Exhibit 10.18
FORM OF SALE PARTICIPATION AGREEMENT
__________ __, 1997
[NAME OF EMPLOYEE]
[TITLE]
▇▇▇▇▇▇▇'▇ Food Markets, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Dear [NAME OF EMPLOYEE]:
You have entered into a Management Stockholder's Agreement, dated as
of __________ __, 199_ between ▇▇▇▇▇▇▇'▇ Food Market, Inc., a Texas corporation
("the Company"), and you (the "Stockholder's Agreement") relating to the
purchase from the Company of shares of the common stock, par value $.25 per
share, of the Company (the "Common Stock"). The undersigned, KKR Partners II,
L.P., a Delaware limited partnership ("KKR Partners"), and RFM Acquisition LLC,
a Delaware limited liability company ("RFM Acquisition"), also have purchased
shares of Common Stock and hereby agree with you as follows, effective upon such
purchase of Common Stock by you:
1. In the event that at any time KKR Partners, or RFM Acquisition, as
the case may be (each, a "KKR Stockholder" and collectively, the "KKR
Stockholders"), proposes to sell for cash or any other consideration any shares
of Common Stock owned by it, in any transaction other than a Public Offering (as
defined in the Stockholder's Agreement) or a sale to an affiliate of KKR
Partners or RFM Acquisition, as the case may be, the KKR Stockholders will
notify you or your Purchaser's Estate or Purchaser's Trust (as such terms are
defined in Section 2 of the Stockholder's Agreement), as the case may be, in
writing (a "Notice") of such proposed sale (a "Proposed Sale") and the material
terms of the Proposed Sale as of the date of the Notice (the "Material Terms")
promptly, and in any event not less than 15 days prior to the consummation of
the Proposed Sale and not more than 5 days after the execution of the definitive
agreement relating to the Proposed Sale, if any (the "Sale Agreement"). If
within 10 days of your or your Purchaser's Estate's or Purchaser's Trust's, as
the case may be, receipt of such Notice the KKR Stockholder receives from you or
your Purchaser's Estate or Purchaser's Trust, as the case may be, a written
request (a "Request") to include Common Stock held by you or your Purchaser's
Estate or Purchaser's Trust, as the case may be, in
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the Proposed Sale (which Request shall be irrevocable unless (a) there shall be
a material adverse change in the Material Terms or (b) if otherwise mutually
agreed to in writing by you or your Purchaser's Estate or Purchaser's Trust, as
the case may be, and the KKR Stockholder), the Common Stock held by you will be
so included as provided herein; provided that only one Request, which shall be
executed by you or your Purchaser's Estate or Purchaser's Trust, as the case may
be, may be delivered with respect to any Proposed Sale for all Common Stock held
by you or your Purchaser's Estate or Purchaser's Trust. Promptly after the
consummation of the transactions contemplated thereby, the KKR Stockholder will
furnish you, your Purchaser's Trust or your Purchaser's Estate with a copy of
the Sale Agreement, if any. In the event that both KKR Partners and RFM
Acquisition propose to sell shares of Common Stock in the Proposed Sale, the
term "KKR Stockholder" shall refer only to RFM Acquisition and not to KKR
Partners.
2. The number of shares of Common Stock which you or your Purchaser's
Estate or Purchaser's Trust, as the case may be, will be permitted to include in
a Proposed Sale pursuant to a Request will be the lesser of (a) the sum of the
number of shares of Common Stock then owned by you or your Purchaser's Estate or
Purchaser's Trust, as the case may be, plus all shares of Common Stock which you
are then entitled to acquire under an unexercised option to purchase shares of
Common Stock, to the extent such option is then vested or would become vested as
a result of the consummation of the Proposed Sale and (b) the sum of the shares
of Common Stock then owned by you or your Purchaser's Estate or Purchaser's
Trust, as the case may be, plus all shares of Common Stock which you are
entitled to acquire under an unexercised option to purchase shares of Common
Stock, whether or not fully vested, multiplied by a percentage calculated by
dividing the aggregate number of shares of Common Stock which KKR Partners and
RFM Acquisition propose to sell in the Proposed Sale by the total number of
shares of Common Stock owned by the KKR Stockholder or, in the case both KKR
Partners and RFM Acquisition propose to sell in the Proposed Sale, KKR Partners
and RFM Acquisition. If one or more holders of shares of Common Stock who have
been granted the same rights granted to you or your Purchaser's Estate or
Purchaser's Trust, as the case may be, hereunder elect not to include the
maximum number of shares of Common Stock which such holders would have been
permitted to include in a Proposed Sale (the "Eligible Shares"), KKR Partners or
RFM Acquisition, or such remaining holders of shares of Common Stock, or any of
them, may sell in the Proposed Sale a number of additional shares of Common
Stock owned by any of them equal to their pro rata portion of the number of
Eligible Shares not included in the Proposed Sale, based on the relative number
of shares of Common Stock then held by each such holder, and such additional
shares of Common Stock which any such holder or holders propose to sell shall
not be included in any calculation made pursuant to the first sentence of this
Paragraph 2 for the purpose of determining the number of shares of Common Stock
which you or your Purchaser's Estate or
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Purchaser's Trust, as the case may be, will be permitted to include in a
Proposed Sale. KKR Partners and RFM Acquisition, or any of them, may sell in
the Proposed Sale additional shares of Common Stock owned by any of them equal
to any remaining Eligible Shares which will not be included in the Proposed Sale
pursuant to the foregoing.
