Exhibit 10.2
FORM OF
STOCKHOLDERS AGREEMENT
BY AND AMONG
GENERAL MILLS, INC.,
[LIST DIAGEO SUBS HOLDING SHARES]
AND
DIAGEO PLC
DATED AS OF [ ]
<PAGE>
TABLE OF CONTENTS
PAGE
----
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 Group........5
ARTICLE III
STANDSTILL; VOTING; BOARD REPRESENTATION
Section 3.1. Standstill Restrictions........................................6
Section 3.2. Termination of the Standstill Restrictions.....................7
Section 3.3. Voting.........................................................7
Section 3.4. Board of Directors.............................................7
Section 3.5. Provision of Information.......................................9
ARTICLE IV
TRANSFER RESTRICTIONS; LIQUIDITY
Section 4.1. Transfer Restrictions..........................................9
Section 4.2. Company Repurchase............................................11
Section 4.3. Obligation to Dispose of Shareholder Group Shares.............12
ARTICLE V
REGISTRATION RIGHTS
Section 5.1. Demand Registrations..........................................12
Section 5.2. Piggy-Back Registration.......................................14
Section 5.3. Termination of Registration Obligation........................14
Section 5.4. Registration Procedures.......................................15
Section 5.5. Registration Expenses.........................................19
Section 5.6. Indemnification; Contribution.................................20
Section 5.7. Purchase Right................................................22
-i-
<PAGE>
Page
----
ARTICLE VI
EFFECTIVENESS AND TERMINATION
Section 6.1. Effectiveness.................................................23
Section 6.2. Termination...................................................23
ARTICLE VII
MISCELLANEOUS
Section 7.1. Injunctive Relief.............................................23
Section 7.2. Successors and Assigns........................................23
Section 7.3. Amendments; Waiver............................................24
Section 7.4. Notices.......................................................24
Section 7.5. Applicable Law................................................25
Section 7.6. Headings......................................................25
Section 7.7. Integration...................................................25
Section 7.8. Severability..................................................25
Section 7.9. Shareholder Group Representative..............................25
Section 7.10. Consent to Jurisdiction.......................................25
Section 7.11. Counterparts..................................................25
-ii-
<PAGE>
STOCKHOLDERS AGREEMENT, dated as of [ ] (this "Agreement"), by and
among General Mills, Inc., a Delaware corporation (the "Company"), Diageo plc, a
public limited company incorporated under the laws of England and Wales
("Parent"), [list Diageo subs holding shares] (Parent and such subsidiaries,
collectively, the "Shareholder Group").
W I T N E S S E T H:
WHEREAS, the Company, Parent, The Pillsbury Company, a Delaware
corporation and an indirect wholly-owned subsidiary of Parent ("Pillsbury"), and
General Mills North American Businesses, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company ("Merger Sub"), have entered into an
Agreement and Plan of Merger, dated as of July 16, 2000 (as it may be amended
from time to time, the "Merger Agreement"), pursuant to which, among other
things, Merger Sub will merge with and into Pillsbury, with Pillsbury as the
surviving corporation, and shares of Pillsbury held by Gramet Holdings
Corporation, the sole stockholder of Pillsbury, will be converted into shares of
Common Stock, par value $0.10 per share (including the related preferred share
purchase rights, the "Common Stock"), of the Company (the "Merger");
WHEREAS, the execution of this Agreement is a condition to the
obligation of the parties to consummate the Merger (the "Closing"); and
WHEREAS, the Company, certain subsidiaries of the Company, and certain
subsidiaries of Parent have entered into Subsidiary Purchase Agreements,
pursuant to which, among other things, certain subsidiaries of the Company will
acquire shares and/or assets of certain subsidiaries of Parent and certain other
entities in which Parent and its affiliates own equity interests, in exchange
for shares of Common Stock (collectively, the "Subsidiary Purchase Agreements");
WHEREAS, the Company and the Shareholder Group desire to establish
in this Agreement certain terms and conditions concerning the acquisition and
disposition of the shares of Common Stock issued to the Shareholder Group
pursuant to the Merger Agreement and the Subsidiary Purchase Agreements, and
related provisions concerning the Shareholder Group's relationship with and
investment in the Company 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:
<PAGE>
"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 first Person. As used in
this definition, "control" (including, with correlative meanings, "controlled
by" and "under common control with") shall mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise).
"Agreement" shall have the meaning assigned to such term in the
preamble hereto.
"Beneficially Own" shall mean, with respect to any securities,
having "beneficial ownership" of such securities for purposes of Rule 13d-3 or
13d-5 under the Exchange Act as in effect on the date hereof, and "Beneficial
Ownership" shall have the corresponding meaning.
"Blackout Period" shall have the meaning assigned in Section 5.1(b).
"Board" shall mean the Board of Directors of the Company in office at
the applicable time.
"Business Day" shall mean any day that is not a Saturday, Sunday or
other day on which the commercial banks in New York City or London are
authorized or required by law to remain closed.
"Claims" shall have the meaning assigned in Section 5.6(a).
"Closing" shall have the meaning assigned in the recitals hereto.
"Common Stock" shall have the meaning assigned in the recitals
hereto.
"Company" shall have the meaning assigned in the preamble hereto.
"Company Rights Plan" shall mean the Rights Agreement, dated as of
December 11, 1995, between the Company and Norwest Bank Minnesota, as Rights
Agent, as it may be amended from time to time.
"Demand Registration" shall have the meaning assigned in Section
5.1(a).
"Demand Request" shall have the meaning assigned in Section 5.1(a).
"Demand Shares" shall have the meaning assigned in Section 5.1(a).
"Director" shall mean any member of the Board.
"Effective Period" shall have the meaning assigned in Section
5.4(a)(iii).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
-2-
<PAGE>
"Market Value" shall mean, as of any date, the average of the daily
high and low sales prices per share of Common Stock during the regular trading
sessions on the NYSE for each of the 20 full trading days immediately preceding
(but not including) such date.
"Maximum Number" shall have the meaning assigned in Section 5.2(b).
"Merger" shall have the meaning assigned in the recitals hereto.
"Merger Agreement" shall have the meaning assigned in the recitals
hereto.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Original Issued Shares" shall mean the Purchase Price Shares and the
Additional Shares, if any (as such terms are defined in the Merger Agreement),
and any shares of Common Stock issued in respect thereof or into which such
shares of Common Stock shall be converted in connection with stock splits,
reverse stock splits, stock dividends or distributions, or combinations or any
similar recapitalization, on or after the date hereof.
"Other Holder" shall have the meaning assigned in Section 5.2(b).
"Parent" shall have the meaning assigned in the preamble hereto.
"Parent Director" shall have the meaning assigned in Section 3.4(a).
"Parent Board Member" shall mean a member of the Board of Directors
of Parent or of the Executive Committee of Parent.
"Person" shall mean any individual, corporation, partnership,
limited liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Piggy-Back Registration" shall have the meaning assigned in Section
5.2(a).
"Piggy-Back Request" shall have the meaning assigned in Section
5.2(a).
"Public Shares" shall have the meaning assigned in Section 4.2(a)
"Registrable Shares" shall mean the Shareholder Group Shares.
"Repurchase" shall have the meaning assigned in Section 4.2(a).
"Repurchase Offer" shall have the meaning assigned in Section 4.2(a).
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security" shall have the meaning assigned in Section 4.1(e).
