EXHIBIT 3
SECOND AMENDMENT TO RIGHTS AGREEMENT
BETWEEN
ALBERTSON'S, INC.
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
This agreement, made this 16th day of March, 1999 between
Xxxxxxxxx'x, Inc. ("Albertson's") and ChaseMellon Shareholder Services,
L.L.C., ("CMSS") amends the Rights Agreement dated as of December 9, 1996
between Albertson's and CMSS (the "Rights Agreement") as heretofore
amended.
WHEREAS, Section 9(a) of the Rights Agreement requires that a
number of shares of Series A Junior Participating Preferred Stock, par
value $1.00 per share, of the Company (the "Preferred Stock"), be available
for issuance sufficient to permit the exercise in full of all outstanding
Rights (as defined in the Rights Agreement);
WHEREAS, the Board of Directors of the Company has authorized
this amendment of the Rights Agreement to reduce the exercise rights of the
holders of Rights with respect to the purchase of shares of Preferred Stock
by a factor of ten, so as to reduce the number of shares of Preferred Stock
that will be necessary to satisfy the requirements of Section 9(a) by a
factor of ten; and
WHEREAS, simultaneously with this amendment, the Board of
Directors has authorized the amendment of the certificate of incorporation
of the Company to increase the rights and privileges of the holders of
shares of Preferred Stock with respect to dividends and liquidation
preferences by a factor of 10, and
WHEREAS, recent decisions in the Delaware courts require
changes to be made in the Rights Agreement, and
WHEREAS, certain additional changes in the Rights Agreement
would be in the best interest of the shareholders of Albertson's, and
WHEREAS, the Board of Directors of Albertson's believes it is
in the best interests of the shareholders of Albertson's to amend the
Rights Agreement as set forth below, and
WHEREAS, under the present circumstances, Section 27 of the
Rights Agreement permits Albertson's and CMSS to amend the Rights Agreement
if Albertson's so directs, and
WHEREAS, Albertson's has directed CMSS to enter into this
agreement,
NOW THEREFORE, intending to be legally bound, Albertson's and
CMSS hereby agree that the Rights Agreement and the Exhibits thereto shall
be amended as set forth below.
1. Section 1(a) of the Rights Agreement is hereby amended in its
entirety to read as follows:
"Acquiring Person" shall mean (x) any Person who or
which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding, but shall not include
(i) the Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company, or of any Subsidiary of
the Company, (iv) any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan, or (v) any Person who becomes the Beneficial Owner
of fifteen percent (15%) or more of the shares of Common Stock
then outstanding as a result of a reduction in the number of
shares of Common Stock outstanding due to the repurchase of
shares of Common Stock by the Company other than during the
Special Period (as defined in Section 23(c) hereof) or at a
time when the rights are not redeemable, unless and until such
Person, after becoming aware that such Person has become the
Beneficial Owner of fifteen percent (15%) or more of the then
outstanding shares of Common Stock, acquires beneficial
ownership of additional shares of Common Stock representing one
percent (1%) or more of the shares of Common Stock then
outstanding, (vi) any such Person who has reported or is
required to report such ownership (but less than 20%) on
Schedule 13G under the Securities and Exchange Act of 1934, as
amended and in effect on the date of the Agreement (the
"Exchange Act") (or any comparable or successor report) or on
Schedule 13D under the Exchange Act (or any comparable or
successor report) which Schedule 13D does not state any
intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the
actions specified in Item 4 of such schedule (other than the
disposition of the Common Stock) and, within 10 Business Days
of being requested by the Company to advise it regarding the
same, certifies to the Company that such Person acquired shares
of Common Stock in excess of 14.9% inadvertently or without
knowledge of the terms of the Rights and who or which, together
with all Affiliates and Associates of such Person, thereafter
does not acquire additional shares of Common Stock while the
Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding; provided, however, that if the Person
requested to so certify fails to do so within 10 Business Days,
then such Person shall become an Acquiring Person immediately
after such 10-Business-Day period, or (vii) any person who
shall have executed a written agreement with the Company (which
agreement shall have been approved by the Board) prior to the
date on which such Person, together with all Affiliates and
Associates, became the Beneficial Owner of fifteen (15%) or
more of the shares of Common Stock then outstanding and which
agreement imposes one or more limitations (the "Thresholds") on
the number of shares of Common Stock such Person may
beneficially own, but only if and so long as (A) such agreement
continues to be binding on such Person, (B) such Person is in
substantial compliance (as determined by the Board in its
discretion) with the terms of such written agreement, as
amended from time to time, (C) any and all such amendments to
such agreement have been approved by the Board, and (D) no such
amendment, if executed after the Distribution Date, cures, or
has the effect of curing, any prior breach of such agreement or
any amendment thereto, or (y) any Person who or which has
entered into any agreement or arrangement with the Company or
any Subsidiary of the Company providing for an Acquisition
Transaction (as defined in Section 1(b) hereof).
