<PAGE>
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-80347
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 21, 1999)
$175,000,000
[LOGO]
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
9 3/8% SENIOR QUARTERLY INTEREST BONDS DUE 2039 (QUIBS)*
INTEREST PAYABLE ON FEBRUARY 1, MAY 1, AUGUST 1 AND NOVEMBER 1
-------------------
THE BONDS WILL MATURE ON AUGUST 1, 2039. WE WILL HAVE THE RIGHT TO REDEEM THE
BONDS IN CERTAIN CIRCUMSTANCES IF WE ARE UNABLE TO DEDUCT INTEREST PAID ON THE
BONDS. WE MAY ALSO REDEEM ANY OR ALL OF THE BONDS BEGINNING AUGUST 11, 2004 AT
100% OF THEIR PRINCIPAL AMOUNT PLUS ACCRUED INTEREST. YOU MAY PURCHASE BONDS IN
DENOMINATIONS OF $25 AND INTEGRAL MULTIPLES OF $25.
WE WILL APPLY TO LIST THE BONDS ON THE NEW YORK STOCK EXCHANGE. IF APPROVED FOR
LISTING, WE EXPECT TRADING OF THE BONDS TO COMMENCE WITHIN A 30-DAY PERIOD AFTER
INITIAL DELIVERY OF THE BONDS.
-------------------
PRICE 100% AND ACCRUED INTEREST, IF ANY
-------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND
PUBLIC COMMISSIONS PROCEEDS TO A&P
---------------- -------------- ----------------
<S> <C> <C> <C>
PER BOND..................................................... 100.00% 3.15% 96.85%
TOTAL........................................................ $175,000,000 $ 5,512,500 $ 169,487,500
</TABLE>
-------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
WE HAVE GRANTED THE UNDERWRITERS THE RIGHT TO PURCHASE UP TO AN ADDITIONAL
$25,000,000 AGGREGATE PRINCIPAL AMOUNT OF BONDS TO COVER OVERALLOTMENTS, IF ANY,
AT THE INITIAL OFFERING PRICE TO THE PUBLIC SET FORTH ABOVE WITHIN 30 DAYS FROM
THE DATE OF THIS PROSPECTUS SUPPLEMENT. THE UNDERWRITERS EXPECT TO DELIVER THE
BONDS TO PURCHASERS ON OR ABOUT AUGUST 11, 1999.
-------------------
*QUIBS IS A SERVICEMARK OF MORGAN STANLEY DEAN WITTER & CO.
-------------------
JOINT BOOK-RUNNING MANAGERS
MORGAN STANLEY DEAN WITTER SALOMON SMITH BARNEY
-----------------
DAIN RAUSCHER WESSELS EVEREN SECURITIES, INC.
A DIVISION OF DAIN RAUSCHER INCORPORATED
AUGUST 4, 1999
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. A&P AND
THE UNDERWRITERS HAVE NOT AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH
DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR INCONSISTENT
INFORMATION, YOU SHOULD NOT RELY ON IT. A&P AND THE UNDERWRITERS ARE NOT MAKING
AN OFFER TO SELL THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS
NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS ACCURATE AS OF THE DATE
ON THE FRONT OF THE DOCUMENTS ONLY. A&P'S BUSINESS, FINANCIAL CONDITION, RESULTS
OF OPERATIONS AND PROSPECTS MAY HAVE CHANGED SINCE THAT DATE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Forward-Looking Statements................................................................................. S-3
Capitalization............................................................................................. S-4
Use of Proceeds............................................................................................ S-4
Recent Developments........................................................................................ S-4
Business................................................................................................... S-5
Selected Financial Information............................................................................. S-6
Description of the Bonds................................................................................... S-8
United States Federal Income Tax Considerations............................................................ S-10
Underwriting............................................................................................... S-11
Legal Matters.............................................................................................. S-13
Experts.................................................................................................... S-13
PROSPECTUS
Where You Can Find More Information........................................................................ 1
Incorporation of Certain Documents by Reference............................................................ 2
The Company................................................................................................ 3
The Trusts................................................................................................. 3
Use of Proceeds............................................................................................ 4
Ratio of Earnings to Fixed Charges......................................................................... 4
Description of Common Stock................................................................................ 4
Description of Preferred Stock............................................................................. 6
Description of Depositary Shares........................................................................... 11
Description of Debt Securities............................................................................. 14
Description of Securities Warranties....................................................................... 22
Description of Preferred Trust Securities.................................................................. 25
Description of Preferred Trust Securities Guaranties....................................................... 25
Description of Junior SubordinatedDebt Securities.......................................................... 28
Relationship among the Preferred Trust Securities, the Junior Subordinated Debt Securities and the
Preferred Trust Securities Guaranties.................................................................... 30
Maryland Anti-Takeover Provisions.......................................................................... 31
Plan of Distribution....................................................................................... 32
Legal Matters.............................................................................................. 33
Experts.................................................................................................... 33
</TABLE>
S-2
<PAGE>
FORWARD-LOOKING STATEMENTS
Certain statements included or incorporated by reference in this prospectus
supplement and the accompanying prospectus constitute "forward-looking
statements." Such forward looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, levels of
activity, performance or achievements of A&P, or industry results, to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include:
- competitive practices and pricing in the food industry generally and
particularly in A&P's principal markets;
- A&P's relationships with its employees and the terms of future collective
bargaining agreements;
- the costs and other effects of legal and administrative cases and
proceedings;
- the nature and extent of continued consolidation in the food industry;
- changes in the financial markets which may affect A&P's cost of capital
and the ability of A&P to access the public debt and equity markets to
fund its capital expenditure program on satisfactory terms;
- supply or quality control problems with A&P's vendors;
- changes in economic conditions which affect the buying patterns of A&P's
customers; and
- the ability of A&P and its vendors, financial institutions and others to
resolve Year 2000 processing issues in a timely manner.
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CAPITALIZATION
The following table sets forth the actual capitalization of A&P as of June
19, 1999, as adjusted to reflect the proposed issuance of bonds offered hereby
assuming the underwriters do not exercise their right to purchase additional
bonds to cover over-allotments. The following data are qualified in their
entirety by reference to and, therefore, should be read together with the
detailed information and financial statements appearing herein and in the
documents incorporated herein by reference.
<TABLE>
<CAPTION>
AS OF JUNE 19, 1999
--------------------------
<S> <C> <C>
(UNAUDITED)
<CAPTION>
ACTUAL AS ADJUSTED
------------ ------------
DOLLARS IN THOUSANDS
<S> <C> <C>
Indebtedness:
Bank borrowings..................................................................... $ 83,000 $ --
Notes............................................................................... 572,892 572,892
9 3/8% Senior Quarterly Interest Bonds due 2039..................................... -- 175,000
Mortgages and other notes........................................................... 5,802 5,802
------------ ------------
Total indebtedness.............................................................. 661,694 753,694
------------ ------------
Shareholders equity:
Preferred stock--no par value; authorized 3,000,000 shares; issued--none............ -- --
Common stock--$1 par value; authorized--80,000,000 shares; issued and outstanding
38,324,966 shares................................................................. 38,325 38,325
Capital surplus..................................................................... 455,872 455,872
Accumulated other comprehensive loss................................................ (65,255) (65,255)
Retained earnings................................................................... 389,659 389,659
------------ ------------
Total shareholders' equity...................................................... 818,601 818,601
------------ ------------
Total capitalization.................................................................. $ 1,480,295 $ 1,572,295
------------ ------------
------------ ------------
</TABLE>
USE OF PROCEEDS
We will use the net proceeds we receive from the sale of the bonds,
estimated to be approximately $169.0 million ($193.2 million if the
underwriters' over-allotment option is exercised in full), to repay borrowings
under our revolving credit facility and for working capital and general
corporate purposes. Borrowings under our revolving credit facility mature on
June 10, 2002 and had a weighted average interest rate of 5.71% as of June 30,
1999.
RECENT DEVELOPMENTS
RECENT RESULTS OF OPERATIONS
For the sixteen week first quarter of fiscal 1999 ended June 19, 1999, we
reported sales of $3,113.7 million versus sales of $3,078.4 million the prior
year. Comparable store sales increased 5.3%.
For the first quarter of 1999, we recorded a net loss of $19.5 million or
$.51 per share, versus the prior year's net income of $19.2 million, or $.50 per
share. Excluding certain costs discussed below, in 1999 we would have had net
income of $19.1 million, or $.50 per share.
In December 1998, we announced a series of strategic initiatives designed to
improve operating and financial performance. These initiatives, which we are
calling "Project Great Renewal", included accelerating the new store opening and
Food Basics conversion programs, realigning distribution functions, closing
manufacturing facilities and exiting 132 underperforming stores. As stated in
the December 1998 announcement, during fiscal 1999 we are incurring various
non-accruable costs related to the strategic initiatives. In the first quarter
of fiscal 1999, we incurred pretax costs of $66 million related to the program,
which amount also includes the operating losses of the stores identified for
S-4
<PAGE>
closure, the cost of exiting the Atlanta market, and increased transitional
costs (estimated to be approximately $4 million) in our ongoing operations.
In the first quarter of fiscal 1999, we opened 10 new stores, and remodeled
or expanded 33 stores. As part of our ongoing store modernization program, in
addition to the exit program, we closed or replaced 12 smaller stores.
BUSINESS
We have been engaged in the retail food business since 1859. Based on
reported sales for fiscal 1998, we believe that as of the end of its 1998 fiscal
year we were one of the ten largest retail food chains in the United States and
that we had the largest market share in metropolitan New York and Detroit and
the second largest in the Province of Ontario. As of the end of our first
quarter ended June 19, 1999, we operated 759 stores averaging approximately
34,540 square feet per store. In addition, in fiscal 1995 we began franchising
certain stores in Canada under our Food Basics format, which focuses its appeal
toward the more price conscious consumer. At June 19, 1999 we had franchised 57
Food Basics stores in Canada.
We sell groceries, meats, fresh produce and other items commonly offered in
supermarkets, operating under the following trade names:
- - Super Fresh
- - Farmer Jack
- - Food Emporium
- - Super Food Mart
- - Dominion
- - Sav-A-Center
- - Kohl's
- - Waldbaum's
- - Ultra Mart
- - Food Basics
In addition, many stores have bakery, delicatessen, pharmacy, floral, fresh fish
and cheese departments, and on-site banking. National, regional and local brands
are sold as well as private label merchandise under brands which include
America's Choice, Master Choice, Health Pride, Savings Plus and The Farm. In
support of our retail operations, we also operate one coffee roasting plant in
the United States. Through our Compass Foods Division, we manufacture and
distribute a line of whole bean coffees under the Eight O'Clock, Bokar and
Royale labels, for sale through our own stores as well as other food and
convenience retailers.
Building upon a broad base of A&P supermarkets, we have expanded and
diversified within the retail food business through the acquisition of other
supermarket chains and the development of several alternative store types. We
now operate our stores with merchandise, pricing and identities tailored to
appeal to different segments of the market, including customers seeking gourmet
and ethnic foods, unusual produce, a wide variety of premium quality private
label goods and health and beauty aids along with the array of traditional
grocery products.
We are engaged in a continuing program of modernizing our operations and
retail stores. During fiscal 1998, we expended approximately $438 million for
capital projects which included 46 new supermarkets, 3 new Food Basics
franchised stores and 69 remodels or enlargements. Our plans for fiscal 1999
anticipate capital expenditures of approximately $500 million, which include the
opening of 55 new supermarkets and the remodeling or expansion of 75 stores. In
addition, we are developing plans to open approximately 65 new supermarkets in
fiscal 2000 and approximately 70 to 80 new supermarkets per year for several
years thereafter. Further, we expect to remodel or enlarge an average of 75
stores per year for the next several years.
As of May 1, 1999, we were 54.92% owned by Tengelmann
Warenhandelsgesellschaft, a general retailer headquartered in Germany which is
one of the largest food retailers in Europe. Our principal executive offices are
located at 2 Paragon Drive, Montvale, New Jersey 07645, telephone (201)
573-9700.
S-5
<PAGE>
SELECTED FINANCIAL INFORMATION
The following is a summary of certain consolidated financial information
relating to us. The consolidated statement of operations data set forth for each
of the three fiscal years ended February 27, 1999 and the consolidated balance
sheet data at February 28, 1998 and February 27, 1999 are derived from, and are
qualified by reference to, our audited consolidated financial statements
incorporated by reference in this prospectus. The consolidated statement of
operations data for each of the two fiscal years ended February 24, 1996 and the
consolidated balance sheet data at February 25, 1995, February 24, 1996 and
February 22, 1997 are derived from our audited consolidated financial statements
not included or incorporated by reference in this prospectus. The financial data
as of and for the 16 weeks ended June 20, 1998 and June 19, 1999 are derived
from our unaudited consolidated financial statements incorporated by reference
in this prospectus. This summary should be read in conjunction with the related
consolidated financial statements incorporated by reference in our Form 10-K for
the fiscal year ended February 27, 1999 and our Form 10-Q for the quarter ended
June 19, 1999 which is incorporated herein by reference.
<TABLE>
<CAPTION>
YEARS ENDED PERIODS ENDED
-------------------------------------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FEBRUARY 25, FEBRUARY 24, FEBRUARY 22, FEBRUARY 28, FEBRUARY 27, JUNE 20, JUNE 19,
1995 1996 1997 1998 1999 1998 1999
(52 WEEKS) (52 WEEKS) (52 WEEKS) (53 WEEKS) (52 WEEKS) (16 WEEKS) (16 WEEKS)
------------ ------------ ------------ ------------ ------------ ----------- -----------
<CAPTION>
DOLLARS IN THOUSANDS
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Sales......................... $10,331,950 $10,101,356 $10,089,014 $10,262,243 $10,179,358 $3,078,386 $3,113,722
Gross margin.................. 2,943,455 2,935,237 2,921,699 2,934,878 2,912,248 886,313 871,589
Income (loss) from
operations.................. (57,530)(1) 151,734 169,303 155,259 (164,391)(2) 44,231 (9,710)(2)
Interest expense.............. 72,972 73,143 73,208 80,152 71,497 21,032 24,394
Income (loss) before
cumulative effect and
extraordinary item.......... (166,586)(1) 57,224 73,032 63,586 (67,164)(2) 19,169 (19,546)(2)
Cumulative effect on prior
years of changes in
accounting principles:
Post employment benefits(3)... (4,950) -- -- -- -- -- --
Extraordinary item--loss on
extinguishment of debt(4)... -- -- -- (544) -- -- --
Net income (loss)(5).......... (171,536) 57,224 73,032 63,586 (67,164) 19,169 (19,546)
OTHER DATA:
Earnings before interest,
taxes, depreciation and
amortization
("EBITDA")(6)............... 348,914 377,183 400,051 389,495 295,479 116,425 73,210
Ratio of EBITDA to interest
expense..................... 4.8x 5.2x 5.5x 4.9x 4.1x 5.5x 3.0x
Ratio of total debt to
EBITDA(7)................... 2.5x 2.1x 2.2x 2.2x 2.9x 7.3x 10.7x
Ratio of earnings to fixed
charges(8).................. -- 1.64x 1.77x 1.58x -- 1.61x --
Deficiency in earnings
available to cover fixed
charges(9).................. 129,448 -- -- -- 229,284 -- 32,326
BALANCE SHEET DATA:
Total assets.................. 2,894,788 2,876,841 3,002,672 2,995,253 3,141,741 3,073,889 3,045,179
Working capital............... 97,277 178,307 215,374 262,097 89,974 254,189 42,834
Long-term debt................ 612,473 650,169 701,609 695,292 728,390 702,335 657,451
Non-current obligations under
capital leases.............. 146,400 129,887 137,886 120,890 115,864 115,815 113,526
Total debt(10)................ 886,186 806,221 870,493 845,389 860,692 848,185 786,889
Shareholders' equity.......... 774,914 822,785 890,072 926,632 837,257 936,075 818,601
</TABLE>
S-6
<PAGE>
- ------------------------
(1) During the third quarter of fiscal 1994, we recorded a non-cash charge of
$127 million reflecting $50 million for the write-off of goodwill related to
the acquisition of Miracle Food Mart stores in Canada and $77 million for
the write-down of certain Miracle fixed assets. In conjunction with the
Miracle write-off, we also recorded a $27 million charge for employee
buy-out costs, $17 million for store closing costs and a net deferred tax
asset write-off of $16 million. Further, we also recorded a valuation
allowance of $119.6 million against Canadian deferred tax assets, which, at
that time, was not likely to be realized.