-3-
<PAGE>
"Select Voting Matter" shall mean any proposed (a) amendment to the
certificate of incorporation of the Company or (b) (i) merger, consolidation or
other business combination as a result of which the stockholders of the Company
prior to such transaction would cease to hold at least 80% of the voting
securities of the entity surviving or resulting from such transaction (or the
ultimate parent entity thereof), (ii) the acquisition by any Person of at least
20% of the outstanding voting securities of the Company, (iii) the sale, lease,
exchange or other disposition of at least 20% of the assets of the Company and
its Subsidiaries taken as a whole or (iv) any transaction as a result of which
the Directors immediately prior to such transaction would cease to represent
two-thirds of the directors comprising the Board or the board of directors of
the entity surviving or resulting from such transaction (or the ultimate parent
entity thereof).
"Shareholder Group" shall have the meaning assigned in the preamble
hereto, it being understood that such term shall also include any transferee
pursuant to a Transfer pursuant to Section 4.1(f) hereof.
"Shareholder Group Director" shall mean either of the Directors
elected to the Board at the effective time of the Merger pursuant to Section
5.12 of the Merger Agreement, or any replacement therefor or additional Director
elected pursuant to Section 3.4 of this Agreement.
"Shareholder Group Shares" shall mean, at any time, the Original
Issued Shares that are Beneficially Owned by the Shareholder Group.
"Subsidiary" means, with respect to any Person, any other entity of
which securities or other ownership interests having ordinary power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
"Subsidiary Purchase Agreements" shall have the meaning assigned in
the recitals hereto.
"Transfer" shall mean any sale (including forward sale), transfer,
pledge, encumbrance or other disposition to any Person.
"Trustee" shall have the meaning assigned in Section 4.1(e).
"Votes" shall mean votes entitled to be cast generally in the election
of Directors, assuming the conversion of any securities of the Company 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) the
aggregate Votes represented by all then outstanding Voting Securities.
-4-
<PAGE>
"Voting Securities" shall mean (i) the Common Stock, (ii) shares of
any other class of capital stock of the Company then entitled to vote generally
in the election of Directors and (iii) any securities of the Company then
convertible into shares of any 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 Group 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 the members
of the Shareholder Group, 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 Group.
Each member of the Shareholder Group represents and warrants to the Company as
of the date hereof as follows:
(a) Such member (i) has been duly incorporated and is validly existing and,
with respect to those corporations organized under the laws of one of the
States of the United States of America, in good standing under the laws of
the jurisdiction of its organization and (ii) 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 each such member
and all necessary and appropriate action has been taken by such member to
execute and deliver this Agreement and to perform its obligations
hereunder.
(c) This Agreement has been duly executed and delivered by such member and,
assuming due authorization and valid execution and delivery by the
Company, is a valid and binding obligation of such member, enforceable
against it in accordance with its terms.
-5-
<PAGE>
ARTICLE III
STANDSTILL; VOTING; BOARD REPRESENTATION
Section 3.1 Standstill Restrictions. Subject to Section 3.2, until the
twentieth anniversary of the Closing, the members of the Shareholder Group shall
not, and shall cause each of their respective Affiliates not to, directly or
indirectly:
(a) acquire, offer to acquire or agree to acquire Beneficial Ownership
of any Voting Securities, except pursuant to stock splits, reverse stock
splits, stock dividends or distributions, or combinations or any similar
recapitalization, on or after the date hereof;
(b) acquire, offer to acquire or agree to acquire any business or
material assets of the Company or any of its Subsidiaries;
(c) initiate or propose any offer by any third party to acquire
Beneficial Ownership of Voting Securities, other than an acquisition of
Shareholder Group Shares permitted in accordance with Section 4.1;
(d) initiate or propose any merger, tender offer, business combination
or other extraordinary transaction involving the Company or any of its
Subsidiaries;
(e) act, alone or in concert with others, to seek to affect or
influence the control of the Board or the management of the Company, or the
business, operations, affairs or policies of the Company; provided that
this subsection shall not be deemed to restrict the Shareholder Group
Directors from participating as members of the Board in their capacity as
such;
(f) deposit any Voting Securities in a voting trust or subject any
Voting Securities to any proxy, arrangement or agreement with respect to
the voting of such securities or other agreement having a similar effect,
except as provided in Section 3.3;
(g) initiate or propose any stockholder proposal or make, or in any
way participate in, directly or indirectly, any "solicitation" of "proxies"
to vote, or seek to influence any Person with respect to the voting of, any
Voting Securities, or become a "participant" in a "solicitation" (as such
terms are defined in Regulation 14A under the Exchange Act) with respect to
Voting Securities;
(h) form, join or in any way participate in a group (other than a
group comprised exclusively of the members of the Shareholder Group) of
Persons acquiring, holding, voting or disposing of any Voting Securities
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 SEC as a "person" within the meaning of Section 13(d)(3) of the
Exchange Act (or any successor statute or regulation);
(i) propose, or agree to, or enter into any discussions, negotiations
or arrangements with, or provide any confidential information to, any third
party with respect to any of the foregoing;
-6-
<PAGE>
(j) make any statement or disclosure inconsistent with the foregoing;
or
(k) propose or seek an amendment or waiver of any of the provisions of
this Section 3.1.
Section 3.2 Termination of the Standstill Restrictions. The
restrictions set forth in Section 3.1 shall terminate three years following such
time as the Shareholder Group Shares represent less than 5% of the then
outstanding shares of Common Stock.
Section 3.3 Voting. Until the twentieth anniversary of the Closing or,
if earlier, such time as the Shareholder Group Shares represent less than 5% of
the then outstanding shares of Common Stock, each member of the Shareholder
Group shall (i) vote at any stockholder meeting or in connection with any action
by written consent at or in which Voting Securities are entitled to vote, on any
matter that may be presented, all of its Shareholder Group Shares in the same
proportion as the votes cast by or on behalf of the holders of Voting Securities
other than the members of the Shareholder Group; provided that, notwithstanding
the above, (A) in connection with any election of Directors by the stockholders
of the Company, the Shareholder Group members shall vote all of the Shareholder
Group Shares in favor of the election of the full slate of Director nominees
recommended by the Board to the stockholders of the Company, which slate shall
include the individual(s) nominated pursuant to Section 3.4, and (B) at any time
when the Shareholder Group Shares represent less than 10% of the then
outstanding shares of Common Stock, the Shareholder Group members shall be
entitled to vote the Shareholder Group Shares in their discretion on any Select
Voting Matter that may be presented to the stockholders of the Company and (ii)
be present in person or represented by proxy, at all meetings of stockholders of
the Company so that all Shareholder Group Shares shall be counted for the
purpose of determining the presence of a quorum at such meetings. For the
avoidance of doubt, it is understood and agreed that nothing contained in
Section 3.1 shall limit any Shareholder Group member from exercising its voting
rights as permitted under this Section 3.3 with respect to Director elections
and Select Voting Matters.
