SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
February 20, 1997
AMERICAN STORES COMPANY
(Exact name of registrant as specified in charter)
Delaware
(State or other jurisdiction
of incorporation)
1-5392 87-0207226
(Commission File No.) (IRS Employer
Identification No.)
709 East South Temple Street, Salt Lake City, Utah 84102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(801) 539-0112<PAGE>
ITEM 5. OTHER EVENTS
On February 20, 1997, the Company entered into a
Stock Purchase Agreement (the "Stock Purchase Agreement") with
members of the family of L.S. Skaggs and certain Skaggs family
and charitable trusts (collectively, the "Selling Stockhold-
ers") for the repurchase by the Company of 12,222,222 shares of
its common stock from the Selling Stockholders for $45 per
share, the closing price of the Company's common stock on the
New York Stock Exchange on such date. A copy of the Stock Pur-
chase Agreement is attached as Exhibit 1 hereto and is incorpo-
rated herein by reference.
On February 20, 1997, the Company also entered into a
Registration Rights Agreement (the "Registration Rights Agree-
ment") with the Selling Stockholders pursuant to which, among
other things, the Company has agreed to file a registration
statement to enable the Selling Stockholders to sell between
14.7 million and 16.4 million additional shares of common stock
of the Company in a secondary offering as promptly as practi-
cable. A copy of the Registration Rights Agreement is attached
as Exhibit 3 hereto and is incorporated herein by reference.
On February 20, 1997, the Company and First Chicago
Trust Company of New York, as Rights Agent, entered into a
Third Amendment (the "Third Amendment") to the Rights Agree-
ment, dated as of March 8, 1988, as amended on March 20, 1990
and June 24, 1996 (the "Rights Agreement") providing that the
execution, delivery and performance of the Stock Purchase
Agreement and the Registration Rights Agreement shall not cause
Mr. L.S. Skaggs, his Affiliates and Associates, his heirs,
family and any trust or foundation to which he or members of
his family has transferred or may transfer common stock of the
Company to become an "Acquiring Person" as defined in the
Rights Agreement. A copy of the Third Amendment is attached
hereto as Exhibit 4 and is incorporated herein by reference.
On February 21, 1997, the Company issued a press re-
lease relating to the Stock Purchase Agreement, the Registra-
tion Rights Agreement and the transactions contemplated
thereby. A copy of the press release is attached as Exhibit 5
hereto and is incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
Exhibit
No. Description
1. Stock Purchase Agreement, dated as of February 20,
1997, by and among American Stores Company and Lennie
Sam Skaggs, Aline W. Skaggs and the stockholders of
American Stores Company listed on Schedule 1 thereto
(together with Lennie Sam Skaggs and Aline W. Skaggs,
the "Initial Sellers") and any of the stockholders
listed on Schedule 2 thereto who have, within 10
business days after February 20, 1997, delivered a
written notice to American Stores Company and the
Initial Sellers agreeing to be bound by the terms of
the Stock Purchase Agreement and the Registration
Rights Agreement.
2. Letter, dated February 20, 1997, from The Northern
Trust Company, as trustee of certain trusts specified
on Schedule 2 to the Stock Purchase Agreement,
agreeing to be bound by the terms of the Stock
Purchase Agreement and the Registration Rights
Agreement.
3. Registration Rights Agreement, dated as of February
20, 1997, by and among American Stores Company and
the Sellers listed on the signature pages thereto.
4. Third Amendment, dated as of February 20, 1997, to
the Rights Agreement, dated as of March 8, 1988, as
amended March 20, 1990 and June 24, 1996, between
American Stores Company and First Chicago Trust
Company of New York, as Rights Agent.
5. Press Release, dated February 21, 1997, relating to
the Stock Purchase Agreement, the Registration Rights
Agreement and the transactions contemplated thereby.
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Pursuant to the requirements of the Securities Ex-
change Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
AMERICAN STORES COMPANY
By: /s/ Teresa Beck
Name: Teresa Beck
Title: Chief Financial
Officer
Date: February 21, 1997
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EXHIBIT INDEX
Exhibit Sequential
No. Description Page Number
1. Stock Purchase Agreement, dated as
of February 20, 1997, by and among
American Stores Company and Lennie
Sam Skaggs, Aline W. Skaggs and
the stockholders of American
Stores Company listed on Schedule
1 thereto (together with Lennie
Sam Skaggs and Aline W. Skaggs,
the "Initial Sellers") and any of
the stockholders listed on Sched-
ule 2 thereto who have, within 10
business days after February 20,
1997, delivered a written notice
to American Stores Company and the
Initial Sellers agreeing to be
bound by the terms of the Stock
Purchase Agreement and the Regis-
tration Rights Agreement.
2. Letter, dated February 20, 1997,
from The Northern Trust Company,
as trustee of certain trusts
specified on Schedule 2 to the
Stock Purchase Agreement, agreeing
to be bound by the terms of the
Stock Purchase Agreement and the
Registration Rights Agreement.
3. Registration Rights Agreement,
dated as of February 20, 1997, by
and among American Stores Company
and the Sellers listed on the sig-
nature pages thereto.
4. Third Amendment, dated as of Feb-
ruary 20, 1997, to the Rights
Agreement, dated as of March 8,
1988, as amended March 20, 1990
and June 24, 1996, between
American Stores Company and First
Chicago Trust Company of New York,
as Rights Agent.
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5. Press Release, dated February 21,
1997, relating to the Stock Pur-
chase Agreement, the Registration
Rights Agreement and the transac-
tions contemplated thereby.
-6-
EXHIBIT 1
STOCK PURCHASE AGREEMENT
DATED AS OF FEBRUARY 20, 1997
BY AND AMONG
AMERICAN STORES COMPANY,
LENNIE SAM SKAGGS,
ALINE W. SKAGGS
AND
CERTAIN STOCKHOLDERS<PAGE>
TABLE OF CONTENTS
Page
1. Purchase and Sale of Shares...................... 2
2. Closing.......................................... 3
3. Deliveries at the Closing........................ 4
4. Representations and Warranties of Sellers........ 5
5. The Company's Representations and Warranties..... 7
6. Covenants........................................ 9
7. Conditions....................................... 24
8. Specific Performance............................. 26
9. Expenses......................................... 26
10. Brokerage........................................ 27
11. Termination...................................... 28
12. Indemnification.................................. 28
13. Public Announcements............................. 30
14. Integration; Amendment; Waiver................... 30
15. Assignment....................................... 31
16. Headings......................................... 31
17. Survival......................................... 31
18. Counterparts..................................... 31
19. Notices.......................................... 32
20. Governing Law.................................... 33
21. Severability..................................... 33
22. Interpretation................................... 33
23. Sellers' Obligations Several..................... 34
Schedule 1 - Initial Sellers.......................... S-1
Schedule 2 - Additional Sellers/Other Stockholders.... S-2
Exhibit A - Form of Transferee Letter................ E-1
Exhibit B - Form of Press Release.................... E-2
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of this 20th day
of February, 1997 (the "Agreement"), by and among American
Stores Company, a Delaware corporation ("the Company"), and
Lennie Sam Skaggs ("L.S. Skaggs"), Aline W. Skaggs and the
stockholders of the Company listed on Schedule 1 hereto (to-
gether with L.S. Skaggs and Aline W. Skaggs, the "Initial Sell-
ers") and any of the stockholders listed on Schedule 2 hereto
who have, within 10 business days after the date hereof, deliv-
ered a written notice to the Company and the Initial Sellers
agreeing to be bound by the terms of this Agreement and the
Registration Rights Agreement (as defined below) (the "Addi-
tional Sellers" and, together with the Initial Sellers, the
"Sellers"). Any bank or trust company which agrees to be bound
by this Agreement shall do so only in the capacity as shown on
Schedule 1 or Schedule 2, as the case may be, and shall not be
deemed to be an affiliate of any trust or account not listed on
such Schedules (provided such trust or account was not formed
by or for the benefit of any Initial Seller or an affiliate of
an Initial Seller). Any person or entity listed on Schedule 2
which does not become an Additional Seller is referred to
herein as an "Other Stockholder."
WHEREAS, the Initial Sellers are collectively the
beneficial owners of 15,991,594 shares (together with shares
owned by the Additional Sellers, the "Shares") of common stock,
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par value $1.00 per share, of the Company (the "Common Stock"),
with each Seller beneficially owning that number of Shares set
forth next to such Seller's name under the heading "Shares
Owned" on Schedule 1;
WHEREAS, subject to the terms and conditions of this
Agreement, each Initial Seller desires to sell or cause to be
sold to the Company, and the Company desires to purchase (the
"Company Repurchase"), that number of Shares set forth next to
such Initial Seller's name under the column "Repurchased
Shares" on Schedule 1 (the "Repurchased Shares") for a price of
$45 per share (the "Repurchase Price"), for an aggregate price
of $550 million; and
WHEREAS, contemporaneously with entering into this
Agreement the Company and the Initial Sellers have entered into
a registration rights agreement (the "Registration Rights
Agreement") pursuant to which, among other things, the Company
shall file with the Securities and Exchange Commission, and use
all reasonable efforts to cause to become effective, a regis-
tration statement covering the sale to the public of all of the
Shares owned by the Sellers that are not sold to the Company
pursuant hereto (the "Retained Shares");
NOW, THEREFORE, the parties hereby agree as follows:
1. Purchase and Sale of Shares. (a) Subject to
the terms and conditions of this Agreement, and in reliance on
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the representations, warranties and covenants contained herein,
at the Closing (as hereinafter defined), each Seller will sell,
assign, transfer and convey to the Company, and the Company
will purchase from such Seller, the Repurchased Shares set
forth next to such Seller's name under the column "Repurchased
Shares" on Schedule 1, free and clear of all pledges, liens,
claims, options, charges or encumbrances of whatever nature
("Encumbrances"). The number of Repurchased Shares sold by
each Seller shall equal the product, rounded to the nearest
whole share, of (i) the number of Shares owned by such Seller
as shown on Schedule 1, multiplied by (ii) a fraction, the
numerator of which is 12,222,222 and the denominator of which
is the aggregate number of Shares owned by all Sellers as shown
on Schedule 1. References in this Agreement to Schedule 1
shall mean such Schedule as amended to reflect any Additional
Sellers and to change the allocation of the Repurchased Shares
among all of the Sellers pursuant to the preceding sentence.
In consideration of the aforesaid sale, the Company will pay to
each such Seller for each Repurchased Share sold by such Seller
pursuant hereto, in immediately available funds and in
accordance with Section 3, the Repurchase Price.
2. Closing. Subject to the satisfaction or waiver
of the conditions set forth in Section 7 hereof, the closing of
the purchase and sale of the Repurchased Shares (the "Closing")
shall be held at the corporate offices of the Company in Salt
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Lake City, Utah at 10:00 a.m. (a) on the closing date of the
Secondary Offering (as defined in the Registration Rights
Agreement); or (b) if the Secondary Offering is terminated pur-
suant to Section 2(b) of the Registration Rights Agreement (or
for any other reason other than due to a breach of this Agree-
ment, the Registration Rights Agreement or the underwriting
agreement relating to the Secondary Offering by any of the
Sellers) and the holders of two-thirds of the Repurchased
Shares have delivered to the Company on the Pricing Date (as
defined in Section 2(b) of the Registration Rights Agreement) a
written waiver of the condition set forth in Section 7(a)(iii)
hereof, on the fourth business day following the Pricing Date;
or (c) on such other date to which the holders of two-thirds of
the Repurchased Shares and the Company shall each agree (the
"Closing Date").
3. Deliveries at the Closing. At the Closing, (a)
each Seller will deliver to the Company (i) certificates repre-
senting the Repurchased Shares to be sold by such Seller pursu-
ant hereto, with appropriate stock powers attached, properly
signed, with any necessary documentary or transfer tax stamps
duly affixed and cancelled, (ii) a certificate of such Seller
that the condition set forth in Section 7(b)(i) has been satis-
fied and (iii) the opinion of counsel to such Seller described
in Section 7(b)(ii); and (b) the Company will (i) pay to each
Seller, for each of such Seller's Repurchased Shares, the Re-
purchase Price (in the amount indicated on Schedule 1 hereto)
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by wire transfer of immediately available funds to the account
designated by each such Seller in writing on or before the sec-
ond business day prior to the Closing Date, (ii) deliver to
each Seller a certificate of the Company that the condition set
forth in Section 7(a)(i) has been satisfied and (iii) deliver
to each Seller the opinion of counsel to the Company described
in Section 7(a)(ii).
4. Representations and Warranties of Sellers. Each
Seller represents and warrants to the Company as follows (as to
such Seller and not as to any other Seller):
(a) Each Seller that is not an individual is
duly organized and validly existing under the laws of its ju-
risdiction of organization. Each Seller has all requisite pow-
er and authority to execute and deliver this Agreement and the
Registration Rights Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated here-
by and thereby. This Agreement and the Registration Rights
Agreement have been duly executed and delivered by each Seller
and, assuming the due execution hereof and thereof by the Com-
pany, this Agreement and the Registration Rights Agreement con-
stitute the legal, valid and binding obligation of each Seller
enforceable in accordance with the terms hereof and thereof.
(b) The Shares listed on Schedule 1 constitute
all of the shares of Common Stock owned of record and/or ben-
eficially by each Seller (other than shares of Common Stock
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underlying the Company's employee stock options or restricted
stock agreements with the Company or held in an employee bene-
fit plan of the Company) and/or the affiliates of such Seller
(other than the Company or any subsidiary of the Company, or
any employee benefit plan thereof (or related employee benefit
trust)) (the "Seller Affiliates"). Upon consummation of the
Company Repurchase at the Closing, as contemplated by this
Agreement, good title to the Repurchased Shares will be de-
livered to the Company, free and clear of any Encumbrances.
(c) Neither the execution and delivery by the
Sellers of this Agreement nor the consummation by the Sellers
of the transactions contemplated hereby will violate or con-
flict with, or constitute a default under, or result in the
creation or imposition of any Encumbrance upon any of the as-
sets or properties of such Seller under (i) in the case of any
Seller that is not an individual, the certificate of incorpora-
tion, bylaws, trust agreement or other organizational documents
of such Seller, (ii) any agreement, judgment, order or other
obligation to which such Seller is a party or by which such
Seller is bound, or (iii) assuming the representation by the
Company in Section 5(c) is correct, any law or regulation ap-
plicable to such Seller or its assets or properties, except for
such violations, conflicts, breaches, defaults or Encumbrances
under clauses (ii) or (iii) which (x) would not prevent, mate-
rially delay or materially adversely affect the consummation of
the transactions contemplated by this Agreement or (y) will be
-6-<PAGE>
waived or otherwise released prior to the Closing as promptly
as practicable (but in any event within 60 days) following the
date of this Agreement.
5. The Company's Representations and Warranties.
The Company represents and warrants to Sellers as follows:
(a) The Company is a corporation duly incorpo-
rated, validly existing and in good standing under the laws of
the State of Delaware. The Company has all requisite corporate
power and authority to execute and deliver this Agreement and
the Registration Rights Agreement and to consummate the trans-
actions contemplated hereby and thereby. This Agreement and
the Registration Rights Agreement have been duly executed and
delivered by the Company, and, assuming the due execution here-
of by each other party hereto and thereto, constitute the le-
gal, valid and binding obligations of the Company, enforceable
against the Company in accordance with the terms hereof and
thereof.
