1
STOCK PURCHASE AGREEMENT
DATED AS OF FEBRUARY 20, 1997
BY AND AMONG
AMERICAN STORES COMPANY,
XXXXXX XXX XXXXXX,
XXXXX X. XXXXXX
AND
CERTAIN STOCKHOLDERS
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TABLE OF CONTENTS
Page
1. Purchase and Sale of Shares...................... 2
2. Closing.......................................... 3
3. Deliveries at the Closing........................ 4
4. Representations and Warranties of Sellers........ 5
5. The Company's Representations and Warranties..... 7
6. Covenants........................................ 9
7. Conditions....................................... 24
8. Specific Performance............................. 26
9. Expenses......................................... 26
10. Brokerage........................................ 27
11. Termination...................................... 28
12. Indemnification.................................. 28
13. Public Announcements............................. 30
14. Integration; Amendment; Waiver................... 30
15. Assignment....................................... 31
16. Headings......................................... 31
17. Survival......................................... 31
18. Counterparts..................................... 31
19. Notices.......................................... 32
20. Governing Law.................................... 33
21. Severability..................................... 33
22. Interpretation................................... 33
23. Sellers' Obligations Several..................... 34
Schedule 1 - Initial Sellers.......................... S-1
Schedule 2 - Additional Sellers/Other Stockholders.... S-2
Exhibit A - Form of Transferee Letter................ E-1
Exhibit B - Form of Press Release.................... X-0
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XXXXX XXXXXXXX AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of this 20th day
of February, 1997 (the "Agreement"), by and among American
Stores Company, a Delaware corporation ("the Company"), and
Xxxxxx Xxx Xxxxxx ("X.X. Xxxxxx"), Xxxxx X. Xxxxxx and the
stockholders of the Company listed on Schedule 1 hereto (to-
gether with X.X. Xxxxxx and Xxxxx X. Xxxxxx, the "Initial Sell-
ers") and any of the stockholders listed on Schedule 2 hereto
who have, within 10 business days after the date hereof, deliv-
ered a written notice to the Company and the Initial Sellers
agreeing to be bound by the terms of this Agreement and the
Registration Rights Agreement (as defined below) (the "Addi-
tional Sellers" and, together with the Initial Sellers, the
"Sellers"). Any bank or trust company which agrees to be bound
by this Agreement shall do so only in the capacity as shown on
Schedule 1 or Schedule 2, as the case may be, and shall not be
deemed to be an affiliate of any trust or account not listed on
such Schedules (provided such trust or account was not formed
by or for the benefit of any Initial Seller or an affiliate of
an Initial Seller). Any person or entity listed on Schedule 2
which does not become an Additional Seller is referred to
herein as an "Other Stockholder."
WHEREAS, the Initial Sellers are collectively the
beneficial owners of 15,991,594 shares (together with shares
owned by the Additional Sellers, the "Shares") of common stock,
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par value $1.00 per share, of the Company (the "Common Stock"),
with each Seller beneficially owning that number of Shares set
forth next to such Seller's name under the heading "Shares
Owned" on Schedule 1;
WHEREAS, subject to the terms and conditions of this
Agreement, each Initial Seller desires to sell or cause to be
sold to the Company, and the Company desires to purchase (the
"Company Repurchase"), that number of Shares set forth next to
such Initial Seller's name under the column "Repurchased
Shares" on Schedule 1 (the "Repurchased Shares") for a price of
$45 per share (the "Repurchase Price"), for an aggregate price
of $550 million; and
WHEREAS, contemporaneously with entering into this
Agreement the Company and the Initial Sellers have entered into
a registration rights agreement (the "Registration Rights
Agreement") pursuant to which, among other things, the Company
shall file with the Securities and Exchange Commission, and use
all reasonable efforts to cause to become effective, a regis-
tration statement covering the sale to the public of all of the
Shares owned by the Sellers that are not sold to the Company
pursuant hereto (the "Retained Shares");
NOW, THEREFORE, the parties hereby agree as follows:
1. Purchase and Sale of Shares. (a) Subject to
the terms and conditions of this Agreement, and in reliance on
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the representations, warranties and covenants contained herein,
at the Closing (as hereinafter defined), each Seller will sell,
assign, transfer and convey to the Company, and the Company
will purchase from such Seller, the Repurchased Shares set
forth next to such Seller's name under the column "Repurchased
Shares" on Schedule 1, free and clear of all pledges, liens,
claims, options, charges or encumbrances of whatever nature
("Encumbrances"). The number of Repurchased Shares sold by
each Seller shall equal the product, rounded to the nearest
whole share, of (i) the number of Shares owned by such Seller
as shown on Schedule 1, multiplied by (ii) a fraction, the
numerator of which is 12,222,222 and the denominator of which
is the aggregate number of Shares owned by all Sellers as shown
on Schedule 1. References in this Agreement to Schedule 1
shall mean such Schedule as amended to reflect any Additional
Sellers and to change the allocation of the Repurchased Shares
among all of the Sellers pursuant to the preceding sentence.
In consideration of the aforesaid sale, the Company will pay to
each such Seller for each Repurchased Share sold by such Seller
pursuant hereto, in immediately available funds and in
accordance with Section 3, the Repurchase Price.
2. Closing. Subject to the satisfaction or waiver
of the conditions set forth in Section 7 hereof, the closing of
the purchase and sale of the Repurchased Shares (the "Closing")
shall be held at the corporate offices of the Company in Salt
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Lake City, Utah at 10:00 a.m. (a) on the closing date of the
Secondary Offering (as defined in the Registration Rights
Agreement); or (b) if the Secondary Offering is terminated pur-
suant to Section 2(b) of the Registration Rights Agreement (or
for any other reason other than due to a breach of this Agree-
ment, the Registration Rights Agreement or the underwriting
agreement relating to the Secondary Offering by any of the
Sellers) and the holders of two-thirds of the Repurchased
Shares have delivered to the Company on the Pricing Date (as
defined in Section 2(b) of the Registration Rights Agreement) a
written waiver of the condition set forth in Section 7(a)(iii)
hereof, on the fourth business day following the Pricing Date;
or (c) on such other date to which the holders of two-thirds of
the Repurchased Shares and the Company shall each agree (the
"Closing Date").
3. Deliveries at the Closing. At the Closing, (a)
each Seller will deliver to the Company (i) certificates repre-
senting the Repurchased Shares to be sold by such Seller pursu-
ant hereto, with appropriate stock powers attached, properly
signed, with any necessary documentary or transfer tax stamps
duly affixed and cancelled, (ii) a certificate of such Seller
that the condition set forth in Section 7(b)(i) has been satis-
fied and (iii) the opinion of counsel to such Seller described
in Section 7(b)(ii); and (b) the Company will (i) pay to each
Seller, for each of such Seller's Repurchased Shares, the Re-
purchase Price (in the amount indicated on Schedule 1 hereto)
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by wire transfer of immediately available funds to the account
designated by each such Seller in writing on or before the sec-
ond business day prior to the Closing Date, (ii) deliver to
each Seller a certificate of the Company that the condition set
forth in Section 7(a)(i) has been satisfied and (iii) deliver
to each Seller the opinion of counsel to the Company described
in Section 7(a)(ii).
