<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENT FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13d-2(a)
(Amendment No.__)*
WHITMAN CORPORATION
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE,
AND ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS
--------------------------------------------------------------------------------
(Title of Class of Securities)
96647R107
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(CUSIP Number)
JOHN F. BIERBAUM
60 SOUTH SIXTH STREET
SUITE 3800
MINNEAPOLIS, MN 55402
(612) 661-3830
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
NOVEMBER 30, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box / /.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
(Continued on following pages)
(Page 1 of 15 Pages)
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CUSIP No. 96647R107 13D Page 2 of 15 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
DAKOTA HOLDINGS, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 12,855,419**
REPORTING -----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
0
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
12,855,419**
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,855,419**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.6***
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14 TYPE OF REPORTING PERSON*
OO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
**Includes a warrant to purchase 377,128 shares of Whitman common stock.
***Assumes (1) all other former shareholders of PepsiAmericas, Inc. elect the
cash alternative and (2) no purchase is made of the subscription shares,
pursuant to the merger of PepsiAmericas into a wholly owned subsidiary of
Whitman Corporation effective November 30, 2000.
<PAGE>
CUSIP No. 96647R107 13D Page 3 of 15 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
POHLAD COMPANIES
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
MINNESOTA
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7 SOLE VOTING POWER
NUMBER OF 102
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 12,855,419**
REPORTING -----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
102
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
12,855,419**
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,855,419**
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.6***
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
**Includes a warrant to purchase 377,128 shares of Whitman common stock.
***Assumes (1) all other former shareholders of PepsiAmericas, Inc. elect the
cash alternative and (2) no purchase is made of the subscription shares,
pursuant to the merger of PepsiAmericas into a wholly owned subsidiary of
Whitman Corporation effective November 30, 2000.
<PAGE>
CUSIP No. 96647R107 13D Page 4 of 15 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PEPSICO, INC.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
NORTH CAROLINA
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7 SOLE VOTING POWER
NUMBER OF 54,794,115
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 12,855,419**
REPORTING -----------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
54,794,115
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
12,855,419**
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
67,649,534**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
45.3***
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
**Includes a warrant to purchase 377,128 shares of Whitman common stock.
***Assumes (1) all other former shareholders of PepsiAmericas, Inc. elect the
cash alternative and (2) no purchase is made of the subscription shares,
pursuant to the merger of PepsiAmericas into a wholly owned subsidiary of
Whitman Corporation effective November 30, 2000.
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $0.01 per share,
and associated preferred share purchase rights, of Whitman Corporation (the
"Company" or "Whitman"), which class of shares is registered under Section 12(b)
of the Securities Exchange Act of 1934, as amended. The Company's address is
3501 Algonquin Road, Rolling Meadows, Illinois 60008.
ITEM 2. IDENTITY AND BACKGROUND.
(a), (b) and (c) This statement is filed on behalf of (1) Dakota
Holdings, LLC, a Delaware limited liability company (the "LLC"), (2) Pohlad
Companies, a Minnesota corporation ("Pohlad"), and (3) PepsiCo, Inc., a North
Carolina corporation ("PepsiCo"). The LLC's members are Pohlad, Beverages, Foods
& Service Industries, Inc., a Delaware corporation ("BFSI"), which is a wholly
owned subsidiary of PepsiCo, Pepsi-Cola Metropolitan Bottling Co., Inc., a New
Jersey corporation ("Metro"), which is also a wholly owned subsidiary of
PepsiCo, and Beverage Investment, LLC, a Minnesota limited liability company, a
company under common control with Pohlad ("Beverage Investment"). The LLC is
governed by the Amended and Restated Limited Liability Company Agreement, dated
November 30, 2000, by and among Pohlad, BFSI, Metro, Beverage Investment and
PepsiCo (the "LLC Agreement"). A copy of the LLC Agreement is attached hereto as
Exhibit A. The LLC holds and manages its investment in Whitman common stock and
PepsiCo common stock. The LLC's principal business address is 60 South Sixth
Street, Suite 3800, Minneapolis, Minnesota 55402. Pohlad is principally engaged
as an investment holding company. Pohlad's principal business address is 60
South Sixth Street, Suite 3800, Minneapolis, Minnesota 55402. PepsiCo is
principally engaged as a holding company for various entities engaged in the
beverage industry. PepsiCo's principal business address is 700 Anderson Hill
Road, Purchase, New York 10577.
The name, residence or business address, present principal occupation
or employment, and the name, principal business and address of the corporation
or other organization in which such employment is conducted, of each executive
officer and director of Pohlad and PepsiCo are set forth on Appendix I attached
hereto and incorporated herein by reference.
(d) During the last five years, none of the executive officers and
directors set forth in Appendix I has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) During the last five years, none of the executive officers and
directors set forth in Appendix I was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
(f) Each executive officer and director set forth in Appendix I is
a citizen of the United States, except for Peter Foy, a director of PepsiCo, who
is a citizen of the United Kingdom.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The LLC and Pohlad obtained the shares reported herein pursuant to the
merger of PepsiAmericas into a wholly owned subsidiary of Whitman. The LLC
obtained beneficial ownership of 12,855,419 shares of Whitman common stock in
exchange for 4,000,000 shares of PepsiAmericas Class A common stock, 57,028,274
shares of PepsiAmericas Class B common stock and a warrant to purchase 1,360,000
shares of PepsiAmericas Class B common stock. Pohlad obtained beneficial
ownership of 102 shares of Whitman common stock in exchange for 500 shares of
the PepsiAmericas Class B common stock.
Page 5 of 15 Pages
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ITEM 4. PURPOSE OF TRANSACTION.
On November 30, 2000, PepsiAmericas merged into a wholly owned
subsidiary of Whitman pursuant to an Agreement and Plan of Merger dated August
18, 2000 (the "Merger").
In connection with the Merger, Whitman agreed to sell an aggregate of
up to 1,710,863 shares of its common stock, at a price of $14.6125 per share, to
the PepsiAmericas shareholders who participate in the contingent payment
alternative and wish to purchase such shares (the "Subscription Shares").
PepsiAmericas shareholders have until December 14, 2000 to elect to purchase
Subscription Shares. The LLC has the right to purchase, at a purchase price of
$14.6125 per share, any Subscription Shares that are not purchased by the
PepsiAmericas shareholders initially entitled to purchase them. If the LLC
declines to purchase such Subscription Shares, such shares will not be sold to
anyone. As of the date of this Schedule 13D, the LLC had not made an election
regarding the purchase of the Subscription Shares it is entitled to purchase.
In connection with the Merger, Pohlad has separately negotiated the
right to acquire from PepsiCo up to 1,710,863 shares of Whitman common stock
currently held by PepsiCo at a price of $14.6125 per share. Robert C. Pohlad,
the Chief Executive Officer and a director of Whitman, is the President of
Pohlad and the owner of one-third of the stock of Pohlad. As of the date of this
Schedule 13D, Pohlad has not purchased any of these shares.
Upon the effectiveness of the Merger, Robert C. Pohlad became the Chief
Executive Officer and a director of Whitman, Kenneth E. Keiser became the
President and Chief Operating Officer of Whitman's United States operations,
John F. Bierbaum became the Executive Vice President of Corporate Growth and
Strategic Planning of Whitman, G. Michael Durkin became the Senior Vice
President and Chief Financial Officer of Whitman, and Larry Young became the
President and Chief Operating Officer of Whitman's International Operations.
Due to the LLC's election of the contingent payment alternative, the
LLC has the right to receive in the future up to 6,669,747 additional shares of
Whitman common stock if PepsiAmericas meets certain performance levels for the
years 2000 through 2002. Due to Pohlad's election of the contingent payment
alternative, Pohlad has the right to receive in the future up to 54 additional
shares of Whitman common stock if PepsiAmericas meets the specified performance
levels.
Other than as described above, the reporting persons have no plans or
proposals that relate to or would result in the actions listed under Items
4(a)-(j) of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of November 30, 2000, assuming for percentage calculation
purposes that all other former shareholders of PepsiAmericas elect the cash
alternative and no purchase is made of the Subscription Shares, the reporting
persons beneficially owned the following shares:
1. The LLC beneficially owned 12,855,419 shares (8.6%), including
377,128 shares which the LLC has a right to acquire upon exercise of a warrant.
2. Pohlad benefically owned 12,855,521 shares (8.6%), including
the shares beneficially owned by the LLC and 102 shares owned directly by
Pohlad.
3. PepsiCo beneficially owned 67,649,534 shares (45.3%),
including the shares beneficially owned by the LLC, 54,000,000 shares owned
directly by PepsiCo and 794,115 shares owned by Midland Bottling Co., a wholly
owned subsidiary of PepsiCo.
Page 6 of 15 Pages
<PAGE>
(b) The responses of each reporting person to Items (7) through
(11) of the portions of the cover page of this Schedule 13D which relate to
beneficial ownership of shares are incorporated herein by reference. By virtue
of their interest in the LLC, Pohlad and PepsiCo may be deemed to beneficially
own the shares held by the LLC. Such shares are included in the beneficial
ownership totals of Pohlad and PepsiCo presented above.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT.
The LLC was formed and is governed by the LLC Agreement, a copy of
which is attached as Exhibit A hereto and incorporated herein by reference. The
following summary of certain terms of the LLC Agreement is qualified in its
entirety by reference to the LLC Agreement.
The LLC was originally formed by Metro, BFSI and Pohlad (each a
"Member" and collectively, the "Members") and PepsiCo. Beverage Investment
subsequently became a Member on November 30, 2000. The LLC was originally formed
to manage the Members' investment in, and to hold and exercise voting control
over, PepsiAmericias and its affiliates.
Pursuant to the Merger, all of the outstanding shares of PepsiAmericas
owned by the LLC were converted into shares of Whitman common stock, contingent
rights to receive additional shares of Whitman common stock and the right to
purchase additional shares of Whitman common stock. From and after the effective
time of the Merger, the LLC's continuing purpose is to hold and manage its
investment in the Whitman common stock and PepsiCo common stock. It is the
intention of the Members that the LLC operate exclusively as a holding company,
and shall not conduct any business operations except with respect to the
management of those investments. In furtherance of the foregoing, the LLC has
the power to undertake and carry on all business activities necessary or
advisable in connection with such activity. The LLC may not engage in any other
business without the consent of all Members.
The responsibility for the day to day management of the LLC is vested
in Pohlad or one of its affiliates. The Members have agreed that Pohlad shall
have the authority to act on behalf of the LLC in connection with its business.
Pohlad has all of the necessary powers to carry out the purposes and business of
the LLC. Without limiting the foregoing, Pohlad has the following specific
rights and powers:
(1) To the extent of LLC assets, to prosecute, defend, settle or
compromise actions or claims at law or in equity at the LLC's expense as may be
necessary or proper to enforce or protect the LLC's interests provided that,
approval of any settlement to be entered into by an indemnified party shall
require unanimous consent of those Members who are not indemnified parties; and
to satisfy any judgment, decree, decision or settlement of any such suit or
claim, first, out of any insurance proceeds available therefor, and next, out of
the LLC's assets and income.
(2) To authorize the entry into and performance of contracts and
agreements and to do and perform all such other things as may be in furtherance
of LLC purposes; and to authorize a Member to execute, acknowledge and deliver
on behalf of the LLC any and all instruments which may be deemed necessary or
convenient to effect the foregoing.
Page 7 of 15 Pages
<PAGE>
(3) To acquire and enter into any contract of insurance which
Pohlad deems necessary and proper for the protection of the LLC or for any
purpose beneficial to the LLC.
Unanimous approval of the Members shall be required in the following
circumstances:
(1) Any material change in the business or purpose of
the LLC.
(2) The disposition of any assets of the LLC outside the
ordinary course of business.
(3) Any voluntary liquidation, dissolution or termination
of the LLC.
(4) The issuance by the LLC of any additional equity
interests of the LLC, or the admission of a new Member to the LLC.
(5) Any amendment to the LLC Agreement or to the
certificate of formation of the LLC.
(6) The necessity for additional capital contributions.
(7) Any split, combination or reclassification of any
interests.
(8) Any registered public offering of any equity
interests of the LLC.
(9) The establishment by the LLC of any joint venture
with a third party or the acquisition of all or part of any other
business person or entity.
(10) The approval of the making or divesting of any
investment including the acquisition or disposition of securities or
capital expenditures, take-or-pay arrangements or significant operating
arrangements.
(11) The entry by the LLC into any agreement for the
lending of funds or provision of a guaranty by the LLC.
(12) Any loan to or guarantee by the LLC of any
indebtedness of, a Member, any affiliate thereof or any officer or
employee thereof and any amendment of any of the foregoing.
(13) The initiation or settlement of any litigation
material to the business of the LLC.
(14) The selection of a replacement accounting firm to
represent the LLC other than a "Big 5" accounting firm without an
existing conflict issue with any Member or the LLC.
(15) Any borrowing of money, assumption or guarantee of
any indebtedness or other obligations, or issuing any debt securities.
(16) Any agreement with any other person or entity
restricting or constraining the LLC's right to vote its securities.
Notwithstanding the foregoing, BFSI, Metro and PepsiCo agree that they,
or each of them, shall not propose, initiate or otherwise pursue the voluntary
liquidation, dissolution or termination of the Company prior to July 31, 2001.
Each of BFSI and Metro has appointed PepsiCo as their joint
representative (the "PepsiCo Joint Representative") and Pohlad acts as the joint
representative for itself and Beverage Investment (the "Pohlad Joint
Representative").
Page 8 of 15 Pages
<PAGE>
Pohlad has the power to exercise voting rights with respect to any and
all stock of Whitman held by the LLC provided that within two business days of
receiving any communication regarding (i) a Whitman shareholder meeting at which
shareholders shall vote ("Meeting") or (ii) a deadline for submitting a written
action of the Whitman shareholders ("Deadline"), or (iii) any other action of
the Whitman shareholders that is required or permitted, the LLC provides written
notice to the PepsiCo Joint Representative specifying the manner in which the
LLC intends to vote or the action which the LLC intends to take for the Whitman
shares with respect to each matter upon which a separate shareholder vote or
action is to be taken and specifying the earliest time at which the LLC will
vote or take such action (the "Notice"). Such notice requirement shall be
satisfied upon receipt by the PepsiCo Joint Representative of the Notice in
written form (whether by mail, fax, e-mail or courier). If upon receipt of the
Notice and prior to the deadline for the vote or shareholder action, the PepsiCo
Joint Representative advises the LLC that it objects, with respect to any
matter, to the manner in which the Whitman shares will be voted, the LLC shall
exercise its voting rights or take such other action with respect to Metro's and
BFSI's pro rata share of Whitman shares as directed by the PepsiCo Joint
Representative in writing. In the event the LLC is not advised by the PepsiCo
Joint Representative of such objection and the LLC can evidence that the Notice
was received by the PepsiCo Joint Representative, the LLC may vote the stock or
take such other action as specified in the Notice.
With the exception of certain transfers to affiliates, no Member may
transfer or assign as security or otherwise encumber, any of its interest,
without the prior written consent of the other Members, which consent may be
withheld or conditioned in such other Member's sole discretion. Any transfer or
encumbrance other than in accordance with the provisions of the LLC Agreement,
shall be null and void and shall not be recorded as a transfer on the transfer
records of the LLC.
PepsiCo shall not permit the assignment or transfer of voting control
of Metro or BFSI, to any person other than an affiliate of PepsiCo without the
prior written consent of Pohlad and Beverage Investment which consent may be
withheld or conditioned in the sole discretion of Pohlad or Beverage Investment.
Neither Pohlad nor Beverage Investment shall permit the assignment or
transfer of voting control of Pohlad, or Beverage Investment, respectively, or
of any transferee of Pohlad or Beverage Investment to any person other than an
affiliate of any of Robert C. Pohlad, James O. Pohlad or William M. Pohlad or
their immediate family members, without the prior written consent of PepsiCo,
which consent may be withheld or conditioned in PepsiCo's sole discretion.
AMENDED AND RESTATED PEPSICO SHAREHOLDER AGREEMENT
The following summary description of the amended and restated
shareholder agreement between Whitman and PepsiCo is qualified in its entirety
by reference to the Amended and Restated PepsiCo Shareholder Agreement (the
"PepsiCo Shareholder Agreement"), a copy of which is attached as Exhibit B
hereto and incorporated herein by reference. The following summary of certain
terms of the PepsiCo Shareholder Agreement is qualified in its entirety by
reference to the PepsiCo Shareholder Agreement.
The PepsiCo Shareholder Agreement generally limits PepsiCo and its
affiliates to a maximum ownership percentage of 49.0% of the voting power of
Whitman and generally limits PepsiCo and its affiliates, together with Robert C.
Pohlad, his affiliates and his family, to a combined maximum ownership
percentage of 49.9% of the voting power of Whitman. Acquisitions by PepsiCo and
its affiliates permitted under the PepsiCo Shareholder Agreement include:
(1) Any transaction that would not result in the maximum ownership
percentage or combined maximum ownership percentage being exceeded.
(2) A tender offer or exchange offer by PepsiCo or its
affiliates for all voting securities of Whitman not beneficially owned by
PepsiCo and its affiliates at a price not less than the minimum price calculated
as set forth in the PepsiCo Shareholder Agreement.
Page 9 of 15 Pages
<PAGE>
(3) Any merger or business combination approved by Whitman
shareholders excluding PepsiCo and its affiliates.
(4) A transaction approved by a majority of directors who are
independent of PepsiCo and Robert C. Pohlad and their respective affiliates.
(5) An acquisition of voting securities of Whitman by Robert C.
Pohlad, his affiliates or his family approved by the affiliated transaction
committee of the Whitman board (or if such committee is not in existence, by a
committee of the Whitman board composed entirely of independent directors).
For purposes of the PepsiCo Shareholder Agreement, independent
directors are directors unaffiliated with PepsiCo and its affiliates, or with
Robert C. Pohlad, his affiliates and his family, and who are not officers,
employees, consultants or advisors to Whitman and have not been within the past
two years. The minimum price referred to above in clause (2) is the highest
average of Whitman closing prices on the NYSE over any 20 consecutive day period
during the 18 months preceding the announcement of the offer or business
combination in question.
The PepsiCo Shareholder Agreement provides that PepsiCo and its
affiliates will not take any of the following actions without the prior approval
of a majority of the independent directors:
(1) Acquire, propose to acquire, disclose an intention to acquire,
or offer or agree to acquire beneficial ownership of any voting security of
Whitman which would cause the maximum ownership percentage or combined maximum
ownership percentage to be exceeded, other than pursuant to an acquisition
permitted by the PepsiCo Shareholder Agreement.
(2) Form, join or in any way participate in a group that would be
required to file a statement on Schedule 13D as a "person" under Section
13(d)(3) of the Exchange Act with respect to any voting securities of Whitman or
its subsidiaries if such group's ownership of Whitman voting securities would
exceed the maximum ownership percentage.
(3) Initiate a merger, acquisition or other business combination
transaction relating to Whitman, other than a combination of a party
unaffiliated with PepsiCo with Whitman that would not be a permitted acquisition
under the PepsiCo Shareholder Agreement.
In addition, if at any time PepsiCo becomes aware that the ownership of
PepsiCo and its affiliates exceeds the maximum ownership percentage, except as
specifically permitted under the PepsiCo Shareholder Agreement, PepsiCo and its
affiliates will promptly take all action necessary to reduce the amount of
voting securities of Whitman beneficially owned by them so that they are below
the maximum ownership percentage.
If at any time PepsiCo becomes aware that the combined maximum
ownership percentage has been exceeded as a result of a reduction in the number
of voting securities outstanding, PepsiCo and its affiliates will take specified
actions to reduce their ownership, though, in taking certain actions, the
reduction need only be pro rata based on the relative ownership of PepsiCo and
its affiliates, on the one hand, and Robert C. Pohlad, his affiliates and his
family, on the other hand.
If at any time PepsiCo becomes aware that the combined maximum
ownership percentage has been exceeded (other than as a result of a reduction in
the number of voting securities outstanding), PepsiCo and its affiliates will
promptly take actions to reduce the amount of voting securities of Whitman
beneficially owned by them so that the combined maximum ownership percentage is
not exceeded, though, if the reason that the combined maximum ownership
percentage has been exceeded is due to an acquisition of voting securities by
Robert C. Pohlad, his affiliates or his family, PepsiCo and its affiliates will
not be required to reduce their ownership percentage.
Page 10 of 15 Pages
<PAGE>
While the PepsiCo Shareholder Agreement is in effect, none of PepsiCo
or its affiliates will, directly or indirectly, enter into any agreement or
commitment with Robert C. Pohlad, any of his affiliates or any member of his
family with respect to the holding, voting, acquisition or disposition of voting
securities of Whitman. The foregoing prohibition specifically excludes the LLC
Agreement so long as (1) such LLC Agreement provides that PepsiCo and its
affiliates ultimately have sole power with respect to the voting of a certain
percentage of voting securities of Whitman held by the LLC and have no power
with respect to the voting of the remainder of the voting securities of Whitman
held by the LLC and (2) the LLC takes no action to acquire beneficial ownership
of any additional voting securities of Whitman except as permitted by the
PepsiCo Shareholder Agreement.
PepsiCo and its affiliates may transfer any of their voting securities
of Whitman to any transferee without restriction except for significant
transferees who would own 20% or more of Whitman voting securities after the
transfer. PepsiCo and its affiliates may effect a transfer to a significant
transferee with the prior written consent of a majority of the independent
directors. However, PepsiCo and its affiliates may transfer voting securities of
Whitman to any significant transferee without restriction and without obtaining
such consent if, at the time of the transfer, PepsiCo and its affiliates
beneficially own at least 20% of the outstanding voting securities of such
significant transferee and no other person beneficially owns a greater
percentage of such significant transferee than PepsiCo and its affiliates.
PepsiCo and its affiliates would need to obtain the prior written consent of a
majority of the independent directors of Whitman to transfer any voting
securities of the significant transferee if, at the time of that transfer, such
significant transferee owns greater than 20% of Whitman voting securities and
that transfer would result in PepsiCo and its affiliates beneficially owning
less than 20% of the voting securities of such significant transferee or any
other person beneficially owning a greater percentage of such significant
transferee than PepsiCo and its affiliates. None of the foregoing restrictions
will apply to (1) a transfer of Whitman voting securities by PepsiCo or any of
its affiliates in a public offering where reasonable efforts are made to achieve
a wide distribution of such voting securities, (2) a liquidation of the LLC or
other distribution of its assets to its members in proportion to their capital
accounts or (3) a transfer of voting securities of Whitman among PepsiCo and its
affiliates, provided that any such transferee agrees in writing prior to each
such transfer to be bound by the terms of the PepsiCo Shareholder Agreement.
The PepsiCo Shareholder Agreement took effect immediately upon the
closing of the Merger and will remain in effect until the earliest to occur of:
(1) The date on which PepsiCo and its affiliates' ownership of
Whitman voting securities falls below 15%.
(2) Subject to the provisions described in the following
paragraph, the date on which a permitted acquisition is consummated which
results in PepsiCo and its affiliates, together with Robert C. Pohlad, his
affiliates and his family, beneficially owning 75% or more of the voting power
of Whitman.
(3) Two years from the first date on which the following two
conditions are met: (a) PepsiCo and its affiliates, together with Robert C.
Pohlad, his affiliates and his family, beneficially own more than 55% but less
than 75% of the voting power of Whitman and (b) PepsiCo and its affiliates have
consummated a tender offer or exchange offer for Whitman securities at a price
not less than the minimum price, as defined in the PepsiCo Shareholder
Agreement, pursuant to which at least 10% of the voting power of Whitman not
beneficially owned prior to such offer by PepsiCo and its affiliates, or Robert
C. Pohlad, his affiliates or his family, was acquired.
(4) Any termination date mutually agreed upon by Whitman and
PepsiCo.
For 90 days after the consummation of a permitted acquisition pursuant
to which PepsiCo and affiliates, together with Robert C. Pohlad, his affiliates
and his family, become the beneficial owner of 75% or
Page 11 of 15 Pages
<PAGE>
more of Whitman common stock, Whitman will not, without PepsiCo's consent, take
any action or enter into any agreement which:
(1) Restricts the acquisition by PepsiCo and its affiliates of any
voting securities of Whitman.
(2) Restricts in any manner the transfer of any voting securities
of Whitman by PepsiCo and its affiliates.
(3) Restricts any right of PepsiCo and its affiliates to initiate
a merger, acquisition or business combination relating to Whitman.
(4) Otherwise restricts in any manner the ability of PepsiCo and
its affiliates to take any action with respect to voting securities of Whitman,
including amending the Whitman rights agreement to provide for any such
restriction.
