UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
------
Bruno's, Inc.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
116881 10 3
(CUSIP Number)
Paul E. Raether, KKR Associates, BI Associates, L.P. c/o Kohlberg Kravis
Roberts & Co.
9 West 57th Street, New York, N.Y. 10019 (212) 750-8300
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
April 20, 1995
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box .
Check the following box if a fee is being paid with the statement. /X/ (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five percent
or less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
PAGE 1 OF 17 PAGES
<PAGE>
SCHEDULE 13D
CUSIP No. 116881 10 3 Page 2 of 17
----- ------------
Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CRIMSON ACQUISITION CORP.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF, OO (see item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Alabama
7 SOLE VOTING POWER
34,736,579
NUMBER OF
8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 15,541,570
PERSON 10 SHARED DISPOSITIVE POWER
WITH
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
34,736,579
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
37.1
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
SCHEDULE 13D
CUSIP No. 116881 10 3 Page 3 of 17
----- ------------
Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KKR ASSOCIATES
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF, OO (see item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
7 SOLE VOTING POWER
34,736,579
NUMBER OF
8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 15,541,570
PERSON 10 SHARED DISPOSITIVE POWER
WITH
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
34,736,579
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
37.1
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
SCHEDULE 13D
CUSIP No. 116881 10 3 Page 4 of 17
----- ------------
Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BI ASSOCIATES, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO (see item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
34,736,579
NUMBER OF
8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH
REPORTING 15,541,570
PERSON 10 SHARED DISPOSITIVE POWER
WITH
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
34,736,579
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
37.1
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
<PAGE>
Page 5 of 17 Pages
Item 1. Security and Issuer.
-------------------
This statement relates to shares of common stock, $.01 par value
per share, of Bruno's, Inc. ("Issuer Common Stock"), an Alabama corporation
(the "Issuer"). The principal executive offices of the Issuer are located
at 800 Lakeshore Parkway, Birmingham, Alabama 35211.
Item 2. Identity and Background.
-----------------------
This statement is being filed jointly by BI Associates, L.P., a
Delaware limited partnership ("BI Associates"), Crimson Acquisition Corp.,
a wholly-owned subsidiary of BI Associates ("Newco"), and KKR Associates, a
New York limited partnership ("KKR Associates", and together with BI
Associates and Newco, the "Reporting Persons"). The agreement among the
Reporting Persons relating to the joint filing of this statement is
attached as Exhibit 1 hereto.
Newco was formed to effect the proposed transactions described in
Item 4 below, and has not engaged in any activities other than those
incident to its formation and such proposed transactions. BI Associates is
principally engaged in the business of investing in securities. The
address of the principal business and office of each of Newco and BI
Associates is 9 West 57th Street, New York, New York 10019.
Information concerning the directors and executive officers of
Newco is contained in Schedule A attached hereto.
The sole general partner of BI Associates is KKR Associates. KKR
Associates is principally engaged in the business of investing through
partnerships in industrial and other companies. The address of its
principal business and office is 9 West 57th Street, New York, New York
10019.
<PAGE>
Page 6 of 17 Pages
Messrs. Henry R. Kravis, George R. Roberts, Robert I. MacDonnell,
Paul E. Raether, Michael W. Michelson, Saul A. Fox, James H. Greene, Jr.,
Michael T. Tokarz, Perry Golkin, Clifton S. Robbins, Scott M. Stuart and
Edward A. Gilhuly are the general partners of KKR Associates. Messrs.
Kravis, Roberts, MacDonnell, Raether, Michelson, Fox, Greene, Tokarz,
Golkin, Robbins, Stuart and Gilhuly are each United States citizens, and
the present principal occupation or employment of each is as a general
partner of Kohlberg Kravis Roberts & Co. ("KKR"), a private investment
firm, the addresses of which are 9 West 57th Street, New York, New York
10019, and 2800 Sand Hill Road, Suite 200, Menlo Park, California 94025.
The business address of Messrs. Kravis, Raether, Tokarz, Golkin, Robbins
and Stuart is 9 West 57th Street, New York, New York 10019; the business
address of Messrs. Roberts, MacDonnell, Michelson, Fox, Greene and Gilhuly
is 2800 Sand Hill Road, Suite 200, Menlo Park, California 94025.
During the last five years, neither the Reporting Persons nor, to
the best knowledge of the Reporting Persons, any of the other persons named
in this Item 2 or Schedule A hereto: (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors); or (ii)
was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
<PAGE>
Page 7 of 17 Pages
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
As more fully described in Item 4 hereof, Issuer has granted an
irrevocable option (the "Option") to Newco to purchase, during a time
period described in such Option, up to 15,541,570 shares of Issuer Common
Stock (the "Option Shares") for $12.50 per share, payable in cash (the
"Exercise Price"), subject to customary anti-dilution adjustments. In
addition, Newco and the persons set forth on Schedule B hereof (the
"Stockholders") each of whom is a record and/or beneficial owner of shares
of Issuer Common Stock (or, in the case of certain trusts, foundations or
estates that are the record or beneficial owners of shares of Issuer Common
Stock and whose beneficiaries are the beneficial owners, a trustee,
foundation director or executor of such trust, foundation or estate, as the
case may be) have entered into the Stockholders Agreement described in Item
4. If Newco were to exercise the Option in full and pay the Exercise Price
in cash, the funds required would be approximately $194,269,625. It is
currently anticipated that such funds would be provided from general funds
available to Newco and its affiliates and by borrowings from sources yet to
be determined.
In the event that certain fees are actually paid to KKR pursuant
to the Merger Agreement as a result of the termination of the Merger
Agreement in connection with certain transaction proposals by third
parties, the Exercise Price will be adjusted upward (retroactively if
necessary and net of any taxes or brokerage fees paid or payable in
connection with the sale, tender or exchange of shares by Newco or its
designee to reflect (i) with respect to any Option Shares actually sold,
tendered, or exchanged in any third party
<PAGE>
Page 8 of 17 Pages
transaction that triggers a payment pursuant to the Merger Agreement of
such fees, the price per share actually paid to holders of Issuer Common
Stock as a result of any such third party transaction and (ii) with respect
to any Option Shares sold, tendered or exchanged to another party or
parties by Newco (or its designee) other than pursuant to such third party
transaction, the price per share actually paid to Newco (or its designee)
by such other party or parties in consideration for such Option Shares.
Issuer entered into the Option Agreement (defined in Item 4), and
the Stockholders entered into the Stockholders Agreement (defined in Item
4), to induce Newco to enter into the Merger Agreement.
Item 4. Purpose of Transaction.
----------------------
On April 20, 1995, Newco and Issuer entered into an Agreement and
Plan of Merger (the "Merger Agreement") providing for the merger (the
"Merger") of Newco with and into Issuer, whereupon the separate existence
of Newco will cease and the Issuer will continue as the surviving
corporation.
At the effective time of the Merger, (the "Effective Time of the
Merger"), each share of Issuer Common Stock issued and outstanding
immediately prior to the Effective Time of the Merger (other than (i)
shares of Issuer Common Stock owned, directly or indirectly, by the Issuer
or any subsidiary of the Issuer or by BI Associates, Newco or any other
subsidiary of BI Associates and (ii) shares of Issuer Common Stock subject
to dissenters rights) will be converted into either (A) the right to
retain, at the election of the holder thereof and subject
<PAGE>
Page 9 of 17 Pages
to the terms of the Merger Agreement, Issuer Common Stock ("Electing
Shares") or (B) the right to receive cash.
The aggregate number of shares of Issuer Common Stock to be
converted into the right to retain Issuer Common Stock at the Effective
Time of the Merger (the "Non-Cash Election Number") shall be equal to (i)
2,413,000 (excluding for this purpose any shares of Issuer Common Stock
owned by the Issuer or by any subsidiary or by BI Associates or Newco) plus
(ii) a number of shares equal to the number of record holders of Issuer
Common Stock immediately prior to the Effective Time of the Merger.
If the number of Electing Shares exceeds the Non-Cash Election
Number, then the number of Electing Shares to be converted into the right
to retain Issuer Common Stock will be reduced pro rata (on a consistent
basis among stockholders who made the election to retain Issuer Common
Stock), and, to the extent of such reduction, a stockholder's Electing
Shares shall be converted into cash.
If the number of Electing Shares is less than the Non-Cash
Election Number, then (i) all Electing Shares shall be converted into the
right to retain Issuer Common Stock and (ii) additional shares of Issuer
Common Stock other than Electing Shares shall be converted into the right
to retain Issuer Common Stock (on a consistent basis among stockholders who
held shares of Issuer Common Stock as to which they did not make the
election to retain Issuer Common Stock), pro rata to the number of shares
as to which they did not make such election).
Stockholders of the Issuer otherwise entitled to fractional
shares of Issuer Common Stock shall be paid cash in lieu of fractional
shares.
<PAGE>
Page 10 of 17 Pages
Because approval of Issuer's stockholders is required by
applicable law in order to consummate the Merger, Issuer will submit the
Merger to its stockholders for approval. If consummated, the Merger will
result in BI Associates and its affiliates becoming the controlling
stockholders of the Issuer. The Reporting Persons intend to vote any
shares of Issuer Common Stock acquired by them in favor of the Merger and
in favor of any other transactions contemplated by the Merger Agreement.
The obligations of the parties to the Merger Agreement to effect
the Merger are subject to certain conditions, and prior to the Effective
Time of the Merger, Newco or the Issuer may terminate the Merger Agreement
under certain circumstances, in each case as set forth in the Merger
Agreement.
Concurrently with the execution and delivery of the Merger
Agreement, Newco and Issuer entered into a Stock Option Agreement dated as
of April 20, 1995 (the "Option Agreement") pursuant to which Issuer granted
the Option to Newco. Pursuant to the Option Agreement, the Option may be
exercised by Newco (or its designee), in whole or in part at any time and
from time to time until the Expiration Date (as defined below).
"Expiration Date" means the first to occur of the Effective Time of the
Merger and April 30, 1996.
The Option Agreement also provides Newco with certain rights to
cause the Issuer to effect the registration under the Securities Act of
1933, as amended, of any Option Shares acquired by Newco.
Concurrently with and as a further condition to the execution and
delivery of the Merger Agreement, Newco and the Stockholders entered into a
Stockholders Agreement dated as of April
<PAGE>
Page 11 of 17 Pages
20, 1995 (the "Stockholders Agreement") relating to 19,195,009 shares of
Issuer Common Stock. If the Merger Agreement is terminated in accordance
with its terms, the covenants and agreements contained in the Stockholders
Agreement with respect to shares of Issuer Common Stock will also terminate
at such time. Subject to the foregoing and to certain exceptions and
conditions, the Stockholders have agreed pursuant to the Stockholders
Agreement to vote, and have appointed Newco, certain of its executive
officers and any other of its designees as their proxy to vote, the shares
of Issuer Common Stock held by them (at April 20, 1995 representing
19,195,009 shares of Common Stock) in favor of the Merger and of certain
related agreements and actions and against certain other enumerated actions
or agreements (together with the Merger, the "Merger Related Matters").
Subject to the foregoing and to certain exceptions and conditions, all of
the Stockholders have agreed to refrain from soliciting or responding to
certain inquiries or proposals regarding the Issuer, to restrictions upon
the transfer of their shares of Issuer Common Stock and to waive any rights
of appraisal available in the Merger and to take or refrain from taking
certain other actions.
If the Merger is completed as planned, (i) the board of directors
of the Issuer will consist of the directors of Newco at the time of the
Merger, until the earlier of their resignation or removal or the election
and qualification of their successors, and (ii) the officers of the Issuer
will consist of the officers of Newco at the time of the Merger, until the
earlier of their resignation or removal or the election and qualification
of their successors.
<PAGE>
Page 12 of 17 Pages
At the Effective Time of the Merger, (i) the articles of
incorporation of Issuer, as in effect immediately prior to the Effective
Time of the Merger, shall be amended so as to read in their entirety in the
form set forth as Exhibit A to the Merger Agreement and (ii) the by-laws of
Newco as in effect at the Effective Time of the Merger shall be the by-laws
of the Issuer. The authorized capital stock of Newco consists of 1,000
shares of common stock, 1,000 shares of which are owned by BI Associates.
If the Merger is completed as planned, the Issuer intends to (i)
seek to have the shares of Issuer Common Stock cease to be listed on the
NASDAQ National Market System and (ii) seek, if in conformity with
applicable law and regulation, to have the shares of Issuer Common Stock
deregistered under the Exchange Act.
The preceding summary of certain provisions of the Merger
Agreement, the Option Agreement and the Stockholders Agreement is not
intended to be complete and is qualified in its entirety by reference to
the full text of such agreements, copies of which are filed as Exhibits 2,
3 and 4 hereto, and which are incorporated herein by reference.
Other than as described above, none of the Reporting Persons has
any plans or proposals that relate to or would result in any of the actions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D
(although subject to the provisions of the Merger Agreement they reserve
the right to develop such plans).
<PAGE>
Page 13 of 17 Pages
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) and (b) As of April 20, 1995, Newco beneficially owned ten
shares of Issuer Common Stock, and had the sole power to vote and the sole
power to dispose of such shares.
In addition, as of April 20, 1995, under the definition of
"beneficial ownership" as set forth in Rule 13d-3 under the Securities and
Exchange Act of 1934, as amended, Newco may be deemed to have beneficially
owned (i) 15,541,570 shares of Issuer Common Stock underlying the Option
and (ii) 19,195,009 shares of Issuer Common Stock subject to the
Stockholders Agreement, constituting in the aggregate approximately 37.1%
of the outstanding shares of Issuer Common Stock (based on the number of
shares of Issuer Common Stock represented by the Issuer in the Merger
Agreement to be outstanding as of April 20, 1995) assuming, for purposes of
calculating the foregoing percentage regarding the Issuer Common Stock,
that the Option had been exercised in full.
Newco is a wholly owned subsidiary of BI Associates and
therefore, BI Associates, acting through its sole general partner, KKR
Associates, has the power to direct the voting of and disposition of any
shares of Issuer Common Stock deemed to be beneficially owned by Newco. As
a result, KKR Associates may be deemed to beneficially own any shares of
Issuer Common Stock deemed to be beneficially owned by BI Associates or
Newco. Each of Messrs. Kravis, Roberts, MacDonnell, Raether, Michelson,
Fox, Greene, Tokarz, Golkin, Robbins, Stuart and Gilhuly, the general
partners of KKR Associates, has shared power to vote or direct the vote,
and to dispose of or direct the disposition of, any shares of Issuer Common
Stock deemed to be beneficially owned
<PAGE>
Page 14 of 17 Pages
by KKR Associates. As a result, each of the general partners of KKR
Associates may be deemed to beneficially own any shares of Issuer Common
Stock that KKR Associates may be deemed to beneficially own.
If Newco were to exercise the Option, Newco would have the sole
power to vote and sole power to dispose of all of the Option Shares, and BI
Associates, acting through its sole general partner, KKR Associates, would
have the sole power to direct the voting of and the disposition of all of
the Option Shares, in each case subject to the terms of the Option
Agreement. In addition, Newco has the right to assign the Option to any
designee. With respect to the Merger Related Matters, Newco has sole power
to vote the 19,195,009 shares of Issuer Common Stock subject to the
Stockholders Agreement. Unless and until Newco or its designee, if any,
acquires any Option Shares upon exercise of the Option, and except as set
forth above, neither Newco nor such designee, if any, has any power to vote
or dispose of any Issuer Common Stock. Neither the filing of this Schedule
13D nor any of its contents shall be deemed to constitute an admission that
any Reporting Person is the beneficial owner of the Issuer Common Stock
referred to in this paragraph for purposes of Section 13(d) of the Exchange
Act or for any other purpose, and such beneficial ownership is expressly
disclaimed.
(c) Except as set forth in this Item 5, to the best knowledge of
each of the Reporting Persons, none of the Reporting Persons and no other
person described in Item 2 hereof has beneficial ownership of, or has
engaged in any transaction during the past 60 days in, any shares of Issuer
Common Stock.
<PAGE>
Page 15 of 17 Pages
(d) No person other than Newco has the right to receive
dividends from, or the proceeds from the sale of, the ten shares of Issuer
Common Stock referred to in this Item 5. Newco or its designee, if any,
would have the sole right to receive dividends from, or the proceeds from
the sale of, all Option Shares it would acquire upon exercise of the
Option. To the best knowledge of the Reporting Persons, no person, other
than Newco and its designee, if any, and the respective partners of BI
Associates and KKR Associates, has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
Option Shares which Newco or its designee, if any, would acquire upon
exercise of the Option. Until the Option is exercised, neither Newco nor
its designee, if any, has a right to receive dividends from, or the
proceeds from the sale of, the Option Shares. Newco has no right to
receive dividends from, or the proceeds from the sale of, the shares of
Issuer Common Stock which are subject to the Stockholders Agreement.
(e) Not applicable.
Item 6. Contracts, Arrangements or Understandings
with Respect to Securities of the Issuer.
----------------------------------------
Except as set forth in this Statement, to the best knowledge of
the Reporting Persons, there are no other contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons
named in Item 2 and between such persons and any person with respect to any
securities of the Issuer, including but not limited to, transfer or voting
of any of the securities of the Issuer, joint ventures, loan or option
arrangements, puts or calls, guarantees or profits, division of profits or
loss, or the giving or withholding of proxies, or a
<PAGE>
Page 16 of 17 Pages
pledge or contingency the occurrence of which would give another person
voting power over the securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
--------------------------------
1. Joint Filing Agreement, dated April 26, 1995, among BI
Associates, L.P., KKR Associates and Crimson Acquisition Corp.
relating to the filing of a joint statement on Schedule 13D.
2. Stock Option Agreement, dated as of April 20, 1995, between
Crimson Acquisition Corp. and Bruno's, Inc.
3. Agreement and Plan of Merger, dated as of April 20, 1995, between
Crimson Acquisition Corp. and Bruno's, Inc.
4. Stockholders Agreement, dated as of April 20, 1995, among Crimson
Acquisition Corp. and certain stockholders of Bruno's, Inc.
<PAGE>
Page 17 of 17 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Statement is true,
complete and correct.
KKR ASSOCIATES
By:/s/ Paul E. Raether
-----------------------
Name: Paul E. Raether
Title: General Partner
BI ASSOCIATES, L.P.
By KKR Associates
General Partner
By:/s/ Paul E. Raether
-----------------------
Name: Paul E. Raether
Title: General Partner
CRIMSON ACQUISITION CORP.
By:/s/ Paul E. Raether
-----------------------
Name: Paul E. Raether
Title: Chief Executive Officer
DATED: April 26, 1995
<PAGE>
SCHEDULE A
CRIMSON ACQUISITION CORP.
Executive Officers and Directors:
- --------------------------------
Business Principal
Name Address Occupation Office Citizenship
---- -------- ---------- ------ -----------
Paul E. 9 West 57th Partner of Director; U.S.
Raether St. Kohlberg Chief
NY, NY 10019 Kravis Roberts Executive
& Co., a Officer
private
investment
firm ("KKR")
James H. 2800 Sand Hill Partner, KKR Director; U.S.
Greene, Road, Suite President
Jr. 200
Menlo Park, CA
94025
Nils P. 9 West 57th Employee, KKR Director; Vice U.S.
Brous St. President,
NY, NY 10019 Treasurer and
Secretary
<PAGE>
SCHEDULE B
Name of Stockholder
- -------------------
Vincent Bruno, Executor and Carol Ann Bruno Rumore,
Executor, of Lee Bruno Estate
Nancy Bruno, President of Lee Bruno Foundation
Ann M. Bruno, President, The Ann and Angelo Bruno
Foundation
Ann Marie M. Bruno, Executor, and Ronald G. Bruno,
Executor, of Angelo J. Bruno Estate
Joseph S. Bruno
Theresa L. Bruno
Joseph S. Bruno, President of Joseph S. Bruno
Foundation
Joseph S. Bruno, President of Joseph S. Bruno
Charitable Foundation
Anthony J. Bruno
Marianne Bruno
Anthony J. Bruno, President of Anthony J.
Bruno Foundation
Marianne Bruno, C/F Elizabeth Bruno
under AUGMA
Marianne Bruno, C/F Tony Spano
under AUGMA
Marianne Bruno, C/F Paul Spano
under AUGMA
Marianne Bruno, C/F Luis Antonio Spano
under AUGMA
Marianne Bruno, C/F Brooke Nicole Spano
under AUGMA
Ann M. Bruno
Ann M. Bruno, Trustee of Trust Estate A
f/b/o Ann M. Bruno under Angelo J. Bruno
Revocable Management Trust dated
September 13, 1984
<PAGE>
Ronald G. Bruno, Trustee of Trust
Estate A f/b/o Ann M. Bruno under
Angelo J. Bruno Revocable Management
Trust dated September 13, 1984
Ann M. Bruno, C/F Alan Bruno under AUGMA
Ronald G. Bruno, Trustee of Trust Estate B
f/b/o Alan Bruno under the Angelo J. Bruno
Revocable Management Trust Agreement
dated September 13, 1984
Kenneth Bruno, Trustee of Trust Estate B f/b/o
Alan Bruno under the Angelo J. Bruno
Revocable Management Trust Agreement dated
September 13, 1984
Kenneth Bruno
Theresa Bruno
Kenneth Bruno, President of Kenneth Bruno
Foundation
Ronald Bruno
Lee Ann Bruno
David Bruno, Trustee of Trust Estate B f/b/o
Ronald G. Bruno, Jr., under Angelo J. Bruno
Revocable Management Trust dated September 13, 1984
Kenneth Bruno, Trustee of Trust Estate B f/b/o
Ronald G. Bruno, Jr., under Angelo J. Bruno
Revocable Management Trust dated September 13, 1984
Ronald G. Bruno, Trustee under Declaration of
Trust by Ann Marie Messina Bruno for Ronald G.
Bruno, Jr., dated December 30, 1991
David P. Bruno
Mary Lynn Bruno
Mary Lynn Bruno, Trustee of David P. Bruno
Children's Trust dated December 30, 1992
David P. Bruno, Trustee for Jessica Bruno
under Trust dated December 30, 1992
David P. Bruno, Trustee for David Patrick
Bruno, Jr., under Trust dated May 1, 1989
<PAGE>
Ronald G. Bruno, Trustee of Trust Estate B
f/b/o David P. Bruno, Jr., under Angelo
Bruno Revocable Management Trust dated
September 13, 1984
Kenneth J. Bruno, Trustee of Trust Estate B
f/b/o David P. Bruno, Jr., under Angelo Bruno
Revocable Management Trust dated September 13, 1984
Ronald G. Bruno, Trustee of Trust Estate B f/b/o
Jessica Bruno under the Angelo Bruno Revocable
Management Trust dated September 13, 1984
Kenneth J Bruno, Trustee of Trust Estate B,
f/b/o Jessica Bruno under the Angelo Bruno
Revocable Management Trust dated September 13,
1984
Suzanne Bruno Bowness
Ronald G. Bruno, Trustee f/b/o Suzanne B.
Bowness under Angelo J. Bruno Revocable
Management Trust dated September 13, 1984
Kenneth J. Bruno, Trustee f/b/o Suzanne B.
Bowness under Angelo J. Bruno Revocable
Management Trust dated September 13, 1984
Ronald G. Bruno, Trustee of Suzanne Bruno
Bowness Children's Trust dated December 16, 1992
Ronald G. Bruno, Trustee of Trust Estate B
f/b/o Matthew Bowness under the Angelo J. Bruno
Revocable Management Trust dated
September 13, 1984
Kenneth J. Bruno, Trustee of Trust Estate B
f/b/o Matthew Bowness under the Angelo J.
Bruno Revocable Management Trust dated
September 13, 1984
Suzanne Bowness, C/F Matthew Bowness under
AUGMA
Ronald G. Bruno, Trustee of Trust Estate B
f/b/o Brian Bowness under the Angelo J.
Bruno Revocable Management Trust dated
September 13, 1984
Kenneth J. Bruno, Trustee of Trust Estate
B f/b/o Brian Bowness under the Angelo J.
Bruno Revocable Management Trust dated
September 13, 1984
Suzanne Bowness, C/F Brian Vincent
Bowness under AUGMA
<PAGE>
Suzanne Bowness, C/F Caroline A.
Bowness under AUGMA
Vincent J. Bruno
Mary Ann Bruno
Vincent Bruno, Trustee of Vincent
Bruno Children's Trust
Richard Cohn, Trustee of Vincent
Bruno Children's Trust
Vincent J. Bruno, C/F
Lee John Bruno under AUGMA
Vincent Bruno, Trustee of Grandchildren's
Trust Estate GST Exempt n/w/o Lee J.
Bruno f/b/o Lee John Bruno
Carol Ann Bruno Rumore, Trustee of
Grandchildren's Trust Estate GST Exempt
u/w/o Lee J. Bruno f/b/o Lee John Bruno
Lee John Bruno
Vincent J. Bruno, C/F
Brannon Bruno under AUGMA
Vincent Bruno, Trustee of Grandchildren's
Trust Estate GST Exempt u/w/o Lee J.
Bruno f/b/o Brannon Bruno
Carol Ann Bruno Rumore Trustee of
Grandchildren's Trust Estate GST Exempt
u/w/o Lee J. Bruno f/b/o Brannon Bruno
Vincent Bruno, Trustee of Non-Exempt
Grandchildren's Trust u/w/o Lee J. Bruno
f/b/o Vincent J. Bruno, Jr.