Section 3.4 Board of Directors. (a)(i) For so long as the Shareholder
Group Shares represent 50% or more of the Original Issued Shares, the original
Shareholder Group Directors or any replacements therefor (one of whom shall be
the Chief Executive Officer of Parent and one of whom shall be an individual
mutually agreed upon by Parent and the Company from amongst a pool of the Parent
Board Members (a "Parent Director"), provided that Parent and the Company shall
be entitled, should they agree, to select a nominee not from amongst such pool
in lieu of such Parent Director) shall be included in the slate of nominees
recommended by the Board to stockholders for election as Directors at each
annual meeting of stockholders commencing with the first annual meeting of
stockholders following the Closing, (ii) for so long as the Shareholder Group
Shares represent 5% or more of the then outstanding shares of Common Stock but
less than 50% of the Original Issued Shares, the Chief Executive Officer of
Parent shall be included in the slate of nominees recommended by the Board to
stockholders for election as a Director at each annual meeting of stockholders
commencing with the first annual meeting of stockholders following the Closing
and (iii) if the Shareholder Group Shares represent less than 5% of the then
outstanding shares of Common Stock, Parent shall not be entitled to participate
in the selection of any nominees for election to the Board; provided, that in
the event the size of the Board shall be increased to at least 16 but fewer than
20 individuals, (A)
-7-
<PAGE>
under the circumstances set forth in clause (i) above, such slate of nominees
shall include, in addition to the nominees contemplated by such clause (i), one
additional Parent Director (or in lieu of such Parent Director another
individual not from amongst the pool of Parent Board Members if mutually agreed
upon by Parent and the Company) and (B) for so long as the Shareholder Group
Shares represent 10% or more of the then outstanding shares of Common Stock but
less than 50% of the Original Issued Shares, such slate of nominees shall
include the Chief Executive Officer of Parent and one Parent Director (or in
lieu of such Parent Director another individual not from amongst the pool of
Parent Board Members if Parent and the Company so mutually agree); and provided,
further, that in the event the size of the Board is increased to at least 20
individuals, (A) under the circumstances set forth in clause (i) above, such
slate of nominees shall include, in addition to the nominees contemplated by
such clause (i), two additional Parent Directors (or in lieu of either of such
Parent Directors another individual or individuals not from amongst the pool of
Parent Board Members if mutually agreed to by Parent and the Company) and (B)
under the circumstances set forth in clause (ii) above, such slate of nominees
shall include, in addition to the Chief Executive Officer of Parent, one Parent
Director (or in lieu of such Parent Director another individual not from amongst
the pool of Parent Board Members if Parent and the Company so mutually agree).
Parent shall provide in a timely manner all information required by Regulation
14A and Schedule 14A under the Exchange Act with respect to each such nominee.
(b) In the event that any Shareholder Group Director shall cease to
serve as a Director for any reason other than the fact that Parent no longer has
a right to participate in the selection of nominees to the Board (i) if the
vacancy is created by a change in the Chief Executive Officer of Parent, the
vacancy created thereby shall be filled by the new Chief Executive Officer of
Parent, (ii) if the vacancy is created by the departure of a Parent Director,
the vacancy created thereby shall be filled by a Parent Director (or in lieu of
such Parent Director another individual not from amongst the pool of Parent
Board Members if Parent and the Company shall so mutually agree) or (iii)
otherwise, the vacancy created thereby shall be filled by a Parent Director (or
in lieu of a Parent Director another individual not from amongst the pool of
Parent Board Members if mutually agreed upon by Parent and the Company).
(c) Notwithstanding anything in this Agreement to the contrary, (i)
upon the first date that the Shareholder Group Shares represent 5% or more of
the then outstanding Shares of Common Stock but less than 50% of the Original
Issued Shares (A) at such time when there are 15 or fewer Directors serving on
the Board, the Shareholder Group members shall use their reasonable best efforts
to cause the Shareholder Group Director who is not the Chief Executive Officer
of Parent to resign immediately and (B) at such time when there are 20 or more
Directors serving on the Board, the Shareholder Group members shall use their
reasonable best efforts to cause the Shareholder Group Directors other than the
Chief Executive Officer and one other Shareholder Group Director to resign
immediately, (ii) upon the first date that the Shareholder Group Shares
represent 10% or more of the then outstanding Shares of Common Stock but less
than 50% of the Original Issued Shares at such time when there are at least 16
but fewer than 20 Directors serving on the Board, the Shareholder Group members
shall use their reasonable best efforts to cause one Shareholder Group Director
other than the Chief Executive Officer of Parent to resign immediately, (iii)
upon the first date that the Shareholder Group Shares represent 5% or more but
less than 10% of the then outstanding Shares of Common Stock at such time when
there are at least 16 but fewer than 20 Directors serving on the Board, the
Shareholder Group
-8-
<PAGE>
members shall use their reasonable best efforts to cause the Shareholder Group
Director other than the Chief Executive Officer of Parent to resign immediately
and (iv) upon the first date that the Shareholder Group Shares represent less
than 5% of the then outstanding shares of Common Stock, the Shareholder Group
members shall use their reasonable best efforts to cause any Shareholder Group
Director(s) then serving on the Board to resign immediately.
(d) Notwithstanding anything to the contrary contained in this
Agreement, the Shareholder Group Directors shall be permitted to provide to
Parent information concerning the Company and its Subsidiaries that such
individuals receive in their capacity as Directors, provided that with respect
to any such information provided, Parent shall, and it hereby agrees to, be
bound by the same restrictions on disclosure and use of confidential information
as apply to such Shareholder Group Directors in their capacity as Directors.
Section 3.5 Provision of Information. The Company shall provide to
Parent in a reasonably timely manner such information regarding the Company and
its Subsidiaries as Parent requests and which is necessary in order for Parent
to prepare (a) the reports and accounts of Parent required under applicable
stock exchange rules and regulations or (b) the reports of Parent required to be
filed under the Exchange Act, provided that with respect to such information
provided, Parent shall, and it hereby agrees to, be bound by the same
restrictions on disclosure and use of confidential information as apply to a
Shareholder Group Director in its capacity as a Director, it being understood
and agreed that nothing contained in this Section 3.5 shall prohibit Parent from
including any such information in such reports under applicable stock exchange
rules and regulations or under the Exchange Act as and to the extent required to
be so included.
ARTICLE IV
TRANSFER RESTRICTIONS; LIQUIDITY
Section 4.1 Transfer Restrictions. Without the prior consent of the
Board, the members of the Shareholder Group shall not Transfer any Shareholder
Group Shares except for:
(a) Transfers made prior to the eight-month anniversary of the
Closing or following the fourteen-month anniversary of the
Closing (i) in an underwritten public offering in a manner
designed to result in a wide distribution or (ii) in one or more
privately negotiated transactions exempt from the registration
requirements of the Securities Act; provided that in each case no
Transfer under this clause (a) is made, to the knowledge of the
Shareholder Group (without inquiry in the case of a Transfer
pursuant to clause (i)), to any Person or group that, after
giving effect to such Transfer, would Beneficially Own Voting
Securities representing more than 5% of the Voting Power, except
that in the case of a Transfer to a Person specified in Rule
13d-1(b)(1)(ii) promulgated under the Exchange Act that would be
eligible based on such Person's status and passive intent with
respect to the ownership, holding and voting of such Voting
Securities to report such Person's ownership of Voting Securities
on Schedule 13G (assuming such Person owned a sufficient number
of such Voting Securities to require such
-9-
<PAGE>
filing), no Transfer under this clause (a) is made to any such
Person that, after giving effect to such Transfer, would
Beneficially Own Voting Securities representing 10% or more of
the Voting Power; and provided further, that in the
case of a Transfer pursuant to clause (i), the members of the
Shareholder Group shall use their reasonable best efforts to
cause the underwriter(s) of such offering to agree to use their
reasonable efforts to prevent any purchase of shares in such
offering by any Person or group that would, upon such purchase,
exceed either of the foregoing thresholds;
(b) Transfers made following the fourteen-month anniversary of the
Closing pursuant to Rule 144 under the Securities Act;
(c) Transfers pursuant to any business combination, tender or
exchange offer to acquire Common Stock or other extraordinary
transaction that the Board has recommended, or pursuant to a
tender or exchange offer that the Board has not recommended but
only after such time as a majority of the shares of Common Stock
outstanding have been tendered into such offer and after all
material conditions with respect to such offer (including any
financing condition, any minimum condition with respect to number
of shares tendered and any condition with respect to removal of
the Company Rights Plan or any other takeover protections) have
been satisfied or irrevocably waived by the offeror; provided
that no Shareholder Group Shares shall be tendered into any
tender offer or exchange offer not recommended by the Board prior
to the time all such material conditions (other than any such
condition that can be satisfied only at the closing of such
offer) have been satisfied or irrevocably waived by the offeror;
(d) Transfers to the Company or a Subsidiary of the Company;
(e) Transfers to a bona fide financial institution acting in the
capacity of trustee ("Trustee") with respect to an exchangeable
or convertible security of Parent (the "Security"); provided,
that the terms of the Security shall be consistent with the
rights, restrictions and limitations set forth in this Agreement
and the powers of the Trustee shall be consistent therewith; and
provided further that the distribution by Parent of the Security
and the underlying Shareholder Group Shares otherwise complies
with the restrictions on Transfer contained in this Section 4.1;
and
(f) Transfers by a member of the Shareholder Group to Parent or to
any controlled Affiliate of Parent or to any new holding company
of the Shareholder Group, provided that prior thereto such
transferee agrees in writing to acquire and hold such transferred
shares subject to all the provisions of this Agreement as if such
transferee were an original member of the Shareholder Group.
