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EXHIBIT 99.7
December 22, 1997
Albertsons, Inc.
P.O. Box 20
Boise, Idaho 83726
Atten: Mr. Gary G. Michael
Chairman and Chief Executive Officer
Gentlemen:
In connection with your consideration of a possible negotiated
business combination or acquisition transaction (a "Transaction") with Buttrey
Food and Drug Stores Company (together with its subsidiaries, the "Company")
certain financial, operational and other information concerning the Company is
being furnished to you. As a condition to your receipt of such information,
you agree, as set forth below, to treat any information concerning the Company
(irrespective of its source or form of communication) that may be furnished to
you by or on behalf of the Company (collectively referred to as "Evaluation
Material"), whether furnished before, on or after the date of this
Confidentiality Agreement ("Confidentiality Agreement"), in accordance with the
provisions hereof and you further agree to abide by the other provisions
contained in this Confidentiality Agreement.
The term Evaluation Material shall include any notes, analyses,
compilations, studies or other documents or records prepared by you or others,
which contain or reflect or are generated from information supplied by the
Company or its representatives. The term Evaluation Material shall not include
information which you can prove by documentary evidence (i) is now or becomes
generally available to the public other than as a result of a disclosure by you
or your representatives in violation of this Confidentiality Agreement, (ii)
was available to you on a non-confidential basis from a source other than the
Company or its representatives prior to receipt
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Albertsons, Inc.
December 22, 1997
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in accordance with this Confidentiality Agreement provided such information is
not known by you to be subject to another confidentiality agreement with or
other obligation of secrecy to the Company or another party, or (iii) becomes
available to you on a non-confidential basis from sources other than the
Company or its representatives, provided that such source is not known by you
or your representatives to be prohibited from transmitting the information to
you by a contractual, legal or fiduciary obligation.
You agree that the Evaluation Material will be used solely for the
purpose of evaluating a possible Transaction involving the Company and will not
be used by you in any way detrimental to the Company and that the Evaluation
Material will be kept confidential by you; provided, however, that any of such
information may be disclosed (i) initially, only to Mr. Michael, and key
personnel in your finance and real estate departments and executive office as
well as to your legal and other outside professional advisors involved in your
acquisition review process, and (ii) after the Company's express written
consent has been given, to your directors, other officers and employees,
potential financing sources, professional service providers and advisors
(collectively referred to as "representatives") who, in your reasonable
judgment, need to know such information for the purpose described above, it
being understood that prior to any disclosure of Evaluation Material under
either clause (i) or (ii) of this sentence, each of your representatives shall
be informed by you of the terms of this Confidentiality Agreement and of the
confidential nature of the Evaluation Material. Each of your representatives
shall agree to keep the Evaluation Material confidential and to use it only in
connection with the purpose described above and in accordance with the other
terms of this Confidentiality Agreement. You shall be responsible for any
breach of this Confidentiality Agreement by you or any of your representatives
and you agree, at your sole expense, to take all reasonable measures (including
but not limited to court proceedings) to restrain your representatives from
prohibited or unauthorized disclosure or use of the Evaluation Material.
Without the prior written consent of the Company, you will not
disclose and will direct your representatives not to disclose, to any person
other than your representatives, the fact that the Evaluation Material has been
made available to you, the fact that you or we are considering a Transaction,
or any information with respect
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Albertsons, Inc.
December 22, 1997
Page 3
to the discussions or negotiations, including the status thereof; provided that
you may, after consultation with us, make such disclosure to the extent (i) you
have been advised by legal counsel that such disclosure is required by law or
the requirements of any securities exchange on which your securities are traded
and (ii) as provided in the next paragraph. The term "person" as used in this
Confidentiality Agreement shall be broadly interpreted to include, without
limitation, any corporation, company, partnership or individual.
