Exhibit 4.5
FORM OF OUTSIDE DIRECTOR'S STOCKHOLDER AGREEMENT
This Outside Director's Stockholder Agreement (this "Agreement") is
entered into as of _____________ __, 1999 among XXXXXXX'X FOOD MARKETS, INC.,
a Texas corporation (the "Company"), and [NAME OF DIRECTOR] ("Stockholder")
(the Company and Stockholder being hereinafter collectively referred to as
the "Parties").
To implement the foregoing and in consideration of the mutual
agreements contained herein, the Parties agree as follows:
1. Purchase of Stock; Stock Options.
(a) Subject to the terms and conditions hereinafter set forth,
Stockholder hereby subscribes for and shall purchase, and the Company shall
sell to Stockholder, [ _______] shares of the Company's common stock, par
value $.25 per share (the "Common Stock"), at a price of $12.96 per share
(the "Per Share Purchase Price", and such shares of Common Stock, the
"Purchase Stock") on _____________ ____, 1998 (the "Purchase Date"). The
Company shall have no obligation to sell any Purchase Stock to any person who
is a resident or citizen of a state or other jurisdiction in which the sale
of the Purchase Stock to him or her would constitute a violation of the
securities or "blue sky" laws of such jurisdiction.
(b) The aggregate price for the Purchase Stock shall be $[_____]
(such amount hereinafter sometimes referred to as the "Purchase Price"). As
soon as practicable after the Purchase Date, in consideration of receipt of
the Purchase Price, the Company will deliver to Stockholder a certificate,
registered in Stockholder's name, for the Purchase Stock, which shall be
subject to the terms and conditions hereinafter set forth.
(c) In addition to the foregoing, the Company may also grant to
Stockholder an option or options to purchase shares of Common Stock (the
"Options") pursuant to the terms of the Amended and Restated 1997 Stock
Purchase and Option Plan for Xxxxxxx'x Food Markets, Inc. and Subsidiaries
(attached hereto as Exhibit A) and a Director's Non-Qualified Stock Option
Agreement (the form of which is attached as Exhibit B hereto) (collectively,
the "Plan").
2. Stockholder's Representations, Warranties and Agreements.
(a) Stockholder hereby represents and warrants that he is
acquiring the Purchase Stock (collectively, and, together with any other
shares of Common Stock beneficially owned by Stockholder hereafter acquired,
whether by exercise of an Option or otherwise, the "Stock") for investment
for his own account and not with a view to, or for resale in connection with,
the distribution or other disposition thereof. Stockholder agrees and
acknowledges that he will not, directly or indirectly, offer, transfer, sell,
assign, pledge, hypothecate or otherwise dispose of any shares of the Stock
unless such offer, transfer, sale, assignment, pledge, hypothecation or other
disposition complies with this Agreement, including Section 3 hereof.
(b) The certificate (or certificates) representing the Stock shall
bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE
PROVISIONS OF THE OUTSIDE DIRECTOR'S STOCKHOLDER AGREEMENT
DATED AS OF _______________ __ 1999, BETWEEN XXXXXXX'X FOOD
MARKETS, INC. (THE "COMPANY") AND THE STOCKHOLDER NAMED ON THE
FACE HEREOF (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
THE COMPANY)."
(c) The Stockholder acknowledges that he has been advised that (i)
the Stock has been registered on Form S-8 under the Act, (ii) a restrictive
legend in the form heretofore set forth shall be placed on the certificate
representing the Stock and (iii) a notation shall be made in the appropriate
records of the Company indicating that the Stock is subject to restrictions
on transfer and appropriate stop transfer restrictions will be issued to the
Company's transfer agent with respect to the Stock.
(d) Stockholder represents and warrants that (i) he has received
and reviewed the documents comprising the Prospectus (the "Prospectus")
relating to the Stock and the documents referred to therein, certain of which
documents set forth the rights, preferences, and restrictions relating to the
Stock, and (ii) he has been given the opportunity to obtain any information
or documents and to ask questions and receive answers about such documents,
the Company and the business and prospects of the Company which he deems
necessary to evaluate the merits and risks related to his investment in the
Stock, and he has relied solely on such information.
