##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
of the Securities Exchange Act of 1934
 For the fiscal year ended April 1, 2006
 Commission File Number: 0-1532
 MARSH SUPERMARKETS, INC.
  INDIANA
(State or other jurisdiction of
incorporation or organization)
    
    35-0918179
(IRS Employer
Identification No.)
 9800 CROSSPOINT BOULEVARD
 INDIANAPOLIS, INDIANA
(Address of principal executive offices)
    
    46256-3350
(Zip Code)
 317-594-2100
 Securities registered pursuant to Section 12(b) of the Act:
 Securities registered pursuant to Section 12(g) of the Act:
 
  o þ
  o þ
  þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
  o þ




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##### 



MARSH SUPERMARKETS, INC.
 FORM 10-K
 FOR THE FISCAL YEAR ENDED APRIL 1, 2006
 INDEX
 PagePART IItem 1.
    
    Business
    
    
    3Item 1A.
    
    Risk Factors
    
    
    8Item 1B.
    
    Unresolved Staff Comments
    
    
    13Item 2.
    
    Properties
    
    
    14Item 3.
    
    Legal Proceedings
    
    
    15Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    16PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    16Item 6.
    
    Selected Financial Data
    
    
    18Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 8.
    
    Financial Statements and Supplementary Data
    
    
    27Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    55Item 9A.
    
    Controls and Procedures
    
    
    55Item 9B.
    
    Other Information
    
    
    55PART IIIItem 12.
    
    Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    
    56PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    
    57
  2




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PART I
 
 Item 1. Business
 General
     Supermarkets
    3




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â
    â
  NumberSquare Feet
    
    of StoresMore than 75,000
    
    
    655,000  74,999
    
    
    1945,000 - 54,999
    
    
    1035,000 - 44,999
    
    
    2225,000 - 34,999
    
    
    48Less than 25,000
    
    
    12117
  4




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SM
 Convenience Stores
   Crystal Food Services
   Floral Fashions® and McNamara®
  Supply and Distribution
  5




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Management Information Systems
    Competition
    6




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Seasonality
  Employees
  Regulatory Matters
  Executive Officers of the Registrant
  Name
    
    Position
    
    Age
    
    Family RelationshipDON E. MARSH
    
    Chairman of the Board
and Chief Executive Officer
    
    
    68
    
    
    Brother of William L. Marsh
  WILLIAM L. MARSH
    
    Interim President
and Chief Operating Officer
    
    
    62
    
    
    Brother of Don E. Marsh
  P. LAWRENCE BUTT
    
    Senior Vice President, Counsel
and Secretary
    
    
    64
    
    
    None
  DOUGLAS W. DOUGHERTY
    
    Executive Vice President -
Finance and Administration
and Chief Financial Officer
    
    
    62
    
    
    None
  7




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JACK J. BAYT
    
    President and Chief Operating
Officer, Crystal Food Services Division
    
    
    49
    
    
    None
  CHARLES BARNARD, JR.
    
    President and Chief Operating
Officer, Supermarket Division
    
    
    57
    
    
    None
 
 DANIEL S. CROSS
    
    President and Chief Operating
Officer, Village Pantry Division
    
    
    50
    
    
    None
  MARK A. VARNER
    
    Vice President  Corporate Controller
    
    
    56
    
    
    None
  
 Item 1A. Risk Factors
  Risks Relating to the Business
 The Company faces a high level of competition which may have a negative impact on its revenues and
profitability.
   8




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The Companys substantial indebtedness could adversely affect its financial health.
     The Company may not be able to refinance its 8 7/8% senior subordinated notes.
  Changes in the terms on which suppliers require the Company to pay for store merchandise could have
an adverse effect on the Companys business, financial condition and results of operations.
  The Company is in a labor-intensive business, and increased labor costs or the Companys inability
to retain its employees could have a material adverse effect on the Companys business and results
of operations.
 9




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##### 



The Companys significant pension and post-retirement obligations could increase future expenses.
    Various operating factors may affect the Companys costs of operations and its profit margins.
  The Companys business is sensitive to local and regional economic conditions, and economic
downturns or uncertainty may have a material adverse effect on its financial condition and results
of operations.
  10




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Severe weather and natural disasters can adversely impact the areas in which the Company conducts
its business.
  Unfavorable changes in government regulations may affect the Companys business and results of
operations.
   The Company, particularly its Village Pantry division, is subject to state and federal
environmental regulations and faces the risk of being held liable for environmental damages that
may occur.
    The Company depends on one principal supplier for the gasoline sold at its Village Pantry stores.
 ®
 11




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Volatility
of wholesale petroleum costs and retail prices could impact the Companys operating results.
  The Companys self-insurance arrangements could materially impact its results of operations.
  The Company may record significant charges for impairment of goodwill and long-lived assets, which
could adversely affect its results of operations.
  Risks Relating to the Merger with MSH Supermarkets
 The merger of the Company with MSH Supermarkets is subject to certain closing conditions that, if
not satisfied or waived, will result in the merger not being completed, which may cause the market
price of the Companys common stock to decline.
   12




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Whether or not the merger with MSH Supermarkets is completed, the announcement and pendency of the
merger may continue to cause disruptions in the Companys business, which could have an adverse
effect on its business and results of operations.
  The Company, its directors and its former President are involved in pending litigation with respect
to the merger with MSH Supermarkets, the result of which is uncertain.
   
 Item 1B. Unresolved Staff Comments
  13




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Item 2. Properties
  Per StoreFootage Operated
    
    Average
    
    0-5 Years
    
    6-10 Years
    
    Over 10 YearsSupermarkets
    
    
    4,661,000
    
    
    
    39,800
    
    
    
    31
    %
    
    
    22
    %
    
    
    47
    %Convenience Stores
    
    
    458,000
    
    
    
    3,000
    
    
    
    71
    %
    
    
    
    
    
    
    29
    %5,119,000
  ConvenienceSupermarkets
    
    stores
    
    OtherOwned
    
    
    34
    
    
    
    43
    
    
    
    Leased:Fixed rentals only
    
    
    48
    
    
    
    100
    
    
    
    7Fixed plus contingent rentals
    
    
    35
    
    
    
    11
    
    
    
    83
    
    
    
    111
    
    
    
    7117
    
    
    
    154
    
    
    
    7
        14




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Item 3. Legal Proceedings
       15




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##### 



Item 4. Submission of Matters to a Vote of Security Holders
  
 PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
  2006
    
    2005Fourth
    
    Third
    
    Second
    
    First
    
    Fourth
    
    Third
    
    Second
    
    FirstRange of market price of common stockClass A: High
    
    $
    9.27
    
    
    $
    12.90
    
    
    $
    14.25
    
    
    $
    12.80
    
    
    $
    13.00
    
    
    $
    12.00
    
    
    $
    14.00
    
    
    $
    15.00Class A: Low
    
    
    6.40
    
    
    
    8.75
    
    
    
    11.20
    
    
    
    11.00
    
    
    
    11.00
    
    
    
    10.82
    
    
    
    11.09
    
    
    
    13.00Class B: High
    
    
    9.03
    
    
    
    13.65
    
    
    
    16.35
    
    
    
    14.45
    
    
    
    14.75
    
    
    
    13.00
    
    
    
    13.90
    
    
    
    14.18Class B: Low
    
    
    5.90
    
    
    
    8.62
    
    
    
    11.75
    
    
    
    12.00
    
    
    
    12.20
    
    
    
    10.98
    
    
    
    11.01
    
    
    
    12.32Cash DividendClass A
    
    
    
    
    
    
    
    
    
    $
    .13
    
    
    $
    .13
    
    
    $
    .13
    
    
    $
    .13
    
    
    $
    .13
    
    
    $
    .13Class B
    
    
    
    
    
    
    
    
    
    
    .13
    
    
    
    .13
    
    
    
    .13
    
    
    
    .13
    
    
    
    .13
    
    
    
    .13
   16




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17




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##### 



Item 6. Selected Financial Data
 SELECTED FINANCIAL DATA
 April 1,
    
    
    April 2,
    
    
    March 27,
    
    
    March 29,
    
    
    March 30,As of and for the year ended
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Total revenues
    
    $
    1,744,441
    
    
    $
    1,747,436
    
    
    $
    1,653,915
    
    
    $
    1,655,735
    
    
    $
    1,642,599Income (loss) from continuing operations
before income taxes
    
    
    (57,860
    )
    
    
    6,545
    
    
    
    5,556
    
    
    
    1,544
    
    
    
    17,613Income (loss) from continuing operations
    
    
    (40,235
    )
    
    
    4,162
    
    
    
    3,037
    
    
    
    406
    
    
    
    11,541Discontinued operation:Loss, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (890
    )Gain (loss) on disposal, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (354
    )
    
    
    2,726Net income (loss)
    
    $
    (40,235
    )
    
    $
    4,162
    
    
    $
    3,037
    
    
    $
    52
    
    
    $
    13,408Basic earnings (loss) per common share:Continuing operations
    
    $
    (5.09
    )
    
    $
    .53
    
    
    $
    .38
    
    
    $
    .05
    
    
    $
    1.45Discontinued operation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (.11
    )Disposal of discontinued operation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (.04
    )
    
    
    .34Net income (loss)
    
    $
    (5.09
    )
    
    $
    .53
    
    
    $
    .38
    
    
    $
    .01
    
    
    $
    1.68Diluted earnings (loss) per common share:Continuing operations
    
    $
    (5.09
    )
    
    $
    .52
    
    
    $
    .38
    
    
    $
    .05
    
    
    $
    1.31Discontinued operation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (.09
    )Disposal of discontinued operation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (.04
    )
    
    
    .29Net income (loss)
    
    $
    (5.09
    )
    
    $
    .52
    
    
    $
    .38
    
    
    $
    .01
    
    
    $
    1.51Dividends declared per share
    
    $
    .26
    
    
    $
    .52
    
    
    $
    .52
    
    
    $
    .46
    
    
    $
    .44Total assets
    
    $
    519,971
    
    
    $
    546,868
    
    
    $
    542,405
    
    
    $
    549,322
    
    
    $
    583,230Long-term liabilities
    
    
    271,039
    
    
    
    212,709
    
    
    
    245,074
    
    
    
    267,981
    
    
    
    263,756Total shareholders equity
    
    
    85,419
    
    
    
    124,315
    
    
    
    128,276
    
    
    
    127,809
    
    
    
    140,797
  18




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
 General
   Business Overview
  Market Trends
   Management Focus/Potential Sale of the Company
    19




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Results of Operations
  Percentage of RevenuesYear Ended
    
    Percentage ChangeApril 1,
    
    April 2,
    
    March 27,
    
    2006
    
    20052006
    
    2005
    
    2004
    
    vs. 2005
    
    vs. 2004Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    (0.2
    )%
    
    
    5.7
    %Gross profit
    
    
    29.4
    
    
    
    29.5
    
    
    
    30.1
    
    
    
    (0.7
    )
    
    
    3.6Selling, general and administrative
    
    
    27.4
    
    
    
    26.7
    
    
    
    27.1
    
    
    
    2.4
    
    
    
    3.8Depreciation
    
    
    1.5
    
    
    
    1.5
    
    
    
    1.5
    
    
    
    1.8
    
    
    
    3.7Restructuring costs and impairment of long-lived assets
    
    
    1.7
    
    
    
    
    
    
    
    
    
    
    
    n/m
    
    
    
    Impairment of goodwill
    
    
    0.8
    
    
    
    
    
    
    
    
    
    
    
    n/m
    
    
    
    Operating income (loss)
    
    
    (2.0
    )
    
    
    1.3
    
    
    
    1.4
    
    
    
    n/m
    
    
    
    (0.8
    )Interest
    
    
    1.2
    
    
    
    1.1
    
    
    
    1.2
    
    
    
    11.3
    
    
    
    0.9Other non-operating expense (income)
    
    
    0.0
    
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    (121.1
    )
    
    
    138.4Income (loss) before income taxes
    
    
    (3.3
    )
    
    
    0.4
    
    
    
    0.3
    
    
    
    n/m
    
    
    
    17.8Income taxes (benefit)
    
    
    (1.0
    )
    
    
    0.1
    
    
    
    0.2
    
    
    
    n/m
    
    
    
    (5.4
    )Net income (loss)
    
    
    (2.3
    )
    
    
    0.2
    
    
    
    0.2
    
    
    
    n/m
    
    
    
    37.0
 
 n/m = not meaningful Total Revenues
   2006
    
    
    2005Total revenues
    
    $
    1,744.4
    
    
    $
    1,747.4Less non-comparable sales, other revenues, gains from sales of property
and the 53rd week in 2005
    
    
    140.7
    
    
    
    155.8Comparable supermarket and convenience store sales
    
    
    1,603.7
    
    
    
    1,591.6Less comparable gasoline sales
    
    
    179.3
    
    
    
    143.1Comparable supermarket and convenience store merchandise sales
    
    $
    1,424.4
    
    
    $
    1,448.5
   20




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2005
    
    
    2004Total revenues
    
    $
    1,747.4
    
    
    $
    1,653.9Less non-comparable sales, other revenues, gains from sales of property
and 53rd week in 2005
    
    
    172.8
    
    
    
    104.5Comparable supermarket and convenience store sales
    
    
    1,574.6
    
    
    
    1,549.4Less comparable gasoline sales
    
    
    154.7
    
    
    
    118.7Comparable supermarket and convenience merchandise sales
    
    $
    1,419.9
    
    
    $
    1,430.7
 Gross Profit
    Selling, General and Administrative Expenses
    Depreciation
   Restructuring Costs and Impairment of Long-lived Assets
   21