(2) During fiscal 1998, we recorded a charge of $226 million for the planned
exit of 132 of our underperforming stores, two warehouse facilities, a
coffee plant and a bakery plant. The charge was comprised of $15 million
severance and benefits, $118 million of store and facilities occupancy
costs, which principally relate to the present value of future lease
obligations, net of anticipated sublease recoveries, and $93 million
write-down of fixed assets. In addition, during the first quarter of 1999,
we recorded a net charge of $13 million for severance and benefits related
to Project Great Renewal and the cost of exiting the Atlanta market.
(3) Effective February 27, 1994, we adopted SFAS No. 112 "Employers' Accounting
for Postemployment Benefits" resulting in a charge of $5 million.
(4) During fiscal 1997, we recorded an extraordinary charge of $0.5 million, net
of a tax benefit of $0.4 million, relating to the early extinguishment of
debt.
(5) Included in net income is an income tax benefit relating to the reduction of
a portion of our valuation allowance previously established against our
Canadian deferred tax assets. Prior to the fourth quarter of fiscal 1998,
the valuation allowance has been reduced to the extent that our Canadian
operations have generated taxable income. For the fiscal years ended
February 24, 1996, February 22, 1997, February 28, 1998 and February 27,
1999, the total reduction of the valuation allowance amounted to $3.4
million, $11.3 million, $16.6 million and $69.2 million, respectively. In
addition, at the beginning of the fourth quarter of fiscal 1998, we
concluded that it was more likely than not that the net deferred tax asset
would be realized and, accordingly, reversed the remaining portion of the
valuation allowance.
(6) EBITDA represents income from operations before income taxes, interest
expense, depreciation and amortization. EBITDA is a widely accepted
financial indicator of a company's ability to service and/or incur debt.
However, EBITDA should not be construed as an alternative to operating
income (as determined in accordance with generally accepted accounting
principles) or to cash flows from operating activities (as determined in
accordance with generally accepted accounting principles) and should not be
construed as an indication of our operating performance or as a measure of
liquidity. EBITDA for the year ended February 25, 1995 was adjusted to
exclude the effects of the Canadian charges ($127 million write-off of
goodwill, $27 million for employee buy-out costs and $17 million for store
closing costs). For the year ended February 27, 1999 and the first quarter
ended June 19, 1999, EBITDA excludes the effects of the store and facilities
exit costs totaling $226 million and $13 million, respectively. EBIDTA for
fiscal 1998 includes $74 million of operating losses and other costs related
to the stores identified for closure. Further, in the first quarter of 1999,
EBIDTA includes $53 million of operating losses and expenses related to
stores identified for closure and the Atlanta exit.
(7) Ratio calculated as total debt as of year end divided by that year's EBITDA.
(8) In calculating the ratio of earnings to fixed charges, earnings consist of
income (loss) before income taxes, cumulative effect on prior years of
changes in accounting principles and extraordinary item plus fixed charges.
Fixed charges consist of interest expense plus the portion of rental expense
under lease which has been deemed by us to be representative of the interest
factor.
(9) The deficiency in earnings available to cover fixed charges includes the
write-off of Canadian goodwill and long-lived assets totaling $127 million
for the year ended February 25, 1995 and includes $226 million of costs
associated with the closure of 132 underperforming stores, two warehouses
and two facilities for the year ended February 27, 1999. Excluding the
effect of these charges, the deficiency in earnings available to cover fixed
charges would have been $2.4 million and $3.1 million for the fiscal years
ended February 25, 1995 and February 27, 1999, respectively.
(10) Total debt includes short-term and long-term debt and current and
non-current obligations under capital leases.
S-7
<PAGE>
DESCRIPTION OF THE BONDS
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE BONDS OFFERED
HEREBY (REFERRED TO IN THE ACCOMPANYING PROSPECTUS AS THE "SENIOR DEBT
SECURITIES") SUPPLEMENTS THE DESCRIPTION OF THE GENERAL TERMS AND PROVISIONS OF
SENIOR DEBT SECURITIES SET FORTH IN THE ACCOMPANYING PROSPECTUS. YOU SHOULD READ
THE "DESCRIPTION OF DEBT SECURITIES" IN THE ACCOMPANYING PROSPECTUS FOR A
DESCRIPTION OF ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO THE BONDS.
The bonds will mature on August 1, 2039 and will be limited in aggregate
principal amount to $200,000,000. The bonds will be issued as a single series of
senior debt securities under the senior debt securities indenture, dated as of
January 1, 1991, between A&P and The Chase Manhattan Bank, as trustee. The bonds
will be issued in fully registered book-entry form only, without coupons, in
denominations of $25 and integral multiples thereof. Each bond will bear
interest at the rate per annum shown on the cover page of this prospectus
supplement from and including the issue date or from and including the most
recent interest payment date to which interest has been paid or provided for,
payable quarterly on February 1, May 1, August 1 and November 1 of each year,
commencing November 1, 1999, to the person in whose name the bond is registered
at the close of business on the date fifteen days prior to the applicable
interest payment date.
If the date of any scheduled payment of interest or principal falls on a day
that is not a business day, the interest or principal payment shall be made on
the next day that is business day, and no interest on such payment shall accrue
for the period from and after such scheduled payment date. Interest on the bonds
will be computed on the basis of a 360-day year comprised of twelve 30-day
months.
TRADING CHARACTERISTICS
The bonds are expected to trade at a price that takes into account the
value, if any, of accrued but unpaid interest. Accordingly, purchasers will not
pay and sellers will not receive accrued and unpaid interest with respect to the
bonds except as included in the trading price thereof. Any portion of the
trading price of a bond received that is attributable to accrued interest will
be treated as ordinary interest income for federal income tax purposes and will
not be treated as part of the amount realized for purposes of determining gain
or loss on the disposition of the bonds.
OPTIONAL REDEMPTION
Except as described below under "--Redemption for Tax Reasons," the bonds
will not be redeemable prior to August 11, 2004. Thereafter, the bonds will be
subject to redemption on any date at our option, as a whole or from time to time
in part, upon not less than 30 nor more than 60 days' notice, at a redemption
price equal to 100% of the principal amount redeemed plus accrued and unpaid
interest to the date of redemption.
REDEMPTION FOR TAX REASONS
If as a result of:
- any actual or proposed change in or amendment to the laws (or any
regulations or rulings promulgated thereunder) of the United States, or
any change in the application, official interpretation or enforcement of
such laws, regulations or rulings;
- any action taken by a taxing authority, which action is generally applied
or is taken with respect to us;
- a decision rendered by a court of competent jurisdiction in the United
States, whether or not such decision was rendered with respect to us; or
S-8
<PAGE>
- a technical advice memorandum or letter ruling or other administrative
pronouncement issued by the National Office of the United States Internal
Revenue Service, on substantially the same facts as those pertaining to
us;
which is effective or issued on or after the issue date of the bonds, there is a
substantial likelihood that we will not be entitled to deduct currently for
United States federal income tax purposes the full amount of interest accrued in
respect of the bonds, we may at our option redeem the bonds in whole, but not in
part, at any time at a redemption price equal to 100% of the principal amount of
the bonds, together with interest accrued and unpaid to the date fixed for
redemption. Notice of such redemption of the bonds will be given to the holders
of the bonds not more than 60 nor fewer than 30 days prior to the date fixed for
redemption.
BOOK-ENTRY SYSTEM, FORM AND DELIVERY
The bonds will be represented by one or more global securities registered in
the name of Cede & Co., the nominee of The Depository Trust Company, as
Depository, and the provisions set forth under "Description of Debt
Securities--Global Securities" in the accompanying prospectus will apply to the
bonds.
S-9
<PAGE>
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal United States federal income tax
consequences of the ownership of bonds. This discussion is based upon the
Internal Revenue Code of 1986, as amended, referred to as the "Code", its
legislative history, existing and proposed regulations thereunder, published
rulings and court decisions, all as currently in effect and all subject to
change at any time, possibly with retroactive effect. For purposes of this
discussion, the term "Holder" refers to beneficial owners of the bonds. This
discussion deals only with bonds offered hereby and held as capital assets and
does not purport to deal with purchasers in special tax situations, such a
financial institutions, tax-exempt organizations, insurance companies, regulated
investment companies, dealers in securities or currencies, persons holding bonds
as a hedge against currency risks or as a position in a "straddle" for tax
purposes, or person who are not United States persons (as defined in Section
7701 of the Code) or whose functional currency (as defined in Section 985 of the
Code) is not the United States dollar. The summary does not include any
description of the tax laws of any state, local or foreign governments that may
be applicable to the bonds or the Holders thereof. Persons considering the
purchase of bonds should consult their own tax advisors concerning the
application of federal income tax laws to their particular situations and any
consequences arising under the laws of any other taxing jurisdiction.
PAYMENTS OF INTEREST. Stated interest on a bond will be taxable to a Holder
as ordinary interest income at the time it accrues or is received in accordance
with the Holder's method of accounting for tax purposes.
SALE OR REDEMPTION OF BONDS. A Holder's tax basis on a bond generally will
be its U.S. dollar cost. Upon the sale or redemption of a bond, a Holder will
recognize capital gain or loss equal to the difference between the amount
realized on the sale or redemption of the bond and the Holder's tax basis in the
bond, as such gain or loss will be long-term capital gain or loss if at the time
of the sale or redemption the bond has been held for more than one year. For
these purposes, the original cost basis and the amount realized do not include
any amount attributable to accrued interest on the bond. Any amount attributable
to accrued interest is treated as interest as described under "Payments of
Interest" above.
BACKUP WITHHOLDING AND INFORMATION REPORTING
A 31% backup withholding tax and information reporting requirements apply to
certain payments of principal of and interest on an obligation, and to proceeds
of disposition of an obligation, to certain noncorporate Holders, if such
Holders fail to provide correct taxpayer identification numbers and other
information or fail to comply with certain other requirements. We, our paying
agent, or a broker, as the case may be, will be required to withhold from any
payment that is subject to backup withholding a tax equal to 31% of such payment
unless the Holder furnished its taxpayer identification number in the manner
prescribed in applicable Treasury regulations and certain other conditions are
met.
Any amounts withheld under the backup withholding rules from a payment to a
Holder will be allowed as a refund or a credit against such Holder's federal
income tax, provided that the required information is furnished to the Internal
Revenue Service.
S-10
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement,
we have agreed to sell to the underwriters named below, and the underwriters,
for whom Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc., Dain
Rauscher Wessels, a division of Dain Rauscher Incorporated and EVEREN
Securities, Inc. are acting as representatives, have severally agreed to
purchase, the principal amount of bonds set forth opposite their respective
names below. In the underwriting agreement, the underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
bonds offered hereby if any of the bonds are purchased.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
NAME OF BONDS
- -------------------------------------------------------------------------------------------------- --------------
<S> <C>
Morgan Stanley & Co. Incorporated................................................................. 32,375,000
Salomon Smith Barney Inc. ........................................................................ 32,375,000
Dain Rauscher Wessels, a division of Dain Rauscher Incorporated................................... 32,375,000
EVEREN Securities, Inc. .......................................................................... 32,375,000
Bear, Stearns & Co. Inc. ......................................................................... 1,750,000
CIBC World Markets Corp. ......................................................................... 1,750,000
Deutsche Bank Securities Inc. .................................................................... 1,750,000
A.G. Edwards & Sons, Inc. ........................................................................ 1,750,000
First Union Capital Markets Corp. ................................................................ 1,750,000
SG Cowen Securities Corporation................................................................... 1,750,000
Warburg Dillon Read LLC........................................................................... 1,750,000
Advest, Inc. ..................................................................................... 875,000
Robert W. Baird & Co. Incorporated................................................................ 875,000
Banc One Capital Markets, Inc. ................................................................... 875,000
Banc of America Securities LLC.................................................................... 875,000
J.C. Bradford & Co. .............................................................................. 875,000
BB&T Capital Markets
A Division of Scott & Stringfellow, Inc......................................................... 875,000
Crowell, Weedon & Co. ............................................................................ 875,000
Davenport & Company LLC........................................................................... 875,000
D.A. Davidson & Co. Incorporated.................................................................. 875,000
Fahnestock & Co. Inc. ............................................................................ 875,000
Ferris, Baker Watts, Incorporated................................................................. 875,000
Fifth Third Securities, Inc. ..................................................................... 875,000
First Albany Corporation.......................................................................... 875,000
Gibraltar Securities Co. ......................................................................... 875,000
Gruntal & Co., L.L.C. ............................................................................ 875,000
Janney Montgomery Scott Inc. ..................................................................... 875,000
Kirkpatrick, Pettis, Smith, Polian Inc. .......................................................... 875,000
Legg Mason Wood Walker, Incorporated.............................................................. 875,000
McDonald Investments Inc., A Keycorp Company...................................................... 875,000
Mesirow Financial, Inc. .......................................................................... 875,000
Miller, Johnson & Kuehn, Inc. .................................................................... 875,000
Morgan Keegan & Company, Inc. .................................................................... 875,000
Neuberger & Berman, LLC........................................................................... 875,000
Parker/Hunter Incorporated........................................................................ 875,000
Pershing/Division of Donaldson, Lufkin & Jenrette Securities Corporation.......................... 875,000
Raymond James & Associates, Inc. ................................................................. 875,000
The Robinson-Humphrey Company, LLC................................................................ 875,000
</TABLE>
S-11
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
NAME OF BONDS
- -------------------------------------------------------------------------------------------------- --------------
<S> <C>
Roney & Co........................................................................................ 875,000
Schroder & Co. Inc. .............................................................................. 875,000
Southwest Securities, Inc. ....................................................................... 875,000
Sterne, Agee & Leach, Inc. ....................................................................... 875,000
Stifel, Nicolaus & Company, Incorporated.......................................................... 875,000
Sutro & Co. Incorporated.......................................................................... 875,000
TD Securities (USA) Inc. ......................................................................... 875,000
Tucker Anthony Incorporated....................................................................... 875,000
U.S. Bancorp Piper Jaffray Inc. .................................................................. 875,000
Wachovia Securities, Inc. ........................................................................ 875,000
Wedbush Morgan Securities......................................................................... 875,000
--------------
Total....................................................................................... $ 175,000,000
--------------
--------------
</TABLE>
The underwriters have advised us that they propose to offer the bonds in
part directly to the public at the price to the public, as set forth on the
cover page of this prospectus supplement, and in part to certain securities
dealers at such price less a concession not in excess of $.50 per $25.00 bond.