(e) Stockholder further represents and warrants that (i) his
financial condition is such that he can afford to bear the economic risk of
holding the Stock for an indefinite period of time and has adequate means for
providing for his current needs and personal contingencies, (ii) he can
afford to suffer a complete loss of his investment in the Stock, (iii) all
information which he has provided to the Company concerning himself and his
financial position is correct and complete as of the date of this Agreement,
(iv) he understands and has taken cognizance of all risk factors related to
the purchase of the Stock, and (v) his knowledge and experience in financial
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and business matters are such that he is capable of evaluating the merits and
risks of his purchase of the Stock as contemplated by this Agreement.
3. Transfers of Stock.
(a) Restrictions. From and after the Purchase Date, Stockholder
hereby agrees not to sell, transfer, assign, pledge, hypothecate, encumber or
otherwise dispose of, or enter into any contract, option or other arrangement
or understanding with respect to the sale, transfer, assignment, pledge,
hypothecation, encumbrance or other disposition of, any of or any interest in
the Stock during the term of this Agreement, except for (i) a transfer made
pursuant to this Agreement, (ii) a transfer upon the death or permanent
disability of Stockholder to Stockholder's executors, administrators,
testamentary trustees, legatees or beneficiaries, (iii) a transfer by
Stockholder made in compliance with the federal securities laws to a trust or
custodianship the beneficiaries of which may include only Stockholder, his or
her spouse or lineal descendants; (iv) a bona fide pledge or pledges to a
financial institution of, in the aggregate, not more than 25% of the Stock
and (v) a transfer upon the death of Stockholder by Stockholder's executors,
administrators or testamentary trustees ("Stockholder's Representatives") to
pay estate and similar taxes and costs; provided, that prior to any transfer
described in clause (v) above, the Stockholder's Representatives shall have
offered the Company the right of first refusal described in Section 3(c); and
provided, further, in no event shall any transfer under any clause of this
Section 3 be made to any Person who has a right to require the transferred
Shares to be repurchased by the Company, either immediately or upon the
happening of any contingency; and provided, further, that prior to any
transfer or pledge described in clause (ii), (iii), (iv) or (v) above, the
applicable transferee or pledgee shall have agreed in writing to be bound by
the terms of this Agreement as if such transferee were a "Stockholder"
hereunder and shall have acknowledged in writing that such transferee or
pledgee is not a Person who has any rights described in the immediately
preceding proviso. No transfer of any shares of Stock in violation hereof
shall be made or recorded on the books of the Company and any such transfer
shall be void and of no effect.
(b) Permanent Disability. For purposes of this Agreement,
Stockholder shall be deemed to have a "permanent disability" if Stockholder
is unable to engage in the activities required by Stockholder's position on
the Board of Directors of the Company by reason of any medically determined
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than 12 months.
(c) Right of First Refusal. Prior to effecting any transaction
described in clause (v) of Section 3(a), the Stockholder's Representatives
shall cause any bona fide offer to purchase any or all of the shares of Stock
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held by the Stockholder's Representatives (an "Offer") received by the
Stockholder's Representatives and which the Stockholder's Representatives
wish to accept to be reduced to writing, and the Stockholder's
Representatives shall notify the Company in writing that the Stockholder's
Representatives wish to accept the Offer. The notice shall contain an
irrevocable offer to sell such shares of Stock to the Company or its designee
(in the manner set forth below) at a purchase price equal to the price
contained in, and on the same terms and conditions of, the Offer, and shall
be accompanied by a true copy of the Offer (which shall identify the third
party who has made the Offer (the "Offeror")). At any time within 30 days
after the date of the receipt by the Company of such notice, the Company
shall have the right and option to purchase, or to arrange for a third party
to purchase, all of the shares of Stock covered by the Offer either (i) at
the same price and on the same terms and conditions as the Offer or (ii) if
the Offer includes any consideration other than cash, then at the sole option
of the Company, at the equivalent all cash price, determined in good faith by
a duly authorized compensation committee of the Board of Directors of the
Company, by delivering a certified or bank check in the appropriate amount to
the Stockholder's Representatives against delivery of certificates
representing the shares of Stock so purchased, appropriately endorsed by the
Stockholder's Representatives. If at the end of such 30 day period, the
Company or such third party has not tendered the purchase price for such
shares of Stock in the manner set forth above, the Stockholder's
Representatives may during the succeeding 30 day period sell not less than
all of the shares of Stock covered by the Offer to the Offeror at a price and
on terms no less favorable to such Stockholder's Representatives than those
contained in the Offer. Promptly after such sale, such Stockholder's
Representatives shall notify the Company of the consummation thereof and
shall furnish such evidence of the completion and time of completion of such
sale and of the terms thereof as may reasonably be requested by the Company.
