SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 18, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 0-26602
THE GRAND UNION COMPANY
(Exact name of registrant as specified in its charter)
Delaware 22-1518276
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or
Organization)
201 Willowbrook Boulevard, Wayne, New Jersey 07470-0966
(Address of principal executive offices) (Zip Code)
973-890-6000
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 requirements for the past 90 days.
Yes /X/ No / /
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 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.
Yes /X/ No / /
As of August 31, 1998, there were issued and outstanding 30,000,000 shares,
par value $0.01 per share, of the Registrant's common stock.
THE GRAND UNION COMPANY
(DEBTOR-IN-POSSESSION)
INDEX
PART I - FINANCIAL INFORMATION (Unaudited)
Item 1. Financial Statements.
Page No.
Consolidated Statement of Operations - 16 weeks ended July 18, 1998 and July 19, 1997 3
Consolidated Balance Sheet - July 18, 1998 and March 28, 1998 4
Consolidated Statement of Cash Flows - 16 weeks ended July 18, 1998 and July 19, 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations. 9
PART II - OTHER INFORMATION
Item 2. Change in Securities. 11
Item 4. Submission of Matters to a Vote of Security Holders. 11
Item 6. Exhibits and Reports on Form 8-K. 12
All items which are not applicable or to which the answer is negative have
been omitted from this report.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
THE GRAND UNION COMPANY
(DEBTOR-IN-POSSESSION)
CONSOLIDATED STATEMENT OF OPERATIONS
(numbers in thousands, except per share data)
(unaudited)
16 Weeks Ended
------------------------------------------
July 18, July 19,
1998 1997
----------------- -----------------
Sales $ 691,908 $ 707,983
Cost of sales 486,723 518,514
----------------- -----------------
Gross profit 205,185 189,469
Operating and administrative expenses 174,041 179,822
Depreciation and amortization 20,939 24,467
Amortization of excess reorganization value 32,102 32,102
Interest expense, net 32,459 32,320
Unusual items 4,509 -
----------------- -----------------
Net (loss) before extraordinary item (58,865) (79,242)
Extraordinary item 1,739 -
----------------- -----------------
Net (loss) (60,604) (79,242)
Accrued dividends on preferred stock 2,305 2,057
----------------- -----------------
Net (loss) applicable to common stock $ (62,909) $ (81,299)
================= =================
Basic and diluted net (loss) per common share:
(Loss) before extraordinary item $ (5.77) $ (7.92)
Extraordinary item (0.17) -
Preferred stock dividends per common share (0.23) (0.21)
================= =================
Net (loss) $ (6.17) $ (8.13)
================= =================
Weighted average number of shares
outstanding 10,202 10,000
================= =================
See accompanying notes to consolidated financial statements (unaudited).
