and 36 weeks ended September 10,
1994 there was a decrease in consulting expenses compared to the
corresponding periods of 1993. These decreases were offset by a
contractual increase in the monthly fees in connection with the
Company's computer services agreement and the one-time change in
the administration of the vacation policy which occurred during
the 12 weeks and 36 weeks ended September 11, 1993 which did not
recur in 1994.
Operating Income. Operating income for the 12 weeks
ended September 10, 1994 decreased to $1.9 million compared to
$3.7 million in the corresponding period of 1993, and decreased
to $13.2 million for the 36 weeks ended September 10, 1994
compared to $14.6 million in the corresponding period of 1993.
The decrease in operating income was due primarily to the
decrease in sales and for the 12 weeks ended September 10, 1994
was also due to the increase in selling and administrative
expenses.
Interest Expense. Interest expense for the 12 weeks
ended September 10, 1994 increased to $4.1 million from $4.0
million in the corresponding period of 1993 due to higher
interest rates and an increase in the average outstanding
borrowings under the Company's Revolving Credit Facility (defined
hereafter). The increase in the average outstanding borrowings
is primarily due to a $6 million prepayment made in July 1994 to
join the state workers compensation insurance program. Interest
expense for the 36 weeks ended September 10, 1994 decreased to
$12.2 million from $13.5 million in the corresponding period of
1993. The decrease was due to the redemption of the Company's
15-1/2% Subordinated Notes due November 1, 1997 (the
"Subordinated Notes") on March 1, 1993.
Income Tax Expense. There was no income tax expense
incurred for the 12 weeks ended September 10, 1994 compared to
$465,000 for the corresponding period of the prior year. The
income tax expense for the 36 weeks ended September 10, 1994 was
$1.0 million compared to $1.2 million (including the net effects
of the extraordinary items discussed below) for the corresponding
period of the prior year. The income tax expense is principally
comprised of alternative minimum tax expense.
Extraordinary Items. There were no extraordinary items
incurred during the 12 weeks or 36 weeks ended September 10,
1994. Extraordinary items for the 12 weeks ended March 27, 1993
consisted of the payment of $2.776 million in premiums on the
redemption of $47.750 million in aggregate principal amount of
the Subordinated Notes at a purchase price of 105.8% of the
outstanding principal amount and $1.148 million in unamortized
financing costs related to the redemption of the Subordinated
Notes. The extraordinary items for such 1993 period have been
shown in the financial statements net of income taxes of
$785,000.
Income or Loss. The Company recorded net loss of $2.3
million and $69,000, respectively, during the 12 weeks and 36
weeks ended September 10, 1994, compared to net loss of $819,000
and $3.9 million, respectively, for the comparable prior periods.
The increase in the net loss for the 12 weeks ended September 10,
1994 is due to the decrease in sales and the increases in selling
and administrative expenses and interest expense, offset in part
by the increase in gross profit margin. The decrease in the net
loss for the 36 weeks ended September 10, 1994 was due to the
decreases in selling and administrative expenses, interest
expense and the extraordinary items recognized in the 12 weeks
ended March 27, 1993, offset in part by the decrease in sales.
Liquidity and Capital Resources
The major sources of liquidity for the Company's
operations and expansion have been internally generated funds and
borrowings under revolving credit facilities. The Company's
Revolving Credit Agreement, dated as of March 4, 1992, as amended
(the "Revolving Credit Agreement"), among the Company, Union Bank
of Switzerland, New York Branch ("UBS"), as agent and as lender,
and other lenders and other financial institutions, provides for
a commitment of up to $50 million in secured revolving credit
loans, including a swing loan and certain letters of credit (the
"Revolving Credit Facility"). Borrowings under the Revolving
Credit Agreement bear interest at the UBS Base Rate plus 1.5% or
at an adjusted Eurodollar Rate plus 2.5%, which rates are subject
to increase upon certain conditions. At October 21, 1994, $25
million was outstanding under the Revolving Credit Facility.