4. Representations and Warranties of Sellers. Each
Seller represents and warrants to the Company as follows (as to
such Seller and not as to any other Seller):
(a) Each Seller that is not an individual is
duly organized and validly existing under the laws of its ju-
risdiction of organization. Each Seller has all requisite pow-
er and authority to execute and deliver this Agreement and the
Registration Rights Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated here-
by and thereby. This Agreement and the Registration Rights
Agreement have been duly executed and delivered by each Seller
and, assuming the due execution hereof and thereof by the Com-
pany, this Agreement and the Registration Rights Agreement con-
stitute the legal, valid and binding obligation of each Seller
enforceable in accordance with the terms hereof and thereof.
(b) The Shares listed on Schedule 1 constitute
all of the shares of Common Stock owned of record and/or ben-
eficially by each Seller (other than shares of Common Stock
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underlying the Company's employee stock options or restricted
stock agreements with the Company or held in an employee bene-
fit plan of the Company) and/or the affiliates of such Seller
(other than the Company or any subsidiary of the Company, or
any employee benefit plan thereof (or related employee benefit
trust)) (the "Seller Affiliates"). Upon consummation of the
Company Repurchase at the Closing, as contemplated by this
Agreement, good title to the Repurchased Shares will be de-
livered to the Company, free and clear of any Encumbrances.
(c) Neither the execution and delivery by the
Sellers of this Agreement nor the consummation by the Sellers
of the transactions contemplated hereby will violate or con-
flict with, or constitute a default under, or result in the
creation or imposition of any Encumbrance upon any of the as-
sets or properties of such Seller under (i) in the case of any
Seller that is not an individual, the certificate of incorpora-
tion, bylaws, trust agreement or other organizational documents
of such Seller, (ii) any agreement, judgment, order or other
obligation to which such Seller is a party or by which such
Seller is bound, or (iii) assuming the representation by the
Company in Section 5(c) is correct, any law or regulation ap-
plicable to such Seller or its assets or properties, except for
such violations, conflicts, breaches, defaults or Encumbrances
under clauses (ii) or (iii) which (x) would not prevent, mate-
rially delay or materially adversely affect the consummation of
the transactions contemplated by this Agreement or (y) will be
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waived or otherwise released prior to the Closing as promptly
as practicable (but in any event within 60 days) following the
date of this Agreement.
5. The Company's Representations and Warranties.
The Company represents and warrants to Sellers as follows:
(a) The Company is a corporation duly incorpo-
rated, validly existing and in good standing under the laws of
the State of Delaware. The Company has all requisite corporate
power and authority to execute and deliver this Agreement and
the Registration Rights Agreement and to consummate the trans-
actions contemplated hereby and thereby. This Agreement and
the Registration Rights Agreement have been duly executed and
delivered by the Company, and, assuming the due execution here-
of by each other party hereto and thereto, constitute the le-
gal, valid and binding obligations of the Company, enforceable
against the Company in accordance with the terms hereof and
thereof.
(b) The Company has not entered into any agree-
ment, is not engaged in any discussions, and has not authorized
its representatives to engage in such discussions, with respect
to any transaction (i) that upon consummation would constitute
a "Change of Control" of the Company as defined in Section
6(g), (ii) that is described in Section 6(g)(iii) or (iii) that
involves the purchase by any Person (as defined in Section
6(a)(i)) or group (within the meaning of Section 13(d)(3) of
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the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of 30% or more of the outstanding shares of Common
Stock.
(c) Neither the execution and delivery by the
Company of this Agreement nor the consummation by the Company
of the transactions contemplated hereby will violate or con-
flict with, or constitute a default under, or result in the
creation or imposition of any Encumbrance upon any of the
assets or properties of the Company under (i) the Company's
Restated Certificate of Incorporation or bylaws, (ii) any
agreement, judgment, order or other obligation to which the
Company is a party or by which the Company is bound, or (iii)
any law or regulation applicable to the Company or its assets
or properties, except for such violations, conflicts, breaches,
defaults or Encumbrances under clauses (ii) or (iii) which (x)
would not prevent, materially delay or materially adversely
affect the consummation of the transactions contemplated by
this Agreement or (y) will be waived or otherwise released
prior to the Closing as promptly as practicable (but in any
event within 60 days) following the date of this Agreement.
(d) The Company has taken all necessary action
to ensure that neither the entering into of this Agreement or
the Registration Rights Agreement nor the consummation of the
transactions contemplated hereby or thereby will (i) cause the
preferred share purchase rights issued pursuant to the Rights
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Agreement, dated as of March 8, 1988, as amended, between the
Company and First Chicago Trust Company of New York, as Rights
Agent (the "Rights Agreement"), to become exercisable, (ii)
cause any Seller or Seller Affiliate to become an "Acquiring
Person" (as defined in the Rights Agreement) or (iii) cause a
"Distribution Date" (as defined in the Rights Agreement) to
occur.
6. Covenants.
(a) During the Standstill Period (as defined
below), without the prior written consent of the Company and
except as otherwise expressly contemplated by this Agreement or
the Registration Rights Agreement, each Seller agrees, as to
such Seller, that such Seller shall not, nor shall such Seller
permit any of its Seller Affiliates to (nor shall such Seller
agree, or advise, assist, encourage or provide financing to
others, or permit its Seller Affiliates to agree, or to advise,
assist, encourage or provide financing to others, to), indi-
vidually or collectively:
(i) acquire or offer to acquire or agree
to acquire from any individual, partnership, joint venture,
corporation, trust, unincorporated organization or other entity
or government or any department or agency thereof (each, a
"Person"), directly or indirectly, by purchase, merger, through
the acquisition of control of another Person, by joining a
partnership, limited partnership or other "group" (within the
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meaning of Section 13(d)(3) of the Exchange Act) or otherwise,
beneficial ownership of any securities of the Company, or di-
rect or indirect rights (including convertible securities) or
options to acquire such beneficial ownership (or otherwise act
in concert with respect to any such securities, rights or op-
tions with any Person that so acquires, offers to acquire or
agrees to acquire); provided, however, that no such acquisi-
tion, offer to acquire or agreement to acquire shall be deemed
to occur solely due to (a) a stock split, reverse stock split,
reclassification, reorganization or other transaction by the
Company affecting any class of the outstanding capital stock of
the Company generally, (b) a stock dividend or other pro rata
distribution by the Company to holders of its outstanding capi-
tal stock, (c) the distribution or exercise of rights to ac-
quire capital stock of the Company contemplated by that certain
Rights Agreement, dated as of March 8, 1988, by and between the
Company and First Chicago Trust Company of New York, as Rights
Agent, and the amendments thereto, or any successor rights
agreement, to the extent that no Seller would be deemed to be
an "Acquiring Person" thereunder in connection with such event,
(d) the exercise of employee stock options or the receipt of
shares pursuant to restricted stock agreements with the Company
or from the Company's employee benefit plans or (e) passive
acquisitions of less than 1% of the outstanding shares of Com-
mon Stock by a non-profit Seller Affiliate without the advice,
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assistance, encouragement or financing from any Seller or other
Seller Affiliate; or
(ii) sell, transfer any beneficial interest
in, pledge, hypothecate or otherwise dispose of any Shares
(whether owned by such Seller on the date hereof or thereafter
acquired by such Seller or any Seller Affiliate at any time),
except as permitted by Section 6(b) hereof; or
(iii) make, or in any way participate in,
directly or indirectly, any "solicitation" of "proxies" to vote
(as such terms are used in the Regulation 14A promulgated under
the Exchange Act), become a "participant" in any "election con-
test" (as such terms are defined in Rule 14a-11 promulgated
under the Exchange Act) or initiate, propose or otherwise so-
licit stockholders of the Company for the approval of any
stockholder proposals, in each case with respect to the Com-
pany; provided, however, that the foregoing shall not apply to
any person who is a director of the Company acting in his ca-
pacity as a director of the Company with respect to matters ap-
proved by a majority of the Board of Directors of the Company;
or
(iv) form, join, in any way participate in,
or encourage the formation of, a group (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to any vot-
ing securities of the Company; or
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(v) deposit any securities of the Company
into a voting trust, or subject any securities of the Company
to any agreement or arrangement with respect to the voting of
such securities, or other agreement or arrangement having simi-
lar effect; or
(vi) alone or in concert with others, seek,
or encourage or support any effort, to influence or control the
management, Board of Directors, business, policies, affairs or
actions of the Company; provided, however, that the foregoing
shall not apply to any person who is a director of the Company
acting in his capacity as a director of the Company during the
course of meetings of the Board of Directors of the Company or
of any committee thereof or in response to a request by the
Chairman of the Board of the Company; or
(vii) request the Company (or any directors,
officers, employees or agents of the Company), directly or in-
directly, to amend, waive or modify any provision of this Sec-
tion 6(a) (other than a request to waive Section 6(a)(ii) to
permit Sellers to sell in open market transactions a number of
Shares up to an aggregate of not more than 3% of the outstand-
ing shares of Common Stock; provided, (x) such request is not
publicly disclosed by the Sellers or any Seller Affiliate and
does not require the Company to disclose it publicly, (y) such
sales would be subject to Section 6(c) and (z) it is understood
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that the Company has the right to reject such request in its
sole discretion).