3
THE GRAND UNION COMPANY
(DEBTOR-IN-POSSESSION)
CONSOLIDATED BALANCE SHEET
(numbers in thousands, except par value and liquidation preference data)
(unaudited)
July 18, March 28,
1998 1998
------------------ ------------------
ASSETS
Current assets:
Cash and temporary investments $ 40,106 $ 44,745
Receivables 23,380 21,378
Inventories 133,225 128,370
Other current assets 15,463 14,787
------------------ ------------------
Total current assets 212,174 209,280
Property, net 377,958 389,637
Excess reorganization value, net 198,632 230,734
Beneficial leases, net 36,527 39,531
Other assets 20,043 23,049
------------------ ------------------
$ 845,334 $ 892,231
================== ==================
LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current liabilities:
Current maturities of long-term debt $ 185,978 $ 798,551
Current portion of obligations under capital leases 6,860 7,562
Accounts payable and accrued liabilities 161,998 189,439
------------------ ------------------
Total current liabilities 354,836 995,552
Long-term debt - -
Obligations under capital leases 151,543 153,425
Other noncurrent liabilities 98,814 96,458
Liabilities subject to compromise 653,949 -
------------------ ------------------
Total liabilities 1,259,142 1,245,435
------------------ ------------------
Redeemable Class A Preferred Stock, subject to compromise, 72,121 70,685
$1.00 par value, 3,500,000 shares authorized, 1,300,566
shares issued and outstanding, liquidation preference
$72,121,000 and $70,685,000 at July 18, 1998 and March
28, 1998, respectively
------------------ ------------------
Redeemable Class B Preferred Stock, subject to compromise, 43,615 42,746
$1.00 par value, 1,400,000 shares authorized, 800,000
shares issued and outstanding, liquidation preference
$43,615,000 and $42,746,000 at July 18, 1998 and March
28, 1998, respectively
------------------ ------------------
Stockholders' (deficit):
Common stock, $.01 par value; 60,000,000 shares authorized, 102 102
10,202,018 shares issued and outstanding
Preferred stock, $1.00 par value; 10,000,000 shares authorized, less
amount authorized as Class A and Class B preferred stock, no
shares issued and outstanding - -
Capital in excess of par value 129,701 132,006
Accumulated deficit (657,797) (597,193)
Accumulated other comprehensive income (loss) (1,550) (1,550)
------------------ ------------------
Total stockholders' (deficit) (529,544) (466,635)
================== ==================
$ 845,334 $ 892,231
================== ==================
4
See accompanying notes to consolidated financial statements (unaudited).
THE GRAND UNION COMPANY
(DEBTOR-IN-POSSESSION)
CONSOLIDATED STATEMENT OF CASH FLOWS
(numbers in thousands)
(unaudited)
16 Weeks Ended
--------------------------------------
July 18, July 19,
1998 1997
------------------ ------------------
OPERATING ACTIVITIES:
Net (loss) $ (60,604) $ (79,242)
Adjustments to reconcile net (loss) to net
cash provided by (used for) operating activities before
reorganization items paid:
Unusual item 4,509 -
Extraordinary item 1,739 -
Depreciation and amortization 53,041 56,569
Noncash interest 489 (58)
Net changes in assets and liabilities:
Receivables (2,002) 9,769
Inventories (4,855) (2,844)
Other current assets (676) 2,296
Other assets (11) (1,090)
Accounts payable and accrued liabilities 31,087 12,468
Other noncurrent liabilities (315) (3,588)
------------------ ------------------
Net cash provided by (used for) operating
activities before reorganization items paid 22,402 (5,720)
Reorganization items paid (8,822) (2,799)
------------------ ------------------
Net cash provided by (used for) operating activities 13,580 (8,519)
------------------ ------------------
INVESTMENT ACTIVITIES:
Capital expenditures (2,611) (21,623)
Disposals of property 45 42
------------------ ------------------
Net cash (used for) investment activities (2,566) (21,581)
------------------ ------------------
FINANCING ACTIVITIES:
Net proceeds from sale of preferred stock - 40,000
Proceeds from DIP facility 108,000 -
Repayment of old bank debt (104,144) -
Obligations under capital leases discharged (2,509) (2,900)
Net repayment of credit facility (17,000) (8,046)
------------------ ------------------
Net cash provided by (used for) financing activities (15,653) 29,054
------------------ ------------------
Net (decrease) in cash and temporary investments (4,639) (1,046)
Cash and temporary investments at beginning of year 44,745 34,119
------------------ ------------------
Cash and temporary investments at end of period $ 40,106 $ 33,073
================== ==================
Supplemental disclosure of cash flow information:
Interest payments $ 11,894 $ 11,165
Capital lease obligations incurred - 7,157
Accrued dividends 2,305 2,057
See accompanying notes to consolidated financial statements (unaudited).
5
THE GRAND UNION COMPANY
(DEBTOR-IN-POSSESSION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 - Subsequent Events
On August 17, 1998, The Grand Union Company (the "Company")
consummated its plan of reorganization under Chapter 11 of the Bankruptcy Code
(the "Plan of Reorganization") pursuant to the August 5, 1998 Confirmation
Order of the United States Bankruptcy Court for the District of New Jersey.
