SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 03, 2000 Commission file number 1-6187
ALBERTSON'S, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 82-0184434
- ------------------------- --------------------------------
(State of Incorporation) (Employer Identification Number)
250 Parkcenter Boulevard, P.O. Box 20, Boise, Idaho 83726
(208) 395-6200
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
------------------------------------------ -----------------------
Common Stock, $1.00 par value, 423,723,783 New York Stock Exchange
shares outstanding on March 24, 2000 Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (17 CFR section 405) is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. (x)
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant, computed by reference to the price at which the stock was sold as of
the close of business on March 24, 2000: $11,290,033,098.
Documents Incorporated by Reference
Listed hereunder are the documents, any portions of which are incorporated by
reference, and the Parts of this Form 10-K into which such portions are
incorporated:
1. The Registrant's Annual Report to Stockholders for the fiscal year
ended February 03, 2000, portions of which are incorporated by
reference into Part I, Part II and Part IV of this Form 10-K; and
2. The Registrant's definitive proxy statement for use in connection with
the Annual Meeting of Stockholders to be held on June 15, 2000,(the
"Proxy Statement") to be filed within 120 days after the Registrant's
fiscal year ended February 03, 2000, portions of which are incorporated
by reference into Part III of this Form 10-K.
Page 1
<PAGE>
<TABLE>
ALBERTSON'S, INC.
FORM 10-K
TABLE OF CONTENTS
<CAPTION>
Item Page
PART I
<S> <C> <C>
Cautionary Statement 3
1. Business 3
2. Properties 5
3. Legal Proceedings 8
4. Submission of Matters to a Vote of Security Holders 8
PART II
5. Market for the Registrant's Common Equity 9
and Related Stockholder Matters
6. Selected Financial Data 9
7. Management's Discussion and Analysis of Financial 9
Condition and Results of Operations
7A. Quantitative and Qualitative Disclosures about 9
Market Risk
8. Financial Statements and Supplementary Data 9
9. Changes in and Disagreements with Accountants on 9
Accounting and Financial Disclosure
PART III
10. Directors and Executive Officers of the Registrant 10
11. Executive Compensation 12
12. Security Ownership of Certain Beneficial Owners and Management 12
13. Certain Relationships and Related Transactions 12
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 13
</TABLE>
Page 2
<PAGE>
PART I
Cautionary Statement for Purposes of "Safe Harbor Provisions"
of the Private Securities Litigation Reform Act of 1995
From time to time, information provided by the Company, including written
or oral statements made by its representatives, may contain forward-looking
information as defined in the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts, which address
activities, events or developments that the Company expects or anticipates will
or may occur in the future, including such things as integration of the
operations of acquired or merged companies, expansion and growth of the
Company's business, future capital expenditures and the Company's business
strategy, contain forward-looking information. In reviewing such information it
should be kept in mind that actual results may differ materially from those
projected or suggested in such forward-looking information. This forward-looking
information is based on various factors and was derived utilizing numerous
assumptions. Many of these factors have previously been identified in filings or
statements made by or on behalf of the Company.
Important assumptions and other important factors that could cause actual
results to differ materially from those set forth in the forward-looking
information include changes in the general economy, changes in consumer
spending, competitive factors and other factors affecting the Company's business
in or beyond the Company's control. These factors include changes in the rate of
inflation, changes in state or federal legislation or regulation, adverse
determinations with respect to litigation or other claims (including
environmental matters), labor negotiations, the Company's ability to recruit and
develop employees, its ability to develop new stores or complete remodels as
rapidly as planned, its ability to implement new technology successfully,
stability of product costs, and the Company's ability to integrate the
operations of American Stores Company.
Other factors and assumptions not identified above could also cause the
actual results to differ materially from those set forth in the forward-looking
information. The Company does not undertake to update forward-looking
information contained herein or elsewhere to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
information.
Item 1. Business
The Registrant, Albertson's, Inc. ("Albertson's" or the "Company"), is
incorporated under the laws of the State of Delaware and is the successor to a
business founded by J. A. Albertson in 1939.
On August 2, 1998, Albertson's and American Stores Company ("ASC") entered
into a definitive merger agreement whereby Albertson's would acquire ASC by
exchanging 0.63 share of Albertson's common stock for each share of outstanding
ASC common stock, with cash being paid in lieu of fractional shares (the
"Merger") and ASC would become a wholly owned subsidiary of Albertson's. The
Merger was approved by the stockholders of Albertson's and ASC on November 12,
1998.
The Merger was consummated on June 23, 1999, with the issuance of
approximately 177 million shares of Albertson's common stock. The Merger
constituted a tax-free reorganization and has been accounted for as a pooling of
interests for accounting and financial reporting purposes. The pooling of
interests method of accounting is intended to present as a single interest, two
or more common stockholders' interests that were previously independent;
accordingly, the consolidated financial statements of Albertson's restate the
historical financial statements as though the companies had always been
combined. The restated consolidated financial statements are adjusted to conform
accounting policies and financial statement presentations.
Page 3
<PAGE>
In connection with the Merger, the Company entered into agreements with the
Attorneys General of California, Nevada and New Mexico and the Federal Trade
Commission to enable the Merger to proceed under applicable antitrust,
competition and trade regulation law. The agreements required the Company to
divest a total of 117 stores in California, 19 stores in Nevada and 9 stores in
New Mexico. Of the stores required to be divested, 40 were ASC locations
operated primarily under the Lucky name, and 105 were Albertson's stores
operated primarily under the Albertson's name. In addition, the Company divested
four supermarket real estate sites as required by the agreements. The Company
divested 144 of the required 145 stores as of February 3, 2000.
The Company is one of the largest retail food-drug chains in the United
States. As of February 3, 2000, the Company operated 2,492 stores in 37
Northeastern, Western, Midwestern and Southern states. These stores consist of
1,326 combination food-drug stores, 802 stand-alone drug stores, 335
conventional supermarkets, 28 warehouse stores and one e-commerce retail site.
Retail operations are supported by 21 major Company distribution centers. The
Company's distribution centers provide product exclusively to the Company's
retail stores.
The Company's combination food-drug stores are super grocery/super
drugstores under one roof and range in size from 35,000 to 82,000 square feet.
Most of these stores offer prescription drugs and an expanded section of
cosmetics and general merchandise in addition to specialty departments such as
service seafood and meat, bakery, lobby/video, service delicatessen, liquor and
floral. Many also offer meal centers, party supply centers, coffee bars,
in-store banks, photo processing and, destination categories for beverages,
snacks, pet care products, paper products and baby care merchandise. All
shopping areas are served by a common set of checkstands.
The Company's stand-alone drugstores are free-standing store sites that
average 18,300 square feet. These stores offer convenient shopping and
prescription pickup as well as a wide assortment of general merchandise, health
and beauty care, over-the-counter medication, greeting cards and photo
processing. The Company's new drugstores are typically located on corners and
many offer a drive-thru pharmacy.
The Company's conventional supermarkets range in size from 8,000 to 35,000
square feet. These stores offer a full selection in the basic departments of
grocery, meat, produce, dairy and limited general merchandise. Many locations
have a pharmacy, in-store bakery and service delicatessen.
The Company's warehouse stores are operated primarily under the names "Max
Food and Drug" and "Super Saver." These no-frills stores range in size from
17,000 to 73,000 square feet and offer significant savings with special emphasis
on discounted meat and produce.
The Company's e-commerce retail site located in Bellevue, Washington, is
the Company's first location which combines a gourmet store (17,000 square feet)
with a fulfillment center (14,000 square feet). Employees fill online orders,
which can then be delivered to, or picked up by, the customer. Albertsons.com
accepts on-line orders to be filled either by the Bellevue site or through the
fulfillment center in Fort Worth, Texas.
Sav-ondrugs.com, was piloted in October 1999, for online orders from
customers in the Las Vegas, Nevada and Kansas City, Missouri areas. It offers a
full range of basic sundry items, prescription refills and consumer health
information.
Page 4
<PAGE>
All of the Company's stores carry a broad range of national brands and
offer private label brand products in many merchandise categories. The Company's
stores provide consumer information such as: nutritional signing in the meat and
produce departments, freshness code dating, unit pricing, meal ideas and food
information pamphlets. The Company also offers a choice of recyclable paper or
plastic bags and collection bins for plastic bag recycling.
As of February 3, 2000, the Company operated 76 fuel centers, in six
states, which are located near existing stores. These centers feature three to
six fuel pumps and a small building, ranging in size from a pay-only kiosk to a
small convenience store, featuring such items as candy, soft drinks and snack
foods.
The Company's operations are within a single operating segment, the retail
sale of food and drug merchandise. The Company's stores operate primarily under
the names of Albertson's, Acme Markets, Jewel Food Stores, Seessel's, Super
Saver, Max, Osco Drug and Sav-On.
The Company's business is highly competitive. Competition is based
primarily on price, product quality and variety, service and location. There is
direct competition from many local, regional and national supermarket chains,
supercenters, club stores, specialty retailers such as pet centers and toy
stores and large-scale drug and pharmaceutical retailers. Increasing competition
also exists from convenience stores, prepared food retailers, liquor and video
stores, film developing outlets and Internet and mail-order retailers.
The Company is subject to effects of seasonality. Sales are higher in the
Company's fourth quarter than other quarters due to the holiday season and the
increase in cold and flu occurrences.
The Company has been able to efficiently supply its stores with merchandise
through its distribution centers, outside suppliers or directly from
manufacturers in an effort to obtain merchandise at the lowest possible cost.
The Company believes that it is not dependent on any one supplier, and considers
its relations with its suppliers to be satisfactory. The Company services all of
its retail stores from Company distribution centers.
As of February 3, 2000, the Company employed approximately 235,000 people,
many of whom are covered by collective bargaining agreements. The Company
considers its present relations with employees to be good.
Item 2. Properties
The Company has actively pursued an expansion program of adding new retail
stores, enlarging and remodeling existing stores and replacing smaller stores.
During the past ten years, the Company has built or acquired 1,247 stores and
approximately 89% of the Company's current retail square footage has been opened
or remodeled during this period. The Company continues to follow the policy of
closing stores that are obsolete or lack satisfactory profit potential.
Albertson's stores are located in 37 Northeastern, Western, Midwestern and
Southern areas of the United States. The table on the following page is a
summary of the stores by state and classification as of February 3, 2000:
Page 5
<PAGE>
<TABLE>
<CAPTION>
Combination Conventional Warehouse Stand-Alone E-Commerce
Food-Drug Stores Stores Drug Stores Store TOTAL
- ------------------------ ------------------ -------------------- ---------------- ------------------ ----------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Arizona 45 79 124
Arkansas 2 1 3
California 289 176 15 287 767
Colorado 44 7 51
Delaware 8 7 15
Florida 107 107
Georgia 1 1
Idaho 30 7 1 38
Illinois 155 17 93 265
Indiana 6 50 56
Iowa 4 33 37
Kansas 5 28 33
Louisiana 25 25
Maine 1 1
Maryland 2 9 11
Massachusetts 59 59
Michigan 1 1
Minnesota 1 1
Mississippi 6 1 7
Missouri 10 35 45
Montana 17 16 10 43
Nebraska 11 14 25
Nevada 35 5 42 82
New Hampshire 20 20
New Jersey 29 40 69
New Mexico 22 1 1 4 28
North Dakota 2 6 8
Oklahoma 28 28
Oregon 41 10 51
Pennsylvania 38 28 66
South Dakota 1 3 4
Tennessee 23 1 24
Texas 207 5 212
Utah 42 3 45
Washington 69 12 1 82
Wisconsin 12 34 46
Wyoming 10 2 12
------------------ -------------------- ---------------- ------------------ ----------------- -----------
Total 1,326 335 28 802 1 2,492
================== ==================== ================ ================== ================= ===========
Retail Square
Footage by Store
Type (000's) 70,819 8,926 1,270 14,702 31 95,748
================== ==================== ================ ================== ================= ===========
</TABLE>
The Company has expanded and improved its distribution facilities when
opportunities exist to improve service to the retail stores and generate an
adequate return on investment. During 1999 approximately 75% of the merchandise
purchased for resale in Company retail stores was received from Company
distribution centers.
Albertson's distribution system consists of 21 major Company centers
located strategically throughout the Company's operating markets. The table on
the following page is a summary of the Company's distribution facilities as of
February 3, 2000:
Page 6
<PAGE>
<TABLE>
Major Distribution Facilities
<CAPTION>
Frozen Meat % Ice Cream Health High Volume General Pharmaceuticals Square
Grocery Food Liquor Produce Deli Plant & Beauty Health & Beauty Merch. Footage
------- ------ ------ ------- ------ --------- -------- --------------- ------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lancaster, PA X X X 1,366,000
Melrose Park, IL X X X X 1,188,000
La Habra, CA X X X 1,184,000
Fort Worth, TX X X X X 1,100,000
Brea, CA X X X X X 1,059,000
Buena Park, CA X X X 1,010,000
Irvine, CA X X 996,000
Plant City, FL X X X X X X 979,000
Elk Grove, IL X X X 933,000
Vacaville, CA X 854,000
Portland, OR X X X X 790,000
Tulsa, OK X X X X 748,000
Houston, TX X X X X 747,000
Phoenix, AZ X X X X X X 687,000
Salt Lake City, UT X X X X 680,000
San Leandro, CA X X X 453,000
Ponca City, OK X X X 422,000
Sacramento, CA X X X X X 421,000
Denver, CO X X X X 372,000
Boise, ID X X 238,000
Lancaster, PA X X 231,000
(non-food)
Other Distribution Facilities
Las Vegas, NV X 30,000
Phoenix, AZ X 25,000
Indianapolis, IN X 22,000
Boise, ID X 11,000
----------
TOTAL SQUARE FOOTAGE -
All Distribution Facilities 16,546,000
==========
</TABLE>
Page 7
<PAGE>
The Company currently finances most retail store and distribution
facilities internally, thus retaining ownership of most of its land and
buildings. The Company's future expansion plans are expected to be financed
primarily from cash provided by operating activities. The Company has and will
continue to finance a portion of its new stores through lease transactions when
it does not have the opportunity to own the property.
As of February 3, 2000, the Company held title to the land and buildings of
39% of the Company's stores and held title to the buildings on leased land of an
additional 7% of the Company's stores. The Company also holds title to the land
and buildings of most of its administrative offices and distribution facilities.
Item 3. Legal Proceedings
The information required under this item is included under the caption
"Legal Proceedings" on page 50 of the Company's 1999 Annual Report to
Stockholders. This information is incorporated herein by this reference thereto.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted during the fourth quarter of fiscal 1999 to a
vote of security holders through the solicitation of proxies or otherwise.
Page 8
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
The principal markets in which the Company's common stock is traded and the
related security holder matters are set forth under the caption "Company Stock
Information" on page 60 of the Company's 1999 Annual Report to Stockholders.
This information is incorporated herein by this reference thereto. The market
value of the Company's common stock at the close of trading on March 24, 2000,
was $28.6875 per share. There were approximately 32,000 stockholders of record
on March 24, 2000.
Item 6. Selected Financial Data
Selected financial data of the Company for the fiscal years 1995 through
1999 is included under the caption "Five-Year Summary of Selected Financial
Data" on page 54 of the Company's 1999 Annual Report to Stockholders. This
information is incorporated herein by this reference thereto.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required under this item is included on pages 21 to 28 of
the Company's 1999 Annual Report to Stockholders. This information is
incorporated herein by this reference thereto.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The information required under this item is included under the caption
"Quantitative and Qualitative Disclosures about Market Risk" on page 27 of the
Company's 1999 Annual Report to Stockholders. This information is incorporated
herein by this reference thereto.
Item 8. Financial Statements and Supplementary Data
The Company's consolidated financial statements and related notes thereto,
together with the Independent Auditors' Reports and selected quarterly financial
data of the Company are presented on pages 29 to 53 and page 55 of the Company's
1999 Annual Report to Stockholders and are incorporated herein by this reference
thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
Page 9
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors
The information regarding directors and nominees for directors of the
Company is presented under the heading "Election of Directors" in the Company's
definitive proxy statement for use in connection with the 2000 Annual Meeting of
Stockholders (the "Proxy Statement") to be filed within 120 days after the
Company's fiscal year ended February 3, 2000, and is incorporated herein by this
reference thereto.
<TABLE>
Executive and Reporting Officers
<CAPTION>
Age Date First Appointed
as of as an Executive or
Name 3/24/00 Position Reporting Officer
- ---- -------- --------- --------------------
<S> <C> <C> <C>
Gary G. Michael 59 Chairman of the Board and Chief Executive 12/02/74
Officer
Peter L. Lynch 48 President and Chief Operating Officer 06/23/99
Michael F. Reuling 53 Vice Chairman of the Company 12/30/79
Thomas E. Brother 58 Executive Vice President, Distribution 07/30/89
Robert C. Butler 51 Executive Vice President, Operations 03/21/00
Romeo R. Cefalo 50 Executive Vice President, Operations 03/21/00
Wayne A. Denningham 38 Executive Vice President, Merchandising 03/21/00
Craig R. Herkert 40 Executive Vice President, Marketing 03/21/00
A. Craig Olson 48 Executive Vice President and Chief 12/22/86
Financial Officer
Carl W. Pennington 62 Executive Vice President, Marketing 08/02/87
Thomas R. Saldin 53 Executive Vice President and General Counsel 12/26/83
Patrick S. Steele 50 Executive Vice President, Information 06/10/90
Systems and Technology
Steven D. Young 51 Executive Vice President, Human Resources 12/02/91
Richard J. Navarro 47 Senior Vice President and Controller 12/22/86
</TABLE>
Gary G. Michael has served as Chairman of the Board and Chief Executive
Officer since 1991.
Peter L. Lynch became President and Chief Operating Officer on March 21,
2000. Previously he served as Executive Vice President, Operations from June 23,
1999; Executive Vice President and General Manager of the Acme Division of
American Stores Company from 1998; Senior Vice President, Store Operations of
the Jewel-Osco Division of American Stores Company from December 1995; Vice
President, Delta of American Stores Company from April 1995; and Senior Vice
President and General Manager of Star Market from 1994.
Page 10
<PAGE>
Michael F. Reuling became Vice Chairman of the Company on June 23, 1999.
Previously he served as Executive Vice President, Development from January 1999
and as Executive Vice President, Store Development since 1986.
Thomas E. Brother was promoted to Executive Vice President, Distribution on
January 29, 1999. Previously he served as Senior Vice President, Distribution
from 1991.
Robert C. Butler was promoted to Executive Vice President, Operations on
March 21, 2000. Previously he served as Senior Vice President, Merchandising
from June 23, 1999; Vice President, Southern California Division from 1996; and
Vice President, Rocky Mountain Division from 1994.
Romeo R. Cefalo was promoted to Executive Vice President, Operations on
March 21, 2000. Previously he served as President, Southern California Region
from June 23, 1999; Executive Vice President and General Manager of the Lucky
South Division of American Stores Company from 1997; Senior Vice President and
General Manager of the same division from 1995; and Senior Vice President,
Operations of the Acme Division of American Stores Company from 1992.
Wayne A. Denningham was promoted to Executive Vice President, Merchandising
on March 21, 2000. Previously he served as President, Intermountain Region from
June 23, 1999; Vice President, Florida Division from 1998; Vice President, Rocky
Mountain Division from 1997; Division Manager of the same division from 1996;
and District Sales Manager of the Southwest Division from 1993.
Craig R. Herkert was promoted to Executive Vice President, Marketing on
March 21, 2000. Previously he served as President of the Eastern Region from
June 23, 1999; Senior Vice President of the Acme Division of American Stores
Company in a portion of 1998; Senior Vice President Fresh Food/Procurement of
American Stores Company in a portion of 1998; Vice President, Grocery
Procurement of American Stores Procurement and Logistics Group from 1996; Vice
President, Meat and Farmstand Merchandising of the Jewel Food Stores Division of
American Stores Company from 1995; and Merchandise Manager, Frozen and
Refrigerated Foods of the same division from 1994.
A. Craig Olson was promoted to Executive Vice President and Chief Financial
Officer on January 29, 1999. Previously he served as Senior Vice President,
Finance and Chief Financial Officer from 1991.
Carl W. Pennington was promoted to Executive Vice President, Marketing on
January 29, 1999. Previously he served as Executive Vice President, Corporate
Merchandising from 1996; and Senior Vice President, Corporate Merchandising from
1994.
Thomas R. Saldin was promoted to Executive Vice President and General
Counsel on January 29, 1999. Previously he served as Executive Vice President,
Administration and General Counsel from 1991.
Patrick S. Steele was promoted to Executive Vice President, Information
Systems and Technology on January 29, 1999. Previously he served as Senior Vice
President, Information Systems and Technology from 1993.
Steven D. Young was promoted to Executive Vice President, Human Resources
on January 29, 1999. Previously he served as Senior Vice President, Human
Resources from 1993.
Richard J. Navarro was promoted to Senior Vice President and Controller on
January 29, 1999. Previously he served as Group Vice President and Controller
from 1993.
Page 11
<PAGE>
Item 11. Executive Compensation
Information concerning executive compensation is presented under the
headings "Summary Compensation Table," "Option Grants in Last Fiscal Year,"
"Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values," and "Retirement Benefits" in the Proxy Statement. This information is
incorporated herein by this reference thereto.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information with respect to security ownership of certain beneficial owners
and management is set forth under the heading "Voting Securities and Principal
Holders Thereof" in the Proxy Statement. This information is incorporated herein
by this reference thereto.
Item 13. Certain Relationships and Related Transactions
Information concerning related transactions is presented under the heading
"Certain Transactions" in the Proxy Statement. This information is incorporated
herein by this reference thereto.
Page 12
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)1 Financial Statements:
The Independent Auditors' Reports, together with the
Consolidated Financial Statements and the related notes
thereto, are listed below and are incorporated herein by this
reference thereto from pages 29 to 53 of the Company's Annual
Report to Stockholders for the year ended February 3, 2000:
Consolidated Earnings -- years ended February 3, 2000;
January 28, 1999; January 29, 1998.
Consolidated Balance Sheets -- February 3, 2000; January
28, 1999.
Consolidated Cash Flows -- years ended February 3, 2000;
January 28, 1999; January 29, 1998.
Consolidated Stockholders' Equity -- years ended February
3, 2000; January 28, 1999; January 29, 1998.
Notes to Consolidated Financial Statements.
Independent Auditors' Reports.
Quarterly Financial Data:
Quarterly Financial Data for the years ended February 3,
2000, and January 28, 1999, is set forth on page 55 of the
Annual Report to Stockholders for the year ended February 3,
2000, and is incorporated herein by this reference thereto.
(a)2 Schedules:
All schedules are omitted because they are not required or
because the required information is included in the
consolidated financial statements or notes thereto.
(a)3 Exhibits:
A list of the exhibits required to be filed as part of this
report is set forth in the Index to Exhibits on page 16 hereof.
(b) The following reports on Form 8-K were filed:
There were no reports on Form 8-K filed during the fourteen
week quarter ended February 3, 2000.
For the purposes of complying with the amendments to the rules governing
Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the Company
hereby undertakes as follows, which undertaking shall be incorporated by
reference into the Company's Registration Statements on Form S-8 Nos. 2-80776,
33-2139, 33-7901, 33-15062, 33-43635, 33-62799, 33-59803, 333-82157, 333-82161
and 333-87773.
Page 13
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Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the Act) may be permitted to directors, officers and controlling
persons of the Company, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Albertson's, Inc. has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
ALBERTSON'S, INC.
By /s/ GARY G. MICHAEL
-------------------------
Gary G. Michael
(Chairman of the Board and
Chief Executive Officer)
Page 14
<PAGE>
Date: April 25, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated as of April 25, 2000.
<TABLE>
<S> <C>
GARY G. MICHAEL A. CRAIG OLSON
--------------------------------- ---------------------------------
Gary G. Michael A. Craig Olson
(Chairman of the Board and (Executive Vice President
Chief Executive Officer and and Chief Financial Officer)
Director)
RICHARD J. NAVARRO A. GARY AMES
--------------------------------- ---------------------------------
Richard J. Navarro A. Gary Ames
(Senior Vice President (Director)
and Controller)
CECIL D. ANDRUS PAMELA G. BAILEY
- -------------------------------- ---------------------------------
Cecil D. Andrus Pamela G. Bailey
(Director) (Director)
TERESA BECK HENRY I. BRYANT
--------------------------------- ---------------------------------
Teresa Beck Henry I. Bryant
(Director) (Director)
JOHN B. CARLEY PAUL I. CORDDRY
--------------------------------- ---------------------------------
John B. Carley Paul I. Corddry
(Director) (Director)
JOHN B. FERY FERNANDO R. GUMUCIO
--------------------------------- ---------------------------------
John B. Fery Fernando R. Gumucio
(Director) (Director)
CLARK A. JOHNSON CHARLES D. LEIN
--------------------------------- ---------------------------------
Clark A. Johnson Charles D. Lein
(Director) (Director)
VICTOR L. LUND BEATRIZ RIVERA
--------------------------------- ---------------------------------
Victor L. Lund Beatriz Rivera
(Director) (Director)
J.B. SCOTT ARTHUR K. SMITH
--------------------------------- ---------------------------------
J.B. Scott Arthur K. Smith
(Director) (Director)
THOMAS L. STEVENS, JR WILL M. STOREY
--------------------------------- ---------------------------------
Thomas L. Stevens, Jr. Will M. Storey
(Director) (Director)
STEVEN D. SYMMS THOMAS J. WILFORD
--------------------------------- ---------------------------------
Steven D. Symms Thomas J. Wilford
(Director) (Director)
</TABLE>
Page 15
<PAGE>
Index to Exhibits
Filed with the Annual Report
on Form 10-K for the
Year Ended February 3, 2000
<TABLE>
<CAPTION>
Number Description
<S> <C>
3.1 Restated Certificate of Incorporation (as amended) is
incorporated herein by reference to Exhibit 3.1 of Form 10-Q
for the quarter ended April 30, 1998.
3.1.1 Certificate of Designation, Preferences and Rights of Series
A Junior Participating Preferred Stock is incorporated
herein by reference to Exhibit 3.1.1 of Form 10-K for the
year ended January 30, 1997.
3.1.2 Amendment to Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock is
incorporated herein by reference to Exhibit 3.1.2 of Form
10-K for the year ended January 28, 1999.
3.2 By-Laws dated March 17, 2000.
4.1 Stockholder Rights Plan Agreement is incorporated herein
by reference to Exhibit 1 of Form 8-A Registration Statement
filed with the Commission on March 4, 1997.
4.1.1 Amendment No. One to Stockholder Rights Plan Agreement
(dated August 2, 1998) is incorporated herein by reference
to Exhibit 1 of Amendment to Form 8-A Registration Statement
filed with the Commission on August 6, 1998.
4.1.2 Amendment No. Two to Stockholder Rights Plan Agreement
(dated March 16, 1999) is incorporated herein by reference
to Exhibit 1 of Amendment to Form 8-A Registration Statement
filed with the Commission on March 25, 1999.
4.2 Indenture, dated as of May 1, 1992, between Albertson's,
Inc. and Morgan Guaranty Trust Company of New York as
Trustee is incorporated herein by reference to Exhibit 4.1
of Form S-3 Registration Statement 333-41793 filed with the
Commission on December 9, 1997.(1)
4.3 Senior Indenture dated May 1, 1995, between American Stores
Company and the First National Bank of Chicago, as Trustee,
is incorporated herein by reference to Exhibit 4.1 of Form
10-Q filed by American Stores Company (Commission File
Number 1-5392) on June 12, 1995.(1)
9 Inapplicable
10.1 J. A. and Kathryn Albertson Foundation Inc. Stock Agreement
(dated May 21, 1997) is incorporated herein by reference to
Exhibit 10.1 of Form 10-Q for the quarter ended May 1,
1997.*
10.1.1 Waiver regarding Alscott Limited Partnership #1 Stock
Agreement (dated May 21, 1997) is incorporated herein by
reference to Exhibit 10.1.1 of Form 10-Q for the quarter
ended May 1, 1997.*
</TABLE>
Page 16
<PAGE>
<TABLE>
<CAPTION>
Number Description
<S> <C>
10.1.2 Waiver regarding Kathryn Albertson Stock Agreement (dated
May 21, 1997) is incorporated herein by reference to Exhibit
10.1.2 of Form 10-Q for the quarter ended May 1, 1997.*
10.5 Form of Beneficiary Agreement for Key Executive Life
Insurance is incorporated herein by reference to Exhibit
10.5.1 of Form 10-K for the year ended January 30, 1986.*
10.6 Executive Deferred Compensation Plan (amended and restated
February 1, 1989) is incorporated herein by reference to
Exhibit 10.6 of Form 10-K for the year ended February 2,
1989.*
10.6.1 Amendment to Executive Deferred Compensation Plan (dated
December 4, 1989) is incorporated herein by reference to
Exhibit 10.6.1 of Form 10-Q for the quarter ended November
2, 1989.*
10.6.2 Amendment to Executive Deferred Compensation Plan (dated
December 15, 1998).*
10.7 Senior Operations Executive Officer Bonus Plan is
incorporated herein by reference to Exhibit 10.7 of Form
10-K for the year ended January 30, 1997.*
10.7.1 Amendment to Senior Executive Deferred Compensation Plan
(dated December 15, 1998).*
10.9 Description of Bonus Incentive Plans (amended December 3,
1984)is incorporated herein by reference to Exhibit 10.9 of
Form 10-K for the year ended January 31, 1985.*
10.10 2000 Deferred Compensation Plan (dated January 1, 2000).*
10.11 1982 Incentive Stock Option Plan (amended March 4, 1991) is
incorporated herein by reference to Exhibit 10.11 of Form
10-K for the year ended January 31, 1991. Exhibit 10.11
expired by its terms in 1992. Notwithstanding such
expiration, certain agreements for the options granted under
these option plans remain outstanding.*
10.12 Form of 1982 Incentive Stock Option Agreement (amended
November 30, 1987) is incorporated herein by reference to
Exhibit 10.12 of Form 10-Q for the quarter ended October 29,
1987.*
10.12.1 Form of 1982 Incentive Stock Option Agreement (used in
connection with certain options granted pursuant to the 1982
Incentive Stock Option Plan on or after September 5, 1989)
is incorporated herein by reference to Exhibit 10.12.1 of
Form 10-Q for the quarter ended August 3, 1989.*
10.13 Executive Pension Makeup Plan (amended and restated February
1, 1989) is incorporated herein by reference to Exhibit
10.13 of Form 10-K for the year ended February 2, 1989.*
</TABLE>
Page 17
<PAGE>
<TABLE>
<CAPTION>
Number Description
<S> <C>
10.13.1 First Amendment to Executive Pension Makeup Plan (dated June
8, 1989) is incorporated herein by reference to Exhibit
10.13.1 of Form 10-Q for the quarter ended May 4, 1989.*
10.13.2 Second Amendment to Executive Pension Makeup Plan (dated
January 12, 1990) is incorporated herein by reference to
Exhibit 10.13.2 of Form 10-K for the year ended February 1,
1990.*
10.13.3 Third Amendment to Executive Pension Makeup Plan (dated
January 31, 1990) is incorporated herein by reference to
Exhibit 10.13.3 of Form 10-Q for the quarter ended August 2,
1990.*
10.13.4 Fourth Amendment to Executive Pension Makeup Plan (effective
January 1, 1995) is incorporated herein by reference to
Exhibit 10.13.4 of Form 10-K for the year ended February 2,
1995.*
10.13.5 Amendment to Executive Pension Makeup Plan (retroactive to
January 1, 1990) is incorporated herein by reference to
Exhibit 10.13.5 of Form 10-K for the year ended February 1,
1996.*
10.13.6 Amendment to Executive Pension Makeup Plan (retroactive to
October 1, 1999).*
10.14 Executive ASRE Makeup Plan (dated September 26, 1999).*
10.15 Senior Executive Deferred Compensation Plan (amended and
restated February 1, 1989) is incorporated herein by
reference to Exhibit 10.15 of Form 10-K for the year ended
February 2, 1989.*
10.15.1 Amendment to Senior Executive Deferred Compensation Plan
(dated December 4, 1989) is incorporated herein by reference
to Exhibit 10.15.1 of Form 10-Q for the quarter ended
November 2, 1989.*
10.16 1986 Nonqualified Stock Option Plan (amended March 4, 1991)
is incorporated herein by reference to Exhibit 10.16 of Form
10-K for the year ended January 31, 1991. Exhibit 10.16
expired by its terms in 1996. Notwithstanding such
expiration, certain agreements for the options granted under
these option plans remain outstanding.*
10.17 Form of 1986 Nonqualified Stock Option Plan Stock Option
Agreement (amended November 30, 1987) is incorporated herein
by reference to Exhibit 10.17 of Form 10-Q for the
quarter ended October 29, 1987.*
10.18 Executive Pension Makeup Trust (dated February 1, 1989) is
incorporated herein by reference to Exhibit 10.18 of Form
10-K for the year ended February 2, 1989.*
10.18.1 Amendment to Executive Pension Makeup Trust (dated July 24,
1998).*
</TABLE>
Page 18
<PAGE>
<TABLE>
<CAPTION>
Number Description
<S> <C>
10.18.2 Amendment to Executive Pension Makeup Trust (dated December
1, 1998) is incorporated herein by reference to Exhibit
10.18.1 of Form 10-Q for the quarter ended October 29,
1998.*
10.18.3 Amendment to Executive Pension Makeup Trust (dated December
1, 1999).*
10.19 Executive Deferred Compensation Trust (dated February 1,
1989) is incorporated herein by reference to Exhibit 10.19
of Form 10-K for the year ended February 2, 1989.*
10.19.1 Amendment to Executive Deferred Compensation Trust (dated
July 24, 1998).*
10.19.2 Amendment to Executive Deferred Compensation Trust (dated
December 1, 1998) is incorporated herein by reference to
Exhibit 10.19.1 of Form 10-Q for the quarter ended October
29, 1998.*
10.19.3 Amendment to Executive Deferred Compensation Trust (dated
December 1, 1999).*
10.20 1990 Deferred Compensation Plan is incorporated herein by
reference to Exhibit 10.20 of Form 10-K for the year ended
January 31, 1991.*
10.20.1 Amendment to 1990 Deferred Compensation Plan (dated April
12, 1994) is incorporated herein by reference to Exhibit
10.20.1 of Form 10-Q for the quarter ended August 4, 1994.*
10.20.2 Amendment to 1990 Deferred Compensation Plan (dated November
5, 1997) is incorporated herein by reference to Exhibit
10.20.2 of Form 10-K for the year ended January 29, 1998.*
10.20.3 Amendment to 1990 Deferred Compensation Plan (dated November
1, 1998) is incorporated herein by reference to Exhibit
10.20.3 of Form 10-Q for the quarter ended October 29,
1998.*
10.21 Non-Employee Directors' Deferred Compensation Plan is
incorporated herein by reference to Exhibit 10.21 of Form
10-K for the year ended January 31, 1991.*
10.21.1 Amendment to Non-Employee Directors' Deferred Compensation
Plan (dated December 15, 1998).*
10.22 1990 Deferred Compensation Trust (dated November 20, 1990)
is incorporated herein by reference to Exhibit 10.22 of Form
10-K for the year ended January 31, 1991.*
10.22.1 Amendment to 1990 Deferred Compensation Trust (date July 24,
1998).*
10.22.2 Amendment to 1990 Deferred Compensation Trust (dated
December 1, 1998) is incorporated herein by reference to
Exhibit 10.22.1 of Form 10-Q for the quarter ended October
29, 1998.*
</TABLE>
Page 19
<PAGE>
<TABLE>
<CAPTION>
Number Description
<S> <C>
10.22.3 Amendment to 1990 Deferred Compensation Trust (dated
December 1, 1999).*
10.23 2000 Deferred Compensation Trust (dated January 1, 2000).*
10.24 1995 Stock-Based Incentive Plan (dated May 26, 1995) is
incorporated herein by reference to Exhibit 10.24 of Form
10-Q for the quarter ended May 4, 1995.*
10.24.1 Form of 1995 Stock-Based Incentive Plan Stock Option
Agreement (dated December 4, 1995) is incorporated herein by
reference to Exhibit 10.24.1 of Form 10-K for the year ended
February 1, 1996.*
10.25 1995 Stock Option Plan for Non-Employee Directors (dated May
26, 1995) is incorporated herein by reference to Exhibit
10.25 of Form 10-Q for the quarter ended May 4, 1995.*
10.25.1 Form of 1995 Stock Option Plan for Non-Employee Directors
Agreement (dated May 30, 1995) is incorporated herein by
reference to Exhibit 10.25.1 of Form 10-Q for the quarter
ended May 4, 1995.*
10.26 Amended and Restated 1995 Stock-Based Incentive Plan (dated
November 12, 1998) is incorporated herein by reference to
Exhibit 10.26 of Form 10-Q for the quarter ended October 29,
1998.*
10.27 Termination and Consulting Agreement by and among American
Stores Company, Albertson's, Inc. and Victor L. Lund is
incorporated herein by reference to Exhibit 10.27 of Form
10-K for the year ended January 28, 1999.*
10.28 Credit Agreement (5-year)(dated March 22, 2000).
10.29 Credit Agreement (364-day)(dated March 22, 2000).
10.30 American Stores Company Supplemental Executive Retirement
Plan 1998 Restatement is incorporated herein by reference to
Exhibit 4.1 of Form S-8 filed by American Stores Company
(Commission File Number 1-5392) on July 13,
1998.*
10.30.1 Amendment to American Stores Company Supplemental Executive
Retirement Plan 1998 Restatement, dated as of September 15,
1998, is incorporated herein by reference to Exhibit 10.4 of
Form 10-Q filed by American Stores Company (Commission File
Number 1-5392) on December 11, 1998.*
10.31 American Stores Company 1997 Stock Option and Stock Award
Plan is incorporated herein by reference to Exhibit B of the
1997 Proxy Statement filed by American Stores Company
(Commission File Number 1-5392) on May 2, 1997.*
10.31.1 Amendment to American Stores Company 1997 Stock Option and
Stock Award Plan, dated as of October 8, 1998, is
incorporated herein by reference to Exhibit 10.1 of Form
10-Q filed by American Stores Company (Commission File
Number 1-5392) on December 11, 1998.*
</TABLE>
Page 20
<PAGE>
<TABLE>
<CAPTION>
Number Description
<S> <C>
10.32 American Stores Company 1997A Stock Option and Stock Award
Plan, dated as of March 27, 1997, is incorporated herein by
reference to Exhibit 4.11 of the S-8 Registration Statement
(Registration No. 333-8215 filed by Albertson's, Inc. on
July 2, 1999.*
10.33 American Stores Company 1997 Stock Plan to Non-Employee
Directors is incorporated herein by reference to Exhibit C
of the 1997 Proxy Statement filed by American Stores Company
(Commission file number 1-5392) on May 2, 1997.*
10.34 American Stores Company amended and restated 1989 Stock
Option and Stock Award Plan is incorporated herein by
reference to Exhibit 4.13 of the S-8 Registration Statement
(Registration No. 333-82157) filed by Albertson's, Inc. on
July 2, 1999.*
10.35 American Stores Company Amendment and Restated 1985 Stock
Option and Stock Award Plan is incorporated herein by
reference to the S-8 Registration Statement (Registration
No. 333-82157) filed by Albertson's, Inc. on July 2, 1999.*
11 Inapplicable
12 Inapplicable
13 Exhibit 13 consists of pages 21 to 55 and page 60 of
Albertson's, Inc. 1999 Annual Report to Stockholders which
are numbered as pages 1 to 36 of Exhibit 13. Such report,
except to the extent incorporated herein by reference, has
been sent to and furnished for the information of the
Securities and Exchange Commission only and is not to be
deemed filed as part of this Annual Report on Form 10-K. The
references to the pages incorporated by reference are to the
printed Annual Report. The references to the pages of
Exhibit 13 are as follows: Item 3--page 30; Item 5--page 36;
Item 6-page 34; Item 7-pages 1 through 8; Item 7A-page 7;
and Items 8 and 14--pages 9 through 33 and page 35.
16 Inapplicable
18 Inapplicable
21 Subsidiaries of the Registrant
22 Inapplicable
23 Independent Auditors' Consent - Deloitte & Touche LLP
23.1 Independent Auditors' Consent - Ernst & Young LLP
24 Inapplicable
27 Financial Data Schedule - Fiscal Year 1999
</TABLE>
Page 21
<PAGE>
<TABLE>
<CAPTION>
Footnotes
- ---------
<S> <C>
* Identifies management contracts or compensatory plans or
arrangements required to be filed as an exhibit hereto.
(1) In reliance upon Item 601(b)(4)(iii)(A) of Regulation S-K, various
other instruments defining the rights of holders of long-term debt
of the Registrant and its subsidiaries are not being filed
herewith, because the total amount of securities authorized under
each such instrument does not exceed 10% of the total assets of the
Registrant and its subsidiaries on a consolidated basis. The
Registrant hereby agrees to furnish a copy of any such instrument
to the Commission upon request.
</TABLE>
Page 22
EXHIBIT 3.2
ALBERTSON'S, INC.
BY-LAWS
<PAGE>
<TABLE>
TABLE OF CONTENTS
<CAPTION> Page
ARTICLE I
<S> <C> <C>
Section 1.1 Registered Office.......................................... 1
Section 1.2 Other Offices.............................................. 1
ARTICLE II
MEETINGS OF THE STOCKHOLDERS
Section 2.1 Place of Meetings.......................................... 1
Section 2.2 Annual Meetings............................................ 1
Section 2.3 Notice of Annual Meeting................................... 1
Section 2.4 List of Stockholders Entitled to Vote...................... 1
Section 2.5 Special Meetings........................................... 2
Section 2.6 Notice of Special Meeting.................................. 2
Section 2.7 Quorum..................................................... 2
Section 2.8 Voting..................................................... 2
Section 2.9 Proxies.................................................... 3
Section 2.10 Nature of Business at Meetings of Stockholders............. 3
A Limitation........................................ 3
B. Notice Requirement................................ 3
C. Timeliness of Notice.............................. 4
D. Form of Notice.................................... 4
E. Business Brought Improperly....................... 4
Section 2.11 Stock Ledger............................................... 4
Section 2.12 Record Date in General..................................... 4
Section 2.13 Record Date for Stockholder Action by Written Consent...... 5
Section 2.14 Inspectors of Election..................................... 5
ARTICLE III
DIRECTORS
Section 3.1 Number and Election of Directors........................... 6
Section 3.2 Nomination of Directors.................................... 6
A. Limitation........................................ 6
B. Notice Requirement................................ 7
C. Timeliness of Notice.............................. 7
D. Form of Notice.................................... 7
E. Defective Nomination.............................. 8
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
Section 3.3 Vacancies.................................................. 8
Section 3.4 Resignations and Removals of Directors..................... 8
Section 3.5 Duties and Powers.......................................... 8
Section 3.6 Indemnification............................................ 8
A. Power to Indemnify in Actions, Suits or
ProceedingsOther than Those by or in the
Right of the Corporation.......................... 8
B. Power to Indemnify in Actions, Suits or
Proceedings by or in the Right of the
Corporation....................................... 9
C. Authorization of Indemnification.................. 9
D. Good Faith Defined ............................... 10
E. Indemnification by a Court........................ 10
F. Expenses Payable in Advance....................... 10
G. Nonexclusivity of Indemnification and
Advancement of Expenses........................... 11
H. Insurance......................................... 11
I. Certain Definitions............................... 11
J. Survival of Indemnification and Advancement
of Expenses....................................... 11
K. Limitation on Indemnification..................... 12
L. Indemnification of Employees and Agents........... 12
Section 3.7 Retirement Age............................................. 12
Section 3.8 Meetings................................................... 12
Section 3.9 Quorum..................................................... 12
Section 3.10 Actions of Board........................................... 12
Section 3.11 Meetings by Means of Conference Telephone.................. 13
Section 3.12 Committees................................................. 13
Section 3.13 Compensation............................................... 13
Section 3.14 Interested Directors....................................... 13
ARTICLE IV
NOTICES
Section 4.1 Notices.................................................... 14
Section 4.2 Waiver of Notice........................................... 14
</TABLE>
ii
<PAGE>
<TABLE>
ARTICLE V
<CAPTION> OFFICERS
<S> <C> <C>
Section 5.1 Officers Chosen by the Board............................... 14
Section 5.2 Officers Chosen by the Chief Executive Officer............. 15
Section 5.3 Qualification.............................................. 15
Section 5.4 Voting Securities Owned by the Corporation................. 15
Section 5.5 Chairman of the Board...................................... 15
Section 5.6 Chairman of the Executive Committee........................ 15
Section 5.7 Chief Operating Officer.................................... 16
Section 5.8 Vice Chairman of the Corporation........................... 16
Section 5.9 President.................................................. 16
Section 5.10 Chief Executive Officer.................................... 16
Section 5.11 Vice Presidents............................................ 16
Section 5.12 Secretary.................................................. 16
Section 5.13 Assistant Secretaries...................................... 17
Section 5.14 Treasurer.................................................. 17
Section 5.15 Assistant Treasurers....................................... 17
ARTICLE VI
STOCK
Section 6.1 Form of Certificates....................................... 17
Section 6.2 Signatures................................................. 18
Section 6.3 Lost, Destroyed, Stolen or Mutilated Certificates.......... 18
Section 6.4 Transfers.................................................. 18
Section 6.5 Transfer and Registry Agents............................... 18
Section 6.6 Registered Stockholders.................................... 18
ARTICLE VII
GENERAL PROVISIONS
Section 7.1 Dividends.................................................. 19
Section 7.2 Disbursements.............................................. 19
Section 7.3 Fiscal Year................................................ 19
Section 7.4 Corporate Seal............................................. 19
Section 7.5 Election Not to Be Subject to Idaho Business
Combination Law............................................ 19
Section 7.6 Election Not to Be Subject to Idaho Control Share
Acquisition Law............................................ 19
Section 7.7 Entire Board of Directors.................................. 19
</TABLE>
iii
<PAGE>
<TABLE>
ARTICLE VIII
<CAPTION> AMENDMENTS
<S> <C> <C>
Section 8.1 Amendments................................................. 20
</TABLE>
iv
<PAGE>
ALBERTSON'S, INC.
BY-LAWS
ARTICLE I
OFFICES
Section 1.1 Registered Office. The registered office of Albertson's,
Inc.(the "Corporation") shall be in the City of Wilmington, County of New
Castle, State of Delaware.
Section 1.2 Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF THE STOCKHOLDERS
Section 2.1 Place of Meetings. All meetings of the stockholders for the
election of directors shall be held in the City of Boise, State of Idaho, at
such place as may be fixed from time to time by the Board of Directors, or at
such other place either within or without the State of Delaware as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting. Meetings of the stockholders for any other purpose may be held
at such time and place, within or without the State of Delaware, as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2.2 Annual Meetings. Annual meetings of stockholders shall be held
on the fourth Friday of May, if not a legal holiday and, if a legal holiday,
then on the next day following that is not a legal holiday, at 10:00 o'clock
A.M., or at such other date and time as shall be designated from time to time by
the Board of Directors and stated in the notice of the meeting, at which the
stockholders shall elect by written ballot a Board of Directors, and transact
such other business as may be properly brought before the meeting.
Section 2.3 Notice of Annual Meeting. Written notice of the annual meeting,
stating the place, date and hour of the meeting, shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting.
Section 2.4 List of Stockholders Entitled to Vote. The officer who has
charge of the stock ledger of the Corporation shall prepare and make, or shall
cause to be prepared and made, at least ten days before every meeting of
stockholders a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
Page 1
<PAGE>
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof and may be inspected by any stockholder who is
present; provided, however, the failure to do so shall not offset the validity
of any meeting.
Section 2.5 Special Meetings. Unless otherwise prescribed by statute or
by the certificate of incorporation of the Corporation, as amended and restated
from time to time or by one or more certificates of designation filed on behalf
of the Corporation pursuant to Section 151(f) of the Delaware General
Corporation Law (such certificate of incorporation and such certificate or
certificates of designation being collectively referred to herein as the
"Certificate of Incorporation"), special meetings of the stockholders, for any
purpose or purposes, may be called only by the chairman of the Board of
Directors or by the vice chairman or president of the Corporation and shall be
called by the chairman or vice chairman of the Board of Directors or by the vice
chairman, president or secretary of the Corporation at the request in writing of
a majority of the Board of Directors. Such request shall state the purpose or
purposes of the proposed meeting. At a special meeting of the stockholders, only
such business shall be conducted as shall be specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the Board of
Directors.
Section 2.6 Notice of Special Meeting. Written notice of a special
meeting, stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given to each stockholder
entitled to vote at such meeting not less than ten nor more than sixty days
before the date of the meeting.
Section 2.7 Quorum. The holders of a majority of the shares of common
stock of the Corporation (the "Common Stock") issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by law or by the Certificate of
Incorporation. A quorum, once established, shall not be broken by the withdrawal
of enough votes to leave less than a quorum. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting not less than ten nor more than sixty days before the
date of the meeting.
Section 2.8 Voting. At all meetings of the stockholders at which a
quorum is present, except as otherwise required by law, the Certificate of
Incorporation or these by-laws, any question brought before any meeting of
stockholders shall be decided by the affirmative vote of the holders of shares
present in person or represented by proxy who properly cast a majority of the
votes on such question. Each holder of Common Stock shall be entitled to cast
one vote for each share of Common Stock standing in his or her name on the books
of the Corporation, and each holder of preferred stock shall be entitled to cast
such number of votes as is provided in the Certificate of Incorporation, voting
Page 2
<PAGE>
separately from or together with the holders of Common Stock as provided in the
Certificate of Incorporation. The Board of Directors, in its discretion, or the
officer of the Corporation presiding at a meeting of stockholders, in his or her
discretion, may require that any votes cast at such meeting shall be cast by
written ballot.
Section 2.9 Proxies. Any stockholder entitled to vote may do so in person
or by his or her proxy appointed by an instrument in writing subscribed by such
stockholder or by his or her attorney thereunto authorized, delivered to the
secretary of the meeting; provided, however, that no proxy shall be voted or
acted upon after three years from its date, unless said proxy provides for a
longer period. Without limiting the manner in which a stockholder may authorize
another person or persons to act for him or her as proxy, either of the
following shall constitute a valid means by which a stockholder may grant such
authority: (a) a stockholder may execute a writing authorizing another person or
persons to act for him or her as proxy. Execution may be accomplished by the
stockholder or his or her authorized officer, director, employee or agent
signing such writing or causing his or her signature to be affixed to such
writing by any reasonable means, including, but not limited to, by facsimile
signature; or (b) a stockholder may authorize another person or persons to act
for him or her as proxy by transmitting or authorizing the transmission of a
telegram or other means of electronic transmission to the person who will be the
holder of the proxy or to a proxy solicitation firm, proxy support service
organization or like agent duly authorized by the person who will be the holder
of the proxy to receive such transmission; provided, however, that any such
telegram or other means of electronic transmission must either set forth or be
submitted with information from which it can be determined that the telegram or
other electronic transmission was authorized by the stockholder. Any copy,
facsimile telecommunication or other reliable reproduction of the writing or
transmission authorizing another person or persons to act as proxy for a
stockholder may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or transmission.
Section 2.10 Nature of Business at Meetings of Stockholders.
A. Limitation. Except as otherwise provided by law or the Certificate of
Incorporation, no business may be transacted at an annual meeting of
stockholders, other than business that is (a) specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the Board of
Directors (or any duly authorized committee thereof), (b) otherwise properly
brought before the annual meeting by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (c) otherwise properly
brought before the annual meeting by any holder of Common Stock (i) who is a
stockholder of record on the date of the giving of the notice provided for in
this Section 2.10 and on the record date for the determination of stockholders
entitled to vote at such annual meeting and (ii) who complies with the notice
procedures set forth in this Section 2.10.
B. Notice Requirement. In addition to any other applicable requirements,
for business to be properly brought before an annual meeting by a stockholder,
such stockholder must have given timely notice thereof to the secretary of the
Corporation in accordance with subsection C of this
Page 3
<PAGE>
Section 2.10 in proper written form in accordance with subsection D of this
Section 2.10.
C. Timeliness of Notice. (1) To be timely, a stockholder's notice to the
secretary of the Corporation of business to be brought before a meeting of
stockholders in accordance with Rule 14a-8 promulgated pursuant to the
Securities and Exchange Act of 1934 must be delivered to or mailed and received
at the principal executive offices of the Corporation in accordance with the
deadline specified in subsection (e) of that rule. (2) To be timely, a
stockholder's notice to the secretary of the Corporation of business to be
brought before an annual meeting other than in accordance with Rule 14a-8
promulgated pursuant to the Securities and Exchange Act of 1934 must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 90 days nor more than 120 days prior to the first
anniversary of the date of the immediately preceding annual meeting of
stockholders; provided, however, that in the event that an annual meeting is
called for a date that is not within 30 days before or after such anniversary
date, in order to be timely, notice by the stockholder must be so received not
later than the close of business on the tenth day following the day on which
notice of the date of the annual meeting was mailed or public disclosure of the
date of the annual meeting was made, whichever occurs first.
D. Form of Notice. To be in proper written form, a stockholder's notice to
the secretary of the Corporation of business to be brought before an annual
meeting must set forth as to each matter such stockholder proposes to bring
before the annual meeting (a) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (b) the name and record address of such stockholder, (c)
the class or series and number of shares of stock of the Corporation that are
owned beneficially or of record by such stockholder, (d) a description of all
arrangements or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of such business
by such stockholder and any material interest such stockholder has in such
business and (e) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting.
E. Business Brought Improperly. No business shall be conducted at the
annual meeting of stockholders except business brought before the annual meeting
in accordance with the procedures set forth in this Section 2.10; provided,
however, that, once business has been properly brought before the annual meeting
in accordance with such procedures, nothing in this Section 2.10 shall be deemed
to preclude discussion by any stockholder of any such business. If the chairman
of an annual meeting determines that business was not properly brought before
the annual meeting in accordance with the foregoing procedures, such chairman
shall declare to the meeting that the business was not properly brought before
the meeting, and such business shall not be transacted.
Section 2.11 Stock Ledger. The stock ledger of the Corporation shall be the
only evidence as to who are the stockholders entitled (a) to examine the stock
ledger, the list required by Section 2.4 of these by-laws or the books of the
Corporation or (b) to vote in person or by proxy at any meeting of stockholders.
Section 2.12 Record Date in General. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of any
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dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action (other than an action to be taken
by written consent without a meeting), the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors and which record
date: (a) in the case of determination of stockholders entitled to vote at any
meeting of stockholders or adjournment thereof, shall not be more than sixty nor
less than ten days before the date of such meeting; and (b) in the case of any
other action (other than an action to be taken by written consent without a
meeting), shall not be more than sixty days prior to such other action. If no
record date is fixed: (a) the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held; and (b) the record date for determining stockholders
for any other purpose (other than an action to be taken by written consent
without a meeting) shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
Section 2.13 Record Date for Stockholder Action by Written Consent. In
order that the Corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. Any
stockholder of record seeking to have the stockholders authorize or take
corporate action by written consent shall, by written notice to the secretary of
the Corporation, request the Board of Directors to fix a record date. The Board
of Directors shall promptly, but in all events within ten days after the date on
which such a request is received, adopt a resolution fixing the record date. If
no record date has been fixed by the Board of Directors within ten days of the
date on which such a request is received, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by
applicable law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of stockholders meetings are recorded,
to the attention of the secretary of the Corporation. Delivery shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by applicable law, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the date on which the Board of
Directors adopts the resolution taking such prior action. No consent to
corporate action in writing without a meeting shall be effective unless
delivered to the Corporation within sixty days following the record date
relating thereto fixed pursuant to this Section 2.13.
Section 2.14 Inspectors of Election. In advance of any meeting of
stockholders, the Board of Directors by resolution or the chairman of the Board
of Directors or the vice chairman, president or secretary of the Corporation
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shall appoint one or more inspectors of election to act at the meeting and make
a written report thereof. One or more other persons may be designated as
alternate inspectors to replace any inspector who fails to act. If no inspector
or alternate is present, ready and willing to act at a meeting of stockholders,
the chairman of the meeting shall appoint one or more inspectors to act at the
meeting. Unless otherwise required by law, inspectors may be officers, employees
or agents of the Corporation. Each inspector, before entering upon the discharge
of his or her duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the best of his or
her ability. The inspector shall have the duties prescribed by law, shall take
charge of the polls and, when the vote is completed, shall make a certificate of
the result of the vote taken and of such other facts as may be required by law.
ARTICLE III
DIRECTORS
Section 3.1 Number and Election of Directors. The number of directors
which shall constitute the whole Board shall be not less than three nor more
than twenty-one. Within the limits above specified, the number of directors
shall be determined by resolution of the Board or by the vote at the annual
meeting of the holders of at least three-fourths of the outstanding shares of
stock then entitled to vote in elections of directors. The Board shall be
divided into three classes. Any increase or decrease in the number of directors
shall be apportioned among the classes so as to make all classes as nearly equal
in number as possible. No decrease in the authorized number of directors shall
shorten the term of any incumbent director. Unless and until otherwise
determined, the first and third classes shall each consist of five directors,
and the second class shall consist of four directors. A separate election shall
be held for each class of directors at the 1980 annual meeting of stockholders.
At the 1980 annual meeting of stockholders the directors elected to the first
class shall hold office for a term of one year and until their respective
successors are elected and qualified; the directors elected to the second class
shall hold office for a term of two years and until their respective successors
are elected and qualified, and the directors elected to the third class shall
hold office for a term of three years and until their respective successors are
elected and qualified. At each annual meeting thereafter the successors to the
class of directors whose term is then expiring shall be elected to hold office
for a term of three years and until their respective successors are elected.
Directors need not be stockholders. The chairman of the Board of Directors shall
be an officer of the Corporation, and the vice chairman of the Board of
Directors need not be an officer of the Corporation. The vice chairman of the
Board of Directors shall be chosen by the Board of Directors and shall, in the
absence of the chairman of the Board of Directors, preside at meetings of the
Board of Directors.
Section 3.2 Nomination of Directors.
A. Limitation. Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors of the
Corporation, except as may be otherwise provided in the Certificate of
Incorporation. Nominations of persons for election to the Board of Directors may
be made at any annual meeting of stockholders, or at any special meeting of
stockholders called for the purpose of electing directors, (a) by or at the
direction of the Board of Directors (or any duly authorized committee thereof)
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or (b) by any holder of Common Stock (i) who is a stockholder of record on the
date of the giving of the notice provided for in this Section 3.2 and on the
record date for the determination of stockholders entitled to vote at such
meeting and (ii) who complies with the notice procedures set forth in this
Section 3.2.
B. Notice Requirement. In addition to any other applicable requirements,
for a nomination of a director to be made by a stockholder, such stockholder
must have given timely notice thereof to the secretary of the Corporation in
accordance with subsection C of this Section 3.2 in proper written form in
accordance with subsection D of this Section 3.2.
C. Timeliness of Notice. To be timely, a stockholder's notice to the
secretary of the Corporation of a nomination of a director must be delivered to
or mailed and received at the principal executive offices of the Corporation (a)
in the case of an annual meeting not less than 90 days nor more than 120 days
prior to the first anniversary of the date of the immediately preceding annual
meeting of stockholders; provided, however, that in the event that the annual
meeting is called for a date that is not within thirty days before or after such
anniversary, in order to be timely, notice by the stockholder must be so
received not later than the close of business on the tenth day following the day
on which notice of the date of the annual meeting was mailed or public
disclosure of the date of the annual meeting was made, whichever occurs first;
and (b) in the case of a special meeting of stockholders called for the purpose
of electing directors, not later than the close of business on the tenth day
following the day on which notice of the date of the special meeting was mailed
or public disclosure of the date of the special meeting was made, whichever
occurs first.
D. Form of Notice. To be in proper written form, a stockholder's notice to
the secretary of the Corporation of a nomination of a director must set forth
(a) as to each person whom the stockholder proposes to nominate for election as
a director (i) the name, age, business address and residence address of the
person, (ii) the principal occupation or employment of the person, (iii) the
class or series and number of shares of stock of the Corporation that are owned
beneficially or of record by the person and (iv) any other information relating
to the person that would be required to be disclosed in a proxy statement or
other filings required to be made in connection with solicitations of proxies
for election of directors pursuant to Section 14 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder; and (b) as to the stockholder giving the notice (i) the
name and record address of such stockholder, (ii) the class or series and number
of shares of stock of the Corporation that are owned beneficially or of record
by such stockholder, (iii) a description of all arrangements or understandings
between such stockholder and each proposed nominee and any other person or
persons (including their names) pursuant to which the nomination(s) are to be
made by such stockholder, (iv) a representation that such stockholder intends to
appear in person or by proxy at the meeting to nominate the persons named in its
notice and (v) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent of
each proposed nominee to being named as a nominee and to serve as a director if
elected.
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E. Defective Nomination. No person shall be eligible for election as a
director of the Corporation unless nominated in accordance with the procedures
set forth in this Section 3.2. If the chairman of the meeting determines that a
nomination was not made in accordance with the foregoing procedures, the
chairman shall declare to the meeting that the nomination was defective, and
such defective nomination shall be disregarded.
Section 3.3 Vacancies. Vacancies and newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director. Any director so chosen shall hold office until the next
election of the class for which such director has been chosen, and until his or
her successor has been elected, unless sooner displaced. If there are no
directors in office, then an election of directors may be held in the manner
provided by statute. If at the time of filling any vacancy or any newly created
directorship the directors then in office shall constitute less than a majority
of the entire Board of Directors (as constituted immediately prior to any such
increase), the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent of the total number of shares at the
time outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office.
Section 3.4 Resignations and Removals of Directors. Any director of the
Corporation may resign at any time, by giving written notice to the chairman of
the Board of Directors, or to the vice chairman, president or secretary of the
Corporation. Such resignation shall take effect at the time therein specified
or, if no time is specified, immediately; and, unless otherwise specified in
such notice, the acceptance of such resignation shall not be necessary to make
it effective. Except as otherwise required by law and subject to the rights, if
any, of the holders of shares of preferred stock then outstanding, any director
or the entire Board of Directors may be removed from office at any time, but
only for cause, and only by the affirmative vote of the holders of at least a
majority in voting power of the issued and outstanding stock of the Corporation
entitled to vote in the election of directors. As used in this Section 3.4, the
term "cause" shall mean (a) conviction of a crime involving moral turpitude, (b)
administrative agency determination of conduct involving moral turpitude or (c)
a determination in good faith, by a majority in voting power of the issued and
outstanding stock of the Corporation entitled to vote in the election of
directors after a hearing before at minimum such a majority in voting power, of
conduct involving moral turpitude materially adverse to the interests of the
Corporation.
Section 3.5 Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these by-laws
directed or required to be exercised or done by the stockholders.
Section 3.6 Indemnification.
A. Power to Indemnify in Actions, Suits or Proceedings Other than Those by
or in the Right of the Corporation. Subject to subsection C of this Section 3.6,
the Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by
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reason of the fact that such person is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director or officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, such person had no reasonable cause to believe his or her conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that such person did not
act in good faith and in a manner which such person reasonably believed to be in
or not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his or
her conduct was unlawful.
B. Power to Indemnify in Actions, Suits or Proceedings by or in the Right
of the Corporation. Subject to subsection C of this Section 3.6, the Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
such person is or was a director or officer of the Corporation, or is or was a
director or officer of the Corporation serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
C. Authorization of Indemnification. Any indemnification under this Section
3.6 (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director or officer is proper in the circumstances because such person has met
the applicable standard of conduct set forth in subsection A or subsection B of
this Section 3.6, as the case may be. Such determination shall be made (a) by a
majority vote of the directors who are not parties to such action, suit or
proceeding, even though less than a quorum, or (b) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion or (c) by the stockholders. To the extent, however, that a
director or officer of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding described above, or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith, without the necessity of authorization in
the specific case.
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D. Good Faith Defined. For purposes of any determination under subsection C
of this Section 3.6, a person shall be deemed to have acted in good faith and in
a manner such person reasonably believed to be in or not opposed to the best
interests of the Corporation, or, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe his or her conduct was
unlawful, if such person's action is based on the records or books of account of
the Corporation or another enterprise, or on information supplied to such person
by the officers of the Corporation or another enterprise in the course of their
duties, or on the advice of legal counsel for the Corporation or another
enterprise or on information or records given or reports made to the Corporation
or another enterprise by an independent certified public accountant or by an
appraiser or other expert selected with reasonable care by the Corporation or
another enterprise. The term "another enterprise" as used in this subsection D
shall mean any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise of which such person is or was serving
at the request of the Corporation as a director, officer, employee or agent. The
provisions of this subsection D shall not be deemed to be exclusive or to limit
in any way the circumstances in which a person may be deemed to have met the
applicable standard of conduct set forth in subsection A or subsection B of this
Section 3.6, as the case may be.
E. Indemnification by a Court. Notwithstanding any contrary determination
in the specific case under subsection C of this Section 3.6, and notwithstanding
the absence of any determination thereunder, any director or officer may apply
to the Court of Chancery of the State of Delaware or any other court of
competent jurisdiction in the State of Delaware for indemnification to the
extent otherwise permissible under subsection A and subsection B of this Section
3.6. The basis of such indemnification by a court shall be a determination by
such court that indemnification of the director or officer is proper in the
circumstances because such person has met the applicable standards of conduct
set forth in subsection A or subsection B of this Section 3.6, as the case may
be. Neither a contrary determination in the specific case under subsection C of
this Section 3.6 nor the absence of any determination thereunder shall be a
defense to such application or create a presumption that the director or officer
seeking indemnification has not met any applicable standard of conduct. Notice
of any application for indemnification pursuant to this subsection E shall be
given to the Corporation promptly upon the filing of such application. If
successful, in whole or in part, the director or officer seeking indemnification
shall also be entitled to be paid the expense of prosecuting such application.
F. Expenses Payable in Advance. Expenses incurred by a director or officer
in defending or investigating a threatened or pending action, suit or proceeding
shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by the Corporation
as authorized in this Section 3.6.
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G. Nonexclusivity of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by or granted pursuant to
this Section 3.6 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
the Certificate of Incorporation or any by-law, agreement, contract, vote of
stockholders or disinterested directors or pursuant to the direction (howsoever
embodied) of any court of competent jurisdiction or otherwise, both as to action
in such person's official capacity and as to action in another capacity while
holding such office, it being the policy of the Corporation that indemnification
of the persons specified in subsection A and subsection B of this Section 3.6
shall be made to the fullest extent permitted by law. The provisions of this
Section 3.6 shall not be deemed to preclude the indemnification of any person
who is not specified in subsection A or subsection B of this Section 3.6 but
whom the Corporation has the power or obligation to indemnify under the
provisions of the General Corporation Law of the State of Delaware (the "GCL"),
or otherwise.
H. Insurance. The Corporation may purchase and maintain insurance on behalf
of any person who corporation, or is or was a director or officer of the
Corporation serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against an liability asserted against
such person and incurred by such person in any suc capacity, or arising out of
such person's status as such, whether or not the Corporation would have the
power or the obligation to indemnify such person against such liability under
the provisions of this Section 3.6.
I. Certain Definitions. For purposes of this Section 3.6, references to
"the Corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger that, if its separate existence had continued, would
have had power and authority to indemnify its directors or officers, so that any
person who is or was a director or officer of such constituent corporation, or
is or was a director or officer of such constituent corporation serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, shall stand in the same position under the
provisions of this Section 3.6 with respect to the resulting or surviving
corporation as such person would have stood with respect to such constituent
corporation if its separate existence had continued. For purposes of this
Section 3.6, references to "fines" shall include any excise taxes assessed on a
person with respect to an employee benefit plan; and references to "serving at
the request of the Corporation" shall include any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director or officer with respect to an employee
benefit plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the Corporation"
as referred to in this Section 3.6.
J. Survival of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Section 3.6 shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
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K. Limitation on Indemnification. Notwithstanding anything contained in
this Section 3.6 to the contrary, except for proceedings to enforce rights to
indemnification (which shall be governed by subsection E hereof), the
Corporation shall not be obligated to indemnify any director or officer (or his
or her heirs, executors or personal or legal representatives) or advance
expenses in connection with a proceeding (or part thereof) initiated by such
person unless such proceeding (or part thereof) was authorized or consented to
by the Board of Directors of the Corporation.
L. Indemnification of Employees and Agents. The Corporation may, to the
extent authorized from time to time by the Board of Directors, provide rights to
indemnification and to the advancement of expenses to employees and agents of
the Corporation similar to those conferred in this Section 3.6 to directors and
officers of the Corporation.
Section 3.7 Retirement Age. No director after having attained the age of 70
years shall be allowed to run for re-election or reappointment to the Board of
Directors, excepting, however, that such retirement age shall not apply to
directors over the age of 65 years who were serving on such board on September
9, 1974.
Section 3.8 Meetings. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Delaware. Regular meetings of the Board of Directors may be held at such time
and at such place as may be from time to time determined by the Board of
Directors and, unless required by resolution of the Board of Directors, without
notice. Special meetings of the Board of Directors may be called by the chairman
of the Board of Directors, by the vice chairman or president of the Corporation
or by a majority of the directors then in office. Notice thereof stating the
place, date and hour of the meeting shall be given to each director either by
mail not less than forty-eight hours before the date of the meeting, by
telephone, facsimile, telegram or other electronic means on twenty-four hours'
notice, or on such shorter notice as the person or persons calling such meeting
may deem necessary or appropriate in the circumstances.
Section 3.9 Quorum. Except as may be otherwise required by law, the
Certificate of Incorporation or these by-laws, at all meetings of the Board of
Directors, a majority of the entire Board of Directors shall constitute a quorum
for the transaction of business and the vote of a majority of the directors
present at any meeting at which there is a quorum shall be the act of the Board
of Directors. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting of the time and
place of the adjourned meeting, until a quorum shall be present.
Section 3.10 Actions of Board. Unless otherwise restricted by the
Certificate of Incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing and the writing or writings are filed
with the minutes of proceedings of the Board or committee.
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Section 3.11 Meetings by Means of Conference Telephone. Unless otherwise
provided by the Certificate of Incorporation or these by-laws, members of the
Board of Directors of the Corporation, or any committee designated by the Board
of Directors, may participate in a meeting of the Board of Directors or such
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this Section 3.11 shall constitute
presence in person at such meeting.
Section 3.12 Committees. The Board of Directors may designate one or more
committees, each committee to consist of two or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of such committee. In the absence or disqualification of a
member of a committee, the member or members present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in one or more resolutions adopted by of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to the following matters: (i) approving or adopting, or
recommending to the stockholders, any action or matter expressly required by the
GCL to be submitted to stockholders for approval or (ii) adopting, amending or
repealing any by-law of the Corporation. Each committee shall keep regular
minutes and report to the Board of Directors when required.
Section 3.13 Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors and/or a
stated salary, or such other emoluments as the Board of Directors shall from
time to time determine. No such payment shall preclude any director from serving
the Corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
Section 3.14 Interested Directors. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers or have a financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at or participates
in the meeting of the Board of Directors or committee thereof which authorizes
the contract or transaction, or solely because such person's or their votes are
counted for such purpose if (a) the material facts as to such person's or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (b) the material facts as to
such person's or their relationship or interest and as to the contract or
transaction are disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically approved in good faith
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by vote of the stockholders; or (c) the contract or transaction is fair as to
the Corporation as of the time it is authorized, approved or ratified by the
Board of Directors, a committee thereof or the stockholders. Common or
interested directors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors or of a committee that authorizes the contract
or transaction.
ARTICLE IV
NOTICES
Section 4.1 Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these by-laws to be given to any director,
member of a committee or stockholder, such notice may be given by mail,
addressed to such director, member of a committee or stockholder, at such
person's address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Written notice may also
be given personally or by telegram, facsimile or other electronic means.
Section 4.2 Waiver of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these by-laws to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of a person at
a meeting, present by person or represented by proxy, shall constitute a waiver
of notice of such meeting, except where the person attends the meeting for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business because the meeting is not lawfully called or convened. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of stockholders, directors or members of a committee of directors need
be specified in any written waiver of notice except to the extent required by
law, the Certificate of Incorporation or these by-laws.
ARTICLE V
OFFICERS
Section 5.1 Officers Chosen by the Board. The following officers of the
Corporation shall be chosen by the Board of Directors at its meeting held either
the day before or the day of each annual meeting of stockholders: a chairman of
the Board of Directors (who must be a director) and a president of the
Corporation. The Board of Directors shall designate the chairman of the Board of
Directors as the chief executive officer and the president of the Corporation as
the chief operating officer. A vice chairman of the Corporation may be chosen by
the Board of Directors at its meeting held either the day before or the day of
each annual meeting of stockholders. Effective as of January 29, 1999, the Board
of Directors may also choose a chairman of the executive committee, who shall
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serve for such term as the Board of Directors shall designate, and, if no one is
chosen to fill this officer position, then the chairman of the executive
committee shall be an outside director pursuant to Section 3.12 of these
by-laws. The Board of Directors may also choose such other officers as it deems
necessary or appropriate. The officers of the Corporation chosen by the Board of
Directors shall hold their offices for such terms and shall exercise such powers
and perform such duties as shall be determined from time to time by the Board of
Directors. Any officer chosen or appointed by the Board of Directors may be
removed from office at any time by the affirmative vote of a majority of the
Board of Directors. Any vacancy occurring in any of such offices shall be filled
by the Board of Directors. The salaries of the officers of the Corporation
chosen by the Board of Directors shall be fixed by the Board of Directors.
Section 5.2 Officers Chosen by the Chief Executive Officer. The chief
executive officer may appoint any vice presidents (including executive vice
presidents, senior vice presidents and group vice presidents), the secretary,
any assistant secretaries, the treasurer, any assistant treasurers, presidents
and other officers of subsidiary corporations and such other officers and agents
as he or she may deem necessary, who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the chief executive officer, who may remove any such officers
from office at any time.
Section 5.3 Qualification. Any number of offices may be held by the
same person, unless otherwise prohibited by law, the Certificate of
Incorporation or these By-laws. The officers of the Corporation need not be
stockholders of the Corporation nor, except in the case of the chairman of the
Board of Directors, need such officers be directors of the Corporation.
Section 5.4 Voting Securities Owned by the Corporation. Instruments
relating to securities owned by the Corporation, including powers of attorney,
proxies, waivers of notice of meeting, consents and other instruments relating
to securities owned by the Corporation may be executed in the name of and on
behalf of the Corporation by the chairman of the Board of Directors or by the
vice chairman or president of the Corporation, and any such officers may, in the
name of and on behalf of the Corporation, take all such action as any such
officer may deem advisable to vote in person or by proxy at any meeting of
security holders of any corporation in which the Corporation may own securities
and at any such meeting shall possess and may exercise any and all rights and
power incident to the ownership of such securities that the Corporation, as the
owner thereof, might have exercised and possessed if present. The Board of
Directors may from time to time confer, by resolution, like powers upon any
other person or persons.
Section 5.5 Chairman of the Board. The chairman of the Board of
Directors shall preside at all meetings of the Board of Directors and shall
possess the power to sign on behalf of the Corporation all certificates,
contracts and other instruments the execution of which may be authorized by the
Board of Directors. The chairman of the Board of Directors shall also perform
such other duties and may exercise such other powers as from time to time may be
assigned to him or her by these by-laws or by the Board of Directors.
Section 5.6 Chairman of the Executive Committee. The chairman of the
executive committee shall preside at all meetings of the executive committee of
the Board of Directors, shall be available for advice and consultation as to
operations and administrative matters of significance and shall perform such
other duties and may exercise such other powers as from time to time may be
assigned to him or her by these by-laws or by the Board of Directors.
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Section 5.7 Chief Operating Officer. The chief operating officer shall
have responsibility for the operations of the Corporation as authorized by the
Board of Directors and shall perform such other duties and may exercise such
other powers as from time to time may be assigned to him or her by these by-laws
or by the Board of Directors.
Section 5.8 Vice Chairman of the Corporation. The vice chairman of the
Corporation shall possess the power to sign on behalf of the Corporation all
certificates, contracts and other instruments the execution of which may be
authorized by the Board of Directors and shall perform such other duties and may
exercise such other powers as from time to time may be assigned to him or her by
these by-laws or by the Board of Directors.
Section 5.9 President. The president shall possess the power to sign on
behalf of the Corporation all certificates, contracts and other instruments the
execution of which may be authorized by the Board of Directors and shall perform
such other duties and may exercise such other powers as from time to time may be
assigned to him or her by these by-laws or by the Board of Directors.
Section 5.10 Chief Executive Officer. The chief executive officer shall
preside at, or shall designate such other officer of the Corporation to preside
at, meetings of stockholders. The chief executive officer shall have general and
active management of the business affairs of the Corporation, including the
right to appoint such officers as provided for in Section 5.2 of these by-laws,
and shall see that all orders and resolutions of the Board of Directors are
carried into effect. The chief executive officer shall also perform such other
duties and may exercise such other powers as from time to time may be assigned
to him or her by these by-laws or by the Board of Directors.
Section 5.11 Vice Presidents. The executive vice president, senior vice
president or group vice president designated by the Board of Directors shall be
vested with all powers and shall perform all the duties of the president in the
absence or the disability of the president. Each vice president shall be vested
with such powers and shall perform such duties granted or imposed upon him or
her by the Board of Directors or by the chief executive officer at the time of
his or her appointment to office or as from time to time may be assigned to him
or her by these by-laws, by the chief executive officer or by the Board of
Directors.
Section 5.12 Secretary. The secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose and shall
perform like duties for the standing committees when requested. The secretary
shall give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or the chief executive officer,
under whose supervision the secretary shall be. If the secretary shall be unable
or shall refuse to cause to be given notice of all meetings of the stockholders
and special meetings of the Board of Directors, and if there be no assistant
secretary, then either the Board of Directors or the chief executive officer may
choose another officer to cause such notice to be given. The secretary shall
have custody of the corporate seal of the Corporation, and the secretary or any
assistant secretary, if there be one, shall have authority to affix the same to
any instrument requiring it and, when so affixed, it may be attested by the
signature of the secretary or by the signature of any such assistant secretary.
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The Board of Directors may give general authority to any other officer to affix
the seal of the Corporation and to attest the affixing by his or her signature.
The secretary shall see that all books, reports, statements, certificates and
other documents and records required by law to be kept or filed are properly
kept or filed, as the case may be.
Section 5.13 Assistant Secretaries. Assistant secretaries, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the chief executive officer or the
secretary, and in the absence of the secretary or in the event of his or her
disability or refusal to act, shall perform the duties of the secretary, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the secretary.
Section 5.14 Treasurer. The treasurer shall have custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the chief executive officer and the Board of
Directors at its regular meetings, or when the Board of Directors so requires,
an account of all of his or her transactions as treasurer and of the financial
condition of the Corporation. If required by the Board of Directors, the
treasurer shall give the Corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of the office of treasurer and for the restoration to
the Corporation, in case of the treasurer's death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in the treasurer's possession or under control of the treasurer
belonging to the Corporation.
Section 5.15 Assistant Treasurers. Assistant treasurers, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the chief executive officer or the
treasurer, and in the absence of the treasurer or in the event of the
treasurer's disability or refusal to act, shall perform the duties of the
treasurer, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the treasurer. If required by the Board of Directors,
an assistant treasurer shall give the Corporation a bond in such sum and with
such surety or sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of the office of assistant treasurer and
for the restoration to the Corporation, in case of the assistant treasurer's
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in the assistant treasurer's
possession or under control of the assistant treasurer belonging to the
Corporation.
ARTICLE VI
STOCK
Section 6.1 Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed in the name of the
Corporation, by (a) the chairman of the Board of Directors or the vice chairman,
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the president or an executive vice president of the Corporation and (b) the
treasurer or an assistant treasurer or the secretary or an assistant secretary
of the Corporation certifying the number of shares of stock of the Corporation
owned by such holder.
Section 6.2 Signatures. Where a certificate is countersigned (a) by a
transfer agent other than the Corporation or its employee or (b) by a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar at the date of
issue.
Section 6.3 Lost, Destroyed, Stolen or Mutilated Certificates. The
Board of Directors may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued by the Corporation
alleged to have been lost, stolen or destroyed upon the making of an affidavit
of that fact by the person claiming the certificate of stock to be lost, stolen
or destroyed. When authorizing such issue of a new certificate or certificates,
the Board of Directors may, in its discretion as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or such person's legal representative, to advertise
the same in such manner as it shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
Section 6.4 Transfers. Stock of the Corporation shall be transferable
in the manner prescribed by law and in these by-laws. Transfers of stock shall
be made on the books of the Corporation only by the person named in the
certificate or by such person's attorney lawfully constituted in writing and
upon the surrender of the certificate therefor, properly endorsed for transfer
and payment of all necessary transfer taxes; provided, however, that such
surrender and endorsement or payment of taxes shall not be required in any case
in which the officers of the Corporation shall determine to waive such
requirement. Every certificate exchanged, returned or surrendered to the
Corporation shall be marked "Canceled," with the date of cancellation, by the
secretary or assistant secretary of the Corporation or the transfer agent
thereof. No transfer of stock shall be valid as against the Corporation for any
purpose until it shall have been entered in the stock records of the Corporation
by an entry showing from and to whom transferred.
Section 6.5 Transfer and Registry Agents. The Corporation may from time
to time maintain one or more transfer offices or agencies and registry offices
or agencies at such place or places as may be determined from time to time by
the Board of Directors.
Section 6.6 Registered Stockholders. The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends and to vote as such owner a person
registered on it books as the owner of shares, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by law.
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ARTICLE VII
GENERAL PROVISIONS
Section 7.1 Dividends. Subject to the requirements of the GCL and the
provisions of the Certificate of Incorporation, dividends upon the stock of the
Corporation may be declared by the Board of Directors at any regular or special
meeting of the Board of Directors, and may be paid in cash, in property or in
shares of the Corporation's stock. Before payment of any dividend, there may be
set aside out of any funds of the Corporation available for dividends such sum
or sums as the Board of Directors from time to time, in its absolute discretion,
may deem proper as a reserve or reserves for any purpose, and the Board of
Directors may modify or abolish any such reserve.
Section 7.2 Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 7.3 Fiscal Year. The fiscal year of the Corporation
shall be fixed by resolution of the Board of Directors.
Section 7.4 Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation and the words "Corporate Seal, Delaware."
The seal may be used by causing it or a facsimile thereof to be impressed or
fixed or reproduced or otherwise.
Section 7.5 Election Not to Be Subject to Idaho Business Combination
Law. The Corporation expressly elects not to be subject to the provisions of the
Idaho Business Combination Law, codified as Chapter 17 of Title 30 of the Idaho
Code.
Section 7.6 Election Not to Be Subject to Idaho Control Share
Acquisition Law. The Corporation expressly elects not to be subject to the
provisions of the Idaho Control Share Acquisition Law, codified as Chapter 16 of
Title 30 of the Idaho Code.
Section 7.7 Entire Board of Directors. As used in these by-laws, the
term "entire Board of Directors" means the total number of directors that the
Corporation would have if there were no vacancies.
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ARTICLE VIII
AMENDMENTS
Section 8.1 Amendments. These by-laws may be altered, amended or
repealed, in whole or in part, or new by-laws may be adopted by the Board of
Directors or by the stockholders as provided in the Certificate of
Incorporation.
I, Kaye L. O'Riordan, do hereby certify that the foregoing are the
By-Laws of the Corporation as of March 17, 2000 with subsection C. of Section
2.10 and subsection C. of Section 3.2 effective as of June 16, 2000.
/s/ Kaye L. O'Riordan
-------------------------------------------
Kaye L. O'Riordan
Vice President and Corporate Secretary
Page 20
Exhibit 10.6.2
AMENDMENT
to the
ALBERTSON'S, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
This Amendment is made by Albertson's, Inc., a Delaware corporation (the
"Corporation").
RECITALS:
A. The Corporation established the Albertson's, Inc. Executive Deferred
Compensation Plan effective December 5, 1983 (the "Plan");
B. The Corporation, pursuant to Section 8.01 of the Plan, retained the
right to amend the Plan and Section 8.01 provides that the Plan may be amended
by the Corporation so long as such amendments are non-monetary in their effect
and do not materially alter plan benefits; pursuant to resolutions duly adopted
by the Board of Directors of the Corporation, the Grantor Trust Committee of the
Board of Directors was granted the authority to amend the Plans; and the
Committee has been granted the authority to amend the Plans by the Grantor Trust
Committee so long as such amendments do not materially alter benefits;
C. The Committee has determined that it is advisable to amend the Plan in
the manner hereinafter set forth and that such amendment does not materially
alter benefits.
AMENDMENT
The Plan is amended, as of December 15, 1998, in the following respects:
Subsection 6.04(d) of the Plan shall be deleted and the following
language shall be substituted in its place:
(d) The Participant may modify the form of the distribution of
all or part of the Participant's Deferred Benefit Account,
provided that such modification is made on a validly executed
and filed election form before the end of the calendar year
which ends at least twelve (12) months prior to the date on
which any distribution of the Participant's Deferred Benefit
Account shall have commenced.
IN WITNESS WHEREOF, this instrument has been duly executed by the
undersigned as of December 15, 1998.
ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin
---------------------------------------
Thomas R. Saldin
Executive Vice President,
Administration and General Counsel
Exhibit 10.7.1
AMENDMENT
to the
ALBERTSON'S, INC.
SENIOR EXECUTIVE DEFERRED COMPENSTION PLAN
This Amendment is made by Albertson's, Inc., a Delaware corporation (the
"Corporation").
RECITALS:
A. The Corporation established the Albertson's, Inc. Senior Executive
Deferred Compensation Plan effective December 5, 1983 (the "Plan");
B. The Corporation, pursuant to Section 8.01 of the Plan, retained the
right to amend the Plan and Section 8.01 provides that the Plan may be amended
by the Corporation so long as such amendments are non-monetary in their effect
and do not materially alter plan benefits; pursuant to resolutions duly adopted
by the Board of Directors of the Corporation, the Grantor Trust Committee of the
Board of Directors was granted the authority to amend the Plans; and the
Committee has been granted the authority to amend the Plans by the Grantor Trust
Committee so long as such amendments do not materially alter benefits;
C. The Committee has determined that it is advisable to amend the Plan in
the manner hereinafter set forth and that such amendment does not materially
alter benefits.
AMENDMENT
The Plan is amended, as of December 15, 1998, in the following respects:
Subsection 6.04(d) of the Plan shall be deleted and the following
language shall be substituted in its place:
(d) The Participant may modify the form of the distribution of
all or part of the Participant's Deferred Benefit Account,
provided that such modification is made on a validly executed
and filed election form before the end of the calendar year
which ends at least twelve (12) months prior to the date on
which any distribution of the Participant's Deferred Benefit
Account shall have commenced.
IN WITNESS WHEREOF, this instrument has been duly executed by the
undersigned as of December 15, 1998.
ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin
--------------------------------------
Thomas R. Saldin
Executive Vice President,
Administration and General Counse
Exhibit 10.10
ALBERTSON'S, INC.
2000 DEFERRED COMPENSATION PLAN
Established Effective January 1, 2000
<PAGE>
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II - ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE III - PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE IV - DEFERRED AMOUNTS . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE V - CREDITING OF DEFERRED AMOUNTS AND VALUATION OF ACCOUNTS . .5
ARTICLE VI - COMMENCEMENT OF BENEFITS . . . . . . . . . . . . . . . . . .6
ARTICLE VII - BENEFICIARY DESIGNATION . . . . . . . . . . . . . . . . . .9
ARTICLE VIII - FUNDING . . . . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE IX - AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . .9
ARTICLE X - FINANCIAL HARDSHIP WITHDRAWALS . . . . . . . . . . . . . . 10
ARTICLE XI - CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE XII - GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
<PAGE>
ALBERTSON'S, INC.
2000 DEFERRED COMPENSATION PLAN
Established Effective January 1, 2000
Albertson's, Inc., a Delaware corporation (the "Company"), does hereby
establish, effective January 1, 2000, the Albertson's, Inc. 2000 Deferred
Compensation Plan (the "Plan") as an unfunded deferred compensation arrange-
ment for a select group of management or highly compensated employees. The Plan
is implemented with the intention that it will aid in retaining and attracting
employees of exceptional ability by providing such employees with a means to
supplement their income at retirement.
ARTICLE I
DEFINITIONS
For purposes of the Plan, the following words and phrases shall have the
following meanings unless a different meaning is plainly required by the
context.
1.1 "Account" means the bookkeeping account on behalf of each Participant,
maintained and valued in accordance with Article V.
1.2 "Base Salary" means, with respect to each Participant, the
Participant's annual rate of salary before reduction pursuant to the Plan or any
other deferred compensation plan or salary reduction arrangement, but excluding
bonuses, option awards or other forms of remuneration not included in the
Participant's annual rate of salary.
1.3 "Beneficiary" or "Beneficiaries" means the person or persons designated
under Article VII to receive any benefits in the event of the Participant's
death.
1.4 "Board" means the Board of Directors of the Company.
1.5 "Bonus" means, with respect to each Participant, a cash bonus (i.e.,
excluding options and other noncash awards) paid by the Company with respect to
the Fiscal Year beginning in the respective Plan Year.
