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EXHIBIT 4.2
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
STATE SECURITIES LAWS, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. THE HOLDER OF THIS WARRANT OR ANY
SUCH SHARES MAY BE REQUIRED TO DELIVER TO THE COMPANY, IF THE COMPANY SO
REQUESTS, AN OPINION OF COUNSEL (REASONABLY SATISFACTORY IN FORM AND SUBSTANCE
TO THE COMPANY) TO THE EFFECT THAT AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT (OR QUALIFICATION UNDER STATE SECURITIES LAWS) IS AVAILABLE WITH
RESPECT TO ANY TRANSFER OF THIS WARRANT OR THESE SHARES THAT HAS NOT BEEN SO
REGISTERED (OR QUALIFIED).
THIS WARRANT AND ANY SHARES OF THE COMPANY ACQUIRED UPON THE EXERCISE OF THIS
WARRANT ALSO ARE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AND
OBLIGATIONS, TO WHICH ANY TRANSFEREE AGREES BY HIS ACCEPTANCE HEREOF, AS SET
FORTH HEREIN AND IN THE STOCKHOLDERS AGREEMENT OF THE COMPANY, DATED AS OF
MARCH 22, 1995, COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY. NO TRANSFER
OF THIS WARRANT OR SUCH SHARES WILL BE MADE ON THE BOOKS OF THE COMPANY UNLESS
ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS HEREOF AND OF SUCH
STOCKHOLDERS AGREEMENT AND BY AN AGREEMENT OF THE TRANSFEREE TO BE BOUND BY THE
RESTRICTIONS SET FORTH HEREIN AND IN THE STOCKHOLDERS AGREEMENT.
DOMINICK'S SUPERMARKETS, INC.
Class A Common Stock Purchase Warrant
No. W-1 264,688 shares
March 22, 1995
DOMINICK'S SUPERMARKETS, INC., a Delaware corporation
(together with any corporation that shall succeed to or assume the obligations
of the Company hereunder in compliance with Section 4, the "Company"), for
value received, hereby certifies that THE YUCAIPA COMPANIES, a California
general partnership, or its registered permitted assigns (the "Holder"), is
entitled to purchase from the Company an aggregate of 264,688 shares of Class A
Common Stock (as defined below), at the Exercise Price (as defined below) per
share, subject to the terms, conditions and adjustments set forth below, (i) in
whole or in part, at any time or from time to time from and after the
occurrence of a Qualified IPO (as defined below) and on or prior to 5:00 P.M.,
New York
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City time, on the Expiration Date (as defined below) or (ii) in whole,
concurrently with any Qualified Sale Event occurring on or prior to the
Expiration Date.
1. Definitions. Capitalized terms used herein and not
otherwise defined herein have the meanings ascribed to them in the Stockholders
Agreement (the "Stockholders Agreement"), dated as of March 22, 1995, among the
Company, DFF Supermarkets, Inc., a Delaware corporation, Dominick's Finer
Foods, Inc., a Delaware corporation, and certain stockholders of the Company.
In addition, the following terms shall have the meanings ascribed to them
below:
"Class A Common Stock" shall mean the Class A Common
Stock, par value $.01 per share, of the Company and any stock into which such
Class A Common Stock shall have been changed or any stock resulting from any
reclassification of such Class A Common Stock.
"Enterprise Value" shall mean (without duplication)
the sum of (a) the aggregate value of the fully diluted common equity of the
Company, based on an assumed price per Share equal to the Exercise Price, net
of the exercise, exchange or conversion price, if any, with respect to any
security exercisable or exchangeable for or convertible into Common Stock of
the Company, plus (b) the aggregate principal amount of all Indebtedness of the
Company and its consolidated Subsidiaries and the aggregate liquidation
preference of all preferred stock of the Company (other than preferred stock
included in clause (a) above), in each case as reflected on the most recent
balance sheet of the Company and its consolidated Subsidiaries that was (or was
required to be) provided pursuant to Section 4.4 of the Stockholders Agreement
on or prior to March 22, 2000, less (c) all cash and cash equivalents of the
Company and its consolidated Subsidiaries as reflected on such balance sheet.
"Expiration Date" initially shall mean March 22,
2000; provided, that if, on such date, the product of (i) 6 times (ii) EBITDA
for the latest four fiscal quarters of the Company for which information was
(or was required to be) provided pursuant to Section 4.4 of the Stockholders
Agreement exceeds the Enterprise Value, then "Expiration Date" shall mean March
22, 2002.
