<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration Number 333-2837
33-49329
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY 14, 1996
$200,000,000
ALBERTSON'S, INC.
LOGO
7 3/4% DEBENTURES DUE JUNE 15, 2026
------------------------
Interest on the Debentures is payable on June 15 and December 15 of each
year, commencing December 15, 1996. The Debentures will not be redeemable prior
to maturity. See "Description of Debentures".
The Debentures will be represented by one or more Global Debentures
registered in the name of a nominee of The Depository Trust Company, as
Depositary. Beneficial interests in the Global Debentures will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants. Except as described under "Description of
Debentures -- Book-Entry System" herein and under "Description of Debt
Securities -- Book-Entry System" in the accompanying Prospectus, owners of
beneficial interests in the Global Debentures will not be entitled to receive
Debentures in definitive form and will not be considered the holders thereof.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
------------------------------------------------------
<S> <C> <C> <C>
Per Debenture............................ 99.113% .875% 98.238%
Total.................................... $198,226,000 $1,750,000 $196,476,000
</TABLE>
- ------------
(1) Plus accrued interest from June 17, 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $150,000 payable by the Company.
------------------------
The Debentures offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the
Debentures will be ready for delivery through the facilities of The Depository
Trust Company in New York, New York, on or about June 17, 1996 against payment
therefor in immediately available funds.
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
MERRILL LYNCH & CO.
------------------------
The date of this Prospectus Supplement is June 12, 1996.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
RECENT DEVELOPMENTS
On May 23, 1996, the Company announced its first quarter results. Sales
were $3.3 billion for the 13 weeks ended May 2, 1996, an increase of 8.4% over
the same quarter in the previous year. Identical store sales increased 2.4%, and
comparable store sales (which include replacement stores) increased 2.7%.
Operating profit increased 11.6% compared to the first quarter of 1995. Net
earnings were $112.4 million compared to $99.3 million in the previous year, an
increase of 13.2%. Earnings per share increased 15.4% to $.45 per share from
$.39 per share last year.
During the quarter, fourteen stores were opened, one store was closed and
six store remodels were completed. Net retail square footage increased 9.7% from
May 4, 1995. The Company supplies all of its retail stores from 12 Company-owned
distribution centers, encompassing over seven million square feet.
USE OF PROCEEDS
The Company expects to use the net proceeds from the sale of the Debentures
offered hereby (estimated to be $196,326,000) to repay commercial paper
borrowings bearing interest at rates ranging from 5.33% to 5.41%. To the extent
the Company does not use the net proceeds to repay such borrowings, such
proceeds will be used for working capital and general corporate purposes.
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the Debentures offered
hereby (referred to in the Prospectus as the "Offered Securities") supplements,
and to the extent inconsistent therewith replaces, the description of the
general terms and provisions of the Debt Securities set forth in the
accompanying Prospectus, to which description reference is hereby made.
Capitalized terms not otherwise defined herein shall have the meanings given to
them in the accompanying Prospectus. Section and Article references used herein
are references to the Indenture.
GENERAL
The 7 3/4% Debentures due June 15, 2026 (the "Debentures") will be issued
under an Indenture dated as of May 1, 1992 (the "Indenture"), between the
Company and First Trust of New York, National Association, as Trustee and
successor in interest to the corporate trust business of Morgan Guaranty Trust
Company of New York (the "Trustee"). An affiliate of the Trustee currently
provides certain banking and financial services to the Company in the ordinary
course of business and may provide other such services in the future. The
Debentures will be limited to $200,000,000 aggregate principal amount and will
mature on June 15, 2026. The Debentures will bear interest at the rate per annum
set forth on the cover page of this Prospectus Supplement from June 17, 1996, or
from the most recent Interest Payment Date to which interest has been paid or
provided for, payable semiannually on June 15 and December 15 of each year,
commencing December 15, 1996, to the persons in whose names the Debentures (or
any predecessor Debentures) are registered at the close of business on the June
1 or December 1, as the case may be, next preceding such Interest Payment Date.
The Debentures will be senior unsecured general obligations of the Company
that will rank on a parity with all other senior unsecured indebtedness of the
Company from time to time outstanding.
S-2
<PAGE> 3
The defeasance and covenant defeasance provisions of the Indenture
described under the caption "Description of Debt Securities -- Defeasance and
Covenant Defeasance" in the accompanying Prospectus will apply to the
Debentures.
The covenant provisions of the Indenture described under the caption
"Description of Debt Securities -- Certain Covenants of the Company" in the
accompanying Prospectus will apply to the Debentures.
The Debentures will not be redeemable prior to maturity and do not provide
for any sinking fund.
BOOK-ENTRY SYSTEM
The Debentures will be represented by one or more Global Debentures
(collectively, the "Global Debenture") registered in the name of The Depository
Trust Company, as Depositary. The provisions set forth under "Description of
Debt Securities -- Book-Entry System" in the accompanying Prospectus will be
applicable to the Debentures. Accordingly, beneficial interests in the
Debentures will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary and its participants. Except as
described under "Description of Debt Securities -- Book-Entry System" in the
accompanying Prospectus, owners of beneficial interests in the Global Debenture
will not be entitled to receive Debentures in definitive form and will not be
considered holders of Debentures.
The Depositary has advised the Company and the Underwriters as follows: The
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under the Exchange Act. The Depositary was created
to hold securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly. The
Depositary agrees with and represents to its participants that it will
administer its book-entry system in accordance with its rules and by-laws and
requirements of law.
