The Food Lion Annual Stockholders Meeting has been a Salisbury tradition since the late 1950s. This year, however, it is being held in Tampa, Fla. Salisbury stockholders have lots of questions, most of which are not so friendly. It seems that Pierre Beckers, CEO Delhaize, and Bill McCanless, CEO Delhaize America, are hoping that the 500 miles from North Carolina to Florida will make the meeting much more comfortable for themselves.

There are three areas which should be of vital concern to Food Lion stockholders.

1. Forty-four percent (holding more than 33 million shares) of us have absolutely no representation on the board! Food Lion’s so-called “outside” board members are handpicked by Delhaize and are paid more than $30,000 annually to attend four meetings. Of course, they wouldn’t “rock the boat” and jeopardize their comfortable positions by opposing Delhaize management. The company currently does not permit “cumulative voting,” a practice which would allow stockholders, who together own more than 10 percent, to elect a minimum of one member to the board.

“Cumulative voting” permits stockholders to concentrate their votes for one candidate (or a write-in), rather than spreading votes out among the slate of nominees. For example, a person owning ten shares could give 100 votes to a single candidate of his choice, rather than ten votes for each of ten candidates.

This practice allows and encourages representation on a board for minority stockholders (in this case, the 44 percent of us now without a voice on the Food Lion Board).

For decades, the North Carolina law demanded that corporations allow “cumulative voting,” but this was changed about 10 years ago, making it an option at the discretion of each company. The Delhaize Board has not voted to permit this, thus denying 44 percent of the holders of Class B voting stock any input whatsoever.

2. Delhaize’s plan to merge Food Lion with Hannaford’s would be a disaster for our company. Food Lion stock has plummeted (from $12 to $6, based on the pre-reverse split of 1 for 3) since the announcement of the proposed deal. It is my opinion that this drop is due to Delhaize paying roughly $1 billion too much! At the time, Hannaford’s was trading for $63 a share, and Delhaize offered $79 a share (more than 25 percent higher) — $1 billion too much!!

Delhaize’s balance sheet in the future, as a result of the merger, will show $2.5 billion as goodwill. For the next 40 years, there will be a charge of $62,500,000 per year on the P&L statement.

To complete the transaction, Food Lion plans to borrow $3 billion, at a rate of 7.8 percent, (which figures $234 million per year interest expense!). Can Food Lion afford or justify this? From my detailed studies of their projections, absolutely not! And obviously, Wall Street investors also think “not,” as the stock has plunged from $12 to $6, just since Delhaize’s announcement. The FTC is now studying the proposed merger. Our only hope is that they prohibit it. I strongly suggest all stockholders write immediately to the FTC chairman, urging that this merger be denied.