Carol Ann Bruno Rumore, Trustee of Non-
Exempt Grandchildren's Trust u/w/o Lee J.
Bruno f/b/o Vincent J. Bruno, Jr.
Vincent Bruno, Trustee of Grandchildren's
Trust Estate GST Exempt u/w/o Lee J.
Bruno f/b/o Vincent J. Bruno Jr.
Carol Ann Bruno Rumore, Trustee of
Grandchildren's Trust Estate GST Exempt
u/w/o Lee J. Bruno
f/b/o Vincent J. Bruno, Jr.
Vincent, Bruno,
C/F Vincent Joseph Bruno, under AUGMA
<PAGE>
Vincent Bruno, Trustee of Grandchildren's
Trust Estate GST Exempt u/w/o Lee J.
Bruno f/b/o Paul Bruno
Carol Ann Bruno Rumore, Trustee of
Grandchildren's Trust Estate GST Exempt
u/w/o Lee J. Bruno f/b/o Paul Bruno
Vincent Bruno, C/F Paul Vincent
Bruno under AUGMA
Carol Ann Rumore
Vincent Bruno, Trustee of Lee Bruno
Trust for Carolyn Ann Bruno dated
December 30, 1976
Richard Cohn, Trustee of Lee Bruno
Trust for Carol Ann Bruno dated
December 30, 1976
Vincent Bruno, Trustee of Grandchildren's
Trust Estate GST Exempt u/w/o Lee J.
Bruno f/b/o Christina Rumore
Carol Ann Bruno Rumore, Trustee of
Grandchildren's Trust Estate GST Exempt
u/w/o Lee J. Bruno f/b/o Christina Rumore
Vincent Bruno, Trustee of Non-Exempt
Grandchildren's Trust Estate u/w/o
Lee J. Bruno f/b/o Christina Rumore
Carol Ann Bruno Rumore, Trustee of Non-
Exempt Grandchildren's Trust Estate u/w/o
Lee J. Bruno f/b/o/ Christina Rumore
Vincent Bruno, Trustee of
Grandchildren's Trust Estate GST Exempt
u/w/o Lee J. Bruno f/b/o Michael Rumore
Carol Ann Bruno Rumore, Trustee of Grand-
children's Trust Estate GST Exempt u/w/o
Lee J. Bruno f/b/o Michael Rumore
Vincent Bruno, Trustee of Non-Exempt
Grandchildren's Trust Estate u/w/o
Lee J. Bruno f/b/o Michael Rumore
Carol Ann Bruno Rumore, Trustee of
Non-Exempt Grandchildren's Trust Estate u/w/o
Lee J. Bruno f/b/o Michael Rumore
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit Number Description of Exhibits
- -------------- -----------------------
1. Joint Filing Agreement, dated April 26, 1995, among BI
Associates, L.P., KKR Associates and Crimson Acquisition
Corp. relating to the filing of a joint statement on
Schedule 13D.
2. Stock Option Agreement, dated as of April 20, 1995, between
Crimson Acquisition Corp. and Bruno's, Inc.
3. Agreement and Plan of Merger, dated as of April 20, 1995,
among between Crimson Acquisition Corp. and Bruno's, Inc.
4. Stockholders Agreement, dated as of April 20, 1995, among
Crimson Acquisition Corp. and certain stockholders of
Bruno's, Inc.
EXHIBIT 1
---------
JOINT FILING AGREEMENT
----------------------
We, the signatories of the statement on Schedule 13D to which
this Agreement is attached, hereby agree that such statement is, and any
amendments thereto filed by any of us will be, filed on behalf of each of
us.
KKR ASSOCIATES
By:/s/ Paul E. Raether
-----------------------
Name: Paul E. Raether
Title: General Partner
BI ASSOCIATES, L.P.
By KKR Associates
General Partner
By:/s/ Paul E. Raether
------------------------
Name: Paul E. Raether
Title: General Partner
CRIMSON ACQUISITION CORP.
By:/s/ Paul E. Raether
------------------------
Name: Paul E. Raether
Title: Chief Executive Officer
Dated: April 26, 1995
EXHIBIT 2
---------
Conformed Copy
STOCK OPTION AGREEMENT
----------------------
STOCK OPTION AGREEMENT dated as of April 20, 1995 by and between
Crimson Acquisition Corp., an Alabama Corporation ("Newco"), and Bruno's,
Inc., an Alabama corporation (the "Company").
RECITALS
--------
Concurrently herewith, Newco, a wholly owned subsidiary of BI
Associates L.P., a Delaware limited partnership ("Parent"), and the Company
are entering into an Agreement and Plan of Merger of even date herewith
(the "Merger Agreement"; capitalized terms used but not defined herein
shall have the meanings set forth in the Merger Agreement) pursuant to
which Newco will be merged with and into the Company (the "Merger"),
whereby each share of common stock, par value $.01 per share, of the
Company ("Company Common Stock") issued and outstanding immediately prior
to the Effective Time of the Merger will be converted into either (A) the
right to retain, at the election of the holder thereof and subject to the
terms of the Merger Agreement, common stock, par value $.01 per share, of
the Company or (B) the right to receive cash, other than (i) shares of
Company Common Stock owned, directly or indirectly, by the Company or any
subsidiary of the Company or by Parent, Newco or any other subsidiary of
Parent and (ii) Dissenting Shares.
As a condition to Newco's willingness to enter into the Merger
Agreement, Newco requires that the Company agree, and believing it to be in
the best interests of the Company, the
<PAGE>
2
Company has agreed, among other things, to grant to Newco the Option (as
hereinafter defined).
AGREEMENT
---------
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. Option to Purchase Shares.
-------------------------
1.1 Grant of Option. In consideration for the payment of $100
---------------
and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the Company hereby grants to Newco (or its
designee) an irrevocable option to purchase up to 15,541,570 newly issued
shares of Company Common Stock (the "Shares"), on the terms and subject to
the conditions set forth herein (the "Option"). At the time that the
Option is exercised, Newco shall be entitled to designate whether any or
all of the Shares shall be newly issued Shares or, if the Company then
holds shares of Company Common Stock in treasury, Shares of treasury stock
of the Company.
1.2 Exercise of Option.
------------------
(a) The Option may be exercised by Newco (or its designee), in
whole or in part, at any time, or from time to time, during the period
beginning on the date hereof and ending on the Expiration Date. As used
herein, the term "Expiration Date" means the first to occur of (i) the
Effective Time of the Merger and (ii) April 30, 1996. In the event that
the Option is exercised prior to the termination of the Merger Agreement,
the Company shall take such actions as may be reasonably necessary so that
Newco (or its designee) shall, subject to applicable law, be
<PAGE>
3
entitled at the stockholders meeting to vote on the Merger and the Merger
Agreement to vote the shares of Company Common Stock issued upon exercise
of such Option (including, with respect to such stockholders meeting,
adjourning such meeting, resetting the record date of such meeting and/or
resetting the date of such meeting).
(b) In the event Newco (or its designee) wishes to exercise the
Option, Newco shall send a written notice to the Company of its intention
to so exercise the Option (a "Notice"), specifying the number of Shares to
be purchased, and the place, time and date of the closing of such purchase
(the "Closing Date" or the "Closing"), which date shall not be less than
two business days nor more than ten business days from the date on which a
Notice is delivered; provided, that the respective obligations of each
--------
party hereto to consummate the purchase of the Shares at the Closing shall
be subject to the satisfaction or waiver on or prior to the Closing Date of
the following conditions: (i) such purchase would not otherwise violate or
cause the violation of, any applicable law or regulations (including, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act") and (ii) no statute, rule, regulation, decree, order or injunction
shall have been promulgated, enacted, entered into, or enforced by any
governmental agency or authority or court which prohibits delivery of the
Shares, whether temporary, preliminary or permanent (provided, however,
-------- -------
that the parties hereto shall use their best efforts to have any such
order, decree or injunction vacated or reversed); and provided further,
-------- -------
that the
<PAGE>
4
obligation of Newco to purchase the Shares at the Closing is further
subject to the condition that such purchase would not otherwise violate or
cause the violation of the rules of the NASDAQ National Market System
("NASDAQ"). In the event the Closing is delayed as a result of the
immediately preceding sentence, the Closing Date shall be within five
business days following the cessation of such violation, potential
violation, statute, rule, regulation, decree, order or injunction, as the
case may be; provided that, notwithstanding any prior notice of intention
--------
to exercise the Option, Newco shall not be obligated to purchase any Shares
pursuant hereto after the date six months following the date of such
Notice.
(c) At any Closing, the Company shall deliver to Newco (or its
designee) all of the Shares to be purchased by delivery of a certificate or
certificates evidencing such Shares in the denominations designated by
Newco in the Notice.
1.3 Payments. (a) In the event Newco exercises the Option,
--------
Newco (or, at Newco's option, its designee) shall, at any Closing, deliver
to the Company an amount in cash equal to $12.50 (the "Exercise Price")
multiplied by the number of Shares purchased pursuant to this Section 1,
which will be paid by wire transfer of same day funds to an account
designated by the Company.
(b) In the event that a payment is actually made to KKR & Co.
pursuant to Section 8.02(b) of the Merger Agreement, the Exercise Price
shall be adjusted upward (retroactively if necessary and net of any taxes
or brokerage fees paid or payable
<PAGE>
5
in connection with the sale, tender or exchange of shares by Newco or its
designee) to reflect (i) with respect to any Shares actually sold,
tendered, or exchanged in any third party transaction that triggered a
payment pursuant to Section 8.02(b) of the Merger Agreement, the price per
share (subject to the calculation principles set forth in the next
succeeding sentence) actually paid to holders of Company Common Stock as a
result of any such third party transaction and (ii) with respect to any
Shares sold, tendered or exchanged to another party or parties by Newco (or
its designee) other than pursuant to such third party transaction, the
price per share (subject to the calculation principles set forth in clause
(i) of the next succeeding sentence) actually paid to Newco (or its
designee) by such other party or parties in consideration for such Shares
(the "Exercise Price Adjustment"). To the extent the "price per share"
referred to in the preceding sentence consists in whole or in part of non-
cash consideration, it shall be based on the trading market value thereof
or if there is no trading market for such consideration, the fair market
value as determined by an independent investment banker jointly selected by
Newco and the Company. The Exercise Price Adjustment shall be payable with
respect to shares actually sold, tendered or exchanged promptly following
receipt of the consideration therefor (and, if necessary, the valuation
thereof and the good faith estimation by Newco of any taxes which it
expects to be payable), and Newco agrees promptly, but in no event later
than two business days following such event, to notify the Company of the
receipt of such consideration.
<PAGE>
6
1.4 Listing of Shares. In the event Newco exercises the Option
-----------------
herein granted and receives newly issued Shares in connection therewith,
the Company shall use its best efforts to take, or cause to be taken, all
actions necessary to list the Shares on NASDAQ.
2. Representations and Warranties.
------------------------------
2.1 Representations and Warranties of Newco. Newco hereby
---------------------------------------
represents and warrants to the Company as follows:
(a) Organization, Standing and Corporate Power. Newco is a
------------------------------------------
corporation duly organized, validly existing and in good standing
under the laws of the State of Alabama and has the requisite corporate
power and authority to carry on its business as now being conducted.
Newco is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed (individually or in the
aggregate) would not have a material adverse effect on Newco.
(b) Authority; Noncontravention. Newco has all requisite
---------------------------
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by Newco and the consummation
by Newco of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of
<PAGE>
7
Newco. This Agreement has been duly executed and delivered by and
constitutes a valid and binding obligation of Newco, enforceable
against Newco in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any
breach or violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any
of the properties or assets of Newco under, (i) the certificate of
incorporation, or by-laws of Newco, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Newco or their
respective properties or assets or (iii) subject to the governmental
filings and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Newco or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts,
breaches, violations, defaults, rights, losses or Liens that
individually or in the aggregate would not (x) have a material adverse
effect on Newco, (y) materially impair the ability of Newco to perform
their respective obligations under this Agreement or (z) prevent
<PAGE>
8
the consummation of any of the transactions contemplated by this
Agreement. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any
Governmental Entity is required by or with respect to Newco in
connection with the execution and delivery of this Agreement by Newco
or the consummation by Newco, as the case may be, of any of the
transactions contemplated by this Agreement, except for (i) filings
under the HSR Act, if applicable, (ii) the filing with the SEC of such
reports under Sections 13 and 16 of the Exchange Act as may be
required in connection with this Agreement and the transactions
contemplated by this Agreement and (iii) such other consents,
approvals, orders, authorizations, registrations, declarations,
filings or notices as may be required under the "takeover" or "blue
sky" laws of various states.
(c) Distribution. Any Shares acquired by Newco (or any designee
------------
of Newco) upon exercise of the Option will not be taken with a view to
the public distribution thereof and will not be transferred or
otherwise disposed of except in a transaction registered or exempt
from registration under the Securities Act.
2.2 Representations and Warranties of the Company. The Company
---------------------------------------------
hereby represents and warrants to Newco as follows:
(a) Organization, Standing and Corporate Power. The Company is
------------------------------------------
a corporation duly organized, validly existing and in good standing
under the laws of the State of Alabama
<PAGE>
9
and has the requisite corporate power and authority to carry on its
business as now being conducted. The Company is duly qualified or
licensed to do business and is in good standing in each jurisdiction
in which the nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary, other than
in such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) would not have a material adverse
effect on the Company.
(b) Option Shares. Subject to Section 2.2(c), the Company has
-------------
taken all necessary corporate and other action to authorize, and to
permit it to deliver, and at all times from the date hereof until such
time as the obligation to deliver Shares hereunder terminates, will
have reserved for delivery (in the case of Shares of treasury stock)
or issuance (in the case of newly issued Shares), upon exercise of the
Option, 15,541,570 shares of Company Common Stock. All of such Shares
are (in the case of Shares of treasury stock), or shall be (in the
case of newly issued Shares), duly authorized, validly issued, fully
paid and nonassessable with no personal liability attached to the
ownership thereof and are approved for listing on NASDAQ (in the case
of Shares of treasury stock). Upon delivery of such Shares, such
Shares shall be free and clear of all claims, Liens, encumbrances,
security interests and charges of any nature whatsoever and shall not
be subject to any preemptive right of any stockholder of the Company.
<PAGE>
10
(c) Authority; Noncontravention. The Company has the requisite
---------------------------
corporate and other power and authority to enter into this Agreement
and to consummate the transactions contemplated by this Agreement.
The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action
on the part of the Company. This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms. The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of
hereof will not, conflict with, or result in any breach or violation
of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under,
or result in the creation of any Lien upon any of the properties or
assets of the Company or any of its subsidiaries under, (i) the
Articles of Incorporation, as amended, or By-laws, as amended, of the
Company or the comparable charter or organizational documents of any
of its subsidiaries, (ii) any loan or credit agreement, note, note
purchase agreement, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license
applicable to the
<PAGE>
11
Company or any of its subsidiaries or their respective properties or
assets or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company
or any of its subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such conflicts,
breaches, violations, defaults, rights, losses or Liens that
individually or in the aggregate would not (x) have a material adverse
effect on the Company, (y) impair the ability of the Company to
perform its obligations under this Agreement or (z) prevent the
consummation of any of the transactions contemplated by this
Agreement. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any
Governmental Entity, is required by or with respect to the Company or
any of its subsidiaries in connection with the execution and delivery
of this Agreement by the Company or the consummation by the Company of
the transactions contemplated hereby, except for (i) filings under the
HSR Act, if applicable, (ii) the filing with the SEC of such reports
under Sections 13 and 16 of the Exchange Act, as may be required in
connection with this Agreement.
3. Adjustment Upon Changes in Capitalization. In the event of
-----------------------------------------
any change in the number of issued and outstanding shares of Company Common
Stock by reason of any stock dividend, split-up, merger, recapitalization,
combination, exchange of
<PAGE>
12
shares, spin-off or other change in the corporate or capital structure of
the Company which could have the effect of diluting or otherwise
diminishing Newco's rights hereunder (including any issuance of Company
Common Stock or other equity security of the Company at a price below the
fair value thereof), the number and kind of Shares or other securities
subject to the Option and the Exercise Price shall be appropriately
adjusted so that Newco shall receive upon exercise (or, if such a change
occurs between exercise and Closing, upon Closing) of the Option the number
and kind of shares or other securities or property that Newco would have
received in respect of the Shares that Newco is entitled to purchase upon
exercise of the Option if the Option had been exercised (or the purchase
thereunder had been consummated, as the case may be) immediately prior to
such event. The rights of Newco under this Section shall be in addition
to, and shall in no way limit, its rights against the Company for breach of
the Merger Agreement.
4. Registration of Shares Under the Securities Act. (a) If
-----------------------------------------------
the Option is exercised and if Newco (or its designees) shall so request in
writing, the Company shall use its best efforts to effect, from time to
time, the registration under the Securities Act or any successor statute
then in effect, and any applicable state law (a "Demand Registration"), of
such number of Shares owned by Newco (or its designee) as Newco (or its
designee) shall request and to keep such Demand Registration effective for
a period of not less than 90 days, unless, in the written opinion of
counsel to the Company, which opinion shall be
<PAGE>
13
delivered to Newco and which shall be satisfactory in form and substance to
Newco and its counsel, such Demand Registration is not required in order to
lawfully sell and distribute such Shares in the manner contemplated by
Newco (or its designee). The Company may delay the filing of a Demand
Registration required hereunder for a single period of up to 90 days if it
believes in good faith that it would be disadvantageous to the Company for
such Demand Registration to be effected at the time requested by Newco (or
its designee).
(b) In lieu of effecting any Demand Registration for Newco (or
its designee), the Company may use its best efforts to effect a "shelf"
registration statement on appropriate forms pursuant to Rule 415 under the
Securities Act (or any similar rule that may be adopted) with respect to
such number of Shares owned by Newco (or its designee) as Newco (or its
designee) shall request and to keep such registration continuously
effective (a "Shelf Registration" and, together with any Demand
Registration, a "Registration"). If Newco (or its designee) desires to
sell or otherwise transfer any Shares pursuant to the Shelf Registration,
Newco (or its designee) shall notify the Company of its intention to do so
by written notice received by the Company at least two business days prior
to such sale or transfer. Newco (or its designee) may thereafter effect
such sale or transfer within 15 days of the delivery of such notice unless
at least one business day prior thereto the Company elects to delay such
sale or transfer (for a single period of up to 90 days) as a result of a
good faith determination that it would be disadvantageous to the
<PAGE>
14
Company to prepare a Prospectus or any amendment to the Registration
Statement with respect to the Shelf Registration to permit such sale or
transfer.
(c) The Company shall use its best efforts to cause Shares
registered pursuant to a Registration to be designated for listing on the
NASDAQ National Market System or any national securities exchange on which
the Company Common Stock is then listed, subject to official notice of
issuance, which notice shall be given by the Company upon issuance. The
out-of-pocket expenses incurred by the Company and Newco (or its designee)
in connection with any requested Registration pursuant to this Section 4
(including the registration fee payable to the SEC in connection with such
Registration) shall be borne by the Company. The Company shall have no
obligation hereunder after four Registrations pursuant to this Section 4
have been effected.
5. Public Announcements. The initial press release with
--------------------
respect to the transactions contemplated hereby shall be mutually
satisfactory to the parties and thereafter, except as may be required by
applicable securities laws, court process or by obligations pursuant to any
listing agreement with a securities exchange, no party shall issue any
press release or make any public statements relating to the transactions
contemplated hereby, including the exercise of the Option, without the
consent of the Company on the one hand and Newco on the other, which
consent will not be unreasonably withheld.
6. Best Efforts; Further Assurances. (a) From time to time,
--------------------------------
at the other party's request and without further
<PAGE>
15
consideration, each party hereto shall execute and deliver such additional
documents and take all such further action as may be necessary or desirable
to consummate the transactions contemplated by this Agreement, including,
without limitation, to vest in Newco (or its designee) good title to any
Shares purchased hereunder.
(b) The Company and Newco shall, as promptly as practicable,
file notification and report forms under the HSR Act with the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of
Justice (the "Antitrust Division") and make any other necessary filings
with the applicable Governmental Entities related to the transactions
contemplated by this Agreement and shall use their best efforts to respond
as promptly as practicable to all inquiries received from the FTC or the
Antitrust Division or such other Governmental Entities for additional
information or documentation. The Company shall, subject to the condition
that the transactions contemplated herein actually occur, make any and all
divestitures and undertakings required in order to comply with the
antitrust requirements or laws of any governmental entity, including the
HSR Act, in connection with the transactions contemplated by this
Agreement; provided that no such divestiture or undertaking shall be made
--------
unless acceptable to Newco. The costs and expenses of obtaining and
complying with the antitrust requirements of the FTC, the Antitrust
Division or any other Governmental Entity shall be paid by the Company.
<PAGE>
16
7. Survival of Certain Provisions. The respective
------------------------------
representations and warranties of the Company and Newco contained herein or
in any certificates or other documents delivered at or prior to any Closing
shall not be deemed waived or otherwise affected by any investigation made
by the other party hereto, shall survive the closing of the transactions
contemplated hereby for one year, and the agreements contained herein shall
survive the closing of the transactions contemplated hereby. The Option
shall survive any termination of the Merger Agreement.
8. Miscellaneous.
-------------
8.1 Entire Agreement; Assignment. This Agreement
----------------------------
(i) constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof and (ii) shall not be assigned by operation of
law or otherwise, provided that Newco may assign its rights and obligations
hereunder to Parent or any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Newco of its obligations
hereunder if such assignee does not perform such obligations. Subject to
the foregoing, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by the parties hereto and their respective
successors (including any successor in interest by merger, sale of all or
substantially all of the assets or otherwise) and assigns.
<PAGE>
17
8.2 Amendments. This Agreement may not be modified, amended,
----------
altered or supplemented, except upon the execution and delivery of a
written agreement executed by the parties hereto.
8.3 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof
of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Newco, to
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, New York 10019
Attention: Paul E. Raether
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: David J. Sorkin, Esq.
(b) if to the Company, to
Bruno's, Inc.
800 Lakeshore Parkway
Birmingham, Alabama 35211
Attention: Ronald G. Bruno
with copies to:
Sirote & Permutt
2222 Arlington Avenue South
Birmingham, Alabama 35205
Attention: Richard Cohn, Esq.
8.4 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New
<PAGE>
18
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
8.5 Enforcement. The parties agree that irreparable damage
-----------
would occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to
an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement.
8.6 Counterparts. This Agreement may be executed in two
------------
counterparts, each of which shall be deemed to be an original, but both of
which shall constitute one and the same Agreement.
8.7 Descriptive Headings. The descriptive headings used herein
--------------------
are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
8.8 Severability. Whenever possible, each provision or portion
------------
of any provision of this Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or portion of any provision in such
jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or
<PAGE>
19
unenforceable provision or portion of any provision had never been
contained herein. Without limiting the generality of the foregoing, in the
event that the number of Shares issuable upon exercise of the Option is
held to be invalid, illegal or unenforceable for any reason (including as a
result of the failure to obtain any required vote of stockholders to
authorize such issuance), the number of Shares so issuable shall be reduced
to that number which could validly and legally be issued.
8.9 Definitions. For purposes of this Agreement:
-----------
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first person;
(b) "beneficially own" or "beneficial ownership" with respect to
any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Exchange
Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Without duplicative
counting of the same securities by the same holder, securities
beneficially owned by a person shall include securities beneficially
owned by all other persons with whom such person would constitute a
"group" as described in Section 13(d)(3) of the Exchange Act.
(c) "material adverse effect" means, when used in connection
with the Company, any effect that either individually or in the
aggregate with all other such effects
<PAGE>
20
is materially adverse to the business, assets, properties, condition
(financial or otherwise), results of operations or prospects of the
Company and its subsidiaries taken as a whole;
(d) "person" means an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or
other entity; and
(e) a "subsidiary" of any person means another person, an amount
of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person.
<PAGE>
IN WITNESS WHEREOF, the Company and Newco have caused this
Agreement to be duly executed as of the day and year first above written.
BRUNO'S, INC.
By: /s/ Ronald G. Bruno
-------------------------------
Name: Ronald G. Bruno
Title: Chairman CEO
CRIMSON ACQUISITION CORP.
By: /s/ James H. Greene, Jr.
------------------------------
Name: James H. Greene, Jr.
Title: President
EXHIBIT 3
---------
Conformed Copy
--------------
===========================================================================
AGREEMENT AND PLAN OF MERGER
Dated as of April 20, 1995,
Between
CRIMSON ACQUISITION CORP.
And
BRUNO'S, INC.
