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EXHIBIT 2.1
AMENDED AND RESTATED
STOCK REPURCHASE AGREEMENT
This Amended and Restated Stock Repurchase Agreement, dated as of January
8, 1997 (this "Agreement"), is made and entered into by Safeway Inc., a Delaware
corporation ("Parent"), and SSI Associates, L.P., a Delaware limited partnership
("SSI").
WHEREAS, on December 15, 1996 Parent entered into that certain Agreement
and Plan of Merger, dated as of December 15, 1996 (the "Original Merger
Agreement"), by and among Parent, SSCI Merger Sub, Inc., a Michigan corporation
and an indirect wholly owned subsidiary of Parent ("Merger Sub"), and The Vons
Companies, Inc., a Michigan corporation (the "Company"), pursuant to which
Merger Sub would be merged with and into the Company (the "Merger") and Parent
would indirectly acquire all of the outstanding shares of common stock of the
Company (other than shares owned by Parent or its subsidiaries) in exchange for
shares of common stock, par value $.01 per share, of Parent ("Parent Stock");
and
WHEREAS, in connection with the negotiation of the Original Merger
Agreement, the Company advised Parent that it believed that the Merger would be
of greater benefit to the Company's stockholders if Parent reduced its
outstanding equity through a substantial share and/or warrant repurchase; and
WHEREAS, SSI is a substantial holder of the outstanding equity of Parent;
and
WHEREAS, the Company required as a condition to its entering into the
Original Merger Agreement that Parent enter into that certain Stock Repurchase
Agreement, dated as of December 15, 1996, between Parent and SSI (the "Old
Agreement"), pursuant to which Parent agreed to purchase from SSI, and SSI
agreed to sell to Parent, 15 million shares of Parent Stock on the terms and
conditions set forth in the Old Agreement; and
WHEREAS, Parent and SSI hereby desire to amend and restate the Old
Agreement in its entirety to provide for the repurchase by Parent, and the sale
by SSI, of 32 million shares of Parent Stock (the "Shares") on the terms and
subject to the conditions set forth herein; and
WHEREAS, the Company has advised Parent that it believes that the
repurchase by Parent of 32 million shares of Parent Stock as contemplated by
this Agreement will be of greater benefit to the Company's stockholders than the
repurchase by Parent of 15 million shares of Parent Stock as contemplated by the
Old Agreement; and
WHEREAS, the Independent Committee of the Board of Directors of Parent has
received an opinion from Xxxxxx Brothers
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Inc. stating that the consideration to be paid by Parent in respect of the
repurchase contemplated hereby is fair to Parent (which term for purposes of
such opinion does not include SSI and certain related parties) from a financial
point of view; and
WHEREAS, the repurchase by Parent of the Shares on the terms and
conditions set forth herein has been approved by such Independent Committee; and
WHEREAS, concurrently with the execution of this Agreement, the parties to
the Original Merger Agreement are entering into that certain First Amendment to
Agreement and Plan of Merger, dated as of the date hereof (the Original Merger
Agreement as so amended, the "Merger Agreement"), to reflect this Agreement.
NOW, THEREFORE, the Parties hereto agree that the Old Agreement is hereby
amended and restated in its entirety as follows:
1. Repurchase by Parent; Purchase Price.
(a) At the Closing (as herein defined), Parent will repurchase from SSI,
and SSI will sell, assign and transfer ("Transfer") to Parent or any Parent
subsidiary designated by Parent, the Shares (the "Repurchase"). At the Closing,
(i) SSI shall deliver to Parent (or a subsidiary designated by Parent)
certificates representing the Shares, with documentation satisfactory to Parent
evidencing the Transfer of the Shares and (ii) Parent shall pay to SSI in
immediately available funds by wire transfer to an account designated by SSI an
amount equal to the number of shares of Parent Stock to be Transferred hereby
multiplied by $43.
