EXHIBIT 3
STOCKHOLDER AND PURCHASE AGREEMENT
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STOCKHOLDER AND PURCHASE AGREEMENT (this "Agreement"), dated as of May
10, 1999, among ShopKo Stores, Inc., a Wisconsin corporation ("Parent"), ShopKo
Merger Corp., a Delaware corporation and a wholly owned subsidiary of Parent
("Purchaser"), and the undersigned stockholder (the "Stockholder") of Pamida
Holdings Corporation, a Delaware corporation (the "Company").
WHEREAS, Parent, Purchaser and the Company, propose to enter into an
Agreement and Plan of Merger dated as of even date herewith (as the same may be
amended or supplemented, the "Merger Agreement") to provide for the making of a
cash tender offer (as such offer may be amended from time to time, the "Offer")
by Purchaser for any and all shares of Common Stock, par value $0.01 per share,
of the Company (the "Shares") at the Offer Price (as defined in the Merger
Agreement) and the merger of the Company and Purchaser (the "Merger");
WHEREAS, the Stockholder legally and/or beneficially owns that number
of Shares and that number of shares of Nonvoting Common Stock, par value $0.01
per share, of the Company (the "Nonvoting Shares") appearing on the signature
page hereof (such Shares and Nonvoting Shares, as they may be adjusted by any
stock dividend, stock split, recapitalization, combination or exchange of
shares, merger, consolidation, reorganization or other change or transaction of
or by the Company (each, an "Adjustment Event") being referred to herein as the
"Subject Shares"); and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that the Stockholder enter into
this Agreement;
NOW, THEREFORE, to induce Parent and Purchaser to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. Purchase of Shares.
(a) Grant of Option. The Stockholder hereby grants Purchaser an
irrevocable option (the "Option") to purchase all of the Subject Shares for
a purchase price of $11.50 per share (the "Per Share Purchase Price"). The
obligation to pay upon exercise of the Option shall be the joint and
several obligation of Parent and Purchaser. In the event of an Adjustment
Event, the Per Share Purchase Price shall be adjusted appropriately.
(b) Exercisability. Subject to paragraph (c) below, the Option may
be exercised by Purchaser, in whole but not in part, at any time:
(i) after the termination of the Merger Agreement, if (A) the
Merger Agreement is terminated under Section 8.01(d) thereof because
of the withdrawal, modification or change in the recommendation by the
Board (as defined in the Merger Agreement) of the Offer, the Merger
and the Merger Agreement, as provided in paragraph f(i) of Annex A to
the Merger Agreement, or because the Board has adopted a resolution to
effect any of the foregoing, as provided in paragraph f(iii) of Annex
A to the Merger Agreement, and (B) prior to the time of such
withdrawal, modification or change or the adoption of such resolution,
a Takeover Proposal (as defined in the Merger Agreement) shall have
been made (other than a Takeover Proposal made prior to the date
hereof); or
(ii) after the termination of the Merger Agreement if the Merger
Agreement is terminated under Section 8.01(d) thereof because of the
Board's recommendation of a Takeover Proposal, as provided in
paragraph f(ii) of Annex A to the Merger Agreement, or because the
Board has adopted a resolution to effect such recommendation, as
provided in paragraph f(iii) of Annex A to the Merger Agreement; or
(iii) after the termination of the Merger Agreement under
Section 8.01(e) thereof; or
(iv) after the occurrence of an event described in paragraph (g)
of Annex A to the Merger Agreement.
(the termination described in clauses (i), (ii) and (iii) being referred
to herein as the "Termination Trigger Events").
(c) Termination of Option. The Option shall terminate upon the
earliest of:
(i) the termination of the Merger Agreement pursuant to Section
8.01 thereof, other than a termination that constitutes a Termination
Trigger Event or a termination as a result of the occurrence of an
event described in paragraph (g) of Annex A to the Merger Agreement;
or
(ii) 60 days following any termination of the Merger Agreement
that constitutes a Termination Trigger Event or the occurrence of an
event described in paragraph (g) of Annex A to the Merger Agreement
(or if, at the expiration of such 60-day period the Option cannot be
exercised by reason of any applicable judgment, decree, order, law or
regulation, or because the applicable waiting period under the HSR Act
has not expired or been terminated, 10 business days after such
impediment to exercise shall have been removed or shall have become
final and not subject to appeal, but in no event under this clause
(ii) later than 90 days after the date of termination of the Merger
Agreement); or
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(iii) the amendment of the Merger Agreement in a manner adverse
to the Stockholder without the Stockholder's consent, which consent
shall not be unreasonably withheld or delayed.
(d) Exercise Notice. If Purchaser wishes to exercise the Option,
Purchaser shall deliver to Company a written notice (an "Exercise Notice").
The closing of the purchase of Subject Shares ("Closing") shall occur at a
place, on a date and at a time designated by Parent in the Exercise Notice
delivered at least two business days prior to the date of the Closing.