Any certificates for shares of Common Stock issued in respect of any
Transfer pursuant to Section 4.1(a)(ii) or Section 4.1(f) shall bear a legend or
legends referencing
-10-
<PAGE>
restrictions under the Securities Act on transfer of such shares and, in the
case of a Transfer under Section 4.1(f), under this Agreement; provided, that
the holder of any certificate(s) bearing any such legend referencing
restrictions under the Securities Act shall be entitled to receive from the
Company new certificates for a like number of shares of Common Stock not bearing
such legend upon the request of such holder and upon delivery to the Company of
an opinion of counsel to such holder, which opinion is reasonably satisfactory,
in form and substance, to the Company and its counsel, that the restriction
referenced in such legend is no longer required in order to ensure compliance
with the Securities Act.
Prior to the fourteen-month anniversary of the Closing Date, no
Shareholder Group member nor any of their respective directors and officers
shall, and each Shareholder Group member shall use its reasonable best efforts
to cause its and its Subsidiaries' employees, agents and representatives,
including any investment banker, attorney or accountant retained by it or any of
its Subsidiaries not to, make any public statement or announcement regarding, or
cause to be known by the public or the investment community generally, any plan
or intention of any Shareholder Group member to sell or otherwise dispose of,
prior to such fourteen-month anniversary of the Closing, any Registrable Shares
(or any securities convertible into or exchangeable for any Registrable Shares)
to the public or any third party, other than sales or dispositions that are
intended to be consummated prior to the eight-month anniversary of the Closing
Date.
Section 4.2 Company Repurchase. (a) Until the twentieth anniversary of
the Closing or, if earlier, such time as the Shareholder Group Shares represent
less than 5% of the then outstanding shares of Common Stock, if the Company
purchases, during any fiscal year of the Company, shares of Common Stock whether
by open market repurchase or otherwise, other than by tender offer or in
connection with the Company's employee benefit plans (a "Repurchase"), the
Company shall, within 30 days after the end of such fiscal year (other than the
first fiscal year end occurring after the Closing Date), deliver to Parent, on
behalf of the Shareholder Group, a written offer to purchase Shareholder Group
Shares from the members of the Shareholder Group on the terms set forth below (a
"Repurchase Offer"). Each Repurchase Offer shall offer to purchase a percentage
of the Shareholder Group Shares as of the end of such fiscal year equal to the
percentage that the shares of Common Stock repurchased from the Beneficial
Owners of shares of Common Stock other than the Shareholder Group (the "Public
Shares") during such fiscal year (or, in the case of the Repurchase Offer made
in respect of the first full fiscal year of the Company occurring after the
Closing Date, during the period beginning on the day following the Closing Date
and ending on the fiscal year end of the first full fiscal year occurring after
the Closing Date) represents of the total average outstanding Public Shares
during such fiscal year or period, at a price per share equal to the weighted
average per share purchase price paid for Repurchases during such fiscal year or
period. Each Repurchase Offer shall set forth the calculation of such
percentage, average number of shares outstanding and the weighted average per
share purchase price. Parent shall provide notice to the Company within 15 days
of receipt of a Repurchase Offer of whether the Shareholder Group accepts such
Repurchase Offer, which notice shall specify the total number of Shareholder
Group Shares as to which the Repurchase Offer is accepted, the name or names of
the selling Shareholder Group members and the number of Shareholder Group Shares
to be sold by each such member.
-11-
<PAGE>
(b) Any purchase of Shareholder Group Shares by the Company pursuant
to this Section 4.2 shall be on a mutually determined closing date which shall
not be more than 20 Business Days after Parent delivers the notice of acceptance
pursuant to Section 4.2(a). On the closing date, the selling members of the
Shareholder Group shall deliver the shares of Common Stock being sold and
documentation reasonably satisfactory to the Company evidencing the transfer of
such Common Stock. The purchase price shall be paid by wire transfer of
immediately available funds to an account or accounts specified by Parent by
notice given no less than two Business Days prior to the closing date.
(c) The Company may assign any of its purchase rights under this
Section 4.2 to any Subsidiary of the Company without the consent of the
Shareholder Group, provided, however, that no such assignment shall relieve the
Company of any of its obligations thereunder.
Section 4.3 Obligation to Dispose of Shareholder Group Shares. The
members of the Shareholder Group shall, and hereby agree to, prior to the tenth
anniversary of the Closing Date, sell, transfer or otherwise dispose of
Shareholder Group Shares, in each case in accordance with Section 4.1, such that
on and as of such tenth anniversary of the Closing Date the Shareholder Group
Shares held by the Shareholder Group members shall represent less than 25% of
the Original Issued Shares.
ARTICLE V
REGISTRATION RIGHTS
Section 5.1 Demand Registrations. (a) Subject to Section 5.3, at any
time prior to the six-month anniversary of the Closing or following the
fourteen-month anniversary of the Closing, Parent, on behalf of the Shareholder
Group, may, on not more than twelve (12) separate occasions in the aggregate and
not more frequently than once during any nine-month period, require the Company
to file a registration statement under the Securities Act in respect of all or a
portion of the Registrable Shares (so long as such request covers Registrable
Shares with a Market Value on the date of the Demand Request of at least $300
million if the aggregate Market Value of all Registrable Shares on such date is
at least $300 million or, if such Market Value is less than $300 million, so
long as such request covers all Registrable Shares), by delivering to the
Company written notice stating that such right is being exercised, specifying
the number of shares of Common Stock to be included in such registration (the
shares subject to such request, the "Demand Shares") and describing the intended
method of distribution thereof, which may include an underwritten offering (a
"Demand Request"). Subject to Section 5.7, upon receiving a Demand Request, the
Company shall (i) use reasonable best efforts to file as promptly as reasonably
practicable a registration statement on such form as the Company may reasonably
deem appropriate (provided that the Company shall not be obligated to register
any securities on a "shelf" registration statement or otherwise to register
securities for offer or sale on a continuous or delayed basis) providing for the
registration of the sale of such Demand Shares pursuant to the intended method
of distribution (a "Demand Registration") and (ii) after the filing of an
initial version of the registration statement, use reasonable best efforts to
cause such registration statement to be declared effective under the Securities
Act as promptly as practicable after the date of filing of such registration
statement.