If you or any of your representatives are requested or required
(orally or in writing, by interrogatory, subpoena, civil investigatory demand
or any similar process relating to any legal proceeding, investigation, hearing
or otherwise) to disclose any Evaluation Material, you will provide the Company
with prompt notice in advance of such disclosure so that the Company may seek a
protective order or other appropriate remedy and/or waive compliance with this
Confidentiality Agreement and you agree to cooperate with the Company in
pursuing any such course of action. In the event that such protective order or
other remedy is not obtained, or if the Company waives compliance with the
provisions of this Confidentiality Agreement, you will furnish only such
information as you are advised is legally required and will cooperate with us
in any efforts we may undertake to obtain assurance that confidential treatment
will be accorded to any information which is compelled to be disclosed.
If you decide that you do not wish to proceed with a Transaction, you
will promptly inform the Company of your decision. In that event or if a
Transaction with the Company is not completed, you and your representatives
will upon the request of the Company at your election either (i) promptly
deliver to the Company all Evaluation Material in or under your or your
representatives' possession or control, without retaining any copy, extract or
reproduction thereof, or (ii) promptly destroy all Evaluation Material in or
under your or your representatives' possession or control, and such destruction
shall be certified in writing to the Company by one of your officers
supervising such destruction. Notwithstanding the return or destruction of the
Evaluation Material, you and your representatives will continue to be bound by
the confidentiality and other obligations created hereby.
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December 22, 1997
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You acknowledge that you are aware, and agree that you will advise
your representatives who are informed as to the matters which are the subject
of this Confidentiality Agreement, that the United States securities laws
prohibit any person who has received from an issuer material, nonpublic
information concerning the matters which are the subject of this
Confidentiality Agreement from purchasing or selling securities of such issuer
or from communicating such information to any other person under circumstances
in which it is reasonably foreseeable that such person is likely to purchase or
sell such securities while in possession of material nonpublic information.
You hereby further acknowledge that the Evaluation Material is being
furnished to you in further consideration of your agreement that neither you,
nor any person affiliated with you, will for a period of two years from the
date hereof, directly or indirectly, alone or with others, (a) negotiate with
or provide any information to any party with respect to, or make any statement
or proposal to the Board of Directors of the Company, to any of its agents or
to any stockholder of the Company with respect to, or make any public
announcement or proposal or offer whatsoever (including, but not limited to any
"solicitation" of "proxies" as such terms are defined or used in Regulation 14A
of the Securities Exchange Act of 1934) with respect to, or otherwise solicit,
seek or offer to effect (i) any form of business combination or transaction
involving the Company or any affiliate thereof, including, without limitation,
a merger, tender or exchange offer or liquidation of the Company's assets, (ii)
any form of restructuring, recapitalization or similar transaction with respect
to the Company or any affiliate thereof, (iii) any purchase of any securities
or assets, or rights to acquire any securities or assets, of the Company, (iv)
any proposal to seek representation on the Board of Directors of the Company or
otherwise to seek to control or influence the management, Board of Directors or
policies of the Company, (v) any request or proposal to waive, terminate or
amend the provisions of this letter, or (vi) any proposal or other statement
inconsistent with the terms of this letter, (b) instigate, encourage or assist
any third party to do any of the foregoing, or (c) become a beneficial owner
of any securities of the Company (other than through purchases by persons
affiliated with you for investment in open market transactions not to exceed
1.0% of the Company's common stock), unless and until you have received the
prior written invitation or approval of a majority of the Board of Directors of
the Company to do any of the foregoing.
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December 22, 1997
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You agree that without the prior consent of the Company, neither you
nor any of your representatives will contact any employee, supplier, customer
or representative of the Company concerning the Evaluation Material, the
Transaction or, except in the ordinary course of business, any aspect of the
Company's business, prospects or finances, or any other matter related to any
of the same. It is understood and agreed that J. Frederick Simmons of Freeman
Spogli & Co. Incorporated shall arrange for appropriate contacts at the
Company. It is also understood that all (a) communications regarding a
possible Transaction, (b) requests for additional information, (c) requests for
facility tours or management meetings and (d) discussions or questions
regarding procedures will be submitted or directed to Mr. Simmons.