(b) The Company has not entered into any agree-
ment, is not engaged in any discussions, and has not authorized
its representatives to engage in such discussions, with respect
to any transaction (i) that upon consummation would constitute
a "Change of Control" of the Company as defined in Section
6(g), (ii) that is described in Section 6(g)(iii) or (iii) that
involves the purchase by any Person (as defined in Section
6(a)(i)) or group (within the meaning of Section 13(d)(3) of
-7-<PAGE>
the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of 30% or more of the outstanding shares of Common
Stock.
(c) Neither the execution and delivery by the
Company of this Agreement nor the consummation by the Company
of the transactions contemplated hereby will violate or con-
flict with, or constitute a default under, or result in the
creation or imposition of any Encumbrance upon any of the
assets or properties of the Company under (i) the Company's
Restated Certificate of Incorporation or bylaws, (ii) any
agreement, judgment, order or other obligation to which the
Company is a party or by which the Company is bound, or (iii)
any law or regulation applicable to the Company or its assets
or properties, except for such violations, conflicts, breaches,
defaults or Encumbrances under clauses (ii) or (iii) which (x)
would not prevent, materially delay or materially adversely
affect the consummation of the transactions contemplated by
this Agreement or (y) will be waived or otherwise released
prior to the Closing as promptly as practicable (but in any
event within 60 days) following the date of this Agreement.
(d) The Company has taken all necessary action
to ensure that neither the entering into of this Agreement or
the Registration Rights Agreement nor the consummation of the
transactions contemplated hereby or thereby will (i) cause the
preferred share purchase rights issued pursuant to the Rights
-8-<PAGE>
Agreement, dated as of March 8, 1988, as amended, between the
Company and First Chicago Trust Company of New York, as Rights
Agent (the "Rights Agreement"), to become exercisable, (ii)
cause any Seller or Seller Affiliate to become an "Acquiring
Person" (as defined in the Rights Agreement) or (iii) cause a
"Distribution Date" (as defined in the Rights Agreement) to
occur.
6. Covenants.
(a) During the Standstill Period (as defined
below), without the prior written consent of the Company and
except as otherwise expressly contemplated by this Agreement or
the Registration Rights Agreement, each Seller agrees, as to
such Seller, that such Seller shall not, nor shall such Seller
permit any of its Seller Affiliates to (nor shall such Seller
agree, or advise, assist, encourage or provide financing to
others, or permit its Seller Affiliates to agree, or to advise,
assist, encourage or provide financing to others, to), indi-
vidually or collectively:
(i) acquire or offer to acquire or agree
to acquire from any individual, partnership, joint venture,
corporation, trust, unincorporated organization or other entity
or government or any department or agency thereof (each, a
"Person"), directly or indirectly, by purchase, merger, through
the acquisition of control of another Person, by joining a
partnership, limited partnership or other "group" (within the
-9-<PAGE>
meaning of Section 13(d)(3) of the Exchange Act) or otherwise,
beneficial ownership of any securities of the Company, or di-
rect or indirect rights (including convertible securities) or
options to acquire such beneficial ownership (or otherwise act
in concert with respect to any such securities, rights or op-
tions with any Person that so acquires, offers to acquire or
agrees to acquire); provided, however, that no such acquisi-
tion, offer to acquire or agreement to acquire shall be deemed
to occur solely due to (a) a stock split, reverse stock split,
reclassification, reorganization or other transaction by the
Company affecting any class of the outstanding capital stock of
the Company generally, (b) a stock dividend or other pro rata
distribution by the Company to holders of its outstanding capi-
tal stock, (c) the distribution or exercise of rights to ac-
quire capital stock of the Company contemplated by that certain
Rights Agreement, dated as of March 8, 1988, by and between the
Company and First Chicago Trust Company of New York, as Rights
Agent, and the amendments thereto, or any successor rights
agreement, to the extent that no Seller would be deemed to be
an "Acquiring Person" thereunder in connection with such event,
(d) the exercise of employee stock options or the receipt of
shares pursuant to restricted stock agreements with the Company
or from the Company's employee benefit plans or (e) passive
acquisitions of less than 1% of the outstanding shares of Com-
mon Stock by a non-profit Seller Affiliate without the advice,
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assistance, encouragement or financing from any Seller or other
Seller Affiliate; or
(ii) sell, transfer any beneficial interest
in, pledge, hypothecate or otherwise dispose of any Shares
(whether owned by such Seller on the date hereof or thereafter
acquired by such Seller or any Seller Affiliate at any time),
except as permitted by Section 6(b) hereof; or
(iii) make, or in any way participate in,
directly or indirectly, any "solicitation" of "proxies" to vote
(as such terms are used in the Regulation 14A promulgated under
the Exchange Act), become a "participant" in any "election con-
test" (as such terms are defined in Rule 14a-11 promulgated
under the Exchange Act) or initiate, propose or otherwise so-
licit stockholders of the Company for the approval of any
stockholder proposals, in each case with respect to the Com-
pany; provided, however, that the foregoing shall not apply to
any person who is a director of the Company acting in his ca-
pacity as a director of the Company with respect to matters ap-
proved by a majority of the Board of Directors of the Company;
or
(iv) form, join, in any way participate in,
or encourage the formation of, a group (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to any vot-
ing securities of the Company; or
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(v) deposit any securities of the Company
into a voting trust, or subject any securities of the Company
to any agreement or arrangement with respect to the voting of
such securities, or other agreement or arrangement having simi-
lar effect; or
(vi) alone or in concert with others, seek,
or encourage or support any effort, to influence or control the
management, Board of Directors, business, policies, affairs or
actions of the Company; provided, however, that the foregoing
shall not apply to any person who is a director of the Company
acting in his capacity as a director of the Company during the
course of meetings of the Board of Directors of the Company or
of any committee thereof or in response to a request by the
Chairman of the Board of the Company; or
(vii) request the Company (or any directors,
officers, employees or agents of the Company), directly or in-
directly, to amend, waive or modify any provision of this Sec-
tion 6(a) (other than a request to waive Section 6(a)(ii) to
permit Sellers to sell in open market transactions a number of
Shares up to an aggregate of not more than 3% of the outstand-
ing shares of Common Stock; provided, (x) such request is not
publicly disclosed by the Sellers or any Seller Affiliate and
does not require the Company to disclose it publicly, (y) such
sales would be subject to Section 6(c) and (z) it is understood
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that the Company has the right to reject such request in its
sole discretion).
(b) Notwithstanding Section 6(a)(ii) hereof,
Sellers may sell, transfer any beneficial interest in or other-
wise dispose of Shares, provided that such sale, transfer or
disposition:
(i) is pursuant to the Secondary Offering,
a Demand Offering or a Piggyback Offering (as such terms are
defined in the Registration Rights Agreement) in accordance
with the terms of the Registration Rights Agreement; or
(ii) subject to compliance with Section
6(c) hereof and applicable securities laws, at any time after
the closing or termination of the Secondary Offering (subject
to Section 10 of the Registration Rights Agreement), up to an
aggregate of one million Shares in any three month period by
all of the Sellers and Other Stockholders taken as a whole
(such number to be appropriately adjusted following any stock
split, reverse stock split or stock dividend with respect to
the Common Stock effected after the date of this Agreement and
with respect to which the record date is prior to the date of
any such sale); provided that the maximum number of Shares per-
mitted to be sold under this Section 6(b)(ii) may be allocated
among the Sellers and Other Stockholders in such proportions as
Sellers see fit and provided further, that, if the Sellers and
the Other Stockholders in the aggregate beneficially own fewer
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than two million Shares (such number to be appropriately ad-
justed following any stock split, reverse stock split or stock
dividend with respect to the Common Stock effected after the
date of this Agreement), the Sellers may sell Shares pursuant
to Rule 144 under the Securities Act without regard to such
maximum number subject to Section 6(c); or
(iii) to one of the Sellers or to a member
of such Seller's family, a trust of which such Seller is a ben-
eficiary or a charitable foundation; provided that such family
member, trust or charitable foundation shall have executed and
delivered to the Company an agreement in the form set forth in
Exhibit A; or
(iv) to the personal representative of an
individual Seller, upon such Seller's death, for purposes of
the administration of such Seller's estate, and to the devisee,
legatee or beneficiary of such estate; provided that the Com-
pany shall not be required to register any such transfer unless
such transferee shall have executed and delivered to the Com-
pany an agreement, in the form set forth in Exhibit A; or
(v) pursuant to a tender offer approved by
the Board of Directors of the Company.
(c) In the event that any Seller elects to sell
any Shares pursuant to Section 6(b)(ii), then, subject to the
last sentence of this Section 6(c), such Seller shall give
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written notice of such sale (the "Sell Notice") to the Company
no later than 4:30 p.m., Salt Lake City time, on the business
day prior to the New York Stock Exchange trading day on which
such Seller intends to effect such sale. The Sell Notice shall
identify the Seller, the number of Shares such Seller intends
to sell, the market price of the Common Stock at which the Sel-
ler intends to execute such sale (the "Target Price") and such
Seller's telephone and facsimile numbers to be used by the Com-
pany to provide notice of any exercise of the Company's right
of first refusal under this Section 6(c). Each Sell Notice
shall specify only one Target Price but any Seller may deliver
separate Sell Notices with respect to intended sales at sepa-
rate Target Prices (it being understood that the Company may
exercise its rights under this Section 6(c) with respect to one
or more Sell Notices without exercising its rights with respect
to all such Sell Notices delivered by any Seller). The Com-
pany, in its sole discretion, may elect to purchase from such
Seller all of the Shares specified in a Sell Notice (or, if the
number of Shares specified in the Sell Notice is more than
100,000, a specified portion of such Shares (but not less than
100,000)) at a price per share equal to the Target Price, by
notifying such Seller that the Company shall do so (subject to
the condition described below), such notice (the "Buy Notice")
to be given (in writing by facsimile or orally with written
confirmation by facsimile) by 7:00 a.m., Salt Lake City time,
on the New York Stock Exchange trading day next following the
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date on which the Sell Notice is delivered to the Company. If
the Company has not given the Buy Notice by such time or has
given a Buy Notice with respect to some but not all of the
Shares specified in the Sell Notice, such Seller may (i) at any
time within three New York Stock Exchange trading days after
the date of the Sell Notice (the "Selling Period"), sell, at a
price or prices not less than the Target Price, some or all of
the Shares that are specified in the Sell Notice and not sub-
ject to the Buy Notice, if any or (ii) give one or more new
Sell Notices in accordance with the time periods and other
terms of this Section 6(c) with respect to some or all of the
Shares that are not subject to the Buy Notice, if any. If (i)
the Company provides the Buy Notice to such Seller in compli-
ance with this Section 6(c), and (ii) at any time during the
Selling Period the trading price of the Common Stock equals or
exceeds the Target Price, then such Seller shall sell to the
Company, and the Company shall purchase from such Seller, that
number of Shares specified in the Buy Notice at a price per
share equal to the Target Price (the day on which such condi-
tion is met being referred to herein as the "Trade Date"). The
closing of such purchase and sale shall be at the corporate
offices of the Company in Salt Lake City at 10:00 a.m. on the
third business day following the Trade Date. At such closing
(i) the Seller will deliver to the Company certificates repre-
senting the Shares specified in the Buy Notice, free and clear
of any Encumbrances, with appropriate stock powers attached,
-16-<PAGE>
properly signed, with any necessary documentary or transfer tax
stamps duly affixed and cancelled; and (2) the Company will
deliver to the Seller a check in the amount of (i) the number
of Shares specified in the Buy Notice multiplied by (ii) the
Target Price. No Seller shall be required to comply with this
Section 6(c) with respect to a proposed sale on any trading day
if, in the good faith judgment of such Seller, (A) there is
occurring on such trading day an extraordinary movement in the
trading price of the Common Stock or (B) in the case of a
Seller which is an individual, a trust for the benefit of an
individual, a taxable entity or a charitable remainder trust,
the payment by the Company to purchase Shares proposed to be
sold by such Seller would be treated as a distribution by the
Company to which Section 301 of the Internal Revenue Code of
1986, as amended, applies; provided, that such Seller shall
give prompt written notice to the Company of any such sale not
in compliance with this Section 6(c) with a brief explanation
of the basis for such non-compliance.
(d) As used in this Agreement, the term "Stand-
still Period" shall mean that period commencing on the date of
this Agreement and expiring on the 10th anniversary thereof;
provided, however, that if neither the Company Repurchase nor
the Secondary Offering is consummated (and such failure to con-
summate is in each case permitted by, and is not due to a
breach or a failure of representation by any Seller of, this
-17-<PAGE>
Agreement, the Registration Rights Agreement or the underwrit-
ing agreement relating to the Secondary Offering), such term
shall mean that period commencing on the date of this Agreement
and expiring 30 months thereafter; and provided further, that
if neither the Company Repurchase nor the Secondary Offering is
consummated by reason of a breach or failure of a representa-
tion by the Company of this Agreement, the Registration Rights
Agreement or the underwriting agreement relating to the Second-
ary Offering, the Standstill Period shall terminate upon the
termination of this Agreement.
(e) (i) Each Seller agrees to deliver to the
Company as promptly as practicable (and in any event within 15
days) after the date hereof the certificates representing the
Shares for the placement of the following legend:
The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended, and may not be sold or transferred except
in compliance with that Act.* The securities repre-
sented by this certificate are subject to the provi-
sions (including provisions that restrict the trans-
fer of such securities) of a Stock Purchase Agreement
dated as of February 20, 1997 between American Stores
Company and certain stockholders of the Company, a
copy of which is on file at the offices of American
Stores Company.
_____________________
* Any Shares which were previously registered under the Secu-
rities Act of 1933 shall not be required to include the first
sentence of this legend.
-18-<PAGE>
(ii) Upon delivery to the Company by any
Seller (or permitted transferee) of such legended certificate
in connection with any sale or transfer permitted by Section
6(b)(i) or Section 6(b)(ii) (together, in the case of a sale or
transfer pursuant to Section 6(b)(ii), with customary documents
with respect to the applicability of an exemption from regis-
tration), the Company shall issue in exchange therefor a cer-
tificate for such Shares without such legend. Upon delivery to
the Company by any Seller of a legended certificate following
the expiration of the Standstill Period, the Company shall is-
sue a certificate in exchange therefor that does not contain
the second sentence of the foregoing legend.
(f) On the close of business on the day follow-
ing the first date on which the Sellers shall in the aggregate
beneficially own less than 5% of the outstanding shares of Com-
mon Stock, each of L.S. Skaggs, Don L. Skaggs and Michael T.
Miller (and any Seller then serving as a director of the Com-
pany) shall tender to the Company his resignation as a director
of the Company.
