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 - April 29, 1999
(Date of Earliest Event Reported)
THE GRAND UNION COMPANY
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(Exact name of registrant as specified in its charter)
Commission File No. 0-26602
Delaware 22-15182776
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(State of Incorporation) (I.R.S. Employer
Identification No.)
201 Willowbrook Boulevard, Wayne, NJ 07470
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (973) 890-6000
NYFS03...:\18\50318\0005\1708\FRM9158P.52D
Item 5. Other Events
Adoption of Stockholder Rights Plan
On April 29, 1999, the Board of Directors of the Company declared a
dividend of one Preferred Stock Purchase Right (the "Right(s)") for each
outstanding share of Common Stock, par value $0.01 per share (the "Common
Stock"), of the Company. The dividend is payable as of May 10, 1999 to
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-thousandth (1/1,000) of a share of a new
series of preferred shares of the Company, designated as Series A Junior
Preferred Stock ("Preferred Stock"), at a price of $35.00 per one one-thousandth
(1/1,000) of a share (the "Exercise Price"), subject to certain adjustments. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and American Stock Transfer & Trust Co.,
as Rights Agent ("Rights Agent"), dated as of April 29, 1999.
Initially the Rights will not be exercisable, certificates will not
be sent to stockholders, and the Rights will automatically trade with the Common
Stock.
The Rights, unless earlier redeemed by the Board of Directors,
become exercisable upon the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day following a public announcement
that a person or group of affiliated or associated persons, with certain
exceptions set forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Company (an "Acquiring Person") and (ii) the
tenth business day (or such later date as may be determined by the Board of
Directors prior to such time as any person or group of affiliated or associated
persons becomes an Acquiring Person) after the date of the commencement or
announcement of a person's or group's intention to commence a tender or exchange
offer the consummation of which would result in the ownership of 15% or more of
the Company's outstanding voting stock (even if no shares are actually purchased
pursuant to such offer); prior thereto, the Rights would not be exercisable,
would not be represented by a separate certificate, and would not be
transferable apart from the Company's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of May 10, 1999, by such Common Stock certificate with a copy of this Summary of
Rights attached thereto. An
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Acquiring Person does not include (A) the Company, (B) any subsidiary of the
Company, (C) any employee benefit plan or employee stock plan of the Company or
of any subsidiary of the Company, or any trust or other entity organized,
appointed, established or holding voting stock for or pursuant to the terms of
any such plan or (D) any person or group whose ownership of 15% or more of the
shares of voting stock of the Company then outstanding results solely from (i)
any action or transaction or transactions approved by the Board of Directors
before such person or group became an Acquiring Person or (ii) a reduction in
the number of issued and outstanding shares of voting stock of the Company
pursuant to a transaction or transactions approved by the Board of Directors
(provided that any person or group that does not become an Acquiring Person by
reason of clause (i) or (ii) above shall become an Acquiring Person upon
acquisition of an additional 1% of the Company's voting stock unless such
acquisition of additional voting stock would not result in such person or group
becoming an Acquiring Person by reason of such clause (i) or (ii)).
Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Stock certificates issued after May 10, 1999 will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the Company's Common Stock certificates
outstanding as of May 10, 1999 with or without a copy of the Summary of Rights
attached, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Company's Common Stock
as of the close of business on the Distribution Date and such separate
certificates alone will evidence the Rights from and after the Distribution
Date.
The Rights are not exercisable until the Distribution Date. The
Rights will expire at the close of business on April 29, 2001, unless earlier
redeemed or exchanged by the Company as described below.
The Preferred Stock is non-redeemable and, unless otherwise provided
in connection with the creation of a subsequent series of preferred stock,
subordinate to any other series of the Company's preferred stock. The
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Preferred Stock may not be issued except upon exercise of Rights. Each share of
Preferred Stock will be entitled to receive when, as and if declared, a
quarterly dividend in an amount equal to the greater of $0.001 per share and
1,000 times the cash dividends declared on the Company's Common Stock. In
addition, the Preferred Stock is entitled to 1,000 times any non-cash dividends
(other than dividends payable in equity securities) declared on the Common
Stock, in like kind. In the event of liquidation, the holders of Preferred Stock
will be entitled to receive for each share, a liquidation payment in an amount
equal to the greater of $35.00 or 1,000 times the payment made per share of
Common Stock. Each share of Preferred Stock will have 1,000 votes, voting
together with the Common Stock. In the event of any merger, consolidation or
other transaction in which Common Stock is exchanged, each share of Preferred
Stock will be entitled to receive 1,000 times the amount received per share of
Common Stock. The rights of Preferred Stock as to dividends, liquidation and
voting are protected by anti-dilution provisions.