(5) Effects a material change in Whitman's capital structure.
(6) Declares or pays a dividend other than any regular quarterly
dividend.
(7) Materially increases the compensation of any executive
officer.
(8) Is a material action not in the ordinary course of business.
However, this provision will not restrict the ability of Whitman to
comply with commitments entered into prior to the date of such permitted
acquisition.
POHLAD SHAREHOLDER AGREEMENT
The following summary description of the shareholder agreement among
Whitman, Pohlad, the LLC and Robert C. Pohlad is qualified in its entirety by
reference to the Pohlad Shareholder Agreement (the "Pohlad Shareholder
Agreement"), a copy of which is attached as Exhibit C hereto and incorporated
herein by reference, the following summary of certain terms of the Pohlad
Shareholder Agreement is qualified in its entirety by reference to the Pohlad
Shareholder Agreement.
The Pohlad Shareholder Agreement generally limits Robert C. Pohlad, his
affiliates and his family to a maximum ownership percentage equal to their
aggregate percentage of the voting power of Whitman upon the consummation of the
transactions contemplated by the merger agreement (including purchases of any
Subscription Shares and any purchases pursuant to the right of Pohlad to acquire
Whitman common stock from PepsiCo and its affiliates) and generally limits
Robert C. Pohlad, his affiliates and his family, together with PepsiCo and its
affiliates, to a combined maximum ownership percentage of 49.9% of the voting
power of Whitman. However, so long as the maximum ownership percentage or
combined maximum ownership percentage is exceeded due to an acquisition of
Whitman securities which is permitted by the Pohlad Shareholder Agreement, the
applicable maximum ownership percentage(s) is increased to the extent necessary
to allow such acquisition. Acquisitions by Robert C. Pohlad, his affiliates, his
family and the LLC permitted under the Pohlad Shareholder Agreement include:
(1) Any transaction that would not result in the maximum ownership
percentage or combined maximum ownership percentage being exceeded.
(2) Any acquisition of voting securities pursuant to the
contingent payment alternative or any transaction contemplated by the merger
agreement.
Page 12 of 15 Pages
<PAGE>
(3) Any acquisition pursuant to the right of Pohlad to acquire
Whitman common stock with a value of $25 million from PepsiCo and its
affiliates.
(4) A transaction (including the grant of any options to purchase
Whitman common stock granted to Robert C. Pohlad, any of his affiliates or any
member of his family) approved by the affiliated transaction committee of the
Whitman board (or if such committee is not in existence, by a committee of the
Whitman board composed entirely of independent directors).
(5) An acquisition of voting securities of Whitman by PepsiCo or
its affiliates permitted under the PepsiCo Shareholder Agreement.
For purposes of the Pohlad Shareholder Agreement, independent directors
are directors unaffiliated with Robert C. Pohlad, his affiliates and his family,
or with PepsiCo and its affiliates, and who are not officers, employees,
consultants or advisors to Whitman and have not been within the past two years.
The Pohlad Shareholder Agreement provides that, Robert C. Pohlad, his
affiliates and his family will not take any of the following actions without the
prior approval of the affiliated transaction committee:
(1) Acquire, propose to acquire, disclose an intention to acquire,
or offer or agree to acquire beneficial ownership of any voting security of
Whitman which would cause the maximum ownership percentage or combined maximum
ownership percentage to be exceeded, other than pursuant to an acquisition
permitted by the Pohlad Shareholder Agreement.
(2) Form, join or in any way participate in a group which would be
required to file a statement on Schedule 13D as a "person" under Section
13(d)(3) of the Exchange Act with respect to any voting securities of Whitman or
its subsidiaries if such group's ownership of Whitman voting securities would
exceed the maximum ownership percentage.
(3) Initiate a merger, acquisition or other business combination
transaction relating to Whitman, other than a combination of a party
unaffiliated with Robert C. Pohlad, his affiliates and his family with Whitman
which would not be a permitted acquisition under the Pohlad Shareholder
Agreement.
In addition, if at any time Pohlad, the LLC or Robert C. Pohlad becomes
aware that the ownership of Robert C. Pohlad, his affiliates and his family
exceeds the maximum ownership percentage, except as specifically permitted under
the Pohlad Shareholder Agreement, Robert C. Pohlad, his affiliates and his
family will promptly take all action necessary to reduce the amount of voting
securities of Whitman beneficially owned by them so that they are below the
maximum ownership percentage.
If at any time Pohlad, the LLC or Robert C. Pohlad becomes aware that
the combined maximum ownership percentage has been exceeded as a result of a
reduction in the number of voting securities outstanding, Robert C. Pohlad, his
affiliates and his family will take specified actions to reduce their ownership,
though in taking such actions the reduction need only be pro rata based on the
relative ownership of Robert C. Pohlad, his affiliates and his family, on the
one hand, and PepsiCo and its affiliates, on the other hand.
If at any time Pohlad, the LLC or Robert C. Pohlad becomes aware that
the combined maximum ownership percentage has been exceeded (other than as a
result of a reduction in the number of voting securities outstanding), Robert C.
Pohlad, his affiliates and his family will promptly take actions to reduce the
amount of voting securities of Whitman beneficially owned by them so that the
combined maximum ownership percentage is not exceeded, though, if the reason
that the combined maximum ownership percentage has been exceeded is due to an
acquisition of voting securities by PepsiCo or its affiliates, Robert C. Pohlad,
his affiliates and his family will not be required to reduce their ownership
percentage.
Page 13 of 15 Pages
<PAGE>
While the Pohlad Shareholder Agreement is in effect, none of Robert C.
Pohlad, any of his affiliates or any member of his family will, directly or
indirectly, enter into any agreement or commitment with PepsiCo or its
affiliates with respect to the holding, voting, acquisition or disposition of
voting securities of Whitman. The foregoing prohibition specifically excludes
the LLC Agreement so long as (1) such LLC Agreement provides that Robert C.
Pohlad, his affiliates and his family have sole power with respect to the voting
of a certain percentage of voting securities of Whitman held by the LLC and have
no power with respect to the voting of the remainder of the voting securities of
Whitman held by the LLC which is not subject to the ultimate power of PepsiCo
and (2) the LLC takes no action to acquire beneficial ownership of any
additional voting securities of Whitman except as permitted by the Pohlad
Shareholder Agreement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following items are filed as exhibits hereto:
Exhibit A - Amended and Restated Limited Liability Company Agreement,
dated November 30, 2000.
Exhibit B - Amended and Restated Shareholder Agreement, between
Whitman Corporation and PepsiCo., Inc., dated November
30, 2000.
Exhibit C - Shareholder Agreement, between Whitman Corporation,
Pohlad Companies, Dakota Holdings, LLC and Robert C.
Pohlad, dated November 30, 2000.
Exhibit D - Agreement to File Joint Statement on Schedule 13D, dated
December 11, 2000.
Page 14 of 15 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct as of December 11, 2000.
DAKOTA HOLDINGS, LLC
By Its Members:
POHLAD COMPANIES
By: /s/ John F. Bierbaum
------------------------------------
John F. Bierbaum, Vice President and
Chief Financial Officer
BEVERAGES, FOODS & SERVICE INDUSTRIES, INC.
By: /s/ W. Timothy Heaviside
------------------------------------
W. Timothy Heaviside, Vice President
PEPSI-COLA METROPOLITAN BOTTLING CO., INC.
By: /s/ W. Timothy Heaviside
------------------------------------
W. Timothy Heaviside, Vice President
BEVERAGE INVESTMENT, LLC
By: /s/ John F. Bierbaum
------------------------------------
John F. Bierbaum, Vice President
POHLAD COMPANIES
By: /s/ John F. Bierbaum
------------------------------------
John F. Bierbaum, Vice President and
Chief Financial Officer
PEPSICO, INC.
By: /s/ W. Timothy Heaviside
------------------------------------
W. Timothy Heaviside, Vice President
Page 15 of 15 Pages
<PAGE>
EXHIBIT A
================================================================================
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
DAKOTA HOLDINGS, LLC
DATED AS OF NOVEMBER 30, 2000
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1 DEFINITIONS.....................................................................................2
Section 1.1 Defined Terms...................................................................................2
Section 1.2 Interpretation..................................................................................7
ARTICLE 2 FORMATION OF THE COMPANY........................................................................7
Section 2.1 Formation.......................................................................................7
Section 2.2 Consent to PepsiAmericas/Whitman Merger.........................................................7
Section 2.3 Registered Office...............................................................................7
Section 2.4 Registered Agent................................................................................8
Section 2.5 Purpose and Character of Business...............................................................8
Section 2.6 Duration........................................................................................8
Section 2.7 Filings, Reports and Formalities................................................................8
ARTICLE 3 CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS.........................................................8
Section 3.1 Capital Accounts................................................................................8
Section 3.2 Initial Capital Contribution by Beverage Investment.............................................8
Section 3.3 Additional Capital Contribution.................................................................9
Section 3.4 Return of Contributions.........................................................................9
Section 3.5 Additional Issuance of Interests; Additional Classes of Interests...............................9
Section 3.6 Liability of Members; Ability to Bind the Company...............................................9
ARTICLE 4 ALLOCATIONS OF PROFITS AND LOSSES; SPECIAL ALLOCATIONS;
DISTRIBUTIONS; TAX ALLOCATIONS.................................................................10
Section 4.1 Allocations of Profits and Losses..............................................................10
Section 4.2 Limitation on Allocation of Losses.............................................................10
Section 4.3 Special Provisions Regarding Allocations of Profits and Losses.................................10
Section 4.4 Curative Allocations...........................................................................11
Section 4.5 Other Allocation Rules.........................................................................12
Section 4.6 Tax Allocations................................................................................12
Section 4.7 Contingent Share Allocations...................................................................13
ARTICLE 5 DISTRIBUTIONS; WITHHOLDING.....................................................................13
Section 5.1 Distributions to the Members...................................................................13
Section 5.2 Withholding....................................................................................14
ARTICLE 6 MANAGEMENT OF THE COMPANY......................................................................14
Section 6.1 Management of the Company......................................................................14
Section 6.2 Authority of Pohlad Companies..................................................................14
Section 6.3 Unanimous Vote Required........................................................................15
Section 6.4 Meetings of the Members........................................................................16
Section 6.5 Joint Representative...........................................................................16
Section 6.6 Quorum.........................................................................................16
Section 6.7 Compensation...................................................................................17
Section 6.8 Action Without a Meeting.......................................................................17
Section 6.9 Liability for Certain Acts.....................................................................17
ARTICLE 7 PROVISIONS RELATING TO WHITMAN CORP............................................................18
Section 7.1 General........................................................................................18
Section 7.2 Voting of Whitman Shares.......................................................................18
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Section 7.3 Notice of Procedures...........................................................................18
ARTICLE 8 RECORDS, ACCOUNTING MATTERS, TAX MATTERS MEMBER.................................................1
Section 8.1 Maintenance and Review of Records...............................................................1
Section 8.2 Accounting Method...............................................................................1
Section 8.3 Tax Matters Member..............................................................................1
ARTICLE 9 RESTRICTIONS ON TRANSFER; DEADLOCK; APPRAISAL PROCEDURE.........................................2
Section 9.1 Restrictions on Transfers.......................................................................2
Section 9.2 Transfers to Affiliates.........................................................................2
Section 9.3 Opinions of Counsel.............................................................................3
Section 9.4 Deadlock Event..................................................................................3
ARTICLE 10 DISSOLUTION, LIQUIDATION AND TERMINATION........................................................3
Section 10.1 Negation of Right to Dissolve by Will of Member.................................................3
Section 10.2 Events of Dissolution...........................................................................4
Section 10.3 Notice of Dissolution and Bankruptcy............................................................4
Section 10.4 Procedures Upon Dissolution.....................................................................4
Section 10.5 No Deficit Makeup Obligation....................................................................4
Section 10.6 Termination.....................................................................................5
ARTICLE 11 REPRESENTATIONS AND WARRANTIES..................................................................5
Section 11.1 Representations and Warranties of Members.......................................................5
ARTICLE 12 MISCELLANEOUS...................................................................................6
Section 12.1 Company Opportunity.............................................................................6
Section 12.2 Accountants.....................................................................................6
Section 12.3 Partial Invalidity..............................................................................6
Section 12.4 Notices.........................................................................................6
Section 12.5 Amendment.......................................................................................7
Section 12.6 Consents; Waivers...............................................................................7
Section 12.7 Choice of Law...................................................................................7
Section 12.8 Multiple Counterparts...........................................................................7
Section 12.9 Entire Agreement................................................................................7
Section 12.10 Binding Effect; Assignment......................................................................7
Section 12.11 No Third-Party Beneficiaries....................................................................8
Section 12.12 Expenses........................................................................................8
Section 12.13 Press Releases..................................................................................8
Section 12.14 Confidentiality.................................................................................8
</TABLE>
SCHEDULES
Schedule 1 Membership Percentages
EXHIBITS
Exhibit A Beverage Investment Contribution Agreement
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<PAGE>
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
DAKOTA HOLDINGS, LLC
This Amended and Restated Limited Liability Company Agreement (the
"Agreement") is dated as of November 30, 2000, by and among Pepsi-Cola
Metropolitan Bottling Company, a corporation formed under the laws of the State
of New Jersey (hereinafter referred to as "Metro"), Beverages, Food & Service
Industries, Inc., a corporation formed under the laws of the State of Delaware
(hereinafter referred to as "BFSI"), Beverage Investment, LLC, a limited
liability company formed under the laws of the State of Minnesota (hereinafter
referred to as "Beverage Investment") and Pohlad Companies, a corporation formed
under the laws of the State of Minnesota (hereinafter referred to as "Pohlad
Companies") (each a "Member" and collectively, the "Members") and PepsiCo, Inc.,
a corporation formed under the laws of the State of North Carolina ("PepsiCo").
PRELIMINARY STATEMENT
WHEREAS, by agreement dated October 15, 1999, the Members (other than
Beverage Investment) formed Dakota Holdings, LLC, a Delaware limited liability
company (the "Company"), for the purpose of managing their respective
investments in PepsiAmericas, Inc. (formerly Pepsi-Cola Puerto Rico Bottling
Company), a Delaware corporation ("PepsiAmericas"), which joint venture was a
continuation of the joint venture conducted by BFSI and Pohlad Companies since
1998 through P-PR Transfer LLP, a Delaware limited liability partnership ("P-PR
Transfer"); and
WHEREAS, the parties formed and established the Company in accordance
with the principles of Internal Revenue Service Revenue Ruling 95-37; and
WHEREAS, the Company acquired beneficial ownership of approximately 72%
of the voting power of the outstanding stock of PepsiAmericas; and
WHEREAS, the Company has two classes of Interests outstanding, Class A
Membership Interests and Class B Membership Interests, with the rights to
profits and losses and the value of the Class B Membership Interests being
determined solely by reference to the PepsiCo Stock held by the Company; and
WHEREAS, PepsiAmericas and Whitman Corporation ("Whitman") have entered
into that certain Agreement and Plan of Merger dated August 18, 2000, by and
among Whitman, Anchor Merger Sub and PepsiAmericas (the "Merger Agreement"),
pursuant to which all of the outstanding shares of PepsiAmericas owned by
Company will be converted into shares of Whitman, contingent rights to receive
additional Whitman stock and the right to purchase additional Whitman stock (the
"Merger"); and
WHEREAS, the parties desire to issue additional Class A Membership
Interests to Beverage Investment in exchange for a capital contribution of cash
which cash shall be used to exercise the right to buy Whitman Stock that the
Company will receive in the Merger; and
WHEREAS, in connection with the above-described transactions, the
parties desire to recapitalize the Company; and
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WHEREAS, the Members desire to amend the LLC Agreement to provide for
the operation and management of the Company for the purposes stated herein;
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements contained herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINED TERMS.
As used in this Agreement and unless the context otherwise requires,
the following terms shall have the respective meanings set forth below:
"ADDITIONAL CAPITAL CONTRIBUTIONS" has the meaning set forth in Section
3.5.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means with respect to any Member,
the deficit balance, if any, in such Member's Capital Account as of the end of
the relevant Fiscal Year, after:
(i) crediting to such Capital Account any amounts
that such Member is obligated to restore to the Company
pursuant to Treasury Regulations Section 1.704-1(b)(2)(ii)(c)
or is deemed to be obligated to restore pursuant to the
penultimate sentences of Treasury Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) debiting from such Capital Account the items
described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5), and (6).
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"AFFILIATE" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such Person.
"AGREEMENT" means this Limited Liability Company Agreement.
"BANKRUPTCY" or "BANKRUPT" means, with respect to any Member, such
Member's making an assignment for the benefit of creditors, becoming a party to
any liquidation or dissolution action or proceeding with respect to such Member
or any bankruptcy, reorganization, insolvency or other proceeding for the relief
of financially distressed debtors with respect to such Member, or a receiver,
liquidator, custodian or trustee being appointed for such Member or for a
substantial part of such Member's assets and, if any of the same occur
involuntarily, the same not being dismissed, stayed or discharged within ninety
(90) days or the entry of an order for relief against such Member under Title 11
of the United States Code. A Member shall be deemed Bankrupt if the Bankruptcy
of such Member shall have occurred.
"BOTTLE AND FOUNTAIN AGREEMENTS" means the existing bottle and fountain
agreements whereby PepsiCo and its affiliates have authorized PepsiAmericas or
Whitman to manufacture, market and sell PepsiCo proprietary beverage products
and any renewals, extensions, amendments or modifications thereof.
"CAPITAL ACCOUNT" means an account to be maintained for each Member in
accordance with the Code and Treasury Regulations, which, subject to any
contrary requirements of the Code and Treasury Regulations,
A-2
<PAGE>
shall be increased by the amount of money contributed by such Member to the
Company, if any; the Gross Asset Value of property, if any, contributed by
such Member to the Company (net of liabilities that are secured by such
contributed property, or that the Company is considered to assume or take
subject to under Code Section 752); the amount of any Company liabilities
that are assumed by such Member pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(c); allocations to such Member of Profits pursuant to
Section 4.1 of this Agreement; and any items in the nature of income or gain
which are specially allocated to such Member pursuant to Sections 4.3, 4.4,
4.5 and 4.6;
and decreased by (i) the amount of money distributed to such Member by
the Company; (ii) the Gross Asset Value of property distributed to such Member
by the Company (net of liabilities that are secured by such distributed property
or that such Member is considered to assume or take subject to under Code
Section 752); (iii) the amount of such Member's individual liabilities that are
assumed by the Company pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(c); (iv) allocations to the Member of Losses pursuant to
Section 4.1 and 4.2; and (v) any items in the nature of loss or deduction which
are specially allocated to such Member pursuant to Sections 4.3, 4.4, 4.5 and
4.6 of the Agreement.
The Members' respective Capital Accounts shall be determined and
maintained at all times in accordance with all the provisions of Treasury
Regulations Section 1.704-1(b) and this definition and other provisions of this
Agreement relating to the maintenance of Capital Accounts and/or the
determination and allocation of Profits, Losses, items thereof and items
allocated pursuant to Sections 4.3 and 4.4 shall be interpreted and applied in a
manner consistent with such Treasury Regulations.
"CAPITAL CONTRIBUTION" means contributions of cash or property made by
the Members to the Company.
"CASH FLOW" means the gross cash proceeds from Company operations less
the portion thereof used to pay or establish reserves for all Company expenses,
debt payments, capital improvements, replacements and contingencies, plus the
net cash proceeds from all sales, other dispositions and refinancing of Company
property, less any portion thereof used to establish reserves.
"CLASS A MEMBER" shall mean a Member that owns a Class A Membership
Interest.
"CLASS B MEMBER" shall mean a Member that owns a Class B Membership
Interest.
"CLASS A MEMBERSHIP INTEREST" shall mean an Interest in the Company
with respect to which the rights to income, deductions, profits, losses and
distributions of any kind is determined by excluding the income, profits, losses
and value of the Company attributable to the PepsiCo Stock owned by the Company.
"CLASS B MEMBERSHIP INTEREST" shall mean an Interest in the Company
with respect to which all rights to income, profits, deductions, losses and
distribution of any kind are determined solely by reference to the PepsiCo
Stock, if any, owned by the Company. Class B Members have no voting or approval
rights with respect to Company matters, except as specifically stated herein
with respect to the PepsiCo Stock.
"CLASS A PERCENTAGE INTEREST" means, with respect to any Member as of
any date, the Class A Percentage Interest as set forth in Schedule 1 attached
hereto, as it may be amended from time to time.
"CLASS B PERCENTAGE INTEREST" means, with respect to any Member as of
any date, the Class B Percentage Interest as set forth on Schedule 1 attached
hereto, as it may be amended from time to time.
"CODE" means the Internal Revenue Code of 1986, as amended.
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"COMPANY" means Dakota Holdings, LLC.
"CONTINGENT SHARES" means shares of Whitman Stock received by the
Company as a result of the contingent rights to receive Whitman Stock pursuant
to the Merger Agreement.
"CONTINGENT SHARE DELIVERY DATES" means the dates on which the Company
is entitled to receive, with respect to each share of PepsiAmericas stock
converted in the Merger, Contingent Shares.
"CONTRIBUTION AGREEMENT" means the agreement between Beverage
Investment and the Company dated November 30, 2000, providing for Beverage
Investment's Capital Contribution to the Company and attached hereto as Exhibit
A.
"CONTROLS," "IS CONTROLLED BY" or "UNDER COMMON CONTROL WITH" means (i)
the direct or indirect ownership of more than fifty percent (50%) of the equity
interests (or interests convertible into or otherwise exchangeable for equity
interests) in a Person, or (ii) possession of the direct or indirect right to
vote in excess of fifty percent (50%) of the voting securities or elect in
excess of fifty percent (50%) of the Board of Directors or other governing body
of a Person (whether by securities, ownership, contract or otherwise) or (iii)
possession of the direct or indirect right to cast more than 50% of the votes
eligible to be cast by holders of voting securities of a Person.
"DEPRECIATION" means, for each Fiscal Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for each Fiscal Year,
except that if the Gross Asset Value of an asset differs from its adjusted basis
for federal income tax purposes at the beginning of such Fiscal Year,
Depreciation shall be an amount that bears the same ratio to such beginning
Gross Asset Value as the federal income tax depreciation, amortization, or other
cost recovery deduction for such Fiscal Year bears to such beginning adjusted
tax basis; PROVIDED, HOWEVER, that if the federal income tax depreciation,
amortization, or other cost recovery deduction for such year is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the Members.
"FISCAL YEAR" means the Company's taxable year for federal income tax
purposes, which shall be the calendar year unless otherwise required by Section
706(b) of the Code.
"GROSS ASSET VALUE" means, with respect to any asset, the following:
(i) The initial Gross Asset Value of any asset
contributed by a Member to the Company shall be the gross fair
market value of such asset, as determined in accordance with
paragraph (vi) of this definition;
(ii) The Gross Asset Values of all assets of the
Company shall be adjusted to equal their respective gross fair
market values, as of the following times: (a) the acquisition
of an additional interest in the Company by any new or
existing Member in exchange for more than a de minimis Capital
Contribution; (b) the distribution by the Company to a Member
of more than a de minimis amount of Company property as
consideration for an interest in the Company; (c) each
Contingent Share Delivery Date; and (d) the liquidation of the
Company within the meaning of Treasury Regulations Section
1.704-1(b)(2)(ii)(g). Notwithstanding the foregoing, the
adjustments pursuant to clauses (a) and (b) above shall be
made only if the Members determine unanimously that such
adjustments are necessary or appropriate to reflect the
relative economic interests of the Members in the Company;
A-4
<PAGE>
(iii) The Gross Asset Value of any Company asset
distributed to any Member shall be determined unanimously by
the Members as of the date of distribution in accordance with
paragraph (vi);
(iv) The Gross Asset Value of the assets of the
Company shall be increased (or decreased) to reflect any
adjustments to the adjusted basis of such assets pursuant to
Code Section 734(b) or Code Section 743(b), but only to the
extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(m), subsection (vi) of the
definition of Profits and Losses and Section 4.3(f) of this
Agreement; provided, however, that Gross Asset Value shall not
be adjusted pursuant to this paragraph (iv) to the extent that
an adjustment was made pursuant to paragraph (ii) of this
definition in connection with any transaction that would
otherwise have resulted in an adjustment pursuant to this
paragraph (iv);
(v) In all other cases, the Gross Asset Value of an
asset shall be its adjusted basis for federal income tax
purposes; and
(vi) For purposes of determining the Gross Asset
Value of any asset, the gross fair market value shall be as
determined by the unanimous consent of the Members provided,
however, that if the Members cannot so agree on such fair
market value, the fair market value of Company Property shall
be determined by an independent third party appraisal firm
with experience in the soft drink business and agreed upon by
the Members, with the costs of such appraisal to be borne by
the Company.