Principal and interest payments on the Debentures registered in the name of
the Depositary's nominee will be made in immediately available funds to the
Depositary's nominee as the registered owner of the Global Debenture. Under the
terms of the Indenture, the Company and the Trustee will treat the persons in
whose names the Debentures are registered as the owners of such Debentures for
the purpose of receiving payment of principal and interest on such Debentures
and for all other purposes whatsoever. Therefore, neither the Company, the
Trustee nor any paying agent has any direct responsibility or liability for the
payment of principal or interest on the Debentures to owners of beneficial
interests in the Global Debenture. The Depositary has advised the Company and
the Trustee that its current practice is, upon receipt of any payment of
principal or interest, to immediately credit the accounts of the participants
with such payment in amounts proportionate to their respective holdings in
principal amount of beneficial interests in the Global Debenture as shown in the
records of the Depositary. The Depositary's current practice is to credit such
accounts, as to interest, in next day funds and, as to principal, in same day
funds. Payments by participants and indirect participants to owners of
beneficial interests in the Global Debenture will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of the participants or indirect participants.
Settlement for the Debentures will be made by the Underwriters in immediately
available funds.
S-3
<PAGE> 4
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to each of the Underwriters named
below, and each of such Underwriters has severally agreed to purchase from the
Company, the principal amount of Debentures set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OF
UNDERWRITER DEBENTURES
- ----------------------------------------------------------------------------- ------------
<S> <C>
Goldman, Sachs & Co. ........................................................ $ 66,700,000
J.P. Morgan Securities Inc. ................................................. 66,650,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated........................... 66,650,000
------------
Total.............................................................. $200,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Debentures, if any are
taken.
The Underwriters propose to offer the Debentures in part directly to retail
purchasers at the initial public offering price set forth on the cover page of
this Prospectus Supplement and in part to certain securities dealers at such
price less a concession of 0.50% of the principal amount of the Debentures. The
Underwriters may allow, and such dealers may reallow, a concession not to exceed
0.25% of the principal amount of the Debentures to certain brokers and dealers.
After the Debentures are released for sale to the public, the offering price and
other selling terms may from time to time be varied by the Underwriters.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that the Underwriters
intend to make a market in the Debentures but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Debentures.
Certain of the Underwriters and their affiliates from time to time perform
various commercial banking and investment banking services for the Company, for
which customary compensation has been received. In this regard, Morgan Guaranty
Trust Company of New York, an affiliate of J.P. Morgan Securities Inc., is
currently serving as lead co-agent bank for the Company's $400 million revolving
credit facility and as issuing and paying agent for the Company's commercial
paper program.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.
S-4
<PAGE> 5
ALBERTSON'S, INC.
LOGO
DEBT SECURITIES
------------------------
Albertson's, Inc. (the "Company") may from time to time offer Debt
Securities consisting of debentures, notes and/or other unsecured evidences of
indebtedness in one or more series with an aggregate initial offering price not
to exceed $500,000,000. The Debt Securities may be offered as separate series in
amounts, at prices and on terms to be determined at the time of sale. The
accompanying Prospectus Supplement sets forth with regard to the series of Debt
Securities in respect of which this Prospectus is being delivered the title,
aggregate principal amount, denominations, maturity, rate, if any (which may be
fixed or variable), and time of payment of any interest, any terms for
redemption at the option of the Company or the holder, any terms for sinking
fund payments, any listing on a securities exchange and the initial public
offering price and any other terms in connection with the offering and sale of
such Debt Securities.
The Company may sell Debt Securities to or through underwriters and may
also sell Debt Securities directly to other purchasers or through agents. Such
underwriters may include Goldman, Sachs & Co., J.P. Morgan Securities Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated or may be a group of
underwriters represented by firms including one or more of such firms. Such
firms may also act as agents. The accompanying Prospectus Supplement sets forth
the names of any underwriters or agents involved in the sale of the Debt
Securities in respect of which this Prospectus is being delivered, the principal
amounts, if any, to be purchased by underwriters and the compensation, if any,
of such underwriters or agents.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
This Prospectus may not be used to consummate any sale of Debt Securities
unless accompanied by a Prospectus Supplement.
------------------------
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
MERRILL LYNCH & CO.
------------------------
The date of this Prospectus is May 14, 1996
1
<PAGE> 6
AVAILABLE INFORMATION
Albertson's, Inc. ("Albertson's" or the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and, in accordance therewith, files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information filed
by the Company may be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located
at Seven World Trade Center, 13th Floor, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
can be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, such material may also be inspected and copied at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and the
Pacific Stock Exchange, Incorporated, 115 Sansome Street, 8th Floor, San
Francisco, California 94104.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") with respect to the Debt Securities offered hereby
under the Securities Act of 1933, as amended (the "Securities Act"). This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is hereby made
to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended February
1, 1996, filed with the Commission pursuant to the Exchange Act, is incorporated
herein by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of the Registration Statement or this Prospectus to the extent that
a statement contained herein, in a Prospectus Supplement or in any other
document subsequently filed with the Commission which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or this
Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents which are incorporated herein by reference,
other than exhibits to such information (unless such exhibits are specifically
incorporated by reference into such documents). Requests should be directed to
Albertson's, Inc., 250 Parkcenter Boulevard, P.O. Box 20, Boise, Idaho 83726,
Attention: Corporate Secretary, telephone (208) 385-6200 or to Albertson's,
Inc., c/o Registration Department, Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004, Attention: Donald T. Hansen, telephone (212) 902-6685.
2
<PAGE> 7
THE COMPANY
Albertson's is one of the largest retail food-drug chain in the United
States based on sales. As of February 1, 1996, the Company operated 764 stores
in 19 Western, Midwestern and Southern states and employed approximately 80,000
people. The Company's retail operations are supported by 12 Company-owned
distribution centers.