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Impairment of Goodwill
  Interest
  Other Non-operating Expense (Income)
    Income Taxes
  Capital Expenditures
  2006
    
    
    2005
    
    
    2004Capital expenditures (millions)
    
    $
    36.3
    
    
    $
    63.8
    
    
    $
    26.5SupermarketsNew stores
    
    
    2
    
    
    
    4
    
    
    
    4Closed stores
    
    
    2
    
    
    
    1
    
    
    
    1Major remodels/expansions
    
    
    1
    
    
    
    4
    
    
    
    1Format conversions
    
    
    
    
    
    
    2
    
    
    
    1Convenience storesNew/acquired stores
    
    
    
    
    
    
    
    
    
    
    Closed stores
    
    
    7
    
    
    
    3
    
    
    
    3
  22




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Liquidity and Capital Resources
      Payments due by periodLess than
    
    
    1-3
    
    
    4-5
    
    
    After 5Total
    
    
    1 year
    
    
    years
    
    
    years
    
    
    yearsLong-term debt, including
current maturities
    
    $
    193.0
    
    
    $
    2.9
    
    
    $
    134.6
    
    
    $
    55.5
    
    
    $
    Capital leases and financing obligations
    
    
    88.7
    
    
    
    6.8
    
    
    
    12.8
    
    
    
    12.1
    
    
    
    57.0Operating leases
    
    
    271.2
    
    
    
    38.4
    
    
    
    61.2
    
    
    
    40.5
    
    
    
    131.1Purchase obligations
    
    
    28.0
    
    
    
    7.2
    
    
    
    14.4
    
    
    
    6.4
    
    
    
    Supplemental executive retirement and
contract termination payments
    
    
    18.4
    
    
    
    14.7
    
    
    
    3.7
    
    
    
    
    
    
    
    Total
    
    $
    599.3
    
    
    $
    70.0
    
    
    $
    226.7
    
    
    $
    114.5
    
    
    $
    188.1
 23




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##### 



Off-Balance
Sheet Arrangements
  Repurchase of Common Shares
    Class A shares
    
    
    Class B sharesAverage
    
    
    
    
    
    
    AverageMonth
    
    Number
    
    
    price
    
    
    Number
    
    
    priceApril 2005
    
    
    57
    
    
    $
    12.15
    
    
    
    36,948
    
    
    $
    12.60July 2005
    
    
    2,548
    
    
    
    14.10
    
    
    
    2,224
    
    
    
    15.48August 2005
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    12.00September 2005
    
    
    200
    
    
    
    11.70
    
    
    
    
    
    
    
    Total
    
    
    2,805
    
    
    
    13.89
    
    
    
    39,184
    
    
    
    12.76
  Critical Accounting Policies
   24




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Cautionary Note Regarding Forward-Looking Statements
  25




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##### 



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  26




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##### 



Item 8. Financial Statements and Supplementary Data
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Management on Responsibility for Financial Reporting
    
    
    28Report of Independent Registered Public Accounting Firm
    
    
    28Consolidated Statements of Operations
    
    
    29Consolidated Balance Sheets
    
    
    30Consolidated Statements of Shareholders Equity
    
    
    32Consolidated Statements of Cash Flows
    
    
    33Notes to Consolidated Financial Statements
    
    
    34
 27




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##### 



REPORT OF MANAGEMENT ON RESPONSIBILITY FOR FINANCIAL REPORTING
     Don E. Marsh
    
    Douglas W. Dougherty
    
    Mark VarnerChairman of the Board and
    
    Executive Vice President 
    
    Vice President -Chief Executive Officer
    
    Finance and Administration,
and Chief Financial Officer
    
    Corporate Controller
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     /s/ Ernst & Young LLP 
 28




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##### 



CONSOLIDATED STATEMENTS OF OPERATIONS
 YEAR ENDED
    
    April 1, 2006
    
    
    April 2, 2005
    
    
    March 27, 2004Sales and other revenues
    
    $
    1,743,791
    
    
    $
    1,743,609
    
    
    $
    1,650,868Gains from sales of property
    
    
    650
    
    
    
    3,827
    
    
    
    3,047Total revenues
    
    
    1,744,441
    
    
    
    1,747,436
    
    
    
    1,653,915Cost of merchandise sold, including warehousing and transportation,
excluding depreciation
    
    
    1,232,366
    
    
    
    1,231,840
    
    
    
    1,156,255Gross profit
    
    
    512,075
    
    
    
    515,596
    
    
    
    497,660Selling, general and administrative
    
    
    478,098
    
    
    
    466,179
    
    
    
    449,002Depreciation
    
    
    26,418
    
    
    
    25,950
    
    
    
    25,013Restructuring costs and impairment of long-lived assets
    
    
    30,423
    
    
    
    
    
    
    
    Impairment of goodwill
    
    
    13,122
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    (35,986
    )
    
    
    23,467
    
    
    
    23,645Interest
    
    
    21,390
    
    
    
    19,213
    
    
    
    19,050Other non-operating expense (income)
    
    
    484
    
    
    
    (2,291
    )
    
    
    (961
    )Income (loss) before income taxes
    
    
    (57,860
    )
    
    
    6,545
    
    
    
    5,556Income taxes (benefit)
    
    
    (17,625
    )
    
    
    2,383
    
    
    
    2,519Net income (loss)
    
    $
    (40,235
    )
    
    $
    4,162
    
    
    $
    3,037Earnings (loss) per common share:Basic
    
    $
    (5.09
    )
    
    $
    .53
    
    
    $
    .38Diluted
    
    
    (5.09
    )
    
    
    .52
    
    
    
    .38Dividends declared per share
    
    $
    .26
    
    
    $
    .52
    
    
    $
    .52Basic weighted average shares outstanding
    
    
    7,900
    
    
    
    7,897
    
    
    
    7,940
  29




---



##### 



CONSOLIDATED BALANCE SHEETS
 YEAR ENDED
    
    April 1, 2006
    
    
    April 2, 2005ASSETSCurrent AssetsCash and equivalents
    
    $
    28,997
    
    
    $
    27,364Accounts and notes receivable, less allowances of $1,030
and $806
    
    
    18,808
    
    
    
    22,153Inventories
    
    
    127,970
    
    
    
    132,758Prepaid expenses
    
    
    5,421
    
    
    
    6,619Assets held for sale
    
    
    3,957
    
    
    
    Recoverable income taxes
    
    
    2,846
    
    
    
    841TOTAL CURRENT ASSETS
    
    
    187,999
    
    
    
    189,735Property and EquipmentLand
    
    
    43,561
    
    
    
    42,395Buildings and land improvements
    
    
    195,765
    
    
    
    195,396Fixtures and equipment
    
    
    158,908
    
    
    
    156,812Leasehold improvements
    
    
    94,587
    
    
    
    91,074Construction in progress
    
    
    1,376
    
    
    
    12,485Property under capital leases
    
    
    46,865
    
    
    
    32,330541,062
    
    
    
    530,492Accumulated depreciation
    
    
    (242,437
    )
    
    
    (222,676
    )TOTAL PROPERTY AND EQUIPMENT
    
    
    298,625
    
    
    
    307,816Other Assets
    
    
    33,347
    
    
    
    49,317TOTAL ASSETS
    
    $
    519,971
    
    
    $
    546,868
  30




---



##### 



YEAR ENDED
    
    April 1, 2006
    
    
    April 2, 2005LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    68,601
    
    
    $
    75,786Employee compensation and other liabilities
    
    
    17,127
    
    
    
    15,378State and local taxes
    
    
    18,391
    
    
    
    17,775Terminated supplemental executive retirement plan
    
    
    12,601
    
    
    
    Other accounts payable and accrued expenses
    
    
    15,379
    
    
    
    10,710Dividends payable
    
    
    
    
    
    
    1,025Deferred income taxes
    
    
    7,255
    
    
    
    10,053Current maturities of long-term liabilities
    
    
    4,626
    
    
    
    48,444TOTAL CURRENT LIABILITIES
    
    
    143,980
    
    
    
    179,171Long-term LiabilitiesLong-term debt
    
    
    189,930
    
    
    
    133,268Capital and financing lease obligations
    
    
    43,704
    
    
    
    27,212Pension and post-retirement benefits
    
    
    26,088
    
    
    
    52,229Other long-term liabilities
    
    
    11,317
    
    
    
    TOTAL LONG-TERM LIABILITIES
    
    
    271,039
    
    
    
    212,709Deferred ItemsIncome taxes
    
    
    
    
    
    
    8,823Gains from sale/leasebacks
    
    
    15,173
    
    
    
    16,487Other
    
    
    4,360
    
    
    
    5,363TOTAL DEFERRED ITEMS
    
    
    19,533
    
    
    
    30,673COMMITMENTS AND CONTINGENCIESShareholders EquitySeries A Junior Participating Cumulative Preferred Stock:Authorized: 5,000,000 shares; Issued: None
    
    
    
    
    
    
    Class A Common Stock, no par value:Authorized: 15,000,000 shares; Issued: 4,695,253
    
    
    9,612
    
    
    
    9,680Class B Common Stock, no par value:Authorized: 15,000,000 shares; Issued: 5,265,158
    
    
    17,049
    
    
    
    16,950Retained earnings
    
    
    88,596
    
    
    
    130,890Treasury stock, at costClass A: 2006  960,326 shares; 2005  947,321 shares
    
    
    (6,782
    )
    
    
    (6,678
    )Class B: 2006  1,090,643 shares; 2005  1,105,364 shares
    
    
    (9,133
    )
    
    
    (9,077
    )Deferred cost  restricted stock
    
    
    (26
    )
    
    
    (137
    )Notes receivable  stock purchases
    
    
    (11
    )
    
    
    (11
    )Accumulated other comprehensive loss
    
    
    (13,886
    )
    
    
    (17,302
    )TOTAL SHAREHOLDERS EQUITY
    
    
    85,419
    
    
    
    124,315TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    519,971
    
    
    $
    546,868
  31




---



##### 



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 OtherCommon Stock
    
    
    Retained
    
    
    Treasury
    
    
    
    
    
    
    ComprehensiveClass A
    
    
    Class B
    
    
    Earnings
    
    
    Stock
    
    
    Other
    
    
    Loss
    
    
    TotalBalance at March 29, 2003
    
    $
    9,573
    
    
    $
    16,866
    
    
    $
    131,911
    
    
    $
    (14,928
    )
    
    $
    (229
    )
    
    $
    (15,384
    )
    
    $
    127,809Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    3,037
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,037Minimum pension liability adjustment,
less tax of $789
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,510
    
    
    
    1,510Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,547Cash dividends declared
    
    
    
    
    
    
    
    
    
    
    (4,127
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,127
    )Amortization of restricted stock grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56
    
    
    
    
    
    
    
    56Restricted stock grant
    
    
    109
    
    
    
    
    
    
    
    
    
    
    
    104
    
    
    
    (213
    )
    
    
    
    
    
    
    Repurchase shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (248
    )
    
    
    
    
    
    
    
    
    
    
    (248
    )Reduction in notes receivable  stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164
    
    
    
    
    
    
    
    164Other
    
    
    
    
    
    
    22
    
    
    
    (8
    )
    
    
    61
    
    
    
    
    
    
    
    
    
    
    
    75Balance at March 27, 2004
    
    
    9,682
    
    
    
    16,888
    
    
    
    130,813
    
    
    
    (15,011
    )
    
    
    (222
    )
    
    
    (13,874
    )
    
    
    128,276Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    4,162
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,162Minimum pension liability adjustment,
less tax of $1,792
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,428
    )
    
    
    (3,428
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    734Cash dividends declared
    
    
    
    
    
    
    
    
    
    
    (4,104
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,104
    )Amortization of restricted stock grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74
    
    
    
    
    
    
    
    74Repurchase shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (976
    )
    
    
    
    
    
    
    
    
    
    
    (976
    )Exercise of stock options
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    176
    
    
    
    
    
    
    
    
    
    
    
    209Other
    
    
    (2
    )
    
    
    29
    
    
    
    19
    
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    102Balance at April 2, 2005
    
    
    9,680
    
    
    
    16,950
    
    
    
    130,890
    
    
    
    (15,755
    )
    
    
    (148
    )
    
    
    (17,302
    )
    
    
    124,315Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    (40,235
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40,235
    )Minimum pension liability adjustment,
less tax of $901
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,724
    
    
    
    1,724Termination of supplemental executive
retirement plans, less tax of $885
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,692
    
    
    
    1,692Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36,819
    )Cash dividends declared
    
    
    
    
    
    
    
    
    
    
    (2,068
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,068
    )Amortization of restricted stock grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111
    
    
    
    
    
    
    
    111Repurchase shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (539
    )
    
    
    
    
    
    
    
    
    
    
    (539
    )Exercise of stock options
    
    
    
    
    
    
    72
    
    
    
    
    
    
    
    372
    
    
    
    
    
    
    
    
    
    
    
    444Other
    
    
    (68
    )
    
    
    27
    
    
    
    9
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    (25
    )Balance at April 1, 2006
    
    $
    9,612
    
    
    $
    17,049
    
    
    $
    88,596
    
    
    $
    (15,915
    )
    
    $
    (37
    )
    
    $
    (13,886
    )
    
    $
    85,419
  32




---



##### 



CONSOLIDATED STATEMENTS OF CASH FLOWS
 YEAR ENDED
    
    April 1, 2006
    
    
    April 2, 2005
    
    
    March 27, 2004OPERATING ACTIVITIESNet income (loss)
    
    $
    (40,235
    )
    
    $
    4,162
    
    
    $
    3,037Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation
    
    
    26,418
    
    
    
    25,950
    
    
    
