Annual Report — Form 10-K Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: 10-K Annual Report HTML 1.93M
2: EX-4.18 Instrument Defining the Rights of Security Holders HTML 69K
3: EX-21.1 Subsidiaries List HTML 65K
4: EX-23.1 Consent of Expert or Counsel HTML 34K
5: EX-31.1 Certification -- §302 - SOA'02 HTML 43K
6: EX-31.2 Certification -- §302 - SOA'02 HTML 43K
7: EX-32.1 Certification -- §906 - SOA'02 HTML 38K
14: R1 Cover page HTML 98K
15: R2 Consolidated Balance Sheets HTML 145K
16: R3 Consolidated Balance Sheets (Parenthetical) HTML 72K
17: R4 Consolidated Statements of Operations and HTML 114K
Comprehensive Income
18: R5 Consolidated Statement of Cash Flows HTML 165K
19: R6 Consolidated Statements of Stockholders' Equity HTML 106K
20: R7 Description of Business, Basis of Presentation and HTML 127K
Summary of Significant Accounting Policies
21: R8 Acquisitions HTML 37K
22: R9 Property and Equipment HTML 49K
23: R10 Intangible Assets HTML 72K
24: R11 Fair Value Measurements HTML 85K
25: R12 Derivative Financial Instruments HTML 45K
26: R13 Long-Term Debt and Finance Lease Obligations HTML 90K
27: R14 Leases HTML 242K
28: R15 Stockholders' Equity and Convertible Preferred HTML 57K
Stock
29: R16 Equity-Based Compensation HTML 66K
30: R17 Income Taxes HTML 126K
31: R18 Employee Benefit Plans and Collective Bargaining HTML 349K
Agreements
32: R19 Related Parties HTML 39K
33: R20 Commitments and Contingencies and Off Balance HTML 60K
Sheet Arrangements
34: R21 Other Comprehensive Income or Loss HTML 73K
35: R22 Net Income Per Common Share HTML 71K
36: R23 Quarterly Information (Unaudited) HTML 86K
37: R24 Description of Business, Basis of Presentation and HTML 157K
Summary of Significant Accounting Policies
(Policies)
38: R25 Description of Business, Basis of Presentation and HTML 73K
Summary of Significant Accounting Policies
(Tables)
39: R26 Property and Equipment (Tables) HTML 48K
40: R27 Intangible Assets (Tables) HTML 106K
41: R28 Fair Value Measurements (Tables) HTML 80K
42: R29 Derivative Financial Instruments (Tables) HTML 43K
43: R30 Long-Term Debt and Finance Lease Obligations HTML 71K
(Tables)
44: R31 Leases (Tables) HTML 123K
45: R32 Equity-Based Compensation (Tables) HTML 62K
46: R33 Income Taxes (Tables) HTML 128K
47: R34 Employee Benefit Plans and Collective Bargaining HTML 341K
Agreements (Tables)
48: R35 Other Comprehensive Income or Loss (Tables) HTML 71K
49: R36 Net Income Per Common Share (Tables) HTML 69K
50: R37 Quarterly Information (Unaudited) (Tables) HTML 84K
51: R38 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 43K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Description of Business (Details)
52: R39 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 39K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash
and Cash Equivalents (Details)
53: R40 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 40K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Inventories (Details)
54: R41 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 60K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Property and Equipment, Intangible Assets and
Cloud Computing Arrangements (Details)
55: R42 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 39K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Leases (Details)
56: R43 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 46K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Investments (Details)
57: R44 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 52K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Company-Owned Life Insurance and Self-Insurance
Liabilities (Details)
58: R45 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 47K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Schedule of Self-Insurance Liabilities (Details)
59: R46 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 40K
SUMMAR OF SIGNIFICANT ACCOUNTING POLICIES -
Equity-Based Compensation (Details)