===========================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
The Merger . . . . . . . . . . . 3
SECTION 1.01. The Merger . . . . . . . . . . . . . . . . . 3
SECTION 1.02. Closing . . . . . . . . . . . . . . . . . . 3
SECTION 1.03. Effective Time of the Merger . . . . . . . . 3
SECTION 1.04. Effects of the Merger . . . . . . . . . . . 4
SECTION 1.05. Articles of Incorporation; By-Laws;
Purposes . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.06. Directors . . . . . . . . . . . . . . . . . 4
SECTION 1.07. Officers . . . . . . . . . . . . . . . . . . 5
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations . . . . . . . 5
SECTION 2.01. Effect on Capital Stock . . . . . . . . . . 5
SECTION 2.02. Company Common Stock Elections . . . . . . . 8
SECTION 2.03. Proration . . . . . . . . . . . . . . . . . 11
SECTION 2.04. Stock Plans . . . . . . . . . . . . . . . . 13
SECTION 2.05. Exchange of Certificates . . . . . . . . . . 15
ARTICLE III
Representations and Warranties . . . . . . 20
SECTION 3.01. Representations and Warranties of the
Company . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.02. Representations and Warranties of Newco . . 57
SECTION 3.03. Agreement to Deliver Article III Disclosure
Schedules . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE IV
Covenants Relating to Conduct of Business Prior to Merger
61
SECTION 4.01. Conduct of Business of the Company . . . . . 61
ARTICLE V
-i-
<PAGE>
Page
----
Additional Agreements . . . . . . . . 67
SECTION 5.01. Preparation of Form S-4 and Proxy
Statement; Stockholder Meeting . . . . . . . . . . . . 67
SECTION 5.02. Access to Information; Confidentiality . . . 69
SECTION 5.03. Best Efforts . . . . . . . . . . . . . . . . 71
SECTION 5.04. Benefit Matters . . . . . . . . . . . . . . 75
SECTION 5.05. Indemnification . . . . . . . . . . . . . . 77
SECTION 5.06. Public Announcements . . . . . . . . . . . . 79
SECTION 5.07. Affiliates . . . . . . . . . . . . . . . . . 80
SECTION 5.08. No Solicitation. . . . . . . . . . . . . . . 80
SECTION 5.09. Resignation of Directors . . . . . . . . . . 82
SECTION 5.10. Certain Agreements . . . . . . . . . . . . . 83
SECTION 5.11. Stop Transfer . . . . . . . . . . . . . . . 83
SECTION 5.12. Golf Tournament . . . . . . . . . . . . 83
ARTICLE VI
Conditions Precedent . . . . . . . . 84
SECTION 6.01. Conditions to Each Party's Obligation To
Effect the Merger . . . . . . . . . . . . . . . . . . 84
SECTION 6.02. Conditions to Obligations of Newco . . . . . 85
SECTION 6.03. Conditions to Obligation of the Company . . 88
ARTICLE VII
Termination, Amendment and Waiver . . . . . 89
SECTION 7.01. Termination . . . . . . . . . . . . . . . . 89
SECTION 7.02. Effect of Termination . . . . . . . . . . . 92
SECTION 7.03. Amendment . . . . . . . . . . . . . . . . . 92
SECTION 7.04. Extension; Waiver . . . . . . . . . . . . . 92
SECTION 7.05. Procedure for Termination, Amendment,
Extension or Waiver . . . . . . . . . . . . . . . . . 93
ARTICLE VIII
General Provisions . . . . . . . . . 93
SECTION 8.01. Nonsurvival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . 93
-ii-
<PAGE>
Page
----
SECTION 8.02. Fees and Expenses . . . . . . . . . . . . . 93
SECTION 8.03. Notices . . . . . . . . . . . . . . . . . . 97
SECTION 8.04. Definitions . . . . . . . . . . . . . . . . 98
SECTION 8.05. Interpretation . . . . . . . . . . . . . . . 99
SECTION 8.06. Counterparts . . . . . . . . . . . . . . . . 99
SECTION 8.07. Entire Agreement; No Third-Party
Beneficiaries . . . . . . . . . . . . . . . . . . . . 100
SECTION 8.08. GOVERNING LAW . . . . . . . . . . . . . . . 100
SECTION 8.09. Assignment . . . . . . . . . . . . . . . . . 100
SECTION 8.10. Enforcement . . . . . . . . . . . . . . . . 100
SCHEDULES
Disclosure Schedule
EXHIBIT
Exhibit A Amendments to Articles of Incorporation of
the Company
Exhibit B Form of Affiliate Letter
-iii-
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of
April 20, 1995 between CRIMSON ACQUISITION
CORP., an Alabama corporation ("Newco"), and
-----
BRUNO'S, INC., an Alabama corporation (the
"Company").
-------
WHEREAS, the respective Boards of Directors of the Company and
Newco have determined that the merger of Newco with and into the Company
(the "Merger"), upon the terms and subject to the conditions set forth in
------
this Agreement, would be fair and in the best interests of their respective
stockholders, and such Boards of Directors have approved such Merger,
pursuant to which each share of common stock, par value $.01 per share, of
the Company ("Company Common Stock") issued and outstanding immediately
--------------------
prior to the Effective Time of the Merger (as defined in Section 1.03) will
be converted into either (A) the right to retain at the election of the
holder thereof and subject to the terms hereof, common stock, par value
$.01 per share, of the Company or (B) the right to receive cash, other than
(a) shares of Company Common Stock owned, directly or indirectly, by the
Company or any subsidiary (as defined in Section 8.04) of the Company or by
Parent, Newco or any subsidiary of Parent and (b) Dissenting Shares (as
defined in Section 2.01(e));
WHEREAS, the Merger and this Agreement require the vote of two-
thirds of the shares of the Company Common Stock for the approval thereof
(the "Company Stockholder Approval");
----------------------------
WHEREAS, Newco is a wholly owned subsidiary of BI Associates L.P.
("Parent");
------
WHEREAS, Newco is unwilling to enter into this Agreement unless,
contemporaneously with the execution and
<PAGE>
2
delivery of this Agreement, (i) the Company grants to Newco (or its
designee) an option (the "Option") to purchase up to 15,541,570 shares of
------
Company Common Stock (subject to adjustment) pursuant to the Stock Option
Agreement, dated as of the date hereof (the "Option Agreement"), between
----------------
Newco and the Company and (ii) certain beneficial and record stockholders
of the Company enter into agreements (collectively, the "Stockholders
------------
Agreement") providing for certain actions relating to the transactions
- ---------
contemplated by this Agreement; and in order to induce Newco to enter into
this Agreement, the Company has (a) agreed to grant Newco (or its designee)
the Option and to enter into, execute and deliver the Option Agreement and
(b) approved the entering into by Newco and such stockholders of the
Stockholders Agreement, and such stockholders have agreed to enter into,
execute and deliver the Stockholders Agreement;
WHEREAS, Newco and the Company desire to make certain
representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger; and
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the
parties agree as follows:
<PAGE>
3
ARTICLE I
The Merger
----------
SECTION 1.01. The Merger. Upon the terms and subject to the
----------
conditions set forth in this Agreement, and in accordance with the Alabama
Business Corporation Act (the "ABCA"), Newco shall be merged with and into
----
the Company at the Effective Time of the Merger. Upon the Effective Time
of the Merger, the separate existence of Newco shall cease, and the Company
shall continue as the surviving corporation and shall continue under the
name "Bruno's, Inc."
SECTION 1.02. Closing. Unless this Agreement shall have been
-------
terminated and the transactions herein contemplated shall have been
abandoned pursuant to Section 7.01 and subject to the satisfaction or
waiver of the conditions set forth in Article VI, the closing of the Merger
(the "Closing") will take place at 10:00 a.m. on the second business day
-------
after satisfaction of the conditions set forth in Section 6.01 (or as soon
as practicable thereafter following satisfaction or waiver of the
conditions set forth in Sections 6.02 and 6.03) (the "Closing Date"), at
------------
the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York,
New York 10017, unless another date, time or place is agreed to in writing
by the parties hereto.
SECTION 1.03. Effective Time of the Merger. As soon as
----------------------------
practicable following the satisfaction or waiver of the conditions set
forth in Article VI, the parties shall file articles of merger or other
appropriate documents (in any such case, the "Articles of Merger") executed
------------------
in accordance with the
<PAGE>
4
relevant provisions of the ABCA and shall make all other filings or
recordings required under the ABCA. The Merger shall become effective at
such time as the Articles of Merger are duly filed with the Secretary of
State of the State of Alabama, or at such other time as is permissible in
accordance with the ABCA and as Newco and the Company shall agree should be
specified in the Articles of Merger (the time the Merger becomes effective
being the "Effective Time of the Merger").
----------------------------
SECTION 1.04. Effects of the Merger. The Merger shall have the
---------------------
effects set forth in Section 10-2B-11.06 of the ABCA (or any successor
provision).
SECTION 1.05. Articles of Incorporation; By-Laws; Purposes.
--------------------------------------------
(a) The Articles of Incorporation of the Company, as in effect immediately
prior to the Effective Time of the Merger, shall be amended so as to read
in its entirety in the form set forth as Exhibit A hereto, and, as so
amended, until thereafter further amended as provided therein and under the
ABCA, it shall be the articles of incorporation of the Company following
the Merger.
(b) The By-laws of Newco as in effect at the Effective Time of
the Merger shall be the By-laws of the Company following the Merger until
thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06. Directors. The directors of Newco at the
---------
Effective Time of the Merger shall be the directors of the Company
following the Merger, until the earlier of their
<PAGE>
5
resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
SECTION 1.07. Officers. The officers of Newco at the Effective
--------
Time of the Merger shall be the officers of the Company following the
Merger, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
ARTICLE II
Effect of the Merger on the Capital Stock of the
------------------------------------------------
Constituent Corporations
------------------------
SECTION 2.01. Effect on Capital Stock. As of the Effective Time
-----------------------
of the Merger, by virtue of the Merger and without any action on the part
of the holder of any shares of Company Common Stock or any shares of
capital stock of Newco:
(a) Common Stock of Newco. Each share of common stock of Newco
---------------------
issued and outstanding immediately prior to the Effective Time of the
Merger shall be converted into a number of shares of the common stock,
par value $.01 per share, of the Company following the Merger equal to
the quotient of (i) 21,600,000 divided by (ii) the number of shares of
common stock of Newco outstanding immediately prior to the Effective
Time of the Merger.
(b) Cancellation of Treasury Stock and Parent-Owned Company
-------------------------------------------------------
Common Stock. Each share of Company Common Stock that is owned by the
------------
Company or by any subsidiary of the Company, and each share of Company
Common Stock that is owned by Parent, Newco or any subsidiary of
Parent shall automatically be cancelled and retired and shall cease to
<PAGE>
6
exist, and no cash, Company Common Stock or other consideration shall
be delivered or deliverable in exchange therefor.
(c) Conversion (or Retention) of Company Common Stock. Except
-------------------------------------------------
as otherwise provided herein and subject to Section 2.03, each issued
and outstanding share of Company Common Stock shall be converted into
the following (the "Merger Consideration"):
--------------------
(i) for each such share of Company Common Stock with
respect to which an election to retain Company Common Stock has
been effectively made and not revoked or lost, pursuant to
Sections 2.02(c), (d) and (e) ("Electing Shares"), the right to
---------------
retain one fully paid and nonassessable share of Company Common
Stock (a "Non-Cash Election Share"); and
-----------------------
(ii) for each such share of Company Common Stock (other than
Electing Shares), the right to receive in cash from the Company
following the Merger an amount equal to $12.50 (the "Cash
----
Election Price").
--------------
(d) Dissenting Shares. Notwithstanding anything in this
-----------------
Agreement to the contrary, shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time of the Merger held
by a holder (if any) who has the right to demand payment for and an
appraisal of such shares in accordance with Article 13 of the ABCA (or
any successor provision) ("Dissenting Shares") shall not be converted
-----------------
into a right to receive Merger Consideration or
<PAGE>
7
any cash in lieu of fractional shares of Common Stock unless such
holder fails to perfect or otherwise loses such holder's right to such
payment or appraisal, if any. If, after the Effective Time of the
Merger, such holder fails to perfect or loses any such right to
appraisal, each such share of such holder shall be treated as a share
(other than an Electing Share) that had been converted as of the
Effective Time of the Merger into the right to receive Merger
Consideration in accordance with this Section 2.01. The Company shall
give prompt notice to Newco of any demands received by the Company for
appraisal of shares of Company Common Stock, and Newco shall have the
right to participate in and direct all negotiations and proceedings
with respect to such demands. The Company shall not, except with the
prior written consent of Newco, make any payment with respect to, or
settle or offer to settle, any such demands.
(e) Cancellation and Retirement of Company Common Stock. As of
---------------------------------------------------
the Effective Time of the Merger, all shares of Company Common Stock
(other than shares referred to in Section 2.01(b) and 2.01(c)(i))
issued and outstanding immediately prior to the Effective Time of the
Merger, shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a
certificate representing any such shares of Company Common Stock
shall, to the extent such certificate represents such shares, cease to
have any rights with respect thereto, except the right to receive
cash, including
<PAGE>
8
cash in lieu of fractional shares of Company Common Stock to be issued
or paid in consideration therefor upon surrender of such certificate
in accordance with Section 2.05.
SECTION 2.02. Company Common Stock Elections. (a) Each person
------------------------------
who, on or prior to the Election Date referred to in (c) below, is a record
holder of shares of Company Common Stock will be entitled, with respect to
all or any portion of his shares, to make an unconditional election (a
"Non-Cash Election") on or prior to such Election Date to retain Non-Cash
-----------------
Election Shares, on the basis hereinafter set forth.
(b) Prior to the mailing of the Proxy Statement (as defined in
Section 3.01(d)), Newco shall appoint a bank or trust company to act as
exchange agent (the "Exchange Agent") for the payment of the Merger
--------------
Consideration.
(c) Newco shall prepare and mail a form of election, which form
shall be subject to the reasonable approval of the Company (the "Form of
-------
Election"), with the Proxy Statement to the record holders of Company
- --------
Common Stock as of the record date for the Stockholders Meeting (as defined
in Section 5.01(c)), which Form of Election shall be used by each record
holder of shares of Company Common Stock who wishes to elect to retain
Non-Cash Election Shares for any or all shares of Company Common Stock
held, subject to the provisions of Section 2.03 hereof, by such holder.
The Company will use its best efforts to make the Form of Election and the
Proxy Statement available to all persons who become holders of Company
Common Stock during the period between such record date and the Election
Date referred to below. Any
<PAGE>
9
such holder's election to retain Non-Cash Election Shares shall have been
properly made only if the Exchange Agent shall have received at its
designated office, by 5:00 p.m., New York City time on the business day
(the "Election Date") next preceding the date of the Stockholders Meeting,
-------------
a Form of Election properly completed and signed and accompanied by
certificates for the shares of Company Common Stock to which such Form of
Election relates, duly endorsed in blank or otherwise in form acceptable
for transfer on the books of the Company (or by an appropriate guarantee of
delivery of such certificates as set forth in such Form of Election from a
firm which is a member of a registered national securities exchange or of
the National Association of Securities Dealers, Inc. or a commercial bank
or trust company having an office or correspondent in the United States,
provided such certificates are in fact delivered to the Exchange Agent
within five NASDAQ trading days after the date of execution of such
guarantee of delivery).
(d) Any Form of Election may be revoked by the stockholder
submitting it to the Exchange Agent only by written notice received by the
Exchange Agent (i) prior to 5:00 p.m, New York City time on the Election
Date or (ii) after the date of the Proxy Statement, if (and to the extent
that) the Exchange Agent is legally required to permit revocations and the
Effective Time of the Merger shall not have occurred prior to such date.
In addition, all Forms of Election shall automatically be revoked if the
Exchange Agent is notified in writing by Newco and the Company that the
Merger has been abandoned. If a Form of
<PAGE>
10
Election is revoked, the certificate or certificates (or guarantees of
delivery, as appropriate) for the shares of Company Common Stock to which
such Form of Election relates shall be promptly returned to the stockholder
submitting the same to the Exchange Agent.
(e) The determination of the Exchange Agent shall be binding
whether or not elections to retain Non-Cash Election Shares have been
properly made or revoked pursuant to this Section 2.02 with respect to
shares of Company Common Stock and when elections and revocations were
received by it. If the Exchange Agent determines that any election to
retain Non-Cash Election Shares was not properly made with respect to
shares of Company Common Stock, such shares shall be treated by the
Exchange Agent as shares which were not Electing Shares at the Effective
Time of the Merger, and such shares shall be exchanged in the Merger for
cash pursuant to Section 2.01(c)(ii). The Exchange Agent shall also make
all computations as to the allocation and the proration contemplated by
Section 2.03, and any such computation shall be conclusive and binding on
the holders of shares of Company Common Stock. The Exchange Agent may,
with the mutual agreement of Newco and the Company, make such rules as are
consistent with this Section 2.02 for the implementation of the elections
provided for herein as shall be necessary or desirable fully to effect such
elections.
<PAGE>
11
SECTION 2.03. Proration.
---------
(a) Notwithstanding anything in this Agreement to the contrary,
the aggregate number of shares of Company Common Stock to be converted into
the right to retain Company Common Stock at the Effective Time of the
Merger (the "Non-Cash Election Number") shall be equal to (i) 2,413,000
------------------------
(excluding for this purpose any shares of Company Common Stock to be
cancelled pursuant to Section 2.01(b)) plus (ii) a number of shares equal
to the number of record holders of Company Common Stock immediately prior
to the Effective Time of the Merger.
(b) If the number of Electing Shares exceeds the Non-Cash
Election Number, then each Electing Share shall be converted into the right
to retain Non-Cash Election Shares or receive cash in accordance with the
terms of Section 2.01(c) in the following manner:
(i) A proration factor (the "Non-Cash Proration Factor") shall
-------------------------
be determined by dividing the Non-Cash Election Number by the total
number of Electing Shares.
(ii) The number of Electing Shares covered by each Non-Cash
Election to be converted into the right to retain Non-Cash Election
Shares shall be determined by multiplying the Non-Cash Proration
Factor by the total number of Electing Shares covered by such Non-Cash
Election.
(iii) All Electing Shares, other than those shares converted into
the right to receive Non-Cash Election Shares in accordance with
Section 2.03(b)(ii), shall be converted into cash (on a consistent
basis among shareholders who made
<PAGE>
12
the election referred to in Section 2.01(c)(i), pro rata to the number
of shares as to which they made such election) as if such shares were
not Electing Shares in accordance with the terms of Section
2.01(c)(ii).
(c) If the number of Electing Shares is less than the Non-Cash
Election Number, then:
(i) all Electing Shares shall be converted into the right to
retain Company Common Stock in accordance with the terms of Section
2.01(c)(i);
(ii) additional shares of Company Common Stock other than
Electing Shares shall be converted into the right to retain Non-Cash
Election Shares in accordance with the terms of 2.01(c) in the
following manner:
(1) a proration factor (the "Cash Proration Factor") shall
---------------------
be determined by dividing (x) the difference between the Non-Cash
Election Number and the number of Electing Shares, by (y) the
total number of shares of Company Common Stock other than
Electing Shares; and
(2) the number of shares of Company Common Stock in
addition to Electing Shares to be converted into the right to
retain Non-Cash Election Shares shall be determined by
multiplying the Cash Proration Factor by the total number of
shares other than Electing Shares; and
(iii) subject to Section 2.01(d), shares of Company Common Stock
subject to clause (ii) of this paragraph (c)
<PAGE>
13
shall be converted into the right to retain Non-Cash Election Shares
in accordance with Section 2.01(c)(i) (on a consistent basis among
shareholders who held shares of Company Common Stock as to which they
did not make the election referred to in Section 2.01(c)(i), pro rata
to the number of shares as to which they did not make such election).
SECTION 2.04. Stock Plans. (a) As soon as practicable
-----------
following the date of this Agreement, the Board of Directors of the Company
(or, if appropriate, any committee administering the Stock Plans (as
defined below)) shall adopt such resolutions or take such other actions as
may be required to effect the following:
(i) cause written notification of the Merger to be given to each
holder of a Company Stock Option (as defined below) by the Board of
Directors as provided in the Stock Plans (as defined below) to the
effect that each such holder of a Company Stock Option (as defined
below) may exercise such Company Stock Option no later than thirty
days from the date of such notification (the "Exercise Period"), it
---------------
being understood that (x) with respect to any person, unless exercised
within the Exercise Period (or cancelled in exchange for a cash
payment pursuant to clause (y) of paragraph (ii) below) each Company
Stock Option shall expire at the end of the Exercise Period and (y)
with respect to any person subject to Section 16(a) of the Securities
Exchange Act of 1934 ("Exchange Act"), no such person shall
------------
<PAGE>
14
be entitled to a cash payment in the manner described in clause (y) of
paragraph (ii) below; and
(ii) adjust the terms of all outstanding employee or director
stock options to purchase shares of Company Common Stock ("Company
-------
Stock Options") granted under any stock option or stock purchase plan,
-------------
program or arrangement of the Company, including without limitation,
the Employee Incentive Stock Option Plan, the Second Amended and
Restated Employee Stock Option Plan and the Non-Employee Director
Stock Option Plan (collectively, the "Stock Plans"), to provide that,
-----------
at the Effective Time of the Merger (x) each Company Stock Option
outstanding immediately prior to the Effective Time of the Merger
shall vest as a consequence of the Merger and (y) with respect to any
person not subject to Section 16(a) of the Securities Exchange Act of
1934 ("Exchange Act"), each Company Stock Option having an exercise
------------
price of less than $12.50, shall be cancelled in exchange for a
payment from the Company after the Merger (subject to any applicable
withholding taxes) equal to the product of (1) the total number of
shares of Company Common Stock subject to such Company Stock Option
and (2) the excess of $12.50 over the exercise price per share of
Company Common Stock subject to such Company Stock Option, payable in
cash immediately following the Effective Time of the Merger;
(iii) except as provided herein or as otherwise agreed to by the
parties, the Stock Plans and any other plan,
<PAGE>
15
program or arrangement providing for the issuance or grant of any
other interest in respect of the capital stock of the Company or any
subsidiary shall terminate as of the Effective Time of the Merger, and
the Company shall ensure that following the Effective Time of the
Merger no holder of a Company Stock Option nor any participant in any
Stock Plan shall have any right thereunder to acquire equity
securities of the Company following the Merger.
(b) The Company hereby represents and warrants that upon taking
of the actions specified above, immediately following the Effective Time of
the Merger no holder of a Company Stock Option nor any participant in any
Stock Plan shall have the right thereunder to acquire equity securities of
the Company after the Merger.
SECTION 2.05. Exchange of Certificates. (a) Exchange Agent.
------------------------ --------------
As soon as reasonably practicable as of or after the Effective Time of the
Merger, the Company shall deposit with the Exchange Agent, for the benefit
of the holders of shares of Company Common Stock, for exchange in
accordance with this Article II, the cash portion of Merger Consideration.
(b) Exchange Procedures. As soon as practicable after the
-------------------
Effective Time of the Merger, each holder of an outstanding certificate or
certificates which prior thereto represented shares of Company Common Stock
shall, upon surrender to the Exchange Agent of such certificate or
certificates and acceptance thereof by the Exchange Agent, be entitled to a
certificate or certificates representing the number of full shares of
Company
<PAGE>
16
Common Stock, if any, to be retained by the holder thereof pursuant to this
Agreement and the amount of cash, if any, into which the number of shares
of Company Common Stock previously represented by such certificate or
certificates surrendered shall have been converted pursuant to this
Agreement. The Exchange Agent shall accept such certificates upon
compliance with such reasonable terms and conditions as the Exchange Agent
may impose to effect an orderly exchange thereof in accordance with normal
exchange practices. After the Effective Time of the Merger, there shall be
no further transfer on the records of the Company or its transfer agent of
certificates representing shares of Company Common Stock which have been
converted, in whole or in part, pursuant to this Agreement into the right
to receive cash, and if such certificates are presented to the Company for
transfer, they shall be cancelled against delivery of cash and, if
appropriate, certificates for retained Company Common Stock. If any
certificate for such retained Company Common Stock is to be issued in, or
if cash is to be remitted to, a name other than that in which the
certificate for Company Common Stock surrendered for exchange is
registered, it shall be a condition of such exchange that the certificate
so surrendered shall be properly endorsed, with signature guaranteed, or
otherwise in proper form for transfer and that the person requesting such
exchange shall pay to the Company or its transfer agent any transfer or
other taxes required by reason of the issuance of certificates for such
retained Company Common Stock in a name other than that of the registered
holder of the certificate
<PAGE>
17
surrendered, or establish to the satisfaction of the Company or its
transfer agent that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.05(b), each certificate for
shares of Company Common Stock shall be deemed at any time after the
Effective Time of the Merger to represent only the right to receive upon
such surrender the Merger Consideration as contemplated by Section 2.01.
No interest will be paid or will accrue on any cash payable as Merger
Consideration or in lieu of any fractional shares of retained Company
Common Stock.
(c) Distributions with Respect to Unexchanged Shares. No
------------------------------------------------
dividends or other distributions with respect to retained Company Common
Stock with a record date after the Effective Time of the Merger shall be
paid to the holder of any unsurrendered certificate for shares of Company
Common Stock with respect to the shares of retained Company Common Stock
represented thereby and no cash payment in lieu of fractional shares shall
be paid to any such holder pursuant to Section 2.05(e) until the surrender
of such certificate in accordance with this Article II. Subject to the
effect of applicable laws, following surrender of any such certificate,
there shall be paid to the holder of the certificate representing whole
shares of retained Company Common Stock issued in connection therewith,
without interest, (i) at the time of such surrender or as promptly after
the sale of the Excess Shares (as defined in Section 2.05(e)) as
practicable, the amount of any cash payable in lieu of a fractional share
of retained Company Common Stock to which such holder is entitled pursuant
to Section
<PAGE>
18
2.05(e) and the proportionate amount of dividends or other distributions
with a record date after the Effective Time of the Merger theretofore paid
with respect to such whole shares of retained Company Common Stock, and
(ii) at the appropriate payment date, the proportionate amount of dividends
or other distributions with a record date after the Effective Time of the
Merger but prior to such surrender and a payment date subsequent to such
surrender payable with respect to such whole shares of retained Company
Common Stock.