(g) (i) If the Closing occurs, and, during the
period ending six months after the Closing, a Change of Control
occurs or the Company enters into an agreement with a third
party as a result of which a Change of Control of the Company
would occur (which agreement is consummated) and in which the
Subsequent Price (as defined in Section 6(g)(iv)) exceeds the
-19-<PAGE>
Repurchase Price, the Company shall, on the second business day
following the consummation of such Change of Control, pay to
each Seller, as additional consideration with respect to the
Repurchased Shares, an amount equal to the sum of (A) the num-
ber of Repurchased Shares sold to the Company by such Seller
multiplied by the excess of the Subsequent Price over the Re-
purchase Price, plus (B) the number of Registrable Shares sold
by such Seller in the Secondary Offering multiplied by the ex-
cess (if any) of the Subsequent Price over the Offer Price (as
defined in the Registration Rights Agreement).
(ii) As used in this Section 6(g), "Change
of Control" means:
(A) the acquisition by any Person or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) of beneficial ownership of more than 50% of
the then outstanding shares of Common Stock; or
(B) consummation of a reorganization,
merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company; provided that
such a transaction shall not be deemed to be a Change of Con-
trol if, immediately following such transaction, all or sub-
stantially all of the individuals and entities who were the
beneficial owners of the Common Stock outstanding immediately
-20-<PAGE>
prior to such transaction beneficially own, directly or indi-
rectly, more than 50% of common stock of the corporation sur-
viving, or resulting from, such transaction (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or, in the case of a sale or other dis-
position of all or substantially all of the assets of the Com-
pany, substantially all of the Company's assets either directly
or through one or more subsidiaries).
(iii) If the Closing occurs, and, during the
period ending six months after the Closing Date, (A) the Com-
pany or any of its subsidiaries enters into an agreement with a
third party as a result of which the Company sells or otherwise
transfers (or one or more of its subsidiaries sells or oth-
erwise transfers), in one or more transactions, assets (includ-
ing securities or assets of any subsidiary of the Company) to
any other Person (other than the Company or one or more of its
wholly-owned subsidiaries) in a transaction that is not a
Change of Control and for which the Company receives an amount
of cash, property, securities and/or assumption of indebtedness
for borrowed money in excess of $1 billion (the value of any
property, securities or assumed indebtedness to be determined
in a manner substantially similar to that contemplated by Sec-
tion 6(g)(iv)(B)); or (B) the Company or a subsidiary of the
Company shall effect, by spin-off or other distribution or div-
idend of shares of capital stock of a subsidiary thereof to the
stockholders of the Company, the transfer of ownership of one
-21-<PAGE>
or more businesses or operating units that, immediately after
giving effect to such transaction, have alone or in the ag-
gregate an equity market capitalization (plus indebtedness for
borrowed money) in excess of $1 billion, then the Company shall
pay to each Seller on the second business day following the
consummation of such transaction, as additional consideration
with respect to the Repurchased Shares, (A) the number of
Repurchased Shares sold to the Company by such Seller multi-
plied by an amount equal to the excess, if any, of (x) the
Average Closing Price (as defined below) of the Common Stock as
of the twelfth New York Stock Exchange trading day following
the date (the "Announcement Date") of the first public
announcement that the Company intends or has agreed to effect
such transaction (the "Post-Announcement Price"), over (y) the
greater of (I) the Average Closing Price of the Common Stock as
of the date immediately preceding the Announcement Date (the
"Pre-Announcement Price") and (II) the Repurchase Price, plus
(B) the number of Registrable Shares sold by such Seller in the
Secondary Offering multiplied by an amount equal to the excess,
if any, of (x) the Post-Announcement Price over (y) the greater
of (I) the Pre-Announcement Price and (II) the Offer Price.
For purpose of any computation hereun-
der, the "Average Closing Price" of the Common Stock as of any
date shall be deemed to be the average of the daily closing
prices per share of Common Stock for the 10 consecutive New
York Stock Exchange trading days immediately prior to such
-22-<PAGE>
date. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal con-
solidated transaction reporting system of the New York Stock
Exchange. The Average Closing Price shall be subject to pro-
portional adjustment in the event of any stock split, reverse
stock split or stock dividend with respect to the Common Stock
effected after the consummation of the Company Repurchase.
(iv) In determining the Subsequent Price in
any transaction pursuant to this Section 6(g), the following
shall apply:
(A) In the event of a Change of Con-
trol, the Subsequent Price shall be deemed to equal to the ag-
gregate consideration paid per share of Common Stock in such
transaction; provided that if such consideration is paid in
varying amounts or forms to holders of the Common Stock, the
Subsequent Price shall be deemed to be equal to the weighted
average price paid for all shares of Common Stock purchased
thereby.
(B) The value of publicly traded se-
curities received by the Company or the holders of Common Stock
shall be deemed to be the closing price of such securities on
the date of consummation of the transaction. The value of any
securities received the Company that are not publicly traded
-23-<PAGE>
and the value of any property or assumed indebtedness shall be
determined in good faith by two investment banking firms, one
selected by the Company and the other selected by the Sellers,
or, if such investment banking firms are unable to agree, by a
third investment banking firm selected by such investment bank-
ing firms, and any such determination shall be final, conclu-
sive and binding on the Company and Sellers.
7. Conditions.
(a) The obligation of Sellers to consummate the
Company Repurchase is subject to the satisfaction or waiver of
the conditions that (i) the representations and warranties of
the Company contained in Section 5 are true and correct on the
Closing Date as though made as of such date, (ii) counsel to
the Company shall have delivered its opinion to each of the
Sellers, in form and substance reasonably satisfactory to Sell-
ers and dated as of the Closing Date, as to the matters set
forth in Section 5(a), (iii) the Secondary Offering shall have
been consummated; provided, that the condition set forth in
this clause (iii) shall be deemed to have been satisfied if the
Secondary Offering is not consummated due to a breach of the
obligations or failure of a representation of any of the Sell-
ers under this Agreement, the Registration Rights Agreement or
the underwriting agreement in connection with the Secondary
Offering and (iv) no more than 60 days have elapsed following
the date on which the registration statement with respect to
-24-<PAGE>
the Secondary Offering is filed unless the delay in consummat-
ing the Secondary Offering is due to a breach of the obliga-
tions or failure of a representation of any of the Sellers un-
der this Agreement, the Registration Rights Agreement or the
underwriting agreement in connection with the Secondary Offer-
ing.
(b) The obligation of the Company to consummate
the Company Repurchase is subject to the satisfaction or
waiver, as of the Closing Date, of the conditions that (i) the
representations and warranties of Sellers contained in Section
4 are true and correct, (ii) counsel to Sellers shall have de-
livered its opinion to the Company, in form and substance rea-
sonably satisfactory to the Company, as to the matters set
forth in Section 4(a) and the last sentence of Section 4(b) and
(iii) no more than 60 days have elapsed following the date on
which the registration statement with respect to the Secondary
Offering is filed unless the delay in consummating the Second-
ary Offering is due to a breach of the obligations or failure
of a representation of the Company under this Agreement, the
Registration Rights Agreement or the underwriting agreement in
connection with the Secondary Offering.
(c) The respective obligations of the parties
to consummate the Company Repurchase are subject to there not
being in effect any order, decree or injunction issued by a
-25-<PAGE>
court of competent jurisdiction prohibiting or restraining con-
summation of the transactions contemplated hereby.
8. Specific Performance. The parties acknowledge
and agree that in the event of any breach of this Agreement,
the parties would be irreparably harmed and could not be made
whole by monetary damages. It is accordingly agreed that the
Company or a Seller, in addition to any other remedy to which
it may be entitled at law or in equity, shall be entitled to
compel specific performance of this Agreement in any action
instituted in the United States District Court for the State of
Utah (the "Utah Court"). Each Seller and the Company irrevo-
cably consents and submits to personal jurisdiction in any ac-
tion brought in the Utah Court and agrees not to contest the
propriety of venue in the Utah Court. As part of the consider-
ation for the Company executing this Agreement, each Seller
waives all personal service of any and all process upon such
Seller related to this Agreement or the performance thereof and
consents that all such service of process upon such Seller
shall be made by hand delivery, certified mail or confirmed
telecopy directed to such Seller at the address specified in
Section 19 hereof; and service made by certified mail shall be
complete seven days after the same shall have been posted as
aforesaid.
9. Expenses. Except as provided in the Registra-
tion Rights Agreement, all fees and expenses incurred by any
-26-<PAGE>
Seller, and all sales, transfer or other similar taxes payable
in connection with this Agreement (including, but not limited
to, any transfer taxes payable in connection with the sale of
the Shares by such Sellers), will be borne by such Seller and
all fees and expenses incurred by the Company in connection
with this Agreement will be borne the Company; provided, how-
ever, that, if the Company Repurchase is consummated, the Com-
pany shall pay (or reimburse L.S. Skaggs for) (i) the fee, ad-
vances and expenses of Goldman, Sachs & Co. ("Goldman, Sachs")
incurred by Sellers in connection with the sale of the Repur-
chased Shares as set forth in that certain Letter Agreement,
dated June 28, 1996, by and between Goldman, Sachs and L.S.
Skaggs, Aline W. Skaggs and ALSAM Trust, a true and complete
copy of which has been delivered to the Company prior to the
date of this Agreement, subject to a maximum aggregate payment
and reimbursement by the Company not in excess of the amount
specified in a schedule delivered to the Company prior to the
date of this Agreement and (ii) reasonable fees and expenses of
Debevoise & Plimpton, counsel to the Sellers, incurred through
the consummation of the Company Repurchase in connection with
the transactions contemplated by this Agreement.
10. Brokerage. Subject to Section 9, the Company,
on the one hand, and Sellers, on the other, agree to indemnify
and hold the other harmless from and against any and all claims
-27-<PAGE>
or liabilities for finder's fees or other like payments in-
curred by reason of any action taken by it or them, as the case
may be.
11. Termination. This Agreement may be terminated
at any time prior to the Closing (a) by mutual consent of the
Company and Sellers owning two-thirds of the Shares, (b) by the
Company or Sellers owning two-thirds of the Shares, if the
Closing shall not have occurred by the close of business on the
60th day following the date on which the registration statement
for the Secondary Offering is filed unless the delay is due to
a breach of the obligations or failure of a representation of
any of the Sellers (in the case of a termination by the Sell-
ers) or the Company (in the case of a termination by the Com-
pany) under this Agreement, the Registration Rights Agreement
or the underwriting agreement in connection with the Secondary
Offering, or (c) by the Sellers, if the Sellers shall have made
the Secondary Election on the Pricing Date pursuant to Section
2(b) of the Registration Rights Agreement. Notwithstanding the
foregoing, the obligations of the Company and the Sellers pur-
suant to Section 6 of this Agreement (other than Section 6(g))
shall survive any termination hereof except if the Standstill
Period is terminated as provided in Section 6(d).
12. Indemnification. (a) The Company agrees to
indemnify and hold harmless, to the extent permitted by law,
-28-<PAGE>
each Seller, its directors, trustees and officers (collec-
tively, the "Indemnified Parties") against any and all losses,
claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with the
Company's consent, which consent shall not be unreasonably
withheld) (collectively, "Losses") which are not the subject of
(i) Section 7(a) of the Registration Rights Agreement or (ii)
the indemnification provisions of any underwriting agreement
contemplated by the Registration Rights Agreement, and incurred
by such Indemnified Party as a result of, or arising out of,
any action, suit or resulting from the execution and delivery
of this Agreement, the Company's purchase of Shares hereunder
or the performance by the Company of its obligations hereunder.
Notwithstanding the foregoing, the indemnity contemplated by
this Section 12 shall not apply to Losses incurred as a result
of, or arising out of, (i) the reckless or willful misconduct
of any Indemnified Party, (ii) any action, suit or proceeding
brought by any Seller or any Seller Affiliate (or by any direc-
tor, officer, shareholder, trustee or beneficiary thereof)
against the Company, any Indemnified Party or Seller Affiliate,
(iii) any action, suit or proceeding brought as a result of, or
arising out of, any underwriting agreement entered into in con-
nection with the transactions contemplated by the Registration
Rights Agreement or (iv) any action, suit or proceeding brought
by the Company for breach of this Agreement or the Registration
Rights Agreement. The Company will reimburse such Indemnified
-29-<PAGE>
Party for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending
any action, suit or proceeding for which indemnity is available
pursuant to this Section 12 to the same extent and subject to
the same limitations set forth in Section 7(a) of the Registra-
tion Rights Agreement. Such indemnity shall survive the Clos-
ing. Nothing in this Agreement shall affect the rights of the
Company or the Sellers to bring an action against any party
arising from a breach of this Agreement or the Registration
Rights Agreement.
(b) Notices of Claims, Etc. The rights of the
Company and the Sellers with respect to notice of claims, re-
sponsibilities for defense, participation in any proceedings
hereunder and consent to entry of judgment or settlement of
claims shall be substantially as set forth in Section 7(c) of
the Registration Rights Agreement.
13. Public Announcements. The Company and Sellers
agree that the Company will issue the press release in the form
attached hereto as Exhibit B.
14. Integration; Amendment; Waiver. This Agreement,
together with the Registration Rights Agreement, constitutes
the entire agreement, and supersedes all prior agreements and
understandings, whether oral or written, between the parties
hereto with respect to the subject matter hereof. This Agree-
ment may not be modified, amended or waived orally, but only by
-30-<PAGE>
an instrument in writing signed by the party against whom en-
forcement of any such amendment, modification or waiver is
sought. The waiver by any party hereto of a breach of any term
or provision of this Agreement shall not be construed as a
waiver of any subsequent breach.
15. Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
heirs, legal representatives, successors and assigns; provided,
however, that the Company may not assign its rights or delegate
its obligations under this Agreement without the express prior
written consent of Sellers holding two-thirds of the Shares,
and Sellers may not assign their rights or delegate their obli-
gations under this Agreement without the express prior written
consent of the Company.
16. Headings. Section headings contained in this
Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
17. Survival. All representations, warranties and
covenants shall survive the Closing.
18. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall, when executed,
be deemed to be an original and all of which shall be deemed to
be one and the same instrument.
-31-<PAGE>
19. Notices. All notices hereunder shall be suf-
ficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery
service or, to the extent receipt is confirmed, telecopy, tele-
fax or other electronic transmission service to the appropriate
address or number as set forth below. Notices to any Seller
shall be addressed to the address of such Seller set forth in
Schedule 1 (it being understood that only one copy of a notice
is required to be sent to any trustee, which notice shall be
deemed to be sufficient as to each Seller for which such
trustee is acting in such capacity) with copies to:
Mr. Lennie Sam Skaggs
6190 South Moffat Farm Lane
Salt Lake City, Utah 84121
Telecopy No.: (801) 262-0826
and
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attn: Meredith M. Brown, Esq.
Telecopy No.: (212) 909-6836
or at such other address and to the attention of such other
person as any Seller may designate by written notice to the
Company. Notices to the Company shall be addressed to:
American Stores Company
709 East South Temple
Salt Lake City, Utah 84102
(1) Attn: Kathleen E. McDermott
Telecopy No.: (801) 537-7808
(2) Attn: Teresa Beck
Telecopy No.: (801) 537-7863
-32-<PAGE>
and
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attn: Richard D. Katcher, Esq.
Telecopy No: (212) 403-2000
or at such other address and to the attention of such other
persons the Company may designate by written notice to Sellers.
20. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Delaware without reference to the choice of law principles
thereof.