"Market Price" shall mean the average closing sale
price of a share of Class A Common Stock, regular way, for the period of 20
consecutive trading days ending on the trading day immediately preceding the
date of such exercise or, in case no such sale takes place on any such day, the
average of the reported closing bid and asked prices, regular way, in each case
on a Permitted Exchange or, if not so available, as such Market Price may be
determined by a nationally recognized investment bank selected by a majority of
the disinterested members of the Board of Directors of the Company that are
neither Affiliates of the Holder nor designated or nominated by the Holder or
any of its Affiliates (the "Disinterested Directors"); provided, that if the
Warrant is exercised (i) on or prior to the 20th trading day following
consummation of a Qualified IPO, "Market Price" shall mean the price for the
public in such Qualified IPO or (ii) concurrently with a Qualified
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Sale Event, "Market Price" shall mean the price per share of Class A Common
Stock paid in such Qualified Sale Event.
"Qualified Sale Event" shall mean a sale of all, but
not less than all, of the issued and outstanding shares of capital stock of the
Company to a Third Party in a bona fide transaction; provided, that from and
after March 22, 2000, such term shall only include a Compelled Sale.
2. Exercise of Warrant.
2.1. Manner of Exercise. Subject to the
foregoing, this Warrant may be exercised by the Holder hereof, in whole or in
part, during normal business hours on any day other than a Saturday or a Sunday
or a day on which commercial banking institutions in the City of New York are
authorized by law to be closed (a "Business Day"), by surrender of this Warrant
to the Company at its office maintained pursuant to Section 9.2, accompanied by
a subscription in substantially the form attached to this Warrant (or a
reasonable facsimile thereof), duly executed by such Holder. Payment of the
aggregate Exercise Price of the number of shares of Class A Common Stock
designated in such subscription shall be made by the Company withholding
therefrom that number of shares of Class A Common Stock with an aggregate
Market Price as of the date of exercise equal to such aggregate Exercise Price.
2.2. When Exercise Effective. Each exercise of
this Warrant shall be deemed to have been effected immediately prior to the
close of business on the Business Day on which this Warrant and the
accompanying subscription shall have been duly surrendered to the Company as
provided in Section 2.1, and at such time the Holder shall be deemed to have
become the holder or holders of record of a number of shares of Class A Common
Stock equal to the number of shares designated in such subscription less the
number of shares withheld by the Company as payment therefor.
2.3. Delivery of Stock Certificates, etc. As soon
as practicable after each exercise of this Warrant, in whole or in part, in
accordance with the terms of Section 2.1, the Company will cause to be issued
in the name of, and delivered to the Holder hereof,
(a) a certificate or certificates for
the number of duly authorized, validly issued, fully paid and
nonassessable shares of Class A Common Stock to which such Holder
shall be entitled upon such exercise plus, in lieu of any fractional
share to which such holder would otherwise be entitled, cash in an
amount equal to the same fraction of the Market Price per share on the
date of such exercise, and
(b) in case such exercise is in part
only, a new Warrant of like tenor, calling in the aggregate on the
face or faces thereof for the number of shares of Class A Common Stock
equal to the number of such shares called for on the face of this
Warrant (after giving effect to any adjustment thereof after the date
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hereof) minus the number of such shares designated by the Holder upon
such exercise as provided in Section 2.1.
3. Adjustments.
3.1. General. (a) The number of shares of Class
A Common Stock that the Holder shall be entitled to receive upon each exercise
hereof shall be determined by multiplying the number of shares of Class A
Common Stock that would otherwise (but for the provisions of this Section 3) be
issuable upon such exercise, by a fraction (i) the numerator of which is the
Warrant Price (as defined below) and (ii) the denominator of which is the
Exercise Price, in each case in effect on the date of such exercise.
Each of the "Exercise Price" and the "Warrant Price"
shall initially be $303.48 per share; provided, that the Exercise Price shall
be adjusted and readjusted from time to time as provided in Section 3 and the
Warrant Price shall be adjusted and readjusted from time to time as provided in
Section 3.1(b).
(b) From and after March 22, 2000, the
Exercise Price and the Warrant Price shall each be increased daily at
a rate of 25% per annum, compounded annually.