(b) Notwithstanding Section 6(a)(ii) hereof,
Sellers may sell, transfer any beneficial interest in or other-
wise dispose of Shares, provided that such sale, transfer or
disposition:
(i) is pursuant to the Secondary Offering,
a Demand Offering or a Piggyback Offering (as such terms are
defined in the Registration Rights Agreement) in accordance
with the terms of the Registration Rights Agreement; or
(ii) subject to compliance with Section
6(c) hereof and applicable securities laws, at any time after
the closing or termination of the Secondary Offering (subject
to Section 10 of the Registration Rights Agreement), up to an
aggregate of one million Shares in any three month period by
all of the Sellers and Other Stockholders taken as a whole
(such number to be appropriately adjusted following any stock
split, reverse stock split or stock dividend with respect to
the Common Stock effected after the date of this Agreement and
with respect to which the record date is prior to the date of
any such sale); provided that the maximum number of Shares per-
mitted to be sold under this Section 6(b)(ii) may be allocated
among the Sellers and Other Stockholders in such proportions as
Sellers see fit and provided further, that, if the Sellers and
the Other Stockholders in the aggregate beneficially own fewer
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than two million Shares (such number to be appropriately ad-
justed following any stock split, reverse stock split or stock
dividend with respect to the Common Stock effected after the
date of this Agreement), the Sellers may sell Shares pursuant
to Rule 144 under the Securities Act without regard to such
maximum number subject to Section 6(c); or
(iii) to one of the Sellers or to a member
of such Seller's family, a trust of which such Seller is a ben-
eficiary or a charitable foundation; provided that such family
member, trust or charitable foundation shall have executed and
delivered to the Company an agreement in the form set forth in
Exhibit A; or
(iv) to the personal representative of an
individual Seller, upon such Seller's death, for purposes of
the administration of such Seller's estate, and to the devisee,
legatee or beneficiary of such estate; provided that the Com-
pany shall not be required to register any such transfer unless
such transferee shall have executed and delivered to the Com-
pany an agreement, in the form set forth in Exhibit A; or
(v) pursuant to a tender offer approved by
the Board of Directors of the Company.
(c) In the event that any Seller elects to sell
any Shares pursuant to Section 6(b)(ii), then, subject to the
last sentence of this Section 6(c), such Seller shall give
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written notice of such sale (the "Sell Notice") to the Company
no later than 4:30 p.m., Salt Lake City time, on the business
day prior to the New York Stock Exchange trading day on which
such Seller intends to effect such sale. The Sell Notice shall
identify the Seller, the number of Shares such Seller intends
to sell, the market price of the Common Stock at which the Sel-
ler intends to execute such sale (the "Target Price") and such
Seller's telephone and facsimile numbers to be used by the Com-
pany to provide notice of any exercise of the Company's right
of first refusal under this Section 6(c). Each Sell Notice
shall specify only one Target Price but any Seller may deliver
separate Sell Notices with respect to intended sales at sepa-
rate Target Prices (it being understood that the Company may
exercise its rights under this Section 6(c) with respect to one
or more Sell Notices without exercising its rights with respect
to all such Sell Notices delivered by any Seller). The Com-
pany, in its sole discretion, may elect to purchase from such
Seller all of the Shares specified in a Sell Notice (or, if the
number of Shares specified in the Sell Notice is more than
100,000, a specified portion of such Shares (but not less than
100,000)) at a price per share equal to the Target Price, by
notifying such Seller that the Company shall do so (subject to
the condition described below), such notice (the "Buy Notice")
to be given (in writing by facsimile or orally with written
confirmation by facsimile) by 7:00 a.m., Salt Lake City time,
on the New York Stock Exchange trading day next following the
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date on which the Sell Notice is delivered to the Company. If
the Company has not given the Buy Notice by such time or has
given a Buy Notice with respect to some but not all of the
Shares specified in the Sell Notice, such Seller may (i) at any
time within three New York Stock Exchange trading days after
the date of the Sell Notice (the "Selling Period"), sell, at a
price or prices not less than the Target Price, some or all of
the Shares that are specified in the Sell Notice and not sub-
ject to the Buy Notice, if any or (ii) give one or more new
Sell Notices in accordance with the time periods and other
terms of this Section 6(c) with respect to some or all of the
Shares that are not subject to the Buy Notice, if any. If (i)
the Company provides the Buy Notice to such Seller in compli-
ance with this Section 6(c), and (ii) at any time during the
Selling Period the trading price of the Common Stock equals or
exceeds the Target Price, then such Seller shall sell to the
Company, and the Company shall purchase from such Seller, that
number of Shares specified in the Buy Notice at a price per
share equal to the Target Price (the day on which such condi-
tion is met being referred to herein as the "Trade Date"). The
closing of such purchase and sale shall be at the corporate
offices of the Company in Salt Lake City at 10:00 a.m. on the
third business day following the Trade Date. At such closing
(i) the Seller will deliver to the Company certificates repre-
senting the Shares specified in the Buy Notice, free and clear
of any Encumbrances, with appropriate stock powers attached,
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properly signed, with any necessary documentary or transfer tax
stamps duly affixed and cancelled; and (2) the Company will
deliver to the Seller a check in the amount of (i) the number
of Shares specified in the Buy Notice multiplied by (ii) the
Target Price. No Seller shall be required to comply with this
Section 6(c) with respect to a proposed sale on any trading day
if, in the good faith judgment of such Seller, (A) there is
occurring on such trading day an extraordinary movement in the
trading price of the Common Stock or (B) in the case of a
Seller which is an individual, a trust for the benefit of an
individual, a taxable entity or a charitable remainder trust,
the payment by the Company to purchase Shares proposed to be
sold by such Seller would be treated as a distribution by the
Company to which Section 301 of the Internal Revenue Code of
1986, as amended, applies; provided, that such Seller shall
give prompt written notice to the Company of any such sale not
in compliance with this Section 6(c) with a brief explanation
of the basis for such non-compliance.