Consummation of the Plan of Reorganization has resulted in a capital
restructuring of the Company, whereby approximately $600 million in Old Senior
Notes has been eliminated from the Company's balance sheet, reducing annual
interest expense by approximately $72 million.
Consummation of the Plan of Reorganization has resulted in (i) the
issuance of 30,000,000 shares of New Common Stock to the holders of the
Company's Old Senior Notes; (ii) the issuance of New Series 1, Series 2 and
Series 3 Warrants to the holders of the Company's Old Preferred Stock; (iii)
the issuance of New Series 1 Warrants to holders of the Company's Old Common
Stock; and (iv) cancellation of the Company's Old Senior Notes, Old Preferred
Stock, Old Common Stock, Old Series 1 and Series 2 Warrants and Old Stock
Options. As of August 28, 1998, the Company's New Common Stock is trading on
the OTC market. The Company has a pending application for listing on the
NASDAQ National Market.
On August 17, 1998, in connection with the consummation of the Plan
of Reorganization, the Company entered into a $300 million credit agreement
(the "Credit Agreement") underwritten by UBS AG, Stamford Branch and Lehman
Commercial Paper Inc. ("LCPI"), which is secured by substantially all of the
assets of the Company and its subsidiaries and is guaranteed by the Company's
subsidiaries. Some of the proceeds of the Credit Facility were used to pay off
the Company's obligation under its debtor-in-possession credit agreement (the
"DIP Facility"), which had provided the Company operating liquidity during the
Chapter 11 case.
Consummation of the Plan of Reorganization has resulted in the
election of a new Board of Directors for the Company (the "Board"). Effective
August 17, 1998, the Board is comprised of eleven members. The three
management Directors are: J. Wayne Harris, Chairman and Chief Executive
Officer; Jack W. Partridge Jr., Vice Chairman and Chief Administrative
Officer, and Gary M. Philbin, President and Chief Merchandising Officer. The
eight additional members of the Board are: Martin Bernstein, Thomas R.
Cochill, Joseph Colonnetta, Jacob W. Doft, David M. Green, Joseph V. Lash,
Anthony Petrillo and Scott Tepper.
For more information about the Plan of Reorganization, reference is
made to Exhibit 2.1 to Grand Union's report on Form 8-K dated August 19, 1998.
For more information about the Credit Agreement, reference is made to Exhibit
10.6 hereto. For more information about members of the Board, reference is
made to Exhibit 99.2 to Grand Union's report on Form 8-K dated August 19,
1998. Reference is also made to Part II of this report on Form 10-Q.
NOTE 2 - Basis of Presentation
The accompanying interim consolidated financial statements of the
Company include the accounts of the Company and its subsidiaries, all of which
are wholly owned. In the opinion of management, the consolidated financial
statements include all adjustments, which consist only of normal recurring
items, necessary for a fair presentation of operating results for the interim
periods.
These consolidated financial statements should be read in conjunction
with the consolidated financial statements and related notes contained in the
Company's Annual Report on Form 10-K for the 52 weeks ended March 28, 1998 and
the Form 8-K dated May 27, 1998 and to the Company's Disclosure Statement
attached thereto as Exhibit 2.1. Operating results for the periods presented
are not necessarily indicative of results for the full fiscal year.
Certain reclassifications have been made to prior year amounts to
conform to current period presentation.
6
NOTE 3 - Liabilities Subject to Compromise
Liabilities subject to compromise refer to certain liabilities incurred
prior to the commencement of the reorganization process. These liabilities
consist of the face value of the Old Senior Notes and the associated accrued
interest. These amounts represent management's best estimate of known or
potential claims to be resolved in connection with the Chapter 11 filing. The
Plan of Reorganization provides that each Old Senior Note claim shall receive,
in full satisfaction of such allowed Old Senior Note claim, its ratable
proportion of 30,000,000 shares of New Common Stock (representing 100% of the
initial shares of such New Common Stock), subject to possible dilution from the
New Warrants and management options.