60: R47 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 59K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Revenue Recognition and Costs of Sales and Vendor
Allowances (Details)
61: R48 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 75K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Sales
Revenue by Similar Products (Details)
62: R49 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 40K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Segments (Details)
63: R50 DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND HTML 63K
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Recently Issues Accounting Standards (Details)
64: R51 ACQUISITIONS - Narrative (Details) HTML 53K
65: R52 PROPERTY AND EQUIPMENT - Schedule of Property and HTML 57K
Equipment (Details)
66: R53 PROPERTY AND EQUIPMENT - Narrative (Details) HTML 41K
67: R54 INTANGIBLE ASSETS - Narrative (Details) HTML 39K
68: R55 INTANGIBLE ASSETS - Schedule of Intangible Assets HTML 70K
(Details)
69: R56 INTANGIBLE ASSETS - Schedule Future Amortization HTML 50K
Expense (Details)
70: R57 FAIR VALUE MEASUREMENTS - Schedule of Assets and HTML 66K
Liabilities Measured at Fair Value (Details)
71: R58 FAIR VALUE MEASUREMENTS - Narrative (Details) HTML 44K
72: R59 DERIVATIVE FINANCIAL INSTRUMENTS - Narrative HTML 44K
(Details)
73: R60 DERIVATIVE FINANCIAL INSTRUMENTS - Schedule of HTML 44K
Cash Flow Hedges (Details)
74: R61 LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS - HTML 98K
Schedule of Long-term Debt (Details)
75: R62 LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS - HTML 53K
Schedule of Future Maturities of Long-term Debt
(Details)
76: R63 LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS - HTML 77K
Albertsons Term Loans (Details)
77: R64 LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS - HTML 70K
Asset-Based Loan Facilities (Details)
78: R65 LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS - HTML 158K
Senior Unsecured, Secured Note, Safeway Notes and
NALP Notes (Details)
79: R66 LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS - HTML 39K
Merger Related Financing (Details)
80: R67 LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS - HTML 45K
Deferred Financing Costs and Interest Expense, Net
(Details)
81: R68 LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS - HTML 51K
Schedule of Interest Expense (Details)
82: R69 LEASES - Components of Lease Expense (Details) HTML 50K
83: R70 LEASES - Balance Sheet Information (Details) HTML 61K
84: R71 LEASES - Supplemental Cash Flow Information HTML 65K
(Details)
85: R72 LEASES - Future Minimum Lease Payments to be Made HTML 83K
(Details)
86: R73 LEASES - Narrative (Details) HTML 36K
87: R74 LEASES - Schedule of Lease Expenses (Details) HTML 46K
88: R75 LEASES - Sale Leaseback Transactions (Details) HTML 73K
89: R76 Stockholders' Equity and Convertible Preferred HTML 181K
Stock (Details)
90: R77 EQUITY-BASED COMPENSATION - Narrative (Details) HTML 109K
91: R78 EQUITY-BASED COMPENSATION - Schedule of HTML 44K
Equity-based Compensation Expense (Details)
92: R79 EQUITY-BASED COMPENSATION - Schedule of RSU and HTML 64K
RSA Activity (Details)
93: R80 INCOME TAXES - Schedule of Components of Income HTML 70K
Tax Benefit (Details)
94: R81 INCOME TAXES - Schedule of Effective Income Tax HTML 60K
Rate Reconciliation (Details)
95: R82 INCOME TAXES - Narrative (Details) HTML 57K
96: R83 INCOME TAXES - Schedule of Deferred Tax Assets and HTML 79K
Liabilities (Details)
97: R84 INCOME TAXES - Summary of Valuation Allowance HTML 43K
Activity (Details)
98: R85 INCOME TAXES - Schedule of Unrecognized Tax HTML 49K
Benefits (Details)
99: R86 EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING HTML 93K
AGREEMENTS - Schedule of Changes in Retirement
Plan's Benefit Obligation and Fair Value of Plan
Assets (Details)
100: R87 EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING HTML 47K
AGREEMENTS - Schedule of Amounts Recognized in
Accumulated Other Comprehensive Income (Loss)
(Details)