2. The following Section 1(b) is inserted into the Rights Agreement, and
all subsequent subsections of Section 1 are renumbered accordingly,
and all cross-references to such renumbered sections are changed to
refer to such sections as if renumbered:
"Acquisition Transaction" shall mean (x) a merger,
consolidation or similar transaction involving the Company or
any of its Subsidiaries as a result of which stockholders of
the Company will no longer own a majority of the outstanding
shares of Common Stock of the Company or a publicly traded
entity which controls the Company or, if appropriate, the
entity into which the Company may be merged, consolidated or
otherwise combined (based solely on the shares of Common Stock
received or retained by such stockholders, in their capacity as
stockholders of the Company, pursuant to such transaction), (y)
a purchase or other acquisition of all or a substantial portion
of the assets of the Company and its Subsidiaries, or (z) a
purchase or other acquisition of securities representing 15% or
more of the shares of Common Stock then outstanding.
3. Section 1(cc) of the Agreement is hereby amended in its entirety to
read as follows:
"Stock Acquisition Date" shall mean the earlier of (i)
the first date of public announcement (which, for purposes of
this definition, shall include, without limitation, a report
filed or amended pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring
Person has become such pursuant to clause (x) of the definition
of Acquiring Person, and (ii) the date that an Acquiring Person
has become such pursuant to clause (y) of the definition of
Acquiring Person.
4. The first sentence of Section 3(a) of the Agreement is hereby amended
in its entirety to read as follows:
Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date (or, if the tenth
day after the Stock Acquisition Date occurs before the Record
Date, the close of business on the Record Date), or (ii) the
close of business on the tenth day (or such later date as the
Board shall determine, provided, however, that no deferral of a
Distribution Date by the Board pursuant to this clause (ii) may
be made at any time during the Special Period) after the date
that a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule 14d-2(a)
of the General Rules and Regulations under the Exchange Act, if
upon consummation thereof, such Person would become an
Acquiring Person, (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraphs (b) and (c)
of this Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock
(which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a
transfer to the Company).
5. Section 4(a) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" in the second sentence shall be replaced
with the words "one one-thousandths."
6. Section 4(a) of the Rights Agreement is hereby amended such that the
words "one one-hundredth" in the second sentence shall be replaced
with the words "one one-thousandth."
7. Section 6(a) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" in the first sentence shall be replaced
with the words "one one-thousandths."
8. Section 7(a) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" shall be replaced with the words "one
one-thousandths."
9. Section 7(b) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" shall be replaced with the words "one
one-thousandths."
10. Section 7(c) of the Rights Agreement is hereby amended such that the
words "one one-hundredth" in the first sentence shall be replaced
with the words "one one-thousandth."
11. Section 7(c)(i)(A) of the Rights Agreement is hereby amended such
that the words "one one-hundredths" shall be replaced with the words
"one one-thousandths."
12. Section 7(c)(i)(B) of the Rights Agreement is hereby amended such
that the words "one one-hundredths" shall be replaced with the words
"one one-thousandths."
13. Section 9(d) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" shall be replaced with the words "one
one-thousandths."
14. Section 9(e) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" in the first sentence shall be replaced
with the words "one one-thousandths."
15. Section 9(e) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" in the second sentence shall be replaced
with the words "one one-thousandths" in both locations where such
words are used.
16. Section 10 of the Rights Agreement is hereby amended such that the
words "one one-hundredths" shall be replaced with the words "one
one-thousandths."
17. Section 11(a)(ii) of the Rights Agreement is hereby amended such that
the words "one one-hundredths" shall be replaced with the words "one
one-thousandths" in both locations where such words are used.
