EXHIBIT 10.2
ADDENDUM NO 3 TO THE
PROTOCOL OF CEREAL PARTNERS WORLDWIDE
ASEAN AGREEMENT
The following sets forth the understanding of General Mills, Inc. ("GMI") and
Nestle S.A. ("Nestle") with respect to the entry of Cereal Partners Worldwide
("CPW") into the breakfast cereal market in the ASEAN countries in accordance
with the document headed "CPW activities in Asia - ASEAN Project". It is
effective as of March 15, 1993:
1) In view of the requirements of the overall Asean Industrial Joint Venture
Agreements to which Nestle is a party and which govern a significant part
of its food activities in that region, the issued and paid-up capital of
Nestle Asean Philippines Inc. ("NAJPHIL"), the company established in the
Philippines for the manufacture and sale of breakfast cereals, is
currently held in the ratio of 40% by several Asean-based investors
("Investors") and of 60% by Nestle. Nestle acknowledges that it holds half
of its 60% interest in trust for GMI, and that GMI is therefore currently
the beneficial owner of a 30% interest in NAJPHIL. Nestle further
acknowledges that GMI has to that effect transferred the US$ equivalent of
Ph. P. 36 million to Nestle for its portion of the initial capital of
NAJPHIL.
Nestle and GMI agree that the basic principle regarding the equity in
NAJPHIL is that Nestle's formal holding in the company, whatever it may
be, will at all times be held as to 50% on trust for GMI.
It follows that in the event of Nestle being forced (by law or contractual
obligations which have been acknowledged and approved by the Supervisory
Board of CPW) to reduce the ratio of its holding in NAJPHIL, or if the
issued and paid-up capital of NAJPHIL needs to be increased above its
present level, or if the ratio of Nestle's holding in NAJPHIL increases at
any time above 60%, GMI undertakes to surrender such of its shares in
NAJPHIL, or to make such further contributions to Nestle, as the case may
be, as will enable GMI to maintain a beneficial interest in 50% of
Nestle's then shareholding in NAJPHIL.
2) In regard to the overall Nestle ASEAN breakfast cereal activities,
involving NAJPHIL as well as the Nestle breakfast cereal selling
operations in the Philippines, Malaysia, Singapore and Thailand, Nestle
acknowledges and agrees that GMI shall (to the extent that the relevant
company pays taxes) be entitled to (responsible for) 50% of the total
profits (losses) attributable to such activities in the respective Nestle
companies, provided that such entitlement shall be on a net effective
after-tax basis and shall take into account all minority shareholders and
correlative commitments therewith, if any. In the event that any of the
respective Nestle companies does not receive a current tax benefit for
losses realized from its breakfast cereal operations, the distribution of
profits by Nestle to GMI or the contribution for losses by GMI to Nestle
for the year in which any such loss is utilized for tax purposes on a
carryforward or carryback basis, shall be adjusted to reflect the tax
benefit from such loss received by any of the respective Nestle companies.
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To that effect GMI shall, within 30 days of receipt of a summary of the
annual Profit and Loss statements for all companies concerned in the Asean
breakfast cereal activities, pay to Nestle its 50% share of any aggregate
fiscal year loss incurred in the immediately preceding fiscal year.
Conversely, but to the extent that the same can actually be transferred to
Switzerland, Nestle shall within the same period remit to GMI 50% of any
aggregate fiscal year profits. If some or all of such profits can not be
transferred to Switzerland due to reasons beyond the reasonable control of
Nestle, they shall be accounted for the credit of General Mills and bear
interest at the prime borrowing rate in the respective countries, after
deduction of taxes and minority interests; such interest shall accrue once
a year. Such profits, or any eligible portion thereof, which are withheld
from transfer to Switzerland, will be remitted to Switzerland as soon as
legally possible.
3) Nestle undertakes regularly to provide GMI with all financial and other
data regarding NAJPHIL, as well as an Auditor's certificate covering the
year-end Profit & Loss situation relating to the breakfast cereal
activities in each of the companies concerned, together with such
supporting documentation as GMI may reasonably require for its US tax
return or other mandatory purpose, including in particular an annual tax
accounting report. Such additional supporting documentation shall be for
GMI's account.
4) The CPW-ASEAN understanding shall also include the terms of a technology
license agreement from Societe des Produits Nestle S.A. ("SPN") to NAJPHIL
and a letter agreement between SPN and CPW S.A. ("CPW") regarding the
payment of royalties to CPW.
This understanding shall be deemed Supplementary to the Protocol of Cereal
Partners Worldwide, as amended.
NESTLE S.A
By: /s/ M. Garrett
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GENERAL MILLS, INC.
By: /s/ M. H. Willes
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