    25,013Long-lived asset impairment
    
    
    15,025
    
    
    
    
    
    
    
    Restructuring reserves
    
    
    15,398
    
    
    
    
    
    
    
    Cash used for restructuring
    
    
    (942
    )
    
    
    
    
    
    
    Goodwill impairment
    
    
    13,122
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    (16,174
    )
    
    
    (3,972
    )
    
    
    9,678Changes in operating assets and liabilities:Accounts, notes and other receivables
    
    
    6,083
    
    
    
    3,575
    
    
    
    (653
    )Inventories
    
    
    4,788
    
    
    
    (5,918
    )
    
    
    3,457Prepaid expenses and recoverable income taxes
    
    
    (807
    )
    
    
    4,436
    
    
    
    (6,367
    )Accounts payable and accrued expenses
    
    
    (3,933
    )
    
    
    (1,773
    )
    
    
    5,679Payments under terminated retirement and
deferred compensation plans
    
    
    (13,705
    )
    
    
    
    
    
    
    Other operating activities
    
    
    4,534
    
    
    
    77
    
    
    
    3,872NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    9,572
    
    
    
    26,537
    
    
    
    43,716INVESTING ACTIVITIESAcquisition of property, equipment and land held for expansion
    
    
    (36,378
    )
    
    
    (63,778
    )
    
    
    (26,457
    )Disposition of property, equipment and land held for expansion
    
    
    6,844
    
    
    
    19,683
    
    
    
    2,700Other investing activities
    
    
    380
    
    
    
    1,005
    
    
    
    (2,190
    )NET CASH USED FOR INVESTING ACTIVITIES
    
    
    (29,154
    )
    
    
    (43,090
    )
    
    
    (25,947
    )FINANCING ACTIVITIESRepayments of short-term borrowings
    
    
    
    
    
    
    
    
    
    
    (1,700
    )Proceeds of long-term borrowings
    
    
    288,991
    
    
    
    140,000
    
    
    
    50,000Proceeds of sales/leasebacks
    
    
    15,600
    
    
    
    16,368
    
    
    
    12,338Payments of long-term debt and capital lease obligations
    
    
    (277,860
    )
    
    
    (136,852
    )
    
    
    (74,833
    )Cash dividends paid
    
    
    (3,084
    )
    
    
    (4,110
    )
    
    
    (4,130
    )Debt acquisition costs
    
    
    (2,303
    )
    
    
    
    
    
    
    Purchases of Class A and Class B Common Stock for treasury
    
    
    (539
    )
    
    
    (976
    )
    
    
    (248
    )Stock options exercised
    
    
    444
    
    
    
    209
    
    
    
    Other financing activities
    
    
    (34
    )
    
    
    1,694
    
    
    
    75NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES
    
    
    21,215
    
    
    
    16,333
    
    
    
    (18,498
    )INCREASE (DECREASE) IN CASH AND EQUIVALENTS
    
    
    1,633
    
    
    
    (220
    )
    
    
    (729
    )Cash and equivalents at beginning of year
    
    
    27,364
    
    
    
    27,584
    
    
    
    28,313CASH AND EQUIVALENTS AT END OF YEAR
    
    $
    28,997
    
    
    $
    27,364
    
    
    $
    27,584
  33




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
  Description of Business
  Principles of Consolidation
  Business Segments
  Fiscal Year
  Revenue Recognition
  Excise Taxes
  Cost of Merchandise Sold
  Vendor Allowances
  Selling, General and Administrative
  Advertising Costs
  Cost of Opening Stores
  Cash and Equivalents
  34




---



##### 



Inventories
  Accounts and Notes Receivable
   Property and Equipment
  Impairment of Long-Lived Assets
  Store Closing Costs
   Impairment of Goodwill
  Capitalized Lease Property
  35




---



##### 



Income Taxes
  Self-Insurance
  Environmental Liabilities
  Stock Options
   2006
    
    
    2005
    
    
    2004Net income (loss), as reported
    
    $
    (40,235
    )
    
    $
    4,162
    
    
    $
    3,037Compensation recorded, net of tax
    
    
    (13
    )
    
    
    45
    
    
    
    37Compensation using
the fair value method, net of tax
    
    
    1
    
    
    
    (600
    )
    
    
    (815
    )Pro-forma net income (loss)
    
    $
    (40,247
    )
    
    $
    3,607
    
    
    $
    2,259Earnings (loss) per share, as reported:Basic
    
    $
    (5.09
    )
    
    $
    .53
    
    
    $
    .38Diluted
    
    
    (5.09
    )
    
    
    .52
    
    
    
    .38Pro-forma earnings (loss) per share:Basic
    
    $
    (5.09
    )
    
    $
    .46
    
    
    $
    .28Diluted
    
    
    (5.09
    )
    
    
    .45
    
    
    
    .28
 Use of Estimates
  Reclassifications
  NOTE 2  RECENT ACCOUNTING PRONOUNCEMENTS
  36




---



##### 



NOTE 3  RESTRUCTURING COSTS AND IMPAIRMENT OF LONG-LIVED ASSETS
     Impairment and
    
    
    Reduction inRestructuring
    
    
    basis of
    
    
    
    
    
    
    Liability atExpense
    
    
    fixed assets
    
    
    Payments
    
    
    April 1, 2006Asset impairment
    
    $
    15,025
    
    
    $
    (15,025
    )
    
    $
    
    
    
    $
    Leased real estate
    
    
    5,262
    
    
    
    
    
    
    
    (178
    )
    
    
    5,084Leased equipment
    
    
    2,646
    
    
    
    
    
    
    
    (238
    )
    
    
    2,408Personnel related costs
    
    
    7,015
    
    
    
    
    
    
    
    (186
    )
    
    
    6,829Other
    
    
    475
    
    
    
    
    
    
    
    (340
    )
    
    
    135Total restructuring charges
    
    $
    30,423
    
    
    $
    (15,025
    )
    
    $
    (942
    )
    
    $
    14,456
 37




---



##### 



NOTE 4  GOODWILL IMPAIRMENT
  NOTE 5  EARNINGS (LOSS) PER SHARE
  2006
    
    
    2005
    
    
    2004Net income (loss)  basic
and diluted EPS numerator
    
    $
    (40,235
    )
    
    $
    4,162
    
    
    $
    3,037Weighted average shares outstanding
    
    
    7,910
    
    
    
    7,913
    
    
    
    7,945Non-vested restricted shares
    
    
    (10
    )
    
    
    (16
    )
    
    
    (5
    )Basic EPS denominator
    
    
    7,900
    
    
    
    7,897
    
    
    
    7,940Effect of dilutive securities:Non-vested restricted shares
    
    
    
    
    
    
    16
    
    
    
    5Employee stock options
    
    
    
    
    
    
    91
    
    
    
    61Adjusted weighted average shares 
diluted EPS denominator
    
    
    7,900
    
    
    
    8,004
    
    
    
    8,006
 NOTE 6  INVENTORIES
  NOTE 7  EMPLOYEE BENEFIT PLANS
     38




---



##### 



Pension
    
    
    Post-retirement2006
    
    
    2005
    
    
    2006
    
    
    2005Change in benefit obligation:Benefit obligation at beginning of year
    
    $
    82,683
    
    
    $
    76,124
    
    
    $
    4,853
    
    
    $
    4,901Service cost
    
    
    928
    
    
    
    1,100
    
    
    
    533
    
    
    
    523Interest cost
    
    
    4,299
    
    
    
    4,447
    
    
    
    258
    
    
    
    258Actuarial
(gain) loss
    
    
    (7,905
    )
    
    
    4,108
    
    
    
    (270
    )
    
    
    (506
    )Correction of error for officer liability
    
    
    
    
    
    
    
    
    
    
    1,778
    
    
    
    Benefits paid
    
    
    (3,169
    )
    
    
    (3,096
    )
    
    
    (357
    )
    
    
    (323
    )SERP termination
    
    
    (18,902
    )
    
    
    
    
    
    
    
    
    
    
    Benefit obligation at end of year
    
    $
    57,934
    
    
    $
    82,683
    
    
    $
    6,795
    
    
    $
    4,853Change in plan assets:Fair value of plan assets beginning of year
    
    $
    38,687
    
    
    $
    40,379
    
    
    $
    
    
    
    $
    Return on plan assets
    
    
    2,436
    
    
    
    1,036
    
    
    
    
    
    
    
    Company contribution
    
    
    441
    
    
    
    368
    
    
    
    357
    
    
    
    323Benefits paid
    
    
    (3,169
    )
    
    
    (3,096
    )
    
    
    (357
    )
    
    
    (323
    )Fair value of plan assets at end of year
    
    $
    38,395
    
    
    $
    38,687
    
    
    $
    
    
    
    $
    
  Pension
    
    
    Post-retirement2006
    
    
    2005
    
    
    2006
    
    
    2005Accumulated benefit obligation
    
    $
    (57,934
    )
    
    $
    (79,633
    )
    
    $
    (6,795
    )
    
    $
    (4,853
    )Projected benefit obligation
    
    $
    (57,934
    )
    
    $
    (82,683
    )
    
    $
    (6,795
    )
    
    $
    (4,853
    )Plan assets at fair value
    
    
    38,395
    
    
    
    38,687
    
    
    
    
    
    
    
    Funded status of the plan (underfunded)
    
    
    (19,539
    )
    
    
    (43,996
    )
    
    
    (6,795
    )
    
    
    (4,853
    )Unrecognized net actuarial loss
    
    
    21,297
    
    
    
    29,550
    
    
    
    612
    
    
    
    1,031Unrecognized prior service costs
    
    
    
    
    
    
    766
    
    
    
    (366
    )
    
    
    (413
    )Net amount recognized
    
    $
    1,758
    
    
    $
    (13,680
    )
    
    $
    (6,549
    )
    
    $
    (4,235
    )Accrued benefit liability
    
    $
    (19,539
    )
    
    $
    (40,946
    )
    
    $
    (6,549
    )
    
    $
    (4,235
    )Intangible asset
    
    
    
    
    
    
    766
    
    
    
    
    
    
    
    Accumulated other comprehensive loss
    
    
    21,297
    
    
    
    26,500
    
    
    
    
    
    
    
    Net amount recognized
    
    $
    1,758
    
    
    $
    (13,680
    )
    
    $
    (6,549
    )
    
    $
    (4,235
    )Increase (decrease) in minimum liability
included in other comprehensive income
    
    $
    (2,625
    )
    
    $
    5,220
    
    
    
    
    
    
    
    
 39




---



##### 



2006
    
    
    2005
    
    
    2004Service cost
    
    $
    928
    
    
    $
    1,100
    
    
    $
    866Interest cost
    
    
    4,299
    
    
    
    4,447
    
    
    
    4,407Expected return on plan assets
    
    
    (3,076
    )
    
    
    (3,316
    )
    
    
    (2,826
    )Recognized actuarial loss
    
    
    1,475
    
    
    
    1,360
    
    
    
    1,714Amortization of prior service cost
    
    
    278
    
    
    
    370
    
    
    
    370Benefit cost
    
    $
    3,904
    
    
    $
    3,961
    
    
    $
    4,531
  Pension
    
    Post-retirement2006
    
    2005
    
    2006
    
    2005Discount rate
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    6.00
    %Compensation increases
    
    
    n/a
    
    
    
    4.00
    %
    
    
    n/a
    
    
    
    n/a
  Pension
    
    Post-retirement2006
    
    2005
    
    2006
    
    2005Discount rate
    
    
    5.75
    %
    
    
    6.00
    %
    
    
    5.75
    %
    
    
    6.00
    %Expected long-term return on plan assets
    
    
    8.25
    %
    
    
    8.50
    %
    
    
    n/a
    
    
    
    n/aCompensation increases
    
    
    n/a
    
    
    
    4.00
    %
    
    
    n/a
    
    
    
    n/a
   2006
    
    
    2005
    
    
    2004Service cost
    
    $
    533
    
    
    $
    523
    
    
    $
    558Interest cost
    
    
    258
    
    
    
    258
    
    
    
    310Correction of error for officer liability
    
    
    1,778
    
    
    
    
    
    
    
    Other
    
    
    9
    
    
    
    (7
    )
    
    
    47Benefit cost
    
    $
    2,578
    
    
    $
    774
    
    
    $
    915
   2006
    
    2005Equity securities
    
    
    59.4
    %
    
    
    53.7
    %Debt securities
    
    
    25.0
    
    
    
    23.5Real estate
    
    
    2.6
    
    
    
    2.9Other
    
    
    13.0
    
    
    
    19.9Total
    
    
    100.0
    %
    
    
    100.0
    %
  40




---



##### 



Pension
    
    Post-retirement2007
    
    $
    2,889
    
    
    $
    3762008
    
    
    2,990
    
    
    
    3992009
    
    
    3,103
    
    
    
    4232010
    
    
    3,198
    
    
    
    4952011
    
    
    3,279
    
    
    
    5742012 through 2016
    
    
    18,210
    
    
    
    4,153
 NOTE 8  DEBT
  2006
    
    
    200510.05% notes
    
    $
    7,903
    
    
    $
    9,6568.25% mortgage
    
    
    14,476
    
    
    
    15,0218.95% mortgage
    
    
    8,288
    
    
    
    8,662Revolving credit facility
    
    
    34,516
    
    
    
    43,00012.50% term loan
    
    
    25,000
    
    
    
    8 7/8% senior subordinated notes
    
    
    102,795
    
    
    
    102,795Less discount
    
    
    (110
    )
    
    
    (194
    )Other
    
    
    
    
    
    
    1,600Less current maturities
    
    
    (2,938
    )
    