1.6 "Change in Control" shall mean the occurrence, in a single trans-
action or series of transactions after January 1, 2000, or any one of the
following events or circumstances: (a) merger, consolidation or reorganization
where the beneficial owners of the Voting Securities immediately preceding such
merger, consolidation or reorganization beneficially own less than 80% of the
securities possessing the right to vote to elect directors or to authorize a
merger, consolidation or reorganization with respect to the survivor, after
giving effect to such merger, consolidation or reorganization, (b) merger,
consolidation or reorganization of the Company where 20% or more of the
incumbent directors of the Company are changed, (c) acquisition by any person or
group, as defined for purposes of Section 13(d) of the Securities Exchange Act
of 1934, as amended, other than a trustee or other fiduciary holding Voting
Securities under an employee benefit plan of the Company (or a corporation
owned, directly or indirectly, by the holders of Voting Securities in
substantially the same proportion as their ownership of Voting Securities)
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of beneficial ownership of 20% or more of the Voting Securities (such amount to
include any Voting Securities acquired prior to January 2, 2000), (d) during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clauses (a), (b), (c) or (e) of this
paragraph) whose election by the Company's shareholders was approved by a vote
of at least two-thirds (b) of the directors still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof, or (e) approval by the shareholders of the Company of a plan
of liquidation or dissolution with respect to the Company or an agreement for
the sale or disposition by the Company of all or substantially all the Company's
assets; provided, that in the event the exact date of a Change in Control cannot
be determined, such Change in Control will be deemed to have occurred on the
earliest date on which it could have occurred.
1.7 "Claim" shall mean a request by a Claimant in accordance with Article
XI for a benefit under the Plan.
1.8 "Claimant" means any person who claims to be entitled to a benefit
under the Plan.
1.9 "Committee" means the Grantor Trust Committee appointed by the Board to
administer the Plan, or such other administrative committee of not less than
three (3) persons that the Board shall designate.
1.10 "Company" means Albertson's, Inc., a Delaware corporation, or its
successor or successors.
1.11 "Compensation Committee" means the Compensation Committee appointed by
the Board to establish and review the annual salaries and bonuses paid to the
elected officers and the Executive Vice Presidents of the Company, to establish
the bonus policy for all the officers of the Company and to establish stock
option plans and grant options pursuant thereto, or such other committee of not
less than three (3) persons that the Board shall designate.
1.12 "Deferral Agreement" means the written participation agreement
(substantially in the form attached to this Plan) that shall be entered into by
the Employer and a Participant pursuant to Articles III and IV to carry out the
Plan with respect to such Participant.
1.13 "Deferred Amounts" means the portion of each Participant's Base Salary
and/or Bonus deferred each Plan Year pursuant to a Deferral Agreement executed
by the Participant.
1.14 "Effective Date" means January 1, 2000.
1.15 "Eligible Employee" means any employee of the Employer who (i)(a)
holds a position of Vice President or above or is in the Company's Salary
Administration Program and (b) has a Base Salary (determined as of the first day
of each Plan Year and unaffected by any changes during the Plan Year) of $77,873
or more (as indexed pursuant to the Salary Schedule Adjustment), or (ii)
satisfies such other criteria as may be established by the Committee. An
employee shall cease to be an Eligible Employee if the employee does not receive
his Base Salary for four (4) or more consecutive weeks.
1.16 "Employer" means the Company and any of its Subsidiaries.
1.17 "Fiscal Year" means the fiscal year of the Company.
1.18 "Grantor Trust Committee" means that committee created by the Board
pursuant to resolutions adopted on August 29, 1988, to administer and amend
certain Company deferred compensation plans and trusts.
1.19 "Investment Options" means the securities or funds identified by the
Committee from time to time as the investments available as to the growth
measurement mechanism for Accounts under the Plan.
1.20 "Minimum Deferral" means five percent (5%) of the Participant's Base
Salary and, if the Participant elects to defer a portion of his or her Bonus,
five percent (5%) of the Participant's Bonus.
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1.21 "Moody's Rate" means the "corporate bond yield average" with respect
to "average corporations" for the preceding calendar month, as determined from
the Moody's Bond Record published by Moody's Investors Service, Inc.
1.22 "Participant" shall have the meaning provided under Section 3.3
hereof.
1.23 "Plan" means this Albertson's, Inc. 2000 Deferred Compensation Plan,
as it may be amended from time to time.
1.24 "Plan Year" means the 12-month period beginning on the Effective Date
and ending on December 31, 2000 and each 12-month period thereafter.
1.25 "Rate of Return" means the amount credited monthly to a Partici-
pant's Account under Article V. Except as provided in Section 6.4(a), such rate
shall be determined by the Committee based upon the net performance of the
Investment Options selected by the Participant pursuant to Section 5.2.
1.26 "Retirement" means termination of employment with the Employer, for
reasons other than death, on or after the later of (i) the date the Participant
attains age 55, and (ii) completion of five (5) "years of service" (as defined
in the Albertson's Savings & Retirement Estates (ASRE)) with the Employer.
1.27 "Salary Administration Program" means the program established by the
Company for the administration of the salaries of employees of the Company,
excluding any arrangement established pursuant to a collective bargaining
agreement.
1.28 "Salary Schedule Adjustment" means the annual percentage adjustment to
the medians of the pay grades (i.e., salaried grades) of the Company's Salary
Administration Program.
1.29 "Subsidiary" means any corporation, partnership, limited liability
company, venture or other entity in which the Company has, directly or
indirectly, at least a 50% ownership interest.
1.30 "Total Disability" means the complete inability of the Eligible
Employee to perform any and every duty of his or her regular occupation.
1.31 "Voting Securities" means securities possessing the right to vote to
elect directors or to authorize a merger, consolidation or reorganization of the
Company.
ARTICLE II
ADMINISTRATION
2.1 The Plan shall be administered by the Committee. The Committee shall
have the authority to interpret the Plan, to establish and revise rules and
regulations relating to the Plan, to make any other determinations that it
believes necessary or advisable for the administration of the Plan and to
delegate such administrative powers and duties as it shall determine. All
decisions of the Committee shall be by a vote of the majority of its members and
shall be final and binding unless the Board shall determine otherwise. Members
of the Committee who are Eligible Employees shall be eligible to participate in
the Plan while serving as a member of the Committee, but a member of the
Committee shall not vote or act upon any matter which relates solely to such
member as a Participant.
2.2 The Employer shall indemnify and hold harmless the members of the
Committee and their delegates against any and all claims, loss, damage, expense
or liability arising from any action or failure to act with respect to the Plan,
except in the case of gross negligence or willful misconduct.
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ARTICLE III
PARTICIPATION
3.1 By such date as the Committee shall determine, but not later than the
December 31 immediately preceding the first day of any Plan Year, the Committee
shall permit any employee who is, or who the Committee reasonably anticipates
will be on the first day of such Plan Year, an Eligible Employee to elect to
defer compensation effective as of the first day of such Plan Year by filing a
completed and executed Deferral Agreement with the Committee; provided, however,
that if the employee fails to qualify as an Eligible Employee on the first day
of such Plan Year, such election shall be void. If at any time during the Plan
Year any Participant ceases to be an Eligible Employee, the compensation
deferrals of such Participant shall cease as of such date, and any amounts
deferred during such Plan Year after the date of such cessation of eligibility
shall be returned to the Participant as soon as practicable thereafter.
3.2 For each Fiscal Year, the Compensation Committee shall determine if an
Eligible Employee who is also a "covered employee" as that term is defined in
Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section
162(m)") would receive total remuneration, including bonus, for that Fiscal Year
in excess of the maximum amount allowed as a deduction by the Company from
income taxes pursuant to the provisions of Section 162(m) and shall
(notwithstanding the limitation on deferrals set forth in Section 4.2(a)) defer
to the Account of such Eligible Employee that portion of the bonus which would
otherwise be paid to the Eligible Employee which, in the judgment of the
Compensation Committee, would not be deductible by the Company pursuant to the
provisions of Section 162(m). The Compensation Committee shall designate one of
its members to file with the Committee a Deferral Agreement for the portion of
bonus to be deferred.
3.3 If an Eligible Employee or Participant elects not to defer compensation
in any Plan Year, or ceases, pursuant to Section 3.1, to be an Eligible Employee
during any Plan Year, such Participant will not be permitted to defer
compensation under the Plan until the first day of the immediately succeeding
Plan Year, if eligible on such date.
3.4 An Eligible Employee shall become a Participant in the Plan as of the
date he or she first commences participation in the Plan and shall remain a
Participant until the earlier of the Participant's death or the complete
distribution of the Participant's Account.
3.5 Notwithstanding anything in the Plan to the contrary, the Committee
shall be authorized to take such steps as may be necessary to ensure that the
Plan is and remains at all times an unfunded deferred compensation arrangement
for a select group of management or highly compensated employees, within the
meaning of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the Internal Revenue Code of 1986, as amended, or such other
successor or applicable laws.
ARTICLE IV
DEFERRED AMOUNTS
4.1 An Eligible Employee electing to defer compensation in accordance with
Article III shall have the right to determine his or her Deferred Amounts for
each Plan Year, subject to the limitations set forth in this Article IV. Such
Deferred Amounts shall reduce the amount of the Participant's Base Salary and/or
Bonus that is to be paid to the Participant in the Plan Year of reference.
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4.2 (a) By such date as the Committee shall determine, but not later than
the December 31 immediately preceding the first day of each Plan Year, an
Eligible Employee may elect to defer a percentage of his or her Base Salary and
Bonus for such Plan Year; provided, however, that the amount deferred may not be
less than the Minimum Deferral and may not exceed 50% of the Participant's Base
Salary nor 50% of the Participant's Bonus.
(b) Each validly executed and timely filed Deferral Agreement shall
be effective for the first Plan Year for which it is timely filed and for each
succeeding Plan Year, until (i) modified or revoked by a subsequently timely
filed, validly executed Deferral Agreement applicable to any such succeeding
Plan Year, (ii) the Participant's eligibility ceases or (iii) the Participant
terminates employment with the Employer for any reason. Any Eligible Employee
who fails to have on file with the Committee with respect to any Plan Year a
timely filed, validly executed Deferral Agreement shall not defer compensation
under the Plan in such Plan Year.
(c) Except as provided in Articles VI and X, each validly executed
Deferral Agreement filed with the Committee may not be terminated or modified
by the Participant until the first day of the succeeding Plan Year by timely
filing with the Committee prior to such date a validly executed Deferral
Agreement.
4.3 Subject to Sections 5.2 and 6.4(e), the Participant shall at all times
be 100% vested in his or her Account.
ARTICLE V
CREDITING OF DEFERRED AMOUNTS AND VALUATION OF ACCOUNTS
5.1 The Committee shall establish and maintain a separate bookkeeping
Account on behalf of each Participant. The value of an Account as of any date
shall equal the credits for Deferred Amounts elected by the Participants,
adjusted for the Rate of Return pursuant to this Article V, through the day
preceding such date and less all payments made by the Employer to the
Participant or his/her Beneficiary through the day preceding such date.
5.2 Unless otherwise delegated, the Committee shall (a) determine the
Investment Options available as the measurement mechanism for the Rate of Return
on Accounts under the Plan and (b) establish procedures for the manner and
extent to which elections may be made, the method of valuing the Accounts and
the various Investment Options and the method of crediting the Accounts with the
Rate of Return, including making other adjustments as a result of dividend
equivalents, interest equivalents or other earnings or return on such Accounts.
The selection of the Moody's Rate as an Investment Option shall be limited as
follows:
(i) Eligible Employees holding a position of Group Vice President
or above may select the Moody's Rate as the Investment Option for up to
100% of their Deferred Amount for a Plan Year.
(ii) Eligible Employees not described in subparagraph (i) above,
holding the position of Vice President may select the Moody's Rate as the
Investment Option for up to 15% of their Base Salary and Bonus for a
Plan Year.
(iii) Eligible Employees not described in subparagraphs (i) or (ii)
above are not permitted to select the Moody's Rate as an Investment Option.
5.3 To the extent an Eligible Employee selects the Moody's Rate as the
Investment Option for his or her Account, the following provisions shall apply:
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(a) Each month, during the Participant's employment with the Employer,
the balance of such Participant's Account shall be credited with a Rate of
Return at the Moody's Rate plus 3%; provided, however, that if benefits
first become distributable pursuant to Section 6.3, the Rate of Return for
the period commencing on the Participant's first day of participation in
the Plan until his or her date of termination of employment, shall be the
Moody's Rate; and, provided further, notwithstanding the foregoing, that
upon and after the occurrence of a Change in Control, the Rate of Return
for such Participant, if employed by the Employer on the date of such
occurrence, shall be the Moody's Rate plus 3%;
(b) Each month, commencing on the first day the Participant ceases to
be employed by the Employer and continuing until the earlier of the
Participant's reemployment with the Employer or the complete distribution
of the Participant's Account, the balance of the Participant's Account
shall be credited with a Rate of Return equal to the Moody's Rate plus 3%;
provided, however, that if benefits first become distributable pursuant to
Section 6.3, shall be equal to the Moody's Rate: and, provided further,
notwithstanding the foregoing, that upon and after the occurrence of a
Change in Control, the Rate of Return for such Participant, if employed by
the Employer on the date of such occurrence, shall be the Moody's Rate plus
3%.
(c) For purpose of this Section 5.3, the Rate of Return for the
current month shall be the appropriate Moody's Rate specified therein taken
to the one-twelfth power so that when calculated for 12 months, the
effective annual interest credit shall be equal to the annual rate used to
determine the applicable Moody's Rate specified therein. The formula for
such calculation is:
12 1 + i - 1
where "i" is the applicable Moody's Rate specified in Sections 5.2 and 5.3.
(d) The selection of the Moody's Rate as the Investment Option for
Deferred Amounts is irrevocable with respect to those Deferred Amounts and
earnings thereon.
5.4 The Company shall not be required to purchase, hold or dispose of any
securities representing the Investment Options designated by a Participant.
Participants shall not have any voting rights or any other ownership rights with
respect to the Investment Options in which their Accounts are deemed invested.
5.5 The Account shall be valued by the Committee as of each December 31.
The Account may also be valued by the Committee as of any other date as the
Committee may authorize for the purpose of determining the Account for payment
of benefits, or any other reason the Committee deems appropriate.
5.6 The Committee shall submit to each Participant periodic statements, at
least annually, in such form as the Committee deems desirable, setting forth the
balance standing to the credit of each Participant in his/her Account.
ARTICLE VI
COMMENCEMENT OF BENEFITS
6.1 In the event of a Participant's Retirement, the amount credited
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to such Participant's Account shall be distributed to such Participant in the
form(s) provided under this Article VI commencing as soon as administratively
practicable, but effective as of the first day of the month immediately
following the later of (a) the date of such Retirement, or (b) the date
specified in the Participant's Deferral Agreement which can in no event be later
than the Participant's 65th birthday.
6.2 In the event of a Participant's death prior to the complete
distribution of his or her Account, the balance of such Participant's Account
shall be distributed to such Participant's Beneficiary in the form(s) provided
under Section 6.4(c) commencing as soon as administratively practicable fol-
lowing such death, but effective as of the first day of the month immediately
following the date of such Participant's death.
6.3 In the event any Participant terminates employment with the Employer
prior to Retirement, for any reason other than death, the amount credited to
such Participant's Account shall be distributed to such Participant in the
form(s) provided for under this Article VI commencing as soon as
administratively practicable, effective as of the first day of the month
immediately following the later of (a) his or her date of termination, or (b)
the date specified in the Participant's Deferral Agreement which can in no event
be later than the Participant's 65th birthday. A Participant may elect in his or
her Deferral Agreement to have the distribution of his or her Account commence
effective as of the first day of the month following the determination that the
Participant has suffered a Total Disability; provided that distribution of the
Participant's Account has not already commenced.
6.4 (a) Except as otherwise provided in this Section 6.4, the amount
credited to a Participant's Account shall be paid in one or more of the
following forms: (i) a single lump sum, (ii) 60 approximately equal monthly
installments, (iii) 120 approximately equal monthly installments or (iv)
180 approximately equal monthly installments, as the Participant shall
elect in any Deferral Agreement; provided, however, that in the absence of
such election in any Deferral Agreement, the respective amounts credited to
the Participant's Account shall be payable in 120 approximately equal
monthly installments. If installment payments are elected, the Account
shall be amortized with an assumed Rate of Return of six percent (6%)
unless the Participant selects, and the Committee approves, an alternative
assumed Rate of Return. As of each January 1, the amount to be distributed
in installment payments for that year shall be determined by amortizing the
Participant's Account balance as of the preceding December 31 over the
remainder of the installment period, using the assumed Rate of Return which
was fixed under the preceding sentence at the time installment payments
were elected. The Participant shall not be entitled to select a different
form of distribution with respect to amounts credited to the Participant
Account in each Plan Year. Instead, the distribution form(s) selected by
the Participant shall apply to the entire balance of the Participant's
Account. The Participant may modify the form(s) of distribution selected by
the Participant's; provided that such modification is made on a validly
executed and timely filed Deferral Agreement at least 12 months prior to
the date on which any distributions of the Participant's Account shall have
commenced.
(b) In the event the amounts credited to the Participant's Account become
payable pursuant to Section 6.3 prior to a Change in Control, the amounts
credited to such Participant's Account shall be distributed in 60
approximately equal monthly installments without regard to paragraph (a) of
this Section 6.4.
(c) In the event of the Participant's death prior to the complete
distribution of his or her Account pursuant to Section 6.4(b), the balance
of the Participant's Account shall be paid to the Participant's
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Beneficiary over the remainder of the period provided in Section 6.4(b). In
the event of the Participant's death prior to the complete distribution of
his or her Account other than in accordance with Section 6.4(b), the
balance of the Participant's Account shall be paid to the Participant's
Beneficiary in accordance with the form(s) elected by the Participant;
provided, however, that prior to the commencement of benefits to such
Beneficiary, upon written application to the Committee no later than 60
days following notification to the Beneficiary of his or her entitlement to
benefits under the Plan, such Beneficiary may request that the Committee
approve an alternative single form of distribution that would apply to the
balance of the Participant's Account. The Committee, after considering all
the facts and circumstances that it deems relevant (including, for example,
the effect of such alternative form of distribution on the finances of the
Company and the financial needs of the Beneficiary), shall determine in its
sole discretion whether to permit the alternative form of distribution. In
the event of the death of the Participant's last Beneficiary prior to the
complete distribution of the Participant's Account, the balance of the
Participant's Account shall be paid in a single lump sum to the deceased
Beneficiary's estate.
(d) Notwithstanding anything in this Section 6.4 to the contrary,
in the event that the value of a Participant's Account does not exceed
$30,000, as of the date benefits first become distributable, the Committee
shall cause such Participant's Account to be distributed in a single lump
sum payment.
(e) Notwithstanding anything in the Plan to the contrary, benefits
shall not be paid to a Participant who is a "covered employee" as that term
is defined in Section 162(m) until the Participant is no longer a "covered
employee".
6.5 Notwithstanding anything in this Article VI to the contrary, benefit
payments under the Plan shall cease as of the first day the Participant returns
to employment with the Employer. Upon such return to employment, the Participant
shall, if eligible, be permitted to defer salary, as provided in Article III;
provided, however, that, with respect to any such reemployed Participant whose
Account prior to such reemployment was being credited with a Rate of Return
under Sections 5.3 at the Moody's Rate, such reemployment shall not be effective
to increase to the Moody's Rate plus 3% Rate of Return to be credited to the
Participant's Account with respect to amounts deferred prior to such
reemployment.
6.6 If the Participant or the Participant's Beneficiary is entitled to
receive any benefits hereunder and is in his or her minority, or is, in the
judgment of the Committee, legally, physically or mentally incapable of
personally receiving and receipting any distribution, the Committee may make
distributions to a legally appointed guardian or to such other person or
institution as, in the judgment of the Committee, is then maintaining or has
custody of the payee.
6.7 After all benefits have been distributed in full to the Participant or
to the Participant's Beneficiary, all liability under the Plan to such
Participant or to his or her Beneficiary shall cease.
6.8 No benefit shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge by the Participant or
Beneficiary, and any such action shall be void for all purposes. No benefit
shall in any manner be subject to the debts, contracts, liabilities, engagements
or torts of the Participant or Beneficiary, nor shall it be subject to
attachments or other legal process for or against the Participant or
Beneficiary, except to such extent as may be required by law.
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6.9 To the extent required by law in effect at the time payments are made,
the Employer shall withhold from payments made hereunder the minimum taxes
required to be withheld by the federal or any state or local government.
ARTICLE VII
BENEFICIARY DESIGNATION
7.1 The Participant may, at any time, designate a Beneficiary or
Beneficiaries to receive the benefits payable in the event of his or her death
and may designate a successor Beneficiary or Beneficiaries to receive any
benefits payable in the event of the death of any other Beneficiary. Each
Beneficiary designation shall become effective only when filed in writing with
the Committee during the Participant's lifetime on a form prescribed by the
Committee. The filing of a new Beneficiary designation form will cancel all
Beneficiary designations previously filed. Any finalized divorce or marriage
(other than a common law marriage) of a Participant subsequent to the date of
filing of a Beneficiary designation form shall revoke such designation. The
spouse of a Participant domiciled in a community property jurisdiction shall
join in any designation of Beneficiary or Beneficiaries other than the spouse.
If no Beneficiary shall be designated by the Participant, or if his or her
Beneficiary designation is revoked by marriage, divorce or otherwise without
execution of another designation, or if the designated Beneficiary or Bene-
ficiaries shall not survive the Participant, payment of the Participant's
Account shall be made to the Participant's estate in a single lump sum pay-
ment. Notwithstanding any provision of this Plan to the contrary, any Bene-
ficiary designation may be changed by a Participant by the written filing of
such change on a form prescribed by the Committee.
ARTICLE VIII
FUNDING
8.1 All benefits hereunder are intended to be in the form of an unfunded
obligation of the Employer.
8.2 Nothing contained herein shall create any obligation on the part of the
Employer to set aside or earmark any monies or other assets specifically for
payments under the Plan. Participants and their Beneficiaries, heirs, successors
and assigns shall have no legal or equitable rights, interests or claims in any
property or assets of the Employer, nor shall they be beneficiaries of, or have
any rights, claims or interests in any life insurance policies, annuity
contracts or the proceeds therefrom owned or which may be acquired by the
Employer ("Policies"). Such Policies or other assets of the Employer shall not
be held under any fund for the benefit of Participants, their Beneficiaries,
heirs, successors or assigns, or held in any way as collateral security for the
fulfilling of the obligations of the Employer under this Plan. Any and all of
the Employer's assets and Policies shall be, and remain, for purposes of the
Plan, the general unpledged, unrestricted assets of the Employer. The Employer's
obligation under the Plan shall be merely that of an unfunded and unsecured
promise of the Employer to pay money in the future.
8.3 If a Participant or Beneficiary becomes entitled to a distribution of
benefits under the Plan, and if at such time the Participant has outstanding any
debt, obligation or other such liability representing an amount owing to the
Employer, then the Employer may offset such amount owing it against the amount
of benefits otherwise distributable. Such determination shall be made by the
Committee.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 The Board, the Committee or their duly authorized delegates may at any
time amend the Plan in whole or in part; provided, however, that no amendment
shall be effective to decrease the benefits or rights of any Participant
theretofore accrued. Written notice of such amendment shall be given to each
Participant.
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9.2 The Board may at any time terminate the Plan. Upon any termination of
the Plan under this Section 9.2, each Participant shall cease to make deferrals
under the Plan, and all amounts shall prospectively cease to be deferred for
such Plan Year. Benefits payable under the Plan shall be paid at such times and
pursuant to such terms and conditions as were effective immediately prior to the
termination of the Plan.
ARTICLE X
FINANCIAL HARDSHIP WITHDRAWALS
10.1 Subject to the provisions set forth herein, a Participant may withdraw
up to 100% of his or her Account as necessary to satisfy immediate and heavy
financial needs of the Participant which the Participant is unable to meet from
any other resource reasonably available to such Participant. The amount of such
hardship withdrawal may not exceed the amount required to meet such need.
10.2 (a) Upon written application, the Committee, in its sole discretion,
may grant a withdrawal to the Participant for any of the following
unforeseen financial hardships:
(i) unusual medical expenses incurred by the Participant for the
Participant or his or her dependents;
(ii) special health requirements of the Participant or his or her
dependents; or
(iii) any other situation which the Committee shall deem to
constitute financial hardship.
(b) The Participant shall be required to furnish evidence of purpose
and need to the Committee on forms prescribed by the Committee.
10.3 The Rate of Return credited to the Participant's Account under Section
5.2, for purposes of determining the Participant's Account under this Article X
only, shall be determined as if the Participant had terminated employment with
the Employer as of the date of the relevant hardship withdrawal distribution
made hereunder.
10.4 Notwithstanding any other provision of the Plan to the contrary, upon
written application of the Participant, the Committee may, in the case of
financial hardship, authorize the cessation of deferrals by the Participant.
ARTICLE XI
CLAIMS PROCEDURE
11.1 Each Claimant shall have the right to submit a Claim with respect to a
benefit sought hereunder. Written notice of any Claim hereunder must be given to
the Committee either personally or by certified or registered mail, return
receipt requested, at the following address:
Albertson's, Inc.
Attn: Grantor Trust Committee
c/o Corporate Secretary
250 Parkcenter Blvd.
P.O. Box 20
Boise, Idaho 83726
Such Claim shall state with particularity:
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(a) The benefit claimed; and
(b) All facts believed to be relevant in connection with such Claim.
11.2 Upon receipt of a Claim hereunder, the Committee shall consider the
merits of the Claim and shall within 90 days from the receipt of the Claim
render a decision on the merits and communicate the same to the Claimant. In the
event the Committee denies the Claim in whole or in part, the Claimant shall be
so notified in writing, which shall be addressed and delivered to him or her
personally or by mail, and shall set forth the following in a manner reasonably
calculated to be understood by the Claimant:
(a) The reason or reasons for rejection of the Claim;
(b) The provisions of the Plan and the particular provisions of law,
if any, relied upon in reaching such determination;
(c) A description of any additional information needed from the
Claimant in order for him or her to perfect his or her Claim and an
explanation of why such information is necessary; and
(d) A statement outlining the Appellate Review Procedure as set forth
in Section 11.3.
The failure of the Committee to render a decision on the merits of a Claim shall
be deemed to be a denial of such Claim and notice of such denial shall be deemed
to have been given to the Claimant on the ninetieth (90th) day from receipt by
the Committee of the Claim.
11.3 Where a Claim has been or is deemed denied, the Claimant shall have
the right within 60 days after the date he or she receives or is deemed to have
been given notice that his or her Claim has been rejected, in whole or in part,
to an Appellate Review Procedure as set forth herein. Such procedure shall
enable the Claimant to appeal from an adverse decision by delivering a written
request for an appeal to the Committee either personally or by certified or
registered mail, return receipt requested. Such request shall set forth the
reasons why the Claimant believes the decision rejecting his or her Claim is
erroneous and shall be signed by the Claimant under oath. Within 30 days after
such request is received, the Committee may conduct a review of the Claim at a
hearing at which the Committee may invite the Claimant to present his or her
views with respect to the merits of the Claim. Whether or not a hearing is held,
the Claimant may submit issues and comments in writing to the Committee for
consideration at the hearing and may review pertinent documents. A decision with
respect to the merits of the Claim shall be rendered by the Committee not later
than 60 days after the delivery of the written request for an appeal hereunder
unless special circumstances (such as holding a hearing) require an extension of
time for processing, and then no later than 120 days after receipt of the
request.
The Appellate Review decision shall include specific reasons believed to
support such decision, including specific references to provisions of the Plan
and of law, shall be written in a manner reasonably calculated to be under-
stood by the Claimant and shall be delivered to the Claimant personally or by
mail.
11.4 No action shall be commenced under Section 502(a)(1)(B) of ERISA, or
under any other provision of law, until the Claimant shall first have exhausted
the Claims Procedure available to him or her hereunder, provided that such
Claimant would not have been irreparably and materially harmed by any delay
occasioned by this Claims Procedure. Insofar as the same is not inconsistent
with regulations promulgated under Section 503 of ERISA, relating to claims
procedures, any Claim under this Claims Procedure must be submitted within three
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(3) months from the earlier of (a) the date on which the Claimant learned of
facts sufficient to enable him or her to formulate such Claim, or (b) the date
on which the Claimant should reasonably have been expected to learn the facts
sufficient to enable him or her to formulate such Claim. Claims submitted after
such period shall be deemed to have been waived by the Claimant and shall
thereafter be wholly unenforceable. No statute of limitations set forth under
either Section 413 of ERISA, or any other applicable provision of law, shall be
deemed to be extended in any way by the period of limitations set forth herein
with respect to this Claims Procedure.
11.5 All references in this Article XI to Claimant shall include
representatives who are duly authorized as such, in writing, which authoriza-
tion shall have been delivered to the Committee at some stage of the Claims
Procedure. After such written authorization is delivered, copies of all sub-
sequent communications with the Claimant and decisions with respect to the
Claim, for which such authorization has been provided, shall be delivered to the
authorized representative, as well as to the Claimant.
ARTICLE XII
GENERAL PROVISIONS
12.1 Neither the establishment of the Plan, nor any modification thereof,
nor the creation of an Account, nor the payment of any benefits shall be
construed
(a) as giving the Participant, Beneficiary or any other person, any
legal or equitable right against the Employer unless such right shall be
specifically provided for in the Plan or conferred by affirmative action of
the Employer in accordance with the terms and provisions of the Plan, or
(b) as giving the Participant the right to be retained in the
service of the Employer, and the Participant shall remain subject to
discharge to the same extent as if the Plan had never been established.
12.2 A Participant will cooperate with the Employer by furnishing any and
all information requested by the Employer in order to facilitate the payment of
benefits hereunder, taking such physical examinations as the Employer may deem
necessary and taking such other relevant action as may be requested by the
Employer. If a Participant refuses so to cooperate, the Employer shall have no
further obligation to the Participant under the Plan.
12.3 All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter, as the identity of the person or persons may
require. As the context may require, the singular may be read as the plural and
the plural as the singular.
12.4 Any notice or filing required or permitted to be given to the
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the principal office of the Company,
directed to the attention of the Corporate Secretary of the Company. Such notice
shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark or receipt for registration or
certification.
12.5 The validity of the Plan or any of its provisions shall be determined
under and construed according to the laws of the State of Idaho, except to the
extent Idaho law is preempted by federal law, including, but not limited to,
ERISA. Should any provision of the Plan or any regulations adopted thereunder be
deemed or held to be unlawful or invalid for any reason, such fact shall not
adversely affect the other provisions or regulations unless such invalidity
shall render impossible or impractical the functioning or the Plan and, in such
case, the appropriate parties shall immediately adopt
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<PAGE>
a new provision or regulation to take the place of the one held illegal or
invalid.
12.6 Nothing contained herein shall preclude the Employer from merging into
or with, or being acquired by, another business entity.
12.7 The liabilities under the Plan shall be binding upon any successor or
assign of the Employer and any purchaser of the Employer or substantially all of
the assets of the Employer, and the Plan shall continue in full force and
effect.
12.8 The titles of the Articles in the Plan are for convenience of
reference only, and, in the event of any conflict, the text rather than such
titles shall control.
IN WITNESS WHEREOF, the Company has caused its officers, duly authorized by
its Board of Directors, to execute the Plan this 1st day of December, 1999.
ALBERTSON'S, INC.
ATTEST:
/s/ Kaye L. O'Riordan By /s/ Thomas R. Saldin
- ---------------------- ---------------------------------------
Its Executive Vice President
and General Counsel
---------------------------------------
Page 13
Exhibit 10.13.6
SECOND AMENDMENT
TO
ALBERTSON'S, INC. EXECUTIVE PENSION MAKEUP PLAN
WHEREAS, the Albertson's, Inc. Executive Pension Makeup Plan (the "Plan")
was amended and restated, effective January 1, 1995;
WHEREAS, Albertson's Inc. (the "Employer") has adopted the Albertson's
Savings & Retirement Estates II, a profit sharing plan ("ASRE II") and the
Albertson's, Inc. 2000 Deferred Compensation Plan, a nonqualified deferred
compensation plan ("2000 Plan").
WHEREAS, the Employer has amended the Albertson's Salaried Employees'
Pension Plan and the Albertson's Employees' Corporate Pension Plan (the "Pension
Plans") to establish a floor-offset arrangement with ASRE II in order to provide
a minimum level of benefits to certain participants who are also covered by the
Pension Plans;
WHEREAS, the Employer desires to further amend the Plan to reflect the
amendments to the Pension Plans and the adoption of ASRE II and the 2000 Plan by
the Employer;
NOW, THEREFORE, the following amendments to the Plan are hereby adopted,
effective October 1, 1999:
1. Definitions for the terms "ASRE II", "ASRE Makeup Plan" and "2000 Plan"
are added to Article I of the Plan to read in their entirety as follows:
"ASRE II" shall mean the Albertson's Savings & Retirement Estates
II, as from time to time amended, established and maintained by the
Employer.
"ASRE Makeup Plan" shall mean the Albertson's, Inc. Executive ASRE
Makeup Plan, as from time to time amended, established and
maintained by the Employer.
. . .
"2000 Plan" shall mean the Albertson's, Inc. 2000
Deferred Compensation Plan, as from time to time
amended, established and maintained by the Employer.
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2. Section 2.01 is amended and restated to read in its entirety as follows:
2.01 Eligibility to Participate. An Employee shall be eligible to
participate in the Plan only if specified, either by name or by class of
employees, by resolution of the Board of Directors of the Employer. Notwith-
standing the foregoing, effective November 20, 1999, only Employees who were
participants in the Corporate Pension Plan or Salaried Pension Plan on such
date, shall be eligible to participate in the Plan. Once an Employee becomes a
Participant, the Employee shall remain a Participant until the earlier of the
Participant's death or the complete distribution of the Participant's Accrued
Benefit.
3. Section 3.01 is amended and restated to read in its entirety as follows:
3.01 Amount of Accrued Benefit. (a) An Officer Participant's Accrued
Benefit shall be a monthly retirement benefit equal to an amount calculated
pursuant to Section 4.01 (as amended from time to time), or any successor
provision thereto, of the Salaried Pension Plan with the following
modifications:
(i) Any restrictions on the amount of such benefit contained in
the Salaried Pension Plan or required by law with respect to
"qualified" defined benefit plans (including, but not limited to,
the limitations of Section 415 of the Internal Revenue Code of
1986, as amended, and any successor thereto) shall not be taken
into account;
(ii) Any limitation on the amount of annual compensation of the
Officer Participant shall not be taken into account;
(iii) Annual compensation shall include (A)compensation otherwise
payable by the Employer to the Officer Participant which the
Officer Participant elects to defer under either of the Deferred
Compensation Plans, or the 1990 Plan or the 2000 Plan for the
year in which the compensation is deferred, but only those
components of deferred compensation which, if not deferred, would
be taken into account in determining benefits under the Salaried
Pension Plan; (B) compensation deferred under certain deferred
compensation arrangements relating to phantom stock, which
arrangements have been superseded by Employer contributions to
Albertson's, Inc. Senior Executive Deferred Compensation Plan;
and (C) Employer contributions to Albertson's, Inc. Senior
Executive Deferred Compensation Plan;
(iv) All years of credited service of the Officer Participant
under the Corporate Pension Plan and all years of credited
service of the Officer Participant under the Salaried Pension
Plan, shall be taken into account; and
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(v) Such Officer Participant's Accrued Benefit shall be reduced
by the sum of (A) the Officer Participant's accrued benefit under
the Salaried Pension Plan, (B) the Officer Participant's accrued
benefit, if any, under the Corporate Pension Plan, and (C) the
actuarial equivalent of the Officer Participant's vested account
balances in the "company contribution on pay accounts" under ASRE
II and ASRE Makeup Plan.
If an Officer Participant becomes a Non-Officer Participant or
otherwise ceases to be in the eligible class of employees under
Section 2.01 without retiring or terminating employment with the
Employer, the Participant's benefit shall continue to accrue and be
calculated pursuant to this Section 3.01(a).
(b) A Non-Officer Participant's Accrued Benefit shall be a
monthly retirement benefit equal to an amount calculated pursuant to
Section 4.01 (as amended from time to time), or any successor
provision thereto, of the Salaried Pension Plan with the following
modifications:
(i) Annual compensation shall include compensation otherwise
payable by the Employer to the Non-Officer Participant which the
Non-Officer Participant elects to defer under the 1990 Plan or
2000 Plan for the year in which the compensation is deferred, but
only those components of deferred compensation which, if not
deferred, would be taken into account in determining benefits
under the Salaried Pension Plan; and
(ii) Such Non-officer Participant's Accrued Benefit shall be
reduced by the sum of (A) the Non-Officer Participant's accrued
benefit under the Salaried Pension Plan and (B) by the actuarial
equivalent of the Non-officer Participant's vested account
balances in the "company contribution on pay accounts" under ASRE
II and ASRE Makeup Plan. If a Non-Officer Participant ceases to
be in the eligible class of employees under Section 2.01 without
retiring or terminating employment with the Employer, the
Participant's benefit shall continue to accrue and be calculated
pursuant to this Section 3.01(b).
IN WITNESS WHEREOF, the Employer has caused this instrument to be executed
by its officer, duly authorized by its Board of Directors, this 1st day of
December, 1999. ALBERTSON'S, INC.
ATTEST: By /s/ Thomas R. Saldin
--------------------------------
/s/ Kaye L. O'Riordan Its Executive Vice President
- ---------------------- and General Counsel
--------------------------------
Page 3
Exhibit 10.14
ALBERTSON'S, INC.
EXECUTIVE ASRE MAKEUP PLAN
Established Effective September 26, 1999
<PAGE>
TABLE OF CONTENTS
=================
Page
====
ARTICLE I - DEFINITIONS..............................................1
ARTICLE II - ADMINISTRATION...........................................4
ARTICLE III - PARTICIPATION............................................4
ARTICLE IV - MAINTENANCE AND VALUATION OF ACCOUNTS....................5
ARTICLE V - CREDITING OF ACCOUNTS....................................6
ARTICLE VI - COMMENCEMENT OF BENEFITS.................................6
ARTICLE VII - BENEFICIARY DESIGNATION..................................8
ARTICLE VIII - FUNDING..................................................8
ARTICLE IX - AMENDMENT AND TERMINATION................................9
ARTICLE X - FINANCIAL HARDSHIP WITHDRAWALS...........................9
ARTICLE XI - CLAIMS PROCEDURE.........................................9
ARTICLE XII - GENERAL PROVISIONS......................................11
<PAGE>
ALBERTSON'S, INC.
EXECUTIVE ASRE MAKEUP PLAN
Established Effective September 26, 1999
Albertson's, Inc., a Delaware corporation (the "Company"), does hereby
establish, effective October 1, 1999, the Albertson's, Inc. Executive ASRE
Makeup Plan (the "Plan") as an unfunded deferred compensation arrangement for a
select group of management or highly compensated employees. The Plan is
implemented with the intention that it will aid in retaining and attracting
employees of exceptional ability by providing such employees with a means to
supplement their income at retirement.
ARTICLE I
DEFINITIONS
For purposes of the Plan, the following words and phrases shall have the
following meanings unless a different meaning is plainly required by the
context.
1.1 "Account" means the bookkeeping account on behalf of each Participant,
maintained and valued in accordance with Article VIII.
1.2 "ASRE" means the Albertson's Savings & Retirement Estates, as amended
from time to time.
1.3 "Base Salary" means, with respect to each Participant, the
Participant's annual rate of salary (determined as of the first day of each Plan
Year and unaffected by any changes during the Plan Year) before reduction
pursuant to the Plan or any other deferred compensation plan or salary reduc-
tion arrangement, but excluding bonuses, option awards or other forms of
remuneration not included in the Participant's annual rate of salary.
1.4 "Beneficiary" or "Beneficiaries" means the person or persons designated
under Article VII to receive any benefits in the event of the Participant's
death.
1.5 "Board" means the Board of Directors of the Company.
1.6 "Change in Control" shall mean the occurrence, in a single trans-
action or series of transactions after September 26, 1999, of any one of the
following events or circumstances:
(a) merger, consolidation or reorganization where the beneficial
owners of the Voting Securities immediately preceding such merger,
consolidation or reorganization beneficially own less than 80% of the
securities possessing the right to vote to elect directors or to authorize
a merger, consolidation or reorganization with respect to the survivor,
after giving effect to such merger, consolidation or reorganization;
(b) merger, consolidation or reorganization of the Company where 20%
or more of the incumbent directors of the Company are changed;
(c) acquisition by any person or group, as defined for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended, other
than a trustee or other fiduciary holding Voting Securities under an
employee benefit plan of the Company (or a corporation owned, directly or
indirectly, by the holders of Voting Securities in substantially the same
proportion as their ownership of Voting Securities) of beneficial
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<PAGE>
ownership of 20% or more of the Voting Securities (such amount to include
any Voting Securities acquired prior to September 27, 1999);
(d) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors and any new
director (other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in clauses
(a), (b), (c) or (e) of this paragraph) whose election by the Company's
shareholders was approved by a vote of at least two-thirds (b) of the
directors still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or
(e) approval by the shareholders of the Company of a plan of
liquidation or dissolution with respect to the Company or an agreement for
the sale or disposition by the Company of all or substantially all the
Company's assets; provided, that in the event the exact date of a Change in
Control cannot be determined, such Change in Control will be deemed to have
occurred on the earliest date on which it could have occurred.
1.7 "Code" means the Internal Revenue Code of 1986, as amended.
1.8 "Committee" means the Grantor Trust Committee appointed by the Board to
administer the Plan, or such other administrative committee of not less than
three (3) persons that the Board shall designate.
1.9 "Company" means Albertson's, Inc., a Delaware corporation, or its
successor or successors.
1.10 "Compensation" means a Participant's straight-time earnings, overtime,
and any bonus or other amounts paid by the Employer by reason of services
performed by the Participant (including payments pursuant to amounts previously
deferred under the Albertson's, Inc. 2000 Deferred Compensation Plan or any
other nonqualified deferred compensation plan), and wage replacement benefits
under Company-sponsored programs for either occupational or non-occupational
disability benefits, except as provided in (a)(iv) below, before deductions are
authorized by the Participant or required by law to be withheld.
(a) Notwithstanding the foregoing, a Participant's Compensation shall
be determined without taking into account any of the following:
(i) Contributions or payments by the Employer on behalf of a
Participant under any employee benefit plan (other than payments
pursuant to a nonqualified deferred compensation plan), including but
not limited to ASRE and any health or welfare plan;
(ii) Compensation that is not subject to employer income tax
withholding under Code Section 3402 (or any successor thereof), except
such Compensation as is provided in paragraph (c) below;
(iii) Income caused by the exercise of stock options and stock
appreciation rights;
(iv) Income attributable to benefits received under the long-term
disability plan maintained by the Employer; and income attributable to
severance from employment with the Employer.
(b) A Participant's Compensation for purposes of the Plan shall be the
Compensation paid to him/her during the relevant portion of the Plan Year,
irrespective of when such Compensation is actually earned.
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(c) Except as is expressly provided to the contrary herein, a
Participant's Compensation shall include (i) his/her deferrals under the
Albertson's, Inc. 2000 Deferred Compensation Plan, and (ii) his/her
contributions and any amount covering employee contributions from the
pre-tax health care premium payment arrangement under the American Stores
Company Before Tax Plan or any similar arrangement sponsored by the
Employer pursuant to Code Section 125.
1.11 "Compensation Committee" means the Compensation Committee appointed by
the Board to establish and review the annual salaries and bonuses paid to the
elected officers and the Executive Vice Presidents of the Company, to establish
the bonus policy for all the officers of the Company and to establish stock
option plans and grant options pursuant thereto, or such other committee of not
less than three (3) persons that the Board shall designate.
1.12 "Deferral Agreement" means the written participation agreement
(substantially in the form attached to this Plan) that shall be entered into by
the Employer and a Participant pursuant to Article III with respect to such
Participant.
1.13 "Effective Date" means September 26, 1999.
1.14 "Eligible Employee" means any employee of an Employer who (a) is a
participant in ASRE, (b) (i) holds a position of Vice President or above or is
in the Company's Salary Administration Program and (ii) has a Base Salary of
$77,873 or more (as indexed pursuant to the Salary Schedule Adjustment), and (c)
satisfies such other criteria as may be established by the Committee. An
employee shall cease to be an Eligible Employee if the employee does not receive
Compensation for four (4) or more consecutive weeks. Notwithstanding the
foregoing, no participant in the American Stores Company Supplemental Executive
Retirement Plan shall be considered an Eligible Employee prior to January 1,
2000.
1.15 "Employer" means the Company and any of its Subsidiaries.
1.16 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.17 "Grantor Trust Committee" means that committee created by the Board
pursuant to resolutions adopted on August 29, 1988, to administer and amend
certain Company deferred compensation plans and trusts.
1.18 "Fiscal Year" means the fiscal year of the Company.
1.19 "Investment Options" means the securities or funds identified by the
Committee from time to time as the investments available as the growth
measurement mechanism for Accounts under the Plan.
1.20 "Participant" shall have the meaning provided under Section 3.1
hereof.
1.21 "Plan" means this Albertson's, Inc. Executive ASRE Makeup Plan, as it
may be amended from time to time.
1.22 "Plan Year" means the period beginning on the Effective Date and
ending on December 31, 1999 and each 12-month period thereafter.
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1.23 "Salary Administration Program" means the program established by the
Company for the administration of the salaries of employees of the Company.
1.24 "Salary Schedule Adjustment" means the annual percentage adjustment to
the medians of the pay grades (i.e., salaried grades) of the Company's Salary
Administration Program.
1.25 "Subsidiary" means any corporation, partnership, limited liability
company, venture or other entity in which the Company has, directly or
indirectly, at least a 50% ownership interest.
1.26 "Total Disability" means the complete inability of the Eligible
Employee to perform any and every duty of his or her regular occupation, as
determined by the Committee in its sole and absolute discretion.
1.27 "Voting Securities" means securities possessing the right to vote to
elect directors or to authorize a merger, consolidation or reorganization of the
Company.
ARTICLE II
ADMINISTRATION
2.1 The Plan shall be administered by the Committee. The Committee shall
have the authority to interpret the Plan, to establish and revise rules and
regulations relating to the Plan, to make any other determinations that it
believes necessary or advisable for the administration of the Plan and to
delegate such administrative powers and duties as it shall determine. All
decisions of the Committee shall be by a vote of the majority of its members and
shall be final and binding unless the Board shall determine otherwise. Members
of the Committee who are Eligible Employees shall be eligible to participate in
the Plan while serving as a member of the Committee, but a member of the
Committee shall not vote or act upon any matter which relates solely to such
member as a Participant.
2.2 The Employer shall indemnify and hold harmless the members of the
Committee and their delegates against any and all claims, loss, damage, expense
or liability arising from any action or failure to act with respect to the Plan,
except in the case of gross negligence or willful misconduct.
ARTICLE III
PARTICIPATION
3.1 An Eligible Employee shall automatically become a Participant in the
Plan immediately upon becoming an Eligible Employee and shall remain a
Participant until the earlier of the Participant's death or the complete
distribution of the Participant's Account.
3.2 An Eligible Employee electing to defer compensation in accordance with
this Article III shall have the right to determine his or her deferred amounts
for each Plan Year, subject to the limitations set forth in this Article III.
Such deferred amounts shall reduce the amount of the Participant's Compensation
that is to be paid to the Participant in the Plan Year of reference.
3.3 (a) By such date as the Committee shall determine, but not later than
the December 31 immediately preceding the first day of each Plan Year, an
Eligible Employee may elect to defer a percentage of his or her
Compensation for such Plan Year; provided, however, that the amount
deferred may not exceed the amount necessary to receive the maximum
Employer matching contribution under ASRE and the Plan, as determined by
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<PAGE>
the Committee. Such election shall be effected by the execution of a valid
Deferral Agreement, timely filed with the Committee.
(b) Each validly executed and timely filed Deferral Agreement shall be
effective for the first Plan Year for which it is timely filed and for each
succeeding Play Year, until (i) modified or revoked by a subsequently
timely filed, validly executed Deferral Agreement applicable to any such
succeeding Play Year, (ii) the Participant's eligibility ceases or (iii)
the Participant terminates employment with the Employer for any reason. Any
Eligible Employee who fails to have on file with the Committee with respect
to any Plan Year a timely filed, validly executed Deferral Agreement shall
not defer Compensation under the Plan in such Plan Year.
(c) Except as provided in Articles VI and X, each validly executed
Deferral Agreement filed with the Committee may not be terminated or
modified by the Participant until the first day of the succeeding Plan Year
by timely filing with the Committee prior to such date a validly executed
Deferral Agreement.
3.4 Notwithstanding anything in the Plan to the contrary, the Committee
shall be authorized to take such steps as may be necessary to ensure that the
Plan is and remains at all times an unfunded deferred compensation arrangement
for a select group of management or highly compensated employees, within the
meaning of ERISA and the Code or such other successor or applicable laws.
ARTICLE IV
MAINTENANCE AND VALUATION OF ACCOUNTS
4.1 The Committee shall establish and maintain a separate bookkeeping
Account on behalf of each Participant. The value of an Account as of any date
shall equal the credits for deemed Employer contributions (including deferrals
elected by Participants) made by the Employer to such Account in accordance with
Article V, adjusted for earnings and losses pursuant to this Article IV, through
the day preceding such date and less all payments made by the Employer to the
Participant or his/her Beneficiary through the day preceding such date.
4.2 Unless otherwise delegated, the Committee has the sole discretion to
determine the Investment Options available as the measurement mechanism for
earnings or losses on Accounts under the Plan, the manner and extent to which
elections may be made, the method of valuing the Accounts and the various
Investment Options and the method of crediting the Accounts with, or making
other adjustments as a result of dividend equivalents, interest equivalents or
other earnings or return on such Accounts.
(a) The amounts in each Participant's Account shall be deemed to
have been invested and reinvested in the Investment Options designated by
the Participant. A Participant may make changes in his/her designation of
Investment Options in the same manner and to the same extent as such
changes are made under ASRE. Accounts and Investment Options shall be
valued, and adjustments made, if necessary, in the same manner as under
ASRE.
4.3 The Company shall not be required to purchase, hold or dispose of any
securities representing the Investment Options designated by a Participant.
Participants shall not have any voting rights or any other ownership rights with
respect to the Investment Options in which their Accounts are deemed invested.
4.4 The Account shall be valued by the Committee as of each December 31.
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The Account may also be valued by the Committee as of any other date as the
Committee may authorize for the purpose of determining the Account for payment
of benefits, or any other reason the Committee deems appropriate.
4.5 The Committee shall submit to each Participant periodic statements, at
least annually, in such form as the Committee deems desirable, setting forth the
balance standing to the credit of each Participant in his/her Account.
4.6 A Participant shall be vested in his/her Account to the same extent and
in the same proportion that the Company contribution under Section 5.1(b) is
treated as vested under the terms of ASRE. Notwithstanding the foregoing, a
Participant shall be 100% vested in his/her Account at all times following a
Change in Control.
ARTICLE V
CREDITING OF ACCOUNTS
5.1 A Participant under the Plan shall be credited (as a bookkeeping entry)
to such Participant's Account an amount equal to the deferral amount elected by
the Participant under the Deferral Agreement, together with the excess of the
amount described in Section 5.1(a) over the amount described in Section 5.1(b)
as follows:
(a) The amount equal to the contribution the Employer would make to
ASRE on behalf of the Participant for the Plan Year, without regard to any
limitations imposed by the Code based on the Participant's Compensation for
such Plan Year.
(b) The amount equal to the Employer's actual contribution to ASRE on
behalf of the Participant for such Plan Year.
Although the Employer contribution shall typically be actually determined or
credited in the Plan Year following the Plan Year to which it corresponds, the
contribution shall be credited effective as of the date the Employer made the
actual contribution to ASRE for such Plan Year.
ARTICLE VI
COMMENCEMENT OF BENEFITS
6.1 The amount credited to a Participant's Account shall be distributed to
such Participant in the form(s) provided under this Article VI commencing as
soon as administratively practicable, but effective as of the first day of the
month immediately following the occurrence of the first distribution event
selected by the Participant in his or her distribution form. A Participant may
select any or all of the following distribution events: (a) termination of
employment, (b) death, (c) Total Disability and (d) attainment of a specified
age on or after age 59 1/2.
6.2 In the event of a Participant's death prior to the complete
distribution of his/her Account, the balance of such Participant's Account shall
be distributed to such Participant's Beneficiary in the form(s) provided under
Section 6.3(b) commencing as soon as administratively practicable following such
death, but effective as of the first day of the month immediately following the
date of such Participant's death.
6.3 (a) Except as otherwise provided in this Section 6.3, the entire amount
credited to a Participant's Account shall be paid in one of the following
forms selected on the Participant's distribution form: (i) a single lump
sum, (ii) 60 approximately equal monthly installments, (iii)
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120 approximately equal monthly installments or (iv) 180 approximately
equal monthly installments, as the Participant shall elect in any
distribution form; provided, however, that in the absence of such election
in any distribution form, the respective amounts credited to the
Participant's Account shall be payable in 120 approximately equal monthly
installments. The Participant shall not be entitled to select a different
form of distribution with respect to the amounts credited to the
Participant's Account in each Plan Year. Instead, the distribution form
selected by the Participant shall apply to the entire balance of the
Participant's Account. The Participant may modify the form of distribution
selected by the Participant; provided that such modification is made on a
validly executed and timely filed distribution form at least 12 months
prior to the date on which any distributions of the Participant's Account
shall have commenced.
(b) In the event of the Participant's death prior to the complete
distribution of his/her Account, the balance of the Participant's Account
shall be paid to the Participant's Beneficiary over the remainder of the
period provided in Section 6.3(a). Upon written application to the
Committee no later than 60 days following notification to the Beneficiary
of his/her entitlement to benefits under the Plan, such Beneficiary may
request that the Committee approve an alternative single form of
distribution that would apply to the balance of the Participant's Account.
The Committee, after considering all the facts and circumstances that it
deems relevant (including, for example, the effect of such alternative form
of distribution on the finances of the Employer and the financial needs of
the Beneficiary), shall determine in its sole discretion whether to permit
the alternative form of distribution. In the event of the death of the
Participant's last Beneficiary prior to the complete distribution of the
Participant's Account, the balance of the Participant's Account shall be
paid in a single lump sum to the deceased Beneficiary's estate.
(c) Notwithstanding anything in this Section 6.3 to the contrary, in
the event that the value of a Participant's Account does not exceed
$30,000, as of the date benefits first become distributable, the Committee
shall cause such Participant's Account to be distributed in a single lump
sum payment.
(d) Notwithstanding anything in this Plan to the contrary, benefits
shall not be paid to a Participant who is a "covered employee" as that term
is defined in Code Section 162(m) until the Participant is no longer a
"covered employee".
6.4 Notwithstanding anything in this Article VI to the contrary, benefit
payments under the Plan shall cease as of the first day the Participant returns
to employment with an Employer. Upon such return to employment, the Participant
shall, if eligible, participate in the Plan as provided in Article III.
6.5 If the Participant or the Participant's Beneficiary is entitled to
receive any benefits hereunder and is in his or her minority, or is, in the
judgment of the Committee, legally, physically or mentally incapable of
personally receiving and receipting any distribution, the Committee may make
distributions to a legally appointed guardian or to such other person or
institution as, in the judgment of the Committee, is then maintaining or has
custody of the payee.
6.6 After all benefits have been distributed in full to the Participant
or to the Participant's Beneficiary, all liability under the Plan to such
Participant or to his/her Beneficiary shall cease.
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<PAGE>
6.7 No benefit shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge by the Participant or
Beneficiary, and any such action shall be void for all purposes. No benefit
shall in any manner be subject to the debts, contracts, liabilities, engagements
or torts of the Participant or Beneficiary, nor shall it be subject to
attachments or other legal process for or against the Participant or
Beneficiary, except to such extent as may be required by law.
6.8 To the extent required by law in effect at the time payments are made,
the Employer shall withhold from payments made hereunder the minimum taxes
required to be withheld by the federal or any state or local government.
ARTICLE VII
BENEFICIARY DESIGNATION
7.1 The Participant may, at any time, designate a Beneficiary or
Beneficiaries to receive the benefits payable in the event of his/her death and
may designate a successor Beneficiary or Beneficiaries to receive any benefits
payable in the event of the death of any other Beneficiary. Each Beneficiary
designation shall become effective only when filed in writing with the Committee
during the Participant's lifetime on a form prescribed by the Committee. The
filing of a new Beneficiary designation form will cancel all Beneficiary
designations previously filed. Any finalized divorce or marriage (other than a
common law marriage) of a Participant subsequent to the date of filing of a
Beneficiary designation form shall revoke such designation. The spouse of a
Participant domiciled in a community property jurisdiction shall join in any
designation of Beneficiary or Beneficiaries other than the spouse. If no
Beneficiary shall be designated by the Participant, or if his/her Beneficiary
designation is revoked by marriage, divorce or otherwise without execution of
another designation, or if the designated Beneficiary or Beneficiaries shall not
survive the Participant, payment of the Participant's Account shall be made to
the Participant's estate in a single lump sum payment. Notwithstanding any
provision of this Plan to the contrary, any Beneficiary designation may be
changed by a Participant by the written filing of such change on a form
prescribed by the Committee.
ARTICLE VIII
FUNDING
8.1 All benefits hereunder are intended to be in the form of an unfunded
obligation of the Employer.
8.2 Nothing contained herein shall create any obligation on the part of an
Employer to set aside or earmark any monies or other assets specifically for
payments under the Plan. Participants and their Beneficiaries, heirs, successors
and assigns shall have no legal or equitable rights, interests or claims in any
property or assets of the Employer, nor shall they be beneficiaries of, or have
any rights, claims or interests in any life insurance policies, annuity
contracts or the proceeds therefrom owned or which may be acquired by the
Employer ("Policies"). Such Policies or other assets of the Employer shall not
be held under any fund for the benefit of Participants, their Beneficiaries,
heirs, successors or assigns, or held in any way as collateral security for
the fulfilling of the obligations of the Employer under this Plan. Any and all
of the Employer's assets and Policies shall be, and remain, for purposes of the
Plan, the general unpledged, unrestricted assets of the Employer. The Employer's
obligation under the Plan shall be merely that of an unfunded and unsecured
promise of the Employer to pay money in the future.
8.3 If a Participant or Beneficiary becomes entitled to a distribution of
benefits under the Plan, and if at such time the Participant has outstanding
Page 8
<PAGE>
any debt, obligation or other such liability representing an amount owing to the
Employer, then the Employer may offset such amount owing it against the amount
of benefits otherwise distributable. Such determination shall be made by the
Committee.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 The Board, the Committee or their duly authorized delegates may at any
time amend the Plan in whole or in part; provided, however, that no amendment
shall be effective to decrease the benefits or rights of any Participant
theretofore accrued. Written notice of such amendment shall be given to each
Participant.
9.2 The Board may at any time terminate the Plan. Upon any termination of
the Plan under this Section 9.2, each Participant shall cease to accrue any
benefit under the Plan, and all amounts shall prospectively cease to accrue for
such Plan Year. Benefits payable under the Plan shall be paid at such times and
pursuant to such terms and conditions as were effective immediately prior to the
termination of the Plan.
ARTICLE X
FINANCIAL HARDSHIP WITHDRAWALS
10.1 Subject to the provisions set forth herein, a Participant may withdraw
up to 100% of his/her Account as necessary to satisfy immediate and heavy
financial needs of the Participant which the Participant is unable to meet from
any other resource reasonably available to such Participant. The amount of such
hardship withdrawal may not exceed the amount required to meet such need.
10.2 (a) Upon written application, the Committee, in its sole discretion,
may grant a withdrawal to the Participant for any of the following
unforeseen financial hardships:
(i) unusual medical expenses incurred by the Participant for the
Participant or his or her dependents;
(ii) special health requirements of the Participant or his or her
dependents; or
(iii) any other situation which the Committee shall deem to
constitute financial hardship.
(b) The Participant shall be required to furnish evidence of purpose
and need to the Committee on forms prescribed by the Committee.
10.3 Anything else to the contrary notwithstanding, a Participant who is
covered by the floor-offset arrangement involving ASRE and the Albertson's
Salaried Employees' Pension Plan or the Albertson's Employees' Corporate Pension
Plan shall not be permitted to withdraw any portion of the Account representing
credits for deemed Company contributions (other than matching contributions),
and earnings thereon, prior to termination of employment.
ARTICLE XI
CLAIMS PROCEDURE
11.1 Each Claimant shall have the right to submit a Claim with respect to a
benefit sought hereunder. Written notice of any Claim hereunder must be given to
the Committee either personally or by certified or registered
Page 9
<PAGE>
mail, return receipt requested, at the following address:
Albertson's, Inc.
Attn: Grantor Trust Committee
c/o Corporate Secretary
250 Parkcenter Blvd.
P.O. Box 20
Boise, Idaho 83726
Such Claim shall state with particularity:
(a) The benefit claimed; and
(b) All facts believed to be relevant in connection with such
Claim.
11.2 Upon receipt of a Claim hereunder, the Committee shall consider the
merits of the Claim and shall within 90 days from the receipt of the Claim
render a decision on the merits and communicate the same to the Claimant. In the
event the Committee denies the Claim in whole or in part, the Claimant shall be
so notified in writing, which shall be addressed and delivered to him or her
personally or by mail, and shall set forth the following in a manner reasonably
calculated to be understood by the Claimant:
(a) The reason or reasons for rejection of the Claim;
(b) The provisions of the Plan and the particular provisions of law,
if any, relied upon in reaching such determination;
(c) A description of any additional information needed from the
Claimant in order for him or her to perfect his or her Claim and an
explanation of why such information is necessary; and
(d) A statement outlining the Appellate Review Procedure as set forth
in Section 11.3.
The failure of the Committee to render a decision on the merits of a Claim shall
be deemed to be a denial of such Claim and notice of such denial shall be deemed
to have been given to the Claimant on the ninetieth (90th) day from receipt by
the Committee of the Claim.
11.3 Where a Claim has been or is deemed denied, the Claimant shall have
the right within 60 days after the date he or she receives or is deemed to have
been given notice that his or her Claim has been rejected, in whole or in part,
to an Appellate Review Procedure as set forth herein. Such procedure shall
enable the Claimant to appeal from an adverse decision by delivering a written
request for an appeal to the Committee either personally or by certified or
registered mail, return receipt requested. Such request shall set forth the
reasons why the Claimant believes the decision rejecting his or her Claim is
erroneous and shall be signed by the Claimant under oath. Within 30 days after
such request is received, the Committee may conduct a review of the Claim at a
hearing at which the Committee may invite the Claimant to present his or her
views with respect to the merits of the Claim. Whether or not a hearing is held,
the Claimant may submit issues and comments in writing to the Committee for
consideration at the hearing and may review pertinent documents. A decision with
respect to the merits of the Claim shall be rendered by the Committee not later
than 60 days after the delivery of the written request for an appeal hereunder
unless special circumstances (such as holding a hearing) require an extension of
time for processing, and then no later than 120 days after receipt of the
request.
Page 10
<PAGE>
The Appellate Review decision shall include specific reasons believed to sup-
port such decision, including specific references to provisions of the Plan and
of law, shall be written in a manner reasonably calculated to be understood by
the Claimant and shall be delivered to the Claimant personally or by mail.
11.4 No action shall be commenced under Section 502(a)(1)(B) of ERISA, or
under any other provision of law, until the Claimant shall first have exhausted
the Claims Procedure available to him or her hereunder, provided that such
Claimant would not have been irreparably and materially harmed by any delay
occasioned by this Claims Procedure. Insofar as the same is not inconsistent
with regulations promulgated under Section 503 of ERISA, relating to claims
procedures, any Claim under this Claims Procedure must be submitted within three
(3) months from the earlier of (a) the date on which the Claimant learned of
facts sufficient to enable him or her to formulate such Claim, or (b) the date
on which the Claimant should reasonably have been expected to learn the facts
sufficient to enable him or her to formulate such Claim. Claims submitted after
such period shall be deemed to have been waived by the Claimant and shall
thereafter be wholly unenforceable. No statute of limitations set forth under
either Section 413 of ERISA, or any other applicable provision of law, shall
be deemed to be extended in any way by the period of limitations set forth
herein with respect to this Claim(s) Procedure.
11.5 All references in this Article XI to Claimant shall include
representatives who are duly authorized as such, in writing, which authori-
zation shall have been delivered to the Committee at some stage of the Claims
Procedure. After such written authorization is delivered, copies of all sub-
sequent communications with the Claimant and decisions with respect to the
Claim, for which such authorization has been provided, shall be delivered to the
authorized representative, as well as to the Claimant.
ARTICLE XII
GENERAL PROVISIONS
12.1 Neither the establishment of the Plan, nor any modification thereof,
nor the creation of an Account, nor the payment of any benefits shall be
construed (a) as giving the Participant, Beneficiary or any other person, any
legal or equitable right against Employer unless such right shall be
specifically provided for in the Plan or conferred by affirmative action of the
Employer in accordance with the terms and provisions of the Plan, or(b) as
giving the Participant the right to be retained in the service of the Employer,
and the Participant shall remain subject to discharge to the same extent as if
the Plan had never been established.
12.2 A Participant will cooperate with the Employer by furnishing any and
all information requested by the Employer in order to facilitate the payment of
benefits hereunder, taking such physical examinations as the Employer may deem
necessary and taking such other relevant action as may be requested by the
Employer. If a Participant refuses so to cooperate, the Employer shall have no
further obligation to the Participant under the Plan.
12.3 All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine or neuter, as the identity of the person or persons may
require. As the context may require, the singular may be read as the plural and
the plural as the singular.
12.4 Any notice or filing required or permitted to be given to the
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the principal office of the Company,
directed to the attention of the Corporate Secretary of the Company.
Page 11
<PAGE>
Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark or receipt for registration
or certification.
12.5 The validity of the Plan or any of its provisions shall be determined
under and construed according to the laws of the State of Idaho, except to the
extent Idaho law is preempted by federal law, including but not limited to
ERISA. Should any provision of the Plan or any regulations adopted thereunder be
deemed or held to be unlawful or invalid for any reason, such fact shall not
adversely affect the other provisions or regulations unless such invalidity
shall render impossible or impractical the functioning or the Plan and, in such
case, the appropriate parties shall immediately adopt a new provision or
regulation to take the place of the one held illegal or invalid.
12.6 Nothing contained herein shall preclude an Employer from merging into
or with, or being acquired by, another business entity.
12.7 The liabilities under the Plan shall be binding upon any successor or
assign of an Employer and any purchaser of an Employer or substantially all of
the assets of an Employer, and the Plan shall continue in full force and effect.
12.8 The titles of the Articles in the Plan are for convenience of
reference only, and, in the event of any conflict, the text rather than such
titles shall control.
IN WITNESS WHEREOF, the Company has caused its officer, duly authorized by
its Board of Directors, to execute the Plan this 1st day of December, 1999.
ALBERTSON'S, INC.
ATTEST:
/S/ Kaye L. O'Riordan By /s/ Thomas R. Saldin
- ---------------------- --------------------
Its Executive Vice President
and General Counsel
Page 13
Exhibit 10.18.1
AMENDMENT
TO
ALBERTSON'S, INC.
EXECUTIVE PENSION MAKEUP TRUST
This Amendment to the ALBERTSON'S, INC. EXECUTIVE PENSION MAKEUP TRUST
(the "Trust" or "Trust Agreement") is made by Albertson's, Inc., a Delaware
corporation (the "Employer"), pursuant to Section 6.01 of the Trust Agreement.
WITNESSETH:
WHEREAS, the Employer desires to change the Recordkeeper (as that term
is defined in the Trust Agreement) for
the Trust;
WHEREAS, pursuant to Section 6.01 of the Trust Agreement, the Employer
may amend the Trust Agreement by executing an instrument in writing and
delivering it to the Trustee (as defined in the Trust Agreement), provided that
the Trust has not become irrevocable, and, pursuant to Sections 4.14(f) and (g)
of the Trust Agreement, the Employer may remove the Recordkeeper at any time
prior to a Change in Control (as defined in the Trust Agreement) and may appoint
a successor Recordkeeper meeting the requirements of Section 4.14(g) by
delivering to the successor Recordkeeper a written instrument appointing the
successor Recordkeeper; and
WHEREAS, the Trust has not become irrevocable and a Change of Control
has not occurred;
NOW, THEREFORE, the Employer hereby amends the Trust Agreement as
follows:
1. TOWERS, PERRIN, FORSTER & CROSBY, INC., a Pennsylvania corporation, is
hereby removed as the Recordkeeper of the Trust and MANAGEMENT COMPENSATION
GROUP, NORTHWEST, LLC, a Delaware limited liability company, which meets
the requirements of Section 4.14(g) of the Trust is hereby appointed as the
Recordkeeper of the Trust and Section 2.03 of the Trust Agreement is
amended to reflect this change.
2. Section 7.07 of the Trust Agreement is hereby amended to read with regard
to the address for communications to the Recordkeeper: Management
Compensation Group, Northwest, LLC, 205 SE Spokane Street, Portland, Oregon
97202, Attention: David J. Taylor (or his successor regarding Albertson's,
Inc.).
The Employer hereby certifies that the Trust has not become irrevocable and that
a Change of Control has not occurred.
Page 1
<PAGE>
IN WITNESS WHEREOF, the Employer has executed this amendment this 24th
day of July, 1998 and has caused it to be delivered to the Trustee and to the
successor Recordkeeper.
EMPLOYER:
ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin
---------------------------------------------
Thomas R. Saldin
Executive Vice President, Administration
and General Counsel
Page 2
Exhibit 10.18.3
AMENDMENT
to the
ALBERTSON'S, INC.
EXECUTIVE PENSION MAKEUP TRUST
This Amendment is made by Albertson's, Inc., a Delaware corporation (the
"Corporation" or the "Employer").
RECITALS:
A. The Corporation has established the Albertson's, Inc. Executive Pension
Makeup Trust, effective February 1, 1989 (the "Trust");
B. The Corporation, pursuant to Section 6.01 of the Trust, retains the
right to amend the Trust at any time prior to the time when the Trust shall
become irrevocable pursuant to Section 6.02 thereof; and
C. The Corporation certifies that the Trust has not become irrevocable
pursuant to Section 6.02 thereof; and
D. The Corporation has determined that it is advisable to amend the Trust
in the manner hereinafter set forth.
AMENDMENT
The Trust is hereby amended, as of December 1, 1999, as follows:
1. To change the first sentence of Section 4.06. Creditors of Employer to
read as follows: The Trust Fund shall at all times be subject to the
claims of the Employer's general creditors but shall be utilized to
satisfy any such claims only in the case of the Employer's bankruptcy
or insolvency.
2. To change the first two sentences of subsection (b) of Section 4.13.
Resignation and Removal to read as follows: Prior to a Change in
Control the Employer shall fill a vacancy in the office of Trustee as
soon as practicable by a written instrument filed with the person(s)
appointed to fill the vacancy, which person(s) must be a financial
institution that is independent of the Employer, and with a copy to
the predecessor Trustee and the Recordkeeper. Following a Change in
Control, the Employer shall be entitled to fill a vacancy in the
office of Trustee, but only with the consent and approval of the
Majority Participants, as evidenced in a written instrument filed with
the person(s) appointed to fill the vacancy which person(s) must be a
financial institution that is independent of the Employer.
Page 1
<PAGE>
3. To change the first two sentences of subsection (g) of Section 4.13.
Resignation and Removal to read as follows: Prior to a Change in
Control, the Employer shall fill a vacancy in the office of
Recordkeeper as soon as practicable by a written instrument filed with
the person(s) appointed to fill the vacancy, which person(s) must be
independent from the Employer and must be a certified consulting
actuary of firm of actuaries or accountants, and with a copy to the
predecessor Recordkeeper and the Trustee. Following a Change in
Control, the Employer shall be entitled to fill a vacancy in the
office of Recordkeeper, but only with the consent and approval of the
Majority Participants as evidenced in a written instrument filed with
the person(s) appointed to fill the vacancy, which person(s) must be
independent from the Employer and must be a certified consulting
actuary or firm of actuaries or accountants.
4. To change the first sentence of subsection (b) of Section 4.16. Rights
of Trustee to read as follows: Before the Trustee acts or refrains from
acting, and in making any determination with respect to a Change in
Control, a Potential Change in Control, the Value of the Trust Fund or
any other determination hereunder (including but not limited to
determination of the validity of consents of the Majority
Participants), the Trustee may require and rely on an Expert's
Certificate or an Opinion of Counsel or both covering such matters as
the Trustee may reasonably require.
IN WITNESS WHEREOF, this instrument has been duly executed by the
undersigned on this 1st day of December, 1999 and has been delivered by
facsimile to the Trustee (as that term is defined in the Trust) of the Trust on
this 1st day of December, 1999.
ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin
---------------------------
Thomas R. Saldin
Executive Vice President
and General Counsel
Page 2
Exhibit 10.19.1
AMENDMENT
TO
ALBERTSON'S, INC.
EXECUTIVE DEFERRED COMPENSATION TRUST
This Amendment to the ALBERTSON'S, INC. EXECUTIVE DEFERRED COMPENSATION
TRUST (the "Trust" or "Trust Agreement") is made by Albertson's, Inc., a
Delaware corporation (the "Employer"), pursuant to Section 6.01 of the Trust
Agreement.
WITNESSETH:
WHEREAS, the Employer desires to change the Recordkeeper (as that term
is defined in the Trust Agreement) for the Trust;
WHEREAS, pursuant to Section 6.01 of the Trust Agreement, the Employer
may amend the Trust Agreement by executing an instrument in writing and
delivering it to the Trustee (as defined in the Trust Agreement), provided that
the Trust has not become irrevocable, and, pursuant to Sections 4.14(f) and (g)
of the Trust Agreement, the Employer may remove the Recordkeeper at any time
prior to a Change in Control (as defined in the Trust Agreement) and may appoint
a successor Recordkeeper meeting the requirements of Section 4.14(g) by
delivering to the successor Recordkeeper a written instrument appointing the
successor Recordkeeper; and
WHEREAS, the Trust has not become irrevocable and a Change of Control
has not occurred;
NOW, THEREFORE, the Employer hereby amends the Trust Agreement as
follows:
1. TOWERS, PERRIN, FORSTER & CROSBY, INC., a Pennsylvania corporation, is
hereby removed as the Recordkeeper of the Trust and MANAGEMENT COMPENSATION
GROUP, NORTHWEST, LLC, a Delaware limited liability company, which meets
the requirements of Section 4.14(g) of the Trust is hereby appointed as the
Recordkeeper of the Trust and Section 2.03 of the Trust Agreement is
amended to reflect this change.
2. Section 7.07 of the Trust Agreement is hereby amended to read with regard
to the address for communications to the Recordkeeper: Management
Compensation Group, Northwest, LLC, 205 SE Spokane Street, Portland, Oregon
97202, Attention: David J. Taylor (or his successor regarding Albertson's,
Inc.).
The Employer hereby certifies that the Trust has not become irrevocable and that
a Change of Control has not occurred.
Page 1
<PAGE>
IN WITNESS WHEREOF, the Employer has executed this amendment this 24th
day of July, 1998 and has caused it to be delivered to the Trustee and to the
successor Recordkeeper.
EMPLOYER:
ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin
---------------------------------------------
Thomas R. Saldin
Executive Vice President, Administration
and General Counsel
Page 2
Exhibit 10.19.3
AMENDMENT
to the
ALBERTSON'S, INC.
EXECUTIVE DEFERRED COMPENSATION TRUST
This Amendment is made by Albertson's, Inc., a Delaware corporation (the
"Corporation" or the "Employer").
RECITALS:
A. The Corporation has established the Albertson's, Inc. Executive Deferred
Compensation Trust, effective February 1, 1989 (the "Trust");
B. The Corporation, pursuant to Section 6.01 of the Trust, retains the
right to amend the Trust at any time prior to the time when the Trust shall
become irrevocable pursuant to Section 6.02 thereof; and
C. The Corporation certifies that the Trust has not become irrevocable
pursuant to Section 6.02 thereof; and
D. The Corporation has determined that it is advisable to amend the Trust
in the manner hereinafter set forth.
AMENDMENT
The Trust is hereby amended, as of December 1, 1999, as follows:
1. To change the first sentence of Section 4.06. Creditors of Employer to
read as follows: The Trust Fund shall at all times be subject to the
claims of the Employer's general creditors but shall be utilized to
satisfy any such claims only in the case of the Employer's bankruptcy
or insolvency.
2. To change the first two sentences of subsection (b) of Section 4.13.
Resignation and Removal to read as follows: Prior to a Change in
Control the Employer shall fill a vacancy in the office of Trustee as
soon as practicable by a written instrument filed with the person(s)
appointed to fill the vacancy, which person(s) must be a financial
institution that is independent of the Employer, and with a copy to
the predecessor Trustee and the Recordkeeper. Following a Change in
Control, the Employer shall be entitled to fill a vacancy in the
office of Trustee, but only with the consent and approval of the
Majority Participants, as evidenced in a written instrument filed with
the person(s) appointed to fill the vacancy which person(s) must be a
financial institution that is independent of the Employer.
Page 1
<PAGE>
3. To change the first two sentences of subsection (g) of Section 4.13.
Resignation and Removal to read as follows: Prior to a Change in
Control, the Employer shall fill a vacancy in the office of
Recordkeeper as soon as practicable by a written instrument filed with
the person(s) appointed to fill the vacancy, which person(s) must be
independent from the Employer and must be a certified consulting
actuary of firm of actuaries or accountants, and with a copy to the
predecessor Recordkeeper and the Trustee. Following a Change in
Control, the Employer shall be entitled to fill a vacancy in the
office of Recordkeeper, but only with the consent and approval of the
Majority Participants as evidenced in a written instrument filed with
the person(s) appointed to fill the vacancy, which person(s) must be
independent from the Employer and must be a certified consulting
actuary or firm of actuaries or accountants. 4. To change the first
sentence of subsection (b) of Section 4.16. Rights of Trustee to read
as follows: Before the Trustee acts or refrains from acting, and in
making any determination with respect to a Change in Control, a
Potential Change in Control, the Value of the Trust Fund or any other
determination hereunder (including but not limited to determination of
the validity of consents of the Majority Participants), the Trustee
may require and rely on an Expert's Certificate or an Opinion of
Counsel or both covering such matters as the Trustee may reasonably
require.
IN WITNESS WHEREOF, this instrument has been duly executed by the
undersigned on this 1st day of December, 1999 and has been delivered by
facsimile to the Trustee (as that term is defined in the Trust) of the Trust on
this 1st day of December, 1999.
ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin
--------------------------
Thomas R. Saldin
Executive Vice President
and General Counsel
Page 2
Exhibit 10.21.1
AMENDMENT
to the
ALBERTSON'S, INC.
NON-EMPLOYEE DIRECTORS' DEFERRED COMPENSATION PLAN
This Amendment is made by Albertson's, Inc., a Delaware corporation (the
"Corporation").
RECITALS:
A. The Corporation established the Albertson's, Inc. Non-Employee
Directors' Deferred Compensation Plan effective January 1, 1990 (the "Plan");
B. The Corporation, pursuant to Section 10.1 of the Plan, retained the
right to amend the Plan; Section 10.1 provides that the Plan may be amended by
the Non-Employee Directors' Deferred Compensation Committee appointed by the
Board of Directors of Albertson's, Inc.; and the Committee has been granted the
authority to amend the Plan by the Non-Employee Directors' Deferred Compensation
Committee so long as such amendments do not materially alter benefits; and
C. The Committee has determined that it is advisable to amend the Plan in
the manner hereinafter set forth and that such amendments do not materially
alter benefits.
AMENDMENT
The Plan is amended, as of December 15, 1998, in the following respects:
The last two sentences of Section 6.4 (a) of the Plan shall be deleted
and the following language shall be substituted in their place:
The Participant may modify the form of the distribution of
all or part of the Participant's Account, provided that such
modification is made on a validly executed and timely filed
Deferral Agreement before the end of the calendar year which
ends at least twelve (12) months prior to the date on which
any distribution of the Participant's Account shall have
commenced.
IN WITNESS WHEREOF, this instrument has been duly executed by the
undersigned as of December 15, 1998.
ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin
---------------------------------------
Thomas R. Saldin
Executive Vice President,
Administration and General Counsel
Exhibit 10.22.1
AMENDMENT
TO
ALBERTSON'S, INC.
1990 DEFERRED COMPENSATION TRUST
This Amendment to the ALBERTSON'S, INC. 1990 DEFERRED COMPENSATION
TRUST (the "Trust" or "Trust Agreement") is made by Albertson's, Inc., a
Delaware corporation (the "Employer"), pursuant to Section 6.01 of the Trust
Agreement.
WITNESSETH:
WHEREAS, the Employer desires to change the Recordkeeper (as that term
is defined in the Trust Agreement) for the Trust;
WHEREAS, pursuant to Section 6.01 of the Trust Agreement, the Employer
may amend the Trust Agreement by executing an instrument in writing and
delivering it to the Trustee (as defined in the Trust Agreement), provided that
the Trust has not become irrevocable, and, pursuant to Sections 4.14(f) and (g)
of the Trust Agreement, the Employer may remove the Recordkeeper at any time
prior to a Change in Control (as defined in the Trust Agreement) and may appoint
a successor Recordkeeper meeting the requirements of Section 4.14(g) by
delivering to the successor Recordkeeper a written instrument appointing the
successor Recordkeeper; and
WHEREAS, the Trust has not become irrevocable and a Change of Control
has not occurred;
NOW, THEREFORE, the Employer hereby amends the Trust Agreement as
follows:
1. TOWERS, PERRIN, FORSTER & CROSBY, INC., a Pennsylvania corporation, is
hereby removed as the Recordkeeper of the Trust and MANAGEMENT COMPENSATION
GROUP, NORTHWEST, LLC, a Delaware limited liability company, which meets
the requirements of Section 4.14(g) of the Trust is hereby appointed as the
Recordkeeper of the Trust and Section 2.03 of the Trust Agreement is
amended to reflect this change.
2. Section 7.07 of the Trust Agreement is hereby amended to read with regard
to the address for communications to the Recordkeeper: Management
Compensation Group, Northwest, LLC, 205 SE Spokane Street, Portland, Oregon
97202, Attention: David J. Taylor (or his successor regarding Albertson's,
Inc.).
The Employer hereby certifies that the Trust has not become irrevocable and that
a Change of Control has not occurred.
Page 1
<PAGE>
IN WITNESS WHEREOF, the Employer has executed this amendment this 24th
day of July, 1998 and has caused it to be delivered to the Trustee and to the
successor Recordkeeper.
EMPLOYER:
ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin
---------------------------------------------
Thomas R. Saldin
Executive Vice President, Administration
and General Counsel
Page 2
Exhibit 10.22.3
AMENDMENT
to the
ALBERTSON'S, INC.
1990 DEFERRED COMPENSATION TRUST
This Amendment is made by Albertson's, Inc., a Delaware corporation (the
"Corporation" or the "Employer").
RECITALS:
A. The Corporation has established the Albertson's, Inc. Deferred
Compensation Trust, effective November 20, 1990 (the "Trust");
B. The Corporation, pursuant to Section 6.01 of the Trust, retains the
right to amend the Trust at any time prior to the time when the Trust shall
become irrevocable pursuant to Section 6.02 thereof; and
C. The Corporation certifies that the Trust has not become irrevocable
pursuant to Section 6.02 thereof; and
D. The Corporation has determined that it is advisable to amend the Trust
in the manner hereinafter set forth.
AMENDMENT
The Trust is hereby amended, as of December 1, 1999, as follows:
1. To change the definition in Article I, Definitions of "Insurance
Policies" to read as follows: "Insurance Policies" shall mean life insurance
policies purchased on the life of any Participant or Eligible Person from any
Insurance Company.
2. To change the first sentence of Section 4.06. Creditors of Employer to
read as follows: The Trust Fund shall at all times be subject to the claims of
the Employer's general creditors but shall be utilized to satisfy any such
claims only in the case of the Employer's bankruptcy or insolvency.
3. To change the first two sentences of subsection (b) of Section 4.14.
Resignation and Removal to read as follows: Prior to a Change in Control the
Employer shall fill a vacancy in the office of Trustee as soon as practicable by
a written instrument filed with the person(s) appointed to fill the vacancy,
which person(s) must be a financial institution that is independent of the
Employer, and with a copy to the predecessor Trustee and the Recordkeeper.
Following a Change in Control, the Employer shall be entitled to fill a vacancy
in the office of Trustee, but only with the consent and approval of the Majority
Participants, as evidenced in a written instrument filed with the person(s)
appointed to fill the vacancy which person(s) must be a financial institution
that is independent of the Employer.
4. To change the first two sentences of subsection (g) of Section 4.14.
Resignation and Removal to read as follows: Prior to a Change in Control, the
Employer shall fill a vacancy in the office of Recordkeeper as soon as
practicable by a written instrument filed with the person(s) appointed to fill
the vacancy, which person(s) must be independent from the Employer and must be a
certified consulting actuary of firm of actuaries or accountants, and with a
copy to the predecessor Recordkeeper and the Trustee. Following a Change in
Control, the Employer shall be entitled to fill a vacancy in the office of
Recordkeeper, but only with the consent and approval of the Majority
Participants as evidenced in a written instrument filed with the person(s)
appointed to fill the vacancy, which person(s) must be independent from the
Employer and must be a certified consulting actuary or firm of actuaries or
accountants.
5. To change the first sentence of subsection (b) of Section 4.17. Rights
of Trustee to read as follows: Before the Trustee acts or refrains from acting,
and in making any determination with respect to a Change in Control, a Potential
Change in Control, the Value of the Trust Fund or any other determination
hereunder (including but not limited to determination of the validity of
consents of the Majority Participants), the Trustee may require and rely on an
Expert's Certificate or an Opinion of Counsel or both covering such matters as
the Trustee may reasonably require.
IN WITNESS WHEREOF, this instrument has been duly executed by the
undersigned on this 1st day of December, 1999 and has been delivered by
facsimile to the Trustee (as that term is defined in the Trust) of the Trust on
this 1st day of December, 1999.
ALBERTSON'S, INC.
By: /s/ Thomas R. Saldin
-----------------------
Thomas R. Saldin
Executive Vice President
and General Counsel
Exhibit 10.23
ALBERTSON'S, INC.
2000 DEFERRED COMPENSATION TRUST
<PAGE>
<TABLE>
ALBERTSON'S, INC.
2000 DEFERRED COMPENSATION TRUST
TABLE OF CONTENTS
<S> <C> <C>
PREAMBLE 1
ARTICLE I: DEFINITIONS 1
ARTICLE II: NAME AND ESTABLISHMENT OF TRUST 7
Section 2.01 Name and Purpose 7
Section 2.02 Appointment of Trustee; Acceptance 7
Section 2.03 Appointment of Recordkeeper; Acceptance 8
Section 2.04 Grantor Trust 8
ARTICLE III: PROVISIONS RELATING TO THE EMPLOYER 8
Section 3.01 Contributions 8
Section 3.02 Insurance Policies 8
Section 3.03 Letters of Credit 9
Section 3.04 Return of Employer Contributions 9
Section 3.05 Certain Employer Notices 10
Section 3.06 Action by Employer 10
Section 3.07 Employer Liability 10
ARTICLE IV: PROVISIONS RELATING TO TRUSTEE AND RECORDKEEPER 10
Section 4.01 Receiving Contributions 10
Section 4.02 Management and Control of Trust Assets 10
Section 4.03 Investment of Trust Assets 11
Section 4.04 Distribution of Trust Assets; Limitations 12
Section 4.05 Protection of Trustee 14
Section 4.06 Creditors of Employer 14
Section 4.07 Compensation and Expenses 15
Section 4.08 Limitation of Administrative Duties 15
Section 4.09 Accountings 15
Section 4.10 General Management Powers 16
Section 4.11 Insurance Policies 18
Section 4.12 Liability for Breach of Fiduciary Duty 20
Section 4.13 Consultation and Indemnification 20
Section 4.14 Resignation and Removal 21
Section 4.15 Duties of the Recordkeeper 24
Section 4.16 Determinations by the Trustee; Notices 24
Section 4.17 Rights of Trustee 24
Section 4.18 Priority of Distribution and Liquidation of Trust Assets 25
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ARTICLE V: GENERAL ADMINISTRATIVE PROVISIONS 26
Section 5.01 Exchange of Information by the Employer and the Trustee 26
Section 5.02 Information to the Recordkeeper and Trustee 26
Section 5.03 Mistake of Fact 26
Section 5.04 Taxes 26
Section 5.05 Investment Company Act 27
ARTICLE VI: AMENDMENT AND TERMINATION 27
Section 6.01 Right to Amend 27
Section 6.02 Termination of Trust and Reversion of Assets 28
ARTICLE VII: MISCELLANEOUS PROVISIONS 28
Section 7.01 Entire Agreement 28
Section 7.02 Successors 28
Section 7.03 Headings 29
Section 7.04 Controlling Law 29
Section 7.05 Third-Party Inquiries 29
Section 7.06 Courts; Arbitration 29
Section 7.07 Addresses For Communications 29
Section 7.08 Waiver of Notice 30
Section 7.09 Accounting Period 30
Section 7.10 Interest in the Trust Fund 30
Section 7.11 Counterparts 30
EXHIBIT A - Form of Irrevocable Letter of Credit 31
EXHIBIT B - Real Estate Leases 35
EXHIBIT C - Actuarial Assumptions 36
EXHIBIT D - Trust Property 38
EXHIBIT E - Form of Certificate to the Trustee Certificate 39
EXHIBIT F - Individuals Eligible to be Participants 40
EXHIBIT G - Assignment Agreement 41
</TABLE>
ii
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ALBERTSON'S, INC. 2000 DEFERRED COMPENSATION TRUST
THIS TRUST AGREEMENT is made and entered into the 1st day of January, 2000,
by and between ALBERTSON'S, INC., a Delaware corporation, as grantor, IBJ
Whitehall Bank & Trust Company, a New York banking corporation, as trustee, and
Management Compensation Group, Northwest, LLC, a Delaware limited liability
company, as recordkeeper.