All of the Company's stores carry a broad range of national brands and
offer private label items when they are a value to the consumer. The Company
emphasizes everyday low prices, large up-to-date facilities, first-class
perishable and specialty departments, cleanliness and customer service.
The Company operates three basic store formats:
Combination food-drug stores -- Combination stores are super
grocery/super drugstores under one roof. Most offer prescription drugs, a
large selection of cosmetics and non-foods in addition to specialty
departments such as service seafood and meat, bakery, lobby and service
delicatessen. As of February 1, 1996, the Company operated 646 combination
food-drug stores. These stores range in size from 35,000 to 75,000 square
feet and account for approximately 89% of the Company's total retail square
footage.
Conventional supermarkets -- Conventional supermarkets are
supermarkets that offer a full selection in the basic departments of
grocery, meat, produce and dairy. Many also have in-store bakeries and
service delicatessens. As of February 1, 1996, the Company operated 78
conventional stores. These stores range in size from 15,000 to 35,000
square feet and account for approximately 6% of the Company's total retail
square footage.
Max stores -- Max stores are no-frills stores that offer shoppers the
opportunity to save by buying in quantity. Special emphasis is placed on
quality meat and produce at discount prices. As of February 1, 1996, the
Company operated 40 warehouse stores primarily under the name "Max Food and
Drug." These stores range in size from 17,000 to 73,000 square feet and
account for approximately 5% of the Company's total retail square footage.
The Company is committed to maintaining a modern store base, with an
emphasis on larger stores. All existing stores are continually evaluated, with
marginal performers closed and either leased, subleased or sold. As of February
1, 1996, approximately 95% of the Company's total retail square footage had been
opened or remodeled in the prior ten years. The Company currently operates over
7 million square feet of distribution facilities that supply approximately 77%
of all products purchased by the Company's retail stores.
Albertson's is a Delaware corporation organized as a successor to a
business founded by J. A. Albertson in 1939. Albertson's principal executive
offices are located at 250 Parkcenter Boulevard, Boise, Idaho 83706, and its
telephone number is (208) 385-6200.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Debt Securities for
general corporate purposes, which may include the payment of outstanding
indebtedness, the financing of capital expenditures and acquisitions and the
purchase and retirement of the Company's common stock. When a particular series
of Debt Securities is offered, the Prospectus Supplement relating thereto will
set forth the Company's intended use for the net proceeds received from the sale
of such Debt Securities.
3
<PAGE> 8
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated. Earnings consist of earnings from continuing operations
before income taxes and fixed charges (excluding interest capitalized). Fixed
charges consist of interest and the portion of rental expense deemed
representative of the interest factor.
<TABLE>
<CAPTION>
52 WEEKS 52 WEEKS 53 WEEKS 52 WEEKS 52 WEEKS
ENDED ENDED ENDED ENDED ENDED
JAN. 30, JAN. 28, FEB. 3, FEB. 2, FEB. 1,
1992 1993 1994 1995 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges.......... 7.26 6.19 6.96 7.45 8.16
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the debentures, notes and/or
other unsecured evidences of indebtedness offered hereby (the "Debt Securities")
sets forth certain general terms and provisions of the Debt Securities to which
any Prospectus Supplement may relate. The particular terms and provisions of the
series of Debt Securities offered by a Prospectus Supplement, and the extent to
which the general terms and provisions described below may apply thereto, will
be described in the Prospectus Supplement relating to such Debt Securities.
The Debt Securities will be issued under an Indenture, dated as of May 1,
1992 (the "Indenture"), between the Company and First Trust of New York, N.A.,
as Trustee (the "Trustee", as successor in interest to the corporate trust
business of Morgan Guaranty Trust Company of New York), a copy of which is filed
as an exhibit to this Registration Statement. The following summaries of certain
provisions of the Indenture do not purport to be complete and are subject to,
and are qualified in their entirety by, reference to all of the provisions of
the Indenture, including the definitions therein of certain terms. Wherever
particular provisions or defined terms of the Indenture are referred to herein
or in a Prospectus Supplement, such provisions or defined terms are incorporated
herein or therein by reference. Section and Article references used herein are
references to the Indenture.
GENERAL
The Debt Securities will be senior unsecured general obligations of the
Company that will rank on a parity with other senior unsecured indebtedness of
the Company from time to time outstanding. The Debt Securities offered by this
Prospectus will be limited to $500,000,000 aggregate principal amount (based on
the aggregate initial public offering price of such Debt Securities), although
the Indenture does not limit the aggregate principal amount of Debt Securities
that may be issued thereunder. The Debt Securities may be issued thereunder from
time to time in separate series up to the aggregate amount from time to time
authorized by the Company for each series.