(d) No Further Ownership Rights in Company Common Stock
---------------------------------------------------
Exchanged For Cash. All cash paid upon the surrender for exchange of
- ------------------
certificates representing shares of Company Common Stock in accordance with
the terms of this Article II (including any cash paid pursuant to Section
2.05(e)) shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to the shares of Company Common Stock
exchanged for cash theretofore represented by such certificates.
(e) No Fractional Shares. (i) No certificates or scrip
--------------------
representing fractional shares of retained Company Common Stock shall be
issued in connection with the Merger, and such fractional share interests
will not entitle the owner thereof to vote or to any rights of a
stockholder of the Company after the Merger; and
(ii) Notwithstanding any other provision of this Agreement, each
holder of shares of Company Common Stock exchanged pursuant to the Merger
who would otherwise have been entitled to receive a fraction of a share of
retained Company
<PAGE>
19
Common Stock (after taking into account all shares of Company Common Stock
delivered by such holder) shall receive, in lieu thereof, a cash payment
(without interest) representing such holder's proportionate interest in the
net proceeds from the sale by the Exchange Agent (following the deduction
of applicable transaction costs), on behalf of all such holders, of the
shares (the "Excess Shares") of retained Company Common Stock representing
-------------
such fractions. Such sale shall be made as soon as practicable after the
Effective Time of the Merger.
(f) Termination of Exchange Fund. Any portion of the Merger
----------------------------
Consideration deposited with the Exchange Agent pursuant to this Section
2.05 (the "Exchange Fund") which remains undistributed to the holders of
-------------
the certificates representing shares of Company Common Stock for six months
after the Effective Time of the Merger shall be delivered to the Company,
upon demand, and any holders of shares of Company Common Stock prior to the
Merger who have not theretofore complied with this Article II shall
thereafter look only to the Company and only as general creditors thereof
for payment of their claim for cash, if any, retained Company Common Stock,
if any, any cash in lieu of fractional shares of retained Company Common
Stock and any dividends or distributions with respect to retained Company
Common Stock to which such holders may be entitled.
(g) No Liability. None of Newco or the Company or the Exchange
------------
Agent shall be liable to any person in respect of any shares of retained
Company Common Stock (or dividends or distributions with respect thereto)
or cash from the Exchange
<PAGE>
20
Fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any certificates representing shares
of Company Common Stock shall not have been surrendered prior to one year
after the Effective Time of the Merger (or immediately prior to such
earlier date on which any cash, if any, any cash in lieu of fractional
shares of retained Company Common Stock or any dividends or distributions
with respect to retained Company Common Stock in respect of such
certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.01(d))), any such cash,
dividends or distributions in respect of such certificate shall, to the
extent permitted by applicable law, become the property of the Company,
free and clear of all claims or interest of any person previously entitled
thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall
---------------------------
invest any cash included in the Exchange Fund, as directed by the Company,
on a daily basis. Any interest and other income resulting from such
investments shall be paid to the Company.
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Representations and Warranties of the Company.
---------------------------------------------
The Company represents and warrants to Newco as follows:
(a) Organization, Standing and Corporate Power. Each of the
------------------------------------------
Company and each of its Subsidiaries (as defined in Section 3.01(b))
is duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it
<PAGE>
21
is incorporated and has the requisite corporate power and authority to
carry on its business as now being conducted. Each of the Company and
each of its Subsidiaries is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed (individually or in
the aggregate) would not have a Material Adverse Effect (as defined in
Section 8.04) with respect to the Company. Attached as Section
3.01(a) of the disclosure schedule ("Disclosure Schedule") delivered
-------------------
to Newco by the Company at the time of execution of this Agreement are
complete and correct copies of the Articles of Incorporation, as
amended, and By-laws, as amended, of the Company. The Company has
delivered to Newco complete and correct copies of the articles of
incorporation (or other organizational documents) and by-laws of each
of its Subsidiaries, in each case as amended to the date of this
Agreement.
(b) Subsidiaries. The only direct or indirect subsidiaries of
------------
the Company (other than subsidiaries of the Company that would not
constitute in the aggregate a "Significant Subsidiary" within the
meaning of Rule 1-02 of Regulation S-X of the Securities and Exchange
Commission (the "SEC")) are those listed in Section 3.01(b) of the
---
Disclosure Schedule (the "Subsidiaries"). All the
------------
<PAGE>
22
outstanding shares of capital stock of each such Subsidiary have been
validly issued and are fully paid and nonassessable and are owned (of
record and beneficially) by the Company, by another Subsidiary (wholly
owned) of the Company or by the Company and another such Subsidiary
(wholly owned), free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"). Except for the ownership interests set forth
-----
in Section 3.01(b) of the Disclosure Schedule, the Company does not
own, directly or indirectly, any capital stock or other ownership
interest in any corporation, partnership, business association, joint
venture or other entity.
(c) Capital Structure. The authorized capital stock of the
-----------------
Company consists of (i) 200,000,000 shares of Company Common Stock,
par value $.01 per share, and (ii) no shares of preferred stock.
Subject to any Permitted Changes (as defined in Section 4.01(a)(ii))
there are: (i) 78,098,341 shares of Company Common Stock issued and
outstanding (including shares held in the treasury of the Company);
(ii) 595,000 shares of Company Common Stock held in the treasury of
the Company; (iii) 3,689,817 shares of Company Common Stock reserved
for issuance upon exercise of authorized but unissued Company Stock
Options pursuant to the Stock Plans; (iv) 1,242,917 shares of Company
Common Stock issuable upon exercise of outstanding Company Stock
Options (with an average exercise price of $8.36); and (v) 15,541,570
shares
<PAGE>
23
of Company Common Stock reserved for issuance upon exercise of the
Option. Except as set forth above, no shares of capital stock or
other equity securities of the Company are issued, reserved for
issuance or outstanding. All outstanding shares of capital stock of
the Company are, and all shares which may be issued pursuant to the
Stock Plans will be, when issued, duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of the Company having the right to
vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which stockholders of the Company may
vote. Except as set forth above and except for the Option, there are
no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to
which the Company or any of its subsidiaries is a party or by which
any of them is bound obligating the Company or any of its subsidiaries
to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity or voting
securities of the Company or of any of its subsidiaries or obligating
the Company or any of its subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. The only
outstanding indebtedness for borrowed money of the Company and its
subsidiaries is (i) $100 million in principal amount of
<PAGE>
24
6.62% Series A Senior Notes Due September 15, 2003 (the "Series A
--------
Senior Notes") issued pursuant to the Note Purchase Agreement, dated
------------
as of September 1, 1993 (the "Note Purchase Agreement"), (ii) $100
-----------------------
million in aggregate principal amount of 7.09% of Series B Senior
Notes Due September 15, 2008 (the "Series B Senior Notes," and
---------------------
together with the Series A Senior Notes, the "Senior Notes") issued
------------
pursuant to the Note Purchase Agreement, (iii) $19.7 million of
capitalized leases as of December 31, 1994 disclosed in Section
3.01(c) of the Disclosure Schedule and (iv) other indebtedness not
exceeding $2 million. Other than the Senior Notes and any loans and
other extensions of credit under the Credit Agreement dated as of
August 28, 1992 among the Company, Wachovia Bank of Georgia, N.A. and
the banks parties thereto (the "Credit Agreement"), each of which is
----------------
prepayable in full in accordance with its terms, no indebtedness for
borrowed money of the Company or its subsidiaries contains any
restriction upon the incurrence of indebtedness for borrowed money by
the Company or any of its subsidiaries or restricts the ability of the
Company or any of its subsidiaries to grant any Liens on its
properties or assets. Other than the Company Stock Options, the
Option and the Stockholders Agreement and other than as disclosed in
Section 3.01(c) of the Disclosure Schedule, (i) there are no
outstanding contractual obligations, commitments, understandings or
arrangements of the Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire or
<PAGE>
25
make any payment in respect of any shares of capital stock of the
Company or any of its subsidiaries and (ii) to the knowledge of the
Company, there are no irrevocable proxies with respect to shares of
capital stock of the Company or any subsidiary of the Company except
for proxies granted in favor of Ronald G. Bruno by Ann Bruno, Alan
Bruno, David Bruno and Suzanne Bowness. Sections 1 and 2 of the
Stockholders Agreement Disclosure Schedule (as defined in the
Stockholders Agreement), which set forth the record and, to the
knowledge of the Company, beneficial ownership of, and voting power in
respect of, the capital stock of the Company with respect to the
signatories to the Stockholders Agreement, are accurate in all
material respects. Except as set forth above, there are no agreements
or arrangements pursuant to which the Company is or could be required
to register shares of Company Common Stock or other securities under
the Securities Act of 1933, as amended (the "Securities Act") or other
--------------
agreements or arrangements with or among any securityholders of the
Company with respect to securities of the Company.
(d) Authority; Noncontravention. The Company has the requisite
---------------------------
corporate and other power and authority to enter into this Agreement
and the Option Agreement and, subject to the Company Stockholder
Approval with respect to the consummation of the Merger, to consummate
the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Option Agreement by the Company
<PAGE>
26
and the consummation by the Company of the transactions contemplated
hereby and thereby have been duly authorized by all necessary
corporate action on the part of the Company, subject, in the case of
the Merger, to the Company Stockholder Approval. Each of this
Agreement and the Option Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms. Except for the Senior Notes, the Credit
Agreement and except as disclosed in Section 3.01(d) of the Disclosure
Schedule, the execution and delivery of each of this Agreement and the
Option Agreement do not, and the consummation of the transactions
contemplated by this Agreement and the Option Agreement and compliance
with the provisions hereof and thereof will not, conflict with, or
result in any breach or violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with
respect to any obligation or to loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or
assets of the Company or any of its subsidiaries under, (i) the
Articles of Incorporation, as amended, or By-laws, as amended, of the
Company or the comparable charter or organizational documents of any
of its subsidiaries, (ii) any loan or credit agreement, note, note
purchase agreement, bond, mortgage, indenture, lease or other
agreement, instrument,
<PAGE>
27
permit, concession, franchise or license applicable to the Company or
any of its subsidiaries or their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance,
rule, regulation or arbitration award applicable to the Company or any of
its subsidiaries or their respective properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, breaches,
violations, defaults, rights, losses or Liens that individually or in the
aggregate could not have a Material Adverse Effect with respect to the
Company or could not prevent, hinder or materially delay the ability
of the Company to consummate the transactions contemplated by this
Agreement or the Option Agreement. No consent, approval, order or
authorization of, or registration, declaration or filing with, or
notice to, any Federal, state or local government or any court,
administrative agency or commission or other governmental authority or
agency, domestic or foreign (a "Governmental Entity"), is required by
-------------------
or with respect to the Company or any of its subsidiaries in
connection with the execution and delivery of this Agreement or the
Option Agreement by the Company or the consummation by the Company of
the transactions contemplated hereby or thereby, except, with respect
to this Agreement, for (i) the filing of a premerger notification and
report form by the Company under the Hart-Scott-Rodino Antitrust
Improvements
<PAGE>
28
Act of 1976, as amended (the "HSR Act"), (ii) the filing with the SEC
-------
of (x) a proxy statement relating to the Company Stockholder Approval
(such proxy statement as amended or supplemented from time to time,
the "Proxy Statement"), (y) the registration statement on Form S-4 to
---------------
be filed with the SEC by the Company in connection with the issuance
of the Common Stock of the Company following the Merger (the "Form S-
-------
4") and (z) such reports under the Exchange Act as may be required in
-
connection with this Agreement and the transactions contemplated by
this Agreement, (iii) the filing of the Articles of Merger with the
Secretary of State of the State of Alabama and appropriate documents
with the relevant authorities of other states in which the Company is
qualified to do business and (iv) such other consents, approvals,
orders, authorizations, registrations, declarations, filings or
notices as are set forth in Section 3.01(d) of the Disclosure
Schedule.
(e) SEC Documents; Undisclosed Liabilities. The Company has
--------------------------------------
filed all required reports, schedules, forms, statements and other
documents with the SEC since June 30, 1991 (collectively, and in each
case including all exhibits and schedules thereto and documents
incorporated by reference therein, the "SEC Documents"). As of their
-------------
respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act, or the Exchange Act, as
the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to
<PAGE>
29
such SEC Documents, and none of the SEC Documents (including any and
all financial statements included therein) as of such dates contained
any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Except to the extent revised or superseded
by a subsequent filing with the SEC (a copy of which has been provided
to Newco prior to the date of this Agreement), none of the SEC
Documents filed by the Company since June 30, 1994 and prior to the
date of this Agreement (the "Recent SEC Documents") contains any
--------------------
untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The consolidated financial statements of
the Company included in all SEC Documents filed since June 30, 1994
(the "SEC Financial Statements") comply as to form in all material
------------------------
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles
(except, in the case of unaudited consolidated quarterly statements,
as permitted by Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial
<PAGE>
30
position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of
unaudited quarterly statements, to normal year-end audit adjustments).
Except as set forth in the Recent SEC Documents and except as
disclosed in Section 3.01(e) of the Disclosure Schedule, at the date
of the most recent audited financial statements of the Company
included in the Recent SEC Documents, neither the Company nor any of
its subsidiaries had, and since such date neither the Company nor any
of such subsidiaries has incurred, any liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise) which,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect with respect to the Company.
(f) Information Supplied. None of the information supplied or
--------------------
to be supplied by the Company for inclusion or incorporation by
reference in (i) the Form S-4 will, at the time the Form S-4 is filed
with the SEC, and at any time it is amended or supplemented or at the
time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Proxy Statement will, at the date
it is first mailed to the Company's stockholders or at the time of the
Stockholders Meeting, contain any untrue statement of a material fact
or
<PAGE>
31
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The Form S-4
will, as of its effective date, and the prospectus contained therein
will, as of its date, comply as to form in all material respects with
the requirements of the Securities Act and the rules and regulations
promulgated thereunder. The Proxy Statement will comply as to form in
all material respects with the requirements of the Exchange Act and
the rules and regulations promulgated thereunder, except that no
representation is made by the Company with respect to statements made
or incorporated by reference therein based on information supplied in
writing by Newco specifically for inclusion in the Proxy Statement.
For purposes of this Agreement, the parties agree that statements made
and information in the Form S-4 and the Proxy Statement relating to
the Federal income tax consequences of the transactions herein
contemplated to holders of Company Common Stock shall be deemed to be
supplied by the Company and not by Newco.
(g) Absence of Certain Changes or Events. Except as disclosed
------------------------------------
in the Recent SEC Documents, since the date of the most recent audited
financial statements included in such Recent SEC Documents, the
Company has conducted its business only in the ordinary course
consistent with past practice, and there is not and has not been: (i)
any Material Adverse Change with respect to the Company; (ii) any
condition,
<PAGE>
32
event or occurrence which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or give rise
to a Material Adverse Change with respect to the Company; (iii) any
event which, if it had taken place following the execution of this
Agreement, would not have been permitted by Section 4.01 without the
prior consent of Newco; or (iv) any condition, event or occurrence
which could reasonably be expected to prevent, hinder or materially
delay the ability of the Company to consummate the transactions
contemplated by this Agreement or the Option Agreement.
(h) Litigation; Labor Matters; Compliance with Laws.
-----------------------------------------------
(x) Except as disclosed in the Recent SEC Documents, there
is (1) no suit, action or proceeding or investigation pending,
(2) to the knowledge of the Company, no suit, action or
proceeding or investigation threatened against or affecting the
Company or any of its subsidiaries and (3) to the knowledge of
the Company, no basis for any such suit, action, proceeding or
investigation that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect with
respect to the Company or prevent, hinder or materially delay the
ability of the Company to consummate the transactions
contemplated by this Agreement or the Option Agreement, nor is
there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against
<PAGE>
33
the Company or any of its subsidiaries having, or which in the
future could have, any such effect.
(y) Except as disclosed in Section 3.01(h)(ii) of the
Disclosure Schedule, (1) neither the Company nor any of its
subsidiaries is a party to, or bound by, any collective
bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization; (2) to
the best knowledge of the Company, neither the Company nor any of
its subsidiaries is the subject of any proceeding asserting that
it or any subsidiary has committed an unfair labor practice or
seeking to compel it to bargain with any labor organization as to
wages or conditions of employment; (3) there is no strike, work
stoppage or other labor dispute involving it or any of its
subsidiaries pending or, to its knowledge, threatened; (4) no
action, suit, complaint, charge, arbitration, inquiry, proceeding
or investigation by or before any court, governmental agency,
administrative agency or commission brought by or on behalf of
any employee, prospective employee, former employee, retiree,
labor organization or other representative of the Company's
employees is pending or, to the best knowledge of the Company,
threatened against the Company or any of its subsidiaries which
could have a Material Adverse Effect with respect to the Company;
(5) no grievance is pending or, to the best knowledge of the
Company, threatened against the
<PAGE>
34
Company or any of its subsidiaries which could have a Material
Adverse Effect with respect to the Company; (6) neither the
Company nor any of its subsidiaries is a party to, or otherwise
bound by, any consent decree with, or citation by, any government
agency relating to employees or employment practices; (7) to the
best knowledge of the Company, the Company and each subsidiary is
in compliance with all applicable laws, agreements, contracts,
and policies relating to employment, employment practices, wages,
hours, and terms and conditions of employment except for failures
so to comply, if any, that individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect with
respect to the Company; (8) the Company has paid in full to all
employees of the Company and its subsidiaries all wages,
salaries, commissions, bonuses, benefits and other compensation
due to such employees or otherwise arising under any policy,
practice, agreement, plan, program, statute or other law; and (9)
the Company is not liable for any severance pay or other payments
to any employee or former employee arising from the termination
of employment under any benefit or severance policy, practice,
agreement, plan, or program of the Company, nor to the best of
its knowledge will the Company have any liability which exists
or arises, or may be deemed to exist or arise, under any
applicable law or
<PAGE>
35
otherwise, as a result of or in connection with the transactions
contemplated hereunder or as a result of the termination by the
Company of any persons employed by the Company or any of its
subsidiaries on or prior to the Effective Time of the Merger.
(z) The conduct of the business of each of the Company and
each of its subsidiaries complies with all statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees or
arbitration awards applicable thereto, except for violations or
failures so to comply, if any, that, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect with respect to the Company.
(i) Employee Benefit Plans. (1) Section 3.01(i) of the
----------------------
Disclosure Schedule contains a true and complete list of each
"employee benefit plan" (within the meaning of section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
-----
(including, without limitation, multiemployer plans within the meaning
of ERISA section 3(37)), stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, collective bargaining,
bonus, incentive, deferred compensation and all other employee benefit
plans, agreements, programs, policies or other arrangements relating
to employment, benefits or entitlements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect or
required in the future as a result of the transaction contemplated by
this
<PAGE>
36
Agreement or otherwise), whether formal or informal, oral or written,
legally binding or not under which any employee or former employee of
the Company has any present or future right to benefits or under which
the Company has any present or future liability. All such plans,
agreements, programs, policies and arrangements shall be collectively
referred to as the "Company Plans".
-------------
(2) With respect to each Company Plan, the Company will deliver
to Newco on the terms set forth in Section 3.03 hereof a current,
accurate and complete copy (or, to the extent no such copy exists, an
accurate description) thereof and, to the extent applicable, (i) any
related trust agreement, annuity contract or other funding instrument;
(ii) the most recent determination letter; (iii) any summary plan
description and other written communications (or a description of any
oral communications) by the Company to its employees concerning the
extent of the benefits provided under a Company Plan; and (iv) for the
three most recent years (I) the Form 5500 and attached schedules;
(II) audited financial statements; (III) actuarial valuation reports;
and (IV) attorney's response to an auditor's request for information.
(3) (i) Each Company Plan has been established and administered
in accordance with its terms, and in compliance with the applicable
provisions of ERISA, the Code and other applicable laws, rules and
regulations, in each case in all material respects; (ii) each Company
Plan which is intended
<PAGE>
37
to be qualified within the meaning of Code section 401(a) is so
qualified and has received a favorable determination letter as to its
qualification and nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification; (iii) with
respect to any Company Plan, no actions, suits or claims (other than
routine claims for benefits in the ordinary course) are pending or, to
the best knowledge of the Company, threatened, no facts or
circumstances exist which could give rise to any such actions, suits
or claims and the Company will promptly notify Buyer in writing of any
pending claims or, to the knowledge of the Company, any threatened
claims arising between the date hereof and the Effective Time of the
Merger; (iv) neither the Company nor any other party has engaged in a
prohibited transaction, as such term is defined under Code section
4975 or ERISA section 406, which would subject the Company or the
Buyer to any taxes, penalties or other liabilities under Code section
4975 or ERISA sections 409 or 502(i) (v) no event has occurred and no
condition exists that would subject the Company, either directly or by
reason of its affiliation with any member of its Controlled Group
(defined as any organization which is a member of a controlled group
of organizations within the meaning of Code sections 414(b), (c), (m)
or (o)), to any tax, fine or penalty imposed by ERISA, the Code or
other applicable laws, rules and regulations including, but not
limited to the taxes imposed by Code sections 4971, 4972, 4977, 4979,
<PAGE>
38
4980B, 4976(a) or the fine imposed by ERISA section 502(c); (vi) all
insurance premiums required to be paid with respect to Company Plans
as of the Effective Time of the Merger have been or will be paid prior
thereto and adequate reserves have been provided for on the Company's
balance sheet for any premiums (or portions thereof) attributable to
service on or prior to the Effective Time of the Merger; (vii) for
each Company Plan with respect to which a Form 5500 has been filed, no
material change has occurred with respect to the matters covered by
the most recent Form since the date thereof; (viii) except as
disclosed in Section 3.01(i) of the Disclosure Schedule, all
contributions required to be made prior to the Effective Time of the
Merger under the terms of any Company Plan, the Code, ERISA or other
applicable laws, rules and regulations have been or will be timely
made and adequate reserves have been provided for on the Company's
balance sheet for all benefits attributable to service on or prior to
the Effective Time of the Merger; (ix) no Company Plan provides for an
increase in benefits on or after the Effective Time of the Merger; and
(x) each Company Plan may be amended or terminated without obligation
or liability (other than those obligations and liabilities for which
specific assets have been set aside in a trust or other funding
vehicle or reserved for on the Company's balance sheet or obligations
under plans required by contracts with labor unions).
<PAGE>
39
(4) Except as disclosed in Section 3.01(i)(4) of the Disclosure
Schedule and except to the extent each of the following, individually or in
the aggregate, would not result in a material liability to the Company,
(i) no Company Plan has incurred any "accumulated funding deficiency" as
such term is defined in ERISA section 302 and Code section 412 (whether or
not waived); (ii) no event or condition exists which could be deemed a
reportable event within the meaning of ERISA section 4043 which could
result in a liability to the Company or any member of its Controlled Group
and no condition exists which could subject the Company or any member of
its Controlled Group to a fine under ERISA section 4071; (iii) as of the
Effective Time of the Merger, the Company and each member of its Controlled
Group have made all required premium payments when due to the PBGC;
(iv) neither the Company nor any member of its Controlled Group is subject
to any liability to the PBGC for any plan termination occurring on or prior
to the Effective Time of the Merger; (v) no amendment has occurred which
has required or could require the Company or any member of its Controlled
Group to provide security pursuant to Code section 401(a)(29); and (vi)
neither the Company nor any member of its Controlled Group has engaged in a
transaction which could subject it to liability under ERISA section 4069.
(5) With respect to each of the Company Plans which is not a
multiemployer plan within the meaning of section
<PAGE>
40
4001(a)(3) of ERISA but is subject to Title IV of ERISA, as of the
Effective Time of the Merger, except as disclosed in Section 3.01(i)
of the Disclosure Schedule, the assets of each such Company Plan are
at least equal in value to the present value of the accrued benefits
(vested and unvested) of the participants in such Company Plan on a
termination and projected basis, based on the actuarial methods and
assumptions indicated in the most recent actuarial valuation reports.
(6) Except as disclosed in Section 3.01(i)(6) of the Disclosure
Schedule, with respect to any multiemployer plan (within the meaning
of section 4001(a)(3) of ERISA) to which the Company or any member of
its Controlled Group has any liability or contributes (or has at any
time contributed or had an obligation to contribute): (i) the Company
and each member of its Controlled Group has or will have, as of the
Effective Time of the Merger, made all contributions to each such
multiemployer plan required by the terms of such multiemployer plan or
any collective bargaining agreement; (ii) neither the Company nor any
member of its Controlled Group has incurred any withdrawal liability
under Title IV of ERISA or would be subject to such liability if, as
of the Effective Time of the Merger, the Company or any member of its
Controlled Group were to engage in a complete withdrawal (as defined
in ERISA section 4203) or partial withdrawal (as defined in ERISA
section 4205) from any such multiemployer plan; (iii) no such
multiemployer plan is in reorganization
<PAGE>
41
or insolvent (as those terms are defined in ERISA sections 4241 and
4245, respectively); and (iv) neither the Company nor any member of
its Controlled Group has engaged in a transaction which could subject
it to liability under ERISA section 4212(c).