You agree further that without the Company's prior written consent,
for a period of two years from the date hereof, you will not directly or
indirectly solicit any management employee of the Company for employment and
you will not initiate, participate in, include or contribute to any
interference with the Company's employment relationship with any such person;
provided, however, that nothing herein shall restrict or preclude your right to
make generalized searches for employees by use of advertisements in the media
(including without limitation trade media) or by engaging search firms which
are not targeted or focused on employees of the Company and this paragraph
shall not be deemed to prohibit your hiring of any employee of the Company who
initially contacts you without prior contact by you or anyone acting on your
behalf.
You agree to limit to three the number of your representatives who may
visit any of the Company's retail stores at any one time in the ordinary course
of business. You further agree that no group of more than three of your
representatives shall visit any of the Company's retail stores at any one time
without the prior specific approval of Mr. Simmons. You acknowledge that the
company could be irreparably harmed in the event that any of its retail store
employees learned about the possibility of the Transaction, and you agree to
use your best efforts to ensure that they do not become aware of it during any
of the visits which your representatives may make during the ordinary course of
the Company's business.
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December 22, 1997
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You understand that the Company does not make any representation or
warranty as to the accuracy or completeness of the Evaluation Material. Only
those representations and warranties contained in the final definitive
agreement covering the Transaction, when, as and if executed, and subject to
such limitations as may be specified therein, will have any legal effect. You
agree that unless and until a definitive agreement (expressly excluding any
executed letter of intent or other preliminary written agreement and any
written or oral acceptance of an offer or a bid) with respect to any
Transaction has been executed and delivered, neither the Company nor you will
be under any legal obligation of any kind whatsoever with respect to such a
transaction by virtue of this letter agreement or any written or oral
expression with respect to such a Transaction by either party or any of its
respective agents except, in the case of this Confidentiality Agreement, for
the matters specifically agreed to herein.
You acknowledge and agree that (a) the Company reserves the right, in
its sole discretion, to change the procedures relating to its consideration of
a possible transaction at any time without prior notice to you or any other
person, to reject any and all proposals made by you or any of your
representatives, and to terminate discussions and negotiations with you at any
time and for any reason, and (b) unless and until a written definitive
agreement concerning the Transaction has been executed, neither the Company nor
any of its representatives will have any liability to you with respect to the
Transaction or the evaluation and the bidding process and procedures, whether
by virtue of this Confidentiality Agreement, any other written or oral
expression with respect to the Transaction or otherwise.
You acknowledge and agree that the Company would not have an adequate
remedy at law and would be irreparably harmed in the event that any of the
provisions of this Confidentiality Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the Company shall be entitled to injunctive relief to prevent breaches of
this Confidentiality Agreement and to specifically enforce the terms and
provisions hereof, in addition to any other remedy to which the Company may be
entitled at law or in equity. It is further understood and agreed that no
failure to or delay in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, and no single or
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December 22, 1997
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partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise of any right, power or privilege.
In the event of litigation relating to this Confidentiality Agreement,
if a court of competent jurisdiction determines in a final, nonappealable order
that a party has breached this agreement, then such party shall be liable and
pay to the non-breaching party the reasonable legal fees such non-breaching
party has incurred in connection with such litigation, including any appeal
therefrom.
This Confidentiality Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed within such State.
This Confidentiality Agreement shall remain in effect for a period of
three years from the date hereof and may be modified or waived only by a
separate writing by the Company and you that expressly so modifies or waives
this Confidentiality Agreement.
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December 22, 1997
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Please confirm your agreement with the foregoing by signing and
returning one copy of this letter agreement to the undersigned, whereupon this
Confidentiality Agreement shall become a binding agreement.
Very truly yours,
FREEMAN SPOGLI & CO. INCORPORATED
For Buttrey Food and Drug Stores Company
By: /s/ J. Frederick Simmons
J. Frederick Simmons
Agreed to and Accepted:
ALBERTSONS, INC.
By: /s/ Gary G. Michael
Gary G. Michael
Chairman and CEO
Date: December 22, 1997