101: R88 EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING HTML 42K
AGREEMENTS - Schedule of Accumulated Benefit
Obligation in Excess of Plan Assets (Details)
102: R89 EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING HTML 87K
AGREEMENTS - Schedule of Components of Net Pension
and Post-retirement Expense (Details)
103: R90 EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING HTML 51K
AGREEMENTS - Schedule of Assumptions Used
(Details)
104: R91 EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING HTML 117K
AGREEMENTS - Narrative (Details)
105: R92 EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING HTML 67K
AGREEMENTS - Schedule of Plan Assets Allocation
(Details)
106: R93 EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING HTML 107K
AGREEMENTS - Schedule of Fair Value of Plan Assets
(Details)
107: R94 EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING HTML 52K
AGREEMENTS - Schedule of Expected Future Benefit
Payments (Details)
108: R95 EMPLOYEE BENEFIT PLANS AND COLLECTIVE BARGAINING HTML 93K
AGREEMENTS - Schedule of Multiemployer Plan
(Details)
109: R96 RELATED PARTIES - Narrative (Details) HTML 50K
110: R97 COMMITMENTS AND CONTINGENCIES AND OFF BALANCE HTML 36K
SHEET ARRANGEMENTS - Guarantees (Details)
111: R98 COMMITMENTS AND CONTINGENCIES AND OFF BALANCE HTML 53K
SHEET ARRANGEMENTS - Legal Contingencies (Details)
112: R99 OTHER COMPREHENSIVE INCOME OR LOSS - Changes in HTML 74K
the AOCI Balance (Details)
113: R100 NET INCOME PER CLASS A COMMON SHARE - Schedule of HTML 107K
Computation of Basic and Diluted Net Income Per
Share (Details)
114: R101 Quarterly Information (unaudited) - Schedule of HTML 83K
Interim Information (Details)
115: R102 Quarterly Information (unaudited) - Narrative HTML 43K
(Details)
117: XML IDEA XML File -- Filing Summary XML 229K
13: XML XBRL Instance -- aci-20210227_htm XML 4.68M
116: EXCEL IDEA Workbook of Financial Reports XLSX 183K
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118: JSON XBRL Instance as JSON Data -- MetaLinks 649± 996K
119: ZIP XBRL Zipped Folder -- 0001646972-21-000026-xbrl Zip 722K
‘EX-4.18’ — Instrument Defining the Rights of Security Holders
The following summary of the terms of the Class A common stock of Albertsons Companies, Inc., a Delaware corporation (the “Company,”“we,”“our,” or “us”) is not meant to be complete and is qualified in its entirety by reference to our Amended and Restated Certificate of
Incorporation (“certificate of incorporation”) and our Amended and Restated Bylaws (“bylaws”), which are filed as exhibits to the Annual Report on Form 10-K of which this forms a part and are incorporated by reference herein, and the Delaware General Corporation Law (the “DGCL”).
General
Our authorized capital stock consists of 1,150,000,000 shares of common stock, par value $0.01 per share, of which 1,000,000,000 shares have been designated Class A common stock, or common stock, and 150,000,000 shares have been designated Class A-1 common stock,
and 100,000,000 shares of preferred stock, par value $0.01 per share, of which 1,750,000 shares have been designated as Series A preferred stock and 1,410,000 shares have been designated as Series A-1 preferred stock (which together constitute the “Convertible Preferred Stock”).
As of February 27, 2021, there were 465,565,019 shares of our Class A common stock and 1,750,000 shares of our Convertible Preferred Stock issued and outstanding. Only our Class A common stock is registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The following is a summary of information concerning our Class A common stock and, to the extent applicable, the material limitations or qualifications on the rights of our common stock by our currently outstanding Convertible Preferred Stock.
Class A Common
Stock
Dividend Rights
Subject to preferences that may be applicable to any then outstanding preferred stock, holders of our Class A common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by our board of directors out of legally available funds.