(d) As used in this Agreement, the term "Stand-
still Period" shall mean that period commencing on the date of
this Agreement and expiring on the 10th anniversary thereof;
provided, however, that if neither the Company Repurchase nor
the Secondary Offering is consummated (and such failure to con-
summate is in each case permitted by, and is not due to a
breach or a failure of representation by any Seller of, this
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Agreement, the Registration Rights Agreement or the underwrit-
ing agreement relating to the Secondary Offering), such term
shall mean that period commencing on the date of this Agreement
and expiring 30 months thereafter; and provided further, that
if neither the Company Repurchase nor the Secondary Offering is
consummated by reason of a breach or failure of a representa-
tion by the Company of this Agreement, the Registration Rights
Agreement or the underwriting agreement relating to the Second-
ary Offering, the Standstill Period shall terminate upon the
termination of this Agreement.
(e) (i) Each Seller agrees to deliver to the
Company as promptly as practicable (and in any event within 15
days) after the date hereof the certificates representing the
Shares for the placement of the following legend:
The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended, and may not be sold or transferred except
in compliance with that Act.* The securities repre-
sented by this certificate are subject to the provi-
sions (including provisions that restrict the trans-
fer of such securities) of a Stock Purchase Agreement
dated as of February 20, 1997 between American Stores
Company and certain stockholders of the Company, a
copy of which is on file at the offices of American
Stores Company.
_____________________
* Any Shares which were previously registered under the Secu-
rities Act of 1933 shall not be required to include the first
sentence of this legend.
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(ii) Upon delivery to the Company by any
Seller (or permitted transferee) of such legended certificate
in connection with any sale or transfer permitted by Section
6(b)(i) or Section 6(b)(ii) (together, in the case of a sale or
transfer pursuant to Section 6(b)(ii), with customary documents
with respect to the applicability of an exemption from regis-
tration), the Company shall issue in exchange therefor a cer-
tificate for such Shares without such legend. Upon delivery to
the Company by any Seller of a legended certificate following
the expiration of the Standstill Period, the Company shall is-
xxx a certificate in exchange therefor that does not contain
the second sentence of the foregoing legend.
(f) On the close of business on the day follow-
ing the first date on which the Sellers shall in the aggregate
beneficially own less than 5% of the outstanding shares of Com-
mon Stock, each of X.X. Xxxxxx, Xxx X. Xxxxxx and Xxxxxxx X.
Xxxxxx (and any Seller then serving as a director of the Com-
pany) shall tender to the Company his resignation as a director
of the Company.
(g) (i) If the Closing occurs, and, during the
period ending six months after the Closing, a Change of Control
occurs or the Company enters into an agreement with a third
party as a result of which a Change of Control of the Company
would occur (which agreement is consummated) and in which the
Subsequent Price (as defined in Section 6(g)(iv)) exceeds the
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Repurchase Price, the Company shall, on the second business day
following the consummation of such Change of Control, pay to
each Seller, as additional consideration with respect to the
Repurchased Shares, an amount equal to the sum of (A) the num-
ber of Repurchased Shares sold to the Company by such Seller
multiplied by the excess of the Subsequent Price over the Re-
purchase Price, plus (B) the number of Registrable Shares sold
by such Seller in the Secondary Offering multiplied by the ex-
cess (if any) of the Subsequent Price over the Offer Price (as
defined in the Registration Rights Agreement).
(ii) As used in this Section 6(g), "Change
of Control" means:
(A) the acquisition by any Person or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) of beneficial ownership of more than 50% of
the then outstanding shares of Common Stock; or
(B) consummation of a reorganization,
merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company; provided that
such a transaction shall not be deemed to be a Change of Con-
trol if, immediately following such transaction, all or sub-
stantially all of the individuals and entities who were the
beneficial owners of the Common Stock outstanding immediately
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prior to such transaction beneficially own, directly or indi-
rectly, more than 50% of common stock of the corporation sur-
viving, or resulting from, such transaction (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or, in the case of a sale or other dis-
position of all or substantially all of the assets of the Com-
pany, substantially all of the Company's assets either directly
or through one or more subsidiaries).
(iii) If the Closing occurs, and, during the
period ending six months after the Closing Date, (A) the Com-
pany or any of its subsidiaries enters into an agreement with a
third party as a result of which the Company sells or otherwise
transfers (or one or more of its subsidiaries sells or oth-
erwise transfers), in one or more transactions, assets (includ-
ing securities or assets of any subsidiary of the Company) to
any other Person (other than the Company or one or more of its
wholly-owned subsidiaries) in a transaction that is not a
Change of Control and for which the Company receives an amount
of cash, property, securities and/or assumption of indebtedness
for borrowed money in excess of $1 billion (the value of any
property, securities or assumed indebtedness to be determined
in a manner substantially similar to that contemplated by Sec-
tion 6(g)(iv)(B)); or (B) the Company or a subsidiary of the
Company shall effect, by spin-off or other distribution or div-
idend of shares of capital stock of a subsidiary thereof to the
stockholders of the Company, the transfer of ownership of one
-21-
24
or more businesses or operating units that, immediately after
giving effect to such transaction, have alone or in the ag-
gregate an equity market capitalization (plus indebtedness for
borrowed money) in excess of $1 billion, then the Company shall
pay to each Seller on the second business day following the
consummation of such transaction, as additional consideration
with respect to the Repurchased Shares, (A) the number of
Repurchased Shares sold to the Company by such Seller multi-
plied by an amount equal to the excess, if any, of (x) the
Average Closing Price (as defined below) of the Common Stock as
of the twelfth New York Stock Exchange trading day following
the date (the "Announcement Date") of the first public
announcement that the Company intends or has agreed to effect
such transaction (the "Post-Announcement Price"), over (y) the
greater of (I) the Average Closing Price of the Common Stock as
of the date immediately preceding the Announcement Date (the
"Pre-Announcement Price") and (II) the Repurchase Price, plus
(B) the number of Registrable Shares sold by such Seller in the
Secondary Offering multiplied by an amount equal to the excess,
if any, of (x) the Post-Announcement Price over (y) the greater
of (I) the Pre-Announcement Price and (II) the Offer Price.
For purpose of any computation hereun-
der, the "Average Closing Price" of the Common Stock as of any
date shall be deemed to be the average of the daily closing
prices per share of Common Stock for the 10 consecutive New
York Stock Exchange trading days immediately prior to such
-22-
25
date. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal con-
solidated transaction reporting system of the New York Stock
Exchange. The Average Closing Price shall be subject to pro-
portional adjustment in the event of any stock split, reverse
stock split or stock dividend with respect to the Common Stock
effected after the consummation of the Company Repurchase.