At October 21, 1994, the Company had outstanding
indebtedness of $12 million of Series A Senior Secured Floating
Rate Notes due 1997, bearing interest at a floating rate of 3%
over LIBOR, $75 million of Series B Senior Secured Fixed Rate
Notes due 1999, bearing interest at 11-3/4% per annum which are
not redeemable by the Company until on or after March 1, 1997,
and $33 million of Series D Senior Secured Floating Rate Notes
due 1997. These notes were issued under an Indenture with United
States Trust Company of New York, as trustee (the "Senior Note
Indenture").
The Company has received a waiver from its lenders
through December 14, 1994, for failure to comply with certain
financial covenants under the Revolving Credit Agreement at the
end of the third quarter of 1994. The Company is in the process
of discussing with its lenders an amendment to permanently change
such covenants. In addition, based on the Company's recent
operating performance, management believes that it is probable
that the Company will not be able to comply with certain
financial covenants under the Revolving Credit Agreement at the
end of fiscal year 1994. Furthermore, the Company expects that
it will not be in compliance with one of its financial covenants
contained in the Senior Note Indenture at the end of fiscal year
1994. If the Company is not in compliance with its financial
covenants, it will seek to obtain amendments from its lenders.
Although the Company has been successful in obtaining amendments
to its Revolving Credit Agreement in the past, there is no
assurance that it will be able to do so in the future. There is
also no assurance that it would be able to obtain an amendment
under the Senior Note Indenture if one is required.
The Company has engaged outside advisors to assist with
the sale of all or a substantial portion of the operations of the
Company. Management is working toward the sale of a significant
portion of the operations of the Company. If such a sale is not
completed, management would pursue other strategic alternatives,
including but not limited to mergers, joint ventures or further
outsourcing.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company's 1994 Annual Meeting of Stockholders was
held August 23, 1994. At the meeting, the Company's Board of
Directors was re-elected in its entirety.
Item 5. Other Information
Employment Agreements
In August 1994, Homeland entered into a three-year
employment agreement with Max E. Raydon, the Company's President
and Chief Executive Officer. The agreement provides a base
annual salary of not less than $180,000, subject to increase from
time to time at the discretion of the Board of Directors and
authorizes reimbursement for certain business-related expenses.
Under the agreement, Mr. Raydon is entitled to participate in the
Management Incentive Plan established by Homeland. Mr. Raydon is
also entitled to receive a special one-time non-recurring cash
bonus in an amount to be determined pursuant to a formula based
on the Company's stock price at the time of a transaction
(minimum amount payable of $200,000) if a Trigger Event (defined
generally as a merger, sale of more than 50% of the Company's
stock, or the sale of substantially all of the Company's assets)
occurs on or prior to December 31, 1995 (or by February 28, 1996
if a definitive agreement is in place at December 31, 1995). If
the agreement is terminated by Homeland for other than cause
prior to a change of control or is terminated by Mr. Raydon for
good reason prior to a change of control, Mr. Raydon is entitled
to receive a lump sum payment equal to three times his salary
(without regard to the 10% reduction in management salaries
effected in June 1993) plus a pro rata amount of the incentive
compensation for the portion of the incentive year that precedes
the date of termination, subject to reduction to the extent of
any compensation received from other employment. If the
agreement is terminated, whether voluntary or involuntary, within
180 days following a change of control or a Trigger Event, Mr.
Raydon is entitled to receive payment as set forth in the
preceding sentence including the amount forgone by Mr. Raydon
under the 10% reduction in management salaries effected in June
1993, and such amount would not be subject to any offset as a
result of his receiving compensation from other employment.
In August 1994, the Company entered into a two-year
employment agreement with Jack M. Lotker, the Company's Senior
Vice President of Administration. The agreement provides a base
annual salary of not less than $130,500, subject to increase from
time to time at the discretion of the Board of Directors and
authorizes reimbursement for certain business-related expenses.