(e) Sale. If the Option becomes exercisable upon a Termination
Trigger Event, then, at the option of Purchaser and in lieu of any exercise
of the Option, Purchaser may require the Stockholder to sell the Subject
Shares pursuant to any Takeover Proposal then pending and to remit to
Purchaser with respect to each Subject Share sold the gross proceeds from
such sale less the Per Share Purchase Price. If Purchaser exercises its
rights pursuant to this Section 1(e), then upon such remittance the Option
shall terminate.
(f) Mandatory Exercise of Option. Parent and Purchaser, jointly and
severally, agree to exercise the Option in whole, but not in part, and to
acquire from the Stockholder all of the Subject Shares at the Per Share
Purchase Price (as adjusted in the event of an Adjustment Event)
immediately after the purchase by Purchaser of Shares pursuant to the
Offer, with the Closing with respect to such exercise and acquisition to
take place immediately after the closing of the purchase of Shares pursuant
to the Offer.
2. Representations and Warranties of the Stockholder. The
Stockholder hereby represents and warrants to Parent and Purchaser as follows:
(a) Authority. The Stockholder has all requisite power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Stockholder and constitutes a valid and binding obligation
of the Stockholder enforceable in accordance with its terms. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will
not, conflict with, or result in any violation of, or default (with or
without notice or lapse of time or both) under any provision of, any trust
agreement, loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise, license,
judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Stockholder or to the Stockholder's property
or assets. Except for the expiration or termination of the waiting period
under the HSR Act and informational filings with the SEC, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic, foreign or supranational, is
required by or with respect to the Stockholder in connection with the
execution and
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delivery of this Agreement or the consummation by the Stockholder of the
transactions contemplated hereby.
(b) The Shares. The Stockholder has good and marketable title to the
Subject Shares, free and clear of any claims, liens, encumbrances and
security interests whatsoever. The Stockholder owns no Shares or Nonvoting
Shares other than the Subject Shares.
3. Representations and Warranties of Parent and Purchaser.
(a) Authority. Parent and Purchaser hereby represent and warrant to
the Stockholder that each of Parent and Purchaser has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Parent and Purchaser, and the consummation of the
transactions contemplated hereby, have been duly authorized by all
necessary corporate action on the part of Parent and Purchaser. This
Agreement has been duly executed and delivered by Parent and Purchaser and
constitutes a valid and binding obligation of Parent and Purchaser
enforceable in accordance with its terms.
(b) Securities Act. The Subject Shares will be acquired in
compliance with, and Purchaser will not offer to sell or otherwise dispose
of any Subject Shares so acquired by it in violation of any of, the
registration requirements of the Securities Act of 1933, as amended.
4. Covenants of the Stockholder. The Stockholder agrees as follows:
(a) At any meeting of stockholders of the Company called to vote upon
the Merger and the Merger Agreement or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval with
respect to the Merger and the Merger Agreement is sought, the Stockholder
shall vote (or cause to be voted) the Subject Shares that are Shares in
favor of the Merger, the approval of the Merger Agreement and the approval
of the terms thereof and each of the other transactions contemplated by the
Merger Agreement.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the Stockholder
shall vote (or cause to be voted) the Subject Shares that are Shares
against (i) any merger agreement or merger (other than the Merger Agreement
and the Merger), consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of
or by the Company or any other Takeover Proposal or (ii) any amendment of
the Company's certificate of incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction
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would in any manner impede, frustrate, prevent or nullify the Merger, the
Merger Agreement or any of the other transactions contemplated by the
Merger Agreement.
(c) The Stockholder agrees not to (i) sell, transfer, pledge, assign
or otherwise dispose of, or enter into any contract, option or other
arrangement (including any profit sharing arrangement) with respect to the
sale, transfer, pledge, assignment or other disposition of, the Subject
Shares to any person other than Purchaser or Purchaser's designee or (ii)
enter into any voting arrangement, whether by proxy, voting agreement or
otherwise, in connection, directly or indirectly, with any Takeover
Proposal.
(d) The Stockholder shall not, nor shall the Stockholder permit any
investment banker, attorney or other adviser or representative of the
Stockholder to, (i) directly or indirectly solicit, initiate or encourage
the submission of, any Takeover Proposal or (ii) directly or indirectly
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any Takeover Proposal , or (iii)
enter into any agreement with respect to or approve or recommend any
Takeover Proposal.
(e) So long as the Merger Agreement has not been terminated, the
Stockholder shall tender pursuant to the Offer, and not withdraw, all of
the Subject Shares that are Shares.