If, at the end of 30 days following the expiration of the 30 day period for
the Company to purchase such shares of Stock, such Stockholder's
Representatives have not completed the sale of such shares of Stock as
aforesaid, all the restrictions on sale, transfer or assignment contained in
this Agreement shall again be in effect with respect to such shares of Stock.
(d) Other Sales to the Company. Notwithstanding anything to the
contrary contained in Section 3(c) and notwithstanding the absence of an
Offer, the parties hereto acknowledge that any Stockholder's Representatives
may approach the Company at any time regarding the sale of shares of Stock
held by such Stockholder's Representatives to the Company or its designee,
provided that the Company shall have no obligation to purchase such shares of
Stock.
4. "Tag-Along Rights" and "Drag-Along" Rights.
(a) "Tag-Along" Right With Respect to Private Sales by KKR
Holders. (i) Private Sales of Shares by KKR Holders. Subject to the last
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sentence of Section 4(c)(i), with respect to any proposed Private Sale (as
defined in Section 5) of any Buyer Shares (as defined in Section 5) by a KKR
Holder (as defined in Section 5) during the term of this Agreement to a
Person (a "Proposed Purchaser"), other than pursuant to an Exempt Transaction
(as defined in Section 5), each Stockholder shall have the right and option,
but not the obligation, to participate in such sale, on the same terms and
subject to the same conditions as the sale by the KKR Holder (a KKR Holder),
for the number of shares of Stock owned by Stockholder equalling the number
derived by multiplying the total number of Buyer Shares (as defined in
Section 5) which the KKR Holder proposes to sell (the "Proposed Number of
Shares") by a fraction, the numerator of which is the total number of shares
of Stock held by Stockholder and the denominator of which is the sum of (A)
the total number of shares of Stock held by Stockholder, (B) the total number
of Buyer Shares, and (C) the total number of shares of Common Stock
(determined on a fully diluted basis) owned by other Persons entitled to the
benefits of "tag-along" rights (including under this Agreement) arising as a
result of such sale.
(ii) Notices. The KKR Holder shall notify, or cause to be
notified, Stockholder in writing of each proposed Private Sale that is
subject to Section 4(a)(i) above. Such notice shall set forth: (1) the
Proposed Number of Shares, (2) the name and address of the Proposed
Purchaser, (3) the proposed amount of consideration, the material terms and
conditions of such sale (and if the proposed consideration is not cash, the
notice shall describe the terms of the proposed consideration) and the
proposed closing date of such sale, (4) the total number of Buyer Shares and
the total number of shares of Common Stock (determined on a fully diluted
basis) owned by Persons entitled to the benefits of any other "tag-along"
rights arising as a result of such sale and (5) an indication that the
Proposed Purchaser has been informed of the "tag-along" right provided for in
this Section 4(a) and has agreed to purchase shares of Stock held by
Stockholder in accordance with the terms hereof. The "tag-along" right may
be exercised by Stockholder by delivery of a written notice from such
Stockholder to the KKR Holder (the "Tag-Along Notice") within 10 days
following receipt of the notice specified in the preceding sentence. The
Tag-Along Notice shall state the number of shares of Stock that Stockholder
proposes to include in such Private Sale to the Proposed Purchaser. If
Stockholder delivers a Tag-Along Notice to the KKR Holder, Stockholder shall
(1) prior to the closing of any such sale, execute and deliver (or cause to
be executed and delivered) any purchase agreement or other documentation
required by the Proposed Purchaser to consummate the sale (including all
legal opinions, cross-receipts and certificates), which purchase agreement
and other documentation shall be on terms no less favorable in respect of any
material term to Stockholder than those executed by the KKR Holder and (2) at
the closing of any such sale, deliver to the Proposed Purchaser the
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certificate or certificates representing the shares of Stock to be sold
pursuant to such sale by Stockholder, duly endorsed for transfer with
signatures guaranteed, against receipt of the purchase price thereof.
