EMPLOYMENT SEVERANCE AGREEMENT
                       AND MUTUAL RELEASE


     Food Lion, Inc. (the "Company") and Dan A. Boone (the
"Executive") social security number ###-##-#### hereby agree as
follows:


1.   Purpose of Severance Agreement and Release.

     A.   The parties recognize that during his 14 years of
employment with the Company, theExecutive has performed valuable
service to the Company in a confidential capacity.  By virtue of
his responsibilities during his employment, the Executive has acquired
valuable proprietary information of a sensitive and confidential nature
pertaining tothe Company's business operations, trade secrets, its strategies
and plans,which, if disclosed to individuals or entities not employed by
the Company, would materially harm the Company and/or provide an
unfair advantage to its competitors.

     B.   The purpose of this Employment Severance Agreement and
Mutual Release of Liability(the "Severance Agreement and Release")
is to set forth the terms of the Executive's severance from
employment with the Company, to resolve fully any and all
obligations arising out of his employment and
severance from employment, and to protect the Company's
legitimate interest in maintaining the confidentiality
of information pertaining to its business plans and operations
known to, or possessed by, the Executive.


2.   Termination of Employment.

     A.   The Executive will resign from employment with the
Company effective August 26, 1996 (the "termination date").

     B.   On August 26, 1996, the Executive shall terminate his
participation in the Profit Sharing Retirement Plan of Food Lion, Inc.
The Executive shall be entitled to receive all vested benefits owing
under the Company's employee benefit plans in which the Executive
is participating as of the date of his resignation to the extent
set forth and specifically provided for by such plans and/or to
the extent otherwise required by law.


3.   Consideration.

     A.  In consideration of the Executive's release of all
claims that may exist against the Company in connection with his
employment as more specifically set forth below in Paragraph 4,
and in consideration of the Executive's compliance with the
obligations set forth below in Paragraphs 7 and 8, and provided
the Executive complies with all other terms and conditions of
this Severance Agreement and Release, the Company agrees that:

     1.   The Company will pay the Executive his current weekly
salary of $4,144.39 for the period beginningAugust 26, 1996, and
ending February 28, 1998, payable on regular biweekly pay periods
during this term.  However, at any time during the period 
August 26, 1997, through February 28, 1998, in which Executive is
employed, or receives any compensation for services, then the weekly
payment due to the Executive shall be reduced by the lesser of
fifty percent of his current weekly salary or the weekly
compensation he receives.  Executive shall give notice to the
Company, through the Vice President of Human Resources, of any
such employment or  compensation for services at
least 21 days in advance or as promptly as is reasonably
possible. These payments shall be subject to all
legally required state and federal tax deductions and
withholdings.

     2.   The Company will pay the net amount of $5,000 toward
outplacement services.

     3.   The Executive will be paid accrued vacation pay for
three weeks and three (3) days.

     B.   The Executive acknowledges that the rights and payments
provided in Paragraph 3(A):

          1.   represent valuable consideration over and above what he is
            otherwise entitled to in connection with the termination of his
            employment and that his release of claims in Paragraph 4 and his
            agreement to comply with the obligations of Paragraphs 7 and 8 of
            this Severance Agreement and Release are in return for this
            consideration;
          
          2.   shall be in lieu of any and all claims for severance pay,
            additional wages, bonus, salary, accrued vacation and sick leave
            pay or other compensation, or benefits, or claim of
            damages he may have as of his termination date other than vested
            benefits described in Paragraph 2(C) and such rights as Executive
            may have to obtain continued insurance coverage under COBRA; and
          
          3.   arise solely out of the terms of this Severance Agreement
            and Release and are not part of any Company severance pay plan.
          
     C.   The Company acknowledges that its promises and releases
contained in this Severance Agreement and Release are for good and
valuable consideration.

4.   Waiver and Release.

     As a material inducement for Executive and Company to enter
this Severance Agreement and Release, each of them hereby
irrevocably and unconditionally releases and forever discharges
the other as detailed below.

     A.   The Executive releases and forever discharges all
claims he may have against the Company, its subsidiaries,
affiliates, parents, predecessors, and all officers, directors,
representatives, agents or employees in any manner arising out of
or attributable to his employment with the Company.  This release
includes all claims that may have existed on his termination date
relating to the Executive's employment with and termination from
the Company, whether brought by Executive or by a third party on
his behalf, including, but not limited to:

          1.   discrimination on the basis of age, including claims under
            the Age Discrimination in Employment Act as amended, the
            Americans with Disabilities Act, or other applicable federal
            statutes and other applicable state and local statutes;
     
          2.   any claim under any statute, law or regulation, based on any
            fact, matter, event or cause, whether known or unknown, arising
            out of or relating to the employment relationship between the
            Executive and the Company or the Executive's termination
            therefrom.