3.2. Treatment of Stock Dividends. If, after the
date hereof, the Company shall declare or pay any dividend on the Class A
Common Stock payable in Class A Common Stock, then, and in each such case, the
Exercise Price in effect immediately after the close of business on the record
date for the determination of holders entitled to receive such dividend, shall
be reduced by multiplying such Exercise Price by a fraction (a) the numerator
of which shall be the number of shares of Class A Common Stock outstanding at
the close of business on such record date and (b) the denominator of which
shall be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution.
3.3. Adjustments for Stock-Splits, Combinations.
If, after the date hereof, the outstanding shares of Class A Common Stock shall
be subdivided into a greater number of shares of Class A Common Stock or
combined into a smaller number of shares of Class A Common Stock by stock
split, combination, reclassification or otherwise, the Exercise Price in effect
immediately prior to such subdivision or combination shall, concurrently with
the effectiveness of such subdivision or combination, be proportionately
reduced or increased.
3.4. Minimum Adjustment of Warrant Price. If the
amount of any adjustment of the Exercise Price required pursuant to Sections
3.2 or 3.3 would be less than one percent (1%) of the Exercise Price in effect
at the time such adjustment is otherwise so required to be made, such amount
shall be carried forward and adjustment with respect thereto made at the time
of and together with any subsequent adjustment which, together with such amount
and any other amount or amounts so carried forward, shall aggregate at least
one percent (1%) of such Exercise Price, provided, that all such adjustments
required
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pursuant to Sections 3.2 and 3.3 and carried forward under this Section 3.4
shall be made upon (and in connection with) any exercise of the Warrant.
3.5. Form of Warrants. Irrespective of any
adjustments in the Exercise Price or the number of shares of Class A Common
Stock purchasable upon the exercise of the Warrants, Warrants theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in the Warrant initially issued.
4. Consolidation, Merger, etc.
If, after the date hereof, the Company shall
(a) consolidate with or merge into any
other Person and shall not be the continuing or surviving corporation
of such consolidation or merger, or
(b) permit any other Person to
consolidate with or merge into the Company and the Company shall be
the continuing or surviving Person but, in connection with such
consolidation or merger, the Class A Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or
cash or any other property, or
(c) effect a capital reorganization or
reclassification of the Class A Common Stock
(other than (i) a Qualified Sale Event or (ii) in the cases for which an
adjustment has been or is to be made pursuant to Section 3), then proper
provision shall be made so that, upon the basis and the terms and in the manner
provided in this Warrant, the holder of this Warrant, upon the exercise hereof
after the consummation of such transaction, shall be entitled to receive, in
lieu of the Class A Common Stock issuable upon such exercise, the kind and
amount of securities, cash or other property to which such holder would
actually have been entitled upon such consummation if such holder had exercised
the rights represented by this Warrant in full (giving effect to the payment of
the aggregate Exercise Price) immediately prior thereto.
5. Certain Covenants. The Company (a) will not permit
the par value of any shares of stock receivable upon the exercise of this
Warrant to exceed the amount payable therefor upon such exercise, (b) will take
all such reasonable action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
stock on the exercise of the Warrants from time to time outstanding.
6. Accountants' Report as to Adjustments. Upon the
occurrence of any event requiring adjustment or readjustment in the Exercise
Price (other than by operation of Section 3.1(b)) or the shares of Class A
Common Stock issuable upon the exercise of this Warrant, the Company will
promptly compute such adjustment or readjustment in
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accordance with the terms of this Warrant and cause independent certified
public accountants of recognized national standing (which may be the regular
auditors of the Company) selected by a majority of the Disinterested Directors
to verify such computation and prepare a report setting forth such adjustment
or readjustment and showing in reasonable detail the method of calculation
thereof and the facts upon which such adjustment or readjustment is based. The
Company will promptly mail a copy of each such report to the Holder.
7. Restrictions on Transfer.
(a) Legends. Each Warrant shall be stamped or
otherwise imprinted with a legend in substantially the form set forth
hereon. Each certificate for shares of Class A Common Stock issued
upon the exercise of any Warrant, and each certificate issued upon the
transfer of any such Class A Common Stock, shall be stamped or
otherwise imprinted with a legend in substantially the form set forth
in Section 2.3 of the Stockholders Agreement.
(b) No Transfer. Neither this Warrant nor any
interest herein may be directly or indirectly transferred or assigned
by the Holder other than to Xxxxxx X. Xxxxxx or a Controlling
Stockholder controlled by Xxxxxx X. Xxxxxx and, the equity holders of
which consist solely of Xxxxxx X. Xxxxxx and Yucaipa Individuals.