(iii) Number of Shares to be Sold. If a Tag-Along Notice is
received pursuant to Section 4(a)(ii), Stockholder shall be permitted to sell
to the Proposed Purchaser up to the number of Shares determined as set forth
in Section 4(a)(i) above (the "Proposed Shares"), and the KKR Holder shall be
permitted to sell to the Proposed Purchaser up to a number of shares of
Common Stock (the "Proposed Buyer Shares") equal to the Proposed Number of
Shares less the aggregate number of Proposed Shares and all other shares of
Common Stock being sold to such Proposed Purchaser in such transaction
pursuant to tag-along rights arising as a result of such sale; provided, that
the KKR Holder shall have the right to sell a number of additional shares of
Common Stock up to the excess of the Proposed Number of Shares over the
number of Proposed Buyer Shares, if the Proposed Purchaser wishes to purchase
such additional shares. If no Tag-Along Notice is received by the KKR Holder
pursuant to Section 4(a)(ii), such KKR Holder shall have the right for a 120-
day period to sell to the Proposed Purchaser up to the Proposed Number of
Shares on terms and conditions no more favorable in any material respect to
the KKR Holder than those stated in the Tag-Along Notice.
(b) "Tag-Along" Right With Respect to Public Sales by KKR Holders.
(i) Public Sales of Shares by KKR Holders. Subject to the last sentence of
Section 4(c)(i), with respect to any proposed sale of any Buyer Shares by a
KKR Holder during the term of this Agreement in a Public Offering,
Stockholder shall have the right and option, but not the obligation, to
participate in such Public Offering on the same terms and subject to the same
conditions as the sale by the KKR Holder, for the number of Shares owned by
Stockholder as determined pursuant to Section 4(b)(iii) below.
(ii) Notices. The KKR Holder shall notify, or cause to be
notified, Stockholder in writing of each proposed Public Offering that is
subject to Section 4(b)(i) above (a "Proposed Registration"). Such notice
may be given before the filing of such registration statement and need not
specify any price or other terms or conditions of such sale. If within 5
days of the delivery of such notice to Stockholder, the KKR Holder receives
from Stockholder a written request (a "Request"), which Request shall be
irrevocable, to register Shares held by Stockholder, shares of Stock shall be
so registered as and to the extent provided in this Section 4(b) if Buyer
Shares are so registered. If Stockholder delivers a Request to the KKR
Holder, Stockholder shall participate in such Public Offering, if any, at the
same price and on the same terms and conditions as the KKR Holder, which
price and other terms and conditions shall be determined on behalf of the KKR
Holder and Stockholder by the KKR Holder in its sole discretion. Nothing in
this Agreement shall create any obligation on the part of the KKR Holder to
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cause a registration statement to become effective under the Securities Act
or to consummate a Public Offering.
(iii) Number of Shares to be Sold. The maximum number of Shares
which shall be registered pursuant to a Request shall equal the number
derived by multiplying the total number of Shares held by Stockholder by a
fraction, the numerator of which is the total number of Buyer Shares which
the KKR Holder proposes to sell in the Public Offering and the denominator of
which is the total number of Buyer Shares; provided, that in the event that
the aggregate number of shares of Common Stock to be sold in any Public
Offering is increased or decreased including any decrease resulting from the
advice of the managing underwriter in an underwritten offering that, in its
opinion, the number of Buyer Shares which the KKR Holder proposes to sell in
the Public Offering plus the aggregate number of shares of Common Stock
subject to Requests by all other Stockholders of the Company would be likely
to have an adverse effect on the price, timing or distribution of the shares
of Common Stock offered in such Public Offering), then the number of shares
of Stock which Stockholder shall sell in such Public Offering shall be
increased or decreased by the product of (i) the number of shares of Common
Stock by which the total number of shares of Common Stock in such Public
Offering is increased or decreased and (ii) a fraction, the numerator of
which equals the number of shares of Stock subject to the Request and the
denominator of which is the total number of shares of Common Stock originally
to be so registered.
(iv) Upon delivery of a Request, Stockholder will, if requested by
the KKR Holder, execute and deliver to the KKR Holder a custody agreement and
power of attorney in form and substance reasonably satisfactory to the KKR
Holder with respect to the Shares to be registered pursuant to this Section
4(b) (a "Custody Agreement and Power of Attorney"). The custodian and
attorney-in-fact under the Custody Agreement and Power of Attorney shall be
the KKR Holder or its designee. The Custody Agreement and Power of Attorney
shall provide, among other things, that Stockholder shall deliver to and
deposit in custody with the custodian and attorney-in-fact named therein a
certificate or certificates representing such shares of Stock (duly endorsed
in blank by the registered owner or owners thereof or accompanied by duly
executed stock powers in blank) and irrevocably appoint said custodian and
attorney-in-fact as Stockholder's agent and attorney-in-fact with full power
and authority to act under the Custody Agreement and Power of Attorney on
Stockholder's behalf with respect to the matters specified therein (including
executing an underwriting agreement and cross-receipts).
