DATED JUNE 2000
---------------
(1) PUBLICIS S.A.
- and -
(2) SAATCHI & SAATCHI PLC
TRANSACTION AGREEMENT
Herbert Smith
Exchange House
Primrose Street
London EC2A 2HS
Tel: 020 7374-8000
Fax: 020 7374-0888
Ref: 2070
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TABLE OF CONTENTS
CLAUSE HEADINGS PAGE
1. INTERPRETATION.......................................................1
2. CONDITIONS OF THE MERGER AND THE SCHEME..............................3
3. PROCESS..............................................................3
4. THE SCHEME...........................................................4
5. UNDERTAKINGS.........................................................4
6. TERMINATION..........................................................5
7. COSTS................................................................6
8. EXISTING AGREEMENTS..................................................6
9. DELAY................................................................6
10. ASSIGNMENT...........................................................6
11. NOTICES..............................................................6
12. MISCELLANEOUS PROVISIONS.............................................8
13. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS...................8
<PAGE>
THIS AGREEMENT is made on June 2000
BETWEEN:
(1) PUBLICIS S.A. a company incorporated in France and whose registered office
is at 133 avenue des Champs-Elysees 75008 Paris ("Publicis"); and
(2) SAATCHI & SAATCHI PLC a company incorporated in England and Wales with
registered number 2464197 and whose registered office is at 83/89 Whitfield
Street, London W1A 4XA ("Saatchi").
WHEREAS:
(A) The parties have agreed to enter into this Agreement to regulate the basis
upon which they have agreed to effect a merger of Publicis and Saatchi.
(B) The parties have agreed that the Merger will be implemented by the
acquisition of Saatchi by Publicis pursuant to a scheme of arrangement of
Saatchi under Section 425 of the Companies Act 1985.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement the following definitions are used:
"Agreed Form" means the form agreed (or as the case may be, to be agreed)
between and signed for the purpose of identification only by or on behalf
of Saatchi and Publicis;
"Condition" means the conditions to the implementation of the Scheme and
the Merger, as set out in Appendix I to the Press Announcement;
"Confidentiality Agreement" means the confidentiality agreement entered
into between Publicis and Saatchi dated 26th May 2000;
"Directors" means the Directors of Saatchi and/or the members of the
Directoire of Publicis, as the context may require;
"Effective Time" means the time at which the Scheme becomes effective in
accordance with its terms and "Effective Date" means the date on which the
Effective Time occurs;
"Final Court Order" means the order of the Court sanctioning the Scheme
under Section 425 of the Companies Act 1985 and confirming the reduction of
share capital provided for by the Scheme under Section 137 of the Companies
Act 1985;
"Long-stop date" means (subject to City Code) 31st October 2000 (or such
later date as the parties and the Court may agree);
"Merger" means the merger of Saatchi and Publicis proposed to be achieved
by, and on the terms of, the Scheme pursuant to the terms of this
Agreement;
"Publicis Circular" means the circular to be approved by the French
Commission des operation de bourse for the purpose of listing the Publicis
Shares to be issued to Saatchi Shareholders pursuant to the Merger;
"Publicis Group" means Publicis, its subsidiaries and subsidiary
undertakings;
"Publicis Resolution" means each of the resolutions proposed to be passed
at the Publicis EGM the passing of which is necessary to enable the Merger
to be implemented;
"Press Announcement" means the proposed announcement of the Merger in the
Agreed Form;
"Saatchi EGM" means the extraordinary general meeting of Saatchi to be
convened by a notice set out in the Scheme Circular for the purpose of
approving the reduction of capital contemplated by the Press Announcement,
an amendment to Saatchi's Articles of Association to provide for Saatchi
Shares issued after the Effective Time upon exercise of options to be
exchanged for the same consideration as under the Scheme, and any other
matters incidental to the Merger, including any adjournment thereof;
"Saatchi Resolution" means each of the resolutions to approve the Scheme
proposed to be passed at the Court Meeting and the resolutions proposed to
be passed at the Saatchi EGM the passing of which is necessary to enable
the Merger to be implemented; and
"Saatchi Share Scheme" means each of the Saatchi Demerger Executive Share
Option Scheme (No.2), the Saatchi Demerger Performance Share Option Scheme,
the Saatchi Equity Participation Plan, the Saatchi Performance Share Option
Scheme, the Zenith Executive Incentive Plan, the Saatchi Demerger Sharesave
Scheme and the Saatchi International Sharesave Plan.