WITNESSETH:
WHEREAS, Albertson's, Inc. is adopting, effective January 1, 2000, the
Albertson's, Inc. 2000 Deferred Compensation Plan as amended from time to time
(the "Plan"); and
WHEREAS, Albertson's, Inc. has incurred or expects to incur liability under
the terms of the Plan with respect to individuals participating in the Plan; and
WHEREAS, Albertson's, Inc. wishes to establish a grantor trust (the
"Trust") for the purpose of accumulating assets to assist it in fulfilling its
obligations under the Plan, to which Trust Albertson's, Inc. shall make
contributions in the amounts determined in accordance with the terms of the Plan
and this trust agreement; and
WHEREAS, Albertson's, Inc. desires the Trustee to hold and administer all
funds and other property contributed by Albertson's, Inc. and the Trustee is
willing to hold and administer such funds pursuant to the terms of this trust
agreement; and
WHEREAS, Albertson's, Inc. desires that the assets of the Trust shall be
available to satisfy the claims of Albertson's, Inc. general creditors in case
of insolvency or bankruptcy;
NOW, THEREFORE, in consideration of the promises, covenants, agreements,
terms, obligations and duties herein set forth, the Trust to be named the
"Albertson's, Inc. 2000 Deferred Compensation Trust" is hereby established
effective from and after the date first above written, and the parties do hereby
covenant and agree, as follows:
ARTICLE I
DEFINITIONS
The following words and phrases are used in this trust agreement and shall
have the meaning set forth in this Article unless a different meaning is clearly
required by the context:
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"Additional Premium Payment Obligation" shall mean any additional
premiums, assessments, dues, charges and interest on any Insurance Policies held
in the Trust as may be necessary following the satisfaction of the Premium
Payment Obligation to cause each of such Insurance Policies to be paid in full.
"Additional Premium Payment Obligation Amount" shall mean the aggregate
payments required to be made by the Employer to the Trustee in order to satisfy
any Additional Premium Payment Obligation.
"Application" shall mean a written application from a Participant or a
beneficiary of a deceased Participant received by the Recordkeeper requesting a
payment from the Trust by reason of a benefit being due to such Participant or
beneficiary under the Plan.
"Bank" shall mean the commercial bank issuing a Letter of Credit.
"Board of Directors" shall mean the Board of Directors of the Employer.
"Change in Control" shall mean the occurrence in a single transaction
or series of transactions after January 1, 2000, of any one of the following
events or circumstances: (a) merger, consolidation or reorganization where the
beneficial owners of the Voting Securities immediately preceding such merger,
consolidation or reorganization beneficially own less than 80% of the securities
possessing the right to vote to elect directors or to authorize a merger,
consolidation or reorganization with respect to the survivor, after giving
effect to such merger, consolidation or reorganization, (b) merger,
consolidation or reorganization of the Employer where 20% or more of the
incumbent directors of the Employer are changed, (c) acquisition by any person
or group, as defined for purposes of Section 13(d) of the Exchange Act, other
than a trustee or other fiduciary holding Voting Securities under an employee
benefit plan of the Employer (or a corporation owned, directly or indirectly, by
the holders of Voting Securities in substantially the same proportion as their
ownership of Voting Securities) of beneficial ownership of 20% or more of the
Voting Securities (such amount to include any Voting Securities acquired prior
to January 2, 2000), (d) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors and any
new director (other than a director designated by a person who has entered into
an agreement with the Employer to effect a transaction described in clauses (a),
(b), (c) or (e) of this paragraph) whose election by the Employer's shareholders
was approved by a vote of at least two-thirds (2/3) of the directors still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (e) approval by the shareholders of
the Employer of a plan of liquidation or dissolution with respect to the
Employer or an agreement for the sale or disposition by the Employer of all or
substantially all the Employer's assets; provided, that in the event the exact
date of a Change in Control cannot be determined, such Change in Control will be
deemed to have occurred on the earliest date on which it could have occurred.
The Trustee and the Recordkeeper shall rely upon notice from the Employer
pursuant to Section 3.05, provided such notice concludes that a Change in
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Control has occurred. In the absence of such a notice, the Trustee and the
Recordkeeper may require and rely upon an Opinion of Counsel relating to whether
a Change in Control has occurred. Any Opinion of Counsel with respect to a
Change in Control shall specify the date on which the Change in Control
occurred, or if an exact date cannot be determined, the earliest date on which
such Change in Control could have occurred and cover such other matters as the
Trustee or the Recordkeeper shall reasonably require. Notwithstanding the
foregoing, the occurrence of any of the foregoing events or transactions shall
not be deemed to be a Change in Control of the Employer, if prior to the
consummation of any of the foregoing events or transactions, the Continuing
Directors (as defined in paragraph 1 of Article TWELFTH of the Employer's
Restated Certificate of Incorporation, dated May 27, 1998) adopt a resolution to
the effect that a Change in Control for the purposes of this Trust shall not be
deemed to have occurred upon the consummation of any such event or transaction.
"Code" shall mean the Internal Revenue Code of 1986, as from time to time
amended. Reference to a section of the Code shall include that section and any
comparable section or any future legislation that amends, supplements or
supersedes said section.
"Deficiency Amount" shall mean, with respect to each Participant and
beneficiary of a deceased Participant, the amount of unpaid benefits, if any,
and interest thereon, determined in accordance with Section 4.04(c).
"Eligible Person" shall mean an employee of the Employer who is eligible to
participate in the Plan but is not a Participant.
"Employer" shall mean Albertson's, Inc., a corporation organized and
existing under the laws of the State of Delaware, or its successor or
successors.
"Exchange Act" shall mean the Securities Exchange Act of 1934, all
subsequent amendments thereto and any successor statute(s) adopted which
addresses substantially the same subject matter. Further, a reference to any
section of the Exchange Act shall refer to the section in effect on September 1,
1988, all subsequent amendments thereto and any successor section(s) adopted
which addresses substantially the same subject matter.
"Expert" shall mean the Recordkeeper, the Insurance Adviser, the Real
Estate Adviser and any consultant, adviser, engineer, accountant, appraiser,
actuary or other expert hired or retained by the Trustee to provide advice or to
make or assist in making any determination hereunder.
"Expert's Certificate" shall wean a certificate signed by an Expert or, if
the Expert is a corporation or partnership, by two of its executive officers or
partners.
Page 3
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"Insurance Adviser" shall mean a person, firm or corporation hired or
retained by the Employer or Trustee to assist it in procuring, modifying,
liquidating or valuing any Insurance Policies held by the Trust.
"Insurance Company" shall mean any insurance company or companies from
which the Employer or Trustee shall have procured Insurance Policies.
"Insurance Policies" shall mean life insurance policies purchased on
the life of any Participant or Eligible Person from any Insurance Company.
"Letter of Credit" shall mean an irrevocable letter of credit issued
for the benefit of the Trustee pursuant to Article III, substantially in the
form attached hereto as Exhibit "A", by a United States commercial bank, or a
United States office of a foreign bank, which issuing bank is acceptable to the
Trustee, has a long-term debt rating by Standard & Poor's Corp. of no less than
A (or the equivalent rating by Moody's Investors Service, Inc.), and whose
combined capital and surplus is no less than $1,000,000,000.
"Majority Participants" shall mean at any time Participants whose Value
of Accrued Benefits then aggregate more than 66-2/3% of the then Value of Total
Accrued Benefits. For purposes of determining "Majority Participants,"
"Participants" shall include persons then considered Participants under the Plan
and beneficiaries of deceased Participants, and the Trustee shall be entitled to
rely on the determination of the Recordkeeper as to whether or not a Participant
or beneficiary of a deceased Participant or a group of Participants or
beneficiaries of deceased Participants constitute "Majority Participants".
"Opinion of Counsel" shall mean a written opinion from legal counsel
acceptable to the Trustee. Such counsel may but need not be legal counsel
regularly retained by the Employer or the Trustee.
"Participant" shall mean an employee of the Employer participating in
the Plan, as well as all former Participants whose benefits under the Plan have
not been fully distributed.
"Plan" shall mean the Albertson's, Inc. 2000 Deferred Compensation
Plan, adopted effective January 1, 2000, as from time to time amended.
"Potential Change in Control" shall mean the occurrence in a
transaction or series of transactions after January 1, 2000, of any one or more
of the following events or circumstances: (a) a tender offer or its substantial
equivalent made by any person or group, as defined for the purposes of Section
13(d) of the Exchange Act, to purchase or otherwise acquire securities of the
Employer which if consummated, together with securities already owned, directly
or indirectly, by the offeror, would give the offeror beneficial ownership,
directly or indirectly, of 20% or more of the Voting Securities, (b) acquisition
by any person or group (other than acquisitions by a trustee or other fiduciary
Page 4
<PAGE>
under an employee benefit plan of the Employer, and other than acquisitions by
the personal representative(s), when acting in such capacity, of the estates of
J.A. Albertson and/or Kathryn Albertson), as defined for purposes of Section
13(d) of the Exchange Act, of beneficial ownership of 20% or more of the Voting
Securities (such amount to include any Voting Securities acquired prior to
January 2, 2000), (c) filing or the requirement for filing by any person or
group, as defined for purposes of Section 13(d) of the Exchange Act, of an
initial Schedule 13D or 13G with the Securities and Exchange Commission, or of
an amendment to an existing Schedule 13D or 13G indicating a cumulative increase
in beneficial ownership by any person or group of at least an additional 5% of
the Voting Securities in comparison with such person's or group's Schedule 13D
or 13G on file with the Securities and Exchange Commission as of September 1,
1988, (d) solicitation of proxies by a person or group, as defined for purposes
of Section 13(d) of the Exchange Act (other than management or the Board of
Directors), having beneficial ownership of 1% or more of the Voting Securities
for election, removal or change of directors of the Employer or with respect to
resolutions seeking or directing (1) any transaction or series of transactions
with a person or group, as defined for purposes of Section 13(d) of the Exchange
Act, beneficially owning 5% or more of the Voting Securities, (2) to impose any
restriction, supermajority requirement or other limitation on the power of the
Board of Directors, or (3) sale, merger or other disposition involving more than
20% of the Voting Securities or assets (by book value) of the Employer or (e)
receipt by the Employer of an offer to acquire beneficial ownership of 20% or
more of the Voting Securities by merger, acquisition or otherwise; provided that
in the event the exact date of a Potential Change in Control cannot be
determined, such Potential Change in Control will be deemed to have occurred on
the earliest date on which it could have occurred; and, provided further, that a
particular occurrence of any of the foregoing events or circumstances shall not
be deemed to be a Potential Change in Control if within 15 days after receipt by
the Board of Directors of actual notice from the Employer of the occurrence of a
particular event or circumstance, the Board of Directors adopts a resolution to
the effect that a Potential Change in Control for the purposes of this Trust
shall not be deemed to have occurred (but only if at least a two-thirds majority
of the members of the Board of Directors at the time of adoption of such
resolution were members immediately prior to such event or circumstance). The
Trustee and the Recordkeeper shall rely upon notice from the Employer pursuant
to Section 3.05, provided such notice concludes that a Potential Change in
Control has occurred. In the absence of such a notice, the Trustee and the
Recordkeeper may require and rely upon an Opinion of Counsel relating to whether
a Potential Change in Control has occurred. Any Opinion of Counsel with respect
to a Potential Change in Control shall specify the date on which the Potential
Change in Control occurred, or if an exact date cannot be determined, the
earliest date on which such Potential Change in Control could have occurred and
cover such other matters as the Trustee or the Recordkeeper shall reasonably
require.
"Premium Payment Obligation" shall mean all premiums, assessments,
dues, charges and interest on all the Insurance Policies held in the Trust
necessary to cause each of such Insurance Policies to be paid in full.
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"Premium Payment Obligation Amount" shall mean the aggregate payments
required to be paid by the Employer to the Trustee in order to satisfy in full
the Premium Payment Obligation.
"Real Estate Adviser" shall mean a person, firm or corporation hired or
retained by the Trustee to manage, or to assist in managing, the real estate
assets and/or the Real Estate Leases held by the Trust or to assist in the sale
by the Trustee of any of the real estate assets held by the Trust.
"Real Estate Leases" shall mean the lease agreements set forth and
described in Exhibit "B" attached hereto and by this reference made a part
hereof, if any, and shall include any future real estate leases entered into
between the Employer and the Trustee pursuant to Section 3.01 with respect to
real property contributed by the Employer to the Trust.
"Recordkeeper" shall mean the person or persons from time to time
serving as recordkeeper with respect to the Trust.
"Repurchase Obligation" shall mean the requirement in each Real Estate
Lease that the Employer repurchase in cash from the Trustee the property which
is the subject of such Real Estate Lease upon a Change in Control or at the
termination of the Real Estate Lease.
"Repurchase Obligation Amount" shall mean the purchase price required
by each Real Estate Lease to be paid by the Employer to the Trustee to
repurchase the property which is the subject of such Real Estate Lease upon a
Change in Control or at the termination of the Real Estate Lease.
"Retention Amount" shall mean $50,000.00.
"Trust" shall mean the trust set forth in and created by this document,
and all subsequent amendments thereto.
"Trust Fund" shall mean all assets held by the Trustee under the Trust.
"Trust Year" shall mean the fiscal year of the Employer.
"Trustee" shall mean the person or persons from time to time serving as
trustee of the Trust.
"Value of Accrued Benefits" shall mean at any time with respect to a
Participant or beneficiary of a deceased Participant an amount equal to the
present value of his or her benefit accrued under the Plan determined based on
the actuarial assumptions described on Exhibit "C" attached hereto, but without
taking into account any changes in pay out options under the Plan made following
a Change in Control, as calculated by the Recordkeeper.
Page 6
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"Value of the Trust Fund" shall mean at any time an amount equal to the
then total of the following: (a) the Value of Trust Insurance Policies, (b) the
Value of Trust Real Estate, (c) any undrawn amount under a Letter of Credit
(other than any letter of credit delivered to the Trustee pursuant to the Real
Estate Leases), and (d) the fair market value of all other assets of the Trust
Fund, each as determined by the Trustee.
"Value of Total Accrued Benefits" shall mean at any time an amount
equal to the aggregate of the Value of Accrued Benefits for all Participants and
beneficiaries of deceased Participants as of the date of determination, as
calculated by the Recordkeeper.
"Value of Trust Insurance Policies" shall mean the cash surrender value
at any time of the Insurance Policies held in the Trust, as determined by the
Insurance Adviser.
"Value of Trust Real Estate" shall mean at any time an amount equal to
the aggregate of all Repurchase Obligation Amounts.
"Voting Securities" shall mean securities possessing the right to vote
to elect directors or to authorize a merger, consolidation or reorganization of
the Employer.
In this agreement the singular includes the plural and the plural the
singular; words importing any gender include any other gender; and references to
"days" shall mean calendar days, unless otherwise specified.
ARTICLE II
NAME AND ESTABLISHMENT OF TRUST
Section 2.01. Name and Purpose. The name of the Trust shall be the
"Albertson's, Inc. 2000 Deferred Compensation Trust." This Trust is established
in conjunction with the Plan, and any successor of the foregoing, for the
purpose of holding, investing and distributing assets as a reserve for the
discharge of the Employer's obligations to Participants or beneficiaries of
deceased Participants entitled to benefits pursuant to the provisions of the
Plan.
Section 2.02. Appointment of Trustee; Acceptance. The Employer hereby
appoints IBJ Whitehall Bank & Trust Company, a New York banking corporation, as
sole Trustee for the Trust. The Trustee hereby accepts the appointment as
Trustee under the Trust. In accepting such appointment, the Trustee agrees to
act solely as trustee hereunder and not in its individual capacity; and all
persons having any claim against the Trustee by reason of the transactions
contemplated hereby shall look only to the Trust Fund for payment or
satisfaction thereof, except to the extent otherwise provided in Section 4.17(d)
hereof.
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Section 2.03. Appointment of Recordkeeper; Acceptance. The Employer
hereby appoints Management Compensation Group, Northwest, LLC, a Delaware
limited liability company, as its Recordkeeper under this Trust. The
Recordkeeper hereby accepts the appointment as Recordkeeper under the Trust. It
is recognized that Management Compensation Group, Northwest, LLC also acts as
the independent consulting actuary of the Employer with respect to the Plan.
Section 2.04. Grantor Trust. The Trust is intended to be a grantor
trust, within the meaning of Section 671 of the Code, and shall be construed
accordingly. The Employer, therefore, agrees that all income, deductions and
credits of this Trust belong to it as owner for income tax purposes and will be
included on the Employer's income tax returns.
ARTICLE III
PROVISIONS RELATING TO THE EMPLOYER
Section 3.01. Contributions. With the execution of this trust agreement
the Employer has transferred to the Trustee the property listed on Exhibit "D"
attached hereto. The Employer may from time to time deliver to the Trustee one
or more Insurance Policies, Letters of Credit, or contribute cash or real
property to the Trust which is acceptable to the Trustee and enter into Real
Estate Leases with the Trustee which are acceptable to the Trustee, in order to
fund all or a portion of its obligation to make contributions to this Trust. All
Employer contributions and all investments thereof, together with all
accumulations, accruals, earnings and income with respect thereto, shall be held
by the Trustee in trust hereunder as the Trust Fund.
Section 3.02. Insurance Policies. The Employer shall give the Trustee
the original of each Insurance Policy established for the benefit of the Trust,
executed by the Insurance Company issuing such Insurance Policy. Upon the
earlier of the occurrence of a Change in Control or Potential Change in Control,
the Employer shall (i) irrevocably assign to the Trustee all ownership interest
the Employer may have in any Insurance Policies held in the Trust, pursuant to
an assignment agreement substantially in the form attached hereto as Exhibit G;
and (ii) pay to the Trustee the Premium Payment Obligation Amount with respect
to the Insurance Policies held in the Trust. If, following the satisfaction of
the Premium Payment Obligation, the Trustee receives a notice from any Insurance
Company regarding the existence of an Additional Premium Payment Obligation, the
Trustee shall so notify the Employer promptly and the Employer shall pay to the
Trustee any Additional Premium Payment Obligation Amount with respect to such
Insurance Policies.
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Section 3.03. Letters of Credit. The Employer shall give the Trustee
the original of each Letter of Credit established for the benefit of the Trust,
executed by the Bank issuing such Letter of Credit. The Trustee shall draw on
every Letter of Credit to the full extent thereof on the earlier of:
(a) Receipt of an Opinion of Counsel stating that a Change
in Control has occurred;and
(b) On the tenth business day preceding the last day of the
term of each Letter of Credit that is due to expire and has not been
extended, unless, prior to taking such action, the Trustee receives the
original of a replacement Letter of Credit, executed by the Bank
issuing such Letter of Credit, and in at least the amount of the Letter
of Credit which is due to expire;
except to the extent the Trustee has received cash contributions from the
Employer up to the amount of, and in substitution for, the Letter of Credit
which is due to expire.
Section 3.04. Return of Employer Contributions. Subject to Sections
4.06 and 6.02, Employer contributions shall be irrevocable upon the earlier of
the occurrence of a Change in Control or Potential Change in Control. The
foregoing notwithstanding, after the Employer has satisfied its Premium Payment
Obligation or Additional Premium Payment Obligation with respect to all
Insurance Policies, has satisfied its Repurchase Obligation with respect to all
Real Estate Leases, and provided there is then no unpaid Deficiency Amount with
respect to any Participant or beneficiary of a deceased Participant, or at any
time prior to the time when the Trust shall become irrevocable as provided in
Section 6.02 (and without revoking the Trust), the Employer shall be entitled to
a return of a portion of the Trust Fund in accordance with the following:
(a) The Employer shall give not less than 30 days advance
written notice to the Trustee and the Recordkeeper that the Employer is
invoking its rights to a return of a portion of the Trust Fund pursuant
to this Section 3.04.
(b) The Employer may exercise its rights under this Section
3.04 no more frequently than twice during any 12 month period.
(c) Upon receipt of a notice from the Employer pursuant to
Section 3.04(a) the Trustee shall determine the then Value of the Trust
Fund and the Recordkeeper shall determine the then Value of Total
Accrued Benefits. To the extent the then Value of the Trust Fund
exceeds an amount equal to 1.3 times the sum of (1) the then Value of
Total Accrued Benefits, plus (2) the Retention Amount, the Trustee
shall liquidate sufficient Trust assets (or, notwithstanding Section
4.18, distribute Trust assets in kind, as directed by the Employer) and
return such excess to the Employer.
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Section 3.05. Certain Employer Notices. The Employer hereby agrees to
give prompt notice to the Trustee, the Recordkeeper and each Participant and
beneficiary of a deceased Participant of the occurrence of a Potential Change in
Control or a Change in Control.
Section 3.06. Action by Employer. Whenever the Employer is permitted or
required to perform any act hereunder, it shall be done and performed by an
officer or other delegate duly authorized by the Employer. Promptly following
the execution of this trust agreement, the Employer shall file with the Trustee
and the Recordkeeper a certified list of the names and specimen signatures of
any person authorized to act for the Employer. The Employer shall promptly
notify the Trustee and the Recordkeeper of the addition or deletion of any
person's name to or from such list, respectively. Until receipt of notice that
any person is no longer authorized so to act, the Trustee or the Recordkeeper
may continue to rely on the authority of the person. All certifications, notices
and directions by any such authorized person or persons to the Trustee or the
Recordkeeper shall be in writing signed by such person or persons. The Trustee
and the Recordkeeper may rely on any such certification, notice or direction
purporting to have been signed by or on behalf of such person or persons.
Section 3.07. Employer Liability. Nothing in this trust agreement shall
relieve the Employer of its liabilities to pay the benefits provided for under
the Plan except to the extent such liabilities are met by the application of
Trust assets.
ARTICLE IV
PROVISIONS RELATING TO TRUSTEE AND RECORDKEEPER
Section 4.01. Receiving Contributions. The Trustee shall receive and
accept contributions from the Employer in accordance with this trust agreement
as a reserve for the discharge of the Employer's obligations to Participants and
beneficiaries of deceased Participants entitled to benefits pursuant to the
Plan.
Section 4.02. Management and Control of Trust Assets. The Trustee shall
have exclusive authority and discretion to manage and control all assets in the
Trust Fund, except as may otherwise be provided herein. Notwithstanding the
foregoing, upon the appointment of an Insurance Adviser or Real Estate Adviser
the Trustee shall rely exclusively on the advice of such Insurance Adviser or
Real Estate Adviser, regarding the management and control of the Insurance
Policies or real estate assets and/or Real Estate Leases held by the Trustee,
respectively.
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Section 4.03. Investment of Trust Assets. The Trustee shall promptly
invest and re-invest the assets of the Trust Fund. Prior to a Change in Control
and so long as a Potential Change in Control has not occurred and continued to
the date of determination, the Trustee shall rely upon any investment directions
from the Employer, and the Trustee shall not be required to inquire into the
propriety of such directions; provided, however, the Trustee shall not be
required to invest assets of the Trust Fund in a manner that it reasonably
believes could result in any damage or liability on the part of the Trustee in
its individual capacity. The Trustee shall not be liable for the consequences of
following such directions. Following a Change in Control and during any period
of time when a Potential Change in Control shall have occurred and be
continuing, the Trustee shall invest and re-invest the assets of the Trust Fund
as it shall determine but only in investments constituting one or more of the
following:
(a) Obligations of the United States Government or any agency
thereof which are supported by the full faith and credit of the United
States Government, and obligations guaranteed by the United States
Government.
(b) Commercial paper rated no less than Prime-l by Moody's
Investors Service, Inc. or as A-l by Standard & Poor's Corp., or
bankers' acceptances or certificates in United States commercial banks
(but only with banks which at the time of purchase have a combined
capital and surplus in excess of $200,000,000 and whose long-term debt
is rated no less than A by Standard & Poor's Corp., or the equivalent
rating by Moody's Investors Service, Inc.), or such instruments
similarly rated by any successor to either of such investment rating
services; provided, no purchases shall be made of commercial paper
which is credit enhanced or which is issued by a company whose
headquarters is outside the United States, and no more than $2,000,000
shall be invested in the commercial paper of any one company.
(c) Direct and general obligations of any state within the
United States, to the payment of the principal of and interest on which
the full faith and credit of such state is pledged, provided at the
time of their purchase such obligations are rated no less than A by
Standard & Poor's Corp. with respect to long-term obligations, or the
equivalent rating by Moody's Investors Service, Inc., and no less than
MIG-l by Moody's Investors Service, Inc. with respect to short-term
obligations, or the equivalent rating by Standard & Poor's Corp.;
provided, no more than $1,000,000 shall be invested in any one issue of
notes or bonds and no more than 15% of the Trust Fund shall be invested
at any time in state obligations; and, provided further, no purchases
shall be made of state obligations which are credit enhanced.
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(d) Non-interest bearing operating accounts of the Trust with
the Trustee, even though the Trustee does not otherwise meet the
investment requirements of this Section 4.03; provided that if the
Trustee does not meet the investment requirements of this Section 4.03,
such accounts may not in the aggregate exceed $100,000.
(e) Insurance Policies, Real Estate Leases, the property
listed on Exhibit "D" and real property contributed to the Trust by the
Employer.
(f) Temporary investment funds and/or money market funds,
including the IBJ Whitehall Bank & Trust Company Money Market Fund,
which meet the criteria described in Section 4.03(a) through (c).
Section 4.04. Distribution of Trust Assets; Limitations.
(a) At the direction of the Employer to the Recordkeeper prior
to a Change in Control or upon the Application of a Participant or
beneficiary of a deceased Participant after a Change in Control, the
Recordkeeper shall prepare a certification to the Trustee that benefits
under the Plan have become payable, which certification shall be in
substantially the form attached hereto as Exhibit "E." Such
certification shall include the amount of such benefits, the terms of
payment, and the name, address and social security number of the
recipient. Upon the receipt of such certified statement and subject to
Section 4.06, the Trustee shall liquidate such Trust assets as may be
available and necessary to pay the benefits set forth in such
certification and shall make or commence cash distributions from the
Trust Fund in accordance therewith to the person or persons so
indicated and to the appropriate taxing authorities with respect to
taxes required to be withheld; provided, however, that the Trustee
shall not be required to make any distribution which would reduce the
value of the assets of the Trust Fund described in Section 4.03(a)
through (d) to less than the Retention Amount. The Recordkeeper shall
also furnish a copy of such certification to the Participant or the
beneficiary of a deceased Participant. The Trustee shall furnish each
Participant or beneficiary of a deceased Participant with the
appropriate tax information form evidencing such payment and the amount
thereof. The Trustee shall provide the Employer with written
confirmation of any payments hereunder within 10 business days after
such payments are made or commenced to a Participant or beneficiary of
a deceased Participant. Notwithstanding any provision of the Trust to
the contrary, the Trustee shall make payments hereunder before such
payments are otherwise due if, and to the extent that, it (l) receives
a written request therefor from a Participant or beneficiary of a
deceased Participant, which written request specifies the amount to be
distributed,
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and (2) determines, based on an Opinion of Counsel, that a change in
the federal tax laws, a published ruling or similar announcement
issued by the Internal Revenue Service, the issuance of Treasury
Regulations, a decision by a court of competent jurisdiction involving
a Participant or beneficiary of a deceased Participant, or a closing
agreement involving a Participant or beneficiary of a deceased
Participant made under Section 7121 of the Code, has caused or will
cause a Participant or beneficiary of a deceased Participant to
recognize income for federal income tax purposes with respect to such
amounts before they otherwise would be paid to him or her.
(b) Subject to Section 4.06, the only persons who shall be
entitled to payments from this Trust pursuant to this Section 4.04
following a Change in Control shall be Participants and beneficiaries
of deceased Participants under the Plan as of the Change in Control,
and persons who become beneficiaries of such persons. Following a
Change in Control, no Participant or beneficiary of a deceased
Participant shall be entitled to receive distributions from this Trust
with respect to any benefit accrued under the Plan attributable to
contributions after a Change in Control or to an election made after a
Change in Control to lengthen pay out options under the Plan. The
Trustee shall make distributions pursuant to this Section 4.04 only as
directed by the Recordkeeper and shall be entitled to rely on any
certification received from the Recordkeeper for purposes of complying
with this Section 4.04(b).
(c) Following a Change in Control, payments from the Trust
shall be adjusted for the 12 month period commencing each June 1 in
accordance with the following:
(1) Adjustments to payments from the Trust shall be
made only in the event the Value of the Trust Fund as of the
last day of the immediately preceding Trust Year was less
than an amount equal to the sum of (A) the Value of Total
Accrued Benefits as of the last day of the immediately
preceding Trust Year, plus (B) the Retention Amount.
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(2) If an adjustment is required, all payments
otherwise payable from the Trust during the applicable 12
month period shall be reduced to an amount equal to the
payment which would otherwise have been made, multiplied by
a fraction, the numerator of which is the Value of the Trust
Fund as of the last day of the immediately preceding Trust
Year, and the denominator of which is an amount equal to the
sum of (A) the Value of Total Accrued Benefits as of the
last day of the immediately preceding Trust Year, plus (B)
the Retention Amount.
(3) Any amount not paid to a Participant or beneficiary
of a deceased Participant by reason of this Section 4.04(c)
shall be considered a Deficiency Amount and shall accrue
interest from the date payment would otherwise have been
made, until paid, at the interest crediting rate provided
for in Exhibit "C".
(4) Deficiency Amounts shall be paid to Participants
and beneficiaries of deceased Participants as soon as
practicable following any Trust Year when, and to the extent
that, the Value of the Trust Fund as of the last day of such
Trust Year exceeds an amount equal to the sum of (A) the
Value of Total Accrued Benefits as of the last day of such
Trust Year, plus (B) the Retention Amount. Payment of
Deficiency Amounts shall be pro rata based on the unpaid
Deficiency Amounts as of the date of payment.
Section 4.05. Protection of Trustee. The Trustee shall be fully
protected in making or refraining from making any payments in accordance with
the terms of this trust agreement.
Section 4.06. Creditors of Employer. The Trust Fund shall at all times
be subject to the claims of the Employer's general creditors but shall be
utilized to satisfy any such claims only in the case of the Employer's
bankruptcy or insolvency. The Employer shall be considered "bankrupt" or
"insolvent" if the Employer is either unable to pay its debts when due or is
subject to a proceeding under the Bankruptcy Code, 11 U.S.C. ss. 101, et seq.
The Board of Directors and chief executive officer of the Employer are
responsible to give written notice to the Trustee and the Recordkeeper of the
Employer's bankruptcy or insolvency as soon as practicable following the
occurrence of such event. Upon receipt of such notice of the Employer's
bankruptcy or insolvency, or in the case of the Trustee's receipt of a written
notice from a creditor of the Employer alleging the Employer's bankruptcy or
insolvency, the Trustee shall discontinue payments to Participants and
beneficiaries of deceased Participants and shall hold the Trust Fund for the
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benefit of the Employer's general creditors. The Trustee shall resume payments
to Participants and beneficiaries of deceased Participants only after it has
been notified by the Employer (or has received an Expert's Certificate or
Opinion of Counsel stating) that the Employer is no longer bankrupt or insolvent
or pursuant to an order of a court of competent jurisdiction. If the Trustee
discontinues payments to Participants and beneficiaries of deceased
Participants, the first payment following such discontinuance shall include the
aggregate of all payments which would have been made to the Participants and
beneficiaries of deceased Participants Together with interest calculated at the
interest crediting rate provided for in Exhibit "C" on the amount of the delayed
distributions).
Section 4.07. Compensation and Expenses. The Trustee and the
Recordkeeper shall be entitled to receive compensation for services rendered.
Such compensation shall be the usual and customary fees of the Trustee or
Recordkeeper in effect from time to time for similar services unless in the case
of the Trustee, an amount is agreed upon in writing by the Employer and the
Trustee and in the case of the Recordkeeper, the Employer and the Recordkeeper,
and shall, unless paid directly by the Employer, be a lien against and paid out
of the assets of the Trust Fund; provided, an individual serving as Trustee who
receives compensation from the Employer for full-time employment shall not
receive additional compensation from the Trust. The Recordkeeper and the Trustee
(whether or not the Trustee is a full-time employee of the Employer) shall be
reimbursed for any reasonable expenses, including reasonable counsel and Expert
fees, incurred by the Recordkeeper or the Trustee in connection with the
acceptance or administration of the Trust Fund or Trust and the exercise or
performance of any of their respective powers or duties hereunder, and such
expenses shall, unless paid directly by the Employer, be a lien against and paid
out of the assets of the Trust Fund.
Section 4.08. Limitation of Administrative Duties. Nothing contained in
the Plan, either expressly or by implication, shall be deemed to impose any
responsibilities, obligations or duties on the Trustee or the Recordkeeper other
than those set forth herein. Without limiting the generality of the foregoing,
the Trustee shall have no responsibility, obligation or duty with respect to any
action required by the Plan, or this Trust to be taken by the Employer, the
Recordkeeper, the Insurance Adviser, the Real Estate Adviser or any other
Expert, any employee, Participant, beneficiary or any other person, and the
Recordkeeper shall have no responsibility, obligation or duty with respect to
any action required by the Plan or this Trust to be taken by the Employer, the
Trustee, any employee, Participant, beneficiary or any other person.
Section 4.09. Accountings. Within 15 days following the close of each
Trust Year, the Trustee shall file with the Employer and the Recordkeeper, and
with each Participant with respect to each Trust Year ending after a Change in
Control, a written statement and accounting setting forth:
(a) A categorized schedule of the assets and liabilities of the
Trust Fund, at cost and current value, as of the end of the Trust
Year; provided, that the Insurance Policies shall be valued at their
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cash surrender value; and, provided further, that real estate which is
the subject of a Real Estate Lease shall be valued at its Repurchase
Obligation Amount and all other real estate shall be valued at zero;
(b) A categorized schedule of the receipts, disbursements and
other transactions for the Trust Year; and
(c) A description of all assets purchased and sold during the
Trust Year.
Such accountings shall be in a form and format usable in preparing and filing
returns and reports with the Internal Revenue Service and in accordance with
generally accepted accounting principles. Upon receipt of written approval of
the accounting from the Employer (or upon the passage of 60 days without written
objections having been delivered to the Trustee) such accounting shall be deemed
to be approved, and the Trustee shall be released and discharged as to all
items, matters and things set forth in such accounting.
Section 4.10. General Management Powers. Subject to Section 4.03, with
respect to the Trust Fund the Trustee shall have the following powers, rights
and duties in addition to those otherwise vested in the Trustee herein or by
law:
(a) To sell, exchange, transfer and otherwise deal with the Trust
Fund in such manner, for such consideration and on such terms and
conditions as the Trustee shall determine;
(b) To retain in cash so much of the Trust Fund as the Trustee
shall from time to time determine and to deposit cash with any
depositary;
(c) To register any securities or other property held by it
hereunder in its own name or in the name of its nominees with or
without the addition of words indicating that such securities are held
in a fiduciary capacity, and to hold any securities in bearer form,
but the books and records of the Trustee shall at all times show that
all such investments are part of the Trust Fund;
(d) To pay all reasonable costs, charges and expenses incurred in
the administration of the Trust Fund, including fees for reasonable
services rendered to the Trustee by any person, firm or corporation
other than the Employer, and all taxes that may be levied or assessed
under existing or future laws upon or in respect to the Trust or the
Trust Fund or the income thereof;
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(e) To employ suitable agents (including a Real Estate Adviser)
and counsel who may be counsel for the Employer;
(f) To credit and distribute the Trust Fund pursuant to the terms
of the trust agreement;
(g) To compromise, contest, arbitrate or abandon claims and
demands, all in the Trustee's discretion;
(h) To perform any and all other acts which, in the Trustee's
judgment, are necessary or appropriate for the proper management,
investment and distribution of the Trust Fund;
(i) To retain any funds or property subject to any dispute
(and without liability for the payment of interest) and to refuse
to make payment or delivery thereof until final adjudication by a
court of competent jurisdiction;
(j) To begin, maintain or defend any litigation necessary in
connection with the administration of this Trust and the Trust Fund;
(k) To make such deposits (including certificates of deposit) and
open such number of bank accounts (including interest and noninterest
bearing accounts) in such bank(s) (including the Trustee, and any bank
which is an agent of the Trustee or otherwise a fiduciary with respect
to the Plan and Trust) in the name of the Trustee, and to make
deposits therein in order to facilitate the payment of benefits, as
the Trustee shall determine. The amounts on deposit in each such
account shall constitute a part of the Trust Fund until paid out in
accordance with the Plan;
(l) To maintain accurate records and accounts of all investments,
receipts, disbursements and other transactions of the Trust Fund and
to open such records and accounts to the inspection by the Employer
and its duly authorized representatives during normal business hours
of the Trustee, and to the Participants and their duly authorized
representatives following a Change in Control, during normal business
hours of the Trustee;
(m) To adopt such rules and regulations for the operation and
administration of the Trust as the Trustee shall determine to be
necessary and appropriate and in keeping with the terms and purposes
of the Trust;
(n) To construe and interpret the terms and provisions of this
Trust, and any such construction or interpretation adopted in good
faith shall be binding on the Employer, and any employees, dependents
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and beneficiaries, and their successors, assigns, executors,
administrators and/or legal representatives;
(o) To withhold any taxes with respect to the property or
income of the Trust Fund or to withhold any amounts otherwise payable
from the Trust Fund; and to dispose of any amounts so withheld as
determined by the Trustee;
(p) To hold the Trust Fund assets for the benefit of the
creditors of the Employer and to deliver assets to satisfy such
creditor's claims as directed by a court of competent jurisdiction
pursuant to Section 4.06; and
(q) To do any and all other acts and things necessary, proper
or advisable to effectuate the purposes of this Trust to the extent the
same are permissible under applicable laws.
Section 4.11. Insurance Policies.
(a) Prior to the occurrence of a Change in Control or
Potential Change in Control, the Trustee, upon written direction of the
Employer, shall pay from the Trust Fund such sums to any Insurance
Company as the Employer may direct. The Employer shall prepare the
application for any Insurance Policies to be applied for. Subject to
Section 3.02 and the provisions hereinafter set forth in this Section
4.11, the Employer, prior to the occurrence of a Change in Control or
Potential Change in Control may, in its sole discretion, retain
complete and absolute ownership of all or any portion of the Insurance
Policies held in the Trust or may, in its discretion, cause the Trustee
to retain ownership of all or any portion of the Insurance Policies
held in the Trust. The Trustee shall receive and hold in the Trust,
subject to the provisions hereinafter set forth in this Section 4.11,
all Insurance Policies so obtained.
(b) Prior to the occurrence of a Change in Control or a
Potential Change in Control, the Trustee, irrespective of any ownership
interest it may hold in any Insurance Policies held in the Trust, shall
have no discretion (i) with respect to the exercise of any of the
powers enumerated or implied under this Section 4.11 or (ii) to take
any other action permitted by any Insurance Policy held in the Trust,
but shall exercise such powers or take such action only upon the
written direction of the Employer. Prior to the occurrence of a Change
in Control or a Potential Change in Control, the Trustee shall have no
duty to exercise any of such powers or to take any such action unless
and until it shall have received such direction.
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(c) Prior to the occurrence of a Change in Control or
Potential Change in Control, the Employer shall direct the Insurance
Company to notify the Employer of all premiums and other payments due
or to become due, the respective amounts of any said premiums or
amounts, and the respective dates when such amounts are due, whereupon
the Employer shall verify the names of the individual Participants
covered under such Insurance Policies; thereafter, the Trustee, upon
written direction of the Employer, shall promptly pay from the Trust
Fund as soon as practicable thereafter any premiums, assessments, dues,
charges and interest, if any, with respect to any Insurance Policy held
in the Trust Fund. Prior to the occurrence of a Change in Control or a
Potential Change in Control, the Trustee shall have no duty to make
such payment unless and until it shall have received such direction.
(d) Upon the occurrence of a Change in Control or a Potential
Change in Control, the Trustee, pursuant to the assignment stipulated
in Section 3.02, shall be the complete and absolute owner of the
Insurance Policies held in the Trust, shall have power without consent
of any other person, to exercise any and all the rights, options or
privileges that belong to the absolute owner of any Insurance Policy
held in the Trust or that are granted by the terms of any such
Insurance Policy or by the terms of this trust agreement.
(e) In the event of a sale, assignment or surrender of any
Insurance Policy held in the Trust Fund, or the receipt by the Trustee
of any interest, dividend or other payments in respect of any Insurance
Policy, the Trustee shall hold in the Trust Fund the proceeds of any
such sale, assignment or surrender, any and all interest and other
payments of any kind received in respect of any Insurance Policy and
shall invest such funds in accordance with Section 4.03.
(f) No Insurance Company that may issue any Insurance Policy
shall be deemed to be a party to this trust agreement for any purpose,
or to be responsible in any way for the validity of this trust
agreement or have any liability under this trust agreement other than
as stated in each Insurance Policy that it may issue. Upon the
occurrence of a Change in Control or a Potential Change in Control, any
Insurance Company may deal with the Trustee as sole owner of any
Insurance Policy issued by it and held in the Trust Fund, without
inquiry as to the authority of the Trustee to act, and may accept and
rely upon written notice, instruction, direction, certificate or other
communication from the Trustee believed by it to be genuine and to be
signed by an officer of the Trustee and shall incur no liability or
responsibility for so doing. Any sums paid out by any Insurance
Company, under any of the terms of the Insurance Policies issued by it
and held in the Trust Fund, either to the Trustee, or, in accordance
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with its direction, to any other person or persons the Trustee shall
designate as payces shall be a full and complete discharge of the
liability to pay such sums, and the Insurance Company shall have no
obligation to look to the disposition of any sums so paid. No Insurance
Company shall be required to look into the terms of this trust
agreement, to question any action of the Trustee or to see that any
action of the Trustee is authorized under the terms of this trust
agreement.
(g) Anything contained in this trust agreement to the contrary
notwithstanding, neither the Employer nor the Trustee shall be liable
for the refusal of any Insurance Company to issue or change any
Insurance Policy or Insurance Policies or to take any action requested
by the Trustee; nor for the form, genuineness, validity, sufficiency or
effect of any Insurance Policy or Insurance Policies held in the Trust
Fund; nor for the act of any person or persons that may render any such
Insurance Policy or Insurance Policies null and void; nor for the
failure of any Insurance Company to pay the proceeds and avails of any
such Insurance Policy or Insurance Policies as and when the same shall
become payable.
(h) In the event any conflict occurs between the provisions of
any Insurance Policy and either this trust agreement or the Plan, the
provisions of the trust agreement or Plan shall govern and control, as
applicable.
Section 4.12. Liability for Breach of Fiduciary Duty. Except as
provided in Section 4.17(d), the Trustee shall not be liable for any losses to
the Trust Fund resulting from the breach of any of the responsibilities,
obligations or duties imposed upon the Trustee herein or by applicable laws.
Section 4.13. Consultation and Indemnification.
(a) The Trustee and the Recordkeeper may consult with counsel,
and neither the Trustee nor the Recordkeeper shall be deemed imprudent
by reason of taking or refraining from taking any action in accordance
with an Opinion of Counsel.
(b) The Employer hereby indemnifies the Trustee and holds it
harmless from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, claims, demands, costs and
expenses of any kind or nature whatsoever, including, without
limitation, attorney's fees and disbursements (except those caused by
the Trustee's gross negligence or willful misconduct) that may be
imposed on, incurred by or asserted against the Trustee in any way
relating to or arising out of or in connection with this trust
agreement, the acceptance or administration by the Trustee of the Trust
or the Trust Fund, the exercise or performance by the Trustee of any of
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its powers or duties hereunder and any of the transactions contemplated
by this trust agreement, including (but not limited to) distributions
to Participants, beneficiaries of deceased Participants and upon the
termination of the Plan or Trust.
(c) The Employer hereby indemnifies the Recordkeeper and holds
it harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, claims, demands, costs
and expenses of any kind or nature whatsoever, including, without
limitation, attorney's fees and disbursements (except those caused by
the Recordkeeper's gross negligence or willful misconduct) that may be
imposed on, incurred by or asserted against the Recordkeeper in any way
relating to or arising out of or in connection with this trust
agreement, the exercise or performance by the Recordkeeper of any of
its powers or duties hereunder and any of the transactions contemplated
by this trust agreement.
(d) Neither the Trustee nor the Recordkeeper shall be required
to give any bond or any other security for the faithful performance of
their respective duties under this trust agreement, except as such may
be required by any law which prohibits the waiver thereof.
(e) The Employer shall assume, at its own expense, the defense
of any action commenced against the Trustee or the Recordkeeper
asserting any claim which would be covered by the indemnities set forth
in this Section 4.13. The Trustee and the Recordkeeper shall each have
the right to employ its own counsel in any such action to which it is a
party, and the reasonable fees and expenses of such counsel shall be
borne by the Employer.
(f) The Employer's obligations under this Section 4.13 shall
survive the termination of this trust agreement and the resignation or
removal of any Trustee.
Section 4.14. Resignation and Removal. The Trustee and/or the
Recordkeeper shall resign or be removed and a successor Trustee and/or
Recordkeeper appointed according to the following procedures:
(a) The Trustee may be removed by the Employer at any time
prior to a Change in Control, with or without cause, and following a
Change in Control, with or without cause but only with the written
consent of the Majority Participants, upon the giving of not less than
31 days prior written notice. The Trustee may resign upon the giving of
not less than 31 days prior written notice to the Employer and all
Participants and beneficiaries of deceased Participants. No resignation
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or removal of the Trustee pursuant to this Section 4.14 shall become
effective until the acceptance of appointment by the successor Trustee.
(b) Prior to a Change in Control the Employer shall fill a
vacancy in the office of Trustee as soon as practicable by a written
instrument filed with the person(s) appointed to fill the vacancy,
which person(s) must be a financial institution that is independent of
the Employer, and a copy to the predecessor Trustee and the
Recordkeeper. Following a Change in Control, the Employer shall be
entitled to fill a vacancy in the office of Trustee, but only with the
consent and approval of the Majority Participants, as evidenced in a
written instrument filed with the person(s) appointed to fill the
vacancy which person(s) must be a financial institution that is
independent of the Employer. If the vacancy in the office of Trustee
has not been filled within 20 days following the Trustee's resignation
or removal, the Trustee shall have the right to petition a court of
competent jurisdiction to appoint a successor Trustee.
(c) The appointment of a successor Trustee shall take effect
upon delivery to the Trustee of a written appointment of such successor
Trustee, duly executed by the Employer, the Majority Participants, or
the predecessor Trustee as the case may be, and a written acceptance by
such successor Trustee, duly executed thereby. Except as described in
the preceding sentence, a successor Trustee shall succeed to the title
to the assets in the Trust Fund without the signing or filing of any
document and the rights and obligations of the Trustee under each
Insurance Policy or Letter of Credit shall automatically become the
rights and obligations of the successor Trustee, and the Trustee shall
have no further rights, duties, obligations or liabilities with respect
to any Insurance Policy, Letter of Credit or Real Estate Lease. The
resigning or removed Trustee shall execute all documents and do all
acts reasonably necessary to vest such title of record in the successor
Trustee. A successor Trustee shall have all of the powers conferred by
this trust agreement as if originally named Trustee.
(d) Within 60 days after transfer of the assets in the Trust
Fund, the resigning or removed Trustee shall render to the Employer a
statement and accounting in the form and manner prescribed by Section
4.09. Unless the Employer shall, within 60 days after receipt of such
accounting, object in writing delivered to such Trustee, such
accounting shall be deemed approved, and the Trustee shall be released
and discharged as to all items, matters and things set forth in such
accounting.
(e) A successor Trustee shall not be liable or responsible for
any acts or defaults of a predecessor Trustee or co-Trustee, or for any
losses or expenses resulting from or occasioned by anything done or
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neglected to be done in the administration of the Trust Fund or Trust
prior to its appointment as Trustee, nor shall it be required to
inquire into or take notice of the prior administration of the Trust
Fund or Trust.
(f) The Recordkeeper may be removed by the Employer at any
time prior to a Change in Control, with or without cause, and following
a Change in Control, with or without cause but only with the written
consent of the Majority Participants, upon the giving of not less than
31 days prior written notice to the Recordkeeper. The Recordkeeper may
resign on the giving of not less than 31 days prior written notice to
the Trustee, the Employer and all Participants and beneficiaries of
deceased Participants. No resignation or removal of the Recordkeeper
pursuant to this Section 4.14 shall become effective until the
acceptance of appointment by the successor Recordkeeper.
(g) Prior to a Change in Control, the Employer shall fill a
vacancy in the office of Recordkeeper as soon as practicable by a
written instrument filed with the person(s) appointed to fill the
vacancy, which person(s) must be independent from the Employer and must
be a certified consulting actuary or firm of actuaries or certified
public accountant or firm of certified public accountants, and a copy
to the predecessor Recordkeeper and the Trustee. Following a Change in
Control, the Employer shall be entitled to fill a vacancy in the office
of Recordkeeper, but only with the consent and approval of the Majority
Participants, as evidenced in a written instrument filed with the
person(s) appointed to fill the vacancy, which person(s) must be
independent from the Employer and must be a certified consulting
actuary or firm of actuaries or certified public accountant or firm of
certified public accountants. If the vacancy in the office of
Recordkeeper has not been filled within 20 days following the
Recordkeeper's resignation or removal, the Trustee shall have the right
to appoint a successor Recordkeeper. The appointment of a successor
Recordkeeper shall take effect upon delivery to the Recordkeeper, with
a copy to the Trustee, Employer and all Participants and beneficiaries
of deceased Participants, of a written appointment of such successor
Recordkeeper, duly executed by the Employer, the Majority Participants
or the Trustee, as the case may be, and a written acceptance by such
successor Recordkeeper, duly executed thereby. As soon as practicable
after the Recordkeeper has resigned or has been removed hereunder, it
shall deliver to the successor Recordkeeper all reports, records,
documents and other written information in its possession regarding the
Elan, the Trust Fund and the Participants, and thereupon shall be
entitled to all unpaid fees, compensation and reimbursements to which
it is entitled under this Trust and shall be relieved of all
responsibilities and duties under this Trust.
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(h) If the Trustee consolidates, merges or converts into, or
transfers all or substantially all its trust business or assets to
another corporation, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.
Section 4.15. Duties of the Recordkeeper. Within 10 days following the
close of each Trust Year ending after a Change in Control, the Recordkeeper
shall file with the Employer and the Trustee a written statement setting forth
for each Participant and beneficiary of a deceased Participant his or her Value
of Accrued Benefits and account balance(s) as of the last day of such Trust
Year. In the event the Employer fails to provide the Recordkeeper with the
information necessary to prepare such written statement, the Recordkeeper shall
file the written statement based on a good faith estimate of the Value of
Accrued Benefits and account balance(s). In addition, the Recordkeeper shall
maintain or cause to be maintained all the Participant records required by this
Trust and shall perform such other duties and responsibilities necessary or
advisable to achieve the objectives of this Trust. Following a Change in
Control, the Recordkeeper shall prepare and distribute to the Employer,
Participants and beneficiaries of deceased Participants, Participant statements
which shall include income tax information, if that information is supplied to
the Recordkeeper by the Employer, or its delegate, with respect to payments to
Participants and beneficiaries of deceased Participants. In the event that the
Employer refuses or neglects to provide updated Participant information, as
contemplated herein, the Recordkeeper shall be entitled to rely on the most
recent information furnished to it by the Employer. The Recordkeeper shall have
no responsibility to verify information provided to it by the Employer;
provided, however, no information provided by the Employer following a Change in
Control shall reduce any benefit to which a Participant or beneficiary of a
deceased Participant was entitled under the Plan or this Trust as of the Change
in Control.
Section 4.16. Determinations by the Trustee; Notices. Within 21 days
following receipt by the Trustee of written notice from any Participant or
beneficiary of a deceased Participant that such Participant or beneficiary
believes a Potential Change in Control or Change in Control has taken place, the
Trustee shall determine if a Potential Change in Control or Change in Control
has in fact occurred, in accordance with the procedures set forth in the
definitions of such terms. Within 5 days of making the foregoing determination
the Trustee shall give written notice of its determination to the Employer,
Recordkeeper and all Participants and beneficiaries of deceased Participants,
which notice shall attach a complete copy of any Opinion of Counsel rendered to
the Trustee with regard to the foregoing, a complete copy of the notice to the
Trustee alleging that a Potential Change in Control or Change in Control has
occurred as well as all materials in the possession of the Trustee which relate
to the foregoing determinations.
Section 4.17. Rights of Trustee.
(a) The Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the proper
person.
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(b) Before the Trustee acts or refrains from acting, and in
making any determination with respect to a Change in Control, a
Potential Change in Control, the Value of the Trust Fund or any other
determination hereunder (including but not limiting to determinations
of the validity of consents of the Majority Participants), the Trustee
may require and rely on an Expert's Certificate or an Opinion of
Counsel or both covering such matters as the Trustee may reasonably
require The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on the Expert's Certificate or
Opinion of Counsel or with the consent of the Majority Participants.
(c) The Trustee may act through agents and Experts and shall
not be responsible for the misconduct or negligence of any agent or
Expert appointed and retained with due care or with the consent of the
Employer or the Majority Participants.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers, provided that the Trustee's conduct does
not constitute gross negligence or willful misconduct. The Trustee
shall be liable for any action it takes or omits to take and which
constitutes gross negligence or willful misconduct.
(e) No provision of this trust agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
Section 4.18. Priority of Distribution and Liquidation of Trust Assets.
Whenever Trust assets are required to be distributed pursuant to this trust
agreement, the Trustee shall pay such distributions with cash on hand, if any.
To the extent cash on hand (not including the Retention Amount) is not
sufficient to pay such distributions, the Trustee shall in the following
priority: (a) liquidate investments described in Section 4.03 other than
paragraph (e) thereof, (b) draw on any Letter of Credit held by the Trust to the
extent necessary to pay the required distribution, (c) liquidate real estate
assets and/or Real Estate Leases held by the Trust and (d) liquidate any
Insurance Policies held by the Trust.
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ARTICLE V
GENERAL ADMINISTRATIVE PROVISIONS
Section 5.01. Exchange of Information by the Employer and the Trustee.
The Trustee shall furnish to or on the order of the Employer whatever
information relating to the Trust Fund is necessary for the performance by the
Employer of its functions with respect to the Plan or this Trust. The Employer
shall furnish to or on the order of the Trustee whatever information relating to
the Trust Fund and Participants and beneficiaries of deceased Participants is
necessary for the performance by the Trustee of its functions hereunder. The
Employer and Trustee may each rely and act upon information so furnished without
further inquiry.
Section 5.02. Information to the Recordkeeper and Trustee. The Employer
shall provide the Recordkeeper with a certified copy of the Plan and all
amendments thereto, and the resolutions or other actions of the Employer
approving the Plan and all amendments thereto, promptly upon their adoption and
all information necessary to determine the benefits payable to or with respect
to each Participant, including any benefits payable after each Participant's
death and the recipient of the same. The Employer shall regularly, at least
annually, or promptly on the request of the Recordkeeper, furnish revised
updated information to the Recordkeeper. In addition, promptly after the last
day of each calendar year quarter the Employer agrees to notify the Trustee and
Recordkeeper as to those persons who are then Participants or beneficiaries of
deceased Participants, which notice shall specify the name, address and social
security number of such persons. The Trustee shall be entitled to rely on the
latest available written notice from the Employer regarding such information.
The Employer shall be responsible for keeping accurate books and records with
respect to the employees of the Employer, their compensation and their rights
and interests in the Trust Fund and under the Plan.
Section 5.03. Mistake of Fact. Any misstatement or any other mistake of
fact in any certificate, notice or other document filed with the Employer, the
Recordkeeper or the Trustee shall be corrected when it becomes known and proper
adjustment shall be made by reason thereof; provided, however, the Trustee shall
offset any overpayment to any Participant or beneficiary of a deceased
Participant against future payments to such Participant or beneficiary but shall
have no obligation to seek reimbursement from any Participant, beneficiary of a
deceased Participant or other person to whom the Trustee has disbursed amounts
from the Trust Fund pursuant to any such certificate, notice or other document.
Section 5.04. Taxes. The Employer may from time to time pay taxes of
any and all kinds whatsoever which at any time are levied or assessed upon or
become payable in respect of the Trust Fund, the income therefrom or any
property forming a part thereof, or any purchase, sale, collateral security or
other transaction pertaining thereto. To the extent that any taxes levied or
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assessed upon the Trust Fund or in respect of such income, property or
transaction are not paid by the Employer, the Trustee shall pay such taxes out
of the Trust Fund and the Employer shall reimburse the Trustee for any amounts
so paid. The Trustee shall, at the Employer's expense, contest the validity of
such taxes in any manner deemed appropriate by the Employer or its counsel, but
only if the Trustee has received an indemnity bond or other security
satisfactory to it to pay all of its fees and expenses with respect to such
contest; provided, however, the Trustee shall have no obligation to contest if
it receives an Opinion of Counsel to the effect that there is no reasonable
basis in law or fact for such contest. Alternatively, the Employer may itself
contest the validity of any such taxes.
Section 5.05. Investment Company Act. Notwithstanding any other
provision of this trust agreement, the Employer and the Trustee agree that in
the event the Trust may be deemed to be an "investment company" as defined under
the Investment Company Act of 1940, as amended (the "Investment Company Act"),
they shall use their best efforts to take such action as shall be necessary so
that either (i) the Trust will qualify for an exemption from the provisions of
the Investment Company Act or (ii) the Trust will not be deemed to be such an
investment company.
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.01. Right to Amend. Prior to the time when the Trust shall
become irrevocable as provided in Section 6.02, this trust agreement may be
amended by an instrument in writing, duly executed by the Employer and delivered
to the Trustee, which instrument shall certify to the Trustee that the Trust has
not become irrevocable. When the Trust shall become irrevocable as provided in
Section 6.02, this trust agreement may not thereafter be amended in whole or
part by the Employer; provided, however, that this trust agreement may
nonetheless be amended by an instrument in writing, duly executed by the
Employer, and delivered to the Trustee and all Participants and beneficiaries of
deceased Participants only (a) with the express written consent of the Majority
Participants on the date of such amendment, (b) as necessary to obtain a
favorable ruling from the Internal Revenue Service with respect to the tax
consequences of the establishment or settlement of the Trust as a grantor trust
within the meaning of Section 671 of the Code, (c) as necessary to obtain an
Opinion of Counsel that the Plan is an unfunded plan of deferred compensation or
(d) as necessary to prevent the Trust from being deemed an "investment company"
as defined under the Investment Company Act or to ensure that the Trust
qualifies for an exemption from the provisions of such act. Provided, that the
duties, powers and liabilities of the Trustee shall not be increased without the
Trustee's written consent, and, provided further, that the amount or time for
payment of any benefit hereunder to any Participant or beneficiary of a deceased
Participant may not be reduced or adversely affected without the written consent
of the affected Participant or beneficiary.
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Section 6.02. Termination of Trust and Reversion of Assets. Following
the occurrence of a Change in Control or Potential Change in Control, and
regardless of whether or not such Potential Change in Control shall exist as of
a later date of determination, the Trust shall be irrevocable; provided that the
Trust shall nonetheless terminate upon the earlier of (a) the payment of all
amounts due Participants and beneficiaries of deceased Participants under the
Plan, as determined by the Recordkeeper, and (b) the later of (i) January 1,
2025, and (ii) the date which is 21 years following the death of the last
surviving individual eligible to be a Participant listed on Exhibit "F" attached
hereto and by this reference made a part hereof. At any time prior to a Change
in Control or Potential Change in Control the Trust may be revoked by the
Employer by an instrument in writing delivered to the Trustee and accompanied by
an Opinion of Counsel stating that the Trust is revocable and that neither a
Change in Control nor a Potential Change in Control has occurred. The foregoing
to the contrary notwithstanding, if the Trustee has received notice, pursuant to
Section 3.05 or Section 4.16, that a Change in Control or Potential Change in
Control may have occurred, the Trust may not be revoked until the Trustee has
determined that a Change in Control or Potential Change in Control has not
occurred. Upon revocation of the Trust, any and all assets remaining in the
Trust Fund after payment of the Trustee's and Recordkeeper's compensation and
other expenses of the Trust, shall revert to the Employer and the Trustee shall
promptly transfer any such assets to the Employer. Upon termination of the Trust
other than by revocation, the Trustee shall pay all amounts due Participants and
beneficiaries of deceased Participants under the Plan, as determined by the
Recordkeeper, and any and all assets remaining in the Trust Fund after payment
of the Trustee's and Recordkeeper's compensation and other expenses of the
Trust, shall revert to the Employer and the Trustee shall promptly transfer any
such assets to the Employer. Upon termination of the Trust for whatever reason
the Trustee shall prepare and file a final statement and accounting with the
Employer and all necessary returns, statements, forms and reports as may be
required of the Trustee by law. Upon receipt of written approval of the
accounting from the Employer (or upon the passage of 60 days without written
objections having been delivered to the Trustee) such accounting shall be deemed
approved, and the Trustee shall be released and discharged as to all items,
matters and things set forth in such accounting.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Entire Agreement. This trust agreement constitutes the
entire understanding and agreement between the parties and supersedes all prior
agreements, representations and understandings relating to the subject matter
hereof.
Section 7.02. Successors. This trust agreement shall be binding upon
all persons entitled to benefits under the Plan and their respective heirs and
personal representatives, upon the Employer, its successors and assigns, and
upon the Trustee and its successors.
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Section 7.03. Headings. The headings used in this trust agreement are
inserted for reference purposes only and shall not be deemed to limit or affect
in any way the meaning or interpretation of any of the terms or provisions of
this trust agreement.
Section 7.04. Controlling Law. Except to the extent superseded by the laws
of the United States of America, the laws of the State of Idaho (other than the
choice of law principles thereof) shall govern all questions arising with
respect to this trust agreement and the interpretation and validity of its
provisions.
Section 7.05. Third-Party Inquiries. No person dealing with the Trustee
shall be obliged to see to the application of any money paid or property
delivered to the Trustee, or as to whether or not the Trustee has acted pursuant
to any authorization required or set forth in this trust agreement.
Section 7.06. Courts; Arbitration. The Employer agrees that by the
establishment of this Trust it hereby foregoes any judicial review of
certification by the Recordkeeper as to the benefit payable to any person
hereunder. If a dispute arises as to the amounts or timing of any such benefits
or the persons entitled thereto under the Plan or this Trust, the Employer
agrees that such dispute shall be resolved by binding arbitration proceedings
initiated in accordance with the rules of the American Arbitration Association
and that the results of such proceeds shall be conclusive and shall not be
subject to judicial review. It is expressly understood and agreed that pending a
resolution of any such dispute, payment of benefits shall be made and continued
by the Trustee in accordance with the certification by the Recordkeeper and that
the Trustee and the Recordkeeper shall have no liability with respect to such
payments. The Employer agrees to pay the entire cost of any arbitration or legal
proceeding, including the legal fees of the Trustee, the Recordkeeper and the
Participant or the beneficiary of any deceased Participant regardless of the
outcome of any such proceeding or the party which initiated any such proceeding,
and until so paid the expenses thereof shall be a charge on and lien against the
Trust Fund. The Employer agrees to pay the foregoing costs as such costs are
incurred, but not more frequently than on a monthly basis. Nothing in this
Section shall be construed to in any way limit any right or remedy a Participant
or beneficiary may have under the Plan.
Section 7.07. Addresses For Communications. All communications, directions,
notices and requests required or permitted to be given hereunder shall be in
writing and shall be given to the following:
If to Employer, to: Albertson's, Inc.
250 Parkcenter Blvd.
Boise, Idaho 83726
Attention: Corporate Secretary
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<PAGE>
If to Trustee, to: IBJ Whitehall Bank & Trust Company
One State Street
New York, New York 10004
Attention: Nicholas J. Cascio
and
Hughes, Hubbard and Reed
One Battery Park Plaza
New York, New York 10004-1482
Attention: Gilson Gray, Esq.
If to Recordkeeper, to: Management Compenstion Group, Northwest LLC
205 SE Spokane Street
Portland, Oregon 97202
Attention: David J. Taylor (or his successor
regarding Albertson's, Inc.)
If to a Participant or beneficiary of a deceased participant, to the last known
address of the Participant or beneficiary on the books and records of the
Employer, the Trustee or the Recordkeeper; provided, however, the Trustee shall
be entitled to rely on the latest available written notice from the Employer
regarding the names and addresses of such persons.
Either the Employer, the Recordkeeper or the Trustee shall have the right to
specify in writing in the manner above provided, another address to which
subsequent communications, directions, notices and requests to such party shall
be given. Any communications, directions, notices and requests given hereunder
shall be deemed to have been given as of the date received in writing by the
party to whom given.
Section 7.08. Waiver of Notice. Any notice required by this trust agreement
may be waived by the person entitled thereto.
Section 7.09. Accounting Period. The annual accounting period for this
Trust shall be the Trust Year.
Section 7.10. Interest in the Trust Fund. No employee of the Employer, no
dependent or personal representative of an employee of the Employer or person
claiming through such an employee and no beneficiary under the Plan shall have
any right, title or interest in the Trust or Trust Fund at any time prior to
satisfaction of all conditions to a right to payment to such beneficiary from
the Trust pursuant to the terms of the Plan and Trust. No benefit, right or
interest, if any exists, is transferable or assignable by any employee,
dependent or beneficiary and any attempt to effect a transfer or assignment is
void. No portion of the Trust Fund shall be subject to attachment, garnishment,
levy of execution, bankruptcy proceedings or other legal process of any creditor
of any of the Participants or beneficiaries. Notwithstanding any other provision
of this Trust to the contrary, the Trust Fund shall at all times remain subject
to claims of creditors of the Employer in the event the Employer is adjudicated
to be bankrupt or insolvent as provided herein.
Section 7.11. Counterparts. This trust agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which shall together constitute only one agreement.
IN WITNESS WHEREOF, the parties hereto have caused this trust agreement to
be executed the day and year first above written.
EMPLOYER:
ALBERTSON'S, INC.
/s/ Thomas R. Saldin
By: Thomas R. Saldin
Its: Executive Vice President and
General Counsel
TRUSTEE:
IBJ WHITEHALL BANK & TRUST COMPANY
/s/ Nicholas J. Cascio
By: Nicholas J. Cascio
Its: Vice President
RECORDKEEPER:
MANAGEMENT COMPENSATION GROUP, NORTHWEST, LLC
/s/ David J. Taylor
By: David J. Taylor
Its: Vice President, Account Executive
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<PAGE>
EXHIBIT "A"
FORM OF IRREVOCABLE LETTER OF CREDIT
[Date of Issuance]
IBJ Whitehall Bank & Trust Company, as Trustee
[Address]
Attention: [ ]
Dear Ladies and Gentlemen:
At the request and for the account of Albertson's, Inc., a Delaware
corporation ("Albertson' s"), we hereby establish in your favor (and in favor of
your successors, the terms "you" and "yours" referring to you and any
successor), as Trustee under the Albertson's, Inc. 2000 Deferred Compensation
Trust established pursuant to the trust agreement between Albertson's,
Management Compensation Group, Northwest, LLC, a Delaware limited liability
company, and IBJ Whitehall Bank & Trust Company, dated [ ] (the "Trust
Agreement"), this Irrevocable Letter of Credit No. [ ] in the amount of U.S. $[
] (the "Maximum Amount"). This Letter of Credit is effective immediately and
shall expire at the close of banking business at our office at [address] on
[expiration date] unless terminated earlier, or extended, in either case in
accordance with the provisions hereof. The amount of this Letter of Credit will
be reduced from time to time as hereinafter provided.
Funds under this Letter of Credit are available to you, in multiple,
partial drawings or as a single lump sum drawing hereunder, against delivery to
us of the following documents presented (which presentation may be made by
facsimile transmission) on a Business Day (as hereinafter defined) at our letter
of credit department at [insert address] or at [insert telecopier number], to
the specific attention of [ ] or at any other office or telecopier number which
may be designated by us by written notice delivered to you:
1. A sight draft in the form of Annex I hereto, appropriately completed
and drawn on us bearing the number of this Letter of Credit and in an amount not
in excess of the Maximum Amount, less the amount of any sight draft previously
presented under this Letter of Credit.
2. Your signed certificate in the form of Annex II, appropriately
completed.
3. A copy of this Letter of Credit.
For purposes of this Letter of Credit, the term "Business Day" shall
mean a day on which our letter of credit department specified above as the place
for presentation of documents hereunder is open for business.
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<PAGE>
This Letter of Credit shall be payable at sight on first demand without
prior notice being given to Albertson's by either you or us. Payment of any
sight draft shall be made in immediately available funds at or before the close
of business on the Business Day next following the day of your presentation of
documents, if such presentation is made prior to 2:00 p.m., New York City time,
on any Business Day.
The amount available under this Letter of Credit shall be automatically
reduced by the amount of each draft paid hereunder (effective on the date of
payment of such draft).
Upon the earlier to occur of any one of the following events: (i) the
surrender to us by you of this Letter of Credit for cancellation, and (ii) the
expiration date stated in the initial paragraph hereof, this Letter of Credit
shall automatically expire.
Communications with respect to this Letter of Credit shall be addressed
to us at [address], specifically referring to the number of this Letter of
Credit.
We hereby agree that drafts drawn and presented in compliance with this
Letter of Credit will be paid in accordance with the terms hereof.
It is a condition of this Letter of Credit that it will be
automatically extended for periods of one year from the then relevant expiry
date, unless sixty (60) days prior to that relevant expiry date we notify you by
registered mail, return receipt requested, that we elect not to extend this
Letter of Credit for any additional period.
We hereby agree that all notices to you under this Letter of Credit
will be sent to you by registered mail, return receipt requested, at the address
noted above, or such other address as from time to time specified by you in
writing.
To the extent not inconsistent with the express terms hereof, this
Letter of Credit shall be governed by, and construed in accordance with, the
terms of the Uniform Customs and Practices for Documentary Credits (1983
Revision) International Chamber of Commerce, Publication No. 400 (the "UCP").
This Letter of Credit shall be deemed to be issued under the laws of the State
of [State] (including the Uniform Commercial Code as in effect in said State),
and as to matters not governed by the UCP, shall be governed by, and construed
in accordance with, the laws of the State of [State].
Very truly yours,
[Name of Bank]
By:
Vice President
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<PAGE>
ANNEX I
SIGHT DRAFT
[Date]
For Value Received, pay on demand (by wire transfer in same day funds)
to Account No. [insert number of account to which payment is to be made and name
and address of bank] [ ] United States Dollars ($[ ]).
Charge to Account of (name of account party] Irrevocable Letter of
Credit No. [ ]
To: [Name of Bank]
[Address]
Attention: [ ],
Letter of Credit Operations
[Name of beneficiary under
above-captioned Letter of
Credit]
By:
Title: [Vice President,
Assistant Vice President, Senior
Trust Officer or Trust Officer]
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<PAGE>
ANNEX II
CERTIFICATE
The undersigned hereby certifies to [ ], with reference to the Irrevocable
Letter of Credit No. [ ] (the "Letter of Credit") in favor of IBJ Whitehall Bank
& Trust Company, as trustee (the "Trustee"), as follows (capitalized terms not
otherwise defined in this Certificate shall have the meanings given them in the
Letter of Credit):
1. The person signing this Certificate on behalf of the Trustee is a duly
authorized representative or Attorney-in-Fact or an officer of the Trustee duly
authorized to execute this Certificate.
2. The amount of the sight draft presented with this Certificate does not
exceed the Maximu Amount and is authorized by the Trust
Agreement.
IBJ Whitehall Bank & Trust Company as Trustee
By:
------------------------------------------
Authorized Representative Officer, or
Attorney-in-Fact
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<PAGE>
EXHIBIT "B"
REAL ESTATE LEASES
NONE
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<PAGE>
EXHIBIT "C"
ACTUARIAL ASSUMPTIONS
The calculation of the Value of Accrued Benefits of a Participant or
beneficiary of a deceased Participant under the Plan shall be performed based on
the Investment Option selected by the Participant as a measurement mechanism for
the Rate of Return.
A. Moody's Investment Option
1. Interest Crediting Rate:
For Participants who have selected Moody's as their Investment
Option for all or a portion of their balance, the value of the Accrued
Benefits shall be performed using the Participant's appropriate Account
Balance under the Plan as of the date of calculation, increased at the
interest crediting rate compounded annually to his assumed payment date
(based on his assumed benefit commencement date and the benefit option
elected), decreased at the discount rate compounded annually, and
subject to the following:
(a) During Employment with the Employer. The interest rate used to
credit a Participant's account balance for the period of
employment with the Employer beginning on the date of calculation
and ending on the Participant's assumed payment date shall be the
annual "corporate bond yield average" with respect to "average
corporations" as determined from the Moody's Bond Record
published by Moody's Investors Service, Inc. closest to the
calculation date ("Moody's"), plus 3 percent. Notwithstanding the
foregoing, the interest crediting rate used to credit the account
balance of a Participant who has separated from service and
according to the provisions of the Plan is not eligible for
Moody's, plus 3 percent, shall be Moody's, without further
adjustment.
(b) During Periods not Employed with the Employer. The interest rate
used to credit a Participant's account balance for the period of
non-employment with the Employer beginning on the date of
calculation and ending on the Participant's assumed payment date
shall be the "corporate bond yield average" with respect to
"average corporations" as determined from the Moody's Bond Record
published by Moody's Investors Service, Inc. for the five-year
period immediately preceding the calculation date ("Moody's
Average"), plus 3 percent. Notwithstanding the foregoing, the
interest crediting rate used to credit the account balance of a
Participant who has separated from service and according to the
provisions of the Plan is not eligible for Moody's Average, plus
3 percent, shall be Moody's Average, without further adjustment.
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<PAGE>
2. Discount Rate:
The rate used to discount the Participant's assumed benefit
payments from the assumed payment date to the calculation date shall be
the rate credited to the most recently issued five-year U.S. Treasury
notes as of the calculation date.
3. Assumed Benefit Commencement Date:
The Participant's assumed benefit commencement date shall be
the later of (1) and (2):
(a) Age 62.
(b) Five years from date of calculation.
Provided, under no circumstances shall a Participant's assumed
benefit commencement date be later than age 65.
4. Timing of Payments and Contributions:
All payments to be paid to the Participant shall be assumed
paid at the end of the year. All contributions deferred by the
Participant shall be assumed contributed as of the beginning of each
year.
5. Mortality:
No mortality shall be assumed.
B. Investment Options Other Than Moody's
For Participants with Account Balances in which they have selected an
Investment Option other than the applicable Moody's, the Value of the Accrued
Benefits shall be one hundred ten percent (110%) of the Participant's Account
Balance on the date of calculation.
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EXHIBIT "D"
TRUST PROPERTY
$----------
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<PAGE>
EXHIBIT "E"
FORM OF CERTIFICATE TO THE TRUSTEE
CERTIFICATE
[Date]
To: [Name and Address of the Trustee]
Ladies and Gentlemen:
1. The undersigned, a duly authorized officer of [Recordkeeper] (in such
capacity the "Recordkeeper"), as Recordkeeper under that certain Albertson's,
Inc. 2000 Deferred Compensation Trust (the "Trust"), dated the ___ day of
______________ , 1999, between Albertson's, Inc., IBJ Whitehall Bank & Trust
Company, as trustee, and Management Compensation Group, Northwest, LLC as
recordkeeper, HEREBY CERTIFIES as follows with respect to Section 4.04(a) of the
Trust.
2. Benefits have become payable under the Albertson's, Inc. 2000 Deferred
Compensation Plan.
3. The name, address and social security number of the recipient of such
benefits are as follows:
Name:
Address:
Social Security Number:
4. The amount and terms of payment of such benefits are as follows:
Amount:
Terms of Payment: [Specify payment dates, number of
payments, and any other relevant information]
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this [ ] day of [ ], [ ].
[Recordkeeper]
By:
-----------------------------------
Name:
Title:
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EXHIBIT "F"
INDIVIDUALS ELIGIBLE TO BE PARTICIPANTS
[TO BE SUPPLIED]
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<PAGE>
EXHIBIT "G"
FORM OF ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, dated as of _______________, ____ is entered
into between Albertson's, Inc. ("Assignor"), a Delaware corporation, and IBJ
Whitehall Bank & Trust Company ("Assignee"), the Trustee of the Albertson's,
Inc. 2000 Deferred Compensation Plan Trust (the "Trust").
WHEREAS, pursuant to the trust agreement (the "Trust Agreement"), dated as
of _________________, 1999, among Assignee and IBJ Whitehall Bank & Trust
Company, a New York banking corporation, as Trustee of the Trust, the Assignor
is obligated to assign its ownership interest in any insurance policies held in
the Trust upon the occurrence of a Change in Control or Potential Change in
Control (as defined in the Trust Agreement);
WHEREAS, a determination has been made that a Change in Control or
Potential Change in Control has occurred, effective as of [ ];
WHEREAS, the Assignor has retained ownership of certain insurance policies
held in the Trust, a list of which policies is provided in the attached Exhibit
A (the "Insurance Policies"); and
WHEREAS, Assignor is obligated to assign to Assignee and Assignee is
obligated to accept an assignment of Assignor's ownership in the Insurance
Policies.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. Assignment and Assumption. Assignor hereby assigns to Assignee all of
Assignor's rights, options or privileges of ownership under the Insurance
Policies. Assignee hereby accepts such assignment and assumes all of Assignor's
rights, options or privileges of ownership under the Insurance Policies.
2. Obligation for Premiums. Nothing in this Assignment Agreement shall be
interpreted as (i) obligating the Assignee in any way not specifically provided
in the Trust Agreement to pay any Premium Payment Obligation or Additional
Premium Payment Obligation (as defined in the Trust Agreement), or (ii)
modifying in any way the Assignor's sole and continuing obligation to pay any
Premium Payment Obligation or Additional Premium Payment Obligation, as provided
in the Trust Agreement.
3. Successors and Assigns. This Assignment Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the parties hereto and their
respective successors and assigns.
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4. Amendment. This Assignment Agreement shall be irrevocable and
may not hereafter be amended in whole or in part by the parties.
ALBERTSON'S, INC.
By:
Its:
IBJ WHITEHALL BANK & TRUST COMPANY
By:
Its:
Page 42
Exhibit 10.28
[5-Year Agreement] EXECUTION COPY
================================================================================
CREDIT AGREEMENT
Dated as of March 22, 2000
among
ALBERTSON'S, INC.,
BANK OF AMERICA, N.A.
as Administrative Agent,
WACHOVIA BANK, N.A.
as Syndication Agent,
BANK ONE, NA,
as Documentation Agent,
FIRST UNION NATIONAL BANK,
UNION BANK OF CALIFORNIA, N.A.,
U.S. BANK NATIONAL ASSOCIATION, and
WELLS FARGO BANK, N.A.,
as Senior Managing Agents,
FIRST SECURITY BANK, N.A. and
THE NORTHERN TRUST COMPANY,
as Managing Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged by
Banc of America Securities LLC,
Sole Lead Arranger
and Sole Book Manager
================================================================================
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS 1
1.01 Certain Defined Terms...............................................1
1.02 Other Interpretive Provisions......................................14
1.03 Accounting Principles..............................................15
ARTICLE II THE CREDITS........................................................16
2.01 Amounts and Terms of Commitments...................................16
2.02 Loan Accounts......................................................16
2.03 Procedure for Committed Borrowing..................................16
2.04 Conversion and Continuation Elections for Committed Borrowings.....17
2.05 Bid Borrowings.....................................................19
2.06 Procedure for Bid Borrowings.......................................19
2.07 Swingline Loans....................................................22
2.08 Voluntary Termination or Reduction of Commitments..................24
2.09 Optional Prepayments...............................................25
2.10 Repayment..........................................................25
2.11 Interest...........................................................26
2.12 Fees...............................................................27
2.13 Computation of Fees and Interest...................................27
2.14 Payments by the Company............................................28
2.15 Payments by the Banks to the Agent.................................28
2.16 Sharing of Payments, Etc...........................................29
2.17 Revolving Termination Date Extensions..............................30
2.18 Optional Increase in Commitments...................................30
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY............................32
3.01 Taxes..............................................................32
3.02 Illegality.........................................................34
3.03 Increased Costs and Reduction of Return............................34
3.04 Funding Losses.....................................................35
3.05 Inability to Determine Rates.......................................36
3.06 Certificates of Banks and Designated Bidders.......................37
3.07 Base Rate Committed Loans Substituted for Affected Offshore Rate
Committed Loans....................................................37
3.08 Reserves on Offshore Rate Committed Loans..........................37
3.09 Substitution of Banks..............................................37
3.10 Survival...........................................................38
ARTICLE IV CONDITIONS PRECEDENT...............................................38
4.01 Conditions of Initial Loans........................................38
4.02 Conditions to All Borrowings.......................................40
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ARTICLE V REPRESENTATIONS AND WARRANTIES......................................40
5.01 Corporate Existence and Power......................................40
5.02 Subsidiaries.......................................................41
5.03 Corporate and Governmental Authorization; No Contravention.........41
5.04 Binding Effect.....................................................41
5.05 Litigation.........................................................41
5.06 ERISA Compliance...................................................41
5.07 Use of Proceeds; Margin Regulations................................41
5.08 Title to Properties; Liens.........................................41
5.09 Taxes..............................................................41
5.10 Financial Information..............................................42
5.11 Environmental Matters..............................................42
5.12 Regulated Entities.................................................42
5.13 Insurance..........................................................42
5.14 Full Disclosure....................................................43
5.15 Year 2000..........................................................43
ARTICLE VI AFFIRMATIVE COVENANTS..............................................43
6.01 Information........................................................43
6.02 Conduct of Business and Maintenance of Existence...................45
6.03 Maintenance of Property............................................45
6.04 Insurance..........................................................45
6.05 Payment of Obligations.............................................45
6.06 Compliance with Laws...............................................45
6.07 Inspection of Property, Books and Records..........................45
6.08 Use of Proceeds....................................................46
6.09 Further Assurances.................................................46
ARTICLE VII NEGATIVE COVENANTS................................................46
7.01 Limitation on Liens................................................46
7.02 Disposition of Assets..............................................47
7.03 Limitation on Subsidiary Indebtedness and Swap Contracts...........48
7.04 Use of Proceeds....................................................48
7.05 Minimum Consolidated Tangible Net Worth............................49
ARTICLE VIII EVENTS OF DEFAULT................................................49
8.01 Event of Default...................................................49
8.02 Remedies...........................................................51
8.03 Rights Not Exclusive...............................................51
ARTICLE IX THE AGENT 51
9.01 Appointment and Authorization; "Agent."............................51
9.02 Delegation of Duties...............................................52
9.03 Liability of Agent.................................................52
9.04 Reliance by Agent..................................................52
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9.05 Notice of Default..................................................53
9.06 Credit Decision....................................................53
9.07 Indemnification of Agent...........................................53
9.08 Agent in Individual Capacity.......................................54
9.09 Successor Agent....................................................54
9.10 Withholding Tax....................................................54
9.11 Co-Agents..........................................................56
ARTICLE X MISCELLANEOUS.......................................................56
10.01 Amendments and Waivers.............................................56
10.02 Notices............................................................57
10.03 No Waiver; Cumulative Remedies.....................................57
10.04 Costs and Expenses.................................................57
10.05 Company Indemnification............................................58
10.06 Payments Set Aside.................................................58
10.07 Binding Effect; Successors and Assigns.............................58
10.08 Assignments, Participations, Etc...................................59
10.09 Designated Bidders.................................................60
10.10 Confidentiality....................................................61
10.11 Set-off............................................................61
10.12 Notification of Addresses, Lending Offices, Etc....................62
10.13 Counterparts.......................................................62
10.14 Severability.......................................................62
10.15 No Third Parties Benefited.........................................62
10.16 Governing Law and Jurisdiction.....................................62
10.17 Waiver of Jury Trial...............................................63
10.18 Entire Agreement...................................................63
ANNEXES
Annex I Pricing Grid
SCHEDULES
Schedule 2.01 Commitments and Pro Rata Shares
Schedule 10.02 Payment Offices; Addresses for Notices; Lending
Offices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Counsel to the Company
Exhibit E Form of Assignment and Acceptance
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Exhibit F Form of Invitation for Competitive Bids
Exhibit G Form of Competitive Bid Request
Exhibit H Form of Competitive Bid
Exhibit I Form of Committed Loan Note
Exhibit J Form of Bid Loan Note
Exhibit K Form of Designation Agreement
Exhibit L Form of Commitment Increase Agreement
Exhibit M Form of New Bank Agreement
iv
<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of March 22, 2000, among
Albertson's, Inc., a Delaware corporation (the "Company"), the several financial
institutions from time to time party to this Agreement (individually, a "Bank"
and, collectively, the "Banks"), Bank One, NA, as documentation agent (the
"Documentation Agent"), Wachovia Bank, N.A., as syndication agent (in such
capacity, the "Syndication Agent"), First Security Bank, N.A. and The Northern
Trust Company, as managing agents (in such capacity, the "Managing Agents"),
First Union National Bank, Union Bank Of California, N.A., U.S. Bank National
Association and Wells Fargo Bank, N.A., as senior managing agents (in such
capacity, the "Senior Managing Agents"), and Bank of America, N.A., as Swingline
Bank and as administrative agent for itself, the Designated Bidders and the
Banks (in such capacity, the "Agent").
WHEREAS, the Banks have agreed to make available to the Company a
revolving credit and bid loan facility with a swingline subfacility, upon the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I.........
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the following meanings
when used herein (including in the recitals hereof):
"Absolute Rate" has the meaning specified in subsection
2.06(c).
"Absolute Rate Auction" means a solicitation of Competitive
Bids setting forth Absolute Rates pursuant to Section 2.06.
"Absolute Rate Bid Loan" means a Bid Loan that bears interest
at a rate determined with reference to the Absolute Rate.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.
"Agent" means BofA in its capacity as administrative agent for
the Banks and the Designated Bidders hereunder, and any successor agent
arising under Section 9.09.
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"Agent-Related Persons" means BofA and any successor agent
arising under Section 9.09, together with their respective Affiliates
(including, in the case of BofA, the Lead Arranger), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Payment Office" means the address for payments set
forth on Schedule 10.02 or such other address as the Agent may from
time to time specify.
"Aggregate Commitment" means the combined Commitments of the
Banks.
"Agreement" means this Credit Agreement.
"Applicable Fee Amount" means with respect to the fees payable
hereunder, the amount set forth opposite the indicated Indebtedness
Rating or Facility Usage Percentage, as the case may be, below the
headings "Facility Fee" and "Utilization Fee" in the pricing grid set
forth on Annex I in accordance with the parameters for calculations of
such amount also set forth on Annex I.
"Applicable Margin" means, with respect to Base Rate Committed
Loans and Offshore Rate Committed Loans, the amount set forth opposite
the indicated Indebtedness Rating below the heading "Base Rate Spread"
or "Offshore Rate Spread" in the pricing grid set forth on Annex I in
accordance with the parameters for calculations of such amounts also
set forth on Annex I.
"Assignee" has the meaning specified in subsection 10.08(a).
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel.
"Bank" has the meaning specified in the introductory clause
hereto. References to the "Banks" shall include the Swingline Bank in
its capacity as such unless the context otherwise clearly requires. For
purposes of clarification only, to the extent that the Swingline Bank
may have any rights or obligations in addition to those of the Banks
due to its status as Swingline Bank, its status as such will be
specifically referenced.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C.ss.101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest
in effect for such day as publicly announced from time to time by BofA
as its "prime rate." The "prime rate" is a rate set by BofA based upon
various factors including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such
announced rate. Any change in the prime rate announced by BofA shall
take effect at the opening of business on the day specified in the
public announcement of such change.
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"Base Rate Committed Loan" means a Committed Loan that bears
interest based on the Base Rate.
"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or
Multiemployer Plan and which is maintained or otherwise contributed to
by any member of the ERISA Group.
"Bid Borrowing" means a borrowing of Loans under Article II
consisting of one or more Bid Loans made to the Company on the same day
by the Bid Loan Banks and Designated Bidders participating in such
borrowing.
"Bid Loan" means an Absolute Rate Bid Loan by a Bid Loan Bank
or a Designated Bidder to the Company under Section 2.05.
"Bid Loan Bank" means each Bank party hereto.
"Bid Loan Note" has the meaning specified in Section 2.02.
"BofA" means Bank of America, N.A., a national banking
association.
"Borrowing" means (i) a Committed Borrowing or a Bid Borrowing
and (ii) a borrowing hereunder consisting of a Swingline Loan (or
Swingline Loans) made to the Company on the same day by the Swingline
Bank, and, other than in the case of Base Rate Committed Loans, having
the same Interest Period.
"Borrowing Date" means any date on which a Committed Borrowing
occurs under Section 2.03 or a Bid Borrowing occurs under Section 2.06.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City or San Francisco
are authorized or required by law to close and, if the applicable
Business Day relates to any Offshore Rate Committed Loan, means such a
day on which dealings are carried on in the applicable offshore Dollar
interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Change of Control" means any person or group of persons
(within the meaning of Section 13 or 14 of the Exchange Act) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the SEC under said Act) of 40% or more of the
outstanding shares of common stock of the Company; or, during any
period of twelve consecutive calendar months, individuals who were
directors of the Company on the first day of such period shall cease to
constitute a majority of the board of directors of the Company.
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"Closing Date" means the date occurring on or before March 29,
2000 on which all conditions precedent set forth in Section 4.01 are
satisfied or waived by all Banks (or, in the case of subsection
4.01(e), waived by the Person entitled to receive such payment).
"Co-Agents" means each of the Syndication Agent, Documentation
Agent, Senior Managing Agents and Managing Agents, in its respective
capacity as a syndication agent, documentation agent, senior managing
agents or managing agent hereunder.
"Code" means the Internal Revenue Code of 1986.
"Commitment" as to each Bank, has the meaning specified in
Section 2.01.
"Committed Borrowing" means a borrowing of Loans under Article
II consisting of Committed Loans of the same Type made on the same day
by the Banks ratably according to their respective Pro Rata Shares and,
in the case of Offshore Rate Committed Loans, having the same Interest
Periods.
"Committed Loan" means a Loan made by a Bank to the Company
under Section 2.01 or a Swingline Loan made by the Swingline Bank under
Section 2.07.
"Committed Loan Note" has the meaning specified in Section
2.02.
"Company's 1998 Form 10-K" means the Company's Annual Report
on Form 10-K for the fiscal year ended January 28,1999, as filed with
the SEC pursuant to the Exchange Act.