(v) Stockholder agrees that, if Stockholder shall make a Request,
Stockholder shall execute and deliver or cause to be executed and delivered
such other agreements and other documents (such as legal opinions, cross-
receipts and certificates) as the KKR Holder itself is delivering or as the
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KKR Holder may otherwise reasonably request to implement the provision of
this Section 4(b).
(vi) Stockholder shall bear a proportionate amount of the expenses
(including filing fees, underwriting discounts and commissions and attorneys
and accountants fees) relating to such Public Offering (based on the relative
number of shares of Common Stock of Stockholder which are covered by the
applicable registration statement relative to the total number of shares
covered by such registration statement).
(vii) If a Proposed Registration involves an underwritten
offering, the investment banker(s), underwriter(s) and manager(s) for such
Public Offering shall be selected by the KKR Holder.
(c) "Drag-Along" Right With Respect to the Shares of Stock.
(i) Sales by KKR Holders. In the event that the KKR Holder determines,
during the term of this Agreement, to transfer either (A) at least 35% of the
shares of Common Stock (including shares issuable upon exercise of a 25-year
option held by RFM (the "Option") in the event that the Option is to be
transferred) then outstanding on a fully diluted basis at the time of such
transfer or (B) at least 15% of the shares of Common Stock (including shares
subject to the Option in the event that the Option is to be transferred) then
outstanding on a fully diluted basis at the time of such transfer (provided
that such percentage set forth in this clause (B) equals 100% of the Buyer
Shares at the time of such transfer) to a Proposed Purchaser in a Private
Sale, other than in an Exempt Transaction (a "Drag-Along Sale"), then upon
the request of the KKR Holder, Stockholder shall transfer to such Proposed
Purchaser, at the same price and upon the same terms and conditions in
respect of any material term as such transfer by the KKR Holder, the
percentage of shares of Stock held by Stockholder that equals the percentage
of shares of Common Stock to be transferred by the KKR Holder (including
shares subject to the Option in the event that the Option is to be
transferred) relative to the number of Buyer Shares. In the event that
Sections 4(a), 4(b) and 4(c) hereto apply to a single transaction, the "drag-
along" rights set forth in this Section 4(c) shall have priority over the
"tag-along" rights set forth in Sections 4(a) and 4(b) above, and the "tag-
along" rights set forth in Sections 4(a) and 4(b) shall not become
exercisable by Stockholder unless the KKR Holder shall have determined not to
exercise its rights under this Section 4(c).
(ii) Notice. Prior to making any Drag-Along Sale, the KKR Holder
shall, if it determines in its sole discretion that Stockholder should
participate in such transfer, provide Stockholder with written notice (the
"Drag-Along Notice") not less than 5 Business Days prior to the proposed date
of the Drag-Along Sale (the "Drag-Along Sale Date"). The Drag-Along Notice
shall set forth: (A) the name and address of the Proposed Purchaser; (B) the
proposed amount and form of consideration to be paid per share of Common
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Stock and the material terms and conditions of the transfer; (C) the Drag-
Along Sale Date and the date upon which Stockholder shall deliver to the KKR
Holder the certificates representing the shares of Common Stock held by such
Stockholder, duly endorsed, and the power of attorney referred to below; and
(D) an indication that the Proposed Purchaser has been informed of the Drag-
Along Sale rights and has agreed to acquire all of the shares of Common Stock
held by Stockholder. Stockholder shall (A) prior to the closing of any such
transfer, execute any purchase agreement or other documentation required by
the Proposed Purchaser to consummate the transfer, which purchase agreement
and other documentation shall be on terms no less favorable in respect of any
material term to Stockholder than those executed by the KKR Holder, and (B)
at the closing of any such transfer, deliver to the Proposed Purchaser the
certificate or certificates representing the shares of Common Stock held by
Stockholder, duly endorsed for transfer with signatures guaranteed, against
receipt of the purchase price thereof.