(iv) In determining the Subsequent Price in
any transaction pursuant to this Section 6(g), the following
shall apply:
(A) In the event of a Change of Con-
trol, the Subsequent Price shall be deemed to equal to the ag-
gregate consideration paid per share of Common Stock in such
transaction; provided that if such consideration is paid in
varying amounts or forms to holders of the Common Stock, the
Subsequent Price shall be deemed to be equal to the weighted
average price paid for all shares of Common Stock purchased
thereby.
(B) The value of publicly traded se-
curities received by the Company or the holders of Common Stock
shall be deemed to be the closing price of such securities on
the date of consummation of the transaction. The value of any
securities received the Company that are not publicly traded
-23-
26
and the value of any property or assumed indebtedness shall be
determined in good faith by two investment banking firms, one
selected by the Company and the other selected by the Sellers,
or, if such investment banking firms are unable to agree, by a
third investment banking firm selected by such investment bank-
ing firms, and any such determination shall be final, conclu-
sive and binding on the Company and Sellers.
7. Conditions.
(a) The obligation of Sellers to consummate the
Company Repurchase is subject to the satisfaction or waiver of
the conditions that (i) the representations and warranties of
the Company contained in Section 5 are true and correct on the
Closing Date as though made as of such date, (ii) counsel to
the Company shall have delivered its opinion to each of the
Sellers, in form and substance reasonably satisfactory to Sell-
ers and dated as of the Closing Date, as to the matters set
forth in Section 5(a), (iii) the Secondary Offering shall have
been consummated; provided, that the condition set forth in
this clause (iii) shall be deemed to have been satisfied if the
Secondary Offering is not consummated due to a breach of the
obligations or failure of a representation of any of the Sell-
ers under this Agreement, the Registration Rights Agreement or
the underwriting agreement in connection with the Secondary
Offering and (iv) no more than 60 days have elapsed following
the date on which the registration statement with respect to
-24-
27
the Secondary Offering is filed unless the delay in consummat-
ing the Secondary Offering is due to a breach of the obliga-
tions or failure of a representation of any of the Sellers un-
der this Agreement, the Registration Rights Agreement or the
underwriting agreement in connection with the Secondary Offer-
ing.
(b) The obligation of the Company to consummate
the Company Repurchase is subject to the satisfaction or
waiver, as of the Closing Date, of the conditions that (i) the
representations and warranties of Sellers contained in Section
4 are true and correct, (ii) counsel to Sellers shall have de-
livered its opinion to the Company, in form and substance rea-
sonably satisfactory to the Company, as to the matters set
forth in Section 4(a) and the last sentence of Section 4(b) and
(iii) no more than 60 days have elapsed following the date on
which the registration statement with respect to the Secondary
Offering is filed unless the delay in consummating the Second-
ary Offering is due to a breach of the obligations or failure
of a representation of the Company under this Agreement, the
Registration Rights Agreement or the underwriting agreement in
connection with the Secondary Offering.
(c) The respective obligations of the parties
to consummate the Company Repurchase are subject to there not
being in effect any order, decree or injunction issued by a
-25-
28
court of competent jurisdiction prohibiting or restraining con-
summation of the transactions contemplated hereby.
8. Specific Performance. The parties acknowledge
and agree that in the event of any breach of this Agreement,
the parties would be irreparably harmed and could not be made
whole by monetary damages. It is accordingly agreed that the
Company or a Seller, in addition to any other remedy to which
it may be entitled at law or in equity, shall be entitled to
compel specific performance of this Agreement in any action
instituted in the United States District Court for the State of
Utah (the "Utah Court"). Each Seller and the Company irrevo-
cably consents and submits to personal jurisdiction in any ac-
tion brought in the Utah Court and agrees not to contest the
propriety of venue in the Utah Court. As part of the consider-
ation for the Company executing this Agreement, each Seller
waives all personal service of any and all process upon such
Seller related to this Agreement or the performance thereof and
consents that all such service of process upon such Seller
shall be made by hand delivery, certified mail or confirmed
telecopy directed to such Seller at the address specified in
Section 19 hereof; and service made by certified mail shall be
complete seven days after the same shall have been posted as
aforesaid.
9. Expenses. Except as provided in the Registra-
tion Rights Agreement, all fees and expenses incurred by any
-26-
29
Seller, and all sales, transfer or other similar taxes payable
in connection with this Agreement (including, but not limited
to, any transfer taxes payable in connection with the sale of
the Shares by such Sellers), will be borne by such Seller and
all fees and expenses incurred by the Company in connection
with this Agreement will be borne the Company; provided, how-
ever, that, if the Company Repurchase is consummated, the Com-
pany shall pay (or reimburse X.X. Xxxxxx for) (i) the fee, ad-
vances and expenses of Xxxxxxx, Sachs & Co. ("Xxxxxxx, Xxxxx")
incurred by Sellers in connection with the sale of the Repur-
chased Shares as set forth in that certain Letter Agreement,
dated June 28, 1996, by and between Xxxxxxx, Sachs and X.X.
Xxxxxx, Xxxxx X. Xxxxxx and ALSAM Trust, a true and complete
copy of which has been delivered to the Company prior to the
date of this Agreement, subject to a maximum aggregate payment
and reimbursement by the Company not in excess of the amount
specified in a schedule delivered to the Company prior to the
date of this Agreement and (ii) reasonable fees and expenses of
Debevoise & Xxxxxxxx, counsel to the Sellers, incurred through
the consummation of the Company Repurchase in connection with
the transactions contemplated by this Agreement.
10. Brokerage. Subject to Section 9, the Company,
on the one hand, and Sellers, on the other, agree to indemnify
and hold the other harmless from and against any and all claims
-27-
30
or liabilities for finder's fees or other like payments in-
curred by reason of any action taken by it or them, as the case
may be.
11. Termination. This Agreement may be terminated
at any time prior to the Closing (a) by mutual consent of the
Company and Sellers owning two-thirds of the Shares, (b) by the
Company or Sellers owning two-thirds of the Shares, if the
Closing shall not have occurred by the close of business on the
60th day following the date on which the registration statement
for the Secondary Offering is filed unless the delay is due to
a breach of the obligations or failure of a representation of
any of the Sellers (in the case of a termination by the Sell-
ers) or the Company (in the case of a termination by the Com-
pany) under this Agreement, the Registration Rights Agreement
or the underwriting agreement in connection with the Secondary
Offering, or (c) by the Sellers, if the Sellers shall have made
the Secondary Election on the Pricing Date pursuant to Section
2(b) of the Registration Rights Agreement. Notwithstanding the
foregoing, the obligations of the Company and the Sellers pur-
suant to Section 6 of this Agreement (other than Section 6(g))
shall survive any termination hereof except if the Standstill
Period is terminated as provided in Section 6(d).
12. Indemnification. (a) The Company agrees to
indemnify and hold harmless, to the extent permitted by law,
-28-
31
each Seller, its directors, trustees and officers (collec-
tively, the "Indemnified Parties") against any and all losses,
claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with the
Company's consent, which consent shall not be unreasonably
withheld) (collectively, "Losses") which are not the subject of
(i) Section 7(a) of the Registration Rights Agreement or (ii)
the indemnification provisions of any underwriting agreement
contemplated by the Registration Rights Agreement, and incurred
by such Indemnified Party as a result of, or arising out of,
any action, suit or resulting from the execution and delivery
of this Agreement, the Company's purchase of Shares hereunder
or the performance by the Company of its obligations hereunder.