-12-
<PAGE>
(b) Notwithstanding anything in this Agreement to the contrary, the
Company shall be entitled to postpone and delay, for reasonable periods of time,
but in no event more than an aggregate of 60 days during any 12-month period (a
"Blackout Period"), the filing or effectiveness of any Demand Registration if
the Company shall determine that any such filing or the offering of any
Registrable Shares would (i) in the good faith judgment of the Board, impede,
delay or otherwise interfere with any pending or contemplated material
acquisition, corporate reorganization or other similar material transaction
involving the Company, (ii) based upon advice from the Company's investment
banker or financial advisor, adversely affect any pending or contemplated
financing, offering or sale of any class of securities by the Company or (iii)
in the good faith judgment of the Board, require disclosure of material
non-public information (other than information relating to an event described in
clauses (i) or (ii) above) which, if disclosed at such time, would be harmful to
the best interests of the Company and its stockholders; provided, however, that
the Company shall give written notice to Parent of its determination to postpone
or delay the filing of any Demand Registration; and provided, further, that in
the event that the Company proposes to register Common Stock, whether or not for
sale for its own account, during a Blackout Period, the Shareholder Group shall
have the right to exercise its rights under Section 5.2 of this Agreement with
respect to such registration, subject to the limitations contained in this
Agreement on the exercise of such rights. Upon notice by the Company to Parent
of any such determination, the members of the Shareholder Group shall keep the
fact of any such notice strictly confidential, and during any Blackout Period,
promptly halt any offer, sale, trading or transfer by it of any Common Stock for
the duration of the Blackout Period set forth in such notice (or until such
Blackout Period shall be earlier terminated in writing by the Company) and
promptly halt any use, publication, dissemination or distribution of the Demand
Registration, each prospectus included therein, and any amendment or supplement
thereto by it for the duration of the Blackout Period set forth in such notice
(or until such Blackout Period shall be earlier terminated in writing by the
Company) and, if so directed by the Company, will deliver to the Company any
copies then in its possession of the prospectus covering such Registrable
Shares.
(c) In connection with an underwritten offering, if the managing
underwriter or co-managing underwriter reasonably and in good faith shall have
advised the Company or Parent that, in its opinion, the number of Demand Shares
subject to a Demand Request exceeds the number which can be sold in such
offering, the Company shall include in such registration the number of Demand
Shares that, in the opinion of such managing underwriter or underwriters, can be
sold in such offering; provided that if as a result of any reduction pursuant to
this paragraph (c) the aggregate Market Value of the Demand Shares to be so
included is less than $300 million, the Shareholder Group may withdraw such
Demand Request with respect to all Demand Shares covered thereby and such
registration shall not count for the purposes of determining the number of
Demand Registrations to which the Shareholder Group is entitled under Section
5.1(a).
(d) In connection with any underwritten offering, the managing
underwriter for such Demand Registration shall be selected by Parent, provided
that such managing underwriter shall be a nationally recognized investment
banking firm and shall be reasonably acceptable to the Company. The Company may,
at its option, select a nationally recognized investment banking firm reasonably
acceptable to Parent to act as co-managing underwriter.
-13-
<PAGE>
(e) Nothing in this Article V shall affect or supersede any of the
transfer restrictions set forth in Article IV hereof or any of the other
provisions of this Agreement.
Section 5.2 Piggy-Back Registration. (a) If, at any time following the
Closing, the Company proposes to register any Common Stock under the Securities
Act on its behalf or on behalf of any of its stockholders, on a form and in a
manner that would permit registration of the Registrable Shares (other than in
connection with dividend reinvestment plans, rights offerings or a registration
statement on Form S-4 or S-8 or any similar successor form), the Company shall
give reasonably prompt written notice to Parent, on behalf of the Shareholder
Group, of its intention to do so, which notice shall be given to Parent not less
than 15 Business Days prior to the contemplated filing date for such
registration statement. Upon the written election of Parent, on behalf of the
Shareholder Group (a "Piggy-Back Request"), given within 10 Business Days
following the receipt by Parent of any such written notice (which election shall
specify the number of the Registrable Shares intended to be disposed of by the
Shareholder Group), the Company shall include in such registration statement (a
"Piggy-Back Registration"), subject to the provisions of this Section 5.2 and,
in the case of a registration on behalf of any of the Company's stockholders,
subject to the rights of such stockholders, such number of the Registrable
Shares as shall be set forth in such Piggy-Back Request. No registration
effected under this Section 5.2 shall relieve the Company of its obligations to
effect a Demand Registration required under Section 5.1.
(b) In the event that the Company proposes to register Common Stock in
connection with an underwritten offering and a nationally recognized investment
banking firm selected by the Company to act as managing underwriter thereof
reasonably and in good faith shall have advised the Company, a member of the
Shareholder Group, or any other holder of Common Stock intending to offer Common
Stock in the offering (each, an "Other Holder") that, in its opinion, the
inclusion in the registration statement of some or all of the Registrable Shares
sought to be registered by the Shareholder Group would adversely affect the
price or success of the offering, the Company shall include in such registration
statement such number of shares of Common Stock as the Company is advised can be
sold in such offering without such an effect (the "Maximum Number") as follows
and in the following order of priority: (A) first, such number of shares of
Common Stock as the Company intended to be registered and sold by the Company if
such registration was initiated by the Company or, if such registration is on
behalf of any Other Holders, such number of shares of Common Stock as such Other
Holders intended to be registered and sold, and (B) second, if and to the extent
that the number of shares of Common Stock to be registered under clause (A) is
less than the Maximum Number, such number of shares of Common Stock as the
Shareholder Group, the Company (if such registration was not initiated by the
Company) and any Other Holders (or additional Other Holders) shall have intended
to register which, when added to the number of shares of Common Stock to be
registered under clause (A), is less than or equal to the Maximum Number, on a
pro rata basis according to the total number of shares of Common Stock intended
to be registered by each such Person.
Section 5.3 Termination of Registration Obligation. Notwithstanding
anything in this Agreement to the contrary, if at any time the Company shall
obtain a written opinion of legal counsel reasonably satisfactory to Parent to
the effect that the Registrable Shares may be publicly offered for sale in the
United States by the Shareholder Group without restriction as to
-14-
<PAGE>
manner of sale and amount of securities sold and without registration under the
Securities Act, the Company shall no longer be obligated to file or maintain a
registration statement with respect to the Registrable Shares pursuant to this
Agreement, unless at a later date Parent delivers to the Company an opinion of
counsel to Parent, which opinion is reasonably satisfactory in form and
substance to counsel to the Company, that registration is then required as a
result of a change in applicable law.