21. Severability. If at any time subsequent to the
date hereof any provision of this Agreement shall be held by
any court of competent jurisdiction to be illegal, void or un-
enforceable, such provision shall be of no force and effect,
but shall not effect the illegality or unenforceability of any
other provision of this Agreement.
22. Interpretation. Wherever used herein, the term
"affiliate" has the meaning given such term in Rule 12b-2 pro-
mulgated under the Exchange Act, and a person or entity who at
any time may be an affiliate of any Seller shall be deemed to
be an affiliate of such Seller while, but only while, such
person or entity is an affiliate of such Seller, regardless of
whether such person or entity is such an affiliate on the date
hereof. For purposes of this Agreement, a person or entity
shall be deemed to "beneficially own" any securities of which
-33-<PAGE>
it would be the "beneficial owner," as such term is defined in
Rule 13d-3 promulgated under the Exchange Act.
23. Sellers' Obligations Several. All of the obli-
gations of the Sellers under this Agreement shall be several
and not joint, and no Seller shall be liable for a breach
hereof by any other Seller, it being understood and agreed that
the Company shall not have the obligation to repurchase less
than all of the Repurchased Shares.
-34-<PAGE>
IN WITNESS WHEREOF, this Agreement has been signed by
or on behalf of each of the parties as of the day first above
written.
AMERICAN STORES COMPANY
By:/s/ Teresa Beck
Name: Teresa Beck
Title: Chief Financial Officer
LENNIE SAM SKAGGS
/s/ Lennie Sam Skaggs
ALINE W. SKAGGS
/s/ Aline W. Skaggs
ALSAM TRUST
By:/s/ George L. Moosman
Name: George L. Moosman
Title: Trustee
By:/s/ Claudia Skaggs Luttrell
Name: Claudia Skaggs Luttrell
Title: Trustee
By:/s/ Don L. Skaggs
Name: Don L. Skaggs
Title: Trustee
By:/s/ Michael T. Miller
Name: Michael T. Miller
Title: Trustee<PAGE>
SIX S RANCH, INC.
By:/s/ Michael T. Miller
Name: Michael T. Miller
Title: Vice President
ALSAM FOUNDATION
By:/s/ Michael T. Miller
Name: Michael T. Miller
Title: President and
Executive Director
SKAGGS FAMILY FOUNDATION FOR
ROMAN CATHOLIC AND
COMMUNITY CHARITIES
By:/s/ J. Terrence Fitzgerald
Name: J. Terrence Fitzgerald
Title: President
SKAGGS INSTITUTE FOR
RESEARCH
By:/s/ Richard A. Lerner
Name: Richard A. Lerner
Title: President
LYNDA SUE SKAGGS BALUKOFF
/s/ Lynda Sue Skaggs Balukoff
CLAUDIA SKAGGS LUTTRELL
/s/ Claudia Skaggs Luttrell <PAGE>
SCHEDULE 1*
<TABLE>
<CAPTION>
Name and address Shares Repurchased Payment
of Seller Owned Shares Amount
<S> <C> <C> <C>
ALSAM Trust
(L.S. Skaggs portion) 10,274,195 7,852,469 $353,361,105
ALSAM Trust
(Aline W. Skaggs portion) 185,452 141,739 6,378,255
Six S Ranch, Inc. 20,000 15,286 687,870
ALSAM Foundation 2,046,930 1,564,449 70,400,205
Skaggs Family Foundation 675,000 515,896 23,215,320
for Roman Catholic and
Community Charities
Skaggs Institute for Research 1,950,000 1,490,366 67,066,470
Lynda Sue Skaggs Balukoff 402,545 307,661 13,844,745
Claudia Skaggs Luttrell 437,472 334,356 15,046,020
---------- ---------- ------------
TOTAL 15,991,594 12,222,222 $549,999,990
========== ========== ============
</TABLE>
Notices to L.S. Skaggs, Aline W. Skaggs
and Six S Ranch, Inc. shall be made to:
L.S. Skaggs
6190 South Moffat Farm Lane
Salt Lake City, Utah 84121
Telecopy No.: (801) 767-0876
Notices to ALSAM Trust:
Don L. Skaggs, Claudia S. Luttrell,
Michael T. Miller and George L. Moosman, Trustees
6190 South Moffat Farm Lane
Salt Lake City, Utah 84121-1793
Notices to ALSAM Foundation:
Michael T. Miller, President and Executive Director
6190 South Moffat Farm Lane
Salt Lake City, Utah 84121-1793
_______________________
* Subject to adjustment pursuant to Section 1 of the Stock
Purchase Agreement.<PAGE>
Notices to Skaggs Family Foundation for Roman
Catholic and Community Charities:
6190 South Moffat Farm Lane
Salt Lake City, Utah 84121-1793
Notices to Skaggs Institute for Research:
Dr. Richard A. Lerner, President
c/o Scripps Research Institute
10550 North Torrey Pines Road
BCC 506
La Jolla, California 92037
Notices to Lynda Sue Skaggs Balukoff:
6190 South Moffat Farm Lane
Salt Lake City, Utah 84121
Notices to Claudia Skaggs Luttrell:
6190 South Moffat Farm Lane
Salt Lake City, Utah 84121
S-2<PAGE>
SCHEDULE 2
Name Shares Owned
The Northern Trust Company, 92,400
As Trustee, UA dtd 8/30/96 with
L.S. Skaggs, The L.S. Skaggs &
Aline W. Skaggs Charitable
Remainder Unitrust #1
The Northern Trust Company, 7,222,000
As Trustee, UA dtd 1/17/97 with
L.S. Skaggs, The L.S. Skaggs &
Aline W. Skaggs Charitable
Remainder Unitrust #2
The Northern Trust Company, 255,000
As Trustee, UA dtd 8/26/96 with
L.S. Skaggs, The Lynda Sue Balukoff
Charitable Remainder Unitrust #1
The Northern Trust Company, 523,530
Successor Trustee, UA dtd 7/6/71
with Claudia Skaggs (Luttrell),
The Claudia Skaggs (Luttrell)
Personal Trust
The Northern Trust Company, 635,000
As Trustee, UA dtd 8/30/96
with L.S. Skaggs, The Claudia
Skaggs Luttrell Charitable
Remainder Unitrust #1
The Northern Trust Company, 488,000
As Trustee, UA dtd 1/17/97 with
L.S. Skaggs, The Claudia Skaggs
Luttrell Charitable Remainder
Unitrust #2
The Northern Trust Company, 49,200
Successor Trustee, UA dtd 2/2/66
with Vivian Skaggs Armstrong,
for the benefit of Claudia Skaggs
(Luttrell)
The Northern Trust Company, 280,465
Successor Trustee, UA dtd 5/21/75
with Donald Lennie Skaggs,
The Donald Lennie Skaggs Personal
Trust
S-3<PAGE>
The Northern Trust Company, 635,000
As Trustee, UA dtd 8/26/96
with L.S. Skaggs, The Don L.
Skaggs Charitable Remainder
Unitrust #1
The Northern Trust Company, 488,000
As Trustee, UA dtd 1/17/97 with
L.S. Skaggs, The Don L. Skaggs
Charitable Remainder Unitrust #2
The Northern Trust Company, 49,200
Successor Trustee, UA dtd 2/2/66
with Vivian Skaggs Armstrong,
For the benefit of Don L. Skaggs
The Northern Trust Company, 49,200
Successor Trustee, UA dtd 2/2/66
with Vivian Skaggs Armstrong For
the benefit of Mark Stanley Skaggs
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong
For the benefit of Richelle Skaggs,
Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong
For the benefit of Dustin L.
Skaggs, Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong For
the benefit of Jennifer Luttrell,
Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong For
the benefit of Justin Dallas
Luttrell, Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong For
the benefit of Mindy Stana Skaggs,
Age 30 Trust
S-4<PAGE>
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong For
the benefit of Stephen A. Skaggs,
Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong For
the benefit of Loy Leana Skaggs,
Age 30 Trust
The Northern Trust Company, 100,000
Trustee, UA dtd 1/29/97
with Lynda Sue Balukoff,
The Lynda Sue Skaggs Balukoff
Charitable Remainder Trust #2
TOTAL: 10,937,975
Address for notices to Northern Trust:
50 South LaSalle
M 12
Chicago, Illinois 60675
Attn: Mary Boehler
Telecopy No.: (312) 557-8873
S-5<PAGE>
Wells Fargo Bank, As Trustee, UA Dtd 12/10/76 584,319
with Vivian Skaggs Armstrong, The Vivian Skaggs
Armstrong Greatgrandchildren's Trust, Age 40
Trust For Benefit of Richelle Skaggs, Dustin
L. Skaggs, Jennifer Rae Luttrell, Justin Dallas
Luttrell, Angela D. Skaggs, Mindy Stana Skaggs,
Loy LeAna Skaggs, Stephen A. Skaggs, David Paul
Langton, Melissa Rae Langton, Sherri Lyn Balukoff,
Jenifer Balukoff, Anthony Joseph Balukoff, Jr.,
Stephen R. Balukoff, Karen M. Balukoff, Sam
Balukoff, Jon R. Madsen, Dan L. Madsen, James N.
Madsen, Doug R. Madsen, Jody Madsen, Diane Madsen,
Bret A. Madsen, Alexander Lowen, Dominique Lowen,
Mackenzie Lowen, Stephani Lowen
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Jennifer
Luttrell Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Vivian Skaggs Armstrong for the benefit of Justin
D. Luttrell Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Vivian Skaggs Armstrong for the benefit of Jon R.
Madsen Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Jon R.
Madsen Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Vivian Skaggs Armstrong for the benefit of Dan L.
Madsen Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Dan L.
Madsen Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of James
N. Madsen Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of James N.
Madsen Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Doug R.
Madsen Lifetime Trust
S-6<PAGE>
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Doug R.
Madsen Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Jody
Madsen Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Jody
Madsen Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Diane
Madsen Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Diane
Madsen Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Bret A.
Madsen Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Bret
Madsen Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Vivian Skaggs Armstrong for the benefit of Angela
D. Skaggs Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Angela
D. Skaggs Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Vivian Skaggs Armstrong for the benefit of Mindy
Stana Skaggs Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Stephen
A. Skaggs Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Loy
Leana Skaggs Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Richelle
Skaggs Lifetime Trust
S-7<PAGE>
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Dustin L.
Skaggs Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Vivian Skaggs Armstrong for the benefit of Alexander
R. Lowen Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Alexander
Lowen, Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,352
Vivian Skaggs Armstrong for the benefit of Dominique
E. Lowen Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Dominique
Lowen, Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Mackenzie
M. Lowen Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Mackenzie
Lowen, Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,353
Vivian Skaggs Armstrong for the benefit of Stephani
L. Lowen Lifetime Trust
Wells Fargo Bank, As Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Stephani
Lowen, Age 30 Trust
Wells Fargo Bank, As Trustee, UA dtd 8/9/74 with 3,459
Mark Stanley Skaggs
The Mark Stanley Skaggs Personal Trust
Wells Fargo Bank, As Trustee, UA dtd 2/2/66 with 25,000
Vivian Skaggs Armstrong for the benefit of Thomas
Lowen
Wells Fargo Bank, As Trustee, UA dtd 2/2/66 with 40,000
Vivian Skaggs Armstrong for the benefit of Steven
Lowen
Wells Fargo Bank, As Trustee, UA dtd 2/2/66 with 15,000
Vivian Skaggs Armstrong for the benefit of Margaret -------
Madsen
TOTAL: 986,158
=======
S-8<PAGE>
Address for Notices to Wells Fargo Bank:
_____________________________
_____________________________
_____________________________
Attn: ______________________
Telecopy No.: ______________
S-9<PAGE>
U.S. BANK, AS TRUSTEE
U.S. Bank, Successor Trustee, UA dtd 9/13/68 267,884
With Lynda Sue Skaggs (Balukoff)
The Lynda Sue Skaggs (Balukoff) Personal Trust
U.S. Bank, Successor Trustee UA dtd 2/2/66 49,200
with Vivian Skaggs Armstrong for the
benefit of Lynda Sue Skaggs (Balukoff)
U.S. Bank, Successor Trustee, UA dtd 11/23/83 with 10,352
Vivian Skaggs Armstrong for the benefit of David
P. Langton Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of
David Paul Langton, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,352
Vivian Skaggs Armstrong for the benefit of Melissa
Rae Langton Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 With 10,140
Vivian Skaggs Armstrong for the benefit of
Melissa Rae Langton, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,352
Vivian Skaggs Armstrong for the benefit of Sherri
Lyn Balukoff Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of
Sherri Lyn Balukoff, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,352
Vivian Skaggs Armstrong for the benefit of Jenifer
Balukoff Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 9,680
Vivian Skaggs Armstrong for the benefit of Jenifer
Balukoff, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,353
Vivian Skaggs Armstrong for the benefit of Anthony
Joseph Balukoff, Jr. Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Anthony
Joseph Balukoff, Jr., Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,353
Vivian Skaggs Armstrong for the benefit of Stephen
R. Balukoff Lifetime Trust
S-10<PAGE>
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Stephen
Robert Balukoff, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,352
Vivian Skaggs Armstrong for the benefit of Karen
Marie Balukoff Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Karen
Marie Balukoff, Age 30 Trust
U.S. Bank, Successor Trustee, UA dtd 11/23/83 With 10,353
Vivian Skaggs Armstrong for the benefit of Sam
Balukoff Lifetime Trust
U.S. Bank, As Successor Trustee, UA dtd 11/23/83 with 10,140
Vivian Skaggs Armstrong for the benefit of Sam
Balukoff, Age 30 Trust
U.S. Bank, As Trustee, UA dtd 2/13/97 with Linda 220,000
Sue Skaggs Balukoff, the Balukoff Charitable
Remainder Trust
TOTAL: 700,563
=======
Address for Notices to U.S. Bank:
101 South Capital Boulevard
Boise, Idaho 83733
Attn: John Ward
Telecopy No.: (208) 383-3858
S-11<PAGE>
EXHIBIT A -- FORM OF TRANSFEREE LETTER
[Name and Address of Transferee]
[Date]
American Stores Company
709 East South Temple
Salt Lake City, Utah 84102
Attn: ___________________
Ladies and Gentlemen:
Reference is made to that certain Stock Purchase
Agreement (the "Stock Purchase Agreement"), dated _________
___, 1997, by and among American Stores Company, a Delaware
corporation (the "Company") and the stockholders listed on the
signature pages thereto (each individually a "Seller"). Capi-
talized terms used but not defined herein have the meanings as-
signed to such terms in the Stock Purchase Agreement.
The undersigned hereby provides notice to the Company
of the proposed transfer of ____________ Shares from [transfer-
ring Seller] to the undersigned pursuant to [Section 6(b)(iii)]
[Section 6(b)(iv)] of the Stock Purchase Agreement. In connec-
tion with such transfer, the undersigned hereby agrees to be
bound by each of the terms, provisions and obligations of the
Stock Purchase Agreement and of the Registration Rights Agree-
ment, as fully as if the undersigned were a Seller thereunder.
The undersigned further agrees that any notices re-
quired to be sent to the undersigned pursuant to the Stock Pur-
chase Agreement and the Registration Rights Agreement shall be
deemed to be validly sent for all purposes of such Agreements
if sent to the attention of the undersigned at the address set
forth above.