"Competitive Bid" means an offer by a Bid Loan Bank or a
Designated Bidder to make a Bid Loan in accordance with subsection
2.06(c).
"Competitive Bid Request" has the meaning specified in
subsection 2.06(a).
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C.
"Consolidated Subsidiary" means at any date any Subsidiary or
other Person the accounts of which would be consolidated with those of
the Company in its consolidated financial statements as of such date.
"Consolidated Tangible Net Worth" means at any date (a) the
consolidated stockholders' equity of the Company and its Consolidated
Subsidiaries as reflected on the Company's consolidated balance sheet,
plus their consolidated deferred investment tax credits as reflected on
the Company's consolidated balance sheet, minus (b) their consolidated
Intangible Assets, all determined as of such date. For purposes of this
definition, "Intangible Assets" means the amount (to the extent
reflected in determining such consolidated stockholders' equity) of (i)
all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business made
within twelve months after the acquisition of such business) subsequent
to January 28, 1999 in the book value of any asset owned by the Company
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or a Consolidated Subsidiary, (ii) all investments in unconsolidated
Subsidiaries and all equity investments in Persons which are not
Subsidiaries and (iii) all unamortized debt discount and expense,
unamortized deferred charges (except deferred income taxes), goodwill,
patents, trademarks, service marks, trade names, copyrights,
organization or developmental expenses and other intangible items
(except leasehold improvements and liquor licenses).
"Conversion/Continuation Date" means any date on which, under
Section 2.04, the Company (a) converts Committed Loans of one Type to
another Type, or (b) continues as Committed Loans of the same Type, but
with a new Interest Period, Committed Loans having Interest Periods
expiring on such date.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"Designated Bidder" means an Affiliate of a Bid Loan Bank that
is a Person described in clause (c)(i) or (ii) of the definition of
"Eligible Assignee" and that has become a party hereto pursuant to
Section 10.09.
"Designation Agreement" means a Designation Agreement entered
into by a Bank and a Designated Bidder and accepted by the Agent, in
substantially the form of Exhibit K.
"Documentation Agent" means Bank One, NA in its capacity as
documentation agent hereunder.
"Dollars", "dollars" and "$" each mean lawful money of the
United States.
"Eligible Assignee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $250,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"),
or a political subdivision of any such country, and having a combined
capital and surplus of at least $250,000,000, provided that such bank
is acting through a branch or agency located in the United States; and
(c) a Person that is primarily engaged in the business of commercial
lending and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (iii) a Person of which a
Bank is a Subsidiary.
"Environmental Laws" means all federal, state, local or
foreign laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative orders, directed
duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authorities, in each case relating to
the environment or to emissions, discharges or releases of pollutants,
contaminants, petroleum or petroleum products, chemicals or industrial,
toxic or hazardous substances or wastes into the environment including
ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants,
Page 5
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petroleum or petroleum products, chemicals or industrial, toxic or
hazardous substances or wastes or the clean-up or other remediation
thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA Group" means the Company and all members of a
controlled group of corporations and all trades or businesses (whether
or not incorporated) under common control which, together with the
Company, are treated as a single employer under Section 414 of the
Code.
"Event of Default" means any of the events or circumstances
specified in Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934.
"Excluded Taxes" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees, withholding or
similar charges and all liabilities with respect thereto, other than
those taxes included in the definition of Taxes.
"Existing Credit Facilities" means (i) the Credit Agreement
dated as of March 30, 1999, among the Company, BofA as agent, and the
other financial institutions party thereto, and (ii) the Credit
Agreement dated as of October 5, 1994, among the Company, BofA as
co-agent, Morgan Guaranty Trust Company of New York as agent, and the
other financial institutions party thereto.
"Facility Period" means the period from the Closing Date to
the Revolving Termination Date, or, if earlier, the date of termination
of the Aggregate Commitment in its entirety and the repayment of all
Loans outstanding hereunder.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York with respect to the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is
not so published with respect to any such preceding Business Day, the
rate for such day will be the arithmetic mean as determined by the
Agent of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each of
three leading brokers of Federal funds transactions in New York City
selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.12(a).
"Foundation Stock Agreement" means the agreement dated May 21,
1997, between the Company and the J.A.and Kathryn Albertson Foundation,
Inc. and any successor agreement.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
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"GAAP" means generally accepted accounting principles as in
effect from time to time.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, with respect to any obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any such
primary obligation, or to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency
or any balance sheet item, level of income or financial condition of
the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect
thereof. The amount of any Guaranty Obligation shall be deemed equal to
the stated or determinable amount of the primary obligation in respect
of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect
thereof.
"Increased Commitment Date" has the meaning specified in
subsection 2.18(b).
"Indebtedness" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations evidenced by
notes, bonds, debentures or similar instruments, (c) all obligations
issued, undertaken or assumed as the deferred purchase price of
property or services, (d) all obligations with respect to capital
leases (but not obligations with respect to operating leases), (e) all
obligations of such Person to purchase securities or other property
which arise out of or in connection with the sale of the same or
substantially similar securities or property, (f) all non-contingent
obligations (and, for purposes of Section 7.01 and the definition of
Material Indebtedness all contingent obligations) of such Person to
reimburse any bank or other Person in respect of amounts paid under any
Surety Instrument, (g) all indebtedness of others of the type referred
to in clauses (a) through (f) secured by a Lien on any asset of such
Person, whether or not such indebtedness is assumed by such Person, (h)
all Guaranty Obligations of such Person in respect of indebtedness of
others of the type referred to in clauses (a) through (f), and (i) all
preferred stock of such Person redeemable at the option of the holder
during the Facility Period. Insurance reserves, tax reserves and
interest thereon, salaries payable, taxes payable, dividends payable,
trade accounts payable arising in the ordinary course of business,
deferred investment tax credits, deferred compensation, deferred rents
payable under non-capital leases, benefits payable, unearned income and
other similar liabilities shall not constitute "Indebtedness."
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"Indebtedness Rating" has the meaning set forth in Annex I.
"Indemnified Liabilities" has the meaning specified in Section
10.05.
"Indemnified Person" has the meaning specified in Section
10.05.
"Independent Auditor" has the meaning specified in subsection
6.01(a).
"Insolvency Proceeding" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors,
or other similar arrangement in respect of its creditors generally or
any substantial portion of its creditors, in either case undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy
Code.
"Interest Payment Date" means, (i) as to any Loan other than a
Base Rate Committed Loan, the last day of each Interest Period
applicable to such Loan, (ii) as to any Base Rate Committed Loan which
is not a Swingline Loan, or any Bid Loan, the last day of each calendar
quarter and the Revolving Termination Date and (iii) as to any Base
Rate Committed Loan which is a Swingline Loan, the Business Day on
which the principal of such Swingline Loan is repaid or as otherwise
provided in Section 2.07(e); provided, however, that (a) if any
Interest Period for an Offshore Rate Committed Loan exceeds three
months, the date that falls three months after the beginning of such
Interest Period and after each Interest Payment Date thereafter is also
an Interest Payment Date, and (b) as to any Bid Loan, such other
intervening date prior to the maturity thereof as may be specified by
the Company and agreed to by the applicable Bid Loan Bank or Designated
Bidder in the applicable Competitive Bid shall also be Interest Payment
Dates.
"Interest Period" means, (a) as to any Offshore Rate Committed
Loan, the period commencing on the Borrowing Date of such Loan, or on
the Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Committed Loan, and ending on the date
one, two, three or six months thereafter as selected by the Company in
its Notice of Borrowing, Notice of Conversion/Continuation or
Competitive Bid Request, as the case may be; and (b) as to any Absolute
Rate Bid Loan, a period of not less than 7 days and not more than 183
days as selected by the Company in the applicable Competitive Bid
Request;
provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless, in the case of
an Offshore Rate Committed Loan, the result of such extension
would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the
preceding Business Day;
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(ii) any Interest Period pertaining to an Offshore
Rate Committed Loan that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iii)no Interest Period for any Loan shall extend
beyond the Revolving Termination Date.
"Invitation for Competitive Bids" means an Invitation for
Competitive Bids, substantially in the form of Exhibit F.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Lead Arranger" means Banc of America Securities LLC, a
Delaware limited liability company, in its capacity as Sole Lead
Arranger and Sole Book Manager.
"Lending Office" means, (i) as to any Bank, the office or
offices of such Bank specified as its "Lending Office" or "Domestic
Lending Office" or "Offshore Lending Office", as the case may be, on
Schedule 10.02; (ii), as to any Designated Bidder, the office or
offices of such Designated Bidder specified as its "Lending Office" in
its Designation Agreement; and (iii) such other office or offices as
such Bank or Designated Bidder may from time to time notify to the
Company and the Agent.
"Lien" means with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect
of such asset. For the purposes of this Agreement, the Company or any
Subsidiary shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" means an extension of credit by a Bank or a Designated
Bidder to the Company in the form of a Revolving Loan or a Swingline
Loan under Article II, and may be a Committed Loan or a Bid Loan.
"Loan Documents" means this Agreement, the Notes, any
Commitment Increase Agreement (as defined in Section 2.18), any New
Bank Agreement (as defined in Section 2.18), the Fee Letter and all
other documents delivered to the Agent or any Bank or Designated Bidder
in connection herewith.
"Majority Banks" means at any time Banks then having more than
50% of the Aggregate Commitment or, if the Commitments have been
terminated, Banks then holding more than 50% of the then aggregate
unpaid principal amount of the Credit Exposure. As used in this
definition, the "Credit Exposure" of any Bank means (i) with respect to
any outstanding Revolving Loans or Term Loans, the aggregate
outstanding principal amount of the Loans made by such Bank, and (ii)
with respect to any outstanding Swingline Loans, the participating
interest therein equal to such Bank's Pro Rata Share thereof. For
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purposes of this definition, each Bank shall be deemed to hold all
outstanding Bid Loans of such Bank's Designated Bidders.
"Managing Agents" means each of First Security Bank, N.A. and
The Northern Trust Company in its capacity as a managing agent
hereunder.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.
"Markus-Stiftung Stock Agreement" means the agreement dated
February 15, 1980, among the Company, Theo Albrecht Stiftung (now known
as Markus-Stiftung) and Theo Albrecht, as amended by the First
Amendment thereto dated as of April 11, 1984, the Second Amendment
thereto dated as of September 25, 1989 and the Third Amendment thereto
dated as of December 5, 1994 and any successor agreement.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
assets, liabilities or financial condition of the Company and its
Consolidated Subsidiaries taken as a whole; (b) a material impairment
of the ability of the Company to perform under any Loan Document and to
avoid any Event of Default; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the
Company of any Loan Document.
"Material Indebtedness" means Indebtedness (other than the
Loans) of the Company and/or one or more of its Subsidiaries, arising
in one or more related or unrelated transactions, in an aggregate
outstanding principal amount exceeding $30,000,000.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $30,000,000.
"Minimum Amount" means (i) in respect of any Committed
Borrowing, conversion or continuation of Committed Loans, (a) in the
case of Base Rate Committed Loans (other than Swingline Loans), an
aggregate minimum amount of $5,000,000 or any integral multiple of
$1,000,000 in excess thereof, (b) in the case of Swingline Loans, an
aggregate minimum amount of $500,000 or any integral multiple of
$100,000 in excess thereof, and (c) in the case of Offshore Rate
Committed Loans, an aggregate minimum amount of $5,000,000 or any
integral multiple of $1,000,000 in excess thereof, and (ii) in the case
of any reduction of the Commitments under Section 2.08, or optional
prepayment of Committed Loans under Section 2.09, $5,000,000 or any
multiple of $1,000,000 in excess thereof.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA, to
which any member of the ERISA Group is then making or accruing an
obligation to make contributions or has within the preceding five plan
years made contributions, including for these purposes any Person which
ceased to be a member of the ERISA Group during such five year period.
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"Non-Continuing Bank" means, at any time, each Bank the
Revolving Termination Date of which has not been extended pursuant to
Section 2.17.
"Notes" means the Committed Loan Notes and the Bid Loan Notes.
"Notice of Borrowing" means a notice in substantially the form
of Exhibit A.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit B.
"Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document,
owing by the Company to any Bank, any Designated Bidder, the Swingline
Bank, the Agent, or any Indemnified Person, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with respect
to Offshore Rate Committed Loans comprising part of the same Borrowing:
(i) the rate of interest per annum determined by the Agent to
be the rate of interest per annum (rounded upwards to the nearest
1/100th of 1%) appearing on Dow Jones Page 3750 (as defined below) for
deposits in Dollars having a maturity comparable to such Interest
Period, at approximately 11:00 a.m. (London time) two Business Days
prior to the commencement of such Interest Period, subject to clause
(ii) below; or
(ii) if for any reason the rate is not available as provided
in the preceding clause (i) of this definition, the "Offshore Rate"
instead means the rate of interest per annum determined by the Agent to
be the arithmetic mean (rounded upward to the nearest 1/100th of 1%) of
the rates of interest per annum notified to the Agent by each Reference
Bank as the rate of interest at which deposits in Dollars in the
approximate amount of the Offshore Rate Committed Loan to be made,
continued or converted by such Reference Bank, and having a maturity
comparable to such Interest Period, would be offered to major banks in
the London interbank market or other applicable interbank market at
their request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period. As used in this
definition, "Dow Jones Page 3750" means the display designated as
"3750" on the Dow Jones Market Service (formerly known as the Telerate
Service) or any replacement page thereof.
"Offshore Rate Committed Loan" means any Committed Loan that
bears interest based on the Offshore Rate.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect
to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection
10.08(d).
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"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
any other entity of whatever nature.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the
Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii)
has at any time within the preceding five years been maintained, or
contributed to, by any Person which was at such time a member of the
ERISA Group for employees of any Person which was at such time a member
of the ERISA Group.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Bank's Commitment divided by the
Aggregate Commitment (or, if all Commitments have been terminated, the
aggregate principal amount of such Bank's Loans divided by the
aggregate principal amount of the Loans then held by all Banks). The
initial Pro Rata Share of each Bank is set forth opposite such Bank's
name in Schedule 2.01 under the heading "Pro Rata Share."
"Reference Bank" means each of BofA, Wachovia Bank, N.A. and
Bank One, NA.
"Replacement Bank" has the meaning specified in Section 3.09.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable
to or binding upon the Person or any of its property or to which the
Person or any of its property is subject.
"Responsible Officer" means, as to any Person, the chief
executive officer, the chief financial officer, or the treasurer or the
president of such Person, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of
such Person, or any other officer having substantially the same
authority and responsibility.
"Revolving Loan" has the meaning specified in Section 2.01.
"Revolving Termination Date" means the earlier to occur of:
(a) March 22, 2005 as the same may be extended from
time to time pursuant to Section 2.17; and
(b) the date on which the Commitments terminate in
accordance with the provisions of this Agreement.
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"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Senior Managing Agents" means each of First Union National
Bank, Union Bank Of California, N.A., U.S.Bank National Association and
Wells Fargo Bank, N.A in its capacity as a senior managing agent
hereunder.
"Subsidiary" of a Person means any corporation or other
business entity of which more than 50% of the voting stock, membership
interests or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Company.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or bill option, interest rate
option, forward foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including any option
to enter into any of the foregoing) or any combination of the
foregoing, and, unless the context otherwise clearly requires, any
master agreement relating to or governing any or all of the foregoing.
"Swap Termination Value" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced
in clause (a) the amount(s) determined as the mark-to-market value(s)
for such Swap Contracts, as determined by the Company based upon one or
more mid- market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include any Bank).
"Swingline Bank" means BofA, in its capacity as maker of
Swingline Loans hereunder. Specific reference to the Swingline Bank
shall exclude the Swingline Bank in its capacity as a Bank hereunder.
"Swingline Commitment" has the meaning specified in subsection
2.07(a).
"Swingline Loan" has the meaning specified in subsection
2.07(a).
"Swingline Loan Borrowing" means a Borrowing consisting of one
or more Swingline Loans.
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"Syndication Agent" means Wachovia Bank, N.A., in its capacity
as syndication agent hereunder.
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the
case of each Bank and the Agent, respectively, (a) income or franchise
taxes imposed on or measured by its net income, (i) by the United
States, (ii) by the jurisdiction under the laws of which such recipient
is organized or in which its principal office is located, (iii) by any
jurisdiction solely as a result of such Bank's activities in or contact
with such jurisdiction unrelated to the transactions contemplated by
this Agreement, or (iv) by the jurisdiction in which in the Lending
Office of the recipient is located, and (b) any branch profits taxes
imposed by the United States or any similar tax imposed by any other
jurisdiction in which any recipient is located.
"364-Day Credit Agreement" means the Credit Agreement dated as
of the date hereof, among the Company, BofA as agent, and the other
financial institutions party thereto, providing for a 364 day revolving
credit facility.
"Type" means, as to any Committed Loan, its nature as an
Offshore Rate Committed Loan or a Base Rate Committed Loan.
"Unfunded Liability" means with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all
benefits under such Plan exceeds (ii) the fair market value of all Plan
assets allocable to such benefits (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents
a potential liability of a member of the ERISA Group to the PBGC or any
other Person under Title IV of ERISA.
"United States" and "U.S." each means the United States of
America.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership
interests of which (except directors' qualifying shares) are at the
time directly or indirectly owned by the Company.
1.02 Other Interpretive Provisions(a) . (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
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(iii) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including";
the words "to" and "until" each mean "to but excluding", and the word
"through" means "to and including."
(iv) The term "property" includes any kind of property or asset,
real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references to
agreements(including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters.
All such limitations, tests and measurements are cumulative and shall each
be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among the Agent, the Company and the other parties, have been
reviewed by counsel to the Agent, the Company and such other parties, and
are the products of all parties. Accordingly, they shall not be construed
against the Banks or the Agent merely because of the Agent's or Banks'
involvement in their preparation.
1.03 Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Company's Independent Auditor) with the most recent audited
consolidated financial statements of the Company and its Consolidated
Subsidiaries delivered to the Banks, except that accounting terms used in
Sections 7.01, 7.03 and 7.05 shall be interpreted, and all accounting
determinations and calculations required to establish whether the Company is or
was in compliance with the requirements of said Sections shall be prepared in
accordance with generally accepted accounting principles as in effect on the
date hereof, applied on a basis consistent with the audited consolidated
financial statements of the Company and its Consolidated Subsidiaries referred
to in Section 5.10(a).
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.
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ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments. Each Bank severally agrees, on the
terms and conditions set forth herein, to make loans to the Company (each such
loan, a "Revolving Loan") from time to time on any Business Day during the
period from the Closing Date to the Revolving Termination Date, in an aggregate
amount not to exceed at any time outstanding the amount set forth opposite such
Bank's name on Schedule 2.01 under the heading "Commitment" (such amount as the
same may be reduced under Section 2.08 or reduced or increased as a result of
one or more assignments under Section 10.08, such Bank's "Commitment");
provided, however, that, after giving effect to any Committed Borrowing of
Revolving Loans, the aggregate principal amount of all outstanding Committed
Loans plus the aggregate principal amount of all outstanding Bid Loans, shall
not at any time exceed the Aggregate Commitment. Within the limits of each
Bank's Commitment, and subject to the other terms and conditions hereof, the
Company may borrow under this Section 2.01, prepay under Section 2.09 and
reborrow under this Section 2.01.
2.02 Loan Accounts. (a) The Loans made by each Bank or Designated Bidder
shall be evidenced by one or more loan accounts or records maintained by such
Bank or Designated Bidder in the ordinary course of business. The loan accounts
or records maintained by the Agent and each Bank or Designated Bidder shall be
conclusive absent manifest error of the amount of the Loans made by the Banks
and Designated Bidders to the Company and the interest and payments thereon. Any
failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Company hereunder to pay any amount owing
with respect to the Loans.
(b) The Committed Loans made by such Bank shall be evidenced by one or
more notes of the Company, substantially in the form of Exhibit I, with
appropriate insertions (the "Committed Loan Notes"), and upon the request
of any Bank or Designated Bidder made through the Agent, the Bid Loans made
by such Bank or Designated Bidder shall be evidenced by one or more notes
of the Company, substantially in the form of Exhibit J, with appropriate
insertions (the "Bid Loan Notes"), instead of or in addition to loan
accounts. Each such Bank or Designated Bidder shall endorse on the
schedules annexed to its Note(s) the date and amount of each Loan made by
it, the maturity (in the case of any Bid Loan)and the amount of each
payment of principal made by the Company with respect thereto. Each such
Bank and Designated Bidder is irrevocably authorized by the Company to
endorse its Note(s) and each Bank's or Designated Bidder's record shall be
conclusive absent manifest error; provided, however, that the failure of a
Bank or Designated Bidder to make, or an error in making, a notation
thereon with respect to any Loan shall not limit or otherwise affect the
obligations of the Company hereunder or under any such Note to such Bank or
Designated Bidder.
2.03 Procedure for Committed Borrowing. (a) Each Committed Borrowing shall
be made upon the Company's irrevocable written notice delivered to the Agent in
the form of a Notice of Borrowing (which notice must be received by the Agent
prior to 11:00 a.m. (San Francisco time) (i) at least three Business Days
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prior to the requested Borrowing Date, in the case of Offshore Rate Committed
Loans, and (ii) on the requested Borrowing Date, in the case of Base Rate
Committed Loans, specifying:
(A) the amount of the Committed Borrowing, which shall be in a
Minimum Amount;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) the Type of Loans comprising the Committed Borrowing; and
(D) the duration of the Interest Period applicable to such
Committed Loans included in such notice (subject to the provisions of
the definition of "Interest Period" herein). If the Notice of
Borrowing fails to specify the duration of the Interest Period for any
Committed Borrowing comprised of Offshore Rate Committed Loans, such
Interest Period shall be three months.
(b) The Agent will promptly notify each Bank of its receipt of any
Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Committed Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Committed Borrowing available to the Agent for the account of the Company
at the Agent's Payment Office by 1:00 p.m. San Francisco time) on the
Borrowing Date requested by the Company in funds immediately available to
the Agent. The proceeds of each such Committed Borrowing will then be made
available to the Company by the Agent at such office by crediting the
account of the Company on the books of BofA with the aggregate of the
amounts made available to the Agent by the Banks and in like funds as
received by the Agent, or if requested by the Company, by wire transfer in
accordance with written instructions provided to the Agent by the Company
of such funds as received by the Agent, unless on the date of the Committed
Borrowing all or any portion of the proceeds thereof shall then be required
to be applied to the repayment of any outstanding Loans, in which case such
proceeds or portion thereof shall be applied to the payment of such Loans.
(d) After giving effect to any Committed Borrowing, unless the Agent shall
otherwise consent, there may not be more than fifteen different Interest
Periods in effect in respect of all Committed Loans then outstanding.
2.04 Conversion and Continuation Elections for Committed Borrowings(a). (a)
The Company may, upon irrevocable written notice to the Agent in accordance with
subsection 2.04(b):
(i) elect, as of any Business Day, in the case of Base Rate
Committed Loans (other than Swingline Loans), or as of the last day of
the applicable Interest Period in the case of any other Type of
Committed Loans, to convert into Committed Loans of any other Type any
such Committed Loans (or any part thereof in a Minimum Amount); or
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(ii) elect, as of the last day of the applicable Interest Period,
to continue any Offshore Rate Committed Loans having Interest Periods
expiring on such day (or any part thereof in a Minimum Amount);
provided, that if at any time the aggregate amount of Offshore Rate Committed
Loans in respect of any Committed Borrowing is reduced, by payment, prepayment,
or conversion of part thereof to be less than $5,000,000, such Offshore Rate
Committed Loans shall automatically convert into Base Rate Committed Loans, and
on and after such date the right of the Company to continue such Committed Loans
as, and convert such Committed Loans into, Offshore Rate Committed Loans shall
terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation to be
received by the Agent not later than 11:00 a.m. (San Francisco time) (i) at
least three Business Days in advance of the Conversion/ Continuation Date, if
the Committed Loans are to be converted into or continued as Offshore Rate
Committed Loans, and (ii) on the Conversion/Continuation Date, if the Committed
Loans are to be converted into Base Rate Committed Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Committed Loans to be converted or
continued;
(C) the Type of Committed Loans resulting from the proposed
conversion or continuation; and
(D) other than in the case of conversions into Base Rate
Committed Loans, the duration of the requested Interest Period
(subject to the provisions of the definition of "Interest Period"
herein).
(c) If upon the expiration of any Interest Period applicable to Offshore
Rate Committed Loans, the Company has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Committed Loans, or if any Default
or Event of Default then exists, the Company shall be deemed to have elected to
convert such Offshore Rate Committed Loans into Base Rate Committed Loans
effective as of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the Company, the
Agent will promptly notify each Bank of the details of any automatic conversion.
All conversions and continuations shall be made ratably according to the
respective outstanding principal amounts of the Committed Loans held by each
Bank with respect to which the notice was given.
(e) Unless the Majority Banks otherwise consent, during the existence of a
Default or Event of Default, the Company may not elect to have a Committed Loan
converted into or continued as an Offshore Rate Committed Loan.
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(f) After giving effect to any conversion or continuation of Committed
Loans, unless the Agent shall otherwise consent, there may not be more than
fifteen different Interest Periods in effect in respect of all Committed Loans
and Bid Loans together then outstanding.
2.05 Bid Borrowings. In addition to Committed Borrowings pursuant to
Section 2.03, each Bid Loan Bank severally agrees that the Company may, as set
forth in Section 2.06, from time to time request the Bid Loan Banks prior to the
Revolving Termination Date to submit offers to make Bid Loans to the Company;
provided, however, that the Bid Loan Banks may, but shall have no obligation to,
submit such offers and the Company may, but shall have no obligation to, accept
any such offers, and any Bid Loan Bank may designate Designated Bidders to make
such offers from time to time and, if such offers are accepted by the Company,
to make such Bid Loans; and provided, further, that at no time shall (a) the
outstanding aggregate principal amount of all Bid Loans made by all Bid Loan
Banks and Designated Bidders, plus the outstanding aggregate principal amount of
all Committed Loans made by all Banks, exceed the Aggregate Commitment; or (b)
unless the Agent shall otherwise consent, the number of Interest Periods for Bid
Loans then outstanding, plus the number of Interest Periods for Committed Loans
then outstanding, exceed fifteen.
2.06 Procedure for Bid Borrowings(a) . (a) When the Company wishes to
request the Bid Loan Banks to submit offers to make Bid Loans hereunder, it
shall transmit to the Agent by telephone call followed promptly by facsimile
transmission a notice in substantially the form of Exhibit G (a "Competitive Bid
Request") so as to be received no later than 8:00 a.m. (San Francisco time) one
Business Day prior to the date of a proposed Bid Borrowing, specifying:
(i) the date of such Bid Borrowing, which shall be a Business
Day;
(ii) the aggregate amount of such Bid Borrowing, which shall be a
minimum amount of $5,000,000 or in integral multiples of $1,000,000 in
excess thereof; and
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of "Interest Period"
herein.
Subject to subsection 2.06(c), the Company may not request Competitive Bids for
more than three Interest Periods in a single Competitive Bid Request and may not
request Competitive Bids more than once in any period of five Business Days.
(b) Upon receipt of a Competitive Bid Request, the Agent will promptly send
to the Bid Loan Banks and Designated Bidders by facsimile transmission an
Invitation for Competitive Bids, which shall constitute an invitation by the
Company to each Bid Loan Bank and Designated Bidder to submit Competitive Bids
offering to make the Bid Loans to which such Competitive Bid Request relates in
accordance with this Section 2.06.
(c) (i) Each Bid Loan Bank and Designated Bidder may at its discretion
submit a Competitive Bid containing an offer or offers to make Bid Loans in
response to any Invitation for Competitive Bids. Each Competitive Bid shall
comply with the requirements of this subsection 2.06(c) and shall be submitted
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to the Agent by facsimile transmission at the Agent's office for notices set
forth on Schedule 10.02 not later than 7:30 a.m. (San Francisco time) on the
proposed Borrowing Date; provided that Competitive Bids submitted by the Agent
(or any Affiliate of the Agent) in the capacity of a Bid Loan Bank or Designated
Bidder may be submitted, and may only be submitted, if the Agent or such
Affiliate notifies the Company of the terms of the offer or offers contained
therein not later than 7:15 a.m. (San Francisco time) on the proposed Borrowing
Date.
(ii) Each Competitive Bid shall be in substantially the form of
Exhibit H, specifying therein:
(A) the proposed Borrowing Date;
(B) the principal amount of each Bid Loan for which such
Competitive Bid is being made, which principal amount (1) may be
equal to, greater than or less than the Commitment of the quoting
Bid Loan Bank or the quoting Designated Bidder's affiliated Bid
Loan Bank, (2) shall be $5,000,000 or in integral multiples of
$1,000,000 in excess thereof, and (3) may not exceed the
principal amount of Bid Loans for which Competitive Bids were
requested;
(C) the rate of interest per annum expressed in multiples of
1/1000th of one basis point (the "Absolute Rate") offered for
each such Bid Loan and the Interest Period applicable thereto;
and
(D) the identity of the quoting Bid Loan Bank or Designated
Bidder.
A Competitive Bid may contain up to three separate offers by the quoting Bid
Loan Bank or Designated Bidder with respect to each Interest Period specified in
the related Invitation for Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with Exhibit H or
does not specify all of the information required by subsection
(c)(ii) of this Section;
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Competitive Bids; or
(D) arrives after the time set forth in subsection (c)(i).
(iv) Notwithstanding anything to the contrary contained in this
subsection 2.06(c), a Competitive Bid by BofA may contain, and will
not be disregarded if it does contain, a restriction on the use of
proceeds thereof.
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(d) Promptly on receipt and not later than 8:00 a.m. (San Francisco time)
on the proposed Borrowing Date, the Agent will notify the Company of the terms
(i) of any Competitive Bid submitted by a Bid Loan Bank or Designated Bidder
that is in accordance with subsection 2.06(c), and (ii) of any Competitive Bid
that amends, modifies or is otherwise inconsistent with a previous Competitive
Bid submitted by such Bid Loan Bank or Designated Bidder with respect to the
same Competitive Bid Request. Any such subsequent Competitive Bid shall be
disregarded by the Agent unless such subsequent Competitive Bid is submitted
solely to correct a manifest error in such former Competitive Bid and only if
received within the times set forth in subsection 2.06(c). The Agent's notice to
the Company shall specify (1) the aggregate principal amount of Bid Loans for
which offers have been received for each Interest Period specified in the
related Competitive Bid Request; and (2) the respective principal amounts and
Absolute Rates so offered. Subject only to the provisions of Sections 3.02, 3.05
and 4.02 hereof and the provisions of this subsection (d), any Competitive Bid
shall be irrevocable except with the written consent of the Agent given on the
written instructions of the Company.
(e) Not later than 8:30 a.m. (San Francisco time) on the proposed Borrowing
Date, in the case of an Absolute Rate Auction, the Company shall notify the
Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection 2.06(d). The Company shall be under no obligation to
accept any offer and may choose to reject all offers. In the case of acceptance,
such notice shall specify the aggregate principal amount of offers for each
Interest Period that is accepted. The Company may accept any Competitive Bid in
whole or in part; provided that:
(i) the aggregate principal amount of each Bid Borrowing may not
exceed the applicable amount set forth in the related Competitive Bid
Request;
(ii) the principal amount of each Bid Borrowing shall be
$5,000,000 or in any integral multiple of $1,000,000 in excess
thereof;
(iii) acceptance of offers may only be made on the basis of
ascending Absolute Rates within each Interest Period; and
(iv) the Company may not accept any offer that is described in
subsection 2.06(c)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(f) If offers are made by two or more Bid Loan Banks or Designated Bidders
with the same Absolute Rates for a greater aggregate principal amount than the
amount in respect of which such offers are accepted for the related Interest
Period, the principal amount of Bid Loans in respect of which such offers are
accepted shall be allocated by the Agent among such Bid Loan Banks or Designated
Bidders as nearly as possible (in such multiples, not less than $1,000,000, as
the Agent may deem appropriate) in proportion to the aggregate principal amounts
of such offers. Determination by the Agent of the amounts of Bid Loans shall be
conclusive in the absence of manifest error.
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(g) (i) The Agent will promptly notify each Bid Loan Bank or Designated
Bidder having submitted a Competitive Bid if its offer has been accepted and, if
its offer has been accepted, of the amount of the Bid Loan or Bid Loans to be
made by it on the Borrowing Date.
(ii) Each Bid Loan Bank or Designated Bidder which has received notice
pursuant to subsection 2.06(g)(i) that its Competitive Bid has been
accepted shall make the amounts of such Bid Loans available to the Agent
for the account of the Company at the Agent's Payment Office, by 11:00 a.m.
(San Francisco time), on such Borrowing Date, in funds immediately
available to the Agent for the account of the Company at the Agent's
Payment Office. The proceeds of such Bid Loans will in each case then be
made available to the Company by the Agent at such office by crediting the
account of the Company on the books of BofA with the aggregate of the
amounts made available to the Agent by the Bid Loan Banks and in like funds
as received by the Agent.
(iii) Promptly following each Bid Borrowing, the Agent will notify
each Bank and Designated Bidder of the ranges of bids submitted and the
highest and lowest Bids accepted for each Interest Period requested by the
Company and the aggregate amount borrowed pursuant to such Bid Borrowing.
(iv) From time to time, the Company and the Bid Loan Banks and
Designated Bidders shall furnish such information to the Agent as the Agent
may request relating to the making of Bid Loans, including the amounts,
interest rates, dates of borrowings and maturities thereof, for purposes of
the allocation of amounts received from the Company for payment of all
amounts owing hereunder.
(h) Nothing in this Section 2.06 shall be construed as a right of first
offer in favor of the Bid Loan Banks or Designated Bidders or otherwise to limit
the ability of the Company to request and accept credit facilities from any
Person (including any of the Bid Loan Banks or Designated Bidders), provided
that no Default or Event of Default would otherwise arise or exist as a result
of the Company executing, delivering or performing under such credit facilities.
2.07 Swingline Loans(a) . (a) Subject to the terms and conditions hereof,
the Swingline Bank agrees to make a portion of the Aggregate Commitment
available to the Company by making swingline loans (individually, a "Swingline
Loan", and, collectively, the "Swingline Loans") to the Company on any Business
Day during the period from the Closing Date to the Revolving Termination Date in
accordance with the procedures set forth in this Section 2.07 in an aggregate
principal amount at any one time outstanding not to exceed Twenty-Five Million
Dollars ($25,000,000), notwithstanding the fact that such Swingline Loans, when
aggregated with any other Loans made by or participated in by the Swingline
Bank, may exceed the Swingline Bank's Commitment (the amount of such commitment
of the Swingline Bank to make Swingline Loans to the Company pursuant to this
subsection 2.07(a), as the same shall be reduced pursuant to subsection 2.08(b)
or as a result of any assignment pursuant to Section 10.08, the Swingline Bank's
"Swingline Commitment"); provided, that at no time shall (i) the sum of the
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aggregate principal amount of all outstanding Swingline Loans plus the aggregate
principal amount of all outstanding Revolving Loans plus the aggregate principal
amount of all Bid Loans exceed the Aggregate Commitment, or (ii) the aggregate
principal amount of outstanding Swingline Loans exceed the Swingline Commitment.
Additionally, no more than three Swingline Loans may be outstanding at any one
time, and all Swingline Loans shall at all times be Base Rate Committed Loans or
accrue interest at such other rate as may be agreed to by the Swingline Bank and
the Company. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Company may borrow under this subsection 2.07(a), prepay
pursuant to Section 2.09 and reborrow pursuant to this subsection 2.07(a).
(b) The Company shall provide the Agent irrevocable written notice
(including notice by a telephone call confirmed immediately via facsimile) in
the form of a Notice of Borrowing of any Swingline Loan requested hereunder
(which notice must be received by the Agent prior to 1:00 p.m. (San Francisco
time) on the requested Borrowing Date) specifying (i) the amount to be borrowed,
which shall be in a Minimum Amount (unless otherwise agreed by the Swingline
Bank), and (ii) the requested Borrowing Date, which shall be a Business Day.
Unless the Swingline Bank has received notice prior to 1:00 p.m. (San Francisco
time) on such Borrowing Date from the Agent (including at the request of any
Bank) (A) directing the Swingline Bank not to make the requested Swingline Loan
as a result of the limitations set forth in the proviso set forth in the first
sentence of subsection 2.07(a); or (B) that one or more conditions specified in
Article IV are not then satisfied; then, subject to the terms and conditions
hereof, the Swingline Bank will, not later than 3:00 p.m. (San Francisco time)
on the Borrowing Date specified in such Notice of Borrowing, make the amount of
its Swingline Loan available to the Company by crediting the account of the
Company on the books of BofA or if requested by the Company, by wire transfer in
accordance with written instructions provided to the Agent by the Company. The
Agent will notify the Banks on a quarterly basis if any Swingline Loan
Borrowings occurred during such quarter.
(c) The Company shall repay to the Swingline Bank in full on the Revolving
Termination Date the aggregate principal amount of the Swingline Loans
outstanding on the Revolving Termination Date.
(d) For one Business Day during each successive 30 Business Day period the
aggregate principal amount of Swingline Loans shall be $0 (a "Clean-Up Day").
The Company shall prepay the outstanding principal amount of the Swingline Loans
in whole to the extent required so that a Clean-Up Day may occur in each such 30
Business Day period as provided in this subsection 2.07(d) (which Swingline
Loans may not be reborrowed until such Clean-Up Day has ended); provided that
the foregoing may be from the proceeds of Revolving Loans hereunder.
(e) If:(i) any Swingline Loans shall remain outstanding at 5:00 p.m. (San
Francisco time) on the Business Day immediately prior to a Clean-Up Day and by
such time on such Business Day the Agent shall have received neither:
(A) a Notice of Borrowing delivered pursuant to Section 2.03
requesting that Revolving Loans be made pursuant to subsection 2.01 on
the Clean-Up Day in an amount at least equal to the aggregate
principal amount of such Swingline Loans; nor
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(B) any other notice indicating the Company's intent to repay
such Swingline Loans with funds obtained from other sources; or
(ii) any Swingline Loans shall remain outstanding during the existence of a
Default or Event of Default and the Swingline Bank shall in its sole discretion
notify the Agent that the Swingline Bank desires that such Swingline Loans be
converted into Revolving Loans;
then the Agent shall be deemed to have received a Notice of Borrowing from the
Company pursuant to Section 2.03 requesting that Base Rate Committed Loans be
made pursuant to subsection 2.01 on such Clean-Up Day (in the case of the
circumstances described in clause (i) above) or on the first Business Day
subsequent to the date of such notice from the Swingline Bank (in the case of
the circumstances described in clause (ii) above) in an amount equal to the
aggregate amount of such Swingline Loans, and the procedures set forth in
subsections 2.03(b) and 2.03(c) shall be followed in making such Base Rate
Committed Loans; provided that such Base Rate Committed Loans shall be made
notwithstanding the Company's failure to comply with Section 4.02; and provided,
further, that if a Borrowing of Revolving Loans becomes legally impracticable
and if so required by the Swingline Bank at the time such Revolving Loans are
required to be made by the Banks in accordance with this subsection 2.07(e),
each Bank agrees that in lieu of making Revolving Loans as described in this
subsection 2.07(e), such Bank shall purchase a participation from the Swingline
Bank in the applicable Swingline Loans in an amount equal to such Bank's Pro
Rata Share of such Swingline Loans, and the procedures set forth in subsections
2.03(b) and 2.03(c) shall be followed in connection with the purchases of such
participations. Upon such purchases of participations the prepayment
requirements of subsection 2.07(d) shall be deemed waived with respect to such
Swingline Loans. If any Swingline Loan shall remain outstanding in lieu of a
Borrowing of Revolving Loans as provided above, interest on such Swingline Loan
shall be due and payable on demand, and 1% per annum shall be added to the
interest rate applicable to such Swingline Loan. The proceeds of such Base Rate
Committed Loans, or participations purchased, shall be applied to repay such
Swingline Loans. A copy of each notice given by the Agent to the Banks pursuant
to this subsection 2.07(e) with respect to the making of Revolving Loans, or the
purchases of participations, shall be promptly delivered by the Agent to the
Company. Each Bank's obligation in accordance with this Agreement to make the
Revolving Loans, or purchase the participations, as contemplated by this
subsection 2.07(e), shall be absolute and unconditional and shall not be
affected by any circumstance, including (1) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against the
Swingline Bank, the Company or any other Person for any reason whatsoever; (2)
the occurrence or continuance of a Default, an Event of Default or a Material
Adverse Effect; or (3) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
2.08 Voluntary Termination or Reduction of Commitments. (a) (a) The Company
may, upon not less than three Business Days' prior notice to the Agent,
terminate the Commitments, or permanently reduce the Commitments, provided that
the aggregate amount of any partial reduction is in a Minimum Amount; unless,
after giving effect thereto and to any prepayments of any Loans made on the
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effective date thereof, the then outstanding principal amount of the Loans would
exceed the amount of the Aggregate Commitment. A notice of termination of the
Commitments delivered by the Company may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Company by notice to the Agent on or prior to the specified
date if such condition is not satisfied. Once reduced in accordance with this
Section 2.08, the Commitments may not be increased. Any reduction of the
Commitments shall be applied to each Bank according to its Pro Rata Share. If
and to the extent specified by the Company in the notice to the Agent, some or
all of the reduction in the Aggregate Commitment shall be applied to reduce the
Swingline Commitment. All accrued commitment fees to, but not including, the
effective date of any reduction or termination of the Commitments, shall be paid
on the effective date of such reduction or termination.
(b) At no time shall the Swingline Commitment exceed the Aggregate
Commitment, and any reduction of the Commitments which reduces the Aggregate
Commitment below the then-current amount of the Swingline Commitment shall
result in an automatic corresponding reduction of the Swingline Commitment to
the amount of the Aggregate Commitment, as so reduced, without any action on the
part of the Swingline Bank. At no time shall the Swingline Commitment exceed the
Commitment of the Swingline Bank, and any reduction of the Commitments which
reduces the Commitment of the Swingline Bank below the then-current amount of
the Swingline Commitment shall result in an automatic corresponding reduction of
the Swingline Commitment to the amount of the Commitment of the Swingline Bank,
as so reduced, without any action on the part of the Swingline Bank.
2.09 Optional Prepayments(a) . (a) Committed Loans. Subject to Section
3.04, the Company may, at any time or from time to time, upon notice to the
Agent, ratably prepay Committed Loans in whole or in part, in Minimum Amounts,
or, with respect to Swingline Loans, in other amounts with the consent of the
Swingline Bank. The Company shall deliver a notice of prepayment in accordance
with Section 10.02 to be received by the Agent not later than 10:00 a.m. (San
Francisco time) (i) at least three Business Days in advance of the prepayment
date if the Loans to be prepaid are Offshore Rate Committed Loans and (ii) at
least one Business Day in advance of the prepayment date if the Loans to be
prepaid are Base Rate Committed Loans. Such notice shall not thereafter be
revocable by the Company and the Agent will promptly notify the Swingline Bank
thereof (in the case of any prepayment of Swingline Loans) and each Bank thereof
and of such Bank's Pro Rata Share of such prepayment if any. Such notice of
prepayment shall specify the date and amount of such prepayment and the Type(s)
of Loans to be prepaid and whether such prepayment is of Base Rate Committed
Loans, Offshore Rate Committed Loans or Swingline Loans (or any combination
thereof). If such notice is given by the Company, the Company shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount of Offshore Rate Committed Loans prepaid and any amounts
required pursuant to Section 3.04.
(b) Bid Loans. Bid Loans may not be voluntarily prepaid.
2.10 Repayment.
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(a) The Committed Loans. The Company shall repay to the Agent for the
account of the Banks on the Revolving Termination Date the aggregate principal
amount of Committed Loans outstanding on such date.
(b) The Bid Loans. The Company shall repay to the Agent for the account of
each Bid Loan Bank or Designated Bidder, as the case may be, that makes any Bid
Loan the principal amount of such Bid Loan on the last day of the relevant
Interest Period for such Bid Loan.
2.11 Interest(a) . (a) (i) Each Committed Loan (other than a Swingline
Loan) shall bear interest on the outstanding principal amount thereof from the
applicable Borrowing Date at a rate per annum equal to the Offshore Rate or the
Base Rate, as the case may be (and subject to the Company's right to convert to
other Types of Loans under Section 2.04), plus the Applicable Margin. (ii) Each
Bid Loan shall bear interest on the outstanding principal amount thereof from
the relevant Borrowing Date at a rate per annum equal to the Absolute Rate.
(iii) Each Swingline Loan shall bear interest on the outstanding principal
amount thereof from the applicable Borrowing Date at a rate per annum equal to
the Base Rate plus the Applicable Margin, or at such other rate as may be agreed
to by the Swingline Bank.
(b) Interest on each Loan shall be paid in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any prepayment of Committed
Loans under Section 2.09 for the portion of the Loans so prepaid and upon
payment (including prepayment) in full thereof.
(c) Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder or
under any other Loan Document is not paid in full when due (whether at stated
maturity, by acceleration, demand or otherwise), the Company agrees to pay
interest on such unpaid principal or other amount, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon to the extent permitted by law, payable on
demand, at a rate per annum which is determined by adding 1% per annum to the
Applicable Margin then in effect for such Loans and, in the case of Obligations
not subject to an Applicable Margin, at a rate per annum equal to the Base Rate,
plus the Applicable Margin then in effect for Base Rate Committed Loans, plus 1%
per annum.
(d) Anything herein to the contrary notwithstanding, the obligations of the
Company to any Bank or Designated Bidder hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by such Bank or Designated Bidder
would be contrary to the provisions of any law applicable to such Bank or
Designated Bidder limiting the highest rate of interest that may be lawfully
contracted for, charged or received by such Bank or Designated Bidder, and in
such event the Company shall pay such Bank or Designated Bidder interest at the
highest rate permitted by applicable law.
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2.12 Fees(a)... (a) Arrangement and Agency Fees. The Company shall pay fees
as required by the letter agreement (the "Fee Letter") between the Company and
the Lead Arranger and Agent dated February 29, 2000.
(b) Competitive Bid Fee. The Company shall pay to the Agent, for the
Agent's own account, a competitive bid fee in the amount set forth in the Fee
Letter, each time the Company requests the Bid Loan Banks to submit offers to
make Bid Loans.
(c) Facility Fee. The Company shall pay to the Agent for the account of
each Bank a facility fee on such Bank's Commitment, regardless of usage,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter at a rate per annum equal to the Applicable Fee Amount. Such
facility fee shall accrue from the Closing Date to the Revolving Termination
Date and shall be due and payable quarterly in arrears on the last Business Day
of each quarter following the Closing Date through the Revolving Termination
Date, with the final payment to be made on the Revolving Termination Date;
provided that, in connection with any reduction or termination of Commitments
under Section 2.08, the accrued facility fee calculated for the period ending on
such date shall also be paid on the date of such reduction or termination, with
the following quarterly payment being calculated on the basis of the period from
such reduction or termination date to such quarterly payment date. The facility
fee provided in this subsection shall accrue at all times after the
above-mentioned commencement date, including at any time during which one or
more conditions in Article IV are not met.
(d) Utilization Fee. The Company shall pay to the Agent for the account of
each Bank a utilization fee on the outstanding Loans (including Swingline Loans
and Bid Loans) at any time that the aggregate outstanding Loans exceed the
levels of the Aggregate Commitment determined in accordance with Annex I, at a
rate per annum equal to the Applicable Fee Amount. Such utilization fee shall be
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter, shall accrue from the Closing Date to the Revolving
Termination Date and shall be payable in arrears on the last Business Day of
each quarter commencing on the last Business Day of the fiscal quarter following
the Closing Date through the Revolving Termination Date, with the final payment
to be made on the Revolving Termination Date. The utilization fee, if
applicable, will be added to the Applicable Margin.
2.13 Computation of Fees and Interest(a). (a) All computations of interest
hereunder when the Base Rate is determined by BofA's "prime rate" shall be made
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed. All other computations of fees and interest shall be made on the basis
of a 360-day year and actual days elapsed (which results in more interest being
paid than if computed on the basis of a 365-day year). Interest and fees shall
accrue during each period during which interest or such fees are computed from
the first day thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall be conclusive
and binding on the Company, the Banks and the Designated Bidders in the absence
of manifest error.
(c) The Agent will, at the request of the Company or any Bank or Designated
Bidder, deliver to the Company or such Bank or Designated Bidder, as the case
may be, a statement showing the quotations used by the Agent in determining any
interest rate.
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(d) If any Reference Bank's Commitment terminates (other than on
termination of all the Commitments), or for any reason whatsoever any Reference
Bank ceases to be a Bank hereunder, that Reference Bank shall thereupon cease to
be a Reference Bank, and the Offshore Rate shall be determined on the basis of
the rates as notified by the remaining Reference Banks; provided that if, as a
result, there shall only be one Reference Bank remaining, the Agent (after
consultation with the Banks and with the consent of the Company (which shall not
be unreasonably withheld)) shall, by notice to the Company and the Banks,
designate another Bank as a Reference Bank so that there shall at all times be
at least two Reference Banks.
(e) Each Reference Bank shall use its best efforts to furnish quotations of
rates to the Agent as contemplated hereby. If any of the Reference Banks fails
to supply such rates to the Agent upon its request, the rate of interest shall
be determined on the basis of the quotations of the remaining Reference Bank(s).
2.14 Payments by the Company(a) . (a) Except as otherwise expressly
provided herein, all payments by the Company shall be made to the Agent for the
account of the Banks and Designated Bidders at the Agent's Payment Office, and
shall be made from an account of the Company maintained within the United
States, in Dollars, and in immediately available funds, no later than 12:00 noon
(San Francisco time) on the date specified herein. The Agent will promptly
distribute to each Bank (or Designated Bidder) its Pro Rata Share (or other
applicable share as expressly provided herein) of such payment in like funds as
received. Any payment received by the Agent later than 12:00 noon (San Francisco
time) shall be deemed to have been received on the following Business Day and
any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Agent receives notice from the Company prior to the date on
which any payment is due to the Banks or Designated Bidders that the Company
will not make such payment in full as and when required, the Agent may assume
that the Company has made such payment in full to the Agent on such date in
immediately available funds and the Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Bank or Designated Bidder on
such due date an amount equal to the amount then due such Bank or Designated
Bidder. If and to the extent the Company has not made such payment in full to
the Agent, each Bank or Designated Bidder shall repay to the Agent on demand
such amount distributed to such Bank or Designated Bidder, together with
interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Bank or Designated Bidder until the date repaid.
2.15 Payments by the Banks to the Agent(a) . (a) Unless the Agent receives
notice from a Bank or Designated Bidder, as the case may be, on or prior to the
Closing Date or, with respect to any Borrowing after the Closing Date, on the
date of such Borrowing, that such Bank or Designated Bidder will not make
available as and when required hereunder to the Agent for the account of the
Company the amount of that Bank's or Designated Bidder's Loan, the Agent may
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assume that such Bank or Designated Bidder has made such amount available to the
Agent in immediately available funds on the Borrowing Date and the Agent may
(but shall not be so required), in reliance upon such assumption, make available
to the Company on such date a corresponding amount. If and to the extent any
Bank or Designated Bidder shall not have made its full amount available to the
Agent in immediately available funds and the Agent in such circumstances has
made available to the Company such amount, that Bank or Designated Bidder shall
on the Business Day following such Borrowing Date make such amount available to
the Agent, together with interest at the Federal Funds Rate for each day during
such period. A notice of the Agent submitted to any Bank or Designated Bidder
with respect to amounts owing under this subsection (a) shall be conclusive,
absent manifest error. If such amount is so made available, such payment to the
Agent shall constitute such Bank's or Designated Bidder's Loan on the Borrowing
Date for all purposes of this Agreement. If such amount is not made available to
the Agent on the Business Day following the Borrowing Date, the Agent will
notify the Company of such failure to fund and, upon demand by the Agent, the
Company shall pay such amount to the Agent for the Agent's account, together
with interest thereon for each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
(b) The failure of any Bank or Designated Bidder to make any Loan on any
Borrowing Date shall not relieve any other Bank or Designated Bidder of any
obligation hereunder to make a Loan on such Borrowing Date, but no Bank or
Designated Bidder shall be responsible for the failure of any other Bank or
Designated Bidder to make the Loan to be made by such other Bank or Designated
Bidder on any Borrowing Date.
2.16 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank or Designated Bidder shall obtain on account of the
Loans made by it any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its Pro Rata Share
(or other share contemplated hereunder) of (i) payments in respect of the
Committed Loans obtained by all the Banks, or (ii) payments in respect of Bid
Loans having the same Borrowing Date, Interest Payment Date and maturity date,
such Bank or Designated Bidder shall immediately (a) notify the Agent of such
fact, and (b) purchase from the other Banks and, if applicable, Designated
Bidders, such participations in the Committed Loans or Bid Loans, as applicable,
made by them as shall be necessary to cause such purchasing Bank or Designated
Bidder to share the excess payment pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Bank or Designated Bidder, such purchase shall to
that extent be rescinded and each other Bank or Designated Bidder shall repay to
the purchasing Bank or Designated Bidder the purchase price paid therefor,
together with an amount equal to such paying Bank's or Designated Bidder's
ratable share (according to the proportion of (i) the amount of such paying
Bank's or Designated Bidder's required repayment to (ii) the total amount so
recovered from the purchasing Bank or Designated Bidder) of any interest or
other amount paid or payable by the purchasing Bank or Designated Bidder in
respect of the total amount so recovered. The Company agrees that any Bank or
Designated Bidder so purchasing a participation from another Bank or Designated
Bidder may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off, but subject to Section 10.11) with
respect to such participation as fully as if such Bank or Designated Bidder were
the direct creditor of the Company in the amount of such participation. The
Agent will keep records (which shall be conclusive and binding in the absence of
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manifest error) of participations purchased under this Section 2.16 and will in
each case notify the Banks and, if applicable, Designated Bidders, following any
such purchases or repayments.
2.17 Revolving Termination Date Extensions. (a) (a) Not less than 30 days
and not more than 60 days prior to the Revolving Termination Date then in
effect, the Company may make a written request to the Agent, who shall forward a
copy of each such request to each of the Banks, that the Revolving Termination
Date then in effect be extended to the date which occurs one year after the
Revolving Termination Date then in effect. Each request by the Company pursuant
to the immediately preceding sentence shall specify a date (the "Requested
Extension Effective Date"), which shall be not earlier than 20 days after the
giving of the respective notice and not later than 15 days prior to the
Revolving Termination Date then in effect, as the date by which the Banks should
respond to the requested extension request and which would be the date of the
effectiveness of the change to the Revolving Termination Date. Each request
pursuant to the first sentence of this Section 2.17 shall also be accompanied by
a certificate of an officer of the Company stating that no Default or Event of
Default has occurred and is continuing. Each Bank, acting in its sole discretion
and with no obligation to grant any extension pursuant to this Section 2.17,
shall, by written notice to the Company and the Agent, such notice to be given
on or prior to the Requested Extension Effective Date, advise the Company and
the Agent whether or not such Bank agrees to such extension, provided that any
Bank which fails to so notify the Company and the Agent as provided above shall
be deemed to have elected not to grant such extension. If less than all the
Banks shall agree to such extension, the extension contemplated in this Section
may nonetheless occur with respect to the consenting Banks, provided that any
such extension shall be conditioned upon an agreement to such extension by Banks
with at least 75% of the Aggregate Commitment. The Agent shall notify the
Company and each of the Banks as to which Banks have agreed to such extension
and as to the new Revolving Termination Date as a result thereof, or that such
extension shall not occur, as the case may be.
(b) In the event that the Revolving Termination Date is extended by some
but not all of the Banks, on the existing Revolving Termination Date for any
Bank not extending (each a "Non-Continuing Bank"), the Company shall repay all
Revolving Loans of such Non-Continuing Bank, together with all accrued and
unpaid interest thereon, and all fees and other amounts owing to such
Non-Continuing Bank, and upon such payment each such Non-Continuing Bank shall
cease to constitute a Bank hereunder, except with respect to the indemnification
provisions under this Agreement, which shall survive as to such Non-Continuing
Bank.
2.18 Optional Increase in Commitments(a). (a) Effective as of the Closing
Date, or at any time thereafter prior to the Revolving Termination Date but no
more than once per month, if no Default or Event of Default has occurred and is
continuing both before and after giving effect to an increase, the Company shall
have the option to increase the Aggregate Commitment by (i) increasing the
Commitment of one or more Banks already party to this Agreement (each such Bank
increasing its Commitment, an "Increasing Bank"), in each case pursuant to a
Commitment Increase Agreement, in substantially the form of Exhibit L (a
"Commitment Increase Agreement") and/or (ii) adding one or more lending
institutions not a party hereto (each such new bank, a "New Bank") as a party to
this Agreement, in each case pursuant to a New Bank Agreement, in substantially
the form of Exhibit M (a "New Bank Agreement"). The effectiveness of any such
increase is subject to the satisfaction of the following conditions:
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(A) that any request for increase of the Commitment of an
Increasing Bank be made through the Agent (it being understood
that an Increasing Bank may accept or reject any increase request
in its sole and absolute discretion);
(B) that the Company shall provide prior written notice of
any proposed increase (whether involving an Increasing Bank or a
New Bank) to the Agent, at least 15 Business Days (or such
shorter period as the Agent may agree to in the given instance)
prior to the effectiveness of such increase, who shall promptly
notify the Banks;
(C) in the case of a Commitment increase by an Increasing
Bank, that the Company and such Increasing Bank shall have
entered into a Commitment Increase Agreement, and such Commitment
Increase Agreement shall have been delivered to the Agent;
(D) in the case of an accession hereto by a New Bank, that
the Company and such New Bank shall have entered into a New Bank
Agreement, and such New Bank Agreement shall have been delivered
to the Agent;
(E) that the Swingline Bank and the Agent shall have
acknowledged and accepted the Commitment Increase Agreement or
New Bank Agreement, as the case may be (such acknowledgment and
acceptance not to be unreasonably withheld);
(F) that each New Bank shall be an Eligible Assignee;
(G) that the Aggregate Commitment, following such increase,
shall not exceed $1,250,000,000;
(H) that any fees payable to any Increasing Bank or New Bank
in connection with such increase shall have been paid; and
(I) that any other amounts then due hereunder in connection
therewith, including any amounts payable under Section 3.04 as a
result of any assignments of Offshore Rate Committed Loans under
subsection 2.18(b) on a day other than the last day of an
Interest Period, shall have been paid.
(b) Upon the effectiveness of any Commitment Increase Agreement, the
Commitment of the Increasing Bank party thereto shall be increased in the amount
set forth in the Commitment Increase Agreement, and upon the effectiveness of
any New Bank Agreement, the New Bank party thereto shall be and become a party
hereto and shall constitute a Bank hereunder with the rights and obligations of
a Bank under the Loan Documents (each such date of effectiveness, an "Increased
Commitment Date"). Effective on each Increased Commitment Date, the amount of
Loans then outstanding and held by each Bank shall be adjusted to reflect any
such changes in such Bank's Pro Rata Share, subject to Section 3.04. Each Bank
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having Loans then outstanding and whose Pro Rata Share has been decreased as a
result of the increase in the Aggregate Commitment shall be deemed to have
assigned, without recourse, to any Increasing Banks increasing their Commitments
and New Banks, such portion of such Loans as shall be necessary to effectuate
such adjustment. Each Increasing Bank and New Bank shall (A) be deemed to have
assumed such portion of such Loans and (B) fund on the Increased Commitment Date
such assumed amounts to the Agent for the account of the assigning Banks in
accordance with the provisions hereof.
(c) The Agent shall promptly notify the Banks of the Agent's receipt of
notice of any proposed Commitment increase under clause (B) of subsection
2.18(a). Additionally, promptly following the Increased Commitment Date for a
Commitment increase the Agent shall cause Schedule 2.01 to be modified to
accurately reflect the Commitments and Pro Rata Shares of the Banks, whereupon
such amended Schedule 2.01 shall be substituted for the pre-existing Schedule
2.01, be deemed a part of this Agreement without any further action or consent
of any party and be promptly distributed to each Bank and the Company by the
Agent. Within five Business Days of any Increased Commitment Date (whether as to
an Increasing Bank or a New Bank), the Company shall execute and deliver to the
Agent (i) a replacement Committed Loan Note in favor of each Increasing Bank,
evidencing the increased Commitment of such Increasing Bank, and (ii) a new
Committed Loan Note in favor of each New Bank, in the principal amount of such
New Bank's Commitment. Additionally, the Agent shall promptly notify each
Increasing Bank and New Bank of the amount of its funding obligations under
subsection 2.18(b).
(d) Any fees paid by the Company for any such increase shall not be
required to be ratable and shall be paid only to Increasing Banks, or New Banks,
as the case may be, as shall be separately agreed from time to time by the
Company and any such Increasing Bank or New Bank.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes(a).. (a) Unless otherwise required by applicable law, any and
all payments by the Company to each Bank, each Designated Bidder, or the Agent
under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for, any Taxes.
(b) If the Company shall be required by law to deduct or withhold any
United States federal Taxes from or in respect of any sum payable hereunder to
any Bank, any Designated Bidder or the Agent, and subject to Section 9.10, then:
(i) the sum payable shall be increased as necessary so that, after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section),
such Bank, such Designated Bidder or the Agent, as the
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case may be, receives and retains an amount equal to the sum it would have
received and retained had no such deductions or withholdings been made;
(ii) the Company shall make such deductions and withholdings; and
(iii) the Company shall pay the full amount deducted or withheld to
the relevant taxing authority in accordance with applicable law
(c) In addition, the Company shall pay any Other Taxes.
(d) The Company agrees to indemnify and hold harmless each Bank, each
Designated Bidder and the Agent for the full amount of Other Taxes, and, subject
to Section 9.10, Taxes referred to in Subsection 3.01(b). Without limiting the
generality of the foregoing, if the Company fails to pay any Other Taxes or any
such Taxes when due to the appropriate taxing authority or fails to remit to the
Banks and the Agent the required documentary evidence referred to in Subsection
3.01(c) and the Company received from the Agent or the affected Bank prior
notice of its obligation to make the payment of Other Taxes or such Taxes, the
Company agrees to indemnify and hold harmless each Bank and the Agent for any
incremental taxes, interest or penalties that may become payable by any Bank or
the Agent as a result of any such failure. Payment pursuant to this
indemnification shall be made within 30 days after the date such Bank or the
Agent makes written demand therefor setting forth in reasonable detail the basis
of the Company's obligation to indemnify such Bank or the Agent pursuant to this
Section 3.01.
(e) Within 60 days after the date of any payment of any Taxes or Other
Taxes pursuant to Subsections 3.01(a), (b) or (c), the Company shall furnish to
each Bank, each Designated Bidder and the Agent, at its address referred to in
Section 10.02, documentary evidence reasonably satisfactory to each Bank, each
Designated Bidder and the Agent of payment thereof, but only to the extent such
documentary evidence is furnished to the Company by the relevant taxing
authority.
(f) If the Company is required to pay any additional amount to the Agent,
any Designated Bidder or any Bank or any taxing authority for the account of the
Agent, any Designated Bidder or any Bank pursuant to this Section 3.01, the
Company shall have the right, upon notice to such Bank or such Designated
Bidder, to (i) prepay, on a non-pro rata basis, the principal amount or any
portion thereof held by such Bank or such Designated Bidder plus all interest,
fees, and other amounts owing to such Bank or such Designated Bidder as of the
date of such prepayment (including any amounts owing under Section 3.04), or
(ii) require such Bank or such Designated Bidder to use reasonable efforts to
designate a different Lending Office for funding or booking its Loan (or any
Loan participation) hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or Affiliates, if, in the sole judgment of
such Bank, such designation or assignment (A) would eliminate or reduce amounts
payable pursuant to Subsection 3.01(b) in the future and (B) would not subject
such Bank or such Designated Bidder to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Bank or such Designated Bidder.
With respect to the foregoing clause (ii) the Company hereby agrees to pay all
reasonable costs and expenses incurred by any Bank or any Designated Bidder in
connection with any such designation or assignment.
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(g) Each Bank and each Designated Bidder agrees that it will (i) take all
reasonable actions requested in writing by the Company that are without material
cost or risk to such Bank to maintain all exemptions, if any, available to it
from withholding taxes (whether available by treaty or existing administrative
waiver), and (ii) to the extent reasonable and without material cost or risk to
it, otherwise cooperate with the Company to minimize any amounts payable by the
Company under this Section 3.01.
(h) Each non-United States Bank and each non-United States Designated
Bidder represents and warrants to the Agent and the Company as of the date
hereof that under applicable law and treaties such Bank or such Designated
Bidder is entitled to claim the benefit of complete exemption from imposition of
United States withholding tax or that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States.
3.02 Illegality(a) . (a) If any Bank determines that the introduction of
any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Committed Loans, then, on notice thereof by such Bank to the
Company through the Agent, any obligation of that Bank to make Offshore Rate
Committed Loans or convert Base Rate Committed Loans into Offshore Rate
Committed Loans shall be suspended until such Bank notifies the Agent and the
Company that the circumstances giving rise to such determination no longer
exist.
(b) If a Bank determines that it is unlawful for such Bank to maintain any
Offshore Rate Committed Loan, the Company shall, upon its receipt of notice of
such fact and demand from such Bank (with a copy to the Agent), prepay in full
such Offshore Rate Committed Loans of that Bank then outstanding, together with
interest accrued thereon and amounts required under Section 3.04, either on the
last day of the Interest Period thereof, if such Bank may lawfully continue to
maintain such Offshore Rate Committed Loans to such day, or immediately, if such
Bank may not lawfully continue to maintain such Offshore Rate Committed Loan. If
the Company is required so to prepay any Offshore Rate Committed Loan, then
concurrently with such prepayment, the Company shall borrow from the affected
Bank, in the amount of such repayment, a Base Rate Committed Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate
Committed Loans has been so terminated or suspended, the Company may elect, by
giving notice to such Bank through the Agent that all Loans which would
otherwise be made by such Bank as Offshore Rate Committed Loans shall be instead
Base Rate Committed Loans.
(d) Before giving any notice to the Agent under this Section 3.02, the
affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Committed Loans if such designation will avoid the need for giving
such notice or making such demand and will not, in the judgment of such Bank, be
illegal or otherwise disadvantageous to such Bank.
3.03 Increased Costs and Reduction of Return(a) . (a) If any Bank
determines that, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation (other than any such introduction or
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change in respect of any law or regulation relating to Taxes or Excluded Taxes
which shall be governed solely by Section 3.01) or (ii) the compliance by such
Bank with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Bank of agreeing to make or making, funding or maintaining
any Offshore Rate Committed Loans, by an amount deemed by such Bank to be
material, then the Company shall be liable for, and shall from time to time,
within 15 days after demand by such Bank (with a copy of such demand to be sent
to the Agent), pay to the Agent for the account of such Bank, additional amounts
as are sufficient to compensate such Bank for such increased costs.
(b) If any Bank or Designated Bidder shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by such Bank or Designated Bidder (or its Lending Office) or any
corporation controlling such Bank or Designated Bidder with any Capital Adequacy
Regulation, affects or would affect the amount of capital required or expected
to be maintained by such Bank or Designated Bidder or any corporation
controlling such Bank or Designated Bidder and (taking into consideration such
Bank's, such Designated Bidder's or such corporation's policies with respect to
capital adequacy and such Bank's or Designated Bidder's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitment, Loans, credits or obligations under this
Agreement, by an amount deemed by such Bank or such Designated Bidder to be
material, then, within 15 days after demand by such Bank or Designated Bidder to
the Company through the Agent, the Company shall pay to such Bank or Designated
Bidder, as the case may be, from time to time as specified by such Bank or
Designated Bidder, such additional amounts as are sufficient to compensate such
Bank or Designated Bidder for such increase.
(c) Each Bank and each Designated Bidder will promptly notify the Company
and the Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Bank or such Designated Bidder to compensation
pursuant to this Section and will designate a different Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole judgment of such Bank or such Designated Bidder, be
otherwise disadvantageous to such Bank or such Designated Bidder.
Notwithstanding the foregoing subsections (a) and (b) of this Section 3.03, the
Company shall only be obligated to compensate any Bank or any Designated Bidder
for any amount arising or accruing during (i) any time or period commencing not
more than 30 days prior to the date on which such Bank or such Designated Bidder
notifies the Agent and the Company that it proposes to demand such compensation
and identifies to the Agent and the Company the statute, regulation or other
basis upon which the claimed compensation is or will be based and (ii) any time
or period during which, because of the retroactive application of such statute,
regulation or other such basis, such Bank or such Designated Bidder did not know
that such amount would arise or accrue.
3.04 Funding Losses. The Company shall reimburse each Bank and each
Designated Bidder, and hold each Bank and each Designated Bidder harmless from,
any loss or expense which such Bank or such Designated Bidder may sustain or
incur as a consequence of:
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(a) the failure of the Company to make on a timely basis any payment of
principal of any Offshore Rate Committed Loan;
(b) the failure of the Company to borrow, continue or convert a Committed
Loan after the Company has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment of any Committed Loan
in accordance with any notice delivered under Section 2.09;
(d) the prepayment (including pursuant to Section 2.09 or 3.02(b)) or other
payment (including after acceleration thereof) of any Offshore Rate Committed
Loan or Absolute Rate Bid Loan on a day that is not the last day of the relevant
Interest Period; or
(e) the conversion under Section 2.04 of any Offshore Rate Committed Loan
to a Base Rate Committed Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Committed Loans or from
fees payable to terminate the deposits from which such funds were obtained. For
purposes of calculating amounts payable by the Company to the Banks and the
Designated Bidders under this Section and under subsection 3.03(a), each
Offshore Rate Committed Loan made by a Bank or Designated Bidder (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the London interbank offered rate used in
determining the Offshore Rate for such Offshore Rate Committed Loan by a
matching deposit or other borrowing in the interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Offshore Rate
Committed Loan is in fact so funded.
3.05 Inability to Determine Rates. If on or prior to the first day of any
Interest Period:
(a) the Agent is advised by the Reference Banks that deposits in Dollars
(in the applicable amounts) are not being offered to the Reference Banks in the
relevant market for such Interest Period, or
(b) the Majority Banks advise the Agent that the Offshore Rate, as
determined by the Agent, will not adequately and fairly reflect the cost to such
Banks of funding their Offshore Rate Committed Loans for such Interest Period,
the Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Committed Loans,
hereunder shall be suspended until the Agent upon the instruction of the
Majority Banks revokes such notice in writing. Upon receipt of such notice, the
Company may revoke any Notice of Borrowing or Notice of Conversion/Continuation
then submitted by it. If the Company does not revoke such Notice as to any such
proposed Committed Loans, the Banks shall make, convert or continue any such
Committed Loans, as proposed by the Company, in the amount specified in the
applicable Notice submitted by the Company, but such Committed Loans shall be
made, converted or continued as Base Rate Committed Loans instead of Offshore
Rate Committed Loans.
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3.06 Certificates of Banks and Designated Bidders. Any Bank or Designated
Bidder claiming reimbursement or compensation under this Article III shall
deliver to the Company (with a copy to the Agent) a certificate setting forth in
reasonable detail the amount payable to such Bank or such Designated Bidder
hereunder and such certificate shall be conclusive and binding on the Company in
the absence of manifest error. In determining any amount due under this Article
III, a Bank or Designated Bidder may use any reasonable averaging and
attribution methods.
3.07 Base Rate Committed Loans Substituted for Affected Offshore Rate
Committed Loans. If (i) the obligation of any Bank to make Offshore Rate
Committed Loans has been suspended pursuant to Section 3.02 or (ii) any Bank has
demanded compensation under Section 3.03(a) and the Company shall, by at least
five Business Days' prior notice to such Bank through the Agent, have elected
that the provisions of this Section shall apply to such Bank, then, unless and
until such Bank notifies the Company that the circumstances giving rise to such
suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as Offshore Rate
Committed Loans, shall be made instead as Base Rate Committed Loans (on which
interest and principal shall be payable contemporaneously with the related
Offshore Rate Committed Loans of the other Banks); and
(b) after each of its Offshore Rate Committed Loans has been repaid, all
payments of principal which would otherwise be applied to repay such Offshore
Rate Committed Loans shall be applied to repay its Base Rate Committed Loans
instead.
3.08 Reserves on Offshore Rate Committed Loans. The Company shall pay to
each Bank, as long as such Bank shall be required under regulations of the FRB
to maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional costs on the unpaid principal amount of each Offshore
Rate Committed Loan equal to the actual costs of such reserves allocated to such
Offshore Rate Committed Loan by the Bank (as determined by the Bank in good
faith, which determination shall be conclusive), payable on each date on which
interest is payable on such Committed Loan, provided the Company shall have
received at least 15 days' prior written notice (with a copy to the Agent) of
such additional interest from the Bank. If a Bank fails to give notice 15 days
prior to the relevant Interest Payment Date, such additional interest shall be
payable 15 days from receipt of such notice.
3.09 Substitution of Banks. Upon the receipt by the Company from any Bank
(an "Affected Bank") of a claim for compensation under Section 3.03, upon notice
to the Agent from any Bank that it shall not consent to a request by the Company
for an extension of the Revolving Termination Date pursuant to subsection
2.17(a), or if the Company is required to pay any additional amount to the Agent
or any Bank pursuant to Section 3.01, the Company may: (i) request one or more
of the other Banks to acquire and assume all or part of such Affected Bank's
Loans and Commitment; or (ii) designate a replacement commercial bank (which
shall be an Eligible Assignee) satisfactory to the Company to acquire and assume
all or a ratable part of such Affected Bank's Loans and Commitment (a
"Replacement Bank"); provided, however, that the Company shall be liable for the
payment upon demand of all costs and other amounts arising under Section 3.04
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that result from the acquisition of any Affected Bank's Loan and/or Commitment
(or any portion thereof) by a Bank or Replacement Bank, as the case may be, on a
date other than the last day of the applicable Interest Period with respect to
any Offshore Rate Committed Loan then outstanding. Any such designation of a
Replacement Bank under clause (i) shall be effected in accordance with, and
subject to the terms and conditions of, the assignment provisions contained in
Section 10.08, and shall in any event be subject to the prior written consent of
the Agent and the Swingline Bank (which consents shall not be unreasonably
withheld).
3.10 Survival. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans. The obligation of each Bank and the
Swingline Bank to make its initial Committed Loan hereunder, and the obligation
of each Bid Loan Bank and Designated Bidder to receive through the Agent the
initial Competitive Bid Request, is subject to the condition that the Agent
shall have received on or before the Closing Date all of the following, in form
and substance satisfactory to the Agent and each Bank, and in sufficient copies
for each Bank:
(a) Credit Agreement and Notes. This Agreement executed by each party
hereto, and the Committed Loan Notes executed by the Company;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of the
Company authorizing the transactions contemplated hereby, certified as
of the Closing Date by the Secretary or an Assistant Secretary of the
Company; and
(ii) A certificate of the Secretary or Assistant Secretary of the
Company, dated the Closing Date, certifying the names, titles and true
signatures of the officers of the Company authorized to execute,
deliver and perform, as applicable, this Agreement, and all other Loan
Documents to be delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of the following documents:
(i) the articles or certificate of incorporation and the bylaws
of the Company as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of the Company as of the Closing
Date; and
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(ii) good standing certificates for the Company from the
Secretary of State (or similar, applicable Governmental Authority) of
its state of incorporation and the state of its principal offices;
(d) Legal Opinions.
(i) an opinion of Thomas R. Saldin, Executive Vice-President and
General Counsel to the Company, dated as of the Closing Date and
addressed to the Agent and the Banks, substantially in the form of
Exhibit D; and
(ii) a favorable opinion of Brobeck, Phleger & Harrison LLP,
special counsel to the Agent, dated as of the Closing Date.
(e) Payment of Fees. Evidence of payment by the Company of all accrued and
unpaid fees, costs and expenses to the extent then due and payable on the
Closing Date, together with Attorney Costs of BofA and the Lead Arranger to the
extent invoiced prior to or on the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute BofA's reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude final settling of accounts between
the Company and BofA), including any such costs, fees and expenses arising under
or referenced in Sections 2.12 and 10.04;
(f) Certificate. A certificate signed by a Responsible Officer, dated as of
the Closing Date, stating that:
(i) the representations and warranties contained in Article V are
true and correct on and as of such date, as though made on and as of
such date;
(ii) no Default or Event of Default exists or would result from
the initial Borrowing; and
(iii) there has occurred since January 28, 1999 (or since the
date of any Form 10-Q or other public disclosure document filed by the
Company with the SEC prior to the Closing Date, to the extent any such
event or circumstance is disclosed in such document), no event or
circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect;
(g) Existing Credit Facilities. Evidence satisfactory to the Agent that the
commitments to extend credit under the Existing Credit Facilities have been
terminated and that all principal, interest, charges and fees due thereunder
have been paid or that arrangements reasonably satisfactory to the Agent for the
payment thereof have been made by the Company (the Company and each Bank party
hereto that is a lender under the Existing Credit Facilities acknowledging that
such commitments shall be terminated simultaneously with the closing hereunder);
(h) Documents and Actions Relating to the 364-Day Credit Agreement. A
certificate of a Responsible Officer of the Company certifying that all
conditions precedent to the closing of the 364-Day Credit Agreement shall have
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been satisfied in accordance with the terms and conditions thereof (other than
any conditions relating to the closing of the transactions contemplated by this
Agreement); and
(i) Other Documents. Such other approvals, opinions, documents or
materials as the Agent or any Bank may reasonably request.
4.02 Conditions to All Borrowings. The obligation of each Bank and the
Swingline Bank to make any Committed Loan to be made by it, and the obligation
of any Bid Loan Bank or Designated Bidder to make any Bid Loan as to which the
Company has accepted the relevant Competitive Bid (including its initial Loan),
is subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date:
(a) Notice of Borrowing. As to any Committed Loan, the Agent shall have
received a Notice of Borrowing;
(b) Continuation of Representations and Warranties. The representations and
warranties in Article V shall be true and correct on and as of such Borrowing
Date with the same effect as if made on and as of such Borrowing Date (except to
the extent such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct as of such earlier date; and
except that this subsection (b) shall be deemed instead to refer to the last day
of the most recent quarter and year for which financial statements have then
been delivered, and to the most recent Form 10-K filed by the Company with the
SEC, in respect of the representations and warranties made in Section 5.10(a));
(c) No Material Adverse Effect. There has occurred since January 28, 1999
(or since the date of any Form 10-Q or other public disclosure document filed by
the Company with the SEC prior to the Closing Date, to the extent any such event
or circumstance is disclosed in such document), no event or circumstance that
has resulted or could reasonably be expected to result in a Material Adverse
Effect; and
(d) No Existing Default. No Default or Event of Default shall exist or
shall result from such Borrowing.
Each Notice of Borrowing and Competitive Bid Request submitted by the Company
hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of each such notice or request and as of each
Borrowing Date, that the conditions in this Section 4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
5.01 Corporate Existence and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of Delaware,
and has all corporate powers and all material governmental licenses,
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authorizations, consents and approvals required to carry on its business as now
conducted.
5.02 Subsidiaries. Each of the Company's corporate Subsidiaries is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
5.03 Corporate and Governmental Authorization; No Contravention. The
execution, delivery and performance by the Company of the Loan Documents are
within the Company's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any Governmental Authority and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of the certificate of
incorporation or by-laws of the Company or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company or result
in the creation or imposition of any Lien on any asset of the Company or any of
its Subsidiaries.
5.04 Binding Effect. This Agreement and each other Loan Document to which
the Company is a party constitutes a valid and binding agreement of the Company,
and each Note, when executed and delivered in accordance with this Agreement,
will constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with their respective terms.
5.05 Litigation. Except as disclosed in the Company's 1998 Form 10-K, there
is no action, suit or proceeding pending against, or to the knowledge of the
Company threatened against or affecting, the Company or any of its Subsidiaries
before any court or arbitrator or any Governmental Authority in which there is a
reasonable possibility of an adverse decision which could have a Material
Adverse Effect.
5.06 ERISA Compliance. Each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and is in compliance in all material respects with the
presently applicable provisions of ERISA and the Code with respect to each Plan.
5.07 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to
be used solely for the purposes set forth in and permitted by Section 6.08 and
Section 7.04.
5.08 Title to Properties; Liens. The Company and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. The property of the Company and
its Subsidiaries is subject to no Liens, other than Liens permitted under
Section 7.01.
5.09 Taxes. The Company and its Subsidiaries have filed all United States
Federal income tax returns and all other material tax returns which are required
to be filed by them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Company or any Subsidiary, other than
any such taxes being contested in good faith and for which appropriate reserves
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have been established on the books and records of the Company in accordance with
GAAP. The charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Company, adequate.
5.10 Financial Information(a) . (a) The consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of January 28, 1999 and the related
consolidated statements of earnings, cash flows and stockholders' equity for the
fiscal year then ended, reported on by Deloitte & Touche and set forth or as
incorporated by reference in the Company's 1998 Form 10-K, a copy of which has
been delivered to each of the Banks, fairly present, in conformity with GAAP,
the consolidated financial position of the Company and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of October 29, 1999 and the related unaudited
consolidated statements of earnings and cash flows for the thirty-nine weeks
then ended, set forth in the Company's quarterly report for the third quarter
ended October 29, 1999 filed with the SEC on Form 10-Q, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with GAAP applied
on a basis consistent with the financial statements referred to in Subsection
5.10(a), the consolidated financial position of the Company and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such thirty-nine week period (subject to normal year-end
adjustments).
(c) Since January 28, 1999 (or since the date of any Form 10-Q or other
public disclosure document filed by the Company with the SEC prior to the
Closing Date, to the extent any such event or circumstance is disclosed in such
document), there has been no Material Adverse Effect.
5.11 Environmental Matters. In the ordinary course of its business, the
Company considers the effect of Environmental Laws on the business, operations
and properties of the Company and its Subsidiaries as such business, operations
and properties exist at the time. On this basis, the Company has reasonably
concluded that Environmental Laws at the time in effect are unlikely to have a
Material Adverse Effect.
5.12 Regulated Entities. The Company is not an "Investment Company" within
the meaning of the Investment Company Act of 1940. The Company is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
5.13 Insurance. The properties of the Company and its Consolidated
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Company, in such amounts, with such deductibles
(and with such risk retention) and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Company or such Subsidiary operates.
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5.14 Full Disclosure. All information heretofore furnished by the Company
to the Agent or any Bank for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all such information hereafter
furnished by the Company to the Agent or any Bank will be, true and accurate in
all material respects on the date as of which such information is stated or
certified.
5.15 Year 2000. The Company has (a) completed a review and assessment of
critical areas within its and each of its Subsidiaries' business and operations
(including those affected by customers and vendors) that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications and devices containing imbedded computer chips used by the Company
or any of its Subsidiaries (or their respective customers and vendors) may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and after December 31, 1999), (b) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (c)
substantially completed implementation of that plan in accordance with that
timetable. The Year 2000 Problem has not resulted in, and the Company reasonably
believes that the Year 2000 Problem will not result in, a Material Adverse
Effect.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Majority Banks
waive compliance in writing:
6.01 Information. The Company will deliver to each of the Banks:
(a) as soon as available and in any event within 120 days after the end of
each fiscal year of the Company, a consolidated balance sheet of the Company and
its Consolidated Subsidiaries as of the end of such fiscal year and the related
consolidated statements of earnings, cash flows and stockholders' equity for
such fiscal year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on in a manner acceptable to the SEC by
Deloitte & Touche or other independent public accountants of nationally
recognized standing (the "Independent Auditor"). Such report shall not be
qualified as to (i) going concern or (ii) any limitation in the scope of the
audit;
(b) as soon as available and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of earnings
for such quarter and for the portion of the Company's fiscal year ended at the
end of such quarter and the related consolidated statement of cash flows for the
portion of the Company's fiscal year ended at the end of such quarter, setting
forth in comparative form the corresponding statements for the corresponding
portions of the Company's previous fiscal year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, GAAP and consistency by
the chief financial officer or the chief accounting officer of the Company;
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(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a Compliance Certificate of the chief
financial officer or the chief accounting officer of the Company;
(d) simultaneously with the delivery of each set of financial statements
referred to in subsection (a), a statement of the Independent Auditor which
reported on such statements (i) whether anything has come to their attention to
cause them to believe that any Default existed on the date of such statements
and (ii) confirming the calculations set forth in the Compliance Certificate
delivered simultaneously therewith pursuant to subsection (c);
(e) forthwith upon the occurrence of any Default, a certificate of the
chief financial officer or the chief accounting officer of the Company setting
forth the details thereof and the action which the Company is taking or proposes
to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the Company
generally, copies of all financial statements, reports and proxy statements so
mailed and not previously delivered to each Bank pursuant to this Section 6.01;
(g) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, l0-Q and 8-K (or their equivalents)
which the Company shall have filed with the SEC and not previously delivered to
each Bank pursuant to this Section 6.01;
(h) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA, or notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such notice; (iii) receives
notice from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the Code, a
copy of such application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the chief financial officer or the chief
accounting officer of the Company setting forth details as to such occurrence
and action, if any, which the Company or applicable member of the ERISA Group is
required or proposes to take; and
(i) from time to time such additional information regarding the
consolidated financial position of the Company as the Agent, at the request
of any Bank, may reasonably request.
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As to any information contained in materials furnished pursuant to subsection
6.01(g), the Company shall not be separately required to furnish such
information under subsection (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Company to furnish the information and
materials described in subsection (a) and (b) above at the times specified
therein.
6.02 Conduct of Business and Maintenance of Existence. The Company will
continue, and will cause each Subsidiary to continue, to engage in business of
the same general type as now conducted by the Company and its Subsidiaries, and
will preserve, renew and keep in full force and effect, and will cause each
Subsidiary to preserve, renew and keep in full force and effect their respective
corporate existence and their respective rights, privileges and franchises
necessary or desirable in the normal conduct of business; provided that the
Company may (a) discontinue operations or dispose of property in the normal
conduct of its business and (b) cause the dissolution of Subsidiaries or the
merger of a Subsidiary into the Company or into another Subsidiary as it may
from time to time reasonably deem necessary or desirable in the conduct of its
business.
6.03 Maintenance of Property. The Company will keep, and will cause each
Subsidiary to keep, all property useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted; provided that the
Company and each of its Subsidiaries may discontinue operations and dispose of
property in the normal conduct of its business.
6.04 Insurance. The Company will maintain, and will cause each Subsidiary
to maintain with financially sound and reputable insurance companies, insurance
on all their real and personal property in at least such amounts and against at
least such risks (and with such risk retention) as are usually insured against
by companies of established repute engaged in the same or similar business as
the Company or such Subsidiary, and the Company will promptly furnish to the
Banks such information as to insurance carried as may be reasonably requested in
writing by the Agent.
6.05 Payment of Obligations. The Company will pay and discharge, and will
cause each Subsidiary to pay and discharge, at or before maturity, all their
respective material obligations and liabilities, including tax liabilities,
except where the same may be contested in good faith by appropriate proceedings,
and will maintain, and will cause each Subsidiary to maintain, in accordance
with GAAP, appropriate reserves for the accrual of any of the same.
6.06 Compliance with Laws. The Company will comply, and cause each
Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of Governmental Authorities
(including Environmental Laws and ERISA), except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings and
non-compliance during the period of such contest could not reasonably be
expected to have a Material Adverse Effect.
6.07 Inspection of Property, Books and Records. The Company will keep, and
will cause each Subsidiary to keep, proper books of record and account in which
full, true and correct entries shall be made of all dealings and transactions in
relation to its business and activities. Upon the occurrence and during the
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continuance of a Default, the Company will permit, and will cause each
Subsidiary to permit, representatives of any Bank at such Bank's expense, to
examine any of their respective books and records (except as they relate to the
Company's trade secrets or other proprietary information of the Company other
than any information required to be delivered to the Banks by the Company under
Section 6.01) and to discuss their respective finances and accounts with their
respective officers, employees and independent public accountants, all at such
reasonable times and as often as may reasonably be desired.
6.08 Use of Proceeds. The proceeds of the Loans made under this Agreement
will be used by the Company for commercial paper back-up liquidity and other
lawful corporate purposes.
6.09 Further Assurances. Promptly upon request by the Agent or the Majority
Banks, the Company shall do, execute, acknowledge, and deliver, any and all such
further acts, certificates, assurances and other instruments the Agent or such
Banks, as the case may be, may reasonably require from time to time in order to
carry out more effectively the purposes of this Agreement or any other Loan
Document.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Majority Banks
waive compliance in writing:
7.01 Limitation on Liens. Neither the Company nor any Consolidated
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Indebtedness
outstanding on the date of this Agreement in an aggregate principal amount not
exceeding $500,000,000;
(b) any Lien existing on any specific tangible asset or assets of any
Person at the time such Person becomes a Consolidated Subsidiary and not created
in contemplation of such event, subject to subsection 7.01(e);
(c) any Lien on any asset securing Indebtedness incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such asset,
provided that (i) in the case of land acquired for the purpose of constructing
new business or operating facilities thereon, (A) such Lien attaches to such
land within 24 months after the acquisition thereof and (B) construction of such
new business or operating facilities thereon is substantially complete within 24
months after the acquisition of such land and (ii) in the case of any asset
other than an asset of the type described in the preceding clause (i), such Lien
attaches to such asset concurrently with or within 180 days after the
acquisition thereof;
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(d) any Lien on any specific tangible asset or assets of any Person
existing at the time such Person is merged or consolidated with or into the
Company or a Consolidated Subsidiary and not created in contemplation of such
event, subject to subsection 7.01(e);
(e) any Lien existing on any specific tangible asset or assets prior to the
acquisition thereof by the Company or a Consolidated Subsidiary and not created
in contemplation of such acquisition; provided that in the case of any Lien
permitted under this subsection (e) or under subsections (b) and (d), any such
Lien does not by its terms cover any such tangible assets after the time the
Company directly or indirectly acquires such assets which were not covered
immediately prior thereto, and any such Lien does not by its terms secure any
Indebtedness other than Indebtedness existing immediately prior to the time of
acquisition of such assets;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Indebtedness is not
increased and is not secured by any additional assets; (g) Liens arising in the
ordinary course of its business which (i) do not secure Indebtedness and (ii) do
not in the aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its business;
(h) Liens arising from the Company's or a Subsidiary's pledging of
equipment, not otherwise permitted by the foregoing clauses of this Section,
securing Indebtedness in an aggregate principal amount at any time outstanding
not to exceed $500,000,000; and
(i) Liens on real property; provided that the aggregate value of real
property owned by the Company (not including for purposes of this proviso any
real property acquired or held by the Company subject to the interest of a
lessor under a capital lease relating to such real property), as determined on a
lower of cost or Fair Market Value basis (as defined below), exceeds the
aggregate principal amount of Indebtedness secured by Liens on such real
property in an amount not less than $250,000,000.