If the Gross Asset Value of an asset has been determined or adjusted
pursuant to paragraph (i), (ii), or (iv) of this definition, the Gross Asset
Value of such asset shall thereafter be adjusted by the Depreciation taken into
account with respect to such asset for purposes of computing Profits and Losses.
"MEMBER NONRECOURSE DEBT MINIMUM GAIN" means a Member's share of
"partner nonrecourse debt minimum gain" as determined pursuant to Treasury
Regulation Section 1.704-2(i)(5).
"MEMBER NONRECOURSE DEDUCTIONS" means "partner nonrecourse deductions"
as defined in Treasury Regulation Sections 1.704-2(i)(1) and 1.704-2(i)(2).
"MEMBERSHIP INTEREST" or "INTEREST" as defined under the Act, means the
Class A Membership Interests and Class B Membership Interests and the
appurtenant rights thereunder to a share of the Profits and Losses of the
Company, to receive distributions of the assets and Cash Flow of the Company
and, with respect only to the Class A Membership Interests, to approve certain
actions relating to the management of the Company in accordance with the terms
of this Agreement or as otherwise provided by the Act.
"MINIMUM GAIN" means "partnership minimum gain" as determined pursuant
to Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d).
"NONRECOURSE DEDUCTIONS" shall have the meaning set forth in Treasury
Regulation Section 1.704-2(b)(1).
"PEPSICO STOCK" means shares of capital stock of PepsiCo owned by the
Company.
"PERSON" as defined in the Act, means a natural person, partnership
(whether general or limited), limited liability company, trust, estate,
association, corporation, custodian, nominee or any other individual or entity
in its own or any representative capacity.
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"PROFITS AND LOSSES" means for each Fiscal Year or other period, an
amount equal to the Company's taxable income or loss determined in accordance
with Code Section 703(a) (for this purpose, all items of income, gain, loss, or
deduction, whether or not required to be stated separately pursuant to Code
Section 703(a)(1), shall be included in taxable income or loss), with the
following adjustments:Any income of the Company that is exempt from federal
income tax and not otherwise taken into account in computing Profits or Losses
shall be added to such taxable income or loss;
(i) Any Code Section 705(a)(2)(B) expenditures of the
Company (or expenditures treated as such pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(i)) that are not
otherwise taken into account in computing Profits or Losses
shall be subtracted from such taxable income or loss;
(ii) If the Gross Asset Value of any Company asset is
adjusted pursuant to paragraph (ii) or (iii) of the definition
of Gross Asset Value, the amount of such adjustment shall be
taken into account in the year of such adjustment as gain or
loss from the disposition of such asset, for purposes of
computing Profits or Losses;
(iii) Gain or loss resulting from any disposition of
Company property with respect to which gain or loss is
recognized for federal income tax purposes (or is deemed
realized pursuant to paragraph (iii) above) shall be computed
by reference to the Gross Asset Value of the property disposed
of, notwithstanding that the adjusted tax basis of such
property differs from its Gross Asset Value;
(iv) In lieu of the depreciation, amortization, and
other cost recovery deductions taken into account in computing
such taxable income or loss, there shall be taken into account
Depreciation for such Fiscal Year or other period.
(v) To the extent that a Code Section 734(b) or Code
Section 743(b) adjustment is required to be taken into account
in determining Capital Accounts, pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(m), the amount of such
adjustment shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the
adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for
purposes of computing Profits or Losses;
(vi) Notwithstanding anything to the contrary in the
definition of the terms "Profits" and "Losses," any items that
are specially allocated pursuant to Sections 4.3 and 4.4 shall
be excluded in computing Profits or Losses; and
(vii) For purposes of this Agreement, any deduction
for a loss on a sale or exchange of Company property that is
disallowed to the Company under Code Section 267(a)(1) or Code
Section 707(b) shall be treated as a Code Section 705(a)(2)(B)
expenditure.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
"TREASURY REGULATIONS" means permanent and temporary regulations
promulgated by the United States Department of the Treasury, as such regulations
may be lawfully changed from time to time.
"WHITMAN STOCK" means shares of common stock of Whitman Corporation.
"YEAR" means each calendar year, or part thereof, occurring during the
existence of the Company.
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Section 1.2. INTERPRETATION.
Each definition in this Agreement includes the singular and the plural,
and reference to the neuter gender includes the masculine and feminine where
appropriate. References to (i) any statute or Treasury Regulation means such
statute or regulation as amended at the time and include any successor
legislation or regulations and (ii) any agreement means such agreement as
amended at the time. The words "include" or "including" shall mean including
without limitation based on the item or items listed. The headings to the
Articles and Sections are for convenience of reference and shall not affect the
meaning or interpretation of this Agreement. Except as otherwise stated,
reference to Articles, Sections, Schedules, Appendices and Exhibits mean the
Articles, Sections, Schedules, Appendices and Exhibits of this Agreement. The
Schedules, Appendices and Exhibits are hereby incorporated by reference into and
shall be deemed a part of this Agreement.
ARTICLE II
FORMATION OF THE COMPANY
Section 2.1. FORMATION.
The Members acknowledge that the certificate of formation for the
Company has been filed, on their behalf, with the Office of the Secretary of
State of Delaware on September 17, 1999. Each Member agrees to be bound by and
to comply with the provisions thereof and hereof.
Section 2.2. CONSENT TO PEPSIAMERICAS/WHITMAN MERGER.
In furtherance of the parties mutual goals, by execution of this
Agreement, each of PepsiCo, Metro BFSI, Beverage Investment and Pohlad Companies
consents to the conversion by the Company of the PepsiAmericas common stock in
accordance with the terms of the Merger Agreement. PepsiCo further agrees to
provide such additional consents or agreements necessary or appropriate to
consummate the Merger including, but not limited to, executing or otherwise
providing the consents necessary under any Bottle and Fountain Agreements or
other contracts between or among the Company, PepsiCo and PepsiAmericas or
Whitman (or the subsidiaries of any of the foregoing); and each of Metro, BFSI,
PepsiCo, Pohlad Companies and Beverage Investment hereby authorize Pohlad
Companies to cause the Company to (i) vote all shares of PepsiAmericas owned by
the Company in favor of the Merger, (ii) elect to receive the Contingent Payment
Consideration (as defined in the Merger Agreement), and (iii) exercise the right
to purchase additional shares of Whitman Stock pursuant to Section 4.7(a) of the
Merger Agreement.
Section 2.3. REGISTERED OFFICE.
The registered office in the State of Delaware shall be:
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
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Section 2.4. REGISTERED AGENT.
The registered agent in the State of Delaware for service of process
shall be CT Corporation.
Section 2.5. PURPOSE AND CHARACTER OF BUSINESS.
The Company was formed to hold and manage its investment in
PepsiAmericas Stock and PepsiCo Stock and from and after the effective time of
the Merger the Company's continuing purpose will be to hold and manage its
investment in the Whitman Stock and the PepsiCo Stock. It is the intention of
the Members that the Company operate exclusively as a holding company, and shall
not conduct any business operations except with respect to the management of
those investments. In furtherance of the foregoing, the Company shall have the
power to undertake and carry on all activities necessary or advisable in
connection with such activity. The Company may not engage in any other business
without the consent of all Members.
Section 2.6. DURATION.
The Company shall continue in perpetuity, unless it is sooner dissolved
pursuant to Section 11.2.
Section 2.7. FILINGS, REPORTS AND FORMALITIES.
The Company shall make all filings and submit all reports required to
be filed or submitted under the Act with respect to the Company, and shall make
such filings and take such other actions as may be required under the laws of
any jurisdiction where the Company conducts business. Throughout the term of the
Company, the Company shall comply with all requirements necessary to maintain
the limited liability status of the Company and the limited liability of the
Members under the laws of the State of Delaware and of each other jurisdiction
in which the Company does business.
ARTICLE III
CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS
Section 3.1. CAPITAL ACCOUNTS.
A Capital Account shall be established and maintained for each Member.
The provisions of this Agreement dealing with the maintenance of the Capital
Accounts and/or the determination and allocation of Profits, Losses, items
thereof and items allocated pursuant to Section 4.3 and 4.4 are intended to
comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and
applied in a manner consistent with such Treasury Regulations. Notwithstanding
that a particular adjustment is not set forth in this Agreement, the Capital
Accounts of the Members shall be adjusted and maintained as required by, and in
accordance with, the capital account maintenance rules of Treasury Regulations
Section 1.704-1(b).
Section 3.2. INITIAL CAPITAL CONTRIBUTION BY BEVERAGE INVESTMENT.
Beverage Investment's acquisition of its Class A Membership Interest in
the Company shall be effective upon the contribution pursuant to the
Contribution Agreement. The cash contributed by Beverage Investment shall be
used by the Company to acquire additional shares of Whitman Stock pursuant to
Section 4.7 of the Merger Agreement. Schedule 1 shall be adjusted to reflect the
acquisition of a Class A Membership Interest by Beverage Investment.
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Section 3.3. ADDITIONAL CAPITAL CONTRIBUTION.
Except as provided herein, no Member shall be obligated to make any
contribution of capital or assets to the Company other than its initial Capital
Contribution or to guarantee any loan to the Company. If the Members unanimously
approve an additional capital contribution (an "Additional Capital
Contribution") each Member shall contribute in cash or property, an amount (the
"Proportional Amount") equal to the total Additional Capital Contribution amount
so approved multiplied by that Member's Class A Percentage Interest. The Members
shall make such Additional Capital Contributions to the Company within ten (10)
business days following the approval by the Members of the Additional Capital
Contribution. No changes shall be made to the Percentage Interests of any Member
in connection with any Additional Capital Contribution made pursuant to this
Section 3.5.
Section 3.4. RETURN OF CONTRIBUTIONS.
No interest shall accrue on any contributions to the capital of the
Company. No Member shall have the right to withdraw or to be repaid any Capital
Contribution made by such Member except as otherwise provided herein or by the
Act.
Section 3.5. ADDITIONAL ISSUANCE OF INTERESTS; ADDITIONAL CLASSES OF
INTERESTS.
(a) In order to raise additional capital, acquire assets,
redeem or retire debt of the Company or for any other purpose, the
Company may issue Interests in addition to those initially issued to
any Member, or any other Person, and may admit such other Persons to
the Company as Members, for consideration, and on terms and conditions,
all as approved by unanimous consent of the Members in accordance with
Section 6.3.
(b) In accordance with Section 6.3, the Members may
unanimously determine to issue Interests in the Company from time to
time in one or more classes of Interests, or one or more series of such
classes of Interests, which classes or series shall have, subject to
the provisions of applicable law, such designations, preferences and
relative, participating, optional or other special rights as shall be
approved by the unanimous consent of the Members, including, without
limitation, with respect to: (i) the allocation of items of Profits or
Losses to each such class or series; (ii) the right of each such class
or series to share in distributions; (iii) the rights of each such
class or series upon dissolution and liquidation of the Company; (iv)
the price at which, and the terms and conditions upon which, each such
class or series may be redeemed by the Company, if any such class or
series is so redeemable; (v) the rate at which, and the terms and
conditions upon which, each such class or series may be converted into
another class or series of Interests; and (vi) the right of each such
class or series to vote on Company matters, including matters relating
to the relative rights, preferences and privileges of such class or
series, if any such class or series is granted any voting rights.
(c) If the Company issues new Interests in accordance with
this Section 3.5, the Members shall amend Schedule 1 hereto to adjust
each Member's Percentage Interest as they may unanimously agree.
Section 3.6. LIABILITY OF MEMBERS; ABILITY TO BIND THE COMPANY.
(a) No Member shall be personally liable for the debts,
obligations or liabilities of the Company solely by reason of being a
Member of the Company. Notwithstanding any provision herein to the
contrary, in no event shall the liability of any Member for the debts,
obligations or liabilities of the Company exceed such Member's Capital
Contribution.
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(b) A Member's Interest in the Company shall be personal
property for all purposes. All property owned by the Company shall be
deemed to be owned by the Company as an entity, and no Member shall be
deemed to own any such property or any portion thereof.
(c) Unless otherwise provided herein, no Member in its
capacity as such, shall have the right to act for or on behalf of or
otherwise bind the Company.
ARTICLE IV
ALLOCATIONS OF PROFITS AND LOSSES; SPECIAL
ALLOCATIONS; DISTRIBUTIONS; TAX ALLOCATIONS
Section 4.1. ALLOCATIONS OF PROFITS AND LOSSES.
(a) Class A Membership Interests. After giving effect to the
allocations set forth in Section 4.1(b) for the Class B Membership
Interests and special allocations set forth in Sections 4.2, 4.3, 4.4
and 4.7, all Profits and Losses of the Company shall be allocated to
the Members in proportion to their Class A Membership Interests.
(b) Class B Membership Interests. After giving effect to the
special allocations set forth in Sections 4.2, 4.3 and 4.4, all Profits
and Losses of the Company arising from or attributable to its
investment in, or, ownership or disposition of, PepsiCo Stock shall be
allocated solely to the Class B Members in proportion to their Class B
Membership Interests.
Section 4.2. LIMITATION ON ALLOCATION OF LOSSES.
Losses shall not be allocated to a Member to the extent an allocation
of such loss would cause or increase an Adjusted Capital Account Deficit of such
Member. If each Member would have an Adjusted Capital Account Deficit as a
consequence of such allocation of Losses, Losses shall be allocated to the
Members as set forth in Section 4.1. Prior to any subsequent allocation of
Profits under Section 4.1, Profits will first be allocated to the Members who
were allocated Losses as a result of this Section 4.2 until such prior
allocations of Losses are fully offset.
Section 4.3. SPECIAL PROVISIONS REGARDING ALLOCATIONS OF PROFITS AND
LOSSES.
(a) MEMBER MINIMUM GAIN CHARGEBACK. Notwithstanding any other
provision of this Article 4, if during any Fiscal Year there is a net
decrease in Member Nonrecourse Debt Minimum Gain, any Member with a
share of that Member Nonrecourse Debt Minimum Gain (determined in
accordance with Treasury Regulations Section 1.704-2(i)(5)) as of the
beginning of such Fiscal Year must be allocated items of Company income
and gain for the Fiscal Year (and, if necessary, for succeeding Fiscal
Years) equal to that Member's share of the net decrease in the Member
Nonrecourse Debt Minimum Gain (determined in accordance with Treasury
Regulations Section 1.704-2(i)(4)); provided, however, that this
Section 4.3(a) shall not apply to the extent the circumstances
described in the third and fifth sentences of Treasury Regulations
Section 1.704-2(i)(4) exist. The items of Company income and gain to be
allocated pursuant to this Section 4.3(a) shall be determined in
accordance with Treasury Regulations Section 1.704-2(i)(4) and (j).
This Section 4.3(a) is intended to comply with the partner nonrecourse
debt minimum gain chargeback requirement in Treasury Regulations
Section 1.704-2(i) and shall be interpreted consistently therewith.
(b) MINIMUM GAIN CHARGEBACK. Notwithstanding any other
provision of this Article 4 (except paragraph (a) of this Section 4.3),
if there is a net decrease in Minimum Gain for any Fiscal
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Year, each Member shall, in the manner provided in Treasury
Regulations Section 1.704-2(f), be allocated items of Company income
and gain for such year (and, if necessary, for subsequent Fiscal
Years) in an amount equal to such Member's share of the net decrease
in Minimum Gain, in accordance with Treasury Regulations Sections
1.704-2(f),(g) and (j); provided, however, that this Section 4.3(b)
shall not apply to the extent the circumstances described in
Treasury Regulations Sections 1.704-2(f)(2), 1.704-2(f)(3),
1.704-2(f)(4), or 1.704-2(f)(5) exist. The items of Company income
and gain to be allocated pursuant to this Section 4.3(b) shall be
determined in accordance with Treasury Regulations Sections
1.704-2(f)(6) and (j). This Section 4.3(b) is intended to comply
with the minimum gain chargeback requirement in Treasury Regulations
Section 1.704-2(f) and shall be interpreted consistently therewith.
(c) QUALIFIED INCOME OFFSET. If any Member unexpectedly
receives any adjustments, allocations, or distributions described in
Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that
create or increase an Adjusted Capital Account Deficit for such Member,
items of Company income and gain (consisting of a pro rata portion of
each item of Company income, including gross income, and gain for such
year) shall be specially allocated to such Member in an amount and
manner sufficient to eliminate, to the extent required by Treasury
Regulations Section 1.704-1(b)(2)(ii)(d), the Adjusted Capital Account
Deficit for such Member as quickly as possible; provided, however, that
an allocation pursuant to this Section 4.3(c) shall be made if and only
to the extent that such Member would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Article 4 have
been tentatively made as if this Section 4.3(c) were not in this
Agreement.
(d) NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any
Fiscal Year or other period shall be specially allocated as Losses as
follows: (i) Nonrecourse Deductions attributable to liabilities assumed
by the Company from Pohlad Companies (including all liabilities treated
as being assumed by the Company from Pohlad Companies for U.S. federal
income tax purposes under Code Section 752) shall be allocated entirely
to Pohlad Companies, and (ii) all other Nonrecourse Deductions shall be
allocated among the Members in accordance with their Class A Membership
Interests.
(e) MEMBER NONRECOURSE DEDUCTIONS. Any Member Nonrecourse
Deductions for any Fiscal Year or other period shall be specially
allocated in accordance with Treasury Regulations Section
1.704-2(i)(1).
(f) SECTION 754 ADJUSTMENT. To the extent that any adjustment
to the adjusted tax basis of any Company asset pursuant to Code Section
734(b) or Code Section 743(b) is required, pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment shall be
treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Members in a manner
consistent with the manner in which their Capital Accounts are required
to be adjusted pursuant to such section of the Treasury Regulations. If
deemed necessary, by the unanimous consent of the Managers, the Tax
Matters Member shall make the election permitted under Code Section
754.
Section 4.4. CURATIVE ALLOCATIONS.
The Members shall determine, by unanimous consent, if any special
allocations of items of income, gain, loss or deduction pursuant to Section 4.3
shall be taken into account in computing allocations in a subsequent Fiscal Year
(or portion thereof) pursuant to the other provisions of Article 4 so that the
net amount of any items so allocated and all other items allocated to each
Member pursuant to Article 4 shall, to the extent possible, be equal to the net
amount that would have been allocated to each Member pursuant to Article 4 if
the special allocations in Section 4.3 had not been made. In determining the
allocations under this Section 4.4,
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consideration must be given to future allocations under Sections 4.3(a) and
4.3(b) that, although not yet required, are likely to offset allocations
under Sections 4.3(d) and 4.3(e).
Section 4.5. OTHER ALLOCATION RULES.
(a) For purposes of determining Profits, Losses or any other
items allocable to any period, Profits, Losses and any such other items
shall be determined on a daily, monthly or other basis, using any
method that is permissible under Code Section 706. If an Interest in
the Company is Transferred in accordance with and as defined in Article
9 of this Agreement, then except as otherwise provided by Code Section
706, the Profits and Losses of the Company and any other items of the
Company shall be allocated between the periods before and after the
Transfer by the closing-of-the-books method. As of the date of such
Transfer, the transferee shall succeed to the Capital Account of the
transferor Member with respect to the Transferred Interest. This
Section 4.5(a) shall apply for purposes of computing a Member's Capital
Account and for federal income tax purposes.
(b) If any fees or other payments deducted for federal income
tax purposes by the Company are recharacterized by a final
determination of the Internal Revenue Service or a court in a
determination or ruling with respect to which no appeal or other relief
is available (or the time within which the applicable party or parties
are required to initiate action to obtain such relief has elapsed
without the applicable party or parties having initiated such action)
as nondeductible distributions to any Class A Member or any Class B
Member, then, notwithstanding all other allocation provisions (other
than the special allocations pursuant to Section 4.3 hereof), gross
income attributed to the Class A Membership Interests or the Class B
Membership Interests, as the case maybe, shall be allocated to such
Class A Member or such Class B Member, as the case may be, (for each
Fiscal Year in which such recharacterization occurs) in an amount equal
to the fees or payments recharacterized.
(c) Each "excess nonrecourse liability" of the Company within
the meaning of Treasury Regulation Section 1.752-3(a)(3) shall be
allocated among the Members in accordance with the manner in which the
Nonrecourse Deductions attributable to such liability will be allocated
pursuant to Section 4.3(d).
Section 4.6. TAX ALLOCATIONS.
Unless otherwise agreed by the Members, the following elections will be
made by the Company:
(a) In accordance with Code Section 704(c), the traditional
method as set forth in Treasury Regulations Section 1.704-3(b), shall,
solely for tax purposes, direct the allocation of income, gain, loss,
and deduction with respect to any Company property among the Members so
as to take account of any variation between the adjusted basis of such
property to the Company for Federal income tax purposes and its initial
Gross Asset Value.
(b) In the event that the Gross Asset Value of any Company
asset is adjusted pursuant to paragraph (ii) or (iv) of the definition
of Gross Asset Value contained herein, subsequent allocations of
income, gain, loss and deduction with respect to such asset shall take
into account any variation between the Gross Asset Value of such asset
immediately before such adjustment and its Gross Asset Value
immediately after such adjustment in the same manner as under Code
Section 704(c) using the traditional method as set forth in Treasury
Regulations Section 1.704-3(b).
(c) Except as provided in Section 4.6(a), for federal income
tax purposes, under the Code and Treasury Regulations, each Company
item of income, gain, loss and deduction shall be allocated among the
Members in the same manner as its correlative item of "book" income,
gain, loss or
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deduction is allocated pursuant to this Article 4. Any elections or
other decisions relating to such allocations shall be made by the
Members (or, to the extent provided in Section 8.3, the Tax Matters
Member) in any manner that reasonably reflects the purpose and
intention of this Agreement. Allocations pursuant to this Section
4.6 are solely for purposes of federal, state, and local taxes and
shall not affect, or in any way be taken into account in computing,
any Member's Capital Account or share of Profits or Losses, other
items, or distributions pursuant to any provision of this Agreement.
Section 4.7. CONTINGENT SHARE ALLOCATIONS.
Notwithstanding any other provision herein, upon a revaluation of the
assets of the Company pursuant to subparagraph (ii)(c) of the definition of
Gross Asset Value, an amount equal to the gross fair market value of any
Contingent Shares to which the Company becomes entitled on the date of such
revaluation (a "Revaluation Date"), which amount the parties agree shall be
taken into account in computing Profits or Losses pursuant to subparagraph (iii)
of the definition of Profits and Losses as an adjustment described therein,
shall be allocated among the Members that held Class A Membership Interests as
of November 29, 2000 in accordance with their respective Class A Percentage
Interests as of such date. In the event that a Member owning a Class A
Membership Interest as of November 29, 2000 subsequently sells or transfers all
or a portion of the Class A Membership Interest held by such Member on November
29, 2000, the transferee of such Class A Membership Interest shall not be
entitled, in respect of the interest so transferred, to any allocations under
the preceding sentence of this Section 4.7 upon Revaluation Dates occurring
subsequent to such transfer, and allocations pursuant to Section 4.7 upon such
Revaluation Dates shall be made among the transferor and the other Members in
the same relative proportions as if such transfer had not occurred. Following
each revaluation described above (and all allocations of items reflecting
adjustments to Gross Asset Values upon such revaluation in accordance with this
Section 4.7 and the remainder of this Article 4), each Member's Class A
Percentage Interest shall be adjusted to equal a fraction, the numerator of
which is equal to (x) such Member's Capital Account balance, minus (y) the
product of (I) such Member's Class B Percentage Interest, if any, times (II) the
Gross Asset Value of the assets and the fair market value of the liabilities of
the Company attributable to the Class B Membership Interests, and the
denominator of which is equal to (a) the sum of all Members' Capital Account
balances, minus (b) the Gross Asset Value of the assets and the fair market
value of the liabilities of the Company attributable to the Class B Membership
Interests. The parties agree that the revaluations, allocations and adjustments
to Class A Percentage Interests required to be made pursuant to this Section 4.7
are being made in connection with the Capital Contribution to the Company by
Beverage Investment pursuant to the Contribution Agreement and are based on the
parties' bargain as to the intended relative fair market values, as of the date
of such Capital Contribution, of such Capital Contribution and of the Company's
other property, in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f).
ARTICLE V
DISTRIBUTIONS; WITHHOLDING
Section 5.1. DISTRIBUTIONS TO THE MEMBERS.
Other than liquidating distributions, which shall be made in accordance
with Section 11.4, or distributions made in accordance with Section 9.4, all
other distributions shall be made as follows:
(a) Distributions of cash to the Members shall be made from
available Cash Flow as follows:
(i) All Cash Flow remaining after distributions under
Section 5.1(a)(ii) shall be distributed annually to the Class
A Members in accordance with their Class A Percentage
Interests in effect at the time the distribution is made.