Very truly yours,
[Name of Transferee]
_________________________
Acknowledged and Agreed:
AMERICAN STORES COMPANY
By:______________________
Name:
Title:
E-1<PAGE>
EXHIBIT B -- FORM OF PRESS RELEASE
AMERICAN STORES COMPANY AGREES TO REPURCHASE
$550 MILLION OF ITS SHARES HELD BY SKAGGS FAMILY AND TRUSTS
Salt Lake City, Utah -- February 21, 1997 -- American
Stores Company (NYSE-ASC) and the family of L.S. Skaggs
announced today an agreement for the repurchase by American
Stores of 12,222,222 shares of its common stock from the Skaggs
family and certain family and charitable trusts for $45 per
share, yesterday's closing price on the New York Stock
Exchange. The Company also announced that it had agreed to
file a registration statement to enable such shareholders to
sell between 14.7 million and 16.4 million additional shares in
a secondary offering as promptly as practicable.
The agreement is designed to further the best
interest of American Stores, while permitting the orderly sale
by the Skaggs family and trusts of their American Stores stock.
Victor L. Lund, Chairman and Chief Executive Officer
of the Company, stated, "This transaction will enable the
Company's management and associates to focus fully on carrying
out our business strategy, including the Delta initiatives
designed to transform the Company from a holding company to a
unified operating company. The repurchase will be slightly
accretive to our earnings per share, and will not affect our
aggressive capital expenditure program."
A spokesman for the Skaggs family stated, "We are
pleased that we have been able to reach an agreement with
American Stores with respect to our holdings. As the largest
shareholders in American Stores, the objective of the Skaggs
family has always been to enhance long term shareholder value."
The Company plans to finance the share repurchase,
which will aggregate $550 million, initially through bank lines
of credit. Subject to market conditions, the Company expects
to refinance such repurchases in public equity and/or debt
offerings over the next six to twelve months.
The closing of the share repurchase is expected to
occur simultaneously with the closing of the secondary
offering. If the price to the public in the secondary offering
would be less than $45 per share, the selling stockholders have
the right to terminate the secondary offering and, if they also
elect, the Company repurchase. Either the Company or the
selling stockholders may terminate the transactions if they are
not consummated within 60 days following the date the Company
files a registration statement for the secondary offering.
The selling stockholders have agreed to enter into a
ten-year standstill agreement restricting purchases and sales
E-2<PAGE>
of the Company's shares, proxy fights and other actions. In
the event that neither the share repurchase nor the secondary
offering is consummated, the standstill period would be reduced
to thirty months. The Company has also granted the selling
stockholders certain registration rights during the standstill
period.
Cautionary Note: This press release contains certain
forward-looking statements about the future performance of the
Company which are based on management's assumptions and beliefs
in light of the information currently available to it. These
forward-looking statements are subject to uncertainties and
other factors that could cause actual results to differ
materially from such statements including, but not limited to:
competitive practices and pricing in the food and drug
industries generally and particularly in the company's
principal markets; the implementation of the Company's Delta
initiatives in accordance with the currently contemplated
schedule and budget; changes in the financial markets related
to the Company's cost of capital; supply or quality control
problems with the Company's vendors; and changes in economic
conditions which affect the buying patterns of the Company's
customers.
E-3
EXHIBIT 2
THE NORTHERN TRUST COMPANY
FIFTY SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60675
February 20, 1997
American Stores Company
709 East South Temple
Salt Lake City, Utah 84102
Attn: Kathleen McDermott and Teresa Beck
Dear Ms. McDermott and Ms. Beck:
Reference is made to that certain Stock Purchase
Agreement (the "Stock Purchase Agreement"), dated February 20,
1997, by and among American Stores Company, a Delaware
corporation (the "Company"), and the persons listed on the
signature pages thereto. Capitalized terms used but not
defined herein have the meanings assigned to such terms in the
Stock Purchase Agreement. The undersigned is listed on
Schedule 2 to the Stock Purchase Agreement, together with the
number of Shares owned by the undersigned.
The undersigned hereby agrees to become an Additional
Seller and to be bound by each of the terms, representations,
covenants and obligations applicable to Sellers under the Stock
Purchase Agreement and the Registration Rights Agreement.
The undersigned further agrees that any notices re-
quired to be sent to the undersigned pursuant to the Stock Pur-
chase Agreement and the Registration Rights Agreement shall be
deemed to be validly sent for all purposes of such Agreements
if sent to the attention of the undersigned at the address set
forth on Schedule 2 to the Stock Purchase Agreement.
This letter agreement is being delivered by the
undersigned to the Company and the Initial Sellers within 10
business days after the date of the Stock Purchase Agreement.
Please acknowledge your receipt of this letter
agreement by executing the enclosed copy of this letter and
returning it to the undersigned.
Very truly yours,
THE NORTHERN TRUST COMPANY,
as Trustee of each of the
Trusts listed on the
initialed pages of Schedule
2 attached hereto.
/s/ Arthur W. Gergets
Vice President
Acknowledged and Agreed:
AMERICAN STORES COMPANY
By: /s/ Teresa Beck
Name: Teresa Beck
Title: Chief Financial Officer<PAGE>
SCHEDULE 2
Name Shares Owned
The Northern Trust Company, 92,400
As Trustee, UA dtd 8/30/96 with
L.S. Skaggs, The L.S. Skaggs &
Aline W. Skaggs Charitable
Remainder Unitrust #1
The Northern Trust Company, 7,222,000
As Trustee, UA dtd 1/17/97 with
L.S. Skaggs, The L.S. Skaggs &
Aline W. Skaggs Charitable
Remainder Unitrust #2
The Northern Trust Company, 255,000
As Trustee, UA dtd 8/26/96 with
L.S. Skaggs, The Lynda Sue Balukoff
Charitable Remainder Unitrust #1
The Northern Trust Company, 523,530
Successor Trustee, UA dtd 7/6/71
with Claudia Skaggs (Luttrell),
The Claudia Skaggs (Luttrell)
Personal Trust
The Northern Trust Company, 635,000
As Trustee, UA dtd 8/30/96
with L.S. Skaggs, The Claudia
Skaggs Luttrell Charitable
Remainder Unitrust #1
The Northern Trust Company, 488,000
As Trustee, UA dtd 1/17/97 with
L.S. Skaggs, The Claudia Skaggs
Luttrell Charitable Remainder
Unitrust #2
The Northern Trust Company, 49,200
Successor Trustee, UA dtd 2/2/66
with Vivian Skaggs Armstrong,
for the benefit of Claudia Skaggs
(Luttrell)
The Northern Trust Company, 280,465
Successor Trustee, UA dtd 5/21/75
with Donald Lennie Skaggs,
The Donald Lennie Skaggs Personal
Trust<PAGE>
The Northern Trust Company, 635,000
As Trustee, UA dtd 8/26/96
with L.S. Skaggs, The Don L.
Skaggs Charitable Remainder
Unitrust #1
The Northern Trust Company, 488,000
As Trustee, UA dtd 1/17/97 with
L.S. Skaggs, The Don L. Skaggs
Charitable Remainder Unitrust #2
The Northern Trust Company, 49,200
Successor Trustee, UA dtd 2/2/66
with Vivian Skaggs Armstrong,
For the benefit of Don L. Skaggs
The Northern Trust Company, 49,200
Successor Trustee, UA dtd 2/2/66
with Vivian Skaggs Armstrong For
the benefit of Mark Stanley Skaggs
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong
For the benefit of Richelle Skaggs,
Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong
For the benefit of Dustin L.
Skaggs, Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong For
the benefit of Jennifer Luttrell,
Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong For
the benefit of Justin Dallas
Luttrell, Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong For
the benefit of Mindy Stana Skaggs,
Age 30 Trust<PAGE>
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong For
the benefit of Stephen A. Skaggs,
Age 30 Trust
The Northern Trust Company, 10,140
Successor Trustee, UA dtd 11/23/83
with Vivian Skaggs Armstrong For
the benefit of Loy Leana Skaggs,
Age 30 Trust
The Northern Trust Company, 100,000
Trustee, UA dtd 1/29/97
with Lynda Sue Balukoff,
The Lynda Sue Skaggs Balukoff
Charitable Remainder Trust #2
Total: 10,937,975
Address for notices to Northern Trust:
50 South LaSalle
M 12
Chicago, Illinois 60675
Attn: Mary Boehler
Telecopy No.: (312) 557-8873
EXHIBIT 3
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of February 20, 1997 among
American Stores Company, a Delaware corporation (the "Compa-
ny"), and the Sellers listed on the signature pages to this
Agreement (together with any Additional Sellers (as defined in
the Stock Purchase Agreement), the "Sellers"). Any bank or
trust company which agrees to be bound by this Agreement shall
do so only in the capacity as shown on the signature page
hereto.
W I T N E S S E T H :
WHEREAS, the Company and the stockholders listed on
the signature pages thereto are parties to that certain Stock
Purchase Agreement, dated as of February 20, 1997 (the "Stock
Purchase Agreement"); and
WHEREAS, the Stock Purchase Agreement contemplates
that the Company and Sellers shall enter into a registration
rights agreement covering the Retained Shares;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants contained herein, and of other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, each of the Company and the several
Sellers, intending to be legally bound, hereby agrees as fol-
lows:
1. Definitions.
(a) Capitalized terms used in this Registration
Rights Agreement (this "Agreement") but not otherwise defined
herein shall have the meanings given to them in the Stock Pur-
chase Agreement.
(b) As used in this Agreement, the following capi-
talized terms shall have the meanings ascribed to them below:
"Company" has the meaning set forth in the first
paragraph hereof.
"Demand Registration" has the meaning set forth in
Section 3(a) hereof.<PAGE>
"Demand Registration Period" has the meaning set
forth in Section 3(a) hereof.
"Minimum Demand Quantity" has the meaning set forth
in Section 3(a) hereof.
"Offer Price" has the meaning set forth in Section
2(b) hereof.
"Piggyback Registration" has the meaning set forth in
Section 6(a) hereof.
"Pricing Date" has the meaning set forth in Section
2(b) hereof.
"Prospectus" means the prospectus included in any
Registration Statement, as amended or supplemented by any pros-
pectus supplement with respect to the terms of the offering of
any portion of the Registrable Shares covered by such Registra-
tion Statement or any other amendments and supplements to such
prospectus, including without limitation any preliminary pro-
spectus, any pre-effective or post-effective amendment and all
material incorporated by reference in any prospectus.
"Registrable Shares" means (i) the Retained Shares
and (ii) any securities issued or issuable in respect of or in
exchange for any of the Retained Shares by way of a stock divi-
dend or other distribution, stock split, reverse stock split or
other combination of shares, recapitalization, reclassifica-
tion, merger, consolidation or exchange offer. As to any par-
ticular Registrable Shares, such securities shall cease to be
Registrable Shares at the earlier of (i) the expiration of the
Standstill Period, (ii) when a Registration Statement with re-
spect to the sale of such securities shall have become effec-
tive under the Securities Act and such securities shall have
been disposed of in accordance with such Registration Statement
or (iii) when such securities shall have been sold pursuant to
Rule 144 (or any successor provision) under the Securities Act.
"Registration Expenses" has the meaning set forth in
Section 5 hereof.
"Registration Statement" means any registration
statement of the Company under the Securities Act which covers
Registrable Shares pursuant to the provisions of this Agree-
ment, all amendments and supplements to such Registration
Statement, including post-effective amendments, and all exhib-
its and all material incorporated by reference in such Regis-
tration Statement.
-2-<PAGE>
"SEC" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securi-
ties Act or the Exchange Act.
"Secondary Election" has the meaning set forth in
Section 2(b) hereof.
"Secondary Lead Underwriters" has the meaning given
such term in Section 2(c) hereof.
"Sellers" has the meaning set forth in the recitals
hereto.
"Stock Purchase Agreement" has the meaning set forth
in the recitals hereto.
2. Secondary Registration.
(a) The Company's Obligation to File. The Company
shall file as promptly as practicable following the date of the
Stock Purchase Agreement, and shall use all reasonable efforts
to cause to be declared effective as soon as possible (but in
any event not later than 60 days) after such filing, a Regis-
tration Statement under the Securities Act for the offering
(the "Secondary Offering") of all of the Registrable Shares
(the "Secondary Registration"). The Company shall use reason-
able efforts to cause such Registration Statement to remain ef-
fective until the earlier of (i) 60 days following the date on
which it was declared effective and (ii) the date on which all
of the Registrable Shares covered thereby are disposed of in
accordance with the method or methods of disposition stated
therein.
(b) The Parties' Obligation to Effect. Each of the
Company and the Sellers holding Registrable Shares shall use
all reasonable efforts to assist the Secondary Lead Underwrit-
ers in the coordination and execution of the Secondary Offering
to enable its successful completion as promptly as reasonably
practicable but in any event not later than the 60th day after
the filing of the Secondary Registration, and such Sellers
agree that they shall consummate the sale of all of the Regis-
trable Shares in the Secondary Offering promptly upon the Reg-
istration Statement in respect thereof being declared effective
by the SEC; provided, however, that such Sellers shall not be
obligated to sell any Registrable Shares in the Secondary Of-
fering if (i) the price at which the Registrable Shares would
be sold to the public in such offering (as determined at the
time of pricing (the "Pricing Date") of such Registrable Shares
by the Secondary Lead Underwriters) (the "Offer Price") would
be less than the Repurchase Price and (ii) the Sellers holding
-3-<PAGE>
a majority of the Retained Shares give written notice to the
Company and the Secondary Lead Underwriters on the Pricing Date
of their termination of the Secondary Offering (the "Secondary
Election").
(c) The Company and the Sellers agree that the co-
lead underwriters of the Secondary Offering shall be Goldman,
Sachs & Co. and J.P. Morgan & Co. Incorporated (the "Secondary
Lead Underwriters").
(d) Inclusion of Other Securities. No securities
other than Registrable Shares and associated preferred share
purchase rights shall be included in the Secondary Registra-
tion.
3. Demand Registration.
The rights and obligations of the parties pursuant to
this Section 3 are conditioned upon the Sellers making the Sec-
ondary Election pursuant to Section 2(b) hereof or the Sellers
not having sold all of the Registrable Shares in the Secondary
Offering (other than due to a breach of the Seller's obliga-
tions or a failure of Seller's representations under this
Agreement, the Stock Purchase Agreement or the Underwriting
Agreement for the Secondary Offering).
(a) Requests for Registration. Subject to the pro-
visions of this Section 3, any Seller or group of Sellers may,
at any time prior to the earlier of (x) the expiration of the
Standstill Period and (y) the first date on which there are
fewer than two million Registrable Shares, subject to appropri-
ate adjustment in the event of a stock split, reverse stock
split or stock dividend (the "Demand Registration Period"),
make a written request to the Company for registration under
the Securities Act of all or any part of such Seller or Sell-
ers' Registrable Shares in a widely distributed underwritten
offering (a "Demand Registration"). Such request shall specify
the number of Registrable Shares to be registered, which amount
shall not be less than the lesser of (i) four million Regis-
trable Shares and (ii) 50% of the Registrable Shares then out-
standing (but in any event not less than two million Registra-
ble Shares), subject to appropriate adjustment in the event of
a stock split, reverse stock split or stock dividend (such min-
imum amount being referred to herein as the "Minimum Demand
Quantity"). The Seller or Sellers making such request shall
send a written notice of such request to all Sellers and the
Company shall, subject to the provisions of this Section 3,
include in such Demand Registration all Registrable Shares with
respect to which the Company receives written requests (speci-
fying the amount of Registrable Shares to be registered) for
-4-<PAGE>
inclusion therein within 15 days after the initial request. As
promptly as practicable thereafter, the Company shall file with
the SEC a Registration Statement, registering all Registrable
Shares that any Sellers have requested the Company to register.