For the purposes of Section 7.01, "Fair Market Value" means with
respect to any real property of the Company or any Subsidiary at any date the
open market cash purchase price that an informed and willing purchaser would pay
for such real property in an arm's-length transaction to a willing and informed
owner under no compulsion to sell, all as determined (i) if no Default has
occurred and is continuing, at the option of the Majority Banks either (A) in
good faith by the Board of Directors of the Company or (B) by an appraisal
conducted by an independent appraiser satisfactory to the Agent and the Company,
the cost of such appraisal to be shared equally by the Company and the Banks,
and (ii) if a Default has occurred and is continuing, by an appraisal conducted
by an independent appraiser satisfactory to the Agent and the Company, the cost
of such appraisal to be borne solely by the Company.
7.02 Disposition of Assets. The Company will not (i) consolidate or merge
with or into any other Person or (ii) directly or indirectly sell, lease or
otherwise transfer all or any substantial part of the assets of the Company and
its Consolidated Subsidiaries, considered as a whole, to any other Person;
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provided that the Company may merge with another Person if (A) the Company is
the Person surviving such merger and (B) immediately after giving effect to such
merger, no Default shall have occurred and be continuing.
7.03 Limitation on Subsidiary Indebtedness and Swap Contracts. The Company
shall not permit any Subsidiary to create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness or Swap Contracts except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) endorsements for collection or deposit in the ordinary course of
business;
(c) Swap Contracts outstanding as of the Closing Date or entered into
thereafter in the ordinary course of business;
(d) Surety Instruments in the ordinary course of business;
(e) Indebtedness existing on the Closing Date in an amount not to exceed
$3,200,000,000;
(f) Indebtedness secured by Liens permitted by subsections 7.01(b), (c),
(d), (e) and (i);
(g) capital leases entered into by any Subsidiary after the Closing Date to
finance the acquisition of equipment;
(h) Indebtedness of Wholly-Owned Consolidated Subsidiaries of the Company
to the Company or to other Wholly-Owned Consolidated Subsidiaries of the
Company; and
(i) additional Indebtedness incurred after the Closing Date not exceeding
$500,000,000 in aggregate principal amount at any time outstanding.
7.04 Use of Proceeds.
(a) The Company shall not, and shall not suffer or permit any Subsidiary
to, use any portion of the Loan proceeds, directly or indirectly, (i) to
purchase or carry Margin Stock, (ii) to repay or otherwise refinance
Indebtedness of the Company or others incurred to purchase or carry Margin
Stock, (iii) to extend credit for the purpose of purchasing or carrying any
Margin Stock or (iv) for any other purpose which violates Regulations T, U or X
of the FRB.
(b) The Company shall not, directly or indirectly, use any portion of the
Loan proceeds to purchase during the underwriting period, or for thirty days
thereafter, Ineligible Securities underwritten by the Arranger. The Arranger is
a wholly-owned subsidiary of BankAmerica Corporation and a registered
broker-dealer which is permitted to underwrite and deal in certain Ineligible
Securities; and "Ineligible Securities" means securities which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. ss. 24, Seventh).
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7.05 Minimum Consolidated Tangible Net Worth. The Company shall not permit
its Consolidated Tangible Net Worth at any time to be less than $2,100,000,000;
provided that upon (a) the purchase from time to time of common stock of the
Company by the Company from one or more of the J.A. and Kathryn Albertson
Foundation, Inc., or donees pursuant to the terms of the Foundation Stock
Agreement, or (b) the purchase from time to time of common stock of the Company
by the Company from Theo Albrecht or from Markus-Stiftung pursuant to the terms
of the Markus-Stiftung Stock Agreement, Consolidated Tangible Net Worth shall be
increased, for purposes of subsequent calculations hereunder, by an amount (the
"CTNW Adjustment") equal to the excess (if any) of (i) the amount by which the
purchase price of such common stock reduces Consolidated Tangible Net Worth over
(ii) the amount by which Consolidated Tangible Net Worth has been increased
through the sale of common stock subsequent to the date of such purchase,
excluding the effect of the exercise of employee stock options, all as
determined in accordance with GAAP.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment. The Company fails to make, (i) when and as required to be
made herein, payments of any amount of principal of any Loan, or (ii) within
five Business Days after the same becomes due, payment of any interest, fee or
any other amount payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation, warranty, certification
or statement made by the Company in this Agreement or in any certificate,
financial statement or other document delivered pursuant to this Agreement shall
prove to have been incorrect in any material respect on or as of the date made
(or deemed made); or
(c) Specific Defaults. The Company shall fail to observe or perform any
covenant contained in Sections 7.01 through 7.05, inclusive; or
(d) Other Defaults. The Company shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those covered by
clause (a), (b) or (c) above) for 15 Business Days after the earlier of (i) the
date upon which the chief financial officer, chief accounting officer or other
senior officer of the Company knew or reasonably should have known of such
failure or (ii) notice thereof has been given to the Company by the Agent at the
request of any Bank; or
(e) Cross-Default. (i) The Company or any Subsidiary (A) fails to make any
payment in respect of any Material Indebtedness (other than in respect of Swap
Contracts), when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure; or (B) fails to perform or observe any other condition
or covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any Material Indebtedness, and such failure
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continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such
Material Indebtedness or beneficiary or beneficiaries of such Material
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Material Indebtedness to be declared
to be due and payable, or to be prepaid prior to its stated maturity, or to
become payable, or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (1) any event of default under such Swap
Contract as to which the Company or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (2) any Termination Event (as so defined) as
to which the Company or any Subsidiary is an Affected Party (as so defined),
and, in either event, the Swap Termination Value owed by the Company or such
Subsidiary as a result thereof is greater than $30,000,000; or
(f) Insolvency; Voluntary Proceedings. The Company or any Subsidiary (i)
ceases or fails to be solvent, or generally fails to pay, or admits in writing
its inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course; (iii) consents to or
commences a voluntary Insolvency Proceeding with respect to itself, or (iv)
takes any corporate action to authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) An involuntary Insolvency Proceeding shall
be commenced or filed against the Company or any Subsidiary, or any writ,
judgment, warrant of attachment, execution or similar process, is issued or
levied against a substantial part of the Company's or any Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Company or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Company or any Subsidiary acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
property or business; or
(h) ERISA. Any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $30,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect of or
to cause a trustee to be appointed to administer any Material Plan; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $30,000,000; or
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(i) Monetary Judgments. A judgment or order for the payment of money in
excess of $30,000,000 shall be rendered against the Company or any Subsidiary
and such judgment or order shall continue unsatisfied and unstayed for a period
of 30 days; or
(j) Change of Control. There occurs any Change of Control.
8.02 Remedies. If any Event of Default occurs, then, and in every such
event, the Agent shall (i) if requested or consented to by the Majority Banks,
by notice to the Company terminate the Commitments and they shall thereupon
terminate, (ii) if requested or consented to by the Majority Banks, by notice to
the Company declare the Loans (together with accrued interest thereon and all
other amounts owing under the Loan Documents) to be, and the Loans (and such
interest and other amounts) shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company and (iii) if requested or consented to by the
Majority Banks, exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law; provided that in the case of any of the Events of Default specified in
subsections (f) or (g) (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), without any notice to the
Company or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Loans (together with accrued interest thereon and
all other amounts owing under the Loan Documents) shall become immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Company.
8.03 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization; "Agent." Each Bank hereby irrevocably
(subject to Section 9.09) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
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Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
9.02 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
9.04 Reliance by Agent(a) . (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Banks as it deems appropriate
and, if it so requests, it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Majority Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Bank that has executed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter either sent (or made available) by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Bank.
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9.05 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Banks of its receipt of any such
notice. The Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Banks in accordance with Article VIII;
provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
9.06 Credit Decision. Each Bank acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it, and that no act by the
Agent hereinafter taken, including any review of the affairs of the Company and
its Subsidiaries, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Bank. Each Bank represents to the Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company and
its Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices,
reports and other documents expressly herein required to be furnished to the
Banks by the Agent, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Company or any Subsidiary which may come into the
possession of any of the Agent-Related Persons.
9.07 Indemnification of Agent. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), in accordance with the Banks'
Pro Rata Shares, from and against any and all Indemnified Liabilities; provided,
however, that no Bank shall be liable for the payment to the Agent-Related
Persons of any portion of such Indemnified Liabilities resulting from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank shall reimburse the Agent upon demand for its ratable share
of any costs or out-of-pocket expenses (including Attorney Costs) incurred by
the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Company. The
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undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
9.08 Agent in Individual Capacity. BofA and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" include BofA in
its individual capacity.
9.09 Successor Agent. The Agent may, and at the request of the Majority
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Majority Banks shall appoint from among the
Banks a successor agent for the Banks which successor agent shall be approved by
the Company (such approval not to be unreasonably withheld). If no successor
agent is appointed prior to the effective date of the resignation of the Agent,
the Agent may appoint, after consulting with the Banks and the Company, a
successor agent from among the Banks. Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers and duties as Agent
shall be terminated. After any retiring Agent's resignation hereunder as Agent,
the provisions of this Article IX and Sections 10.04 and 10.05 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor agent has accepted appointment as
Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Banks shall perform all of the duties of the Agent
hereunder until such time, if any, as the Majority Banks appoint a successor
agent as provided for above. Notwithstanding the foregoing, however, BofA may
not be removed as the Agent at the request of the Majority Banks unless BofA
shall also simultaneously be replaced as "Swingline Bank" hereunder pursuant to
documentation in form and substance reasonably satisfactory to BofA.
9.10 Withholding Tax. (a) (a) Each Bank organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement, and on the Assignment and Acceptance
Date pursuant to which it becomes a party to this Agreement in the case of each
other Bank, and from time to time thereafter if requested in writing by the
Company or the Agent (but only so long thereafter as such Bank remains lawfully
able to do so), provide the Agent and the Company with (i) an accurate,
complete, and duly executed Internal Revenue Service form W-8BEN or W-8ECI, as
appropriate, or any successor or substitute form prescribed or permitted by the
Internal Revenue Service, certifying that such Bank is entitled to claim the
benefit of complete exemption from imposition of United States withholding tax
under an income tax treaty to which the United States is a party in respect of
payments made under this Agreement or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
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or business in the United States and (ii) in the event that, by virtue of a
change in law or regulations, such forms are no longer valid evidence of a
Person's exemption from withholding which is reasonably satisfactory to the
Company, other appropriate evidence supporting such Person's exemption from
withholding as the Company may reasonably request.
(b) For any period with respect to which a Bank or an Assignee has failed
to provide the Company with the appropriate form described in Subsection 9.10(a)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under Subsection 9.10(a)), such Bank or Assignee shall not be
entitled to indemnification under Section 3.01(b) or (d) with respect to Taxes
imposed by the United States.
(c) If any Bank claims exemption from, or reduction of, withholding tax
under a United States tax treaty by providing IRS Form W-8BEN and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Company owing to such Bank, such Bank agrees to notify
the Company and Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company owing to such Bank. To the extent
of such percentage amount, the Agent will treat such Bank's IRS Form W-8BEN as
no longer valid.
(d) If any Bank claiming exemption from United States withholding tax by
filing IRS Form W-8ECI with the Agent sells, assigns, grants a participation in,
or otherwise transfers all or part of the Obligations of the Company owing to
such Bank, such Bank agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(e) If any Bank is entitled to a reduction in the applicable withholding
tax, the Agent may withhold from any interest payment to such Bank an amount
equivalent to the applicable withholding tax after taking into account such
reduction. However, if the forms or other documentation required by subsection
(a) of this Section are not delivered to the Company and Agent, then the Company
or Agent may withhold from any interest payment to such Bank not providing such
forms or other documentation an amount equivalent to the applicable withholding
tax imposed by Sections 1441 and 1442 of the Code, without reduction.
(f) If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold tax
from amounts paid to or for the account of any Bank (because the appropriate
form was not delivered or was not properly executed, or because such Bank failed
to notify the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Bank shall indemnify the Company or the Agent, as the case may be, fully
for all amounts paid, directly or indirectly, by the Company or the Agent, as
the case may be, as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Company or the Agent, as the case may be, under this Section, together with all
costs and expenses (including Attorney Costs). The obligation of the Banks under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of the Agent.
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9.11 Co-Agents. None of the Banks identified on the facing page or
signature pages of this Agreement as a "Documentation Agent," "Syndication
Agent," "Senior Managing Agent" or "Managing Agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Banks as such. Without limiting the foregoing, none of
the Banks so identified shall have or be deemed to have any fiduciary
relationship with any Bank. Each Bank acknowledges that it has not relied, and
will not rely, on any of the Banks so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by the Majority Banks
(or by the Agent at the written request of the Majority Banks) and the Company
and acknowledged by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Banks and the Company and acknowledged
by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank or the Swingline
Commitment of the Swingline Bank (or reinstate any Commitment terminated
pursuant to Section 8.02);
(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Banks (or any of them) hereunder or under any other Loan Document (including
the date of any mandatory prepayment hereunder);
(c) reduce the principal of, or the rate of interest specified herein on
any Loan, or (subject to clause (ii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which is required for the Banks or any of them to
take any action hereunder; or
(e) amend this Section 10.01, subsection 2.04(e), Section 2.17, Section
2.18, the definition of "Majority Banks" herein, or any provision herein
providing for consent or other action by all Banks or some specified amount of
Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Majority Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document, (ii) no amendment, waiver or consent
shall, unless in writing and signed by the Swingline Bank in addition to the
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Majority Banks or all the Banks, as the case may be, increase the Swingline
Commitment or otherwise affect the rights or duties of the Swingline Bank under
this Agreement, and (iii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed by the parties thereto.
10.02 Notices(a) . (a) All notices, requests, consents, approvals, waivers
and other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission) and mailed, faxed or
delivered, to the address or facsimile number specified for notices on Schedule
10.02; or, as directed to the Company or the Agent, to such other address as
shall be designated by such party in a written notice to the other parties, and
as directed to any other party, at such other address as shall be designated by
such party in a written notice to the Company and the Agent.
(b) All such notices, requests and communications shall, when transmitted
by overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date deposited
into the mails, or if delivered, upon delivery; except that notices pursuant to
Article II or IX to the Agent shall not be effective until actually received by
the Agent; and notices pursuant to Article II to the Swingline Bank shall not be
effective until actually received by the Swingline Bank at the address specified
for such Person on Schedule 10.02.
(c) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Company. The Agent and the Banks shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by the Company to
give such notice and the Agent and the Banks shall not have any liability to the
Company or other Person on account of any action taken or not taken by the Agent
or the Banks in reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans shall not be affected in any way or
to any extent by any failure by the Agent and the Banks to receive written
confirmation of any telephonic or facsimile notice or the receipt by the Agent
and the Banks of a confirmation which is at variance with the terms understood
by the Agent and the Banks to be contained in the telephonic or facsimile
notice.
10.03 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent, any Designated Bidder or any Bank, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
10.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are consummated,
pay or reimburse BofA (including in its capacity as Agent) within five Business
Days after demand (subject to subsection 4.01(e)) for all reasonable costs and
expenses incurred by BofA (including in its capacity as Agent) and the Lead
Arranger in connection with (i) the development, preparation, delivery and
execution of, and any amendment, supplement, waiver or modification to (in each
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case, whether or not consummated), this Agreement, any Loan Document and any
other documents prepared in connection herewith or therewith and (ii) the
consummation of the transactions contemplated hereby and thereby, including
reasonable Attorney Costs incurred by BofA (including in its capacity as Agent)
with respect thereto; and
(b) pay or reimburse the Agent, the Lead Arranger, each Designated Bidder
and each Bank within five Business Days after demand (subject to subsection
4.01(e)) for all costs and expenses (including Attorney Costs) incurred by them
in connection with the enforcement, attempted enforcement, or preservation of
any rights or remedies under this Agreement or any other Loan Document during
the existence of an Event of Default or after acceleration of the Loans
(including in connection with any "workout" or restructuring regarding the
Loans, and including in any Insolvency Proceeding or appellate proceeding).
10.05 Company Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Company shall indemnify, defend and hold the
Agent-Related Persons, and each Bank, each Designated Bidder and each of its
respective officers, directors, employees, counsel, agents and attorneys-in-fact
(each an "Indemnified Person") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses and disbursements (including Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Bank) be imposed on, incurred by or asserted against
any such Person in any way relating to or arising out of this Agreement, the
other Loan Documents or any document contemplated by or referred to therein, or
the transactions contemplated hereby, or any action taken or omitted by any such
Indemnified Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of this
Agreement or the Loans or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided that the Company shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities to
the extent resulting from the gross negligence or willful misconduct of such
Indemnified Person. The agreements in this Section and in Section 10.04 shall
survive payment of all other Obligations.
10.06 Payments Set Aside. To the extent that the Company makes a payment to
the Agent, any Designated Bidder or any Bank or the Agent, any Designated Bidder
or any Bank exercises its right of set-off, and such payment or the proceeds of
such set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Agent, such Designated Bidder or such Bank in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Bank
and each Designated Bidder severally agrees to pay to the Agent upon demand its
pro rata share of any amount so recovered from or repaid by the Agent.
10.07 Binding Effect; Successors and Assigns. This Agreement shall become
effective when it shall have been executed by the Company, the Agent and the
Banks and thereafter shall be binding upon and inure to the benefit of the
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parties hereto and their respective successors and assigns, except that the
Company may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Agent and each Bank.
10.08 Assignments, Participations, Etc(a). (a) Any Bank may, with the
written consent of the Company, the Swingline Bank and the Agent (which in each
case shall not be unreasonably withheld), at any time assign and delegate to one
or more Eligible Assignees (each an "Assignee") all, or any ratable part of all,
of the Loans, the Commitment and the other rights and obligations of such Bank
hereunder; provided, however, that (i) no written consent of the Company shall
be required during the existence of a Default or an Event of Default; (ii) no
written consent of the Company or the Agent or the Swingline Bank shall be
required in connection with any assignment and delegation by a Bank to an
Eligible Assignee that is a United States Affiliate of such Bank or another
Bank; and (iii) except in connection with an assignment of all of a Bank's
rights and obligations with respect to its Commitment and Loans, any such
assignment (A) to an Eligible Assignee that is a Bank or an Affiliate of a Bank
hereunder shall be equal to or greater than $5,000,000 or (B) to an Eligible
Assignee that is not a Bank or an Affiliate of a Bank hereunder shall be equal
to or greater than $10,000,000; and (iv) each such partial assignment shall be
of a ratable part of the Loans, the Commitment and the other interests, rights
and obligations hereunder of such assigning Bank; and provided further, however,
that the Company, the Swingline Bank and the Agent may continue to deal solely
and directly with such Bank in connection with the interest so assigned to an
Assignee until (A) such Bank and its Assignee shall have delivered to the
Company and the Agent an Assignment and Acceptance Agreement substantially in
the form of Exhibit E (an "Assignment and Acceptance") together with any Note or
Notes subject to such assignment; (B) a written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, in substantially the form of the Notice of Assignment
and Acceptance attached as Schedule 1 to the Assignment and Acceptance, shall
have been given to the Company and the Agent by such Bank and the Assignee; and
(C) the assignor Bank or Assignee shall have paid to the Agent a processing fee
in the amount of $3,500; and (D) the Agent, the Swingline Bank and the Company
each shall have provided any required consent to such assignment in accordance
with this Section. In connection with any assignment by BofA, its Swingline
Commitment may be assigned in whole (and not part) and only in connection with
an assignment transaction involving an assignment of all of its Commitment and
Loans, and the Assignment and Acceptance may be appropriately modified to
include an assignment and delegation of its Swingline Commitment and any
outstanding Swingline Loans.
(b) From and after the date that the Agent notifies the assignor Bank that
the Agent has received (and, if required, provided its consent with respect
thereto and, if necessary, received any other consents required under this
Section 10.08) an executed Assignment and Acceptance and payment of the
above-referenced processing fee (such date referred to herein as the "Assignment
and Acceptance Date", (i) the Assignee thereunder shall be a party hereto and,
to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, shall have the rights and
obligations of a Bank under the Loan Documents, (ii) this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom, and (iii) the assignor Bank shall, to the extent that rights
and obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
Page 59
<PAGE>
released from its obligations under the Loan Documents; provided, however, that
the assignor Bank shall not relinquish its rights under Article III or under
Sections 10.04 and 10.05 (and any equivalent provisions of the other Loan
Documents) to the extent such rights relate to the time prior to the effective
date of the Assignment and Acceptance. The Commitment allocated to each Assignee
shall reduce the Commitment of the assigning Bank pro tanto.
(c) Within five Business Days after the Company's receipt of notice from
the Agent that it has received (and, if necessary, consented to) an executed
Assignment and Acceptance and payment of the processing fee (and provided that
the Company and the Swingline Bank consent to such assignment in accordance with
subsection 10.08(a)), the Company shall execute and deliver to the Agent any new
Notes requested by such Assignee evidencing such Assignee's assigned Loans and
Commitment and, if the assignor Bank has retained a portion of its Loans and its
Commitment, replacement Notes as requested by the assignor Bank evidencing the
Loans and Commitment retained by the assignor Bank (such Notes to be in exchange
for, but not in payment of, the Notes held by such Bank, if any).
(d) Any Bank or Designated Bidder may at any time sell to one or more
commercial banks or other Persons not Affiliates of the Company (a
"Participant") participating interests in any Loans, the Commitment of that Bank
and the other interests of that Bank or Designated Bidder (the "Originator")
hereunder and under the other Loan Documents; provided, however, that (i) the
Originator's obligations under this Agreement shall remain unchanged, (ii) the
Originator shall remain solely responsible for the performance of such
obligations, (iii) the Company and the Agent shall continue to deal solely and
directly with the Originator in connection with the Originator's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no Bank
shall transfer or grant any participating interest under which the Participant
has rights to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment, consent or waiver would require unanimous consent of the Banks as
described in the first proviso to Section 10.01. In the case of any such
participation, the Participant shall not have any rights under this Agreement,
or any of the other Loan Documents, and all amounts payable by the Company
hereunder shall be determined as if such Originator had not sold such
participation; except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Bank or Designated Bidder
(as the case may be) under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank or
Designated Bidder may at any time create a security interest in, or pledge, all
or any portion of its rights under and interest in this Agreement and any Note
held by it (other than in respect of Swingline Loans) in favor of any Federal
Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
10.09 Designated Bidders. Any Bid Loan Bank may designate one Designated
Bidder to have a right to offer and make Bid Loans pursuant to Section 2.06;
provided, however, that (i) no such Bid Loan Bank may make more than one such
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<PAGE>
designation, (ii) each such Bid Loan Bank making any such designation shall
retain the right to make Bid Loans, and (iii) the parties to each such
designation shall execute and deliver to the Agent a Designation Agreement. Upon
its receipt of an appropriately completed Designation Agreement executed by a
designating Bid Loan Bank and a designee representing that it is a Designated
Bidder, the Agent will accept such Designation Agreement and give prompt notice
thereof to the Company, whereupon such designation of such Designated Bidder
shall become effective and such Designated Bidder shall become a party to this
Agreement as a "Designated Bidder."
10.10 Confidentiality. Each Bank and each Designated Bidder agrees to take
and to cause its Affiliates to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all information identified
as "confidential" or "secret" by the Company and provided to it by the Company
or any Subsidiary, or by the Agent on the Company's or such Subsidiary's behalf,
under this Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information other than in connection with or in
enforcement of this Agreement and the other Loan Documents or in connection with
other business now or hereafter existing or contemplated with the Company or any
Subsidiary; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by such Bank or
Designated Bidder, or (ii) was or becomes available on a non-confidential basis
from a source other than the Company, provided that such source is not bound by
a confidentiality agreement with the Company known to such Bank or Designated
Bidder; provided, however, that any Bank or Designated Bidder may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which such Bank or Designated Bidder is subject or in
connection with an examination of such Bank or Designated Bidder by any such
authority; (B) pursuant to subpoena or other court process; (C) when required to
do so in accordance with the provisions of any applicable Requirement of Law;
(D) to the extent required in connection with any litigation or proceeding to
which the Agent, any Bank, Designated Bidder or their respective Affiliates may
be party; (E) to the extent required in connection with the exercise of any
remedy hereunder or under any other Loan Document; (F) to such Bank's or
Designated Bidder's independent auditors, legal counsel and other professional
advisors; (G) to any Participant or Assignee, actual or potential, provided that
such Person agrees in writing to keep such information confidential to the same
extent required of the Banks hereunder; (H) as to any Bank or Designated Bidder
or its Affiliate, as expressly permitted under the terms of any other document
or agreement regarding confidentiality to which the Company or any Subsidiary is
party or is deemed party with such Bank or Designated Bidder or such Affiliate;
and (I) to its Affiliates.
10.11 Set-off. In addition to any rights and remedies of the Banks provided
by law, if an Event of Default exists or the Loans have been accelerated, each
Bank and Designated Bidder is authorized at any time and from time to time,
without prior notice to the Company, any such notice being waived by the Company
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing by, such Bank or Designated
Bidder to or for the credit or the account of the Company against any and all
Obligations owing to such Bank or Designated Bidder, now or hereafter existing.
Each Bank and Designated Bidder agrees promptly to notify the Company and the
Agent after any such set-off and application made by such Bank or Designated
Bidder; provided, however, that the failure to give such notice shall not affect
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<PAGE>
the validity of such set-off and application. Any Bank having outstanding both
Committed Loans and Bid Loans at any time a right of set-off is exercised by
such Bank and applying such setoff to the Loans shall apply the proceeds of such
set-off first to such Bank's Committed Loans, until its Committed Loans are
reduced to zero, and thereafter to its Bid Loans.
10.12 Notification of Addresses, Lending Offices, Etc. Each Bank and each
Designated Bidder shall notify the Agent in writing of any changes in the
address to which notices to such Bank or Designated Bidder should be directed,
of addresses of any Lending Office, of payment instructions in respect of all
payments to be made to it hereunder and of such other administrative information
as the Agent shall reasonably request.
10.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
10.14 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
10.15 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of the Company, the Banks, the
Designated Bidders, the Agent, the Agent-Related Persons, the Indemnified
Persons and their permitted successors and assigns, and no other Person shall be
a direct or indirect legal beneficiary of, or have any direct or indirect cause
of action or claim in connection with, this Agreement or any of the other Loan
Documents.
10.16 Governing Law and Jurisdiction(a) . (a) THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK; PROVIDED THAT THE COMPANY, THE AGENT AND THE BANKS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT, THE DESIGNATED
BIDDERS AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT,
THE DESIGNATED BIDDERS AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE COMPANY, THE AGENT, THE DESIGNATED BIDDERS AND THE BANKS
EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
Page 62
<PAGE>
10.17 Waiver of Jury Trial. THE COMPANY, THE BANKS, THE DESIGNATED BIDDERS AND
THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY,
THE BANKS, THE DESIGNATED BIDDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
10.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks, the Designated Bidders, the Swingline Bank and the Agent, and
supersedes all prior or contemporaneous agreements and understandings of such
Persons, oral or written, relating to the subject matter hereof and thereof.
(remainder of page intentionally left blank)
Page 63
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.
ALBERTSON'S, INC.
By:
Title:
BANK OF AMERICA, N.A., as Agent
By:
Title:
BANK OF AMERICA, N.A., as Swingline Bank and as
a Bank
By:
Title:
BANK ONE, NA, as Documentation Agent and as a
Bank
By:
Title:
Page 64
<PAGE>
WACHOVIA BANK, N.A., as Syndication Agent and as
a Bank
By:
Title:
BANCA DI ROMA, SAN FRANCISCO BRANCH
By:
Title:
THE BANK OF NEW YORK
By:
Title:
BANK OF OKLAHOMA, N.A.
By:
Title:
FIRSTAR BANK, NATIONAL ASSOCIATION
By:
Title:
Page 65
<PAGE>
FIRST UNION NATIONAL BANK
By:
Title:
FIRST SECURITY BANK, N.A.
By:
Title:
HUNTINGTON NATIONAL BANK
By:
Title:
INTERNATIONAL BANK OF COMMERCE
By:
Title:
KEYBANK NATIONAL ASSOCIATION
By:
Title:
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<PAGE>
THE NORTHERN TRUST COMPANY
By:
Title:
SOUTHTRUST BANK, N.A.
By:
Title:
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By:
Title:
UMB BANK, N.A.
By:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
Title:
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<PAGE>
U.S. BANK NATIONAL ASSOCIATION
By:
Title:
WELLS FARGO BANK, N.A.
By:
Title:
MERRILL LYNCH BANK USA
By:
Title:
Page 68
<PAGE>
ANNEX I
PRICING GRID
Applicable Margin and Applicable Fee Amount (Facility Fee): The Facility Fee and
the Applicable Margin for Offshore Rate Committed Loans and Base Rate Committed
Loans shall be, at any time, the rate per annum set forth in the tables below.
"Indebtedness Rating" means the long term unsecured senior, non-credit enhanced
debt rating of the Company by Standard & Poor's Ratings Group or Moody's
Investors Service Inc. (in the case of a split rating, the higher rating will
apply, unless the split results in a difference of more than one rating, in
which case the rating one rating below the highest rating will apply). Any
change in the Applicable Margin or Applicable Fee Amount for the Facility Fee
shall become effective five Business Days after any public announcement of
Indebtedness Rating requiring such a change.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Indebtedness Offshore
Rating Facility Fee Rate Spread Base Rate Spread
------ ------------ ----------- ----------------
- ------------------------------ ---------------------- ------------------------- -----------------------------
- ------------------------------ ---------------------- ------------------------- -----------------------------
=> A or A2 8.0 bps 17.0 bps 0 bps
- ------------------------------ ---------------------- ------------------------- -----------------------------
- ------------------------------ ---------------------- ------------------------- -----------------------------
=> A- or A3 9.0 bps 21.0 bps 0 bps
- ------------------------------ ---------------------- ------------------------- -----------------------------
- ------------------------------ ---------------------- ------------------------- -----------------------------
=> BBB+ or Baa1 10.0 bps 25.0 bps 0 bps
- ------------------------------ ---------------------- ------------------------- -----------------------------
- ------------------------------ ---------------------- ------------------------- -----------------------------
< BBB+ or Baa1 12.5 bps 32.5 bps 0 bps
- ------------------------------ ---------------------- ------------------------- -----------------------------
</TABLE>
Applicable Fee Amount (Utilization Fee): The Utilization Fee applicable to Loans
shall be, at any time, the rate per annum set forth in the table below,
determined in accordance with usage:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
-------------------------- -----------------------
Facility
Usage % Utilization Fee
-------------------------- -----------------------
-------------------------- -----------------------
50% 10.0 bps
-------------------------- -----------------------
</TABLE>
If usage shall equal or exceed the applicable percentage specified above, the
utilization fee corresponding to such percentage shall apply with respect to all
outstanding Loans.
Annex 1-1.
<PAGE>
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
<TABLE>
<CAPTION>
PRO RATA
BANK COMMITMENT SHARE
---- ------------ -------------
<S> <C> <C>
BANK OF AMERICA, N.A. $135,000,000 14.594594595%*
WACHOVIA BANK, N.A. $125,000,000 13.513513514%*
BANK ONE, NA $125,000,000 13.513513514%*
WELLS FARGO BANK, N.A. $75,000,000 8.108108108%*
U.S. BANK NATIONAL ASSOCIATION $75,000,000 8.108108108%*
FIRST UNION NATIONAL BANK $75,000,000 8.108108108%*
UNION BANK OF CALIFORNIA, N.A. $75,000,000 8.108108108%*
THE NORTHERN TRUST COMPANY $42,500,000 4.594594595%*
FIRST SECURITY BANK, N.A. $42,500,000 4.594594595%*
SUNTRUST BANK $25,000,000 2.702702703%*
KEYBANK NATIONAL ASSOCIATION $25,000,000 2.702702703%*
THE HUNTINGTON NATIONAL BANK $25,000,000 2.702702703%*
THE BANK OF NEW YORK $12,500,000 1.351351351%*
INTERNATIONAL BANK OF COMMERCE $12,500,000 1.351351351%*
UMB BANK, N.A. $12,500,000 1.351351351%*
SOUTHTRUST BANK, N.A. $12,500,000 1.351351351%*
BANCA DI ROMA, SAN FRANCISCO BRANCH $12,500,000 1.351351351%*
FIRSTAR BANK, NATIONAL ASSOCIATION $12,500,000 1.351351351%*
BANK OF OKLAHOMA, N.A. $5,000,000 0.540540541%*
TOTAL $925,000,000.00 100%
</TABLE>
* [9 DECIMAL PTS.]
S-2.01-1.
<PAGE>
SCHEDULE 10.02
PAYMENT OFFICES; ADDRESSES FOR NOTICES; LENDING OFFICES
COMPANY
Address for Notices:
Albertson's, Inc.
250 Park Center Blvd.
Box 20
Boise, Idaho 83726
Attention: Finance Department
Telephone: (208) 395-6534
Facsimile: (208) 395-6631
BANK OF AMERICA, N.A.
as Agent
Notices for Borrowing, Conversions/Continuations, and Payments:
Bank of America, N.A.
Mail Code: CA4-706-05-09
Agency Services #5596
1850 Gateway Boulevard, 5th Floor
Concord, California 94520
Attention: Tosha Clements
Telephone: (925) 675-8409
Facsimile: (925) 969-2805
Other Notices:
Bank of America, N.A.
Retail Industry Group #33751
Mail Code: CA5-705-41-89
555 California Street, 41st Floor
San Francisco, California 94104
Attention: James P. Johnson
Telephone: (415) 622-6177
Facsimile: (415) 622-4585
S-10.02-1.
<PAGE>
Agent's Payment Office:
Bank of America, N.A.
Attention: Agency Services #5596
Reference: Albertson's, Inc.
For credit to Acct. No. 3750836479
ABA No. 111000012
BANK OF AMERICA, N.A.
as Swingline Bank and as a Bank
Domestic and Offshore Lending Office:
(Borrowing Notices, Notices of Conversion/Continuation and Payments)
Bank of America, N.A.
Mail Code: CA4-706-05-09
1850 Gateway Boulevard, 4th Floor
Concord, California 94520
Attention: Tosha Clements
Telephone: (925) 675-8409
Facsimile: (925) 969-2805
All other Notices:
Bank of America, N.A.
Retail Industry Group # 33751
Mail Code: CA5-705-41-89
555 California Street, 41st Floor
San Francisco, California 94104
Attention: James P. Johnson
Telephone: (415) 622-6177
Facsimile: (415) 622-4585
WACHOVIA BANK, N.A.
as Syndication Agent and as a Bank
Domestic and Offshore Lending Office:
Wachovia Bank, N.A.
191 Peachtree Street NE
MC-GA 370
Atlanta, Georgia 30303
Attention: Bill Allen
Telephone: (404) 332-5271
Facsimile: (404) 332-4320
S-10.02-2.
<PAGE>
Notices (other than Borrowing Notice and Notices of Conversion/Continuation):
Wachovia Bank, N.A.
191 Peachtree Street NE
MC-GA 370
Atlanta, Georgia 30303
Attention: John A. Whitner
Telephone: (404) 332-6738
Facsimile: (404) 332-6898
BANK ONE, NA
as Documentation Agent and as a Bank
Domestic and Offshore Lending Office:
Bank One, NA
One Bank One Plaza
IL1-0088, 14th Floor
Chicago, Illinois 60670
Attention: Karen Hannusch
Telephone: (312) 732-9868
Facsimile: (312) 732-2715
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Bank One, NA
One Bank One Plaza
IL1-0086, 14th Floor
Chicago, Illinois 60670
Attention: Eva Drinis
Telephone: (312) 732-5037
Facsimile: (312) 336-4380
WELLS FARGO BANK, N.A.
as Senior Managing Agent and as a Bank
Domestic and Offshore Lending Office:
Wells Fargo Bank, N.A.
707 Wilshire Boulevard, 16th Floor
MAC E28-18-165
Los Angeles, California 90017
Attention: Matthew Frey
Telephone: (213) 614-5038
Facsimile: (213) 614-2305
S-10.02-3.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Wells Fargo Bank, N.A.
999 Third Avenue
Seattle, Washington 98104
Attention: Steve Andersen
Telephone: (206) 292-3666
Facsimile: (206) 292-3595
U.S. BANK NATIONAL ASSOCIATION
as Senior Managing Agent and as a Bank
Domestic and Offshore Lending Office:
U.S. Bank National Association
101 South Capital Boulevard
Boise, Idaho 83702
Attention: Kathy O'Grady
Telephone: (503) 275-3805
Facsimile: (503) 275-8181
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
U.S. Bank National Association
101 South Capital Boulevard
Boise, Idaho 83702
Attention: James W. Henken
Telephone: (208) 383-7823
Facsimile: (208) 383-7563
FIRST UNION NATIONAL BANK
as Senior Managing Agent and as a Bank
Domestic and Offshore Lending Office:
First Union National Bank
301 South College Street, 4th Floor
Charlotte, North Carolina 28288-0479
Attention: Todd Tucker
Telephone: (704) 383-0905
Facsimile: (704) 383-7999
S-10.02-4.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
First Union National Bank
One First Union Center
Charlotte, North Carolina 28288
Attention: Mike Grady
Telephone: (704) 383-7514
Facsimile: (704) 383-7236
UNION BANK OF CALIFORNIA, N.A.
as Senior Managing Agent and as a Bank
Domestic and Offshore Lending Office:
Union Bank of California, N.A.
Commercial Customer Service Unit
1980 Saturn Street
Monterey Park, California 91755
Attention: Ruby Gonzales
Telephone: (323) 720-7055
Facsimile: (323) 724-6198
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Union Bank of California, N.A.
350 California Street, 6th Floor
San Francisco, California 94104
Attention: Timothy P. Streb
Telephone: (415) 705-7021
Facsimile: (415) 705-7085
THE NORTHERN TRUST COMPANY
as Managing Agent and as a Bank
Domestic and Offshore Lending Office:
The Northern Trust Company
50 South LaSalle
Chicago, Illinois 60675
Attention: Linda Honda
Telephone: (312) 444-3532
Facsimile: (312) 630-1566
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
The Northern Trust Company
50 South LaSalle
Chicago, Illinois 60675
Attention: Patrick J. Connelly
Telephone: (312) 444-5048
Facsimile: (312) 444-5055
FIRST SECURITY BANK, N.A.
as Managing Agent and as a Bank
Domestic and Offshore Lending Office:
First Security Bank, N.A.
Commercial Loan Account Center
P.O. Box 7666
Boise, Idaho 83707-1666
Attention: Mary Wissel
Telephone: (208) 393-4046
Facsimile: (208) 393-4540
S-10.02-5.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
First Security Bank, N.A.
Idaho Corporate Banking
119 North 9th Street
Boise, Idaho 83702
Attention: Mary Monroe
Telephone: (208) 393-2106
Facsimile: (208) 393-2472
THE BANKS
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
Domestic and Offshore Lending Office:
Suntrust Bank, Central Florida, N.A.
200 South Orange Avenue
Orlando, Florida 32801
Attention: Joanna Contreras
Telephone: (407) 237-5283
Facsimile: (407) 237-5342
S-10.02-6.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Suntrust Bank, Central Florida, N.A.
303 Peachtree Street, 3rd Floor
Atlanta, Georgia 30308
Attention: Ann Ford
Telephone: (407) 724-3899
Facsimile: (407) 827-6270
KEYBANK NATIONAL ASSOCIATION
Domestic and Offshore Lending Office:
KeyBank National Association
831 East Parkcenter Boulevard
Boise, Idaho 88705
Attention: Specialty Services Team
Telephone: (800) 297-5518
Facsimile: (800) 297-5495
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
KeyBank National Association
700 Fifth Avenue
WA31-10-4612
Seattle, Washington 98104
Attention: Patrick Kennedy
Telephone: (206) 684-6079
Facsimile: (206) 684-6035
THE HUNTINGTON NATIONAL BANK
Domestic and Offshore Lending Office:
The Huntington National Bank
7450 Huntington Park Drive
Mail Code HZ0338
Columbus, Ohio 43235
Attention: Alla Kier
Telephone: (614) 480-1200
Facsimile: (614) 480-2533
S-10.02-7.
<PAGE>
Notices (other than Borrowing Notice and Notices of Conversion/Continuation):
The Huntington National Bank
240 South Pineapple Avenue
Mail Code FL631
Sarasota, Florida 34236
Attention: James C. Wardlaw
Telephone: (941) 951-4686
Facsimile: (941) 951-4659
THE BANK OF NEW YORK
Domestic and Offshore Lending Office:
The Bank of New York
One Wall Street, 8th Floor
New York, New York 10286
Attention: Charlotte Sohn
Telephone: (212) 635-7869
Facsimile: (212) 635-1481/1483
Notices (other than Borrowing Notice and Notices of Conversion/Continuation):
The Bank of New York
One Wall Street, 8th Floor
New York, New York 10286
Attention: Charlotte Sohn
Telephone: (212) 635-7869
Facsimile: (212) 635-1481/1483
INTERNATIONAL BANK OF COMMERCE
Domestic and Offshore Lending Office:
International Bank of Commerce
130 East Travis
San Antonio, Texas 78205
Attention: Christine D. McCullar
Telephone: (210) 518-2507
Facsimile: (210) 518-2591
S-10.02-8.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
International Bank of Commerce
130 East Travis
San Antonio, Texas 78205
Attention: Thomas Travis
Telephone: (210) 518-2502
Facsimile: (210) 518-2590
UMB BANK, N.A.
Domestic and Offshore Lending Office:
UMB Bank, n.a.
1010 Grand Boulevard
Kansas City, Missouri 64106
Attention: Vaughnda Ritchie
Telephone: (816) 860-7019
Facsimile: (816) 860-3772
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
UMB Bank, n.a.
1010 Grand Boulevard
Kansas City, Missouri 64106
Attention: David A. Proffitt
Telephone: (816) 860-7935
Facsimile: (816) 860-7143
SOUTHTRUST BANK
Domestic and Offshore Lending Office:
SouthTrust Bank
600 West Peachtree Street, 27th Floor
Atlanta, Georgia 30308
Attention: Robert M. Searson
Telephone: (404) 853-5754
Facsimile: (404) 853-5766
S-10.02-9.
<PAGE>
Notices (other than Borrowing Notice and Notices of Conversion/Continuation):
SouthTrust Bank
600 West Peachtree Street, 27th Fl
Atlanta, Georgia 30308
Attention: Donna King
Telephone: (404) 853-5763
Facsimile: (404) 853-5766
BANCA DI ROMA, SAN FRANCISCO BRANCH
Domestic and Offshore Lending Office:
Banca di Roma, San Francisco Branch
One Market
Steuart Tower, Suite 1000
San Francisco, California 94105
Attention: Richard G. Dietz
Telephone: (415) 977-7320
Facsimile: (415) 357-9869
Notices (other than Borrowing Notice and Notices of Conversion/Continuation):
Banca di Roma, San Francisco Branch
One Market
Steuart Tower, Suite 1000
San Francisco, California 94105
Attention: Thomas C. Woodruff
Telephone: (415) 977-7308
Facsimile: (415) 357-9869
FIRSTAR BANK, NATIONAL ASSOCIATION
Domestic and Offshore Lending Office:
Firstar Bank, National Association
Commercial Loan Operations
1850 Osborn Avenue
Oshkosh, Wisconsin 54901
Attention: Patti Gumbert
Telephone: (920) 426-7913
Facsimile: (920) 426-7655
S-10.02-10.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Firstar Bank, National Association
425 Walnut Street, 8th Floor
Mail Location 8160
Cincinnati, Ohio 45202
Attention: Richard W. Neltner
Telephone: (513) 632-4073
Facsimile: (513) 632-2068
BANK OF OKLAHOMA, N.A.
Domestic and Offshore Lending Office:
Bank Of Oklahoma, N.A.
P.O. Box 2300
Tulsa, Oklahoma 94192
Attention: Sharon Shannon
Telephone: (918) 588-6335
Facsimile: (918) 588-8231
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Bank Of Oklahoma, N.A.
One Williams Tower
Tulsa, Oklahoma 94192
Attention: Jane Faulkenberry
Telephone: (918) 588-6272
Facsimile: (918) 588-8231
S-10.02-11.
<PAGE>
EXHIBIT A
FORM OF NOTICE OF BORROWING
Date: ______________
To: Bank of America, N.A.,
as Agent
Ladies and Gentlemen:
The undersigned, Albertson's, Inc. (the "Company"), refers to the
Credit Agreement, dated as of March 22, 2000 (as extended, renewed, amended or
restated from time to time, the "5-Year Credit Agreement"), among the Company,
the several financial institutions from time to time party thereto (the
"Banks"), the Co-Agents party thereto, and Bank of America, N.A., as Agent (the
"Agent"), the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 2.03 of the 5-Year
Credit Agreement, of the Committed Borrowing specified below:
1. The Business Day of the proposed Committed Borrowing is _______________.
2. The aggregate amount of the proposed Committed Borrowing is $______________.
3. The Committed Borrowing is to be comprised of $___________ of [Base Rate
Committed Loans] [Offshore Rate Committed Loans].
4. [The duration of the Interest Period for the Offshore Rate Committed Loans
included in the Committed Borrowing shall be _____ months.]
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Committed
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) the representations and warranties of the Company contained
in Article V of the 5-Year Credit Agreement are true and correct as
though made on and as of such date, except to the extent such
representations and warranties expressly refer to an earlier date, in
which case they are true and correct as of such date, and except that
this notice shall be deemed instead to refer to the last day of the
most recent year for which financial statements have then been
delivered in respect of the representation and warranty made in
Section 5.10(a) of the 5-Year Credit Agreement;
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed Borrowing;
(c) there has occurred since January 28, 1999 no event or
circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect; and
A-1.
<PAGE>
(d) after giving effect to the proposed Committed Borrowing, the
aggregate principal amount of all outstanding Committed Loans plus the
aggregate principal amount of all Bid Loans outstanding, shall not at
any time exceed the Aggregate Commitments.
ALBERTSON'S, INC.
By:
Title:
A-2.
<PAGE>
EXHIBIT B
FORM OF NOTICE OF CONVERSION/CONTINUATION
Date: _______________
To: Bank of America, N.A.,
as Agent
Ladies and Gentlemen:
The undersigned, Albertson's (the "Company"), refers to the Credit
Agreement, dated as of March 22, 2000 (as extended, renewed, amended or restated
from time to time, the "5-Year Credit Agreement"), among the Company, the
several financial institutions from time to time party thereto (the "Banks"),
the Co-Agents party thereto, and Bank of America, N.A., as Agent (the "Agent"),
the terms defined therein being used herein as therein defined, and hereby gives
you notice irrevocably, pursuant to Section 2.04 of the 5-Year Credit Agreement,
of the [conversion] [continuation] of Committed Loans specified below:
1. The Conversion/Continuation Date is ______________.
2. The aggregate amount of the Committed Loans to be [converted] [continued]
is $_______________.
3. The Committed Loans are to be [converted into] [continued as] [Offshore Rate
Committed Loans] [Base Rate Committed Loans].
4. [The duration of the Interest Period for the [Offshore Rate Committed Loans]
included in the [conversion][continuation] shall be [____ months].]
ALBERTSON'S, INC.
By:
Title:
B-1.
<PAGE>
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
ALBERTSON'S, INC.
Financial Statements Date: ______________
Reference is made to that certain Credit Agreement dated as of March
22, 2000 (as extended, renewed, amended or restated from time to time, the
"5-Year Credit Agreement"), among ______________ (the "Company"), the several
financial institutions from time to time party thereto (the "Banks"), the
Co-Agents party thereto, and Bank of America, N.A., as Agent (in such capacity,
the "Agent"). Unless otherwise defined herein, capitalized terms used herein
have the respective meanings assigned to them in the 5-Year Credit Agreement.
The undersigned Responsible Officer of the Company hereby certifies as
of the date hereof that he/she is the [_______________] of the Company, and
that, as such, he/she is authorized to execute and deliver this Certificate to
the Banks and the Agent on the behalf of the Company and its consolidated
Subsidiaries, and that:
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection 6.01(a) of the 5-Year Credit
Agreement.]
1. Attached hereto are true and correct copies of the audited
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
at the end of the fiscal year ended _______________ and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on in a manner acceptable to the SEC,
accompanied by the unqualified opinion of the Independent Auditor, which opinion
(a) shall state that such consolidated financial statements present fairly the
financial position for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years and (b) is not qualified as to (i) going
concern, or (ii) any limitation in the scope of audit.
or
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection 6.01(b) of the 5-Year Credit
Agreement.]
1. Attached hereto are true and correct copies of the unaudited consolidated
balance sheet of the Company and its Consolidated Subsidiaries as of the end of
the fiscal quarter ended _________ and the related consolidated statements of
income, shareholders' equity and cash flows for the period commencing on the
first day and ending on the last day of such quarter, which are complete and
accurate in all material respects and fairly present, in accordance with GAAP
(subject to ordinary, good faith year-end audit adjustments), the financial
position, the results of operations and the cash flows of the Company and the
Consolidated Subsidiaries.
C-1
<PAGE>
2. The undersigned has reviewed and is familiar with the terms of the 5-Year
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and condition (financial or
otherwise) of the Company and its Subsidiaries during the accounting period
covered by the attached financial statements.
3. The Company and its Subsidiaries, during such period, have observed,
performed or satisfied all of the covenants and other agreements, and satisfied
every condition in the 5-Year Credit Agreement to be observed, performed or
satisfied by the Company and its Subsidiaries, and the undersigned has no
knowledge of any Default or Event of Default.
4. The financial covenant analyses and information set forth on Schedule 1
attached hereto are true and accurate on and as of the date of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as the
____________ of the Company as of ____________, ________.
ALBERTSON'S, INC.
By:
Title:
C-2
<PAGE>
SCHEDULE 1
to the Compliance Certificate
ALBERTSON'S, INC.
5-YEAR CREDIT AGREEMENT DATED AS OF MARCH 22, 2000
Dated _________________
For the fiscal quarter ended __________
(in thousands)
Consolidated Tangible Net Worth Calculation:
Common stock $___________
Capital in excess ___________
Retained earnings ___________
Stockholders' equity ___________
Plus: Deferred investment tax credits ___________
Minus: Intangible assets:
(specify) ___________
Plus: CTNW Adjustments, if any:
(specify) ___________
Consolidated Tangible Net Worth $__________
Section 7.05: Consolidated Tangible Net Worth shall be not less
than $2.1 billion $__________
1
<PAGE>
EXHIBIT D
FORM OF LEGAL OPINION OF COMPANY'S COUNSEL
[Form of opinion of Thomas R. Saldin, Esq.,
Executive Vice-President and General Counsel to the Company]
March 22, 2000
To the Banks and the Agent Referred to Below
c/o Bank of America N.A., as Agent
Re: Albertson's, Inc.
Ladies and Gentlemen:
I have acted as counsel for Albertson's, Inc. (the "Company")
in connection with the Credit Agreement, dated as of March 22, 2000 (the "5-Year
Credit Agreement") among the Company, the financial institutions party thereto
(the "Banks"), the Documentation Agent and the Syndication Agent party thereto,
and Bank of America N.A., as Agent (the "Agent").
This opinion is being delivered to you pursuant to Section
4.01(d) of the 5-Year Credit Agreement. Capitalized terms used herein and not
otherwise defined herein shall have the same meanings herein as ascribed thereto
in the 5-Year Credit Agreement.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of the Loan Documents and such other documents,
corporate records, certificates of public officials and other instruments and
have conducted such other investigations of fact and law as I have deemed
necessary or advisable for purposes of this opinion.
In my examination I have assumed the legal capacity of all
natural persons, the genuineness of all signatures, including endorsements, the
authority of all persons signing each of the documents on behalf of the parties
thereto (other than the Company), the authenticity of all documents submitted to
me as originals, the conformity to original documents of all documents submitted
to me as certified or photostatic copies, and the authenticity of the originals
of such copies. As to any facts material to this opinion which I did not
independently establish or verify, I have relied upon oral or written statements
and representations of officers and other representatives of the Company and
others, and factual representations contained in the Loan Documents.
I am a member of the Bar of the State of Idaho, and I express
no opinion as to the laws of any jurisdiction, or the effect of any such laws on
the opinions herein stated, other than (i) the laws of the State of Idaho, (ii)
the General Corporation Law of the State of Delaware (the "Delaware Statute")
with respect to the opinions set forth in paragraph 1 hereof, and (iii) the
federal laws of the United States of America to the extent specifically referred
to herein.
Upon the basis of the foregoing, I am of the opinion that:
D-1
<PAGE>
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the Delaware Statute, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted. The Company is qualified as a foreign
corporation and is in good standing in the State of Idaho.
2. The execution, delivery and performance by the Company of the Loan
Documents are within the Company's corporate powers, have been duly authorized
by all necessary corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Company or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the Company
or result in the creation or imposition of any Lien on any asset of the Company
or any of its Subsidiaries.
3. The Loan Documents have been duly executed and delivered by the Company
and constitute valid and binding agreements of the Company, in each case
enforceable in accordance with their terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
by general principles of equity. Insofar as this opinion addresses instruments
or agreements expressed to be governed by New York law, it is my opinion (i)
that an Idaho court would give effect to such choice of New York Law and (ii) in
any event, the conclusion stated in this paragraph would be correct as a matter
of Idaho law.
4. Except as disclosed in the Company's 1998 Form 10-K, there is no action,
suit or proceeding pending against, or to the best of my knowledge threatened
against or affecting, the Company or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official, in which there is a
reasonable possibility of an adverse decision which could materially adversely
effect the business, consolidated financial position or consolidated reports of
operations of the Company and its Consolidated Subsidiaries, considered as a
whole or which in any manner draws into question the validity of the Loan
Documents.
5. The Company is not an "investment company," or a company "controlled" by
an "investment company," within the meaning of the Investment Company Act of
1940, as amended.
This opinion is being furnished only to you solely for your
benefit in connection with the 5-Year Credit Agreement and is not to be used,
circulated, quoted, referred to or relied upon by any other person or for any
other purpose without my prior express written consent; provided, the Agent and
each Bank may deliver a copy to its legal counsel in connection with the 5-Year
Credit Agreement, to any prospective Assignee or Participant of any Bank and to
any successor Agent, and such legal counsel, any Assignee or Participant and any
successor Agent shall be entitled to rely hereon, it being understood that this
opinion is rendered only as of the date hereof.
Very truly yours,
D-2
<PAGE>
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of _____________ is made between __________________ (the
"Assignor") and ________________ (the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Credit Agreement dated
as of March 22, 2000 (as amended, restated, modified, supplemented or renewed
from time to time, the "5-Year Credit Agreement"), among Albertson's, Inc. (the
"Company"), the several financial institutions from time to time party thereto
(including the Assignor, the "Banks"), the Co-Agents party thereto, and Bank of
America, N.A., as agent for the Banks (the "Agent"). Any terms defined in the
5-Year Credit Agreement and not defined in this Assignment and Acceptance are
used herein as defined in the 5-Year Credit Agreement;
WHEREAS, as provided under the 5-Year Credit Agreement, the Assignor
has committed to making Loans to the Company in an aggregate amount not to
exceed $__________ (the "Commitment");
WHEREAS, [the Assignor has made Loans in the aggregate principal amount
of $__________ to the Company consisting of $___________ principal amount of
Committed Loans [and $____________ principal amount of Bid Loans]] [no Loans are
outstanding under the 5-Year Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the 5-Year Credit Agreement
in respect of its Commitment, [together with a corresponding portion of each of
its outstanding Loans], in an amount equal to ___% of the Assignor's Commitment
and Loans, on the terms and subject to the conditions set forth herein, and the
Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and Acceptance,
(i) the Assignor hereby sells, transfers and assigns to the Assignee, and (ii)
the Assignee hereby purchases, assumes and undertakes from the Assignor, without
recourse and without representation or warranty (except as provided in this
Assignment and Acceptance) ___% (the "Assignee's Percentage Share") of (A) the
Commitment [and the Loans] of the Assignor and (B) all related rights, benefits,
obligations, liabilities and indemnities of the Assignor under and in connection
with the 5-Year Credit Agreement and the Loan Documents.
E-1
<PAGE>
(b) With effect on and after the Effective Date (as defined in Section 5
hereof), the Assignee shall be a party to the 5-Year Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Bank under the 5-Year Credit Agreement, including the requirements
concerning confidentiality and the payment of indemnification, with a Commitment
in the amount set forth in subsection (c) below. The Assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of the 5-Year Credit Agreement are required to be performed by it as a
Bank. It is the intent of the parties hereto that the Commitment of the Assignor
shall, as of the Effective Date, be reduced by an amount equal to the portion
thereof assigned to the Assignee hereunder, and the Assignor shall relinquish
its rights and be released from its obligations under the 5-Year Credit
Agreement to the extent such obligations have been assumed by the Assignee;
provided, however, that the Assignor shall not relinquish its rights under
Article III or Sections 10.04 and 10.05 of the 5-Year Credit Agreement to the
extent such rights relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth herein,
on the Effective Date: (i) the Assignee's Commitment will be $__________; and
(ii) the Assignee's aggregate outstanding Committed Loans will be
$_______________ [and its aggregate outstanding Bid Loans will be $___________].
(d) After giving effect to the assignment and assumption set forth herein,
on the Effective Date: (i) the Assignor's Commitment will be $__________; and
(ii) the Assignor's aggregate outstanding Committed Loans will be
$_______________ [and its aggregate outstanding Bid Loans will be $___________].
2. Payments.
(a) As consideration for the sale, assignment and transfer contemplated in
Section 1 hereof, the Assignee shall pay to the Assignor on the Effective Date
in immediately available funds an amount equal to $__________, representing the
Assignee's Percentage Share of the principal amount of all Loans previously made
by the Assignor to the Company under the 5-Year Credit Agreement and outstanding
on the Effective Date.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section 10.08 of the 5-Year Credit
Agreement.
3. Reallocation of Payments. Any interest, fees and other payments accrued to
the Effective Date with respect to the Commitment [and Loans] of the Assignor
shall be for the account of the Assignor. Any interest, fees and other payments
accrued on and after the Effective Date with respect to the portion of such
Commitment [and Loans] assigned to the Assignee shall be for the account of the
Assignee. Each of the Assignor and the Assignee agrees that it will hold in
trust for the other party any interest, fees and other amounts which it may
receive to which the other party is entitled pursuant to the preceding sentence
and pay to the other party any such amounts which it may receive promptly upon
receipt.
4. Independent Credit Decision. The Assignee: (a) acknowledges that it has
received a copy of the 5-Year Credit Agreement and the Schedules and Exhibits
E-2
<PAGE>
thereto, together with copies of the most recent financial statements referred
to in Section 5.10 or Section 6.01 of the 5-Year Credit Agreement, and such
other documents and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this Assignment and
Acceptance; and (b) agrees that it will, independently and without reliance upon
the Assignor, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the 5-Year
Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date for this
Assignment and Acceptance shall be ______________ (the "Effective Date");
provided that the following conditions precedent have been satisfied on or
before the Effective Date:
(i) this Assignment and Acceptance shall be executed and delivered by
the Assignor and the Assignee;
(ii) any consent of the Company, the Swingline Bank and the Agent
required under Section 10.08 of the 5-Year Credit Agreement for the
effectiveness of the assignment hereunder by the Assignor to the Assignee
shall have been duly obtained and shall be in full force and effect as of
the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due to the
Assignor under this Assignment and Acceptance;
(iv) the processing fee referred to in Section 2(b) hereof and in
Section 10.08 of the 5-Year Credit Agreement shall have been paid to the
Agent; and
(v) the Assignor and Assignee shall have complied with the other
requirements of Section 10.08 of the 5-Year Credit Agreement and with the
requirements of Sections 9.10 and 10.10 of the 5-Year Credit Agreement (in
each case to the extent applicable).
(b) Promptly following the execution of this Assignment and Acceptance, the
Assignor shall deliver to the Company and the Agent for acknowledgement by the
Agent, a Notice of Assignment substantially in the form attached hereto as
Schedule 1.
6. Agent. The Assignee hereby appoints and authorizes the Assignor to take such
action as agent on its behalf and to exercise such powers under the 5-Year
Credit Agreement as are delegated to the Agent by the Banks pursuant to the
terms of the 5-Year Credit Agreement. [The Assignee shall assume no duties or
obligations held by the Assignor in its capacity as Agent under the 5-Year
Credit Agreement.] [INCLUDE ONLY IF ASSIGNOR IS AGENT]
7. Withholding Tax. The Assignee (a) represents and warrants to the Assignor,
the Agent and the Company that under applicable law and treaties no tax will be
required to be withheld by the Bank with respect to any payments to be made to
the Assignee hereunder, and (b) agrees to furnish (if it is organized under the
laws of any jurisdiction other than the United States or any State thereof) to
the Agent and the Company prior to the time that the Agent or
E-3
<PAGE>
Company is required to make any payment of interest or fees under the 5-Year
Credit Agreement, duplicate executed originals of either U.S. Internal Revenue
Service Form W-8BEN or U.S. Internal Revenue Service Form W-8ECI (wherein the
Assignee claims entitlement to the benefits of a tax treaty that provides for a
complete exemption from U.S. federal income withholding tax on all payments
hereunder) and agrees to provide new Forms W-8BEN or W-8ECI upon the expiration
of any previously delivered form or comparable statements in accordance with
applicable U.S. law and regulations and amendments thereto, duly executed and
completed by the Assignee, as and when required under the 5-Year Credit
Agreement.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than those referred to in Section
5(a)(ii) hereof and any already given or obtained) for its due execution,
delivery and performance of this Assignment and Acceptance, and apart from any
agreements or undertakings or filings required by the 5-Year Credit Agreement,
no further action by, or notice to, or filing with, any Person is required of it
for such execution, delivery or performance; and (iv) this Assignment and
Acceptance has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of the Assignor, enforceable against the Assignor
in accordance with the terms hereof, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization and other laws of general application
relating to or affecting creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the 5-Year Credit Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
5-Year Credit Agreement or any other instrument or document furnished pursuant
thereto. The Assignor makes no representation or warranty in connection with,
and assumes no responsibility with respect to, the solvency, financial condition
or statements of the Company, or the performance or observance by the Company,
of any of its respective obligations under the 5-Year Credit Agreement or any
other instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly organized and
existing and it has full power and authority to take, and has taken, all action
necessary to execute and deliver this Assignment and Acceptance and any other
documents required or permitted to be executed or delivered by it in connection
with this Assignment and Acceptance, and to fulfill its obligations hereunder;
(ii) no notices to, or consents, authorizations or approvals of, any Person are
required (other than those referred to in Section 5(a)(ii) hereof and any
already given or obtained) for its due execution, delivery and performance of
this Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the 5-Year Credit Agreement, no further action by, or notice
to, or filing with, any Person is required of it for such execution, delivery or
E-4
<PAGE>
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. Further Assurances.
(a) The Company shall ensure that all written information, exhibits and
reports furnished to the Agent or the Banks do not and will not contain any
untrue statement of a material fact and do not and will not omit to state any
material fact or any fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made, and will promptly
disclose to the Agent and the Banks and correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement
or recordation thereof.
(b) Promptly upon request by the Agent or the Majority Banks, the Company
shall (and shall cause any of its Subsidiaries to) do, execute, acknowledge, and
deliver, any and all such further acts, certificates, assurances and other
instruments the Agent or such Banks, as the case may be, may reasonably require
from time to time in order to carry out more effectively the purposes of this
Agreement or any other Loan Document.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. THE ASSIGNOR AND THE ASSIGNEE
EACH IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT SITTING IN NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS ASSIGNMENT AND ACCEPTANCE AND IRREVOCABLY AGREES THAT
E-5
<PAGE>
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH NEW YORK STATE OR FEDERAL COURT. EACH PARTY TO THIS ASSIGNMENT AND
ACCEPTANCE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
ASSIGNMENT AND ACCEPTANCE OR ANY DOCUMENT RELATED HERETO, AND PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
ASSIGNMENT AND ACCEPTANCE, AND ANY RELATED DOCUMENTS AND AGREEMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY EITHER OF THE PARTIES AGAINST THE OTHER PARTY,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH OF THE
PARTIES ALSO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY.
[Other provisions to be added as may be negotiated between the Assignor and the
Assignee, provided that such provisions are not inconsistent with the 5-Year
Credit Agreement.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
Title:
[ASSIGNEE]
By:
Title:
E-6
<PAGE>
SCHEDULE 1
to the Assignment and Acceptance
NOTICE OF ASSIGNMENT AND ACCEPTANCE
Date: ___________________
Bank of America, N.A.
Retail Industry Group #33751
[Mail Code: CA5-705-41-89]
555 California Street, 41st Floor
San Francisco, CA 94104
Attention: James P. Johnson
Telephone: (415) 622-6177
Facsimile: (415)
Albertson's, Inc.
250 Park Center Blvd.
Box 20
Boise, ID 83726
Attention: Finance Department
Telephone: (208) 395-6534
Facsimile: (208) 395-6631
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of March 22, 2000 (as
amended, restated, modified, supplemented or renewed from time to time, the
"5-Year Credit Agreement") among Albertson's, Inc. (the "Company"), the Banks
referred to therein, the Co-Agents party thereto, and Bank of America, N.A., as
Agent for the Banks (the "Agent"). Terms defined in the 5-Year Credit Agreement
are used herein as therein defined.
1. We hereby give you notice of[, and request the consent of the
Swingline Bank, [the Company and] the Agent to,] the assignment by
________________________ (the "Assignor") to ____________________ (the
"Assignee") of ____% of the right, title and interest of the Assignor in and to
the 5-Year Credit Agreement (including, without limitation, ____% of the right,
title and interest of the Assignor in and to the Commitment of the Assignor [and
all outstanding Loans made by the Assignor]) pursuant to that certain Assignment
and Acceptance Agreement, dated as of ___________ (the "Assignment and
Acceptance") between Assignor and Assignee, a copy of which Assignment and
Acceptance is attached hereto. Before giving effect to such assignment the
Assignor's Commitment is $___________. [The Assignor has made Loans in the
aggregate principal amount of $__________ to the Company consisting of
$___________ principal amount of Committed Loans [and $____________ principal
amount of Bid Loans].] [No Loans are outstanding under the 5-Year Credit
Agreement.]
1.
<PAGE>
2. The Assignee agrees that, upon receiving the consent of the Company
and the Agent to such assignment (if applicable) and from and after the
Effective Date (as such term is defined in Section 5 of the Assignment and
Acceptance), the Assignee shall be bound by the terms of the 5-Year Credit
Agreement, with respect to the interest in the 5-Year Credit Agreement assigned
to it as specified above, as fully and to the same extent as if the Assignee
were the Bank originally holding such interest in the 5-Year Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Lending Office(s):
Assignee name:
Address:
Attention:
Telephone: ( )
------
Facsimile: ( )
------
Assignee name:
Address:
Attention:
Telephone: ( )
------
Facsimile: ( )
------
(B) Notice Address:
Assignee name:
Address:
Attention:
Telephone: ( )
------
Facsimile: ( )
------
(C) Payment Instructions:
Account No.:
At:
2.
<PAGE>
Reference:
Attention:
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
5. This Notice of Assignment and Acceptance may be executed by the
Assignor and the Assignee in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute one and the same notice and agreement.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
Adjusted Commitment: [ASSIGNOR]
- -------------------
$ By:
-----------------------------
Title:
Adjusted Pro Rata Share:
- -----------------------
- -------%
Commitment: [ASSIGNEE]
- ----------
$ ] By:
----------------------------
Title:
Pro Rata Share:
- --------------
- -------%
[CONSENTED TO this _____ day of ___________________:
ALBERTSON'S, INC.
By:
Title: ]
-------------------------------------------
3.
<PAGE>
ACKNOWLEDGED [AND CONSENTED TO] this ____ day of ________:
BANK OF AMERICA, N.A., as Agent and as Swingline Bank
By:
Title:
4.
<PAGE>
EXHIBIT F
FORM OF INVITATION FOR COMPETITIVE BIDS
Via Facsimile
Date: __________________
To the Bid Loan Banks and Designated Bidders Listed on Annex A Attached Hereto
-------
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of March
22, 2000 (as extended, renewed, amended or restated from time to time, the
"5-Year Credit Agreement"), among _______________ (the "Company"), the Banks
party thereto, the Co-Agents party thereto, and Bank of America, N.A., as Agent
for the Banks (the "Agent"). Capitalized terms used herein have the meanings
specified in the 5-Year Credit Agreement.
Pursuant to subsection 2.06(b) of the 5-Year Credit Agreement, you are
hereby invited to submit offers to make Bid Loans to the Company based on the
following specifications:
1. Date of Bid Borrowing: _______________;
2. Aggregate amount of Bid Borrowing: $___________________;
3. The Bid Loans shall be Absolute Rate Bid Loans; and
4. Interest Period[s] and requested Interest Payment Dates, if any:
[____________________], [________________] and
[________________].
All Competitive Bids shall be in the form of Exhibit H to the 5-Year
Credit Agreement and shall be received by the Agent no later than 7:30 a.m. (San
Francisco time) on ___________, 2000; provided that terms of the offer or offers
contained in any Competitive Bid(s) to be submitted by the Agent (or any
Affiliate of the Agent) in the capacity of a Bid Loan Bank or Designated Bidder
shall be notified to the Company not later than 7:15 a.m. (San Francisco time)
on ________________.
BANK OF AMERICA, N.A., as Agent
By:
Title:
F-1
<PAGE>
ANNEX A
to the Invitation for Competitive Bids
List of Bid Loan Banks and Designated Bidders
[Bank]
Facsimile: (415) 622-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
1
<PAGE>
EXHIBIT G
FORM OF COMPETITIVE BID REQUEST
Date: _______________
To: Bank of America, N.A.,
as Agent
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of March 22, 2000
(as extended, renewed, amended or restated from time to time, the "5-Year Credit
Agreement"), among Albertson's, Inc. (the "Company"), the Banks party thereto,
the Co-Agents party thereto, and Bank of America, N.A., as Agent for the Banks
(the "Agent"). Capitalized terms used herein have the meanings specified in the
5-Year Credit Agreement.
This is a Competitive Bid Request for Bid Loans pursuant to Section
2.06 of the 5-Year Credit Agreement as follows:
(i) The Business Day of the proposed Bid Borrowing is: ______________.
(ii) The aggregate amount of the proposed Bid Borrowing is:
$___________________.
(iii) The proposed Bid Borrowing to be made pursuant to Section 2.06
shall be comprised of Absolute Rate Bid Loans.
(iv) The Interest Period[s] and Interest Payment Dates, if any, for
the Bid Loans comprised in the Bid Borrowing shall be: _______________,
[_________________] and [___________________].
[The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed Bid
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) the representations and warranties of the Company contained in
Article V of the 5-Year Credit Agreement are true and correct as though
made on and as of such date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they are true
and correct as of such date and except that this notice shall be deemed
instead to refer to the last day of the most recent quarter and year for
which financial statements have then been delivered in respect of the
representation and warranty made in Section 5.10(a) of the 5-Year Credit
Agreement);
(b) no Default or Event of Default has occurred and is continuing, or
would result from such proposed Bid Borrowing; and
G-1
<PAGE>
(c) after giving effect to the Bid Borrowing requested hereby the
outstanding aggregate principal amount of all Bid Loans made by all Bid
Loan Banks and Designated Bidders, plus the outstanding aggregate principal
amount of all Committed Loans made by all Banks, will not exceed the
Aggregate Commitment.
ALBERTSON'S, INC.
By: ______________________________
Title: _____________________________
G-2
<PAGE>
EXHIBIT H
FORM OF COMPETITIVE BID
Date: _______________
To: Bank of America, N.A.,
as Agent
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of March 22, 2000
(as extended, renewed, amended or restated from time to time, the "5-Year Credit
Agreement"), among Albertson's, Inc. (the "Company"), the Banks party thereto,
the Co-Agents party thereto, and Bank of America, N.A., as Agent for the Banks
(the "Agent"). Capitalized terms used herein have the meanings specified in the
5-Year Credit Agreement.
In response to the Competitive Bid Request of the Company dated
___________ and in accordance with subsection 2.06(c)(ii) of the 5-Year Credit
Agreement, the undersigned [Bank] [Designated Bidder] offers to make Bid Loan[s]
thereunder in the following principal amounts[s], at the following interest
rates and for the following Interest Period[s], with Interest Payment Dates as
specified by the Company:
Date of Bid Borrowing: _____________________
Aggregate Maximum Bid Amount: $________________
Offer 1 (Maximum Bid Amount: $________________)
Principal Amount $_______ Principal Amount $________ Principal Amount $_________
Interest: Interest: Interest:
[Absolute Rate __%] [Absolute Rate __%] [Absolute Rate __%]
Interest Period _________ Interest Period __________ Interest Period ___________
Offer 2 (Maximum Bid Amount: $________________)
Principal Amount $________ Principal Amount $________ Principal Amount $________
H-1
<PAGE>
Interest: Interest: Interest:
[Absolute Rate __%] [Absolute Rate __%] [Absolute Rate __%]
Interest Period __________ Interest Period ___________ Interest Period _________
Principal Amount $________ Principal Amount $________ Principal Amount $________
Interest: Interest: Interest:
[Absolute Rate __%] [Absolute Rate __%] [Absolute Rate __%]
Interest Period __________ Interest Period __________ Interest Period __________
[NAME OF BANK/DESIGNATED BIDDER]
By: _____________________
Title: __________________
H-2
<PAGE>
EXHIBIT I
FORM OF COMMITTED LOAN NOTE
U.S. $___________________ Date: _______________
FOR VALUE RECEIVED, the undersigned, Albertson's, Inc., a Delaware
corporation (the "Company"), hereby promises to pay to the order of
_________________________ (the "Bank") the principal sum of ___________________
Dollars ($_____________) or, if less, the aggregate unpaid principal amount of
all Committed Loans made by the Bank to the Company pursuant to the Credit
Agreement, dated as of March 22, 2000 (as amended, restated, supplemented or
otherwise modified from time to time, the "5-Year Credit Agreement"), among the
Company, the Bank, the other financial institutions from time to time party
thereto (the "Banks"), the Documentation Agent and the Syndication Agent party
thereto, and Bank of America, N.A., as Agent for the Banks (the "Agent"), on the
dates and in the amounts provided in the 5-Year Credit Agreement. The Company
further promises to pay interest on the unpaid principal amount of the Committed
Loans evidenced hereby from time to time at the rates, on the dates, and
otherwise as provided in the 5-Year Credit Agreement.
The Bank is authorized to endorse the amount of each Committed Loan,
the date on which each Committed Loan is made, and each payment of principal
with respect thereto on the schedule annexed hereto and made a part hereof, or
on continuations thereof which shall be attached hereto and made a part hereof;
provided that any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect any obligation of the
Company under the 5-Year Credit Agreement and this Promissory Note (this
"Note").
This Note is one of the Committed Loan Notes referred to in, and is
entitled to the benefits of, the 5-Year Credit Agreement, which 5-Year Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
Terms defined in the 5-Year Credit Agreement are used herein with their
defined meanings therein unless otherwise defined herein.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
ALBERTSON'S, INC.
By:
Title:
I-1
<PAGE>
<TABLE>
SCHEDULE
to Committed Loan Note
<CAPTION>
Date Loan Disbursed Amount of Loan Principal Payment Date Principal Paid
- ------------------------------- -------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
</TABLE>
I-2
<PAGE>
EXHIBIT J
FORM OF BID LOAN NOTE
Date: ________________
FOR VALUE RECEIVED, the undersigned, Albertson's, Inc., a Delaware
corporation (the "Company"), hereby promises to pay to the order of
_________________________ (the "Bank") the aggregate unpaid principal amount of
all Bid Loans made by the Bank to the Company pursuant to the Credit Agreement,
dated as of March 22, 2000 (as amended, restated, supplemented or otherwise
modified from time to time, the "5-Year Credit Agreement"), among the Company,
the Bank, the other financial institutions from time to time party thereto (the
"Banks"), the Co-Agents party thereto, and Bank of America, N.A., as Agent for
the Banks (the "Agent"), on the dates and in the amounts provided in the 5-Year
Credit Agreement. The Company further promises to pay interest on the unpaid
principal amount of the Bid Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the 5-Year Credit Agreement.
The Bank is authorized to endorse the amount of and the date on which
each Bid Loan is made, the maturity date therefor and each payment of principal
with respect thereto on the schedules annexed hereto and made a part hereof, or
on continuations thereof which shall be attached hereto and made a part hereof;
provided that any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect any obligation of the
Company under the 5-Year Credit Agreement and this Promissory Note (this
"Note").
This Note is one of the Bid Loan Notes referred to in, and is entitled
to the benefits of, the 5-Year Credit Agreement, which 5-Year Credit Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
Terms defined in the 5-Year Credit Agreement are used herein with their
defined meanings therein unless otherwise defined herein.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
ALBERTSON'S, INC.
By: ______________________________
Title: ____________________________
J-1
<PAGE>
<TABLE>
SCHEDULE
to Bid Loan Note
<CAPTION>
Date Loan Disbursed Amount of Loan Maturity Date Principal Payment Date Principal Paid
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
</TABLE>
J-2
<PAGE>
EXHIBIT K
FORM OF DESIGNATION AGREEMENT
Dated ______________
Reference is made to the Credit Agreement dated as of March
22, 2000 (as extended, renewed, amended or restated from time to time, the
"5-Year Credit Agreement") among _______________________ (the Company"), the
Banks party thereto, the Co-Agents party thereto, and Bank of America, N.A., as
Agent for the Banks (the "Agent"). Capitalized terms used herein have the
meanings specified in the 5-Year Credit Agreement.
_________________ (the "Designator") and ___________________ the ("Designee")
agree as follows:
1. The Designator hereby designates the Designee, and the Designee hereby
accepts such designation, to have a right to make Bid Loans pursuant to Section
2.06 of the 5-Year Credit Agreement.
2. The Designator makes no representation or warranty and assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the 5-Year Credit Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
5-Year Credit Agreement or any other instrument or document furnished pursuant
thereto or (ii) the financial condition of the Company or the performance or
observance by the Borrower of any of its obligations under the 5-Year Credit
Agreement or any other instrument or document furnished pursuant thereto.
3. The Designee (i) confirms that it has received a copy of the 5-Year
Credit Agreement, together with copies of the financial statements referred to
in Section 5.10 or Section 6.01 thereof and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into this Designation Agreement; (ii) agrees that it will, independently
and without reliance upon the Agent, the Designator or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the 5-Year Credit Agreement; (iii) confirms that it is an entity qualified to be
a Designated Bidder; (iv) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the 5-Year Credit
Agreement as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
5-Year Credit Agreement are required to be performed by it as a Designated
Bidder; (vi) agrees to and accepts all duties, obligations and responsibilities
of a Bank set forth in Article IX of the 5-Year Credit Agreement and confirms
that said Article shall otherwise apply to the Designated Bidder as if it were a
Bank named therein; and (vii) specifies as its Lending Office with respect to
Bid Loans (and address for notices) the offices set forth beneath its name on
the signature page hereof.
4. Following the execution of this Designation Agreement by the Designator
and its Designee, it will be delivered to the Agent for acceptance by the Agent.
K-1
<PAGE>
The effective date of this Designation Agreement shall be the date of acceptance
thereof by the Agent (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, the Designee shall be a party to the 5-Year Credit Agreement as a
"Designated Bidder" with a right to make Bid Loans pursuant to Section 2.06 of
the 5-Year Credit Agreement and the rights and obligations of a Designated
Bidder related thereto.
6. THIS DESIGNATION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Designation
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
[NAME OF DESIGNATOR]
By:
Title:
[NAME OF DESIGNEE]
By:
Title:
Lending Office(s) (and address for notices):
Attn.:
Tel.:
Fax:
K-2
<PAGE>
Attn.:
Tel.:
Fax:
Accepted [as of] the ___ day of ____________, _______
BANK OF AMERICA, N.A., as Agent
and Swingline Bank
By:
Title:
K-3
<PAGE>
EXHIBIT L
FORM OF COMMITMENT INCREASE AGREEMENT
Date: ___________________
Bank of America, N.A.,
as Agent and as a Bank
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of March 22, 2000 (as extended,
renewed, amended or restated from time to time, the "5-Year Credit Agreement")
among Albertson's, Inc. (the Company"), the Banks party thereto, the Co-Agents
party thereto, and Bank of America, N.A., as Agent for the Banks (the "Agent").
Terms defined in the 5-Year Credit Agreement are used herein as therein defined.
This Commitment Increase Agreement is made and delivered pursuant to
Section 2.18 of the 5-Year Credit Agreement.
Subject to the terms and conditions of Section 2.18 of the 5-Year Credit
Agreement, _______________________________ (the "Increasing Bank") will increase
its Commitment to an amount equal to $___________, on the Increased Commitment
Date applicable to it. The Increasing Bank hereby confirms and agrees that with
effect on and after such Increased Commitment Date, the Commitment of the
Increasing Bank shall be increased to the amount set forth above, and the
Increasing Bank shall have all of the rights and be obligated to perform all of
the obligations of a Bank under the 5-Year Credit Agreement with a Commitment in
the amount set forth above.
Effective on the Increased Commitment Date applicable to it, the Increasing
Bank (i) accepts and assumes from the assigning Bank(s), without recourse, such
assignment of Loans as shall be necessary to effectuate the adjustments in the
Pro Rata Shares of the Banks contemplated by Section 2.18 of the 5-Year Credit
Agreement, and (ii) agrees to fund on such Increased Commitment Date such
assumed amounts to the Agent for the account of the assigning Banks in
accordance with the provisions of the 5-Year Credit Agreement, in the amount
notified to the Increasing Bank by the Agent.
This Commitment Increase Agreement shall constitute a Loan Document under
the 5-Year Credit Agreement.
THIS COMMITMENT INCREASE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
L-1
<PAGE>
IN WITNESS WHEREOF, the Increasing Bank has caused this Commitment Increase
Agreement to be duly executed and delivered in _____________, ______________, by
its proper and duly authorized officer as of the day and year first above
written.
[INCREASING BANK]
By: ___________________________
Title: ________________________
CONSENTED TO as of _________:
ALBERTSON'S, INC.
By:
Title:
ACKNOWLEDGED AND CONSENTED TO as of ____________:
BANK OF AMERICA, N.A.,
as Agent
By:
Title:
L-2
<PAGE>
EXHIBIT M
FORM OF NEW BANK AGREEMENT
Date: ___________________
Bank of America, N.A.
as Agent
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of March 22, 2000 (as
extended, renewed, amended or restated from time to time, the "5-Year Credit
Agreement") among Albertson's, Inc. (the Company"), the Banks party thereto, the
Co-Agents party thereto, and Bank of America, N.A., as Agent for the Banks (the
"Agent"). Terms defined in the 5-Year Credit Agreement are used herein as
therein defined.
This New Bank Agreement is made and delivered pursuant to Section 2.18
of the 5-Year Credit Agreement.
Subject to the terms and conditions of Section 2.18 of the 5-Year
Credit Agreement, _________________________ (the "New Bank") will become a party
to the 5-Year Credit Agreement as a Bank, with a Commitment equal to
$___________, on the Increased Commitment Date applicable to it. The New Bank
hereby confirms and agrees that with effect on and after such Increased
Commitment Date, the New Bank shall be and become a party to the 5-Year Credit
Agreement as a Bank and have all of the rights and be obligated to perform all
of the obligations of a Bank thereunder with a Commitment in the amount set
forth above.
Effective on the Increased Commitment Date applicable to it, the New
Bank (i) accepts and assumes from the assigning Bank(s), without recourse, such
assignment of Loans as shall be necessary to effectuate the adjustments in the
Pro Rata Shares of the Banks contemplated by Section 2.18 of the 5-Year Credit
Agreement, and (ii) agrees to fund on such Increased Commitment Date such
assumed amounts to the Agent for the account of the assigning Bank(s) in
accordance with the provisions of the 5-Year Credit Agreement, in the amount
notified to the New Bank by the Agent.
The following administrative details apply to the New Bank:
(A) Lending Office(s):
Bank name:
Address:
M-1
<PAGE>
Attention:
Telephone: ( )
------
Facsimile: ( )
------
Bank name:
Address:
Attention:
Telephone: ( )
------
Facsimile: ( )
------
(B) Notice Address:
--------------
Bank name:
Address:
Attention:
Telephone: ( )
------
Facsimile: ( )
------
M-2
<PAGE>
(C) Payment Instructions:
--------------------
Account No.:
At:
Reference:
Attention:
This New Bank Agreement shall constitute a Loan Document under the
5-Year Credit Agreement.
THIS NEW BANK AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the New Bank has caused this New Bank Agreement to
be duly executed and delivered in _____________, ______________, by its proper
and duly authorized officer as of the day and year first above written.
[NEW BANK]
By: ___________________________
Title: ________________________
CONSENTED TO as of ___________:
ALBERTSON'S, INC.
By:
Title:
ACKNOWLEDGED AND CONSENTED TO as of _________:
M-3
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BANK OF AMERICA, N.A.,
as Agent and Swingline Bank
By:
Title:
M-4
Exhibit 10.29
[364-Day Agreement] EXECUTION COPY
CREDIT AGREEMENT
Dated as of March 22, 2000
among
ALBERTSON'S, INC.,
BANK OF AMERICA, N.A.
as Administrative Agent,
WACHOVIA BANK, N.A.
as Syndication Agent,
BANK ONE, NA,
as Documentation Agent,
FIRST UNION NATIONAL BANK,
UNION BANK OF CALIFORNIA, N.A.,
U.S. BANK NATIONAL ASSOCIATION, and
WELLS FARGO BANK, N.A.,
as Senior Managing Agents,
FIRST SECURITY BANK, N.A. and
THE NORTHERN TRUST COMPANY,
as Managing Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged by
Banc of America Securities LLC,
Sole Lead Arranger
and Sole Book Manager
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS 1
1.01 Certain Defined Terms...............................................1
1.02 Other Interpretive Provisions......................................14
1.03 Accounting Principles..............................................15
ARTICLE II THE CREDITS........................................................15
2.01 Amounts and Terms of Commitments...................................15
2.02 Loan Accounts......................................................16
2.03 Procedure for Committed Borrowing..................................16
2.04 Conversion and Continuation Elections for Committed Borrowings.....17
2.05 Bid Borrowings.....................................................19
2.06 Procedure for Bid Borrowings.......................................19
2.07 Voluntary Termination or Reduction of Commitments..................22
2.08 Optional Prepayments...............................................23
2.09 Repayment..........................................................23
2.10 Interest...........................................................23
2.11 Fees...............................................................24
2.12 Computation of Fees and Interest...................................25
2.13 Payments by the Company............................................25
2.14 Payments by the Banks to the Agent.................................26
2.15 Sharing of Payments, Etc...........................................27
2.16 Revolving Termination Date Extensions..............................27
2.17 Optional Increase in Commitments...................................28
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY............................30
3.01 Taxes..............................................................30
3.02 Illegality.........................................................31
3.03 Increased Costs and Reduction of Return............................32
3.04 Funding Losses.....................................................33
3.05 Inability to Determine Rates.......................................34
3.06 Certificates of Banks and Designated Bidders.......................34
3.07 Base Rate Committed Loans Substituted for Affected Offshore Rate
Committed Loans....................................................34
3.08 Reserves on Offshore Rate Committed Loans..........................35
3.09 Substitution of Banks..............................................35
3.10 Survival...........................................................35
ARTICLE IV CONDITIONS PRECEDENT...............................................36
4.01 Conditions of Initial Loans........................................36
4.02 Conditions to All Borrowings.......................................37
ARTICLE V REPRESENTATIONS AND WARRANTIES......................................38
5.01 Corporate Existence and Power......................................38
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5.02 Subsidiaries.......................................................38
5.03 Corporate and Governmental Authorization; No Contravention.........38
5.04 Binding Effect.....................................................39
5.05 Litigation.........................................................39
5.06 ERISA Compliance...................................................39
5.07 Use of Proceeds; Margin Regulations................................39
5.08 Title to Properties; Liens.........................................39
5.09 Taxes..............................................................39
5.10 Financial Information..............................................39
5.11 Environmental Matters..............................................40
5.12 Regulated Entities.................................................40
5.13 Insurance..........................................................40
5.14 Full Disclosure....................................................40
5.15 Year 2000..........................................................40
ARTICLE VI AFFIRMATIVE COVENANTS..............................................41
6.01 Information........................................................41
6.02 Conduct of Business and Maintenance of Existence...................42
6.03 Maintenance of Property............................................43
6.04 Insurance..........................................................43
6.05 Payment of Obligations.............................................43
6.06 Compliance with Laws...............................................43
6.07 Inspection of Property, Books and Records..........................43
6.08 Use of Proceeds....................................................43
6.09 Further Assurances.................................................43
ARTICLE VII NEGATIVE COVENANTS................................................44
7.01 Limitation on Liens................................................44
7.02 Disposition of Assets..............................................45
7.03 Limitation on Subsidiary Indebtedness and Swap Contracts...........45
7.04 Use of Proceeds....................................................46
7.05 Minimum Consolidated Tangible Net Worth............................46
ARTICLE VIII EVENTS OF DEFAULT................................................46
8.01 Event of Default...................................................46
8.02 Remedies...........................................................48
8.03 Rights Not Exclusive...............................................49
ARTICLE IX THE AGENT 49
9.01 Appointment and Authorization; "Agent."............................49
9.02 Delegation of Duties...............................................49
9.03 Liability of Agent.................................................49
9.04 Reliance by Agent..................................................50
9.05 Notice of Default..................................................50
9.06 Credit Decision....................................................50
9.07 Indemnification of Agent...........................................51
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9.08 Agent in Individual Capacity.......................................51
9.09 Successor Agent....................................................51
9.10 Withholding Tax....................................................52
9.11 Co-Agents..........................................................53
ARTICLE X MISCELLANEOUS.......................................................53
10.01 Amendments and Waivers.............................................53
10.02 Notices............................................................54
10.03 No Waiver; Cumulative Remedies.....................................55
10.04 Costs and Expenses.................................................55
10.05 Company Indemnification............................................55
10.06 Payments Set Aside.................................................56
10.07 Binding Effect; Successors and Assigns.............................56
10.08 Assignments, Participations, Etc...................................56
10.09 Designated Bidders.................................................58
10.10 Confidentiality....................................................58
10.11 Set-off............................................................59
10.12 Notification of Addresses, Lending Offices, Etc....................59
10.13 Counterparts.......................................................59
10.14 Severability.......................................................59
10.15 No Third Parties Benefited.........................................59
10.16 Governing Law and Jurisdiction.....................................59
10.17 Waiver of Jury Trial...............................................60
10.18 Entire Agreement...................................................60
ANNEXES
Annex I Pricing Grid
SCHEDULES
Schedule 2.01 Commitments and Pro Rata Shares
Schedule 10.02 Payment Offices; Addresses for Notices; Lending
Offices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Counsel to the Company
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Invitation for Competitive Bids
Exhibit G Form of Competitive Bid Request
Exhibit H Form of Competitive Bid
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Exhibit I Form of Committed Loan Note
Exhibit J Form of Bid Loan Note
Exhibit K Form of Designation Agreement
Exhibit L Form of Commitment Increase Agreement
Exhibit M Form of New Bank Agreement
iv
<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of March 22, 2000, among
Albertson's, Inc., a Delaware corporation (the "Company"), the several financial
institutions from time to time party to this Agreement (individually, a "Bank"
and, collectively, the "Banks"), Bank One, NA, as documentation agent (the
"Documentation Agent"), Wachovia Bank, N.A., as syndication agent (in such
capacity, the "Syndication Agent"), First Security Bank, N.A. and The Northern
Trust Company, as managing agents (in such capacity, the "Managing Agents"),
First Union National Bank, Union Bank Of California, N.A., U.S. Bank National
Association and Wells Fargo Bank, N.A., as senior managing agents (in such
capacity, the "Senior Managing Agents"), and Bank of America, N.A., as
administrative agent for itself, the Designated Bidders and the Banks (in such
capacity, the "Agent").