    
    (47,272
    )$
    189,930
    
    
    $
    133,268
      41




---



##### 



2007
    
    $
    2,9382008
    
    
    131,0262009
    
    
    3,5532010
    
    
    14,5342011
    
    
    40,927Thereafter
    
    
    Interest expense consisted of:
 2006
    
    
    2005
    
    
    2004Long-term debt
    
    $
    17,126
    
    
    $
    15,640
    
    
    $
    15,517Capital and financing lease obligations
    
    
    4,264
    
    
    
    3,501
    
    
    
    3,528Other
    
    
    
    
    
    
    72
    
    
    
    5Total interest expense
    
    $
    21,390
    
    
    $
    19,213
    
    
    $
    19,050Interest capitalized
    
    $
    196
    
    
    $
    238
    
    
    $
    533Cash payments for interest
    
    $
    23,150
    
    
    $
    18,158
    
    
    $
    18,780
 42




---



##### 



NOTE 9  DEBT AND GUARANTOR SUBSIDIARIES
   Guarantor
    
    
    ConsolidatingParent
    
    
    subsidiaries
    
    
    entries
    
    
    TotalSales and other revenues
    
    $
    5,861
    
    
    $
    1,743,791
    
    
    $
    (5,861
    )
    
    $
    1,743,791Gains (losses) from sales of property
    
    
    (2
    )
    
    
    652
    
    
    
    
    
    
    
    650Total revenues
    
    
    5,859
    
    
    
    1,744,443
    
    
    
    (5,861
    )
    
    
    1,744,441Cost of merchandise sold, including
warehousing and transportation,
excluding depreciation
    
    
    
    
    
    
    1,232,366
    
    
    
    
    
    
    
    1,232,366Gross profit
    
    
    5,859
    
    
    
    512,077
    
    
    
    (5,861
    )
    
    
    512,075Selling, general and administrative
    
    
    3,747
    
    
    
    480,212
    
    
    
    (5,861
    )
    
    
    478,098Depreciation
    
    
    1,642
    
    
    
    24,776
    
    
    
    
    
    
    
    26,418Restructuring costs and impairment of
long-lived assets
    
    
    
    
    
    
    30,423
    
    
    
    
    
    
    
    30,423Impairment of goodwill
    
    
    
    
    
    
    13,122
    
    
    
    
    
    
    
    13,122Operating income (loss)
    
    
    470
    
    
    
    (36,456
    )
    
    
    
    
    
    
    (35,986
    )Interest
    
    
    2,126
    
    
    
    19,264
    
    
    
    
    
    
    
    21,390Other non-operating (income) expense
    
    
    (856
    )
    
    
    1,340
    
    
    
    
    
    
    
    484Loss before income taxes
    
    
    (800
    )
    
    
    (57,060
    )
    
    
    
    
    
    
    (57,860
    )Income taxes benefit
    
    
    (280
    )
    
    
    (17,345
    )
    
    
    
    
    
    
    (17,625
    )Net loss
    
    $
    (520
    )
    
    $
    (39,715
    )
    
    $
    
    
    
    $
    (40,235
    )
  Guarantor
    
    
    ConsolidatingParent
    
    
    subsidiaries
    
    
    entries
    
    
    TotalSales and other revenues
    
    $
    5,190
    
    
    $
    1,743,609
    
    
    $
    (5,190
    )
    
    $
    1,743,609Gains from sales of property
    
    
    894
    
    
    
    2,933
    
    
    
    
    
    
    
    3,827Total revenues
    
    
    6,084
    
    
    
    1,746,542
    
    
    
    (5,190
    )
    
    
    1,747,436Cost of merchandise sold, including
warehousing and transportation,
excluding depreciation
    
    
    
    
    
    
    1,231,840
    
    
    
    
    
    
    
    1,231,840Gross profit
    
    
    6,084
    
    
    
    514,702
    
    
    
    (5,190
    )
    
    
    515,596Selling, general and administrative
    
    
    3,028
    
    
    
    468,341
    
    
    
    (5,190
    )
    
    
    466,179Depreciation
    
    
    1,431
    
    
    
    24,519
    
    
    
    
    
    
    
    25,950Operating income
    
    
    1,625
    
    
    
    21,842
    
    
    
    
    
    
    
    23,467Interest
    
    
    1,822
    
    
    
    17,391
    
    
    
    
    
    
    
    19,213Other non-operating income
    
    
    (1,453
    )
    
    
    (838
    )
    
    
    
    
    
    
    (2,291
    )Income before income taxes
    
    
    1,256
    
    
    
    5,289
    
    
    
    
    
    
    
    6,545Income taxes
    
    
    436
    
    
    
    1,947
    
    
    
    
    
    
    
    2,383Net Income
    
    $
    820
    
    
    $
    3,342
    
    
    $
    
    
    
    $
    4,162
 43




---



##### 



Guarantor
    
    
    ConsolidatingParent
    
    
    subsidiaries
    
    
    entries
    
    
    TotalSales and other revenues
    
    $
    4,912
    
    
    $
    1,650,865
    
    
    $
    (4,909
    )
    
    $
    1,650,868Gains from sales of property
    
    
    
    
    
    
    3,047
    
    
    
    
    
    
    
    3,047Total revenues
    
    
    4,912
    
    
    
    1,653,912
    
    
    
    (4,909
    )
    
    
    1,653,915Cost of merchandise sold, including
warehousing and transportation,
excluding depreciation
    
    
    
    
    
    
    1,156,255
    
    
    
    
    
    
    
    1,156,255Gross profit
    
    
    4,912
    
    
    
    497,657
    
    
    
    (4,909
    )
    
    
    497,660Selling, general and administrative
    
    
    3,084
    
    
    
    450,827
    
    
    
    (4,909
    )
    
    
    449,002Depreciation
    
    
    1,369
    
    
    
    23,644
    
    
    
    
    
    
    
    25,013Operating income
    
    
    459
    
    
    
    23,186
    
    
    
    
    
    
    
    23,645Interest
    
    
    1,788
    
    
    
    17,262
    
    
    
    
    
    
    
    19,050Other non-operating income
    
    
    (961
    )
    
    
    
    
    
    
    
    
    
    
    (961
    )Income (loss) before income taxes
    
    
    (368
    )
    
    
    5,924
    
    
    
    
    
    
    
    5,556Income taxes (benefit)
    
    
    (168
    )
    
    
    2,687
    
    
    
    
    
    
    
    2,519Net income (loss)
    
    $
    (200
    )
    
    $
    3,237
    
    
    $
    
    
    
    $
    3,037
 44




---



##### 



GuarantorParent
    
    
    subsidiaries
    
    
    TotalAssetsCurrent assets:Cash and equivalents
    
    $
    
    
    
    $
    28,997
    
    
    $
    28,997Accounts and notes receivable, net
    
    
    
    
    
    
    18,808
    
    
    
    18,808Inventories
    
    
    
    
    
    
    127,970
    
    
    
    127,970Prepaid expenses
    
    
    
    
    
    
    5,421
    
    
    
    5,421Assets held for sale
    
    
    
    
    
    
    3,957
    
    
    
    3,957Recoverable income taxes
    
    
    2,846
    
    
    
    
    
    
    
    2,846Total current assets
    
    
    2,846
    
    
    
    185,153
    
    
    
    187,999Property and equipment, less
allowances for depreciation
    
    
    36,668
    
    
    
    261,957
    
    
    
    298,625Other assets
    
    
    3,134
    
    
    
    30,213
    
    
    
    33,347Total Assets
    
    $
    42,648
    
    
    $
    477,323
    
    
    $
    519,971Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    68,601
    
    
    $
    68,601Accrued liabilities
    
    
    8,730
    
    
    
    62,023
    
    
    
    70,753Current maturities of long-term liabilities
    
    
    1,938
    
    
    
    2,688
    
    
    
    4,626Total current liabilities
    
    
    10,668
    
    
    
    133,312
    
    
    
    143,980Long-term liabilities:Long-term debt
    
    
    108,650
    
    
    
    81,280
    
    
    
    189,930Capital lease and financing obligations
    
    
    
    
    
    
    43,704
    
    
    
    43,704Pension and post-retirement benefits
    
    
    19,539
    
    
    
    6,549
    
    
    
    26,088Other long-term liabilities
    
    
    
    
    
    
    11,317
    
    
    
    11,317Total long-term liabilities
    
    
    128,189
    
    
    
    142,850
    
    
    
    271,039Deferred items:Gains from sale/leasebacks
    
    
    2,012
    
    
    
    13,161
    
    
    
    15,173Other
    
    
    
    
    
    
    4,360
    
    
    
    4,360Total deferred items
    
    
    2,012
    
    
    
    17,521
    
    
    
    19,533Amounts due parent from subsidiaries
    
    
    (99,930
    )
    
    
    99,930
    
    
    
    Shareholders Equity:Common stock, Classes A and B
    
    
    26,661
    
    
    
    
    
    
    
    26,661Retained earnings
    
    
    4,886
    
    
    
    83,710
    
    
    
    88,596Treasury stock, at cost
    
    
    (15,915
    )
    
    
    
    
    
    
    (15,915
    )Deferred cost restricted stock
    
    
    (26
    )
    
    
    
    
    
    
    (26
    )Notes receivable stock purchases
    
    
    (11
    )
    
    
    
    
    
    
    (11
    )Accumulated other comprehensive loss
    
    
    (13,886
    )
    
    
    
    
    
    
    (13,886
    )Total shareholders equity
    
    
    1,709
    
    
    
    83,710
    
    
    
    85,419Total Liabilities
and Shareholders Equity
    
    $
    42,648
    
    
    $
    477,323
    
    
    $
    519,971
 45




---



##### 



GuarantorParent
    
    
    subsidiaries
    
    
    TotalAssetsCurrent assets:Cash and equivalents
    
    $
    
    
    
    $
    27,364
    
    
    $
    27,364Accounts and notes receivable, net
    
    
    
    
    
    
    22,153
    
    
    
    22,153Inventories
    
    
    
    
    
    
    132,758
    
    
    
    132,758Prepaid expenses
    
    
    
    
    
    
    6,619
    
    
    
    6,619Recoverable income taxes
    
    
    841
    
    
    
    
    
    
    
    841Total current assets
    
    
    841
    
    
    
    188,894
    
    
    
    189,735Property and equipment, less
allowances for depreciation
    
    
    37,919
    
    
    
    269,897
    
    
    
    307,816Other assets
    
    
    2,841
    
    
    
    46,476
    
    
    
    49,317Total Assets
    
    $
    41,601
    
    
    $
    505,267
    
    
    $
    546,868Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    75,786
    
    
    $
    75,786Accrued liabilities
    
    
    12,581
    
    
    
    42,360
    
    
    
    54,941Current maturities of long-term liabilities
    
    
    1,754
    
    
    
    46,690
    
    
    
    48,444Total current liabilities
    
    
    14,335
    
    
    
    164,836
    
    
    
    179,171Long-term liabilities:Long-term debt
    
    
    110,504
    
    
    
    22,764
    
    
    
    133,268Capital lease and financing obligations
    
    
    
    
    
    
    27,212
    
    
    
    27,212Pension and post-retirement benefits
    
    
    47,994
    
    
    
    4,235
    
    
    
    52,229Total long-term liabilities
    
    
    158,498
    
    
    
    54,211
    
    
    
    212,709Deferred items:Income taxes
    
    
    8,823
    
    
    
    
    
    
    
    8,823Gains from sale/leasebacks
    
    
    2,162
    
    
    
    14,325
    
    
    
    16,487Other
    
    
    
    
    
    
    5,363
    
    
    
    5,363Total deferred items
    
    
    10,985
    
    
    
    19,688
    
    
    
    30,673Amounts due parent from subsidiaries
    
    
    (141,381
    )
    
    
    141,381
    
    
    
    Shareholders Equity:Common stock, Classes A and B
    
    
    26,630
    
    
    
    
    
    
    
    26,630Retained earnings
    
    
    5,739
    
    
    
    125,151
    
    
    
    130,890Treasury stock, at cost
    
    
    (15,755
    )
    
    
    
    
    
    
    (15,755
    )Deferred cost restricted stock
    
    
    (137
    )
    
    
    
    
    
    
    (137
    )Notes receivable stock purchases
    
    
    (11
    )
    
    
    
    
    
    
    (11
    )Accumulated other comprehensive loss
    
    
    (17,302
    )
    
    
    
    
    
    
    (17,302
    )Total shareholders equity
    
    
    (836
    )
    
    
    125,151
    
    
    
    124,315Total Liabilities
and Shareholders Equity
    
    $
    41,601
    
    
    $
    505,267
    
    
    $
    546,868
 46




---



##### 



GuarantorParent
    
    
    subsidiaries
    
    
    TotalNet cash provided by operating activities
    
    $
    3,548
    
    
    $
    6,024
    
    
    $
    9,572Net cash used for investing activities
    
    
    (391
    )
    
    
    (28,763
    )
    
    
    (29,154
    )Financing activities:Proceeds of long-term borrowings
    
    
    
    
    
    
    288,991
    
    
    
    288,991Proceeds of sales/leasebacks
    
    
    
    
    
    
    15,600
    
    
    
    15,600Payments of long-term debt and capital leases
    
    
    (1,670
    )
    
    
    (276,190
    )
    
    
    (277,860
    )Debt acquisition costs
    
    
    
    
    
    
    (2,303
    )
    
    
    (2,303
    )Cash dividends paid
    
    
    (3,084
    )
    
    
    
    
    
    
    (3,084
    )Other financing activities
    
    
    1,597
    
    
    
    (1,726
    )
    
    
    (129
    )Net cash provided by (used for) financing activities
    
    
    (3,157
    )
    