Reference is made to the applicable Prospectus Supplement for a description
of the following terms of the series of Debt Securities ("Offered Securities")
in respect of which this Prospectus is being delivered: (1) the title of the
Offered Securities; (2) any limit on the aggregate principal amount of the
Offered Securities; (3) the person to whom any interest on any Offered Security
shall be payable, if other than the person in whose name the Offered Security is
registered on the Regular Record Date; (4) the date or dates on which the
Offered Securities will mature; (5) the rate or rates at which the Offered
Securities will bear interest, if any, or the method by which such rate or rates
are determined, the date or dates from which any interest will accrue, the
Interest Payment Dates on which any such interest on the Offered Securities will
be payable and the Regular Record Dates for interest payable on any such
Interest Payment Dates; (6) the place or places where the principal of and any
premium and interest on the Offered Securities will be payable; (7) the period
or periods within which, the price or prices at which, and the terms and
conditions upon which the Offered Securities may, pursuant to any optional or
mandatory provisions, be redeemed or purchased, in
4
<PAGE> 9
whole or in part by the Company; (8) the obligation of the Company, if any, to
redeem or repurchase the Offered Securities pursuant to any sinking fund or
analogous provisions or at the option of the Holders and the price or prices at
which and the terms and conditions upon which such Offered Securities shall be
redeemed or purchased, in whole or in part, and any provisions for the
remarketing of such Offered Securities; (9) the denominations in which any
Offered Securities will be issuable, if other than denominations of $1,000 and
any integral multiple thereof; (10) any index, formula or other method used to
determine the amount of payments of principal of and any premium and interest on
the Offered Securities; (11) if other than the principal amount thereof, the
portion of the principal amount of the Offered Securities which will be payable
upon declaration of the acceleration of the Maturity thereof; (12) the
applicability of any provisions described under "Certain Covenants of the
Company"; (13) the applicability of any provisions described under "Defeasance
and Covenant Defeasance"; (14) whether any of the Offered Securities are to be
issuable in permanent global form; and, if so, the terms and conditions, if any,
upon which interests in such Offered Securities in global form may be exchanged,
in whole or in part, for the individual Offered Securities represented thereby;
(15) any Events of Default with respect to the Offered Securities of such
series, if not otherwise set forth under "Events of Default"; and (16) any other
terms of the Offered Securities not inconsistent with the provisions of the
Indenture. (Section 301)
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount below their
stated principal amount. (Section 301) Federal income tax consequences and other
special considerations applicable to any such Original Issue Discount Securities
will be described in the Prospectus Supplement relating thereto. "Original Issue
Discount Security" means any security that provides for an amount less than the
principal amount thereof to be due and payable upon the declaration of
acceleration of the Maturity thereof upon the occurrence of an Event of Default
and the continuation thereof. (Section 101)
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal, premium, if any, and interest, if any, on the Debt Securities will
be payable, and the exchange of and the transfer of Debt Securities will be
registerable, at the office or agency of the Company maintained for such purpose
and at any other office or agency maintained for such purpose. (Sections 305 and
1002) Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will be issued in denominations of $1,000 or integral multiples
thereof. (Section 302) No service charge will be made for any registration of
transfer or exchange of Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith. (Section 305)
All moneys paid by the Company to a Paying Agent for the payment of
principal, premium, if any, or interest, if any, on any Debt Security which
remain unclaimed for two years after such principal, premium or interest has
become due and payable may be repaid to the Company, and thereafter the Holder
of such Debt Security may look only to the Company for payment thereof. (Section
1003)
In the event of any redemption, the Company shall not be required to (i)
issue, register the transfer of or exchange Debt Securities of any series during
a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Debt Securities of that series to be
redeemed and ending at the close of business on the day of such mailing or (ii)
register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security being
redeemed in part. (Section 305)
BOOK-ENTRY SYSTEM
The provisions set forth below in this section headed "Book-Entry System"
will apply to the Debt Securities of any series if the Prospectus Supplement
relating to such series so indicates.
5
<PAGE> 10
The Debt Securities of such series will be represented by one or more
global securities (collectively, a "Global Security") registered in the name of
a depositary (the "Depositary") or a nominee of the Depositary identified in the
Prospectus Supplement relating to such series. Except as set forth below, a
Global Security may be transferred, in whole and not in part, only to the
Depositary or another nominee of the Depositary.
Upon the issuance of a Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with the Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters, dealers or agents. Ownership of beneficial interests in a Global
Security will be limited to participants or persons that may hold interests
through participants. Ownership of interests in such Global Security will be
shown on, and the transfer of those ownership interests will be effected only
through, records maintained by the Depositary (with respect to participants'
interests) and such participants (with respect to the owners of beneficial
interests in such Global Security). The laws of some jurisdictions may require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary, or its nominee, is the registered holder and
owner of such Global Security, the Depositary or such nominee, as the case may
be, will be considered the sole owner and holder of the related Debt Securities
for all purposes of such Debt Securities and for all purposes under the
Indenture. Except as set forth below or as otherwise provided in the applicable
Prospectus Supplement, owners of beneficial interests in a Global Security will
not be entitled to have the Debt Securities represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities in definitive form and will not be considered to be
the owners or holders of any Debt Securities under the Indenture or such Global
Security. (Section 305)
Accordingly, each person owning a beneficial interest in a Global Security
must rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a holder of Debt Securities under the
Indenture or such Global Security. The Company understands that under existing
industry practice, in the event the Company requests any action of holders of
Debt Securities or an owner of a beneficial interest in a Global Security
desires to take any action that the Depositary, as the holder of such Global
Security is entitled to take, the Depositary would authorize the participants to
take such action, and that the participants would authorize beneficial owners
owning through such participants to take such action or would otherwise act upon
the instructions of beneficial owners owning through them.
Payment of principal of and premium, if any, and interest, if any, on Debt
Securities represented by a Global Security will be made to the Depositary or
its nominee, as the case may be, as the registered owner and holder of such
Global Security.
The Company expects that that Depositary, upon receipt of any payment of
principal, premium, if any, or interest, if any, in respect of a Global
Security, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of the Depositary. The
Company expects that payments by participants to owners of beneficial interests
in a Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such participants. Neither the Company nor the
Trustee nor any agent of the Company or the Trustee will have any responsibility
or liability for any aspect of the records relating to, or payments made on
account of, beneficial ownership interests in a Global Security for any Debt
Securities or for maintaining, supervising or reviewing any records
6
<PAGE> 11
relating to such beneficial ownership interests or for any other aspect of the
relationship between the Depositary and its participants or the relationship
between such participants and the owners of beneficial interests in such Global
Security owning through such participants.