     B.   The Executive agrees not to institute any legal or
administrative proceeding against the Company or those persons
described in Paragraph 4(A) as to any matter based upon, arising
out of or related to his employment, compensation during his
employment, or termination of his employment with the Company.

     C.   The Company, on behalf of its officers, directors,
employees, agents, counsel, successors, assigns and related
entities hereby releases and forever discharges Executive, his
heirs, assigns and representatives from any and all claims,
liabilities, damages, costs, and other obligations in any manner
arising out of or attributable to his employment with the
Company, and will indemnify and hold harmless the Executive, his
heirs, assigns and representatives from such claims, except those
claims attributable to the gross negligence or willful misconduct
of the Executive.

     D.   This Severance Agreement and Release does not waive or
release rights or claims for occurrences after the effective date
of this Severance Agreement and Release.  This Severance
Agreement and Release does not preclude the Executive or Company
from filing a lawsuit against the other for purposes of enforcing
rights conferred to each other under this Severance Agreement and
Release.

5.   Company Property.

     On or before August 27, 1996, the Executive agrees to return
all property belonging to the Company he may possess, or that he
has possessed but has provided to a third party, including, but
not limited to, all original and copies of Company documents,
files, memoranda, notes, computer-readable information(maintained
in disc or any other form) and video or tape recordings of any
kind other than personal materials relating solely to the
Executive.  Executive promises that he has not and will not
retain, distribute, or cause to be distributed, any original or
duplicates of any such Company material specified in this
Paragraph.

6.   Loans.

     The Company and the Executive acknowledges that, as of the
date of this Agreement, there is an outstanding balance in the
amount of one hundred forty thousand dollars ($140,000.00) (the
"Loan") owed by the Executive to the Company pursuant to the
Company's Low Interest Loan Plan (the "Plan") . The Executive
agrees to repay the full outstanding balance on or before January
31, 1997.

7.   Confidentiality.

     A.   The Executive and Company agree that the existence and
terms of the Severance Agreement and Release are and shall remain
confidential, and further agree not to disclose the existence or
terms of the Severance Agreement and Release to any third party,
except that:

          1.   the Executive may disclose to his family that he resigned
            from the Company and the amount of consideration he received in
            connection with his separation and disclose the terms and
            conditions of this Severance Agreement and Release to his
            attorneys, tax consultants, state and federal authorities or as
            may be required by law;
          
          2.   the Company may disclose the terms and conditions of this
            Severance Agreement and Release as is necessary to carry out the
            terms of this Agreement to its managers, officers and board of
            directors, insurers, consultants, accountants, attorneys, state
            and federal tax authorities, or as may be required by law,
            including but not limited to disclosure as may be required in the
            Company's proxy statement and as required by SEC public reporting
            requirements;
          
          3.   the Company and the Employee may disclose to other parties
            only that the Executive resigned voluntarily and that the parties
            parted amicably; and
            

     B.   As described more fully in Paragraph 1(A) of this
Severance Agreement and Release, the Executive acknowledges that
as a result of his employment by the Company, he has acquired
confidential or proprietary information of special value to the
Company.  The Executive covenants and agrees:

          1.   that he shall not, directly or indirectly, orally or in
            writing, at any time in the future disclose any information of
            the Company as defined in Paragraph 7(B) (2), whether such
            information is a trade secret, confidential or proprietary, to
            any person, partnership, corporation or other business entity,
            except with the written permission of the Company.
          
          2.   that for purposes of Paragraph 7(B) (1), the term "any
            information of the Company" means all information which relates
            to matters such as, but not necessarily limited to, trade
            secrets, research and development activities, books and records,
            expansion strategies, operational plans or strategies, real
            estate strategies, or other processes or strategies, distribution
            channels, pricing information and private processes, real estate
            site selection, projected store openings or closings, employee
            communications, training or development strategies, advice given
            by any legal counsel or other consultants retained by the Company
            whether or not protected by the attorney-client or work product
            privileges.
          
          3.   Paragraph 7(B) (1) or (2) shall not be violated by the
            disclosure of information which is disclosed pursuant to a court
            order or as otherwise required by law, on conditions that notice
            of the requirement for such disclosure is given to the Company
            before the Executive's making any disclosure and the Executive
            cooperates in resisting such disclosure upon reasonable request
            by the Company at the Company's expense.
            