(f) In the event of a Takeover Proposal, the Stockholder shall, as
soon as practicable after receipt of a written request from Parent or
Purchaser (in the sole discretion of Parent or Purchaser) and to the
fullest extent permissible under the Restated Certificate of Incorporation
of the Company, as amended (the "Restated Certificate of Incorporation"),
convert any Nonvoting Shares into Shares pursuant to the terms of Part 4 of
the Restated Certificate of Incorporation, and any Nonvoting Shares so
converted into Shares shall be treated for all purposes as Shares subject
to the terms and restrictions of this Agreement. Notwithstanding the
previous sentence, the Stockholder agrees not to convert any of the
Nonvoting Shares into Shares without the prior written consent of Parent.
5. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Purchaser
may assign any or all of its rights, interests and obligations hereunder, in its
sole discretion, to Parent or, with the consent of the Stockholder, which
consent shall not be unreasonably withheld or delayed, to any direct or indirect
wholly owned subsidiary of Parent. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns and, in the case of the
Stockholder, the heirs, executors and administrators of the Stockholder.
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6. Termination. This Agreement shall terminate upon the earlier of:
(i) the Effective Time; or (ii) the termination of the Option.
7. General Provisions.
(a) Expenses. Except as otherwise expressly provided herein or in
the Merger Agreement, all costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
(b) Specific Performance. The parties recognize and agree that if
for any reason any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate
and irreparable harm or injury would be caused for which money damages
would not be an adequate remedy. Accordingly, each party agrees that, in
addition to other remedies, the other party shall be entitled to an
injunction restraining any violation or threatened violation of the
provisions of this Agreement. In the event that any action should be
brought in equity to enforce the provisions of the Agreement, neither party
will allege, and each party hereby waives the defense, that there is an
adequate remedy at law. Each party hereby irrevocably submits to the
exclusive jurisdiction of the Delaware Chancery Court in any action, suit
or proceeding arising in connection with this Agreement, and agrees that
any such action, suit or proceeding shall be brought only in such courts
(and waives any objection based on forum non conveniens or any other
objection to venue therein). Each party hereto waives any right to a trial
by jury in connection with any such action, suit or proceeding.
(c) Notice. Any notice or communication required or permitted
hereunder shall be in writing and either delivered personally, by
recognized national delivery service or sent by certified or registered
mail, postage prepaid, and shall be deemed to be given upon receipt at the
following address, or to such other address or addresses as such person may
subsequently designate by notice given hereunder:
(a) if to Parent, to:
ShopKo Stores, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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with a copy (which shall
not constitute notice) to:
Sidley & Austin
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(b) if to Purchaser, to:
ShopKo Merger Corp.
c/o ShopKo Stores, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy (which shall
not constitute notice) to:
Sidley & Austin
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(c) if to Stockholder, to:
399 Venture Partners, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy (which shall
not constitute notice) to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
(d) Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon the parties named herein and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any Person
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other than Parent, Purchaser or the Stockholder, or their permitted
successors or assigns, any rights or remedies under or by reason of this
Agreement.
(e) Entire Agreement; Amendments; Waiver. This Agreement constitutes
the entire agreement among the parties with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties or any of them with respect to the
subject matter hereof. This Agreement may be amended by the parties hereto
and the terms and conditions hereof may be waived only by an instrument in
writing signed on behalf of each of the parties hereto, or, in the case of
a waiver, by an instrument signed on behalf of the party waiving
compliance.
(f) Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, but all of
which, taken together, shall constitute one and the same instrument.
(h) Governing Law. This 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 entirely within such state.
(i) Capitalized Terms. Capitalized terms not otherwise defined in
this Agreement shall have the meanings set forth in the Merger Agreement.
(j) Severability. Each party agrees that, should any court or other
competent authority hold any provision of this Agreement or part hereof to
be null, void or unenforceable, or order any party to take any action
inconsistent herewith or not to take an action consistent herewith or
required hereby, the validity, legality and enforceability of the remaining
provisions and obligations contained or set forth herein shall not in any
way be affected or impaired thereby, unless the foregoing inconsistent
action or the failure to take an action constitutes a material breach of
this Agreement or makes the Agreement impossible to perform in which case
this Agreement shall terminate. Except as otherwise contemplated by this
Agreement, to the extent that a party hereto took an action inconsistent
herewith or failed to take action consistent herewith or required hereby
pursuant to an order or judgment of a court or other competent authority,
such party shall incur no liability or obligation unless such party did not
in good faith seek to resist or object to the imposition or entering of
such order or judgment.
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IN WITNESS WHEREOF, each of Parent, Purchaser and the Stockholder has
caused this Agreement to be signed by its officer thereunto duly authorized and
the Stockholder has signed this Agreement, all as of the date first written
above.
SHOPKO STORES, INC.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
SHOPKO MERGER CORP.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
STOCKHOLDER
By: /S/ ▇. ▇▇▇▇▇▇ MUQADDEM
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Name: ▇. ▇▇▇▇▇▇ Muqaddem, 399 Venture Partners,
Inc.
Title:
Number of Shares owned by the Stockholder on the date
hereof:
907,387
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Number of Nonvoting Shares owned by the Stockholder on
the date hereof:
3,050,473
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