NOTE 4 - Preferred Stock Dividends
The preferred stock dividends for the current period were accrued
through June 23, 1998. Pursuant to the Plan of Reorganization, this amount of
$2,305,000 will not be paid. For more information about the elimination of
preferred stock, reference is made to Exhibit 4.1 to Grand Union's report on
Form 8-K dated August 19, 1998.
NOTE 5 - Unusual Items
The Company recorded a charge to operations in the 16 weeks ended
July 18, 1998 of $4,509,000. This charge was comprised of expenses related to
the Plan of Reorganization net of a gain resulting from the elimination of
debt premiums.
NOTE 6 - Extraordinary Items
The extraordinary item expense for the 16 weeks ended July 18, 1998
of $1,739,000 is related to the write-off of deferred financing costs
associated with a term loan refinanced by the DIP Facility.
NOTE 7 - Debt
The components of the Company's debt, excluding liabilities subject
to compromise, are as follows (in thousands):
July 18, March 28,
1998 1998
------------------ -----------------
Bank Credit Agreements
Term Loans $ 77,978 $ 182,122
Revolving Credit Facility - 17,000
DIP Facility 108,000 -
12% Senior Notes due September 1, 2004 (includes $4,008 of
unamortized debt premium at March 28, 1998) - 599,429
------------------ -----------------
185,978 798,551
Less: current maturities of long-term debt 185,978 798,551
================== =================
Long-term debt $ - $ -
================== =================
In connection with the Chapter 11 filing, the Company entered into
the DIP Facility, a $172,022,020 firm underwritten revolving credit agreement
with Swiss Bank Corporation ("SBC") and LCPI, as agents for a syndicate of
lenders. The DIP Facility consisted of a revolving credit facility in an
aggregate amount of $172,022,020, inclusive of a $50 million letter of credit
sub-facility. The DIP facility matured on August 17, 1998, the consummation
date of the Plan of Reorganization.
The proceeds of the DIP Facility were used (i) to finance the working
capital needs of the Company and its subsidiaries in the ordinary course of
business, (ii) to finance the payment of Chapter 11 expenses, (iii) for
general corporate purposes and (iv) to refinance the revolving credit facility
and term loan under the pre-Chapter 11 Credit Agreement (the "Old Credit
Agreement") and to replace or backstop letters of credit outstanding under an
existing credit agreement. The DIP Facility was secured by substantially all
of the assets of Grand Union and its subsidiaries and was guaranteed by the
Company's subsidiaries. At July 18, 1998, an aggregate of $33 million of
letters of credit were issued and outstanding under the DIP facility.
7
On August 17, 1998, in connection with the consummation of the Plan
of Reorganization, the Company entered into the Credit Agreement. The Credit
Agreement is comprised of: (i) a $230 million term loan facility (the "Term
Loan") and (ii) a $70 million revolving credit facility (the "Revolving
Credit"). The Term Loan and Revolving Credit will mature on August 18, 2003.
The proceeds of the Credit Agreement have been used to refinance the
obligations under the DIP Facility and supplemental term loan claims under the
existing credit agreement, and the excess portion will be used for the working
capital needs of Grand Union and its subsidiaries, including capital
expenditures. Up to $50 million of Revolving Credit will be available for the
issuance of letters of credit.
NOTE 8 - Net Loss Per Share
The net loss per share is computed in accordance with SFAS No. 128,
"Earnings Per Share." This statement requires that entities present, on the
face of the income statement for all periods reflected, basic and diluted per
share amounts. Basic earnings per share is computed using the weighted average
number of common shares outstanding for the period. Diluted earnings per share
is computed using the weighted average number of common shares outstanding for
the period adjusted for dilutive potential common shares. There were
10,202,018 and 10,000,000 weighted average shares outstanding for both basic
and diluted earnings per share for the 16 week period ended July 18, 1998 and
the 16 week period ended July 19, 1997, respectively. All potential common
shares were excluded from the computation of the Company's diluted earnings
per share because the effect would have been anti-dilutive.