Under the agreement, Mr. Lotker is entitled to participate in the
Management Incentive Plan established by Homeland. Mr. Lotker is
also entitled to receive a special one-time non-recurring cash
bonus in an amount to be determined pursuant to a formula based
on the Company's stock price at the time of a transaction if a
Trigger Event occurs on or prior to December 31, 1995 (or by
February 28, 1996 if a definitive agreement is in place at
December 31, 1995). If the agreement is terminated by Homeland
for other than cause prior to a change of control or is
terminated by Mr. Lotker for any reason prior to a change of
control, Mr. Lotker is entitled to continue to receive his
compensation until the first anniversary of such termination,
subject to reduction to the extent of any compensation received
from other employment. If the agreement is terminated, whether
voluntary or involuntary, within 180 days following a change of
control or a Trigger Event, Mr. Lotker is entitled to receive
payment equal to one year's salary, plus a pro rata amount of the
incentive compensation for the portion of the incentive year that
precedes the date of termination, plus any amount forgone by Mr.
Lotker under the 10% reduction in management salaries effected in
June 1993, and would not be subject to any offset as a result of
his receiving compensation from other employment. Furthermore,
if Mr. Lotker is entitled to receive severance benefits as
outlined or if his employment terminates due to his death or
Disability (as defined), Homeland will pay his relocation
expenses from Oklahoma to any location in the continental United
States and will reimburse him for any loss incurred on the sale
of his current home following a reasonable effort to obtain a
good sales price, subject to reduction to the extent of any
compensation received from other employment.
In August 1994, the Company entered into a two-year
employment agreement with both Steve Mason, the Company's Vice
President of Marketing and Al Fideline, the Company's Vice
President of Retail Operations. The agreements provide a base
annual salary of not less than $130,500 and $80,000,
respectively, subject to increase from time to time at the
discretion of the Board of Directors and authorizes reimbursement
for certain business-related expenses. Under the agreements,
Messrs. Mason and Fideline are entitled to participate in the
Management Incentive Plan established by Homeland. Messrs. Mason
and Fideline are also entitled to receive a special one-time non-
recurring cash bonus in an amount to be determined pursuant to a
formula based on the Company's stock price at the time of a
transaction if a Trigger Event occurs on or prior to December 31,
1995 (or by February 28, 1996 if a definitive agreement is in
place at December 31, 1995). If the agreements are terminated by
Homeland for other than cause prior to a change of control,
Messrs. Mason and Fideline are each entitled to receive severance
benefits in accordance with Homeland's generally applicable
plans, policies or procedures, subject to any offset as a result
of receiving compensation from other employment. If the
agreements are terminated, whether voluntary or involuntary,
within 180 days following a change of control or a Trigger Event,
Messrs. Mason and Fideline are each entitled to receive payment
equal to one year's salary, plus a pro rata amount of the
incentive compensation for the portion of the incentive year that
precedes the date of termination, plus any amount forgone by
Messrs. Mason or Fideline under the 10% reduction in management
salaries effected in June 1993, and would not be subject to any
offset as a result of them receiving compensation from other
employment.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: The following exhibits are filed as
part of this Report:
Exhibit No. Description
10ll (1) Employment Agreement, dated as of
August 11, 1994, between Homeland and
Max E. Raydon.
10mm (1) Employment Agreement, dated as of
August 11, 1994, between Homeland and
Jack M. Lotker.
10nn (1) Employment Agreement, dated as of
August 11, 1994, between Homeland and
Steve Mason.
10oo (1) Employment Agreement, dated as of
August 11, 1994, between Homeland and
Al Fideline.
(1) Management contract or compensatory plan.
(b) Reports on Form 8-K: No reports on Form 8-K were
filed during the quarter ended September 10,
1994.
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.
HOMELAND HOLDING CORPORATION
Date: October 31, 1994 By: Max E. Raydon
Max E. Raydon, President,
Chief Executive Officer and
Director (Principal Executive
Officer)
Date: October 31, 1994 By: Mark S. Sellers
Mark S. Sellers, Executive
Vice President/Finance,
Treasurer, Chief Financial
Officer and Secretary
(Principal Financial Officer)
Date: October 31, 1994 By: Mary Mikkelson
Mary Mikkelson, Chief
Accounting Officer, Assistant
Treasurer and Assistant
Secretary (Principal
Accounting Officer)