Section 5.4 Registration Procedures. (a) In connection with each
registration statement prepared pursuant to this Article V, and in accordance
with the intended method or methods of distribution of the Registrable Shares as
described in such registration statement, the Company shall, as soon as
reasonably practicable and to the extent practicable:
(i) prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC and use reasonable efforts to
cause such registration statement to become and remain effective promptly,
which registration statement shall comply as to form in all materials
respects with the requirements of the applicable form and include all
financial statements required by such form to be filed therewith; provided
that before filing a registration statement or prospectus or any amendments
or supplements thereto, the Company shall furnish to one counsel selected
by Parent, on behalf of the Shareholder Group, draft copies of all such
documents proposed to be filed at least ten Business Days (in the case of a
Demand Registration) or seven days (in the case of any other registration)
prior to such filing, which documents will be subject to the reasonable
review and comment of Parent and its agents and representatives and the
underwriters, if any, and the Company shall not file any registration
statement in respect of a Demand Registration or amendment or supplement
thereto to which Parent or the underwriters, if any, shall reasonably
object;
(ii) furnish without charge to the members of the Shareholder Group,
and the underwriters, if any, at least one conformed copy of the
registration statement and each post-effective amendment or supplement
thereto (including all schedules and exhibits but excluding all documents
incorporated or deemed incorporated therein by reference, unless requested
in writing by Parent, on behalf of the Shareholder Group, or an
underwriter) and such number of copies of the registration statement and
each amendment or supplement thereto and the summary, preliminary, final,
amended or supplemented prospectuses included in such registration
statement as Parent or such underwriter may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares
being sold by the Shareholder Group (the Company hereby consents to the use
in accordance with the U.S. securities laws of such registration statement
(or post-effective amendment thereto) and each such prospectus (or
preliminary prospectus or supplement thereto) by each member of the
Shareholder Group and the underwriters, if any, in connection with the
offering and sale of the Registrable Shares covered by such registration
statement or prospectus);
(iii) use reasonable best efforts to keep such registration statement
effective for the earlier of (A) 60 days and (B) such time as all of the
securities covered by the registration statement have been disposed (the
"Effective Period"); prepare and file with the SEC such amendments,
post-effective amendments and supplements to the
-15-
<PAGE>
registration statement and the prospectus as may be necessary to maintain
the effectiveness of the registration for the Effective Period and to cause
the prospectus (and any amendments or supplements thereto) to be filed;
(iv) use reasonable best efforts to register or qualify the
Registrable Shares covered by such registration statement under such other
securities or "blue sky" laws of such jurisdictions in the United States as
are reasonably necessary, keep such registrations or qualifications in
effect for so long as the registration statement remains in effect, and do
any and all other acts and things which may be reasonably necessary to
enable the Shareholder Group or any underwriter to consummate the
disposition of the Registrable Shares in such jurisdictions; provided,
however, that in no event shall the Company be required to qualify to do
business as a foreign corporation in any jurisdiction where it would not,
but for the requirements of this subparagraph (iv), be required to be so
qualified; to execute or file any general consent to service of process
under the laws of any jurisdiction; to take any action that would subject
it to service of process in suits other than those arising out of the offer
and sale of the securities covered by the registration statement; or to
subject itself to taxation in any jurisdiction where it would not otherwise
be obligated to do so, but for this paragraph (iv);
(v) use reasonable best efforts to cause the Registrable Shares to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the Shareholder Group to
consummate the disposition of the Registrable Shares;
(vi) use reasonable best efforts to cause all Registrable Shares
covered by such registration statement to be listed on the NYSE or on the
principal securities exchange on which the Common Stock is then listed, or
if no similar securities are then so listed, cause all such Registrable
Shares to be listed on a United States national securities exchange or
secure designation of each such Registrable Share as a Nasdaq National
Market "national market system security" within the meaning of Rule 11
Aa2-1 of the SEC or secure National Association of Securities Dealers
Automated Quotation authorization for such shares and, without limiting the
generality of the foregoing, use reasonable best efforts to take such
actions as may be required by the Company as the issuer of such Registrable
Shares in order to facilitate the registration of at least two market
makers as such with respect to such shares with the National Association of
Securities Dealers, Inc.;
(vii) promptly notify Parent and the managing underwriter or
underwriters, if any, after becoming aware thereof, (A) when the
registration statement or any related prospectus or any amendment or
supplement thereto has been filed, and, with respect to the registration
statement or any post-effective amendment, when the same has become
effective, (B) of any request by the SEC or any United States state
securities authority for amendments or supplements to the registration
statement or the related prospectus or for additional information, (C) of
the issuance by the SEC of any stop order suspending the effectiveness of
the registration statement or the initiation of any proceedings for that
purpose, (D) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable Shares for sale
in any jurisdiction or the initiation of any proceeding for such purpose or
(E) within the Effective Period of the happening of any event or the
existence of any fact which makes any statement in the
-16-
<PAGE>
registration statement or any post-effective amendment thereto, prospectus
or any amendment or supplement thereto, or any document incorporated
therein by reference untrue in any material respect or which requires the
making of any changes in the registration statement or post-effective
amendment thereto or any prospectus or amendment or supplement thereto so
that they will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading;
(viii) during the Effective Period, use its reasonable best efforts to
obtain, as promptly as practicable, the withdrawal of any order enjoining
or suspending the use or effectiveness of the registration statement or any
post-effective amendment thereto or the lifting of any suspension of the
qualification of any of the Registrable Shares for sale in any
jurisdiction;
(ix) deliver promptly to Parent and the managing underwriters, if any,
copies of all correspondence between the SEC and the Company, its counsel
or auditors and all memoranda relating to discussions with the SEC or its
staff with respect to the registration statement and permit Parent to do
such investigation, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary for the
purpose of conducting customary due diligence with respect to the Company,
provided any such investigation shall not interfere unreasonably with the
Company's business;
(x) use reasonable best efforts to provide and cause to be maintained
a transfer agent and registrar for all such Registrable Shares covered by
such registration statement not later than the effective date of such
registration statement;
(xi) cooperate with the Shareholder Group and the managing underwriter
or underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing such Registrable Shares to be sold under the
registration statement in a form eligible for deposit with the Depository
Trust Corporation not bearing any restrictive legends and not subject to
any stop transfer order with any transfer agent, and cause such Registrable
Shares to be issued in such denominations and registered in such names as
the managing underwriters, if any, may request in writing or, if not an
underwritten offering, in accordance with the instructions of the
Shareholder Group, in each case at least two Business Days prior to any
sale of Registrable Shares;
(xii) in the case of an underwritten offering, use reasonable best
efforts to enter into an underwriting agreement customary in form and scope
for underwritten secondary offerings of the nature contemplated by the
applicable registration statement;
(xiii) use reasonable best efforts to obtain an opinion from the
Company's counsel and a "cold comfort" letter from the Company's
independent public accountants (and, if necessary, any other independent
certified public accountants of any Subsidiary of the Company or of any
business acquired by the Company for which financial statements and
financial data is, or is required to be, included in the registration
-17-
<PAGE>
statement) in customary form and covering such matters as are customarily
covered by such opinions and "cold comfort" letters in connection with an
offering of the nature contemplated by the applicable registration
statement;
(xiv) not later than the effective date of the applicable registration
statement, provide a CUSIP number for all Registrable Shares;
(xv) in connection with any underwritten offering of Registrable
Shares having a Market Value on the date of the applicable Demand Request
of at least $500 million, provide reasonable assistance to the underwriters
in the marketing of such Registrable Shares, including by making reasonably
available its employees and personnel and by participating reasonably in
road shows; and
(xvi) use reasonable best efforts to provide to counsel to Parent and
to the managing underwriters, if any, no later than the time of filing of
any document which is to be incorporated by reference into the registration
statement or prospectus (after the initial filing of such registration
statement), copies of any such document.
(b) In the event that the Company would be required, pursuant to
Section 5.4(a)(vii)(E) above, to notify Parent or the managing underwriter or
underwriters, if any, of the happening of any event specified therein, the
Company shall, subject to the provisions of Section 5.1(b) hereof, as promptly
as practicable, prepare and furnish to the Shareholder Group and to each such
underwriter a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to purchasers of Registrable Shares
that have been registered pursuant to this Agreement, such prospectus shall not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Parent, on behalf of the Shareholder Group, agrees that, upon receipt of any
notice from the Company pursuant to Section 5.4(a)(vii)(E) hereof, Parent shall,
and shall use its reasonable best efforts to cause any sales or placement agent
or agents for the Registrable Shares and the underwriters, if any, to forthwith
discontinue disposition of the Registrable Shares until such Person shall have
received copies of such amended or supplemented prospectus and, if so directed
by the Company, to destroy or to deliver to the Company all copies, other than
permanent file copies, then in its possession of the prospectus (prior to such
amendment or supplement) covering such Registrable Shares as soon as practicable
after Parent's receipt of such notice.
