SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-K-A
AMENDMENT NO. 1 TO
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996 COMMISSION FILE NO. 1-4582
RALSTON PURINA COMPANY
INCORPORATED IN MISSOURI - IRS EMPLOYER IDENTIFICATION NO. 43-0470580
CHECKERBOARD SQUARE, ST. LOUIS, MISSOURI 63164
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 314-982-1000
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class Name of each exchange on which registered
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RALSTON PURINA COMPANY NEW YORK STOCK EXCHANGE, INC.
COMMON STOCK, PAR VALUE $.10 PER SHARE CHICAGO STOCK EXCHANGE
PACIFIC STOCK EXCHANGE INCORPORATED
RALSTON PURINA COMPANY NEW YORK STOCK EXCHANGE, INC.
COMMON STOCK PURCHASE RIGHTS CHICAGO STOCK EXCHANGE
PACIFIC STOCK EXCHANGE INCORPORATED
5 3/4% CONVERTIBLE SUBORDINATED DEBENTURES NEW YORK STOCK EXCHANGE, INC.
9 1/4% DEBENTURES NEW YORK STOCK EXCHANGE, INC.
9.30% DEBENTURES NEW YORK STOCK EXCHANGE, INC.
8 5/8% DEBENTURES NEW YORK STOCK EXCHANGE, INC.
8 1/8% DEBENTURES NEW YORK STOCK EXCHANGE, INC.
7 7/8 % DEBENTURES NEW YORK STOCK EXCHANGE, INC.
7 3/4% DEBENTURES NEW YORK STOCK EXCHANGE, INC.
Registrant has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months and has
been subject to such filing requirements for the past 90 days.
Yes: X No:
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein and will not be contained, to the best of registrant's
knowledge, in the definitive proxy statement incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.
Yes: No: X
AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NONAFFILIATES OF THE
REGISTRANT AS OF THE CLOSE OF BUSINESS ON NOVEMBER 1, 1996:
$7,499,138,720.
(Excluded from this figure is the voting stock held by Registrant's Directors,
who are the only persons known to Registrant who may be considered to be its
"affiliates" as defined under Rule 12b-2.)
Number of shares of Ralston Purina Company Common Stock ("RAL Stock"), $.10
par value, outstanding as of close of business on November 1, 1996:
105,975,413.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of Ralston Purina Company 1996 Annual Report to Shareholders
(Parts I and II of Form 10-K).
2. Portions of Ralston Purina Company Notice of Annual Meeting and Proxy
Statement dated December 6, 1996 (Part III of Form 10-K).
AMENDMENT NO. 1
The undersigned registrant hereby amends Item 14b. (10) of its Annual Report
of Form 10-K for the year ended September 30, 1996, to add, as exhibits, the
following material contracts, as sub items (xx) and (xxi):
10 (xx) Shareholder Agreement by and among Interstate Bakeries Corporation,
Rlston Purina Company and VCS Holding Company, dated July 22, 1995.
10 (xxi) Supplement to Shareholder Agreement by and among Interstate Bakeries
Corporation, Ralston Purina Company and VCS Holding Company, dated July 25,
1995.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
RALSTON PURINA COMPANY
Registrant
By
James M. Neville
Vice President and
General Counsel
Date: May 15, 1997
<PAGE>
EXHIBIT INDEX
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Exhibits
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Exhibit 10 (xx) Shareholder Agreement by and among Interstate
Bakeries Corporation, Raslton Purina Comany and VCS Holding Company,
dated July 25, 1995.
Exhibit 10 (xxi) Supplement to Shareholder Agreement by and
among Interstate Bakeries Coropration, Ralston Purina
Company and VCS Holding Company, dated July 25, 1995.
Exhibit 10(xx)
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT dated July 22, 1995 (the "Agreement"), is made
by and among INTERSTATE BAKERIES CORPORATION, a Delaware corporation ("IBC"),
RALSTON PURINA COMPANY, a Missouri corporation ("RPC") and VCS HOLDING
COMPANY, a Delaware corporation and a wholly-owned subsidiary of RPC ("VCS")
(RPC, VCS and any of their Affiliates (as defined below) which own IBC Equity
(as defined below) are collectively referred to as "Ralston").