The underwriters may allow, and such dealers may reallow, a concession not in
excess of $.45 per $25.00 bond to certain other dealers. After the bonds are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the underwriters.
The bonds are a new issue of securities with no established trading market.
The bonds are expected to be approved for listing on the NYSE, subject to
official notice of issuance. Trading of the bonds on the NYSE is expected to
commence within a 30-day period after the initial delivery of the bonds. The
representatives have advised us that they intend to make a market in the bonds
prior to the commencement of trading on the NYSE. The representatives will have
no obligation to make a market in the bonds, however, and may cease market
making activities, if commenced, at any time.
We have granted the underwriters the right to purchase up to an additional
$25,000,000 aggregate principal amount of bonds to cover over-allotments, if
any, at the same price and underwriting discount set forth on the cover page of
this prospectus supplement within 30 days from the date of this prospectus
supplement. To the extent such right to purchase is exercised, each underwriter
will become obligated, subject to certain conditions, to purchase approximately
the same percentage of such additional bonds as the number set forth next to
such underwriter's name in the preceding table bears to the aggregate principal
amount of bonds offered by the underwriters by this prospectus supplement. If
the underwriters' over-allotment option is exercised in full, the total price to
public, underwriting discounts and commissions and proceeds to us would be
$200,000,000, $6,300,000 and $193,700,000, respectively.
In order to facilitate the offering of the bonds, the underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the bonds. Specifically, the underwriters may over-allot in connection with this
offering, creating short positions in the bonds for their own account. In
addition, to cover over-allotments or to stabilize the price of the bonds, the
underwriters may bid for, and purchase, bonds in the open market. Finally, the
underwriters may reclaim selling concessions allowed to an underwriter or dealer
for distributing bonds in this offering, if the underwriters repurchase
previously distributed bonds in transactions that cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the bonds above independent market
levels. The underwriters are not required to engage in these activities, and may
end any of these activities at any time.
S-12
<PAGE>
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
Certain of the underwriters and their affiliates engage in transactions
with, and, from time to time, have performed services for, us and our affiliates
in the ordinary course of business.
LEGAL MATTERS
Certain matters of New York law relating to the validity of the bonds will
be passed upon for us by Cahill Gordon & Reindel (a partnership including a
professional corporation), New York, New York and for the underwriters by Brown
& Wood LLP, New York, New York.
EXPERTS
The financial statements incorporated in the accompanying prospectus by
reference from The Great Atlantic & Pacific Tea Company, Inc.'s Annual Report on
Form 10-K for the year ended February 27, 1999 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which is
incorporated herein by reference, and has been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
S-13
<PAGE>
$550,000,000
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
DEBT SECURITIES
SECURITIES WARRANTS
AND
PREFERRED TRUST SECURITIES GUARANTIES
A&P FINANCE I
A&P FINANCE II
A&P FINANCE III
PREFERRED TRUST SECURITIES
The Great Atlantic & Pacific Tea Company, Inc. may offer, from time to time,
- shares of its common stock,
- shares of its preferred stock,
- shares of its preferred stock represented by depositary shares,
- unsecured senior debt securities,
- unsecured subordinated debt securities,
- warrants to purchase shares of its common stock, and
- warrants to purchase debt securities.
A&P Finance I, A&P Finance II and A&P Finance III may offer, from time to
time, preferred trust securities. A&P will own all of the common securities of
each of the trusts. The trusts exist solely for the purpose of issuing preferred
trust securities and investing the proceeds therefrom in junior subordinated
debt securities of A&P. A&P expects to guarantee distributions and liquidation
payments on the preferred trust securities. However, any preferred trust
securities guaranty will only apply to the extent that the trust issuing the
preferred trust securities has funds available to make payments with respect to
the preferred trust securities.
The securities
- will have a maximum aggregate offering price of $550,000,000,
- will be offered at prices and on terms to be set forth in an
accompanying prospectus supplement,
- may be denominated in U.S. dollars or in other currencies or currency
units,
- may be offered separately or together, or in separate series, and
- may be listed on a national securities exchange, if specified in an
accompanying prospectus supplement.
The senior debt securities, if issued, will rank equally with all other
unsecured and unsubordinated indebtedness of A&P. The subordinated debt
securities, if issued, will be unsecured and subordinated to all present and
future senior indebtedness specified in an accompanying prospectus supplement.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The securities may be sold directly, through agents from time to time or
through underwriters and/or dealers. If any agent of the issuers or any
underwriter is involved in the sale of the securities, the name of such agent or
underwriter and any applicable commission or discount will be set forth in the
accompanying prospectus supplement.
------------------------
THIS PROSPECTUS MAY NOT BE USED UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------------
The date of this prospectus is June 21, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Where You Can Find More Information........................................................................ 1
Incorporation of Certain Documents by Reference............................................................ 2
The Company................................................................................................ 3
The Trusts................................................................................................. 3
Use of Proceeds............................................................................................ 4
Ratio of Earnings to Fixed Charges......................................................................... 4
Description of Common Stock................................................................................ 4
Description of Preferred Stock............................................................................. 6
Description of Depositary Shares........................................................................... 11
Description of Debt Securities............................................................................. 14
Description of Securities Warrants......................................................................... 22
Description of Preferred Trust Securities.................................................................. 25
Description of Preferred Trust Securities Guaranties....................................................... 25
Description of Junior Subordinated Debt Securities......................................................... 28
Relationship among the Preferred Trust Securities, the Junior Subordinated Debt Securities and the
Preferred Trust Securities Guaranties.................................................................... 30
Maryland Anti-Takeover Provisions.......................................................................... 31
Plan of Distribution....................................................................................... 32
Legal Matters.............................................................................................. 33
Experts.................................................................................................... 33
</TABLE>
WHERE YOU CAN FIND MORE INFORMATION
A&P and the trusts filed with the Securities and Exchange Commission a
registration statement on Form S-3 under the Securities Act of 1933 with respect
to the securities to be offered. This prospectus, which forms a part of the
registration statement, does not contain all of the information set forth in the
registration statement and the exhibits and schedules thereto, parts of which
are omitted in accordance with the rules and regulations of the Commission. For
more information about A&P, the trusts and the securities, you should see the
registration statement and its exhibits and schedules. Any statement made in
this prospectus concerning the provisions of documents may be incomplete and you
should refer to the copy of such document filed as an exhibit to the
registration statement with the Commission.
A&P files annual, quarterly and special reports, proxy statements and other
information with the Commission. The registration statement, its exhibits and
such reports, proxy statements and other information can be inspected and copied
at the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: New York Regional Office, Seven World Trade
Center, 13th Floor, New York, New York 10048; and Chicago Regional Office,
Citicorp Center, 500 West Madison Street, 14th Floor, Chicago, Illinois 60601.
Copies of such material can be obtained from the Public Reference Section of the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission also maintains an Internet Web Site at
http://www.sec.gov that contains reports and other information. A&P's common
stock is traded on the New York Stock Exchange under the symbol "GAP" and
reports, proxy statements and other information concerning A&P can be inspected
at the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
The issuers have not filed separate financial statements of the trusts. All
of the common securities of the trusts are owned by A&P and the trusts have no
operating history or independent operations. In addition, following the issuance
of preferred trust securities, the issuing trusts will not engage in any
activity other than holding as trust assets junior subordinated debt securities
of A&P. In connection
1
<PAGE>
with any issuance of preferred trust securities, A&P will, through one or more
preferred trust securities guaranties or other agreements, irrevocably and
unconditionally guarantee payments on the preferred trust securities. For these
reasons, the issuers do not think that the financial statements of any of the
trusts would be material to prospective purchasers of the preferred trust
securities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
A&P is incorporating by reference into this registration statement its
Annual Report on Form 10-K for the fiscal year ended February 27, 1999.
All documents filed by A&P pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act: (1) subsequent to the initial filing of this prospectus and
prior to the date it is declared effective; and (2) subsequent to the date of
this prospectus and prior to the termination of this offering are incorporated
by reference and become a part of this prospectus from their date of filing. Any
statement contained in this prospectus or in a document incorporated by
reference is modified or superseded for purposes of this prospectus to the
extent that a statement contained in any such subsequent document modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
prospectus.
On request, the issuers will provide anyone who receives a copy of this
prospectus with a copy of any or all of the documents incorporated in this
prospectus by reference. Written or telephone requests for such copies should be
directed to Robert G. Ulrich, Esq., Senior Vice President, General Counsel and
Secretary, at A&P's principal office: The Great Atlantic & Pacific Tea Company,
Inc., 2 Paragon Drive, Montvale, New Jersey 07645, telephone (201) 573-9700.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of the securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
2
<PAGE>
THE COMPANY
A&P has been engaged in the retail food business since 1859. Based on
reported sales for fiscal 1998, A&P believes that as of the end of its 1998
fiscal year it was one of the ten largest retail food chains in the United
States and that it had the largest market share in metropolitan New York and
Detroit and the second largest in the Province of Ontario. As of the end of its
1998 fiscal year, A&P operated 839 stores averaging approximately 35,200 square
feet per store. In addition, in fiscal 1995 A&P began franchising certain stores
in Canada under its Food Basics format, which focuses its appeal toward the more
price conscious consumer. As of the end of its 1998 fiscal year, A&P had
franchised 55 Food Basics stores in Canada.
A&P sells groceries, meats, fresh produce and other items commonly offered
in supermarkets, operating under the following trade names:
<TABLE>
<S> <C>
- Super Fresh - Sav-A-Center
- Farmer Jack - Kohl's
- Food Emporium - Waldbaum's
- Super Food Mart - Ultra Mart
- Dominion - Food Basics
</TABLE>
In addition, many stores have bakery, delicatessen, pharmacy, floral, fresh fish
and cheese departments, and on-site banking. National, regional and local brands
are sold as well as private label merchandise under brands which include
America's Choice, Master Choice, Health Pride, Savings Plus and The Farm. In
support of its retail operations, A&P also operates one coffee roasting plant in
the United States. Through its Compass Foods Division, A&P manufactures and
distributes a line of whole bean coffees under the Eight O'Clock, Bokar and
Royale labels, for sale through its own stores as well as other food and
convenience retailers.
Building upon a broad base of A&P supermarkets, A&P has expanded and
diversified within the retail food business through the acquisition of other
supermarket chains and the development of several alternative store types. A&P
now operates its stores with merchandise, pricing and identities tailored to
appeal to different segments of the market, including buyers seeking gourmet and
ethnic foods, unusual produce, a wide variety of premium quality private label
goods and health and beauty aids along with the array of traditional grocery
products.
A&P is engaged in a continuing program of modernizing its operations and
retail stores. During fiscal 1998, A&P expended approximately $438 million for
capital projects which included 46 new supermarkets, 3 new Food Basics
franchised stores and 69 remodels or enlargements. A&P's plans for fiscal 1999
anticipate capital expenditures of approximately $500 million, which include the
opening of 55 new supermarkets and the remodeling or expansion of 75 stores. In
addition, A&P is developing plans to open approximately 65 new supermarkets in
fiscal 2000 and approximately 70 to 80 new supermarkets per year thereafter for
several years. Further, A&P expects to remodel or enlarge an average of 75
stores per year for the next several years.
As of May 1, 1999, A&P was 54.92% owned by Tengelmann
Warenhandelsgesellschaft, a general retailer headquartered in Germany which is
one of the largest food retailers in Europe. The principal executive offices of
A&P are located at 2 Paragon Drive, Montvale, New Jersey 07645, telephone (201)
573-9700.
THE TRUSTS
Each trust is a statutory business trust created under Delaware law for the
exclusive purpose of issuing and selling its preferred trust securities and
using the proceeds to acquire corresponding junior subordinated debt securities
issued by A&P. Each trust will be governed by an amended and restated trust
agreement substantially in the form filed as an exhibit to the registration
statement of which this
3
<PAGE>
prospectus forms a part. Each trust agreement will be qualified as an indenture
under the Trust Indenture Act of 1939. All of the common securities of each
trust will be owned by A&P.
Each trust's business and affairs will be conducted by its trustees, which
shall be appointed by A&P as the holder of the trust's common securities. The
trustees will include two officers of A&P as administrative trustees, Bankers
Trust Company as property trustee, and Bankers Trust (Delaware) as Delaware
trustee. The property trustee of each trust will act as the indenture trustee
with respect to such trust for purposes of compliance with the provisions of the
Trust Indenture Act.
A&P will pay all fees and expenses related to each trust and the offering of
preferred trust securities and will pay, directly or indirectly all ongoing
costs, expenses and liabilities of each trust.
The principal place of business of each trust shall be c/o The Great
Atlantic & Pacific Tea Company, Inc., 2 Paragon Drive, Montvale, New Jersey
07645, telephone (201) 573-9700.
You should see the prospectus supplement relating to the preferred trust
securities of a trust for further information concerning such trust.
USE OF PROCEEDS
Except as otherwise described in the accompanying prospectus supplement, the
net proceeds to A&P from the sale or sales of the securities will be used for
general corporate purposes, which may include, without limitation, the reduction
of outstanding indebtedness, working capital increases, capital expenditures and
acquisitions. The net proceeds of the sale of preferred trust securities of each
trust will be invested in a related series of A&P's junior subordinated debt
securities.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
FEBRUARY 27, 1999 FEBRUARY 28, 1998 FEBRUARY 22, 1997 FEBRUARY 24, 1996 FEBRUARY 25, 1995
(52 WEEKS) (53 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS)
- ------------------- ------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
* 1.58x 1.77x 1.64x *
</TABLE>
- ------------------------
* Earnings for the year ended February 27, 1999 and February 25, 1995 were
inadequate to cover fixed charges by $229.3 million and $129.4 million,
respectively.