Unless and until it is exchanged in whole or in part for Debt Securities in
definitive form, a Global Security may not be transferred except as a whole by
the Depositary to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.
Unless otherwise provided in the applicable Prospectus Supplement, Debt
Securities represented by a Global Security will be exchangeable for Debt
Securities in definitive form of like tenor as such Global Security in
denominations of $1,000 and in any greater amount that is an integral multiple
thereof if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act,
(ii) the Company in its discretion at any time determines not to have all of the
Debt Securities represented by a Global Security and notifies the Trustee
thereof or (iii) an Event of Default has occurred and is continuing with respect
to the Debt Securities. (Section 305) Any Debt Security that is exchangeable
pursuant to the preceding sentence is exchangeable for Debt Securities issuable
in authorized denominations and registered in such names as the Depositary shall
direct. Subject to the foregoing, a Global Security is not exchangeable, except
for a Global Security or Global Securities of the same aggregate denominations
to be registered in the name of the Depositary or its nominee.
CERTAIN COVENANTS OF THE COMPANY
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will not have the benefit of any covenants that limit or
restrict the Company's business or operations, the pledging of the Company's
assets or the incurrence of indebtedness by the Company. If so indicated in the
applicable Prospectus Supplement, certain covenants contained in the Indenture
which are summarized below will be applicable (unless waived or amended) to the
series of Debt Securities to which such Prospectus Supplement relates so long as
any of the Debt Securities of such series are outstanding. The covenants
contained in the Indenture and any series of Debt Securities would not
necessarily afford holders of the Debt Securities protection in the event of a
highly leveraged or other transaction involving the Company that may adversely
affect holders.
Limitations on Liens
If the Company or any Subsidiary shall, directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become liable for or suffer to
exist any evidence of indebtedness for money borrowed or evidenced by a bond,
debenture, note or other similar instrument, whether or not for money borrowed
("Debt"), secured by a Lien on (1) any Principal Property of the Company or of
any Subsidiary or (2) any shares of capital stock or Debt of any Subsidiary
(which Debt is then held by the Company or any Subsidiary), the Company will
secure or cause such Subsidiary to secure the Debt Securities of any series
entitled to the benefit of such covenant equally and ratably with such secured
Debt for so long as such secured Debt shall be so secured, unless the aggregate
amount of all such secured Debt, together with all Attributable Debt of the
Company and its Subsidiaries with respect to Sale and Leaseback Transactions
involving Principal Properties (with the exception of such transactions that are
excluded as described in "Limitations on Sale and Leaseback Transactions"
below), would not exceed 10% of Consolidated Net Tangible Assets.
The above restriction does not apply to, and there will be excluded from
secured Debt in any computation under such restriction, Debt secured by (i)
Liens on property of, or on any shares of capital stock of or Debt of, any
corporation existing at the date of the Indenture or at the time such
corporation becomes a Subsidiary; (ii) Liens in favor of the Company or any
Wholly-owned Subsidiary; (iii) Liens in favor of governmental bodies to secure
progress, advance or certain other
7
<PAGE> 12
payments; (iv) (A) if made in the ordinary course of business, Liens as security
for the performance of contracts other than in connection with the borrowing of
money, deferred purchase price of property or services, an advance of moneys or
the securing of Debt, (B) Liens with governmental agencies to qualify the
Company or any Subsidiary to do business, maintain self-insurance or obtain
certain other benefits, (C) mechanics' Liens, landlord Liens or statutory Liens
securing obligations incurred in the ordinary course of business not overdue or
being contested in good faith by appropriate proceedings and not incurred
directly or indirectly in connection with the borrowing of money, the deferred
purchase price of property or services or an advance of moneys, or (D)
easements, exceptions, reservations or similar encumbrances on real property
that do not materially interfere with the operation of such property or impair
the value of such property for the purposes for which such property is or may
reasonably be expected to be used by the Company or its Subsidiaries; (v) Liens
for taxes, assessments or governmental charges or levies not yet due and payable
or payable without penalty or being contested in good faith by appropriate
proceedings; (vi) Liens created by or resulting from any litigation or legal
proceeding that is being contested in good faith by appropriate proceedings,
Liens arising out of judgments or awards as to which the time for prosecuting an
appeal or proceeding for review has not expired, or Liens arising out of
individual final judgments or awards in amounts of less than $100,000, provided
that the aggregate amount of all such individual final judgments or awards shall
not at any one time exceed $1,000,000; (vii) Liens on property, shares of stock
or Debt existing at the time of acquisition thereof (including acquisition
through merger or consolidation), and purchase money and construction Liens that
are entered into within 360 days after the latest to occur of the acquisition,
completion of construction or the commencement of full operation of such
property; (viii) Liens securing industrial revenue or pollution control bonds;
(ix) Liens created in connection with a project financed with, and created to
secure, a Nonrecourse Obligation; and (x) any extension, renewal or refunding of
any Lien referred to in the foregoing clauses (i) through (ix), inclusive, to
the extent the amount of Debt secured by such Lien is not increased from the
amount originally so secured. (Section 1008)
Limitations on Sale and Leaseback Transactions
Neither the Company nor any Subsidiary may enter into any Sale and
Leaseback Transaction involving any Principal Property, unless the aggregate
amount of all Attributable Debt of the Company and its Subsidiaries with respect
to all such transactions plus all secured Debt (with the exception of secured
Debt which is excluded as described in "Limitations on Liens" above) would not
exceed 10% of Consolidated Net Tangible Assets.