(iii) Transaction Agreements. In the event that the KKR Holder
owns at least 15% of the shares of Common Stock (including shares subject to
the Option) then outstanding on a fully diluted basis and has signed an
agreement, with respect to all such Buyer Shares, to vote in favor of or
tender in connection with a business combination transaction entered into by
the Company (a "Transaction Agreement"), then, upon the request of the KKR
Holder, Stockholder shall execute a Transaction Agreement with the same terms
and conditions in all material respects as the Transaction Agreement signed
by the KKR Holder. Prior to entering into a Transaction Agreement, the KKR
Holder shall, if it determines in its sole discretion that Stockholder should
execute a Transaction Agreement, provide Stockholder with written notice (the
"Transaction Agreement Notice") not less than 5 Business Days prior to the
proposed date of the execution of the Transaction Agreement (the "Transaction
Agreement Date"). The Transaction Agreement Notice shall set forth: (A) the
name and address of the counter-parties to the Transaction Agreement; (B) the
proposed form of Transaction Agreement; and (C) the material terms and
conditions of the business combination with the Company to which the
Transaction Agreement relates. Stockholder shall, at the signing and closing
of such Transaction Agreement, execute and deliver all other documentation
required by such Transaction Agreement, which documents shall be on terms no
less favorable in respect of any material term to Stockholder than those
executed by the KKR Holder.
(iv) Effect of Drag-Along Sale. If Stockholder receives his
proportionate share of the purchase price from a Drag-Along Sale, but has
failed to deliver certificates representing his shares of Common Stock as
described in this Section 4(c), he shall for all purposes be deemed no longer
to be a Stockholder of Common Stock, shall have no voting rights, shall not
be entitled to any dividends or other distributions with respect to the
Common Stock held by him, and shall have no other rights or privileges
granted to Stockholders under law or this Agreement.
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5. Certain Definitions. For purposes of this Agreement, the
term:
(a) "Buyer Shares" shall mean the sum of the shares of Common
Stock beneficially owned by RFM and its Affiliates as of the date hereof.
(b) "Exempt Transaction" shall mean (i) sales by RFM to any
Affiliate of RFM, (ii) sales by any Affiliate of RFM to another Affiliate of
RFM or to RFM and (iii) transfers by RFM and its respective Affiliates to its
partners or members (and any subsequent sales by such partners or members) in
the form of dividends or distributions (whether upon liquidation or
otherwise); provided, that prior to any transfer described in clauses (i) and
(ii) above, the applicable transferee shall have agreed in writing to be
bound by the terms of this Agreement as if such transferee were "RFM"
hereunder; and provided, further, that prior to any transfer described in
clause (iii) above, if the transferee is an Affiliate of KKR, such transferee
shall have agreed in writing to be bound by the provisions of this Agreement
as if such transferee were "RFM" hereunder.
(c) "KKR" means Kohlberg Kravis Xxxxxxx & Co., L.P.
(d) "KKR Holder" shall mean RFM and any Person to whom a KKR
Holder transfers shares of Common Stock which Person is required by this
Agreement to be bound by the provisions of this Agreement.
(e) "Private Sale" shall mean any sale of shares of Common Stock
other than a sale made in a Public Offering.
(f) "Public Offering" shall mean any sale of shares of Common
Stock made in a public distribution pursuant to an effective registration
statement under the Securities Act.
(g) "RFM" means RFM Acquisition LLC, a Delaware limited liability
company.
6. Stock Issued to Purchaser Upon Exercise of Stock Options.
The Company may from time to time grant to the Purchaser, in
addition to the Options, options under the Plan to purchase shares of Common
Stock at the Per Share Purchase Price or at a different option exercise
price.
7. The Company's Representations and Warranties.
(a) The Company represents and warrants to the Purchaser that (i)
this Agreement has been duly authorized, executed and delivered by the
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Company and (ii) the Stock, when issued and delivered in accordance with the
terms hereof, will be duly and validly issued, fully paid and nonassessable.