8. Reservation of Stock, etc. The Company will at all
times reserve and keep available, solely for issuance and delivery upon
exercise of the Warrants, the number of shares of Class A Common Stock from
time to time issuable upon exercise of this Warrant. All shares of Class A
Common Stock issuable upon exercise of this Warrant shall be duly authorized
and, when issued upon such exercise in accordance with the terms hereof, shall
be validly issued and fully paid and nonassessable with no liability on the
part of the holders thereof.
9. Ownership and Transfer.
9.1. Ownership of Warrants. The Company shall
treat the person in whose name any Warrant is registered on the register kept
at the office of the Company maintained pursuant to Section 9.2(a) as the owner
and holder thereof for all purposes, notwithstanding any notice to the
contrary.
9.2. Office; Transfer and Exchange of Warrants.
(a) The Company will maintain an office
at 000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, until such time
as the Company shall notify the Holder of the Warrant of any change of
location of such office.
(b) Subject to Section 7, upon the
surrender of any Warrant, properly endorsed, for registration of
transfer or for exchange at the office of the Company maintained
pursuant to Section 9.2(a), the Company will execute and
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deliver to or upon the order of the Holder thereof a new Warrant or
Warrants of like tenor, in the name of such holder or as such holder
(upon payment by such holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face or faces thereof for the
number of shares of Class A Common Stock called for on the face or
faces of the Warrant or Warrants so surrendered.
10. No Rights or Liabilities as Stockholder. Nothing
contained in this Warrant shall be construed as conferring upon the Holder any
rights as a stockholder of the Company or as imposing any obligation on such
holder to purchase any securities or as imposing any liabilities on such holder
as a stockholder of the Company, whether such obligation or liabilities are
asserted by the Company or by creditors of the Company.
11. Notices. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given hereunder
or which are given with respect to this Warrant shall be in writing and shall
be personally served or delivered by a reputable air courier service with
charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed (a) if to any holder of any Warrant, at the registered address of
such holder as set forth in the register kept at the principal office of the
Company, or (b) if to the Company, to the attention of its Chief Executive
Officer at its office maintained pursuant to Section 9.2(a), provided that the
exercise of any Warrant shall be effective only in the manner provided in
Section 2. Notice shall be deemed given on the date of service or confirmation
of receipt of transmission if personally served or transmitted by telegram,
telex or facsimile. Notice otherwise sent as provided herein shall be deemed
given on the next Business Day following delivery of such notice to a reputable
air courier service.
12. Miscellaneous. This Warrant and any term hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. THIS WARRANT SHALL BE GOVERNED BY, INTERPRETED
UNDER, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE CHOICE-OF-LAW PROVISIONS THEREOF. Titles and
headings of sections of this Warrant are for convenience only and shall not
affect the construction of any provision of this Warrant.
13. Expiration. The right to exercise this Warrant shall
expire at 5:00 P.M., New York City time, on the Expiration Date.
DOMINICK'S SUPERMARKETS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
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FORM OF SUBSCRIPTION
[To be executed only upon exercise of Warrant]
To: DOMINICK'S SUPERMARKETS, INC.
The undersigned registered holder of the within Warrant hereby
irrevocably exercises such Warrant for, and purchases thereunder, ____* shares
of Class A Common Stock of DOMINICK'S SUPERMARKETS, INC. and requests that the
certificates for such shares be issued in the name of, and delivered to the
undersigned, whose address is set forth below. In payment therefor, the
Company may withhold therefrom, and the undersigned holder hereby surrenders
its right to, that number of shares of Class A Common Stock with an aggregate
Market Price as of the date of exercise equal to the aggregate Exercise Price
for the shares designated for purchase in the preceding sentence.
Dated:
_______________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of Warrant)
________________________________________
(Street Address)
________________________________________
(City) (State) (Zip Code)
__________________________________
* Insert here the number of shares called for on the face of this
Warrant (or, in the case of a partial exercise, the portion thereof as
to which the Warrant is being exercised), in either case after making
any adjustment for additional shares of Class A Common Stock which,
pursuant to the adjustment provisions of this Warrant, may be
delivered upon exercise. In the case of a partial exercise, a new
Warrant or Warrants will be issued and delivered, representing the
unexercised portion of the Warrant, to the holder surrendering the
Warrant.