This restriction does not apply to, and there shall be excluded from
Attributable Debt in any computation under such restriction, any Sale and
Leaseback Transaction if (i) the lease is for a period, including renewal
rights, not in excess of three years; (ii) the sale or transfer of the Principal
Property is made within 180 days after the latest to occur of the acquisition,
construction or the commencement of full operation of such property; (iii) the
lease secures or relates to industrial revenue or pollution control bonds; (iv)
the transaction is between the Company and a Wholly-owned Subsidiary or between
Wholly-owned Subsidiaries; (v) the lease payment obligation is created in
connection with a project financed with, and such obligation constitutes, a
Nonrecourse Obligation; or (vi) the Company or such Subsidiary, within 180 days
after the sale is completed, applies to the retirement of Funded Debt of the
Company (other than Funded Debt subordinate to the Debt Securities) or of any
Subsidiary (other than through payment at maturity or a mandatory sinking fund
or other mandatory prepayment) or to the purchase of other property which will
constitute Principal Property of a value at least equal to the value of the
Principal Property leased, an amount not less than the greater of (a) the net
proceeds from the sale of the Principal Property leased or (b) the fair market
value of the Principal Property leased. (Section 1009)
8
<PAGE> 13
Certain Definitions Applicable to Covenants
Certain terms defined in Section 101 of the Indenture and applicable to the
covenants are summarized below:
"Attributable Debt" means, as to any particular lease under which the
Company or any Subsidiary is at the time liable and at any date as of which the
amount thereof is to be determined, the total net amount of rent required to be
paid under such lease during the remaining term thereof (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended), discounted from the respective due dates thereof to such date at a
rate per annum equal to the weighted average interest rate per annum borne by
the Debt Securities of each series outstanding pursuant to the Indenture
compounded semi-annually. The net amount of rent required to be paid under any
such lease for any such period shall be the aggregate amount of the rent payable
by the lessee with respect to such period after excluding amounts required to be
paid on account of maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall also include the
amount of such penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may be so
terminated.
"Capital Lease Obligations" means any rental obligations which, under
generally accepted accounting principles, are or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.
"Consolidated Net Tangible Assets" means the net book value of all assets
of the Company and its consolidated Subsidiaries, excluding any amounts carried
as assets for shares of capital stock held in treasury, debt discount and
expense, goodwill, patents, trademarks and other intangible assets, less all
liabilities of the Company and its consolidated Subsidiaries (except Funded
Debt, minority interests in consolidated Subsidiaries, deferred taxes and
general contingency reserves of the Company and its consolidated Subsidiaries),
which in each case would be included on a consolidated balance sheet of the
Company and its consolidated Subsidiaries as of the date of determination, all
as determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Funded Debt" means (a) all indebtedness of the Company and its
Subsidiaries for money borrowed, or evidenced by a bond, debenture, note or
other similar instrument, whether or not for money borrowed, maturing on, or
renewable or extendible at the option of the obligor to, a date more than one
year from the date of the determination thereof (but not including indebtedness
under any revolving credit arrangement with banks except for any indebtedness
converted pursuant to any such arrangement into a term loan which meets the
requirements of this clause (a)), (b) Capital Lease Obligations payable on a
date more than one year from the date of the determination thereof, (c)
guarantees, direct or indirect, and other contingent obligations of the Company
and its Subsidiaries in respect of, or to purchase or otherwise acquire or be
responsible or liable for (through the investment of funds or otherwise), any
obligations of the type described in the foregoing clauses (a) or (b) of others
(but not including contingent liabilities on customer's receivables sold with
recourse), and (d) amendments, renewals, extensions and refundings of any
obligations of the type described in the foregoing clauses (a), (b) or (c).
"Lien" means any mortgage, pledge, lien, security interest, charge or
encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any of the
foregoing).
"Nonrecourse Obligation" means indebtedness or lease payment obligations
substantially related to (i) the acquisition of assets not previously owned by
the Company or any Subsidiary or (ii) the financing of a project involving the
development or expansion of properties of the Company
9
<PAGE> 14
or any Subsidiary, as to which the obligee with respect to such indebtedness or
obligation has no recourse to the Company or any Subsidiary or any assets of the
Company or any Subsidiary other than the assets which were acquired with the
proceeds of such transaction or the project financed with the proceeds of such
transaction (and the proceeds thereof).
"Principal Property" means (a) any real property (including, without
limitation, leasehold interests) together with the improvements thereon and the
equipment, if any, constituting a part of the facility located thereon
(including, without limitation, any warehouse, service center, shopping center
or distribution center, wherever located) and (b) other equipment, in each case,
of the Company or any Subsidiary and having a book value on the date as of which
the determination is being made of more than 1% of Consolidated Net Tangible
Assets as most recently determined prior to such date; provided, however, that
for purposes of clause (a) above, separate parcels of real property which are
operated generally as part of a single facility (such as a single warehouse,
service center, shopping center or distribution center) shall be deemed to be a
single property, and for purposes of clause (b) above, separate items of
equipment that are secured by Liens shall be deemed to be a single property to
the extent they are secured by such Liens pursuant to the same financing
transaction or a series of related financing transactions.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Debt Securities of any series (unless such event
is specifically inapplicable to a particular series as described in the
Prospectus Supplement relating thereto): (a) failure to pay any interest on any
Debt Security of that series when due, continued for 30 days; (b) failure to pay
principal of or any premium on any Debt Security of that series when due; (c)
failure to deposit any sinking fund payment, when due, in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture solely
for the benefit of a series of Debt Securities other than that series),
continued for 60 days after written notice as provided in the Indenture; (e)
default under indebtedness for money borrowed of the Company or any Significant
Subsidiary (as defined) having an aggregate outstanding principal amount of at
least $25,000,000 or under any mortgage, indenture or other instrument under
which there may be issued or by which there may be secured or evidenced any such
indebtedness of the Company or any Significant Subsidiary, which default either
(i) shall constitute a failure to make a principal payment of at least
$25,000,000 when due and payable after the expiration of any applicable grace
period with respect thereto or (ii) shall have resulted in such indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, without, in either case, such
indebtedness having been discharged or such default rescinded or annulled within
10 days after notice to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 10% in aggregate principal amount of the
Outstanding Debt Securities of that series specifying such default and requiring
the Company or such Significant Subsidiary to cause such indebtedness to be
discharged or such acceleration to be rescinded or annulled; (f) certain events
of bankruptcy, insolvency or reorganization involving the Company or a
Significant Subsidiary; and (g) any other Event of Default provided with respect
to Debt Securities of that series. (Section 501) No Event of Default described
above with respect to a particular series of Debt Securities necessarily
constitutes an Event of Default with respect to any other series of Debt
Securities.