    
    24,372
    
    
    
    21,215Net decrease in cash and equivalents
    
    
    
    
    
    
    1,633
    
    
    
    1,633Cash and equivalents at beginning of period
    
    
    
    
    
    
    27,364
    
    
    
    27,364Cash and equivalents at end of period
    
    $
    
    
    
    $
    28,997
    
    
    $
    28,997
  GuarantorParent
    
    
    subsidiaries
    
    
    TotalNet cash provided by operating activities
    
    $
    11,273
    
    
    $
    15,264
    
    
    $
    26,537Net cash used for investing activities
    
    
    (8,889
    )
    
    
    (34,201
    )
    
    
    (43,090
    )Financing activities:Proceeds of long-term borrowings
    
    
    
    
    
    
    140,000
    
    
    
    140,000Proceeds of sales/leasebacks
    
    
    4,994
    
    
    
    11,374
    
    
    
    16,368Payments of long-term debt and capital leases
    
    
    (1,502
    )
    
    
    (135,350
    )
    
    
    (136,852
    )Cash dividends paid
    
    
    (4,110
    )
    
    
    
    
    
    
    (4,110
    )Other financing activities
    
    
    (1,766
    )
    
    
    2,693
    
    
    
    927Net cash provided by (used for) financing activities
    
    
    (2,384
    )
    
    
    18,717
    
    
    
    16,333Net decrease in cash and equivalents
    
    
    
    
    
    
    (220
    )
    
    
    (220
    )Cash and equivalents at beginning of period
    
    
    
    
    
    
    27,584
    
    
    
    27,584Cash and equivalents at end of period
    
    $
    
    
    
    $
    27,364
    
    
    $
    27,364
 47




---



##### 



GuarantorParent
    
    
    subsidiaries
    
    
    TotalNet cash provided by operating activities
    
    $
    22,280
    
    
    $
    21,436
    
    
    $
    43,716Net cash used for investing activities
    
    
    (92
    )
    
    
    (25,855
    )
    
    
    (25,947
    )Financing activities:Repayments of short-term borrowings
    
    
    
    
    
    
    (1,700
    )
    
    
    (1,700
    )Proceeds of long-term borrowings
    
    
    
    
    
    
    50,000
    
    
    
    50,000Proceeds of sales/leasebacks
    
    
    
    
    
    
    12,338
    
    
    
    12,338Payments of long-term debt and capital leases
    
    
    (18,042
    )
    
    
    (56,791
    )
    
    
    (74,833
    )Cash dividends paid
    
    
    (4,130
    )
    
    
    
    
    
    
    (4,130
    )Other financing activities
    
    
    (16
    )
    
    
    (157
    )
    
    
    (173
    )Net cash provided by (used for) financing activities
    
    
    (22,188
    )
    
    
    3,690
    
    
    
    (18,498
    )Net decrease in cash and equivalents
    
    
    
    
    
    
    (729
    )
    
    
    (729
    )Cash and equivalents at beginning of period
    
    
    
    
    
    
    28,313
    
    
    
    28,313Cash and equivalents at end of period
    
    $
    
    
    
    $
    27,584
    
    
    $
    27,584
 NOTE 10  LEASES
    Capital andFinancing
    
    
    OperatingLeases
    
    
    Leases2006
    
    $
    6,733
    
    
    $
    38,3962007
    
    
    6,704
    
    
    
    33,7662008
    
    
    6,105
    
    
    
    27,4002009
    
    
    6,046
    
    
    
    22,4232010
    
    
    6,041
    
    
    
    18,074Thereafter
    
    
    57,049
    
    
    
    131,13588,678
    
    
    $
    271,194Less amounts representing interest
    
    
    43,286Present value of net minimum
lease payments
    
    $
    45,392
  Rental expense consisted of:2006
    
    
    2005
    
    
    2004Minimum rentals
    
    $
    45,151
    
    
    $
    43,615
    
    
    $
    38,545Contingent rentals
    
    
    175
    
    
    
    155
    
    
    
    195Sublease rental income
    
    
    (1,626
    )
    
    
    (1,653
    )
    
    
    (1,431
    )$
    43,700
    
    
    $
    42,117
    
    
    $
    37,309
 48




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##### 



NOTE 11  INCOME TAXES
  2006
    
    
    2005Deferred tax assets:Compensation and benefit accruals
    
    $
    16,485
    
    
    $
    19,089Deferred closed store liability
    
    
    2,509
    
    
    
    Federal and state net operating
loss carryforwards
    
    
    8,323
    
    
    
    3,030Goodwill
    
    
    1,328
    
    
    
    Other
    
    
    2,366
    
    
    
    3,229Total deferred tax assets
    
    
    31,011
    
    
    
    25,348Deferred tax liabilities:Property and equipment, including
leased property
    
    
    (23,724
    )
    
    
    (28,747
    )Inventory
    
    
    (11,367
    )
    
    
    (11,654
    )Goodwill
    
    
    
    
    
    
    (2,773
    )Deferred closed store liability
    
    
    
    
    
    
    (706
    )Other
    
    
    (408
    )
    
    
    (344
    )Total deferred tax liabilities
    
    
    (35,499
    )
    
    
    (44,224
    )Net deferred tax liability
    
    $
    (4,488
    )
    
    $
    (18,876
    )
  2006
    
    
    2005
    
    
    2004Current   Federal
    
    $
    (1,613
    )
    
    $
    6,189
    
    
    $
    (7,062
    )State
    
    
    162
    
    
    
    166
    
    
    
    (97
    )Total current
    
    
    (1,451
    )
    
    
    6,355
    
    
    
    (7,159
    )Deferred  Federal
    
    
    (16,095
    )
    
    
    (3,917
    )
    
    
    9,593State
    
    
    (79
    )
    
    
    (55
    )
    
    
    85Total deferred
    
    
    (16,174
    )
    
    
    (3,972
    )
    
    
    9,678$
    (17,625
    )
    
    $
    2,383
    
    
    $
    2,519Cash payments
    
    $
    1,056
    
    
    $
    2,712
    
    
    $
    801
  2006
    
    
    2005
    
    
    2004Federal statutory tax rate (35%)
    
    $
    (20,251
    )
    
    $
    2,291
    
    
    $
    1,945State and local, net of federal tax
    
    
    54
    
    
    
    72
    
    
    
    (8
    )Executive compensation
    
    
    1,117
    
    
    
    156
    
    
    
    98Other
    
    
    1,455
    
    
    
    (136
    )
    
    
    484Total income tax expense
    
    $
    (17,625
    )
    
    $
    2,383
    
    
    $
    2,519
 49




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##### 



NOTE 12  SHAREHOLDERS EQUITY AND EMPLOYEE STOCK PLANS

Common Stock
  Stock Repurchase Plan
   Changes in Shares Outstanding
 Changes in shares issued and treasury shares during the three years ended April 1, 2006 were as follows:
 Class A
    
    
    Class BIssued shares:Balance at March 27, 2004,
April 2, 2005, and April 1, 2006
    
    
    4,695
    
    
    
    5,265Treasury shares:Balance at March 29, 2003
    
    
    878
    
    
    
    1,135Shares repurchased
    
    
    20
    
    
    
    1Director stock purchases
    
    
    
    
    
    
    (7
    )Restricted stock grant
    
    
    (16
    )
    
    
    Balance at March 27, 2004
    
    
    882
    
    
    
    1,129Shares repurchased
    
    
    65
    
    
    
    4Stock options exercised
    
    
    
    
    
    
    (21
    )Director stock purchases
    
    
    
    
    
    
    (7
    )Balance at April 2, 2005
    
    
    947
    
    
    
    1,105Shares repurchased
    
    
    3
    
    
    
    39Stock options exercised
    
    
    
    
    
    
    (45
    )Director stock purchases
    
    
    
    
    
    
    (9
    )Restricted stock forfeiture
    
    
    10
    
    
    
    Balance at April 1, 2006
    
    
    960
    
    
    
    1,090Net outstanding at April 1, 2006
    
    
    3,735
    
    
    
    4,175
 Stock Option Plans and Shares Reserved
  50




---



##### 



Class A
    
    
    Class BShares to be issued
upon exercise of options
    
    
    1,216
    
    
    
    462Weighted average exercise price
    
    $
    14.14
    
    
    $
    11.05Shares available for future issuance
    
    
    230
    (a)
    
    
    (a) in any combination of Class A and Class B
  Class A shares
    
    
    Class B sharesPrice
    
    
    Options
    
    
    Price
    
    
    OptionsOutstanding at March 29, 2003
    
    $
    14.13
    
    
    
    1,358
    
    
    $
    10.90
    
    
    
    551Expired/forfeited
    
    
    14.70
    
    
    
    (34
    )
    
    
    10.55
    
    
    
    (3
    )Outstanding at March 27, 2004
    
    
    14.12
    
    
    
    1,324
    
    
    
    10.90
    
    
    
    548Exercised
    
    
    
    
    
    
    
    
    
    
    9.70
    
    
    
    (21
    )Outstanding at April 2, 2005
    
    
    14.12
    
    
    
    1,324
    
    
    
    10.95
    
    
    
    527Exercised
    
    
    
    
    
    
    
    
    
    
    9.81
    
    
    
    (45
    )Expired/forfeited
    
    
    13.81
    
    
    
    (108
    )
    
    
    11.26
    
    
    
    (20
    )Outstanding at April 1, 2006
    
    
    14.14
    
    
    
    1,216
    
    
    
    11.05
    
    
    
    462
 
 2006
    
    
    
    2005
    
    
    
    2004Vested options at the end of the yearClass A shares
    
    
    1,216
    
    
    
    1,183
    
    
    
    870Class B shares
    
    
    462
    
    
    
    527
    
    
    
    453Weighted average exercise price of vested optionsClass A shares
    
    $
    14.14
    
    
    $
    14.04
    
    
    $
    13.99Class B shares
    
    
    11.05
    
    
    
    10.95
    
    
    
    11.03Weighted average exercise price
of options granted during the yearClass A shares
    
    $
    
    
    
    $
    
    
    
    $
    Class B shares
    
    
    
    
    
    
    
    
    
    
    
  Other Stock Plans
   51




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##### 



Amended and Restated Rights Plan
   NOTE 13  CONTINGENCIES
     NOTE 14  SUBSEQUENT EVENTS
   52




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##### 



53




---



##### 



NOTE 15  SELECTED QUARTERLY FINANCIAL DATA
 2006
    
    
    2005Fourth
    
    
    Third
    
    
    Second
    
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstSales and other revenues
    
    $
    377,616
    
    
    $
    407,292
    
    
    $
    549,103
    
    
    $
    409,780
    
    
    $
    418,387
    
    
    $
    401,752
    
    
    $
    524,074
    
    
    $
    399,396Gains (losses) from sales of property
    
    
    (99
    )
    
    
    217
    
    
    
    532
    
    
    
    
    
    
    
    663
    
    
    
    1,890
    
    
    
    818
    
    
    
    456Total revenues
    
    
    377,517
    
    
    
    407,509
    
    
    
    549,635
    
    
    
    409,780
    
    
    
    419,050
    
    
    
    403,642
    
    
    
    524,892
    
    
    
    399,852Gross profit
    
    
    110,018
    
    
    
    120,196
    
    
    
    159,435
    
    
    
    122,426
    
    
    
    122,568
    
    
    
    119,607
    
    
    
    154,692
    
    
    
    118,729Selling, general and administrative
    
    
    107,108
    
    
    
    109,666
    
    
    
    150,259
    
    
    
    111,065
    
    
    
    115,045
    
    
    
    105,099
    
    
    
    139,996
    
    
    
    106,039Depreciation
    
    
    6,017
    
    
    
    6,278
    
    
    
    8,151
    
    
    
    5,972
    
    
    
    6,563
    
    
    
    5,815
    
    
    
    7,787
    
    
    
    5,785Restructuring costs and impairment
of long-lived assets
    
    
    17,648
    
    
    
    12,775
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment of goodwill
    
    
    13,122
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating income (loss)
    
    
    (33,877
    )
    
    
    (8,523
    )
    
    
    1,025
    
    
    
    5,389
    
    
    
    960
    
    
    
    8,693
    
    
    
    6,909
    
    
    
    6,905Interest
    
    
    5,467
    
    
    
    5,222
    
    
    
    6,254
    
    
    
    4,447
    
    
    
    4,751
    
    
    
    4,475
    
    
    
    5,704
    
    
    
    4,283Other non-operating expense (income)
    
    
    834
    
    
    
    33
    
    
    
    (264
    )
    
    
    (119
    )
    
    
    (1,453
    )
    
    
    
    
    
    
    (838
    )
    
    
    Income (loss) before income taxes
    
    
    (40,178
    )
    
    
    (13,778
    )
    
    
    (4,965
    )
    
    
    1,061
    
    
    
    (2,338
    )
    
    
    4,218
    
    
    
    2,043
    
    
    
    2,622Income taxes (benefit)
    
    
    (12,317
    )
    
    
    (4,146
    )
    
    
    (1,549
    )
    
    
    387
    
    
    
    (905
    )
    
    
    1,545
    
    
    
    739
    
    
    
    1,004Net income (loss)
    
    $
    (27,861
    )
    
    $
    (9,632
    )
    
    $
    (3,416
    )
    
    $
    674
    
    
    $
    (1,433
    )
    
    $
    2,673
    
    
    $
    1,304
    
    
    $
    1,618Earnings (loss) per common share:Basic
    
    $
    (3.53
    )
    
    $
    (1.22
    )
    
    $
    (.43
    )
    
    $
    .09
    
    
    $
    (.18
    )
    