WHEREAS, the Banks have agreed to make available to the Company a
revolving credit and bid loan facility with a term loan option, upon the terms
and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the following meanings
when used herein (including in the recitals hereof):
"Absolute Rate" has the meaning specified in subsection 2.06(c).
"Absolute Rate Auction" means a solicitation of Competitive Bids
setting forth Absolute Rates pursuant to Section 2.06.
"Absolute Rate Bid Loan" means a Bid Loan that bears interest at a
rate determined with reference to the Absolute Rate.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities,
membership interests, by contract, or otherwise.
"Agent" means BofA in its capacity as administrative agent for the
Banks and the Designated Bidders hereunder, and any successor agent arising
under Section 9.09.
1.
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"Agent-Related Persons" means BofA and any successor agent arising
under Section 9.09, together with their respective Affiliates (including,
in the case of BofA, the Lead Arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on
Schedule 10.02 or such other address as the Agent may from time to time
specify.
"Aggregate Commitment" means the combined Commitments of the Banks.
"Agreement" means this Credit Agreement.
"Applicable Fee Amount" means with respect to the fees payable
hereunder, the amount set forth opposite the indicated Indebtedness Rating
or Facility Usage Percentage, as the case may be, below the headings
"Facility Fee" and "Utilization Fee" in the pricing grid set forth on Annex
I in accordance with the parameters for calculations of such amount also
set forth on Annex I.
"Applicable Margin" means, with respect to Base Rate Committed Loans
and Offshore Rate Committed Loans, the amount set forth opposite the
indicated Indebtedness Rating below the heading "Base Rate Spread" or
"Offshore Rate Spread" in the pricing grid set forth on Annex I in
accordance with the parameters for calculations of such amounts also set
forth on Annex I.
"Assignee" has the meaning specified in subsection 10.08(a).
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel.
"Bank" has the meaning specified in the introductory clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C.ss.101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
above the latest Federal Funds Rate; and (b) the rate of interest in effect
for such day as publicly announced from time to time by BofA as its "prime
rate." The "prime rate" is a rate set by BofA based upon various factors
including BofA's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate. Any change in
the prime rate announced by BofA shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Base Rate Committed Loan" means a Committed Loan that bears interest
based on the Base Rate.
2.
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"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or
Multiemployer Plan and which is maintained or otherwise contributed to by
any member of the ERISA Group.
"Bid Borrowing" means a borrowing of Loans under Article II consisting
of one or more Bid Loans made to the Company on the same day by the Bid
Loan Banks and Designated Bidders participating in such borrowing.
"Bid Loan" means an Absolute Rate Bid Loan by a Bid Loan Bank or a
Designated Bidder to the Company under Section 2.05.
"Bid Loan Bank" means each Bank party hereto.
"Bid Loan Note" has the meaning specified in Section 2.02.
"BofA" means Bank of America, N.A., a national banking association.
"Borrowing" means a Committed Borrowing or a Bid Borrowing.
"Borrowing Date" means any date on which a Committed Borrowing occurs
under Section 2.03 or a Bid Borrowing occurs under Section 2.06.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City or San Francisco are
authorized or required by law to close and, if the applicable Business Day
relates to any Offshore Rate Committed Loan, means such a day on which
dealings are carried on in the applicable offshore Dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"Change of Control" means any person or group of persons (within the
meaning of Section 13 or 14 of the Exchange Act) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
SEC under said Act) of 40% or more of the outstanding shares of common
stock of the Company; or, during any period of twelve consecutive calendar
months, individuals who were directors of the Company on the first day of
such period shall cease to constitute a majority of the board of directors
of the Company.
"Closing Date" means the date occurring on or before March 29, 2000 on
which all conditions precedent set forth in Section 4.01 are satisfied or
waived by all Banks (or, in the case of subsection 4.01(e), waived by the
Person entitled to receive such payment).
"Co-Agents" means each of the Syndication Agent, Documentation Agent,
Senior Managing Agents and Managing Agents, in its respective capacity as a
syndication agent, documentation agent, senior managing agents or managing
agent hereunder.
3.
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"Code" means the Internal Revenue Code of 1986.
"Commitment" as to each Bank, has the meaning specified in Section
2.01.
"Committed Borrowing" means a borrowing of Loans under Article II
consisting of Committed Loans of the same Type made on the same day by the
Banks ratably according to their respective Pro Rata Shares and, in the
case of Offshore Rate Committed Loans, having the same Interest Periods.
"Committed Loan" means a Loan made by a Bank to the Company under
Section 2.01.
"Committed Loan Note" has the meaning specified in Section 2.02.
"Company's 1998 Form 10-K" means the Company's Annual Report on Form
10-K for the fiscal year ended January 28, 1999, as filed with the SEC
pursuant to the Exchange Act.
"Competitive Bid" means an offer by a Bid Loan Bank or a Designated
Bidder to make a Bid Loan in accordance with subsection 2.06(c).
"Competitive Bid Request" has the meaning specified in subsection
2.06(a).
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
"Consolidated Subsidiary" means at any date any Subsidiary or other
Person the accounts of which would be consolidated with those of the
Company in its consolidated financial statements as of such date.
"Consolidated Tangible Net Worth" means at any date (a) the
consolidated stockholders' equity of the Company and its Consolidated
Subsidiaries as reflected on the Company's consolidated balance sheet, plus
their consolidated deferred investment tax credits as reflected on the
Company's consolidated balance sheet, minus (b) their consolidated
Intangible Assets, all determined as of such date. For purposes of this
definition, "Intangible Assets" means the amount (to the extent reflected
in determining such consolidated stockholders' equity) of (i) all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of assets of a going concern business made within twelve months
after the acquisition of such business) subsequent to January 28, 1999 in
the book value of any asset owned by the Company or a Consolidated
Subsidiary, (ii) all investments in unconsolidated Subsidiaries and all
equity investments in Persons which are not Subsidiaries and (iii) all
unamortized debt discount and expense, unamortized deferred charges (except
deferred income taxes), goodwill, patents, trademarks, service marks, trade
names, copyrights, organization or developmental expenses and other
intangible items (except leasehold improvements and liquor licenses).
"Conversion/Continuation Date" means any date on which, under Section
2.04, the Company (a) converts Committed Loans of one Type to
4.
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another Type, or (b) continues as Committed Loans of the same Type, but
with a new Interest Period, Committed Loans having Interest Periods
expiring on such date.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Designated Bidder" means an Affiliate of a Bid Loan Bank that is a
Person described in clause (c)(i) or (ii) of the definition of "Eligible
Assignee" and that has become a party hereto pursuant to Section 10.09.
"Designation Agreement" means a Designation Agreement entered into by
a Bank and a Designated Bidder and accepted by the Agent, in substantially
the form of Exhibit K.
"Documentation Agent" means Bank One, NA in its capacity as
documentation agent hereunder.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $250,000,000; (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $250,000,000, provided that such bank is acting
through a branch or agency located in the United States; and (c) a Person
that is primarily engaged in the business of commercial lending and that is
(i) a Subsidiary of a Bank, (ii) a Subsidiary of a Person of which a Bank
is a Subsidiary, or (iii) a Person of which a Bank is a Subsidiary.
"Environmental Laws" means all federal, state, local or foreign laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to the environment or to
emissions, discharges or releases of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous substances
or wastes into the environment including ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or
other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Group" means the Company and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated)
5.
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under common control which, together with the Company, are treated as a
single employer under Section 414 of the Code.
"Event of Default" means any of the events or circumstances specified
in Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934.
"Excluded Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholding or similar
charges and all liabilities with respect thereto, other than those taxes
included in the definition of Taxes.
"Existing Credit Facilities" means (i) the Credit Agreement dated as
of March 30, 1999, among the Company, BofA as agent, and the other
financial institutions party thereto, and (ii) the Credit Agreement dated
as of October 5, 1994, among the Company, BofA as co-agent, Morgan Guaranty
Trust Company of New York as agent, and the other financial institutions
party thereto.
"Facility Period" means the period from the Closing Date to the
Revolving Termination Date (or, if Term Loans are made hereunder, the Term
Maturity Date), or, if earlier, the date of termination of the Aggregate
Commitment in its entirety and the repayment of all Loans outstanding
hereunder.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York with respect
to the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so published
with respect to any such preceding Business Day, the rate for such day will
be the arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal
funds transactions in New York City selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.12(a).
"Foundation Stock Agreement" means the agreement dated May 21, 1997,
between the Company and the J.A. and Kathryn Albertson Foundation, Inc. and
any successor agreement.
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles as in effect
from time to time.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
6.
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legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Guaranty Obligation" means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without
recourse, with respect to any obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that
Person (i) to purchase, repurchase or otherwise acquire such primary
obligations or any security therefor, (ii) to advance or provide funds for
the payment or discharge of any such primary obligation, or to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of
income or financial condition of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, or (iv) otherwise to assure or
hold harmless the holder of any such primary obligation against loss in
respect thereof. The amount of any Guaranty Obligation shall be deemed
equal to the stated or determinable amount of the primary obligation in
respect of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect
thereof.
"Increased Commitment Date" has the meaning specified in subsection
2.17(b).
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations evidenced by notes,
bonds, debentures or similar instruments, (c) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services, (d) all obligations with respect to capital leases (but not
obligations with respect to operating leases), (e) all obligations of such
Person to purchase securities or other property which arise out of or in
connection with the sale of the same or substantially similar securities or
property, (f) all non-contingent obligations (and, for purposes of Section
7.01 and the definition of Material Indebtedness all contingent
obligations) of such Person to reimburse any bank or other Person in
respect of amounts paid under any Surety Instrument, (g) all indebtedness
of others of the type referred to in clauses (a) through (f) secured by a
Lien on any asset of such Person, whether or not such indebtedness is
assumed by such Person, (h) all Guaranty Obligations of such Person in
respect of indebtedness of others of the type referred to in clauses (a)
through (f), and (i) all preferred stock of such Person redeemable at the
option of the holder during the Facility Period. Insurance reserves, tax
reserves and interest thereon, salaries payable, taxes payable, dividends
payable, trade accounts payable arising in the ordinary course of business,
deferred investment tax credits, deferred compensation, deferred rents
payable under non-capital leases, benefits payable, unearned income and
other similar liabilities shall not constitute "Indebtedness."
"Indebtedness Rating" has the meaning set forth in Annex I.
"Indemnified Liabilities" has the meaning specified in Section 10.05.
"Indemnified Person" has the meaning specified in Section 10.05.
7.
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"Independent Auditor" has the meaning specified in subsection 6.01(a).
"Insolvency Proceeding" means, with respect to any Person, (a) any
case, action or proceeding with respect to such Person before any court or
other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other similar
arrangement in respect of its creditors generally or any substantial
portion of its creditors, in either case undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, as to any Loan other than a Base Rate
Committed Loan, the last day of each Interest Period applicable to such
Loan and, as to any Base Rate Committed Loan or Bid Loan, the last Business
Day of each calendar quarter and the Revolving Termination Date and, if
applicable, the Term Maturity Date; provided, however, that (a) if any
Interest Period for an Offshore Rate Committed Loan exceeds three months,
the date that falls three months after the beginning of such Interest
Period and after each Interest Payment Date thereafter is also an Interest
Payment Date, and (b) as to any Bid Loan, such other intervening date(s)
prior to the maturity thereof as may be specified by the Company and agreed
to by the applicable Bid Loan Bank or Designated Bidder in the applicable
Competitive Bid shall also be Interest Payment Dates.
"Interest Period" means, (a) as to any Offshore Rate Committed Loan,
the period commencing on the Borrowing Date of such Loan, or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Committed Loan, and ending on the date one,
two, three or six months thereafter as selected by the Company in its
Notice of Borrowing, Notice of Conversion/Continuation or Competitive Bid
Request, as the case may be; and (b) as to any Absolute Rate Bid Loan, a
period of not less than 7 days and not more than 183 days as selected by
the Company in the applicable Competitive Bid Request;
provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless, in the case of
an Offshore Rate Committed Loan, the result of such extension
would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the
preceding Business Day;
(ii) no Interest Period applicable to a Term Loan or
portion thereof shall extend beyond any date upon which is due
any scheduled principal payment in respect of the Term Loans
unless the aggregate principal amount of Term Loans
represented by Base Rate Committed Loans, or Offshore Rate
Committed Loans having Interest Periods that will expire on or
before such date, equals or exceeds the amount of such
principal payment;
8.
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(iii) any Interest Period pertaining to an Offshore
Rate Committed Loan that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
(iv) no Interest Period for any Term Loan shall extend
beyond the Term Maturity Date and no Interest Period for any
Revolving Loan shall extend beyond the Revolving Termination
Date.
"Invitation for Competitive Bids" means an Invitation for Competitive
Bids, substantially in the form of Exhibit F.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Lead Arranger" means Banc of America Securities LLC, a Delaware
limited liability company, in its capacity as Sole Lead Arranger and Sole
Book Manager.
"Lending Office" means, (i) as to any Bank, the office or offices of
such Bank specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office", as the case may be, on Schedule 10.02; (ii), as
to any Designated Bidder, the office or offices of such Designated Bidder
specified as its "Lending Office" in its Designation Agreement; and (iii)
such other office or offices as such Bank or Designated Bidder may from
time to time notify to the Company and the Agent.
"Lien" means with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Company or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention agreement relating
to such asset.
"Loan" means an extension of credit by a Bank or a Designated Bidder
to the Company under Article II, and may be a Committed Loan or a Bid Loan.
"Loan Documents" means this Agreement, the Notes, any Commitment
Increase Agreement (as defined in Section 2.17), any New Bank Agreement (as
defined in Section 2.17), the Fee Letter and all other documents delivered
to the Agent or any Bank or Designated Bidder in connection herewith.
"Majority Banks" means at any time Banks then having more than 50% of
the Aggregate Commitment or, if the Commitments have been terminated, Banks
then holding more than 50% of the then aggregate unpaid principal amount of
the Loans. For purposes of this definition, each Bank shall be deemed to
hold all outstanding Bid Loans of such Bank's Designated Bidders.
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"Managing Agents" means each of First Security Bank, N.A. and The
Northern Trust Company in its capacity as a managing agent hereunder.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.
"Markus-Stiftung Stock Agreement" means the agreement dated February
15, 1980, among the Company, Theo Albrecht Stiftung (now known as
Markus-Stiftung) and Theo Albrecht, as amended by the First Amendment
thereto dated as of April 11, 1984, the Second Amendment thereto dated as
of September 25, 1989 and the Third Amendment thereto dated as of December
5, 1994 and any successor agreement.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, assets, liabilities
or financial condition of the Company and its Consolidated Subsidiaries
taken as a whole; (b) a material impairment of the ability of the Company
to perform under any Loan Document and to avoid any Event of Default; or
(c) a material adverse effect upon the legality, validity, binding effect
or enforceability against the Company of any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans) of
the Company and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, in an aggregate outstanding principal
amount exceeding $30,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $30,000,000.
"Minimum Amount" means (i) in respect of any Committed Borrowing,
conversion or continuation of Committed Loans, (a) in the case of Base Rate
Committed Loans, an aggregate minimum amount of $5,000,000 or any integral
multiple of $1,000,000 in excess thereof, and (b) in the case of Offshore
Rate Committed Loans, an aggregate minimum amount of $5,000,000 or any
integral multiple of $1,000,000 in excess thereof, and (ii) in the case of
any reduction of the Commitments under Section 2.07, or optional prepayment
of Committed Loans under Section 2.08, $5,000,000 or any multiple of
$1,000,000 in excess thereof.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA, to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period.
"Multi-year Credit Agreement" means the Credit Agreement dated as of
the date hereof, among the Company, BofA as agent, and the other financial
institutions party thereto, providing for a five year revolving credit
facility.
"Non-Continuing Bank" means, at any time, each Bank the Revolving
Termination Date of which has not been extended pursuant to Section 2.16.
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"Notes" means the Committed Loan Notes and the Bid Loan Notes.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice in substantially
the form of Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document, owing by the Company
to any Bank, any Designated Bidder, the Agent, or any Indemnified Person,
whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter
arising.
"Offshore Rate" means, for any Interest Period, with respect to
Offshore Rate Committed Loans comprising part of the same Borrowing:
(i) the rate of interest per annum determined by the Agent to
be the rate of interest per annum (rounded upwards to the nearest
1/100th of 1%) appearing on Dow Jones Page 3750 (as defined below) for
deposits in Dollars having a maturity comparable to such Interest
Period, at approximately 11:00 a.m. (London time) two Business Days
prior to the commencement of such Interest Period, subject to clause
(ii) below; or
(ii) if for any reason the rate is not available as provided
in the preceding clause (i) of this definition, the "Offshore Rate"
instead means the rate of interest per annum determined by the Agent to
be the arithmetic mean (rounded upward to the nearest 1/100th of 1%) of
the rates of interest per annum notified to the Agent by each Reference
Bank as the rate of interest at which deposits in Dollars in the
approximate amount of the Offshore Rate Committed Loan to be made,
continued or converted by such Reference Bank, and having a maturity
comparable to such Interest Period, would be offered to major banks in
the London interbank market or other applicable interbank market at
their request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period. As used in this
definition, "Dow Jones Page 3750" means the display designated as
"3750" on the Dow Jones Market Service (formerly known as the Telerate
Service) or any replacement page thereof.
"Offshore Rate Committed Loan" means any Committed Loan that bears
interest based on the Offshore Rate.
"Other Taxes" means any present or future stamp or documentary taxes
or any other excise taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection 10.08(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under
ERISA.
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"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or any
other entity of whatever nature.
"Plan" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code and either (i)
is maintained, or contributed to, by any member of the ERISA Group for
employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for employees of any
Person which was at such time a member of the ERISA Group.
"Pro Rata Share" means, as to any Bank at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at
such time of such Bank's Commitment divided by the Aggregate Commitment
(or, if all Commitments have been terminated, the aggregate principal
amount of such Bank's Loans divided by the aggregate principal amount of
the Loans then held by all Banks). The initial Pro Rata Share of each Bank
is set forth opposite such Bank's name in Schedule 2.01 under the heading
"Pro Rata Share."
"Reference Bank" means each of BofA, Wachovia Bank, N.A. and Bank One,
NA.
"Replacement Bank" has the meaning specified in Section 3.09.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
"Responsible Officer" means, as to any Person, the chief executive
officer, the chief financial officer, or the treasurer or the president of
such Person, or any other officer having substantially the same authority
and responsibility; or, with respect to compliance with financial
covenants, the chief financial officer or the treasurer of such Person, or
any other officer having substantially the same authority and
responsibility.
"Revolving Loan" has the meaning specified in Section 2.01.
"Revolving Termination Date" means the earlier to occur of:
(a) March 21, 2001 as the same may be extended from time to time
pursuant to Section 2.16; and
(b) the date on which the Commitments terminate in accordance
with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
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"Senior Managing Agents" means each of First Union National Bank,
Union Bank Of California, N.A., U.S. Bank National Association and Wells
Fargo Bank, N.A in its capacity as a senior managing agent hereunder.
"Subsidiary" of a Person means any corporation or other business
entity of which more than 50% of the voting stock, membership interests or
other equity interests (in the case of Persons other than corporations), is
owned or controlled directly or indirectly by the Person, or one or more of
the Subsidiaries of the Person, or a combination thereof. Unless the
context otherwise clearly requires, references herein to a "Subsidiary"
refer to a Subsidiary of the Company.
"Surety Instruments" means all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"Swap Contract" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or bill option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or
any combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or
after the date such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a) the amount(s)
determined as the mark-to-market value(s) for such Swap Contracts, as
determined by the Company based upon one or more mid- market or other
readily available quotations provided by any recognized dealer in such Swap
Contracts (which may include any Bank).
"Syndication Agent" means Wachovia Bank, N.A., in its capacity as
syndication agent hereunder.
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case
of each Bank and the Agent, respectively, (a) income or franchise taxes
imposed on or measured by its net income, (i) by the United States, (ii) by
the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located, (iii) by any jurisdiction solely as
a result of such Bank's activities in or contact with such jurisdiction
unrelated to the transactions contemplated by this Agreement, or (iv) by
the jurisdiction in which in the Lending Office of the recipient is
located, and (b) any branch profits taxes imposed by the United States or
any similar tax imposed by any other jurisdiction in which any recipient is
located.
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"Term Loan" has the meaning specified in Section 2.01.
"Term Maturity Date" means the one year anniversary date of the
borrowing date of the Term Loans.
"Type" means, as to any Committed Loan, its nature as an Offshore Rate
Committed Loan or a Base Rate Committed Loan.
"Unfunded Liability" means with respect to any Plan at any time, the
amount (if any) by which (i) the present value of all benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to
such benefits (excluding any accrued but unpaid contributions), all
determined as of the then most recent valuation date for such Plan, but
only to the extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or any other Person under Title IV of
ERISA.
"United States" and "U.S." each means the United States of America.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests
of which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Company.
1.02 Other Interpretive Provisions.(a) (a) The meanings of defined
terms are equally applicable to the singular and plural forms of the
defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including";
the words "to" and "until" each mean "to but excluding", and the word
"through" means "to and including."
(iv) The term "property" includes any kind of property or asset,
real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
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including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters.
All such limitations, tests and measurements are cumulative and shall each
be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among the Agent, the Company and the other parties, have been
reviewed by counsel to the Agent, the Company and such other parties, and
are the products of all parties. Accordingly, they shall not be construed
against the Banks or the Agent merely because of the Agent's or Banks'
involvement in their preparation.
1.03 Accounting Principles.(a) (a) Unless the context otherwise
clearly requires, all accounting terms not expressly defined herein shall
be construed, and all financial computations required under this Agreement
shall be made, in accordance with GAAP, applied on a basis consistent
(except for changes concurred in by the Company's Independent Auditor) with
the most recent audited consolidated financial statements of the Company
and its Consolidated Subsidiaries delivered to the Banks, except that
accounting terms used in Sections 7.01, 7.03 and 7.05 shall be interpreted,
and all accounting determinations and calculations required to establish
whether the Company is or was in compliance with the requirements of said
Sections shall be prepared in accordance with generally accepted accounting
principles as in effect on the date hereof, applied on a basis consistent
with the audited consolidated financial statements of the Company and its
Consolidated Subsidiaries referred to in Section 5.10(a).
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments.
(a) The Revolving Credit. Each Bank severally agrees, on the terms and
conditions set forth herein, to make loans to the Company (each such loan,
a "Revolving Loan") from time to time on any Business Day during the period
from the Closing Date to the Revolving Termination Date, in an aggregate
amount not to exceed at any time outstanding the amount set forth opposite
such Bank's name on Schedule 2.01 under the heading "Commitment" (such
amount as the same may be reduced under Section 2.07 or reduced or
increased as a result of one or more assignments under Section 10.08, such
Bank's "Commitment"); provided, however, that, after giving effect to any
Committed Borrowing of Revolving Loans, the aggregate principal amount of
all outstanding Committed Loans plus the aggregate principal amount of all
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Bid Loans outstanding, shall not at any time exceed the Aggregate
Commitment. Within the limits of each Bank's Commitment, and subject to the
other terms and conditions hereof, the Company may borrow under this
Section 2.01, prepay under Section 2.08 and reborrow under this Section
2.01.
(b) The Term Loan Option. Not less than five days and not more than
thirty days prior to the Revolving Termination Date then in effect, and in
lieu of any extension of the Revolving Termination Date under Section
2.16(a), the Company may provide written notice to the Agent, who shall
forward a copy of such notice to each of the Banks, that the Revolving
Loans outstanding as of the Revolving Termination Date shall be converted
into Term Loans. If such notice is given, each Bank severally agrees, on
the terms and conditions hereinafter set forth, to make a term loan (each a
"Term Loan" and, collectively, the "Term Loans") to the Company on the
Revolving Termination Date, in a principal amount up to but not exceeding
such Bank's outstanding Revolving Loans. Any amount of any Bank's Term Loan
repaid may not be reborrowed.
2.02 Loan Accounts.(a) (a) The Loans made by each Bank or Designated
Bidder shall be evidenced by one or more loan accounts or records
maintained by such Bank or Designated Bidder in the ordinary course of
business. The loan accounts or records maintained by the Agent and each
Bank or Designated Bidder shall be conclusive absent manifest error of the
amount of the Loans made by the Banks and Designated Bidders to the Company
and the interest and payments thereon. Any failure so to record or any
error in doing so shall not, however, limit or otherwise affect the
obligation of the Company hereunder to pay any amount owing with respect to
the Loans.
(b) The Committed Loans made by such Bank shall be evidenced by one or
more notes of the Company, substantially in the form of Exhibit I, with
appropriate insertions (the "Committed Loan Notes"), and upon the request
of any Bank or Designated Bidder made through the Agent, the Bid Loans made
by such Bank or Designated Bidder shall be evidenced by one or more notes
of the Company, substantially in the form of Exhibit J, with appropriate
insertions (the "Bid Loan Notes"), instead of or in addition to loan
accounts. Each such Bank or Designated Bidder shall endorse on the
schedules annexed to its Note(s) the date and amount of each Loan made by
it, the maturity (in the case of any Bid Loan) and the amount of each
payment of principal made by the Company with respect thereto. Each such
Bank and Designated Bidder is irrevocably authorized by the Company to
endorse its Note(s) and each Bank's or Designated Bidder's record shall be
conclusive absent manifest error; provided, however, that the failure of a
Bank or Designated Bidder to make, or an error in making, a notation
thereon with respect to any Loan shall not limit or otherwise affect the
obligations of the Company hereunder or under any such Note to such Bank or
Designated Bidder.
2.03 Procedure for Committed Borrowing.(a) (a) Each Committed
Borrowing shall be made upon the Company's irrevocable written notice
delivered to the Agent in the form of a Notice of Borrowing (which notice
must be received by the Agent prior to 11:00 a.m. (San Francisco time) (i)
at least three Business Days prior to the requested Borrowing Date, in the
case of Offshore Rate Committed Loans, and (ii) on the requested Borrowing
Date, in the case of Base Rate Committed Loans, specifying:
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(A) the amount of the Committed Borrowing, which shall be in a
Minimum Amount; (B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Loans comprising the Committed Borrowing; and
(D) the duration of the Interest Period applicable to such
Committed Loans included in such notice (subject to the provisions of
the definition of "Interest Period" herein). If the Notice of
Borrowing fails to specify the duration of the Interest Period for any
Committed Borrowing comprised of Offshore Rate Committed Loans, such
Interest Period shall be three months.
(b) The Agent will promptly notify each Bank of its receipt of any
Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Committed Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Committed Borrowing available to the Agent for the account of the Company
at the Agent's Payment Office by 1:00 p.m. San Francisco time) on the
Borrowing Date requested by the Company in funds immediately available to
the Agent. The proceeds of each such Committed Borrowing will then be made
available to the Company by the Agent at such office by crediting the
account of the Company on the books of BofA with the aggregate of the
amounts made available to the Agent by the Banks and in like funds as
received by the Agent, or if requested by the Company, by wire transfer in
accordance with written instructions provided to the Agent by the Company
of such funds as received by the Agent, unless on the date of the Committed
Borrowing all or any portion of the proceeds thereof shall then be required
to be applied to the repayment of any outstanding Loans, in which case such
proceeds or portion thereof shall be applied to the payment of such Loans.
(d) After giving effect to any Committed Borrowing, unless the Agent
shall otherwise consent, there may not be more than fifteen different
Interest Periods in effect in respect of all Committed Loans then
outstanding.
2.04 Conversion and Continuation Elections for Committed
Borrowings.(a) (a) The Company may, upon irrevocable written notice to the
Agent in accordance with subsection 2.04(b):
(i) elect, as of any Business Day, in the case of Base Rate
Committed Loans, or as of the last day of the applicable Interest
Period in the case of any other Type of Committed Loans, to convert
into Committed Loans of any other Type any such Committed Loans (or
any part thereof in a Minimum Amount); or
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(ii) elect, as of the last day of the applicable Interest Period,
to continue any Offshore Rate Committed Loans having Interest Periods
expiring on such day (or any part thereof in a Minimum Amount);
provided, that if at any time the aggregate amount of Offshore Rate Committed
Loans in respect of any Committed Borrowing is reduced, by payment, prepayment,
or conversion of part thereof to be less than $5,000,000, such Offshore Rate
Committed Loans shall automatically convert into Base Rate Committed Loans, and
on and after such date the right of the Company to continue such Committed Loans
as, and convert such Committed Loans into, Offshore Rate Committed Loans shall
terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation to
be received by the Agent not later than 11:00 a.m. (San Francisco time) (i)
at least three Business Days in advance of the Conversion/ Continuation
Date, if the Committed Loans are to be converted into or continued as
Offshore Rate Committed Loans, and (ii) on the Conversion/Continuation
Date, if the Committed Loans are to be converted into Base Rate Committed
Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Committed Loans to be converted
or continued;
(C) the Type of Committed Loans resulting from the proposed
conversion or continuation; and
(D) other than in the case of conversions into Base Rate
Committed Loans, the duration of the requested Interest Period
(subject to the provisions of the definition of "Interest Period"
herein).
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Committed Loans, the Company has failed to select timely a
new Interest Period to be applicable to such Offshore Rate Committed Loans,
or if any Default or Event of Default then exists, the Company shall be
deemed to have elected to convert such Offshore Rate Committed Loans into
Base Rate Committed Loans effective as of the expiration date of such
Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by
the Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made
ratably according to the respective outstanding principal amounts of the
Committed Loans held by each Bank with respect to which the notice was
given.
(e) Unless the Majority Banks otherwise consent, during the existence
of a Default or Event of Default, the Company may not elect to have a
Committed Loan converted into or continued as an Offshore Rate Committed
Loan.
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(f) After giving effect to any conversion or continuation of Committed
Loans, unless the Agent shall otherwise consent, there may not be more than
fifteen different Interest Periods in effect in respect of all Committed
Loans and Bid Loans together then outstanding.
2.05 Bid Borrowings. In addition to Committed Borrowings pursuant to
Section 2.03, each Bid Loan Bank severally agrees that the Company may, as
set forth in Section 2.06, from time to time request the Bid Loan Banks
prior to the Revolving Termination Date to submit offers to make Bid Loans
to the Company; provided, however, that the Bid Loan Banks may, but shall
have no obligation to, submit such offers and the Company may, but shall
have no obligation to, accept any such offers, and any Bid Loan Bank may
designate Designated Bidders to make such offers from time to time and, if
such offers are accepted by the Company, to make such Bid Loans; and
provided, further, that at no time shall (a) the outstanding aggregate
principal amount of all Bid Loans made by all Bid Loan Banks and Designated
Bidders, plus the outstanding aggregate principal amount of all Committed
Loans made by all Banks, exceed the Aggregate Commitment; or (b) unless the
Agent shall otherwise consent, the number of Interest Periods for Bid Loans
then outstanding, plus the number of Interest Periods for Committed Loans
then outstanding, exceed fifteen.
2.06 Procedure for Bid Borrowings.(a) (a) When the Company wishes to
request the Bid Loan Banks to submit offers to make Bid Loans hereunder, it
shall transmit to the Agent by telephone call followed promptly by
facsimile transmission a notice in substantially the form of Exhibit G (a
"Competitive Bid Request") so as to be received no later than 8:00 a.m.
(San Francisco time) one Business Day prior to the date of a proposed Bid
Borrowing, specifying:
(i) the date of such Bid Borrowing, which shall be a Business
Day;
(ii) the aggregate amount of such Bid Borrowing, which shall be a
minimum amount of $5,000,000 or in integral multiples of $1,000,000 in
excess thereof; and
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of "Interest Period"
herein.
Subject to subsection 2.06(c), the Company may not request Competitive Bids for
more than three Interest Periods in a single Competitive Bid Request and may not
request Competitive Bids more than once in any period of five Business Days.
(b) Upon receipt of a Competitive Bid Request, the Agent will promptly
send to the Bid Loan Banks and Designated Bidders by facsimile transmission
an Invitation for Competitive Bids, which shall constitute an invitation by
the Company to each Bid Loan Bank and Designated Bidder to submit
Competitive Bids offering to make the Bid Loans to which such Competitive
Bid Request relates in accordance with this Section 2.06.
(c)(i) Each Bid Loan Bank and Designated Bidder may at its discretion
submit a Competitive Bid containing an offer or offers to make Bid Loans in
response to any Invitation for Competitive Bids. Each Competitive Bid shall
comply with the requirements of this subsection 2.06(c) and shall be
submitted to the Agent by facsimile transmission at the Agent's office for
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notices set forth on Schedule 10.02 not later than 7:30 a.m. (San Francisco
time) on the proposed Borrowing Date; provided that Competitive Bids
submitted by the Agent (or any Affiliate of the Agent) in the capacity of a
Bid Loan Bank or Designated Bidder may be submitted, and may only be
submitted, if the Agent or such Affiliate notifies the Company of the terms
of the offer or offers contained therein not later than 7:15 a.m. (San
Francisco time) on the proposed Borrowing Date.
(ii) Each Competitive Bid shall be in substantially the form
of Exhibit H, specifying therein:
(A) the proposed Borrowing Date;
(B) the principal amount of each Bid Loan for which such
Competitive Bid is being made, which principal amount (1) may be
equal to, greater than or less than the Commitment of the quoting
Bid Loan Bank or the quoting Designated Bidder's affiliated Bid
Loan Bank, (2) shall be $5,000,000 or in integral multiples of
$1,000,000 in excess thereof, and (3) may not exceed the
principal amount of Bid Loans for which Competitive Bids were
requested;
(C) the rate of interest per annum expressed in multiples of
1/1000th of one basis point (the "Absolute Rate") offered for
each such Bid Loan and the Interest Period applicable thereto;
and
(D) the identity of the quoting Bid Loan Bank or Designated
Bidder.
A Competitive Bid may contain up to three separate offers by the quoting Bid
Loan Bank or Designated Bidder with respect to each Interest Period specified in
the related Invitation for Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with Exhibit H or does not
specify all of the information required by subsection (c)(ii) of this
Section;
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth
in the applicable Invitation for Competitive Bids; or
(D) arrives after the time set forth in subsection (c)(i).
(iv) Notwithstanding anything to the contrary contained in this
subsection 2.06(c), a Competitive Bid by BofA may contain, and will not be
disregarded if it does contain, a restriction on the use of proceeds
thereof.
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(d) Promptly on receipt and not later than 8:00 a.m. (San Francisco
time) on the proposed Borrowing Date, the Agent will notify the Company of
the terms (i) of any Competitive Bid submitted by a Bid Loan Bank or
Designated Bidder that is in accordance with subsection 2.06(c), and (ii)
of any Competitive Bid that amends, modifies or is otherwise inconsistent
with a previous Competitive Bid submitted by such Bid Loan Bank or
Designated Bidder with respect to the same Competitive Bid Request. Any
such subsequent Competitive Bid shall be disregarded by the Agent unless
such subsequent Competitive Bid is submitted solely to correct a manifest
error in such former Competitive Bid and only if received within the times
set forth in subsection 2.06(c). The Agent's notice to the Company shall
specify (1) the aggregate principal amount of Bid Loans for which offers
have been received for each Interest Period specified in the related
Competitive Bid Request; and (2) the respective principal amounts and
Absolute Rates so offered. Subject only to the provisions of Sections 3.02,
3.05 and 4.02 hereof and the provisions of this subsection (d), any
Competitive Bid shall be irrevocable except with the written consent of the
Agent given on the written instructions of the Company.
(e) Not later than 8:30 a.m. (San Francisco time) on the proposed
Borrowing Date, in the case of an Absolute Rate Auction, the Company shall
notify the Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to subsection 2.06(d). The Company shall be under
no obligation to accept any offer and may choose to reject all offers. In
the case of acceptance, such notice shall specify the aggregate principal
amount of offers for each Interest Period that is accepted. The Company may
accept any Competitive Bid in whole or in part; provided that:
(i) the aggregate principal amount of each Bid Borrowing may
not exceed the applicable amount set forth in the related
Competitive Bid Request;
(ii) the principal amount of each Bid Borrowing shall be
$5,000,000 or in any integral multiple of $1,000,000 in excess
thereof;
(iii) acceptance of offers may only be made on the basis of
ascending Absolute Rates within each Interest Period; and
(iv) the Company may not accept any offer that is described
in subsection 2.06(c)(iii) or that otherwise fails to comply with
the requirements of this Agreement.
(f) If offers are made by two or more Bid Loan Banks or Designated
Bidders with the same Absolute Rates for a greater aggregate principal
amount than the amount in respect of which such offers are accepted for the
related Interest Period, the principal amount of Bid Loans in respect of
which such offers are accepted shall be allocated by the Agent among such
Bid Loan Banks or Designated Bidders as nearly as possible (in such
multiples, not less than $1,000,000, as the Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers. Determination
by the Agent of the amounts of Bid Loans shall be conclusive in the absence
of manifest error.
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(g)(i) The Agent will promptly notify each Bid Loan Bank or Designated
Bidder having submitted a Competitive Bid if its offer has been accepted
and, if its offer has been accepted, of the amount of the Bid Loan or Bid
Loans to be made by it on the Borrowing Date.
(ii) Each Bid Loan Bank or Designated Bidder which has received notice
pursuant to subsection 2.06(g)(i) that its Competitive Bid has been
accepted shall make the amounts of such Bid Loans available to the Agent
for the account of the Company at the Agent's Payment Office, by 11:00 a.m.
(San Francisco time), on such Borrowing Date, in funds immediately
available to the Agent for the account of the Company at the Agent's
Payment Office. The proceeds of such Bid Loans will in each case then be
made available to the Company by the Agent at such office by crediting the
account of the Company on the books of BofA with the aggregate of the
amounts made available to the Agent by the Bid Loan Banks and in like funds
as received by the Agent.
(iii) Promptly following each Bid Borrowing, the Agent will notify
each Bank and Designated Bidder of the ranges of bids submitted and the
highest and lowest Bids accepted for each Interest Period requested by the
Company and the aggregate amount borrowed pursuant to such Bid Borrowing.
(iv) From time to time, the Company and the Bid Loan Banks and
Designated Bidders shall furnish such information to the Agent as the Agent
may request relating to the making of Bid Loans, including the amounts,
interest rates, dates of borrowings and maturities thereof, for purposes of
the allocation of amounts received from the Company for payment of all
amounts owing hereunder.
(h) Nothing in this Section 2.06 shall be construed as a right of
first offer in favor of the Bid Loan Banks or Designated Bidders or
otherwise to limit the ability of the Company to request and accept credit
facilities from any Person (including any of the Bid Loan Banks or
Designated Bidders), provided that no Default or Event of Default would
otherwise arise or exist as a result of the Company executing, delivering
or performing under such credit facilities.
2.07 Voluntary Termination or Reduction of Commitments. The Company
may, upon not less than three Business Days' prior notice to the Agent,
terminate the Commitments, or permanently reduce the Commitments, provided
that the aggregate amount of any partial reduction is in a Minimum Amount;
unless, after giving effect thereto and to any prepayments of any Loans
made on the effective date thereof, the then outstanding principal amount
of the Loans would exceed the amount of the Aggregate Commitment then in
effect. A notice of termination of the Commitments delivered by the Company
may state that such notice is conditioned upon the effectiveness of other
credit facilities, in which case such notice may be revoked by the Company
by notice to the Agent on or prior to the specified date if such condition
is not satisfied. Once reduced in accordance with this Section 2.07, the
Commitments may not be increased. Any reduction of the Commitments shall be
applied to each Bank according to its Pro Rata Share. All accrued
commitment fees to, but not including, the effective date of any reduction
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or termination of the Commitments, shall be paid on the effective date of
such reduction or termination.
2.08 Optional Prepayments. (a) Committed Loans. Subject to Section
3.04, the Company may, at any time or from time to time, upon notice to the
Agent, ratably prepay Committed Loans in whole or in part, in Minimum
Amounts. The Company shall deliver a notice of prepayment in accordance
with Section 10.02 to be received by the Agent not later than 10:00 a.m.
(San Francisco time) (i) at least three Business Days in advance of the
prepayment date if the Loans to be prepaid are Offshore Rate Committed
Loans and (ii) at least one Business Day in advance of the prepayment date
if the Loans to be prepaid are Base Rate Committed Loans. Such notice shall
not thereafter be revocable by the Company and the Agent will promptly
notify each Bank thereof and of such Bank's Pro Rata Share of such
prepayment if any. Such notice of prepayment shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid and
whether such prepayment is of Base Rate Committed Loans or Offshore Rate
Committed Loans (or any combination thereof). If such notice is given by
the Company, the Company shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to each such date on the amount of
Offshore Rate Committed Loans prepaid and any amounts required pursuant to
Section 3.04.
(b) Bid Loans. Bid Loans may not be voluntarily prepaid.
2.09 Repayment.
(a) The Committed Loans. The Company shall repay to the Agent for the
account of the Banks on the Revolving Termination Date the aggregate
principal amount of Committed Loans outstanding on such date.
(b) The Term Loans. The Company shall repay to the Agent for the
account of the Banks on the Term Maturity Date the aggregate principal
amount of the Term Loans outstanding on the Term Maturity Date.
(c) The Bid Loans. The Company shall repay to the Agent for the
account of each Bid Loan Bank or Designated Bidder, as the case may be,
that makes any Bid Loan the principal amount of such Bid Loan on the last
day of the relevant Interest Period for such Bid Loan.
2.10 Interest.(a) (a) Each Committed Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at
a rate per annum equal to the Offshore Rate or the Base Rate, as the case
may be (and subject to the Company's right to convert to other Types of
Loans under Section 2.04), plus the Applicable Margin. Each Bid Loan shall
bear interest on the outstanding principal amount thereof from the relevant
Borrowing Date at a rate per annum equal to the Absolute Rate.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Committed Loans under Section 2.08 for the portion of the Loans so prepaid
and upon payment (including prepayment) in full thereof.
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(c) Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder
or under any other Loan Document is not paid in full when due (whether at
stated maturity, by acceleration, demand or otherwise), the Company agrees
to pay interest on such unpaid principal or other amount, from the date
such amount becomes due until the date such amount is paid in full, and
after as well as before any entry of judgment thereon to the extent
permitted by law, payable on demand, at a rate per annum which is
determined by adding 1% per annum to the Applicable Margin then in effect
for such Loans and, in the case of Obligations not subject to an Applicable
Margin, at a rate per annum equal to the Base Rate, plus the Applicable
Margin then in effect for Base Rate Committed Loans, plus 1% per annum.
(d) Anything herein to the contrary notwithstanding, the obligations
of the Company to any Bank or Designated Bidder hereunder shall be subject
to the limitation that payments of interest shall not be required for any
period for which interest is computed hereunder, to the extent (but only to
the extent) that contracting for or receiving such payment by such Bank or
Designated Bidder would be contrary to the provisions of any law applicable
to such Bank or Designated Bidder limiting the highest rate of interest
that may be lawfully contracted for, charged or received by such Bank or
Designated Bidder, and in such event the Company shall pay such Bank or
Designated Bidder interest at the highest rate permitted by applicable law.
2.11 Fees. (a) Arrangement and Agency Fees. The Company shall pay fees
as required by the letter agreement (the "Fee Letter") between the Company
and the Lead Arranger and Agent dated February 29, 2000.
(b) Competitive Bid Fee. The Company shall pay to the Agent, for the
Agent's own account, a competitive bid fee in the amount set forth in the
Fee Letter, each time the Company requests the Bid Loan Banks to submit
offers to make Bid Loans.
(c) Facility Fee. The Company shall pay to the Agent for the account
of each Bank a facility fee on such Bank's Commitment, regardless of usage,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter at a rate per annum equal to the Applicable Fee Amount.
Such facility fee shall accrue from the Closing Date to the Revolving
Termination Date and shall be due and payable quarterly in arrears on the
last Business Day of each quarter following the Closing Date through the
Revolving Termination Date, with the final payment to be made on the
Revolving Termination Date; provided that, in connection with any reduction
or termination of Commitments under Section 2.07, the accrued facility fee
calculated for the period ending on such date shall also be paid on the
date of such reduction or termination, with the following quarterly payment
being calculated on the basis of the period from such reduction or
termination date to such quarterly payment date. The facility fee provided
in this subsection shall accrue at all times after the above-mentioned
commencement date, including at any time during which one or more
conditions in Article IV are not met.
(a) Utilization Fee. The Company shall pay to the Agent for the
account of each Bank a utilization fee on the outstanding Loans (including
all Bid Loans) at any time that the aggregate outstanding Loans exceed the
levels of the Aggregate Commitment determined in accordance with Annex I,
at a rate per annum equal to the Applicable Fee Amount. Such utilization
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fee shall be computed on a quarterly basis in arrears on the last Business
Day of each calendar quarter, shall accrue from the Closing Date to the
Revolving Termination Date and shall be payable in arrears on the last
Business Day of each quarter commencing on the last Business Day of the
fiscal quarter following the Closing Date through the Revolving Termination
Date, with the final payment to be made on the Revolving Termination Date.
The utilization fee, if applicable, will be added to the Applicable Margin.
2.12 Computation of Fees and Interest. (a) (a) All computations of
interest hereunder when the Base Rate is determined by BofA's "prime rate"
shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which
results in more interest being paid than if computed on the basis of a
365-day year). Interest and fees shall accrue during each period during
which interest or such fees are computed from the first day thereof to the
last day thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Company, the Banks and the Designated Bidders
in the absence of manifest error.
(c) The Agent will, at the request of the Company or any Bank or
designated Bidder, deliver to the Company or such Bank or Designated
Bidder, as the case may be, a statement showing the quotations used by the
Agent in determining any interest rate.
(d) If any Reference Bank's Commitment terminates (other than on
termination of all the Commitments), or for any reason whatsoever any
Reference Bank ceases to be a Bank hereunder, that Reference Bank shall
thereupon cease to be a Reference Bank, and the Offshore Rate shall be
determined on the basis of the rates as notified by the remaining Reference
Banks; provided that if, as a result, there shall only be one Reference
Bank remaining, the Agent (after consultation with the Banks and with the
consent of the Company (which shall not be unreasonably withheld)) shall,
by notice to the Company and the Banks, designate another Bank as a
Reference Bank so that there shall at all times be at least two Reference
Banks.
(e) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Agent as contemplated hereby. If any of the
Reference Banks fails to supply such rates to the Agent upon its request,
the rate of interest shall be determined on the basis of the quotations of
the remaining Reference Bank(s).
2.13 Payments by the Company(a) . (a) Except as otherwise expressly
provided herein, all payments by the Company shall be made to the Agent for
the account of the Banks and Designated Bidders at the Agent's Payment
Office, and shall be made from an account of the Company maintained within
the United States, in Dollars, and in immediately available funds, no later
than 12:00 noon (San Francisco time) on the date specified herein. The
Agent will promptly distribute to each Bank (or Designated Bidder) its Pro
Rata Share (or other applicable share as expressly provided herein) of such
payment in like funds as received. Any payment received by the Agent later
than 12:00 noon (San Francisco time) shall be deemed to have been received
on the following Business Day and any applicable interest or fee shall
continue to accrue.
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(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business
Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to the
date on which any payment is due to the Banks or Designated Bidders that
the Company will not make such payment in full as and when required, the
Agent may assume that the Company has made such payment in full to the
Agent on such date in immediately available funds and the Agent may (but
shall not be so required), in reliance upon such assumption, distribute to
each Bank or Designated Bidder on such due date an amount equal to the
amount then due such Bank or Designated Bidder. If and to the extent the
Company has not made such payment in full to the Agent, each Bank or
Designated Bidder shall repay to the Agent on demand such amount
distributed to such Bank or Designated Bidder, together with interest
thereon at the Federal Funds Rate for each day from the date such amount is
distributed to such Bank or Designated Bidder until the date repaid.
2.14 Payments by the Banks to the Agent. (a) Unless the Agent receives
notice from a Bank or Designated Bidder, as the case may be, on or prior to
the Closing Date or, with respect to any Borrowing after the Closing Date,
on the date of such Borrowing, that such Bank or Designated Bidder will not
make available as and when required hereunder to the Agent for the account
of the Company the amount of that Bank's or Designated Bidder's Loan, the
Agent may assume that such Bank or Designated Bidder has made such amount
available to the Agent in immediately available funds on the Borrowing Date
and the Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Company on such date a corresponding
amount. If and to the extent any Bank or Designated Bidder shall not have
made its full amount available to the Agent in immediately available funds
and the Agent in such circumstances has made available to the Company such
amount, that Bank or Designated Bidder shall on the Business Day following
such Borrowing Date make such amount available to the Agent, together with
interest at the Federal Funds Rate for each day during such period. A
notice of the Agent submitted to any Bank or Designated Bidder with respect
to amounts owing under this subsection (a) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the
Agent shall constitute such Bank's or Designated Bidder's Loan on the
Borrowing Date for all purposes of this Agreement. If such amount is not
made available to the Agent on the Business Day following the Borrowing
Date, the Agent will notify the Company of such failure to fund and, upon
demand by the Agent, the Company shall pay such amount to the Agent for the
Agent's account, together with interest thereon for each day elapsed since
the date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing.
(a) The failure of any Bank or Designated Bidder to make any Loan on
any Borrowing Date shall not relieve any other Bank or Designated Bidder of
any obligation hereunder to make a Loan on such Borrowing Date, but no Bank
or Designated Bidder shall be responsible for the failure of any other Bank
or Designated Bidder to make the Loan to be made by such other Bank or
Designated Bidder on any Borrowing Date.
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2.15 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank or Designated Bidder shall obtain on account of
the Loans made by it any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) in excess of its Pro
Rata Share (or other share contemplated hereunder) of (i) payments in
respect of the Committed Loans obtained by all the Banks, or (ii) payments
in respect of Bid Loans having the same Borrowing Date, Interest Payment
Date and maturity date, such Bank or Designated Bidder shall immediately
(a) notify the Agent of such fact, and (b) purchase from the other Banks
and, if applicable, Designated Bidders, such participations in the
Committed Loans or Bid Loans, as applicable, made by them as shall be
necessary to cause such purchasing Bank or Designated Bidder to share the
excess payment pro rata with each of them; provided, however, that if all
or any portion of such excess payment is thereafter recovered from the
purchasing Bank or Designated Bidder, such purchase shall to that extent be
rescinded and each other Bank or Designated Bidder shall repay to the
purchasing Bank or Designated Bidder the purchase price paid therefor,
together with an amount equal to such paying Bank's or Designated Bidder's
ratable share (according to the proportion of (i) the amount of such paying
Bank's or Designated Bidder's required repayment to (ii) the total amount
so recovered from the purchasing Bank or Designated Bidder) of any interest
or other amount paid or payable by the purchasing Bank or Designated Bidder
in respect of the total amount so recovered. The Company agrees that any
Bank or Designated Bidder so purchasing a participation from another Bank
or Designated Bidder may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off, but subject to
Section 10.11) with respect to such participation as fully as if such Bank
or Designated Bidder were the direct creditor of the Company in the amount
of such participation. The Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section 2.16 and will in each case notify the Banks
and, if applicable, Designated Bidders, following any such purchases or
repayments.
2.16 Revolving Termination Date Extensions.
(a) Not less than 30 days and not more than 60 days prior to the
Revolving Termination Date then in effect, and in lieu of the exercise at
such time of the term out option under Section 2.01(b), the Company may
make a written request to the Agent, who shall forward a copy of each such
request to each of the Banks, that the Revolving Termination Date then in
effect be extended to the date which occurs 364 days after the Revolving
Termination Date then in effect. Each request by the Company pursuant to
the immediately preceding sentence shall specify a date (the "Requested
Extension Effective Date"), which shall be not earlier than 20 days after
the giving of the respective notice and not later than 15 days prior to the
Revolving Termination Date then in effect, as the date by which the Banks
should respond to the requested extension request and which would be the
date of the effectiveness of the change to the Revolving Termination Date.
Each request pursuant to the first sentence of this Section 2.16 shall also
be accompanied by a certificate of an officer of the Company stating that
no Default or Event of Default has occurred and is continuing. Each Bank,
acting in its sole discretion and with no obligation to grant any extension
pursuant to this Section 2.16, shall, by written notice to the Company and
the Agent, such notice to be given on or prior to the Requested Extension
Effective Date, advise the Company and the Agent whether or not such Bank
agrees to such extension, provided that any Bank which fails to so notify
the Company and the Agent as provided above shall be deemed to have elected
not to grant such extension. If less than all the Banks shall agree to such
extension, the extension contemplated in this Section may nonetheless occur
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with respect to the consenting Banks, provided that any such extension
shall be conditioned upon an agreement to such extension by Banks with at
least 75% of the Aggregate Commitment. The Agent shall notify the Company
and each of the Banks as to which Banks have agreed to such extension and
as to the new Revolving Termination Date as a result thereof, or that such
extension shall not occur, as the case may be.
(b) In the event that the Revolving Termination Date is extended by
some but not all of the Banks, on the existing Revolving Termination Date
for any Bank not extending (each a "Non-Continuing Bank"), the Company
shall either (i) repay all Revolving Loans of such Non-Continuing Bank,
together with all accrued and unpaid interest thereon, and all fees and
other amounts owing to such Non-Continuing Bank, and upon such payment each
such Non-Continuing Bank shall cease to constitute a Bank hereunder, except
with respect to the indemnification provisions under this Agreement, which
shall survive as to such Non-Continuing Bank or (ii) in lieu of an
extension of the Revolving Loan Termination Date under this Section 2.16,
elect to convert the outstanding Revolving Loans into Term Loans pursuant
to Section 2.01(b).
2.17 Optional Increase in Commitments.(a) (a) Effective as of the
Closing Date, or at any time thereafter (prior to the Revolving Termination
Date) but no more than once per month, if no Default or Event of Default
has occurred and is continuing both before and after giving effect to an
increase, the Company shall have the option to increase the Aggregate
Commitment by (i) increasing the Commitment of one or more Banks already
party to this Agreement (each such Bank increasing its Commitment, an
"Increasing Bank"), in each case pursuant to a Commitment Increase
Agreement, in substantially the form of Exhibit L (a "Commitment Increase
Agreement") and/or (ii) adding one or more lending institutions not a party
hereto (each such new bank, a "New Bank") as a party to this Agreement, in
each case pursuant to a New Bank Agreement, in substantially the form of
Exhibit M (a "New Bank Agreement"). The effectiveness of any such increase
is subject to the satisfaction of the following conditions:
(A) that any request for increase of the Commitment of an Increasing
Bank be made through the Agent (it being understood that an Increasing Bank
may accept or reject any increase request in its sole and absolute
discretion);
(B) that the Company shall provide prior written notice of any
proposed increase (whether involving an Increasing Bank or a New Bank) to
the Agent, at least 15 Business Days (or such shorter period as the Agent
may agree to in the given instance) prior to the effectiveness of such
increase, who shall promptly notify the Banks;
(C) in the case of a Commitment increase by an Increasing Bank, that
the Company and such Increasing Bank shall have entered into a Commitment
Increase Agreement, and such Commitment Increase Agreement shall have been
delivered to the Agent;
(D) in the case of an accession hereto by a New Bank, that the Company
and such New Bank shall have entered into a New Bank Agreement, and such
New Bank Agreement shall have been delivered to the Agent;
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(E) that the Agent shall have acknowledged and accepted the Commitment
Increase Agreement or New Bank Agreement, as the case may be (such
acknowledgment and acceptance not to be unreasonably withheld);
(F) that each New Bank shall be an Eligible Assignee;
(G) that the Aggregate Commitment, following such increase, shall not
exceed $1,250,000,000;
(H) that any fees payable to any Increasing Bank or New Bank in
connection with such increase shall have been paid; and
(I) that any other amounts then due hereunder in connection therewith,
including any amounts payable under Section 3.04 as a result of any
assignments of Offshore Rate Committed Loans under subsection 2.16(b) on a
day other than the last day of an Interest Period, shall have been paid.
(b) Upon the effectiveness of any Commitment Increase Agreement, the
Commitment of the Increasing Bank party thereto shall be increased in the
amount set forth in the Commitment Increase Agreement, and upon the
effectiveness of any New Bank Agreement, the New Bank party thereto shall
be and become a party hereto and shall constitute a Bank hereunder with the
rights and obligations of a Bank under the Loan Documents (each such date
of effectiveness, an "Increased Commitment Date"). Effective on each
Increased Commitment Date, the amount of Loans then outstanding and held by
each Bank shall be adjusted to reflect any such changes in such Bank's Pro
Rata Share, subject to Section 3.04. Each Bank having Loans then
outstanding and whose Pro Rata Share has been decreased as a result of the
increase in the Aggregate Commitment shall be deemed to have assigned,
without recourse, to any Increasing Banks increasing their Commitments and
New Banks, such portion of such Loans as shall be necessary to effectuate
such adjustment. Each Increasing Bank and New Bank shall (A) be deemed to
have assumed such portion of such Loans and (B) fund on the Increased
Commitment Date such assumed amounts to the Agent for the account of the
assigning Banks in accordance with the provisions hereof.
(c) The Agent shall promptly notify the Banks of the Agent's receipt
of notice of any proposed Commitment increase under clause (B) of
subsection 2.17(a). Additionally, promptly following the Increased
Commitment Date for a Commitment increase the Agent shall cause Schedule
2.01 to be modified to accurately reflect the Commitments and Pro Rata
Shares of the Banks, whereupon such amended Schedule 2.01 shall be
substituted for the pre-existing Schedule 2.01, be deemed a part of this
Agreement without any further action or consent of any party and be
promptly distributed to each Bank and the Company by the Agent. Within five
Business Days of any Increased Commitment Date (whether as to an Increasing
Bank or a New Bank), the Company shall execute and deliver to the Agent (i)
a replacement Committed Loan Note in favor of each Increasing Bank,
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evidencing the increased Commitment of such Increasing Bank, and (ii) a new
Committed Loan Note in favor of each New Bank, in the principal amount of
such New Bank's Commitment. Additionally, the Agent shall promptly notify
each Increasing Bank and New Bank of the amount of its funding obligations
under subsection 2.17(b).
(d) Any fees paid by the Company for any such increase shall not be
required to be ratable and shall be paid only to Increasing Banks, or New
Banks, as the case may be, as shall be separately agreed from time to time
by the Company and any such Increasing Bank or New Bank.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.(a) (a) Unless otherwise required by applicable law, any
and all payments by the Company to each Bank, each Designated Bidder, or
the Agent under this Agreement and any other Loan Document shall be made
free and clear of, and without deduction or withholding for, any Taxes.
(b) If the Company shall be required by law to deduct or withhold any
United States federal Taxes from or in respect of any sum payable hereunder
to any Bank, any Designated Bidder or the Agent, and subject to Section
9.10, then:
(i) the sum payable shall be increased as necessary so that, after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section),
such Bank, such Designated Bidder or the Agent, as the case may be,
receives and retains an amount equal to the sum it would have received and
retained had no such deductions or withholdings been made;
(ii) the Company shall make such deductions and withholdings; and
(iii) the Company shall pay the full amount deducted or withheld to
the relevant taxing authority in accordance with applicable law.
(c) In addition, the Company shall pay any Other Taxes.
(d) The Company agrees to indemnify and hold harmless each Bank, each
Designated Bidder and the Agent for the full amount of Other Taxes, and,
subject to Section 9.10, Taxes referred to in Subsection 3.01(b). Without
limiting the generality of the foregoing, if the Company fails to pay any
Other Taxes or any such Taxes when due to the appropriate taxing authority
or fails to remit to the Banks and the Agent the required documentary
evidence referred to in Subsection 3.01(c) and the Company received from
the Agent or the affected Bank prior notice of its obligation to make the
payment of Other Taxes or such Taxes, the Company agrees to indemnify and
hold harmless each Bank and the Agent for any incremental taxes, interest
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or penalties that may become payable by any Bank or the Agent as a result
of any such failure. Payment pursuant to this indemnification shall be made
within 30 days after the date such Bank or the Agent makes written demand
therefor setting forth in reasonable detail the basis of the Company's
obligation to indemnify such Bank or the Agent pursuant to this Section
3.01.
(e) Within 60 days after the date of any payment of any Taxes or Other
Taxes pursuant to Subsection 3.01(a), (b) or (c), the Company shall furnish
to each Bank, each Designated Bidder and the Agent, at its address referred
to in Section 10.02, documentary evidence reasonably satisfactory to each
Bank, each Designated Bidder and the Agent of payment thereof, but only to
the extent such documentary evidence is furnished to the Company by the
relevant taxing authority.
(f) If the Company is required to pay any additional amount to the
Agent, any Designated Bidder or any Bank or any taxing authority for the
account of the Agent, any Designated Bidder or any Bank pursuant to this
Section 3.01, the Company shall have the right, upon notice to such Bank or
such Designated Bidder, to (i) prepay, on a non-pro rata basis, the
principal amount or any portion thereof held by such Bank or such
Designated Bidder plus all interest, fees, and other amounts owing to such
Bank or such Designated Bidder as of the date of such prepayment (including
any amounts owing under Section 3.04), or (ii) require such Bank or such
Designated Bidder to use reasonable efforts to designate a different
Lending Office for funding or booking its Loan (or any Loan participation)
hereunder or to assign its rights and obligations hereunder to another of
its offices, branches or Affiliates, if, in the sole judgment of such Bank,
such designation or assignment (A) would eliminate or reduce amounts
payable pursuant to Subsection 3.01(b) in the future and (B) would not
subject such Bank or such Designated Bidder to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Bank or such
Designated Bidder. With respect to the foregoing clause (ii) the Company
hereby agrees to pay all reasonable costs and expenses incurred by any Bank
or any Designated Bidder in connection with any such designation or
assignment.
(g) Each Bank and each Designated Bidder agrees that it will (i) take
all reasonable actions requested in writing by the Company that are without
material cost or risk to such Bank to maintain all exemptions, if any,
available to it from withholding taxes (whether available by treaty or
existing administrative waiver), and (ii) to the extent reasonable and
without material cost or risk to it, otherwise cooperate with the Company
to minimize any amounts payable by the Company under this Section 3.01.
(h) Each non-United States Bank and each non-United States Designated
Bidder represents and warrants to the Agent and the Company as of the date
hereof that under applicable law and treaties such Bank or such Designated
Bidder is entitled to claim the benefit of complete exemption from
imposition of United States withholding tax or that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a
trade or business in the United States.
3.02 Illegality.(a) If any Bank determines that the introduction of
any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Bank or its applicable Lending Office
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to make Offshore Rate Committed Loans, then, on notice thereof by such Bank
to the Company through the Agent, any obligation of that Bank to make
Offshore Rate Committed Loans or convert Base Rate Committed Loans into
Offshore Rate Committed Loans shall be suspended until such Bank notifies
the Agent and the Company that the circumstances giving rise to such
determination no longer exist.
(b) If a Bank determines that it is unlawful for such Bank to maintain
any Offshore Rate Committed Loan, the Company shall, upon its receipt of
notice of such fact and demand from such Bank (with a copy to the Agent),
prepay in full such Offshore Rate Committed Loans of that Bank then
outstanding, together with interest accrued thereon and amounts required
under Section 3.04, either on the last day of the Interest Period thereof,
if such Bank may lawfully continue to maintain such Offshore Rate Committed
Loans to such day, or immediately, if such Bank may not lawfully continue
to maintain such Offshore Rate Committed Loan. If the Company is required
so to prepay any Offshore Rate Committed Loan, then concurrently with such
prepayment, the Company shall borrow from the affected Bank, in the amount
of such repayment, a Base Rate Committed Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate
Committed Loans has been so terminated or suspended, the Company may elect,
by giving notice to such Bank through the Agent that all Loans which would
otherwise be made by such Bank as Offshore Rate Committed Loans shall be
instead Base Rate Committed Loans.
(d) Before giving any notice to the Agent under this Section 3.02, the
affected Bank shall designate a different Lending Office with respect to
its Offshore Rate Committed Loans if such designation will avoid the need
for giving such notice or making such demand and will not, in the judgment
of such Bank, be illegal or otherwise disadvantageous to such Bank.
3.03 Increased Costs and Reduction of Return.(a) (a) If any Bank
determines that, due to either (i) the introduction of or any change in or
in the interpretation of any law or regulation (other than any such
introduction or change in respect of any law or regulation relating to
Taxes or Excluded Taxes which shall be governed solely by Section 3.01) or
(ii) the compliance by such Bank with any guideline or request from any
central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such Bank of
agreeing to make or making, funding or maintaining any Offshore Rate
Committed Loans, by an amount deemed by such Bank to be material, then the
Company shall be liable for, and shall from time to time, within 15 days
after demand by such Bank (with a copy of such demand to be sent to the
Agent), pay to the Agent for the account of such Bank, additional amounts
as are sufficient to compensate such Bank for such increased costs.
(b) If any Bank or Designated Bidder shall have determined that (i)
the introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or
other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by such Bank or Designated
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Bidder (or its Lending Office) or any corporation controlling such Bank or
Designated Bidder with any Capital Adequacy Regulation, affects or would
affect the amount of capital required or expected to be maintained by such
Bank or Designated Bidder or any corporation controlling such Bank or
Designated Bidder and (taking into consideration such Bank's, such
Designated Bidder's or such corporation's policies with respect to capital
adequacy and such Bank's or Designated Bidder's desired return on capital)
determines that the amount of such capital is increased as a consequence of
its Commitment, Loans, credits or obligations under this Agreement, by an
amount deemed by such Bank or such Designated Bidder to be material, then,
within 15 days after demand by such Bank or Designated Bidder to the
Company through the Agent, the Company shall pay to such Bank or Designated
Bidder, as the case may be, from time to time as specified by such Bank or
Designated Bidder, such additional amounts as are sufficient to compensate
such Bank or Designated Bidder for such increase.
(c) Each Bank and each Designated Bidder will promptly notify the
Company and the Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Bank or such Designated
Bidder to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole judgment
of such Bank or such Designated Bidder, be otherwise disadvantageous to
such Bank or such Designated Bidder. Notwithstanding the foregoing
subsections (a) and (b) of this Section 3.03, the Company shall only be
obligated to compensate any Bank or any Designated Bidder for any amount
arising or accruing during (i) any time or period commencing not more than
30 days prior to the date on which such Bank or such Designated Bidder
notifies the Agent and the Company that it proposes to demand such
compensation and identifies to the Agent and the Company the statute,
regulation or other basis upon which the claimed compensation is or will be
based and (ii) any time or period during which, because of the retroactive
application of such statute, regulation or other such basis, such Bank or
such Designated Bidder did not know that such amount would arise or accrue.
3.04 Funding Losses. The Company shall reimburse each Bank and each
Designated Bidder, and hold each Bank and each Designated Bidder harmless
from, any loss or expense which such Bank or such Designated Bidder may
sustain or incur as a consequence of:
(a) the failure of the Company to make on a timely basis any payment
of principal of any Offshore Rate Committed Loan;
(b) the failure of the Company to borrow, continue or convert a
Committed Loan after the Company has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment of any Committed
Loan in accordance with any notice delivered under Section 2.08;
(d) the prepayment (including pursuant to Section 2.08 or 3.02(b)) or
other payment (including after acceleration thereof) of any Offshore Rate
Committed Loan or Absolute Rate Bid Loan on a day that is not the last day
of the relevant Interest Period; or
(e) the conversion under Section 2.04 of any Offshore Rate Committed
Loan to a Base Rate Committed Loan on a day that is not the last day of the
relevant Interest Period;
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including any such loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain its Offshore Rate
Committed Loans or from fees payable to terminate the deposits from which
such funds were obtained. For purposes of calculating amounts payable by
the Company to the Banks and the Designated Bidders under this Section and
under subsection 3.03(a), each Offshore Rate Committed Loan made by a Bank
or Designated Bidder (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the London
interbank offered rate used in determining the Offshore Rate for such
Offshore Rate Committed Loan by a matching deposit or other borrowing in
the interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Offshore Rate Committed Loan is in
fact so funded.
3.05 Inability to Determine Rates. If on or prior to the first day of
any Interest Period:
(a) the Agent is advised by the Reference Banks that deposits in
Dollars (in the applicable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
(b) the Majority Banks advise the Agent that the Offshore Rate, as
determined by the Agent, will not adequately and fairly reflect the cost to
such Banks of funding their Offshore Rate Committed Loans for such Interest
Period, the Agent will promptly so notify the Company and each Bank.
Thereafter, the obligation of the Banks to make or maintain Offshore Rate
Committed Loans hereunder shall be suspended until the Agent upon the
instruction of the Majority Banks revokes such notice in writing. Upon
receipt of such notice, the Company may revoke any Notice of Borrowing or
Notice of Conversion/Continuation then submitted by it. If the Company does
not revoke such Notice as to any such proposed Committed Loans, the Banks
shall make, convert or continue any such Committed Loans, as proposed by
the Company, in the amount specified in the applicable Notice submitted by
the Company, but such Committed Loans shall be made, converted or continued
as Base Rate Committed Loans instead of Offshore Rate Committed Loans.
3.06 Certificates of Banks and Designated Bidders. Any Bank or
Designated Bidder claiming reimbursement or compensation under this Article
III shall deliver to the Company (with a copy to the Agent) a certificate
setting forth in reasonable detail the amount payable to such Bank or such
Designated Bidder hereunder and such certificate shall be conclusive and
binding on the Company in the absence of manifest error. In determining any
amount due under this Article III, a Bank or Designated Bidder may use any
reasonable averaging and attribution methods.
3.07 Base Rate Committed Loans Substituted for Affected Offshore Rate
Committed Loans. If (i) the obligation of any Bank to make Offshore Rate
Committed Loans has been suspended pursuant to Section 3.02 or (ii) any
Bank has demanded compensation under Section 3.03(a) and the Company shall,
by at least five Business Days' prior notice to such Bank through the
Agent, have elected that the provisions of this Section shall apply to such
Bank, then, unless and until such Bank notifies the Company that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
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(a) all Loans which would otherwise be made by such Bank as Offshore
Rate Committed Loans, shall be made instead as Base Rate Committed Loans
(on which interest and principal shall be payable contemporaneously with
the related Offshore Rate Committed Loans of the other Banks); and
(b) after each of its Offshore Rate Committed Loans has been repaid,
all payments of principal which would otherwise be applied to repay such
Offshore Rate Committed Loans shall be applied to repay its Base Rate
Committed Loans instead.
3.08 Reserves on Offshore Rate Committed Loans. The Company shall pay
to each Bank, as long as such Bank shall be required under regulations of
the FRB to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known
as "Eurocurrency liabilities"), additional costs on the unpaid principal
amount of each Offshore Rate Committed Loan equal to the actual costs of
such reserves allocated to such Offshore Rate Committed Loan by the Bank
(as determined by the Bank in good faith, which determination shall be
conclusive), payable on each date on which interest is payable on such
Committed Loan, provided the Company shall have received at least 15 days'
prior written notice (with a copy to the Agent) of such additional interest
from the Bank. If a Bank fails to give notice 15 days prior to the relevant
Interest Payment Date, such additional interest shall be payable 15 days
from receipt of such notice.
3.09 Substitution of Banks. Upon the receipt by the Company from any
Bank (an "Affected Bank") of a claim for compensation under Section 3.03,
upon notice to the Agent from any Bank that it shall not consent to a
request by the Company for an extension of the Revolving Termination Date
pursuant to subsection 2.16(a), or if the Company is required to pay any
additional amount to the Agent or any Bank pursuant to Section 3.01, the
Company may: (i) request one or more of the other Banks to acquire and
assume all or part of such Affected Bank's Loans and Commitment; or (ii)
designate a replacement commercial bank (which shall be an Eligible
Assignee) satisfactory to the Company to acquire and assume all or a
ratable part of such Affected Bank's Loans and Commitment (a "Replacement
Bank"); provided, however, that the Company shall be liable for the payment
upon demand of all costs and other amounts arising under Section 3.04 that
result from the acquisition of any Affected Bank's Loan and/or Commitment
(or any portion thereof) by a Bank or Replacement Bank, as the case may be,
on a date other than the last day of the applicable Interest Period with
respect to any Offshore Rate Committed Loan then outstanding. Any such
designation of a Replacement Bank under clause (i) shall be effected in
accordance with, and subject to the terms and conditions of, the assignment
provisions contained in Section 10.08, and shall in any event be subject to
the prior written consent of the Agent (which consent shall not be
unreasonably withheld).
3.10 Survival. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations.
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ARTICLE IV
CONDITIONS PRECEDENT
4.01 Conditions of Initial Loans. The obligation of each Bank to make
its initial Committed Loan hereunder, and the obligation of each Bid Loan
Bank and Designated Bidder to receive through the Agent the initial
Competitive Bid Request, is subject to the condition that the Agent shall
have received on or before the Closing Date all of the following, in form
and substance satisfactory to the Agent and each Bank, and in sufficient
copies for each Bank:
(a) Credit Agreement and Notes. This Agreement executed by each party
hereto, and the Committed Loan Notes executed by the Company;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of the Company
authorizing the transactions contemplated hereby, certified as of the
Closing Date by the Secretary or an Assistant Secretary of the Company; and
(ii) A certificate of the Secretary or Assistant Secretary of the
Company, dated the Closing Date, certifying the names, titles and true
signatures of the officers of the Company authorized to execute, deliver
and perform, as applicable, this Agreement, and all other Loan Documents to
be delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of the following
documents:
(i) the articles or certificate of incorporation and the bylaws of the
Company as in effect on the Closing Date, certified by the Secretary or
Assistant Secretary of the Company as of the Closing Date; and
(ii) good standing certificates for the Company from the Secretary of
State (or similar, applicable Governmental Authority) of its state of
incorporation and the state of its principal offices;
(d) Legal Opinions.
(i) an opinion of Thomas R. Saldin, Executive Vice-President and
General Counsel to the Company, dated as of the Closing Date and addressed
to the Agent and the Banks, substantially in the form of Exhibit D; and
(ii) a favorable opinion of Brobeck, Phleger & Harrison LLP, special
counsel to the Agent, dated as of the Closing Date.
(e) Payment of Fees. Evidence of payment by the Company of all accrued
and unpaid fees, costs and expenses to the extent then due and payable on
the Closing Date, together with Attorney Costs of BofA and the Lead
Arranger to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute BofA's reasonable
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estimate of Attorney Costs incurred or to be incurred by it through the
closing proceedings (provided that such estimate shall not thereafter
preclude final settling of accounts between the Company and BofA),
including any such costs, fees and expenses arising under or referenced in
Sections 2.12 and 10.04;
(f) Certificate. A certificate signed by a Responsible Officer, dated
as of the Closing Date, stating that:
(i) the representations and warranties contained in Article V are true
and correct on and as of such date, as though made on and as of such date;
(ii) no Default or Event of Default exists or would result from the
initial Borrowing; and
(iii) there has occurred since January 28, 1999 (or since the date of
any Form 10-Q or other public disclosure document filed by the Company with
the SEC prior to the Closing Date, to the extent any such event or
circumstance is disclosed in such document), no event or circumstance that
has resulted or could reasonably be expected to result in a Material
Adverse Effect;
(g) Existing Credit Facilities. Evidence satisfactory to the Agent
that the commitments to extend credit under the Existing Credit Facilities
have been terminated and that all principal, interest, charges and fees due
thereunder have been paid or that arrangements reasonably satisfactory to
the Agent for the payment thereof have been made by the Company (the
Company and each Bank party hereto that is a lender under the Existing
Credit Facilities acknowledging that such commitments shall be terminated
simultaneously with the closing hereunder);
(h) Documents and Actions Relating to the Multi-year Credit Agreement.
A certificate of a Responsible Officer of the Company certifying that all
conditions precedent to the closing of the Multi-year Credit Agreement
shall have been satisfied in accordance with the terms and conditions
thereof (other than any conditions relating to the closing of the
transactions contemplated by this Agreement); and
(i) Other Documents. Such other approvals, opinions, documents or
materials as the Agent or any Bank may reasonably request.
4.02 Conditions to All Borrowings. The obligation of each Bank to make
any Committed Loan to be made by it, and the obligation of any Bid Loan
Bank or Designated Bidder to make any Bid Loan as to which the Company has
accepted the relevant Competitive Bid (including its initial Loan), is
subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date:
(a) Notice of Borrowing. As to any Committed Loan, the Agent shall
have received a Notice of Borrowing;
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(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct on
and as of such Borrowing Date with the same effect as if made on and as of
such Borrowing Date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall be
true and correct as of such earlier date; and except that this subsection
(b) shall be deemed instead to refer to the last day of the most recent
quarter and year for which financial statements have then been delivered,
and to the most recent Form 10-K filed by the Company with the SEC, in
respect of the representations and warranties made in Section 5.10(a));
(c) No Material Adverse Effect. There has occurred since January 28,
1999 (or since the date of any Form 10-Q or other public disclosure
document filed by the Company with the SEC prior to the Closing Date, to
the extent any such event or circumstance is disclosed in such document),
no event or circumstance that has resulted or could reasonably be expected
to result in a Material Adverse Effect; and
(d) No Existing Default. No Default or Event of Default shall exist or
shall result from such Borrowing.
Each Notice of Borrowing and Competitive Bid Request submitted by the Company
hereunder shall constitute a representation and warranty by the Company
hereunder, as of the date of each such notice or request and as of each
Borrowing Date, that the conditions in this Section 4.02 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Bank that:
5.01 Corporate Existence and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of
Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
5.02 Subsidiaries. Each of the Company's corporate Subsidiaries is a
corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, and has all corporate powers
and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
5.03 Corporate and Governmental Authorization; No Contravention. The
execution, delivery and performance by the Company of the Loan Documents
are within the Company's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or
filing with, any Governmental Authority and do not contravene, or
constitute a default under, any provision of applicable law or regulation
or of the certificate of incorporation or by-laws of the Company or of any
agreement, judgment, injunction, order, decree or other instrument binding
upon the Company or result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries.
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5.04 Binding Effect. This Agreement and each other Loan Document to
which the Company is a party constitutes a valid and binding agreement of
the Company, and each Note, when executed and delivered in accordance with
this Agreement, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with their
respective terms.
5.05 Litigation. Except as disclosed in the Company's 1998 Form 10-K,
there is no action, suit or proceeding pending against, or to the knowledge
of the Company threatened against or affecting, the Company or any of its
Subsidiaries before any court or arbitrator or any Governmental Authority
in which there is a reasonable possibility of an adverse decision which
could have a Material Adverse Effect.
5.06 ERISA Compliance. Each member of the ERISA Group has fulfilled
its obligations under the minimum funding standards of ERISA and the Code
with respect to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code with respect
to each Plan.
5.07 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are to be used solely for the purposes set forth in and permitted by
Section 6.08 and Section 7.04.
5.08 Title to Properties; Liens. The Company and each Subsidiary have
good record and marketable title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct
of their respective businesses, except for such defects in title as could
not, individually or in the aggregate, have a Material Adverse Effect. The
property of the Company and its Subsidiaries is subject to no Liens, other
than Liens permitted under Section 7.01.
5.09 Taxes. The Company and its Subsidiaries have filed all United
States Federal income tax returns and all other material tax returns which
are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Company or any
Subsidiary, other than any such taxes being contested in good faith and for
which appropriate reserves have been established on the books and records
of the Company in accordance with GAAP. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of taxes or
other governmental charges are, in the opinion of the Company, adequate.
5.10 Financial Information(a) . (a) The consolidated balance sheet of
the Company and its Consolidated Subsidiaries as of January 28, 1999 and
the related consolidated statements of earnings, cash flows and
stockholders' equity for the fiscal year then ended, reported on by
Deloitte & Touche and set forth or as incorporated by reference in the
Company's 1998 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with GAAP, the consolidated financial
position of the Company and its Consolidated Subsidiaries as of such date
and their consolidated results of operations and cash flows for such fiscal
year.
(b) The unaudited consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of October 29, 1999 and the related unaudited
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consolidated statements of earnings and cash flows for the thirty-nine
weeks then ended, set forth in the Company's quarterly report for the third
quarter ended October 29, 1999 filed with the SEC on Form 10-Q, a copy of
which has been delivered to each of the Banks, fairly present, in
conformity with GAAP applied on a basis consistent with the financial
statements referred to in Subsection 5.10(a), the consolidated financial
position of the Company and its Consolidated Subsidiaries as of such date
and their consolidated results of operations and cash flows for such
thirty-nine week period (subject to normal year-end adjustments).
(c) Since January 28, 1999 (or since the date of any Form 10-Q or
other public disclosure document filed by the Company with the SEC prior to
the Closing Date, to the extent any such event or circumstance is disclosed
in such document), there has been no Material Adverse Effect.
5.11 Environmental Matters. In the ordinary course of its business,
the Company considers the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries as such
business, operations and properties exist at the time. On this basis, the
Company has reasonably concluded that Environmental Laws at the time in
effect are unlikely to have a Material Adverse Effect.
5.12 Regulated Entities. The Company is not an "Investment Company"
within the meaning of the Investment Company Act of 1940. The Company is
not subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation
limiting its ability to incur Indebtedness.
5.13 Insurance. The properties of the Company and its Consolidated
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Company, in such amounts, with such
deductibles (and with such risk retention) and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or such Subsidiary
operates.
5.14 Full Disclosure. All information heretofore furnished by the
Company to the Agent or any Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Company to the Agent or any Bank
will be, true and accurate in all material respects on the date as of which
such information is stated or certified.
5.15 Year 2000. The Company has (a) completed a review and assessment
of critical areas within its and each of its Subsidiaries' business and
operations (including those affected by customers and vendors) that could
be adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications and devices containing imbedded computer chips used
by the Company or any of its Subsidiaries (or their respective customers
and vendors) may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and after December 31, 1999),
(b) developed a plan and timeline for addressing the Year 2000 Problem on a
timely basis, and (c) substantially completed implementation of that plan
in accordance with that timetable. The Year 2000 Problem has not resulted
in, and the Company reasonably believes that the Year 2000 Problem will not
result in, a Material Adverse Effect.
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ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Majority Banks
waive compliance in writing:
6.01 Information. The Company will deliver to each of the Banks:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year of the Company, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of earnings, cash flows and
stockholders' equity for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on
in a manner acceptable to the SEC by Deloitte & Touche or other independent
public accountants of nationally recognized standing (the "Independent
Auditor"). Such report shall not be qualified as to (i) going concern or
(ii) any limitation in the scope of the audit;
(b) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries
as of the end of such quarter and the related consolidated statements of
earnings for such quarter and for the portion of the Company's fiscal year
ended at the end of such quarter and the related consolidated statement of
cash flows for the portion of the Company's fiscal year ended at the end of
such quarter, setting forth in comparative form the corresponding
statements for the corresponding portions of the Company's previous fiscal
year, all certified (subject to normal year-end adjustments) as to fairness
of presentation, GAAP and consistency by the chief financial officer or the
chief accounting officer of the Company;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a Compliance
Certificate of the chief financial officer or the chief accounting officer
of the Company;
(d) simultaneously with the delivery of each set of financial
statements referred to in subsection (a), a statement of the Independent
Auditor which reported on such statements (i) whether anything has come to
their attention to cause them to believe that any Default existed on the
date of such statements and (ii) confirming the calculations set forth in
the Compliance Certificate delivered simultaneously therewith pursuant to
subsection (c);
(e) forthwith upon the occurrence of any Default, a certificate of the
chief financial officer or the chief accounting officer of the Company
setting forth the details thereof and the action which the Company is
taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and proxy
statements so mailed and not previously delivered to each Bank pursuant to
this Section 6.01;
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(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, l0-Q and 8-K (or
their equivalents) which the Company shall have filed with the SEC and not
previously delivered to each Bank pursuant to this Section 6.01;
(h) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA, or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Code, a
copy of such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant
to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any
payment or contribution to any Plan or Multiemployer Plan or in respect of
any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien
or the posting of a bond or other security, a certificate of the chief
financial officer or the chief accounting officer of the Company setting
forth details as to such occurrence and action, if any, which the Company
or applicable member of the ERISA Group is required or proposes to take;
and
(i) from time to time such additional information regarding the
consolidated financial position of the Company as the Agent, at the request
of any Bank, may reasonably request.
As to any information contained in materials furnished pursuant to
subsection 6.01(g), the Company shall not be separately required to furnish
such information under subsection (a) or (b) above, but the foregoing shall
not be in derogation of the obligation of the Company to furnish the
information and materials described in subsection (a) and (b) above at the
times specified therein.
6.02 Conduct of Business and Maintenance of Existence. The Company
will continue, and will cause each Subsidiary to continue, to engage in
business of the same general type as now conducted by the Company and its
Subsidiaries, and will preserve, renew and keep in full force and effect,
and will cause each Subsidiary to preserve, renew and keep in full force
and effect their respective corporate existence and their respective
rights, privileges and franchises necessary or desirable in the normal
conduct of business; provided that the Company may (a) discontinue
operations or dispose of property in the normal conduct of its business and
(b) cause the dissolution of Subsidiaries or the merger of a Subsidiary
into the Company or into another Subsidiary as it may from time to time
reasonably deem necessary or desirable in the conduct of its business.
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6.03 Maintenance of Property. The Company will keep, and will cause
each Subsidiary to keep, all property useful and necessary in its business
in good working order and condition, ordinary wear and tear excepted;
provided that the Company and each of its Subsidiaries may discontinue
operations and dispose of property in the normal conduct of its business.
6.04 Insurance. The Company will maintain, and will cause each
Subsidiary to maintain with financially sound and reputable insurance
companies, insurance on all their real and personal property in at least
such amounts and against at least such risks (and with such risk retention)
as are usually insured against by companies of established repute engaged
in the same or similar business as the Company or such Subsidiary, and the
Company will promptly furnish to the Banks such information as to insurance
carried as may be reasonably requested in writing by the Agent.
6.05 Payment of Obligations. The Company will pay and discharge, and
will cause each Subsidiary to pay and discharge, at or before maturity, all
their respective material obligations and liabilities, including tax
liabilities, except where the same may be contested in good faith by
appropriate proceedings, and will maintain, and will cause each Subsidiary
to maintain, in accordance with GAAP, appropriate reserves for the accrual
of any of the same.
6.06 Compliance with Laws. The Company will comply, and cause each
Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of Governmental
Authorities (including Environmental Laws and ERISA), except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings and non-compliance during the period of such contest could not
reasonably be expected to have a Material Adverse Effect.
6.07 Inspection of Property, Books and Records. The Company will keep,
and will cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities. Upon the
occurrence and during the continuance of a Default, the Company will
permit, and will cause each Subsidiary to permit, representatives of any
Bank at such Bank's expense, to examine any of their respective books and
records (except as they relate to the Company's trade secrets or other
proprietary information of the Company other than any information required
to be delivered to the Banks by the Company under Section 6.01) and to
discuss their respective finances and accounts with their respective
officers, employees and independent public accountants, all at such
reasonable times and as often as may reasonably be desired.
6.08 Use of Proceeds. The proceeds of the Loans made under this
Agreement will be used by the Company for commercial paper back-up
liquidity and other lawful corporate purposes.
6.09 Further Assurances. Promptly upon request by the Agent or the
Majority Banks, the Company shall do, execute, acknowledge, and deliver,
any and all such further acts, certificates, assurances and other
instruments the Agent or such Banks, as the case may be, may reasonably
require from time to time in order to carry out more effectively the
purposes of this Agreement or any other Loan Document.