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default (as defined) shall occur and be continuing,
the Trustee will be under no obligation to
10
<PAGE> 15
exercise any of its rights or powers under the Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to the
Trustee reasonable security or indemnity. (Sections 601 and 603) Subject to
certain provisions, including those requiring security and indemnification of
the Trustee, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee. (Section
512)
The Indenture provides that the Company will deliver to the Trustee, within
120 days after the end of each fiscal year, an Officers' Certificate, stating as
to each signer thereof that he is familiar with the affairs of the Company and
whether or not to the best of his knowledge the Company is in default in the
performance and observance of any of the Company's obligations under the
Indenture and if the Company shall be in default, specifying all such defaults
of which he has knowledge and the nature and status thereof. (Section 1004)
If an Event of Default shall occur and be continuing with respect to Debt
Securities of any series, either the Trustee or the Holders of at least 25% in
aggregate principal amount of all Outstanding Debt Securities of that series may
accelerate the maturity of all Debt Securities of that series; provided,
however, that after such acceleration, but before a judgment or decree based on
acceleration, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration if all Events of Default, other than the
non-payment of accelerated principal, have been cured or waived as provided in
the Indenture. (Section 502) For information as to waiver of defaults, see
"Meetings, Modifications and Waiver" below.
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default and unless also the Holders of
at least 25% in aggregate principal amount of the Outstanding Debt Securities of
that series shall have made written request, and offered reasonable indemnity,
to the Trustee to institute such proceeding as trustee, and the Trustee shall
not have received from the Holders of a majority in aggregate principal amount
of the Outstanding Debt Securities of that series a direction inconsistent with
such request and shall have failed to institute such proceeding within 60 days.
(Section 507) However, such limitations generally do not apply to a suit
instituted by a Holder of a Debt Security for the enforcement of payment of the
principal or interest on such Security on or after the respective due dates
expressed in such Debt Security. (Section 508)
MEETINGS, MODIFICATIONS AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than 66 2/3% in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; provided, however that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any installment of principal of or interest on any Debt
Security, (b) reduce the principal amount of, rate of interest on or any premium
payable upon the redemption of any Debt Security, (c) reduce the amount of
principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof, (d) change the Place of Payment where, or the coin or
currency in which, principal, premium, if any, or interest on any Debt Security
is payable, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security after the Stated Maturity or
Redemption Date, (f) reduce the percentage in principal amount of Outstanding
Debt Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults, or (g)
modify any of the provisions set forth in this paragraph except to increase any
such percentage or to provide that certain other provisions of the Indenture may
not be modified or
11
<PAGE> 16
waived without the consent of the Holder of each Outstanding Debt Security
affected thereby. (Section 902)
The Holders of at least 66 2/3% in aggregate principal amount of the
Outstanding Debt Securities of each series may, on behalf of the Holders of all
the Debt Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1010) The Holders of not less than a majority in aggregate principal
amount of the Outstanding Debt Securities of each series may, on behalf of all
Holders of Securities of that series, waive any past default under the Indenture
with respect to Securities of that series, except a default (a) in the payment
of principal of, any premium on or any interest on any Debt Security of such
series or (b) in respect of a covenant or provision of the Indenture which
cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security of such series affected thereby. (Section 513)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of Holders of Debt Securities, the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof. (Section 101)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Debt Securities under the Indenture, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to, any Person which
is a corporation, partnership or trust organized and validly existing under the
laws of any domestic jurisdiction, or may permit any such Person to consolidate
with or merge into the Company or convey, transfer or lease its properties and
assets substantially as an entirety to the Company, provided that any successor
Person assumes the Company's obligations on the Debt Securities and under the
Indenture, that after giving effect to the transaction (treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as a
result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction) no Event of Default, and no event
which, after notice or lapse of time, would become an Event of Default, shall
have occurred and be continuing, and that certain other conditions are met.