In the calculation of A&P's ratio of earnings to fixed charges, earnings
consist of income (loss) before income taxes and cumulative effect on prior
years of changes in accounting principles, plus fixed charges. Fixed charges
consist of interest expense, plus the portion of rental expense under leases
which has been deemed by A&P to be representative of the interest factor.
DESCRIPTION OF COMMON STOCK
A&P's Articles of Restatement of the Certificate of Incorporation authorize
the issuance of 80 million shares of its common stock with a par value of $1.00
per share. As of May 18, 1999, there were 38,290,716 shares of common stock
outstanding held by approximately 7,500 holders of record, excluding holders
whose shares of record are held by brokers.
GENERAL
The holders of common stock are entitled to cast one vote for each share on
all matters submitted to a vote of stockholders and are not entitled to cumulate
votes for the election of directors. Except in cases in which it is by statute,
by the Articles or by the bylaws of A&P otherwise provided, a majority of the
shares present in person or by proxy is sufficient to elect and pass any
measure. Amendments to the Articles, mergers, consolidations, share exchanges
and the dissolution of A&P generally require the approval of two-thirds of the
outstanding shares of common stock.
4
<PAGE>
There are no redemption or sinking fund provisions applicable to the common
stock. The holders of the common stock are not subject to further calls or
assessments by A&P. In the event of liquidation, holders of common stock are
entitled to share in the distribution of assets remaining after payment of
debts, liquidation preference of any outstanding preferred stock, and expenses.
The holders of common stock are entitled to receive dividends when and as
declared by the board of directors out of funds legally available therefor. The
outstanding shares of common stock and the shares of common stock to be
distributed in connection with any offerings pursuant to this prospectus will be
fully paid and nonassessable when issued.
PREEMPTIVE RIGHTS
The holders of common stock have preemptive rights to subscribe for and to
purchase additional shares of stock of any class or classes of A&P, PROVIDED,
HOWEVER, that no preemptive right shall in any event accrue to any stockholder
with respect to
(1) shares issued for not less than their fair value in exchange for
services or property other than money,
(2) shares remaining unsubscribed after having been offered to stockholders,
(3) treasury shares sold for not less than their fair value,
(4) shares issued or issuable pursuant to articles of merger,
(5) preferred shares without then present voting power with respect to the
election of directors issued for not less than their fair value, and
(6) shares issued and sold to A&P's officers or other employees or to the
officers or other employees of any subsidiary of A&P upon such terms and
conditions as are approved by the affirmative vote of a majority of all
of the shares entitled to vote with respect thereto at a meeting duly
called and held for such purpose.
The determination of "fair value" fixed and recorded in a resolution of the
board of directors authorizing the issuance of any such additional shares of
stock, including the price or consideration for which such shares of stock are
to be issued, shall be conclusive in the absence of fraud or gross disparity in
such determination.
TRANSFER AGENT
American Stock Transfer and Trust Company, 40 Wall Street, New York, NY
10005, is the transfer agent and registrar for the common stock.
5
<PAGE>
DESCRIPTION OF PREFERRED STOCK
A&P's Articles authorize the issuance of 3 million shares of its preferred
stock without par value. No shares of preferred stock are currently outstanding.
GENERAL
The preferred stock may be issued from time to time, in one or more series,
as authorized by the board of directors. Prior to issuance of shares of each
series, the board of directors is required by the Maryland General Corporation
Law and the Articles to fix for each series, the designations, preferences,
rights, voting powers, restrictions, and qualifications of, the dividends on,
the times and prices of redemptions of, and the conversion rights of the shares
of such series as may be permitted by Maryland law. Such rights, powers,
restrictions and limitations could include the right to receive specified
dividend payments and payments on liquidation prior to any such payments to
holders of common stock or other stock of A&P ranking junior to the preferred
stock. Shares of preferred stock to be distributed in connection with any
offerings pursuant to this prospectus will be fully paid and nonassessable when
issued and the holders of shares of any such preferred stock will not have any
preemptive right to subscribe or purchase any new or additional issue of shares
of stock of A&P. The board of directors could authorize the issuance of shares
of preferred stock with terms and conditions that could have the effect of
discouraging a takeover or other transaction that holders of common stock might
believe to be in their best interests or in which holders of some, or a
majority, of the shares of common stock might receive a premium for their shares
over the then market price of such shares of common stock.
FUTURE SERIES OF PREFERRED STOCK
The following description of the preferred stock sets forth material terms
and provisions of the preferred stock which may be specified in a prospectus
supplement. The statements below describing the preferred stock are in all
respects subject to and qualified in their entirety by reference to the
applicable provisions of the Articles and bylaws and any applicable designating
amendment to the Articles establishing the terms of a series of preferred stock.
You should read the prospectus supplement relating to the preferred stock
offered thereby for specific terms, including:
1. The title and stated capital value of such preferred stock;
2. The number of shares of such preferred stock offered, the liquidation
preference per share and the offering price of such preferred stock;
3. The dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to such preferred stock;
4. The date from which dividends on such preferred stock shall accumulate,
if applicable;
5. The procedures for any auction and remarketing, if any, for such
preferred stock;
6. The provision for a sinking fund, if any, for such preferred stock;
7. The provision for redemption, if applicable, of such preferred stock;
8. Any listing of such preferred stock on any securities exchange;
9. The terms and conditions, if applicable, upon which such preferred stock
will be convertible into common stock, including the conversion price or
manner of its calculation;
10. Any other specific terms, preferences, rights, limitations or
restrictions of such preferred stock;
6
<PAGE>
11. A discussion of federal income tax considerations applicable to such
preferred stock;
12. The voting rights of such preferred stock and the relative ranking and
preference of such preferred stock as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of A&P; and
13. Any limitations on issuance of any series of preferred stock ranking
senior to or on a parity with such series of preferred stock as to
dividend rights and rights upon liquidation, dissolution or winding up
of the affairs of A&P.
RANK
Unless otherwise specified in the prospectus supplement, the preferred stock
will, with respect to dividend rights and rights upon liquidation, dissolution
or winding up of A&P, rank
(1) senior to all classes or series of common stock, and to all equity
securities ranking junior to such preferred stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up of
A&P;
(2) on a parity with all equity securities issued by A&P the terms of which
specifically provide that such equity securities rank on a parity with
the preferred stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of A&P; and
(3) junior to all equity securities issued by A&P the terms of which
specifically provide that such equity securities rank senior to the
preferred stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of A&P.
The term "equity securities" does not include convertible debt securities.
DIVIDENDS
Holders of the preferred stock of each series will be entitled to receive,
when, as and if declared by the board of directors, out of assets of A&P legally
available for payment, cash dividends at such rates and on such dates as will be
set forth in the applicable prospectus supplement. Each such dividend shall be
payable to holders of record as they appear on the share transfer books of A&P
on such record dates as shall be fixed by the board of directors.
Dividends on any series of the preferred stock may be cumulative or
non-cumulative, as provided in the applicable prospectus supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable prospectus supplement. If the board of directors fails to declare a
dividend payable on a dividend payment date on any series of the preferred stock
for which dividends are non-cumulative, then the holders of such series of the
preferred stock will have no right to receive a dividend in respect of the
dividend period ending on such dividend payment date, and A&P will have no
obligation to pay the dividend accrued for such period, whether or not dividends
on such series are declared payable on any future dividend payment date.
If preferred stock of any series is outstanding, no dividends will be
declared or paid or set apart for payment on any stock of A&P of any other
series ranking, as to dividends, on a parity with or junior to the preferred
stock of such series for any period unless
(1) if a series of preferred stock has a cumulative dividend, full
cumulative dividends have been declared and paid or declared and a sum
sufficient for the payment thereof is set apart for payment for all past
dividend periods and the then current dividend period, or
(2) if a series of preferred stock does not have a cumulative dividend, full
dividends for the then current dividend period have been declared and
paid or declared and a sum sufficient for the payment thereof is set
apart for such payment for the then current dividend period.
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When dividends upon preferred stock of any series and the shares of any other
series of preferred stock ranking on a parity as to dividends are not paid in
full, or a sum sufficient for such full payment is not set apart, all dividends
declared upon preferred stock of such series and any other series of preferred
stock ranking on a parity as to dividends shall be declared pro rata. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on preferred stock of such series which may be
in arrears.
Except as provided in the immediately preceding paragraph, unless
(1) if a series of preferred stock has a cumulative dividend, full
cumulative dividends have been declared and paid or declared and a sum
sufficient for the payment thereof is set apart for payment for all past
dividend periods and the then current dividend period, and
(2) if a series of preferred stock does not have a cumulative dividend, full
dividends have been declared and paid or declared and a sum sufficient
for the payment thereof is set apart for payment for the then current
dividend period,
no dividends, other distributions or payments for redemption or purchase, other
than in shares of common stock or other shares of stock ranking junior to the
preferred stock of such series as to dividends and upon liquidation, shall be
declared or paid or set aside for payment with respect to A&P's common stock or
any other stock of A&P ranking junior to or on parity with such series of
preferred stock.
Any dividend payment made on shares of a series of preferred stock shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
REDEMPTION
If so provided in the applicable prospectus supplement, the preferred stock
will be subject to mandatory redemption or redemption at the option of A&P, as a
whole or in part, in each case upon the terms, at the times and at the
redemption prices set forth in such prospectus supplement.
The prospectus supplement relating to a series of preferred stock that is
subject to mandatory redemption will specify the number of shares of such
preferred stock that shall be redeemed by A&P in each year commencing after a
date to be specified, at a redemption price per share to be specified, together
with an amount equal to all accrued and unpaid dividends thereon to the date of
redemption. If such preferred stock does not have a cumulative dividend, accrued
and unpaid dividends will not include any accumulation in respect of unpaid
dividends for prior dividend periods. The redemption price may be payable in
cash or other property, as specified in the applicable prospectus supplement. If
the redemption price for preferred stock of any series is payable only from the
net proceeds of the issuance of shares of stock of A&P, the terms of such
preferred stock may provide that, if no such shares of stock shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such preferred stock shall
automatically and mandatorily be converted into the applicable shares of stock
of A&P pursuant to conversion provisions specified in the applicable prospectus
supplement.
Notwithstanding the foregoing, unless
(1) if a series of preferred stock has a cumulative dividend, full
cumulative dividends on all shares of such series of preferred stock
shall have been declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for all past dividend periods
and the then current dividend period, and
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(2) if a series of preferred stock does not have a cumulative dividend, full
dividends on all shares of preferred stock of such series have been
declared and paid or declared and a sum sufficient for the payment
thereof set apart for payment for the then current dividend period,
no shares of such series of preferred stock shall be redeemed unless all
outstanding shares of preferred stock of a series are simultaneously redeemed.
The foregoing, however, shall not prevent the purchase or acquisition of
preferred stock of a series pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding shares of preferred stock of such
series. In addition, unless
(1) if such series of preferred stock has a cumulative dividend, full
cumulative dividends on all shares of such series of preferred stock
have been declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past dividend periods and
the then current dividend period, and
(2) if such series of preferred stock does not have a cumulative dividend,
full dividends on all shares preferred stock of such series have been
declared and paid or declared and a sum sufficient for the payment
thereof set apart for payment for the then current dividend period,
A&P shall not purchase or otherwise acquire directly or indirectly any shares of
preferred stock of such series, except by conversion into or exchange for shares
of stock of A&P ranking junior to the preferred stock of such series as to
dividends and upon liquidation. The foregoing, however, shall not prevent the
purchase or acquisition of shares of preferred stock of a series pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
shares of preferred stock of such series.
If fewer than all of the outstanding shares of preferred stock of any series
are to be redeemed, the number of shares to be redeemed will be determined by
A&P and such shares may be redeemed pro rata or by any other equitable manner
determined by A&P.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of preferred stock of
any series to be redeemed at the address shown on the stock transfer books of
A&P. Each notice shall state:
(1) the redemption date;
(2) the number of shares and series of the preferred stock to be redeemed;
(3) the redemption price;
(4) the place or places where certificates for such preferred stock are to
be surrendered for payment of the redemption price;
(5) that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and
(6) the date upon which the holder's conversion rights, if any, as to such
shares shall terminate.
If fewer than all the shares of preferred stock of any series are to be
redeemed, the notice mailed to each such holder thereof shall also specify the
number of shares of preferred stock to be redeemed from each such holder. If
notice of redemption of any preferred stock has been given and if the funds
necessary for such redemption have been set aside by A&P in trust for the
benefit of the holders of any preferred stock so called for redemption, then
from and after the redemption date dividends will cease to accrue on such
preferred stock, and all rights of the holders of such shares will terminate,
except the right to receive the redemption price.
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LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of A&P, before any distribution or payment shall be made to the
holders of any common stock or any other class or series of stock of A&P ranking
junior to the preferred stock in the distribution of assets upon any
liquidation, dissolution or winding up of A&P, the holders of each series of
preferred stock shall be entitled to receive out of assets of A&P legally
available for distribution to stockholders liquidating distributions in the
amount of the liquidation preference per share, if any, set forth in the
applicable prospectus supplement, plus an amount equal to all dividends accrued
and unpaid thereon, which shall not include any accumulation in respect of
unpaid noncumulative dividends for prior dividend periods. After payment of the
full amount of the liquidating distributions to which they are entitled, the
holders of preferred stock will have no right or claim to any of the remaining
assets of A&P. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of A&P are
insufficient to pay the amount of the liquidating distributions on all
outstanding shares of preferred stock and the corresponding amounts payable on
all shares of other classes or series of stock of A&P ranking on a parity with
the preferred stock in the distribution of assets, then the holders of the
preferred stock and all other such classes or series of stock shall share
ratably in any such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all holders of
preferred stock, the remaining assets of A&P shall be distributed among the
holders of any other classes or series of stock ranking junior to the preferred
stock upon liquidation, dissolution or winding up, according to their respective
rights and preferences and in each case according to their respective number of
shares. For such purposes, the consolidation or merger of A&P with or into any
other corporation, trust or entity, or the sale, lease or conveyance of all or
substantially all of the property or business of A&P, shall not be deemed to
constitute a liquidation, dissolution or winding up of A&P.
VOTING RIGHTS
Holders of the preferred stock will not have any voting rights, except as
set forth below or as otherwise from time to time required by law or as
indicated in the applicable prospectus supplement.