    $
    .34
    
    
    $
    .17
    
    
    $
    .20Diluted
    
    
    (3.53
    )
    
    
    (1.22
    )
    
    
    (.43
    )
    
    
    .08
    
    
    
    (.18
    )
    
    
    .34
    
    
    
    .16
    
    
    
    .20Cash Dividend:Class A
    
    
    
    
    
    
    
    
    
    $
    .13
    
    
    $
    .13
    
    
    $
    .13
    
    
    $
    .13
    
    
    $
    .13
    
    
    $
    .13Class B
    
    
    
    
    
    
    
    
    
    
    .13
    
    
    
    .13
    
    
    
    .13
    
    
    
    .13
    
    
    
    .13
    
    
    
    .13
     54




---



##### 



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
   
 Item 9B. Other Information
  55




---



##### 



PART III
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
  EQUITY COMPENSATION PLAN INFORMATION
 Number of securitiesNumber of
    
    
    
    
    
    
    remaining availablesecurities to be
    
    
    
    
    
    
    for future issuanceissued upon
    
    
    
    
    
    
    under equityexercise of
    
    
    Weighted-average
    
    
    compensation plansoutstanding
    
    
    exercise price of
    
    
    (excluding sharesoptions, warrants
    
    
    outstanding options,
    
    
    reflected in firstPlan Category
    
    and rights
    
    
    warrants and rights
    
    
    column)Equity compensation plans
approved by shareholdersClass A
    
    
    1,216,002
    
    
    $
    14.14
    
    
    
    212,746
    (1)Class B
    
    
    462,050
    
    
    $
    11.05
    
    
    
    212,746
    (1)Equity compensation plans not
approved by shareholders
    
    
    0
    
    
    
    
    
    
    
    0Total
    
    
    1,678,052
    
    
    $
    13.29
    
    
    
    212,746
 
 (1)
    
    Plans authorize the grant of options to purchase either class of common stock.
 56




---



##### 



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 (a)(1)
    
    The following consolidated financial statements of Marsh Supermarkets, Inc. and
subsidiaries are set forth in Part II, Item 8.Report of Management on Responsibility for Financial ReportingReport of Independent Registered Public Accounting FirmConsolidated Statements of Operations for each of the three years in the period ended April 1, 2006Consolidated Balance Sheets as of April 1, 2006 and April 2, 2005Consolidated Statements of Shareholders Equity for each of the three years in the period ended April 1, 2006Consolidated Statements of Cash Flows for each of the three years in the period ended April 1, 2006Notes to Consolidated Financial Statements(a)(2)
    
    Note: All schedules for which provision is made in the applicable accounting regulation of
the Securities and Exchange Commission are not required under the related instructions, or are
inapplicable, and therefore have been omitted.
  Exhibit 2
    
    (a)
    
    Agreement and Plan of Merger, dated as of May 2, 2006, by
and among MSH Supermarkets Holding Corp., MS Operations,
Inc. and Marsh Supermarkets, Inc.  Incorporated by
reference to Form 8-K, filed on May 3, 2006Exhibit 3
    
    (a)
    
    Restated Articles of Incorporation, as amended as of May
15, 1991  Incorporated by reference to Form 10-K for the
year ended March 30, 1991.(b)
    
    By-Laws as amended as of November 26, 1997  Incorporated
by reference to Form 10-Q for the quarter ended January
3, 1998.Exhibit 4
    
    (a)
    
    Articles V, VI and VII of the Companys Restated Articles
of Incorporation, as amended as of May 15, 1991 
Incorporated by reference to Form 10-K for the year ended
March 30, 1991.(b)
    
    Articles I and IV of the Companys By-Laws, as amended as
of November 26, 1997  Incorporated by reference to Form
10-Q for the quarter ended January 3, 1998.(c)
    
    Agreement of the Company to furnish a copy of any
agreement relating to certain long-term debt and leases
to the Securities and Exchange Commission upon its
request  Incorporated by reference to Form 10-K for the
year ended March 27, 1987.(d)
    
    Amended and Restated Rights Agreement, dated as of
December 24, 1998, between Marsh Supermarkets, Inc. and
National City Bank  Incorporated by reference to Form
8-K, dated December 21, 1998.(e)
    
    Amendment, dated as of May 1, 2006, to Amended and
Restated Rights Agreement, dated as of December 24, 1998,
between Marsh Supermarkets, Inc. and National City Bank,
as Rights Agent  Incorporated by reference to Form 8-K,
filed on May 3, 2006.(f)
    
    Indenture, dated August 5, 1997, between Marsh
Supermarkets, Inc. and certain of its subsidiaries and
State Street Bank and Trust Company, as trustee, for
$150,000,000 8-7/8% Senior Subordinated Notes, due 2007 -
Incorporated by reference to Registration Statement on
Form S-4 (File No. 333-34855).(g)
    
    First Supplemental Indenture between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street
Bank and Trust Company, as trustee, dated December 31,
1997  Incorporated by reference to Form 10-K for the
year ended March 28, 1998.(h)
    
    Second Supplemental Indenture between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street
Bank and Trust Company, as trustee, dated January 28,
2000  Incorporated by reference to Form 10-K for the
year ended April 1, 2000.(i)
    
    Third Supplemental Indenture between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street
Bank and Trust Company, as trustee, dated June 22, 2000 
Incorporated by reference to From 10-K for the year ended
April 1, 2000.(j)
    
    Fourth Supplemental Indenture between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street
Bank and Trust Company, as trustee, dated October 15,
2001  Incorporated by reference to Registration
Statement on Form S-8 (File No. 333-82908).(k)
    
    Second Amended and Restated Credit Agreement between
Marsh Supermarkets, Inc. and certain of its subsidiaries
and the Provident Bank, as Agent and Arranger, dated as
of March 21, 2003  Incorporated by reference to Form
10-K for the year ended March 29, 2003.(l)
    
    First Amendment to Second Amended and Restated Credit
Agreement between Marsh Supermarkets, Inc. and certain of
its subsidiaries and The Provident Bank, as Agent and
Arranger, dated as of May 23, 2003  Incorporated by
reference to Form 10-K for the year ended March 29, 2003.(m)
    
    Second Amendment to Second Amended and Restated Credit
Agreement, dated as October 3, 2003  Incorporated by
reference to Form 10-Q for the quarter ended October 11,
2003.
 57




---



##### 



(n)
    
    Credit Agreement between Marsh Supermarkets, Inc. and its
subsidiaries and Bank of America, N.A. as Issuing Agent,
Administrative Agent and Collateral Agent, dated as of
November 9, 2005  Incorporated by reference to Form 8-K
filed November 16, 2005.(o)
    
    First Amendment to Credit Agreement, dated as of January
6, 2006, among Marsh Supermarkets, LLC, Marsh
Supermarkets, Inc., the other borrowers party thereto,
the facility guarantors party thereto, the lenders party
thereto, and Bank of America, N.A., as Issuing Bank, and
as Administrative Agent and Collateral Agent for the
Lenders  Incorporated by reference to Form 8-K filed on
January 12, 2006.(p)
    
    Security Agreement, dated as of November 9, 2005, by and
among Marsh Supermarkets, Inc., the other grantors party
thereto and Bank of America, N.A. as Collateral Agent 
Incorporated by reference to Form 8-K filed on November
16, 2005.(q)
    
    Intellectual Property Security Agreement, dated as of
November 9, 2005, by and among Marsh Supermarkets, Inc.,
Trademark Holdings, Inc. and Bank of America, N.A., as
Collateral Agent  Incorporated by reference to Form 8-K
filed on November 16, 2005.(r)
    
    Pledge Agreement, dated as of November 9, 2005, by and
among Marsh Supermarkets, Inc., the other pledgors party
thereto and Bank of America, N.A., as Collateral Agent 
Incorporated by reference to Form 8-K filed on November
16, 2005.(s)
    
    Guaranty, dated as of November 9, 2005, by Marsh
Supermarkets, Inc. and the other borrowers party thereto,
in favor of Bank of America, N.A., as Administrative
Agent, Collateral Agent and Issuing Bank, the lenders and
the other secured parties  Incorporated by reference to
Form 8-K filed on November 16, 2005.(t)
    
    Form of Mortgage, Collateral Assignment of Leases and
Rents and Fixture Filing  Incorporated by reference to
Form 8-K filed on November 16, 2005.(u)
    
    Credit Agreement, dated as of January 6, 2006, among
Marsh Supermarkets, LLC, Marsh Supermarkets, Inc., the
other borrowers party thereto, the facility guarantors
party thereto, the lenders party thereto, and Back Bay
Capital Funding LLC, as Administrative Agent and
Collateral Agent  Incorporated by reference to Form 8-K
filed on January 12, 2006.(v)
    
    Amendment No. 1, dated as of June 16, 2006, among Marsh
Supermarkets, LLC, Marsh Supermarkets, Inc., the other
borrowers party thereto, the facility guarantors party
thereto, Back Bay Capital Funding LLC as lender,
Administrative Agent and Collateral Agent, and the other
lenders party thereto  Incorporated by reference to Form
8-K filed on June 21, 2006.(w)
    
    Security Agreement, dated as of January 6, 2006, by and
among Marsh Supermarkets, Inc., the other grantors party
thereto and Back Bay Capital Funding LLC, as Collateral
Agent  Incorporated by reference to Form 8-K filed on
January 12, 2006.(x)
    
    Intellectual Property Security Agreement, dated as of
January 6, 2006, by and among Marsh Supermarkets, Inc.,
Trademark Holdings, Inc. and Back Bay Capital Funding
LLC, as Collateral Agent  Incorporated by reference to
Form 8-K filed on January 12, 2006.(y)
    
    Pledge Agreement, dated as of January 6, 2006, by and
among Marsh Supermarkets, Inc., the other pledgors party
thereto and Back Bay Capital Funding LLC, as Collateral
Agent  Incorporated by reference to Form 8-K filed on
January 12, 2006.(z)
    
    Guaranty, dated as of January 6, 2006, by Marsh
Supermarkets, Inc. and the other borrowers party thereto,
in favor of Back Bay Capital Funding LLC, as
Administrative Agent and Collateral Agent, the lenders
and the other secured parties  Incorporated by reference
to Form 8-K filed on January 12, 2006.(aa)
    
    Form of Mortgage, Collateral Assignment of Leases and
Rents, Security Agreement, and Fixture Filing 
Incorporated by reference to Form 8-K filed on January
12, 2006.Exhibit 10
    
    (a)
    
    Agreements between Ruan Leasing Company and Marsh
Supermarkets, Inc., dated
September 18, 1987  Incorporated by reference to
Registration Statement on Form S-2 (File No. 33-17730).
 58




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##### 



(b)
    
    Lease agreements relating to warehouse located at 333
South Franklin Road, Indianapolis, Indiana  Incorporated
by reference to Registration Statement on Form S-2 (File
No. 33-17730).Management Contracts and Compensatory Plans:(c)
    
    Supplemental Retirement Plan of Marsh Supermarkets, Inc.
and Subsidiaries  Incorporated by reference to
Registration Statement on Form S-2 (File No. 33-17730).(d)
    
    Indemnification Agreements  Incorporated by reference to
Form 10-Q for quarter ended January 6, 1990.(e)
    
    Marsh Supermarkets, Inc. 1991 Employee Stock Incentive
Plan  Incorporated by reference to Proxy Statement,
dated March 22, 1991, for a Special Meeting of
Shareholders held May 1, 1991.(f)
    
    Amendment to Marsh Supermarkets, Inc. 1991 Employee Stock
Incentive Plan  Incorporated by reference to Proxy
Statement, dated June 22, 1995, for Annual Meeting of
Shareholders held August 1, 1995.(g)
    
    Marsh Supermarkets, Inc. Executive Supplemental Long-Term
Disability Plan  Incorporated by reference to Form 10-K
for the year ended March 30, 1991.(h)
    
    Marsh Supermarkets, Inc. 1992 Stock Option Plan for
Outside Directors  Incorporated by reference to Proxy
Statement, dated June 25, 1992, for the Annual Meeting of
Shareholders held August 4, 1992.(i)
    
    Severance Benefits Agreements, dated as of January 1,
1996  Incorporated by reference to Form 10-K for the
year ended March 29, 1997.(j)
    
    Form of Split Dollar Insurance Agreement for the benefit
of Don E. Marsh  Incorporated by reference to Form 10-K
for the year ended March 29, 1997.(k)
    
    Form of Restricted Stock Agreement, dated as of September
15, 1997  Incorporated by reference to Form 10-Q for the
quarter ended October 11, 1997.(l)
    
    Marsh Supermarkets, Inc. Outside Directors Stock Plan,
as adopted November 26, 1997  Incorporated by reference
to Form 10-Q for the quarter ended January 3, 1998.(m)
    
    Marsh Supermarkets, Inc. 1998 Stock Incentive Plan,
effective as of June 1, 1998  Incorporated by reference
to Proxy Statement, dated June 25, 1998, for the Annual
Meeting of Shareholders held August 4, 1998.(n)
    
    Executive Stock Purchase Plan of Marsh Supermarkets,
Inc., effective as of September 1, 1998  Incorporated by
reference to Proxy Statement, dated June 25, 1998, for
the Annual Meeting of Shareholders held August 4, 1998.(o)
    
    Forms of Guarantee related to Executive Stock Purchase
Plan of Marsh Supermarkets, Inc.  Incorporated by
reference to Form 10-K for the year ended April 1, 2000.(p)
    
    1999 Outside Directors Stock Option Plan, effective as
of June 1, 1999  Incorporated by reference to Proxy
Statement, dated June 27, 1999, for Annual Meeting of
Shareholders held August 3, 1999.(q)
    