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ARTICLE VII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Majority Banks
waive compliance in writing:
7.01 Limitation on Liens. Neither the Company nor any Consolidated
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Indebtedness
outstanding on the date of this Agreement in an aggregate principal amount
not exceeding $500,000,000;
(b) any Lien existing on any specific tangible asset or assets of any
Person at the time such Person becomes a Consolidated Subsidiary and not
created in contemplation of such event, subject to subsection 7.01(e);
(c) any Lien on any asset securing Indebtedness incurred or assumed
for the purpose of financing all or any part of the cost of acquiring such
asset, provided that (i) in the case of land acquired for the purpose of
constructing new business or operating facilities thereon, (A) such Lien
attaches to such land within 24 months after the acquisition thereof and
(B) construction of such new business or operating facilities thereon is
substantially complete within 24 months after the acquisition of such land
and (ii) in the case of any asset other than an asset of the type described
in the preceding clause (i), such Lien attaches to such asset concurrently
with or within 180 days after the acquisition thereof;
(d) any Lien on any specific tangible asset or assets of any Person
existing at the time such Person is merged or consolidated with or into the
Company or a Consolidated Subsidiary and not created in contemplation of
such event, subject to subsection 7.01(e);
(e) any Lien existing on any specific tangible asset or assets prior
to the acquisition thereof by the Company or a Consolidated Subsidiary and
not created in contemplation of such acquisition; provided that in the case
of any Lien permitted under this subsection (e) or under subsections (b)
and (d), any such Lien does not by its terms cover any such tangible assets
after the time the Company directly or indirectly acquires such assets
which were not covered immediately prior thereto, and any such Lien does
not by its terms secure any Indebtedness other than Indebtedness existing
immediately prior to the time of acquisition of such assets;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Indebtedness is not
increased and is not secured by any additional assets;
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(g) Liens arising in the ordinary course of its business which (i) do
not secure Indebtedness and (ii) do not in the aggregate materially detract
from the value of its assets or materially impair the use thereof in the
operation of its business;
(h) Liens arising from the Company's or a Subsidiary's pledging of
equipment, not otherwise permitted by the foregoing clauses of this
Section, securing Indebtedness in an aggregate principal amount at any time
outstanding not to exceed $500,000,000; and
(i) Liens on real property; provided that the aggregate value of real
property owned by the Company (not including for purposes of this proviso
any real property acquired or held by the Company subject to the interest
of a lessor under a capital lease relating to such real property), as
determined on a lower of cost or Fair Market Value basis (as defined
below), exceeds the aggregate principal amount of Indebtedness secured by
Liens on such real property in an amount not less than $250,000,000.
For the purposes of Section 7.01, "Fair Market Value" means with
respect to any real property of the Company or any Subsidiary at any date
the open market cash purchase price that an informed and willing purchaser
would pay for such real property in an arm's-length transaction to a
willing and informed owner under no compulsion to sell, all as determined
(i) if no Default has occurred and is continuing, at the option of the
Majority Banks either (A) in good faith by the Board of Directors of the
Company or (B) by an appraisal conducted by an independent appraiser
satisfactory to the Agent and the Company, the cost of such appraisal to be
shared equally by the Company and the Banks, and (ii) if a Default has
occurred and is continuing, by an appraisal conducted by an independent
appraiser satisfactory to the Agent and the Company, the cost of such
appraisal to be borne solely by the Company.
7.02 Disposition of Assets. The Company will not (i) consolidate or
merge with or into any other Person or (ii) directly or indirectly sell,
lease or otherwise transfer all or any substantial part of the assets of
the Company and its Consolidated Subsidiaries, considered as a whole, to
any other Person; provided that the Company may merge with another Person
if (A) the Company is the Person surviving such merger and (B) immediately
after giving effect to such merger, no Default shall have occurred and be
continuing.
7.03 Limitation on Subsidiary Indebtedness and Swap Contracts. The
Company shall not permit any Subsidiary to create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness or Swap Contracts except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) endorsements for collection or deposit in the ordinary course of
business;
(c) Swap Contracts outstanding as of the Closing Date or entered into
thereafter in the ordinary course of business;
(d) Surety Instruments in the ordinary course of business;
(e) Indebtedness existing on the Closing Date in an amount not to
exceed $3,200,000,000;
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(f) Indebtedness secured by Liens permitted by subsections 7.01(b),
(c), (d), (e) and (i);
(g) capital leases entered into by any Subsidiary after the Closing
Date to finance the acquisition of equipment;
(h) Indebtedness of Wholly-Owned Consolidated Subsidiaries of the
Company to the Company or to other Wholly-Owned Consolidated Subsidiaries
of the Company; and
(i) additional Indebtedness incurred after the Closing Date not
exceeding $500,000,000 in aggregate principal amount at any time
outstanding.
7.04 Use of Proceeds.
(a) The Company shall not, and shall not suffer or permit any
Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or
otherwise refinance Indebtedness of the Company or others incurred to
purchase or carry Margin Stock, (iii) to extend credit for the purpose of
purchasing or carrying any Margin Stock or (iv) for any other purpose which
violates Regulations T, U or X of the FRB.
(b) The Company shall not, directly or indirectly, use any portion of
the Loan proceeds to purchase during the underwriting period, or for thirty
days thereafter, Ineligible Securities underwritten by the Arranger. The
Arranger is a wholly-owned subsidiary of BankAmerica Corporation and a
registered broker-dealer which is permitted to underwrite and deal in
certain Ineligible Securities; and "Ineligible Securities" means securities
which may not be underwritten or dealt in by member banks of the Federal
Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. ss.
24, Seventh).
7.05 Minimum Consolidated Tangible Net Worth. The Company shall not
permit its Consolidated Tangible Net Worth at any time to be less than
$2,100,000,000; provided that upon (a) the purchase from time to time of
common stock of the Company by the Company from one or more of the J.A. and
Kathryn Albertson Foundation, Inc., or donees pursuant to the terms of the
Foundation Stock Agreement, or (b) the purchase from time to time of common
stock of the Company by the Company from Theo Albrecht or from
Markus-Stiftung pursuant to the terms of the Markus-Stiftung Stock
Agreement, Consolidated Tangible Net Worth shall be increased, for purposes
of subsequent calculations hereunder, by an amount (the "CTNW Adjustment")
equal to the excess (if any) of (i) the amount by which the purchase price
of such common stock reduces Consolidated Tangible Net Worth over (ii) the
amount by which Consolidated Tangible Net Worth has been increased through
the sale of common stock subsequent to the date of such purchase, excluding
the effect of the exercise of employee stock options, all as determined in
accordance with GAAP.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Event of Default. Any of the following shall constitute an "Event
of Default":
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(a) Non-Payment. The Company fails to make, (i) when and as required
to be made herein, payments of any amount of principal of any Loan, or (ii)
within five Business Days after the same becomes due, payment of any
interest, fee or any other amount payable hereunder or under any other Loan
Document; or
(b) Representation or Warranty. Any representation, warranty,
certification or statement made by the Company in this Agreement or in any
certificate, financial statement or other document delivered pursuant to
this Agreement shall prove to have been incorrect in any material respect
on or as of the date made (or deemed made); or
(c) Specific Defaults. The Company shall fail to observe or perform
any covenant contained in Sections 7.01 through 7.05, inclusive; or
(d) Other Defaults. The Company shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those covered
by clause (a), (b) or (c) above) for 15 Business Days after the earlier of
(i) the date upon which the chief financial officer, chief accounting
officer or other senior officer of the Company knew or reasonably should
have known of such failure or (ii) notice thereof has been given to the
Company by the Agent at the request of any Bank; or
(e) Cross-Default. (i) The Company or any Subsidiary (A) fails to make
any payment in respect of any Material Indebtedness (other than in respect
of Swap Contracts), when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) and such failure continues
after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure; or (B) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any Material
Indebtedness, and such failure continues after the applicable grace or
notice period, if any, specified in the relevant document on the date of
such failure if the effect of such failure, event or condition is to cause,
or to permit the holder or holders of such Material Indebtedness or
beneficiary or beneficiaries of such Material Indebtedness (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause such Material Indebtedness to be declared to be due and payable,
or to be prepaid prior to its stated maturity, or to become payable, or
cash collateral in respect thereof to be demanded; or (ii) there occurs
under any Swap Contract an Early Termination Date (as defined in such Swap
Contract) resulting from (1) any event of default under such Swap Contract
as to which the Company or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (2) any Termination Event (as so defined)
as to which the Company or any Subsidiary is an Affected Party (as so
defined), and, in either event, the Swap Termination Value owed by the
Company or such Subsidiary as a result thereof is greater than $30,000,000;
or
(f) Insolvency; Voluntary Proceedings. The Company or any Subsidiary
(i) ceases or fails to be solvent, or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the ordinary course;
(iii) consents to or commences a voluntary Insolvency Proceeding with
respect to itself, or (iv) takes any corporate action to authorize any of
the foregoing; or
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(g) Involuntary Proceedings. (i) An involuntary Insolvency Proceeding
shall be commenced or filed against the Company or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of the Company's or any
Subsidiary's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60
days after commencement, filing or levy; (ii) the Company or any Subsidiary
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) the Company or any
Subsidiary acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or
other similar Person for itself or a substantial portion of its property or
business; or
(h) ERISA. Any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $30,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate, to impose liability (other than for premiums under Section
4007 of ERISA) in respect of or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall exist by reason of which
the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a complete or
partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $30,000,000; or
(i) Monetary Judgments. A judgment or order for the payment of money
in excess of $30,000,000 shall be rendered against the Company or any
Subsidiary and such judgment or order shall continue unsatisfied and
unstayed for a period of 30 days; or
(j) Change of Control. There occurs any Change of Control.
8.02 Remedies. If any Event of Default occurs, then, and in every such
event, the Agent shall (i) if requested or consented to by the Majority
Banks, by notice to the Company terminate the Commitments and they shall
thereupon terminate, (ii) if requested or consented to by the Majority
Banks, by notice to the Company declare the Loans (together with accrued
interest thereon and all other amounts owing under the Loan Documents) to
be, and the Loans (and such interest and other amounts) shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company and
(iii) if requested or consented to by the Majority Banks, exercise on
behalf of itself and the Banks all rights and remedies available to it and
the Banks under the Loan Documents or applicable law; provided that in the
case of any of the Events of Default specified in subsections (f) or (g)
(in the case of clause (i) of subsection (g) upon the expiration of the
60-day period mentioned therein), without any notice to the Company or any
other act by the Agent or the Banks, the Commitments shall thereupon
terminate and the Loans (together with accrued interest thereon and all
other amounts owing under the Loan Documents) shall become immediately due
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and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company.
8.03 Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any
other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or
hereafter arising.
ARTICLE IX
THE AGENT
9.01 Appointment and Authorization; "Agent." Each Bank hereby
irrevocably (subject to Section 9.09) appoints, designates and authorizes
the Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the
contrary contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Agent have or be deemed to
have any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or any other Loan Document or otherwise exist
against the Agent. Without limiting the generality of the foregoing
sentence, the use of the term "agent" in this Agreement with reference to
the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.
9.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the
Banks for any recital, statement, representation or warranty made by the
Company or any Subsidiary or Affiliate of the Company, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in
any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Loan Document, or for any failure of the Company or any other party to any
Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain
or to inquire as to the observance or performance of any of the agreements
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contained in, or conditions of, this Agreement or any other Loan Document,
or to inspect the properties, books or records of the Company or any of the
Company's Subsidiaries or Affiliates.
9.04 Reliance by Agent. (a) (a) The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex
or telephone message, statement or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel to the Company), independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Loan Document unless it shall first receive such advice or concurrence of
the Majority Banks as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the
Majority Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter either sent (or made available) by the
Agent to such Bank for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Bank.
9.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and
fees required to be paid to the Agent for the account of the Banks, unless
the Agent shall have received written notice from a Bank or the Company
referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a "notice of default". The Agent will
notify the Banks of its receipt of any such notice. The Agent shall take
such action with respect to such Default or Event of Default as may be
requested by the Banks in accordance with Article VIII; provided, however,
that unless and until the Agent has received any such request, the Agent
may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable or in the best interest of the Banks.
9.06 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and
that no act by the Agent hereinafter taken, including any review of the
affairs of the Company and its Subsidiaries, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Bank.
Each Bank represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial
and other condition and creditworthiness of the Company and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank
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also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Company or any Subsidiary which may come into the
possession of any of the Agent-Related Persons.
9.07 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand
the Agent-Related Persons (to the extent not reimbursed by or on behalf of
the Company and without limiting the obligation of the Company to do so),
in accordance with the Banks' Pro Rata Shares, from and against any and all
Indemnified Liabilities; provided, however, that no Bank shall be liable
for the payment to the Agent-Related Persons of any portion of such
Indemnified Liabilities resulting from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank shall
reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that the
Agent is not reimbursed for such expenses by or on behalf of the Company.
The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Agent.
9.08 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Company
and its Subsidiaries and Affiliates as though BofA were not the Agent
hereunder and without notice to or consent of the Banks. The Banks
acknowledge that, pursuant to such activities, BofA or its Affiliates may
receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of
the Company or such Subsidiary) and acknowledge that the Agent shall be
under no obligation to provide such information to them. With respect to
its Loans, BofA shall have the same rights and powers under this Agreement
as any other Bank and may exercise the same as though it were not the
Agent, and the terms "Bank" and "Banks" include BofA in its individual
capacity.
9.09 Successor Agent. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon 30 days' notice to the Banks. If
the Agent resigns under this Agreement, the Majority Banks shall appoint
from among the Banks a successor agent for the Banks which successor agent
shall be approved by the Company (such approval not to be unreasonably
withheld). If no successor agent is appointed prior to the effective date
of the resignation of the Agent, the Agent may appoint, after consulting
with the Banks and the Company, a successor agent from among the Banks.
Upon the acceptance of its appointment as successor agent hereunder, such
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successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX and Sections 10.04 and 10.05 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it
was Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a retiring
Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Banks shall perform all of
the duties of the Agent hereunder until such time, if any, as the Majority
Banks appoint a successor agent as provided for above.
9.10 Withholding Tax.
(a) Each Bank organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery
of this Agreement, and on the Assignment and Acceptance Date pursuant to
which it becomes a party to this Agreement in the case of each other Bank,
and from time to time thereafter if requested in writing by the Company or
the Agent (but only so long thereafter as such Bank remains lawfully able
to do so), provide the Agent and the Company with (i) an accurate,
complete, and duly executed Internal Revenue Service form W-8BEN or W-8ECI,
as appropriate, or any successor or substitute form prescribed or permitted
by the Internal Revenue Service, certifying that such Bank is entitled to
claim the benefit of complete exemption from imposition of United States
withholding tax under an income tax treaty to which the United States is a
party in respect of payments made under this Agreement or certifying that
the income receivable pursuant to this Agreement is effectively connected
with the conduct of a trade or business in the United States and (ii) in
the event that, by virtue of a change in law or regulations, such forms are
no longer valid evidence of a Person's exemption from withholding which is
reasonably satisfactory to the Company, other appropriate evidence
supporting such Person's exemption from withholding as the Company may
reasonably request.
(b) For any period with respect to which a Bank or an Assignee has
failed to provide the Company with the appropriate form described in
Subsection 9.10(a) (other than if such failure is due to a change in law
occurring after the date on which a form originally was required to be
provided or if such form otherwise is not required under Subsection
9.10(a)), such Bank or Assignee shall not be entitled to indemnification
under Section 3.01(b) or (d) with respect to Taxes imposed by the United
States.
(c) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form W-8BEN and such
Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Company owing to such Bank, such Bank
agrees to notify the Company and Agent of the percentage amount in which it
is no longer the beneficial owner of Obligations of the Company owing to
such Bank. To the extent of such percentage amount, the Agent will treat
such Bank's IRS Form W-8BEN as no longer valid.
(d) If any Bank claiming exemption from United States withholding tax
by filing IRS Form W-8ECI with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of
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the Company owing to such Bank, such Bank agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed
by Sections 1441 and 1442 of the Code.
(e) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. However, if the forms or other documentation
required by subsection (a) of this Section are not delivered to the Company
and Agent, then the Company or Agent may withhold from any interest payment
to such Bank not providing such forms or other documentation an amount
equivalent to the applicable withholding tax imposed by Sections 1441 and
1442 of the Code, without reduction.
(f) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered or was not properly
executed, or because such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall
indemnify the Company or the Agent, as the case may be, fully for all
amounts paid, directly or indirectly, by the Company or the Agent, as the
case may be, as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to
the Company or the Agent, as the case may be, under this Section, together
with all costs and expenses (including Attorney Costs). The obligation of
the Banks under this subsection shall survive the payment of all
Obligations and the resignation or replacement of the Agent.
9.11 Co-Agents. None of the Banks identified on the facing page or
signature pages of this Agreement as a "Documentation Agent," "Syndication
Agent," "Senior Managing Agent" or "Managing Agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Banks as such. Without limiting the
foregoing, none of the Banks so identified shall have or be deemed to have
any fiduciary relationship with any Bank. Each Bank acknowledges that it
has not relied, and will not rely, on any of the Banks so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE X
MISCELLANEOUS
10.01 Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect
to any departure by the Company or any applicable Subsidiary therefrom,
shall be effective unless the same shall be in writing and signed by the
Majority Banks (or by the Agent at the written request of the Majority
Banks) and the Company and acknowledged by the Agent, and then any such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all
the Banks and the Company and acknowledged by the Agent, do any of the
following:
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(a) increase or extend the Commitment of any Bank (or reinstate any
Commitment terminated pursuant to Section 8.02);
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts
due to the Banks (or any of them) hereunder or under any other Loan
Document (including the date of any mandatory prepayment hereunder);
(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or (subject to clause (ii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any
of them to take any action hereunder; or
(e) amend this Section 10.01, subsection 2.04(e), Section 2.16,
Section 2.17, the definition of "Majority Banks" herein, or any provision
herein providing for consent or other action by all Banks or some specified
amount of Banks;
and, provided further, that (i) no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Majority Banks
or all the Banks, as the case may be, affect the rights or duties of the
Agent under this Agreement or any other Loan Document and (ii) the Fee
Letter may be amended, or rights or privileges thereunder waived, in a
writing executed by the parties thereto.
10.02 Notices.(a) (a) All notices, requests, consents, approvals,
waivers and other communications shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission) and
mailed, faxed or delivered, to the address or facsimile number specified
for notices on Schedule 10.02; or, as directed to the Company or the Agent,
to such other address as shall be designated by such party in a written
notice to the other parties, and as directed to any other party, at such
other address as shall be designated by such party in a written notice to
the Company and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by
facsimile machine, respectively, or if mailed, upon the third Business Day
after the date deposited into the mails, or if delivered, upon delivery;
except that notices pursuant to Article II or IX to the Agent shall not be
effective until actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Company. The Agent and the Banks shall be entitled to rely
on the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action taken or
not taken by the Agent or the Banks in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay the Loans shall
not be affected in any way or to any extent by any failure by the Agent and
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the Banks to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Agent and the Banks of a confirmation which is
at variance with the terms understood by the Agent and the Banks to be
contained in the telephonic or facsimile notice.
10.03 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent, any Designated Bidder or any
Bank, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.
10.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent)
within five Business Days after demand (subject to subsection 4.01(e)) for
all reasonable costs and expenses incurred by BofA (including in its
capacity as Agent) and the Lead Arranger in connection with (i) the
development, preparation, delivery and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith and (ii) the consummation of
the transactions contemplated hereby and thereby, including reasonable
Attorney Costs incurred by BofA (including in its capacity as Agent) with
respect thereto; and
(b) pay or reimburse the Agent, the Lead Arranger, each Designated
Bidder and each Bank within five Business Days after demand (subject to
subsection 4.01(e)) for all costs and expenses (including Attorney Costs)
incurred by them in connection with the enforcement, attempted enforcement,
or preservation of any rights or remedies under this Agreement or any other
Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding).
10.05 Company Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify, defend
and hold the Agent-Related Persons, and each Bank, each Designated Bidder
and each of its respective officers, directors, employees, counsel, agents
and attorneys-in-fact (each an "Indemnified Person") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may at
any time (including at any time following repayment of the Loans and the
termination, resignation or replacement of the Agent or replacement of any
Bank) be imposed on, incurred by or asserted against any such Person in any
way relating to or arising out of this Agreement, the other Loan Documents
or any document contemplated by or referred to therein, or the transactions
contemplated hereby, or any action taken or omitted by any such Indemnified
Person under or in connection with any of the foregoing, including with
respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of
this Agreement or the Loans or the use of the proceeds thereof, whether or
not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided that the Company
shall have no obligation hereunder to any Indemnified Person with respect
to Indemnified Liabilities to the extent resulting from the gross
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negligence or willful misconduct of such Indemnified Person. The agreements
in this Section and in Section 10.04 shall survive payment of all other
Obligations.
10.06 Payments Set Aside. To the extent that the Company makes a
payment to the Agent, any Designated Bidder or any Bank or the Agent, any
Designated Bidder or any Bank exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent, such Designated Bidder or such Bank in its discretion) to be repaid
to a trustee, receiver or any other party, in connection with any
Insolvency Proceeding or otherwise, then (a) to the extent of such recovery
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not
been made or such set-off had not occurred, and (b) each Bank and each
Designated Bidder severally agrees to pay to the Agent upon demand its pro
rata share of any amount so recovered from or repaid by the Agent.
10.07 Binding Effect; Successors and Assigns. This Agreement shall
become effective when it shall have been executed by the Company, the Agent
and the Banks and thereafter shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, except
that the Company may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the
Agent and each Bank.
10.08 Assignments, Participations, Etc.(a) (a) Any Bank may, with the
written consent of the Company and the Agent (which in each case shall not
be unreasonably withheld), at any time assign and delegate to one or more
Eligible Assignees (each an "Assignee") all, or any ratable part of all, of
the Loans, the Commitment and the other rights and obligations of such Bank
hereunder; provided, however, that (i) no written consent of the Company
shall be required during the existence of a Default or an Event of Default;
(ii) no written consent of the Company or the Agent shall be required in
connection with any assignment and delegation by a Bank to an Eligible
Assignee that is a United States Affiliate of such Bank or another Bank;
and (iii) except in connection with an assignment of all of a Bank's rights
and obligations with respect to its Commitment and Loans, any such
assignment (A) to an Eligible Assignee that is a Bank or an Affiliate of a
Bank hereunder shall be equal to or greater than $5,000,000 or (B) to an
Eligible Assignee that is not a Bank or an Affiliate of a Bank hereunder
shall be equal to or greater than $10,000,000; and (iv) each such partial
assignment shall be of a ratable part of the Loans, the Commitment and the
other interests, rights and obligations hereunder of such assigning Bank;
and provided further, however, that the Company and the Agent may continue
to deal solely and directly with such Bank in connection with the interest
so assigned to an Assignee until (A) such Bank and its Assignee shall have
delivered to the Company and the Agent an Assignment and Acceptance
Agreement substantially in the form of Exhibit E (an "Assignment and
Acceptance") together with any Note or Notes subject to such assignment;
(B) a written notice of such assignment, together with payment
instructions, addresses and related information with respect to the
Assignee, in substantially the form of the Notice of Assignment and
Acceptance attached as Schedule 1 to the Assignment and Acceptance, shall
have been given to the Company and the Agent by such Bank and the Assignee;
and (C) the assignor Bank or Assignee shall have paid to the Agent a
processing fee in the amount of $3,500; and (D) the Agent and the Company
each shall have provided any required consent to such assignment in
accordance with this Section.
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(b) From and after the date that the Agent notifies the assignor Bank
that the Agent has received (and, if required, provided its consent with
respect thereto and, if necessary, received any other consents required
under this Section 10.08) an executed Assignment and Acceptance and payment
of the above-referenced processing fee (such date referred to herein as the
"Assignment and Acceptance Date", (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, shall have
the rights and obligations of a Bank under the Loan Documents, (ii) this
Agreement shall be deemed to be amended to the extent, but only to the
extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom, and (iii) the assignor
Bank shall, to the extent that rights and obligations hereunder and under
the other Loan Documents have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Loan Documents; provided, however, that the assignor
Bank shall not relinquish its rights under Article III or under Sections
10.04 and 10.05 (and any equivalent provisions of the other Loan Documents)
to the extent such rights relate to the time prior to the effective date of
the Assignment and Acceptance. The Commitment allocated to each Assignee
shall reduce the Commitment of the assigning Bank pro tanto.
(c) Within five Business Days after the Company's receipt of notice
from the Agent that it has received (and, if necessary, consented to) an
executed Assignment and Acceptance and payment of the processing fee (and
provided that the Company consents to such assignment in accordance with
subsection 10.08(a)), the Company shall execute and deliver to the Agent
any new Notes requested by such Assignee evidencing such Assignee's
assigned Loans and Commitment and, if the assignor Bank has retained a
portion of its Loans and its Commitment, replacement Notes as requested by
the assignor Bank evidencing the Loans and Commitment retained by the
assignor Bank (such Notes to be in exchange for, but not in payment of, the
Notes held by such Bank, if any).
(d) Any Bank or Designated Bidder may at any time sell to one or more
commercial banks or other Persons not Affiliates of the Company (a
"Participant") participating interests in any Loans, the Commitment of that
Bank and the other interests of that Bank or Designated Bidder (the
"Originator") hereunder and under the other Loan Documents; provided,
however, that (i) the Originator's obligations under this Agreement shall
remain unchanged, (ii) the Originator shall remain solely responsible for
the performance of such obligations, (iii) the Company and the Agent shall
continue to deal solely and directly with the Originator in connection with
the Originator's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Bank shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment
to, or any consent or waiver with respect to, this Agreement or any other
Loan Document, except to the extent such amendment, consent or waiver would
require unanimous consent of the Banks as described in the first proviso to
Section 10.01. In the case of any such participation, the Participant shall
not have any rights under this Agreement, or any of the other Loan
Documents, and all amounts payable by the Company hereunder shall be
determined as if such Originator had not sold such participation; except
that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest in amounts
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owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Bank or Designated
Bidder (as the case may be) under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank or
Designated Bidder may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement and
any Note held by it in favor of any Federal Reserve Bank in accordance with
Regulation A of the FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and
such Federal Reserve Bank may enforce such pledge or security interest in
any manner permitted under applicable law.
10.09 Designated Bidders. Any Bid Loan Bank may designate one
Designated Bidder to have a right to offer and make Bid Loans pursuant to
Section 2.06; provided, however, that (i) no such Bid Loan Bank may make
more than one such designation, (ii) each such Bid Loan Bank making any
such designation shall retain the right to make Bid Loans, and (iii) the
parties to each such designation shall execute and deliver to the Agent a
Designation Agreement. Upon its receipt of an appropriately completed
Designation Agreement executed by a designating Bid Loan Bank and a
designee representing that it is a Designated Bidder, the Agent will accept
such Designation Agreement and give prompt notice thereof to the Company,
whereupon such designation of such Designated Bidder shall become effective
and such Designated Bidder shall become a party to this Agreement as a
"Designated Bidder."
10.10 Confidentiality. Each Bank and each Designated Bidder agrees to
take and to cause its Affiliates to take normal and reasonable precautions
and exercise due care to maintain the confidentiality of all information
identified as "confidential" or "secret" by the Company and provided to it
by the Company or any Subsidiary, or by the Agent on the Company's or such
Subsidiary's behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information other
than in connection with or in enforcement of this Agreement and the other
Loan Documents or in connection with other business now or hereafter
existing or contemplated with the Company or any Subsidiary; except to the
extent such information (i) was or becomes generally available to the
public other than as a result of disclosure by such Bank or Designated
Bidder, or (ii) was or becomes available on a non-confidential basis from a
source other than the Company, provided that such source is not bound by a
confidentiality agreement with the Company known to such Bank or Designated
Bidder; provided, however, that any Bank or Designated Bidder may disclose
such information (A) at the request or pursuant to any requirement of any
Governmental Authority to which such Bank or Designated Bidder is subject
or in connection with an examination of such Bank or Designated Bidder by
any such authority; (B) pursuant to subpoena or other court process; (C)
when required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent required in connection with any
litigation or proceeding to which the Agent, any Bank, Designated Bidder or
their respective Affiliates may be party; (E) to the extent required in
connection with the exercise of any remedy hereunder or under any other
Loan Document; (F) to such Bank's or Designated Bidder's independent
auditors, legal counsel and other professional advisors; (G) to any
Participant or Assignee, actual or potential, provided that such Person
agrees in writing to keep such information confidential to the same extent
required of the Banks hereunder; (H) as to any Bank or Designated Bidder or
its Affiliate, as expressly permitted under the terms of any other document
or agreement regarding confidentiality to which the Company or any
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Subsidiary is party or is deemed party with such Bank or Designated Bidder
or such Affiliate; and (I) to its Affiliates.
10.11 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank and Designated Bidder is authorized at any time and
from time to time, without prior notice to the Company, any such notice
being waived by the Company to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any
time owing by, such Bank or Designated Bidder to or for the credit or the
account of the Company against any and all Obligations owing to such Bank
or Designated Bidder, now or hereafter existing. Each Bank and Designated
Bidder agrees promptly to notify the Company and the Agent after any such
set-off and application made by such Bank or Designated Bidder; provided,
however, that the failure to give such notice shall not affect the validity
of such set-off and application. Any Bank having outstanding both Committed
Loans and Bid Loans at any time a right of set-off is exercised by such
Bank and applying such setoff to the Loans shall apply the proceeds of such
set-off first to such Bank's Committed Loans, until its Committed Loans are
reduced to zero, and thereafter to its Bid Loans.
10.12 Notification of Addresses, Lending Offices, Etc. Each Bank and
each Designated Bidder shall notify the Agent in writing of any changes in
the address to which notices to such Bank or Designated Bidder should be
directed, of addresses of any Lending Office, of payment instructions in
respect of all payments to be made to it hereunder and of such other
administrative information as the Agent shall reasonably request.
10.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
10.14 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
10.15 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Banks,
the Designated Bidders, the Agent, the Agent-Related Persons, the
Indemnified Persons and their permitted successors and assigns, and no
other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.
10.16 Governing Law and Jurisdiction.(a) (a) THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK; PROVIDED THAT THE COMPANY, THE AGENT AND THE BANKS
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
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EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT,
THE DESIGNATED BIDDERS AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF
THE COMPANY, THE AGENT, THE DESIGNATED BIDDERS AND THE BANKS IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN
RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE
AGENT, THE DESIGNATED BIDDERS AND THE BANKS EACH WAIVE PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY NEW YORK LAW.
10.17 Waiver of Jury Trial. THE COMPANY, THE BANKS, THE DESIGNATED
BIDDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY
TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY
AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE BANKS, THE
DESIGNATED BIDDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the
Company, the Banks, the Designated Bidders and the Agent, and supersedes
all prior or contemporaneous agreements and understandings of such Persons,
oral or written, relating to the subject matter hereof and thereof.
(remainder of page intentionally left blank)
60.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.
ALBERTSON'S, INC.
By:
Title:
BANK OF AMERICA, N.A., as Agent
By:
Title:
BANK OF AMERICA, N.A., as a Bank
By:
Title:
BANK ONE, NA, as Documentation Agent and as
a Bank
By:
Title:
<PAGE>
WACHOVIA BANK, N.A., as Syndication Agent
and as a Bank
By:
Title:
BANCA DI ROMA, SAN FRANCISCO BRANCH
By:
Title:
THE BANK OF NEW YORK
By:
Title:
BANK OF OKLAHOMA, N.A.
By:
Title:
FIRSTAR BANK, NATIONAL ASSOCIATION
By:
Title:
<PAGE>
FIRST UNION NATIONAL BANK
By:
Title:
FIRST SECURITY BANK, N.A.
By:
Title:
THE HUNTINGTON NATIONAL BANK
By:
Title:
INTERNATIONAL BANK OF COMMERCE
By:
Title:
KEYBANK NATIONAL ASSOCIATION
By:
Title:
<PAGE>
THE NORTHERN TRUST COMPANY
By:
Title:
SOUTHTRUST BANK, N.A.
By:
Title:
SUNTRUST BANK
By:
Title:
UMB BANK, N.A.
By:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
Title:
<PAGE>
U.S. BANK NATIONAL ASSOCIATION
By:
Title:
WELLS FARGO BANK, N.A.
By:
Title:
MERRILL LYNCH BANK USA
By:
Title:
<PAGE>
ANNEX I
PRICING GRID
Applicable Margin and Applicable Fee Amount (Facility Fee): The Facility Fee and
the Applicable Margin for Offshore Rate Committed Loans and Base Rate Committed
Loans shall be, at any time, the rate per annum set forth in the tables below.
"Indebtedness Rating" means the long term unsecured senior, non-credit enhanced
debt rating of the Company by Standard & Poor's Ratings Group or Moody's
Investors Service Inc. (in the case of a split rating, the higher rating will
apply, unless the split results in a difference of more than one rating, in
which case the rating one rating below the highest rating will apply). If the
Term Loan option is utilized, the rate of interest on all Loans outstanding will
include the Applicable Margin plus 25 basis points. Any change in the Applicable
Margin or Applicable Fee Amount for the Facility Fee shall become effective five
Business Days after any public announcement of Indebtedness Rating requiring
such a change.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Indebtedness Offshore
Rating Facility Fee Rate Spread Base Rate Spread
------ ------------ ----------- ----------------
- ------------------------------ ---------------------- ------------------------- -----------------------------
- ------------------------------ ---------------------- ------------------------- -----------------------------
=> A or A2 6.5 bps 18.5 bps 0 bps
- ------------------------------ ---------------------- ------------------------- -----------------------------
- ------------------------------ ---------------------- ------------------------- -----------------------------
=> A- or A3 7.5 bps 22.5 bps 0 bps
- ------------------------------ ---------------------- ------------------------- -----------------------------
- ------------------------------ ---------------------- ------------------------- -----------------------------
=> BBB+ or Baa1 8.5 bps 26.5 bps 0 bps
- ------------------------------ ---------------------- ------------------------- -----------------------------
- ------------------------------ ---------------------- ------------------------- -----------------------------
< BBB+ or Baa1 10.0 bps 35.0 bps 0 bps
- ------------------------------ ---------------------- ------------------------- -----------------------------
</TABLE>
Applicable Fee Amount (Utilization Fee): The Utilization Fee applicable to Loans
shall be, at any time, the rate per annum set forth in the table below,
determined in accordance with usage:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
- ------------------------- ----------------------
Facility
Usage % Utilization Fee
- ------------------------- ----------------------
- ------------------------- ----------------------
50% 10.0 bps
- ------------------------- ----------------------
</TABLE>
If usage shall equal or exceed the applicable percentage specified above, the
utilization fee corresponding to such percentage shall apply with respect to all
outstanding Loans.
Annex 1-1.
<PAGE>
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
<TABLE>
<CAPTION>
BANK COMMITMENT PRO RATA
SHARE
<S> <C> <C>
BANK OF AMERICA, N.A. $135,000,000 14.594594595%*
WACHOVIA BANK, N.A. $125,000,000 13.513513514%*
BANK ONE, NA $125,000,000 13.513513514%*
WELLS FARGO BANK, N.A. $75,000,000 8.108108108%*
U.S. BANK NATIONAL ASSOCIATION $75,000,000 8.108108108%*
FIRST UNION NATIONAL BANK $75,000,000 8.108108108%*
UNION BANK OF CALIFORNIA, N.A. $75,000,000 8.108108108%*
THE NORTHERN TRUST COMPANY $42,500,000 4.594594595%*
FIRST SECURITY BANK, N.A. $42,500,000 4.594594595%*
SUNTRUST BANK, CENTRAL FLORIDA $25,000,000 2.702702703%*
KEYBANK NATIONAL ASSOCIATION $25,000,000 2.702702703%*
THE HUNTINGTON NATIONAL BANK $25,000,000 2.702702703%*
THE BANK OF NEW YORK $12,500,000 1.351351351%*
INTERNATIONAL BANK OF COMMERCE $12,500,000 1.351351351%*
UMB BANK, N.A. $12,500,000 1.351351351%*
SOUTHTRUST BANK, N.A. $12,500,000 1.351351351%*
BANCA DI ROMA, SAN FRANCISCO BRANCH $12,500,000 1.351351351%*
FIRSTAR BANK, NATIONAL ASSOCIATION $12,500,000 1.351351351%*
BANK OF OKLAHOMA, N.A. $5,000,000 0.540540541%*
TOTAL $925,000,000.00 100%
</TABLE>
* [9 DECIMAL PTS.]
- --------------------------------------------------------------------------------
S-2.01-1.
<PAGE>
SCHEDULE 10.02
PAYMENT OFFICES; ADDRESSES FOR NOTICES; LENDING OFFICES
COMPANY
Address for Notices:
Albertson's, Inc.
250 Park Center Blvd.
Box 20
Boise, Idaho 83726
Attention: Finance Department
Telephone: (208) 395-6534
Facsimile: (208) 395-6631
BANK OF AMERICA, N.A.
as Agent
Notices for Borrowing, Conversions/Continuations, and Payments:
Bank of America, N.A.
Mail Code: CA4-706-05-09
Agency Services #5596
1850 Gateway Boulevard, 5th Floor
Concord, California 94520
Attention: Tosha Clements
Telephone: (925) 675-8409
Facsimile: (925) 969-2805
Other Notices:
Bank of America, N.A.
Retail Industry Group #33751
Mail Code: CA5-705-41-89
555 California Street, 41st Floor
San Francisco, California 94104
Attention: James P. Johnson
Telephone: (415) 622-6177
Facsimile: (415) 622-4585
S-10.02-1.
<PAGE>
Agent's Payment Office:
Bank of America, N.A.
Attention: Agency Services #5596
Reference: Albertson's, Inc.
For credit to Acct. No. 3750836479
ABA No. 111000012
BANK OF AMERICA, N.A.
as a Bank
Domestic and Offshore Lending Office:
(Borrowing Notices, Notices of Conversion/Continuation and Payments)
Bank of America, N.A.
Mail Code: CA4-706-05-09
1850 Gateway Boulevard, 4th Floor
Concord, California 94520
Attention: Tosha Clements
Telephone: (925) 675-8409
Facsimile: (925) 969-2805
All other Notices:
Bank of America, N.A.
Retail Industry Group # 33751
Mail Code: CA5-705-41-89
555 California Street, 41st Floor
San Francisco, California 94104
Attention: James P. Johnson
Telephone: (415) 622-6177
Facsimile: (415) 622-4585
WACHOVIA BANK, N.A.
as Syndication Agent and as a Bank
Domestic and Offshore Lending Office:
Wachovia Bank, N.A.
191 Peachtree Street NE
MC-GA 370
Atlanta, Georgia 30303
Attention: Bill Allen
Telephone: (404) 332-5271
Facsimile: (404) 332-4320
S-10.02-2.
<PAGE>
Notices (other than Borrowing Notice and Notices of Conversion/Continuation):
Wachovia Bank, N.A.
191 Peachtree Street NE
MC-GA 370
Atlanta, Georgia 30303
Attention: John A. Whitner
Telephone: (404) 332-6738
Facsimile: (404) 332-6898
BANK ONE, NA
as Documentation Agent and as a Bank
Domestic and Offshore Lending Office:
Bank One, NA
One Bank One Plaza
IL1-0088, 14th Floor
Chicago, Illinois 60670
Attention: Karen Hannusch
Telephone: (312) 732-9868
Facsimile: (312) 732-2715
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Bank One, NA
One Bank One Plaza
IL1-0086, 14th Floor
Chicago, Illinois 60670
Attention: Eva Drinis
Telephone: (312) 732-5037
Facsimile: (312) 336-4380
WELLS FARGO BANK, N.A.
as Senior Managing Agent and as a Bank
Domestic and Offshore Lending Office:
Wells Fargo Bank, N.A.
707 Wilshire Boulevard, 16th Floor
MAC E28-18-165
Los Angeles, California 90017
Attention: Matthew Frey
Telephone: (213) 614-5038
Facsimile: (213) 614-2305
S-10.02-3.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Wells Fargo Bank, N.A.
999 Third Avenue
Seattle, Washington 98104
Attention: Steve Andersen
Telephone: (206) 292-3666
Facsimile: (206) 292-3595
U.S. BANK NATIONAL ASSOCIATION
as Senior Managing Agent and as a Bank
Domestic and Offshore Lending Office:
U.S. Bank National Association
101 South Capital Boulevard
Boise, Idaho 83702
Attention: Kathy O'Grady
Telephone: (503) 275-3805
Facsimile: (503) 275-8181
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
U.S. Bank National Association
101 South Capital Boulevard
Boise, Idaho 83702
Attention: James W. Henken
Telephone: (208) 383-7823
Facsimile: (208) 383-7563
FIRST UNION NATIONAL BANK
as Senior Managing Agent and as a Bank
Domestic and Offshore Lending Office:
First Union National Bank
301 South College Street, 4th Floor
Charlotte, North Carolina 28288-0479
Attention: Todd Tucker
Telephone: (704) 383-0905
Facsimile: (704) 383-7999
S-10.02-4.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
First Union National Bank
One First Union Center
Charlotte, North Carolina 28288
Attention: Mike Grady
Telephone: (704) 383-7514
Facsimile: (704) 383-7236
UNION BANK OF CALIFORNIA, N.A.
as Senior Managing Agent and as a Bank
Domestic and Offshore Lending Office:
Union Bank of California, N.A.
Commercial Customer Service Unit
1980 Saturn Street
Monterey Park, California 91755
Attention: Ruby Gonzales
Telephone: (323) 720-7055
Facsimile: (323) 724-6198
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Union Bank of California, N.A.
350 California Street, 6th Floor
San Francisco, California 94104
Attention: Timothy P. Streb
Telephone: (415) 705-7021
Facsimile: (415) 705-7085
THE NORTHERN TRUST COMPANY
as Managing Agent and as a Bank
Domestic and Offshore Lending Office:
The Northern Trust Company
50 South LaSalle
Chicago, Illinois 60675
Attention: Linda Honda
Telephone: (312) 444-3532
Facsimile: (312) 630-1566
S-10.02-5.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
The Northern Trust Company
50 South LaSalle
Chicago, Illinois 60675
Attention: Patrick J. Connelly
Telephone: (312) 444-5048
Facsimile: (312) 444-5055
FIRST SECURITY BANK, N.A.
as Managing Agent and as a Bank
Domestic and Offshore Lending Office:
First Security Bank, N.A.
Commercial Loan Account Center
P.O. Box 7666
Boise, Idaho 83707-1666
Attention: Mary Wissel
Telephone: (208) 393-4046
Facsimile: (208) 393-4540
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
First Security Bank, N.A.
Idaho Corporate Banking
119 North 9th Street
Boise, Idaho 83702
Attention: Mary Monroe
Telephone: (208) 393-2106
Facsimile: (208) 393-2472
THE BANKS
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
Domestic and Offshore Lending Office:
Suntrust Bank, Central Florida, N.A.
200 South Orange Avenue
Orlando, Florida 32801
Attention: Joanna Contreras
Telephone: (407) 237-5283
Facsimile: (407) 237-5342
S-10.02-6.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Suntrust Bank, Central Florida, N.A.
303 Peachtree Street, 3rd Floor
Atlanta, Georgia 30308
Attention: Ann Ford
Telephone: (407) 724-3899
Facsimile: (407) 827-6270
KEYBANK NATIONAL ASSOCIATION
Domestic and Offshore Lending Office:
KeyBank National Association
831 East Parkcenter Boulevard
Boise, Idaho 88705
Attention: Specialty Services Team
Telephone: (800) 297-5518
Facsimile: (800) 297-5495
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
KeyBank National Association
700 Fifth Avenue
WA31-10-4612
Seattle, Washington 98104
Attention: Patrick Kennedy
Telephone: (206) 684-6079
Facsimile: (206) 684-6035
THE HUNTINGTON NATIONAL BANK
Domestic and Offshore Lending Office:
The Huntington National Bank
7450 Huntington Park Drive
Mail Code HZ0338
Columbus, Ohio 43235
Attention: Alla Kier
Telephone: (614) 480-1200
Facsimile: (614) 480-2533
S-10.02-7.
<PAGE>
Notices (other than Borrowing Notice and Notices of Conversion/Continuation):
Huntington National Bank
240 South Pineapple Avenue
Mail Code FL631
Sarasota, Florida 34236
Attention: James C. Wardlaw
Telephone: (941) 951-4686
Facsimile: (941) 951-4659
THE BANK OF NEW YORK
Domestic and Offshore Lending Office:
The Bank of New York
One Wall Street, 8th Floor
New York, New York 10286
Attention: Charlotte Sohn
Telephone: (212) 635-7869
Facsimile: (212) 635-1481/1483
Notices (other than Borrowing Notice and Notices of Conversion/Continuation):
The Bank of New York
One Wall Street, 8th Floor
New York, New York 10286
Attention: Charlotte Sohn
Telephone: (212) 635-7869
Facsimile: (212) 635-1481/1483
INTERNATIONAL BANK OF COMMERCE
Domestic and Offshore Lending Office:
International Bank of Commerce
130 East Travis
San Antonio, Texas 78205
Attention: Christine D. McCullar
Telephone: (210) 518-2507
Facsimile: (210) 518-2591
S-10.02-8.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
International Bank of Commerce
130 East Travis
San Antonio, Texas 78205
Attention: Thomas Travis
Telephone: (210) 518-2502
Facsimile: (210) 518-2590
UMB BANK, N.A.
Domestic and Offshore Lending Office:
UMB Bank, n.a.
1010 Grand Boulevard
Kansas City, Missouri 64106
Attention: Vaughnda Ritchie
Telephone: (816) 860-7019
Facsimile: (816) 860-3772
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
UMB Bank, n.a.
1010 Grand Boulevard
Kansas City, Missouri 64106
Attention: David A Proffitt
Telephone: (816) 860-7935
Facsimile: (816) 860-7143
SOUTHTRUST BANK
Domestic and Offshore Lending Office:
SouthTrust Bank
600 West Peachtree Street, 27th Floor
Atlanta, Georgia 30308
Attention: Robert M. Searson
Telephone: (404) 853-5754
Facsimile: (404) 853-5766
S-10.02-9.
<PAGE>
Notices (other than Borrowing Notice and Notices of Conversion/Continuation):
SouthTrust Bank
600 West Peachtree Street, 27th Fl
Atlanta, Georgia 30308
Attention: Donna King
Telephone: (404) 853-5763
Facsimile: (404) 853-5766
BANCA DI ROMA, SAN FRANCISCO BRANCH
Domestic and Offshore Lending Office:
Banca di Roma, San Francisco Branch
One Market
Steuart Tower, Suite 1000
San Francisco, California 94105
Attention: Richard G. Dietz
Telephone: (415) 977-7320
Facsimile: (415) 357-9869
Notices (other than Borrowing Notice and Notices of Conversion/Continuation):
Banca di Roma, San Francisco Branch
One Market
Steuart Tower, Suite 1000
San Francisco, California 94105
Attention: Thomas C. Woodruff
Telephone: (415) 977-7308
Facsimile: (415) 357-9869
FIRSTAR BANK, NATIONAL ASSOCIATION
Domestic and Offshore Lending Office:
Firstar Bank, National Association
Commercial Loan Operations
1850 Osborn Avenue
Oshkosh, Wisconsin 54901
Attention: Patti Gumbert
Telephone: (920) 426-7913
Facsimile: (920) 426-7655
S-10.02-10.
<PAGE>
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Firstar Bank, National Association
425 Walnut Street, 8th Floor
Mail Location 8160
Cincinnati, Ohio 45202
Attention: Richard W. Neltner
Telephone: (513) 632-4073
Facsimile: (513) 632-2068
BANK OF OKLAHOMA, N.A.
Domestic and Offshore Lending Office:
Bank Of Oklahoma, N.A.
P.O. Box 2300
Tulsa, Oklahoma 94192
Attention: Sharon Shannon
Telephone: (918) 588-6335
Facsimile: (918) 588-8231
Notices (other than Borrowing Notices and Notices of Conversion/Continuation):
Bank Of Oklahoma, N.A.
One Williams Tower
Tulsa, Oklahoma 94192
Attention: Jane Faulkenberry
Telephone: (918) 588-6272
Facsimile: (918) 588-8231
S-10.02-11.
<PAGE>
EXHIBIT A
FORM OF NOTICE OF BORROWING
Date: ______________
To: Bank of America, N.A.,
as Agent
Ladies and Gentlemen:
The undersigned, Albertson's, Inc. (the "Company"), refers to the
Credit Agreement, dated as of March 22, 2000 (as extended, renewed, amended or
restated from time to time, the "364-Day Credit Agreement"), among the Company,
the several financial institutions from time to time party thereto (the
"Banks"), the Co-Agents party thereto, and Bank of America, N.A., as Agent (the
"Agent"), the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 2.03 of the 364-Day
Credit Agreement, of the Committed Borrowing specified below:
1. The Business Day of the proposed Committed Borrowing is ____________________.
2. The aggregate amount of the proposed Committed Borrowing is $_______________.
3. The Committed Borrowing is to be comprised of $___________ of [Base Rate
Committed Loans] [Offshore Rate Committed Loans].
4. [The duration of the Interest Period for the Offshore Rate Committed Loans
included in the Committed Borrowing shall be _____ months.]
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Committed
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) the representations and warranties of the Company
contained in Article V of the 364-Day Credit Agreement are true
and correct as though made on and as of such date, except to the
extent such representations and warranties expressly refer to an
earlier date, in which case they are true and correct as of such
date, and except that this notice shall be deemed instead to
refer to the last day of the most recent year for which financial
statements have then been delivered in respect of the
representation and warranty made in Section 5.10(a) of the
364-Day Credit Agreement;
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed Borrowing;
(c) there has occurred since January 28, 1999 no event or
circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect; and
A-1.
<PAGE>
(d) after giving effect to the proposed Committed Borrowing,
the aggregate principal amount of all outstanding Committed Loans
plus the aggregate principal amount of all Bid Loans outstanding,
shall not at any time exceed the Aggregate Commitment.
ALBERTSON'S, INC.
By:
Title:
A-2.
<PAGE>
EXHIBIT B
FORM OF NOTICE OF CONVERSION/CONTINUATION
Date: _______________
To: Bank of America, N.A.,
as Agent
Ladies and Gentlemen:
The undersigned, Albertson's (the "Company"), refers to the Credit
Agreement, dated as of March 22, 2000 (as extended, renewed, amended or restated
from time to time, the "364-Day Credit Agreement"), among the Company, the
several financial institutions from time to time party thereto (the "Banks"),
the Co-Agents party thereto, and Bank of America, N.A., as Agent (the "Agent"),
the terms defined therein being used herein as therein defined, and hereby gives
you notice irrevocably, pursuant to Section 2.04 of the 364-Day Credit
Agreement, of the [conversion] [continuation] of Committed Loans specified
below:
1. The Conversion/Continuation Date is ______________.
2. The aggregate amount of the Committed Loans to be [converted] [continued]
is $_______________.
3. The Committed Loans are to be [converted into] [continued as] [Offshore
Rate Committed Loans] [Base Rate Committed Loans].
4. [The duration of the Interest Period for the [Offshore Rate Committed
Loans] included in the [conversion] [continuation] shall be [____ months].]
ALBERTSON'S, INC.
By:
Title:
B-1.
<PAGE>
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
ALBERTSON'S, INC.
Financial Statements Date: ______________
Reference is made to that certain Credit Agreement dated as of March
22, 2000 (as extended, renewed, amended or restated from time to time, the
"364-Day Credit Agreement"), among ______________ (the "Company"), the several
financial institutions from time to time party thereto (the "Banks"), the
Co-Agents party thereto, and Bank of America, N.A., as Agent (in such capacity,
the "Agent"). Unless otherwise defined herein, capitalized terms used herein
have the respective meanings assigned to them in the 364-Day Credit Agreement.
The undersigned Responsible Officer of the Company hereby certifies as
of the date hereof that he/she is the [_______________] of the Company, and
that, as such, he/she is authorized to execute and deliver this Certificate to
the Banks and the Agent on the behalf of the Company and its consolidated
Subsidiaries, and that:
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection 6.01(a) of the 364-Day Credit
Agreement.]
1. Attached hereto are true and correct copies of the audited
consolidated balance sheet of the Company and its Consolidated Subsidiaries as
at the end of the fiscal year ended _______________ and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on in a manner acceptable to the SEC,
accompanied by the unqualified opinion of the Independent Auditor, which opinion
(a) shall state that such consolidated financial statements present fairly the
financial position for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years and (b) is not qualified as to (i) going
concern, or (ii) any limitation in the scope of audit.
or
[Use the following paragraph if this Certificate is delivered in connection with
the financial statements required by subsection 6.01(b) of the 364-Day Credit
Agreement.]
1. Attached hereto are true and correct copies of the unaudited consolidated
balance sheet of the Company and its Consolidated Subsidiaries as of the end of
the fiscal quarter ended _________ and the related consolidated statements of
income, shareholders' equity and cash flows for the period commencing on the
first day and ending on the last day of such quarter, which are complete and
accurate in all material respects and fairly present, in accordance with GAAP
(subject to ordinary, good faith year-end audit adjustments), the financial
position, the results of operations and the cash flows of the Company and the
Consolidated Subsidiaries.
C-1
<PAGE>
2. The undersigned has reviewed and is familiar with the terms of the 364-Day
Credit Agreement and has made, or has caused to be made under his/her
supervision, a detailed review of the transactions and condition (financial or
otherwise) of the Company and its Subsidiaries during the accounting period
covered by the attached financial statements.
3. The Company and its Subsidiaries, during such period, have observed,
performed or satisfied all of the covenants and other agreements, and satisfied
every condition in the 364-Day Credit Agreement to be observed, performed or
satisfied by the Company and its Subsidiaries, and the undersigned has no
knowledge of any Default or Event of Default.
4. The financial covenant analyses and information set forth on Schedule 1
attached hereto are true and accurate on and as of the date of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as the
____________ of the Company as of ___________, _______.
ALBERTSON'S, INC.
By:
Title:
C-2
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SCHEDULE 1
to the Compliance Certificate
ALBERTSON'S, INC.
364-DAY CREDIT AGREEMENT DATED AS OF MARCH 22, 2000
Dated _________________
For the fiscal quarter ended __________
(in thousands)
Consolidated Tangible Net Worth Calculation:
Common stock $___________
Capital in excess ___________
Retained earnings ___________
Stockholders' equity ___________
Plus: Deferred investment tax credits ___________
Minus: Intangible assets:
(specify) ___________
Plus: CTNW Adjustments, if any:
(specify) ___________
Consolidated Tangible Net Worth $__________
Section 7.05: Consolidated Tangible Net Worth shall be not
less than $2.1 billion $__________
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EXHIBIT D
FORM OF LEGAL OPINION OF COMPANY'S COUNSEL
[Form of opinion of Thomas R. Saldin, Esq.,
Executive Vice-President and General Counsel to the Company]
March 22, 2000
To the Banks and the Agent Referred to Below
c/o Bank of America N.A., as Agent
Re: Albertson's, Inc.
Ladies and Gentlemen:
I have acted as counsel for Albertson's, Inc. (the "Company")
in connection with the Credit Agreement, dated as of March 22, 2000 (the
"364-Day Credit Agreement") among the Company, the financial institutions party
thereto (the "Banks"), the Documentation Agent and the Syndication Agent party
thereto, and Bank of America N.A., as Agent (the "Agent").
This opinion is being delivered to you pursuant to Section
4.01(d) of the 364-Day Credit Agreement. Capitalized terms used herein and not
otherwise defined herein shall have the same meanings herein as ascribed thereto
in the 364-Day Credit Agreement.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of the Loan Documents and such other documents,
corporate records, certificates of public officials and other instruments and
have conducted such other investigations of fact and law as I have deemed
necessary or advisable for purposes of this opinion.
In my examination I have assumed the legal capacity of all
natural persons, the genuineness of all signatures, including endorsements, the
authority of all persons signing each of the documents on behalf of the parties
thereto (other than the Company), the authenticity of all documents submitted to
me as originals, the conformity to original documents of all documents submitted
to me as certified or photostatic copies, and the authenticity of the originals
of such copies. As to any facts material to this opinion which I did not
independently establish or verify, I have relied upon oral or written statements
and representations of officers and other representatives of the Company and
others, and factual representations contained in the Loan Documents.
I am a member of the Bar of the State of Idaho, and I express
no opinion as to the laws of any jurisdiction, or the effect of any such laws on
the opinions herein stated, other than (i) the laws of the State of Idaho, (ii)
the General Corporation Law of the State of Delaware (the "Delaware Statute")
with respect to the opinions set forth in paragraph 1 hereof, and (iii) the
federal laws of the United States of America to the extent specifically referred
to herein.
Upon the basis of the foregoing, I am of the opinion that:
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1. The Company is a corporation duly incorporated, validly existing
and in good standing under the Delaware Statute, and has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted. The Company
is qualified as a foreign corporation and is in good standing in the State
of Idaho.
2. The execution, delivery and performance by the Company of the Loan
Documents are within the Company's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and
do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or
by-laws of the Company or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Company or result in the
creation or imposition of any Lien on any asset of the Company or any of
its Subsidiaries.
3. The Loan Documents have been duly executed and delivered by the
Company and constitute valid and binding agreements of the Company, in each
case enforceable in accordance with their terms, except as the same may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and by general principles of equity. Insofar as this
opinion addresses instruments or agreements expressed to be governed by New
York law, it is my opinion (i) that an Idaho court would give effect to
such choice of New York Law and (ii) in any event, the conclusion stated in
this paragraph would be correct as a matter of Idaho law.
4. Except as disclosed in the Company's 1998 Form 10-K, there is no
action, suit or proceeding pending against, or to the best of my knowledge
threatened against or affecting, the Company or any of its Subsidiaries
before any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable possibility of an adverse decision
which could materially adversely effect the business, consolidated
financial position or consolidated reports of operations of the Company and
its Consolidated Subsidiaries, considered as a whole or which in any manner
draws into question the validity of the Loan Documents.
5. The Company is not an "investment company," or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
This opinion is being furnished only to you solely for your benefit in
connection with the 364-Day Credit Agreement and is not to be used,
circulated, quoted, referred to or relied upon by any other person or for
any other purpose without my prior express written consent; provided, the
Agent and each Bank may deliver a copy to its legal counsel in connection
with the 364-Day Credit Agreement, to any prospective Assignee or
Participant of any Bank and to any successor Agent, and such legal counsel,
any Assignee or Participant and any successor Agent shall be entitled to
rely hereon, it being understood that this opinion is rendered only as of
the date hereof.
Very truly yours,
D-2
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EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of _____________ is made between __________________ (the
"Assignor") and ________________ (the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Credit Agreement dated
as of March 22, 2000 (as amended, restated, modified, supplemented or renewed
from time to time, the "364-Day Credit Agreement"), among Albertson's, Inc. (the
"Company"), the several financial institutions from time to time party thereto
(including the Assignor, the "Banks"), the Co-Agents party thereto, and Bank of
America, N.A., as agent for the Banks (the "Agent"). Any terms defined in the
364-Day Credit Agreement and not defined in this Assignment and Acceptance are
used herein as defined in the 364-Day Credit Agreement;
WHEREAS, as provided under the 364-Day Credit Agreement, the Assignor
has committed to making Loans to the Company in an aggregate amount not to
exceed $__________ (the "Commitment");
WHEREAS, [the Assignor has made Loans in the aggregate principal amount
of $__________ to the Company consisting of $___________ principal amount of
Committed Loans [and $____________ principal amount of Bid Loans]] [no Loans are
outstanding under the 364-Day Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the 364-Day Credit Agreement
in respect of its Commitment, [together with a corresponding portion of each of
its outstanding Loans], in an amount equal to ___% of the Assignor's Commitment
and Loans, on the terms and subject to the conditions set forth herein, and the
Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes
from the Assignor, without recourse and without representation or warranty
(except as provided in this Assignment and Acceptance) ___% (the
"Assignee's Percentage Share") of (A) the Commitment [and the Loans] of the
Assignor and (B) all related rights, benefits, obligations, liabilities and
indemnities of the Assignor under and in connection with the 364-Day Credit
Agreement and the Loan Documents.
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(b) With effect on and after the Effective Date (as defined in Section
5 hereof), the Assignee shall be a party to the 364-Day Credit Agreement
and succeed to all of the rights and be obligated to perform all of the
obligations of a Bank under the 364-Day Credit Agreement, including the
requirements concerning confidentiality and the payment of indemnification,
with a Commitment in the amount set forth in subsection (c) below. The
Assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the 364-Day Credit Agreement are
required to be performed by it as a Bank. It is the intent of the parties
hereto that the Commitment of the Assignor shall, as of the Effective Date,
be reduced by an amount equal to the portion thereof assigned to the
Assignee hereunder, and the Assignor shall relinquish its rights and be
released from its obligations under the 364-Day Credit Agreement to the
extent such obligations have been assumed by the Assignee; provided,
however, that the Assignor shall not relinquish its rights under Article
III or Sections 10.04 and 10.05 of the 364-Day Credit Agreement to the
extent such rights relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date: (i) the Assignee's Commitment will be
$__________; and (ii) the Assignee's aggregate outstanding Committed Loans
will be $_______________ [and its aggregate outstanding Bid Loans will be
$___________].
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date: (i) the Assignor's Commitment will be
$__________; and (ii) the Assignor's aggregate outstanding Committed Loans
will be $_______________ [and its aggregate outstanding Bid Loans will be
$___________].
Payments.
(e) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on
the Effective Date in immediately available funds an amount equal to
$__________, representing the Assignee's Percentage Share of the principal
amount of all Loans previously made by the Assignor to the Company under
the 364-Day Credit Agreement and outstanding on the Effective Date.
(f) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section 10.08 of the 364-Day
Credit Agreement.
Reallocation of Payments. Any interest, fees and other payments accrued
to the Effective Date with respect to the Commitment [and Loans] of the Assignor
shall be for the account of the Assignor. Any interest, fees and other payments
accrued on and after the Effective Date with respect to the portion of such
Commitment [and Loans] assigned to the Assignee shall be for the account of the
Assignee. Each of the Assignor and the Assignee agrees that it will hold in
trust for the other party any interest, fees and other amounts which it may
receive to which the other party is entitled pursuant to the preceding sentence
and pay to the other party any such amounts which it may receive promptly upon
receipt.
Independent Credit Decision. The Assignee: (a) acknowledges that it has
received a copy of the 364-Day Credit Agreement and the Schedules and Exhibits
thereto, together with copies of the most recent financial statements referred
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to in Section 5.10 or Section 6.01 of the 364-Day Credit Agreement, and such
other documents and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this Assignment and
Acceptance; and (b) agrees that it will, independently and without reliance upon
the Assignor, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the 364-Day
Credit Agreement.
Effective Date; Notices.
(g) As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance shall be ______________ (the "Effective
Date"); provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and delivered by
the Assignor and the Assignee;
(ii) any consent of the Company and the Agent required under Section
10.08 of the 364-Day Credit Agreement for the effectiveness of the
assignment hereunder by the Assignor to the Assignee shall have been duly
obtained and shall be in full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due to the
Assignor under this Assignment and Acceptance;
(iv) the processing fee referred to in Section 2(b) hereof and in
Section 10.08 of the 364-Day Credit Agreement shall have been paid to the
Agent; and
(v) the Assignor and Assignee shall have complied with the other
requirements of Section 10.08 of the 364-Day Credit Agreement and with the
requirements of Sections 9.10 and 10.10 of the 364-Day Credit Agreement (in
each case to the extent applicable).
(h) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Company and the Agent for
acknowledgement by the Agent, a Notice of Assignment substantially in the
form attached hereto as Schedule 1.
Agent. The Assignee hereby appoints and authorizes the Assignor to
take such action as agent on its behalf and to exercise such powers under
the 364-Day Credit Agreement as are delegated to the Agent by the Banks
pursuant to the terms of the 364-Day Credit Agreement. [The Assignee shall
assume no duties or obligations held by the Assignor in its capacity as
Agent under the 364-Day Credit Agreement.] [INCLUDE ONLY IF ASSIGNOR IS
AGENT]
Withholding Tax. The Assignee (a) represents and warrants to the
Assignor, the Agent and the Company that under applicable law and treaties
no tax will be required to be withheld by the Bank with respect to any
payments to be made to the Assignee hereunder, and (b) agrees to furnish
(if it is organized under the laws of any jurisdiction other than the
United States or any State thereof) to the Agent and the Company prior to
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the time that the Agent or Company is required to make any payment of
interest or fees under the 364-Day Credit Agreement, duplicate executed
originals of either U.S. Internal Revenue Service Form W-8BEN or U.S.
Internal Revenue Service Form W-8ECI (wherein the Assignee claims
entitlement to the benefits of a tax treaty that provides for a complete
exemption from U.S. federal income withholding tax on all payments
hereunder) and agrees to provide new Forms W-8BEN or W-8ECI upon the
expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto,
duly executed and completed by the Assignee, as and when required under the
364-Day Credit Agreement.
Representations and Warranties.
(i) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any Lien or other adverse claim; (ii) it
is duly organized and existing and it has the full power and authority to
take, and has taken, all action necessary to execute and deliver this
Assignment and Acceptance and any other documents required or permitted to
be executed or delivered by it in connection with this Assignment and
Acceptance and to fulfill its obligations hereunder; (iii) no notices to,
or consents, authorizations or approvals of, any Person are required (other
than those referred to in Section 5(a)(ii) hereof and any already given or
obtained) for its due execution, delivery and performance of this
Assignment and Acceptance, and apart from any agreements or undertakings or
filings required by the 364-Day Credit Agreement, no further action by, or
notice to, or filing with, any Person is required of it for such execution,
delivery or performance; and (iv) this Assignment and Acceptance has been
duly executed and delivered by it and constitutes the legal, valid and
binding obligation of the Assignor, enforceable against the Assignor in
accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and other laws of
general application relating to or affecting creditors' rights and to
general equitable principles.
(j) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the 364-Day Credit Agreement
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the 364-Day Credit Agreement or any other
instrument or document furnished pursuant thereto. The Assignor makes no
representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or
statements of the Company, or the performance or observance by the Company,
of any of its respective obligations under the 364-Day Credit Agreement or
any other instrument or document furnished in connection therewith.
(k) The Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken,
all action necessary to execute and deliver this Assignment and Acceptance
and any other documents required or permitted to be executed or delivered
by it in connection with this Assignment and Acceptance, and to fulfill its
obligations hereunder; (ii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than those referred to in
Section 5(a)(ii) hereof and any already given or obtained) for its due
execution, delivery and performance of this Assignment and Acceptance; and
apart from any agreements or undertakings or filings required by the
364-Day Credit Agreement, no further action by, or notice to, or filing
with, any Person is required of it for such execution, delivery or
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performance; (iii) this Assignment and Acceptance has been duly executed
and delivered by it and constitutes the legal, valid and binding obligation
of the Assignee, enforceable against the Assignee in accordance with the
terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating
to or affecting creditors' rights and to general equitable principles; and
(iv) it is an Eligible Assignee.
Further Assurances.
(a) The Company shall ensure that all written information, exhibits
and reports furnished to the Agent or the Banks do not and will not contain
any untrue statement of a material fact and do not and will not omit to
state any material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which
made, and will promptly disclose to the Agent and the Banks and correct any
defect or error that may be discovered therein or in any Loan Document or
in the execution, acknowledgement or recordation thereof.
(b) Promptly upon request by the Agent or the Majority Banks, the
Company shall (and shall cause any of its Subsidiaries to) do, execute,
acknowledge, and deliver, any and all such further acts, certificates,
assurances and other instruments the Agent or such Banks, as the case may
be, may reasonably require from time to time in order to carry out more
effectively the purposes of this Agreement or any other Loan Document.
Miscellaneous.
(l) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure
or delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of
the provisions of this Assignment and Acceptance shall be without prejudice
to any rights with respect to any other or further breach thereof.
(m) All payments made hereunder shall be made without any set-off or
counterclaim
(n) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation,
execution and performance of this Assignment and Acceptance.
(o) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(p) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. THE ASSIGNOR AND THE
ASSIGNEE EACH IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT SITTING IN NEW YORK OVER ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS ASSIGNMENT AND ACCEPTANCE AND
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
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MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. EACH
PARTY TO THIS ASSIGNMENT AND ACCEPTANCE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS ASSIGNMENT AND
ACCEPTANCE OR ANY DOCUMENT RELATED HERETO, AND PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.
(q) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, AND ANY RELATED DOCUMENTS
AND AGREEMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY EITHER OF THE
PARTIES AGAINST THE OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. EACH OF THE PARTIES ALSO AGREES THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
[Other provisions to be added as may be negotiated between the Assignor and the
Assignee, provided that such provisions are not inconsistent with the 364-Day
Credit Agreement.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By:
Title:
[ASSIGNEE]
By:
Title:
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SCHEDULE 1
to the Assignment and Acceptance
NOTICE OF ASSIGNMENT AND ACCEPTANCE
Date: ___________________
Bank of America, N.A.,
as Agent
Bank of America, N.A.
Retail Industry Group #33751
[Mail Code: CA5-705-41-89]
555 California Street, 41st Floor
San Francisco, CA 94104
Attention: James P. Johnson
Telephone: (415) 622-6177
Facsimile: (415)
Albertson's, Inc.
250 Park Center Blvd.
Box 20
Boise, ID 83726
Attention: Finance Department
Telephone: (208) 395-6534
Facsimile: (208) 395-6631
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of March 22, 2000 (as
amended, restated, modified, supplemented or renewed from time to time, the
"364-Day Credit Agreement") among Albertson's, Inc. (the "Company"), the Banks
referred to therein, the Co-Agents party thereto, and Bank of America, N.A., as
Agent for the Banks (the "Agent"). Terms defined in the 364-Day Credit Agreement
are used herein as therein defined.
1. We hereby give you notice of[, and request the consent of [the
Company and] the Agent to,] the assignment by ________________________ (the
"Assignor") to ____________________ (the "Assignee") of ____% of the right,
title and interest of the Assignor in and to the 364-Day Credit Agreement
(including, without limitation, ____% of the right, title and interest of the
Assignor in and to the Commitment of the Assignor [and all outstanding Loans
made by the Assignor]) pursuant to that certain Assignment and Acceptance
Agreement, dated as of ___________ (the "Assignment and Acceptance") between
Assignor and Assignee, a copy of which Assignment and Acceptance is attached
hereto. Before giving effect to such assignment the Assignor's Commitment is
$___________. [The Assignor has made Loans in the aggregate principal amount of
$__________ to the Company consisting of $___________ principal amount of
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Committed Loans [and $____________ principal amount of Bid Loans].] [No Loans
are outstanding under the 364-Day Credit Agreement.]
2. The Assignee agrees that, upon receiving the consent of the Company
and the Agent to such assignment (if applicable) and from and after the
Effective Date (as such term is defined in Section 5 of the Assignment and
Acceptance), the Assignee shall be bound by the terms of the 364-Day Credit
Agreement, with respect to the interest in the 364-Day Credit Agreement assigned
to it as specified above, as fully and to the same extent as if the Assignee
were the Bank originally holding such interest in the 364-Day Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Lending Office(s):
Assignee name:
Address:
Attention:
Telephone: ( )
------
Facsimile: ( )
------
Assignee name:
Address:
Attention:
Telephone: ( )
------
Facsimile: ( )
------
(B) Notice Address:
Assignee name:
Address:
Attention:
Telephone: ( )
------
Facsimile: ( )
------
(C) Payment Instructions:
Account No.:
At:
2.
<PAGE>
Reference:
Attention:
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the
Assignment and Acceptance.
5. This Notice of Assignment and Acceptance may be executed by the
Assignor and the Assignee in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute one and the same notice and agreement.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
Adjusted Commitment: [ASSIGNOR]
- -------------------
$ By:
------------------------------
Title:
Adjusted Pro Rata Share:
- -----------------------
- -------%
Commitment: [ASSIGNEE]
- ----------
$ ] By:
-------------------------------
Title:
Pro Rata Share:
- --------------
- -------%
[CONSENTED TO this _____ day of ___________________:
ALBERTSON'S, INC.
By:
3.
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Title: ]
------------------------------------
ACKNOWLEDGED [AND CONSENTED TO] this ____ day of ________:
BANK OF AMERICA, N.A., as Agent
By:
Title:
4.
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EXHIBIT F
FORM OF INVITATION FOR COMPETITIVE BIDS
Via Facsimile
Date: __________________
To the Bid Loan Banks and Designated Bidders Listed on Annex A Attached Hereto
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of March
22, 2000 (as extended, renewed, amended or restated from time to time, the
"364-Day Credit Agreement"), among _______________ (the "Company"), the Banks
party thereto, the Co-Agents party thereto, and Bank of America, N.A., as Agent
for the Banks (the "Agent"). Capitalized terms used herein have the meanings
specified in the 364-Day Credit Agreement.
Pursuant to subsection 2.06(b) of the 364-Day Credit Agreement, you are
hereby invited to submit offers to make Bid Loans to the Company based on the
following specifications:
1. Date of Bid Borrowing: _______________;
2. Aggregate amount of Bid Borrowing: $___________________;
3. The Bid Loans shall be Absolute Rate Bid Loans; and
4. Interest Period[s] and requested Interest Payment Dates, if any:
[____________________], [________________] and [_______________].
All Competitive Bids shall be in the form of Exhibit H to the 364-Day
Credit Agreement and shall be received by the Agent no later than 7:30 a.m. (San
Francisco time) on ___________, 2000; provided that terms of the offer or offers
contained in any Competitive Bid(s) to be submitted by the Agent (or any
Affiliate of the Agent) in the capacity of a Bid Loan Bank or Designated Bidder
shall be notified to the Company not later than 7:15 a.m. (San Francisco time)
on ___________.
BANK OF AMERICA, N.A., as Agent
By:
Title:
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ANNEX A
to the Invitation for Competitive Bids
List of Bid Loan Banks and Designated Bidders
[Bank]
Facsimile: (415) 622-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
[Bank]
Facsimile: (___) ___-____
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EXHIBIT G
FORM OF COMPETITIVE BID REQUEST
Date: _______________
To: Bank of America, N.A.,
as Agent
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of March 22, 2000
(as extended, renewed, amended or restated from time to time, the "364-Day
Credit Agreement"), among Albertson's, Inc. (the "Company"), the Banks party
thereto, the Co-Agents party thereto, and Bank of America, N.A., as Agent for
the Banks (the "Agent"). Capitalized terms used herein have the meanings
specified in the 364-Day Credit Agreement.
This is a Competitive Bid Request for Bid Loans pursuant to Section
2.06 of the 364-Day Credit Agreement as follows:
(i) The Business Day of the proposed Bid Borrowing is: ______________.
(ii) The aggregate amount of the proposed Bid Borrowing is: $_____________.
(iii) The proposed Bid Borrowing to be made pursuant to Section 2.06 shall be
comprised of Absolute Rate Bid Loans.
(iv) The Interest Period[s] and Interest Payment Dates, if any, for the Bid
Loans comprised in the Bid Borrowing shall be: _______________,
[_________________] and [___________________].
[The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed Bid
Borrowing, before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) the representations and warranties of the Company contained in Article
V of the 364-Day Credit Agreement are true and correct as though made
on and as of such date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they are
true and correct as of such date and except that this notice shall be
deemed instead to refer to the last day of the most recent quarter and
year for which financial statements have then been delivered in respect
of the representation and warranty made in Section 5.10(a) of the
364-Day Credit Agreement);
(b) no Default or Event of Default has occurred and is continuing, or
would result from such proposed Bid Borrowing; and
G-1
<PAGE>
(c) after giving effect to the Bid Borrowing requested hereby the
outstanding aggregate principal amount of all Bid Loans made by all Bid
Loan Banks and Designated Bidders, plus the outstanding aggregate
principal amount of all Committed Loans made by all Banks, will not
exceed the Aggregate Commitment.
ALBERTSON'S, INC.
By: ______________________________
Title: _____________________________
G-2
<PAGE>
EXHIBIT H
FORM OF COMPETITIVE BID
Date: _______________
To: Bank of America, N.A.,
as Agent
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of March 22, 2000
(as extended, renewed, amended or restated from time to time, the "364-Day
Credit Agreement"), among Albertson's, Inc. (the "Company"), the Banks party
thereto, the Co-Agents party thereto, and Bank of America, N.A., as Agent for
the Banks (the "Agent"). Capitalized terms used herein have the meanings
specified in the 364-Day Credit Agreement.
In response to the Competitive Bid Request of the Company dated
___________ and in accordance with subsection 2.06(c)(ii) of the 364-Day Credit
Agreement, the undersigned [Bank] [Designated Bidder] offers to make Bid Loan[s]
thereunder in the following principal amounts[s], at the following interest
rates and for the following Interest Period[s], with Interest Payment Dates as
specified by the Company:
Date of Bid Borrowing: _____________________
Aggregate Maximum Bid Amount: $________________
Offer 1 (Maximum Bid Amount: $________________)
Principal Amount $______ Principal Amount $______ Principal Amount $______
Interest: Interest: Interest:
[Absolute Rate __%] [Absolute Rate __%] [Absolute Rate __%]
Interest Period ________ Interest Period ________ Interest Period ________
Offer 2 (Maximum Bid Amount: $________________)
Principal Amount $______ Principal Amount $______ Principal Amount $______
H-1
<PAGE>
Interest: Interest: Interest:
[Absolute Rate __%] [Absolute Rate __%] [Absolute Rate __%]
Interest Period ________ Interest Period ________ Interest Period ________
Principal Amount $______ Principal Amount $______ Principal Amount $______
Interest: Interest: Interest:
[Absolute Rate __%] [Absolute Rate __%] [Absolute Rate __%]
Interest Period ________ Interest Period ________ Interest Period ________
[NAME OF BANK/DESIGNATED BIDDER]
By: _____________________
Title: __________________
H-2
<PAGE>
EXHIBIT I
FORM OF COMMITTED LOAN NOTE
U.S. $___________________ Date: _______________
FOR VALUE RECEIVED, the undersigned, Albertson's, Inc., a Delaware
corporation (the "Company"), hereby promises to pay to the order of
_________________________ (the "Bank") the principal sum of ___________________
Dollars ($_____________) or, if less, the aggregate unpaid principal amount of
all Committed Loans made by the Bank to the Company pursuant to the Credit
Agreement, dated as of March 22, 2000 (as amended, restated, supplemented or
otherwise modified from time to time, the "364-Day Credit Agreement"), among the
Company, the Bank, the other financial institutions from time to time party
thereto (the "Banks"), the Documentation Agent and the Syndication Agent party
thereto, and Bank of America, N.A., as Agent for the Banks (the "Agent"), on the
dates and in the amounts provided in the 364-Day Credit Agreement. The Company
further promises to pay interest on the unpaid principal amount of the Committed
Loans evidenced hereby from time to time at the rates, on the dates, and
otherwise as provided in the 364-Day Credit Agreement.
The Bank is authorized to endorse the amount of each Committed Loan,
the date on which each Committed Loan is made, and each payment of principal
with respect thereto on the schedule annexed hereto and made a part hereof, or
on continuations thereof which shall be attached hereto and made a part hereof;
provided that any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect any obligation of the
Company under the 364-Day Credit Agreement and this Promissory Note (this
"Note").
This Note is one of the Committed Loan Notes referred to in, and is
entitled to the benefits of, the 364-Day Credit Agreement, which 364-Day Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
Terms defined in the 364-Day Credit Agreement are used herein with
their defined meanings therein unless otherwise defined herein.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
ALBERTSON'S, INC.
By:
Title:
I-1
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE
to Committed Loan Note
<S> <C> <C> <C>
Date Loan Disbursed Amount of Loan Principal Payment Date Principal Paid
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
- ------------------------------- -------------------------- ---------------------------- ----------------------------
</TABLE>
I-2
<PAGE>
EXHIBIT J
FORM OF BID LOAN NOTE
Date: ________________
FOR VALUE RECEIVED, the undersigned, Albertson's, Inc., a Delaware
corporation (the "Company"), hereby promises to pay to the order of
_________________________ (the "Bank") the aggregate unpaid principal amount of
all Bid Loans made by the Bank to the Company pursuant to the Credit Agreement,
dated as of March 22, 2000 (as amended, restated, supplemented or otherwise
modified from time to time, the "364-Day Credit Agreement"), among the Company,
the Bank, the other financial institutions from time to time party thereto (the
"Banks"), the Co-Agents party thereto, and Bank of America, N.A., as Agent for
the Banks (the "Agent"), on the dates and in the amounts provided in the 364-Day
Credit Agreement. The Company further promises to pay interest on the unpaid
principal amount of the Bid Loans evidenced hereby from time to time at the
rates, on the dates, and otherwise as provided in the 364-Day Credit Agreement.
The Bank is authorized to endorse the amount of and the date on which
each Bid Loan is made, the maturity date therefor and each payment of principal
with respect thereto on the schedules annexed hereto and made a part hereof, or
on continuations thereof which shall be attached hereto and made a part hereof;
provided that any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect any obligation of the
Company under the 364-Day Credit Agreement and this Promissory Note (this
"Note").
This Note is one of the Bid Loan Notes referred to in, and is entitled
to the benefits of, the 364-Day Credit Agreement, which 364-Day Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
Terms defined in the 364-Day Credit Agreement are used herein with
their defined meanings therein unless otherwise defined herein.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
ALBERTSON'S, INC.
By: ______________________________
Title: _____________________________
J-1
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE
to Bid Loan Note
<S> <C> <C> <C> <C>
Date Loan Disbursed Amount of Loan Maturity Date Principal Payment Date Principal Paid
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
</TABLE>
J-2
<PAGE>
EXHIBIT K
FORM OF DESIGNATION AGREEMENT
Dated ______________
Reference is made to the Credit Agreement dated as of March
22, 2000 (as extended, renewed, amended or restated from time to time, the
"364-Day Credit Agreement") among _______________________ (the Company"), the
Banks party thereto, the Co-Agents party thereto, and Bank of America, N.A., as
Agent for the Banks (the "Agent"). Capitalized terms used herein have the
meanings specified in the 364-Day Credit Agreement.
_________________ (the "Designator") and ___________________
the ("Designee") agree as follows:
1. The Designator hereby designates the Designee, and the Designee hereby
accepts such designation, to have a right to make Bid Loans pursuant to Section
2.06 of the 364-Day Credit Agreement.
2. The Designator makes no representation or warranty and assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the 364-Day Credit Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
364-Day Credit Agreement or any other instrument or document furnished pursuant
thereto or (ii) the financial condition of the Company or the performance or
observance by the Borrower of any of its obligations under the 364-Day Credit
Agreement or any other instrument or document furnished pursuant thereto.
3. The Designee (i) confirms that it has received a copy of the 364-Day Credit
Agreement, together with copies of the financial statements referred to in
Section 5.10 or Section 6.01 thereof and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Designation Agreement; (ii) agrees that it will, independently and
without reliance upon the Agent, the Designator or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the 364-Day Credit Agreement; (iii) confirms that it is an entity qualified to
be a Designated Bidder; (iv) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the 364-Day
Credit Agreement as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the 364-Day Credit Agreement are required to be performed by it as a
Designated Bidder; (vi) agrees to and accepts all duties, obligations and
responsibilities of a Bank set forth in Article IX of the 364-Day Credit
Agreement and confirms that said Article shall otherwise apply to the Designated
Bidder as if it were a Bank named therein; and (vii) specifies as its Lending
Office with respect to Bid Loans (and address for notices) the offices set forth
beneath its name on the signature page hereof.
4. Following the execution of this Designation Agreement by the Designator and
its Designee, it will be delivered to the Agent for acceptance by the Agent. The
K-1
<PAGE>
effective date of this Designation Agreement shall be the date of acceptance
thereof by the Agent (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of the Effective Date,
the Designee shall be a party to the 364-Day Credit Agreement as a "Designated
Bidder" with a right to make Bid Loans pursuant to Section 2.06 of the 364-Day
Credit Agreement and the rights and obligations of a Designated Bidder related
thereto.
6. THIS DESIGNATION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Designation Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
[NAME OF DESIGNATOR]
By:
Title:
[NAME OF DESIGNEE]
By:
Title:
Lending Office(s) (and address for notices):
Attn.:
Tel.:
Fax:
K-2
<PAGE>
Attn.:
Tel.:
Fax:
Accepted [as of] the ___ day of ____________, _______
BANK OF AMERICA, N.A., as Agent
By:
Title:
K-3
<PAGE>
EXHIBIT L
FORM OF COMMITMENT INCREASE AGREEMENT
Date: ___________________
Bank of America, N.A.,
as Agent and as a Bank
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of March 22, 2000 (as extended,
renewed, amended or restated from time to time, the "364-Day Credit Agreement")
among Albertson's, Inc. (the Company"), the Banks party thereto, the Co-Agents
party thereto, and Bank of America, N.A., as Agent for the Banks (the "Agent").
Terms defined in the 364-Day Credit Agreement are used herein as therein
defined.
This Commitment Increase Agreement is made and delivered pursuant to
Section 2.17 of the 364-Day Credit Agreement.
Subject to the terms and conditions of Section 2.17 of the 364-Day Credit
Agreement, _______________________________ (the "Increasing Bank") will increase
its Commitment to an amount equal to $___________, on the Increased Commitment
Date applicable to it. The Increasing Bank hereby confirms and agrees that with
effect on and after such Increased Commitment Date, the Commitment of the
Increasing Bank shall be increased to the amount set forth above, and the
Increasing Bank shall have all of the rights and be obligated to perform all of
the obligations of a Bank under the 364-Day Credit Agreement with a Commitment
in the amount set forth above.
Effective on the Increased Commitment Date applicable to it, the Increasing
Bank (i) accepts and assumes from the assigning Bank(s), without recourse, such
assignment of Loans as shall be necessary to effectuate the adjustments in the
Pro Rata Shares of the Banks contemplated by Section 2.17 of the 364-Day Credit
Agreement, and (ii) agrees to fund on such Increased Commitment Date such
assumed amounts to the Agent for the account of the assigning Bank(s) in
accordance with the provisions of the 364-Day Credit Agreement, in the amount
notified to the Increasing Bank by the Agent.
This Commitment Increase Agreement shall constitute a Loan Document under
the 364-Day Credit Agreement.
THIS COMMITMENT INCREASE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
L-1
<PAGE>
IN WITNESS WHEREOF, the Increasing Bank has caused this Commitment
Increase Agreement to be duly executed and delivered in _____________,
______________, by its proper and duly authorized officer as of the day and year
first above written.
[INCREASING BANK]
By: ___________________________
Title: ________________________
CONSENTED TO as of _________:
ALBERTSON'S, INC.
By:
Title:
ACKNOWLEDGED AND CONSENTED TO as of ____________:
BANK OF AMERICA, N.A.,
as Agent
By:
Title:
L-2
<PAGE>
EXHIBIT M
FORM OF NEW BANK AGREEMENT
Date: ___________________
Bank of America, N.A.
as Agent
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of March 22, 2000 (as
extended, renewed, amended or restated from time to time, the "364-Day Credit
Agreement") among Albertson's, Inc. (the Company"), the Banks party thereto, the
Co-Agents party thereto, and Bank of America, N.A., as Agent for the Banks (the
"Agent"). Terms defined in the 364-Day Credit Agreement are used herein as
therein defined.
This New Bank Agreement is made and delivered pursuant to Section 2.17
of the Credit Agreement.
Subject to the terms and conditions of Section 2.17 of the 364-Day
Credit Agreement, _________________________ (the "New Bank") will become a party
to the 364-Day Credit Agreement as a Bank, with a Commitment equal to
$___________, on the Increased Commitment Date applicable to it. The New Bank
hereby confirms and agrees that with effect on and after such Increased
Commitment Date, the New Bank shall be and become a party to the 364-Day Credit
Agreement as a Bank and have all of the rights and be obligated to perform all
of the obligations of a Bank thereunder with a Commitment in the amount set
forth above.
Effective on the Increased Commitment Date applicable to it, the New
Bank (i) accepts and assumes from the assigning Bank(s), without recourse, such
assignment of Loans as shall be necessary to effectuate the adjustments in the
Pro Rata Shares of the Banks contemplated by Section 2.17 of the 364-Day Credit
Agreement, and (ii) agrees to fund on such Increased Commitment Date such
assumed amounts to the Agent for the account of the assigning Bank(s) in
accordance with the provisions of the 364-Day Credit Agreement, in the amount
notified to the New Bank by the Agent.
The following administrative details apply to the New Bank:
(A) Lending Office(s):
Bank name:
Address:
M-1.
<PAGE>
Attention:
Telephone: ( )
------
Facsimile: ( )
------
Bank name:
Address:
Attention:
Telephone: ( )
------
Facsimile: ( )
------
(B) Notice Address:
Bank name:
Address:
Attention:
Telephone: ( )
------
Facsimile: ( )
------
M-2
<PAGE>
(C) Payment Instructions:
Account No.:
At:
Reference:
Attention:
This New Bank Agreement shall constitute a Loan Document under the
364-Day Credit Agreement.
THIS NEW BANK AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the New Bank has caused this New Bank Agreement to
be duly executed and delivered in _____________, ______________, by its proper
and duly authorized officer as of the day and year first above written.
[NEW BANK]
By: ___________________________
Title: ________________________
CONSENTED TO as of ___________:
ALBERTSON'S, INC.
By:
Title:
ACKNOWLEDGED AND CONSENTED TO as of _________:
M-3
<PAGE>
BANK OF AMERICA, N.A.,
as Agent
By:
Title:
M-4
EXHIBIT 13
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Dollars in millions, except per share data)
Business Combinations
On August 2, 1998, Albertson's, Inc. ("Albertson's" or the "Company") and
American Stores Company ("ASC") entered into a definitive merger agreement
("Merger Agreement") whereby Albertson's would acquire ASC by exchanging 0.63
share of Albertson's common stock for each outstanding share of ASC common
stock, with cash being paid in lieu of fractional shares (the "Merger") and ASC
would become a wholly owned subsidiary of Albertson's. In addition, outstanding
rights to receive ASC common stock under ASC stock option plans would be
converted into rights to receive equivalent Albertson's common stock.