Voting Rights
Each holder of our Class A common stock is entitled to one vote for each share owned of record on all matters voted upon by stockholders. A majority vote is required for all action to be taken by stockholders, except as otherwise provided for in our certificate
of incorporation and bylaws or as required by law, including the election of directors in an election that is determined by our board of directors to be a contested election, which requires a plurality. Our certificate of incorporation provides that our board of directors and, prior to the date that Cerberus Capital Management, L.P., Klaff Realty, L.P., Schottenstein Stores Corp., Lubert-Adler Partners, L.P. and Kimco Realty Corporation (collectively, the “Sponsors”) and their respective affiliates, or any person who is an express assignee or designee of their respective rights under our certificate of incorporation (and such assignee’s or designee’s affiliates) ceases to own, in the aggregate,
at least 50% of the then-outstanding shares of our Class A common stock (the “50% Trigger Date”), the Sponsors, voting together, are expressly authorized to make, alter or repeal our bylaws and that our stockholders may only amend our bylaws after the 50% Trigger Date with the approval of at least two-thirds of the total voting power of the outstanding shares of our capital stock entitled to vote in any annual election of directors.
Liquidation Rights
In
the event of our liquidation, dissolution or winding-up, the holders of our Class A common stock are entitled to share equally and ratably in our assets, if any, remaining after the payment of all of our debts and liabilities and the liquidation preference of any outstanding preferred stock.
Other Rights
Our Class A common stock has no preemptive rights, no cumulative voting rights and no redemption, sinking fund or conversion provisions.
Some
provisions of Delaware law and of our certificate of incorporation and bylaws could have the effect of delaying, deferring or discouraging another party from acquiring control of the Company. These provisions, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of the Company to first negotiate with our board of directors.
Requirements for Advance Notification of Stockholder Nominations and Proposals
Our bylaws establish advance notice procedures with respect to stockholder proposals, other than proposals made by or at the direction of our board of directors or, prior to the date that our Sponsors and their respective affiliates, or any person who is an express assignee or designee of their respective rights under our certificate of incorporation (and such assignee’s or designee’s affiliates) ceases to own, in the aggregate, at least 35% of the then-outstanding shares of our Class A common stock, by the Sponsors, voting together. Our bylaws also establish advance notice procedures with respect to the nomination of candidates
for election as directors, other than nominations made by or at the direction of our board of directors or by a committee appointed by our board of directors. These provisions may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed, and may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.
Calling Special Stockholder Meetings
Our certificate of incorporation and bylaws
provide that special meetings of our stockholders may be called only by our board of directors or by stockholders owning at least 25% in amount of our entire capital stock issued and outstanding, and entitled to vote.
Stockholder Action by Written Consent
The DGCL permits stockholder action by written consent unless otherwise provided by our certificate of incorporation. Our certificate of incorporation precludes stockholder action by written consent after the 50% Trigger Date.
Undesignated Preferred Stock
Our
board of directors is authorized to issue, without stockholder approval, preferred stock with such terms as our board of directors may determine. The ability to authorize undesignated preferred stock makes it possible for our board of directors to issue one or more series of preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of the Company.
Delaware Anti-Takeover Statute
2
We
have elected not to be governed by Section 203 of the DGCL, an anti-takeover law (“Section 203”). This law prohibits a publicly-held Delaware corporation from engaging under certain circumstances in a business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder, unless:
•
prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested
stockholder;
•
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer; or
•
on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least
two-thirds
of the outstanding voting stock which is not owned by the interested stockholder.
Section 203
defines “business combination” to include: any merger or consolidation involving us and the interested stockholder; any sale, transfer, pledge or other disposition of 10% or more of our assets involving the interested stockholder; in general, any transaction that results in the issuance or transfer by us of any of our stock to the interested stockholder; or the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through us. In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by any such entity or person. A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation
or by amendment to its certificate of incorporation or bylaws approved by its stockholders. We have opted out of this provision. Accordingly, we will not be subject to any anti-takeover effects of Section 203.