Unless provided otherwise for any series of preferred stock, so long as any
shares of preferred stock of a series remain outstanding, A&P will not, without
the affirmative vote or consent of the holders of at least two-thirds of the
shares of such series of preferred stock outstanding at the time,
(1) authorize or create, or increase the authorized or issued amount of, any
class or series of stock ranking prior to such series of preferred stock
with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up, or reclassify any authorized
stock of A&P into such shares, or create, authorize or issue any
obligation or security convertible into or evidencing the right to
purchase any such shares, or
(2) amend, alter or repeal the provisions of the Articles or the designating
amendment for such series of preferred stock, whether by merger,
consolidation or otherwise, so as to materially and adversely affect any
right, preference, privilege or voting power of such series of preferred
stock or the holders thereof.
So long as the preferred stock remains outstanding with the terms thereof
materially unchanged, taking into account that A&P may not be the surviving
entity, the occurrence of any merger, consolidation or other similar event will
not be deemed to materially and adversely affect the rights, preferences,
privileges or voting power of holders of preferred stock. Any increase in the
amount of the authorized preferred stock or the creation or issuance of any
other series of preferred stock, or any increase in the amount of authorized
shares of such series or any other series of preferred stock, in each case
ranking
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on a parity with or junior to the preferred stock of such series with respect to
payment of dividends or the distribution of assets upon liquidation, dissolution
or winding up, also will not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of preferred stock shall have
been redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of preferred stock
is convertible into common stock will be set forth in the applicable prospectus
supplement relating thereto. Such terms will include the number of shares of
common stock into which the shares of preferred stock are convertible, the
conversion price or manner of its calculation, the conversion period, provisions
as to whether conversion will be at the option of the holders of the preferred
stock or A&P, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such series of
preferred stock.
TRANSFER AGENT
The transfer agent and registrar for the preferred stock will be set forth
in the applicable prospectus supplement.
DESCRIPTION OF DEPOSITARY SHARES
A&P may, at its option, elect to offer depositary shares rather than full
shares of preferred stock. In the event such option is exercised, each of the
depositary shares will represent ownership of and entitlement to all rights and
preferences of a fraction of a share of preferred stock of a specified series,
including dividend, voting, redemption and liquidation rights. The applicable
fraction will be specified in the prospectus supplement. The shares of preferred
stock represented by the depositary shares will be deposited with a depositary
named in the applicable prospectus supplement, under a deposit agreement among
A&P, the depositary and the holders of depositary receipt certificates
evidencing depositary shares. Depositary receipts will be delivered to those
persons purchasing depositary shares in the offering. The depositary will be the
transfer agent, registrar and dividend disbursing agent for the depositary
shares. Holders of depositary receipts agree to be bound by the deposit
agreement, which requires holders to take actions described in an accompanying
prospectus supplement such as filing proof of residence and paying certain
charges.
The summary of terms of the depositary shares contained in this prospectus
does not purport to be complete and is subject to, and qualified in its entirety
by, the provisions of the deposit agreement, the Articles and the form of
designating amendment for the applicable series of preferred stock.
DIVIDENDS
The depositary will distribute all cash dividends or other cash
distributions received in respect of the series of preferred stock represented
by the depositary shares to the record holders of depositary receipts in
proportion to the number of depositary shares owned by such holders on the
relevant record date, which will be the same date as the record date fixed by
A&P for the applicable series of preferred stock. The depositary, however, will
distribute only such amount as can be distributed without attributing to any
depositary share a fraction of one cent, and any balance not so distributed will
be added to and treated as part of the next sum received by the depositary for
distribution to record holders of depositary receipts then outstanding.
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In the event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary receipts
entitled thereto, in proportion, as nearly as may be practicable, to the number
of depositary shares owned by such holders on the relevant record date, unless
the depositary determines, after consultation with A&P, that it is not feasible
to make such distribution, in which case the depositary may, with the approval
of A&P, adopt any other method for such distribution as it deems equitable and
appropriate, including the sale of such property and distribution of the net
proceeds from such sale to such holders.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the affairs of
A&P, whether voluntary or involuntary, the holders of each depositary share will
be entitled to the fraction of the liquidation preference accorded each share of
the applicable series of preferred stock, as set forth in the prospectus
supplement.
REDEMPTION
If the series of preferred stock represented by the applicable series of
depositary shares is redeemable, such depositary shares will be redeemed from
the proceeds received by the depositary resulting from the redemption, in whole
or in part, of preferred stock held by the depositary. Whenever A&P redeems any
preferred stock held by the depositary, the depositary will redeem as of the
same redemption date the number of depositary shares representing the preferred
stock so redeemed. The depositary will mail the notice of redemption promptly
upon receipt of such notice from A&P and not less than 30 nor more than 60 days
prior to the date fixed for redemption of the preferred stock and the depositary
shares to the record holders of the depositary receipts.
VOTING
Promptly upon receipt of notice of any meeting at which the holders of the
series of preferred stock represented by the applicable series of depositary
shares are entitled to vote, the depositary will mail the information contained
in such notice of meeting to the record holders of the depositary receipts as of
the record date for such meeting. Each such record holder of depositary receipts
will be entitled to instruct the depositary as to the exercise of the voting
rights pertaining to the number of shares of preferred stock represented by such
record holder's depositary shares. The depositary will endeavor, insofar as
practicable, to vote such preferred stock represented by such depositary shares
in accordance with such instructions, and A&P will agree to take all action
which may be deemed necessary by the depositary in order to enable the
depositary to do so. The depositary will abstain from voting any of the
preferred stock to the extent that it does not receive specific instructions
from the holders of depositary receipts.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of depositary receipts at the principal office of the
depositary, upon payment of any unpaid amount due the depositary, and subject to
the terms of the deposit agreement, the owner of the depositary shares evidenced
thereby is entitled to delivery of the number of whole shares of preferred stock
and all money and other property, if any, represented by such depositary shares.
Partial shares of preferred stock will not be issued. If the depositary receipts
delivered by the holder evidence a number of depositary shares in excess of the
number of depositary shares representing the number of whole shares of preferred
stock to be withdrawn, the depositary will deliver to such holder at the same
time a new depositary receipt evidencing such excess number of depositary
shares. Holders of preferred stock thus withdrawn will not thereafter be
entitled to deposit such shares under the deposit agreement or to receive
depositary receipts evidencing depositary shares therefor.
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AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time and from time to time be
amended by agreement between A&P and the depositary. However, any amendment
which materially and adversely alters the rights of the holders, other than any
change in fees, will not be effective unless such amendment has been approved by
at least a majority of the depositary shares then outstanding. No such amendment
may impair the right, subject to the terms of the deposit agreement, of any
owner of any depositary shares to surrender the depositary receipt evidencing
such depositary shares with instructions to the depositary to deliver to the
holder the preferred stock and all money and other property, if any, represented
thereby, except in order to comply with mandatory provisions of applicable law.
The deposit agreement may be terminated by A&P or the depositary only if all
outstanding depositary shares have been redeemed or there has been a final
distribution in respect of the preferred stock in connection with any
dissolution of A&P and such distribution has been made to all the holders of
depositary shares.
CHARGES OF DEPOSITARY
A&P will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. A&P will pay charges
of the depositary in connection with the initial deposit of the preferred stock
and initial issuance of the depositary shares, and redemption of the preferred
stock and all withdrawals of preferred stock by owners of depositary shares.
Holders of depositary receipts will pay transfer, income and other taxes and
governmental charges and other charges as are provided in the deposit agreement
to be for their accounts. The depositary may refuse to transfer depositary
shares, may withhold dividends and distributions and may sell the depositary
shares evidenced by such depositary receipt if such charges are not paid.
MISCELLANEOUS
The depositary will forward to the holders of depositary receipts all
reports and communications from A&P which are delivered to the depositary and
which A&P is required to furnish to the holders of the preferred stock. In
addition, the depositary will make available for inspection by holders of
depositary receipts at the principal office of the depositary, and at such other
places as it may from time to time deem advisable, any reports and
communications received from A&P which are received by the depositary as the
holder of preferred stock.
Neither the depositary nor A&P assumes any obligation or will be subject to
any liability under the deposit agreement to holders of depositary receipts
other than for its negligence or willful misconduct. Neither the depositary nor
A&P will be liable if it is prevented or delayed by law or any circumstance
beyond its control in performing its obligations under the deposit agreement.
The obligations of A&P and the depositary under the deposit agreement will be
limited to performance in good faith of their duties thereunder, and they will
not be obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or preferred stock unless satisfactory indemnity is furnished.
A&P and the depositary may rely on written advice of counsel or accountants, on
information provided by holders of the depositary receipts or other persons
believed in good faith to be competent to give such information and on documents
believed to be genuine and to have been signed or presented by the proper party
or parties.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to A&P notice of its
election to do so, and A&P may at any time remove the depositary, any such
resignation or removal to take effect upon the appointment of a successor
depositary and its acceptance of such appointment. Such successor depositary
must be appointed within 60 days after delivery of the notice for resignation or
removal and
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must be a bank or trust company having its principal office in the United States
of America and having a combined capital and surplus of at least $100,000,000.
FEDERAL INCOME TAX CONSEQUENCES
Owners of depositary shares will be treated for Federal income tax purposes
as if they were owners of the preferred stock represented by such depositary
shares. Accordingly, such owners will be entitled to take into account, for
Federal income tax purposes, income and deductions to which they would be
entitled if they were holders of such preferred stock. In addition,
(1) no gain or loss will be recognized for Federal income tax purposes upon
the withdrawal of preferred stock in exchange for depositary shares,
(2) the tax basis of each share of preferred stock to an exchanging owner of
depositary shares will, upon such exchange, be the same as the aggregate
tax basis of the depositary shares exchanged therefor, and
(3) the holding period for preferred stock in the hands of an exchanging
owner of depositary shares will include the period during which such
person owned such depositary shares.
DESCRIPTION OF DEBT SECURITIES
The senior debt securities may be issued from time to time in one or more
series under an indenture, dated as of January 1, 1991, between A&P and The
Chase Manhattan Bank (formerly Chemical Bank as successor by merger to
Manufacturers Hanover Trust Company), as trustee, which is filed as an exhibit
to the registration statement of which this prospectus is a part. The
subordinated debt securities may be issued from time to time in one or more
series under an indenture between A&P and a trustee to be identified in the
related prospectus supplement, a form of which is filed as an exhibit to the
registration statement of which this prospectus is a part. The following summary
of provisions of the indentures and the debt securities does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the provisions of the indentures, including defined terms. The particular terms
of the debt securities offered by any prospectus supplement and the extent, if
any, to which such general provisions may apply to the offered debt securities
will be described in the applicable prospectus supplement.
GENERAL
Neither indenture limits the amount of debt securities which may be issued
thereunder and each indenture provides that debt securities may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time. The debt securities may be issued from time to time in one or more
series. The senior debt securities will be unsecured and will rank on a parity
with all other unsecured and unsubordinated indebtedness of A&P. Each series of
subordinated debt securities will be unsecured and subordinated to all present
and future senior indebtedness with respect to such series. The senior
indebtedness will be described in an accompanying prospectus supplement.
You should read the prospectus supplement relating to the particular series
of debt securities for the following terms of the offered debt securities:
1. the designation, aggregate principal amount and authorized
denominations;
2. the issue price, expressed as a percentage of the aggregate principal
amount;
3. the maturity date;
4. the interest rate per annum, if any;
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5. if the offered debt securities provide for interest payments, the date
from which such interest will accrue, the dates on which such interest
will be payable, the date on which payment of such interest will commence
and the regular record dates for such interest payment dates;
6. any optional or mandatory sinking fund provisions;
7. the date, if any, after which and the price or prices at which the
offered debt securities may be optionally redeemed or must be mandatorily
redeemed, and any other terms and provisions of such optional or
mandatory redemptions;
8. if other than denominations of $1,000 and any integral multiple thereof,
the denominations in which offered debt securities of the series will be
issuable;
9. if other than the full principal amount, the portion of the principal
amount of offered debt securities of the series which will be payable
upon acceleration or provable in bankruptcy;
10. any events of default not set forth in the applicable indenture;
11. the currency or currencies, including composite currencies, in which
principal, premium and interest will be payable, if other than the
currency of the United States of America;
12. if principal, premium or interest is payable, at the election of A&P or
any holder thereof, in a coin or currency other than that in which the
offered debt securities of the series are stated to be payable, the
period or periods within which, and the terms and conditions upon which,
such election may be made;
13. if denominated in a currency or currencies other than the currency of
the United States of America, the equivalent price in the currency of the
United States of America for purposes of determining the voting rights of
holders of such debt securities under the applicable indenture;
14. if the amount of payments of principal, premium or interest may be
determined with reference to an index, formula or other method based on a
coin or currency other than that in which the offered debt securities of
the series are stated to be payable, the manner in which such amounts
will be determined; and
15. any additional restrictive covenants or other material terms relating to
the offered debt securities, which may not be inconsistent with the
applicable indenture.
Unless otherwise indicated in the prospectus supplement relating thereto,
principal, premium and interest will be payable and the debt securities will be
transferable at the corporate trust office of the applicable trustee. Unless
other arrangements are made, principal, premium and interest will be paid by
checks mailed to the holders at their registered addresses.
Unless otherwise indicated in the prospectus supplement relating thereto,
the debt securities will be issued only in fully registered form without
coupons, in denominations of $1,000 or any integral multiple thereof. No service
charge will be made for any transfer or exchange of the debt securities, but A&P
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
Some or all of the debt securities may be issued as discounted debt
securities, bearing no interest or interest at a rate which at the time of
issuance is below market rates, to be sold at a substantial discount below their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted debt securities will be
described in the prospectus supplement relating thereto.
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RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The senior debt securities indenture classified A&P's subsidiaries
restricted subsidiaries and unrestricted subsidiaries. The subordinated debt
securities indenture does not classify A&P's subsidiaries or unrestricted
subsidiaries. Accordingly, the following provisions do not apply to subordinated
debt securities.
The various restrictive provisions of the senior debt securities indenture
apply to A&P and its restricted subsidiaries and do not apply to unrestricted
subsidiaries. The assets and indebtedness of unrestricted subsidiaries are not
consolidated with those of A&P and its restricted subsidiaries in making
financial calculations under the senior debt securities indenture. Investments
by A&P or by its restricted subsidiaries in unrestricted subsidiaries are
excluded from A&P's assets for purposes of the senior debt securities indenture.
Unrestricted subsidiaries are those subsidiaries which are designated as
unrestricted subsidiaries by the board of directors from time to time pursuant
to the senior debt securities indenture. Unrestricted subsidiaries may also be
designated as restricted subsidiaries by the board of directors pursuant to the
senior debt securities indenture. Restricted subsidiaries are all subsidiaries
other than unrestricted subsidiaries. At the date of execution of the senior
debt securities indenture and at the date of this prospectus, all subsidiaries
of A&P were restricted subsidiaries. However, subject to compliance with the
terms of the senior debt securities indenture, A&P has the right to change the
designation of one or more of such subsidiaries to unrestricted subsidiaries. A
wholly-owned restricted subsidiary is a restricted subsidiary, of which at least
99% of the capital stock, except directors' qualifying shares, is owned by A&P
and its other wholly-owned restricted subsidiaries.