(Section 801)
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that, if such provision is made applicable to the
Debt Securities of any series pursuant to the provisions of the Indenture, the
Company may elect (i) to defease and be discharged from any and all obligations
in respect of such Debt Securities except for certain obligations to register
the transfer or exchange of such Debt Securities, to replace temporary,
destroyed, stolen, lost or mutilated Debt Securities, to maintain paying
agencies and to hold moneys for payment in trust ("defeasance") or (ii) (A) to
omit to comply with certain restrictive covenants in Sections 1005 through 1009
(including the covenants referred to above under "Certain Covenants of the
Company") and (B) to deem the occurrence of any event referred to in clauses (d)
(with respect to Sections 1005 through 1009 inclusive), (e) and (g) under
"Events of Default" above not to be or result in an Event of Default if, in each
case with respect to the Outstanding Debt Securities of such series as provided
in Section 1303 on or after the date the conditions set forth in Section 1304
are satisfied ("covenant defeasance"), in either case upon the deposit with the
Trustee (or other qualifying trustee), in trust, of money and/or U.S. Government
Obligations, which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of and any premium and interest on the Debt
Securities of such series on the respective Stated Maturities and any mandatory
sinking fund payments or analogous payments on the days payable, in accordance
with the terms of the
12
<PAGE> 17
Indenture and the Debt Securities of such series. Such a trust may only be
established if, among other things, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the Outstanding Debt
Securities of such series will not recognize gain or loss for Federal income tax
purposes as a result of such deposit, defeasance or covenant defeasance and will
be subject to Federal income tax on the same amount, and in the same manner and
at the same times as would have been the case if such deposit, defeasance or
covenant defeasance had not occurred. Such opinion, in the case of defeasance
under clause (i) above, must refer to and be based upon a ruling of the Internal
Revenue Service or a change in applicable Federal income tax law occurring after
the date of the Indenture. The Prospectus Supplement relating to a series may
further describe the provisions, if any, permitting such defeasance or covenant
defeasance with respect to the Debt Securities of a particular series. (Article
Thirteen)
In the event the Company omits to comply with certain covenants of the
Indenture with respect to the Debt Securities of any series as described above,
and the Debt Securities of such series are declared due and payable because of
the occurrence of an Event of Default, the amount of money and U.S. Government
Obligations on deposit with the Trustee will be sufficient to pay amounts due on
the Debt Securities of such series at the time of their Stated Maturity but may
not be sufficient to pay amounts due on the Debt Securities of such series at
the time of the acceleration resulting from such Event of Default. The Company
shall, however, remain liable for such payments.
NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they appear in the Debt Security Register.
(Sections 101 and 106)
REPLACEMENT OF SECURITIES
Any mutilated Debt Security will be replaced by the Company at the expense
of the Holder upon surrender of such Debt Security to the Trustee. Debt
Securities that become destroyed, stolen or lost will be replaced by the Company
at the expense of the Holder upon delivery to the Trustee of the Debt Security
or evidence of the destruction, loss or theft thereof satisfactory to the
Company and the Trustee. In the case of a destroyed, lost or stolen Debt
Security an indemnity satisfactory to the Trustee and the Company may be
required at the expense of the Holder of such Debt Security before a replacement
Debt Security will be issued. (Section 306)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. (Section 613) The Trustee
will be permitted to engage in certain other transactions; however, if it
acquires any conflicting interest and there is a default under the Debt
Securities of any series for which the Trustee serves as trustee, the Trustee
must eliminate such conflict or resign. (Section 608) The Trustee currently
provides certain banking and financial services to the Company in the ordinary
course of business and may provide such services in the future.
13
<PAGE> 18
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters, and also
may sell Debt Securities directly to other purchasers or through agents. Such
underwriters may include Goldman, Sachs & Co., J.P. Morgan Securities Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated or a group of underwriters
represented by firms including Goldman, Sachs & Co., J.P. Morgan Securities Inc.
and Merrill Lynch, Pierce, Fenner & Smith Incorporated. Goldman, Sachs & Co.,
J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated may also act as agents.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters or agents may
receive compensation from the Company or from purchasers of Debt Securities for
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Debt Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of Debt Securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company will be
described, in the applicable Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Debt Securities from the
Company pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
saving banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the offered Debt Securities shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject. The
underwriters and such other agents will not have any responsibility in respect
of the validity or performance of such contracts.
Certain of the Underwriters and their affiliates from time to time may
perform various commercial banking and investment banking services for the
Company in the ordinary course of business.
The place and time of delivery for the Debt Securities in respect of which
this Prospectus is delivered are set forth in the applicable Prospectus
Supplement.
Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be a new issue of securities, will not have an
established trading market when issued and will not be listed on any securities
exchange. Any underwriters or agents to or through whom Debt Securities are sold
by the Company for public offering and sale may make a market in such Debt
Securities, but such underwriters or agents will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for any Debt Securities.
14
<PAGE> 19
LEGAL MATTERS
Certain legal matters relating to the validity of the Debt Securities
offered hereby will be passed upon for the Company by Thomas R. Saldin, Esq.,
Executive Vice President, Administration and General Counsel of the Company, and
for any underwriter or agent by Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in its Annual Report on Form 10-K for the year ended February 1, 1996
which is incorporated by reference herein, have been audited by Deloitte &
Touche LLP, independent auditors, as indicated in their report with respect
thereto, and have been so incorporated by reference herein in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
15
<PAGE> 20
------------------------------------------------------
------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
<S> <C>
Recent Developments.................... S-2
Use of Proceeds........................ S-2
Description of Debentures.............. S-2
Underwriting........................... S-4
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Company............................ 3
Use of Proceeds........................ 3
Ratio of Earnings to Fixed Charges..... 4
Description of Debt Securities......... 4
Plan of Distribution................... 14
Legal Matters.......................... 15
Experts................................ 15
- --------------------------------------------
- --------------------------------------------
</TABLE>
------------------------------------------------------
------------------------------------------------------
$200,000,000
ALBERTSON'S, INC.
7 3/4% DEBENTURES DUE
JUNE 15, 2026
------------------------
LOGO
------------------------
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
MERRILL LYNCH & CO.
------------------------------------------------------
------------------------------------------------------