Removal of Directors; Vacancies
Our certificate of incorporation provides that, following the 50% Trigger Date, directors may be removed with or without cause upon the affirmative vote of holders of at least two-thirds of the total voting power of the outstanding shares of the capital stock of the
Company entitled to vote in any annual election of directors or class of directors, voting together as a single class. In addition, our certificate of incorporation provides that vacancies, including those resulting from newly created directorships or removal of directors, may only be filled (i) by the Sponsors, voting together, or by a majority of the directors then in office, prior to the 50% Trigger Date, and (ii) after the 50% Trigger Date, by a majority of the directors then in office, in each case although less than a quorum, or by a sole remaining director. This may deter a stockholder from increasing the size of our board of directors and gaining control of the board of directors by filling the remaining vacancies with its own nominees.
Limitation on Director’s Liability
Our
certificate of incorporation and bylaws will indemnify our directors to the fullest extent permitted by the DGCL. The DGCL permits a corporation to limit or eliminate a director’s personal liability to the corporation or the holders of its capital stock for breach of duty. This limitation is generally unavailable for acts or omissions by a director which (i) were in bad faith, (ii) were the result of active and deliberate dishonesty and were material to the cause of
3
action
so adjudicated or (iii) involved a financial profit or other advantage to which such director was not legally entitled. The DGCL also prohibits limitations on director liability for acts or omissions which resulted in a violation of a statute prohibiting certain dividend declarations, certain payments to stockholders after dissolution and particular types of loans. The effect of these provisions is to eliminate the rights of our company and our stockholders (through stockholders’ derivative suits on behalf of our company) to recover monetary damages against a director for breach of fiduciary duty as a director (including breaches resulting from grossly negligent behavior), except in the situations described above. These provisions will not limit the liability of directors under the federal securities
laws of the United States.
Choice of Forum
Our certificate of incorporation and bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the exclusive forum for: (a) any derivative action or proceeding brought on our behalf; (b) any action asserting a breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders; (c) any action asserting a claim pursuant to any provision of the DGCL, our certificate
of incorporation or our bylaws; or (d) any action asserting a claim governed by the internal affairs doctrine. However, it is possible that a court could find our forum selection provision to be inapplicable or unenforceable. Because the applicability of the exclusive forum provision is limited to the extent permitted by law, we do not intend that the exclusive forum provision would apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any action asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”). Investors cannot waive
compliance with the federal securities laws and the rules and regulations thereunder.
Stockholders’ Agreement
As of June 25, 2020, we entered into a stockholders agreement with our Sponsors (the “Stockholders’ Agreement”). The Stockholders’ Agreement provides for designation rights for the Sponsors to nominate directors to the board of directors. Pursuant to the Stockholders’ Agreement, we will be required to appoint to our board of directors individuals designated by and voted for by our Sponsors. If Cerberus Capital Management, L.P. (or a permitted transferee or assignee) has beneficial ownership of at least 20% of our then-outstanding common stock, it shall have the right to designate four directors to our board of directors. If Cerberus Capital Management,
L.P. (or a permitted transferee or assignee) owns less than 20% but at least 10% of our then-outstanding Class A common stock, it shall have the right to designate two directors to our board of directors. If Cerberus Capital Management, L.P. (or a permitted transferee or assignee) owns less than 10% but at least 5% of our then-outstanding Class A common stock, it shall have the right to designate one director to our board of directors. If Klaff Realty, L.P. (or a permitted transferee or assignee) owns at least 5% of our then-outstanding Class A common stock, it shall have the right to designate one director to our board of directors. If Schottenstein Stores Corp. (or a permitted transferee or assignee) owns at least 5% of our then-outstanding Class A common stock, it shall have the right to designate one director to our board of directors. Each Sponsor will agree to vote the Class A common stock owned by them in favor of each other Sponsor’s nominees to the board of
directors.