     C.   The Executive acknowledges that, by virtue of the
responsibilities assigned to him throughout
his employment, in the event he should make any public statements
relating to the Company after his termination, such statements
could be attributed to the Company or be viewed as authoritative
and based on information to which the Executive had access while
employed by the Company.  Accordingly, the Executive agrees that
for the period from the effective date of this Agreement until
February 28, 1998, he will make no public comment in any way
relating to the Company.

8.   AGREEMENT NOT  TO COMPETE.

     The Executive acknowledges that the Company has legitimate
business interests in assuring that the skills and knowledge
relating to the nature and character of the Company's business
obtained by the Executive during his employment with the Company
are not converted to the use of entities in competition with the
Company or who are engaged in activities aimed at damaging the
Company's public image or are otherwise antithetical to the
Company's lawful interests.  In recognition of these legitimate
interests, the Executive agrees that:

     A.   The Executive agrees that from August 26, 1996 until
February 28, 1998, he will not compete with the Company, directly
or indirectly, by acting either individually or as an advisor,
representative, agent, employee, partner, shareholder, investor,
consultant, or in any other similar capacity, on behalf of any
other person, partnership, corporation or other business in the
retail grocery industry, which shall include warehouse membership
clubs selling groceries or other retail formats selling food
products, (but which shall not include manufacturers of food
products not engaged in the retail grocery business, and shall
not include stores of 10,000 square feet or less), in the
geographical area defined in Paragraph 8(B).  The Executive's
ownership of not more than one percent (1%) of the stock of any
publicly-held grocery chain shall not be deemed a violation of
this Paragraph.

      B.  The Executive agrees not to act in the capacities set
forth in Paragraph 8(A) for entities operating in North Carolina,
South Carolina, Virginia, Tennessee, Georgia, Florida, Maryland,
Delaware, Kentucky, West Virginia, Pennsylvania, Texas, Oklahoma,
and Louisiana.

     C.   From August 27, 1996 to February 28, 1998, the
Executive further agrees not to recruit, solicit or otherwise
contact employees of Food Lion on behalf of any other entity,
either directly or as an agent, in order to solicit or induce any
Food Lion employee to accept employment with another entity.

     D.   In the event the Company ceases to operate in any of
the states included above, then the restriction with respect to
said state shall cease upon the date the Company ceases
operations in said state.

9.   ENFORCEMENT.

     The Executive agrees that he has received good and valuable
consideration for his agreement both to adhere to the
confidentiality provisions of Paragraph 7 and to the non-compete
provisions of Paragraph 8 and that in the event the Company
obtains evidence that Executive has violated Paragraphs 7 or 8 in
any respect, the Company shall have the option to:

     A.   cease payment of any additional amounts provided for in
Paragraph 3(A) of this Severance Agreement and Release; or

     B.   obtain temporary and permanent injunctive relief in a
Superior Court of the State of North Carolina to remedy such violation.
The Executive consents tojurisdiction of that court to provide such
injunctive relief.  The Executive agrees that failure to comply
with his obligations under Paragraphs 7(B), 7(C), or 8(A), 8(B)
or 8(C) of this Severance Agreement and Release shall constitute
irreparable harm to the Company, without regard to any
demonstrable economic harm to the Company from Executive's
breach, and that the appropriate remedy for partial or total
breach of those provisions shall be an interim and permanent
order directing specific performance with each and every term of this
Severance Agreement and Release, with damages resulting
from the breach, and all costs and attorneys fees incurred in
obtaining enforcement of this Severance Agreement
and Release to be awarded to the Company.  The Executive further
agrees that in such proceeding, he shall make no assertion of
mitigation in defense to the Company's prayer for injunctive
relief.

10.  Acknowledgment of Voluntary Nature of Severance Agreement
and Release.

     By signing this Severance Agreement and Release, the
Employee and the Company acknowledge:

     A.   That each has entered into this Severance Agreement and
Release voluntarily and fully understands all of its terms;

     B.   That the Executive has been advised and has had the
opportunity to consult with an attorney prior to signing this
Severance Agreement and Release;

     C.   That the Executive has been given the opportunity to
consider this Severance Agreement and Release for a period of at
least twenty-one (21) days, and, after consulting with his
attorney, has voluntarily and freely executed this Agreement
prior to the expiration of the twenty-one day period, and has
voluntarily and freely waived the right to consider the Agreement
and Release for the full twenty-one day period; and,

     D.   That the Executive and Company are not relying on any
statement or promise other than as contained in this Severance
Agreement and Release.