8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
The following table sets forth certain statements of operations and
other data (all dollars in millions).
16 WEEKS ENDED
------------------------------------
July 18, July 19,
1998 1997
----------------- ------------------
Sales $ 691.9 $ 708.0
Gross profit 205.2 189.5
Operating and administrative expenses 174.0 179.8
Depreciation and amortization 21.0 24.5
Amortization of excess reorganization value 32.1 32.1
Interest expense, net 32.5 32.3
Unusual item 4.5 -
Net (loss) before extraordinary item (58.9) (79.2)
Extraordinary item 1.7 -
Net (loss) (60.6) (79.2)
Net (loss) applicable to common stock (62.9) (81.3)
Sales percentage (decrease) increase (2.3)% (2.6)%
Gross profit as a percentage of sales 29.7% 26.8%
Operating and administrative expenses as a percentage
of sales 25.1% 25.4%
Sales for the 16 weeks ended July 18, 1998 (the "1999 first quarter")
decreased $16.1 million, or 2.3%, compared to the 16 week period ended July
19, 1997 (the "1998 first quarter"). Comparable store sales, including
replacement stores, decreased 1.4% during the 1999 first quarter as compared
to the same period a year ago, primarily due to increased competition, adverse
weather conditions during the middle of the quarter and the historical
deferral of capital expenditures in existing stores. For the 1999 first
quarter, the Company closed one store and opened one replacement location. For
the 1998 first quarter, the Company opened two replacement stores and closed
three units.
Gross profit, as a percentage of sales, increased to 29.7% for the
1999 first quarter from 26.8% for the 1998 first quarter. This increase is
primarily attributable to increased allowance and promotional income as well
as new marketing programs instituted by the Company.
Operating and administrative expenses, as a percentage of sales,
decreased to 25.1% from 25.4% for the 1999 first quarter as compared to the
1998 first quarter as the Company continues to aggressively identify
opportunities to reduce expenses in all areas of the business without
affecting customer service.
Depreciation and amortization decreased in the 1999 first quarter to
$21.0 million compared to $24.5 million in the 1998 first quarter due
primarily to assets which have fully depreciated and the historical deferral
of capital expenditures.
Interest expense increased to $32.5 million from $32.3 million.
Interest expense of $16.9 million on the Old Senior Notes was accrued through
June 23, 1998 and will not be paid as a result of the consummation of the Plan
of Reorganization.
The Company recorded no net income tax benefit or provision during
both the 1999 first quarter and the 1998 first quarter. The tax benefit that
related to the potential use of operating loss carryforwards was fully offset
by a valuation allowance during the 1999 first quarter.
9
Liquidity and Capital Resources
In connection with the Chapter 11 filing, the Company entered into
the DIP Facility, a $172,022,020 firm underwritten revolving credit agreement
with SBC and LCPI as agents for a syndicate of lenders. The DIP Facility
included a $50 million letter of credit sub-facility. The DIP facility matured
on August 17, 1998, the effective date of the Plan of Reorganization.
The proceeds of the DIP Facility were used (i) to finance the working
capital needs of the Company and its subsidiaries in the ordinary course of
business, (ii) to finance the payment of Chapter 11 expenses, (iii) for
general corporate purposes and (iv) to refinance the revolving credit and term
loan under the Old Credit Agreement and to replace or backstop letters of
credit outstanding under the Old Credit Agreement. The DIP Facility was
secured by substantially all of the assets of Grand Union and its subsidiaries
and was guaranteed by the Company's subsidiaries. At July 18, 1998, an
aggregate of $33 million of letters of credit were issued and outstanding
under the DIP facility.