    1999 Senior Executive Supplemental Retirement Plan, dated
as of August 3, 1999  Incorporated by reference to Form
10-Q for the quarter ended October 9, 1999.(r)
    
    First Amendment to 1999 Senior Executive Supplemental
Retirement Plan, dated February 13, 2003Incorporated by
reference to Form 10-Q for the quarter ended January 4,
2003.(s)
    
    Second Amendment to the Marsh Supermarkets, Inc. 1999
Senior Executive Supplemental Retirement Plan 
Incorporated by reference to Form 8-K filed on December
30, 2005.(t)
    
    Form of Employment Agreement, dated as of August 3, 1999
 Incorporated by reference to Form 10-Q for the quarter
ended October 9, 1999.(u)
    
    Employment Agreement between Marsh Supermarkets, LLC and
Frank J. Bryja, dated as of September 15, 2002 
Incorporated by reference to Form 10-Q for the quarter
ended January 4, 2003.(v)
    
    Employment Agreement between Marsh Supermarkets, Inc. and
Don E. Marsh, dated as of August 3, 1999  Incorporated
by reference to Form 10-K for the year ended March 29,
2003.
 59




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##### 



(w)
    
    Amendment to Employment Agreement, by and between the
Company and Don E. Marsh, dated as of December 29, 2005 
Incorporated by reference to Form 8-K filed on December
30, 2005(x)
    
    Employment Agreement between Marsh Supermarkets, Inc. and
David A. Marsh, dated as of August 9, 2002  Incorporated
by reference to Form 10-K for the year ended March 29,
2003.(y)
    
    Employment Agreement between Marsh Supermarkets, Inc. and
William L. Marsh, dated as of August 3, 1999 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(z)
    
    Amendment to Employment Agreement, by and between the
Company and William L. Marsh, dated as of December 29,
2005  Incorporated by reference to Form 8-K filed on
December 30, 2005(aa)
    
    Employment Agreement between Marsh Supermarkets, Inc. and
P. Lawrence Butt, dated as of August 3, 1999 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(bb)
    
    Amendment to Employment Agreement, by and between the
Company and P. Lawrence Butt, dated as of December 29,
2005  Incorporated by reference to Form 8-K filed on
December 30, 2005(cc)
    
    Employment Agreement, as amended, between Marsh
Supermarkets, Inc, and Douglas W. Dougherty, dated as of
August 3, 1999  Incorporated by reference to Form 10-K
for the year ended March 29, 2003.(dd)
    
    Separation and Release Agreement, dated as of May 20,
2005, by and between Marsh Supermarkets, Inc. and Douglas
W. Dougherty  Incorporated by reference to Form 8-K
filed on May 26, 2005.(ee)
    
    Consulting Agreement, dated as of May 20, 2005, by and
between Marsh Supermarkets, Inc. and Douglas W. Dougherty
 Incorporated by reference to Form 8-K filed on May 26,
2005.(ff)
    
    Employment Agreement, dated as of June 9, 2006, by and
between Marsh Supermarkets, Inc. and Douglas W. Dougherty
 Incorporated by reference to Form 8-K filed on June 15,
2006.(gg)
    
    Employment Agreement between Crystal Food Services, LLC
and Jack J. Bayt, dated as of Marsh 30, 2003 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(hh)
    
    Agreement between Marsh Supermarkets, Inc. and Mark A.
Varner, dated October 24, 2005  Incorporated by
reference to Form 8-K filed October 28, 2005.(ii)
    
    Split-Dollar Insurance Agreement between Marsh
Supermarkets, Inc. and Douglas W. Dougherty, dated as of
May 6, 1998  Incorporated by reference to Form 10-K for
the year ended March 29, 2003.(jj)
    
    Split-Dollar Insurance Agreement between Marsh
Supermarkets, Inc. and P. Lawrence Butt, dated as of
October 22, 1997  Incorporated by reference to Form 10-K
for the year ended March 29, 2003.(kk)
    
    Split Dollar Agreement between Marsh Supermarkets, Inc.
and American National Trust and Investment Company,
Trustee of the Don E. Marsh 1983 Irrevocable Trust for
Children, dated as of January 1, 1997  Incorporated by
reference to Form 10-K for the year ended March 29, 2003.(ll)
    
    Split-Dollar Insurance Agreement between Marsh
Supermarkets, Inc. and Don E. Marsh, Trustee u/a David A.
Marsh Irrevocable Trust, dated January 16, 2002, dated as
of January 17, 2002  Incorporated by reference to Form
10-K for the year ended March 29, 2003.(mm)
    
    Amended and Restated Supplemental Retirement Plan, dated
as of January 1, 1997  Incorporated by reference to Form
10-K for the year ended March 29, 2003.(nn)
    
    First Amendment to Amended and Restated Supplemental
Retirement Plan, dated as of December 31, 1998 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(oo)
    
    Second Amendment to Amended and Restated Supplemental
Retirement Plan, dated as of February 19, 2004 -
Incorporated by reference to Form 10-K for the year ended
March 27, 2004.
 60




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##### 



(pp)
    
    Third Amendment to the Supplemental Retirement Plan of
Marsh Supermarkets, Inc. and Subsidiaries, as Amended and
Restated as of January 1, 1997  Incorporated by
reference to Form 8-K filed on December 30, 2005(qq)
    
    Amended and Restated Marsh Equity Ownership Plan, dated
as of January 1, 1989  Incorporated by reference to Form
10-K for the year ended March 29, 2003.(rr)
    
    First Amendment to Amended and Restated Marsh Equity
Ownership Plan, dated as of December 7, 2001 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(ss)
    
    Second Amendment to Amended and Restated Marsh Equity
Ownership Plan, dated as of December 31, 2002 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(tt)
    
    Third Amendment to Amended and Restated Marsh Equity
Ownership Plan, dated as of December 31, 2003 -
Incorporated by reference to Form 10-K for the year ended
March 27, 2004.(uu)
    
    Fourth Amendment to the Marsh Equity Ownership Plan, as
Amended and Restated as of January 1, 1989  Incorporated
by reference to Form 8-K filed on May 30, 2006(vv)
    
    Confidential Settlement Agreement and Release of All
Claims, dated as of April 13, 2005  Incorporated by
reference to Form 10-K for the year ended April 2, 2005.(ww)
    
    Marsh Deferred Compensation Plan  Incorporated by
reference to Form S-8, dated September 25, 1998 (File No.
333-64343).(xx)
    
    First Amendment to Marsh Deferred Compensation Plan,
dated as of December 31, 2003  Incorporated by reference
to Form 10-K for the year ended March 27, 2004.(yy)
    
    Amended and Restated Marsh Deferred Compensation Plan,
effective as of January 1, 2005  Incorporated by
reference to Form 10-K for the year ended April 2, 2005.(zz)
    
    Second Amendment to the Marsh Deferred Compensation Plan,
effective as of December 20, 2005 *(aaa)
    
    Summary of Director and Executive Officer Compensation *Exhibit 21
    
    
    
    Subsidiaries of the Registrant.*Exhibit 23
    
    
    
    Consent of Independent Registered Public Accounting Firm *Exhibit 31.1
    
    
    
    Certification pursuant to Rule 13a-14(a) and Rule
15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*Exhibit 31.2
    
    
    
    Certification pursuant to Rule 13a-14(a) and Rule
15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*Exhibit 32.1
    
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.*Exhibit 32.2
    
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.*
     
  61




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##### 



Signatures
   June 29, 2006
    By:
    /s/ Don E. MarshDon E. MarshChief Executive Officer  June 29, 2006
    
    /s/ Don E. MarshDon E. Marsh, Chairman of the Boardand Chief Executive Officer and DirectorJune 29, 2006
    
    /s/ Douglas W. DoughertyDouglas W. Dougherty, Executive Vice President -Finance and Administration, and Chief Financial OfficerJune 29, 2006
    
    /s/ Mark A. VarnerMark A. Varner, Vice President -Corporate Controller (Principal Accounting Officer)June 29, 2006
    
    /s/ William L. MarshWilliam L. Marsh, Interim Presidentand Chief Operating Officer, and DirectorJune 29, 2006
    
    /s/ J. Michael BlakleyJ. Michael Blakley, DirectorJune 29, 2006
    
    /s/ P. Lawrence ButtP. Lawrence Butt, Senior Vice President,Counsel and Secretary, and DirectorCharles R. Clark, DirectorJune 29, 2006
    
    /s/ John J. HeidtJohn J. Heidt, DirectorStephen M. Huse, DirectorJune 29, 2006
    
    /s/ Catherine A. LanghamCatherine A. Langham, DirectorJune 29, 2006
    
    /s/ James K. RiskJames K. Risk, III, DirectorJune 29, 2006
    
    /s/ K. Clay SmithK. Clay Smith, Director
 62




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##### 



EXHIBIT INDEX
 Exhibit 2
    
    (a)
    
    Agreement and Plan of Merger, dated as of May 2, 2006, by
and among MSH Supermarkets Holding Corp., MS Operations,
Inc. and Marsh Supermarkets, Inc.  Incorporated by
reference to Form 8-K, filed on May 3, 2006Exhibit 3
    
    (a)
    
    Restated Articles of Incorporation, as amended as of May
15, 1991  Incorporated by reference to Form 10-K for the
year ended March 30, 1991.(b)
    
    By-Laws as amended as of November 26, 1997  Incorporated
by reference to Form 10-Q for the quarter ended January
3, 1998.Exhibit 4
    
    (a)
    
    Articles V, VI and VII of the Companys Restated Articles
of Incorporation, as amended as of May 15, 1991 
Incorporated by reference to Form 10-K for the year ended
March 30, 1991.(b)
    
    Articles I and IV of the Companys By-Laws, as amended as
of November 26, 1997  Incorporated by reference to Form
10-Q for the quarter ended January 3, 1998.(c)
    
    Agreement of the Company to furnish a copy of any
agreement relating to certain long-term debt and leases
to the Securities and Exchange Commission upon its
request  Incorporated by reference to Form 10-K for the
year ended March 27, 1987.(d)
    
    Amended and Restated Rights Agreement, dated as of
December 24, 1998, between Marsh Supermarkets, Inc. and
National City Bank  Incorporated by reference to Form
8-K, dated December 21, 1998.(e)
    
    Amendment, dated as of May 1, 2006, to Amended and
Restated Rights Agreement, dated as of December 24, 1998,
between Marsh Supermarkets, Inc. and National City Bank,
as Rights Agent  Incorporated by reference to Form 8-K,
filed on May 3, 2006.(f)
    
    Indenture, dated August 5, 1997, between Marsh
Supermarkets, Inc. and certain of its subsidiaries and
State Street Bank and Trust Company, as trustee, for
$150,000,000 8-7/8% Senior Subordinated Notes, due 2007 -
Incorporated by reference to Registration Statement on
Form S-4 (File No. 333-34855).(g)
    
    First Supplemental Indenture between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street
Bank and Trust Company, as trustee, dated December 31,
1997  Incorporated by reference to Form 10-K for the
year ended March 28, 1998.(h)
    
    Second Supplemental Indenture between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street
Bank and Trust Company, as trustee, dated January 28,
2000  Incorporated by reference to Form 10-K for the
year ended April 1, 2000.(i)
    
    Third Supplemental Indenture between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street
Bank and Trust Company, as trustee, dated June 22, 2000 
Incorporated by reference to From 10-K for the year ended
April 1, 2000.(j)
    
    Fourth Supplemental Indenture between Marsh Supermarkets,
Inc. and certain of its subsidiaries and State Street
Bank and Trust Company, as trustee, dated October 15,
2001  Incorporated by reference to Registration
Statement on Form S-8 (File No. 333-82908).(k)
    
    Second Amended and Restated Credit Agreement between
Marsh Supermarkets, Inc. and certain of its subsidiaries
and the Provident Bank, as Agent and Arranger, dated as
of March 21, 2003  Incorporated by reference to Form
10-K for the year ended March 29, 2003.(l)
    
    First Amendment to Second Amended and Restated Credit
Agreement between Marsh Supermarkets, Inc. and certain of
its subsidiaries and The Provident Bank, as Agent and
Arranger, dated as of May 23, 2003  Incorporated by
reference to Form 10-K for the year ended March 29, 2003.(m)
    
    Second Amendment to Second Amended and Restated Credit
Agreement, dated as October 3, 2003  Incorporated by
reference to Form 10-Q for the quarter ended October 11,
2003.
 63




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##### 



(n)
    
    Credit Agreement between Marsh Supermarkets, Inc. and its
subsidiaries and Bank of America, N.A. as Issuing Agent,
Administrative Agent and Collateral Agent, dated as of
November 9, 2005  Incorporated by reference to Form 8-K
filed November 16, 2005.(o)
    
    First Amendment to Credit Agreement, dated as of January
6, 2006, among Marsh Supermarkets, LLC, Marsh
Supermarkets, Inc., the other borrowers party thereto,
the facility guarantors party thereto, the lenders party
thereto, and Bank of America, N.A., as Issuing Bank, and
as Administrative Agent and Collateral Agent for the
Lenders  Incorporated by reference to Form 8-K filed on
January 12, 2006.(p)
    
    Security Agreement, dated as of November 9, 2005, by and
among Marsh Supermarkets, Inc., the other grantors party
thereto and Bank of America, N.A. as Collateral Agent 
Incorporated by reference to Form 8-K filed on November
16, 2005.(q)
    
    Intellectual Property Security Agreement, dated as of
November 9, 2005, by and among Marsh Supermarkets, Inc.,
Trademark Holdings, Inc. and Bank of America, N.A., as
Collateral Agent  Incorporated by reference to Form 8-K
filed on November 16, 2005.(r)
    