(c) Parent shall furnish to the Company in writing such information
regarding the Shareholder Group and its intended method of distribution of the
Registrable Shares as the Company may from time to time reasonably request in
writing, but only to the extent that such information is required in order for
the Company to comply with its obligations under all applicable securities and
other laws and to ensure that the prospectus relating to such Registrable Shares
conforms to the applicable requirements of the Securities Act and the rules and
regulations thereunder. Parent shall notify the Company as promptly as
practicable of any inaccuracy or change in information previously furnished by
Parent to the Company or of the occurrence of any event, in either case as a
result of which any prospectus relating to the Registrable Shares contains or
would contain an untrue statement of a material fact or omits to
-18-
<PAGE>
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and promptly furnish to the Company any additional information
required to correct and update any previously furnished information or required
so that such prospectus shall not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(d) (i) The members of the Shareholder Group agree not to effect any
public sale or distribution of any Registrable Shares, including any sale
pursuant to Rule 144 under the Securities Act, and not to effect any such public
sale or distribution of any other equity security of the Company or of any
security convertible into or exchangeable or exercisable for any equity security
of the Company (in each case, other than as part of such underwritten public
offering) during the 10 days prior to, and during the 60 day period (or such
longer period as Parent agrees with the underwriter of such offering) beginning
on, the consummation of any underwritten public offering of the Registrable
Shares covered by a registration statement referred to in Section 5.2 to the
extent the Shareholder Group's Registrable Shares are being sold thereunder.
(ii) The Company hereby agrees that if it shall previously have
received a request pursuant to Section 5.1 or 5.2 for registration of
Registrable Shares in an underwritten offering, and if such previous
registration shall not have been withdrawn or abandoned, the Company shall not
sell, transfer, or otherwise dispose of, any Common Stock, or any other equity
security of the Company or any security convertible into or exchangeable for any
equity security of the Company until the earlier of (A) 60 days after the
effective date of such registration statement and (B) such time as all of the
Registrable Shares covered by such registration statement have been distributed,
other than (x) as part of such underwritten offering, (y) pursuant to a
registration statement on Form S-8 or Form S-4 under the Securities Act or any
successor or similar form or (z) in one or more private transactions that would
not interfere with the method of distribution contemplated by such registration
statement.
(e) In the case of any registration under Section 5.1 pursuant to an
underwritten offering, or in the case of a registration under Section 5.2 if the
Company has entered into an underwriting agreement in connection therewith, all
shares of Common Stock to be included in such registration shall be subject to
the applicable underwriting agreement and no Person may participate in such
registration unless such Person agrees to sell such Person's securities on the
basis provided therein and completes and executes all questionnaires,
indemnities, underwriting agreements and other documents (other than powers of
attorney) which must be executed in connection therewith, and provides such
other information to the Company or the underwriter as may be reasonably
requested to register such Person's Common Stock.
Section 5.5 Registration Expenses. The members of the Shareholder
Group shall bear all agent fees and commissions, underwriting discounts and
commissions, and fees and disbursements of their counsel and accountants, in
connection with any registration of any Registrable Shares pursuant to Section
5.1 or 5.2. The Company shall bear all other fees and expenses in connection
with any registration statement pursuant to Section 5.1 or 5.2, including all
registration and filing fees, all printing costs, and all fees and expenses of
counsel and accountants for the Company.
-19-
<PAGE>
Section 5.6 Indemnification; Contribution. (a) The Company shall, and
it hereby agrees to, indemnify and hold harmless each member of the Shareholder
Group and its respective directors, officers, employees and controlling Persons,
if any, and each underwriter, its partners, directors, officers, employees and
controlling Persons, if any, in any offering or sale of the Registrable Shares,
against any losses, claims, damages or liabilities, actions or proceedings
(whether commenced or threatened) in respect thereof and expenses (including
reasonable fees of counsel) (collectively, "Claims") to which each such
indemnified party may become subject, insofar as such Claims (including any
amounts paid in settlement effected with the consent of the Company as provided
herein), or actions or proceedings in respect thereof, arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any registration statement, or any preliminary or final prospectus
contained therein, or any amendment or supplement thereto, or any document
incorporated by reference therein, or arise out of or are based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, and the Company shall,
and it hereby agrees to, reimburse periodically Parent or any such underwriter
for any legal or other out-of-pocket expenses reasonably incurred by them in
connection with investigating or defending any such Claims; provided, however,
that the Company shall not be liable to any such Person in any such case to the
extent that any such Claims arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement, or preliminary or final prospectus, or amendment or
supplement thereto, in reliance upon and in conformity with information
furnished to the Company by the Shareholder Group or any underwriter or
representative of the Shareholder Group expressly for use therein, or by the
Shareholder Group's failure to furnish the Company, upon request, with the
information with respect to the Shareholder Group, or any underwriter or
representative of the Shareholder Group, or the Shareholder Group's intended
method of distribution, that is the subject of the untrue statement or omission
or if the Company shall sustain the burden of proving that the Shareholder Group
or such underwriter sold securities to the Person alleging such Claims without
sending or giving, at or prior to the written confirmation of such sale, a copy
of the applicable prospectus (excluding any documents incorporated by reference
therein) or of the applicable prospectus, as then amended or supplemented
(excluding any documents incorporated by reference therein), if the Company had
previously furnished copies thereof to the Shareholder Group or such
underwriter, and such prospectus corrected such untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement.
(b) The members of the Shareholder Group shall, and hereby agree,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers, employees and controlling Persons, if any, and each
underwriter, its partners, officers, directors, employees and controlling
Persons, if any, in any offering or sale of Registrable Shares, against any
Claims to which each such indemnified party may become subject, insofar as such
Claims (including any amounts paid in settlement as provided herein), or actions
or proceedings in respect thereof, arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, or any preliminary or final prospectus contained
therein, or any amendment or supplement thereto, or any document incorporated by
reference therein, or arise out of or are based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case only to
the extent that such untrue statement or alleged untrue statement or omission or
-20-
<PAGE>
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Shareholder Group expressly for use
therein, and (ii) reimburse the Company for any legal or other out-of-pocket
expenses reasonably incurred by the Company in connection with investigating or
defending any such Claim.