As of June 9, 2020, we entered into a registration rights agreement (the “Registration Rights Agreement”) with certain of our stockholders as of immediately prior to the closing of our initial public offering (the “Pre-IPO Stockholders”) and the holders of our Convertible Preferred Stock (the “Preferred Investors” and together with the Pre-IPO Stockholders, the “Holders”). Pursuant to the Registration Rights
Agreement, we granted the Holders certain registration rights with respect to the registrable securities, which registrable securities include the shares of Class A common stock issuable pursuant to the Convertible Preferred Stock (the “Conversion Shares”), but not Convertible Preferred Stock. These rights include certain demand registration rights for our Sponsors and “piggyback” registration rights for all Holders. Additionally, we are required to use our reasonable best efforts to file
4
and
maintain an effective shelf registration as permitted by Rule 415 of the Securities Act for all registrable securities held by the Preferred Investors by no later than the later of (i) seven and one-half months after the consummation of our initial public offering and (ii) 18 months after the Initial Issue Date (the “Preferred Investor Shelf Registration Statement”). The registration rights only apply to registrable securities, and shares of our Class A common stock cease to be registrable securities under certain conditions including (i) they are sold pursuant to an effective registration statement, (ii) they are sold pursuant to Rule 144, or (iii) they are eligible to be resold without regard to the volume or public information requirements of Rule 144 and the resale of such shares is not prohibited by the lock-up agreements described below. The registration rights are subject to certain delay, suspension and cutback provisions. The Preferred Investors are also
subject to certain additional transfer restrictions with respect to the Convertible Preferred Stock and the Conversion Shares.
The Registration Rights Agreement includes customary indemnification and contribution provisions. All fees, costs and expenses related to registrations generally will be borne by us, other than underwriting discounts and commissions attributable to the sale of registrable securities.
The Holders may be required to deliver lock-up agreements to underwriters in connection with registered offerings of shares.
Demand Registration Rights for Non-Shelf Registered Offerings Granted to Sponsors. The Registration Rights Agreement
grants our Sponsors certain demand registration rights. Until we are eligible to file a registration statement on Form S-3, our Sponsors will be limited to a single demand right for an underwritten offering pursuant to a registration statement on Form S-1. Such registration statement would be required to include at least 5% of the total number of shares of our Class A common stock outstanding immediately prior to our initial public offering, which we refer to as the pre-IPO Class A common stock, or all of the remaining registrable securities of the demanding holder, and such request will require the consent of the holders of at least a majority of the outstanding registrable securities.
Shelf Registration Rights Granted to Sponsors. When we become eligible to file a registration statement on Form S-3, the Registration Rights
Agreement grants our Sponsors certain rights to demand that we file a shelf registration statement covering any registrable securities that Sponsors are permitted to sell pursuant to the lock-up agreements with us described below or any other lock-up restrictions. The number of shares covered by the shelf registration statement may also be reduced by us based on any advice of any potential underwriters, after consultation with us, to limit such number of shares.
Demand Registration Rights for Shelf Takedowns Granted to Sponsors. The Registration Rights Agreement grants our Sponsors certain rights to demand takedowns from a shelf registration statement. For underwritten offerings pursuant to the Registration Rights Agreement
(which may include the offering on Form S-1 described above), any such takedown demand would be required to include at least 5% of the pre-IPO Class A common stock or all of the remaining registrable securities of the demanding holder. Sponsors lose their remaining demand registration rights when they cease to beneficially own at least 5% of our Class A common stock. Further, we are not required to effect more than one demand registration in any 30-day period (with such 30-day period commencing on the closing date of any underwritten offering pursuant to a preceding demand registration).