(b) If the Company shall have engaged in a Public Offering, the
Company will file the reports required to be filed by it under the Act and
the Exchange Act and the rules and regulations adopted by the SEC thereunder,
to the extent required from time to time to enable the Purchaser to sell
shares of Stock without registration under the Act within the limitations of
the exemptions provided by (A) Rule 144 under the Act, as such Rule may be
amended from time to time, or (B) any similar rule or regulation hereafter
adopted by the SEC. Notwithstanding anything contained in this Section 7(b),
the Company may deregister under Sections 12 or 15 of the Exchange Act if it
is then permitted to do so pursuant to the Exchange Act and the rules and
regulations thereunder. Nothing in this Section 7(b) shall be deemed to
limit in any manner the restrictions on sales of Stock contained in this
Agreement.
8. Recapitalizations, etc.
The provisions of this Agreement shall apply, to the full extent
set forth herein with respect to the Stock, to any and all shares of capital
stock of the Company or any capital stock, partnership units or any other
security evidencing ownership interests in any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or substitution of the Stock,
by reason of any stock dividend, split, reverse split, combination,
recapitalization, liquidation, reclassification, merger, consolidation or
otherwise.
9. State Securities Laws.
The Company hereby agrees to use its best efforts to comply with
all state securities or "blue sky" laws which might be applicable to the sale
of the Stock to Stockholder.
10. Binding Effect.
The provisions of this Agreement shall be binding upon and accrue
to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of a transferee
permitted under Section 3 hereof, such transferee shall be deemed the
Stockholder hereunder; provided, however, that no transferee (including
without limitation, transferees referred to in Section 3 hereof) shall derive
any rights under this Agreement unless and until such transferee has
delivered to the Company a valid undertaking and becomes bound by the terms
of this Agreement.
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11. Amendment.
This Agreement may be amended only by a written instrument signed
by the Parties hereto.
12. Closing.
Except as otherwise provided herein, each closing of the purchase
and sale of shares of Stock pursuant to this Agreement shall take place at
the principal office of the Company in a manner and at a time determined by
the Company, in its sole discretion.
13. Applicable Law.
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, regardless of the law that might
be applied under principles of conflicts of law. Any suit, action or
proceeding against Stockholder, with respect to this Agreement, or any
judgment entered by any court in respect of any thereof, may be brought in
any court of competent jurisdiction in the State of Texas (or if the Company
reincorporates in another state, in that state), and Stockholder hereby
submits to the non-exclusive jurisdiction of such courts for the purpose of
any such suit, action, proceeding or judgment. Nothing herein shall in any
way be deemed to limit the ability of the Company to serve any such writs,
process or summonses in any other manner permitted by applicable law or to
obtain jurisdiction over Stockholder, in such other jurisdictions and in such
manner, as may be permitted by applicable law. Stockholder hereby
irrevocably waives any objections which he may now or hereafter have to the
laying of the venue of any suit, action or proceeding arising out of or
relating to this Agreement brought in any court of competent jurisdiction in
the State of Texas (or if the Company reincorporates in another state, in
that state), and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum. No suit, action or proceeding against the Company with
respect to this Agreement may be brought in any court, domestic or foreign,
or before any similar domestic or foreign authority other than in a court of
competent jurisdiction in the State of Texas (or if the Company
reincorporates in another state, in that state) or New York, and Stockholder
hereby irrevocably waives any right which he may otherwise have had to bring
such an action in any other court, domestic or foreign, or before any similar
domestic or foreign authority. The Company hereby submits to the
jurisdiction of such courts for the purpose of any such suit, action or
proceeding.
14. Miscellaneous.
In this Agreement (i) all references to "dollars" or "$" are to
United States dollars and (ii) the word "or" is not exclusive. If any
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provision of this Agreement shall be declared illegal, void or unenforceable
by any court of competent jurisdiction, the other provisions shall not be
affected, but shall remain in full force and effect.
15. Notices.
All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight courier or otherwise) or sent by registered or
certified mail, return receipt requested, postage prepaid, to the Party to
whom it is directed:
(a) If to the Company, to it at the following address:
Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxx X. Xxxxxx
with copies to:
Kohlberg Kravis Xxxxxxx & Co.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxx
and
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
(b) If to Stockholder, to him at the address set forth below under
his signature;
or at such other address as either party shall have specified
by notice in writing to the other.
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16. Covenant Not to Compete; Confidential Information.