18. Section 11(a)(ii) of the Agreement is hereby amended to add the
following after "the best interests of the Company and its
stockholders" and before "then promptly following the occurrence":
(provided, however, that no such determination shall be made during
the Special Period)
19. Section 11(d)(ii) of the Rights Agreement is hereby amended such that
"100" shall be replaced with "1,000."
20. Section 11(e) of the Rights Agreement is hereby amended such that the
words "ten-thousandth" in the second sentence shall be replaced with
the words "hundred-thousandth."
21. Section 11(e) of the Rights Agreement is hereby amended such that the
words "one-millionth " in the second sentence shall be replaced with
the words "ten-millionth."
22. Section 11(g) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" shall be replaced with the words "one
one-thousandths."
23. Section 11(h) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" shall be replaced with the words "one
one-thousandths" in both where such words are used.
24. Section 11(i) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" in the first sentence shall be replaced
with the words "one one-thousandths."
25. Section 11(i) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" in the second sentence shall be replaced
with the words "one one-thousandths."
26. Section 11(i) of the Rights Agreement is hereby amended such that the
words "ten-thousandth" in the third sentence shall be replaced with
the words "hundred-thousandth."
27. Section 11(j) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" shall be replaced with the words "one
one-thousandths" 6in both locations where such words are used.
28. Section 11(j) of the Rights Agreement is hereby amended such that the
words "one one-hundredth" shall be replaced with the words "one
one-thousandth."
29. Section 11(k) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" shall be replaced with the words "one
one-thousandths" in both locations where such words are used.
30. Section 11(l) of the Rights Agreement is hereby amended such that the
words "one one-hundredths" shall be replaced with the words "one
one-thousandths" in each of two locations.
31. Section 13(a)(i) of the Rights Agreement is hereby amended such that
the words "one one-hundredths" shall be replaced with the words "one
one-thousandths" in each of two locations.
32. Section 14(b) of the Rights Agreement is hereby amended such that the
words "one one-hundredth" in the first sentence shall be replaced
with the words "one one-thousandth" in both locations where such
words are used.
33. Section 14(b) of the Rights Agreement is hereby amended such that the
words "one one-hundredth" in the second sentence shall be replaced
with the words "one one-thousandth" in both locations where such
words are used.
34. Section 14(b) of the Rights Agreement is hereby amended such that the
words "one one-hundredth" in the third sentence shall be replaced
with the words "one one-thousandth" in both locations where such
words are used.
35. Section 17 of the Rights Agreement is hereby amended such that the
words "one one-hundredths" shall be replaced with the words "one
one-thousandths."
36. Section 24(c) of the Rights Agreement is hereby amended such that the
words "one one-hundredth" shall be replaced with the words "one
one-thousandth."
37. The Form of Rights Certificate attached to the Rights Agreement as
Exhibit B is hereby amended such that the words "one-one hundredth"
shall be replaced by the words "one one-thousandth" and the words
"one one-hundredths" shall be replaced by the words "one
one-thousandths."
38. The second sentence of the Summary of Rights to Purchase Preferred
Stock attached to the Rights Agreement as Exhibit C is hereby amended
such that words "one-one hundredth" shall be replaced by the words
"one one-thousandth."