1.2 Unless otherwise defined herein terms defined in the Press Announcement
shall have the same meaning in this Agreement.
1.3 In this Agreement, save where the context otherwise requires:
1.3.1 a reference to a statute or statutory provision shall include
a reference:
(A) to that statute or provision as from time to time consolidated,
modified, re-enacted or replaced by any statute or statutory
provision; and
(B) to any subordination legislation made under the relevant
statute;
1.3.2 words in the singular shall include the plural, and vice versa;
1.3.3 the masculine gender shall include the feminine and neuter and vice
versa;
1.3.4 a reference to a person shall be construed so as to include any
individual, a firm, a body corporate, an unincorporated association
and a person's executors or administrators;
1.3.5 a reference to a clause, sub-clause or paragraph shall be a
reference to a clause, sub-clause or paragraph (as the case may be)
of this Agreement;
1.3.6 reference to writing shall include any modes of reproducing words in
a legible and non-transitory form;
1.3.7 the headings in this Agreement are for convenience only and shall
not effect the interpretation of any provision of this Agreement;
1.3.8 references to subsidiary and subsidiary undertaking shall bear the
meanings respectively given in Sections 736 and 259 of the Companies
Act 1985; and
References to any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, Court, Official or legal
concept or thing shall, in respect of any jurisdiction other than England
be deemed to include what most nearly approximates in that jurisdiction to
the English term.
2. CONDITIONS OF THE MERGER AND SCHEME
2.1 The parties have agreed that the Merger is conditional upon the Scheme
becoming effective in accordance with its terms by the Long-stop date.
2.2 The implementation of the Scheme is subject to:-
2.2.1 the satisfaction (or, to the extent permitted by Clause 2.3, waiver)
of all of the Conditions other than those contained in paragraph
1(e) of the Conditions (Court Order and Registration thereof) at or
prior to 8.00 am (London time) on the Hearing Date; and
2.2.2 the satisfaction of the Conditions contained in paragraph 1(e) of
the Conditions by the date referred to Clause 2.1.
2.3 Certain of the Conditions may be waived in writing by Publicis and/or
Saatchi, as specified in Appendix I to the Press Announcement.
3. PROCESS
3.1 As soon as possible following signing of this Agreement the parties shall
commence the process of implementing the Merger by procuring the release of
the Press Announcement.
3.2 Saatchi and Publicis shall in consultation with the other prepare and
submit for approval to the other (prior to execution, submission,
publication or release):
3.2.1 applications for such clearances, confirmations, consents or other
similar matters (other than any submitted prior to the date hereof)
necessary or desirable to effect the Merger to any tax, competition
or other regulatory or legal authorities;
3.2.2 copies of any draft and final form clearances, confirmations,
consents, undertakings or other material similar matters; and
3.2.3 drafts of the Scheme Circular, the Publicis Circular and Publicis
Resolutions.
3.3 Each of Saatchi and Publicis shall promptly review and provide comments on
documentation submitted to it under Clause 3.2 and shall not unreasonably
withhold or delay its consent to the issue, execution, publication or
submission of the relevant documentation and, thereafter, promptly execute,
issue, publish or submit such documentation.
4. THE SCHEME
Subject to their respective Directors' fiduciary duties and to the
provisions of clause 6, the parties shall use all reasonable endeavours to
procure the satisfaction of the Conditions and to implement the Merger upon
the terms described in the Press Announcement and as other provided in this
Agreement.