Notwithstanding the foregoing, the indemnity contemplated by
this Section 12 shall not apply to Losses incurred as a result
of, or arising out of, (i) the reckless or willful misconduct
of any Indemnified Party, (ii) any action, suit or proceeding
brought by any Seller or any Seller Affiliate (or by any direc-
tor, officer, shareholder, trustee or beneficiary thereof)
against the Company, any Indemnified Party or Seller Affiliate,
(iii) any action, suit or proceeding brought as a result of, or
arising out of, any underwriting agreement entered into in con-
nection with the transactions contemplated by the Registration
Rights Agreement or (iv) any action, suit or proceeding brought
by the Company for breach of this Agreement or the Registration
Rights Agreement. The Company will reimburse such Indemnified
-29-
32
Party for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending
any action, suit or proceeding for which indemnity is available
pursuant to this Section 12 to the same extent and subject to
the same limitations set forth in Section 7(a) of the Registra-
tion Rights Agreement. Such indemnity shall survive the Clos-
ing. Nothing in this Agreement shall affect the rights of the
Company or the Sellers to bring an action against any party
arising from a breach of this Agreement or the Registration
Rights Agreement.
(b) Notices of Claims, Etc. The rights of the
Company and the Sellers with respect to notice of claims, re-
sponsibilities for defense, participation in any proceedings
hereunder and consent to entry of judgment or settlement of
claims shall be substantially as set forth in Section 7(c) of
the Registration Rights Agreement.
13. Public Announcements. The Company and Sellers
agree that the Company will issue the press release in the form
attached hereto as Exhibit B.
14. Integration; Amendment; Waiver. This Agreement,
together with the Registration Rights Agreement, constitutes
the entire agreement, and supersedes all prior agreements and
understandings, whether oral or written, between the parties
hereto with respect to the subject matter hereof. This Agree-
ment may not be modified, amended or waived orally, but only by
-30-
33
an instrument in writing signed by the party against whom en-
forcement of any such amendment, modification or waiver is
sought. The waiver by any party hereto of a breach of any term
or provision of this Agreement shall not be construed as a
waiver of any subsequent breach.
15. Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
heirs, legal representatives, successors and assigns; provided,
however, that the Company may not assign its rights or delegate
its obligations under this Agreement without the express prior
written consent of Sellers holding two-thirds of the Shares,
and Sellers may not assign their rights or delegate their obli-
gations under this Agreement without the express prior written
consent of the Company.
16. Headings. Section headings contained in this
Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
17. Survival. All representations, warranties and
covenants shall survive the Closing.
18. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall, when executed,
be deemed to be an original and all of which shall be deemed to
be one and the same instrument.
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34
19. Notices. All notices hereunder shall be suf-
ficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery
service or, to the extent receipt is confirmed, telecopy, tele-
fax or other electronic transmission service to the appropriate
address or number as set forth below. Notices to any Seller
shall be addressed to the address of such Seller set forth in
Schedule 1 (it being understood that only one copy of a notice
is required to be sent to any trustee, which notice shall be
deemed to be sufficient as to each Seller for which such
trustee is acting in such capacity) with copies to:
Xx. Xxxxxx Xxx Xxxxxx
0000 Xxxxx Xxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopy No.: (000) 000-0000
and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
or at such other address and to the attention of such other
person as any Seller may designate by written notice to the
Company. Notices to the Company shall be addressed to:
American Stores Company
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
(1) Attn: Xxxxxxxx X. XxXxxxxxx
Telecopy No.: (000) 000-0000
(2) Attn: Xxxxxx Xxxx
Telecopy No.: (000) 000-0000
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35
and
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy No: (000) 000-0000
or at such other address and to the attention of such other
persons the Company may designate by written notice to Sellers.
20. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Delaware without reference to the choice of law principles
thereof.
21. Severability. If at any time subsequent to the
date hereof any provision of this Agreement shall be held by
any court of competent jurisdiction to be illegal, void or un-
enforceable, such provision shall be of no force and effect,
but shall not effect the illegality or unenforceability of any
other provision of this Agreement.
22. Interpretation. Wherever used herein, the term
"affiliate" has the meaning given such term in Rule 12b-2 pro-
mulgated under the Exchange Act, and a person or entity who at
any time may be an affiliate of any Seller shall be deemed to
be an affiliate of such Seller while, but only while, such
person or entity is an affiliate of such Seller, regardless of
whether such person or entity is such an affiliate on the date
hereof. For purposes of this Agreement, a person or entity
shall be deemed to "beneficially own" any securities of which
-33-
36
it would be the "beneficial owner," as such term is defined in
Rule 13d-3 promulgated under the Exchange Act.
23. Sellers' Obligations Several. All of the obli-
gations of the Sellers under this Agreement shall be several
and not joint, and no Seller shall be liable for a breach
hereof by any other Seller, it being understood and agreed that
the Company shall not have the obligation to repurchase less
than all of the Repurchased Shares.
-34-
37
IN WITNESS WHEREOF, this Agreement has been signed by
or on behalf of each of the parties as of the day first above
written.
AMERICAN STORES COMPANY
By:/s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: Chief Financial Officer
XXXXXX XXX XXXXXX
/s/ Xxxxxx Xxx Xxxxxx
XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
ALSAM TRUST
By:/s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
By:/s/ Xxxxxxx Xxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxx Xxxxxxxx
Title: Trustee
By:/s/ Xxx X. Xxxxxx
Name: Xxx X. Xxxxxx
Title: Trustee
By:/s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Trustee
38
SIX S RANCH, INC.
By:/s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ALSAM FOUNDATION
By:/s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: President and
Executive Director
XXXXXX FAMILY FOUNDATION FOR
ROMAN CATHOLIC AND
COMMUNITY CHARITIES
By:/s/ J. Xxxxxxxx Xxxxxxxxxx
Name: J. Xxxxxxxx Xxxxxxxxxx
Title: President
XXXXXX INSTITUTE FOR
RESEARCH
By:/s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: President
XXXXX XXX XXXXXX XXXXXXXX
/s/ Xxxxx Xxx Xxxxxx Balukoff
XXXXXXX XXXXXX XXXXXXXX
/s/ Xxxxxxx Xxxxxx Xxxxxxxx
39
SCHEDULE 1*
Name and address Shares Repurchased Payment
of Seller Owned Shares Amount
ALSAM Trust
(X.X. Xxxxxx portion) 10,274,195 7,852,469 $353,361,105
ALSAM Trust
(Xxxxx X. Xxxxxx portion) 185,452 141,739 6,378,255
Six S Ranch, Inc. 20,000 15,286 687,870
ALSAM Foundation 2,046,930 1,564,449 70,400,205
Xxxxxx Family Foundation 675,000 515,896 23,215,320
for Roman Catholic and
Community Charities
Xxxxxx Institute for Research 1,950,000 1,490,366 67,066,470
Xxxxx Xxx Xxxxxx Xxxxxxxx 402,545 307,661 13,844,745
Xxxxxxx Xxxxxx Xxxxxxxx 437,472 334,356 15,046,020
---------- ---------- ------------
TOTAL 15,991,594 12,222,222 $549,999,990
========== ========== ============
Notices to X.X. Xxxxxx, Xxxxx X. Xxxxxx
and Six S Ranch, Inc. shall be made to:
X.X. Xxxxxx
0000 Xxxxx Xxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopy No.: (000) 000-0000
Notices to ALSAM Trust:
Xxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx,
Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxx, Trustees
0000 Xxxxx Xxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Notices to ALSAM Foundation:
Xxxxxxx X. Xxxxxx, President and Executive Director
0000 Xxxxx Xxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
_______________________
* Subject to adjustment pursuant to Section 1 of the Stock
Purchase Agreement.