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(ii) Cash dividends paid to the Company and any Cash
Flow with respect to the PepsiCo Stock shall be distributed to
the Class B Members annually in proportion to the Class B
Percentage Interests.
(b) Distributions in Kind.
(i) No distribution of Company property shall be
made without the unanimous consent of all Members.
Notwithstanding the preceding sentence, the Company may, at
any time, distribute to the Class B Members all or any portion
of the PepsiCo Stock held by the Company.
(ii) Identification of Securities. Prior to any
distribution of securities, (1) the Company shall specifically
identify, through such methodology as shall be acceptable to
each of Metro, BFSI, Pohlad Companies and Beverage Investment,
the securities of each issuer and each class (and other
assets) that it owns (including determining and recording the
date and transaction in which acquired by the Company, the
lot, certificate or other identifying numbers for the
securities (or other assets) in question and the tax basis of
such securities (or other assets) in the Company's hands), and
(2) the Company shall distribute to each of Metro, BFSI,
Pohlad Companies and to Beverage Investment such specifically
identified securities of issuer and each class (or other
assets) as are selected and approved both by BFSI and Metro,
on the one hand, and Pohlad Companies and Beverage Investment
on the other.
Section 5.2. WITHHOLDING.
All amounts withheld pursuant to the Code or any provision of any state
or local tax law with respect to any payment or distribution to a Member shall
be treated as amounts distributed to such Member pursuant to Section 5.1(a) and
shall be offset against other amounts otherwise distributable to such Member.
ARTICLE VI
MANAGEMENT OF THE COMPANY
Section 6.1. MANAGEMENT OF THE COMPANY.
The responsibility for the day to day management of the Company shall
be vested in Pohlad Companies or one of its Affiliates. The Members agree that
Pohlad Companies shall have the authority to act on behalf of the Company in
connection therewith, subject in all cases, however, to the provisions of
Section 6.3 and Article VII.
Section 6.2. AUTHORITY OF POHLAD COMPANIES.
Subject to Section 6.3, Pohlad Companies shall have all necessary
powers to carry out the purposes and business of the Company. Without limiting
the foregoing, except as otherwise expressly provided in this Agreement, the
Pohlad Companies shall have the following specific rights and powers:
(a) To the extent of Company assets, to prosecute, defend,
settle or compromise actions or claims at law or in equity at the
Company's expense as may be necessary or proper to enforce or protect
the Company's interests provided that, approval of any settlement to be
entered into by an Indemnified Party (as hereinafter defined) pursuant
to Section 6.7(c) shall require unanimous consent of those Members who
are not Indemnified Parties; and to satisfy any judgment, decree,
decision or
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settlement of any such suit or claim, first, out of any insurance
proceeds available therefor, and next, out of the Company's assets and
income.
(b) To authorize the entry into and performance of contracts
and agreements and to do and perform all such other things as may be in
furtherance of Company purposes; and to authorize a Member to execute,
acknowledge and deliver on behalf of the Company any and all
instruments which may be deemed necessary or convenient to effect the
foregoing.
(c) To acquire and enter into any contract of insurance which
the Pohlad Companies deems necessary and proper for the protection of
the Company or for any purpose beneficial to the Company.
Section 6.3. UNANIMOUS VOTE REQUIRED.
Unanimous approval of the Members shall be required in the following
circumstances:
(a) Any material change in the business or purpose of the
Company from the business described in Section 2.7 hereof by the
Company;
(b) The sale, lease, transfer or other disposition of any
assets of the Company outside the ordinary course of business, other
than distributions made pursuant to and in accordance with Articles 5
or 9 hereof;
(c) Any voluntary liquidation, dissolution or termination of
the Company;
(d) The issuance by the Company of any additional Interests or
other equity interests (including any interests convertible into or
exchangeable for equity interests) of the Company, or the admission of
a new Member to the Company pursuant to Section 3.7;
(e) Any amendment to this Agreement or to the certificate of
formation of the Company;
(f) The necessity for, amount and timing of, Additional
Capital Contributions;
(g) Any split, combination or reclassification of any
Interests;
(h) Any registered public offering of any equity interests of
the Company;
(i) The establishment by the Company of any joint venture with
a third party or the acquisition of all or part of any other business
person or entity;
(j) The approval of the making or divesting of any investment
including the acquisition or disposition of securities (except as
otherwise addressed in Section 6.3(i) above) or capital expenditures,
take-or-pay arrangements or significant operating arrangements;
(k) The entry by the Company into any contract, agreement or
arrangement providing for the lending of funds by the Company or the
provision by the Company of a guaranty;
(l) The entry by the Company into any contract, agreement or
arrangement with, making any loan to or guarantee of any indebtedness
of, a Member or any Affiliate of any Member or any officer or employee
thereof and any amendment or modification of any of the foregoing;
(m) The initiation or settlement of any litigation material to
the business of the Company;
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(n) The selection of a replacement accounting firm to
represent the Company in lieu of the accounting firm named in Section
13.1, as necessary; provided, however, that such approval shall not be
required where the replacement accountants are a "Big 5" accounting
firm without an existing conflict issue with any Member or the Company;
(o) Any borrowing of money, assumption or guarantee of any
indebtedness or other obligations, or issuing any debt securities.
(p) Any agreement with any other person or entity restricting
or constraining the Company's right to vote its securities.
Any action taken by the Company in connection with matters requiring
unanimous approval of the Members as set forth above or elsewhere in this
Agreement without unanimous approval of the Members shall be null and void and
of no legal effect. Any disagreement between the Members concerning any of the
foregoing topics shall constitute a Deadlock Event for purposes of Section 9.4
hereof.
Notwithstanding the foregoing, BFSI, Metro and PepsiCo agree that they,
or each of them, shall not propose, initiate or otherwise pursue the voluntary
liquidation, dissolution or termination of the Company prior to July 31, 2001.
The Members acknowledge and agree that each Member shall be free to
exercise its own judgment in connection with any provision contained herein
requiring a unanimous vote of the Members, which judgment may be in accordance
with its own best interest. At no time shall the use of a reasonableness
standard in this Agreement impose a duty on a Member to act or vote in the best
interests of the Company.
Section 6.4. MEETINGS OF THE MEMBERS.
The Members shall meet quarterly for the proper conduct of the business
of the Company. The Members may unanimously determine to cancel any quarterly
meeting. Special Meetings of the Members may be called by any Member. In no
event shall any meeting of the Members be held upon less than ten (10) days
prior written notice to all Members. All discussion, presentation and
distribution materials to be discussed, presented or distributed at any Meeting
of the Members shall be provided to the Members at least one (1) week in advance
of such meeting.
Section 6.5. JOINT REPRESENTATIVE.
For purposes of this Agreement, each of BFSI and Metro hereby appoint
PepsiCo as their joint representative (the "PepsiCo Joint Representative").
Pohlad Companies shall act as the joint representative for itself and Beverage
Investment (the "Pohlad Joint Representative"). BFSI and Metro may change their
joint representative at any time and from time to time by written notice to the
Pohlad Joint Representative, and Pohlad Companies and Beverage Investment may
change their joint representative by providing written notice to the PepsiCo
Joint Representative. The written approval of the joint representative of a
party hereto shall constitute the written approval of such party for all
purposes of this Agreement.
Section 6.6. QUORUM.
The presence, in person or by proxy, of both the PepsiCo Joint
Representative and the Pohlad Joint Representative shall constitute a quorum for
the transaction of business at any meeting of the Members.
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Section 6.7. COMPENSATION.
Pohlad Companies shall not receive any compensation for services
rendered in its capacity as day-to-day manager of the Company's business.
Section 6.8. ACTION WITHOUT A MEETING.
Any action required or permitted to be taken only by unanimous vote of
the Members may be taken without a meeting if (i) an advance notice, which shall
describe the nature of such proposed action in sufficient detail to allow each
Member to adequately evaluate such action, is sent to each Member prior to such
action being consented to, and (ii) all Members consent in writing to the taking
of the action and (iii) the writing or writings are filed with the minutes of
proceedings of the Members. No meeting shall be required for the taking of any
action which does not require the unanimous consent of the Members.
Section 6.9. LIABILITY FOR CERTAIN ACTS.
(a) Pohlad Companies shall perform its duties as manager of
the Company's day-to-day operations in good faith, in a manner
reasonably believed to be in the best interests of the Company, with
such care as an ordinarily prudent person in a like position would use
under similar circumstances, and in accordance with the terms of this
Agreement. If Pohlad Companies so performs its duties, it shall not
have any liability by reason of its actions in that capacity. Pohlad
Companies do not, in any way, guarantee the return of the Members'
Capital Contributions or a profit for the Members from the operations
of the Company. Pohlad Companies shall not be liable to the Company or
to any Member by reason of any act, omission, or alleged act or
omission arising out of any of its activities or alleged activities on
behalf of the Company or in furtherance of the interests of the
Company; provided, however, that this Section 6.9 shall be of no force
or effect if the act, omission, or alleged act or omission upon which
such actual or threatened action, proceeding or claim is based was
performed or omitted as a result of gross negligence or willful
misconduct or a knowing and material breach by Pohlad Companies of this
Agreement.
(b) The Company shall indemnify and hold Pohlad Companies
harmless from and against any claim, loss, expense, damage or injury
suffered or sustained by it (including, but not limited to, any
judgment, award, settlement, reasonable attorney's fees, and other
costs or expenses incurred in connection with the investigation and
defense of any actual or threatened action, proceeding, or claim) (i)
related to, or arising out of, any claim that Pohlad Companies is
liable for any debt, obligation or liability of the Company or is
directly or indirectly required to make any payments in respect thereof
or in connection therewith, and (ii) by reason of any act, omission, or
alleged act or omission, arising out of Pohlad Companies activities or
alleged activities on behalf of the Company or in furtherance of the
interests of the Company; provided, however, that this Section 6.9(b)
shall be of no force or effect if the act, omission, or alleged act or
omission upon which such actual or threatened action, proceeding or
claim is based was performed or omitted as a result of gross negligence
or willful misconduct or a knowing and material breach by Pohlad
Companies of this Agreement.
(c) Each party to be indemnified (an "Indemnified Party")
under paragraph (b) or (d) of this Section 6.9 shall give the Company
notice of any losses, claims, damages, and liabilities subject to the
indemnity within thirty (30) days after the Indemnified Party has
received actual notice thereof. The Company shall be entitled to
participate in or direct the defense of any action in connection with
the reported losses, claims, damages, and liabilities, provided that
counsel, reasonably satisfactory to the Indemnified Party, is employed.
The Company shall not be liable to an Indemnified Party in respect of
settlements effected by the Indemnified Party without the written
consent of the Company.
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(d) The Company shall pay in advance any legal or other
expenses incurred in investigating or defending against any loss,
claim, damage or liability which may be subject to indemnification
under this Section 6.9, upon receipt of an undertaking from the
Indemnified Party on whose behalf such expenses are paid to repay such
amount if it shall ultimately be determined that such Indemnified Party
is not entitled to be indemnified by the Company. The Company shall
purchase insurance, to the extent available at reasonable cost, to
cover losses, claims, damages or liabilities subject to indemnification
under Section 6.9.
ARTICLE VII
PROVISIONS RELATING TO WHITMAN CORP.
Section 7.1. GENERAL.
With respect to the Company's investment in Whitman, the Members hereby
agree that each of them and the Company shall comply with the provisions of this
Article 7 for so long as the Company, directly or indirectly, owns or controls
shares of the capital stock of Whitman.
Section 7.2. VOTING OF WHITMAN SHARES.
Subject to Section 7.3, Pohlad Companies shall have all necessary
powers to exercise the voting rights with respect to any and all stock of
Whitman held by the Company.
Section 7.3. NOTICE OF PROCEDURES.
The Company, within two (2) business days of receiving any
communication regarding (i) a Whitman shareholder meeting at which shareholders
shall vote ("Meeting") or (ii) a deadline for submitting a written action of the
Whitman shareholders ("Deadline"), or (iii) any other action of the Whitman
shareholders that is required or permitted, shall provide written notice to the
PepsiCo Joint Representative specifying the manner in which the Company intends
to vote or the action which the Company intends to take for the Whitman shares
with respect to each matter upon which a separate shareholder vote or action is
to be taken and specifying the earliest time at which the Company will vote or
take such action (the "Notice"). Such notice requirement shall be satisfied upon
receipt by the PepsiCo Joint Representative of the Notice in written form
(whether by mail, fax, e-mail or courier) to General Counsel, 700 Anderson Hill
Road, Purchase, New York, 10577, or such other individual as the PepsiCo Joint
Representative may designate from time to time which designation shall be
provided to the Company in writing. If upon receipt of the Notice and prior to
the deadline for the vote or shareholder action, the PepsiCo Joint
Representative advises the Company that it objects, with respect to any matter,
to the manner in which the Whitman Stock will be voted, the Company shall
exercise its voting rights or take such other action with respect to Metro's and
BFSI's pro rata share of Whitman Stock (rounded down to the nearest whole share)
as directed by the PepsiCo Joint Representative in writing. In the event the
Company is not advised by the PepsiCo Joint Representative of such objection and
the Company can evidence that the Notice was received by the PepsiCo Joint
Representative, the Company may vote the stock or take such other action as
specified in the Notice.
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ARTICLE VIII
RECORDS, ACCOUNTING MATTERS, TAX MATTERS MEMBER
Section 8.1. MAINTENANCE AND REVIEW OF RECORDS.
The Company shall maintain, at the office of the Company or of its
accountant, books, records, and accounts showing separately, in accordance
with generally accepted accounting principles, all items that in any way
affect the financial and tax computations called for by this Agreement, and
shall make the records, and accounts available for inspection and copying by
any Member or its authorized representative at all reasonable times. Each
Member shall have the right to (i) review all financial books, records,
reports and statements of the Company, (ii) review all financial controls and
processes of the Company, (iii) ensure that all such books, reports,
statements, controls and processes are in accordance with generally accepted
accounting principles applied on a consistent basis, and (iv) authorize,
supervise and direct any audit of the Company by the Company's accountants.
The Company shall be responsible for any fees and expenses from the
accountants associated with such audit.
Section 8.2. ACCOUNTING METHOD.
The Company shall prepare its financial statements and tax returns
using the accrual method of accounting and generally accepted United States
financial and tax accounting principles, respectively.
Section 8.3. TAX MATTERS MEMBER.
Pohlad Companies or an Affiliate shall be the tax matters partner
("Tax Matters Member") of the Company for purposes of Code Section 6231. The
Tax Matters Member shall perform the following:
(a) Prepare and file or supervise the preparation and filing
of the Company's federal, state and local or other partnership tax
returns.
(b) Furnish or cause to be furnished to the Members all
necessary or appropriate tax information within ninety (90) days after
the close of the Fiscal Year of the Company.
(c) Cause to be prepared and furnished to the Members, within
ninety (90) days after the close of the Fiscal Year, audited financial
statements of the Company.
(d) Furnish the name, address, profits interest and taxpayer
identification number of each Member to the Internal Revenue Service
and take such action as may be reasonably necessary to constitute every
Member as a "notice partner" as that term is defined in Code Section
6231.
(e) Refuse to extend the statute of limitations with respect
to tax items of the Company without the unanimous written consent of
the Members.
(f) Elect the accrual method of accounting for the Company
and make any other tax elections on behalf of the Company as the Tax
Matters Member, subject to Section 4.6(c), deems necessary and
advisable; provided, however, that the election under Code Section 754
or any election to be classified for federal tax purposes as other
than a partnership shall be made only with the unanimous consent of
the Members.
Nothing in this Section shall limit the ability of any Member to
take any action in its individual capacity relating to administrative
proceedings of Company matters that is left to the determination of any
individual Member under the Code or under any similar state or local
provision.
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The Tax Matters Member will be entitled to reimbursement from the
Company for all reasonable costs and expenses incurred by it in complying
with and carrying out its responsibilities as Tax Matters Member.
ARTICLE IX
RESTRICTIONS ON TRANSFER; DEADLOCK; APPRAISAL PROCEDURE
Section 9.1. RESTRICTIONS ON TRANSFERS.
(a) Except as otherwise provided in Section 9.2 or 9.4, no
Member may sell, assign, convey, transfer, give, donate or otherwise
dispose of (collectively, "Transfer") or mortgage, pledge, hypothecate,
assign as security or otherwise encumber (collectively, "Encumber"), or
contract to Transfer or Encumber, any of its Interest, without the
prior written consent of the other Members, which consent may be
withheld or conditioned in such other Member's sole discretion. No
noncomplying Transfer or Encumbrance or purported Transfer or
Encumbrance (an "Ineffective Transfer") pursuant to which any Person
shall attempt to acquire any Interest other than in accordance with the
provisions of this Agreement, shall be recognized by the Company. An
Ineffective Transfer shall be null and void and shall not be recorded
as a transfer on the transfer records of the Company.
(b) Indirect Assignments of Metro's and BFSI's Interest.
PepsiCo shall not permit the assignment or transfer of voting control
of Metro or BFSI, or of any transferee of either of them under Section
9.2, to any Person other than an Affiliate of PepsiCo without the prior
written consent of Pohlad Companies and Beverage Investment which
consent may be withheld or conditioned in the sole discretion of Pohlad
Companies or Beverage Investment.
(c) Indirect Assignments by Pohlad Companies and Beverage
Investment. Neither Pohlad Companies nor Beverage Investment shall
permit the assignment or transfer of voting control of Pohlad
Companies, or Beverage Investment, respectively, or of any transferee
of Pohlad Companies or Beverage Investment under Section 9.2, to any
Person other than an Affiliate of any of Robert C. Pohlad, James O.
Pohlad or William M. Pohlad or their immediate family members, without
the prior written consent of PepsiCo, which consent may be withheld or
conditioned in PepsiCo's sole discretion.
Section 9.2. TRANSFERS TO AFFILIATES.
Metro and BFSI may at their sole discretion transfer their
respective Interests to any wholly-owned subsidiaries of PepsiCo, provided
that PepsiCo shall notify Pohlad Companies, and Beverage Investment, in
writing, of such transfer and any such transferee shall agree prior to such
transfer to be bound by the terms of this Agreement and shall, to the extent
requested by Pohlad Companies, comply with the provisions of Section 9.3.
Pohlad Companies and Beverage Investment may each, at its sole discretion,
transfer its Interest to any Affiliate of Pohlad Companies, Robert C. Pohlad,
James O. Pohlad or William M. Pohlad or their immediate family members,
provided that Pohlad Companies [or Beverage Investment], as appropriate,
shall notify PepsiCo, in writing, of such transfer and any such transferee
shall agree prior to such transfer to be bound by the terms of this Agreement
and shall, to the extent requested by PepsiCo, comply with the provisions of
Section 9.3.
Section 9.3. OPINIONS OF COUNSEL.
As a condition to granting the consent described in Section 9.1 or
pursuant to a transfer described in Section 9.2, a non-transferring Member
may, but is not required to, request that the transferring Member provide an
opinion of counsel, acceptable to the remaining Member, that such transfer or
disposition (i) does
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not require registration or other qualification under the Securities Act,
(ii) does not require registration or other qualification under applicable
state securities or "Blue Sky" laws, (iii) does not violate any state
securities or "Blue Sky" laws (including any investment suitability
standards) applicable to the Company or to the Interest to be transferred,
(iv) does not result in the Company being treated as an association taxable
as a corporation, or otherwise as an entity not taxable as a partnership for
federal income tax purposes, and (v) does not result in the Company being
treated as a "publicly traded partnership" as such term is defined in Code
Section 7704 and the Treasury Regulations promulgated thereunder.
Section 9.4. DEADLOCK EVENT.
(a) If a Deadlock Event under Section 6.3 hereof occurs, each
party hereto agrees to give notice to each other party upon it becoming
aware of the existence of a Deadlock Event (such notice constituting a
"Deadlock Event Notice"). Once such Deadlock Event Notice has been
given, PepsiCo, on behalf of BFSI and Metro, and Pohlad Companies on
behalf of itself and Beverage Investment shall consult with each other
in good faith on a regular basis during the thirty (30) day period
following the giving of such Deadlock Event Notice in an effort to
resolve such Deadlock Event ("Resolution Period"). Within thirty (30)
days after the end of the First Resolution Period, such thirty (30) day
period being subject to extension by mutual agreement of Pohlad
Companies and PepsiCo, PepsiCo and Pohlad Companies shall cause their
respective Chief Executive Officers, or their delegates, to meet and
consult with each other in good faith at a mutually agreeable place to
resolve such Deadlock Event (the "Second Resolution Period"). The
Second Resolution Period shall end thirty (30) days after such meeting.
In the event the Members are unable to resolve the Deadlock Event
before the end of the 30-day period, the Members may mutually agree to
submit such matter to non-binding mediation on such terms as they may
agree or either Member may give written notice to the other Members of
a continuing Deadlock Event (a "Continuing Deadlock Event Notice"). In
the event such Continuing Deadlock Notice is given, the Members shall
proceed to dissolve the Company and, subject to Section 10.4 hereof,
distribute the Whitman Stock and PepsiCo Stock to the Members upon such
dissolution.
(b) In the event that a Continuing Deadlock Event Notice is
issued, PepsiCo agrees that it will not, for the duration of the period
committed to, reduce any financial support it had previously committed
in writing to provide to Whitman, including, but not by way of
limitation, marketing support consistent with specified levels of
sales, volume, equipment placement and other criteria upon which such
financial support is determined.
In any situation in which Pohlad Companies' Class A
Membership Interest is either transferred or liquidated, the parties shall
execute and deliver all such documents and instruments as may be necessary
and appropriate to remove Pohlad Companies from its role as day to day
manager of the Company's affairs and the parties shall amend this Agreement
as appropriate.
ARTICLE X
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 10.1. NEGATION OF RIGHT TO DISSOLVE BY WILL OF MEMBER.
Except as otherwise provided herein, no Member shall have the right
to terminate this Agreement or dissolve the Company by its express will or by
withdrawal without the express written consent of the other Members. Without
limiting any other rights or remedies (in equity or at law) available to a
Member, upon any dissolution occurring in contravention of this Agreement
caused by the express will or withdrawal of Pohlad Companies, Metro shall be
the liquidating Member (the "Liquidating Member"), and upon any dissolution
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occurring in contravention of this Agreement caused by the express will or
withdrawal of BFSI or Metro, Pohlad Companies shall be the Liquidating Member.
Section 10.2. EVENTS OF DISSOLUTION.
The Company shall be dissolved, and its affairs shall be wound up upon,
and only upon, the first to occur of the following:
(a) the date that the Members consent to its dissolution;
(b) the date that the Bottle and Fountain Agreements are
terminated;
(c) the sale, exchange, involuntary conversion, or other
disposition or transfer of all or substantially all of the assets of
the Company;
(d) a Continuing Deadlock Event Notice is given;
(e) the dissolution, Bankruptcy or resignation of any Member,
unless, within sixty (60) days of receipt of the notice described in
Section 11.3, the remaining Member elects to continue the business of
the Company; or
(f) the entry of a decree of judicial dissolution of the
Company under the Act;
Section 10.3. NOTICE OF DISSOLUTION AND BANKRUPTCY.
Within thirty (30) days following the dissolution or Bankruptcy of a
Member, such Member shall send written notice to the other Member.
Section 10.4. PROCEDURES UPON DISSOLUTION.
Subject to Section 10.1, upon dissolution of the Company, Pohlad
Companies shall wind up the affairs of the Company, sell the Company's assets
consisting of a pro rata portion of each Member's securities, other than
PepsiCo Stock, as identified in accordance with Section 5.1(b)(ii) hereof to
the extent necessary to pay its liabilities, establish necessary reserves and
after payment of all liabilities of the Company (including liabilities to a
Member or affiliate of a Member, if it is a creditor), shall distribute the
remaining assets of the Company to the Members (after giving effect to all
contributions, distributions, allocations, and other Capital Account
adjustments for all fiscal years, including the period during which such
liquidation occurs) in accordance with the procedure in Section 5.1(b)(ii) in
proportion to the positive balances in their Capital Accounts. Any
distribution made pursuant to this Section 10.4 shall be made by the end of
such taxable year, or, if later, within ninety (90) days after the date of
such liquidation.
Section 10.5. NO DEFICIT MAKEUP OBLIGATION.
Upon dissolution of the Company, no Member has any obligation to
restore to the capital of the Company any deficit balance in such Member's
Capital Account.
Section 10.6. TERMINATION.
Upon the dissolution and the completion of winding up of the
Company, Pohlad Companies shall file a certificate of cancellation with the
Office of the Secretary of State of Delaware in accordance with the Act to
accomplish the cancellation of the certificate of formation.