The Company shall use all reasonable efforts to cause such Reg-
istration Statement to be declared effective as soon as practi-
cable after filing and to remain effective until the earlier of
(i) 60 days following the date on which it was declared effec-
tive and (ii) the date on which all of the Registrable Shares
covered thereby are disposed of in accordance with the method
or methods of disposition stated therein.
(b) Number of Registrations. The Sellers shall be
entitled to request an aggregate of two Demand Registrations
during the Demand Registration Period if the Standstill Period
pursuant to the Stock Purchase Agreement is 30 months, or three
Demand Registrations during the Demand Registration Period if
such Standstill Period is ten years; provided, however, that
the Company will not be obligated to comply with any such re-
quest unless, subject to Section 6(a) hereof, (i) such request
is for the registration of an aggregate of least the Minimum
Demand Quantity of Registrable Shares, (ii) the Company has not
filed a registration statement for a Demand Registration in
accordance with the terms of this Agreement within the previous
twelve months, and (iii) if the Company Repurchase has been
consummated, twelve months have elapsed since the Closing
thereof. If any request for the Minimum Demand Quantity is
delivered within the applicable time period specified in this
Section 3(b), the Company shall proceed in accordance with the
applicable provisions hereof for a reasonable time period not-
withstanding the fact that the related Registration Statement
would not become effective until after the expiration of the
period during which such request was required to be delivered.
(c) Lead Underwriters. Each offering pursuant to a
Demand Registration shall be managed by a lead underwriter (the
"Lead Underwriter") chosen by the Sellers holding a majority of
Registrable Shares to be registered in such offering in consul-
tation with and subject to the consent of the Company; provided
that such consent shall not be unreasonably withheld.
(d) Suspension of Registration. The Company shall
have the right to delay the filing or effectiveness of a Regis-
tration Statement for any Demand Registration or to require the
Sellers not to sell under any such Registration Statement, dur-
ing one or more periods aggregating not more than 90 days in
each twelve-month period during the Demand Registration Period
in the event that (i) the Company would, in accordance with the
-5-<PAGE>
advice of its counsel, be required to disclose in the Prospec-
tus information not otherwise then required by law to be pub-
licly disclosed and (ii) in the judgment of the Company's Board
of Directors, there is a reasonable likelihood that such dis-
closure, or any other action to be taken in connection with the
Prospectus, would materially and adversely affect any existing
or prospective material business situation, transaction or ne-
gotiation or otherwise materially and adversely affect the Com-
pany. If the Company shall exercise its rights of delay, all
related time periods shall be extended, if and to the extent
appropriate, to take into account the length of such delay.
(e) Offering by the Company. The Company may in-
clude in any Demand Registration additional shares of capital
stock to be sold for the Company's account pursuant to such
registration; provided, however, that if the Lead Underwriter
for a Demand Registration shall advise the Company that, in its
opinion, the inclusion of the amount to be sold for the Com-
pany's account would adversely affect the success of the offer-
ing for the participating Sellers, then the number and kind of
shares of capital stock to be sold for the Company's account
shall be reduced (and may be reduced to zero) in accordance
with the Lead Underwriter's recommendation.
4. Registration Procedures.
(a) Obligation of the Company. In connection with
the Company's Secondary Registration and Demand Registration
obligations pursuant to Sections 2 and 3 hereof, the Company
shall use all reasonable efforts to effect such registrations
to permit the sale of such Registrable Shares in an underwrit-
ten public offering, and pursuant thereto the Company shall:
(i) prepare and as soon as practicable there-
after file with the SEC a Registration Statement or Reg-
istration Statements relating to the Secondary Regis-
tration and the Demand Registrations on any appropriate
form under the Securities Act, and use all reasonable
efforts to cause such Registration Statements to become
effective as soon as practicable and to remain continu-
ously effective for the time period required by this
Agreement to the extent permitted under the Securities
Act and the Company shall cooperate with the participat-
ing Sellers, the underwriters and their respective coun-
sel in connection with the preparation of the Registra-
tion Statement relating to the Secondary Offering or any
Demand Registration, as the case may be; provided, how-
ever, that as soon as practicable but in no event later
than five Business Days before filing such Registration
Statement, any related Prospectus or any amendment or
-6-<PAGE>
supplement thereto, other than any amendment or supple-
ment made solely as a result of incorporation by refer-
ence of documents filed with the SEC subsequent to the
filing of such Registration Statement, the Company shall
furnish to the Sellers of the Registrable Shares covered
by such Registration Statement and the underwriters cop-
ies of all such documents proposed to be filed, which
documents shall be subject to the review of such Sellers
and underwriters; the Company shall not file any Regis-
tration Statement or amendment thereto or any Prospectus
or any supplement thereto (other than any amendment or
supplement made solely as a result of incorporation by
reference of documents filed with the SEC subsequent to
the filing of such Registration Statement) to which the
lead underwriters of the applicable offering, or the
Sellers holding a majority of the Registrable Shares
covered by such Registration Statement shall have ob-
jected within three Business Days after receipt of such
documents to such filing based upon their reasonable
belief that such Registration Statement or amendment
thereto or Prospectus or supplement thereto does not
comply in all material respects with the requirements of
the Securities Act; provided that the foregoing shall
not limit the right of any Seller whose Registrable
Shares are covered by a Registration Statement to advise
the Company relating to any particular information that
is to be contained in such Registration Statement,
amendment, Prospectus or supplement and relates specifi-
cally to such Seller; and if the Company is unable to
file any such document due to the reasonable objections
of such underwriters or such Sellers, to cooperate with
such underwriters and Sellers to prepare, as soon as
practicable, a document that is responsive in all mate-
rial respects to such reasonable objections of such un-
derwriters and Sellers;
(ii) prepare and file with the SEC such amend-
ments and post-effective amendments to each Registration
Statement as may be necessary to keep such Registration
Statement effective for the applicable period set forth
in Sections 2(a) and 3(a) hereof; and use all reasonable
efforts to cause the related Prospectus to be supple-
mented by any required Prospectus supplement, and as so
supplemented shall file such Prospectus in accordance
with the Securities Act and any rules and regulations
promulgated thereunder; and shall otherwise use all rea-
sonable efforts to comply with the provisions of the
Securities Act as may be necessary to facilitate the
disposition of all Registrable Shares covered by such
Registration Statement during the applicable period;
-7-<PAGE>
(iii) notify the participating Sellers and the
Secondary Lead Underwriter or the Lead Underwriter, as
the case may be, promptly if at any time (A) any Pro-
spectus, Registration Statement or amendment or supple-
ment thereto is filed, (B) any Registration Statement,
or any post-effective amendment thereto, becomes effec-
tive, (C) the SEC requests any amendment or supplement
to, or any additional information in respect of, any
Registration Statement or Prospectus, (D) the SEC issues
any stop order suspending the effectiveness of a Regis-
tration Statement or initiates any proceedings for that
purpose, (E) the representations and warranties of the
Company contemplated by subclause (C) of clause (xii) of
this paragraph (a) cease to be true and correct in any
material respect, (F) the Company receives any notice
that the qualification of any Registrable Shares for
sale in any jurisdiction has been suspended or that any
proceeding has been initiated for the purpose of sus-
pending such qualification, or (G) subject to the Com-
pany's rights under Section 3(d), any event occurs which
the Company reasonably believes requires that any
changes be made in such Registration Statement or any
related Prospectus so that such Registration Statement
or Prospectus will not contain any untrue statement of a
material fact or omit to state any material fact re-
quired to be stated therein or necessary to make the
statements therein not misleading;
(iv) use all reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of
a Registration Statement, or the qualification of any
Registrable Shares for sale in any jurisdiction, at the
earliest practicable moment;
(v) if requested by the Secondary Lead Under-
writers or the Lead Underwriter, as the case may be, or
any participating Seller, promptly incorporate into a
Prospectus supplement or a post-effective amendment to
the Registration Statement any information which such
underwriters and such Seller requests, and the Company
reasonably agrees, is required to be included therein
relating to such sale of Registrable Shares; and shall
file such supplement or post-effective amendment as soon
as practicable in accordance with the Securities Act and
the rules and regulations promulgated thereunder;
(vi) furnish to the Sellers and the Secondary
Lead Underwriters or Lead Underwriter, as the case may
be, one signed copy of the Registration Statement or
Registration Statements and any post-effective amendment
-8-<PAGE>
thereto, including all financial statements and sched-
ules thereto, all documents incorporated therein by ref-
erence and all exhibits thereto (including exhibits in-
corporated by reference) as promptly as practicable af-
ter filing such documents with the SEC;
(vii) deliver to the participating Sellers and
each underwriter as many copies of the Prospectus or
Prospectuses (including each preliminary Prospectus) and
any amendment or supplement thereto as such Persons may
reasonably request; and shall consent to the use of such
Prospectus or any amendment or supplement thereto by
each such participating Seller and underwriter, if any,
in connection with the offering and sale of the Regis-
trable Shares covered by such Prospectus, amendment or
supplement;
(viii) prior to any public offering of Registra-
ble Shares, use all reasonable efforts to register or
qualify, and shall cooperate with the participating
Sellers, the underwriters and their respective counsel
in connection with the registration or qualification of
such Registrable Shares for offer and sale under the
securities or blue sky laws of such jurisdictions as may
reasonably be requested by the Sellers of a majority of
the Registrable Shares included in such Registration
Statement; use all reasonable efforts to keep each such
registration or qualification effective during the pe-
riod set forth in Section 2(a) or 3(a) hereof that the
applicable Registration Statement is required to be kept
effective; and shall do any and all other acts or things
reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Shares covered by such
Registration Statement; provided, however, that the Com-
pany will not be required to qualify generally to do
business in any jurisdiction where it is not then so
qualified or to take any action which would subject it
to general service of process in any jurisdiction where
it is not then so subject;
(ix) cooperate with the participating Sellers
and the underwriters in the preparation and delivery of
certificates representing the Registrable Shares to be
sold, such certificates to be in such denominations and
registered in such names as such Sellers or managing un-
derwriters may request at least two business days prior
to any sale of Registrable Shares represented by such
certificates;
-9-<PAGE>
(x) use all reasonable efforts to cause the
Registrable Shares covered by the applicable Registra-
tion Statement to be registered with or approved by such
other governmental agencies or authorities as may be
reasonably necessary to enable the participating Sellers
or the underwriters to consummate the sale of such Reg-
istrable Shares in conformity with federal law and the
laws of the jurisdictions in which such Registrable
Shares shall be registered or qualified pursuant to
clause (viii) of this paragraph (a);
(xi) upon the occurrence of any event de-
scribed in subclause (G) of clause (iii) of this para-
graph (a), subject to the Company's rights under Section
3(d), promptly prepare and file a supplement or post-
effective amendment to the applicable Registration
Statement or Prospectus or any document incorporated
therein by reference, and any other required document,
so that such Registration Statement and Prospectus will
not thereafter contain an untrue statement of a material
fact or omit to state any material fact necessary to
make the statements therein not misleading, and shall
use all reasonable efforts to cause such supplement or
post-effective amendment to become effective as soon as
practicable;
(xii) (A) take all other actions in connection
therewith as are reasonably necessary or desirable in
order to expedite or facilitate the disposition of the
Registrable Shares included in such Registration State-
ment; (B) enter into an underwriting agreement in cus-
tomary form for the Secondary Lead Underwriters or the
Lead Underwriter, as the case may be, with respect to
issuers with similar market capitalization and reporting
and financial histories; (C) make representations and
warranties to each Seller participating in such offering
and to each of the underwriters, in such form, substance
and scope as are customarily made to the Secondary Lead
Underwriters or the Lead Underwriter, as the case may
be, by issuers with similar market capitalization and
reporting and financial histories, and shall confirm the
same to the extent customary if and when requested; (D)
obtain opinions of counsel to the Company (which may be
the Company's inside counsel) and updates thereof ad-
dressed to each participating Seller and to each of the
underwriters, such opinions and updates to be in custom-
ary form and to cover the matters customarily covered in
opinions obtained in underwritten offerings by the Sec-
ondary Lead Underwriters or the Lead Underwriter, as the
-10-<PAGE>
case may be, for issuers with similar market capitaliza-
tion and reporting and financial histories; (E) obtain
"comfort" letters and updates thereof from the Company's
independent certified public accountants addressed to
each of the underwriters, such letters to be in custom-
ary form and to cover matters of the type customarily
covered in "comfort" letters to the Secondary Lead Un-
derwriters or Lead Underwriter, as the case may be, in
connection with underwritten offerings by them for issu-
ers with similar market capitalization and reporting and
financial histories; (F) provide, in the underwriting
agreement to be entered into in connection with such
offering, indemnification provisions and procedures no
less favorable than those set forth in Section 7 hereof
with respect to all parties to be indemnified pursuant
to such Section 7; and (G) deliver such customary docu-
ments and certificates as may be reasonably requested by
the holders of a majority of the Registrable Shares in-
cluded in such Registration Statement and by the Second-
ary Lead Underwriters or Lead Underwriter, as the case
may be, to evidence compliance with clause (C) of this
paragraph (xii) and with any customary conditions con-
tained in the underwriting agreement entered into by the
Company and the participating Sellers in connection with
such offering;
(xiii) make available for inspection at rea-
sonable times by representatives of the Sellers of Reg-
istrable Shares being sold pursuant to a Registration
Statement and of the underwriters participating in such
sale all relevant financial and other records, pertinent
corporate documents and properties of the Company, and
to cause the Company's officers, directors and employees
to supply all information reasonably requested by any
such representatives, in connection with the Secondary
Registration or such Demand Registration; provided, how-
ever, that all non-public information regarding such
records, documents and properties shall be kept confi-
dential by such persons unless disclosure of such infor-
mation is required by court or administrative order;
(xiv) comply with all applicable rules and reg-
ulations of the SEC relating to such Registration State-
ment and the distribution of the securities being of-
fered or otherwise necessary in order to perform the
Company's obligations under this paragraph (a);
(xv) cooperate and assist in any filings re-
quired to be made with the New York Stock Exchange, Inc.
-11-<PAGE>
and in the performance of any customary or required due
diligence investigation by any underwriter; and
(xvi) take all other reasonable steps necessary
or appropriate to effect such registration in the manner
contemplated by this Agreement.
(b) Sellers' Obligation to Furnish Information.
The Company may require each Seller of Registrable Shares as
to which any registration is being effected to furnish to the
Company such information as the Company may from time to time
reasonably request.