(b) SSI may assign to SSI Equity Associates, L.P., a Delaware limited
partnership ("SSI Equity") and/or KKR Partners II, L.P., a Delaware limited
partnership ("Partners"), a portion of its rights and obligations under this
Agreement; provided that no such assignment shall be effective until SSI Equity
and/or Partners, as the case may be, has executed an agreement with Parent
substantially in the form hereof (with such changes to the form hereof as may be
appropriate to reflect the fact that SSI Equity may Transfer warrants as
described below) or such other form as may be agreed upon by Parent and SSI
Equity and/or Partners, as the case may be; and provided further that no such
assignment shall relieve SSI of its obligations hereunder. In the event of a
partial assignment to SSI Equity of SSI's obligation hereunder to Transfer 32
million shares of Parent Stock to Parent (or a subsidiary designated by Parent),
SSI Equity may, in lieu of transferring shares of Parent Stock, Transfer to
Parent (or a subsidiary designated by Parent) outstanding warrants to purchase
Parent Stock, provided that the aggregate Parent Stock and/or warrants to
purchase Parent Stock Transferred to Parent (or a subsidiary designated by
Parent) at Closing pursuant to this Agreement shall represent
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a total of 32 million shares of Parent Stock (treating any warrant as if it were
exercised). At the Closing, Parent shall pay or cause to be paid to SSI Equity
in immediately available funds by wire transfer to an account designated by SSI
Equity an amount in respect of each warrant Transferred to Parent pursuant to
this Agreement equal to (i) the number of shares of Parent Stock underlying such
warrant multiplied by (ii) an amount equal to the excess of (1) $43 over (2) the
exercise price per share of such warrant.
(c) In the event of any assignment pursuant to Section 1(b), SSI shall
notify Parent in writing at least five business days prior to the date of the
special meeting of the Company's stockholders to act on the Merger with respect
to the type (shares and/or warrants) and amount of equity securities to be
Transferred to Parent (or a subsidiary designated by Parent) at Closing by each
of SSI, SSI Equity and/or Partners, as the case may be.
2. Closing. The closing (the "Closing") of the Repurchase shall occur
immediately following the Effective Time (as such term is defined in the Merger
Agreement) of the Merger.
3. SSI's Representations and Warranties. SSI hereby represents and
warrants, as of the date hereof and as of the Closing, that:
(a) Organization. SSI is duly organized and validly existing under the
laws of the State of Delaware. SSI has all requisite partnership power and
authority to carry on its business as now conducted.
(b) Authorization. SSI has taken all action necessary for the
authorization, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement constitutes
SSI's valid and legally binding obligation, enforceable in accordance with its
terms, subject to bankruptcy and other laws of general application affecting the
rights and remedies of creditors and the availability of equitable remedies,
including specific performance.
(c) Ownership of the Shares. SSI has, and at the time of the Closing will
have, good title to the Shares; has, and at the Closing will have, full,
complete and unrestricted legal right, power and authority to Transfer and
deliver the Shares pursuant to this Agreement; and upon the delivery of and
payment for the Shares to be sold by it pursuant to the provisions of this
Agreement, Parent will receive good title thereto, free and clear of all liens,
claims, encumbrances, rights and restrictions of every kind.
(d) Non-Contravention. The execution and delivery by SSI
of this Agreement does not, and the performance of its
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obligations hereunder will not, (i) contravene or conflict with the partnership
agreement or other organizational documentation of SSI or (ii) contravene or
conflict with or constitute a violation of or default under or give rise to a
right of termination, cancellation or acceleration of any right or obligation of
SSI under any provision of applicable law or regulation of the United States or
any state thereof or of any agreement, contract, judgment, injunction, order,
decree or other instrument binding upon SSI.
(e) No Consents Required. No application, notice, order, registration,
qualification, waiver, consent, approval or other action is required to be
filed, given, obtained or taken by SSI by virtue of the execution, delivery and
performance of this Agreement or the Repurchase.
4. Parent's Representations and Warranties. Parent hereby represents and
warrants, as of the date hereof and as of the Closing, that:
(a) Organization. Parent is a corporation duly organized and validly
existing under the laws of the State of Delaware. Parent has all requisite
corporate power and authority to carry on its business as now conducted and to
purchase the Shares pursuant to this Agreement.