(a) In consideration of the Company entering into this Agreement
with Stockholder, Stockholder hereby agrees effective as of the Purchase
Date, until the one-year anniversary of the date Stockholder shall cease to
be a member of the Board of Directors of the Company (the "Non-Compete
Period"), Stockholder shall not, directly or indirectly, without the consent
of the Committee, own, manage, operate, control or participate in the
ownership, management, operation or control of, or be connected in any manner
with (including as a consultant), any business which shall be engaged in the
retail selling of food, beverages or other products under the names
"Randall's", "Xxx Thumb" or "Xxxxx Xxxxx", or under any other name which uses
any of the foregoing names as a component or which is (or includes a
component which is) confusingly similar to any such names (the "Trade
Names"), in the United States. In addition to the foregoing, Stockholder
hereby agrees that during the Non-Compete Period, Stockholder shall not,
directly or indirectly, without the consent of the Committee, own, manage,
operate, control or participate in the ownership, management, operation or
control of, or be connected in any manner with (including as a consultant),
any business which shall be engaged in the retail selling of food, beverages
or other related products under any name, including the Trade Names, in
Texas, provided, that (i) unless such business shall own, lease or operate a
Supercenter (as defined below), the retail selling of food, beverages or
other related products shall be the primary business of such business and
(ii) this sentence shall not be applicable to restaurant or catering
businesses. For purposes hereof, "Supercenter" shall mean any store of at
least 50,000 square feet at which general merchandise as well as groceries
are sold at retail. For illustrative purposes only, Wal-Mart Supercenters
and Super Kmart Centers are examples of Supercenters.
(b) Except as required by law or judicial process, Stockholder
will not disclose or use at any time, any Confidential Information (as
defined below) of which Stockholder is or becomes aware, whether or not such
information is developed by him, except to the extent that such disclosure or
use is directly related to and required by Stockholder's performance of
duties, if any, assigned to Stockholder by the Company. As used in this
Agreement, the term "Confidential Information" means information that is not
known to the public and that is used, developed or obtained by the Company or
its subsidiaries in connection with its business, including but not limited
to (i) products or services, (ii) fees, costs and pricing structures, (iii)
designs, (iv) computer software, including operating systems, applications
and program listings, (v) flow charts, manuals and documentation, (vi) data
bases, (vii) accounting and business methods, (viii) inventions, devices, new
developments, methods and processes, whether patentable or unpatentable and
whether or not reduced to practice, (ix) customers and clients and customer
or client lists, (x) other copyrightable works, (xi) all technology and trade
secrets and (xii) all similar and related information in whatever form.
Confidential Information will not include any information that has been
published in a form available to the public prior to the date Stockholder
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proposes to disclose or use such information. Stockholder acknowledges and
agrees that all copyrights, works, inventions, innovations, improvements,
developments, patents, trademarks and all similar or related information
which relate to the actual or anticipated business of the Company and its
subsidiaries (including its predecessors) and conceived, developed or made by
Stockholder while employed by the Company or its subsidiaries belong to the
Company. Stockholder will perform all actions reasonably requested by the
Company (whether during or after the Noncompete Period) to establish and
confirm such ownership at the Company's expense (including without limitation
assignments, consents, powers of attorney and other instruments).
(c) Notwithstanding the foregoing paragraphs (a) and (b) above, if
at any time a court holds that the restrictions stated in such foregoing
paragraphs (a) and (b) are unreasonable or otherwise unenforceable under
circumstances then existing, the parties hereto agree that the maximum
period, scope or geographic area of such restrictions determined to be
reasonable under such circumstances by such court will be substituted for the
stated period, scope or area of such restrictions. Because Stockholder's
services are unique and because Stockholder has had access to Confidential
Information, the parties hereto agree that money damages will be an
inadequate remedy for any breach of this Agreement. In the event of a breach
or threatened breach of this Agreement, the Company or its successors or
assigns may, in addition to other rights and remedies existing in their
favor, apply to any court of competent jurisdiction for specific performance
and/or injunctive relief in order to enforce, or prevent any violations of,
the provisions hereof (without the posting of a bond or other security).
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date first above written.
XXXXXXX'X FOOD MARKETS, INC.
By ________________________________
Name: Xxx X. Xxxxxx
Title: Senior Vice President-Finance,
Secretary & Treasurer
________________________________
[Insert Name of Director]
_____________________________
_____________________________
Address of Stockholder
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Exhibit A
Amended and Restated 1997
Stock Purchase and Option Plan for
Xxxxxxx'x Food Markets, Inc.
and Subsidiaries.
See attached.
Exhibit B
Form of Director's Non-Qualified Stock Option Agreement
See attached.