A restricted subsidiary may not be designated an unrestricted subsidiary
unless A&P and its restricted subsidiaries would thereafter be permitted to
incur at least $1.00 of secured debt under the senior debt securities indenture.
An unrestricted subsidiary may not be designated a restricted subsidiary if
it has any secured debt or attributable debt unless immediately thereafter A&P
and its restricted subsidiaries would be permitted to incur such secured debt
under the terms of the senior debt securities indenture.
RESTRICTIONS UPON SECURED DEBT
The senior debt securities indenture restricts the incurrence of secured
debt by A&P. The subordinated debt securities indenture does not restrict the
incurrence of secured debt of any kind by A&P. Accordingly, the following
provisions do not apply to subordinated debt securities.
The restrictions which the senior debt securities indenture places upon
A&P's and its restricted subsidiaries' incurrence of secured debt apply only to
debt secured by principal properties of A&P and its restricted subsidiaries. For
purposes of the senior debt securities indenture, a principal property of A&P
and its restricted subsidiaries refers to all improved real property and related
improvements owned by A&P or a restricted subsidiary having a book value equal
to at least 1% of their consolidated net tangible assets of A&P and its
restricted subsidiaries. At the present time, there are only a few principal
properties of A&P and its restricted subsidiaries.
A&P's and its restricted subsidiaries' consolidated net tangible assets are
(a) the total amount of assets, less applicable reserves and other properly
deductible items, which under generally accepted accounting principles
would be included on a consolidated balance sheet of A&P and its
restricted subsidiaries after deducting, without duplication, the sum of
(1) all liabilities and liability items which under generally accepted
accounting principals would be included on such balance sheet, except
funded debt, liabilities in respect of capital leases, other than the
current portion thereof, capital stock and surplus, surplus reserves
and provisions for deferred income taxes, and
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(2) all good will, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, which in each case
under generally accepted accounting principles would be included on
such consolidated balance sheet,
LESS
(b) the amount which would be so included on such consolidated balance sheet
for investments
(1) in unrestricted subsidiaries, or
(2) in corporations while they were unrestricted subsidiaries but which
at the time of computation are not subsidiaries of A&P.
Consolidated net tangible assets is a financial calculation which excludes
unrestricted subsidiaries.
Neither A&P nor a restricted subsidiary is permitted to incur debt secured
by any of their principal properties without equally and ratably securing the
senior debt securities. This restriction does not apply to customary permitted
encumbrances described in the senior debt securities indenture, including
purchase money mortgages, encumbrances existing on property at the time it is
acquired by A&P or a restricted subsidiary or created within 18 months of the
date of its acquisition, conditional sales and similar agreements. The senior
debt securities indenture also permits other indebtedness secured by
encumbrances not otherwise specifically permitted which, together with
attributable debt respecting existing sale and leaseback transactions entered
into after the date of the senior debt securities indenture, would not at the
time exceed 10% of the consolidated net tangible assets of A&P and its
restricted subsidiaries. Sale and leaseback transactions entered into in respect
of property acquired by A&P or a restricted subsidiary during the 18 months
prior to the date of such sale and leaseback transaction are excluded from the
calculation described in the preceding sentence.
RESTRICTIONS UPON SALES WITH LEASES BACK
The senior debt securities indenture restricts sale and leaseback
transactions by A&P. The subordinated debt securities indenture does not
restrict sale and leaseback transactions of any kind by A&P. Accordingly, the
following provisions do not apply to subordinated debt securities.
Under the senior debt securities indenture A&P is not permitted, and may not
permit a restricted subsidiary, to sell any of their principal properties with
the intention that A&P or any restricted subsidiaries take back a lease of any
such principal property, except
1. sale and leaseback transactions among A&P and/or one or more
wholly-owned restricted subsidiaries,
2. where the lease is for a period, including renewals, of not more than 36
months after which it is intended that the use of such principal
property by the lessee will be discontinued,
3. where A&P would be able to incur additional secured debt not otherwise
specifically permitted by the senior debt securities indenture in an
amount equal to the attributable debt respecting such sale and leaseback
transaction,
4. where the sale and leaseback transaction is entered into in respect of
property acquired by A&P or a restricted subsidiary within 18 months of
such acquisition, or
5. where A&P within 180 days of entering into the sale and leaseback
transaction applies an amount equal to the lesser of
(a) the net proceeds of the sale of the property leased pursuant to such
transaction or
(b) the fair market value of the property so leased
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to
1. the retirement of secured debt of A&P or any restricted subsidiaries,
or senior debt securities, or
2. the acquisition of one or more principal properties other than the
principal property involved in such sale.
A bona fide commitment to acquire a principal property entered into within 180
days of a sale and leaseback transaction shall be deemed to satisfy the
requirement to acquire a principal property.
RESTRICTIONS UPON MERGER AND SALE OF ASSETS
The senior debt securities indenture provides that no merger of A&P with or
sale of A&P's property substantially as an entirety to any other corporation
shall be made if, as a result, properties or assets of A&P would become subject
to a mortgage or lien which would not be permitted by the senior debt securities
indenture, unless the senior debt securities shall be equally and ratably
secured with such obligations. Each indenture provides that any successor entity
must be a corporation organized in the United States, shall expressly assume the
due and punctual payment of the principal, premium and interest on the debt
securities and, immediately after giving effect to a merger or consolidation, no
event of default, and no event which, after notice or lapse of time or both,
would become an event of default, shall have happened and be continuing.
MODIFICATION OF THE INDENTURES
Each indenture and the rights of the respective holders may be modified by
A&P only with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding debt securities of all series
under the respective Indenture affected by the modification, taken together as
one class, but no modification altering the terms of payment of principal or
interest, changing the place or medium of payment of principal or interest,
impairing the rights of holders to institute suit for payment or reducing the
percentage required for modification will be effective against any holder
without his consent.
EVENTS OF DEFAULT
Each indenture defines an event of default with respect to the debt
securities of any series as being any one of the following events:
(a) default for 30 days in any payment of interest when due,
(b) default in any payment of principal when due,
(c) default in the deposit of any sinking fund payment when due,
(d) default for 60 days after appropriate notice in the performance of
any other covenant in the debt securities or the applicable
indenture, or
(e) events of bankruptcy, insolvency or reorganization.
In case an event of default shall occur and be continuing with respect to
the debt securities of any series, the applicable trustee or the holders of not
less than 25% in aggregate principal amount of the debt securities then
outstanding of that series may declare the principal of the debt securities of
such series and the accrued interest thereon to be due and payable. Any event of
default with respect to the debt securities of any series which has been cured
may be waived by the holders of a majority in aggregate principal amount of the
debt securities of that series then outstanding.
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Each indenture requires A&P to file annually with the applicable trustee a
written statement signed by two officers of A&P as to the absence of material
defaults under the terms of such indenture. Each indenture provides that the
applicable trustee may withhold notice to the holders of any default if it
considers it in the interest of the holders to do so, except notice of a default
in payment of principal, premium or interest.
Subject to the provisions of each indenture relating to the duties of the
trustee in case an event of default shall occur and be continuing, each
indenture provides that the trustee shall be under no obligation to exercise any
of its rights or powers under such indenture at the request, order or direction
of holders unless such holders shall have offered to the trustee reasonable
indemnity. Subject to such provisions for indemnification and the rights of the
trustee, each indenture provides that the holders of a majority in principal
amount of the debt securities of any series then outstanding shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the trustee or exercising any trust or power conferred on
the trustee.
DEFEASANCE AND DISCHARGE
The terms of each indenture provide A&P with the option to be discharged
from any and all obligations in respect of the debt securities issued thereunder
upon the deposit with the trustee, in trust, of money or U.S. government
obligations, or both, which through the payment of interest and principal
thereof in accordance with their terms will provide money in an amount
sufficient to pay any installment of principal, premium and interest on and any
mandatory sinking fund payments in respect of the debt securities on the stated
maturity of such payments in accordance with the terms of the debt securities
and the indenture governing such debt securities. Such option may only be
exercised if A&P has received from, or there has been published by, the United
States Internal Revenue Service a ruling to the effect that such a discharge
will not be deemed, or result in, a taxable event with respect to holders. Such
discharge would not apply to A&P's obligations to register the transfer or
exchange of debt securities, to replace stolen, lost or mutilated debt
securities, to maintain paying agencies and hold moneys for payment in trust.
DEFEASANCE OF CERTAIN COVENANTS
The terms of the senior debt securities provide A&P with the option to omit
to comply with the covenants described under the headings "Restricted and
Unrestricted Subsidiaries," "Restrictions upon Secured Debt" and "Restrictions
upon Sales with Leases Back" above. A&P, in order to exercise such option, will
be required to deposit with the trustee money or U.S. government obligations, or
both, which through the payment of interest and principal thereof in accordance
with their terms will provide money in an amount sufficient to pay principal,
premium, if any, and interest on any mandatory sinking fund payments in respect
of the senior debt securities on the stated maturity of such payments in
accordance with the terms of the senior debt securities indenture and such
senior debt securities. A&P will also be required to deliver to the trustee an
opinion of counsel to the effect that A&P has received from, or there has been
published by, the IRS a ruling to the effect that the deposit and related
covenant defeasance will not cause the holders of such series to recognize
income, gain or loss for federal income tax purposes.
The prospectus supplement may further describe the provisions, if any, of
any particular series of offered debt securities permitting a discharge or such
an omission to comply with any covenants.
SENIOR TRUSTEE'S RELATIONSHIP WITH A&P
The senior debt securities indenture trustee acts as a depositary of funds
of, extends lines of credit to, and performs other services for A&P in the
normal course of its business.
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GLOBAL SECURITIES
The debt securities of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with, or on behalf
of, a depository identified in the applicable prospectus supplement and
registered in the name of the depository or a nominee for the depository. In
such a case, one or more global securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding debt securities of the series to be represented by such global
security or securities. Unless and until it is exchanged in whole or in part for
debt securities in definitive certificated form, a global security may not be
transferred except as a whole by the depository for such global security to a
nominee of such depository or by a nominee of such depository to such depository
or another nominee of such depository or by such depository or any such nominee
to a successor depository for such series or a nominee of such successor
depository and except in the circumstances described in the applicable
prospectus supplement.
A&P expects that the following provisions will apply to depository
arrangements with respect to any portion of a series of debt securities to be
represented by a global security. Any additional specific terms of the
depository arrangement will be described in the applicable prospectus
supplement.
Upon the issuance of any global security, and the deposit of such global
security with or on behalf of the depository for such global security, the
depository will credit, on its book-entry registration and transfer system, the
respective principal amounts of the debt securities represented by such global
security to the accounts of institutions that have accounts with the depository
or its nominee. The accounts to be credited will be designated by the
underwriters or agents engaging in the distribution of such debt securities or
by A&P, if such debt securities are offered and sold directly by A&P. Ownership
of beneficial interests in a global security will be limited to participating
institutions or persons that may hold interest through such participating
institutions. Ownership of beneficial interests by participating institutions in
such global security will be shown on, and the transfer of such beneficial
interests will be effected only through, records maintained by the depository
for such global security or by its nominee. Ownership of beneficial interests in
such global security by persons that hold through participating institutions
will be shown on, and the transfer of such beneficial interests within such
participating institutions will be effected only through, records maintained by
such participating institutions. The laws of some jurisdictions may require that
purchasers of securities take physical delivery of such securities in
certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such global securities.
So long as the depository for a global security, or its nominee, is the
registered owner of such global security, such depository or such nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by such global security for all purposes under the
applicable indenture. Unless otherwise specified in the applicable prospectus
supplement and except as specified below, owners of beneficial interests in such
global security will not be entitled to have debt securities of the series
represented by such global security registered in their names, will not receive
or be entitled to receive physical delivery of debt securities of such series in
certificated form and will not be considered the holders thereof for any
purposes under the indenture. Accordingly, each person owning a beneficial
interest in such global security must rely on the procedures of the depository
and, if such person is not a participating institution, on the procedures of the
participating institution through which such person owns its interest, to
exercise any rights of a holder under the indenture.
The depository may grant proxies and otherwise authorize participating
institutions to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action which a holder is entitled to give or
take under the applicable indenture. A&P understands that, under existing
industry practices, if A&P requests any action of holders or any owner of a
beneficial interest in such global security desires to give any notice or take
any action a holder is entitled to give or take under the
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applicable indenture, the depository would authorize the participating
institutions to give such notice or take such action, and participating
institutions would authorize beneficial owners owning through such participating
institutions to give such notice or take such action or would otherwise act upon
the instructions of beneficial owners owning through them.
Unless otherwise specified in the applicable prospectus supplement, payments
with respect to principal, premium and interest on debt securities represented
by a global security registered in the name of a depository or its nominee will
be made by A&P to such depository or its nominee, as the case may be, as the
registered owner of such global security.
A&P expects that the depository for any debt securities represented by a
global security, upon receipt of any payment of principal, premium or interest,
will credit participating institutions' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such global security as shown on the records of such depository. A&P also
expects that payments by participating institutions to owners of beneficial
interests in such global security held through such participating institutions
will be governed by standing instructions and customary practices, as is now the
case with the securities held for the accounts of customers registered in street
names, and will be the responsibility of such participating institutions. None
of A&P, the trustees or any agent of A&P or the trustees shall have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial interests in a global security, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
Unless otherwise specified in the applicable prospectus supplement, a global
security of any series will be exchangeable for certificated debt securities of
the same series only if
(1) the depository for such global securities notifies A&P that it is
unwilling or unable to continue as depository or such depository
ceases to be a clearing agency registered under the Exchange Act
and, in either case, a successor depository is not appointed by A&P
within 90 days after A&P receives such notice or becomes aware of
such ineligibility,
(2) A&P in its sole discretion determines that such global securities
shall be exchangeable for certificated debt securities, or
(3) there shall have occurred and be continuing an event of default
under the applicable indenture with respect to the debt securities
of such series.
Upon any such exchange, owners of beneficial interests in such global security
or securities will be entitled to physical delivery of individual debt
securities in certificated form of like tenor and terms equal in principal
amount to such beneficial interests, and to have such debt securities in
certificated form registered in the names of the beneficial owners, which names
are expected to be provided by such depository's relevant participating
institutions to the applicable trustee.
The following is based on information furnished to A&P:
In the event that the Depository Trust Company acts as depository for the
global securities of any series, such global securities will be issued as fully
registered securities registered in the name of Cede & Co., DTC's partnership
nominee.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participating institutions deposit with DTC. DTC also
facilitates the settlement among participating institutions of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in participating institutions'
accounts, thereby eliminating the need for physical movement of securities
certificates. Direct participating
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institutions include securities brokers and dealers, banks, trust companies,
clearing corporations and other organizations. DTC is owned by a number of its
direct participating institutions and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others, such as
securities brokers and dealers and banks and trust companies that clear through
or maintain a custodial relationship with a direct participating institution,
either directly or indirectly. The rules applicable to DTC and its participating
institutions are on file with the Commission.