39. Section 23(c) of the Rights Agreement is hereby amended to read in
its entirety as follows:
(c) Notwithstanding the provisions of Section 23(a)
hereof, if, within 180 days of a public announcement by a third
party of an intent or proposal to engage (without the current
and continuing concurrence of the Board) in a transaction
involving an acquisition of or business combination with the
Company or otherwise to become an Acquiring Person, there is an
election of Directors (whether at one or more stockholder
meetings and/or pursuant to written stockholder consent)
resulting in a majority of the Board being comprised of persons
who were not nominated by the Board in office immediately prior
to such election, then for the 180 day period immediately
following the effectiveness of such election (the "Special
Period") the Rights, if otherwise then redeemable absent the
provisions of this paragraph (c), shall be redeemable upon
either of the following conditions being satisfied, but not
otherwise:
(A) by a vote of a majority of the Directors then in
office, provided that
(I) before such vote, the Board of Directors shall
have implemented the Value Enhancement Procedures
(as defined below) and
(II) promptly after such vote, the Company publicly
announces such vote and
(a) the manner in which the Value
Enhancement Procedures were implemented,
(b) any material financial, business,
personal or other benefit or relationship (an
"Interest") which each Company Director and
each Affiliate of such Company Director
(identifying each Director and Affiliate
separately in relation to each such Interest)
has in connection with any suggested,
proposed or pending transaction with or
involving the Company (a "Transaction"), or
with any other party or Affiliate of any
other party to a Transaction, where such
Transaction would or might, or is intended
to, be permitted or facilitated by redemption
of the Rights (an "Affected Transaction"),
other than treatment as a shareholder on a
pro rata basis with other shareholders or
pursuant to compensation arrangements as a
director or employee of the Company or a
subsidiary which have been previously
disclosed by the Company,
(c) the individual vote of each Director on
the motion to redeem the Rights, and
(d) the statement of any Director who voted
for or against the motion to redeem the
Rights and desires to have a statement
included in such announcement,
or
(B) if clause (A) is not applicable, by a vote of a
majority of the Directors then in office, provided that
(I) if there is a challenge to the Directors'
action approving redemption and/or any
related Affected Transaction as a breach of
the fiduciary duty of care or loyalty, the
Directors solely for purposes of determining
the effectiveness of such redemption pursuant
to this clause (B), are able to establish the
entire fairness of such redemption and, if
applicable, such related Affected
Transaction, and
(II) the Company shall have publicly
announced the vote of the Board of Directors
approving such redemption and, if applicable,
such related Affected Transaction, which
announcement shall set forth the information
prescribed by clauses (A) (II) (b), (c) and
(d) above.
"Value Enhancement Procedures" shall mean:
(1) the selection by the Board of Directors of an
independent financial advisor (the "Independent
Advisor") from among financial advisors which have
national standing, have established expertise in
advising on mergers, acquisitions and related
matters and have no Interest relating to an
Affected Transaction, and have not during the
preceding year provided services to, been engaged
by or been a financing source for any other party
to an Affected Transaction or any Affiliate of any
such party or of any Director (other than the
Company and its subsidiaries);
(2) whether or not there is a then-existing
Affected Transaction, the receipt by the Board of
Directors from its Independent Advisor of (a) such
advisor's view (expressed in such form and subject
to such qualifications and limitations as the
Independent Advisor deems appropriate) regarding
whether redemption of the Rights will serve the
best interests of the Company and its shareholders
or (b) such advisor's statement that it is unable
to express such a view, setting forth the reasons
therefor;
(3) if there is a then-existing Affected
Transaction,
(A) the establishment and implementation by
the Board of Directors of a process and
procedures approved by its Independent
Advisor which the Board and such advisor
conclude would be most likely to result in
the best value reasonably available to
shareholders (regardless of whether such
Affected Transaction involves a "sale of
control" or "break-up" of the Company for
Delaware law purposes),
(B) the Board of Directors (I) receiving the
opinion of its Independent Advisor, in
customary form and content for transactions
of the type involved, that the Affected
Transaction is fair to the Company's
shareholders from a financial point of view
and (II) determining, and the Independent
Advisor confirming, that it has no reason to
believe that a superior transaction is
reasonably available for the benefit of the
Company's shareholders, and
(C) the execution of a definitive transaction
agreement and other definitive documentation
necessary to effect the Affected Transaction.
(d) Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically
set forth in this Section 23 and other than in connection with
the purchase or repurchase by any of them of Common Stock prior
to the Distribution Date.
40. Section 27 of the Agreement is hereby amended in its entirety to read
as follows:
Section 27. Supplements and Amendments.
(a) Prior to the Distribution Date, and subject to the
provisions of Section 27(b) hereof, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders
of certificates representing shares of Common Stock. From and
after the Distribution Date, and subject to the provisions of
Section 27(b) hereof, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a
certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of
Common Stock.
(b) Notwithstanding anything herein to the contrary, no
supplement or amendment shall be made to this Agreement during
the Special Period or at a time when the Rights are not
redeemable, except as contemplated by clause (i) or (ii) of
Section 27(a) hereof.