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ARTICLE XI
REPRESENTATIONS AND WARRANTIES
Section 11.1. REPRESENTATIONS AND WARRANTIES OF MEMBERS.
Each Member hereby represents, warrants and covenants as follows:
(a) Such Member is duly organized or formed, validly existing
and, if applicable, in good standing under the laws of its state of
formation.
(b) Such Member has the right, power and authority to enter
into this Agreement, to become a Member and to perform its obligations
under this Agreement, and this Agreement is a legal, valid and binding
obligation of such Member.
(c) The execution and delivery of this Agreement does not
violate or conflict with the charter, bylaws or formation documents of
such Member or any agreement, judgment, license, permit, order or other
document applicable to or binding upon such Member or any of its
properties; and no consent, approval, authorization or order of any
court or government authority or third party is required with respect
to such Member in connection with the execution and delivery of this
Agreement.
(d) Neither Member nor any of its Affiliates has employed or
retained any broker, agent or finder in connection with this Agreement,
or paid or agreed to pay any brokerage fee, finder's fee, commission or
similar payment to any Person on account of this Agreement.
(e) Such Member and its affiliates and Persons acting on their
behalf have not taken any action, or failed to take any action, which
has caused the organization of the Company and the issuance of the
interests in the Company to come within the registration requirements
of the Securities Act, or any applicable state blue sky laws.
(f) The undersigned Members understand (i) that the Interests
have not been registered under the Securities Act or any state
securities laws because the Company is issuing these Interests in
reliance upon the exemptions from the registration requirements of the
Securities Act or applicable state securities laws providing for
issuance of securities not involving a public offering, (ii) that the
Company has relied upon the fact that the Interests are to be held by
each Member for investment, and (iii) that exemption from registration
under the Securities Act or applicable state securities laws would not
be available if the Interests were acquired by a Member with a view to
distribution.
Accordingly, each Member hereby confirms to the Company that such
Member acquired its Interest for such own Member's account, for investment
and not with a view to the resale or distribution thereof. Each Member agrees
not to transfer, sell or offer for sale all or any portion of the Interests
unless there is an effective registration or other qualification relating
thereto under the Securities Act and under any applicable state securities
laws or unless the holder of Interests delivers to the Company an opinion of
counsel, satisfactory to the Company, that such registration or other
qualification under the Act and applicable state securities laws is not
required in connection with such transfer, offer or sale. Each Member
understands that the Company is under no obligation to register the Interests
or to assist such Member in complying with any exemption from registration
under the Securities Act or any state securities laws if such Member should,
at a later date, wish to dispose of the Interest.
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Prior to acquiring the Interests, each Member made an investigation
of the Company and its business and the Company made available to each such
Member all information with respect thereto that such Member needs to make an
informed decision to acquire the Interest. Each Member considers itself to be
a Person possessing such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of such Member's
investment in the Interests.
ARTICLE XII
MISCELLANEOUS
Section 12.1. COMPANY OPPORTUNITY.
Participation in the Company shall not in any way restrain any
Member or their Affiliates in their present or future business activities
(regardless of whether such activities are competitive with the Company) and
neither the Company nor any Member shall have any claim or entitlement to the
benefits derived by a Member or a Member's Affiliates from such activities.
Section 12.2. ACCOUNTANTS.
The Company accountants shall be Arthur Andersen unless otherwise
agreed by unanimous vote of the Members.
Section 12.3. PARTIAL INVALIDITY.
In case any one or more of the covenants, agreements, or provisions
hereof shall be invalid, illegal, or unenforceable in any respect, the
validity of the remaining covenants, agreements, or provisions hereof shall
be in no way affected, prejudiced, or disturbed thereby.
Section 12.4. NOTICES.
Except as otherwise provided herein, all notices or other
communications required or permitted to be given hereunder shall be in
writing, shall be given by mail, return receipt requested, postage prepaid,
prepaid telegram with confirmation of delivery obtained, telecopy with
evidence of transmission, or personally delivered with confirmation of
delivery obtained, and shall be deemed to have been duly given when received
at the address specified below:
If to PepsiCo, BFSI or Metro: 700 Anderson Hill Road
Purchase, NY 10557-1444
Attn: Tim Heaviside
Fax: (914) 253-2752
If to Pohlad Companies
Beverage Investment: Pohlad Companies
Attn: Robert C. Pohlad
Suite 3800
60 South Sixth Street
Minneapolis, MN 55402
Fax: (612) 661-3825
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Copy to: Briggs and Morgan
Attn: Brian D. Wenger
2400 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Fax: (612) 334-8650
Any party shall have the right to change its address for notice
hereunder from time to time to such other address as may hereafter be furnished
in writing by such party to the other parties.
Section 12.5. AMENDMENT.
This Agreement may be modified or amended at any time only upon the
unanimous consent of the parties, which shall be evidenced by the parties
executing a writing effecting such amendment.
Section 12.6. CONSENTS; WAIVERS.
No consent or waiver, express or implied, by any party to or of any
breach or default by any party in the performance by such party of its
obligations hereunder shall be deemed or construed to be a consent or waiver
to or of any other breach or default in the performance by such party
hereunder. Failure on the part of a party to complain of any act or failure
to act of any other party or to declare the other party in default,
irrespective of how long such failure continues, shall not constitute a
waiver by the party of their rights hereunder.
Section 12.7. CHOICE OF LAW.
This Agreement and all rights and liabilities of the parties
hereunder shall be subject to and governed by the substantive laws (and not
the choice of law rules) of the State of Delaware.
Section 12.8. MULTIPLE COUNTERPARTS.
This Agreement may be executed and acknowledged in multiple
counterparts, each of which shall be an original, but all of which shall be
and constitute one instrument.
Section 12.9. ENTIRE AGREEMENT.
This Agreement, including all Exhibits, Schedules and Appendices,
constitutes the entire agreement between the parties with respect to the
subject matter hereof. This Agreement supersedes any prior agreement or
understanding among the parties, written or oral, and may not be modified or
amended in any manner other than as set forth herein.
Section 12.10. BINDING EFFECT; ASSIGNMENT.
This Agreement shall be binding upon and inure to the benefit of the
parties. No assignment of rights or delegation of duties arising under this
Agreement may be made by any party hereto without the prior written consent
of the other parties; provided, however, that the rights and obligations of
PepsiCo may be assigned and/or delegated to any of its subsidiaries.
A-25
<PAGE>
Section 12.11. NO THIRD-PARTY BENEFICIARIES.
This Agreement is for the sole benefit of the parties and their
permitted assigns, and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the parties and such assigns, any
legal or equitable rights hereunder.
Section 12.12. EXPENSES.
(a) Each of the parties hereto shall pay the fees and expenses
of its respective counsel, accountants and other experts (including any
broker, finder, advisor or intermediary) and shall pay all other
expenses incurred by it in connection with the negotiation, preparation
and execution of this Agreement and the consummation of the
transactions contemplated hereby.
(b) The provisions of this Section 13.11 shall remain
operative and in full force and effect regardless of the expiration of
the term of this Agreement, the consummation of the transactions
contemplated hereby, the invalidity or unenforceability of any term or
provision of this Agreement.
Section 12.13. PRESS RELEASES.
Each of the parties hereby agree that, except as otherwise required by
law or stock exchange regulations, any press release or other public
announcement regarding the transactions contemplated by this Agreement or the
business and/or operations of the Company shall be made only with the mutual
consent of the Members.
Section 12.14. CONFIDENTIALITY.
The Members shall take or cause to be taken such reasonable
precautions as may be necessary to prevent the disclosure of Confidential
Information to any Person other than a Member or an Affiliate thereof for a
period commencing on the date of this Agreement and ending ten (10) years
following the termination of the Company; provided however that the Members
may disclose such information as required to comply with any applicable law
or order of a court or authorized agency of government, provided that ten
(10) days notice must first be given to the other Members so a protective
order, if appropriate, may be sought by such other Members.
"Confidential Information" shall mean all trade secrets and all
information (financial or otherwise) concerning the Members or their
Affiliates, including, but not limited to, information concerning the
Member's or their Affiliates, assets, liabilities, sales and expenses; data
and statistics; methods or operation; strategic business plans; reports,
analyses, compilations, notes, studies and interpretations; forecasts;
planned and existing and/or revised product proprietary or know-how;
merchandising and marketing strategy, plans and materials; warehouse and
distribution plans and practices; employees; and any other information
relating to the Members, provided to the Company or other Members in
connection with this Agreement, whether oral or written, regardless of the
manner in which it is furnished, which information would otherwise not be
generally available to the Company, the Members or the public, and which
information constitutes insider, proprietary and strictly confidential
information of the Members.
Notwithstanding the foregoing, the following will not constitute
Confidential Information for purposes of this Agreement:
(a) Information which was already in the possession of or
known to the Company or the Members prior to June, 1999, and which was
not acquired or obtained from a Member, its Affiliates or
representatives;
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<PAGE>
(b) Information which is obtained or was previously obtained
by the Company or the Members from a third person who, insofar as is
known to the Company or the Members after reasonable inquiry, is not
prohibited from transmitting the information to the Company or the
Members by a contractual, legal or fiduciary obligation to a Member,
its Affiliates or representatives; and
(c) Information which is or becomes generally available to the
public (including any publicly filed document) other than as a result
of a disclosure by the Members or their representatives.
(Remainder of page intentionally left blank)
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date and year first above written.
By: PEPSI-COLA METROPOLITAN
BOTTLING COMPANY
By /s/ W. Timothy Heaviside
-------------------------------------
Name: W. Timothy Heaviside
Title: Vice President
By: PEPSICO, INC.
By /s/ W. Timothy Heaviside
-------------------------------------
Name: W. Timothy Heaviside
Title: Vice President
By: POHLAD COMPANIES
By /s/ Robert C. Pohlad
-------------------------------------
Name: Robert C. Pohlad
Title: President
By: BEVERAGE INVESTMENT, LLC
By /s/ Robert C. Pohlad
-------------------------------------
Name: Robert C. Pohlad
Title: President
By: BEVERAGES, FOOD & SERVICE
INDUSTRIES, INC.
By /s/ Robert K. Biggart
-------------------------------------
Name: Robert K. Biggart
Title: Vice President
SIGNATURE PAGE TO AMENDED AND RESTATED LIMITED LIABILITY
COMPANY AGREEMENT OF DAKOTA HOLDINGS, LLC
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<PAGE>
SCHEDULE 1
CLASS A MEMBERSHIP INTERESTS
<TABLE>
<S> <C>
Pepsi-Cola Metropolitan Bottling Company, Inc. 30.1%
Beverages, Food & Service Industries, Inc. 3.4%
Pohlad Companies 66.5%
<CAPTION>
CLASS B MEMBERSHIP INTERESTS
<S> <C>
Pepsi-Cola Metropolitan Bottling Company, Inc. 5.0%
Pohlad Companies 95.0%
</TABLE>
A-29
<PAGE>
EXHIBIT B
AMENDED AND RESTATED SHAREHOLDER AGREEMENT
BY AND BETWEEN
WHITMAN CORPORATION,
A DELAWARE CORPORATION,
AND
PEPSICO, INC.,
A NORTH CAROLINA CORPORATION
DATED AS OF NOVEMBER 30, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I CERTAIN DEFINITIONS
Section 1.1. Certain Definitions.............................................................................1
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company...................................................5
Section 2.2. Representations and Warranties of the Shareholder...............................................6
ARTICLE III SHAREHOLDER AND COMPANY CONDUCT
Section 3.1. Acquisition of Voting Securities................................................................6
Section 3.2. Required Reduction of Ownership Percentage......................................................7
Section 3.3. Top-Up Rights...................................................................................8
Section 3.4. Transfer........................................................................................8
Section 3.5. Charter and By-Laws.............................................................................9
Section 3.6. Rights Agreement................................................................................9
Section 3.7. Special Meetings Requested by the Shareholder; Nominations......................................9
Section 3.8. No Agreements...................................................................................9
Section 3.9. Dakota Holdings.................................................................................9
ARTICLE IV BOARD COMPOSITION
Section 4.1. Board Composition..............................................................................10
ARTICLE V EFFECTIVENESS AND TERMINATION
Section 5.1. Effectiveness..................................................................................10
Section 5.2. Termination....................................................................................10
Section 5.3. Agreements Following Certain Acquisitions......................................................10
ARTICLE VI MISCELLANEOUS
Section 6.1. Injunctive Relief..............................................................................11
Section 6.2. Successors and Assigns.........................................................................11
Section 6.3. Amendments; Waiver.............................................................................11
Section 6.4. Notices........................................................................................11
Section 6.5. Applicable Law.................................................................................12
Section 6.6. Headings.......................................................................................12
Section 6.7. Integration....................................................................................12
Section 6.8. Severability...................................................................................12
Section 6.9. Consent to Jurisdiction........................................................................13
Section 6.10. Counterparts...................................................................................13
</TABLE>
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<PAGE>
AMENDED AND RESTATED SHAREHOLDER AGREEMENT, dated as of November 30,
2000 (this "AGREEMENT"), by and between Whitman Corporation, a Delaware
corporation (the "COMPANY"), and PepsiCo, Inc., a North Carolina corporation
(the "SHAREHOLDER").
W I T N E S S E T H:
WHEREAS, the Company and the Shareholder are parties to a
Shareholder Agreement, dated as of May 20, 1999 (the "ORIGINAL SHAREHOLDER
AGREEMENT")
WHEREAS, the Company, Anchor Merger Sub, Inc., a Delaware
corporation ("MERGER SUB"), and PepsiAmericas, Inc., a Delaware corporation
("PAS"), have entered into an Agreement and Plan of Merger, dated as of
August 18, 2000 (the "MERGER AGREEMENT"), pursuant to which, among other
things, PAS will be merged with and into Merger Sub, with Merger Sub as the
surviving corporation, and in connection therewith, certain outstanding
shares of common stock of PAS will be converted into shares of common stock,
par value $0.01 per share (the "COMMON STOCK"), of the Company (the "MERGER");
WHEREAS, the execution of this Agreement upon the consummation of
the Merger (the "CLOSING") is a covenant of the Company in the Merger
Agreement and a condition to the Company's obligations to close the
transactions contemplated by the Merger Agreement;
WHEREAS, the Shareholder has entered into a voting agreement, dated
as of August 18, 2000, pursuant to which the Shareholder has agreed to vote
in favor of the Merger and the other transactions contemplated by the Merger
Agreement; and
WHEREAS, in light of the transactions contemplated by the Merger
Agreement, the Company and the Shareholder desire to amend and restate in
this Agreement certain terms and conditions concerning the acquisition and
disposition of Voting Securities (as defined herein) of the Company by the
Shareholder, and related provisions concerning the Shareholder's relationship
with and investment in the Company immediately following the Closing.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration,
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Certain Definitions. In addition to other terms defined
elsewhere in this Agreement, as used in this Agreement, the following terms
shall have the meanings ascribed to them below:
"AFFILIATE" shall mean, with respect to any person, any other person
that directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such person. For the purposes
of this definition, "control," when used with respect to any particular
person, means the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AFFILIATED TRANSACTION COMMITTEE" shall mean the Affiliated
Transaction Committee of the Board.
"AGREEMENT" shall have the meaning assigned to such term in the
preamble.
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<PAGE>
"BENEFICIAL OWNER" (and, with correlative meanings, "BENEFICIALLY
OWN" and "BENEFICIAL OWNERSHIP") of any interest means a Person who, together
with his or its Affiliates, is or may be deemed a beneficial owner of such
interest for purposes of Rule 13d-3 or 13d-5 under the Exchange Act, or who,
together with his or its Affiliates, has the right to become such a
beneficial owner of such interest (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise, conversion or exchange of
any warrant, right or other instrument, or otherwise; PROVIDED that a Person
shall not be deemed the Beneficial Owner of Voting Securities solely as a
result of having been granted a revocable proxy relating to such Voting
Securities in connection with any one special or annual meeting of
shareholders of the Company (including any postponements or adjournments
thereof), nor shall the procurement of such a proxy be deemed to give the
proxy holder "control" over any Person as to which such proxy holder does not
otherwise have control; and PROVIDED, FURTHER, that this definition shall be
subject to the last sentence of Section 3.9.
"BOARD" shall mean the Board of Directors of the Company in office
at the applicable time, as elected in accordance with the By-Laws.
"BUY-BACK EXCESS" shall have the meaning set forth in Section 3.2 of
this Agreement.
"BUY-BACK OFFER" shall have the meaning set forth in Section 3.2 of
this Agreement.
"BY-LAWS" shall mean the by-laws of the Company, as in effect
immediately following consummation of the Merger (including amendments
pursuant to the Merger Agreement), as they may be amended from time to time.
"CHARTER" shall mean the Certificate of Incorporation of the
Company, as in effect immediately following consummation of the Merger, as it
may be amended from time to time.
"CLOSING" shall have the meaning assigned in the third recital of
this Agreement.
"COMBINED MAXIMUM OWNERSHIP PERCENTAGE" shall mean, calculated at a
particular point in time, a Total Ownership Percentage of 49.9%; PROVIDED
that in the event of a Permitted Acquisition (other than a Contingent Payment
Acquisition) which results in the Significant Shareholders' Total Ownership
Percentage exceeding 49.9%, so long as the Significant Shareholders' Total
Ownership Percentage exceeds 49.9% due to such Permitted Acquisition, the
Combined Maximum Ownership Percentage shall become the Significant
Shareholders' Total Ownership Percentage giving effect to such Permitted
Acquisition.
"COMMISSION" shall mean the United States Securities and Exchange
Commission.
"COMMON STOCK" shall have the meaning assigned in the first recital
of this Agreement.
"COMPANY" shall have the meaning assigned in the preamble.
"CONTINGENT PAYMENT ACQUISITION" shall mean any acquisition of
Voting Securities pursuant any Contingent Payment (as defined in the Merger
Agreement).
"DAKOTA HOLDINGS" shall mean Dakota Holdings, LLC, a Delaware
limited liability company.
"DAKOTA HOLDINGS AGREEMENT" shall have the meaning set forth in
Section 3.9 of this Agreement.
"DIRECTOR" shall mean any member of the Board of Directors of the
Company in office at the applicable time, as elected in accordance with the
provisions of the By-Laws.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
B-2
<PAGE>
"FAMILY" shall mean, with respect to any natural person, (i) any
child, stepchild, parent, stepparent, spouse or sibling, and (ii) any
grandchild, grandparent, uncle, aunt, first cousin, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law
who Beneficially Owns greater than 1% of the Voting Power or who has entered
into an agreement or commitment with said natural person with respect to the
Voting Securities, and shall in each case include adoptive relationships.
"INDEPENDENT DIRECTOR" shall mean any person who is both (i)
independent of and otherwise unaffiliated with any member of the Shareholder
Group or the Pohlad Group, and who is not a director, officer, employee,
consultant or advisor (financial, legal or other) of any member of the
Shareholder Group or the Pohlad Group and has not served in any such capacity
in the previous two (2) years and (ii) not an officer or employee, consultant
or advisor (financial, legal or other) of the Company and has not served in
any such capacity in the previous two (2) years.
"MAXIMUM OWNERSHIP PERCENTAGE" shall mean, calculated at a
particular point in time, a Total Ownership Percentage of 49.0%; PROVIDED
that in the event of a Permitted Acquisition (other than a Contingent Payment
Acquisition) which results in the Shareholder Group's Total Ownership
Percentage exceeding 49.0%, so long as the Shareholder Group's Total
Ownership Percentage exceeds 49.0% due to such Permitted Acquisition, the
Maximum Ownership Percentage shall become the Shareholder Group's Total
Ownership Percentage giving effect to such Permitted Acquisition.
"MERGER" shall have the meaning set forth in the second recital of
this Agreement.
"MERGER AGREEMENT" shall have the meaning set forth in the second
recital of this Agreement.
"MINIMUM PRICE" shall mean the highest average of per share closing
prices on the NYSE Composite Tape of the Voting Securities (or, if the Voting
Securities are not quoted on the NYSE Composite Tape, on the principal United
States securities exchange registered under the Exchange Act on which such
Voting Securities are listed, or, if such Voting Securities are not listed on
any such exchange, the closing sale price or bid quotation with respect to
such Voting Securities on the National Association of Securities Dealers,
Inc. Automated Quotations System or any system then in use; PROVIDED,
HOWEVER, if no such quotations are available with respect to such Voting
Securities, the price of such Voting Securities shall be the public market
trading value as determined by an investment banker of nationally recognized
reputation selected by the Independent Directors) over any 20 consecutive
trading day period during the 18 month period preceding the date of the first
public announcement of a Shareholder Offer.
"NYSE" shall mean the New York Stock Exchange, Inc.
"PERMITTED ACQUISITION" shall mean the acquisition of Voting
Securities pursuant to (1) a transaction or series of transactions that would
not result, individually or in the aggregate, in any member of the
Shareholder Group, singly or as part of a partnership, limited partnership,
syndicate or other 13D Group, directly or indirectly, acquiring, proposing to
acquire, or publicly announcing or otherwise disclosing an intention to
propose to acquire, or offering or agreeing to acquire, by purchase or
otherwise, Beneficial Ownership of any Security so as to cause either (x) the
Shareholder Group's Total Ownership Percentage to exceed the Maximum
Ownership Percentage or (y) the Significant Shareholders' Total Ownership
Percentage to exceed the Combined Maximum Ownership Percentage, (2) a
Shareholder Offer at a price which is not less than the Minimum Price, (3) a
merger or other business combination approved by a majority of the Voting
Power attributable to Voting Securities not Beneficially Owned by the
Shareholder Group, (4) a transaction approved by a majority of the
Independent Directors, or (5) any acquisition of Voting Securities by the
Pohlad Group approved by the Affiliated Transaction Committee (or, if such
Committee shall not be in existence, by a committee of the Board composed
entirely of Independent Directors). For purposes of this definition, the
value of any securities offered in exchange for Voting Securities pursuant to
a Shareholder Offer shall be the average of closing prices on the NYSE
Composite Tape of such securities (or, if such securities are not quoted on
the NYSE Composite Tape, on the principal United States securities exchange
registered under the
B-3
<PAGE>
Exchange Act on which such securities are listed, or, if such securities are
not listed on any such exchange, the closing sale price or bid quotation with
respect to such security on the National Association of Securities Dealers,
Inc. Automated Quotations System or any system then in use; PROVIDED,
HOWEVER, if no such quotations are available with respect to such securities,
the price of such securities shall be the public market trading value as
determined by an investment banker of nationally recognized reputation
selected by the Independent Directors) over the five consecutive trading day
period preceding the date of the first public announcement of such
Shareholder Offer.
"PERMITTED SIGNIFICANT TRANSFEREE" shall have the meaning set forth
in Section 3.4 of this Agreement.
"PERSON" shall mean any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government or department or
agency of a government.
"POHLAD COMPANIES" shall mean Pohlad Companies, a Minnesota
corporation.
"POHLAD GROUP" shall mean Robert Pohlad, any Affiliate of Robert
Pohlad (other than the Company or its subsidiaries), any member of Robert
Pohlad's Family, and any Person with whom Robert Pohlad, any Affiliate of
Robert Pohlad or any member of Robert Pohlad's Family is part of a 13D Group.
"POHLAD SHAREHOLDER AGREEMENT" shall mean the Shareholder Agreement,
dated as of November 30, 2000, by and between the Company, Dakota Holdings,
the Pohlad Companies and Robert Pohlad.
"REPURCHASE" shall have the meaning set forth in Section 3.2 of this
Agreement.
"RIGHTS AGREEMENT" shall mean the Shareholder Rights Agreement,
dated as of May 20, 1999, as amended.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHAREHOLDER" shall have the meaning assigned in the preamble.
"SHAREHOLDER AFFILIATE" shall mean any Affiliate of the Shareholder
(other than the Company or its subsidiaries).
"SHAREHOLDER GROUP" shall mean the Shareholder, any Shareholder
Affiliate, any Permitted Significant Transferee and any Person with whom the
Shareholder, any Shareholder Affiliate or any Permitted Significant
Transferee is part of a 13D Group in respect of Voting Securities, but shall
exclude any member of the Pohlad Group.
"SHAREHOLDER OFFER" shall mean (i) a tender offer or exchange offer
by any member of the Shareholder Group for all Voting Securities not
Beneficially Owned by the Shareholder Group or (ii) a merger or other
business combination pursuant to which all Voting Securities not Beneficially
Owned by the Shareholder Group are proposed to be exchanged or converted.
"SIGNIFICANT SHAREHOLDERS" shall mean, collectively, the Shareholder
Group and the Pohlad Group.