11.  Assistance.

     Upon reasonable notice, the Executive agrees to willingly
give his assistance, including his attendance, where appropriate,
to the Company's defense or prosecution of any existing or future
claims or litigation.  The Company will reimburse the Executive
for all reasonable travel expenses incurred by the Executive in
complying with this section.  In the event the Executive is no
longer entitled to the payments set forth in Section 3 of this
Agreement, then the Executive shall be compensated at the rate of
$100 per day for such assistance.

12.  Revocation Period.

     The Executive understands that he has a seven (7) day period
after signing this Severance Agreement and Release in which to
revoke or rescind his agreement and release of claims, by
informing the Company's President in writing of his decision to
revoke.  To be effective, the rescission must be delivered to the
Company's Chief Executive Officer either by hand or by mail
within the seven day period.  If sent by mail, the rescission
must be postmarked within the seven day period, properly address
to the Company's Chief Executive Officer, and sent by certified
mail, return receipt requested.

13.  Binding Agreement.

     A.   This Severance Agreement and Release will become
effective and enforceable upon the expiration of the seven day
revocation period referred to in Paragraph 12 (the "effective
date").  The Executive and the Company understand that following
the seven day revocation period, this Severance Agreement and
Release will be final and binding.

     B.   This Severance Agreement and Release constitutes the
entire agreement of the parties with respect to the subject
matter set forth herein and there are no promises, understandings
or representations, oral or written, other than those set forth
herein.

     C.   The Executive and the Company promise that, after the
Severance Agreement and Release becomes final and binding, they
will not pursue any claim which has been waived under the
Severance Agreement and Release and will not challenge the
enforceability of the Severance Agreement and Release by filing
or instigating any lawsuit or administrative complaint or
investigation arising out of the Employee's employment or
termination.

14.  Law of North Carolina.

     This Severance Agreement and Release, having been prepared,
executed and delivered in the State of North Carolina, and shall
be governed by the laws of the State of North Carolina.

15.  Severability.

     Each provision of this Severance Agreement and Release is
intended to be severable.  If any provision, sentence, phrase or
word of this Severance Agreement and Release or the application
thereof to any person or circumstance shall be held invalid or
unenforceable, the remainder of this Severance Agreement and
Release, or the application of such provision, sentence, phrase
or word to persons or circumstances, other than those as to
which it is held invalid, shall not be affected thereby.

16.  Notices.

     Any notices required or permitted to be given by the parties
shall be given in writing by certified mail, return receipt
requested, or by prepaid telegram, delivered to:

     Lester C. Nail
     Vice President of Legal Affairs
     2110 Executive Drive
     Post Office Box 1330
     Salisbury, NC  28145-1330

          and

     Dan A. Boone
     250 Ikerd Drive
     Concord, NC  28025


17.  Death of Executive.

     In the event of the death of the Executive prior to February
28, 1998, any payments due under this Severance Agreement and
Release will be made to the beneficiary designated by the
Executive in writing, and, if no beneficiary is designated, to
his Estate.


                                   FOOD LION, INC.



Dated: September 6, 1996              By:Eugene R. McKinley

                                          Eugene R. McKinley
                                          Vice President -- Human
                                          Resources


                                   EXECUTIVE



Dated: September 5,1996             By: Dan A. Boone

                                      Dan A. Boone



                            Exhibit A



                              September 12, 1996



MEMO TO:  VICE PRESIDENTS

     Food Lion announced today that Dan Boone, Chief Financial
Officer, has left the company, effective August 26, 1996.  Dan
has been with Food Lion for 14 years, serving for the past six
years as CFO.  He was a member of the Board of Directors from
1991- 1994.
     Food Lion Chairman and CEO, Tom Smith, praised Dan for his
contributions to the growth and success of the company and wished
him success in his future endeavors.  Until a successor is named,
the Finance department, which has reported through Boone to Bill
McCanless, Senior Vice President of Administration and Chief
Administrative Officer, will report directly to McCanless.
     Food Lion is one of the nation's ten largest supermarket
chains, serving nine million customers per week.  The company and
its 72,000 employees offer Extra Low Prices and More at 1,093
supermarkets in 14 states.

                              Best regards,

                              EXTRA LOW PRICES AND MORE



                              TOM E. SMITH