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DOMINICK'S SUPERMARKETS, INC.
AMENDMENT TO CLASS A COMMON STOCK PURCHASE WARRANT
This AMENDMENT TO CLASS A COMMON STOCK PURCHASE WARRANT, dated
as of October ___, 1996, between Dominick's Supermarkets, Inc., a Delaware
corporation (the "Company"), and The Yucaipa Companies, a California general
partnership ("Yucaipa"), amends that certain Class A Common Stock Purchase
Warrant No. W-1 dated as of March 22, 1995 of the Company entitling Yucaipa to
purchase 264,688 shares (subject to adjustment) of Class A Common Stock of the
Company (the "Warrant"). Capitalized terms used herein without definition
shall have the meanings assigned to them in the Warrant.
WHEREAS, the parties hereto have entered into the Warrant and
desire to amend certain provisions thereof, as more fully described herein;
NOW, THEREFORE, in consideration of the premises, the parties
hereto hereby agree as follows:
1. Manner of Exercise. Section 2.1 of the Warrant shall be
amended to read in its entirety as follows:
2.1. Manner of Exercise. Subject to the foregoing,
this Warrant may be exercised by the Holder hereof, in whole or in
part, during normal business hours on any day other than a Saturday or
a Sunday or a day on which commercial banking institutions in the City
of New York are authorized to be closed (a "Business Day"), by
surrender of this Warrant to the Company at its office maintained
pursuant to Section 9.2, accompanied by a subscription in
substantially the form attached to this Warrant (or a reasonable
facsimile thereof), duly executed by such Holder. Payment of the
aggregate Exercise Price of the number of shares of Class A Common
Stock designated in such subscription may be made, at the Holder's
option, either (i) in cash or by certified or bank check in the amount
of the aggregate Exercise Price at the office of the Company
designated for such purpose or by wire transfer of immediately
available funds in the amount of such aggregate Exercise Price to an
account designated by the Company or (ii) by the Company withholding
therefrom that number of shares of Class A Common Stock with an
aggregate Market Price as of the date of exercise equal to such
aggregate Exercise Price.
2. When Exercise Effective. Section 2.2 of the Warrant shall
be amended to read in its entirety as follows:
2.2. When Exercise Effective. Each exercise of this
Warrant shall be deemed to have been effected immediately prior to the
close of business on the Business Day on which this Warrant and the
accompanying
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subscription shall have been duly surrendered to the Company as
provided in Section 2.1, and at such time the Holder shall be deemed
to have become the holder or holders of record of a number of shares
of Class A Common Stock equal to (a) in the case of "cash exercise"
pursuant to clause (i) of Section 2.1, the number of shares designated
in such subscription or (b) in the case of "cashless exercise"
pursuant to clause (ii) Section 2.1, the number of shares designated
in such subscription less the number of shares withheld by the Company
as payment therefor.
3. Form of Subscription. The sole paragraph of the Form of
Subscription attached to the Warrant shall be amended to read in its entirety
as follows:
The undersigned registered holder of the within
Warrant hereby irrevocably exercises such Warrant for, and purchases
thereunder, _______* shares of Class A Common Stock of DOMINICK'S
SUPERMARKETS, INC. and requests that the certificates for such shares
be issued in the name of, and delivered to the undersigned, whose
address is set forth below. In payment therefor, the undersigned
registered holder elects (check one):
[ ] the "cash exercise" pursuant to clause (i) of Section 2.1 of
the Warrant, and the undersigned registered holder herewith tenders
payment for such shares to the order of DOMINICK'S SUPERMARKETS, INC.
in the amount of $__________ in accordance with the terms of the
Warrant; or
[ ] the "cashless exercise" pursuant to clause (ii) of Section 2.1
of the Warrant, and the undersigned registered holder hereby
surrenders its right to, and authorizes the Company to withhold
therefrom, that number of shares of Class A Common Stock with an
aggregate Market Price as of the date of exercise equal to the
aggregate Exercise Price for the shares designated for the purchase in
the preceding sentence.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to Class A Common Stock Purchase Agreement to be duly executed and
delivered as of the day and year first above written.
DOMINICK'S SUPERMARKETS, INC.
By:_____________________________________
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive
Officer
THE YUCAIPA COMPANIES
By:_____________________________________
Name:
Title: General Partner
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