On August 17, 1998, in connection with the consummation of the Plan
of Reorganization, the Company entered into the Credit Agreement. The Credit
Agreement is comprised of: (i) a $230 million Term Loan and (ii) a $70 million
Revolving Credit Facility. The Term Loan and Revolving Credit Facility will
mature on the August 18, 2003. The proceeds of the Credit Agreement have been
used to refinance the obligations under the DIP Facility and supplemental term
loan claims under the Old Credit Agreement. The excess will be used for
working capital and capital expenditures. Up to $50 million of the Revolving
Credit Facility will be available for the issuance of letters of credit.
Year 2000 Compliance
The Company is working to assure business continuity with respect to
the issues which are anticipated to arise related to the calendar year 2000.
The Company is aware of many of the types of problems that could occur as the
millennium approaches and is assessing any exposure from a product, services
and systems standpoint, and working with customers, suppliers and entities
with which the Company does business. The Company intends to address all Year
2000 issues as they are identified. The Company's goal is to achieve maximum
compliance both internally and externally. As part of the Company's goal to
achieve year 2000 compliance, it will seek "millennium certification" and/or
representations and warranties from suppliers, vendors and entities with which
the Company does business about their Year 2000 compliance. The Company's Year
2000 effort is being coordinated by a Year 2000 Steering Committee comprised
of several officers of the Company. Within the Company, resources are being
committed, and projects are being planned and undertaken as required with the
goal of achieving Year 2000 compliance. Based on current information, costs of
addressing potential problems are not expected to have a material adverse
impact on the Company's financial position, results of operations or cash
flows in future periods. However, a material financial risk could result if
the Company, its customers or its vendors are unable to resolve such
processing issues in a timely manner.
New Accounting Standards Adopted
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," ("SFAS No. 130") effective for fiscal years beginning after December
15, 1997. SFAS No. 130 requires the reporting and display of comprehensive
income and its components in an entity's financial statements. For the
Company, other comprehensive income includes only an additional minimum
pension liability. The Company recorded no additional minimum pension
liability for the 16 weeks ended July 18, 1998.
10
PART II - OTHER INFORMATION
Item 2. Change in Securities.
On August 17, 1998, the Company consummated its Plan of
Reorganization. In connection with the Plan of Reorganization, the Company
cancelled its Old Senior Notes, Old Preferred Stock, Old Common Stock, Old
Series 1 and Series 2 Warrants and Old Stock Options. There are 60,000,000
shares of New Common Stock authorized under Grand Union's Certificate of
Incorporation. Of such authorized shares, 30,000,000 shares, representing 100%
of the issued and outstanding shares of New Common Stock, have been
distributed to the holders of the Old Senior Notes. Reorganized Grand Union
issued (i) Series 1 Warrants to purchase 4,324,015 shares of New Common Stock,
representing approximately 12% of the shares of New Common Stock at a price
equal to $19.82 per share; (ii) Series 2 Warrants to purchase 942,971 share of
New Common Stock, representing approximately 2.5% of the shares of the New
Common Stock, at a price equal to $23.15 per share and (iii) the Series 3
Warrants to purchase 306,122 shares of New Common Stock, representing
approximately 1% of the shares of New Common Stock at a price equal to $12.32
per share. The Series 1 Warrants and the Series 2 Warrants will expire on
August 17, 2003. The Series 3 Warrants will expire on August 17, 2002. The
Company's new securities were issued pursuant to an exemption from
registration under the Securities Act of 1933, as amended, pursuant to Section
1145 of the Bankruptcy Code. For further information concerning the issuance
of the new securities, reference is made to Note 1 accompanying the financial
statements.
Item 4. Submission of Matters to a Vote of Security Holders.