To facilitate subsequent transfers, the debt securities are registered in
the name of DTC's nominee, Cede & Co. The deposit of the debt securities with
DTC and their registration in the name of Cede & Co. will effect no change in
beneficial ownership. DTC has no knowledge of the actual beneficial owners of
the debt securities, DTC's records reflect only the identity of the direct
participating institutions to whose accounts debt securities are credited, which
may or may not be the beneficial owners. The participating institutions remain
responsible for keeping account of their holdings on behalf of their customers.
Delivery of notices and other communications by DTC to direct participating
institutions, by direct participating institutions to indirect participating
institutions, and by direct participating institutions and indirect
participating institutions to beneficial owners of debt securities are governed
by arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Neither DTC nor Cede & Co. consents or votes with respect to the debt
securities. Under its usual procedures, DTC mails a proxy to the issuer as soon
as possible after the record date. The proxy assigns Cede & Co.'s consenting or
voting rights to those direct participating institution to whose accounts the
debt securities are credited on the record date.
If applicable, redemption notices shall be sent to Cede & Co. If less than
all of the debt securities of a series represented by global securities are
being redeemed, DTC's practice is to determine by lot the amount of the interest
of each direct participating institutions in such issue to be redeemed.
To the extent that any debt securities provide for repayment or repurchase
at the option of the holders thereof, a beneficial owner shall give notice of
any option to elect to have its interest in the global security repaid by A&P,
through its participating institution, to the applicable trustee, and shall
effect delivery of such interest in a global security by causing the direct
participating institution to transfer the direct participating institution's
interest in the global security or securities representing such interest, on
DTC's records, to the applicable trustee. The requirement for physical delivery
of debt securities in connection with a demand for repayment or repurchase will
be deemed satisfied when the ownership rights in the global security or
securities representing such debt securities are transferred by direct
participating institutions on DTC's records.
DTC may discontinue providing its services as securities depository with
respect to the debt securities at any time. Under such circumstances, in the
event that a successor securities depository is not appointed, debt security
certificates are required to be printed and delivered as described above.
A&P may decide to discontinue use of the system of book-entry transfers
through the securities depository. In that event, debt security certificates
will be printed and delivered as described above.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that A&P believes to be reliable, but A&P takes
no responsibility for the accuracy thereof.
DESCRIPTION OF SECURITIES WARRANTS
A&P may issue securities warrants for the purchase of debt securities or
common stock. Securities warrants may be issued independently or together with
debt securities or common stock offered by any
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prospectus supplement and may be attached to or separate from such debt
securities or common stock. Each series of securities warrants will be issued
under a separate warrant agreement to be entered into between A&P and a bank or
trust company, as warrant agent, all as set forth in the prospectus supplement
relating to the particular issue of offered securities warrants. The warrant
agent will act solely as an agent of A&P in connection with the securities
warrant certificates relating to the securities warrants and will not assume any
obligation or relationship of agency or trust for or with any holders of
securities warrant certificates or beneficial owners of securities warrants. The
following summaries of provisions of the warrant agreements and securities
warrants do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the warrant agreement and
the securities warrant certificates relating to each series of securities
warrants which will be filed with the Commission and incorporated by reference
as an exhibit to the registration statement of which this prospectus is a part
at or prior to the time of the issuance of such series of securities warrants.
GENERAL
If securities warrants are offered, the applicable prospectus supplement
will describe the terms of such securities warrants, including, in the case of
securities warrants for the purchase of debt securities, the following where
applicable:
1. the offering price;
2. the denominations and terms of the series of debt securities
purchasable upon exercise of such securities warrants and whether
such debt securities are senior debt securities or subordinated debt
securities;
3. the designation and terms of any series of debt securities with
which such securities warrants are being offered and the number of
such securities warrants being offered with each such debt security;
4. the date, if any, on and after which such securities warrants and
any related series of debt securities will be transferable
separately;
5. the principal amount of the series of debt securities purchasable
upon exercise of each such securities warrant and the price at which
such principal amount of debt securities of such series may be
purchased upon such exercise;
6. the date on which the right to exercise such securities warrants
shall commence and the date on which such right shall expire;
7. whether the securities warrants will be issued in registered or
bearer form;
8. any special United States Federal income tax consequences;
9. the terms, if any, on which A&P may accelerate the date by which the
securities warrants must be exercised; and
10. any other terms of such securities warrants.
In the case of securities warrants for the purchase of common stock, the
applicable prospectus supplement will describe the terms of such securities
warrants, including the following where applicable:
1. the offering price;
2. the aggregate number of shares purchasable upon exercise and the
exercise price;
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3. the designation and terms of the series of debt securities with
which such securities warrants are being offered, if any, and the
number of such securities warrants being offered with each such debt
security;
4. the date, if any, on and after which such securities warrants and
any related series of debt securities or common stock will be
transferable separately;
5. the date on which the right to exercise such securities warrants
shall commence and the expiration date;
6. any special United States Federal income tax consequences;
7. the terms, if any, on which A&P may accelerate the date by which the
securities warrants must be exercised; and
8. any other terms of such securities warrants.
Securities warrant certificates may be exchanged for new securities warrant
certificates of different denominations, may be presented for registration of
transfer, and may be exercised at the corporate trust office of the applicable
warrant agent or any other office indicated in the applicable prospectus
supplement. Prior to the exercise of any securities warrant to purchase debt
securities, holders of such securities warrants will not have any of the rights
of holders of the debt securities purchasable upon such exercise, including the
right to receive payments of principal, premium or interest on such debt
securities or to enforce covenants in the applicable indenture. Prior to the
exercise of any securities warrants to purchase common stock, holders of such
securities warrants will not have any rights of holders of such common stock,
including the right to receive payments of dividends on such common stock, or to
exercise any applicable right to vote.
EXERCISE OF SECURITIES WARRANTS
Each securities warrant will entitle the holder thereof to purchase such
principal amount of debt securities or number of shares of common stock, as the
case may be, at such exercise price as shall in each case be set forth in, or
calculable from, the prospectus supplement relating to the offered securities
warrants. After the close of business on the expiration date, unexercised
securities warrants will become void.
Securities warrants may be exercised by delivering to the applicable warrant
agent payment as provided in the applicable prospectus supplement of the amount
required to purchase the debt securities or common stock, as the case may be,
purchasable upon such exercise together with information set forth on the
reverse side of the securities warrant certificate. Securities warrants will be
deemed to have been exercised upon receipt of payment of the exercise price in
cash or by certified or official bank check, subject to the receipt within five
business days of the securities warrant certificate evidencing such securities
warrants. Upon receipt of such payment and the securities warrant certificate
properly completed and duly executed at the corporate trust office of the
applicable warrant agent or any other office indicated in the applicable
prospectus supplement, A&P will, as soon as practicable, issue and deliver the
debt securities or common stock, as the case may be, purchasable upon such
exercise. If fewer than all of the securities warrants represented by such
securities warrant certificate are exercised, a new securities warrant
certificate will be issued for the remaining amount of securities warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENTS
The warrant agreements may be amended or supplemented without the consent of
the holders of the securities warrants issued thereunder to effect changes that
are not inconsistent with the provisions of the securities warrants and that do
not adversely affect the interests of the holders of the applicable securities
warrants.
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WARRANT ADJUSTMENTS
The applicable prospectus supplement will specify the manner, if any, in
which the exercise price of, and the number or amount of securities covered by,
a common stock warrant are subject to adjustment.
DESCRIPTION OF PREFERRED TRUST SECURITIES
Each trust may issue only one series of preferred trust securities having
terms described in the prospectus supplement relating thereto. The trust
agreement of each trust will authorize the administrative trustees, on behalf of
the trust, to issue the preferred trust securities and common trust securities
of such trust each representing undivided beneficial interests in the assets of
such trust. You should read the prospectus supplement relating to the particular
preferred trust securities of a trust for specific terms, including
1. the distinctive designation of such preferred trust securities;
2. the number of preferred trust securities;
3. the annual distribution rate or method of its calculation, the date or
dates on which such distributions shall be payable and the record date
with respect to any such distributions;
4. whether distributions on such preferred trust securities shall be
cumulative and, in the case of preferred trust securities having
cumulative distribution rights, the date from which distributions on
such preferred trust securities shall be cumulative;
5. the amount or amounts that shall be paid out of the assets of such trust
to the holders of the preferred trust securities of such trust upon
voluntary or involuntary dissolution of such trust;
6. the obligation, if any, of such trust to purchase or redeem such
preferred trust securities and the price or prices at which, the period
or periods within which, and the terms and conditions upon which such
preferred trust securities shall be purchased or redeemed, in whole or
in part, pursuant to such obligation;
7. the voting rights of such preferred trust securities including the
approval, if any, required to amend such trust;
8. the trust's rights to defer distributions on the preferred trust
securities in conjunction with A&P's extending the interest payment
period on the related junior subordinated debt securities; and
9. any other relative rights, preferences, privileges, limitations or
restrictions of such preferred trust securities not inconsistent with
the trust agreement of such trust or applicable law.
All preferred trust securities offered hereby will be guaranteed by A&P to the
extent set forth under "Description of the Preferred Trust Securities
Guarantees." Any material United States federal income tax considerations
applicable to an offering of preferred trust securities will be described in the
prospectus supplement relating thereto.
DESCRIPTION OF PREFERRED TRUST SECURITIES GUARANTIES
Set forth below is a summary of information concerning the guaranties that
will be executed and delivered by A&P for the benefit of the holders of
preferred trust securities of the respective trusts. Each guaranty will be
qualified as an indenture under the 1939 Act. Bankers Trust Company will act as
guaranty trustee for each guaranty for purposes of the 1939 Act. Each guaranty
will be held by the guaranty trustee for the benefit of holders of the preferred
trust securities to which it relates.
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Pursuant to each guaranty, A&P will irrevocably and unconditionally agree,
to the extent set forth therein, to pay in full, to the holders of the related
preferred trust securities
1. any accrued and unpaid distributions required to be paid on the
preferred trust securities of each trust but if and only if and to the
extent that such trust has funds legally and immediately available
therefor,
2. the redemption price, including all accrued and unpaid distributions to
the date of redemption, with respect to any preferred trust securities
called for redemption by such trust, but if and only to the extent such
trust has funds legally and immediately available therefor, and
3. upon a dissolution, of such trust, other than in connection with the
distribution of junior subordinated debt securities to the holders of
trust securities of such trust or the redemption of all of the preferred
trust securities of such trust, the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on the preferred trust securities of such trust to the
date of payment, to the extent such trust has funds legally and
immediately available therefor, and
(b) the amount of assets of such trust remaining legally available for
distribution to holders of preferred trust securities of such trust upon
liquidation of such trust.
A&P's obligation to make a guaranty payment may be satisfied by direct payment
of the required amounts by A&P to the holders of the related preferred trust
securities or by causing the related trust to pay such amounts to such holders.
Each guaranty will be a guarantee of payments with respect to the related
preferred trust securities from the time of issuance of such preferred trust
securities, but will not apply to the payment of distributions and other
payments on such preferred trust securities when the related trust does not have
sufficient funds legally and immediately available to make such distributions or
other payments. If A&P does not make interest payments on the junior
subordinated debt securities held by the property trustee under a trust, such
trust will not make distributions on its preferred trust securities.
SUBORDINATION
A&P's obligations under each guaranty will constitute an unsecured
obligation of A&P and will rank
1. subordinate and junior in right of payment to all other liabilities of
A&P, including the junior subordinated debt securities, except those
obligations or liabilities made pari passu or subordinate by their
terms,
2. pari passu with the most senior preferred or preference stock now or
hereafter issued by A&P and with any guarantee now or hereafter entered
into by A&P in respect of any preferred or preference securities of any
affiliate of A&P, and
3. senior to all common stock of A&P.
The terms of the preferred trust securities will provide that each holder of
preferred trust securities by acceptance thereof agrees to the subordination
provisions and other terms of the guaranty related thereto.
Each guaranty will constitute a guarantee of payment and not of collection.
This means that the guaranteed party may institute a legal proceeding directly
against the guarantor to enforce its rights under the guarantee without first
instituting a legal proceeding against any other person or entity.
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AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially and adversely
affect the rights of holders of the related preferred trust securities, each
guaranty may be amended only with the prior approval of the holders of a
majority in liquidation amount of such outstanding preferred trust securities.
The manner of obtaining any such approval of holders of the preferred trust
securities will be as set forth in an accompanying prospectus supplement. All
guaranties and agreements contained in each guaranty shall bind the successors,
assigns, receivers, trustees and representatives of A&P and shall inure to the
benefit of the holders of the related preferred trust securities then
outstanding.
TERMINATION
Each guaranty will terminate and be of no further force and effect as to the
related preferred trust securities upon full payment of the redemption price of
all such preferred trust securities, upon distribution of the related junior
subordinated debt securities to the holders of such preferred trust securities,
or upon full payment of the amounts payable upon liquidation of the related
trust. Each guaranty will continue to be effective or will be reinstated, as the
case may be, if at any time any holder of the related preferred trust securities
must restore payment of any sums paid with respect to such preferred trust
securities or under such guaranty.
EVENTS OF DEFAULT
An event of default under each guaranty will occur upon the failure by A&P
to perform any of its payment obligations thereunder. The holders of a majority
in liquidation amount of the preferred trust securities to which any guaranty
relates have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the guaranty trustee in respect of such
guaranty or to direct the exercise of any trust or power conferred upon the
guaranty trustee under such guaranty. Any holder of the related preferred trust
securities may institute a legal proceeding directly against A&P to enforce such
holder's rights under such guaranty without first instituting a legal proceeding
against the guaranty trustee or any other person or entity. The holders of a
majority in liquidation amount of preferred trust securities of any series may,
by vote, on behalf of the holders of all the preferred trust securities of such
series, waive any past event of default and its consequences.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guaranty trustee, prior to the occurrence of any event of default with
respect to any guaranty and after the curing or waiving of all events of default
with respect to such guaranty, undertakes to perform only such duties as are
specifically set forth in such guaranty and, in case an event of default has
occurred, shall exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to such provisions,
the guaranty trustee is under no obligation to exercise any of the powers vested
in it by any guaranty at the request of any holder of the related preferred
trust securities, unless offered reasonable indemnity against the costs,
expenses and liabilities which might be incurred thereby.
Bankers Trust Company, the guaranty trustee, also serves as property trustee
and as indenture trustee.