The Merger was consummated on June 23, 1999, with the issuance of
approximately 177 million shares of Albertson's common stock. The Merger
constituted a tax-free reorganization and has been accounted for as a pooling of
interests for accounting and financial reporting purposes. The pooling of
interests method of accounting is intended to present as a single interest, two
or more common stockholders' interests that were previously independent;
accordingly, these consolidated financial statements restate the historical
financial statements as though the companies had always been combined. The
restated consolidated financial statements are adjusted to conform accounting
policies and financial statement presentations.
The following table compares amounts previously reported by Albertson's and
ASC prior to the Merger transaction and the combined amounts for fiscal 1998 and
1997:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
Albertson's ASC Combined
- -----------------------------------------------------------------
<S> <C> <C> <C>
1998:
Net revenues $ 16,005 $ 19,867 $ 35,872
Net earnings 567 234 801
1997:
Net revenues 14,690 19,138 33,828
Net earnings 517 280 797
</TABLE>
In connection with the Merger, the Company entered into agreements with the
Attorneys General of California, Nevada and New Mexico and the Federal Trade
Commission to enable the Merger to proceed under applicable antitrust,
competition and trade regulation law. The agreements required the Company to
divest a total of 117 stores in California, 19 stores in Nevada and 9 stores in
New Mexico. Of the stores required to be divested, 40 were ASC locations
operated primarily under the Lucky name, and 105 were Albertson's stores
operated primarily under the Albertson's name. In addition, the Company divested
four supermarket real estate sites as required by the agreements. The stores
identified for disposition had sales of $2,300 in fiscal 1998. The Company had
divested 144 of the required 145 stores as of February 3, 2000. Future growth
comparisons will be affected by these divestitures.
During 1998 the Company acquired the stock of three separate operating
companies representing 64 retail food and drug stores in transactions accounted
for using the purchase method of accounting. In accordance with an agreement
with the Federal Trade Commission, nine acquired stores and six previously owned
stores were divested. Reported results include these operations from the date of
consummation of the acquisition.
Page 1
<PAGE>
Results of Operations
Sales for 1999 (a 53-week year) were $37,478 compared to $35,872 in 1998 and
$33,828 in 1997. During fiscal 1999, ASC's fiscal year was converted from a
Saturday year end to a Thursday year end. The following table sets forth certain
income statement components expressed as a percent to sales and the year-to-year
percentage changes in the amounts of such components:
<TABLE>
<CAPTION>
Percent To Sales Percentage Change
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998
1999 1998 1997 vs. 1998 vs. 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales 100.00 100.00 100.00 4.5 6.0
Gross profit 27.52 27.08 26.63 6.2 7.9
Selling, general and
administrative expenses 23.06 21.87 21.67 10.1 7.0
Merger-related and
exit costs 1.06 0.54 0.04 n.m. n.m.
Litigation settlement 0.10 n.m.
Impairment - store closures 0.07 n.m. n.m.
Operating profit 3.31 4.60 4.92 (24.9) (0.8)
Interest expense, net 0.94 0.94 0.87 4.6 14.6
Earnings before
income taxes and
extraordinary item 2.40 3.73 3.99 (35.1) (0.9)
Net earnings 1.08 2.23 2.36 (49.5) 0.4
n.m. - not meaningful
</TABLE>
Sales for 1999 increased 5.4% when compared on a 52-week basis to the prior
year and excluding sales from divested stores from both years. Increases in
sales are primarily attributable to the continued development of new stores and
identical and comparable store sales increases. During 1999 the Company opened
or acquired 147 stores, remodeled 100 stores, and closed or sold 219 stores (144
of which were required divestitures). Net retail square footage decreased by
1.7%. This includes the effect of required divestitures, which reduced square
footage by 6.1 million square feet or 6.2% from the prior year. Net retail
square footage increased 7.8% in 1998. Identical store sales, stores that have
been in operation for two full fiscal years, increased 1.7% in 1999 and 0.5% in
1998. Comparable store sales, which include replacement stores, increased 2.1%
in 1999 and 1.2% in 1998. Identical and comparable store sales continued to
increase through higher average ticket sales per customer. Management estimates
that there was overall inflation in products the Company sells of approximately
0.2% in 1999 and overall deflation of 0.1% in 1998.
In addition to store development, the Company has increased sales through
implementation of best practices across the Company and its investment in
programs initiated in recent years which are designed to provide solutions to
customer needs. In 1999 and 1998, these programs included the Front End Manager
program; the home meal solutions process called "Quick Fixin' Ideas(R)"; special
destination categories; and increased emphasis on training programs utilizing
Computer Guided Training. To provide additional solutions to customer needs, in
1999 the Company added new gourmet-quality bakery products and organic grocery
and produce items. Other solutions include neighborhood marketing, targeted
advertising and exciting new and remodeled stores.
Gross profit, as a percent to sales, increased primarily as a result of
continued improvements made in retail stores, including improvements in
underperforming stores and improved sales mix of partially prepared, value-added
products. Gross profit improvements were also realized through the continued
utilization of Company distribution facilities and increased buying
efficiencies. The merger has created buying synergies and margin improvements
from the implementation of best practices across the Company. The pre-tax LIFO
adjustment, as a percent to sales, reduced gross margin by $30 (0.08%) in 1999,
$16 (0.04%) in 1998 and $12 (0.03%) in 1997.
Selling, general and administrative expenses, as a percent to sales,
increased in 1999 primarily due to integration costs associated with the Merger,
including activities associated with the banner change in California, Nevada and
New Mexico. The increase in 1998 over 1997 was primarily due to increased salary
and related benefit costs resulting from the Company's initiatives to increase
sales, increased depreciation expense associated with the Company's expansion
program and integration costs associated with the various 1998 acquisitions.
Page 2
<PAGE>
Results of operations for year ended February 3, 2000, include $683 of
merger-related costs ($529 after tax). The following table presents the pre-tax
costs incurred by category of expenditure and merger-related accruals included
in the Company's Consolidated Balance Sheet:
<TABLE>
<CAPTION>
Exit Merger Extraordinary Period
Costs Charge Loss Costs Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Severance costs $ 99 $ 8 $ 9 $ 116
Write-down of assets
to net realizable value 239 12 251
Transaction and financing costs $ 31 71 102
Integration costs 3 164 167
Stock option charge 47 47
- ------------------------------------------------------------------------------------------------------------------------------------
Total costs 338 58 31 256 683
Cash expenditures (75) (8) (31) (252) (366)
Write-down of assets
to net realizable value (237) (237)
Stock option charge (47) (47)
- ------------------------------------------------------------------------------------------------------------------------------------
Merger-related accruals
at February 3, 2000 $ 26 $ 3 $ 4 $ 33
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Severance costs consist of obligations to employees who were terminated or
were notified of termination under a plan authorized by senior management.
Approximately 625 employees will be severed as a result of the Merger, of which
499 were terminated as of February 3, 2000.
The write-down of assets to net realizable value includes the expected loss
on disposal of stores required to be divested and duplicate and abandoned
facilities, including administrative offices, intangibles and information
technology equipment which were abandoned by the Company or are being held for
sale. The estimated fair value of assets held for sale has been determined using
negotiated sales prices or independent appraisals.
Transaction and financing costs consist primarily of professional fees paid
for investment banking, legal, accounting, printing and regulatory filing fees.
Financing costs also include the extraordinary loss on extinguishment of debt.
Integration costs consist primarily of incremental transition and integration
costs associated with integrating the operations of Albertson's and ASC and are
being expensed as incurred.
The Company's stock option award plans contain provisions for automatic
vesting upon a change of control. Under ASC plans, option holders had the right
(limited stock appreciation right or LSAR), during an exercise period of up to
60 days after the occurrence of a change of control (but prior to consummation
of the Merger), to elect to surrender all or part of their options in exchange
for shares of Albertson's common stock having a value equal to the excess of the
change of control price over the exercise price. Certain stock option plans of
ASC defined change of control as the date of stockholder approval of the Merger.
Approval of the Merger Agreement on November 12, 1998, by ASC's stockholders
accelerated the vesting of 6.4 million equivalent stock options granted under
pre-1997 ASC plans and permitted the holders of these options to exercise LSARs.
The exercisability of the 6.4 million LSARs resulted in the Company recognizing
a pre-tax $195 merger-related stock option charge during 1998.
In the first quarter of 1999, a market price adjustment of $29 was recorded
as a reduction of merger-related costs to reflect a decline in the relevant
stock price at the end of the first fiscal quarter relative to LSARs. The actual
change of control price used to measure the value of these exercised LSARs
became determinable at the date the Merger was consummated and resulted in no
further adjustments. Upon Merger consummation, the change of control price was
$53.77 per share, resulting in the issuance of approximately 1.7 million
Albertson's shares.
LSARs relating to approximately 4.0 million equivalent stock options became
exercisable upon regulatory approval of the Merger, which resulted in
recognition of an additional charge of $76 in the second quarter of fiscal 1999.
This charge was based upon a change of control price of $56.96 per share, which
included an adjustment factor for the early termination of the LSAR feature. A
total of 0.8 million Albertson's shares were issued in satisfaction of those
options for which the LSAR feature was elected and the remaining options were
converted into options to acquire approximately 1.2 million Albertson's shares.
Page 3
<PAGE>
The Company recorded a $37 pre-tax one-time charge to earnings during the
third quarter of 1999 resulting from an agreement in principle reached to settle
eight purported multi-state cases combined in the United States District Court
in Boise, Idaho, which raised various issues including "off-the-clock" work
allegations. The proposed settlement is subject to court approval. Under the
proposed settlement agreement, current and former employees who meet eligibility
criteria may present their claims to a settlement administrator. While the
Company cannot specify the exact number of individuals who are likely to submit
claims and the exact amount of their claims, the one-time charge is the
Company's current estimate of the total monetary liability, including attorney
fees, for all eight cases.
The Company recorded an impairment charge to earnings during 1998 related to
management's decision to close 16 underperforming stores in eight states. The
$24 pre-tax charge included impaired real estate and equipment, as well as the
present value of remaining liabilities under leases, net of expected sublease
recoveries.
Results of operations for 1997 included a pre-tax charge of $34 related to
the sale of stock by a major stockholder and pre-tax charges of $13 related to
the sale of a division of ASC's communication subsidiary.
The Company's effective income tax rate from continuing operations for 1999
was 52.5%, as compared to 40.2% for 1998 and 41.0% for 1997. The increase for
1999 is primarily due to the non-deductible portion of merger-related costs.
Due to the significance of the merger-related costs and other one-time
expenses and their effect on operating results, the following table is presented
to assist in the comparison of income statement components without these costs
and expenses:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
53 Weeks Ended 52 Weeks Ended 52 Weeks Ended
February 3, 2000 January 28, 1999 January 29, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
As Reported One-Time W/O One-Time W/O One-Time W/O One-Time
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $ 37,478 $ 37,478 100.00% $ 35,872 100.00% $ 33,828 100.00%
Cost of sales 27,164 $ (42) 27,122 72.37 26,156 72.92 24,821 73.37
- ------------------------------------------------------------------------------------------------------------------------------------
Gross profit 10,314 42 10,356 27.63 9,716 27.08 9,007 26.63
Selling,
general and
administrative
expense 8,641 (214) 8,427 22.49 7,845 21.87 7,330 21.67
Merger-related
and exit costs 396 (396)
Litigation
settlement 37 (37)
- ------------------------------------------------------------------------------------------------------------------------------------
Operating profit 1,240 689 1,929 5.15 1,871 5.22 1,677 4.96
Interest expense,
net (353) 1 (352) (0.94) (337) (0.94) (294) (0.87)
Other income, net 12 12 0.03 24 0.07 14 0.04
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings before
income taxes and
extraordinary item 899 690 1,589 4.24 1,558 4.34 1,397 4.13
Income taxes 472 162 634 1.69 609 1.70 559 1.66
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings before
extraordinary item 427 528 955 2.55 949 2.65 838 2.48
Extraordinary loss
on extinguishment
of debt, net of
tax benefit of $7 (23) 23
- ------------------------------------------------------------------------------------------------------------------------------------
Net earnings $ 404 $ 551 $ 955 2.55% $ 949 2.65% $ 838 2.48%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4
<PAGE>
The costs of integrating the two companies have and will result in
significant non-recurring charges and incremental expenses. These costs had a
material effect on 1999 results of operations of the Company and may have a
significant effect on results of operations for the year 2000. The actual timing
of the costs is, in part, dependent upon the actual timing of certain
integration actions. Non-recurring charges and expenses of implementing
integration actions are estimated to total $700 after income tax benefits. The
cash portion of these charges is estimated at approximately $367. When reduced
by the cash received from the sale of the stores required to be divested and the
net proceeds from the sale of assets that will not be used in the combined
company, the net positive cash flow will be approximately $276.
The Company expects to incur additional after-tax merger-related costs of
approximately $157 in future periods, which consist primarily of expected
integration costs and costs associated with other consolidation activities for
which plans have not yet been finalized.
Liquidity and Capital Resources
Cash provided by operating activities during 1999 was $1,397, compared to $1,447
in 1998 and $1,815 in 1997. Cash provided by operating activities during 1999
was negatively impacted by $230 for merger-related after-tax expenditures (the
offsetting proceeds from divestitures is included with cash flow from investing
activities). These expenditures include severance, transaction financing and
integration costs. In addition, for fiscal 1999 a combination of increased
inventories and the reduction of accounts payable leverage negatively impacted
cash provided from operating activities. Fiscal 1998 cash provided from
operating activities decreased from 1997 primarily due to higher inventories and
the timing of cash payments related to insurance programs for workers'
compensation and general liability. The Company has implemented several
initiatives designed to enhance working capital which include reducing inventory
levels and increasing accounts payable leverage. These improvements are expected
to reduce the cash requirements of the business.
The Company's financing activities for 1999 included net new borrowings of
$441 and $265 for the payment of dividends (which represents 27.7% of 1999 net
earnings without merger-related costs and one-time expenses). The Board of
Directors at its March 2000 meeting increased the regular quarterly cash
dividend to $0.19 per share, for an annual rate of $0.76 per share.
The Company utilizes its commercial paper and bank line programs primarily to
supplement cash requirements for seasonal fluctuations in working capital and to
fund its capital expenditure program. Accordingly, commercial paper and bank
line borrowings will fluctuate between reporting periods. The Company had $1,628
of commercial paper borrowings outstanding at February 3, 2000.
Following the Merger, the Company consolidated several of the commercial
paper, bank lines and other financing arrangements. The consolidation of debt
included the repayment of ASC debt containing change of control provisions and
the tender for, or open market purchases of, certain higher coupon debt. At the
effective date of the Merger, approximately $900 of ASC's debt became due or
callable by the creditors due to change of control provisions, of which
approximately $700 was repaid, and a $200 term loan was amended to waive the
change of control provision.
In support of the Company's commercial paper program, the Company had two
credit facilities totaling $2,100 during fiscal 1999. Effective March 2000, the
Company entered into two new revolving credit agreements for $1,900. One
agreement expires in 364 days for $950 and the second agreement expires in 5
years for the remaining $950. At the expiration of the 364-day credit agreement
and upon due notice, the Company may extend the term for an additional 364-day
period if the lenders holding at least 75% of the commitments agree. The 364-day
agreement also contains an option which would allow the Company, upon due
notice, to convert any outstanding amounts at the expiration date to term loans.
The agreements contain certain covenants, the most restrictive of which requires
the Company to maintain consolidated tangible net worth, as defined, of at least
$2,100. In addition, the Company has uncommitted bank lines of credit totaling
$345 million. As of February 3, 2000, no amounts were outstanding under the
credit facilities or bank lines.
Albertson's filed a shelf registration statement with the Securities and
Exchange Commission (SEC), which became effective in February 1999 (the "1999
Registration Statement") to authorize the issuance of up to $2,500 in debt
securities. The Company intends to use the net proceeds of any securities sold
pursuant to the 1999 Registration Statement for retirement of debt and general
corporate purposes.
Page 5
<PAGE>
In July 1999, the Company issued $1,300 of term notes under the 1999
Registration Statement. The notes are composed of $300 of principal bearing
interest at 6.55% due August 1, 2004; $350 of principal bearing interest at
6.95% due August 1, 2009; and $650 of principal bearing interest at 7.45% due
August 1, 2029. Proceeds were used primarily to repay borrowings under the
Company's commercial paper program. Additional securities up to $1,200 remain
available for issuance under the Company's 1999 Registration Statement.
During 1998 Albertson's issued a total of $317 in medium-term notes under a
shelf registration statement filed with the SEC in December 1997. Under a shelf
registration statement filed with the SEC in May 1996, Albertson's issued $200
of medium-term notes in 1997. Proceeds from these issuances were used to reduce
borrowings under Albertson's commercial paper program.
On March 19, 1998, ASC issued $45 of 6.5% notes due March 20, 2008, under an
outstanding Series B Medium-Term Note Program. On March 30, 1998, ASC issued an
additional $100 of 7.1% notes due March 20, 2028, under the same program.
Proceeds were used to refinance short-term debt and for general corporate
purposes.
The Company's operating results continue to enhance its financial position
and ability to continue its planned expansion program. Cash flows from
operations and available borrowings are sufficient for the future operating and
capital needs of the Company.
The following leverage ratios demonstrate the Company's levels of long-term
financing as of the indicated year end:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Long-term debt and capitalized lease obligations to capital (1) 46.7% 48.1%
Long-term debt and capitalized lease obligations to total assets 31.8 33.8
</TABLE>
(1) Capital includes long-term debt, capitalized lease obligations and
stockholders' equity
The Company continues to retain ownership of real estate when possible. As of
February 3, 2000, the Company held title to the land and buildings of 39% of the
Company's stores and held title to the buildings on leased land of an additional
7% of the Company's stores. The Company also holds title to the land and
buildings of most of its administrative offices and distribution facilities.
The Company is committed to keeping its stores up to date. In the last three
years, the Company has opened or remodeled 796 stores representing 35% of the
Company's retail square footage as of February 3, 2000. The following summary of
historical capital expenditures includes capital leases, stores acquired in
business and asset acquisitions, assets acquired with related debt and the
estimated fair value of property financed by operating leases:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New and acquired stores $ 1,126 $ 1,146 $ 948
Remodels 296 299 216
Retail replacement equipment and technological upgrades 151 239 280
Distribution facilities and equipment 198 139 110
Other 97 50 105
- ------------------------------------------------------------------------------------------------------------------------------------
Total capital expenditures 1,868 1,873 1,659
Estimated fair value of property financed by operating leases 230 224 205
- ------------------------------------------------------------------------------------------------------------------------------------
$ 2,098 $ 2,097 $ 1,864
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Company's strong financial position provides the flexibility for the
Company to grow through its store development program and future acquisitions.
Page 6
<PAGE>
Recent Accounting Standards
In June 1998 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This new standard establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
This standard, as amended by SFAS No. 137, is effective for the Company's 2001
fiscal year. The Company has not yet completed its evaluation of this standard
or its impact on the Company's accounting and reporting requirements.
Quantitative and Qualitative Disclosures about Market Risk
The Company is exposed to certain market risks that are inherent in the
Company's financial instruments which arise from transactions entered into in
the normal course of business. From time to time, the Company enters into
derivative transactions. The objective of these derivative transactions is to
reduce the Company's exposure to changes in interest rates, and each transaction
is evaluated periodically by the Company for changes in market value and
counterparty credit exposure.
The Company is subject to interest rate risk on its fixed interest rate debt
obligations. Commercial paper borrowings do not give rise to significant
interest rate risk because these borrowings have maturities of less than three
months. Generally, the fair value of debt with a fixed interest rate will
increase as interest rates fall, and the fair value will decrease as interest
rates rise. The Company manages its exposure to interest rate risk by utilizing
a combination of fixed rate borrowings and commercial paper borrowings.
During 1997 ASC entered into a $300 five-year LIBOR basket swap. The LIBOR
basket swap agreement diversified the indices used to determine the interest
rate on a portion of ASC's variable rate debt by providing for payments based on
an average of foreign LIBOR indices which are reset every three months and also
provided for a maximum interest rate of 8.0%. The Company recognized no income
or expense in 1998 or 1997 related to this swap. During 1999 ASC terminated the
LIBOR basket swap and recognized a loss of $1.
There have been no material changes in the primary risk exposures or
management of the risks since the prior year. The Company expects to continue to
manage risks in accordance with the current policy.
The table below provides information about the Company's debt obligations
that are sensitive to changes in interest rates. For debt obligations, the table
presents principal cash flows and related weighted average interest rates by
expected maturity dates:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
There- Fair
2000 2001 2002 2003 2004 after Total Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Debt obligations
(excluding
commercial paper):
Fixed rate $ 395 $ 43 $ 105 $ 104 $ 504 $ 2,649 $ 3,800 $ 3,718
Weighted average
interest rate 6.7% 5.3% 10.4% 7.3% 6.6% 7.3% 7.2%
</TABLE>
Page 7
<PAGE>
Environmental
The Company has identified environmental contamination sites related
primarily to underground petroleum storage tanks and ground water contamination
at various store, warehouse, office and manufacturing facilities (related to
current operations as well as previously disposed of businesses). The Company
conducts an ongoing program for the inspection and evaluation of new sites
proposed to be acquired by the Company and the remediation/monitoring of
contamination at existing and previously owned sites. Undiscounted reserves have
been established for each environmental contamination site unless an unfavorable
outcome is remote. Although the ultimate outcome and expense of environmental
remediation is uncertain, the Company believes that required remediation and
continuing compliance with environmental laws, in excess of current reserves,
will not have a material adverse effect on the financial condition of the
Company. Charges against earnings for environmental remediation were not
material in 1999, 1998 or 1997.
Cautionary Statement for Purposes of "Safe Harbor Provisions" of the
Private Securities Litigation Reform Act of 1995 From time to time, information
provided by the Company, including written or oral statements made by its
representatives, may contain forward-looking information as defined in the
Private Securities Litigation Reform Act of 1995. All statements, other than
statements of historical facts, which address activities, events or developments
that the Company expects or anticipates will or may occur in the future,
including such things as integration of the ASC operations, expansion and growth
of the Company's business, future capital expenditures and the Company's
business strategy, contain forward-looking information. In reviewing such
information it should be kept in mind that actual results may differ materially
from those projected or suggested in such forward-looking information. This
forward-looking information is based on various factors and was derived
utilizing numerous assumptions. Many of these factors have previously been
identified in filings or statements made by or on behalf of the Company.
Important assumptions and other important factors that could cause actual
results to differ materially from those set forth in the forward-looking
information include changes in the general economy, changes in consumer
spending, competitive factors and other factors affecting the Company's business
in or beyond the Company's control. These factors include changes in the rate of
inflation, changes in state or federal legislation or regulation, adverse
determinations with respect to litigation or other claims (including
environmental matters), labor negotiations, the Company's ability to recruit and
develop associates, its ability to develop new stores or complete remodels as
rapidly as planned, its ability to implement new technology successfully,
stability of product costs and the Company's ability to integrate the operations
of ASC.
Other factors and assumptions not identified above could also cause the
actual results to differ materially from those set forth in the forward-looking
information. The Company does not undertake to update forward-looking
information contained herein or elsewhere to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
information.
Page 8
<PAGE>
<TABLE>
Consolidated Earnings
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
53 Weeks 52 Weeks 52 Weeks
February 3, January 28, January 29,
(In millions, except per share data) 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales $ 37,478 $ 35,872 $ 33,828
Cost of sales 27,164 26,156 24,821
- ------------------------------------------------------------------------------------------------------------------------------------
Gross profit 10,314 9,716 9,007
Selling, general and administrative expenses 8,641 7,846 7,330
Merger-related and exit costs 396 195 13
Litigation settlement 37
Impairment - store closures 24
- ------------------------------------------------------------------------------------------------------------------------------------
Operating profit 1,240 1,651 1,664
Other (expenses) income:
Interest, net (353) (337) (294)
Shareholder related expense (34)
Other, net 12 24 14
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes and extraordinary item 899 1,338 1,350
Income taxes 472 537 553
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings before extraordinary item 427 801 797
Extraordinary loss on extinguishment of debt,
net of tax benefit of $7 (23)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Earnings $ 404 $ 801 $ 797
- ------------------------------------------------------------------------------------------------------------------------------------
Basic Earnings Per Share:
Earnings before extraordinary item $ 1.01 $ 1.91 $ 1.89
Extraordinary item (.05)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Earnings $ 0.96 $ 1.91 $ 1.89
- ------------------------------------------------------------------------------------------------------------------------------------
Diluted Earnings Per Share:
Earnings before extraordinary item $ 1.00 $ 1.90 $ 1.88
Extraordinary item (.05)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Earnings $ 0.95 $ 1.90 $ 1.88
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Common Shares Outstanding:
Basic 422 419 422
Diluted 423 422 423
</TABLE>
See Notes to Consolidated Financial Statements
Page 9
<PAGE>
<TABLE>
Consolidated Balance Sheets
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
February 3, January 28,
(In millions, except per share data) 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 231 $ 116
Accounts and notes receivable, net 587 612
Inventories 3,481 3,249
Prepaid expenses 154 98
Property held for resale 100
Deferred income taxes 29 133
- ------------------------------------------------------------------------------------------------------------------------------------
Total Current Assets 4,582 4,208
Land, Buildings and Equipment, net 8,913 8,545
Goodwill, net 1,582 1,738
Other Assets 624 640
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 15,701 $ 15,131
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 2,132 $ 2,185
Salaries and related liabilities 555 512
Taxes other than income taxes 172 169
Income taxes 82 50
Self-insurance 184 173
Unearned income 110 101
Merger-related reserves 33
Current portion of capitalized lease obligations 19 18
Current maturities of long-term debt 623 50
Other 145 93
- ------------------------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 4,055 3,351
Long-Term Debt 4,805 4,905
Capitalized Lease Obligations 187 202
Self-Insurance 219 315
Deferred Income Taxes 52 208
Other Long-Term Liabilities and Deferred Credits 681 628
Commitments and Contingencies
Stockholders' Equity:
Preferred stock - $1.00 par value; authorized - 10 shares; designated - 3
shares of Series A Junior Participating; issued - none
Common stock - $1.00 par value; authorized - 1,200 shares;
issued - 424 shares and 435 shares, respectively 424 435
Capital in excess of par 145 579
Retained earnings 5,133 5,027
Treasury stock - 15 shares as of January 28, 1999 (519)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 5,702 5,522
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 15,701 $ 15,131
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements
Page 10
<PAGE>
<TABLE>
Consolidated Cash Flows
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
53 Weeks 52 Weeks 52 Weeks
February 3, January 28, January 29,
(In millions) 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 404 $ 801 $ 797
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 854 806 745
Goodwill amortization 58 57 53
Noncash merger-related charges 271 195
Impairment - store closures 24
Net (gain) loss on asset sales (2) (14) 6
Net deferred income taxes (52) (72) 4
Increase in cash surrender value of Company-owned life insurance (12) (23) (14)
Changes in operating assets and liabilities,
net of business acquisitions:
Receivables and prepaid expenses 45 (56) (105)
Inventories (233) (157) (96)
Accounts payable (53) 7 377
Other current liabilities 138 54 37
Self-insurance (85) (134) (14)
Unearned income 76 (12) 42
Other long-term liabilities (12) (29) (17)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 1,397 1,447 1,815
- ------------------------------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities:
Capital expenditures (1,837) (1,626) (1,632)
Proceeds from divestitures and duplicate assets 393
Proceeds from disposals of land, buildings and equipment 83 162 70
Business acquisitions, net of cash acquired (260)
Increase in other assets (115) (97) (138)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (1,476) (1,821) (1,700)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities:
Proceeds from long-term borrowings 1,841 462 734
Payments on long-term borrowings (970) (213) (179)
Net commercial paper activity and bank borrowings (430) 300 210
Proceeds from stock options exercised 32 66 50
Cash dividends paid (265) (263) (253)
Tax payments for options exercised (14)
Treasury stock purchases and retirements (18) (745)
Issuance of common stock 96
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 194 334 (87)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents 115 (40) 28
Cash and Cash Equivalents at Beginning of Year 116 156 128
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $ 231 $ 116 $ 156
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements
Page 11
<PAGE>
<TABLE>
Consolidated Stockholders' Equity
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Common Capital
Stock In Excess
$1.00 Par of Par Retained Treasury
(Dollars in millions) Value Value Earnings Stock Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 30, 1997 $ 439 $ 324 $ 4,145 $ (114) $ 4,794
Net earnings 797 797
Issuance of 1,041,010 shares of stock for
stock options, awards and Employee Stock
Purchase Plan (ESPP) 6 25 31
Exercise of stock options 3 3
Tax benefits related to stock options 4 4
Stock purchase incentive plan 10 10
Treasury stock purchases and retirements (4) (3) (185) (551) (743)
Shares related to directors' stock
compensation plan - 121,590 shares 4 4
Stock issuance - 2,912,094 shares 36 60 96
Dividends (255) (255)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at January 29, 1998 435 384 4,502 (580) 4,741
Net earnings 801 801
Issuance of 1,989,505 shares of stock for
stock options, awards and ESPP (11) 63 52
Merger-related stock option charge 195 195
Exercise of stock options 3 3
Tax benefits related to stock options 10 10
Treasury stock purchases and retirements (6) (10) (2) (18)
Stock purchase incentive plan 1 1
Shares related to directors' stock
compensation plan - 12,633 shares 3 3
Dividends (266) (266)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at January 28, 1999 435 579 5,027 (519) 5,522
Net earnings 404 404
Issuance of 131,099 shares of stock for
stock options and awards (1) 4 3
Merger-related stock option charge 47 47
Exercise of stock options 1 19 20
Tax benefits related to stock options 11 11
Treasury and fractional share retirements (14) (496) 510
Shares issued for limited stock
appreciation rights 2 (16) (14)
Stock purchase incentive plan 2 5 7
Dividends (298) (298)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at February 3, 2000 $ 424 $ 145 $ 5,133 $ 5,702
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements
Page 12
<PAGE>
Notes to Consolidated Financial Statements
(Dollars in millions, except per share data)
Basis of Presentation
On August 2, 1998, Albertson's, Inc. ("Albertson's" or the "Company") and
American Stores Company ("ASC") entered into a definitive merger agreement
("Merger Agreement") whereby Albertson's would acquire ASC by exchanging 0.63
share of Albertson's common stock for each outstanding share of ASC common
stock, with cash being paid in lieu of fractional shares (the "Merger") and ASC
would become a wholly owned subsidiary of Albertson's. In addition, outstanding
rights to receive ASC common stock under ASC stock option plans would be
converted into rights to receive equivalent Albertson's common stock.
The Merger was consummated on June 23, 1999, with the issuance of
approximately 177 million shares of Albertson's common stock. The Merger
constituted a tax-free reorganization and has been accounted for as a pooling of
interests for accounting and financial reporting purposes. The pooling of
interests method of accounting is intended to present as a single interest, two
or more common stockholders' interests that were previously independent;
accordingly, these consolidated financial statements restate the historical
financial statements as though the companies had always been combined. The
restated consolidated financial statements are adjusted to conform accounting
policies and financial statement presentations. There were no material
conforming adjustments.
The Company
The Company is incorporated under the laws of the State of Delaware and is the
successor to a business founded by J. A. Albertson in 1939. Based on sales, the
Company is the second largest retail food and drug chain in the United States.
As of February 3, 2000, the Company operated 2,492 stores in 37 Western,
Midwestern, Eastern and Southern states. Retail operations are supported by 21
major Company distribution operations, strategically located in the Company's
operating markets.
Summary of Significant Accounting Policies
Fiscal Year End The Company's fiscal year is generally 52 weeks and periodically
consists of 53 weeks because the fiscal year ends on the Thursday nearest to
January 31 (the Saturday nearest to January 31 for ASC during fiscal years 1998
and 1997). During fiscal 1999, ASC's fiscal year was converted from a Saturday
year end to a Thursday year end. Unless the context otherwise indicates,
reference to a fiscal year of the Company refers to the calendar year in which
such fiscal year commences.
Consolidation The consolidated financial statements include the results of
operations, account balances and cash flows of the Company and its subsidiaries.
All material intercompany balances have been eliminated.
Cash and Cash Equivalents The Company considers all highly liquid investments
with a maturity of three months or less at the time of purchase to be cash
equivalents. Investments, which consist of government-backed money market funds
and repurchase agreements backed by government securities, are recorded at cost
which approximates market value.
Inventories The Company values inventories at the lower of cost or market.
Cost of substantially all inventories is determined on a last-in, first-out
(LIFO) basis.
Capitalization, Depreciation and Amortization Land, buildings and equipment
are recorded at cost. Depreciation is provided on the straight-line method over
the estimated useful life of the asset. Estimated useful lives are generally as
follows: buildings and improvements--10 to 35 years; fixtures and equipment--3
to 10 years; leasehold improvements--10 to 25 years; and capitalized leases--20
to 30 years. Long-lived assets are reviewed for impairment whenever events or
changes in business circumstances indicate the carrying value of the assets may
not be recoverable.
The costs of major remodeling and improvements on leased stores are
capitalized as leasehold improvements. Leasehold improvements are amortized on
the straight-line method over the shorter of the life of the applicable lease or
the useful life of the asset. Capital leases are recorded at the lower of the
fair market value of the asset or the present value of future minimum lease
payments. These leases are amortized on the straight-line method over their
primary term.
Page 13
<PAGE>
Beneficial lease rights and lease liabilities are recorded on purchased
leases based on differences between contractual rents under the respective lease
agreements and prevailing market rents at the date of the acquisition of the
lease. Beneficial lease rights are amortized over the lease term using the
straight-line method. Lease liabilities are amortized over the lease term using
the interest method.
Goodwill Goodwill resulting from business acquisitions represents the excess
of cost over fair value of net assets acquired and is being amortized over 40
years using the straight-line method. Goodwill is principally from the
acquisition of Lucky Stores, Inc. in 1988. Accumulated amortization amounted to
$602 and $581 in 1999 and 1998, respectively. Periodically, the Company
re-evaluates goodwill and other intangibles based on undiscounted operating cash
flows whenever significant events or changes occur which might impair recovery
of recorded asset costs.
Self-Insurance The Company is partially self-insured for property loss,
workers' compensation and general liability costs. For ASC, beginning in fiscal
1998, insurance was purchased for workers' compensation, general liability and
automotive liability coverage. Self-insurance liabilities are based on claims
filed and estimates for claims incurred but not reported. These liabilities are
not discounted.
Unearned Income Unearned income consists primarily of buying and promotional
allowances received from vendors in connection with the Company's buying and
merchandising activities. These funds are recognized as revenue when earned by
purchasing amounts of product, promoting certain products or passage of time, as
specified in the related agreements.
Store Opening and Closing Costs Noncapital expenditures incurred in opening
new stores or remodeling existing stores are expensed in the year in which they
are incurred. When a store is closed, the remaining investment in land,
buildings and equipment, net of expected recovery value, is expensed. For
properties under operating lease agreements, the present value cost of any
remaining liability under the lease, net of expected sublease recovery, is also
expensed.
Advertising Advertising costs incurred to produce media advertising for major
new campaigns are expensed in the year in which the advertising first takes
place. Other advertising costs are expensed when incurred. Cooperative
advertising income from vendors is recorded in the period in which the related
expense is incurred. Gross advertising expenses of $583, $518 and $497 excluding
cooperative advertising income from vendors, were included with cost of sales in
the Company's Consolidated Earnings for 1999, 1998 and 1997, respectively.
Stock Options Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," encourages, but does not require,
companies to record compensation cost for stock-based employee compensation
plans at fair value. The Company has chosen to continue to account for
stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related Interpretations. Accordingly, compensation cost of stock
options is measured as the excess, if any, of the quoted market price of the
Company's stock at the date of the grant over the option exercise price and is
charged to operations over the vesting period. Income tax benefits attributable
to stock options exercised are credited to capital in excess of par value.
Company-owned Life Insurance The Company has purchased life insurance
policies to cover its obligations under certain deferred compensation plans for
officers and directors. Cash surrender values of these policies are adjusted for
fluctuations in the market value of underlying investments. The cash surrender
value is adjusted each reporting period and any gain or loss is included with
other income (expense) in the Company's Consolidated Earnings Statement.
Income Taxes The Company provides for deferred income taxes resulting from
temporary differences in reporting certain income and expense items for income
tax and financial accounting purposes. The major temporary differences and their
net effect are shown in the "Income Taxes" note. Amortization of goodwill is
generally not deductible for purposes of calculating income tax provisions.
Earnings Per Share (EPS) Basic EPS is computed by dividing consolidated net
earnings by the weighted average number of common shares outstanding. Diluted
EPS is computed by dividing consolidated net earnings by the sum of the weighted
average number of common shares outstanding and the weighted average number of
potential common shares outstanding. Potential common shares consist solely of
outstanding options under the Company's stock option plans. Outstanding options
excluded in 1999 and 1997 (option price exceeded the average market price during
the period) amounted to 3.5 million shares and 4.3 million shares, respectively.
There were no outstanding options excluded from the computation of potential
common shares in 1998. For purposes of the EPS calculation, all shares and
potential
Page 14
<PAGE>
common shares of ASC were converted at the 0.63 to 1 exchange ratio. In
connection with the Merger, certain options of ASC were exchanged for shares of
Albertson's based on the fair value of the options, including contractual
rights.
Reclassifications Certain reclassifications have been made in prior years'
financial statements to conform to classifications used in the current year.
Use of Estimates The preparation of the Company's consolidated financial
statements, in conformity with accounting principles generally accepted in the
United States of America, requires management to make estimates and assumptions.
These estimates and assumptions affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates.
Merger, Divestitures and Related Costs
The following table compares amounts previously reported by Albertson's and ASC
prior to the Merger transaction and the combined amounts for fiscal 1998 and
1997:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Albertson's ASC Combined
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1998:
Net revenues $ 16,005 $ 19,867 $ 35,872
Net earnings 567 234 801
1997:
Net revenues 14,690 19,138 33,828
Net earnings 517 280 797
</TABLE>
In connection with the Merger, the Company entered into agreements with the
Attorneys General of California, Nevada and New Mexico and the Federal Trade
Commission to enable the Merger to proceed under applicable antitrust,
competition and trade regulation law. The agreements required the Company to
divest a total of 117 stores in California, 19 stores in Nevada and 9 stores in
New Mexico. Of the stores required to be divested, 40 were ASC locations
operated primarily under the Lucky name, and 105 were Albertson's stores
operated primarily under the Albertson's name. In addition, the Company divested
four supermarket real estate sites as required by the agreements. The stores
identified for disposition had sales of $2,300 in fiscal 1998. The Company had
divested 144 of the required 145 stores as of February 3, 2000.
Results of operations for year ended February 3, 2000, include $683 of
merger-related costs ($529 after tax). The following table presents the pre-tax
costs incurred by category of expenditure and merger-related accruals included
in the Company's Consolidated Balance Sheet:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Exit Merger Extraordinary Period
Costs Charge Loss Costs Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Severance costs $ 99 $ 8 $ 9 $ 116
Write-down of assets to net
realizable value 239 12 251
Transaction and financing costs $ 31 71 102
Integration costs 3 164 167
Stock option charge 47 47
- ------------------------------------------------------------------------------------------------------------------------------------
Total costs 338 58 31 256 683
Cash expenditures (75) (8) (31) (252) (366)
Write-down of assets to net
realizable value (237) (237)
Stock option charge (47) (47)
- ------------------------------------------------------------------------------------------------------------------------------------
Merger-related accruals at
February 3, 2000 $ 26 $ 3 $ 4 $ 33
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 15
<PAGE>
Severance costs consist of obligations to employees who were terminated or
were notified of termination under a plan authorized by senior management.
Approximately 625 employees will be severed as a result of the Merger, of which
499 were terminated as of February 3, 2000.
The write-down of assets to net realizable value includes the expected loss
on disposal of stores required to be divested and duplicate and abandoned
facilities, including administrative offices, intangibles and information
technology equipment which were abandoned by the Company or are being held for
sale. The estimated fair value of assets held for sale has been determined using
negotiated sales prices or independent appraisals.
Transaction and financing costs consist primarily of professional fees paid
for investment banking, legal, accounting, printing and regulatory filing fees.
Financing costs also include the extraordinary loss on extinguishment of debt.
Integration costs consist primarily of incremental transition and integration
costs associated with integrating the operations of Albertson's and ASC and are
being expensed as incurred.
As discussed in the Stock Options and Stock Awards Note, the Company recorded
net pre-tax charges through the first two quarters of 1999 of $47 related to
limited stock appreciation rights (LSARs). The actual change of control price
used to measure the value of these exercised LSARs became determinable at the
date the Merger was consummated.
The costs of integrating the two companies have and will result in
significant non-recurring charges and incremental expenses. These costs have had
a material effect on 1999 results of operations of the Company and may have a
significant effect on results of operations for the year 2000. The actual timing
of the costs is, in part, dependent upon the actual timing of certain
integration actions. Non-recurring charges and expenses of implementing
integration actions are estimated to total $700 after income tax benefits. The
cash portion of these charges is estimated at approximately $367. When reduced
by the cash received from the sale of the stores required to be divested and the
net proceeds from the sale of assets that will not be used in the combined
company, the net positive cash flow will be approximately $276. The Company
expects to incur additional after-tax merger-related costs of approximately $157
in future periods, which consist primarily of expected integration costs and
costs associated with other consolidation activities for which plans have not
yet been finalized.
Supplemental Cash Flow Information
Selected cash payments and noncash activities were as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash payments for income taxes $ 520 $ 589 $ 547
Cash payments for interest, net of amounts capitalized 413 331 270
Noncash investing and financing activities:
Tax benefits related to stock options 11 10 4
Capitalized lease obligations incurred 24 25 27
Capitalized lease obligations terminated 14 6 2
Liabilities assumed in connection with asset acquisitions 7 2
</TABLE>
Business Acquisitions
During 1998, the Company acquired 64 stores in three separate stock purchase
acquisitions and 15 stores in an asset acquisition transaction. In connection
with one of the stock purchase acquisitions, the Company agreed with the Federal
Trade Commission to divest nine of the acquired stores and six previously owned
stores. These four acquisition transactions had a combined purchase price of
$302.
The above acquisitions were accounted for using the purchase method of
accounting. The results of operations of the acquired businesses have been
included in the consolidated financial statements from their date of
acquisition. Pro forma results of operations have not been presented due to the
immaterial effects of these acquisitions on the Company's consolidated
operations. For these acquisitions, the excess of the purchase price over the
fair market value of net assets acquired, of $151, was allocated to goodwill
which is being amortized over 40 years.
Page 16
<PAGE>
Accounts and Notes Receivable
Accounts and notes receivable consist of the following:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Trade and other accounts receivable $ 603 $ 620
Current portion of notes receivable 15 11
Allowance for doubtful accounts (31) (19)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 587 $ 612
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Inventories
Approximately 96% of the Company's inventories are valued using the last-in,
first-out (LIFO) method. If the first-in, first-out (FIFO) method had been used,
inventories would have been $615 and $585 higher at the end of 1999 and 1998,
respectively. Net earnings (basic and diluted earnings per share) would have
been higher by $18 ($0.04) in 1999, $10 ($0.02) in 1998 and $7 ($0.02) in 1997.
The replacement cost of inventories valued at LIFO approximates FIFO cost.
Land, Buildings and Equipment, net
Land, buildings and equipment, net, consist of the following:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Land $ 1,999 $ 1,878
Buildings 4,908 4,748
Fixtures and equipment 5,309 5,044
Leasehold improvements 1,456 1,301
Capitalized leases 328 350
- ------------------------------------------------------------------------------------------------------------------------------------
14,000 13,321
Accumulated depreciation and amortization (5,087) (4,776)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 8,913 $ 8,545
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 17
<PAGE>
Indebtedness
Long-term debt consists of the following (borrowings are unsecured unless
indicated):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial paper and bank lines of credit $ 1,628 $ 1,719
7.45% Debentures due August 1, 2029 650
6.95% Notes due August 1, 2009 350
6.55% Notes due August 1, 2004 300
Medium-term notes, due 2013 through 2028, average interest rate of 6.5% 317 317
Medium-term notes, due 2007 through 2027, average interest rate of 6.8% 200 200
7.75% Debentures due June 2026 200 200
6.375% Notes due June 2000 200 200
Medium-term notes due 2000, average interest rate of 6.1% 90 90
7.5% Debentures due 2037 200 200
8.0% Debentures due 2026 272 350
7.9% Debentures due 2017 95 100
7.4% Notes due 2005 200 200
Medium-term notes, due 2000 through 2028, average interest rate of 7.3% 295 295
9.125% Notes due 2002 80 249
Notes due 2004, average interest rates of 6.5% and 6.3%, respectively 200 200
Revolving credit facilities, effectively due 2002, average interest rate of 5.8% 325
Other bank borrowings due 2000, average interest rate of 6.6% 75
10.63% Notes, due 2004 93
Industrial revenue bonds, average interest rate of 6.1% 14 15
Secured mortgage notes and other notes payable,
average interest rates of 8.2% and 11.0%, respectively 137 127
- ------------------------------------------------------------------------------------------------------------------------------------
5,428 4,955
Current maturities (623) (50)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 4,805 $ 4,905
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Interest rates on the outstanding commercial paper borrowings as of February
3, 2000, ranged from 4.6% to 6.0% with an effective weighted average rate of
5.2%. The Company has established the necessary credit facilities, through its
revolving credit agreements, to refinance the commercial paper and bank line
borrowings on a long-term basis. The majority of these borrowings have been
classified as noncurrent because it is the Company's intent to refinance these
obligations on a long-term basis.
Following the Merger the Company consolidated several of the commercial
paper, bank lines and other financing arrangements. The consolidation of debt
included the repayment of outstanding amounts under ASC's revolving credit
facilities and other debt containing change of control provisions and the tender
for, or open market purchases of, certain higher coupon debt. As a result, the
following debt was extinguished:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Triggering Factor Amount Extinguished
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revolving Credit Facility Change of control $ 500
Bank borrowing due 2000 Change of control 75
10.63% Note due in 2004 Change of control 93
9.125% Notes due 2002 Tender offer 169
8.0% Debentures due 2026 Open market purchases 78
7.9% Debentures due 2017 Open market purchases 5
</TABLE>
Page 18
<PAGE>
In July 1999 the Company issued $500 million of floating rate notes. The
notes are due July 2000 and bear interest based on LIBOR commercial paper rates
that reset monthly. As of February 3, 2000, the interest rate was 5.8% on the
outstanding notes. These notes were issued under the Company's commercial paper
program.
The Company had two credit facilities totaling $2,100 during fiscal 1999. In
addition, the Company had uncommitted bank lines of credit totaling $345. No
borrowings were outstanding under either credit facility or bank lines as of
February 3, 2000.
Effective March 2000, the Company entered into two new revolving credit
agreements for $1,900. One agreement expires in 364 days for $950 and the second
agreement expires in 5 years for the remaining $950. At the expiration of the
364-day credit agreement and upon due notice, the Company may extend the term
for an additional 364-day period if lenders holding at least 75% of commitments
agree. The 364-day agreement also contains an option which would allow the
Company, upon due notice, to convert any outstanding amounts at the expiration
date to term loans. The agreements contain certain covenants, the most
restrictive of which requires the Company to maintain consolidated tangible net
worth, as defined, of at least $2,100.
Albertson's filed a shelf registration statement with the Securities and
Exchange Commission (SEC), which became effective in February 1999 (the "1999
Registration Statement") to authorize the issuance of up to $2,500 in debt
securities. The Company intends to use the net proceeds of any securities sold
pursuant to the 1999 Registration Statement for retirement of debt and general
corporate purposes.
In July 1999 the Company issued $1,300 of term notes under the 1999
Registration Statement. The notes are comprised of: $300 of principal bearing
interest at 6.55% due August 1, 2004; $350 of principal bearing interest at
6.95% due August 1, 2009; and $650 of principal bearing interest at 7.45% due
August 1, 2029. Proceeds were used primarily to repay borrowings under the
Company's commercial paper program. Additional securities up to $1,200 remain
available for issuance under the Company's 1999 Registration Statement.
In July 1999 the Company negotiated an amendment to a $200 term loan
agreement between ASC and a group of commercial banks. The amended fixed rate
loans carry interest based upon a pricing schedule (which averages 6.45%)
dependent upon the Company's long-term debt rating, and mature July 3, 2004.
During 1998 Albertson's issued a total of $317 in medium-term notes under a
$500 shelf registration statement filed with the SEC in December 1997. The
remaining authorization of $183 under the 1997 shelf registration statement was
rolled into the 1999 Registration Statement. Under a shelf registration
statement filed with the SEC in May 1996, Albertson's issued $200 of medium-term
notes in 1997. Proceeds from these issuances were used to reduce borrowings
under Albertson's commercial paper program.
On March 19, 1998, ASC issued $45 of 6.5% notes due March 20, 2008, under an
outstanding Series B Medium-term Note Program. On March 30, 1998, ASC issued an
additional $100 of 7.1% notes due March 20, 2028, under the same program.
Proceeds were used to refinance short-term debt and for general corporate
purposes.
The Company has pledged real estate with a cost of $11 as collateral for a
mortgage note which is payable semiannually, including interest at a rate of
16.5%. The note matures from 2000 to 2013.
Medium-term notes of $30 due July 2027 contain a put option which would
require the Company to repay the notes in July 2007 if the holder of the note so
elects by giving the Company a 60-day notice. Medium-term notes of $50 due April
2028 contain a put option which would require the Company to repay the notes in
April 2008 if the holder of the note so elects by giving the Company a 60-day
notice.
The $200 of 7.5% debentures due 2037 contain a put option which will require
the Company to repay the note in 2009 if the holder of the notes so elects by
giving the Company a 60-day notice.
Page 19
<PAGE>
Net interest expense was as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Debt $ 350 $ 322 $ 288
Capitalized leases 27 25 22
Capitalized interest (26) (17) (25)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest expense 351 330 285
Net bank service charges 2 7 9
- ------------------------------------------------------------------------------------------------------------------------------------
$ 353 $ 337 $ 294
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The scheduled aggregate maturities of long-term debt outstanding at February
3, 2000, are summarized as follows: $623 in 2000, $1,443 in 2001, $105 in 2002,
$104 in 2003, $504 in 2004 and $2,649 thereafter.
Capital Stock
On December 2, 1996, the Board of Directors adopted a stockholder rights plan,
which was amended on August 2, 1998, and March 16, 1999, under which all
stockholders receive one right for each share of common stock held. Each right
will entitle the holder to purchase, under certain circumstances, one
one-thousandth of a share of Series A Junior Participating Preferred Stock, par
value $1.00 per share, of the Company (the "preferred stock") at a price of 160
dollars. Subject to certain exceptions, the rights will become exercisable for
shares of preferred stock 10 business days (or such later date as may be
determined by the Board of Directors) following the commencement of a tender
offer or exchange offer that would result in a person or group beneficially
owning 15% or more of the outstanding shares of common stock.
Under the plan, subject to certain exceptions, if any person or group as
defined by the plan, becomes the beneficial owner of 15% or more of the
outstanding common stock or takes certain other actions, each right will then
entitle its holder as defined by the plan, other than such person or group, upon
payment of the 160 dollars exercise price, to purchase common stock (or, in
certain circumstances, cash, property or other securities of the Company) with a
value equal to twice the exercise price. The rights may be redeemed by the Board
of Directors at a price of $0.001 per right under certain circumstances. The
rights, which do not vote and are not entitled to dividends, will expire at the
close of business on March 21, 2007, unless earlier redeemed or extended by the
Board of Directors of the Company. In connection with the Merger, no person or
group became the beneficial owner of 15% or more of the common stock.
The Board of Directors adopted a program on March 2, 1998 which authorized
the Company to purchase and retire up to 5 million shares of its common stock.
On August 2, 1998, the Board of Directors rescinded the remaining authorization
in connection with the Merger.
On April 8, 1997, ASC (i) repurchased 15 million equivalent common shares
from its former chairman, certain of his family members and charitable trusts
(the "Selling Stockholders") for an aggregate price of $550 and (ii) sold 3
million equivalent common shares for net proceeds of $96 pursuant to the
exercise of an over-allotment option by the underwriters in connection with a
public offering of shares by the Selling Stockholders.
Page 20
<PAGE>
Income Taxes
Deferred tax assets and liabilities consist of the following:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets (no valuation allowance considered necessary):
Basis in fixed assets $ 123 $ 76
Self-insurance 174 199
Compensation and benefits 181 204
Unearned income 36 31
Other, net 140 127
- ------------------------------------------------------------------------------------------------------------------------------------
Total deferred tax assets 654 637
- ------------------------------------------------------------------------------------------------------------------------------------
Deferred tax liabilities:
Basis in fixed assets and capitalized leases (515) (564)
Inventories (105) (94)
Compensation and benefits (33) (30)
Other, net (24) (24)
- ------------------------------------------------------------------------------------------------------------------------------------
Total deferred tax liabilities (677) (712)
- ------------------------------------------------------------------------------------------------------------------------------------
Net deferred tax liability $ (23) $ (75)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As a result of an acquisition that occurred during 1998, the Company acquired
federal and state net operating loss carryforwards with a remaining balance of
$13 and $14, respectively, that will expire in various years through 2010. Based
on management's assessment, it is more likely than not that all of the deferred
tax assets associated with the net operating loss carryforwards will be
realized; therefore, no valuation allowance is considered necessary.
Income tax expense on continuing operations consists of the following:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $ 476 $ 537 $ 488
State 48 72 61
- ------------------------------------------------------------------------------------------------------------------------------------
524 609 549
- ------------------------------------------------------------------------------------------------------------------------------------
Deferred:
Federal (47) (63) 4
State (5) (9)
- ------------------------------------------------------------------------------------------------------------------------------------
(52) (72) 4
- ------------------------------------------------------------------------------------------------------------------------------------
$ 472 $ 537 $ 553
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 21
<PAGE>
The reconciliations between the federal statutory tax rate and the Company's
effective tax rates are as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 Percent 1998 Percent 1997 Percent
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Taxes computed at statutory rate $ 315 35.0 $ 468 35.0 $ 473 35.0
State income taxes net of federal
income tax benefit 28 3.2 51 3.8 53 3.9
Expenses for repurchase of
major stockholder's common stock 12 0.9
Goodwill amortization 22 2.4 22 1.6 21 1.6
Merger-related charges 115 12.8 15 1.1
Other (8) (0.9) (19) (1.3) (6) (0.4)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 472 52.5 $ 537 40.2 $ 553 41.0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Stock Options and Stock Awards
The Company's stock option plans provide for the grant of options to purchase
shares of common stock and stock awards. At February 3, 2000, Albertson's had
one stock option plan in effect under which grants could be made with respect to
30 million shares of the Company's common stock. Under this plan, approved by
the stockholders in 1998, options may be granted to officers and key employees
to purchase the Company's common stock. During 1999, the Company's stock option
plan was amended to, among other things, include the grant of options and other
awards to non-employee members of the Board of Directors. Generally, options are
granted with an exercise price at not less than 100% of the closing market price
on the date of the grant. The Company's options generally become exercisable in
installments of 20% per year on each of the first through fifth anniversaries of
the grant date and have a maximum term of 10 years. In connection with the
Merger, all outstanding options under prior Albertson's and ASC plans became
exercisable in accordance with the change of control provisions included in the
stock option plans and all outstanding ASC options were converted into a right
to acquire an equivalent number of Albertson's shares. No further options will
be granted under ASC plans. Additionally, all restrictions lapsed with respect
to all outstanding stock awards under the ASC stock award plans.
Variable Accounting Treatment for Option Plans
The Company's stock option award plans contain provisions for automatic vesting
upon a change of control. Under ASC plans, option holders had the right (limited
stock appreciation right or LSAR), during an exercise period of up to 60 days
after the occurrence of a change of control (but prior to consummation of the
Merger), to elect to surrender all or part of their options in exchange for
shares of Albertson's common stock having a value equal to the excess of the
change of control price over the exercise price. Certain stock option plans of
ASC defined change of control as the date of stockholder approval of the Merger.
Approval of the Merger Agreement on November 12, 1998, by ASC's stockholders
accelerated the vesting of 6.4 million equivalent stock options granted under
pre-1997 ASC plans and permitted the holders of these options to exercise LSARs.
The exercisability of the 6.4 million LSARs resulted in the Company recognizing
a pre-tax $195 merger-related stock option charge during 1998.
In the first quarter of 1999, a market price adjustment of $29 was recorded
as a reduction of merger-related costs to reflect a decline in the relevant
stock price at the end of the first fiscal quarter relative to LSARs. The actual
change of control price used to measure the value of these exercised LSARs
became determinable at the date the Merger was consummated and resulted in no
further adjustments. Upon Merger consummation, the change of control price was
$53.77 per share, resulting in the issuance of approximately 1.7 million
Albertson's shares.
LSARs relating to approximately 4.0 million equivalent stock options became
exercisable upon regulatory approval of the Merger, which resulted in
recognition of an additional charge of $76 in the second quarter of fiscal 1999.
This charge was based upon a change of control price of $56.96 per share, which
included an adjustment factor for the early termination of the LSAR feature. A
total of 0.8 million Albertson's shares were issued in satisfaction of those
options for which the LSAR feature was elected and the remaining options were
converted into options to acquire approximately 1.2 million Albertson's shares.
Page 22
<PAGE>
Stock Options
A summary of shares reserved for outstanding options as of the fiscal year end,
changes during the year and related weighted average exercise price is presented
below (shares in thousands, all ASC amounts included based upon the conversion
ratio of 0.63 to 1):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
February 3, 2000 January 28, 1999 January 29, 1998
---------------- ---------------- ----------------
Shares Price Shares Price Shares Price
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 9,989 $ 35.01 16,527 $ 32.74 7,856 $ 24.08
Granted 12,536 39.76 159 40.39 9,846 38.08
Exercised (3,907) 33.00 (5,858) 29.16 (782) 15.46
Forfeited (603) 39.43 (839) 32.11 (393) 28.09
- ------------------------------------------------------------------------------------------------------------------------------------
Outstanding at end of year 18,015 $ 38.34 9,989 $ 35.01 16,527 $ 32.74
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As of February 3, 2000, there were 14.5 million shares of Company common stock
reserved for the granting of additional options. The following table summarizes
options outstanding and options exercisable as of February 3, 2000, and the
related weighted average remaining contractual life (years) and weighted average
exercise price (shares in thousands):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
. Options Outstanding .. Options Exercisable .
--------------------------------------------------------------------------------
Shares Remaining Shares
Option Price per Share Outstanding Life Price Exercisable Price
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$13.44 to $22.63 421 1.8 $ 18.03 421 $ 18.03
24.32 to 33.25 8,493 8.9 30.28 1,596 29.31
35.00 to 45.94 3,576 6.7 40.08 3,576 40.08
47.00 to 51.19 5,525 9.4 51.15 47 47.00
- ------------------------------------------------------------------------------------------------------------------------------------
$13.44 to $51.19 18,015 8.4 $ 38.34 5,640 $ 35.44
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The weighted average fair value at date of grant for Albertson's options
granted during 1999 was $10.42 per option. Pre-merger Albertson's grants per
option were $17.14 and $15.26 for 1998 and 1997, respectively. Pre-merger ASC
grants per option were $11.86 and $11.58 for 1998 and 1997, respectively. The
fair value of options at date of grant was estimated using the Black-Scholes
model with the following weighted average assumptions:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 . 1998 .. 1997 .
-----------------------------------------------------------------
ABS ASC ABS ASC
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Expected life (years) 3.0 8.0 6.5 6.5 7.0
Risk-free interest rate 5.96% 5.74% 4.70% 5.92% 6.60%
Volatility 37.03 26.70 21.20 26.53 21.20
Dividend yield 1.81 1.48 1.80 1.41 1.80
</TABLE>
Page 23
<PAGE>
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." Had compensation cost been determined based on the fair value at
the grant date consistent with the provisions of this statement, the Company's
pro forma net earnings and earnings per share would have been as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net earnings:
As reported $ 404 $ 801 $ 797
Pro forma 375 914 782
Basic earnings per share:
As reported 0.96 1.91 1.89
Pro forma 0.89 2.16 1.85
Diluted earnings per share:
As reported 0.95 1.90 1.88
Pro forma 0.89 2.14 1.85
</TABLE>
The 1999 pro forma income of $375 resulted from net income of $404, less the
1999 pro forma after-tax compensation expense of $67 ($49 of which related to an
adjustment for the acceleration of unamortized compensation expense for the
stock options granted prior to 1999 which vested in connection with the Merger)
and the elimination of net merger-related after-tax stock option charges of $38
included with as reported net earnings. The 1998 pro forma net income of $914
resulted from reported net income of $801, less the 1998 pro forma after-tax
compensation expense of $19 and the elimination of the merger-related after-tax
stock option charge of $132 included with as reported net earnings. The pro
forma effect on net earnings is not representative of the pro forma effect on
net earnings in future years.
Former ASC Plans
The following ASC Plans were terminated in connection with the Merger on June
23, 1999.
Performance Incentive Program The 1998 Performance Incentive Program provided
certain of the ASC key executives an incentive award of shares of two-year
restricted stock if certain ASC performance objectives were attained for the
1998 fiscal year. Employee Stock Purchase Plan The ASC Employee Stock Purchase
Plan, which began January 1, 1996, enabled eligible employees of the Company to
subscribe for shares of common stock on quarterly offering dates at a purchase
price which was the lesser of 85% of the fair market value of the shares on the
first day or the last day of the quarterly offering period.
Employee Benefit Plans
Substantially all employees working over 20 hours per week are covered by
retirement plans. Union employees participate in multi-employer retirement plans
under collective bargaining agreements. The Company sponsors both defined
benefit and defined contribution plans.
The Albertson's Salaried Employees Pension Plan and Albertson's Employees
Corporate Pension Plan are funded, qualified, defined benefit, noncontributory
plans for eligible Albertson's employees who are 21 years of age with one or
more years of service and (with certain exceptions) are not covered by
collective bargaining agreements. Benefits paid to retirees are based upon age
at retirement, years of credited service and average compensation. The Company's
funding policy for these plans is to contribute the larger of the amount
required to fully fund the Plan's current liability or the amount necessary to
meet the funding requirements as defined by the Internal Revenue Code.
The Company also sponsors the Albertson's Savings and Retirement Estates
(ASRE) Plan (formerly the American Stores Retirement Estates Plan) which is a
defined contribution retirement plan. ASRE was originally authorized by the ASC
Board of Directors for the purpose of providing retirement benefits for
employees of ASC and its subsidiaries. During 1999, ASRE was authorized by
Albertson's Board of Directors to provide retirement benefits for all qualified
employees of the Company and its subsidiaries. In conjunction with the
authorization of ASRE, the Company-sponsored defined benefit plans were amended
to close the plans to future new entrants. Future accruals for participants in
the defined benefit plans are offset by the value of Company profit sharing
contributions to the new defined contribution plan.
Page 24
<PAGE>
The Company sponsors a tax-deferred savings plan which is a salary deferral
plan pursuant to Section 401(k) of the Internal Revenue Code. The plan covers
employees meeting age and service eligibility requirements, except those
represented by a labor union, unless the collective bargaining agreement
provides for participation. In addition, the Company provides a matching
contribution based on the amount of eligible compensation contributed by the
employee.
All Company contributions to ASRE and the Company sponsored 401(k) plan are
made at the discretion of the Board of Directors. The total amount contributed
by the Company is included with the ASRE defined contribution plan expense.
The Company also sponsors an unfunded Executive Pension Makeup Plan and an
Executive ASRE Makeup Plan. These plans are nonqualified and provide certain key
employees retirement benefits which supplement those provided by the Company's
other retirement plans.
Net periodic benefit cost for defined benefit plans is determined using
assumptions as of the beginning of each year. The projected benefit obligation
and related funded status is determined using assumptions as of the end of each
year. Assumptions used at the end of each year for the Company-sponsored defined
benefit pension plans were as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Weighted-average discount rate 7.50% 6.25% 6.60%
Annual salary increases 4.35-4.50 4.50-4.95 4.50-5.00
Expected long-term rate of return on assets 9.50 9.50 9.50
</TABLE>
Net periodic benefit cost for Company-sponsored defined benefit pension plans
was as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned during the period $ 45 $ 42 $ 27
Interest cost on projected benefit obligations 34 30 23
Expected return on assets (49) (42) (34)
Amortization of prior service cost 1 1
Recognized net actuarial loss 1 2
- ------------------------------------------------------------------------------------------------------------------------------------
$ 31 $ 33 $ 17
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 25
<PAGE>
The following table sets forth the funded status of the Company-sponsored
defined benefit pension plans:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Change in projected benefit obligation:
Beginning of year benefit obligation $ 547 $ 412
Service cost 45 42
Interest cost 34 30
Actuarial (gain) loss (105) 72
Amendments (88)
Benefits paid (10) (9)
- ------------------------------------------------------------------------------------------------------------------------------------
End of year benefit obligation 423 547
- ------------------------------------------------------------------------------------------------------------------------------------
Change in plan assets:
Plan assets at fair value at beginning of year 549 414
Actual return on plan assets 89 96
Employer contributions (return) (46) 48
Benefit payments (10) (9)
- ------------------------------------------------------------------------------------------------------------------------------------
Plan assets at fair value at end of year 582 549
- ------------------------------------------------------------------------------------------------------------------------------------
Funded status 159 2
Unrecognized net (gain) loss (100) 46
Unrecognized prior service cost (85) 4
Additional minimum liability (4)
- ------------------------------------------------------------------------------------------------------------------------------------
Net (accrued) prepaid pension cost $ (26) $ 48
- ------------------------------------------------------------------------------------------------------------------------------------
Prepaid pension cost included with other assets $ 8 $ 64
Accrued pension cost included with other long-term liabilities (34) (16)
- ------------------------------------------------------------------------------------------------------------------------------------
Net (accrued) prepaid pension cost $ (26) $ 48
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The following table summarizes the projected benefit obligation and the
accumulated benefit obligation of the unfunded Executive Pension Makeup Plan:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Projected benefit obligation $ 15 $ 19
Accumulated benefit obligation 13 16
Assets of the two funded Company defined benefit pension plans are invested
in directed trusts. Assets in the directed trusts are invested in common stocks
(including $33 and $68 of the Company's common stock at February 3, 2000 and
January 28, 1999, respectively), U.S. government obligations, corporate bonds,
international equity funds, real estate and money market funds.
</TABLE>
Page 26
<PAGE>
The Company also contributes to various plans under industrywide collective
bargaining agreements, primarily for defined benefit pension plans. Total
contributions to these plans were $98 for 1999, $100 for 1998, and $94 for 1997.
Retirement plans expense was as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Defined benefit pension plans $ 31 $ 33 $ 17
ASRE defined contribution plan 110 93 93
Multi-employer plans 98 100 94
- ------------------------------------------------------------------------------------------------------------------------------------
$ 239 $ 226 $ 204
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Most retired employees of the Company are eligible to remain in its health
and life insurance plans. Retirees who elect to remain in the
Albertson's-sponsored plans are charged a premium which is equal to the
difference between the estimated costs of the benefits for the retiree group and
a fixed contribution amount made by the Company. The Company also provides
certain health care benefits to eligible ASC retirees of certain defined
employee groups under two unfunded plans, a defined dollar and a full coverage
plan. The net periodic postretirement benefit cost was as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 3 $ 3 $ 2
Interest cost 4 5 5
Amortization of unrecognized gain (1) (1)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 6 $ 7 $ 7
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The following table sets forth the funded status of the Company-sponsored
postretirement health and life insurance benefit plans:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Change in accumulated benefit obligation:
Beginning of year benefit obligation $ 69 $ 71
Service cost 3 3
Interest cost 4 5
Plan participants' contributions 2 2
Actuarial gain (12) (6)
Benefits paid (4) (6)
- ------------------------------------------------------------------------------------------------------------------------------------
End of year benefit obligation 62 69
- ------------------------------------------------------------------------------------------------------------------------------------
Plan assets activity:
Employer contributions 2 4
Plan participants' contributions 2 2
Benefit payments (4) (6)
- ------------------------------------------------------------------------------------------------------------------------------------
Funded status (62) (69)
Unrecognized net gain (21) (15)
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued postretirement benefit obligations included with other
long-term liabilities $ (83) $ (84)
- ------------------------------------------------------------------------------------------------------------------------------------
Discount rates as of end of year 7.5% 6.25-7.0%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 27
<PAGE>
For measurement purposes, a 7% annual rate of increase in the per capita cost
of covered health care benefits was assumed for plans covering ASC retirees for
1999. For the full coverage plan, the rate was assumed to decrease to 6% for
2000 and remain at that level thereafter. For the ASC defined dollar plan, no
future increases in the subsidy level were assumed. Annual rates of increases in
health care costs are not applicable in the calculation of the Albertson's
benefit obligation because Albertson's contribution is a fixed amount per
participant.
With the exception of the plans covering ASC grandfathered retirees, all
postretirement plans are contributory, with participants' contributions adjusted
annually. The accounting for the health care plans anticipates that the Company
will not increase its contribution for health care benefits for
non-grandfathered retirees in future years.
Since the subsidy levels for the Albertson's and the ASC defined dollar plans
are fixed and the proportion of grandfathered ASC retirees is small, a health
care cost trend increase or decrease has no material impact on the accumulated
postretirement benefit obligation or the postretirement benefit expense.
Statement of Financial Accounting Standards No. 112, "Employers' Accounting
for Postemployment Benefits" requires employers to recognize an obligation for
benefits provided to former or inactive employees after employment but before
retirement. The Company is self-insured for certain of its employees' short-term
and long-term disability plans which are the primary benefits paid to inactive
employees prior to retirement. Following is a summary of the obligation for
postemployment benefits included in the Company's Consolidated Balance Sheets:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- --------------------------------------------------------------------------------
<S> <C> <C>
Included with salaries and related liabilities $ 11 $ 7
Included with other long-term liabilities 53 64
- --------------------------------------------------------------------------------
$ 64 $ 71
- --------------------------------------------------------------------------------
</TABLE>
The Company also contributes to various plans under industrywide collective
bargaining agreements which provide for health care benefits to both active
employees and retirees. Total contributions to these plans were $316 for 1999,
$270 for 1998, and $288 for 1997.
Employment Contracts
During 1994 and 1995 ASC entered into Key Executive Agreements with 17 of ASC's
key executive officers. Each agreement contained certain terms of employment and
provided the officers with a special long-range payout. Under change of control
provisions activated by the Merger, the executives became fully vested in the
benefits which have been fully accrued for as part of the severance costs as
discussed in the Merger, Divestitures and Related Costs Note.
Leases
The Company leases a portion of its real estate. The typical lease period is
20 to 30 years and most leases contain renewal options. Exercise of such options
is dependent on the level of business conducted at the location. In addition,
the Company leases certain equipment. Some leases contain contingent rental
provisions based on sales volume at retail stores or miles traveled for trucks.
Capitalized leases are calculated using interest rates appropriate at the
inception of each lease. Following is an analysis of the Company's assets under
capitalized leases:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- ------------------------------------------------------------------------------
<S> <C> <C>
Real estate and equipment $ 328 $ 350
Accumulated amortization (160) (170)
- ------------------------------------------------------------------------------
$ 168 $ 180
- ------------------------------------------------------------------------------
</TABLE>
Page 28
<PAGE>
Future minimum lease payments for noncancelable operating leases which
exclude the amortization of acquisition-related fair value adjustments, related
subleases and capital leases at February 3, 2000, were as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Operating Capital
Leases Subleases Leases
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2000 $ 307 $ (60) $ 42
2001 292 (66) 39
2002 272 (61) 30
2003 254 (36) 28
2004 243 (17) 27
Remainder 2,059 (122) 295
- ------------------------------------------------------------------------------------------
Total minimum obligations (receivables) $ 3,427 $ (362) 461
- ------------------------------------------------------------------------------------------
Interest (255)
- ------------------------------------------------------------------------------------------
Present value of net minimum obligations 206
Current portion (19)
- ------------------------------------------------------------------------------------------
Long-term obligations at February 3, 2000 $ 187
- ------------------------------------------------------------------------------------------
</TABLE>
The Company is contingently liable as a guarantor of certain leases that were
assigned to third parties in connection with various store closures and
dispositions. The Company believes the likelihood of a significant loss from
these agreements is remote because of the wide dispersion among third parties
and remedies available to the Company should the primary party fail to perform
under the agreements.
Rent expense under operating leases, excluding the amortization of
acquisition-related fair value adjustments of $14 in 1999, 1998 and 1997, was as
follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1999 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Minimum rent $ 330 $ 309 $ 288
Contingent rent 29 25 26
- --------------------------------------------------------------------------------
359 334 314
Sublease rent (58) (60) (48)
- --------------------------------------------------------------------------------
$ 301 $ 274 $ 266
- --------------------------------------------------------------------------------
</TABLE>
Financial Instruments
Financial instruments which potentially subject the Company to concentration of
credit risk consist principally of cash equivalents and receivables. The Company
limits the amount of credit exposure to each individual financial institution
and places its temporary cash into investments of high credit quality.
Concentrations of credit risk with respect to receivables are limited due to
their dispersion across various companies and geographies.
The estimated fair values of cash and cash equivalents, accounts receivable,
accounts payable, short-term debt and commercial paper borrowings approximate
their carrying amounts. Substantially all of the fair values were estimated
using quoted market prices. The estimated fair values and carrying amounts of
outstanding debt (excluding commercial paper) were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
February 3, January 28,
2000 1999
- --------------------------------------------------------------------------------
<S> <C> <C>
Fair value $ 3,718 $ 3,956
Carrying amount 3,800 3,628
</TABLE>
Page 29
<PAGE>
Environmental
The Company has identified environmental contamination sites related primarily
to underground petroleum storage tanks and ground water contamination at various
store, warehouse, office and manufacturing facilities (related to current
operations as well as previously disposed of businesses). The Company conducts
an ongoing program for the inspection and evaluation of new sites proposed to be
acquired by the Company and the remediation/monitoring of contamination at
existing and previously owned sites. Undiscounted reserves have been established
for each environmental contamination site unless an unfavorable outcome is
remote. Although the ultimate outcome and expense of environmental remediation
is uncertain, the Company believes that required remediation and continuing
compliance with environmental laws, in excess of current reserves, will not have
a material adverse effect on the financial condition of the Company. Charges
against earnings for environmental remediation were not material in 1999, 1998
or 1997.
Legal Proceedings
An agreement in principle has been reached to settle eight purported multi-state
cases combined in the United States District Court in Boise, Idaho, which raise
various issues including "off the clock" work allegations. The proposed
settlement is subject to court approval. Under the proposed settlement
agreement, current and former employees who met eligibility criteria may present
their claims to a settlement administrator. While the Company cannot specify the
exact number of individuals who are likely to submit claims and the exact amount
of their claims, the $37 pre-tax ($22 after tax) one-time charge recorded by the
Company in 1999 is the Company's current estimate of the total monetary
liability, including attorney fees, for all eight cases.
The Company is also involved in routine litigation incidental to operations.
The Company utilizes various methods of alternative dispute resolution,
including settlement discussions, to manage the costs and uncertainties inherent
in the litigation process. In the opinion of management, the ultimate resolution
of these legal proceedings will not have a material adverse effect on the
Company's financial condition.
Segment Information
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information," which
establishes annual and interim reporting standards for an enterprise's operating
segments and related disclosures about its products, services, geographic areas
and major customers. The Company has analyzed the reporting requirements of the
new standard and has determined that its operations are within a single
operating segment.
Recent Accounting Standard
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This new standard establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
This standard, as amended by SFAS No. 137, is effective for the Company's 2001
fiscal year. The Company has not yet completed its evaluation of this standard
or its impact on the Company's accounting and reporting requirements.
Page 30
<PAGE>
Responsibility for Financial Reporting
The management of Albertson's, Inc., is responsible for the preparation and
integrity of the consolidated financial statements of the Company. The
accompanying consolidated financial statements have been prepared by the
management of the Company, in accordance with accounting principles generally
accepted in the United States of America, using management's best estimates and
judgment where necessary. Financial information appearing throughout this Annual
Report is consistent with that in the consolidated financial statements.
To help fulfill its responsibility, management maintains a system of internal
controls designed to provide reasonable assurance that assets are safeguarded
against loss or unauthorized use and that transactions are executed in
accordance with management's authorizations and are reflected accurately in the
Company's records. The concept of reasonable assurance is based on the
recognition that the cost of maintaining a system of internal accounting
controls should not exceed benefits expected to be derived from the system. The
Company believes that its long-standing emphasis on the highest standards of
conduct and ethics, set forth in comprehensive written policies, serves to
reinforce its system of internal controls.
Deloitte & Touche LLP, independent auditors, audited the consolidated
financial statements in accordance with auditing standards generally accepted in
the United States of America to independently assess the fair presentation of
the Company's financial position, results of operations and cash flows.
The Audit Committee of the Board of Directors, composed entirely of outside
directors, oversees the fulfillment by management of its responsibilities over
financial controls and the preparation of financial statements. The Audit
Committee meets with internal and external auditors four times per year to
review audit plans and audit results. This provides internal and external
auditors direct access to the Board of Directors.
Management recognizes its responsibility to conduct the business of
Albertson's, Inc., in accordance with high ethical standards. This
responsibility is reflected in key policy statements that, among other things,
address potentially conflicting outside business interests of Company employees
and specify proper conduct of business activities. Ongoing communications and
review programs are designed to help ensure compliance with these policies.
/s/ Gary G. Michael /s/ A. Craig Olson
------------------------- ----------------------------
Gary G. Michael A. Craig Olson
Chairman of the Board and Executive Vice President and
Chief Executive Officer Chief Financial Officer
Page 31
<PAGE>
Independent Auditors' Report
The Board of Directors and Stockholders of Albertson's, Inc.:
We have audited the accompanying consolidated balance sheets of Albertson's,
Inc., and subsidiaries as of February 3, 2000 and January 28, 1999, and the
related consolidated statements of earnings, stockholders' equity, and cash
flows for each of the three years in the period ended February 3, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statements based on our
audits. The consolidated financial statements give retroactive effect to the
merger of Albertson's, Inc. and American Stores Company, which has been
accounted for as a pooling of interests as described in the Basis of
Presentation Note to the consolidated financial statements. We did not audit the
balance sheet of American Stores Company as of January 28, 1999, or the related
statements of earnings, stockholders' equity, and cash flows for each of the two
years in the period ended January 28, 1999, which statements reflect total
assets of approximately $8.9 billion as of January 28, 1999, and net earnings of
approximately $234 million and $280 million for the years ended January 28, 1999
and January 29, 1998, respectively. Those statements were audited by other
auditors whose report has been furnished to us, and our opinion, insofar as it
relates to the amounts included for American Stores Company for 1998 and 1997,
is based solely on the report of such other auditors.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report of
the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Albertson's, Inc., and subsidiaries
at February 3, 2000 and January 28, 1999, and the results of their operations
and their cash flows for each of the three years in the period ended February 3,
2000, in conformity with accounting principles generally accepted in the United
States of America.
/s/ Deloitte & Touche LLP
-------------------------
Deloitte & Touche LLP
Boise, Idaho
March 24, 2000
Page 32
<PAGE>
Independent Auditors' Report
Shareholders and Board of Directors of American Stores Company
We have audited the accompanying consolidated balance sheet of American Stores
Company and subsidiaries as of January 30, 1999 and the related consolidated
statements of earnings, shareholders' equity and cash flows for the years ended
January 30, 1999 and January 31, 1998 (not presented herein). These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of American Stores
Company and subsidiaries at January 30, 1999 and the consolidated results of
their operations and their cash flows for the years ended January 30, 1999 and
January 31, 1998 in conformity with accounting principles generally accepted in
the United States.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Salt Lake City, Utah
March 17, 1999
Page 33
<PAGE>
Five-Year Summary of Selected Financial Data
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in millions, except 53 weeks 52 weeks 52 weeks 52 weeks 52 weeks
per share data) February 3, January 28, January 29, January 30, February 1,
2000 1999 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating Results:
Sales $ 37,478 $ 35,872 $ 33,828 $ 32,455 $ 30,894
Earnings before extraordinary item 427 801 797 781 782
Extraordinary item (23)
Net earnings 404 801 797 781 782
Net earnings as a percent to sales 1.08% 2.23% 2.36% 2.41% 2.53%
Common Stock Data:
Earnings per share before extraordinary item:
Basic $ 1.01 $ 1.91 $ 1.89 $ 1.79 $ 1.78
Diluted 1.00 1.90 1.88 1.79 1.78
Extraordinary item:
Basic (0.05)
Diluted (0.05)
Earnings per share:
Basic 0.96 1.91 1.89 1.79 1.78
Diluted 0.95 1.90 1.88 1.79 1.78
Cash dividends per share:
Albertson's, Inc. 0.72 0.68 0.64 0.60 0.52
American Stores Company Equivalent 0.14 0.57 0.56 0.51 0.44
Financial Position:
Total assets $ 15,701 $ 15,131 $ 13,767 $ 12,608 $ 11,511
Long-term debt and capitalized
lease obligations 4,992 5,108 4,333 3,665 2,837
Other Year End Statistics:
Number of stores 2,492 2,564 2,435 2,355 2,261
</TABLE>
All fiscal years consist of 52 weeks, except for 1999 which is a 53-week
year, and fiscal 1995 which included 52 weeks of operations for Albertson's and
53 weeks of operations for ASC.
1999 operating results included pre-tax merger-related costs of $683 ($529
after tax or $1.25 per share), and a pre-tax charge of $37 ($22 after tax or
$0.05 per share) for a litigation settlement. Merger-related costs included
severance, the write-down of assets to net realizable value, transaction and
financing costs, integration costs and stock option charges.
During 1999 American Stores Company paid only one quarterly dividend due to
the consummation of the Merger.
1998 operating results included a pre-tax merger-related stock option charge
of $195 ($132 after tax or $0.31 per share) related to the exercisability of 6
million equivalent limited stock appreciation rights due to the approval by
ASC's stockholders of the Merger Agreement and a $24 pre-tax charge ($16 after
tax or $0.04 per share) related to management's decision to close 16
underperforming stores.
1997 operating results included pre-tax charges of $34 related to the sale of
stock by a major stockholder and pre-tax charges of $13 related to the sale of a
division of ASC's communications subsidiary (total of $41 after tax or $0.10 per
share).
1996 operating results included pre-tax charges of $100 ($60 after tax or
$0.14 per share) primarily related to ASC's re-engineering activities.
Page 34
<PAGE>
Quarterly Financial Data
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in millions,
except per share data - unaudited) First Second Third Fourth Year
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999
Sales $ 9,215 $ 9,381 $ 8,983 $ 9,899 $ 37,478
Gross profit 2,503 2,555 2,465 2,791 10,314
Operating profit (loss) 473 (75) 301 541 1,240
Net earnings (loss) 238 (228) 130 264 404
Earnings (loss) per share:
Basic 0.57 (0.54) 0.31 0.62 0.96
Diluted 0.56 (0.54) 0.31 0.62 0.95
- ------------------------------------------------------------------------------------------------------------------------------------
1998
Sales $ 8,721 $ 8,945 $ 8,838 $ 9,368 $ 35,872
Gross profit 2,298 2,395 2,412 2,611 9,716
Operating profit 365 443 448 395 1,651
Net earnings 176 217 219 189 801
Earnings per share:
Basic 0.42 0.52 0.52 0.45 1.91
Diluted 0.42 0.52 0.52 0.45 1.90
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
During 1999 all four quarters` operating results were affected by pre-tax
merger-related costs totaling $683 ($529 after tax). Merger-related costs
included severance, the write-down of assets to net realizable value,
transaction and financing costs, integration costs and stock option charges. The
third quarter included a pre-tax one-time charge of $37 ($22 after tax) for a
litigation settlement. The following table reflects the net earnings (loss) and
earnings per share (EPS) effect of these items.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
First Second Third Fourth Annual
Net EPS Net EPS Net EPS Net EPS Net EPS
Earnings Effect Loss Effect Loss Effect Loss Effect Loss Effect
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Merger-
related costs $ 15 $ 0.03 $ (464) $ (1.10) $ (34) $ (0.08) $ (46) $ (0.11) $ (529) $ (1.25)
Litigation
settlement (22) (0.05) (22) (0.05)
</TABLE>
Fourth quarter 1998 operating results included a pre-tax merger-related stock
option charge of $195 ($132 after tax or $0.31 per share) related to the
exercisability of 6 million equivalent limited stock appreciation rights due to
the approval by ASC's stockholders of the Merger Agreement. A $24 pre-tax charge
($16 after tax or $0.04 per share) was recorded in fiscal 1998 related to
management's decision to close 16 underperforming stores. An initial pre-tax
charge of $29 ($18 after tax or $0.04 per share) was recorded in the first
quarter and a pre-tax adjustment of $5 ($3 after tax or $0.01 per share) of
income was recorded in the fourth quarter.
The Company estimates the quarterly LIFO reserves, which cannot be accurately
determined until year end. The LIFO method of valuing inventories (decreased)
increased net earnings and EPS as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands
except per share data -Unaudited) First Second Third Fourth Year
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999
Net earnings $ (5,400) $ (5,400) $ (5,400) $ (1,772) $ (17,972)
Basic and diluted EPS (0.01) (0.01) (0.01) (0.01) (0.04)
- ------------------------------------------------------------------------------------------------------------------------------------
1998
Net earnings $ (7,846) $ (4,935) $ (6,159) $ 9,185 $ (9,755)
Basic and diluted EPS (0.02) (0.01) (0.01) 0.02 (0.02)
</TABLE>
Due to rounding and different periods used to compute weighted average
outstanding shares, the sum of the quarterly EPS does not equal the annual EPS.
Page 35
<PAGE>
Company Stock Information
The Company's stock is traded on the New York and Pacific stock exchanges under
the symbol ABS. The high and low stock prices by quarter were as follows:
<TABLE>
<CAPTION>
First Second Third Fourth Year
High Low High Low High Low High Low High Low
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999 61 15/16 49 1/16 56 15/16 48 9/16 52 1/4 37 38 5/16 29 61 15/16 29
1998 54 15/16 46 5/16 53 11/16 44 58 1/8 44 1/2 67 1/8 53 3/8 67 1/8 44
1997 37 30 1/2 38 11/16 31 7/8 37 3/4 32 3/4 48 5/8 36 5/16 48 5/8 30 1/2
</TABLE>
Cash dividends declared per share were:
<TABLE>
<CAPTION>
First Second Third Fourth Year
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.72
1998 0.17 0.17 0.17 0.17 0.68
1997 0.16 0.16 0.16 0.16 0.64
</TABLE>
In March 2000 the Board of Directors increased the regular quarterly cash
dividend 5.6% to $0.19 per share from $0.18 per share, for an annual rate of
$0.76 per share. The new quarterly rate will be paid on May 10, 2000, to
stockholders of record on April 14, 2000.
Page 36
Exhibit 21
ALBERTSON'S, INC.
PRINCIPAL SUBSIDIARIES
As Of February 3, 2000
<TABLE>
<CAPTION>
Subsidiary State of Incorporation
<S> <C>
American Stores Company DE
</TABLE>
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement No.
333-70967 on Form S-3 and Registration Statement Nos. 2-80776, 33-2139, 33-7901,
33-15062, 33-43635, 33-62799, 33-59803, 333-82157, 333-82161, and 333-87773 on
Form S-8 of Albertson's, Inc. and subsidiaries of our report dated March 24,
2000, incorporated by reference in the Annual Report on Form 10-K, of
Albertson's, Inc. and subsidiaries for the year ended February 3, 2000, to be
filed with the Securities and Exchange Commission on April 25, 2000.
/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP
Boise, Idaho
April 25, 2000
Exhibit 23.1
Independent Auditors' Consent
We consent to the incorporation by reference in the Registration Statements
(Form S-3 No. 333-70967 and related Prospectus and Forms S-8 No. 2-80776,
33-2139, 33-7901, 33-15062, 33-43635, 33-62799, 33-59803, 333-82157, 333-82161
and 333-87773) of Albertson's Inc. and subsidiaries of our report dated March
17, 1999 with respect to the consolidated financial statements of American
Stores Company, included in the Annual Report (Form 10-K) for the year ended
February 3, 2000 of Albertson's Inc. and subsidiaries filed with the Securities
and Exchange Commission.
/s/ Ernst & Young LLP
- ---------------------
Ernst & Young LLP
Salt Lake City, Utah
April 25, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM ALBERTSON'S
FINANCIAL STATEMENTS FOR THE 53 WEEKS ENDED FEBRUARY 3, 2000, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-03-2000
<PERIOD-START> JAN-29-1999
<PERIOD-END> FEB-03-2000
<CASH> 231
<SECURITIES> 0
<RECEIVABLES> 618
<ALLOWANCES> 31
<INVENTORY> 3,481
<CURRENT-ASSETS> 4,582
<PP&E> 13,999
<DEPRECIATION> 5,087
<TOTAL-ASSETS> 15,701
<CURRENT-LIABILITIES> 4,055
<BONDS> 4,992
0
0
<COMMON> 424
<OTHER-SE> 5,278
<TOTAL-LIABILITY-AND-EQUITY> 15,701
<SALES> 37,478
<TOTAL-REVENUES> 37,478
<CGS> 27,164
<TOTAL-COSTS> 27,164
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 353
<INCOME-PRETAX> 899
<INCOME-TAX> 472
<INCOME-CONTINUING> 427
<DISCONTINUED> 0
<EXTRAORDINARY> 23
<CHANGES> 0
<NET-INCOME> 404
<EPS-BASIC> 0.96
<EPS-DILUTED> 0.95
</TABLE>