(c) Promptly after receipt by an indemnified party under Section
5.6(a) or Section 5.6(b) of written notice of the commencement of any action or
proceeding for which indemnification under Section 5.6(a) or Section 5.6(b) may
be requested, such indemnified party shall notify such indemnifying party in
writing of the commencement of such action or proceeding; but the omission so to
notify the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party in respect of such action or proceeding
hereunder unless the indemnifying party was materially prejudiced by such
failure of the indemnified party to give such notice, and in no event shall such
omission relieve the indemnifying party from any other liability it may have to
such indemnified party. In case any such action or proceeding shall be brought
against any indemnified party and it shall notify an indemnifying party of the
commencement thereof, such indemnifying party shall be entitled to participate
therein and, to the extent that it shall determine, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal or any other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that (i) if the
indemnifying party fails to take reasonable steps necessary to defend diligently
the action or proceeding within 20 days after receiving notice from such
indemnified party that the indemnified party believes it has failed to do so;
(ii) if such indemnified party who is a defendant in any action or proceeding
which is also brought against the indemnifying party reasonably shall have
concluded that there may be one or more legal defenses available to such
indemnified party which are not available to the indemnifying party; or (iii) if
representation of both parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct, then, in any such case, the
indemnified party shall have the right to assume or continue its own defense as
set forth above (but with no more than one firm of counsel for all indemnified
parties in each jurisdiction) and the indemnifying party shall be liable for any
expenses therefor (including, without limitation, any such reasonable counsel's
fees). If the indemnifying party is not entitled to, or elects not to, assume
the defense of a claim, it will not be obligated to pay the fees and expenses of
more than one counsel for each indemnified party with respect to such claim. The
indemnifying party will not be subject to any liability for any settlement made
without its consent, which consent shall not be unreasonably withheld or
delayed. No indemnifying party shall, without the prior written consent of the
indemnified party, compromise or consent to entry of any judgment or enter into
any settlement agreement with respect to any action or proceeding in respect of
which indemnification is sought under Section 5.6(a) or Section 5.6(b) (whether
or not the indemnified party is an actual or potential party thereto), unless
such compromise, consent or settlement includes an unconditional release of the
indemnified party from all liability in respect of such claim or litigation,
does not subject the indemnified party to any material injunctive relief or
other material equitable remedy and does not include a statement or admission of
fault, culpability or a failure to act, by or on behalf of the indemnified
party.
-21-
<PAGE>
(d) The members of the Shareholder Group and the Company agree that
if, for any reason, the indemnification provisions contemplated by Sections
5.6(a) or 5.6(b) hereof are unavailable to or are insufficient to hold harmless
an indemnified party in respect of any Claims referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such Claims in such proportion as is
appropriate to reflect the relative fault of, the indemnifying party, on the one
hand, and the indemnified party, on the other hand, with respect to such
offering of securities. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. If, however, the allocation in the second preceding
sentence is not permitted by applicable law, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative faults, but also
the relative benefits of the indemnifying party and the indemnified party, as
well as any other relevant equitable considerations. The parties hereto agree
that it would not be just and equitable if contributions pursuant to this
Section 5.6(d) were to be determined by pro rata allocation or by any other
method of allocation which does not take into account the equitable
considerations referred to in the preceding sentences of this Section 5.6(d).
The amount paid or payable by an indemnified party as a result of the Claims
referred to above shall be deemed to include (subject to the limitations set
forth in Section 5.6(c) hereof) any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action, proceeding or claim. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
Section 5.7 Purchase Right. (a) Notwithstanding anything to the
contrary contained in this Agreement, within five Business Days after receipt by
the Company of a Demand Request from Parent, the Company may elect, by delivery
of written notice (the "Purchase Notice") to Parent, on behalf of the
Shareholder Group, to purchase all or any of the Demand Shares specified therein
(the number of shares elected to be purchased, the "Purchase Shares") at a price
per share equal to the Market Value on the date of the Demand Request. Any
purchase of the Demand Shares shall be allocated pro rata among the members of
the Shareholder Group according to each member's portion of the Demand Shares.
Any Demand Shares that are not purchased pursuant to this Section 5.7, either
because the Company has elected not to purchase any Demand Shares (or fails to
make the required election within the relevant time period) or because the
Company elects to purchase some but not all of the Demand Shares, shall be
subject to the registration obligations of the Company under this Article V. In
the event that the Company elects to purchase some but not all of the Demand
Shares, Parent, on behalf of the Shareholder Group, may withdraw the Demand
Request with respect to the remaining shares, which shall not constitute a
Demand Request for the purposes of determining the number of Demand Requests to
which the Shareholder Group is entitled under Section 5.1(a).
(b) Any purchase of Demand Shares by the Company pursuant to this
Section 5.7 shall be on a mutually determined closing date which shall not be
more than 20 Business Days
-22-
<PAGE>
after the Purchase Notice is given. On the closing date, the members of the
Shareholder Group shall deliver the shares of Common Stock being sold and
documentation satisfactory to the Company evidencing the transfer of such Common
Stock. The purchase price shall be paid by wire transfer of immediately
available funds to an account or accounts specified by Parent by notice given no
less than two Business Days prior to the closing date.
(c) The Company may assign any of its purchase rights under this
Section 5.7 to any Subsidiary of the Company without the consent of the
Shareholder Group, provided, however, that no such assignment shall relieve the
Company of any of its obligations thereunder.
ARTICLE VI
EFFECTIVENESS AND TERMINATION
Section 6.1 Effectiveness. This Agreement shall take effect
immediately upon the Closing and shall remain in effect until it is terminated
pursuant to Section 6.2 hereof.
Section 6.2 Termination. Other than the termination provisions
applicable to particular Sections of this Agreement that are specifically
provided elsewhere in this Agreement, this Agreement shall terminate upon the
earliest to occur of the following:
(a) The twentieth anniversary of the Closing; or
(b) Mutual written agreement of the Company and Parent, on behalf of
the Shareholder Group, at any time to terminate this Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.1 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 it,
without the necessity of posting bond or other security against it, and consents
to the entry of injunctive relief against it enjoining or restraining any breach
or threatened breach of such provisions of this Agreement.
Section 7.2 Successors and Assigns. This Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the Company and
by Parent and the members of the Shareholder Group 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
-23-
<PAGE>
Person, except as otherwise specifically provided in this Agreement. Except as
expressly provided in Sections 4.1(f), 4.2(c) and 5.7(c), neither this Agreement
nor any rights or obligations hereunder shall be assignable without the consent
of the other party.
Section 7.3 Amendments; Waiver. This Agreement may be amended only by
an agreement in writing executed by the parties hereto. 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.
Section 7.4 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 U.S. mail (registered or certified mail, postage prepaid,
return receipt requested), or when received by facsimile transmission if
promptly confirmed by telephone, as follows:
If to any member of the Shareholder Group:
Diageo plc
8 Henrietta Place
London England W1M9AG
Attention: Group General Counsel
Fax: 011-44207-927-4864
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Attention: Francis J. Aquila, Esq.
Fax: (212) 558-3588
If to the Company:
General Mills, Inc.
Number One General Mills Boulevard
Minneapolis, Minnesota 55426
Attention: General Counsel
Fax: (763) 764-3302
-24-
<PAGE>
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Steven A. Rosenblum, Esq.
Fax: (212) 403-2000
or to such other address, facsimile number or telephone as either party may,
from time to time, designate in a written notice given in a like manner.
Section 7.5 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 7.6 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 7.7 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.
Section 7.8 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 7.9 Shareholder Group Representative. Parent shall act on
behalf of the Shareholder Group to receive notices and take any other actions
hereunder.
Section 7.10 Consent to Jurisdiction. In connection with any suit,
claim, action or proceeding arising out of this Agreement, the parties each
hereby consent to the in personam jurisdiction of the United States federal
courts and state courts located in the State of Delaware; Parent and the Company
each agree that service in the manner set forth in Section 7.4 hereof shall be
valid and sufficient for all purposes; and the parties each agree to, and
irrevocably waive any objection based on forum non conveniens or venue to,
appear in any United States federal court or state court located in the State of
Delaware.
Section 7.11 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.
-25-
<PAGE>
IN WITNESS WHEREOF, the parties 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.
GENERAL MILLS, INC.
By:---------------------------------
Name:
Title:
DIAGEO plc
By:---------------------------------
Name:
Title:
GRAMET HOLDINGS CORPORATION
By:---------------------------------
Name:
Title:
[ADD DIAGEO SUBS]
-26-