40
Notices to Xxxxxx Family Foundation for Roman
Catholic and Community Charities:
0000 Xxxxx Xxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Notices to Xxxxxx Institute for Research:
Xx. Xxxxxxx X. Xxxxxx, President
c/o Scripps Research Institute
00000 Xxxxx Xxxxxx Xxxxx Xxxx
XXX 000
Xx Xxxxx, Xxxxxxxxxx 00000
Notices to Xxxxx Xxx Xxxxxx Balukoff:
0000 Xxxxx Xxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Notices to Xxxxxxx Xxxxxx Xxxxxxxx:
0000 Xxxxx Xxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
S-2
41
SCHEDULE 2
Name Shares Owned
The Northern Trust Company, 92,400
As Trustee, UA dtd 8/30/96 with
X.X. Xxxxxx, The X.X. Xxxxxx &
Xxxxx X. Xxxxxx Charitable
Remainder Unitrust #1
The Northern Trust Company, 7,222,000
As Trustee, UA dtd 1/17/97 with
X.X. Xxxxxx, The X.X. Xxxxxx &
Xxxxx X. Xxxxxx Charitable
Remainder Unitrust #2
The Northern Trust Company, 255,000
As Trustee, UA dtd 8/26/96 with
X.X. Xxxxxx, The Xxxxx Xxx Xxxxxxxx
Charitable Remainder Unitrust #1
The Northern Trust Company, 523,530
Successor Trustee, UA dtd 7/6/71
with Xxxxxxx Xxxxxx (Xxxxxxxx),
The Xxxxxxx Xxxxxx (Xxxxxxxx)
Personal Trust
The Northern Trust Company, 635,000
As Trustee, UA dtd 8/30/96
with X.X. Xxxxxx, The Xxxxxxx
Xxxxxx Xxxxxxxx Charitable
Remainder Unitrust #1
The Northern Trust Company, 488,000
As Trustee, UA dtd 1/17/97 with
X.X. Xxxxxx, The Xxxxxxx Xxxxxx
Xxxxxxxx Charitable Remainder
Unitrust #2
The Northern Trust Company, 49,200
Successor Trustee, UA dtd 2/2/66
with Xxxxxx Xxxxxx Xxxxxxxxx,
for the benefit of Xxxxxxx Xxxxxx
(Xxxxxxxx)
The Northern Trust Company, 280,465
Successor Trustee, UA dtd 5/21/75
with Xxxxxx Xxxxxx Xxxxxx,
The Xxxxxx Xxxxxx Xxxxxx Personal
Trust
S-3
42
The Northern Trust Company, 635,000
As Trustee, UA dtd 8/26/96
with X.X. Xxxxxx, The Xxx X.
Xxxxxx Charitable Remainder
Unitrust #1
The Northern Trust Company, 488,000
As Trustee, UA dtd 1/17/97 with
X.X. Xxxxxx, The Xxx X. Xxxxxx
Charitable Remainder Unitrust #2
The Northern Trust Company, 49,200
Successor Trustee, UA dtd 2/2/66
with Xxxxxx Xxxxxx Xxxxxxxxx,
For the benefit of Xxx X. Xxxxxx
The Northern Trust Company, 49,200
Successor Trustee, UA dtd 2/2/66
with Xxxxxx Xxxxxx Xxxxxxxxx For
the benefit of Xxxx Xxxxxxx Xxxxxx
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Xxxxxx Xxxxxx Xxxxxxxxx
For the benefit of Xxxxxxxx Xxxxxx,
Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Xxxxxx Xxxxxx Xxxxxxxxx
For the benefit of Xxxxxx X.
Xxxxxx, Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Xxxxxx Xxxxxx Xxxxxxxxx For
the benefit of Xxxxxxxx Xxxxxxxx,
Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Xxxxxx Xxxxxx Xxxxxxxxx For
the benefit of Xxxxxx Xxxxxx
Xxxxxxxx, Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Xxxxxx Xxxxxx Xxxxxxxxx For
the benefit of Xxxxx Xxxxx Xxxxxx,
Age 30 Trust
S-4
43
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Xxxxxx Xxxxxx Xxxxxxxxx For
the benefit of Xxxxxxx X. Xxxxxx,
Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Xxxxxx Xxxxxx Xxxxxxxxx For
the benefit of Xxx Xxxxx Xxxxxx,
Age 30 Trust
The Northern Trust Company, 100,000
Trustee, UA dtd 1/29/97
with Xxxxx Xxx Xxxxxxxx,
The Xxxxx Xxx Xxxxxx Xxxxxxxx
Charitable Remainder Trust #2
TOTAL: 10,937,975
Address for notices to Northern Trust:
00 Xxxxx XxXxxxx
X 00
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxx
Telecopy No.: (000) 000-0000
S-5
44
Xxxxx Fargo Bank, As Trustee, UA Dtd 12/10/76 584,319
with Xxxxxx Xxxxxx Xxxxxxxxx, The Xxxxxx Xxxxxx
Xxxxxxxxx Greatgrandchildren's Trust, Age 40
Trust For Benefit of Xxxxxxxx Xxxxxx, Xxxxxx
X. Xxxxxx, Xxxxxxxx Xxx Xxxxxxxx, Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxx Xxxxx Xxxxxx,
Xxx XxXxx Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxx Xxxx
Xxxxxxx, Xxxxxxx Xxx Xxxxxxx, Xxxxxx Xxx Xxxxxxxx,
Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxx Xxxxxxxx, Xx.,
Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xxx
Xxxxxxxx, Xxx X. Xxxxxx, Xxx X. Xxxxxx, Xxxxx X.
Xxxxxx, Xxxx X. Xxxxxx, Xxxx Xxxxxx, Xxxxx Xxxxxx,
Xxxx X. Xxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx,
Xxxxxxxxx Xxxxx, Xxxxxxxx Xxxxx
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxx
Xxxxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxx
X. Xxxxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxx X.
Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxx X.
Xxxxxx Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxx X.
Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxx X.
Xxxxxx Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxx
X. Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxx X.
Xxxxxx Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxx X.
Xxxxxx Lifetime Trust
S-6
45
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxx X.
Xxxxxx Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxx
Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxx
Xxxxxx Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxx
Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxx
Xxxxxx Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxx X.
Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxx
Xxxxxx Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxx
X. Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxx
X. Xxxxxx Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxx
Xxxxx Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxx
X. Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxx
Xxxxx Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxx
Xxxxxx Lifetime Trust
S-7
46
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxx X.
Xxxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxxx
X. Xxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxxx
Xxxxx, Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxxx
X. Xxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxxx
Xxxxx, Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxxx
X. Xxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxxx
Xxxxx, Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxx
X. Xxxxx Lifetime Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxx
Xxxxx, Age 30 Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 8/9/74 with 3,459
Xxxx Xxxxxxx Xxxxxx
The Xxxx Xxxxxxx Xxxxxx Personal Trust
Xxxxx Fargo Bank, As Trustee, UA dtd 2/2/66 with 25,000
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxx
Xxxxx
Xxxxx Fargo Bank, As Trustee, UA dtd 2/2/66 with 40,000
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxx
Xxxxx
Xxxxx Fargo Bank, As Trustee, UA dtd 2/2/66 with 15,000
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxxx -------
Xxxxxx
TOTAL: 986,158
=======
S-8
47
Address for Notices to Xxxxx Fargo Bank:
_____________________________
_____________________________
_____________________________
Attn: ______________________
Telecopy No.: ______________
S-9
48
U.S. BANK, AS TRUSTEE
U.S. Bank, Successor Trustee, UA dtd 9/13/68 267,884
With Xxxxx Xxx Xxxxxx (Xxxxxxxx)
The Xxxxx Xxx Xxxxxx (Balukoff) Personal Trust
U.S. Bank, Successor Trustee UA dtd 2/2/66 49,200
with Xxxxxx Xxxxxx Xxxxxxxxx for the
benefit of Xxxxx Xxx Xxxxxx (Balukoff)
U.S. Bank, Successor Trustee, UA dtd 11/23/83 with 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxx
X. Xxxxxxx Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of
Xxxxx Xxxx Xxxxxxx, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxx
Xxx Xxxxxxx Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 With 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of
Xxxxxxx Xxx Xxxxxxx, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxx
Xxx Xxxxxxxx Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of
Xxxxxx Xxx Xxxxxxxx, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxx
Xxxxxxxx Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 9,680
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxx
Xxxxxxxx, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxx
Xxxxxx Xxxxxxxx, Xx. Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxx
Xxxxxx Xxxxxxxx, Xx., Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxx
X. Xxxxxxxx Lifetime Trust
S-10
49
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxxxx
Xxxxxx Xxxxxxxx, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,352
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxx
Xxxxx Xxxxxxxx Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxxxx
Xxxxx Xxxxxxxx, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,353
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxx
Xxxxxxxx Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Xxxxxx Xxxxxx Xxxxxxxxx for the benefit of Xxx
Xxxxxxxx, Age 30 Trust
U.S. Bank, As Trustee, UA dtd 2/13/97 with Xxxxx 220,000
Xxx Xxxxxx Xxxxxxxx, the Xxxxxxxx Charitable
Remainder Trust
TOTAL: 700,563
=======
Address for Notices to U.S. Bank:
000 Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxx, Xxxxx 00000
Attn: Xxxx Xxxx
Telecopy No.: (000) 000-0000
S-11
50
EXHIBIT A -- FORM OF TRANSFEREE LETTER
[Name and Address of Transferee]
[Date]
American Stores Company
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: ___________________
Ladies and Gentlemen:
Reference is made to that certain Stock Purchase
Agreement (the "Stock Purchase Agreement"), dated _________
___, 1997, by and among American Stores Company, a Delaware
corporation (the "Company") and the stockholders listed on the
signature pages thereto (each individually a "Seller"). Capi-
talized terms used but not defined herein have the meanings as-
signed to such terms in the Stock Purchase Agreement.
The undersigned hereby provides notice to the Company
of the proposed transfer of ____________ Shares from [transfer-
ring Seller] to the undersigned pursuant to [Section 6(b)(iii)]
[Section 6(b)(iv)] of the Stock Purchase Agreement. In connec-
tion with such transfer, the undersigned hereby agrees to be
bound by each of the terms, provisions and obligations of the
Stock Purchase Agreement and of the Registration Rights Agree-
ment, as fully as if the undersigned were a Seller thereunder.
The undersigned further agrees that any notices re-
quired to be sent to the undersigned pursuant to the Stock Pur-
chase Agreement and the Registration Rights Agreement shall be
deemed to be validly sent for all purposes of such Agreements
if sent to the attention of the undersigned at the address set
forth above.
Very truly yours,
[Name of Transferee]
_________________________
Acknowledged and Agreed:
AMERICAN STORES COMPANY
By:______________________
Name:
Title:
X-0
00
XXXXXXX X -- FORM OF PRESS RELEASE
AMERICAN STORES COMPANY AGREES TO REPURCHASE
$550 MILLION OF ITS SHARES HELD BY XXXXXX FAMILY AND TRUSTS
Salt Lake City, Utah -- February 21, 1997 -- American
Stores Company (NYSE-ASC) and the family of X.X. Xxxxxx
announced today an agreement for the repurchase by American
Stores of 12,222,222 shares of its common stock from the Xxxxxx
family and certain family and charitable trusts for $45 per
share, yesterday's closing price on the New York Stock
Exchange. The Company also announced that it had agreed to
file a registration statement to enable such shareholders to
sell between 14.7 million and 16.4 million additional shares in
a secondary offering as promptly as practicable.
The agreement is designed to further the best
interest of American Stores, while permitting the orderly sale
by the Xxxxxx family and trusts of their American Stores stock.
Xxxxxx X. Xxxx, Chairman and Chief Executive Officer
of the Company, stated, "This transaction will enable the
Company's management and associates to focus fully on carrying
out our business strategy, including the Delta initiatives
designed to transform the Company from a holding company to a
unified operating company. The repurchase will be slightly
accretive to our earnings per share, and will not affect our
aggressive capital expenditure program."
A spokesman for the Xxxxxx family stated, "We are
pleased that we have been able to reach an agreement with
American Stores with respect to our holdings. As the largest
shareholders in American Stores, the objective of the Xxxxxx
family has always been to enhance long term shareholder value."
The Company plans to finance the share repurchase,
which will aggregate $550 million, initially through bank lines
of credit. Subject to market conditions, the Company expects
to refinance such repurchases in public equity and/or debt
offerings over the next six to twelve months.
The closing of the share repurchase is expected to
occur simultaneously with the closing of the secondary
offering. If the price to the public in the secondary offering
would be less than $45 per share, the selling stockholders have
the right to terminate the secondary offering and, if they also
elect, the Company repurchase. Either the Company or the
selling stockholders may terminate the transactions if they are
not consummated within 60 days following the date the Company
files a registration statement for the secondary offering.
The selling stockholders have agreed to enter into a
ten-year standstill agreement restricting purchases and sales
E-2
52
of the Company's shares, proxy fights and other actions. In
the event that neither the share repurchase nor the secondary
offering is consummated, the standstill period would be reduced
to thirty months. The Company has also granted the selling
stockholders certain registration rights during the standstill
period.
Cautionary Note: This press release contains certain
forward-looking statements about the future performance of the
Company which are based on management's assumptions and beliefs
in light of the information currently available to it. These
forward-looking statements are subject to uncertainties and
other factors that could cause actual results to differ
materially from such statements including, but not limited to:
competitive practices and pricing in the food and drug
industries generally and particularly in the company's
principal markets; the implementation of the Company's Delta
initiatives in accordance with the currently contemplated
schedule and budget; changes in the financial markets related
to the Company's cost of capital; supply or quality control
problems with the Company's vendors; and changes in economic
conditions which affect the buying patterns of the Company's
customers.
E-3