(7) (i) Each Company Plan which is intended to meet the
requirements for tax-favored treatment under Subchapter B of Chapter 1
of Subtitle A of the Code meets such requirements; and (ii) the
Company has received a favorable determination from the Internal
Revenue Service with respect to any trust intended to be qualified
within the meaning of Code section 501(c)(9).
(8) Section 3.01(i)(8) of the Disclosure Schedule sets forth, on
a plan by plan basis, the present value of benefits payable presently
or in the future to present or former employees of the Company under
each unfunded Company Plan.
(9) Except as set forth in Section 3.01(i)(9) of the Disclosure
Schedule, no Company Plan exists which could result in the payment to
any Company employee of any money or other property or rights or
accelerate or provide any other rights or benefits to any Company
employee as a result of the transaction contemplated by this
Agreement, whether or not such payment would constitute a parachute
payment within the meaning of Code section 280G.
<PAGE>
42
(j) Tax Returns and Tax Payments. Except as disclosed in
----------------------------
Section 3.01(j) of the Disclosure Schedule, the Company and each of
its subsidiaries, and any consolidated, combined, unitary or aggregate
group for Tax purposes of which the Company or any of its subsidiaries
is or has been a member (a "Consolidated Group") has timely filed all
------------------
Tax Returns required to be filed by it, has paid all Taxes shown
thereon to be due and has provided adequate reserves in its financial
statements for any Taxes that have not been paid, whether or not shown
as being due on any returns. Except as disclosed in Section 3.01(j)
of the Disclosure Schedule, (i) No material claim for unpaid Taxes has
become a lien against the property of the Company or any of its
subsidiaries or is being asserted against the Company or any of its
subsidiaries; (ii) to the best knowledge of the Company, no audit of
any Tax Return of the Company or any of its subsidiaries is being
conducted by a Tax authority; (iii) no extension of the statute of
limitations on the assessment of any Taxes has been granted by the
Company or any of its subsidiaries and is currently in effect; (iv) no
consent under Section 341(f) of the Code has been filed with respect
to the Company or any of its subsidiaries; (v) neither the Company nor
any of its subsidiaries is a party to any agreement or arrangement
that would result, separately or in the aggregate, in the actual or
deemed payment by the Company or a subsidiary of any "excess parachute
payments" within the meaning of Section 280G of the Code; (vi) no
<PAGE>
43
acceleration of the vesting schedule for any property that is
substantially unvested within the meaning of the regulations under
Section 83 of the Code will occur in connection with the transactions
contemplated by this Agreement; (vii) none of the Company or its
subsidiaries has been at any time a member of any partnership or joint
venture or the holder of a beneficial interest in any trust for any
period for which the statute of limitations for any Tax has not
expired; (viii) none of the Company or its subsidiaries has been a
United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code; (ix) none of the Company or
its subsidiaries is doing business in or engaged in a trade or
business in any jurisdiction in which it has not filed all required
income or franchise tax returns; (x) the Company and each of its
subsidiaries have made all payments of estimated Taxes required to be
made under Section 6655 of the Code and any comparable state, local or
foreign Tax provision; (xi) to the best knowledge of the Company, all
Taxes required to be withheld, collected or deposited by or with
respect to the Company and each of its subsidiaries have been timely
withheld, collected or deposited, as the case may be, and, to the
extent required, have been paid to the relevant taxing authority;
(xii) neither the Company nor any of its subsidiaries has issued or
assumed (A) any obligations described in Section 279(a) of the Code,
(B) any
<PAGE>
44
applicable high yield discount obligations, as defined in Section
163(i) of the Code, or (C) any registration-required obligations,
within the meaning of Section 163(f)(2) of the Code, that is not in
registered form; (xiii) there are no requests for information
currently outstanding that could affect the Taxes of the Company or
any of its subsidiaries; (xiv) to the best knowledge of the Company,
there are no proposed reassessments of any property owned by the
Company or any of its subsidiaries or other proposals that could
increase the amount of any Tax to which the Company or any such
subsidiary would be subject; and (xv) no power of attorney that is
currently in force has been granted with respect to any matter
relating to Taxes that could materially affect the Tax liability of
the Company or one of its subsidiaries. As used herein, "Taxes" shall
-----
mean all taxes of any kind, including, without limitation, those on or
measured by or referred to as income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, value
added, property or windfall profits taxes, customs, duties or similar
fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts
imposed by any governmental authority, domestic or foreign. As used
herein, "Tax Return" shall mean any return, report or statement
----------
required to be filed with any governmental authority with respect to
Taxes.
<PAGE>
45
(k) Properties. (i) Owned Real Property. Section 3.01(k)(i)
---------- -------------------
of the Disclosure Schedule sets forth, by address, owner and usage,
all of the real property owned by the Company, any of its subsidiaries
or any partnerships, joint ventures or other business organizations
(collectively the "Ventures") of which the Company or its subsidiaries
--------
are party (collectively, the "Owned Real Property"). Except as
-------------------
disclosed in Section 3.01(k)(ii) of the Disclosure Schedule, each of
the Company, its subsidiaries and the Ventures have good and
sufficient, valid and marketable title to the Owned Real Property free
and clear of all Liens and other encumbrances that, individually or in
the aggregate could reasonably be expected to have a Material Adverse
Effect with respect to the Company. Except as set forth in Section
3.01(k)(ii) of the Disclosure Schedule, there are (a) no outstanding
contracts for any improvements to the Owned Real Property which have
not been fully paid that, individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect with respect
to the Company, (b) no expenses of any kind (including brokerage and
leasing commissions) pertaining to the Owned Real Property which have
not been fully paid and (c) no outstanding contracts for the sale of
any of the Owned Real Property, except those contracts the property in
respect of which is not in excess of $100,000 individually.
(ii) Leased Real Property. Section 3.01(k)(iii) of the
--------------------
Disclosure Schedule sets forth, by address, owner and
<PAGE>
46
usage, a true and complete list of all real property agreements (including
any amendments thereto) pursuant to which the Company, its subsidiaries or
any Venture lease, sublease or otherwise occupy any real property (the
"Real Property Leases"). Pursuant to the Real Property Leases, the
--------------------
Company, its subsidiaries or a Venture, as the case may be, have validly
existing and enforceable leasehold, subleasehold or occupancy interests in
the property leased thereunder in each case fee from defaults and events
which with the passage of time would constitute a default except in either
instance for defaults which individually or in the aggregate, would not be
material and adverse to the financial condition, business or operations of
the Company, its subsidiaries or the Venture, as the case may be.
(iii) Third Party Leases. Section 3.01(k)(iv) of the
------------------
Disclosure Schedule sets forth, by address, owner and usage, a true and
complete list of all real property agreements (including any amendments
thereto) pursuant to which the Company, any of its subsidiaries or any
Venture leases, subleases or otherwise permits any third party to occupy
any Owned Real Property or Leased Real Property (collectively, the "Third
Party Leases"). Each of the Third Party Leases is in full force and effect
and in each case free from defaults and events which with the passage of
time would constitute a default (by landlord or tenant thereunder) except
in either instance for defaults which individually or in the aggregate,
would not have a Material Adverse Effect with respect to the Company.
Except as set forth in Section 3.01(k)(iv) of the Disclosure Schedule, none
of the
<PAGE>
47
Third Party Leases grant any options or other rights to the tenant
thereunder to purchase any of the Owned Real Property or Leased Real
Property.
(iv) Development Agreements. Section 3.01(k)(v) of the
----------------------
Disclosure Schedule sets forth a true and complete list of all agreements
(including any amendments thereto; as amended, the "Development
Agreements") pursuant to which (i) any third party has been given the right
(exclusive or otherwise) to develop any real property for the Company, any
of its subsidiaries or any Venture or (ii) the Company, any of its
subsidiaries or any Venture has agreed to develop, construct or occupy in
the future (whether by lease or other occupancy agreement) any real
property. Except as set forth in Section 3.01(k)(v) of the Disclosure
Schedule, each of the Development Agreements is in full force and effect
and in each case free from defaults and events which with the passage of
time would constitute a default thereunder.
(v) Permits. Each of the Company, its subsidiaries and the
-------
Ventures has all permits (including, without limitation, any and all beer,
wine and/or liquor licenses) necessary to own or operate its Owned Real
Property and Leased Real Property, and no such permits will be required, as
a result of the Merger or the other transactions contemplated hereby, to be
issued after the Closing in order to permit the Company following the
Merger to continue to own or operate such Properties, other than any such
permits which are ministerial in
<PAGE>
48
nature or the absence of which would not have a Material Adverse Effect
with respect to the Company.
(vi) Violations/Condemnation. Except as set forth in
-----------------------
Section 3.01(k)(vi) of the Disclosure Schedule, neither the Company, its
subsidiaries nor any Venture has received, with respect to any Owned Real
Property or Leased Real Property, any written notice of default or any
written notice of noncompliance with respect to applicable state, federal
and local laws and regulations relating to zoning, building, fire, use
restriction or safety or health codes which have not been remedied in all
respects which could have a Material Adverse Effect. There is no pending
or to the knowledge of the Company, its subsidiaries or any Venture,
threatened condemnation or other governmental taking of any of the Owned
Real Property or Leased Real Property.
(l) Environmental Matters. Except as disclosed in Section
---------------------
3.01(l) of the Disclosure Schedule, which disclosed items of non-
compliance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect with respect to the
Company, (i) the Company and its subsidiaries hold and formerly held,
and, to the best knowledge of the Company, are, and have been, in
compliance with, all Environmental Permits, and the Company and its
subsidiaries are, and have been, otherwise in compliance with all
applicable Environmental Laws and there are no circumstances that
might prevent or interfere with such compliance in the future;
<PAGE>
49
(ii) None of the Company or its subsidiaries has received any
Environmental Claim, and none of the Company or its subsidiaries is aware
after reasonable inquiry, of any threatened material Environmental Claim or
of any circumstances, conditions or events that could reasonably be
expected to give rise to a material Environmental Claim, against the
Company or any of its subsidiaries;
(iii) None of the Company or its subsidiaries has entered into or
agreed to any consent decree, order or agreement under any
Environmental Law, and none of the Company or its subsidiaries is
subject to any material judgment, decree, order or other material
requirement relating to compliance with any Environmental Law or to
investigation, cleanup, remediation or removal of regulated substances
under any Environmental Law;
(iv) To the best knowledge of the Company, there are no (A)
underground storage tanks, (B) polychlorinated biphenyls, (C) asbestos
or asbestos-containing materials, (D) urea-formaldehyde insulation,
(E) sumps, (F) surface impoundments, (G) landfills, (H) sewers or
septic systems or (I) Hazardous Materials present at any facility
currently or formerly owned, leased, operated or otherwise used by the
Company or any of its subsidiaries that could reasonably be expected
to give rise to liability of the Company or any of its subsidiaries
under any Environmental Laws;
(v) There are no past (including, without limitation, with
respect to assets or businesses formerly owned, leased
<PAGE>
50
or operated by the Company or any of its subsidiaries) or present
actions, activities, events, conditions or circumstances, including
without limitation the release, threatened release, emission,
discharge, generation, treatment, storage or disposal of Hazardous
Materials, that could reasonably be expected to give rise to liability
of the Company or any of its subsidiaries under any Environmental Laws
or any contract or agreement;
(vi) No modification, revocation, reissuance, alteration,
transfer, or amendment of the Environmental Permits, or any review by,
or approval of, any third party of the Environmental Permits is
required in connection with the execution or delivery of this
Agreement or the consummation of the transactions contemplated hereby
or the continuation of the business of the Company or its subsidiaries
following such consummation;
(vii) Hazardous Materials have not been generated, transported,
treated, stored, disposed of, released or threatened to be released
at, on, from or under any of the properties or facilities currently or
formerly owned, leased or otherwise used by the Company or any of its
subsidiaries, in violation of or in a manner or to a location that
could give rise to liability under any Environmental Laws;
(viii) to the best knowledge of the Company, the Company and its
subsidiaries have not assumed, contractually or by operation of law,
any liabilities or obligations under any Environmental Laws;
<PAGE>
51
(ix) the Company and its subsidiaries have accrued or otherwise
provided, in accordance with general accepted accounting principles,
for all damages, liabilities, penalties or costs that they may incur
in connection with any claim pending or threatened against them, or
any requirement that is or may be applicable to them, under any
Environmental Laws, and such accrual or other provision is reflected
in the Company's most recent consolidated financial statements.
(x) For purposes of this Agreement, the following terms shall
have the following meanings:
"Environmental Claim" means any written or oral notice,
-------------------
claim, demand, action, suit, complaint, proceeding or other
communication by any person alleging liability or potential
liability (including without limitation liability or potential
liability for investigatory costs, cleanup costs, governmental
response costs, natural resource damages, property damage,
personal injury, fines or penalties) arising out of, relating to,
based on or resulting from (i) the presence, discharge, emission,
release or threatened release of any Hazardous Materials at any
location, whether or not owned, leased or operated by the Company
or any of its subsidiaries or (ii) circumstances forming the
basis of any violation or alleged violation of any Environmental
Law or Environmental Permit or
<PAGE>
52
(iii) otherwise relating to obligations or liabilities under any
Environmental Laws.
"Environmental Permits" means all permits, licenses,
---------------------
registrations and other governmental authorizations required for
the Company and the operations of the Company's and its
subsidiaries' facilities and otherwise to conduct its business
under Environmental Laws.
"Environmental Laws" means all applicable federal, state and
------------------
local statutes, rules, regulations, ordinances, orders, decrees
and common law relating in any manner to contamination, pollution
or protection of human health or the environment, including
without limitation the Comprehensive Environmental Response,
Compensation and Liability Act, the Solid Waste Disposal Act, the
Clean Air Act, the Clean Water Act, the Toxic Substances Control
Act, the Occupational Safety and Health Act, the Emergency
Planning and Community-Right-to-Know Act, the Safe Drinking Water
Act, all as amended, and similar state laws.
"Hazardous Materials" means all hazardous or toxic
-------------------
substances, wastes, materials or chemicals, petroleum (including
crude oil or any fraction thereof) and petroleum products,
asbestos and asbestos-containing materials, pollutants,
contaminants and all other materials, substances and forces,
including but not limited to electromagnetic fields, regulated
pursuant
<PAGE>
53
to, or that could form the basis of liability under, any
Environmental Law.
(m) Material Contract Defaults. Neither the Company nor any of
--------------------------
its subsidiaries is, or has received any notice or has any knowledge
that any other party is, in default in any respect under any material
contract, agreement, commitment, arrangement, lease, policy or other
instrument to which it or any of its subsidiaries is a party or by
which it or any such subsidiary is bound ("Material Contracts"),
------------------
except for those defaults which could not reasonably be expected,
either individually or in the aggregate, to have a Material Adverse
Effect with respect to the Company; and there has not occurred any
event that with the lapse of time or the giving of notice or both
would constitute such a material default.
(n) Brokers. No broker, investment banker, financial advisor or
-------
other person, other than The Robinson-Humphrey Company, Inc., the fees
and expenses of which will be paid by the Company (pursuant to a fee
agreement, a copy of which has been provided to Newco), is entitled to
any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company.
(o) Opinion of Financial Advisor. The Company has received the
----------------------------
opinion of The Robinson-Humphrey Company, Inc. dated the date of this
Agreement, to the effect that the
<PAGE>
54
consideration to be received in the Merger by the Company's stockholders is
fair to the holders of the Company Common Stock from a financial point of
view, a signed copy of which opinion has been delivered to Newco.
(p) Board Recommendation. The Board of Directors of the
--------------------
Company, at a meeting duly called and held, has by unanimous vote of
those directors present (who constituted 100% of the directors then in
office) (i) determined that this Agreement and the transactions
contemplated hereby, including the Merger, and the Option Agreement
and the Stockholders Agreement and the transactions contemplated
thereby, taken together, are fair to and in the best interests of the
stockholders of the Company, (ii) determined, in accordance with
Section 10-2B-6.40 of the ABCA, that the transactions contemplated by
this Agreement are in compliance with Section 10-2B-6.40 of the ABCA
and (iii) resolved to recommend that the holders of the shares of
Company Common Stock approve this Agreement and the transactions
contemplated herein, including the Merger.
(q) Required Company Vote. The Company Stockholder Approval,
---------------------
being the affirmative vote of two-thirds of the shares of the Company
Common Stock, is the only vote of the holders of any class or series
of the Company's securities necessary to approve this Agreement, the
Merger and the other transactions contemplated hereby. There is no
vote of the holders of any class or series of the Company's
<PAGE>
55
securities necessary to approve the Option Agreement or the
Stockholders Agreement.
(r) State Takeover Statutes. No state takeover statute or
-----------------------
similar statute or regulation of the State of Alabama (and, to the
knowledge of the Company after due inquiry, of any other state or
jurisdiction) applies or purports to apply to this Agreement, the
Merger, the Option Agreement, the Stockholders Agreement or any of the
other transactions contemplated hereby or thereby. No provision of
the articles of organization, by-laws or other governing instruments
of the Company or any of its subsidiaries would, directly or
indirectly, restrict or impair the ability of Newco or its affiliates
to vote, or otherwise to exercise the rights of a stockholder with
respect to, securities of the Company and its subsidiaries that may be
acquired or controlled by Newco or its affiliates or permit any
stockholder to acquire securities of the Company on a basis not
available to Newco in the event that Newco were to acquire securities
of the Company, and neither the Company nor any of its subsidiaries
has any rights plan, preferred stock or similar arrangement which have
any of the aforementioned consequences.
(s) Trade names. (i) The Company or its subsidiaries (A) except
-----------
as set forth in Section 3.01(s) of the Disclosure Schedule, owns (in
each case, free and clear of any Liens) all rights to all trade names
(other than "Piggly Wiggly" used by the Company and each of its
subsidiaries, including,
<PAGE>
56
without limitation, the exclusive right to use the names "Bruno's",
"Food World", "Food Max", and "Food Fair" and any variations thereof
used by the Company or its subsidiaries, in each case in the states in
which the stores to which such names relate are located, (B) the
Company possesses a valid, subsisting and enforceable exclusive
license to use the name "Piggly Wiggly" in the states in which the
stores to which such name relates are located and (C) the Company owns
(free and clear of any Liens) all rights to the name "Food Max" in the
United States irrespective of store location. Except as disclosed in
Section 3.01(s) of the Disclosure Schedule, no other person has a
United States trademark registration in effect, or to the best
knowledge of the Company, a United States trademark application
pending, in respect of any of such trade names. To the best knowledge
of the Company, except as disclosed in Section 3.01(s) of the
Disclosure Schedule, no other person has the right to use any such
trade names in any of the following states: Alabama, Arkansas,
Florida, Georgia, Louisiana, Mississippi, North Carolina, South
Carolina and Tennessee. To the best knowledge of the Company, except
as disclosed in Section 3.01(s) of the Disclosure Schedule, (i) the
use of trade names by the Company and its subsidiaries does not
infringe on the rights of any person, (ii) no person is infringing on
any right of the Company or any of its subsidiaries with respect to
any of the Company's trade names, (iii) there is no decree,
undertaking or agreement limiting the scope of
<PAGE>
57
the Company's right to use any of its trade names and (iv) the Company
has not granted any license to any person for the use of the Company's
trade names.
(t) Senior Notes Make-Whole Amount. The Make-Whole Amount (as
------------------------------
defined in the Note Purchase Agreement) in respect of the Senior Notes
to be paid in connection with any offer to prepay the Senior Notes
upon a Change in Control (as defined in the Note Purchase Agreement)
equals zero.
SECTION 3.02. Representations and Warranties of Newco. Newco
---------------------------------------
represents and warrants to the Company as follows:
(a) Organization, Standing and Corporate Power. Newco is duly
------------------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite
corporate power and authority to carry on its business as now being
conducted. Newco is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed (individually or in
the aggregate) would not have a material adverse effect with respect
to Newco. Newco has delivered to the Company complete and correct
copies of its certificate of incorporation (or other organizational
documents) and by-laws.
<PAGE>
58
(b) Subsidiaries. Newco has no direct or indirect
------------
subsidiaries.
(c) Capital Structure. The authorized capital stock of Newco
-----------------
consists of 1,000 shares of common stock, par value $.01 per share,
all of which have been validly issued, are fully paid and
nonassessable and are owned by Parent, free and clear of any Lien.
(d) Authority; Noncontravention. Newco has all requisite
---------------------------
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by Newco and the consummation
by Newco of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of
Newco. This Agreement has been duly executed and delivered by and
constitutes a valid and binding obligation of Newco, enforceable
against Newco in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result in any
breach or violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of or "put" right with respect to any
obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of Newco
under, (i) the
<PAGE>
59
certificate of incorporation or by-laws of Newco, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license
applicable to Newco or its properties or assets or (iii) subject to
the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law,
ordinance, rule, regulation or arbitration award applicable to Newco
or its properties or assets, other than, in the case of clauses (ii)
and (iii), any such conflicts, breaches, violations, defaults, rights,
losses or Liens that individually or in the aggregate could not have a
material adverse effect with respect to Newco or could not prevent,
hinder or materially delay the ability of Newco to consummate the
transactions contemplated by this Agreement. No consent, approval,
order or authorization of, or registration, declaration or filing
with, or notice to, any Governmental Entity is required by or with
respect to Newco in connection with the execution and delivery of this
Agreement by Newco or the consummation by Newco of any of the
transactions contemplated by this Agreement, except for (i) the filing
of a premerger notification and report form under the HSR Act, (ii)
the filing with the SEC of (y) the Proxy Statement and the Form S-4
and (z) such reports under the Exchange Act as may be required in
connection with this Agreement, the Option Agreement, the Stockholders
Agreement and the transactions contemplated hereby and thereby, (iii)
the filing of the
<PAGE>
60
Articles of Merger with the Secretary of State of the State of Alabama
and appropriate documents with the relevant authorities of other
states in which the Company is qualified to do business and (iv) such
other consents, approvals, orders, authorizations, registrations,
declarations, filings or notices as may be required under the
"takeover" or "blue sky" laws of various states.
(e) Brokers. No broker, investment banker, financial advisor or
-------
other person, other than Salomon Brothers Inc, the fees and expenses
of which will be paid by Newco or its affiliates, is entitled to any
broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Newco to its
affiliates.
(f) Interim Operations of Newco. Newco was formed on April 14,
---------------------------
1995 solely for the purpose of engaging in the transactions
contemplated hereby, has engaged in no other business activities and
has conducted its operations only as contemplated hereby.
SECTION 3.03. Agreement to Deliver Article III Disclosure
-------------------------------------------
Schedules. The Company hereby agrees to deliver to Newco those sections of
- ---------
the Disclosure Schedule specifically referenced in this Article III, and
the information described in Section 3.01(i)(2), no later than May 1, 1995,
provided that information to be included in Sections 3.01(a), 3.01(b),
3.01(c) (other than the list of capitalized leases referenced in clause
<PAGE>
61
(iii) of the seventh sentence of Section 3.01(c)), 3.01(d) and 3.01(e) of
the Disclosure Schedule shall be delivered at or prior to the time of the
signing of this Agreement. Any section of the Disclosure Schedule other
than in respect of matters referenced in this Article III shall be
delivered to Newco at or prior to the time of the signing of this
Agreement.