41. The sixth paragraph of the Form of Rights Certificate attached to the
Rights Agreement as Exhibit B, which contains the sentence
The foregoing notwithstanding, the Rights generally may not be
redeemed for one hundred eighty days (180) days following a
change in a majority of the Board as a result of a proxy
contest.
is hereby amended to delete such sentence in its entirety and
insert in its place the following sentence:
The foregoing notwithstanding, the Rights generally may not be
redeemed for one hundred eighty days (180) days following a
change in a majority of the Board as a result of a proxy
contest, unless the Board adopts specified "Value Enhancement
Procedures," or the Board (i) is able to establish the entire
fairness of the decision to redeem the rights if an action
challenging such decision is brought and (ii) satisfies certain
other requirements.
[,with, where required, the concurrence of the Continuing
Directors,]
42. The ninth paragraph of the Summary of Rights to Purchase Preferred
Stock attached to the Rights Agreement as Exhibit C, which contains
the sentence
The foregoing notwithstanding, the Rights generally may not be
redeemed for one hundred eighty days (180) days following a
change in a majority of the Board as a result of a proxy
contest.
is hereby amended to delete such sentence in its entirety and
insert in its place the following sentence:
The foregoing notwithstanding, the Rights generally may not be
redeemed for one hundred eighty days (180) days following a
change in a majority of the Board as a result of a proxy
contest, unless the Board adopts specified "Value Enhancement
Procedures," or the Board (i) is able to establish the entire
fairness of the decision to redeem the rights if an action
challenging such decision is brought and (ii) satisfies certain
other requirements.
43. Exhibit C to the Agreement is hereby amended by deleting the tenth
paragraph therein and replacing it in its entirety with the
following:
For 180 days (the "Special Period") following a change in
control of the Board of Directors of the Company, that has not
been approved by the Board of Directors, occurring within six
months of announcement of an unsolicited third party
acquisition or business combination proposal or of a third
party's intent or proposal otherwise to become an Acquiring
Person, the new directors are entitled to redeem the rights
(assuming the rights would have otherwise been redeemable),
including to facilitate an acquisition or business combination
transaction involving the Company, but only (1) if they have
followed certain prescribed procedures or (2) if such
procedures are not followed, and if their decision regarding
redemption and any acquisition or business combination is
challenged as a breach of fiduciary duty of care or loyalty,
the directors (solely for purposes of the effectiveness of the
redemption decision) are able to establish the entire fairness
of the redemption or transaction.
44. Exhibit C to the Agreement is hereby amended by removing the final
sentence of the eleventh paragraph and replacing it in its entirety
with the following:
The foregoing notwithstanding, no amendment may be
made to the Rights Agreement during the Special Period or at a
time when the Rights are not redeemable, except to cure any
ambiguity or correct or supplement any provision contained in
the Rights Agreement which may be defective or inconsistent
with any other provision therein.
45. The term "Agreement" as used in the Agreement shall be deemed to
refer to the Agreement as heretofore amended and as amended hereby,
and all references to the Agreement shall be deemed to include this
Amendment and all prior Amendments.
46. This Amendment shall be effective as of the date first written above,
and except as set forth herein, the Agreement shall remain in full
force and effect and otherwise shall be unaffected hereby.
47. This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
ALBERTSON'S, INC.
Attest:
By /s/ XXXX X. X'XXXXXXX By /s/ XXXX X. XXXXXXX
-------------------------- ---------------------------------------
Xxxx X. X'Xxxxxxx Xxxx X. Xxxxxxx
Corporate Secretary Chairman of the Board and
Chief Executive Officer
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Attest:
By /s/ XXXXX XXXXX By /s/ XXX XXXX
-------------------------- ---------------------------------------
Xxxxx Xxxxx Xxx Xxxx
Assistant Vice President Assistant Vice President
Certificate
of
Officer of
Albertson's, Inc.
The undersigned hereby certifies that Amendment No. 2 to the
Rights Agreement ("the Rights Agreement"), dated December 6, 1996, by and
between Xxxxxxxxx'x, Inc. and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent, and previously amended on August 1, 1998, attached hereto is
in compliance with Section 27 of the Rights Agreement and requests that in
accordance with such Section 27 such amendment be executed by the Rights
Agent.
ALBERTSON'S, INC.
By: /s/ XXXX X. XXXXXXX
-----------------------------
Xxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