AGREEMENTS AS TO EXPENSES AND LIABILITIES
Pursuant to an agreement as to expenses and liabilities to be entered into
by A&P under each trust agreement, A&P will irrevocably and unconditionally
guarantee to each person or entity to whom each trust becomes indebted or liable
the full payment of any indebtedness, expenses or liabilities of such trust,
other than obligations of such trust to pay to the holders of the related
preferred trust securities or other similar interests in such trust the amounts
due such holders pursuant to the terms of such preferred trust securities or
such other similar interests, as the case may be.
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DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
GENERAL
Each series of junior subordinated debt securities will be issued under the
subordinated debt securities indenture. You should read the description of debt
securities for a description of terms applicable to the junior subordinated debt
securities. You should read the prospectus supplement relating to the particular
preferred trust securities for additional terms relating to the junior
subordinated debt securities.
SUBORDINATION
The junior subordinated debt securities are subordinated and junior in right
of payment to all senior indebtedness of A&P. With respect to the junior
subordinated debt securities, senior indebtedness refers to
1. any payment due in respect of indebtedness of A&P, whether outstanding
at the date of execution of the subordinated debt securities indenture
or thereafter incurred, created or assumed,
(a) in respect of money borrowed, including any financial derivative,
hedging or futures contract or similar instrument, and
(b) evidenced by securities, debentures, bonds, notes or other similar
instruments issued by A&P that, by their terms, are senior or senior
subordinated debt securities including, without limitation, all
obligations under its indentures with various trustees;
2. all capital lease obligations;
3. all obligations issued or assumed as the deferred purchase price of
property, all conditional sale obligations and all obligations of A&P
under any title retention agreement, but excluding trade accounts
payable arising in the ordinary course of business and long-term
purchase obligations;
4. all obligations for the reimbursement of any letter of credit, banker's
acceptance, security purchase facility or similar credit transaction;
5. all obligations of the type referred to in clauses 1 through 4 above of
other persons the payment of which A&P is responsible or liable as
obligor, guarantor or otherwise; and
6. all obligations of the type referred to in clauses 1 through 5 above of
other persons secured by any lien on any property or asset of A&P,
whether or not such obligation is assumed by A&P,
EXCEPT FOR
1. any such indebtedness that is by its terms subordinated to or pari passu
with the junior subordinated debt securities and
2. any unsecured indebtedness between or among A&P and/or its affiliates.
No payment of principal, premium or interest on the junior subordinated debt
securities may be made if
(a) any senior indebtedness is not paid when due and any applicable grace
period with respect to such default has ended with such default not
being cured or waived or otherwise ceasing to exist, or
(b) the maturity of any senior indebtedness has been accelerated because
of a default.
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Upon any payment or distribution of assets of A&P to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors, marshalling of assets or liabilities, or any bankruptcy,
insolvency or similar proceedings of A&P, the holders of senior indebtedness
shall be entitled to receive payment in full of all amounts due or to become due
on or in respect of all senior indebtedness before the holders of the junior
subordinated debt securities are entitled to receive or retain any payment or
distribution. Subject to the prior payment of all senior indebtedness, the
rights of the holders of the junior subordinated debt securities will be
subrogated to the rights of the holders of senior indebtedness to receive
payments and distributions applicable to such senior indebtedness until all
amounts owing on the junior subordinated debt securities are paid in full.
As of February 27, 1999, senior indebtedness of A&P aggregated approximately
$860,692,000.
ADDITIONAL COVENANTS
A&P will covenant in the supplemental subordinated debt securities indenture
relating to each series of junior subordinated debt securities, for the benefit
of the holders of each series of junior subordinated debt securities, that
1. if A&P shall have given notice of its election to extend an interest
payment period for such series of junior subordinated debt securities
and such extension shall be continuing,
2. if A&P shall be in default with respect to its payment or other
obligations under the related preferred trust securities, or
3. if an event of default with respect to such series of junior
subordinated debt securities shall have occurred and be continuing,
then
(a) A&P shall not declare or pay any dividend or make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock, and
(b) A&P shall not make any payment of principal, premium or interest on or
repay, repurchase or redeem any debt securities issued by A&P which rank
pari passu with or junior to the junior subordinated debt securities.
None of the foregoing, however, shall restrict
1. any of the actions described clause (a) above resulting from any
reclassification of A&P's capital stock or the exchange or conversion of
one class or series of A&P's capital stock for another class or series
of A&P's capital stock, or
2. the purchase of fractional interests in shares of A&P's capital stock
pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged.
The supplemental subordinated debt securities indenture will further provide
that, for so long as the preferred trust securities of any trust remain
outstanding, A&P covenants
1. to directly or indirectly maintain 100% ownership of the common
securities of such trust; PROVIDED that any permitted successor of A&P
under the subordinated debt securities indenture may succeed to A&P's
ownership of such common securities, and
2. to use its reasonable efforts to cause such trust
(a) to remain a statutory business trust, except in connection with the
distribution of junior subordinated debt securities to the holders of
trust securities in liquidation of such trust, the redemption of all
of the trust securities of such trust, or mergers, consolidations or
amalgamations permitted by the related trust agreement, and
(b) to otherwise continue to be classified as a grantor trust for United
States federal income tax purposes.
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ADDITIONAL EVENT OF DEFAULT
The supplemental subordinated debt securities indenture for each series of
junior subordinated debt securities will also provide that the failure of A&P to
pay to a preferred trust securities issuing trust that is a holder of junior
subordinated debt securities, concurrent with each payment of interest and
subject to the 30 day grace period applicable to interest payments, such
additional amounts as may be required so that the net amounts received and
retained by such trust, after paying taxes, duties, assessments or governmental
charges of whatever nature imposed by the United States or any other taxing
authority, other than withholding taxes, will not be less than the amounts such
trust would have received had no such taxes, duties, assessments, or other
governmental charges been imposed.
RELATIONSHIP AMONG THE PREFERRED TRUST SECURITIES,
THE JUNIOR SUBORDINATED DEBT SECURITIES AND
THE PREFERRED TRUST SECURITIES GUARANTIES
As long as payments of interest and other payments are made when due on each
series of junior subordinated debt securities, such payments will be sufficient
to cover distributions and payments due on the related trust securities because
1. the aggregate principal amount of each series of junior subordinated
debt securities will be equal to the sum of the aggregate stated
liquidation amount of the related trust securities;
2. the interest rate and interest and other payment dates on each series
of junior subordinated debt securities will match the distribution
rate and distribution and other payment dates for the related
preferred trust securities;
3. A&P shall pay for all costs and expenses of each trust; and
4. each trust agreement provides that the trustees thereunder shall not
cause or permit the trust to, among other things, engage in any
activity that is not consistent with the purposes of the trust.
Payments of distributions and other payments due on the preferred trust
securities, to the extent funds therefor are legally and immediately available,
will be guaranteed by A&P as and to the extent set forth under "Description of
the Preferred Trust Securities Guaranties." If A&P does not make interest
payments on any series of junior subordinated debt securities, it is not
expected that the related trust will have sufficient funds to pay distributions
on its preferred trust securities. Each guaranty is a guaranty from the time of
its issuance, but does not apply to any payment of distributions unless and
until the related trust has sufficient funds legally and immediately available
for the payment of such distributions.
If A&P fails to make interest or other payments on any series of junior
subordinated debt securities when due, after taking into account any extension
period as described in the applicable prospectus supplement, the trust agreement
provides a mechanism whereby the holders of the related preferred trust
securities may appoint a substitute property trustee. Such holders may also
direct the property trustee to enforce its rights under the junior subordinated
debt securities of such series, including proceeding directly against A&P to
enforce such junior subordinated debt securities. If the property trustee fails
to enforce its rights under any series of junior subordinated debt securities,
to the fullest extent permitted by applicable law, any holder of related
preferred trust securities may institute a legal proceeding directly against A&P
to enforce the property trustee's rights under such series of junior
subordinated debt securities without first instituting any legal proceeding
against the property trustee or any other person or entity. Notwithstanding the
foregoing, a holder of preferred trust securities may institute a legal
proceeding directly against A&P, without first instituting a legal proceeding
against the property trustee or any other person or entity, for enforcement of
payment to
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such holder of principal of or interest on junior subordinated debt securities
of the related series having a principal amount equal to the aggregate stated
liquidation amount of the preferred trust securities of such holder on or after
the due dates specified in the junior subordinated debt securities of such
series.
If A&P fails to make payments under any guaranty, such guaranty provides a
mechanism whereby the holders of the preferred trust securities to which such
guaranty relates may direct the guaranty trustee to enforce its rights
thereunder. In addition, any holder of preferred trust securities may institute
a legal proceeding directly against A&P to enforce the guaranty trustee's rights
under the related guaranty without first instituting a legal proceeding against
the guaranty trustee or any other person or entity.
Upon any voluntary or involuntary dissolution of any trust, unless junior
subordinated debt securities of the related series are distributed in connection
therewith, the holders of preferred trust securities of such trust will be
entitled to receive, out of assets legally available for distribution to
holders, a liquidation distribution in cash as described in the applicable
prospectus supplement. Upon any voluntary or involuntary liquidation or
bankruptcy of A&P, the property trustee, as holder of the related series of
junior subordinated debt securities, would be a subordinated creditor of A&P,
subordinated in right of payment to all senior indebtedness with respect to the
related series of junior subordinated debt securities, but entitled to receive
payment in full of principal and interest, before any stockholders of A&P
receive payments or distributions. Because A&P is guarantor under each guaranty
and has agreed to pay for all costs, expenses and liabilities of each trust
other than the trust's obligations to holders of the preferred trust securities,
the positions of a holder of preferred trust securities and a holder of junior
subordinated debt securities of the related series relative to other creditors
and to stockholders of A&P in the event of liquidation or bankruptcy of A&P
would be substantially the same.
MARYLAND ANTI-TAKEOVER PROVISIONS
As of May 1, 1999, A&P was 54.92% owned by Tengelmann
Warenhandelsgesellschaft, a general retailer headquartered in Germany.
Tengelmann established its majority ownership position in A&P prior to the
enactment of the following legislation.
MARYLAND FAIR PRICE PROVISIONS. The Maryland fair price statute may
discourage persons or entities from attempting to gain control of a corporation.
This law imposes statutory requirements with respect to business combinations,
such as mergers and other similar transactions and specified transfers of assets
and securities, when such transactions are between a company and an interested
stockholder or an affiliate of an interested stockholder. An interested
stockholder is a person who owns beneficially, directly or indirectly, 10% or
more of the outstanding voting stock of the corporation or an affiliate or
associate of such person who was a 10% holder at any time in the last two years.
Under the Maryland fair price statute, business combinations, including a
second-stage merger transaction, with an interested stockholder may not be
consummated for a period of five years following the most recent date on which
the interested stockholder becomes an interested stockholder. After this
five-year period, unless minimum value standards are met or an exemption is
available, transactions of these types may not be consummated between a Maryland
corporation and an interested stockholder unless recommended by the board of
directors of the corporation, and approved by the affirmative vote of at least
80% of the votes entitled to be cast by the holders of outstanding shares of
voting stock and 66 2/3% of the votes entitled to be cast by the holders of the
voting stock held by stockholders other than the interested stockholder. A
business combination with an interested stockholder which is approved by the
board of directors of a Maryland corporation at any time before an interested
stockholder first becomes an interested stockholder is not subject to the
special voting
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requirements. A&P has no special provisions in its Articles or by laws related
to the Maryland fair price statute.
MARYLAND CONTROL SHARE ACQUISITION PROVISION. Maryland law imposes
limitations on voting rights in a control share acquisition. The Maryland
statute defines control shares as shares representing between
1. 20% to 33 1/3%,
2. 33 1/3% to 50%, and
3. 50% or higher
of the outstanding shares. The Maryland statute requires a two-thirds
stockholder vote, excluding shares owned by the acquiring person and members of
management, to accord voting rights to stock acquired in a control share
acquisition. Each acquisition of stock resulting in aggregate holdings within a
new control share level listed above would be a distinct control share
acquisition.
The statute requires Maryland corporations to hold a special meeting at the
request of an actual or proposed control share acquiror generally within 50 days
after a request is made with the submission of an acquiring person statement,
but only if the acquiring person gives a written undertaking to pay the
corporation's expenses of the special meeting. In addition, the statute gives
the Maryland corporation redemption rights if there is a stockholder vote on the
issue and the grant of voting rights is not approved, or if an acquiring person
statement is not delivered to the target within 10 days following a control
share acquisition. Moreover, the statute provides that if, before a control
share acquisition occurs, voting rights are accorded to control shares which
results in the acquiring person having majority voting power, then minority
stockholders have appraisal rights. A&P has no special provisions in its
Articles or by laws related to the Maryland control share acquisition statute.
Reference is made to the full text of the foregoing statutes for their
entire terms, and the partial summary contained herein is not intended to be
complete.
PLAN OF DISTRIBUTION
A&P may sell the Securities
1. through underwriters or dealers;
2. through agents;
3. directly to purchasers; or
4. through a combination of any such methods of sale.
Any such underwriter, dealer or agent may be deemed to be an underwriter within
the meaning of the Securities Act. The prospectus supplement relating to any
offering of securities will set forth their offering terms, including the name
or names of any underwriters, the purchase price of the securities and the
proceeds to A&P from such sale, any underwriting discounts, commissions and
other items constituting underwriters' compensation, any initial public offering
price, and any underwriting discounts, commissions and other items allowed or
reallowed or paid to dealers, and any securities exchanges on which the
securities may be listed.
If underwriters are used in the sale, the securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, or at prices related to such
prevailing market prices, or at negotiated prices. The securities may be offered
to the public either through underwriting syndicates represented by one or more
managing underwriters or directly by one or more of such firms. Unless otherwise
set forth in the prospectus supplement, the obligations of the
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underwriters to purchase the securities will be subject to customary conditions
precedent and the underwriters will be obligated to purchase all the offered
securities if any are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
Any agent involved in the offer or sale of the securities in respect of
which this prospectus is delivered will be named, and any commissions payable by
A&P to such agent will be set forth, in the accompanying prospectus supplement.
Unless otherwise indicated in the prospectus supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
Underwriters, dealers and agents may be entitled, under agreements entered
into with A&P, to indemnification by A&P against civil liabilities, including
liabilities under the Securities Act or to contribution by A&P to payments they
may be required to make in respect thereof.
Certain of the underwriters, agents or dealers and their associates may
perform services for A&P in the ordinary course of business.
LEGAL MATTERS
Certain legal matters in connection with the securities will be passed upon
for A&P by Cahill Gordon & Reindel (a partnership including a professional
corporation), New York, New York. Certain matters of Delaware law relating to
the validity of the preferred trust securities will be passed upon for A&P and
the trusts by Richards, Layton & Finger, P.A.
EXPERTS
The financial statements incorporated in this prospectus by reference from
The Great Atlantic & Pacific Tea Company, Inc.'s Annual Report on Form 10-K for
the year ended February 27, 1999 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and has been so incorporated in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
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The Great Atlantic & Pacific Tea Company, Inc.