(c) Suspension of Sales Pending Amendment of Pro-
spectus. Each Seller agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind
described in subclause (C), (D), (E), (F) or (G) of clause
(iii) of paragraph (a) of this Section 4, such Seller will
forthwith forego or delay the disposition of any Registrable
Shares covered by such Registration Statement or Prospectus
until such Seller's receipt of the copies of the supplemented
or amended Prospectus contemplated by clause (xi) of such
paragraph (a), or until it is advised in writing by the Com-
pany that the use of the applicable Prospectus may be re-
sumed, and has received copies of any additional or supple-
mental filings which are incorporated by reference in such
Prospectus, and, if so directed by the Company, such Seller
will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Sell-
er's possession of any Prospectus covering such Registrable
Shares. If the Company shall have given any such notice dur-
ing a period when the Secondary Registration or any Demand
Registration is in effect, the 60-day period described in
Section 2(a) or 3(a) hereof, as the case may be, shall be
extended by the number of days from and including the date of
the giving of such notice to and including the date when each
Seller of Registrable Shares covered by such Registration
Statement shall have received the copies of the supplemented
or amended Prospectus contemplated by clause (xi) of para-
graph (a) of this Section 4 or shall have been advised in
writing by the Company that the use of the applicable Pro-
spectus may be resumed.
5. Registration Expenses.
All expenses incident to the Company's performance
of or compliance with its obligations under this Agreement,
including without limitation all (i) registration and filing
fees, (ii) fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of
-12-<PAGE>
counsel in connection with blue sky qualifications or regis-
trations (or the obtaining of exemptions therefrom) of the
Registrable Shares), (iii) printing expenses (including ex-
penses of printing Prospectuses), (iv) messenger and delivery
expenses, (v) the Company's internal expenses (including,
without limitation, salaries and expenses of its officers and
employees performing legal or accounting duties), (vi) fees
and disbursements of its counsel and its independent certi-
fied public accountants (including the expenses of any spe-
cial audit or "comfort" letters required by or incident to
such performance or compliance), (vii) securities acts li-
ability insurance (if the Company elects to obtain such in-
surance), (viii) fees and expenses of other Persons retained
by the Company and (ix) reasonable fees and expenses of one
counsel for the Sellers whose Registrable Shares are covered
by each Registration Statement as a group (all such expenses
being herein referred to as "Registration Expenses"), shall
be borne by the Company. Registration Expenses shall not
include any underwriting discounts or commissions and trans-
fer taxes, if any, attributable to the sale of the Registra-
ble Shares, which shall be borne solely by the participating
Sellers; provided that, in the case of the Secondary Offer-
ing, if the proceeds per share of Common Stock to the par-
ticipating Sellers, net of underwriting discounts or commis-
sions, would be less than the Repurchase Price, then the Com-
pany shall bear such portion of the underwriting discounts or
commissions as necessary such that such net proceeds per
share to the participating Sellers shall equal the lesser of
the Repurchase Price or the Offer Price; and provided fur-
ther, that, in the event the Company elects to include in any
Demand Registration shares for its own account pursuant to
Section 3(e) hereof, the Company shall bear all underwriting
discounts or commissions relating to the sale or disposition
of such shares. Subject to the Stock Purchase Agreement, all
other expenses incurred by any party to this Agreement in
connection with the transactions contemplated hereby shall,
subject to Section 6(b), be borne by the party incurring such
expenses.
6. Piggyback Registration.
The rights and obligations of the parties pursuant
to this Section 6 are conditioned upon the Sellers making the
Secondary Election pursuant to Section 2(b) hereof or the
Sellers not having sold all of the Registrable Shares in the
Secondary Offering (other than due to a breach of any of the
Sellers' obligations or a failure of any of Sellers' repre-
sentations under this Agreement, the Stock Purchase Agreement
or the underwriting agreement for the Secondary Offering).
-13-<PAGE>
(a) Right to Include Registrable Shares. If at
any time during the Demand Registration Period, the Company
proposes to register its common stock under the Securities
Act, whether or not for sale for its own account (other than
a registration on Form S-4 or Form S-8, or any successor or
similar forms), it will each such time promptly give written
notice to the Seller Representative (as defined in Section
11(d)) of its intention to do so and of rights of such Sell-
ers under this Section 6 (the "Section 6 Notice"). The Com-
pany will use all reasonable efforts to include in the pro-
posed registration all Registrable Shares that the Company is
requested in writing, within 10 days after the Section 6 No-
tice is given, to register by the Sellers thereof (a "Piggy-
back Registration"); provided, however, that (i) if, at any
time after giving written notice of its intention to register
any equity securities and prior to the effective date of the
registration statement filed in connection with such regis-
tration, the Company shall determine for any reason not to
register such equity securities, the Company may, at its
election, give written notice of such determination to the
Seller Representative and, thereupon, shall be relieved of
its obligation to register any Registrable Shares in con-
nection with such abandoned registration and (ii) in case of
a determination by the Company to delay registration of its
common stock, the Company shall be permitted to delay the
registration of such Registrable Shares for the same period
as the delay in registering such other common stock. Not-
withstanding anything to the contrary in Section 3 hereof, no
Seller shall have the right to require the Company to regis-
ter any Registrable Shares pursuant to such Section 3 until
the later of (A) the completion of the distribution of the
securities offered and registered pursuant to the Section 6
Notice and (B) 90 days after the date each registration
statement effected under this Section 6 is declared effec-
tive.
(b) Expenses. The Company shall pay all Registra-
tion Expenses in connection with each registration of Regis-
trable Shares requested pursuant to this Section 6; provided,
however, that each participating Seller shall pay all under-
writing discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Seller's Regis-
trable Shares pursuant to a Registration Statement effected
pursuant to this Section 6.
(c) Underwriters. The Company shall be entitled,
in its sole discretion, to designate the underwriters (in-
cluding the lead underwriter or underwriters) for any offer-
ing pursuant to this Section 6.
-14-<PAGE>
(d) Priority in Piggyback Registration. If the
lead underwriter for a registration pursuant to this Sec-
tion 6 shall advise the Company that, in its opinion, the
inclusion of the amount of Registrable Shares to be sold for
the account of Sellers would adversely affect the success of
the offering for the Company, then the number of Registrable
Shares to be sold for the account of such Sellers shall be
reduced (and may be reduced to zero) in accordance with the
lead underwriter's recommendation. In the event that the
number of Registrable Shares to be included in any regis-
tration is reduced (but not to zero), the number of such Reg-
istrable Shares included in such registration shall be al-
located pro rata among all requesting Sellers, on the basis
of the relative number of shares of such Registrable Shares
each such Seller has requested to be included in such regis-
tration. If, as a result of the proration provisions of this
Section 6(d), any Seller shall not be entitled to include all
Registrable Shares in a registration pursuant to this Sec-
tion 6 that such Seller has requested be included, such
Seller may elect to withdraw its Registrable Shares from the
registration; provided, however, that such withdrawal elec-
tion shall be irrevocable and, after making a withdrawal
election, a Seller shall no longer have any right to include
Registrable Shares in the registration as to which such with-
drawal election was made.
(e) Merger, Consolidation, etc. Notwithstanding
anything in this Section 6 to the contrary, Sellers shall not
have any right to include their Registrable Shares in any
distribution or registration of equity securities by the Com-
pany which is a result of a merger, consolidation, acquisi-
tion, exchange offer, recapitalization, other reorganization,
dividend reinvestment plan, stock option plan or other em-
ployee benefit plan, or any similar transaction having the
same effect.
7. Indemnification.
(a) Indemnification by the Company. In the event
of any registration of any securities of the Company under
the Securities Act pursuant to Section 2, 3 or 6 hereof, the
Company will, and hereby does, indemnify and hold harmless,
to the extent permitted by law, each Seller of any Regis-
trable Shares covered by such Registration Statement, its
directors, trustees and officers, each other person who par-
ticipates as an underwriter, if any, in the offering or sale
of such securities and each other person, if any, who con-
trols such Seller or any such underwriter within the meaning
-15-<PAGE>
of the Securities Act (collectively, the "Seller Indemni-
tees"), against any and all losses, claims, damages or li-
abilities, joint or several, and expenses (including any
amounts paid in any settlement effected with the Company's
consent, which consent shall not be unreasonably withheld) to
which such Seller Indemnitees may become subject under the
Securities Act, common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or pro-
ceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement under
which such securities were registered under the Securities
Act or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact con-
tained in any preliminary Prospectus, together with the docu-
ments incorporated by reference therein (as amended or sup-
plemented if the Company shall have filed with the SEC any
amendment thereof or supplement thereto), if used prior to
the effective date of such Registration Statement, or con-
tained in the Prospectus, together with the documents incor-
porated by reference therein (as amended or supplemented if
the Company shall have filed with the SEC any amendment
thereof or supplement thereto), or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading, and the Company will reimburse
such Seller Indemnitees for any legal or any other expenses
reasonably incurred by any of them in connection with inves-
tigating or defending any such loss, claim, liability, action
or proceeding; provided, however, that the Company shall not
be liable to any such Seller Indemnitee in any such case to
the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises
out of or is based upon any untrue statement or alleged un-
true statement or omission or alleged omission made in such
Registration Statement or amendment thereof or supplement
thereto or in any such preliminary, final or summary Prospec-
tus in reliance upon and in conformity with information fur-
nished in writing to the Company by or on behalf of any such
Seller Indemnitee, for use in the preparation thereof; and
provided further, that the Company will not be liable to any
person who participates as an underwriter in any underwritten
offering or sale of Registrable Shares, or any other person,
if any, who controls such underwriter within the meaning of
the Securities Act, under the indemnity agreement in this
Section 7(a) with respect to any preliminary Prospectus or
the final Prospectus (including any amended or supplemented
-16-<PAGE>
preliminary or final Prospectus), as the case may be, to the
extent that any such loss, claim, damage or liability of such
underwriter or controlling person results from the fact that
such underwriter sold Registrable Shares to a person to whom
there was not sent or given, at or prior to the written con-
firmation of such sale, a copy of the final Prospectus or of
the final Prospectus as then amended or supplemented, which-
ever is most recent, if the Company has previously furnished
copies thereof to such underwriter and such final Prospectus,
as then amended or supplemented, has corrected any such mis-
statement or omission. Such indemnity shall remain in full
force and effect regardless of any investigation made by or
on behalf of any Seller Indemnitee and shall survive the
transfer of any such securities by any such Seller Indemni-
tee.
(b) Indemnification by the Sellers. In consider-
ation of the Company's including any Registrable Shares in
any Registration Statement filed in accordance with Sec-
tion 2, 3 or 6 hereof, the prospective Seller of such Regis-
trable Shares and any underwriter shall be deemed to have
agreed to indemnify and hold harmless (in the same manner and
to the same extent as set forth in paragraph (a) of this Sec-
tion 7) the Company and its directors and officers and each
person controlling the Company within the meaning of the Se-
curities Act (collectively, "Company Indemnitees") and all
other prospective Sellers and their directors, trustees, of-
ficers and respective controlling persons with respect to any
statement or alleged statement in or omission or alleged
omission from such Registration Statement, any preliminary,
final or summary Prospectus contained therein, or any amend-
ment or supplement, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in
conformity with information furnished in writing to the Com-
pany or its representatives by or on behalf of such Seller or
underwriter for use in the preparation of such Registration
Statement, preliminary, final or summary Prospectus or amend-
ment or supplement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or
on behalf of the Company or any Company Indemnitee and shall
survive the transfer of such securities by such Seller.
(c) Notices of Claims, Etc. Promptly after re-
ceipt by an indemnified party hereunder of written notice of
the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to
this Section 7, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such
-17-<PAGE>
action; provided, however, that the failure of any indemni-
fied party to give notice as provided herein shall not re-
lieve the indemnifying party of its obligations under the
preceding paragraphs of this Section 7, except to the extent
that the indemnifying party is actually and materially preju-
diced by such failure to give notice. If any such claim or
action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein, and, to the
extent that it wishes, jointly with any other similarly noti-
fied indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party;
provided, however, that if, in the indemnified party's rea-
sonable judgment, a conflict of interest between the indem-
nified party and the indemnifying party exists in respect of
such claim, then such indemnified party shall have the right
to participate in the defense of such claim and to employ one
firm of attorneys at the indemnifying party's expense to rep-
resent such indemnified party. Once the indemnifying party
has assumed the defense of any claim, no indemnified party
will consent to entry of any judgment or enter into any set-
tlement without the indemnifying party's consent to such
judgment or settlement, which shall not be unreasonably with-
held.
(d) Other Indemnification. Indemnification simi-
lar to that specified in the preceding paragraphs of this
Section 7 (with appropriate modifications) shall be given by
the Company and each Seller of Registrable Shares with re-
spect to any required registration or other qualification of
securities under any state securities and "blue sky" laws.
(e) Contribution. If the indemnification provided
for in this Section 7 is unavailable or insufficient to hold
harmless an indemnified party under Section 7(a) or (b)
hereof, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in
Section 7(a) or (b) hereof in such proportion as is appropri-
ate to reflect the relative fault of the indemnifying party
on the one hand and the indemnified party on the other hand
in connection with statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault
shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material
fact relates to information supplied by the indemnifying par-
ty or the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct
-18-<PAGE>
or prevent such untrue statement or omission. The Company
agrees, and the Sellers (in consideration of the Company's
including any Registrable Shares in any Registration State-
ment filed in accordance with Section 2, 3 or 6 hereof) shall
be deemed to have agreed, that it would not be just and equi-
table if contributions pursuant to this Section 7(e) were to
be determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable
considerations referred to in the first sentence of this Sec-
tion 7(e). The amount paid by an indemnified party as a re-
sult of the losses, claims, damages or liabilities referred
to in the first sentence of this Section 7(e) shall be deemed
to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or
defending any action or claim (which shall be limited as pro-
vided in Section 7(c) hereof if the indemnifying party has
assumed the defense of any such action in accordance with the
provisions thereof) which is the subject of this Section
7(e). No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Promptly after
receipt by an indemnified party under this Section 7(e) of
notice of the commencement of any action against such party
in respect of which a claim for contribution may be made
against an indemnifying party under this Section 7(e), such
indemnified party shall notify the indemnifying party in wri-
ting of the commencement thereof if the notice specified in
Section 7(c) hereof has not been given with respect to such
action; provided, however, that the omission so to notify the
indemnifying party shall not relieve the indemnifying party
from any liability which it may have to any indemnified party
otherwise under this Section 7(e), except to the extent that
the indemnifying party is actually and materially prejudiced
by such failure to give notice. Notwithstanding anything in
this Section 7(e) to the contrary, no indemnifying party
(other than the Company) shall be required pursuant to this
Section 7(e) to contribute any amount in excess of the pro-
ceeds received by such indemnifying party from the sale of
Registrable Shares in the offering to which the losses,
claims, damages or liabilities of the indemnified parties
relate.
8. Rule 144.
During the Standstill Period, the Company shall
file the reports required to be filed by it under the Securi-
ties Act and the Exchange Act and the rules and regulations
promulgated thereunder, and shall take such further action as
any Seller may reasonably request, all to the extent required
-19-<PAGE>
from time to time to enable such Seller to sell Registrable
Shares without registration under the Securities Act within
the limitations of the exemptions provided by Rule 144 (sub-
ject in all cases to any additional limitations or restric-
tions on such sales set forth in the Stock Purchase Agree-
ment).