"SIGNIFICANT TRANSFEREE" shall mean a transferee which would have a
Total Ownership Percentage of greater than 20% after giving effect to any
proposed Transfer.
"13D GROUP" shall mean any group of Persons acquiring, holding,
voting or disposing of any Voting Security which would be required under
Section 13(d) of the Exchange Act and the rules and regulations thereunder to
file a statement on Schedule 13D with the Commission as a "person" within the
meaning of Section 13(d)(3) of the Exchange Act; PROVIDED that a Person shall
not be deemed to be part of a 13D Group
B-4
<PAGE>
with another Person solely as a result of having been granted a revocable
proxy relating to such Person's Voting Securities in connection with any one
special or annual meeting of shareholders of the Company (including any
postponements or adjournments thereof); PROVIDED, FURTHER, that the members
of the Shareholder Group shall not be deemed to be part of a 13D Group with
any member of the Pohlad Group solely due to ownership of interests in Dakota
Holdings so long as all members of the Shareholder Group are in compliance
with the proviso in the first sentence of Section 3.9.
"TOTAL OWNERSHIP PERCENTAGE" shall mean, calculated at a particular
point in time, the Voting Power represented by the Voting Securities
Beneficially Owned by the Person (or Persons) whose Total Ownership
Percentage is being determined.
"TOTAL VOTING POWER" shall mean, calculated at a particular point in
time, the aggregate Votes represented by all then outstanding Voting
Securities.
"TRADING DAY", with respect to a Voting Security, shall mean a day
on which the principal national securities exchange on which such Voting
Security is listed or admitted to trading is open for the transaction of
business or, if such security is not listed or admitted to trading on any
national securities exchange, any day other than a Saturday, Sunday or a day
on which banking institutions in the City of New York are authorized or
obligated to close.
"TRANSFER" shall mean any sale, transfer, pledge, encumbrance or
other disposition to any Person, and to "TRANSFER" shall mean to sell,
transfer, pledge, encumber or otherwise dispose of to any Person.
"VOTES" shall mean votes entitled to be cast generally in the
election of Directors, assuming the conversion of any securities then
convertible into common stock or shares of any other class of capital stock
of the Company then entitled to vote generally in the election of Directors.
"VOTING POWER" shall mean, calculated at a particular point in time,
the ratio, expressed as a percentage, of (a) the Votes represented by the
Voting Securities with respect to which the Voting Power is being determined
to (b) Total Voting Power.
"VOTING SECURITIES" shall mean the common stock and shares of any
other class of capital stock of the Company then entitled to vote generally
in the election of Directors and any securities then convertible into common
stock or shares of any other class of capital stock of the Company then
entitled to vote generally in the election of Directors.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company. The
Company represents and warrants to the Shareholder as of the date hereof as
follows:
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has all necessary corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder.
(b) This Agreement has been duly and validly authorized by
the Company and all necessary and appropriate action has been taken
by the Company to execute and deliver this Agreement and to perform
its obligations hereunder.
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<PAGE>
(c) This Agreement has been duly executed and delivered by
the Company and assuming due authorization and valid execution and
delivery by the Shareholder, this Agreement is a valid and binding
obligation of the Company, enforceable against it in accordance with
its terms.
Section 2.2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The
Shareholder represents and warrants to the Company as of the date hereof as
follows:
(a) The Shareholder has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of North Carolina and has all necessary corporate power and authority
to enter into this Agreement and to carry out its obligations
hereunder.
(b) This Agreement has been duly and validly authorized by the
Shareholder and all necessary and appropriate action has been taken by
the Shareholder to execute and deliver this Agreement and to perform
its obligations hereunder.
(c) This Agreement has been duly executed and delivered by
the Shareholder and assuming due authorization and valid execution and
delivery by the Company, this Agreement is a valid and binding
obligation of the Shareholder, enforceable against it in accordance
with its terms.
ARTICLE III
SHAREHOLDER AND COMPANY CONDUCT
Section 3.1. ACQUISITION OF VOTING SECURITIES. Subject to the
provisions of this Agreement, during the term of this Agreement, the
Shareholder agrees with the Company that, without the prior approval of a
majority of the Independent Directors, the Shareholder will not, and will
cause each member of the Shareholder Group not to, take any of the following
actions:
(a) singly or as part of a partnership, limited partnership,
syndicate or other 13D Group, directly or indirectly, acquire, propose
to acquire, or publicly announce or otherwise disclose an intention to
propose to acquire, or offer or agree to acquire, by purchase or
otherwise, Beneficial Ownership of any Voting Security so as to cause
either (x) the Shareholder Group's Total Ownership Percentage to
exceed the Maximum Ownership Percentage or (y) to the best of the
Shareholder's knowledge, the Significant Shareholders' Total Ownership
Percentage to exceed the Combined Maximum Ownership Percentage, other
than pursuant to a Permitted Acquisition;
(b) form, join or in any way participate in a 13D Group with
respect to any Voting Securities of the Company or any securities of
its subsidiaries if such 13D Group's Total Ownership Percentage would
exceed the Maximum Ownership Percentage;
(c) initiate (including by means of proposing or publicly
announcing or otherwise disclosing an intention to propose, solicit,
offer, seek to effect or negotiate) a merger, acquisition or other
business combination transaction relating to the Company (other than a
merger, acquisition or business combination of a third party (not a
member of the Shareholder Group) with the Company) which would not be,
if consummated, a Permitted Acquisition.
The Shareholder Group shall not be prohibited by the terms of this
Agreement from taking any action or exercising any right which is not
inconsistent with the terms of this Agreement, including soliciting or
obtaining the revocable proxy of any other shareholder of the Company with
respect to the election of directors or any other matter, seeking the
election of new directors, calling special meetings of shareholders of the
Company, making shareholder proposals, engaging in discussions with the Board
or the management of the Company or otherwise voting its Voting Securities in
any manner in which any member of the Shareholder
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<PAGE>
Group shall determine in its sole discretion. In addition, this section shall
not be deemed to restrict Directors affiliated with the Shareholder from
participating as Board members in the direction of the Company.
Section 3.2. REQUIRED REDUCTION OF OWNERSHIP PERCENTAGE. (a) If
at any time the Shareholder becomes aware that the Shareholder Group's Total
Ownership Percentage exceeds the Maximum Ownership Percentage, other than as
permitted pursuant to the terms of this Agreement, then the Shareholder
shall, or shall cause the Shareholder Group to, consistent with the
provisions of this Agreement, promptly (in any event, prior to the earliest
to occur of (i) the record date for the next annual or special meeting of
shareholders of the Company, (ii) the record date for the taking of any
action of shareholders of the Company by written consent or (iii) the
purchase of any additional Voting Securities by any member of the Shareholder
Group) take all action necessary to reduce the amount of Voting Securities
Beneficially Owned by the Shareholder Group such that the Shareholder Group's
Total Ownership Percentage is not greater than the Maximum Ownership
Percentage.
(b) If at any time the Shareholder becomes aware that the
Significant Shareholders' Total Ownership Percentage exceeds the
Combined Maximum Ownership Percentage as a result of a reduction in
the number of Voting Securities outstanding (including, without
limitation, as a result of a purchase of common stock by the Company)
(such excess, the "BUY-BACK EXCESS"), then the Shareholder shall, or
shall cause the Shareholder Group to, consistent with the provisions
of this Agreement, promptly (in any event, prior to the earliest to
occur of (x) the record date for the next annual or special meeting
of shareholders of the Company, (y) the record date for the taking of
any action of shareholders of the Company by written consent or (z)
the purchase of any additional Voting Securities by any member of the
Shareholder Group) take all action necessary to reduce the amount of
Voting Securities Beneficially Owned by the Shareholder Group by the
amount of such Buy-Back Excess in the following manner and order:
(i) First, by Transferring to a Person other than the
Significant Shareholders the amount, if any, of Voting
Securities received by the Shareholder Group as an Aggregate
Contingent Payment (as defined in the Merger Agreement), to
the extent not previously Transferred pursuant to this
Section;
(ii) Second, by Transferring to a Person other than
the Significant Shareholders the pro rata amount (based on the
relative amounts of Voting Securities purchased by each of the
Shareholder Group and the Pohlad Group since August 18, 2000)
of Voting Securities, if any, purchased by the Shareholder
Group since August 18, 2000;
(iii) Third, by Transferring to a Person other than
the Significant Shareholders the pro rata amount of any
remaining Buy-Back Excess (based on the relative Total
Ownership Percentages, after giving effect to (i) and (ii)
above, of the Shareholder Group and the Pohlad Group
immediately prior to the time when the Combined Maximum
Ownership Percentage was exceeded).
(iv) Fourth, notwithstanding the foregoing, the
maximum number of Voting Securities that the Shareholder Group
shall be required to Transfer pursuant to (ii) and (iii) above
shall not exceed the amount that would be required to be
Transferred if the Pohlad Group made its corresponding pro
rata Transfers consistent with (ii) and (iii) above.
(c) If at any time the Shareholder becomes aware that the
Significant Shareholders' Total Ownership Percentage exceeds the
Combined Maximum Ownership Percentage, other than as a result of a
reduction in the total number of Voting Securities (which situation
shall be governed by paragraph (b) above) or as permitted pursuant to
the terms of this Agreement, then the Shareholder shall, or shall cause
the Shareholder Group to, consistent with the provisions of this
Agreement, promptly (in any event, prior to the earliest to occur of
(i) the record date for the next annual or special
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meeting of shareholders of the Company, (ii) the record
date for the taking of any action of shareholders of the
Company by written consent or (iii) the purchase of any
additional Voting Securities by any member of the Shareholder
Group) take all action necessary to reduce the amount of Voting
Securities Beneficially Owned by the Shareholder Group such that
the Significant Shareholders' Total Ownership Percentage is not greater
than the Combined Maximum Ownership Percentage; PROVIDED that if the
Shareholder becomes aware that the Significant Shareholders' Total
Ownership Percentage exceeds the Combined Maximum Ownership Percentage
due to an acquisition by a member of the Pohlad Group of Voting
Securities or the addition to the Pohlad Group of a new Affiliate that
Beneficially Owns Voting Securities, the Shareholder shall promptly
inform the Company of such fact but shall not be required to reduce the
amount of Voting Securities Beneficially Owned by the Shareholder Group
due to such event so long as the Shareholder Group is in compliance
with the other provisions of this Agreement.
(d) During the term of this Agreement, if the Company
purchases shares of common stock from the public, whether by tender
offer, open market purchase or otherwise (a "REPURCHASE"), the Company
shall contemporaneously with the Repurchase offer to purchase from each
of the Significant Shareholders, on the same terms and conditions,
including price, as in the Repurchase, a percentage of those shares of
common stock Beneficially Owned by each of the Significant Shareholders
equal to the percentage of shares of common stock to be Repurchased
from the Beneficial Owners of shares of common stock other than the
Significant Shareholders (the "BUY-BACK OFFER"). The Company shall
provide notice to the Shareholder of its intention to engage in a
Repurchase and of the mechanism by which the Repurchase shall occur not
less than thirty (30) days in advance of the date on which the
Repurchase is to be consummated, and the Shareholder shall provide
notice to the Company within ten (10) days of receipt of such notice of
whether the Shareholder Group intends to accept the Buy-Back Offer.
Section 3.3. TOP-UP RIGHTS. During the term of this Agreement, if
the Shareholder Group's Total Ownership Percentage is below the Maximum
Ownership Percentage and the Significant Shareholders' Total Ownership
Percentage is below the Combined Maximum Ownership Percentage, the
Shareholder Group may at its option purchase Voting Securities from time to
time in the open market or otherwise in an amount not in excess of the amount
that would cause either (x) the Shareholder Group's Total Ownership
Percentage to exceed the Maximum Ownership Percentage or (y) the Significant
Shareholders' Total Ownership Percentage to exceed the Combined Maximum
Ownership Percentage.
Section 3.4. TRANSFER. Except for any requirements of the Securities
Act applicable to such Transfer, each of the members of the Shareholder Group
may Transfer any of the Voting Securities Beneficially Owned by such member
of the Shareholder Group to any transferee which is not a Significant
Transferee without restriction, and may effect such a Transfer to a
Significant Transferee with the prior written consent of a majority of the
Independent Directors; PROVIDED, HOWEVER, that each of such members of the
Shareholder Group may Transfer any of such Voting Securities to any
Significant Transferee without restriction (other than as contemplated in the
last sentence of this Section 3.4) or obtaining such consent if, at the time
of such Transfer, the Shareholder Group Beneficially Owns at least 20% of the
outstanding voting securities of such Significant Transferee and no other
Person Beneficially Owns a greater percentage of the outstanding voting
securities of such Significant Transferee than the percentage owned by the
Shareholder Group (a "PERMITTED SIGNIFICANT TRANSFEREE"). The Shareholder
Group shall obtain the prior written consent of a majority of the Independent
Directors to any Transfer by the Shareholder Group of any voting securities
of a Permitted Significant Transferee if, at the time of such Transfer, such
Permitted Significant Transferee has a Total Ownership Percentage of greater
than 20% and such Transfer would result in (x) the Shareholder Group
Beneficially Owning less than 20% of the outstanding voting securities of
such Permitted Significant Transferee or (y) any other Person Beneficially
Owning a greater percentage of the outstanding voting securities of such
Permitted Significant Transferee than the percentage Beneficially Owned by
the Shareholder Group after giving effect to such Transfer. Notwithstanding
the foregoing provisions of this Section 3.4, none of the restrictions of
this Section 3.4 shall apply to (i) a Transfer by any member of the
Shareholder Group of
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any of the Voting Securities in a public offering pursuant to which
reasonable efforts are made to achieve a wide distribution of such Voting
Securities, (ii) a liquidation of Dakota Holdings or other distribution of
its assets to its members in proportion to their capital accounts or (iii) a
Transfer of Voting Securities among members of the Shareholder Group,
provided that any such transferee shall agree with the Company in writing
prior to each such Transfer to be bound by the terms of this Agreement with
respect to its Beneficial Ownership of Voting Securities.
Section 3.5. CHARTER AND BY-LAWS. During the term of this Agreement
the Company shall not, and the Shareholder Group shall not, and shall not
facilitate any effort to, amend, alter or repeal, or propose the amendment,
alteration or repeal of, any provision of the Charter or the By-Laws in any
manner which is inconsistent with the terms of this Agreement. If at any time
during the term of this Agreement the provisions of this Agreement shall
conflict with the provisions of the Charter or the By-Laws, the parties shall
use all reasonable efforts, consistent with their fiduciary responsibilities,
to cause the provisions of the Charter and the By-Laws to be brought into
conformity with the provisions of this Agreement.
Section 3.6. RIGHTS AGREEMENT. During the term of this Agreement,
the Company hereby agrees not to (i) amend any provision of the Rights
Agreement in any manner which is inconsistent with the terms of this
Agreement or the Merger Agreement and which adversely affects the rights of
the Shareholder Group under the terms of this Agreement or (ii) adopt any new
rights agreement which is inconsistent with the terms of this Agreement or
the Merger Agreement and which adversely affects the rights of the
Shareholder Group under the terms of this Agreement.
Section 3.7. SPECIAL MEETINGS REQUESTED BY THE SHAREHOLDER;
NOMINATIONS. In the event that during the term of this Agreement the
Shareholder Group requests a special meeting of the stockholders of the
Company in accordance with the By-Laws, or the Shareholder Group nominates an
alternative slate of directors to the slate proposed by the Board at any
annual meeting of stockholders of the Company in accordance with the By-Laws,
the Company hereby agrees that the Company shall not, without the
Shareholder's consent, from the date of receipt of such request for a special
meeting or the date of receipt of such nomination, as the case may be, until
the adjournment of the requested special meeting or the annual meeting, as
the case may be, (i) take any action effecting a material change in its
capital structure, (ii) declare or pay a dividend (other than any regular
quarterly dividend), (iii) materially increase the compensation of any
executive officer or (iv) take any material action not in the ordinary course
of business; provided that this provision shall not restrict the ability of
the Company to comply with commitments entered into prior to the date of such
request.
Section 3.8. NO AGREEMENTS. During the term of this Agreement,
except as specifically contemplated in Section 3.9, no member of the
Shareholder Group shall, directly or indirectly, enter into any agreement or
commitment with any member of the Pohlad Group with respect to the holding,
voting, acquisition or disposition of Voting Securities.
Section 3.9. DAKOTA HOLDINGS. Notwithstanding the provisions of
Section 3.8, members of the Shareholder Group and members of the Pohlad Group
may be parties to the Amended and Restated Limited Liability Company
Agreement of Dakota Holdings, LLC, attached as Annex A to this Agreement (the
"DAKOTA HOLDINGS AGREEMENT"), and hold interests in Dakota Holdings pursuant
to the Dakota Holdings Agreement, PROVIDED that (i) the Dakota Holdings
Agreement expressly provides that (x) the members of the Shareholder Group
who are parties to the Dakota Holdings Agreement ultimately have sole power
with respect to the voting of that percentage of the Voting Securities owned
by Dakota Holdings equal to the Class A Percentage Interest (as defined in
the Dakota Holdings Agreement) (the "CLASS A PERCENTAGE") of the Shareholder
Group members, and with respect to the voting of such Voting Securities
members of the Pohlad Group shall have no power, influence or discretion
which is not subject to the ultimate power of the Shareholder Group to direct
the voting, and (y) the members of the Pohlad Group who are parties to the
Dakota Holdings Agreement have sole power with respect to the voting of their
Class A Percentage of the Voting Securities owned by Dakota Holdings, and
with respect to the voting of such Voting Securities members of the
Shareholder Group shall
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have no power, influence or discretion; and (ii) Dakota Holdings shall not
take any action to acquire, directly or indirectly, Beneficial Ownership of
any additional Voting Securities (excluding any Voting Securities acquired
pursuant to the transactions contemplated by the Merger Agreement (including
any Contingent Payment Acquisitions) and excluding Voting Securities acquired
through stock dividends on then-owned Voting Securities and excluding the
acquisition of Voting Securities pursuant to the right of Dakota Holdings to
acquire common stock with a value of $25 million from the PepsiCo Group, in
connection with the Merger). So long as the proviso in the preceding sentence
is complied with, for purposes of calculating the Shareholder Group's Total
Ownership Percentage, those Voting Securities over which a member of the
Pohlad Group has the sole powers described in clause (y) of clause (i) in
proviso in the preceding sentence shall not be considered Beneficially Owned
by the Shareholder Group and a transfer of interests in Dakota Holdings from
a member of the Pohlad Group to a member of the Shareholder Group shall be
permitted with the consent of the Affiliated Transaction Committee (or, if
such Committee shall not be in existence, by a committee of the Board
composed entirely of Independent Directors), which consent shall not be
unreasonably withheld.
ARTICLE IV
BOARD COMPOSITION
Section 4.1. BOARD COMPOSITION. As of the Effective Time (as defined
in the Merger Agreement) of the Merger, the Board shall consist of the
current directors of the Company and Robert Pohlad.
ARTICLE V
EFFECTIVENESS AND TERMINATION
Section 5.1. EFFECTIVENESS. This Agreement shall take effect
immediately upon the Closing and shall remain in effect until it is
terminated pursuant to Section 5.2 hereof.
Section 5.2. TERMINATION. This Agreement shall terminate upon the
earliest to occur of the following:
(a) The Shareholder Group's Total Ownership Percentage
falling below 15% at any time.
(b) Subject to the provisions of Section 5.3, the consummation
of a Permitted Acquisition pursuant to which the Shareholder Group
becomes the Beneficial Owner of not less than that percentage of the
Voting Power attributable to all Voting Securities of the Company equal
to 75% less the Pohlad Group's Voting Power;
(c) Two (2) years from the first date on which the following
two conditions are met: (i) the Shareholder Group has become the
Beneficial Owner of a percentage of the Voting Power attributable to
all Voting Securities of the Company which is greater than (x) 55% less
the Pohlad Group's Voting Power, but less than (y) 75% less the Pohlad
Group's Voting Power, and (ii) the Shareholder Group has consummated a
Shareholder Offer at a price which is not less than the Minimum Price
pursuant to which at least 10% of the Voting Power attributable to
Voting Securities not Beneficially Owned by the Significant
Shareholders prior to such Shareholder Offer were acquired by the
Shareholder Group.
(d) Mutual written agreement of the Company and the
Shareholder at any time to terminate this Agreement, which termination
shall occur at a time to be fixed in such mutual agreement.
Section 5.3. AGREEMENTS FOLLOWING CERTAIN ACQUISITIONS. Following
the consummation of a Permitted Acquisition pursuant to which the Shareholder
Group becomes the Beneficial Owner of not less than that percentage of the
Voting Power attributable to all Voting Securities of the Company equal to
75% less the Pohlad Group's Voting Power, the Company agrees that for a
period of 90 days after such Permitted Acquisition it shall not, without the
Shareholder's consent, take any action or enter into any agreement which
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(i) restricts the acquisition by the Shareholder Group of any Voting
Securities, notwithstanding that such acquisition is not a Permitted
Acquisition, (ii) restricts in any manner the transfer of any such Voting
Securities by the Shareholder Group, (iii) restricts any right of the
Shareholder Group specifically preserved under Section 3.1, (iv) otherwise
restricts in any manner the ability of any member of the Shareholder Group to
take any action with respect to Voting Securities, including, in the case of
clauses (i) through (iv), amending the Rights Agreement to provide for any
such restriction, (v) effects a material change in the capital structure,
(vi) declares or pays a dividend (other than any regular quarterly dividend),
(vii) materially increases the compensation of any executive officer or
(viii) is a material action not in the ordinary course of business; provided
that this provision shall not restrict the ability of the Company to comply
with commitments entered into prior to the date of such Permitted Acquisition.
ARTICLE VI
MISCELLANEOUS
Section 6.1. INJUNCTIVE RELIEF. Each party hereto acknowledges that
it would be impossible to determine the amount of damages that would result
from any breach of any of the provisions of this Agreement and that the
remedy at law for any breach, or threatened breach, of any of such provisions
would likely be inadequate and, accordingly, agrees that each other party
shall, in addition to any other rights or remedies which it may have, be
entitled to seek such equitable and injunctive relief as may be available
from any court of competent jurisdiction to compel specific performance of,
or restrain any party from violating, any of such provisions. In connection
with any action or proceeding for injunctive relief, each party hereto hereby
waives the claim or defense that a remedy at law alone is adequate and
agrees, to the maximum extent permitted by law, to have each provision of
this Agreement specifically enforced against him or it, without the necessity
of posting bond or other security against him or it, and consents to the
entry of injunctive relief against him or it enjoining or restraining any
breach or threatened breach of such provisions of this Agreement.
Section 6.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the Company
and by the Shareholder and their respective successors and permitted assigns,
and no such term or provision is for the benefit of, or intended to create
any obligations to, any other Person.
Section 6.3. AMENDMENTS; WAIVER. (a) This Agreement may be amended
only by an agreement in writing executed by the parties hereto. Any approval
of an amendment of this Agreement upon the part of the Company shall require
the approval of a majority of the Independent Directors at a duly convened
meeting thereof.
(b) Either party may waive in whole or in part any benefit or
right provided to it under this Agreement, such waiver being effective
only if contained in a writing executed by the waiving party. No
failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon breach thereof shall constitute a
waiver of any such breach or of any other covenant, duty, agreement or
condition, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter. Any waiver of any benefit or right provided
to the Company under this Agreement shall require the approval of a
majority of the Board and a majority of the Independent Directors at a
duly convened meeting thereof.
Section 6.4. NOTICES. Except as otherwise provided in this
Agreement, all notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, when delivered personally or by courier,
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested), or when received by facsimile
transmission if promptly confirmed by one of the foregoing means, as follows:
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If to the Shareholder:
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Attention: General Counsel
Fax: (914) 253-3667
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: Robert Townsend
Fax: (212) 765-1047
If to the Company:
Whitman Corporation
3501 Algonquin Road
Rolling Meadows, Illinois 60008
Attention: General Counsel
Fax: (847) 818-5047
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Seth A. Kaplan
Fax: (212) 403-2223
or to such other address or facsimile number as either party may, from time
to time, designate in a written notice given in a like manner.
Section 6.5. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware
without giving effect to principles of conflicts of law.
Section 6.6. HEADINGS. The descriptive headings of the several
sections in this Agreement are for convenience only and do not constitute a
part of this Agreement and shall not be deemed to limit or affect in any way
the meaning or interpretation of this Agreement.
Section 6.7. INTEGRATION. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof
contain the entire understanding of the parties with respect to its subject
matter. This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter. There are no
restrictions, agreements, promises, representations, warranties, covenants or
undertakings with respect to its subject matter other than those expressly
set forth or referred to herein.