(b) Authorization. Parent has taken all corporate or other action
necessary for the authorization, execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement constitutes Parent's valid and legally binding obligation, enforceable
in accordance with its terms, subject to bankruptcy and other laws of general
application affecting the rights and remedies of creditors and the availability
of equitable remedies, including specific performance.
(c) Non-Contravention. The execution and delivery by Parent of this
Agreement does not, and the performance of its obligations hereunder will not,
(i) contravene or conflict with the certificate of incorporation or by-laws of
Parent or (ii) contravene or conflict with or constitute a violation of or
default under or give rise to a right of termination, cancellation or
acceleration of any right or obligation of Parent under any provision of
applicable law or regulation of the United States or any state thereof or of any
agreement, contract, judgment, injunction, order, decree or other instrument
binding upon Parent.
(d) No Consents Required. No application, notice, order, registration,
qualification, waiver, consent, approval or other action is required to be
filed, given, obtained or taken by Parent by virtue of the execution, delivery
and performance of this Agreement or the Repurchase.
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(e) Fairness Opinion. The Independent Committee of the Board of Directors
of Parent has received an oral opinion (with a written opinion to follow) of
Xxxxxx Brothers Inc. stating that the consideration to be paid by Parent in
respect of the Repurchase is fair to Parent (which term for purposes of such
opinion does not include SSI and certain related parties) from a financial point
of view.
5. Indemnification.
(a) Parent shall, with respect to any Proceeding (as hereinafter defined)
indemnify and hold harmless SSI, SSI Equity, Partners and their respective
affiliates, officers, directors, general and limited partners (and the general
and limited partners thereof), employees, agents, successors and assigns (other
than any of the foregoing solely to the extent acting in his capacity as a
director of Parent) such persons, each an "Indemnified Person" and collectively,
the "Indemnified Persons") with respect to all Expenses (as hereinafter defined)
reasonably incurred in connection with the investigation and defense of such
Proceeding (whether or not any such Indemnified Person is a party to any such
Proceeding). Nothing contained in this Agreement shall limit or otherwise affect
any rights to indemnification to which any person may otherwise be entitled.
(b) In case any Proceeding shall be instituted involving any Indemnified
Person in any manner whatsoever in respect of which indemnity may be sought
pursuant to paragraph (a) of this Section 5, such Indemnified Person shall
promptly notify Parent in writing, and SSI, on behalf of all Indemnified Persons
involved in such Proceeding, may retain counsel reasonably satisfactory to
Parent ("Retained Counsel") to represent all such Indemnified Persons with
respect to such Proceeding. Except as provided in the next sentence, it is
understood that Parent shall not, in respect of the attorneys' fees and related
expenses of any Indemnified Person in connection with any Proceeding or related
Proceedings in the same jurisdiction, be liable for the attorneys' fees and
related expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons. In any Proceeding, any Indemnified Person
shall have the right to retain counsel in addition to or in lieu of Retained
Counsel ("Additional Counsel"), but the fees and expenses of such Additional
Counsel shall be at the expense of such Indemnified Person unless (i) Parent and
the Indemnified Person shall have mutually agreed to the retention of such
Additional Counsel or (ii) it is the advice of counsel for such Indemnified
Person (which may be counsel other than the Retained Counsel) that the
representation of such Indemnified Person and any other person represented by
the Retained Counsel with respect to such Proceeding would be inappropriate due
to actual or potential differing interests between them. It is agreed that all
Expenses for which indemnification is provided under this Section 5 shall be
reimbursed as they are incurred. The failure of any Indemnified Person to give
notice as provided in
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this Section 5(b) shall relieve Parent of its obligations hereunder only to the
extent, if at all, that Parent is prejudiced by such failure.
(c) Parent shall not settle or compromise any Proceeding pending against
Parent, which Proceeding is also pending against any Indemnified Person, without
the written consent of SSI, which consent shall not be unreasonably withheld;
provided, however, that the foregoing limitation on Parent shall not apply to
any settlement or compromise by Parent of any Proceeding as it relates to
parties other than Parent and any Indemnified Person so long as subsequent
thereto the Proceeding remains pending against Parent.