9. Agreements of Participating Sellers.
In connection with any registration of Registrable
Shares pursuant to this Agreement, the Sellers who request to
participate in such registration statement shall (i) cooper-
ate with the underwriters, the Company and their respective
counsel in connection with the preparation of the registra-
tion statement, (ii) enter into an underwriting agreement in
customary form, and (iii) complete, execute and/or cause to
be delivered all customary questionnaires, powers of attor-
ney, certificates, opinions and other documents required un-
der the terms of such underwriting agreements.
10. Holdback Agreements.
(a) Restrictions on Public Sales by Sellers. To
the extent not inconsistent with applicable law, each Seller
that is timely notified in writing by the lead underwriter or
underwriters shall not effect any public sale or distribution
(including a sale pursuant to Rule 144) of any issue being
registered in an underwritten offering (other than pursuant
to an employee stock option, stock purchase, stock bonus or
similar plan, pursuant to a merger, an exchange offer or a
transaction of the type specified in Rule 145(a) under the
Securities Act), any securities of the Company similar to any
such issue or any securities of the Company convertible into
or exchangeable or exercisable for any such issue or any sim-
ilar issue, during the 10-day period prior to the effective
date of the applicable registration statement, or during the
period beginning on such effective date and ending on the
later of (i) the completion of the distribution of such secu-
rities pursuant to such offering and (ii) 90 days after such
effective date, except as part of such registration; pro-
vided, however that nothing in this Section 10(a) shall be
construed as a waiver by the Company of any provision of Sec-
tion 6 of the Stock Purchase Agreement applicable to Sellers.
(b) Restrictions on Public Sales by the Company.
The Company shall not effect any public sale or distribution
of any issue of the same class or series as Registrable
Shares being registered in an underwritten offering (other
than pursuant to an employee stock option, stock purchase,
stock bonus or similar plan, pursuant to a merger, exchange
-20-<PAGE>
offer or a transaction of the type specified in Rule 145(a)
under the Securities Act or pursuant to a "shelf" registra-
tion), any securities of the Company similar to any such is-
sue or any securities of the Company convertible into or ex-
changeable or exercisable for any such issue, during the 10-
day period prior to the effective date of the applicable reg-
istration statement, or during the period beginning on such
effective date and ending on the later of (i) the completion
of the distribution of such securities pursuant to such of-
fering and (ii) 90 days after such effective date, except as
part of such registration; provided, however, that the Com-
pany may in no event make such public sale or distribution
between the date hereof and the date the registration state-
ment relating to the Secondary Offering is declared effective
or withdrawn, as the case may be.
11. Miscellaneous.
(a) Amendments and Waivers. This Agreement may be
amended and the Company may take any action herein prohib-
ited, or omit to perform any act herein required to be per-
formed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act,
of the Sellers of at least a majority of the Registrable
Shares then outstanding (and, in the case of any amendment,
action or omission to act that adversely affects any Seller
or group of Sellers differently from any of the other Sell-
ers, the written consent of such Seller or group of Sellers).
Sellers shall be bound from and after the date of the receipt
of a written notice from the Company setting forth such
amendment or waiver by any consent authorized by this Section
11(a), whether or not the certificates representing such Reg-
istrable Shares shall have been marked to indicate such con-
sent.
(b) Successors, Assigns and Transferees. This
Agreement shall be binding upon and shall inure to the ben-
efit of the Company, the Sellers and their respective succes-
sors, assigns and transferees; provided, however, that noth-
ing set forth herein shall be construed to permit any Seller
to effect any sale, transfer or other disposition of, or take
any action with respect to, any Registrable Shares that would
not be permitted by the Stock Purchase Agreement.
(c) Integration. This Agreement and the documents
referred to herein or delivered pursuant hereto that form a
part hereof contain the entire understanding of the Company
and the Sellers with respect to its subject matter. There
are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the
-21-<PAGE>
subject matter hereof other than those expressly set forth
herein. This Agreement supersedes all prior agreements and
understandings between the Company and the Sellers with re-
spect to its subject matter.
(d) Notices. All notices hereunder shall be suf-
ficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery
service or, to the extent receipt is confirmed, telecopy,
telefax or other electronic transmission service to the ap-
propriate address or number as set forth below. Notices to
any Seller shall be addressed to the address of such Seller
set forth in Schedule 1 to the Stock Purchase Agreement (it
being understood that only one copy of a notice is required
to be sent to any trustee, which notice shall be deemed to be
sufficient as to each Seller for which such trustee is acting
in such capacity) with copies to:
Mr. Lennie Sam Skaggs
6190 So. Moffat Farm Lane
Salt Lake City, Utah 84121
Telecopy No.: (801) 262-0826
and
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attn: Meredith M. Brown, Esq.
Telecopy No.: (212) 909-6836
or at such other address and to the attention of such other
person as any Seller may designate by written notice to the
Company. Notices to the Company shall be addressed to:
American Stores Company
709 East South Temple
Salt Lake City, Utah 84102
(1) Attn: Kathleen E. McDermott
Telecopy No.: (801) 537-7808
(2) Attn: Teresa Beck
Telecopy No.: (801) 537-7863
-22-<PAGE>
and
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attn: Richard D. Katcher, Esq.
Telecopy No: (212) 403-2000
or at such other address and to the attention of such other
persons the Company may designate by written notice to Sell-
ers.
(e) Descriptive Headings. The headings in this
Agreement are for convenience of reference only and shall not
limit, expand or otherwise affect the meaning of the terms
contained herein.
(f) Severability. In the event that any one or
more of the provisions, paragraphs, words, clauses, phrases
or sentences contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable
in any respect for any reason, the validity, legality and
enforceability of any such provision, paragraph, word,
clause, phrase or sentence in every other respect and of the
remaining provisions, paragraphs, words, clauses, phrases or
sentences hereof shall not be in any way impaired, it being
intended that all rights, powers and privileges of the Com-
pany and the Sellers shall be enforceable to the fullest ex-
tent permitted by law.
(g) Governing Law. This Agreement shall be gov-
erned by and construed and enforced in accordance with the
laws of the State of Delaware, without regard to the prin-
ciples of conflicts of laws thereof, as if it were a contract
between the Company and the Sellers made and to be performed
entirely within that State.
(h) Termination. This Agreement shall terminate,
and thereby become null and void, at the end of the Demand
Registration Period; provided, however, that the provisions
of Section 7 hereof shall survive the termination of this
Agreement.
(i) Sellers' Obligation Several. All of the obli-
gations of the Sellers under this Agreement shall be several
and not joint, and no Seller shall be liable for any breach
hereof by any other Seller.
-23-<PAGE>
IN WITNESS WHEREOF, this Agreement has been signed
by or on behalf of each of the parties as of the day first
above written.
AMERICAN STORES COMPANY
By:/s/ Teresa Beck
Name: Teresa Beck
Title: Chief Financial Officer
LENNIE SAM SKAGGS
/s/ Lennie Sam Skaggs
ALINE W. SKAGGS
/s/ Aline W. Skaggs
ALSAM TRUST
By:/s/ George L. Moosman
Name: George L. Moosman
Title: Trustee
By:/s/ Claudia Skaggs Luttrell
Name: Claudia Skaggs Luttrell
Title: Trustee
By:/s/ Don L. Skaggs
Name: Don L. Skaggs
Title: Trustee
By:/s/ Michael T. Miller
Name: Michael T. Miller
Title: Trustee
[REGISTRATION RIGHTS AGREEMENT]
S-1<PAGE>
SIX S RANCH, INC.
By:/s/ Michael T. Miller
Name: Michael T. Miller
Title: Vice President
ALSAM FOUNDATION
By:/s/ Michael T. Miller
Name: Michael T. Miller
Title: President and
Executive Director
SKAGGS FAMILY FOUNDATION FOR
ROMAN CATHOLIC AND
COMMUNITY CHARITIES
By:/s/ J. Terrence Fitzgerald
Name: J. Terrence Fitzgerald
Title: President
SKAGGS INSTITUTE FOR
RESEARCH
By:/s/ Richard A. Lerner
Name: Richard A. Lerner
Title: President
LYNDA SUE BALUKOFF
/s/ Lynda Sue Balukoff
CLAUDIA LUTTRELL
/s/ Claudia Luttrell
[REGISTRATION RIGHTS AGREEMENT]
S-2
EXHIBIT 4
THIRD AMENDMENT TO RIGHTS AGREEMENT
THIRD AMENDMENT, dated as of February 20, 1997, to
the Rights Agreement, dated as of March 8, 1988, as amended
March 20, 1990 and June 24, 1996 (the "Rights Agreement"),
between American Stores Company, a Delaware corporation (the
"Company"), and First Chicago Trust Company of New York, as
Rights Agent (the "Rights Agent").
The Company and the Rights Agent have heretofore
executed and entered into the Rights Agreement. Pursuant to
Section 27 of the Rights Agreement, the Company and the Rights
Agent may from time to time supplement or amend the Rights
Agreement in accordance with the provisions of Section 27
thereof. All acts and things necessary to make this Second
Amendment a valid agreement, enforceable according to its
terms, have been done and performed, and the execution and
delivery of this Third Amendment by the Company and the Rights
Agent have been in all respects duly authorized by the Company
and the Rights Agent.
In consideration of the foregoing and the mutual
agreements set forth herein, the parties hereto agree as
follows:
1. Clause (v) of Section 1(a) of the Rights
Agreement is hereby amended to read as follows:
(v) Mr. L.S. Skaggs, his Affiliates and Associates, his
heirs, family, and any trust or foundation to which he or
members of his family has transferred or may transfer
Common Shares of the Company (collectively, "L.S. Skaggs")
but the exception in this clause (v) shall not be
applicable if L.S. Skaggs shall increase its aggregate
Beneficial Ownership of the then outstanding Common Shares
(other than as a result of (1) an acquisition of Common
Shares by the Company or (2) the execution, delivery and
performance of the Stock Purchase Agreement and
Registration Rights Agreement, each dated as of February
20, 1997, by and among the Company, Mr. L.S. Skaggs, his
wife and certain stockholders listed on Schedule 1 or 2 to
the Stock Purchase Agreement) to an amount greater than
the sum of (x) the lowest aggregate Beneficial Ownership
of L.S. Skaggs as a percentage of the outstanding Common
Shares as of any date on or after June 21, 1996 plus (y)
1%.
2. This Third Amendment to the Rights Agreement
shall be governed by and construed in accordance with the laws
of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely
within such State.<PAGE>
3. This Third Amendment to the Rights Agreement may
be executed in any number of counterparts, each of which shall
be an original, but such counterparts shall together constitute
one and the same instrument. Terms not defined herein shall,
unless the context otherwise requires, have the meanings
assigned to such terms in the Rights Agreement.
4. In all respects not inconsistent with the terms
and provisions of this Third Amendment to the Rights Agreement,
the Rights Agreement is hereby ratified, adopted, approved and
confirmed. In executing and delivering this Third Amendment,
the Rights Agent shall be entitled to all the privileges and
immunities afforded to the Rights Agent under the terms and
conditions of the Rights Agreement.
5. If any term, provision, covenant or restriction
of this Third Amendment to the Rights Agreement is held by a
court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Third Amendment
to the Rights Agreement, and of the Rights Agreement, shall
remain in full force and effect and shall in no way be
affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused
this Third Amendment to be duly executed and attested, all as
of the date and year first above written.
Attest: AMERICAN STORES COMPANY
By:/s/ Jack Lunt By:/s/ Teresa Beck
Secretary Chief Financial Officer
FIRST CHICAGO TRUST COMPANY
Attest: OF NEW YORK
By:/s/ James Kuzmich By:/s/ Michael J. Kane
Customer Service Officer Assistant Vice President
-2-
EXHIBIT 5
[AMERICAN STORES COMPANY LETTERHEAD]
NEWS RELEASE
Investor and Media Contact:
Daniel J. Zvonek
Director - Investor and
Public Relations
(801) 539-0112
AMERICAN STORES COMPANY AGREES TO REPURCHASE
$550 MILLION OF ITS SHARES HELD BY SKAGGS FAMILY AND TRUSTS
SALT LAKE CITY, UTAH -- February 21, 1997 -- American
Stores Company (NYSE:ASC) and the family of L.S. Skaggs
announced today an agreement for the repurchase by American
Stores of 12,222,222 shares of its common stock from the Skaggs
family and certain family and charitable trusts for $45 per
share, yesterday's closing price on the New York Stock
Exchange. The Company also announced that it had agreed to
file a registration statement to enable such shareholders to
sell between 14.7 million and 16.4 million additional shares in
a secondary offering as promptly as practicable.
The agreement is designed to further the best
interest of American Stores, while permitting the orderly sale
by the Skaggs family and trusts of their American Stores stock.
Victor L. Lund, Chairman and Chief Executive Officer
of the Company stated, "This transaction will enable the
Company's management and associates to focus fully on carrying
out our business strategy, including the Delta initiatives
designed to transform the Company from a holding company to a
unified operating company. The repurchase will be slightly
accretive to our earnings per share, and will not affect our
aggressive capital expenditure program."
A spokesman for the Skaggs family stated, "We are
pleased that we have been able to reach an agreement with
American Stores with respect to our holdings. As the largest
shareholders in
1<PAGE>
American Stores, the objective of the Skaggs family has always
been to enhance long term shareholder value."
The Company plans to finance the share repurchase,
which will aggregate $550 million, initially through bank lines
of credit. Subject to market conditions, the Company expects
to refinance such repurchases in public equity and/or debt
offerings over the next six to twelve months.
The closing of the share repurchase is expected to
occur simultaneously with the closing of the secondary
offering. If the price to the public in the secondary offering
would be less than $45 per share, the selling stockholders have
the right to terminate the secondary offering and, if they also
elect, the Company repurchase. Either the Company or the
selling stockholders may terminate the transactions if they are
not consummated within 60 days following the date the Company
files a registration statement for the secondary offering.
The selling stockholders have agreed to enter into a
ten-year standstill agreement restricting purchases and sales
of the Company's shares, proxy fights and other actions. In
the event that neither the share repurchase nor the secondary
offering is consummated, the standstill period would be reduced
to thirty months. The Company has also granted the selling
stockholders certain registration rights during the standstill
period.
American Stores Company is one of the nation's
largest food and drug retailers. It operates 1,695 stores in
26 states. Its principal retail operations include Acme
Markets, Jewel Food Stores, Lucky Northern California Division,
Lucky Southern California Division, Jewel Osco Southwest, and
Osco and Sav-on drug stores.
Cautionary Note: This press release contains certain
forward-looking statements about the future performance of the
Company which are based on management's assumptions and beliefs
in light of the information currently available to it. These
forward-looking statements are subject to uncertainties and
other factors that could cause actual results to differ
materially from such statements including, but not limited to:
competitive practices and pricing in the food and drug
industries generally and particularly in the Company's
principal markets; the implementation of the Company's Delta
initiatives in accordance with the currently contemplated
schedule and budget; changes in the financial markets related
to the Company's cost of capital; supply or quality control
problems with the Company's vendors; and changes in economic
conditions which affect the buying patterns of the Company's
customers.
2