5. UNDERTAKINGS
5.1 Each party undertakes to the other that it will not, during the period from
the date of this Agreement to the Effective Date (in each case inclusive),
save with the prior written consent of the other party (such consent not to
be unreasonably withheld or delayed):
5.1.1 issue additional shares of any class, or securities convertible
into, or rights, warrants or options to subscribe for or acquire,
any such shares or securities, or offer or agree or announce an
intention to do any of the foregoing, save for issues pursuant to
the exercise of options or awards outstanding under employee share
or incentive schemes, or other legally binding obligations, which in
each case are in effect as at 18th June 2000 and have been disclosed
by the parties' respective annual reports and accounts for the year
ended 31st December 1999, or announced to the London Stock Exchange
or the Paris Bourse on or before such date and except as
contemplated by the Press Announcement;
5.1.2 recommend, declare, pay or make any bonus issue, dividend or other
distribution, whether payable in cash or otherwise, other than, in
the case of Publicis, the final dividend of Euro 1,70 (plus a tax
credit of Euro 0,85) per Publicis Share proposed to be paid on 12th
July 2000, in respect of the financial year to 31 December 1999, as
referred to in Publicis's annual report and accounts for such year
(and Publicis further undertakes not to do any of the foregoing
after the Effective Date by reference to a record date before the
Effective Time); or
5.1.3 make or permit any of its subsidiary undertakings to make any offer
of shares or other securities (whether or not convertible) or
property or rights, to (in the case of Publicis) Publicis
shareholders or (in the case of Saatchi) Saatchi shareholders or any
class thereof by way of rights or otherwise by reference to their
shareholdings in Publicis or Saatchi respectively.
5.2 Publicis further undertakes to and agrees with Saatchi, that it will not,
and will procure that none of its subsidiary undertakings will during the
Adjustment Reference Period (save with the written consent of Saatchi)
purchase or redeem, or offer or agree to or announce its intention to
purchase or redeem, any of Publicis's issued share capital or any options
over or derivatives referenced to Publicis Shares.
5.3 Saatchi further undertakes to and agrees with Publicis that it will not,
and will procure that none of its subsidiary undertakings will, for the
period from the date of this Agreement to the Effective Date, purchase or
redeem, or offer or agree to or announce its intention to purchase or
redeem, any of Saatchi's issued share capital or any options over or
derivatives referenced to Saatchi Shares.
6. TERMINATION
6.1 Subject always to the City Code, this Agreement may be terminated at any
time prior to the making of the Final Court Order by mutual agreement of
the parties.
6.2 If the Merger is referred to the Competition Commission or an equivalent
regulatory body outside the United Kingdom, the Chairman of Saatchi and the
President of Publicis shall meet within 14 days of such initiation or
referral to attempt to agree (subject to the City Code) whether the parties
should terminate this Agreement or should remain bound and use their
respective reasonable endeavours to procure a clearance of the Merger by
the relevant regulatory authority and consummate the Merger thereafter by
such means as shall be agreed.
6.3 Subject always to the City Code:
6.3.1 If a party commits a material breach of this Agreement, which
breach, if capable of remedy, has not been remedied within 20
business days of service of written notice requiring the breach to
be remedied, the other party may terminate this Agreement.
6.3.2 A party shall be entitled to terminate this Agreement if any of the
Conditions (other than one which the other party, acting alone, is
entitled to waive) cannot reasonably be expected to be satisfied
within the time specified in Appendix I to the Press Announcement.
6.3.3 This Agreement may be terminated by Publicis or Saatchi in the event
that any of the Saatchi Resolutions is not passed at the Court
Meeting or the Saatchi EGM, as the case may be, or in the event that
the Saatchi Directors, having taken advice of their independent
financial and legal advisers, determine that it is no longer in the
best interests of Saatchi Shareholders to proceed with the
implementation of the Scheme and make a public announcement of such
determination.
6.3.4 This Agreement may be terminated by Publicis or Saatchi in the event
that the Publicis Resolutions are not passed at the Publicis EGM.
Termination of this Agreement pursuant to this Clause 6.3 shall be
effective upon written notice from the party entitled to terminate to the
other party delivered by hand at any time prior to 8:00 a.m. on the Hearing
Date.
6.4 If, by the Long-stop Date:
6.4.1 any of the Conditions are not satisfied or waived in accordance with
their terms; or
6.4.2 the Merger has not become effective in accordance with its terms
then this Agreement shall terminate forthwith unless otherwise agreed by
the parties in writing.
6.5 Saatchi undertakes with Publicis not to proceed with the Scheme, and to
withdraw the Scheme forthwith, if this Agreement is terminated in
accordance with its terms.
6.6 For the avoidance of doubt, following termination of this Agreement
pursuant to this clause 6, neither party shall have any further rights or
obligations hereunder, save in respect of any prior breaches of this
Agreement.
7. COSTS
It is agreed that if the Merger is not completed, each party shall bear its
own costs in relation to this Agreement and the transactions contemplated
herein.