The number of shares of Preferred Stock issuable upon exercise of
the Rights and Exercise Price for the Rights are subject to certain adjustments
from time to time in the event of a stock dividend on, or a subdivision or
combination of, the Common Stock. The Exercise Price for the Rights also is
subject to adjustment in the event of extraordinary distributions of cash or
other property to holders of Common Stock.
Unless the Rights are earlier redeemed, in the event that, after the
time that a person becomes an Acquiring Person, the Company were to be acquired
in a merger or other business combination (in which any shares of the Company's
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earning power of the Company and its subsidiaries
(taken as a whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record of a Right will from and after such date have the
right to receive, upon payment of the Exercise Price, that number of shares of
common stock of the acquiring company having a market value at the time of such
transaction equal to two times the Exercise Price. In addition, unless the
Rights are earlier redeemed, if a person becomes an Acquiring Person, the Rights
Agreement provides that proper provision will be made so that each
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holder of record of a Right, other than the Acquiring Person (whose Rights will
thereupon become null and void), will thereafter have the right to receive, upon
payment of the Exercise Price, that number of shares of the Company's Preferred
Stock having a market value at the time of the transaction equal to two times
the Exercise Price (such market value to be determined with reference to the
market value of the Company's Common Stock as provided in the Rights Agreement).
The Rights Agreement also grants the Board of Directors the option, after any
person or group acquires beneficial ownership of 15% or more of the voting stock
but before there has been a 50% acquisition, to exchange each then valid right
(which would exclude rights held by the Acquiring Person that have become void)
for that number of shares of the Company's Common Stock having a fair market
value on the date of such 15% acquisition equal to the excess of (i) the value
of the shares of Preferred Stock issuable upon exercise of the Right in the
event of such acquisition over (ii) the exercise price of the Right, in each
case as adjusted.
Fractions of shares of Preferred Stock (other than fractions that
are integral multiples of one one-thousandth (1/1,000) of a share) may, at the
election of the Company, be evidenced by depositary receipts. The Company may
also issue cash in lieu of fractional shares which are not integral multiples of
one one-thousandth (1/1,000) of a share.
At any time prior to the time there has been a public announcement
that a person has become an Acquiring Person, the Company may redeem the Rights
in whole, but not in part, at a price of $.001 per Right ("Redemption Price").
Immediately upon the effective time of the action of the Board of Directors of
the Company authorizing redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of the Rights will be to
receive the Redemption Price.
For as long as the Rights are then redeemable, the Company may,
except with respect to the Redemption Price, amend the Rights in any manner,
including an amendment to extend the time period in which the Rights may be
redeemed. At any time when the Rights are not then redeemable, the Company may
amend the Rights in any manner that does not materially adversely affect the
interests of holders of the Rights as such.
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Until a Right is exercised, the holder, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
As of April 29, 1999, there were 30,000,000 shares of Common Stock
issued and outstanding (and 3,350,000 shares reserved for issuance under the
Company's existing stock option plans). 50,000 shares of Preferred Stock have
been reserved for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group who attempts to acquire the Company on
terms not approved by the Company's Board of Directors. The Rights should not
interfere with any merger or other business combination approved by the Board
since they may be redeemed by the Company at $.001 per Right at any time prior
to the time there is a public announcement that a person or group has obtained
beneficial ownership of 15% or more of the voting stock.
The form of Rights Agreement between the Company and the Rights
Agent, specifying the terms of the Rights, which includes as Exhibit A the form
of Summary of Rights to Purchase Series A Junior Preferred Stock, as Exhibit B
the form of Right Certificate and as Exhibit C the form of Certificate of
Designations of the Company setting forth the terms of the Preferred Stock are
attached hereto as exhibits and incorporated herein by reference. The foregoing
description of the Rights is qualified by reference to such exhibits.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
1. Rights Agreement dated as of April 29, 1999 between The Grand
Union Company and American Stock Transfer & Trust Co., as
Rights Agent. The Rights Agreement includes as Exhibit B the
form of Right Certificate and as Exhibit C the form of
Certificate of Designations.
2. Press Release, dated April 29, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
By: /s/ Jeffrey P. Freimark
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Name: Jeffrey P. Freimark
Title: Executive Vice President
and Chief Financial Officer
May 7, 1999
EXHIBIT INDEX
Exhibit
No. Description
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1. Rights Agreement dated as of April 29, 1999 between The Grand Union
Company and American Stock Transfer & Trust Co., as Rights Agent. The
Rights Agreement includes as Exhibit B the form of Right Certificate
and as Exhibit C the form of Certificate of Designations.
2. Press Release, dated April 29, 1999.