Section 6.8. SEVERABILITY. If any term or provision of this
Agreement or any application thereof shall be declared or held invalid,
illegal or unenforceable, in whole or in part, whether generally or in any
particular jurisdiction, such provision shall be deemed amended to the
extent, but only to the extent, necessary to cure
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such invalidity, illegality or unenforceability, and the validity, legality
and enforceability of the remaining provisions, both generally and in every
other jurisdiction, shall not in any way be affected or impaired thereby.
Section 6.9. CONSENT TO JURISDICTION. In connection with any suit,
claim, action or proceeding arising out of this Agreement, the Shareholder
and the Company each hereby consent to the in personam jurisdiction of the
United States federal courts and state courts located in the State of
Delaware; the Shareholder and the Company each agree that service in the
manner set forth in Section 6.4 hereof shall be valid and sufficient for all
purposes; and the Shareholder and the Company each agree to, and irrevocably
waive any objection based on forum non conveniens or venue not to, appear in
any United States federal court or state court located in the State of
Delaware.
Section 6.10. COUNTERPARTS. This Agreement may be executed by the
parties hereto in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the Company and the Shareholder have caused this
Agreement to be duly executed by their respective authorized officers as of
the date set forth at the head of this Agreement.
WHITMAN CORPORATION
By: /s/ Steven R. Andrews
----------------------------------------------
Name: Steven R. Andrews
Title: Senior Vice President
PEPSICO, INC. (on behalf of itself and all
members of the Shareholder Group)
By: /s/ W. Timothy Heaviside
----------------------------------------------
Name: W. Timothy Heaviside
Title: Vice President
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EXHIBIT C
SHAREHOLDER AGREEMENT
BY AND BETWEEN
WHITMAN CORPORATION,
A DELAWARE CORPORATION,
POHLAD COMPANIES,
A MINNESOTA CORPORATION
DAKOTA HOLDINGS, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
AND
ROBERT POHLAD
DATED AS OF NOVEMBER 30, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I CERTAIN DEFINITIONS
Section 1.1. Certain Definitions.............................................................................1
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company...................................................5
Section 2.2. Representations and Warranties of the Shareholders..............................................5
ARTICLE III SHAREHOLDER AND COMPANY CONDUCT
Section 3.1. Acquisition of Voting Securities................................................................6
Section 3.2. Required Reduction of Ownership Percentage......................................................6
Section 3.3. Top-Up Rights...................................................................................8
Section 3.4. Charter and By-Laws.............................................................................8
Section 3.5. Rights Agreement................................................................................8
Section 3.6. No Agreements...................................................................................8
Section 3.7. Dakota Holdings.................................................................................9
Section 3.8. Special Meetings Requested by the Shareholder; Nominations......................................9
Section 3.9. Options. .......................................................................................9
ARTICLE IV BOARD COMPOSITION; CHIEF EXECUTIVE
Section 4.1. Board Composition; Chief Executive..............................................................9
ARTICLE V EFFECTIVENESS AND TERMINATION
Section 5.1. Effectiveness..................................................................................10
Section 5.2. Termination....................................................................................10
ARTICLE VI MISCELLANEOUS
Section 6.1. Injunctive Relief..............................................................................10
Section 6.2. Successors and Assigns.........................................................................10
Section 6.3. Amendments; Waiver.............................................................................10
Section 6.4. Notices. ......................................................................................11
Section 6.5. Applicable Law.................................................................................11
Section 6.6. Headings.......................................................................................11
Section 6.7. Integration....................................................................................11
Section 6.8. Severability...................................................................................12
Section 6.9. Consent to Jurisdiction........................................................................12
Section 6.10. Counterparts...................................................................................12
</TABLE>
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SHAREHOLDER AGREEMENT, dated as of November 30, 2000 (this
"AGREEMENT"), by and between Whitman Corporation, a Delaware corporation (the
"COMPANY"), Pohlad Companies, a Minnesota corporation, Dakota Holdings, LLC, a
Delaware limited liability company ("DAKOTA HOLDINGS") and Robert Pohlad.
W I T N E S S E T H:
WHEREAS, the Company, Anchor Merger Sub, Inc., a Delaware corporation
("MERGER SUB"), and PepsiAmericas, Inc., a Delaware corporation ("PAS"), have
entered into an Agreement and Plan of Merger, dated as of August 18, 2000 (the
"MERGER AGREEMENT"), pursuant to which, among other things, PAS will be merged
with and into Merger Sub, with Merger Sub as the surviving corporation, and in
connection therewith, certain outstanding shares of common stock of PAS will be
converted into shares of common stock, par value $0.01 per share (the "COMMON
stock"), of the Company (the "MERGER");
WHEREAS, the execution of this Agreement upon the consummation of the
Merger (the "CLOSING") is a covenant of the Company and PAS in the Merger
Agreement and a condition to the Company's obligations to close the transactions
contemplated by the Merger Agreement;
WHEREAS, Dakota Holdings is a shareholder of PAS and will be receiving
common stock in the Merger;
WHEREAS, Pohlad Companies is the managing member of PAS; and
WHEREAS, in light of the transactions contemplated by the Merger
Agreement, the Company and the Shareholders (as defined herein) desire to set
forth in this Agreement certain terms and conditions concerning the acquisition
and disposition of Voting Securities (as defined herein) of the Company by the
Shareholder Group (as defined herein), and related provisions concerning the
Shareholder Group's relationship with and investment in the Company immediately
following the Closing.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Certain Definitions. In addition to other terms defined
elsewhere in this Agreement, as used in this Agreement, the following terms
shall have the meanings ascribed to them below:
"AFFILIATE" shall mean, with respect to any person, any other person
that directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such person. For the purposes of
this definition, "control," when used with respect to any particular person,
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AFFILIATED TRANSACTION COMMITTEE" shall mean the Affiliated
Transaction Committee of the Board.
"AGREEMENT" shall have the meaning assigned to such term in the
preamble.
"BENEFICIAL OWNER" (and, with correlative meanings, "BENEFICIALLY OWN"
and "BENEFICIAL OWNERSHIP") of any interest means a Person who, together with
his or its Affiliates, is or may be deemed a beneficial owner
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of such interest for purposes of Rule 13d-3 or 13d-5 under the Exchange Act,
or who, together with his or its Affiliates, has the right to become such a
beneficial owner of such interest (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise, conversion or exchange of
any warrant, right or other instrument, or otherwise; provided that a Person
shall not be deemed the Beneficial Owner of Voting Securities solely as a
result of having been granted a revocable proxy relating to such Voting
Securities in connection with any one special or annual meeting of
shareholders of the Company (including any postponements or adjournments
thereof), nor shall the procurement of such a proxy be deemed to give the
proxy holder "control" over any Person as to which such proxy holder does not
otherwise have control; and provided, further, that this definition shall be
subject to the last sentence of Section 3.7.
"BOARD" shall mean the Board of Directors of the Company in office at
the applicable time, as elected in accordance with the By-Laws.
"BUY-BACK EXCESS" shall have the meaning set forth in Section 3.2 of
this Agreement.
"BUY-BACK OFFER" shall have the meaning set forth in Section 3.2 of
this Agreement.
"BY-LAWS" shall mean the by-laws of the Company, as in effect
immediately following consummation of the Merger (including amendments pursuant
to the Merger Agreement), as they may be amended from time to time.
"CHARTER" shall mean the Certificate of Incorporation of the Company,
as in effect immediately following consummation of the Merger, as it may be
amended from time to time.
"CLOSING" shall have the meaning assigned in the second recital of this
Agreement.
"COMBINED MAXIMUM OWNERSHIP PERCENTAGE" shall mean, calculated at a
particular point in time, a Total Ownership Percentage of 49.9%; PROVIDED that
in the event of a Permitted Acquisition (other than a Contingent Payment
Acquisition) which results in the Significant Shareholders' Total Ownership
Percentage exceeding 49.9%, so long as the Significant Shareholders' Total
Ownership Percentage exceeds 49.9% due to such Permitted Acquisition, the
Combined Maximum Ownership Percentage shall become the Significant Shareholders'
Total Ownership Percentage giving effect to such Permitted Acquisition.
"COMMISSION" shall mean the United States Securities and Exchange
Commission.
"COMMON STOCK" shall have the meaning assigned in the first recital of
this Agreement.
"COMPANY" shall have the meaning assigned in the preamble.
"CONTINGENT PAYMENT ACQUISITION" shall mean any acquisition of Voting
Securities pursuant to any Contingent Payment (as defined in the Merger
Agreement).
"DAKOTA HOLDINGS AGREEMENT" shall have the meaning set forth in Section
3.7 of this Agreement.
"DIRECTOR" shall mean any member of the Board of Directors of the
Company in office at the applicable time, as elected in accordance with the
provisions of the By-Laws.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FAMILY" shall mean, with respect to any natural person, (i) any child,
stepchild, parent, stepparent, spouse or sibling, and (ii) any grandchild,
grandparent, uncle, aunt, first cousin, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law who Beneficially
Owns greater than 1% of the
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Voting Power or who has entered into an agreement or commitment with said
natural person with respect to the Voting Securities, and shall in each case
include adoptive relationships.
"INDEPENDENT DIRECTOR" shall mean any person who is both (i)
independent of and otherwise unaffiliated with any member of the Shareholder
Group or the PepsiCo Group, and who is not a director, officer, employee,
consultant or advisor (financial, legal or other) of any member of the
Shareholder Group or the PepsiCo Group and has not served in any such capacity
in the previous two (2) years and (ii) not an officer or employee, consultant or
advisor (financial, legal or other) of the Company and has not served in any
such capacity in the previous two (2) years.
"MAXIMUM OWNERSHIP PERCENTAGE" shall mean, calculated at a particular
point in time, a Total Ownership Percentage equal to the "Shareholder Group's
Closing Ownership Percentage," which shall mean the Shareholder Group's Total
Ownership Percentage calculated as of Closing (giving full effect to the
conversion in the Merger of PAS common stock into Company common stock) on a
fully diluted basis (i) including purchases to be made in connection with the
Merger (including the right of Dakota Holdings to purchase Subscription Shares
(as defined in the Merger Agreement) pursuant to Section 4.7 of the Merger
Agreement (the "Subscription Rights") and the right of Pohlad Companies or an
affiliate thereof to acquire common stock with a value of $25 million from the
PepsiCo Group (the "Pepsi Rights")) and (ii) assuming conversion of all options
(other than the Subscription Rights and the Pepsi Rights included in (i) above,
but, including, without limitation, options to acquire shares of PAS stock
Beneficially Owned by members of the Shareholder Group); PROVIDED that in the
event of a Permitted Acquisition (including any Contingent Payment Acquisition)
which results in the Shareholder Group's Total Ownership Percentage exceeding
the Shareholder Group's Closing Ownership Percentage, so long as the Shareholder
Group's Total Ownership Percentage exceeds Shareholder Group's Closing Ownership
Percentage due to such Permitted Acquisition, the Maximum Ownership Percentage
shall become the Shareholder Group's Total Ownership Percentage giving effect to
such Permitted Acquisition.
"MERGER" shall have the meaning set forth in the first recital of this
Agreement.
"MERGER AGREEMENT" shall have the meaning set forth in the first
recital of this Agreement.
"NYSE" shall mean the New York Stock Exchange, Inc.
"PEPSICO" shall mean PepsiCo, Inc., a North Carolina corporation.
"PEPSICO AFFILIATE" shall mean any Affiliate of PepsiCo (other than the
Company or its subsidiaries).
"PEPSICO GROUP" shall mean PepsiCo, any PepsiCo Affiliate, any
Permitted Significant Transferee (as defined in the PepsiCo Shareholder
Agreement) and any Person with whom PepsiCo, any PepsiCo Affiliate or any
Permitted Significant Transferee is part of a 13D Group, but shall exclude any
member of the Pohlad Group.
"PEPSICO SHAREHOLDER AGREEMENT" shall mean the Amended and Restated
Shareholder Agreement, dated as of November 30, 2000, by and between the Company
and PepsiCo.
"PERMITTED ACQUISITION" shall mean the acquisition of Voting Securities
pursuant to (1) a transaction or series of transactions that would not result,
individually or in the aggregate, in any member of the Shareholder Group, singly
or as part of a partnership, limited partnership, syndicate or other 13D Group,
directly or indirectly, acquiring, proposing to acquire, or publicly announcing
or otherwise disclosing an intention to propose to acquire, or offering or
agreeing to acquire, by purchase or otherwise, Beneficial Ownership of any
Security so as to cause either (x) the Shareholder Group's Total Ownership
Percentage to exceed the Maximum Ownership Percentage or (y) the Significant
Shareholders' Total Ownership Percentage to exceed the Combined Maximum
Ownership Percentage, (2) the acquisition of Voting Securities pursuant to any
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Contingent Payment Acquisition or pursuant to any transaction contemplated by
the Merger Agreement, (3) the acquisition of Voting Securities pursuant to the
right of Dakota Holdings to acquire common stock with a value of $25 million
from the PepsiCo Group, in connection with the Merger; (4) a transaction
(including the grant of any options to purchase common stock granted to any
member of the Shareholder Group) approved by the Affiliated Transaction
Committee (or, if such Committee shall not be in existence, by a committee of
the Board composed entirely of Independent Directors), or (5) any acquisition of
Voting Securities by the PepsiCo Group permitted under the PepsiCo Shareholder
Agreement.
"PERSON" shall mean any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government or department or
agency of a government.
"REPURCHASE" shall have the meaning set forth in Section 3.2 of this
Agreement.
"RIGHTS AGREEMENT" shall mean the Shareholder Rights Agreement, dated
as of May 20, 1999, as amended.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHAREHOLDERS" shall mean, collectively Pohlad Companies, Dakota
Holdings and Robert Pohlad, provided that Pohlad Companies shall only be deemed
a Shareholder under this Agreement so long as Pohlad Companies is a member of
the Shareholder Group.
"SHAREHOLDER GROUP" shall mean Robert Pohlad, any Affiliate of Robert
Pohlad (other than the Company or its subsidiaries), any member of Robert
Pohlad's Family, and any Person with whom Robert Pohlad, any Affiliate of Robert
Pohlad or any member of Robert Pohlad's Family is part of a 13D Group.
"SIGNIFICANT SHAREHOLDERS" shall mean, collectively, the Shareholder
Group and the PepsiCo Group.
"13D GROUP" shall mean any group of Persons acquiring, holding, voting
or disposing of any Voting Security which would be required under Section 13(d)
of the Exchange Act and the rules and regulations thereunder to file a statement
on Schedule 13D with the Commission as a "person" within the meaning of Section
13(d)(3) of the Exchange Act; PROVIDED that a Person shall not be deemed to be
part of a 13D Group with another Person solely as a result of having been
granted a revocable proxy relating to such Person's Voting Securities in
connection with any one special or annual meeting of shareholders of the Company
(including any postponements or adjournments thereof); PROVIDED, FURTHER, that
the members of the Shareholder Group shall not be deemed to be part of a 13D
Group with any member of the PepsiCo Group solely due to ownership of interests
in Dakota Holdings so long as all members of the Shareholder Group are in
compliance with the proviso in the first sentence of Section 3.7.
"TOTAL OWNERSHIP PERCENTAGE" shall mean, calculated at a particular
point in time, the Voting Power represented by the Voting Securities
Beneficially Owned by the Person (or Persons) whose Total Ownership Percentage
is being determined.
"TOTAL VOTING POWER" shall mean, calculated at a particular point in
time, the aggregate Votes represented by all then outstanding Voting Securities.
"TRADING DAY", with respect to a Voting Security, shall mean a day on
which the principal national securities exchange on which such Voting Security
is listed or admitted to trading is open for the transaction of business or, if
such security is not listed or admitted to trading on any national securities
exchange, any day other than a Saturday, Sunday or a day on which banking
institutions in the City of New York are authorized or obligated to close.
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"TRANSFER" shall mean any sale, transfer, pledge, encumbrance or other
disposition to any Person, and to "Transfer" shall mean to sell, transfer,
pledge, encumber or otherwise dispose of to any Person.
"VOTES" shall mean votes entitled to be cast generally in the election
of Directors, assuming the conversion of any securities then convertible into
common stock or shares of any other class of capital stock of the Company then
entitled to vote generally in the election of Directors.
"VOTING POWER" shall mean, calculated at a particular point in time,
the ratio, expressed as a percentage, of (a) the Votes represented by the Voting
Securities with respect to which the Voting Power is being determined to (b)
Total Voting Power.
"VOTING SECURITIES" shall mean the common stock and shares of any other
class of capital stock of the Company then entitled to vote generally in the
election of Directors and any securities then convertible into common stock or
shares of any other class of capital stock of the Company then entitled to vote
generally in the election of Directors.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Shareholders as of the date hereof as follows:
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has all necessary corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder.
(b) This Agreement has been duly and validly authorized by the
Company and all necessary and appropriate action has been taken by the
Company to execute and deliver this Agreement and to perform its
obligations hereunder.
(c) This Agreement has been duly executed and delivered by the
Company and assuming due authorization and valid execution and delivery
by each of the Shareholders, this Agreement is a valid and binding
obligation of the Company, enforceable against it in accordance with
its terms.
SECTION 2.2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each
of the Shareholders and Dakota Holdings represents and warrants to the Company
as of the date hereof as follows:
(a) Each of Pohlad Companies and Dakota Holdings has been duly
organized and is validly existing and in good standing under the laws
of its state of organization and has all necessary power and authority
to enter into this Agreement and to carry out its obligations
hereunder.
(b) This Agreement has been duly and validly authorized by
each of Pohlad Companies and Dakota Holdings and all necessary and
appropriate action has been taken by each of Pohlad Companies and
Dakota Holdings to execute and deliver this Agreement and to perform
its obligations hereunder.
(c) This Agreement has been duly executed and delivered by
each of Pohlad Companies, Dakota Holdings and Robert Pohlad and
assuming due authorization and valid execution and delivery by the
Company, this Agreement is a valid and binding obligation of each of
Pohlad Companies, Dakota Holdings and Robert Pohlad, enforceable
against each of Pohlad Companies, Dakota Holdings and Robert Pohlad in
accordance with its terms.
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ARTICLE III
SHAREHOLDER AND COMPANY CONDUCT
SECTION 3.1. ACQUISITION OF VOTING SECURITIES. Subject to the
provisions of this Agreement, during the term of this Agreement, the
Shareholders agree with the Company that, without the prior approval of the
Affiliated Transaction Committee, the Shareholders will not, and will cause each
member of the Shareholder Group not to, take any of the following actions:
(a) singly or as part of a partnership, limited partnership,
syndicate or other 13D Group, directly or indirectly, acquire, propose
to acquire, or publicly announce or otherwise disclose an intention to
propose to acquire, or offer or agree to acquire, by purchase or
otherwise, Beneficial Ownership of any Voting Security so as to cause
either (x) the Shareholder Group's Total Ownership Percentage to exceed
the Maximum Ownership Percentage or (y) to the best of the
Shareholder's knowledge, the Significant Shareholders' Total Ownership
Percentage to exceed the Combined Maximum Ownership Percentage, other
than pursuant to a Permitted Acquisition;
(b) form, join or in any way participate in a 13D Group with
respect to any Voting Securities of the Company or any securities of
its subsidiaries if such 13D Group's Total Ownership Percentage would
exceed the Maximum Ownership Percentage;
(c) initiate (including by means of publicly proposing or
announcing or otherwise disclosing an intention to propose, solicit,
offer, seek to effect or negotiate) a merger, acquisition or other
business combination transaction relating to the Company (other than a
merger, acquisition or business combination of a third party (not a
member of the Shareholder Group) with the Company) which would not be,
if consummated, a Permitted Acquisition.
The Shareholder Group shall not be prohibited by the terms of this
Agreement from taking any action or exercising any right which is not
inconsistent with the terms of this Agreement, including soliciting or obtaining
the revocable proxy of any other shareholder of the Company with respect to the
election of directors or any other matter, seeking the election of new
directors, calling special meetings of shareholders of the Company, making
shareholder proposals, engaging in discussions with the Board or the management
of the Company or otherwise voting its Voting Securities in any manner in which
any member of the Shareholder Group shall determine in its sole discretion. In
addition, this section shall not be deemed to restrict Directors affiliated with
the Shareholders from participating as officers or Board members in the
direction of the Company.
SECTION 3.2. REQUIRED REDUCTION OF OWNERSHIP PERCENTAGE. (a) If at
any time the Shareholders become aware that the Shareholder Group's Total
Ownership Percentage exceeds the Maximum Ownership Percentage, other than as
permitted pursuant to the terms of this Agreement, then the Shareholders shall,
or shall cause the Shareholder Group to, consistent with the provisions of this
Agreement, promptly (in any event, prior to the earliest to occur of (i) the
record date for the next annual or special meeting of shareholders of the
Company, (ii) the record date for the taking of any action of shareholders of
the Company by written consent or (iii) the purchase of any additional Voting
Securities by any member of the Shareholder Group) take all action necessary to
reduce the amount of Voting Securities Beneficially Owned by the Shareholder
Group such that the Shareholder Group's Total Ownership Percentage is not
greater than the Maximum Ownership Percentage.
(b) If at any time the Shareholder becomes aware that the
Significant Shareholders' Total Ownership Percentage exceeds the
Combined Maximum Ownership Percentage as a result of a reduction in the
number of Voting Securities outstanding (including, without limitation,
as a result of a purchase of common stock by the Company) (such excess,
the "BUY-BACK EXCESS"), then the Shareholder shall, or shall cause the
Shareholder Group to, consistent with the provisions of this
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Agreement, promptly (in any event, prior to the earliest to occur of
(x) the record date for the next annual or special meeting of
shareholders of the Company, (y) the record date for the taking of any
action of shareholders of the Company by written consent or (z) the
purchase of any additional Voting Securities by any member of the
Shareholder Group) take all action necessary to reduce the amount of
Voting Securities Beneficially Owned by the Shareholder Group by the
amount of such Buy-Back Excess in the following manner and order:
(i) First, for purposes of clauses (ii) and (iii)
below, the Buy Back Excess shall be reduced by the amount, if
any, of Voting Securities received by the PepsiCo Group as an
Aggregate Contingent Payment (as defined in the Merger
Agreement), to the extent such Aggregate Contingent Payment
has not been previously used to reduce the Buy-Back Excess
pursuant to this Section.
(ii) Second, by Transferring to a Person other than
the Significant Shareholders the pro rata amount (based on the
relative amounts of Voting Securities purchased by each of the
Shareholder Group and the PepsiCo Group since August 18, 2000)
of Voting Securities, if any, purchased by the Shareholder
Group since August 18, 2000;
(iii) Third, by Transferring to a Person other than
the Significant Shareholders the pro rata amount of any
remaining Buy-Back Excess (based on the relative Total
Ownership Percentages, after giving effect to (i) and (ii)
above, of the Shareholder Group and the PepsiCo Group
immediately prior to the time when the Combined Maximum
Ownership Percentage was exceeded).
(iv) Fourth, notwithstanding the foregoing, the
maximum number of Voting Securities that the Shareholder Group
shall be required to Transfer pursuant to (ii) and (iii) above
shall not exceed the amount that would be required to be
Transferred if the PepsiCo Group made its corresponding pro
rata Transfers consistent with (ii) and (iii) above.
(c) If at any time the Shareholders become aware that the
Significant Shareholders' Total Ownership Percentage exceeds the
Combined Maximum Ownership Percentage, other than as a result of a
reduction in the total number of Voting Securities (which situation
shall be governed by paragraph (b) above) or as permitted pursuant to
the terms of this Agreement, then the Shareholders shall, or shall
cause the Shareholder Group to, consistent with the provisions of this
Agreement, promptly (in any event, prior to the earliest to occur of
(i) the record date for the next annual or special meeting of
shareholders of the Company, (ii) the record date for the taking of any
action of shareholders of the Company by written consent or (iii) the
purchase of any additional Voting Securities by any member of the
Shareholder Group) take all action necessary to reduce the amount of
Voting Securities Beneficially Owned by the Shareholder Group such that
the Significant Shareholders' Total Ownership Percentage is not greater
than the Combined Maximum Ownership Percentage; provided that if the
Shareholder becomes aware that the Significant Shareholders' Total
Ownership Percentage exceeds the Combined Maximum Ownership Percentage
due to an acquisition by a member of the PepsiCo Group of Voting
Securities or the addition to the PepsiCo Group of a new Affiliate that
Beneficially Owns Voting Securities, the Shareholder shall promptly
inform the Company of such fact but shall not be required to reduce the
amount of Voting Securities Beneficially Owned by the Shareholder Group
due to such event so long as the Shareholder Group is in compliance
with the other provisions of this Agreement.