(d) "Expenses" shall include only the following: attorneys' fees and
related expenses, retainers, court costs, transcripts, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and other similar disbursements or
out-of-pocket expenses incurred in connection with either the investigation or
defense of a Proceeding. Notwithstanding the preceding sentence, Expenses shall
include the premium cost of obtaining an appeal bond, which Expense shall not
exceed 2% of the amount of the necessary bond. Notwithstanding the foregoing
provisions of this paragraph 5(d), Expenses shall not include amounts with
respect to attorneys' fees and related expenses to the extent inconsistent with
the provisions of paragraph 5(b) above.
(e) "Proceeding" shall mean any threatened, pending or completed action,
claim, suit, demand, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative, that relates to this Agreement or the
Repurchase, regardless of whether the Repurchase is consummated and including
any proceeding by any Indemnified Person to enforce its rights hereunder.
6. Miscellaneous Matters.
(a) Succession. This Agreement shall be binding upon and shall inure to
the benefit of the parties, their heirs, personal representatives, successors
and assigns; provided, however, that SSI shall not be entitled to assign its
rights or delegate its obligations under this Agreement except as provided in
Section 1(b) hereof.
(b) Severability. If any provision of this Agreement is found to be
unenforceable, such provision shall be deemed to be limited or modified to the
minimum extent necessary to permit enforceability, and as so limited or
modified, such provision and the balance of this Agreement shall be enforceable
in accordance with their terms.
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(c) Law of Agreement. This Agreement shall be interpreted under and
enforced in accordance with the laws of the State of New York, excluding the
choice of law principles thereof.
(d) Further Assurances. Each party hereto agrees to perform any further
acts and to execute and deliver any further documents which may be reasonably
necessary to carry out the provisions of this Agreement.
(e) Counterparts. This Agreement may be executed in two or more
counterparts and shall be effective when each party has executed at least one of
the counterparts notwithstanding that all parties have not executed the same
counterpart.
(f) Waivers. Any of the terms and conditions of this Agreement may be
waived at any time by a writing signed by the party entitled to the benefit
thereof; but a waiver in one instance shall not be deemed to constitute a waiver
in any other instance.
(g) Notices. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given or made if and when delivered personally or by overnight courier to the
parties at the following addresses or sent by electronic transmission, with
confirmation received, to the telecopy numbers specified below (or at such other
address or telecopy number for a party as shall be specified by like notice):
(1) if to Parent:
Safeway Inc.
0000 Xxxxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: President
(2) if to SSI:
SSI Associates, L.P.
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Xx.
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
and
Attention: Xxxxxx X. XxxXxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
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(h) Termination. This Agreement shall terminate concurrently with any
termination of the Merger Agreement; provided, however, that the provisions of
Sections 5 and 6 shall survive any termination of this Agreement; and provided
further, that no such termination of this Agreement shall relieve any party
hereto from liability for any breach hereof prior to such termination.
(i) Limited Recourse. No partner of SSI, SSI Equity or Partners or of the
general partner of SSI, SSI Equity or Partners shall have any personal liability
for the performance of any of SSI's, SSI Equity's or Partner's obligations
hereunder. Any liability or obligation of SSI shall be limited to and satisfied
only out of the property of SSI. Any liability or obligation of SSI Equity shall
be limited to and satisfied only out of the property of SSI or SSI Equity, as
the case may be. Any liability or obligation of Partners shall be limited to and
satisfied only out of the property of SSI or Partners, as the case may be.
(j) Integrated Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject hereof, and there are no
agreements, understandings, restrictions, warranties or representations between
the parties with respect to the subject hereof other than those set forth herein
or herein provided for.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SAFEWAY INC.
By /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
SSI ASSOCIATES, L.P.
By: KKR ASSOCIATES, L.P.
By: /s/ Xxxxx X. Xxxxxx, Xx.
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Xxxxx X. Xxxxx, Xx.
General Partner
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