3. Except as may otherwise be provided herein, shares of Common Stock
subject to a Request will be included in a Proposed Sale pursuant hereto and in
any agreements with purchasers relating thereto on the same terms and subject to
the same conditions applicable to the shares of Common Stock which the KKR
Stockholder proposes to sell in the Proposed Sale. Such terms and conditions
shall include, without limitation: the sale price; the payment of fees,
commissions and expenses; the provision of, and representation and warranty as
to, information requested by the KKR Stockholder; and the provision of requisite
indemnifications; provided that any indemnification provided by you, your
Purchaser's Estate or your Purchaser's Trust shall be pro rata in proportion
with the number of shares of Common Stock to be sold.
4. Upon delivering a Request, you or your Purchaser's Estate or
Purchaser's Trust, as the case may be, will, if requested by the KKR
Stockholder, execute and deliver a custody agreement and power of attorney in
form and substance satisfactory to the KKR Stockholder with respect to the
shares of Common Stock which are to be sold by you or your Purchaser's Estate or
Purchaser's Trust, as the case may be, pursuant hereto (a "Custody Agreement and
Power of Attorney"). The Custody Agreement and Power of Attorney will provide,
among other things, that you or your Purchaser's Estate or Purchaser's Trust, as
the case may be, will deliver to and deposit in custody with the custodian and
attorney-in-fact named therein a certificate or certificates representing such
shares of Common Stock (duly endorsed in blank by the registered owner or owners
thereof) and irrevocably appoint said custodian and attorney-in-fact as your or
your Purchaser's Estate's or Purchaser's Trust's, as the case may be, agent and
attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on your or your Purchaser's Estate's or
Purchaser's Trust's, as the case may be, behalf with respect to the matters
specified therein.
5. Your or your Purchaser's Estate's or Purchaser's Trust's, as the
case may be, right pursuant hereto to participate in a Proposed Sale shall be
contingent on your or your Purchaser's Estate's or Purchaser's Trust's, as the
case may be, strict compliance with each of the provisions hereof and your or
your Purchaser's Estate's or Purchaser's Trust's or, as the case may be,
willingness to execute such documents in connection therewith as may be
reasonably requested by the KKR Stockholder.
6. In the event of a Proposed Sale pursuant to Section 1 hereof, the
KKR Stockholders may elect, by so specifying in the
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Notice, to require you or your Purchaser's Estate or Purchaser's Trust, as the
case may be, to, and you or your Purchaser's Estate or Purchaser's Trust, as the
case may be, will, participate in such Proposed Sale in accordance with the
terms and provisions of Section 2, 3 and 4 hereof.
7. The obligations of KKR Partners and RFM Acquisition hereunder shall
extend only to you or your Purchaser's Estate or Purchaser's Trust, as the case
may be, and no other of your or your Purchaser's Estate's or Purchaser's
Trust's, as the case may be, successors or assigns shall have any rights
pursuant hereto.
8. This Agreement shall terminate and be of no further force and
effect on the fifth anniversary of the first occurrence of a Public Offering (as
defined in the Stockholder's Agreement).
9. All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given when delivered to the
party to whom it is directed:
(a) If to KKR Partners or RFM Acquisition, to it at the following
address:
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(b) If to you, to you at the address first set forth above
herein;
(c) If to your Purchaser's Estate or Purchaser's Trust, at
the address provided to such partnerships by such
entity;
or at such other address as any of the above shall have specified by
notice in writing delivered to the others by certified mail.
10. The laws of the State of Texas (or if the Company
reincorporates in another state, of that state) shall govern the
interpretation, validity and performance of the terms of this
Agreement. No suit, action or proceeding with respect to this
Agreement may be brought in any court or before any similar authority
other than in a court of competent jurisdiction in the State of Texas
(or if the Company reincorporates in another state, of that state), as
the KKR
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Stockholders may elect in their sole discretion, and you hereby submit
to the non-exclusive jurisdiction of such courts for the purpose of
such suit, proceeding or judgment. You hereby irrevocably waive any
right which you may have had to bring such an action in any other
court, domestic or foreign, or before any similar domestic or foreign
authority.
11. If KKR Partners or RFM Acquisition transfers its
interest in the Company to an affiliate of KKR Partners or RFM
Acquisition, as the case may be, such affiliate shall assume the
obligations hereunder of KKR Partners or RFM Acquisition, as the case
may be.
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It is the understanding of the undersigned that you are
aware that no Proposed Sale presently is contemplated and that such a
sale may never occur.
If the foregoing accurately sets forth our agreement, please
acknowledge your acceptance thereof in the space provided below for
that purpose.
Very truly yours,
KKR PARTNERS II, L.P.
By: KKR Associates L.P.,
General Partner
By: ___________________________
General Partner
RFM ACQUISITION LLC
By: KKR 1996 GP FUND L.P.,
Member
By: KKR ASSOCIATES 1996 L.P.,
General Partner
By: KKR 1996 GP L.L.C.,
General Partner
By: ___________________________
Member
Accepted and agreed to:
By: __________________________
[NAME OF EMPLOYEE]