ARTICLE IV
Covenants Relating to Conduct of Business Prior to Merger
---------------------------------------------------------
SECTION 4.01. Conduct of Business of the Company. (a) Conduct
---------------------------------- -------
of Business by the Company. During the period from the date of this
- --------------------------
Agreement to the Effective Time of the Merger (except as otherwise
specifically required by the terms of this Agreement), the Company shall,
and shall cause its subsidiaries to, act and carry on their respective
businesses in the usual, regular and ordinary course of business consistent
with past practice and use its and their respective best efforts to
preserve intact their current business organizations, keep available the
services of their current officers and employees and preserve their
relationships with customers, suppliers, licensors, licensees, advertisers,
distributors and others having business dealings with them to the end that
their goodwill and ongoing businesses shall be unimpaired at the Effective
Time of the Merger. Without limiting the generality of the foregoing,
during the period from the date of this Agreement to the Effective Time of
the Merger, the Company shall not, and shall not permit any of its
subsidiaries to, without the prior consent of Newco:
<PAGE>
62
(i) (x) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, other
than dividends and distributions by a direct or indirect wholly owned
subsidiary of the Company to its parent, and except that the Company
may declare and pay one regular quarterly cash dividend in May, 1995
not in excess of $.065 per share of Company Common Stock (with usual
record and payment dates and in accordance with its past dividend
policy), (y) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its capital stock, or (z)
purchase, redeem or otherwise acquire any shares of capital stock of
the Company or any of its subsidiaries or any other securities thereof
or any rights, warrants or options to acquire any such shares or other
securities, except, in the case of clause (z), for the acquisition of
shares of Company Common Stock from holders of Company Stock Options
in full or partial payment of the exercise price payable by such
holder upon exercise of Company Stock Options outstanding on the date
of this Agreement;
(ii) authorize for issuance, issue, deliver, sell, pledge or
otherwise encumber any shares of its capital stock or the capital
stock of any of its subsidiaries, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
or any other
<PAGE>
63
securities or equity equivalents (including without limitation stock
appreciation rights) (other than (x) the issuance of Company Common
Stock upon the exercise of Company Stock Options outstanding on the
date of this Agreement and in accordance with their present terms and
(y) pursuant to the Option (such issuances pursuant to clauses (x) and
(y), together with the acquisitions of shares of Company Common Stock
permitted under clause (i)(z) above, being referred to herein as
"Permitted Changes");
-----------------
(iii) amend its articles of organization, by-laws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the stock or assets
of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization
or division thereof;
(v) other than as specifically permitted by Section 4.01(a)(v)
of the Disclosure Schedule, sell, lease, license, mortgage or
otherwise encumber or subject to any Lien or otherwise dispose of any
of its properties or assets other than any such properties or assets
the value of which do not exceed $200,000 individually and $2,000,000
in the aggregate, except sales of inventory and entering into leases
for new store sites, in each case in the ordinary course of business
consistent with past practice;
<PAGE>
64
(vi) (y) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, except for short-term
borrowings and for lease obligations, in each case incurred in the ordinary
course of business consistent with past practice, or (z) make any loans,
advances or capital contributions to, or investments in, any other person,
other than to the Company or any direct or indirect wholly owned subsidiary
of the Company;
(vii) acquire or agree to acquire any assets that are material,
individually or in the aggregate, to the Company and its subsidiaries
taken as a whole, or make or agree to make any capital expenditures
except capital expenditures which, individually or in the aggregate,
do not exceed the amount budgeted therefor in the Company's annual
capital expenditures budget for 1995 previously provided to Newco;
(viii) pay, discharge or satisfy any claims (including claims of
stockholders), liabilities or obligations (absolute, accrued, asserted
or unasserted, contingent or otherwise), except for the payment,
discharge or satisfaction, (x) of liabilities or obligations in the
<PAGE>
65
ordinary course of business consistent with past practice or in
accordance with their terms as in effect on the date hereof or (y)
claims settled or compromised to the extent permitted by Section
4.01(a)(xii), or waive, release, grant, or transfer any rights of
material value or modify or change in any material respect any
existing license, lease, contract or other document, other than in the
ordinary course of business consistent with past practice;
(ix) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(x) enter into any new collective bargaining agreement or any
successor collective bargaining agreement to any collective bargaining
agreement disclosed in Section 3.01(h)(ii) of the Disclosure Schedule;
provided that with respect to the successor agreement to the
--------
collective bargaining agreement set forth in Section 4.01(a)(x) of the
Disclosure Schedule, the parties shall consult with each other on an
ongoing basis with respect to the negotiation thereof and shall
mutually agree upon the terms thereof (unless such successor agreement
shall not have been entered into on or before September 30, 1995, in
which event the Company shall be entitled to enter into a successor
agreement thereto without the consent of Newco);
(xi) change any material accounting principle used by it;
<PAGE>
66
(xii) settle or compromise any litigation (whether or not
commenced prior to the date of this Agreement) other than settlements
or compromises of litigation where the amount paid (after giving
effect to insurance proceeds actually received) in settlement or
compromise does not exceed $300,000, provided that the aggregate
amount paid in connection with the settlement or compromise of all
such litigation matters shall not exceed $1,000,000; or
(xiii) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Changes in Employment Arrangements. Neither the Company nor
----------------------------------
any of its subsidiaries shall (except as may be required in order to give
effect to the requirements of Section 2.04) adopt or amend (except as may
be required by law) any bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation, employment or other employee
benefit plan, agreement, trust, fund or other arrangement (including any
Company Plan) for the benefit or welfare of any employee, director or
former director or employee or, other than increases for individuals (other
than officers and directors) in the ordinary course of business consistent
with past practice, increase the compensation or fringe benefits of any
director, employee or former director or employee or pay any benefit not
required by any existing plan, arrangement or agreement; provided that the
--------
Executive Compensation Plan for the fiscal year ending July 1, 1995 may be
adjusted to the extent described in
<PAGE>
67
Section 4.01(b) of the Disclosure Schedule or as provided in Section 5.04.
(c) Severance. Neither the Company nor any of its subsidiaries
---------
shall grant any new or modified severance or termination arrangement or
increase or accelerate any benefits payable under its severance or
termination pay policies in effect on the date hereof.
(d) WARN. Neither the Company nor any of its subsidiaries shall
----
effectuate a "plant closing" or "mass layoff", as those terms are defined
in the Worker Adjustment and Retraining Notification Act of 1988 ("WARN"),
affecting in whole or in part any site of employment, facility, operating
unit or employee of the Company or any subsidiary, without notifying Newco
or its affiliates in advance and without complying with the notice
requirements and other provisions of WARN.
(e) Tax Elections. Except in the ordinary course of business
-------------
and consistent with past practice, neither the Company nor any of its
subsidiaries shall make any tax election or settle or compromise any
federal, state, local or foreign Tax liability.
ARTICLE V
Additional Agreements
---------------------
SECTION 5.01. Preparation of Form S-4 and Proxy Statement;
--------------------------------------------
Stockholder Meeting.
- -------------------
(a) Promptly following the date of this Agreement, the Company
shall prepare the Proxy Statement, and the Company shall prepare and file
with the SEC the Form S-4, in which the Proxy Statement will be included.
The Company shall use its best
<PAGE>
68
efforts as promptly as practicable to have the Form S-4 declared effective
under the Securities Act as promptly as practicable after such filing. The
Company will use its best efforts to cause the Proxy Statement to be mailed
to the Company's stockholders as promptly as practicable after the Form S-4
is declared effective under the Securities Act. The Company shall also
take any action required to be taken under any applicable state securities
laws in connection with the registration and qualification in connection
with the Merger of Common Stock of the Company following the Merger. The
information provided and to be provided by Newco and the Company,
respectively, for use in the Form S-4 shall, at the time the Form S-4
becomes effective and on the date of the Stockholders Meeting referred to
below, be true and correct in all material respects and shall not omit to
state any material fact required to be stated therein or necessary in order
to make such information not misleading, and the Company and Newco each
agree to correct any information provided by it for use in the Form S-4
which shall have become false or misleading.
(b) The Company will immediately notify Newco and its affiliates
of (i) the effectiveness of the Form S-4, (ii) the receipt of any comments
from the SEC and (iii) any request by the SEC for any amendment to the Form
S-4 or for additional information. All filings with the SEC, including the
Form S-4 and any amendment thereto, and all mailings to the Company's
stockholders in connection with the Merger, including the Proxy Statement,
shall be subject to the prior review, comment and
<PAGE>
69
approval of Newco. No such filing or mailing shall be made without the
prior consent of Newco.
(c) The Company will, as promptly as practicable following the
date of this Agreement and in consultation with Newco, duly call, give
notice of, convene and hold a meeting of its stockholders (the
"Stockholders Meeting") for the purpose of approving this Agreement and the
--------------------
transactions contemplated by this Agreement, including, without limitation,
the incurrence of any indebtedness to be funded contemporaneous with or
after the Closing, to the extent required by Alabama law. The Company
will, through its Board of Directors, recommend to its stockholders
approval of the foregoing matters, as set forth in Section 3.01(p). Such
recommendation, together with a copy of the opinion referred to in Section
3.01(o) shall be included in the Proxy Statement. The Company will use its
best efforts to hold such meetings as soon as practicable after the date
hereof.
(d) The Company will cause its transfer agent to make stock
transfer records relating to the Company available to the extent reasonably
necessary to effectuate the intent of this Agreement.
SECTION 5.02. Access to Information; Confidentiality. (a) The
--------------------------------------
Company shall, and shall cause its subsidiaries, officers, employees,
counsel, financial advisors and other representatives to, afford to Newco
and its representatives and to potential financing sources reasonable
access during normal business hours, in a manner initially coordinated with
the chief executive officer of the Company, and thereafter coordinated with
<PAGE>
70
those persons designated by the chief executive officer, during the period
prior to the Effective Time of the Merger to its properties, books,
contracts, commitments, personnel and records and, during such period, the
Company shall, and shall cause its subsidiaries, officers, employees and
representatives to, furnish promptly to Newco (i) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of Federal or state securities laws and
(ii) all other information concerning its business, properties, financial
condition, operations and personnel as Newco may from time to time
reasonably request. Newco shall use reasonable efforts to conduct its
initial interviews with personnel of the Company and its subsidiaries prior
to the Section 7.01(h) Date (as defined herein). Except as required by
law, each of the Company and Newco will hold, and will cause its respective
directors, officers, employees, accountants, counsel, financial advisors
and other representatives and affiliates to hold, any nonpublic information
in confidence to the extent required by, and in accordance with, the
provisions of the letter dated December 20, 1994, between Kohlberg Kravis
Roberts & Co. ("KKR & Co.") and the Company (the "Confidentiality
--------- ---------------
Agreement").
- ---------
(b) No investigation pursuant to this Section 5.02 shall affect
any representations or warranties of the parties herein or the conditions
to the obligations of the parties hereto.
<PAGE>
71
SECTION 5.03. Best Efforts. (a) Upon the terms and subject to
------------
the conditions set forth in this Agreement, each of the parties agrees to
use its best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and the
other transactions contemplated by this Agreement. Newco and the Company
will use their best efforts and cooperate with one another (i) in promptly
determining whether any filings are required to be made or consents,
approvals, waivers, licenses (including, without limitation, all beer, wine
and/or liquor licenses), permits or authorizations are required to be
obtained (or, which if not obtained, would result in an event of default,
termination or acceleration of any agreement or any put right under any
agreement) under any applicable law or regulation or from any governmental
authorities or third parties, including parties to loan agreements or other
debt instruments, in connection with the transactions contemplated by this
Agreement, including the Merger, the Option Agreement, and the Stockholders
Agreement and (ii) in promptly making any such filings, in furnishing
information required in connection therewith and in timely seeking to
obtain any such consents, approvals, permits or authorizations.
Newco and the Company shall mutually cooperate in order to
facilitate the achievement of the benefits reasonably anticipated from the
Merger.
<PAGE>
72
(b) The Company shall make, subject to the condition that the
transactions contemplated herein and therein actually occur, any
undertakings (including undertakings to make divestitures, provided that
such divestitures need not themselves be made until after the transactions
contemplated hereby actually occur) required in order to comply with the
antitrust requirements or laws of any governmental entity, including the
HSR Act, in connection with the transactions contemplated by this
Agreement, the Stockholders Agreement and the Option Agreement; provided
--------
that no such divestiture or undertaking shall be made unless acceptable to
Newco.
(c) The Company shall cooperate with any reasonable requests of
Newco or the SEC related to the recording of the Merger as a
recapitalization for financial reporting purposes, including, without
limitation, to assist Newco and its affiliates with any presentation to the
SEC with regard to such recording and to include appropriate disclosure
with regard to such recording in all filings with the SEC and all mailings
to stockholders made in connection with the Merger. In furtherance of the
foregoing, the Company shall provide to Newco for the prior review of
Newco's advisors any description of the transactions contemplated by this
Agreement which is meant to be disseminated.
(d) Each of the parties agrees to cooperate with each other in
taking, or causing to be taken, all actions necessary to delist the Company
Common Stock from NASDAQ, provided that such delisting shall not be
effective until after the Effective Time
<PAGE>
73
of the Merger. The parties also acknowledge that it is Newco's intent that
the Common Stock following the Merger will not be quoted on NASDAQ or
listed on any national securities exchange.
(e) The Company agrees to provide, and will cause its
subsidiaries and its and their respective officers and employees to
provide, all necessary cooperation in connection with the arrangement of
any financing to be consummated contemporaneous with or at or after the
Closing in respect of the transactions contemplated by this Agreement,
including without limitation, the execution and delivery of any commitment
letters, underwriting or placement agreements, pledge and security
documents, other definitive financing documents, or other requested
certificates or documents, including a certificate of the chief financial
officer of the Company with respect to solvency matters, as may be
requested by Newco. The parties acknowledge that the payment of any fees
by the Company in connection with any committment letters shall either be
subject to the occurrence of the Closing or shall be applied against (and
therefore shall not exceed) the applicable expense reimbursement
limitations set forth in Section 8.02(a) hereof. In addition, in
conjunction with the obtaining of any such financing, the Company agrees,
at the request of Newco, to call for prepayment or redemption, or to
prepay, redeem and/or renegotiate, as the case may be, any then existing
indebtedness of the Company; provided that no such prepayment or redemption
shall themselves actually be made until contemporaneously with or after the
Effective Time of the Merger.
<PAGE>
74
(f) (i) Newco has received the letter set forth in Section
5.03(f) of the Disclosure Schedule. Newco hereby agrees to use its
reasonable best efforts, subject to normal conditions, to arrange the
financing in respect of the transactions contemplated by this Agreement
described in Section 6.02(f) hereof, including, subject to normal
conditions, using its reasonable best efforts (A) to assist the Company in
the negotiation of definitive agreements with respect thereto and (B) to
satisfy all conditions applicable to Newco in such definitive agreements.
Newco will keep the Company informed of the status of its efforts to
arrange such financing, including making reports with respect to
significant developments. In the event Newco is unable to arrange any
portion of such financing in the manner or from the sources originally
contemplated, Newco will use its reasonable best efforts, subject to normal
conditions, to arrange any such portion from alternative sources. Newco
will inform the Company within 24 hours of any determination made by Newco
that it is unable to arrange such financing on terms satisfactory to it.
(ii) Subject to the Company having received the proceeds of the
financing described in Section 6.02(f) on terms satisfactory to Newco,
Newco at Closing will be capitalized with an equity contribution of $270
million. Newco will be under no obligation pursuant to the preceding
sentence unless and until the Company receives the proceeds of the
financing described in Section 6.02(f) on terms satisfactory to Newco. In
addition,
<PAGE>
75
Newco will be under no obligation under any circumstances to be capitalized
with equity of more than $270 million.
(g) In the event Newco shall so request, the Company hereby
agrees to take, prior to Closing, the actions set forth in Section 5.03(g)
of the Disclosure Schedule.
SECTION 5.04. Benefit Matters. Newco and the Company agree,
---------------
with the concurrence of the five executive Employees listed in Section 5.04
of the Disclosure Schedule, that while it is not anticipated that such
listed employees will be long term employees of the Company following the
Merger, such listed employees shall continue in the employ of the Company
following the Merger during the periods described in this Section 5.04 in
order to accomplish in an orderly fashion the transition of ownership of
the Company contemplated by this Agreement. In connection therewith, if an
employee so listed remains in the employ of the Company until one year
following the Effective Time of the Merger (or such shorter period as may
be determined by the board of directors of the Company following the
Merger), such employee shall be entitled to receive, on the earlier of (i)
the thirtieth day after such employee's replacement has commenced
employment and (ii) one year following the Effective Time of the Merger
(the "Date of Payment"), any amounts that would have been payable to him
under the terms of his Employment Continuity Agreement as of the end of the
fiscal year ending on July 1, 1995 if he had been terminated by the Company
without Good Cause (as defined in Section 4 of the Employment Continuity
Agreement) together with the retirement benefit that would have been
payable
<PAGE>
76
to him under the terms of Section 8 of the 1994 Employment and Deferred
Compensation Agreement (after giving effect to such amendments to such
agreement as are necessary to change the basis for determining compensation
under such agreement from the calendar year to the Company's fiscal year)
(the "1994 Agreement"); provided that in the case of Paul F. Garrison, the
-------------- --------
Date of Payment shall be the earlier of (i) the thirtieth day after
negotiations in respect of the collective bargaining agreement described in
Section 4.01(a)(x) of the Disclosure Schedule are completed and (ii) one
year following the Effective Time of the Merger; provided further that
-------- -------
commencing on the later of the date of the Closing and July 2, 1995 and
continuing during the post-Merger employment period with respect to each
such five employees, each such five employees shall receive from the
Company a monthly salary based on 13 pay periods equal to the total base
salary and bonus to which such employee was entitled for the fiscal year
ended July 1, 1995, divided by 13 (provided that no further bonus or
incentive compensation shall be payable for such periods); and provided,
--------
further, that if such employee shall so request, the aforementioned
- -------
retirement benefit shall be paid in a single lump sum in an amount equal to
the present value of the payment stream set forth under Section 2 of the
1994 Agreement. The present value referred to in the preceding sentence
shall be determined by taking the aggregate amount of the payments that
would be due under Section 2 of the 1994 Agreement and reducing such amount
by applying a discount rate of 8% per annum against such amount. The
parties hereto anticipate
<PAGE>
77
that the one year post-Merger employment period referenced in this Section
would be the maximum duration of any post-Merger employment period in
respect of the five listed employees and agree that the board of directors
of the Company following the Merger and each such employee may mutually
agree on a shorter period.
SECTION 5.05. Indemnification. (a) For six years after the
---------------
Effective Time of the Merger, the Company shall indemnify all present and
former directors or officers of the Company and its subsidiaries for acts
or omissions occurring prior to the Effective Time of the Merger to the
fullest extent now provided in their respective articles of organization or
by-laws consistent with applicable law, to the extent such acts or
omissions are uninsured (provided, that to the extent that during any
--------
period insurance does not fully indemnify any person contemplated to be
indemnified in accordance with the terms of this Section 5.05, the Company
shall indemnify such person in accordance with such terms) and shall, in
connection with defending against any action for which indemnification is
available hereunder and subject to Section 5.05(b) hereof, reimburse such
officers and directors, from time to time upon receipt of sufficient
supporting documentation, for any reasonable costs and expenses reasonably
incurred by such officers and directors; provided that such reimbursement
--------
shall be conditioned upon such officer's or director's agreement promptly
to return such amounts to the Company if a court of competent jurisdiction
shall ultimately determine that indemnification of
<PAGE>
78
such officer or director is prohibited by applicable law. The Company will
maintain for a period of not less than six years from the Effective Time of
the Merger, the Company's current directors' and officers' insurance and
indemnification policy to the extent that it provides coverage for events
occurring prior to the Effective Time of the Merger (the "D&O Insurance")
-------------
for all persons who are directors and officers of the Company on the date
of this Agreement; provided that the Company shall not be required to spend
in excess of (i) a $300,000 annual premium therefor, in the event the
Company in its sole discretion elects not to continue any arrangement
which, in exchange for an increased premium, reduces the Company's co-
payment obligation ("Allocation Form") or (ii) a $400,000 annual premium
therefor, in the event the Company in its sole discretion elects to
continue the Allocation Form; provided further that if the Company would be
required to spend per annum in excess of a $300,000 premium, in the case of
clause (i) above, or a $400,000 premium, in the case of clause (ii) above,
to obtain insurance having the maximum available coverage under the current
policy, the Company will be required to spend either $300,000 or $400,000,
as the case may be, to maintain or procure insurance coverage pursuant
hereto, subject to availability of such (or similar) coverage.
(b) In furtherance of and not in limitation of the preceding
paragraph, the officers and directors of the Company that are defendants in
all litigation commenced by shareholders of the Company with respect to the
Merger and the other
<PAGE>
79
transactions contemplated hereby (the "Subject Litigation"), shall be
entitled to be represented, at the reasonable expense of the Company (to
the extent that insurance does not fully indemnify such person against such
expense), in the Subject Litigation by one counsel which such counsel shall
be selected by a plurality of such director defendants; provided that the
Company shall not be liable for any settlement effected without its prior
written consent or, prior to the Closing, the consent of Newco, and that a
condition to the indemnification payments provided in paragraph 5.05(a)
shall be that such officer/director defendant not have settled any Subject
Litigation without the consent of the Company and, prior to the Closing,
Newco; and provided further that the Company and Newco shall have no
obligation hereunder to any officer/director defendant when and if a court
of competent jurisdiction shall ultimately determine that indemnification
of such officer/director defendant in the manner contemplated hereby is
prohibited by applicable law.
SECTION 5.06. Public Announcements. Neither Newco, on the one
--------------------
hand, nor the Company, on the other hand, will issue any press release or
public statement with respect to the transactions contemplated by this
Agreement, the Option Agreement and the Stockholders Agreement, including
the Merger, without the other party's prior consent, except as may be
required by applicable law, court process or by obligations pursuant to any
listing agreement with NASDAQ. In addition to the foregoing, Newco and the
Company will consult with each other before issuing, and provide each other
the opportunity to review and
<PAGE>
80
comment upon, any such press release or other public statements with
respect to such transactions. The parties agree that the initial press
release or releases to be issued with respect to the transactions
contemplated by this Agreement shall be mutually agreed upon prior to the
issuance thereof.
SECTION 5.07. Affiliates. Prior to the Closing Date, the
----------
Company shall deliver to Newco a letter identifying all persons who are, at
the time this Agreement is submitted for approval to the stockholders of
the Company, "affiliates" of the Company for purposes of Rule 145 under the
Securities Act. The Company shall use its reasonable best efforts to cause
each such person to deliver to Newco on or prior to the Closing Date a
written agreement substantially in the form attached as Exhibit B hereto.
SECTION 5.08. No Solicitation. Neither the Company nor any of
---------------
its subsidiaries shall (whether directly or indirectly through advisors,
agents or other intermediaries), nor shall the Company or any of its
subsidiaries authorize or permit any of its or their officers, directors,
agents, representatives, advisors or subsidiaries to (a) solicit, initiate
or take any action knowingly to facilitate the submission of inquiries,
proposals or offers from any person relating to any acquisition or purchase
of a substantial amount of assets of the Company or any of its Significant
Subsidiaries or of over 20% of any class of equity securities of the
Company or any of its subsidiaries or any tender offer (including a self
tender offer) or exchange offer that if consummated would result in any
Person beneficially
<PAGE>
81
owning 20% or more of any class of equity securities of the Company or any
of its subsidiaries, or any merger, consolidation, business combination,
sale of substantially all assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
subsidiaries other than the transactions contemplated by this Agreement,
the Option Agreement and the Stockholders Agreement or any other
transaction the consummation of which would or could reasonably be expected
to impede, interfere with, prevent or materially delay the Merger or which
would or could reasonably be expected to materially dilute the benefits to
Newco of the transactions contemplated hereby (collectively, "Transaction
-----------
Proposals") or agree to or endorse any Transaction Proposal, or (b) enter
- ---------
into or participate in any discussions or negotiations regarding any of the
foregoing, or furnish to any other person any information with respect to
its business, properties or assets or any of the foregoing, or otherwise
cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other person to do or seek any of
the foregoing; provided, however, that the foregoing shall not prohibit the
-------- -------
Company from (i) furnishing information pursuant to an appropriate
confidentiality letter (provided for informational purposes only to Newco)
concerning the Company and its businesses, properties or assets to a third
party who has made a Transaction Proposal, (ii) engaging in discussions or
negotiations with such a third party who has made a Transaction Proposal,
(iii) following receipt of a Transaction Proposal, taking and disclosing to
its stockholders a
<PAGE>
82
position contemplated by Rule 14e-2(a) under the Exchange Act or otherwise
making disclosure to its stockholders, (iv) following receipt of a
Transaction Proposal, failing to make or withdrawing or modifying its
recommendation referred to in Section 3.01(p), and/or (v) taking any non-
appealable, final action ordered to be taken by the Company by any court of
competent jurisdiction but in each case referred to in the foregoing
clauses (i) through (v) only to the extent that the Board of Directors of
the Company shall have concluded in good faith on the basis of advice from
outside counsel that such action is required to prevent the Board of
Directors of the Company from breaching its fiduciary duties to the
stockholders of the Company under Alabama law; provided, further, that the
-------- -------
Board of Directors of the Company shall not take any of the foregoing
actions referred to in clauses (i) through (iv) until after reasonable
notice to Newco with respect to such action and that such Board of
Directors shall, to the extent it may do so without breaching such
fiduciary duties, continue to advise Newco after taking such action and, in
addition, if the Board of Directors of the Company receives a Transaction
Proposal, then the Company shall promptly inform Newco of the terms and
conditions of such proposal and the identity of the person making it. The
Company will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing.
SECTION 5.09. Resignation of Directors. Prior to the Effective
------------------------
Time of the Merger, the Company shall deliver to Newco
<PAGE>
83
evidence satisfactory to Newco of the resignation of all directors of the
Company (other than Ronald G. Bruno), effective at the Effective Time of
the Merger.
SECTION 5.10. Certain Agreements. Neither the Company nor any
------------------
subsidiary of the Company will waive or fail to enforce any provision of
any confidentiality or standstill or similar agreement to which it is a
party without the prior written consent of Newco.
SECTION 5.11. Stop Transfer. The Company acknowledges and
-------------
agrees to be bound by and comply with the provisions of the Stockholders
Agreement as if a party thereto with respect to transfers of record
ownership of shares of Company Common Stock, and agrees to notify the
transfer agent for any shares of Company Common Stock or voting rights
certificates and provide such documentation and do such other things as may
be necessary to effectuate the provisions of such agreement. In the event
that the Option is exercised prior to any termination of the Merger
Agreement, the Company shall take such actions as may be reasonably
necessary so that Newco (or its designee) shall, subject to applicable law,
be entitled at the stockholders meeting called to vote on the Merger and
the Merger Agreement to vote the shares of Company Common Stock acquired
pursuant to the Option Agreement (including, with respect to such
stockholders meeting, adjourning such meeting, resetting the record date of
such meeting and/or resetting the date of such meeting).