The Preferred Investor Shelf Registration Statement. The Registration Rights Agreement provides that we must use our reasonable best efforts to file and maintain effective the Preferred Investor Shelf Registration Statement for all
registrable securities, which registrable securities include Conversion Shares, but not Convertible Preferred Stock, held by the Preferred Investors by no later than the later of (i) seven and one-half months after the consummation of our initial public offering and (ii) 18 months after the Initial Issue Date. The Preferred Investors shall have the right, at any time and from time to time, to demand takedowns from the Preferred Investor Shelf Registration Statement, provided that such takedown demand would be required to include at least 5% of the pre-IPO Class A common stock or all of the remaining registrable securities of the demanding Preferred Investor. Such takedown may be for an underwritten marketed offering, non-marketed or underwritten offering or for a block trade or overnight transaction. The Preferred Investors are also subject to certain additional transfer restrictions with respect to the Convertible Preferred Stock and the Conversion Shares.
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“Piggyback”
Registration Rights. The Registration Rights Agreement grants all Holders “piggyback” registration rights. If we register any of our shares of Class A common stock, either for our own account or for the account of other stockholders, including an exercise of demand rights, all Holders will be entitled, subject to certain exceptions, to include its shares of Class A common stock in the registration. To the extent that the managing underwriters in an offering advise that the number of shares proposed to be included in the offering exceeds the amount that can be sold without adversely affecting the distribution, the number of shares included in the offering will be limited as follows:
•
in
the case of an offering pursuant to a demand by a Sponsor under the Registration Rights Agreement, (1) the Pre-IPO Stockholders that are parties to the Registration Rights Agreement will have first priority to include their registrable securities, (2) the Preferred Investors will have second priority to include their registrable securities, (3) we will have third priority to the extent that we elect to sell any shares for our own account and (4) any other holders with registration rights will have fourth priority;
•
in
the case of an offering pursuant to a demand by a Preferred Investor to takedown shares from the Preferred Investor Shelf Registration Statement under the Registration Rights Agreement, (1) the Preferred Investors will have first priority to include their registrable securities, (2) the Pre-IPO Stockholders that are parties to the Registration Rights Agreement will have second priority to include their registrable securities, (3) we will have third priority to the extent that we elect to sell any shares for our own account and (4) any other holders with registration rights will have fourth priority;
•
in
the case of any offering not pursuant to a demand by a Sponsor or Preferred Investor under the Registration Rights Agreement, (1) we will have first priority to the extent that we elect to sell any shares for our own account, (2) the Holders will have second priority to include their registrable securities on a pro rata basis as among the Holders and (3) any other holders with registration rights will have third priority.
Underwriter Lock-ups. Notwithstanding the registration rights described above, if there is an offering of our Class A common stock, we, our directors and executive officers and certain of the Holders will agree to deliver lock-up agreements to the underwriters of such offering to restrict transfers of their Class A common stock. The restrictions will apply for up to 90 days in connection
with or prior to the second underwritten offering demanded pursuant to the Registration Rights Agreement and up to 45 days in connection with any offering thereafter.
Suspension Periods. We may postpone the filing or the effectiveness of a demand registration, including an underwritten shelf takedown (whether demanded by a Sponsor or a Preferred Investor from the Preferred Investor Shelf Registration Statement), if, based on our good faith judgment, upon consultation with outside counsel, such filing, the effectiveness of a demand registration, or the consummation of an underwritten shelf takedown, as the case may be, would (i) reasonably be expected to materially impede, delay, interfere with or otherwise have a material adverse effect on any material acquisition of assets (other than in the ordinary course of business),
merger, consolidation, tender offer, financing or any other material business transaction by us or any of our subsidiaries or (ii) require disclosure of material information that has not been, and is otherwise not required to be, disclosed to the public, the premature disclosure of which we, after consultation with our outside counsel, believes would be detrimental to us; provided that we will not be permitted to impose any such blackout period more than two times in any 12 month period and provided, further, that any such delay will not be more than an aggregate of 120 days in any 12 month period.
Transfer Agent and Registrar
The
transfer agent and registrar for our Class A common stock is American Stock Transfer & Trust Company, LLC. The address of the transfer agent and registrar is 6201 15th Avenue, Brooklyn, New York11219.
Listing
6
Our
Class A common stock is listed on the NYSE under the symbol “ACI.”
7
Dates Referenced Herein and Documents Incorporated by Reference