(d) During the term of this Agreement, if the Company
purchases shares of common stock from the public, whether by tender
offer, open market purchase or otherwise (a "REPURCHASE"), the Company
shall contemporaneously with the Repurchase offer to purchase from the
Shareholder Group, on the same terms and conditions, including price,
as in the Repurchase, a percentage of those shares of common stock
Beneficially Owned by the Shareholder Group equal to the percentage of
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shares of common stock to be Repurchased from the Beneficial Owners of
shares of common stock other than the Shareholder Group (the "BUY-BACK
OFFER"). The Company shall provide notice to the Shareholders of its
intention to engage in a Repurchase and of the mechanism by which the
Repurchase shall occur not less than thirty (30) days in advance of the
date on which the Repurchase is to be consummated, and the Shareholders
shall provide notice to the Company within ten (10) days of receipt of
such notice of whether the Shareholder Group intends to accept the Buy-
Back Offer.
SECTION 3.3. TOP-UP RIGHTS. During the term of this Agreement, if the
Shareholder Group's Total Ownership Percentage is below the Maximum Ownership
Percentage and the Significant Shareholders' Total Ownership Percentage is below
the Combined Maximum Ownership Percentage, the Shareholder Group may at its
option purchase Voting Securities from time to time in the open market or
otherwise in an amount not in excess of the amount that would cause either (x)
the Shareholder Group's Total Ownership Percentage to exceed the Maximum
Ownership Percentage or (y) the Significant Shareholders' Total Ownership
Percentage to exceed the Combined Maximum Ownership Percentage.
SECTION 3.4. CHARTER AND BY-LAWS. During the term of this Agreement the
Company shall not, and the Shareholder Group shall not, and shall not facilitate
any effort to, amend, alter or repeal, or propose the amendment, alteration or
repeal of, any provision of the Charter or the By-Laws in any manner which is
inconsistent with the terms of this Agreement. If at any time during the term of
this Agreement the provisions of this Agreement shall conflict with the
provisions of the Charter or the By-Laws, the parties shall use all reasonable
efforts, consistent with their fiduciary responsibilities, to cause the
provisions of the Charter and the By-Laws to be brought into conformity with the
provisions of this Agreement.
SECTION 3.5. RIGHTS AGREEMENT. During the term of this Agreement, the
Company hereby agrees not to (i) amend any provision of the Rights Agreement in
any manner which is inconsistent with the terms of this Agreement or the Merger
Agreement and which adversely affects the rights of the Shareholder Group under
the terms of this Agreement or (ii) adopt any new rights agreement which is
inconsistent with the terms of this Agreement or the Merger Agreement and which
adversely affects the rights of the Shareholder Group under the terms of this
Agreement.
SECTION 3.6. NO AGREEMENTS. During the term of this Agreement, except
as specifically contemplated in Section 3.7, no member of the Shareholder Group
shall, directly or indirectly, enter into any agreement or other understanding
with any member of the PepsiCo Group with respect to the holding, voting,
acquisition or disposition of Voting Securities.
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SECTION 3.7. DAKOTA HOLDINGS. Notwithstanding the provisions of Section
3.6, members of the Shareholder Group (whether existing or newly formed) and
members of the PepsiCo Group may be parties to the Amended and Restated Limited
Liability Company Agreement of Dakota Holdings, attached as Annex A to this
Agreement (the "DAKOTA HOLDINGS AGREEMENT"), and to hold interests in Dakota
Holdings pursuant to the Dakota Holdings Agreement, PROVIDED that (i) the Dakota
Holdings Agreement expressly provides that (x) the members of the Shareholder
Group who are parties to the Dakota Holdings Agreement have sole power with
respect to the voting of that percentage of the Voting Securities owned by
Dakota Holdings equal to the Class A Percentage Interest (as defined in the
Dakota Holdings Agreement) (the "CLASS A PERCENTAGE") of the Shareholder Group
members and with respect to the voting of such Voting Securities members of the
PepsiCo Group shall have no power, influence or discretion, and (y) the members
of the PepsiCo Group who are parties to the Dakota Holdings Agreement ultimately
have sole power with respect to the voting of their Class A Percentage of the
Voting Securities owned by Dakota Holdings and with respect to the voting of
such Voting Securities members of the Shareholder Group shall have no power,
influence or discretion which is not subject to the ultimate power of the
PepsiCo Group to direct the voting; and (ii) Dakota Holdings shall not take any
action to acquire, directly or indirectly, Beneficial Ownership of any
additional Voting Securities (excluding any Voting Securities acquired pursuant
to transactions contemplated by the Merger Agreement (including any Contingent
Payment Acquisitions) and excluding Voting Securities acquired through stock
dividends on then-owned Voting Securities and excluding the acquisition of
Voting Securities pursuant to the right of Pohlad Companies to acquire common
stock with a value of $25 million from the PepsiCo Group, in connection with the
Merger). So long as the proviso in the preceding sentence is complied with, for
purposes of calculating the Shareholder Group's Total Ownership Percentage,
those Voting Securities over which a member of the PepsiCo Group has the sole
powers described in clause (y) of clause (i) in the proviso in the preceding
sentence shall not be considered Beneficially Owned by the Shareholder Group and
a transfer of interests in Dakota Holdings from a member of the Shareholder
Group to a member of the PepsiCo Group shall be permitted with the consent of
the Affiliated Transaction Committee (or, if such Committee shall not be in
existence, by a committee of the Board composed entirely of Independent
Directors), which consent shall not be unreasonably withheld.
SECTION 3.8. SPECIAL MEETINGS REQUESTED BY THE SHAREHOLDER;
NOMINATIONS. In the event that during the term of this Agreement the Shareholder
Group requests a special meeting of the stockholders of the Company in
accordance with the By-Laws, or the Shareholder Group nominates an alternative
slate of directors to the slate proposed by the Board at any annual meeting of
stockholders of the Company in accordance with the By-Laws, the Company hereby
agrees that the Company shall not, without the Shareholders' consent, from the
date of receipt of such request for a special meeting or the date of receipt of
such nomination, as the case may be, until the adjournment of the requested
special meeting or the annual meeting, as the case may be, (i) take any action
effecting a material change in its capital structure, (ii) declare or pay a
dividend (other than any regular quarterly dividend), (iii) materially increase
the compensation of any executive officer or (iv) take any material action not
in the ordinary course of business; provided that this provision shall not
restrict the ability of the Company to comply with commitments entered into
prior to the date of such request.
SECTION 3.9. OPTIONS. The Company shall not grant to any member of the
Shareholder Group any options to purchase common stock unless such grant is
approved by the Affiliated Transaction Committee (or, if such Committee shall
not be in existence, by a committee of the Board composed entirely of
Independent Directors).
ARTICLE IV
BOARD COMPOSITION; CHIEF EXECUTIVE
SECTION 4.1. BOARD COMPOSITION; CHIEF EXECUTIVE. (a) As of the
Effective Time (as defined in the Merger Agreement) of the Merger, the Board
shall consist of the current directors of the Company and Robert Pohlad.
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(b) Immediately following the Effective Time, Robert Pohlad
shall be elected Chief Executive Officer of the Company by the Board.
ARTICLE V
EFFECTIVENESS AND TERMINATION
SECTION 5.1. EFFECTIVENESS. This Agreement shall take effect
immediately upon the Closing and shall remain in effect until it is terminated
pursuant to Section 5.2 hereof.
SECTION 5.2. TERMINATION. This Agreement shall terminate upon written
agreement of the Company (which shall require the approval of the Affiliated
Transaction Committee (or, if such Committee shall not be in existence, by a
committee of the Board composed entirely of Independent Directors)) and the
Shareholders at any time to terminate this Agreement, which termination shall
occur at a time to be fixed in such mutual agreement.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. INJUNCTIVE RELIEF. Each party hereto acknowledges that it
would be impossible to determine the amount of damages that would result from
any breach of any of the provisions of this Agreement and that the remedy at law
for any breach, or threatened breach, of any of such provisions would likely be
inadequate and, accordingly, agrees that each other party shall, in addition to
any other rights or remedies which it may have, be entitled to seek such
equitable and injunctive relief as may be available from any court of competent
jurisdiction to compel specific performance of, or restrain any party from
violating, any of such provisions. In connection with any action or proceeding
for injunctive relief, each party hereto hereby waives the claim or defense that
a remedy at law alone is adequate and agrees, to the maximum extent permitted by
law, to have each provision of this Agreement specifically enforced against him
or it, without the necessity of posting bond or other security against him or
it, and consents to the entry of injunctive relief against him or it enjoining
or restraining any breach or threatened breach of such provisions of this
Agreement.
SECTION 6.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the Company and
by the Shareholders and their respective successors and permitted assigns, and
no such term or provision is for the benefit of, or intended to create any
obligations to, any other Person.
SECTION 6.3. AMENDMENTS; WAIVER. (a) This Agreement may be amended
only by an agreement in writing executed by the parties hereto. Any approval of
an amendment of this Agreement upon the part of the Company shall require the
approval of the Affiliated Transaction Committee (or, if such Committee shall
not be in existence, by a committee of the Board composed entirely of
Independent Directors) at a duly convened meeting thereof.
(b) Either party may waive in whole or in part any benefit or
right provided to it under this Agreement, such waiver being effective
only if contained in a writing executed by the waiving party. No
failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon breach thereof shall constitute a
waiver of any such breach or of any other covenant, duty, agreement or
condition, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter. Any waiver of any benefit or right provided
to the Company under this Agreement shall require the approval of a
majority of the Board and approval of the Affiliated Transaction
Committee (or, if such Committee shall not be in existence, by a
committee of the Board composed entirely of Independent Directors) at a
duly convened meeting thereof.
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SECTION 6.4. NOTICES. Except as otherwise provided in this Agreement,
all notices, requests, claims, demands, waivers and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered by hand, when delivered personally or by courier, three days after
being deposited in the mail (registered or certified mail, postage prepaid,
return receipt requested), or when received by facsimile transmission if
promptly confirmed by one of the foregoing means, as follows:
If to the Shareholders:
Pohlad Companies
Suite 3800
60 South 6th Street
Minneapolis, MN 55402
Attention: Robert C. Pohlad
Fax: (612) 661-3825
with a copy to:
Briggs & Morgan, P.A.
2400 IDS Center
Minneapolis, MN 55402
Attention: Brian D. Wenger
Fax: (612) 334-8650
If to the Company:
Whitman Corporation
3501 Algonquin Road
Rolling Meadows, Illinois 60008
Attention: General Counsel
Fax: (847) 818-5029
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Seth A. Kaplan
Fax: (212) 403-2000
or to such other address or facsimile number as either party may, from time to
time, designate in a written notice given in a like manner.
SECTION 6.5. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware without
giving effect to principles of conflicts of law.
SECTION 6.6. HEADINGS. The descriptive headings of the several sections
in this Agreement are for convenience only and do not constitute a part of this
Agreement and shall not be deemed to limit or affect in any way the meaning or
interpretation of this Agreement.
SECTION 6.7. INTEGRATION. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter. There are no restrictions, agreements,
promises, representations, warranties,
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covenants or undertakings with respect to its subject matter other than those
expressly set forth or referred to herein.
SECTION 6.8. SEVERABILITY. If any term or provision of this Agreement
or any application thereof shall be declared or held invalid, illegal or
unenforceable, in whole or in part, whether generally or in any particular
jurisdiction, such provision shall be deemed amended to the extent, but only to
the extent, necessary to cure such invalidity, illegality or unenforceability,
and the validity, legality and enforceability of the remaining provisions, both
generally and in every other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 6.9. CONSENT TO JURISDICTION. In connection with any suit,
claim, action or proceeding arising out of this Agreement, the Shareholder and
the Company each hereby consent to the in personam jurisdiction of the United
States federal courts and state courts located in the State of Delaware; the
Shareholders and the Company each agree that service in the manner set forth in
Section 6.4 hereof shall be valid and sufficient for all purposes; and the
Shareholders and the Company each agree to, and irrevocably waive any objection
based on forum non conveniens or venue not to, appear in any United States
federal court or state court located in the State of Delaware.
SECTION 6.10. COUNTERPARTS. This Agreement may be executed by the
parties hereto in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
C-12
<PAGE>
IN WITNESS WHEREOF, the Company and the Shareholders have caused this
Agreement to be duly executed by their respective authorized officers as of the
date set forth at the head of this Agreement.
WHITMAN CORPORATION
By: /s/ Steven. R. Andrews
-------------------------
Name: Steven R. Andrews
Title: Senior Vice President
POHLAD COMPANIES
By: /s/ John Bierbaum
-------------------
Name: John Bierbaum
Title: Chief Financial Officer
DAKOTA HOLDINGS, LLC
By: Pohlad Companies, Member
By: /s/ John Bierbaum
-------------------
Name: John Bierbaum
Title: Chief Financial Officer
ROBERT C. POHLAD (on behalf of all members of the
Shareholder Group other than Pohlad Companies and
Dakota Holdings)
/s/ Robert C. Pohlad
--------------------------
C-13
<PAGE>
EXHIBIT D
AGREEMENT TO FILE
JOINT STATEMENT ON SCHEDULE 13D
The undersigned hereby agree to file a joint statement on Schedule 13D
on behalf of each of the undersigned pursuant to Rule 13d-1(f) under the
Securities Exchange Act of 1934.
Dated: December 11, 2000 DAKOTA HOLDINGS, LLC
By Its Members
POHLAD COMPANIES
By: /s/ John F. Bierbaum
------------------------
John F. Bierbaum, Vice President and
Chief Financial Officer
BEVERAGES, FOODS & SERVICE INDUSTRIES, INC.
By: /s/ W. Timothy Heaviside
------------------------
W. Timothy Heaviside, Vice President
PEPSI-COLA METROPOLITAN BOTTLING CO., INC.
By: /s/ W. Timothy Heaviside
------------------------
W. Timothy Heaviside, Vice President
BEVERAGE INVESTMENT, LLC
By: /s/ John F. Bierbaum
------------------------
John F. Bierbaum, Vice President
Dated: December 11, 2000 POHLAD COMPANIES
By: /s/ John F. Bierbaum
---------------------
John F. Bierbaum, Vice President and
Chief Financial Officer
Dated: December 11, 2000 PEPSICO, INC.
By: /s/ Timothy Heaviside
---------------------
W. Timothy Heaviside, Vice President
D-1
<PAGE>
APPENDIX I
POHLAD COMPANIES
Pohlad Companies is a business corporation incorporated under the laws
of the State of Minnesota and principally engaged as an investment holding
company. The principal occupation of each executive officer and the address of
the principal business and principal office of Pohlad Companies is 60 South
Sixth Street, Suite 3800, Minneapolis, MN 55402. The principal occupation and
business address of each director is set forth below.
DIRECTORS
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<S> <C>
Robert C. Pohlad President of Pohlad Companies and CEO and a
director of Whitman Corporation
James O. Pohlad Executive Vice President of Pohlad Companies
William M. Pohlad Executive Vice President of Pohlad Companies
</TABLE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<S> <C>
Robert C. Pohlad President of Pohlad Companies and CEO and a
director of Whitman Corporation
James O. Pohlad Executive Vice President of Pohlad Companies
William M. Pohlad Executive Vice President of Pohlad Companies
Raymond W. Zehr, Jr. Executive Vice President and Treasurer of
Pohlad Companies and President
Carl R. Pohlad Vice President of Pohlad Companies
John F. Bierbaum Executive Vice President and Secretary of
Pohlad Companies and Executive Vice President
of Corporate Growth and Strategic Planning of
Whitman Corporation
Michael J. Reinarts Vice President and Assistant Secretary of
Pohlad Companies
</TABLE>
I-1
<PAGE>
PEPSICO, INC.
PepsiCo, Inc. is a business corporation incorporated under the laws of
the State of North Carolina and principally engaged as a holding company for
various entities engaged in the beverage industry. The principal occupation of
each executive officer and the address of the principal business and principal
office of PepsiCo, Inc. is 700 Anderson Hill Road, Purchase, New York 10577. The
principal occupation and business address of each director is set forth below.
DIRECTORS
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<S> <C>
John F. Akers Former Chairman and CEO
International Business Machines Corporation
290 Harbor Drive
Stamford, CT 06902-7441
Robert E. Allen Former Chairman and CEO
AT&T Corp.
101 JFK Parkway, 1D403
Short Hills, NJ 07078
Roger A. Enrico Chairman & CEO
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Peter Foy Retired Chairman
Baring Brothers International Limited
5 Belvedere Dr.
Wimbledon SW19 7BX England
Ray L. Hunt Chairman and CEO
Hunt Oil Company
1445 Ross at Field
Dallas, TX 75202-2785
Arthur C. Martinez Chairman and CEO
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, IL 60179
John J. Murphy Managing Director
SMG Management, LLC
5956 Sherry Lane, Suite 710
Dallas, TX 75225
Franklin W. Raines Chairman and CEO
Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, DC 20016
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<S> <C>
Steven S Reinemund President and COO, PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Sharon Percy Rockefeller President and CEO
WETA
2775 South Quincy Street
Arlington, VA 22206
Franklin A. Thomas TFF Study Group
595 Madison Avenue, 33rd Floor
New York, NY 10022
Karl M. von der Heyden Vice Chairman
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Cynthia M. Trudell Chairman and President
Saturn Corporation, General Motors
1420 Stephenson Highway
Troy, MI 48083
Solomon D. Trijillo Chairman, President and
CEO
U.S. West, Inc.
1801 California Street, Suite 5200
Denver, CO 80202
</TABLE>
I-3
<PAGE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<S> <C>
Roger A. Enrico Chairman of the Board and CEO of PepsiCo, Inc.
Karl M. von der Heyden Vice Chairman of the Board of PepsiCo, Inc.
Matthew M. McKenna Senior Vice President and Treasurer of
PepsiCo, Inc.
Indra K. Nooyi Senior Vice President and CFO of PepsiCo, Inc.
Steven S Reinemund President and COO of PepsiCo, Inc.
Robert F. Sharpe, Jr. Senior Vice President, General Counsel and
Secretary of PepsiCo, Inc.
Peter A. Bridgman Senior Vice President and Controller of
PepsiCo, Inc.
</TABLE>
I-4
<PAGE>
BEVERAGES, FOODS & SERVICE INDUSTRIES, INC.
Beverages, Foods & Service Industries, Inc. is a business corporation
incorporated under the laws of the State of Delaware and principally engaged as
a holding company for various entities engaged in the beverage industry. The
principal occupation of each executive officer and the address of the principal
business and principal office of Beverages, Foods & Service Industries, Inc. is
700 Anderson Hill Road, Purchase, New York 10577. The principal occupation and
business address of each director is set forth below.
DIRECTORS
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<S> <C>
Peter R. Thompson Vice President and Treasurer
Beverages, Foods & Service Industries, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Robert K. Biggart Vice President and Secretary
Beverages, Foods & Service Industries, Inc.
700 Anderson Hill Road
Purchase, NY 10577
</TABLE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<S> <C>
Ronnie Miller President of Beverages, Foods & Service
Industries, Inc.
Don McFarlane Executive Vice President of Beverages, Foods &
Service Industries, Inc.
Michael D. White Executive Vice President of Beverages, Foods &
Service Industries, Inc.
Robert K. Biggart Vice President and Secretary of Beverages,
Foods & Service Industries, Inc.
Peter R. Thompson Vice President and Treasurer of Beverages,
Foods & Service Industries, Inc.
Rogelio Rebolledo Vice President of Beverages, Foods & Service
Industries, Inc.
Lucien Alziari Vice President of Beverages, Foods & Service
Industries, Inc.
Edward F. Hickey Vice President of Beverages, Foods & Service
Industries, Inc.
Douglas McFadden Vice President of Beverages, Foods & Service
Industries, Inc.
I-5
<PAGE>
Name Principal Occupation
---- --------------------
<S> <C>
Zein Abdalla Vice President of Beverages, Foods & Service
Industries, Inc.
David Ayre Vice President of Beverages, Foods & Service
Industries, Inc.
Francisco Glennie Vice President of Beverages, Foods & Service
Industries, Inc.
Frans Hijkoop Vice President of Beverages, Foods & Service
Industries, Inc.
Fermin Diez Vice President of Beverages, Foods & Service
Industries, Inc.
Charles Hawley Vice President of Beverages, Foods & Service
Industries, Inc.
Mahendra Swarup Vice President of Beverages, Foods & Service
Industries, Inc.
Anil Dixit Vice President of Beverages, Foods & Service
Industries, Inc.
Brian Schipper Vice President of Beverages, Foods & Service
Industries, Inc.
Robert A. Rosenberg Vice President of Beverages, Foods & Service
Industries, Inc.
Jacinto Escoriza Vice President of Beverages, Foods & Service
Industries, Inc.
Ronald Schellekens Vice President of Beverages, Foods & Service
Industries, Inc.
Mary Lou Winchborne Vice President of Beverages, Foods & Service
Industries, Inc.
Jean Pierre Wouters Vice President of Beverages, Foods & Service
Industries, Inc.
Brock Leach Vice President of Beverages, Foods & Service
Industries, Inc.
Terry Danahy Vice President of Beverages, Foods & Service
Industries, Inc.
Leslie Wilemon Vice President of Beverages, Foods & Service
Industries, Inc.
I-6
<PAGE>
Name Principal Occupation
---- --------------------
<S> <C>
Frans Hijkoop Vice President of Beverages, Foods & Service
Industries, Inc.
Harriet Kemp Vice President of Beverages, Foods & Service
Industries, Inc.
David Veber Vice President of Beverages, Foods & Service
Industries, Inc.
Joseph Zakaria Vice President of Beverages, Foods & Service
Industries, Inc.
Emilo Leveque Vice President of Beverages, Foods & Service
Industries, Inc.
Kimberly Baugh Vice President of Beverages, Foods & Service
Industries, Inc.
Linda Reddy Vice President of Beverages, Foods & Service
Industries, Inc.
Freddie Cabrera Assistant Secretary of Beverages, Foods &
Service Industries, Inc.
Marijke Hagenaars Assistant Secretary of Beverages, Foods &
Service Industries, Inc.
Felix Chamorro Assistant Secretary of Beverages, Foods &
Service Industries, Inc.
Ron Porter Assistant Secretary of Beverages, Foods &
Service Industries, Inc.
Kerensa Sheen Assistant Secretary of Beverages, Foods &
Service Industries, Inc.
</TABLE>
I-7
<PAGE>
PEPSI-COLA METROPOLITAN BOTTLING COMPANY, INC.
Pepsi-Cola Metropolitan Bottling Company, Inc. is a business
corporation incorporated under the laws of the State of New Jersey and
principally as a holding company for various entities engaged in the beverage
industry. The principal occupation of each executive officer and the address of
the principal business and principal office of Pepsi-Cola Metropolitan Bottling
Company, Inc. is 700 Anderson Hill Road, Purchase, New York 10577. The principal
occupation and business address of each director is set forth below.
DIRECTORS
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<S> <C>
W. Timothy Heaviside Vice President and Assistant General Counsel
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Sarah McGill Vice President and Assistant Treasurer
Pepsi-Cola Metropolitan Bottling Company, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Thomas H. Tamoney, Jr. Vice President and Assistant Secretary
Pepsi-Cola Metropolitan Bottling Company, Inc.
700 Anderson Hill Road
Purchase, NY 10577
</TABLE>
I-8
<PAGE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<S> <C>
Gary M. Rodkin President of Pepsi-Cola Metropolitan Bottling
Company, Inc.
Albert P. Carey Vice President of Pepsi-Cola Metropolitan
Bottling Company, Inc.
Gerard W. Casey Vice President and Secretary of Pepsi-Cola
Metropolitan Bottling Company, Inc.
Thomas H. Tamoney, Jr. Vice President and Assistant Secretary of
Pepsi-Cola Metropolitan Bottling Company, Inc.
Sarah McGill Vice President and Assistant Treasurer of
Pepsi-Cola Metropolitan Bottling Company, Inc.
Kathryn L. Carson Vice President and Assistant Secretary of
Pepsi-Cola Metropolitan Bottling Company, Inc.
James A. Kozlowski Vice President and Treasurer of Pepsi-Cola
Metropolitan Bottling Company, Inc.
James W. Nolan Vice President of Pepsi-Cola Metropolitan
Bottling Company, Inc.
Beth Rodgers Pope Vice President of Pepsi-Cola Metropolitan
Bottling Company, Inc.
David Yawman Vice President of Pepsi-Cola Metropolitan
Bottling Company, Inc.
Carol F. Crossdale Vice President of Pepsi-Cola Metropolitan
Bottling Company, Inc.
W. Timothy Heaviside Vice President of Pepsi-Cola Metropolitan
Bottling Company, Inc.
</TABLE>
I-9