SECTION 5.12. Golf Tournament. With respect to the "Bruno's
---------------
Memorial Classic" Senior PGA Golf Tournament conducted
<PAGE>
84
in Birmingham, Alabama by the Bruno's Memorial Classic Foundation (the
"Golf Tournament"), it is agreed and understood that the Company shall, for
---------------
the 1995 and 1996 Golf Tournaments, continue to provide economic and
organizational support, at the same aggregate level and in the same manner,
taken as a whole, to the Golf Tournament as has been provided to the Golf
Tournament by the Company over the prior three years, including, without
limitation, aid in the solicitation and recruiting of participation of
vendors and suppliers as sponsors and Pro-Am participants by providing
display space in food stores to vendors and suppliers without cost to the
Golf Tournament and by assisting the Golf Tournament in communicating with
those vendors and suppliers. The Company represents that it has fully and
accurately described to Newco the aggregate level and manner of economic
and organizational support provided to the Golf Tournaments by the Company
over the prior three years.
ARTICLE VI
Conditions Precedent
--------------------
SECTION 6.01. Conditions to Each Party's Obligation To Effect
-----------------------------------------------
the Merger. The respective obligation of each party to effect the Merger
- ----------
is subject to the satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Company Stockholder Approval. The Company Stockholder
----------------------------
Approval shall have been obtained.
(b) HSR Act. The waiting period (and any extension thereof)
-------
applicable to the Merger under the HSR Act shall have been terminated
or shall have expired.
<PAGE>
85
(c) No Injunctions or Restraints. No temporary restraining
----------------------------
order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in
effect; provided, however, that the parties hereto shall use their
-------- -------
best efforts to have any such injunction, order, restraint or
prohibition vacated.
(d) Form S-4. The Form S-4 shall have become effective under
--------
the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order, and any material "blue sky" and
other state securities laws applicable to the registration and
qualification of the Common Stock of the Company following the Merger
shall have been complied with.
SECTION 6.02. Conditions to Obligations of Newco. The
----------------------------------
obligations of Newco to effect the Merger are further subject to the
following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Company set forth in this Agreement shall be true
and correct in all material respects in each case as of the date of
this Agreement and as of the Closing Date as though made on and as of
the Closing Date. Newco shall have received a certificate signed on
behalf of the Company by the chief executive officer and the chief
financial officer of the Company to the effect set forth in this
paragraph.
<PAGE>
86
(b) Performance of Obligations of the Company. The Company
-----------------------------------------
shall have performed the obligations required to be performed by it
under this Agreement at or prior to the Closing Date (except for such
failures to perform as have not had or could not reasonably be
expected, either individually or in the aggregate, to have a Material
Adverse Effect with respect to the Company or adversely affect the
ability of the Company to consummate the transactions herein
contemplated or perform its obligations hereunder).
(c) Consents, etc. Newco shall have received evidence, in form
--------------
and substance reasonably satisfactory to it, that such licenses
(including, without limitation, the continued availability of all
beer, wine and/or liquor licenses), permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities
and other third parties as are necessary in connection with the
transactions contemplated hereby have been obtained, except such
licenses, permits, consents, approvals, authorizations, qualifications
and orders which are not, individually or in the aggregate, material
to Newco or the Company or the failure of which to have received would
not (as compared to the situation in which such license, permit,
consent, approval, authorization, qualification or order had been
obtained) materially dilute the aggregate benefits to Newco of the
transactions reasonably contemplated hereby.
(d) No Litigation. There shall not be pending or threatened by
-------------
any Governmental Entity any suit, action or
<PAGE>
87
proceeding (or by any other person any suit, action or proceeding
which has a reasonable likelihood of success), (i) challenging or
seeking to restrain or prohibit the consummation of the Merger or any
of the other transactions contemplated by this Agreement or the
Stockholders Agreement or seeking to obtain from Parent, Newco or any
of their affiliates any damages that are material to any such party,
(ii) seeking to prohibit or limit the ownership or operation by the
Company, Parent or any of their respective subsidiaries of any
material portion of the business or assets of the Company or any of
its subsidiaries, to dispose of or hold separate any material portion
of the business or assets of the Company or any of its subsidiaries,
as a result of the Merger or any of the other transactions
contemplated by this Agreement or the Stockholders Agreement, (iii)
seeking to impose limitations on the ability of Parent or Newco (or
any designee of Newco pursuant to the Option Agreement) to acquire or
hold, or exercise full rights of ownership of, any shares of Company
Common Stock, including, without limitation, the right to vote the
Company Common Stock on all matters properly presented to the
stockholders of the Company or (iv) seeking to prohibit Parent or any
of its subsidiaries from effectively controlling in any material
respect the business or operations of the Company or its subsidiaries.
(e) Affiliate Letters. Newco shall have received the agreements
-----------------
referred to in Section 5.07.
<PAGE>
88
(f) Financing. The Company shall have received the proceeds of
---------
financing on terms satisfactory to Newco in an amount sufficient to
consummate the transactions contemplated by this Agreement, including,
without limitation (i) to pay, with respect to all shares of Company
Common Stock in the Merger, the Cash Election Price pursuant to
Section 2.01(c)(ii) (subject to Section 2.03), (ii) to refinance the
outstanding indebtedness of the Company, including, without
limitation, the Senior Notes, the Credit Agreement and any other debt
to be refinanced, (iii) to pay any fees and expenses in connection
with the transactions contemplated by this Agreement or the financing
thereof and (iv) to provide for the working capital needs of the
Company following the Merger, including, without limitation, letters
of credit.
SECTION 6.03. Conditions to Obligation of the Company. The
---------------------------------------
obligation of the Company to effect the Merger is further subject to
the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Newco set forth in this Agreement shall be true and
correct in all material respects, in each case as of the date of this
Agreement and as of the Closing Date as though made on and as of the
Closing Date. The Company shall have received a certificate signed on
behalf of Newco by an authorized officer of Newco to the effect set
forth in this paragraph.
<PAGE>
89
(b) Performance of Obligations of Newco. Newco shall have performed
-----------------------------------
the obligations required to be performed by them under this Agreement at or
prior to the Closing Date (except for such failures to perform as have not
had or could not reasonably be expected, either individually or in the
aggregate, to have a Material Adverse Effect with respect to Newco or
adversely affect the ability of Newco to consummate the transactions herein
contemplated or perform its obligations hereunder).
ARTICLE VII
Termination, Amendment and Waiver
---------------------------------
SECTION 7.01. Termination. This Agreement may be terminated and
-----------
abandoned at any time prior to the Effective Time of the Merger, whether
before or after approval of matters presented in connection with the Merger
by the stockholders of the Company:
(a) by mutual written consent of Newco and the Company; or
(b) by either Newco or the Company if any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger
and such order, decree, ruling or other action shall have become final
and nonappealable; or
(c) by either Newco or the Company if the Merger shall not have
been consummated on or before October 31, 1995 (other than due to the
failure of the party seeking to
<PAGE>
90
terminate this Agreement to perform its obligations under this
Agreement required to be performed at or prior to the Effective Time
of the Merger); or
(d) by Newco, if any required approval of the stockholders of
the Company shall not have been obtained by reason of the failure to
obtain the required vote upon a vote held at a duly held meeting of
stockholders or at any adjournment thereof; provided, however, that
-------- -------
unless Newco shall otherwise notify the Company within two weeks after
such failure to obtain the required vote, this Agreement shall
automtically terminate without any further action by any of the
parties hereto; or
(e) by Newco, if the Company shall have (1) withdrawn, modified
or amended in any respect adverse to Newco its approval or
recommendation of this Agreement or any of the transactions
contemplated herein, (2) failed as soon as practicable to mail the
Proxy Statement to its stockholders or failed to include in such
statement such recommendation, (3) recommended any Transaction
Proposal from a person other than Newco or any of its affiliates or
(4) resolved to do any of the foregoing; or
(f) by Newco, if (i) the Company shall have exercised a right
specified in the first proviso to Section 5.08 with respect to any
Transaction Proposal and shall, directly or through agents or
representatives, continue discussions with any third party concerning
such Transaction Proposal for more than 10 business days after the
date of receipt of such
<PAGE>
91
Transaction Proposal; (ii) taken any action described in clause (v) of
the first proviso to Section 5.08; or (iii) (1) a Transaction Proposal
that is publicly disclosed shall have been commenced, publicly
proposed or communicated to the Company which contains a proposal as
to price (without regard to the specificity of such price proposal)
and (2) the Company shall not have rejected such proposal within 10
business days of its receipt or the date its existence first becomes
publicly disclosed, if sooner; or
(g) by the Company, if the Company exercises, pursuant to
Section 5.08, the right specified in clause (iv) of the first proviso
to Section 5.08; or
(h) by Newco, on or before the close of the business on the
later of (x) May 8, 1995 and (y) the tenth calendar day after all
information to be included in the Disclosure Schedule has been
delivered to Newco (the later of such dates, the "Section 7.01(h)
---------------
Date"), if Newco and its affiliates shall not be satisfied in its sole
----
discretion with the results of its due diligence investigation of the
Company and its subsidiaries. The parties hereby agree and
acknowledge that neither any such investigation nor any failure by
Newco to exercise its right of termination pursuant to this paragraph
(h) shall (i) diminish in any way or otherwise affect the rights
afforded to it pursuant to Section 5.02 or (ii) affect in any way any
representations or warranties of the Company herein contained or the
conditions to the obligations of the parties hereto.
<PAGE>
92
SECTION 7.02. Effect of Termination. In the event of
---------------------
termination of this Agreement by either the Company or Newco as provided in
Section 7.01, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of Newco or the
Company, other than the provisions of Section 3.01(n), the last sentence of
Section 5.02(a), the second sentence of Section 5.11, this Section 7.02,
Section 8.02 and Section 8.07. Nothing contained in this Section shall
relieve any party for any breach of the representations, warranties,
covenants or agreements set forth in this Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the
---------
parties at any time before or after any required approval of matters
presented in connection with the Merger by the stockholders of the Company;
provided, however, that after any such approval, there shall be made no
- --------
amendment that by law requires further approval by such stockholders
without the further approval of such stockholders. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of
the parties.
SECTION 7.04. Extension; Waiver. At any time prior to the
-----------------
Effective Time of the Merger, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties,
(b) waive any inaccuracies in the representations and warranties contained
in this Agreement or in any document delivered pursuant to this Agreement
or (c) subject to the proviso of Section 7.03, waive compliance with any of
the agreements or conditions contained in this Agreement. Any
<PAGE>
93
agreement on the part of a party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver
of such rights.
SECTION 7.05. Procedure for Termination, Amendment, Extension or
--------------------------------------------------
Waiver. A termination of this Agreement pursuant to Section 7.01, an
- ------
amendment of this Agreement pursuant to Section 7.03 or an extension or
waiver pursuant to Section 7.04 shall, in order to be effective, require in
the case of Newco or the Company, action by its Board of Directors or the
duly authorized designee of its Board of Directors.
ARTICLE VIII
General Provisions
------------------
SECTION 8.01. Nonsurvival of Representations and Warranties.
---------------------------------- ----------
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time of the Merger and all such representations and warranties will be
extinguished on consummation of the Merger and neither the Company nor any
officer, director or employee or shareholder shall be under any liability
whatsoever with respect to any such representation or warranty after such
time. This Section 8.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective
Time of the Merger.
SECTION 8.02. Fees and Expenses. (a) In addition to any other
-----------------
amounts which may be payable or become payable pursuant
<PAGE>
94
to any other paragraph of this Section 8.02, the Company shall (provided
that (i) Newco is not then in material breach of its obligations under this
Agreement and (ii) Newco has not exercised its right of termination
pursuant to Section 7.01(h) hereof), promptly, but in no event later than
one business day after the termination of this Agreement (or from time to
time after Closing), reimburse KKR & Co. for all out-of-pocket expenses and
fees (including, without limitation, fees payable to all banks, investment
banking firms and other financial institutions, and their respective agents
and counsel, and all fees of counsel, accountants, financial printers,
experts and consultants to Newco and its affiliates), whether incurred
prior to, on or after the date hereof, in connection with the Merger and
the consummation of all transactions contemplated by this Agreement, the
Option Agreement and the Stockholders Agreement and the financing thereof;
provided that, except as set forth in the next succeeding proviso or with
- --------
respect to any reimbursement following the Closing, in no event shall the
Company be required to pay in excess of an aggregate of $3 million pursuant
to this paragraph (a); and provided further that in the event a fee is
-------- -------
payable to KKR & Co. pursuant to Section 8.02(b) hereof, the Company shall
be required to pay expenses pursuant to this paragraph (a) up to a maximum
of $12.5 million.
(b) (i) If this Agreement shall have been terminated in
accordance with its terms and either of the following shall have occurred
---
prior to such termination: (A) any corporation (including the Company or
any of its subsidiaries or affiliates),
<PAGE>
95
partnership, person, other entity or "group" (as referred to in Section
13(d)(3) of the Exchange Act) other than Newco or any of its affiliates
(collectively, "Persons") shall have become the beneficial owner of more
-------
than 20% of the outstanding shares of Company Common Stock; or (B)(x) any
Person (other than Newco or any of its affiliates) shall have made, or
proposed, communicated or disclosed in a manner which is or otherwise
becomes public (including being known by stockholders of the Company owning
of record or beneficially in the aggregate 5% or more of the outstanding
shares of Company Common Stock) a bona fide intention to make a Transaction
Proposal (including by making such a Transaction Proposal) and (y) on or
---
prior to October 31, 1996, the Company either consummates with a Person a
transaction the proposal of which would otherwise qualify as a Transaction
Proposal under Section 5.08 or enters into an agreement with a Person with
respect to a transaction the proposal of which would otherwise qualify as a
Transaction Proposal under Section 5.08 (whether or not such Person is the
Person referred to in clause (x) above); or
(ii) if this Agreement is terminated pursuant to Section 7.01(e),
Section 7.01(f) or Section 7.01(g);
then the Company shall, (1) in the case of clause (b)(i)(A) and (b)(ii)
above, promptly, but in no event later than one business day after the
termination of this Agreement and (2) in the case of clause (b)(i)(B)
above, promptly, but in no event later than one business day after an event
specified in subclause (y)
<PAGE>
96
thereof shall have occurred, pay KKR & Co. a fee of $30 million in cash,
which amount shall be payable in same day funds. No termination of this
Agreement at a time when a fee is reasonably expected to be payable
pursuant to this Section 8.02(b) following termination of this Agreement
shall be effective until such fee is paid. Only one fee in the aggregate
of $30 million shall be payable pursuant to this Section 8.02(b). No
amount payable pursuant to any of the other provisions of this Section 8.02
shall reduce the amount of the fee payable pursuant to this paragraph (b).
(c) If the Merger shall be consummated in accordance with this
Agreement, then the Company following the Merger shall pay to KKR & Co., on
the Closing Date, a fee of $15 million in cash, which amount shall be
payable in same day funds. No amount payable pursuant to any of the other
provisions of this Section 8.02 shall reduce the amount of the fee payable
pursuant to this paragraph (c).
(d) In addition to the other provisions of this Section 8.02, in
the event a fee is or becomes payable pursuant to Section 8.02(b) hereof,
the Company agrees promptly, but in no event later than two business days
following written notice thereof, together with related bills or receipts,
to reimburse KKR & Co. and Newco for all reasonable out-of-pocket costs,
fees and expenses, including, without limitation, the reasonable fees and
disbursements of counsel and the expenses of litigation, incurred in
connection with collecting the expenses pursuant to paragraph (a) of this
Section and the fee pursuant to paragraph
<PAGE>
97
(b) of this Section, as a result of any breach by the Company of its
obligations under this Section 8.02.
(e) Except as provided otherwise in paragraph (a) above, all
costs and expenses incurred in connection with this Agreement, the Option
Agreement and the Stockholders Agreement and the transactions contemplated
hereby and thereby shall be paid by the party incurring such expenses,
except that the Company shall pay all costs and expenses (i) in connection
with printing and mailing the Proxy Statement and the Form S-4, as well as
all SEC filing fees relating to the transactions contemplated herein and
(ii) of obtaining any consents of any third party.
SECTION 8.03. Notices. All notices, requests, claims, demands
-------
and other communications under this Agreement shall be in writing and shall
be deemed given if delivered personally or sent by overnight courier
(providing proof of delivery) to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice):
(a) if to Newco, to
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, New York 10019
Attention: Paul E. Raether
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: David J. Sorkin, Esq.
<PAGE>
98
(b) if to the Company, to
Bruno's, Inc.
800 Lakeshore Parkway
Birmingham, Alabama 35211
Attention: Ronald G. Bruno
with copies to:
Sirote & Permutt
2222 Arlington Avenue South
Birmingham, Alabama 35205
Attention: Richard Cohn, Esq.
SECTION 8.04. Definitions. For purposes of this
-----------
Agreement:
(a) an "affiliate" of any person means another person that
---------
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first person;
(b) "knowledge" with respect to the Company means the actual
---------
knowledge of the following officers and employees (as well as any of
their successors) of the Company and its subsidiaries: Ronald G.
Bruno, Glenn J. Griffin, Kenneth J. Bruno, Paul F. Garrison and R.
Michael Conley, and, without duplication, the employees in charge of
environmental, tax, labor, employee benefits and real estate matters
or any of the foregoing, in each case after reasonable investigation
and inquiry.
(c) "Material Adverse Change" or "Material Adverse Effect"
----------------------- -----------------------
means, when used in connection with the Company, any change or effect
that either individually or in the aggregate with all other such
changes or effects is
<PAGE>
99
materially adverse to the business, assets, operations, properties,
condition (financial or otherwise), results of operations or prospects
of the Company and its subsidiaries (including the Ventures) taken as
a whole;
(d) "person" means an individual, corporation, partnership,
------
joint venture, association, trust, unincorporated organization or
other entity; and
(e) a "subsidiary" of any person means another person, an amount
----------
of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person.
SECTION 8.05. Interpretation. When a reference is made in this
--------------
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation".
SECTION 8.06. Counterparts. This Agreement may be executed in
------------
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective
<PAGE>
100
when one or more counterparts have been signed by each of the parties and
delivered to the other parties.
SECTION 8.07. Entire Agreement; No Third-Party Beneficiaries.
----------------------------------------------
This Agreement and the other agreements referred to herein constitute the
entire agreement, and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
of this Agreement. This Agreement, other than Sections 5.05 and 8.02, is
not intended to confer upon any person other than the parties any rights or
remedies.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
-------------
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ALABAMA,
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 8.09. Assignment. Neither this Agreement nor any of the
----------
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 8.10. Enforcement. The parties agree that irreparable
-----------
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall
be entitled to an
<PAGE>
101
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement.
<PAGE>
102
IN WITNESS WHEREOF, Newco and the Company have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
CRIMSON ACQUISITION CORP.
By: /s/ James H. Greene, Jr.
---------------------------------
Name: James H. Greene, Jr.
Title: President
BRUNO'S, INC.
By: /s/ Ronald G. Bruno
----------------------------------
Name: Ronald G. Bruno
Title: Chairman CEO
<PAGE>
EXHIBIT A
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
BRUNO'S, INC.
STATE OF ALABAMA )
)
COUNTY OF JEFFERSON )
TO THE HONORABLE JUDGE OF PROBATE OF JEFFERSON COUNTY, ALABAMA:
Pursuant to the provisions of Article 10 of Chapter 2B of Title
10 of the Code of Alabama of 1975 (Sec. 10-2B-10.01, et seq.), the undersigned
-- ---
corporation executes the following Amended and Restated Articles of
Incorporation:
FIRST: The name of the corporation is Bruno's, Inc.
SECOND: The Articles of Incorporation of the corporation shall be
amended and restated as set forth below:
1. The name of the Corporation is Bruno's, Inc.
2. The duration of the Corporation is perpetual.
3. The purpose or purposes for which the Corporation is
organized are the transaction of any or all lawful business for which
corporations may be incorporated under the Alabama Business Corporation
Act, including, but not limited to, acquiring, purchasing, investing in or
engaging in a business combination or joint venture with, however any of
the foregoing may be structured, any corporation, partnership, limited
liability company or other entity engaged, in whole or in part, in the
manufacturing, marketing, distribution, provision or sale of clothing,
food, pharmaceuticals, consumer goods and services, or other goods or
services; following any such transaction, to engage in any business
theretofore conducted by any business entity which was party to any such
transaction; and to engage in any financing or other transactions
necessary, appropriate or convenient to effect any of the purposes for
which the Corporation is organized.
4. The total number of shares of capital stock that the
Corporation is authorized to issue is 30,000,000 shares of Common Stock,
par value $0.01 each.
<PAGE>
2
5. The registered office and registered agent of the Corporation
is The Corporation Company, 60 Commerce Street, Montgomery, AL 36104.
6. (a) The names and addresses of the current individuals who
are to serve as the directors of the Corporation are as follows:
Paul E. Raether
9 West 57th Street
New York, New York 10019
James H. Greene, Jr.
9 West 57th Street
New York, New York 10019
Nils P. Brous
9 West 57th Street
New York, New York 10019
Such persons shall serve as directors of the Corporation until the first
annual meeting of shareholders of the Corporation and until their
successors are elected and shall qualify.
(b) The number of directors of the Corporation shall consist of
not less than three nor more than fifteen persons, the exact number of
persons within such minimum and maximum limitations being fixed from time
to time by the board of directors of the Corporation pursuant to
resolutions adopted by a majority of the persons constituting the board of
directors at the time such resolutions are adopted. The board of directors
shall have the power to fill all vacancies occurring on the board of
directors, including, without limitation, any vacancies resulting from an
increase in the number of directors within the minimum and maximum
limitations on the number of directors of the Corporation set forth in this
Article 6.
7. The name and address of the incorporators are as follows:
Joseph Bruno
729-10th Avenue, West
Birmingham, Alabama
Angelo J. Bruno
1229 Bush Circle
Birmingham, Alabama
Lee J. Bruno
928-5th Place, West
Birmingham, Alabama
Anthony J. Bruno
1606-27th Street, North
<PAGE>
3
Birmingham, Alabama
Sam Bruno
1000-53rd Street, South
Birmingham, Alabma
8. The Board of Directors of the Corporation, acting by majority
vote, may alter, amend or repeal the By-Laws of the Corporation.
9. Every person who is or was a director or an officer of the
Corporation shall be indemnified by the Corporation to the fullest extent
allowed by law, including the indemnification permitted by Section 10-2B-
8.58 of the Alabama Business Corporation Act, against all liabilities and
expenses imposed upon or incurred by that person in connection with any
proceeding in which that person may be made, or threatened to be made, a
party, or in which that person may become involved by reason of that person
being or having been a director or an officer of or of serving or having
served in any capacity with any other enterprise at the request of the
Corporation, whether or not that person is a director or an officer or
continues to serve the other enterprise at the time the liabilities or
expenses are imposed or incurred. During the pendency of any such
proceeding, the Corporation shall, to the fullest extent permitted by law,
promptly advance expenses that are incurred, from time to time, by a
director or an officer in connection with the proceeding, subject to the
receipt by the Corporation of a written affirmation and a written
undertaking as required by law.
10. A director of the Corporation shall not be liable to the
Corporation or its shareholders for money damages for any action taken, or
failure to take action, as a director, except for (i) the amount of a
financial benefit received by such director to which such director is not
entitled; (ii) an intentional infliction of harm by such director on the
Corporation or its shareholders; (iii) a violation of Section 10-2B-8.33 of
the Alabama Business Corporation Act or any successor provision to such
section; (iv) an intentional violation by such director of criminal law; or
(v) a breach of such director's duty of loyalty to the Corporation or its
shareholders. If the Alabama Business Corporation Act, or any successor
statute thereto, is hereafter amended to authorize the further elimination
or limitation of the liability of a director of a corporation, then the
liability of a director of the Corporation, in addition to the limitations
on liability provided herein, shall be limited to the fullest extent
permitted by the Alabama Business Corporation Act, as amended, or any
successor statute thereto. Any repeal or modification of this provision by
the shareholders of the Corporation shall be prospective only and shall not
adversely affect any limitation on the liability of a director of the
Corporation existing at the time of such repeal or modification.
<PAGE>
4
11. No shareholder shall have a preemptive right to purchase
shares of any class of capital stock of the Corporation, including treasury
shares.
THIRD: The foregoing Amended and Restated Articles of
Incorporation were adopted by the shareholders of the corporation on
____________, 1995, in the manner prescribed by the Alabama Business
Corporation Act.
FOURTH: The Common Stock of the corporation, par value $.01 per
share, was the only voting group entitled to vote on such Amended and
Restated Articles of Incorporation. As of the record date for the meeting
of shareholders at which said amendment was adopted, there were ___________
shares of such Common Stock outstanding, and the holders of such shares
were entitled to cast one vote per share, or an aggregate of _________
votes. There were _____ votes entitled to be cast by the holders of the
Common Stock of the corporation indisputably represented at the meeting.
FIFTH: The total number of votes cast for the adoption of such
Amended and Restated Articles of Incorporation by the holders of the Common
Stock of the corporation was ___________, and the total number of votes
cast against the adoption of such Amended and Restated Articles of
Incorporation by the holders of the Common Stock of the corporation was
_________, and the number of votes cast for the adoption of said Amended
and Restated Articles of Incorporation was sufficient for approval of the
Amended and Restated Articles of Incorporation by the holders of the Common
Stock of the corporation.