8. EXISTING AGREEMENTS
The provisions of this Agreement shall be supplemented to and shall not
prejudice the terms of the Confidentiality Agreement which shall remain in
full force and effect notwithstanding the execution of this Agreement.
9. DELAY
No failure or delay by any party in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any right, power or privilege hereunder or
otherwise.
10. ASSIGNMENT
No party may assign or transfer all or part of its respective rights or
obligations under this Agreement.
11. NOTICES
11.1 A notice, approval, consent or other communication in connection with this
Agreement:
11.1.1 must be in writing; and
11.1.2 must be left at the address of the addressee, or (save as provided
by Clause 6) sent by prepaid ordinary post (airmail if posted to or
from a place outside the United Kingdom) to the address of the
addressee or sent by facsimile to the facsimile number of the
addressee which is specified in this clause or if the addressee
notifies another address or facsimile number then to that address or
facsimile number.
The address and facsimile number of each party is:
Saatchi
-------
Address: Saatchi & Saatchi plc
83/89 Whitfield Street
London W1A 4XA
Facsimile: 44 20 74627876
Attention of: the Chairman
With a copy to:
Macfarlanes
Facsimile: 44 20 7831 9607
Attention of: Robert Sutton/Mary Leth
Publicis
--------
Address: 133 avenue des Champs-Elysees
75008 Paris
France
Facsimile: 331 4443 7560
Attention of: Jean-Paul Morin
With a copy to:
Herbert Smith
Facsimile: 44 20 7374 0888
Attention of: Anthony Macaulay
11.2 A notice, approval, consent or other communication shall take effect from
the time it is received (or, if earlier, the time it is deemed to be
received in accordance with sub-clause 11.3) unless a later time is
specified in it.
11.3 A letter or facsimile is deemed to be received:
11.3.1 in the case of a posted letter, unless actually received earlier, on
the second (fourth, if posted to or from a place outside the United
Kingdom) day after posting; and
11.3.2 in the case of facsimile, on production of a transmission report
from the machine from which the facsimile was sent which indicates
that the facsimile was sent in its entirety to the facsimile number
of the recipient.
12. MISCELLANEOUS PROVISIONS
12.1 No Partnership
Nothing in this Agreement or in any document referred to in it shall
constitute either of the parties a partner of the other.
12.2 Third parties
No term of this Agreement is enforceable under the Contracts (Rights of
Third Parties) Act 1999 by a person who is not a party to this Agreement.
12.3 Counterparts
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when executed and
delivered shall constitute an original, but all the counterparts shall
together constitute but one and the same instrument.
12.4 Variations
No variation to this Agreement shall be effective unless made in writing
and signed by or on behalf of the parties.
13. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS
13.1 This Agreement shall be governed by, and construed in accordance with,
English law.
13.2 The corporate powers, authorisations and procedures of Publicis, including
but not limited to the convening and holding of the Publicis EGM and the
issue of the New Publicis Shares and the Publicis CVRs shall be governed
by, and construed in accordance with, French law.
13.3 Each party irrevocably agrees for the benefit of the other parties that the
Courts of England shall have non-exclusive jurisdiction in relation to any
claim, dispute or difference concerning this Agreement and any matter
arising therefrom.
13.4 Each party irrevocably waives any right that it may have to object to an
action being brought in those Courts, to claim that the action has been
brought in an inconvenient forum, or to claim that those Courts do not have
jurisdiction.
13.5 Each party agrees that without preventing any other mode of service, any
document in an action (including, but not limited to, any writ of summons
or other originating process or any third or other party notice) may be
served on:
13.5.1 Saatchi, by being delivered to or left for that party at its address
for service of notices under Clause 11; and
13.5.2 Publicis, by being delivered to or left at Herbert Smith, Exchange
House, Primrose Street, London EC2A 2HS (marked for the attention of
Anthony Macaulay);
and each party undertakes to notify the other party in advance of any
change from time to time of the details of such address in accordance with
the manner prescribed for service of notices under Clause 11.
IN WITNESS whereof this Agreement has been executed by the parties hereto and is
intended to be and is hereby delivered on the first date above written.
SIGNED by PUBLICIS S.A. )
acting by )
SIGNED by SAATCHI & SAATCHI PLC )
acting by )