    Pledge Agreement, dated as of November 9, 2005, by and
among Marsh Supermarkets, Inc., the other pledgors party
thereto and Bank of America, N.A., as Collateral Agent 
Incorporated by reference to Form 8-K filed on November
16, 2005.(s)
    
    Guaranty, dated as of November 9, 2005, by Marsh
Supermarkets, Inc. and the other borrowers party thereto,
in favor of Bank of America, N.A., as Administrative
Agent, Collateral Agent and Issuing Bank, the lenders and
the other secured parties  Incorporated by reference to
Form 8-K filed on November 16, 2005.(t)
    
    Form of Mortgage, Collateral Assignment of Leases and
Rents and Fixture Filing  Incorporated by reference to
Form 8-K filed on November 16, 2005.(u)
    
    Credit Agreement, dated as of January 6, 2006, among
Marsh Supermarkets, LLC, Marsh Supermarkets, Inc., the
other borrowers party thereto, the facility guarantors
party thereto, the lenders party thereto, and Back Bay
Capital Funding LLC, as Administrative Agent and
Collateral Agent  Incorporated by reference to Form 8-K
filed on January 12, 2006.(v)
    
    Amendment No. 1, dated as of June 16, 2006, among Marsh
Supermarkets, LLC, Marsh Supermarkets, Inc., the other
borrowers party thereto, the facility guarantors party
thereto, Back Bay Capital Funding LLC as lender,
Administrative Agent and Collateral Agent, and the other
lenders party thereto  Incorporated by reference to Form
8-K filed on June 21, 2006.(w)
    
    Security Agreement, dated as of January 6, 2006, by and
among Marsh Supermarkets, Inc., the other grantors party
thereto and Back Bay Capital Funding LLC, as Collateral
Agent  Incorporated by reference to Form 8-K filed on
January 12, 2006.(x)
    
    Intellectual Property Security Agreement, dated as of
January 6, 2006, by and among Marsh Supermarkets, Inc.,
Trademark Holdings, Inc. and Back Bay Capital Funding
LLC, as Collateral Agent  Incorporated by reference to
Form 8-K filed on January 12, 2006.(y)
    
    Pledge Agreement, dated as of January 6, 2006, by and
among Marsh Supermarkets, Inc., the other pledgors party
thereto and Back Bay Capital Funding LLC, as Collateral
Agent  Incorporated by reference to Form 8-K filed on
January 12, 2006.(z)
    
    Guaranty, dated as of January 6, 2006, by Marsh
Supermarkets, Inc. and the other borrowers party thereto,
in favor of Back Bay Capital Funding LLC, as
Administrative Agent and Collateral Agent, the lenders
and the other secured parties  Incorporated by reference
to Form 8-K filed on January 12, 2006.(aa)
    
    Form of Mortgage, Collateral Assignment of Leases and
Rents, Security Agreement, and Fixture Filing 
Incorporated by reference to Form 8-K filed on January
12, 2006.Exhibit 10
    
    (a)
    
    Agreements between Ruan Leasing Company and Marsh
Supermarkets, Inc., dated
September 18, 1987  Incorporated by reference to
Registration Statement on Form S-2 (File No. 33-17730).
 64




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##### 



(b)
    
    Lease agreements relating to warehouse located at 333
South Franklin Road, Indianapolis, Indiana  Incorporated
by reference to Registration Statement on Form S-2 (File
No. 33-17730).Management Contracts and Compensatory Plans:(c)
    
    Supplemental Retirement Plan of Marsh Supermarkets, Inc.
and Subsidiaries  Incorporated by reference to
Registration Statement on Form S-2 (File No. 33-17730).(d)
    
    Indemnification Agreements  Incorporated by reference to
Form 10-Q for quarter ended January 6, 1990.(e)
    
    Marsh Supermarkets, Inc. 1991 Employee Stock Incentive
Plan  Incorporated by reference to Proxy Statement,
dated March 22, 1991, for a Special Meeting of
Shareholders held May 1, 1991.(f)
    
    Amendment to Marsh Supermarkets, Inc. 1991 Employee Stock
Incentive Plan  Incorporated by reference to Proxy
Statement, dated June 22, 1995, for Annual Meeting of
Shareholders held August 1, 1995.(g)
    
    Marsh Supermarkets, Inc. Executive Supplemental Long-Term
Disability Plan  Incorporated by reference to Form 10-K
for the year ended March 30, 1991.(h)
    
    Marsh Supermarkets, Inc. 1992 Stock Option Plan for
Outside Directors  Incorporated by reference to Proxy
Statement, dated June 25, 1992, for the Annual Meeting of
Shareholders held August 4, 1992.(i)
    
    Severance Benefits Agreements, dated as of January 1,
1996  Incorporated by reference to Form 10-K for the
year ended March 29, 1997.(j)
    
    Form of Split Dollar Insurance Agreement for the benefit
of Don E. Marsh  Incorporated by reference to Form 10-K
for the year ended March 29, 1997.(k)
    
    Form of Restricted Stock Agreement, dated as of September
15, 1997  Incorporated by reference to Form 10-Q for the
quarter ended October 11, 1997.(l)
    
    Marsh Supermarkets, Inc. Outside Directors Stock Plan,
as adopted November 26, 1997  Incorporated by reference
to Form 10-Q for the quarter ended January 3, 1998.(m)
    
    Marsh Supermarkets, Inc. 1998 Stock Incentive Plan,
effective as of June 1, 1998  Incorporated by reference
to Proxy Statement, dated June 25, 1998, for the Annual
Meeting of Shareholders held August 4, 1998.(n)
    
    Executive Stock Purchase Plan of Marsh Supermarkets,
Inc., effective as of September 1, 1998  Incorporated by
reference to Proxy Statement, dated June 25, 1998, for
the Annual Meeting of Shareholders held August 4, 1998.(o)
    
    Forms of Guarantee related to Executive Stock Purchase
Plan of Marsh Supermarkets, Inc.  Incorporated by
reference to Form 10-K for the year ended April 1, 2000.(p)
    
    1999 Outside Directors Stock Option Plan, effective as
of June 1, 1999  Incorporated by reference to Proxy
Statement, dated June 27, 1999, for Annual Meeting of
Shareholders held August 3, 1999.(q)
    
    1999 Senior Executive Supplemental Retirement Plan, dated
as of August 3, 1999  Incorporated by reference to Form
10-Q for the quarter ended October 9, 1999.(r)
    
    First Amendment to 1999 Senior Executive Supplemental
Retirement Plan, dated February 13, 2003Incorporated by
reference to Form 10-Q for the quarter ended January 4,
2003.(s)
    
    Second Amendment to the Marsh Supermarkets, Inc. 1999
Senior Executive Supplemental Retirement Plan 
Incorporated by reference to Form 8-K filed on December
30, 2005.(t)
    
    Form of Employment Agreement, dated as of August 3, 1999
 Incorporated by reference to Form 10-Q for the quarter
ended October 9, 1999.(u)
    
    Employment Agreement between Marsh Supermarkets, LLC and
Frank J. Bryja, dated as of September 15, 2002 
Incorporated by reference to Form 10-Q for the quarter
ended January 4, 2003.(v)
    
    Employment Agreement between Marsh Supermarkets, Inc. and
Don E. Marsh, dated as of August 3, 1999  Incorporated
by reference to Form 10-K for the year ended March 29,
2003.
 65




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##### 



(w)
    
    Amendment to Employment Agreement, by and between the
Company and Don E. Marsh, dated as of December 29, 2005 
Incorporated by reference to Form 8-K filed on December
30, 2005(x)
    
    Employment Agreement between Marsh Supermarkets, Inc. and
David A. Marsh, dated as of August 9, 2002  Incorporated
by reference to Form 10-K for the year ended March 29,
2003.(y)
    
    Employment Agreement between Marsh Supermarkets, Inc. and
William L. Marsh, dated as of August 3, 1999 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(z)
    
    Amendment to Employment Agreement, by and between the
Company and William L. Marsh, dated as of December 29,
2005  Incorporated by reference to Form 8-K filed on
December 30, 2005(aa)
    
    Employment Agreement between Marsh Supermarkets, Inc. and
P. Lawrence Butt, dated as of August 3, 1999 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(bb)
    
    Amendment to Employment Agreement, by and between the
Company and P. Lawrence Butt, dated as of December 29,
2005  Incorporated by reference to Form 8-K filed on
December 30, 2005(cc)
    
    Employment Agreement, as amended, between Marsh
Supermarkets, Inc, and Douglas W. Dougherty, dated as of
August 3, 1999  Incorporated by reference to Form 10-K
for the year ended March 29, 2003.(dd)
    
    Separation and Release Agreement, dated as of May 20,
2005, by and between Marsh Supermarkets, Inc. and Douglas
W. Dougherty  Incorporated by reference to Form 8-K
filed on May 26, 2005.(ee)
    
    Consulting Agreement, dated as of May 20, 2005, by and
between Marsh Supermarkets, Inc. and Douglas W. Dougherty
 Incorporated by reference to Form 8-K filed on May 26,
2005.(ff)
    
    Employment Agreement, dated as of June 9, 2006, by and
between Marsh Supermarkets, Inc. and Douglas W. Dougherty
 Incorporated by reference to Form 8-K filed on June 15,
2006.(gg)
    
    Employment Agreement between Crystal Food Services, LLC
and Jack J. Bayt, dated as of Marsh 30, 2003 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(hh)
    
    Agreement between Marsh Supermarkets, Inc. and Mark A.
Varner, dated October 24, 2005  Incorporated by
reference to Form 8-K filed October 28, 2005.(ii)
    
    Split-Dollar Insurance Agreement between Marsh
Supermarkets, Inc. and Douglas W. Dougherty, dated as of
May 6, 1998  Incorporated by reference to Form 10-K for
the year ended March 29, 2003.(jj)
    
    Split-Dollar Insurance Agreement between Marsh
Supermarkets, Inc. and P. Lawrence Butt, dated as of
October 22, 1997  Incorporated by reference to Form 10-K
for the year ended March 29, 2003.(kk)
    
    Split Dollar Agreement between Marsh Supermarkets, Inc.
and American National Trust and Investment Company,
Trustee of the Don E. Marsh 1983 Irrevocable Trust for
Children, dated as of January 1, 1997  Incorporated by
reference to Form 10-K for the year ended March 29, 2003.(ll)
    
    Split-Dollar Insurance Agreement between Marsh
Supermarkets, Inc. and Don E. Marsh, Trustee u/a David A.
Marsh Irrevocable Trust, dated January 16, 2002, dated as
of January 17, 2002  Incorporated by reference to Form
10-K for the year ended March 29, 2003.(mm)
    
    Amended and Restated Supplemental Retirement Plan, dated
as of January 1, 1997  Incorporated by reference to Form
10-K for the year ended March 29, 2003.(nn)
    
    First Amendment to Amended and Restated Supplemental
Retirement Plan, dated as of December 31, 1998 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(oo)
    
    Second Amendment to Amended and Restated Supplemental
Retirement Plan, dated as of February 19, 2004 -
Incorporated by reference to Form 10-K for the year ended
March 27, 2004.
 66




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##### 



(pp)
    
    Third Amendment to the Supplemental Retirement Plan of
Marsh Supermarkets, Inc. and Subsidiaries, as Amended and
Restated as of January 1, 1997  Incorporated by
reference to Form 8-K filed on December 30, 2005(qq)
    
    Amended and Restated Marsh Equity Ownership Plan, dated
as of January 1, 1989  Incorporated by reference to Form
10-K for the year ended March 29, 2003.(rr)
    
    First Amendment to Amended and Restated Marsh Equity
Ownership Plan, dated as of December 7, 2001 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(ss)
    
    Second Amendment to Amended and Restated Marsh Equity
Ownership Plan, dated as of December 31, 2002 
Incorporated by reference to Form 10-K for the year ended
March 29, 2003.(tt)
    
    Third Amendment to Amended and Restated Marsh Equity
Ownership Plan, dated as of December 31, 2003 -
Incorporated by reference to Form 10-K for the year ended
March 27, 2004.(uu)
    
    Fourth Amendment to the Marsh Equity Ownership Plan, as
Amended and Restated as of January 1, 1989  Incorporated
by reference to Form 8-K filed on May 30, 2006(vv)
    
    Confidential Settlement Agreement and Release of All
Claims, dated as of April 13, 2005  Incorporated by
reference to Form 10-K for the year ended April 2, 2005.(ww)
    
    Marsh Deferred Compensation Plan  Incorporated by
reference to Form S-8, dated September 25, 1998 (File No.
333-64343).(xx)
    
    First Amendment to Marsh Deferred Compensation Plan,
dated as of December 31, 2003  Incorporated by reference
to Form 10-K for the year ended March 27, 2004.(yy)
    
    Amended and Restated Marsh Deferred Compensation Plan,
effective as of January 1, 2005  Incorporated by
reference to Form 10-K for the year ended April 2, 2005.(zz)
    
    Second Amendment to the Marsh Deferred Compensation Plan,
effective as of December 20, 2005 *(aaa)
    
    Summary of Director and Executive Officer Compensation *Exhibit 21
    
    
    
    Subsidiaries of the Registrant.*Exhibit 23
    
    
    
    Consent of Independent Registered Public Accounting Firm *Exhibit 31.1
    
    
    
    Certification pursuant to Rule 13a-14(a) and Rule
15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*Exhibit 31.2
    
    
    
    Certification pursuant to Rule 13a-14(a) and Rule
15d-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*Exhibit 32.1
    
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.*Exhibit 32.2
    
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.*
 
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