Dated this ______ day of ___________ , 1995.
BRUNO'S, INC.
By ________________________________
(Name of Officer Executing Document)
Its _______________________________
This instrument prepared by:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
<PAGE>
EXHIBIT B
Form of Company Affiliate Letter
--------------------------------
Gentlemen:
The undersigned, a holder of shares of Common Stock, par value
$.01 per share ("Company Stock"), of Bruno's, Inc., an Alabama corporation
-------------
(the "Company"), is entitled to retain in connection with the merger (the
-------
"Merger") of the Company with Crimson Acquisition Inc., an Alabama
------
corporation, securities (the "Securities") of the Company. The undersigned
----------
acknowledges that the undersigned may be deemed an "affiliate" of the
Company within the meaning of Rule 145 ("Rule 145") promulgated under the
--------
Securities Act of 1933 (the "Act"), although nothing contained herein
---
should be construed as an admission of such fact.
If in fact the undersigned were an affiliate under the Act, the
undersigned's ability to sell, assign or transfer the Securities retained
by the undersigned pursuant to the Merger may be restricted unless such
transaction is registered under the Act or an exemption from such
registration is available. The undersigned understands that such
exemptions are limited and the undersigned has obtained advice of counsel
as to the nature and conditions of such exemptions, including information
with respect to the applicability to the sale of such securities of Rules
144 and 145(d) promulgated under the Act.
The undersigned hereby represents to and covenants with the
Company that the undersigned will not sell, assign or transfer any of the
Securities retained by the undersigned
<PAGE>
2
pursuant to the Merger except (i) pursuant to an effective registration
statement under the Act, (ii) in conformity with the volume and other
limitations of Rule 145 or (iii) in a transaction which, in the opinion of
independent counsel reasonably satisfactory to the Company or as described
in a "no-action" or interpretive letter from the Staff of the Securities
and Exchange Commission (the "SEC"), is not required to be registered under
---
the Act.
In the event of a sale or other disposition by the undersigned of
Securities pursuant to Rule 145, the undersigned will supply the Company
with evidence of compliance with such Rule, in the form of a letter in the
form of Annex I hereto. The undersigned understands that the Company may
instruct its transfer agent to withhold the transfer of any Securities
disposed of by the undersigned, but that upon receipt of such evidence of
compliance the transfer agent shall effectuate the transfer of the
Securities sold as indicated in the letter.
The undersigned acknowledges and agrees that appropriate legends
will be placed on certificates representing Securities retained by the
undersigned in the Merger or held by a transferee thereof, which legends
will be removed by delivery of substitute certificates upon receipt of an
opinion in form and substance reasonably satisfactory to the Company from
independent counsel reasonably satisfactory to the Company to the effect
that such legends are no longer required for purposes of the Act.
The undersigned acknowledges that (i) the undersigned has
carefully read this letter and understands the requirements
<PAGE>
3
hereof and the limitations imposed upon the distribution, sale, transfer or
other disposition of Securities and (ii) the receipt by Newco of this
letter is an inducement and a condition to Newco's obligations to
consummate the Merger.
Very truly yours,
Dated:
<PAGE>
ANNEX I
TO EXHIBIT B
[Name] [Date]
On __________________ the undersigned sold the
securities ("Securities") of the Company (the "Company") described below in
---------- -------
the space provided for that purpose (the "Securities"). The Securities
----------
were retained by the undersigned in connection with the merger of Crimson
Acquisition Corp. with and into Bruno's, Inc.
Based upon the most recent report or statement filed by the
Company with the Securities and Exchange Commission, the Securities sold by
the undersigned were within the prescribed limitations set forth in
paragraph (e) of Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Act").
---
The undersigned hereby represents that the Securities were sold
in "brokers' transactions" within the meaning of Section 4(4) of the Act or
in transactions directly with a "market maker" as that term is defined in
Section 3(a)(38) of the Securities Exchange Act of 1934, as amended. The
undersigned further represents that the undersigned has not solicited or
arranged for the solicitation of orders to buy the Securities, and that the
undersigned has not made any payment in connection
<PAGE>
2
with the offer or sale of the Securities to any person other than to the
broker who executed the order in respect of such sale.
Very truly yours,
[Space to be provided for description of securities]
EXHIBIT 4
---------
Conformed Copy
--------------
STOCKHOLDERS AGREEMENT
----------------------
AGREEMENT dated as of April 20, 1995 by and among Crimson
Acquisition Corp., an Alabama corporation ("Newco"), and the other parties
signatory hereto (each a "Stockholder").
RECITALS
--------
Concurrently herewith, Newco, a wholly-owned subsidiary of BI
Associates L.P., a Delaware limited partnership ("Parent"), and Bruno's,
Inc., an Alabama corporation (the "Company"), are entering into an
Agreement and Plan of Merger of even date herewith (as such agreement may
be amended from time to time, the "Merger Agreement"; capitalized terms
used but not defined herein shall have the meanings set forth in the Merger
Agreement) pursuant to which Newco will be merged with and into the Company
(the "Merger"), whereby each share of common stock, par value $.01 per
share, of the Company ("Company Common Stock") issued and outstanding
immediately prior to the Effective Time of the Merger will be converted
into either (A) the right to retain at the election of the holder thereof
and subject to the terms of the Merger Agreement, common stock, par value
$.01 per share, of the Company or (B) the right to receive cash, other than
(i) shares of Company Common Stock owned, directly or indirectly, by the
Company or any subsidiary of the Company or by Parent, Newco or any other
subsidiary of Parent and (ii) Dissenting Shares.
Pursuant to a purchase by Newco, contemporaneous with the
execution of this Agreement, of ten shares of Company Common Stock from
Ronald G. Bruno at a price equal to the Cash Election
<PAGE>
2
Price (as defined in the Merger Agreement), Newco is a stockholder of the
Company.
As a condition to Newco's willingness to enter into the Merger
Agreement, Newco requires that each Stockholder enter into, and each such
Stockholder has agreed to enter into, this Agreement.
AGREEMENT
---------
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. Representations and Warranties. Each Stockholder hereby
------------------------------
severally represents and warrants to Newco as follows:
(a) Ownership of Shares. (1) Such Stockholder is either
-------------------
(i) the record holder and beneficial owner of, (ii) trustee of a trust
that is the record holder or beneficial owner of, and whose
beneficiaries are the beneficial owners (such trustee, a "Trustee")
of, (iii) executor of an estate that is the record holder or
beneficial owner of, and whose beneficiaries are the beneficial owners
(such executor, an "Executor") of, (iv) director of a foundation that
is the record holder (such director, a "Foundation Director") of, or
(v) the beneficial owner but not the record holder of, the number of
shares of Company Common Stock as set forth opposite such
Stockholder's name on Section 1 of the disclosure schedule (the
"Stockholders Agreement Disclosure Schedule") (the "Existing Shares",
and together with any shares of Company Common Stock acquired by such
Stockholder in any such
<PAGE>
3
capacities after the date hereof and prior to the termination hereof,
whether upon exercise of options, conversion of convertible
securities, purchase, exchange or otherwise, the "Shares").
(2) On the date hereof, the Existing Shares set forth opposite
such Stockholder's name on Section 1 of the Stockholders Agreement
Disclosure Schedule constitute all of the shares of Company Common
Stock owned of record or beneficially by such Stockholder.
(3) Such Stockholder has sole power of disposition with respect
to all of the Existing Shares set forth opposite such Stockholder's
name on Section 1 of the Stockholders Agreement Disclosure Schedule
and sole voting power with respect to the matters set forth in
Section 2 hereof and sole power to demand dissenter's or appraisal
rights, in each case with respect to all of the Existing Shares set
forth opposite such Stockholder's name on Section 2 of the
Stockholders Agreement Disclosure Schedule, with no restrictions on
such rights, subject to applicable federal securities laws and the
terms of this Agreement.
(b) Power; Binding Agreement. Such Stockholder has the legal
------------------------
capacity, power and authority to enter into and perform all of such
Stockholder's obligations under this Agreement. The execution, delivery
and performance of this Agreement by such Stockholder will not violate any
other agreement to which such Stockholder is a party or by which such
Stockholder is bound including, without limitation, any trust agreement,
will,
<PAGE>
4
testamentary document, voting agreement, stockholders agreement, voting
trust or other agreement. This Agreement has been duly and validly
executed and delivered by such Stockholder and constitutes a valid and
binding agreement of such Stockholder, enforceable against such Stockholder
in accordance with its terms. There is no beneficiary of or holder of a
voting trust certificate or other interest of any trust of which a
Stockholder is Trustee, any estate in respect of which a Stockholder is an
Executor or any Foundation of which a Stockholder is a Foundation Director
whose consent is required for the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby. If such
Stockholder is married and such Stockholder's Shares constitute community
property, this Agreement has been duly authorized, executed and delivered
by, and constitutes a valid and binding agreement of, such Stockholder's
spouse, enforceable against such person in accordance with its terms.
(c) No Conflicts. Except for filings under the Hart-Scott-
------------
Rodino Antitrust Improvements Act of 1976, as amended, if applicable, (A)
no filing with, and no permit, authorization, consent or approval of, any
state or federal public body or authority is necessary for the execution of
this Agreement by such Stockholder and the consummation by such Stockholder
of the transactions contemplated hereby and (B) neither the execution and
delivery of this Agreement by such Stockholder nor the consummation by such
Stockholder of the transactions contemplated hereby nor compliance by such
Stockholder with any of the
<PAGE>
5
provisions hereof shall (x) conflict with or result in any breach of any
applicable trust, estate, foundation or other organizational documents
applicable to such Stockholder, (y) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which such Stockholder is a party or by which
such Stockholder or any of such Stockholder's properties or assets may be
bound or (z) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to such Stockholder or any of such
Stockholder's properties or assets.
(d) Such Stockholder's Shares and the certificates representing
such Shares are now and at all times during the term hereof will be held by
such Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, (i) except for any such encumbrances or
proxies arising hereunder and (ii) in the case of Ann Bruno, Alan Bruno,
David Bruno and Suzanne Bowness, except for the proxy granted by each such
Stockholder to Ronald G. Bruno (it being acknowledged by Ronald G. Bruno
and each such Stockholder that so long as this Agreement is in effect, the
agreements of each such
<PAGE>
6
Stockholder hereunder shall, with respect to the subject matter of this
Agreement, override the rights granted to Ronald G. Bruno pursuant to the
proxy in respect of each such Stockholder's Shares).
(e) No broker, investment banker, financial adviser or other
person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Stockholder.
(f) Such Stockholder understands and acknowledges that Newco is
entering into the Merger Agreement in reliance upon such Stockholder's
execution and delivery of this Agreement.
2. Agreement to Vote; Proxy.
------------------------
2.1 Voting. Each Stockholder set forth on Section 2 of the
------
Stockholders Agreement Disclosure Schedule (each, a "Schedule 2
Stockholder") hereby severally agrees that, during the time this Agreement
is in effect, at any meeting of the stockholders of the Company, however
called, or in connection with any written consent of the stockholders of
the Company, such Stockholder shall vote (or cause to be voted) the Shares
held of record or beneficially by such Stockholder (i) in favor of the
Merger, the execution and delivery by the Company of the Merger Agreement
and the approval of the terms thereof and each of the other actions
contemplated by the Merger Agreement, this Agreement and the Option
Agreement and any actions required in furtherance hereof and thereof;
(ii) against any action or agreement that would result in a breach of any
covenant,
<PAGE>
7
representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement, this Agreement or the Option Agreement;
and (iii) except as specifically requested in writing by Newco in advance,
against the following actions (other than the Merger and the transactions
contemplated by the Merger Agreement and the Option Agreement): (1) any
extraordinary corporate transaction, such as a merger, consolidation or
other business combination involving the Company or its subsidiaries; (2) a
sale, lease or transfer of a material amount of assets of the Company or
its subsidiaries or a reorganization, recapitalization, dissolution or
liquidation of the Company or its subsidiaries; (3) (a) any change in the
majority of the board of directors of the Company; (b) any material change
in the present capitalization of the Company or any amendment of the
Company's Articles of Incorporation; (c) any other material change in the
Company's corporate structure or business; or (d) any other action which,
is intended, or could reasonably be expected, to impede, interfere with,
delay, postpone, discourage or materially adversely affect the Merger or
the transactions contemplated by the Merger Agreement, this Agreement or
the Option Agreement or the contemplated economic benefits of any of the
foregoing. Such Stockholder shall not enter into any agreement or
understanding with any person or entity prior to the Termination Date (as
defined in Section 7) to vote or give instructions after the Termination
Date in any manner inconsistent with clauses (i), (ii) or (iii) of the
preceding sentence.
<PAGE>
8
2.2 PROXY. EACH SCHEDULE 2 STOCKHOLDER HEREBY GRANTS TO, AND
-----
APPOINTS, NEWCO AND JAMES H. GREENE, JR. OF NEWCO, NILS P. BROUS OF NEWCO,
IN THEIR RESPECTIVE CAPACITIES AS OFFICERS OF NEWCO, AND ANY INDIVIDUAL WHO
SHALL HEREAFTER SUCCEED TO ANY SUCH OFFICE OF NEWCO, AND ANY OTHER DESIGNEE
OF NEWCO, EACH OF THEM INDIVIDUALLY, SUCH STOCKHOLDER'S IRREVOCABLE (UNTIL
THE TERMINATION DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF
SUBSTITUTION) TO VOTE THE SHARES AS INDICATED IN SECTION 2.1 ABOVE. EACH
SCHEDULE 2 STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE
TERMINATION DATE) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER
ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE
THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY
SUCH STOCKHOLDER WITH RESPECT TO SUCH STOCKHOLDER'S SHARES (EXCEPT FOR THE
PROXY DESCRIBED IN CLAUSE (ii) OF SECTION 1(d) HEREOF, SUBJECT TO THE
PROVISIONS OF SUCH CLAUSE (ii) OF SECTION 1(d) HEREOF).
2.3 Stockholder Capacity. No person executing this Agreement
--------------------
who is, or becomes during the term hereof, a director of the Company makes
any agreement or understanding herein in his or her capacity as such
director, and the agreements set forth herein shall in no way restrict any
director in the exercise of his or her fiduciary duties as a director of
the Company. Each Stockholder signs solely in his or her capacity as the
record and beneficial owner of such Stockholder's Shares or as the trustee
of a trust, executor of an estate or director of a foundation,
<PAGE>
9
whose beneficiaries are the beneficial owners of, such Stockholder's
Shares.
3. Certain Covenants of Stockholders. Except in accordance with
---------------------------------
the terms of this Agreement, each Stockholder hereby severally covenants
and agrees as follows:
3.1 No Solicitation. No Stockholder shall, directly or
---------------
indirectly (including through advisors, agents or other intermediaries),
solicit (including by way of furnishing information) or respond to any
inquiries or the making of any proposal by any person or entity (other than
Parent, Newco or any affiliate thereof) with respect to the Company that
constitutes or could reasonably be expected to lead to a Transaction
Proposal. If any Stockholder receives any such inquiry or proposal, then
such Stockholder shall promptly inform Newco of the terms and conditions,
if any, of such inquiry or proposal and the identity of the person making
it. Each Stockholder will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing.
3.2 Restriction on Transfer, Proxies and Non-Interference;
------------------------------------------------------
Restriction on Withdrawal. No Stockholder shall, directly or indirectly:
- -------------------------
(i) except pursuant to the terms of the Merger Agreement and this
Agreement, and except for gifts to family members who either are
signatories to this Agreement or who, upon such gift, become signatories to
this Agreement, offer for sale, sell, transfer, tender, pledge, encumber,
assign or otherwise dispose of, enforce or permit the execution of the
<PAGE>
10
provisions of any redemption agreement with the Company or enter into any
contract, option or other arrangement or understanding with respect to or
consent to the offer for sale, sale, transfer, tender, pledge, encumbrance,
assignment or other disposition of, any or all of such Stockholder's Shares
or any interest therein; (ii) except as contemplated hereby, grant any
proxies or powers of attorney, deposit any Shares into a voting trust or
enter into a voting agreement with respect to any Shares; or (iii) take any
action that would make any representation or warranty of such Stockholder
contained herein untrue or incorrect or have the effect of preventing or
disabling such Stockholder from performing such Stockholder's obligations
under this Agreement.
3.3 Waiver of Appraisal and Dissenter's Rights. Each
------------------------------------------
Stockholder hereby waives any rights of appraisal or rights to dissent from
the Merger that such Stockholder may have. Each Trustee, Executor and
Foundation Director represents that no beneficiary who is a beneficial
owner of Shares under any trust, estate or foundation for which such
Stockholder acts as Trustee, Executor or Foundation Director, respectively,
has any right of appraisal or right to dissent from the Merger which has
not been so waived.
3.4 No Termination or Closure of Trusts, Foundations and
----------------------------------------------------
Estates. Unless, in connection therewith, the Shares held by any trust,
- -------
foundation or estate which are presently subject to the terms of this
Agreement are transferred upon termination to one or more Stockholders and
remain subject in all respects to the terms of this Agreement, or other
persons or entities who
<PAGE>
11
upon receipt of such Shares become signatories to this Agreement, the
Stockholders who are Trustees, Executors or Foundation Directors shall not
take any action to terminate, close or liquidate any such trust, estate or
foundation and shall take all steps necessary to maintain the existence
thereof at least until the first to occur of (i) the Effective Time of the
Merger and (ii) the Termination Date.
3.5 Continued Service as Director. Ronald G. Bruno agrees to
-----------------------------
serve as a director of the Company for three years following the Effective
Time of the Merger, subject to the customary right of a director to resign
from a board of directors.
3.6 Stock Redemption Agreements. (a) Following the Effective
---------------------------
Time of the Merger, the signatories hereto agree promptly to terminate any
agreements with the Company pursuant to which the Company may be obligated
to repurchase their Shares of Company Common Stock, including without
limitation, the stock redemption agreement between the Company and Joseph
S. Bruno. Pending such termination, no such agreement shall be enforced.
(b) The signatories hereto agree to cooperate in order to
transfer any life insurance policy of the Company designed to provide funds
for the purchase of Company Common Stock pursuant to any such stock
redemption agreement to the relevant Stockholder on a basis which is
mutually satisfactory to the signatories hereto, the Company and Newco,
including, without limitation, the life insurance policy carried by the
Company in
<PAGE>
12
connection with the stock redemption agreement with Joseph S. Bruno.
3.7 Covenant Not to Compete. Each Stockholder agrees that for
-----------------------
the period ending five years after the Closing Date, such Stockholder will
not, directly or indirectly, own, manage, operate, control or participate
in the ownership, management, operation or control of, or be connected in
any manner with, any business which shall be engaged in the retail selling
of food or other products under the names Bruno's, Food World, Food Max,
Food Fair or Piggly Wiggly, or under any other name which uses any of the
foregoing names as a component or which is (or includes a component which
is) confusingly similar to any such names (the "trade names"), in any of
the following states: Alabama, Arkansas, Florida, Georgia, Kentucky,
Louisiana, Mississippi, North Carolina, South Carolina or Tennessee (the
"relevant states"). In addition to the foregoing, each of Ronald G. Bruno,
Kenneth J. Bruno and Joe Bruno agrees that for the period ending five years
after the Closing Date, such Stockholder will not, directly or indirectly,
own, manage, operate, control or participate in the ownership, management,
operation or control of, or be connected in any manner with, any business
which shall be engaged in the retail selling of food, beverages or other
related products under any name, including, without limitation, the trade
names, in any of the relevant states. In the event that this covenant not
to compete is held by any court of competent jurisdiction to be
unenforceable because it is too extensive in scope or time or territory, it
shall be deemed to be
<PAGE>
13
and shall be amended without any further act by the parties hereto to
conform to the scope and period of time and geographical area which would
permit it to be enforced. If this covenant is breached or threatened to be
breached, each Stockholder expressly consents that, in addition to any
other remedy Newco may have, Newco shall be entitled to apply for and
receive injunctive relief in order to prevent the continuation of any
existing breach or the occurrence of any threatened breach.
4. Further Assurances. From time to time, at the other party's
------------------
request and without further consideration, each party hereto shall execute
and deliver such additional documents and take all such further action as
may be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this
Agreement.
5. Certain Events. Each Stockholder agrees that this Agreement
--------------
and the obligations hereunder shall attach to such Stockholder's Shares and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Shares shall pass, whether by operation of law or
otherwise, including without limitation such Stockholder's heirs,
guardians, administrators or successors or as a result of any divorce.
6. Stop Transfer. (a) Each Stockholder agrees with, and
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covenants to, Newco that such Stockholder shall not request that the
Company register the transfer (book-entry or otherwise) of any certificate
or uncertificated interest representing any of such Stockholder's Shares,
unless such transfer is made in compliance with this Agreement. Each
Stockholder agrees, with
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14
respect to any Shares in certificated form, that such Stockholder will
tender to the Company, within ten business days after the date hereof, the
certificates representing such Shares and the Company will inscribe upon
such certificates the following legend: "The shares of Common Stock, par
value $.01 per share, of Bruno's, Inc. (the "Company") represented by this
certificate are subject to a Stockholders Agreement dated as of April 20,
1995, and may not be sold or otherwise transferred, except in accordance
therewith. Copies of such Agreement may be obtained at the principal
executive offices of the Company." Each Stockholder agrees that within ten
business days after the date hereof, such Stockholder will no longer hold
any Shares, whether certificated or uncertificated, in "street name" or in
the name of any nominee. Pursuant to the Merger Agreement, the Company has
agreed to notify the transfer agent for any Shares in uncertificated form
of the provisions set forth in this Section 6 and has agreed to, and each
Stockholder agrees to, provide such documentation and to do such other
things as may be required to give effect to such provisions with respect to
such uncertificated Shares.
(b) Each Stockholder who is an "affiliate" of the Company for
purposes of Rule 145 under the Securities Act of 1933, as amended, hereby
agrees to deliver to Newco, on or prior to the Closing Date (as defined in
the Merger Agreement) a written agreement substantially in the form
attached as Exhibit B to the Merger Agreement.
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15
7. Termination. Other than Sections 3.5, 3.6 and 3.7 hereof,
-----------
which shall survive the Effective Time of the Merger, the covenants and
agreements contained herein with respect to the Company Common Stock shall
terminate on the first to occur of (a) the Effective Time of the Merger and
(b) the date the Merger Agreement is terminated in accordance with its
terms (the "Termination Date").
8. Miscellaneous.
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8.1 Entire Agreement; Assignment. This Agreement
----------------------------
(i) constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof and (ii) shall not be assigned by operation of
law or otherwise without the prior written consent of the other party,
provided that Newco may assign, in its sole discretion, its rights and
obligations hereunder to any direct or indirect wholly-owned subsidiary of
Parent, but no such assignment shall relieve Newco of its obligations
hereunder if such assignee does not perform such obligations.
8.2 Amendments. This Agreement may not be modified, amended,
----------
altered or supplemented, except upon the execution and delivery of a
written agreement executed by the parties hereto; provided that Section 1
--------
of the Stockholders Agreement Disclosure Schedule may be supplemented by
Newco by adding the name and other relevant information concerning any
stockholder of the Company who agrees to be bound by the terms of this
Agreement
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16
without the agreement of any other party hereto, and thereafter such added
stockholder shall be treated as a "Stockholder" for all purposes of this
Agreement.
8.3 Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly received if so given) by hand delivery,
telegram, telex or telecopy, or by mail (registered or certified mail,
postage prepaid, return receipt requested) or by any courier service, such
as Federal Express, providing proof of delivery. All communications
hereunder shall be delivered to the respective parties at the following
addresses:
If to
Stockholder: c/o Bruno's, Inc.
800 Lakeshore Parkway
Birmingham, Alabama 35211
Attn: Ronald G. Bruno
copy to: Sirote & Permutt
2222 Arlington Avenue South
Birmingham, Alabama 35205
Attn: Richard Cohn, Esq.
If to Newco: c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street
New York, New York 10019
Attn: Paul E. Raether
copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: David J. Sorkin, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth
above.
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17
8.4 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, regardless
of the laws that might otherwise govern under applicable principles of
conflicts of laws thereof.
8.5 Enforcement. The parties agree that irreparable damage
-----------
would occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to
an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement.
8.6 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but both of
which shall constitute one and the same Agreement.
8.7 Descriptive Headings. The descriptive headings used herein
--------------------
are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
8.8 Severability. Whenever possible, each provision or portion
------------
of any provision of this Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or portion of any provision in such
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18
jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision
or portion of any provision had never been contained herein.
8.9 Definitions; Construction. For purposes of this Agreement:
-------------------------
(a) "Beneficially Own" or "Beneficial Ownership" with respect to
any securities shall mean having "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same
holder, securities Beneficially Owned by a Person shall include securities
Beneficially Owned by all other Persons with whom such Person would
constitute a "group" as described in Section 13(d)(3) of the Exchange Act.
(b) "Person" shall mean an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or other
entity.
(c) In the event of a stock dividend or distribution, or any
change in the Company Common Stock by reason of any stock dividend, split-
up, recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for
which any or all of the Shares may be changed or exchanged.
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19
IN WITNESS WHEREOF, Newco and each Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
CRIMSON ACQUISITION CORP.
By:/s/ James H. Greene, Jr.
--------------------------------
Name: James H. Greene, Jr.
Title: President