Pursuant to the Solicitation of Consents to the Plan of
Reorganization and the Disclosure Statement relating thereto, the following
matters were voted on:
(a) By the Holders of Old Senior Notes:
(1) The Plan of Reorganization was approved by $427,872,000 in
dollar amount voting in favor and $1,926,000 in dollar
amount voting against the Plan of Reorganization. The Plan
of Reorganization was approved by 669 in number voting in
favor and 52 in number voting against.
(2) The Executive Annual Incentive Bonus Plan (the "EAIB Plan")
in order to qualify certain incentive compensation under
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations promulgated
thereunder was approved, with $444,053,000 in dollar amount
voting in favor and $4,838,000 in dollar amount voting
against.
(3) The amendments to the Company's 1995 Equity Incentive Plan
(the "EIP") to set the number of shares issuable under the
EIP at an aggregate of 3,250,000 and to set the number of
shares and stock appreciation rights issuable under the EIP
to any individual to an aggregate of 3,000,000 was approved,
with $443,924,000 in dollar amount voting in favor and
$4,913,000 in dollar amount voting against.
(b) By the Old Preferred Stockholders:
(1) The Plan of Reorganization was approved by 100% of the
Preferred Stockholders.
The Solicitation of Consents commenced May 22, 1998 and the voting
period ended on June 22, 1998. For additional information about these matters,
reference is made to Grand Union's report on Form 8-K dated May 27, 1998 and
to the Company's Disclosure Statement attached thereto as Exhibit 2.1.
11
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit Number
3.1 Amended and Restated By-laws of The Grand Union Company,
as amended, effective through August 17, 1998.
10.1 Form of Indemnification Agreement between the Company and
1) Manouchehr Moslemi (effective July 6, 1998 and dated
August 13, 1998), 2) Martin Bernstein (effective August
17, 1998 and dated August 20, 1998), 3) Thomas R. Cochill
(effective August 17, 1998 and dated August 20, 1998), 4)
Joseph Colonnetta (effective August 17, 1998 and dated
August 20, 1998), 5) Jacob W. Doft (effective August 17,
1998 and dated August 20, 1998), 6) David M. Green
(effective August 17, 1998 and dated August 20, 1998), 7)
Joseph V. Lash (effective August 17, 1998 and dated
August 20, 1998), Anthony Petrillo (effective August 17,
1998 and dated August 20, 1998), and 9) Scott Tepper
(effective August 17, 1998 and dated August 20, 1998).
10.2 Employment Agreement, (effective August 17, 1998 and dated
August 13, 1998), between Grand Union and J. Wayne Harris.
10.3 Employment Agreement, (effective August 17, 1998 and dated
August 13, 1998), between Grand Union and Jack W.
Partridge, Jr.
10.4 Employment Agreement, (effective August 17, 1998 and dated
August 13, 1998), between Grand Union and Gary M. Philbin.
10.5 Employment Agreement, (effective August 17, 1998 and dated
August 13, 1998), between Grand Union and Jeffrey P.
Freimark.
10.6 Credit Agreement, dated as of August 17, 1998, by and
among the Company, the several lenders from time to time
party thereto, Warburg Dillon Read LLC, as Co-Advisor and
Co-Arranger, UBS AG, Stamford Branch, as Syndication
Agent, Lehman Brothers Inc., as Co-Advisor and
Co-Arranger, and Lehman Commercial Paper Inc., as
Administrative Agent and Collateral Agent.
27.1 Financial Data Schedule
(b) Reports on Form 8-K
1. Relating to the agreement on terms of a capital restructuring - dated
March 31, 1998.
2. Relating to the commencement of the solicitation of votes on the Plan
of Reorganization - dated May 27, 1998.
3. Relating to the confirmation of the Plan of Reorganization - dated
August 5, 1998.
4. Relating to the consummation of the Plan of Reorganization - dated
August 19, 1998.
12
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.
THE GRAND UNION COMPANY
(Registrant)
/s/ Jeffrey P. Freimark
-----------------------
Jeffrey P. Freimark,
Executive Vice President
Chief Financial Officer
Date: August 31, 1998