WHEREAS, pursuant to that certain Sale and Purchase Agreement dated as of
April 12, 1995 (the "Purchase Agreement") by and among IBC, RPC, VCS and
CONTINENTAL BAKING COMPANY, a Delaware corporation and wholly-owned subsidiary
of VCS ("CBC"),
IBC acquired all of the outstanding shares of capital stock of CBC, par value
$100 per share, from VCS in exchange for cash in the amount of $220,000,000
and 16,923,077 shares of IBC Stock (as defined below); and
WHEREAS, the parties hereto desire to enter into this Agreement to
provide for certain rights and restrictions with respect to the shares of IBC
Equity.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth herein, each of IBC and Ralston agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, and unless the context requires a different
meaning, the following terms (whether used in the singular or plural) have the
meanings indicated. Any term used and not defined herein has the meaning set
forth in the Purchase Agreement.
Section 1.1 Affiliate. An "Affiliate" of a Person, means any other
Person that directly or indirectly through one or more intermediaries
Controls, is controlled by or is under common control with such Person. When
used in this Agreement with respect to IBC, the term applies only to other
Persons that are Affiliates, as so defined, as of the date of this Agreement.
Section 1.2 Applicable Acceptance Period. "Applicable Acceptance
Period" has the meaning set forth in Section 4.1(c) of this Agreement.
Section 1.3 Associate. An "Associate" of a Person, means any of such
Person's directors, officers, shareholders, representatives, trustees,
employees, attorneys, advisors, or agents.
Section 1.4 Business Day. "Business Day" means any day other than a
Saturday, Sunday or legal holiday for commercial banks in Kansas City,
Missouri.
Section 1.5 CBC. "CBC" has the meaning set forth above in the
recitals to this Agreement.
Section 1.6 Closing. "Closing" means the closing of the transactions
contemplated by the Purchase Agreement.
Section 1.7 Control. "Control" (including the terms "controlling,"
"controlled by" and "under common control with") means the possession of the
power, directly or indirectly, (a) to elect a majority of the board of
directors (or equivalent governing body) of the entity in question; or (b) to
direct or cause the direction of the management and policies of or with
respect to the entity or assets in question, whether through ownership of
securities, by contract or otherwise.
Section 1.8 Demand Notice. "Demand Notice" has the meaning set forth
in Section 5.1 of this Agreement.
Section 1.9 Demand Registration. "Demand Registration" has the
meaning set forth in Section 5.1 of this Agreement.
Section 1.10 Exchange Act. "Exchange Act" means the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.
Section 1.11 First Offer. "First Offer" has the meaning set forth in
Section 4.1(a) of this Agreement.
Section 1.12 First Registration Rights Agreement. "First
Registration Rights Agreement" has the meaning set forth in Section 5.5 of
this Agreement.
Section 1.13 Group. "Group" means any group of Persons within the
meaning of Section 13(d)(3) of the Exchange Act.
Section 1.14 IBC. "IBC" has the meaning set forth above in the
recitals to this Agreement.
Section 1.15 IBC Call. "IBC Call" means the right of IBC to acquire
certain IBC Equity pursuant to Section 9.1(a) of this Agreement.
Section 1.16 IBC Equity. "IBC Equity" means shares of IBC Stock
acquired by Ralston at the Closing and any other IBC Securities owned,
beneficially or of record, by Ralston at any time during the term of this
Agreement.
Section 1.17 IBC Indemnified Party. "IBC Indemnified Party" has the
meaning set forth in Section 8.1(a) of this Agreement.
Section 1.18 IBC Market Price. "IBC Market Price" means the average
of the closing sale prices of the class of IBC Securities being valued on the
New York Stock Exchange or if such IBC Securities are not listed or admitted
to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system of the principal national securities
exchange on which the security is listed or admitted to trading, for the
twenty (20) trading days which end on the day immediately prior to the date of
the (i) Notice of Exercise delivered pursuant to an IBC Call; (ii) Notice of
Intention; (iii) Demand Notice; or (iv) Incidental Notice, as the case may be.
If the IBC Securities are not listed or admitted to trading on any national
securities exchange, the IBC Market Price means the last quoted sale price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System or such other system then in use,
for the twenty (20) trading days which end on the day immediately prior to
such date, or, if on any such trading day such IBC Securities are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by two professional market makers making a market in such
securities, one selected in good faith by the board of directors of IBC and
the other selected in good faith by Ralston. If the IBC Securities are not
publicly held or so listed or publicly traded, IBC Market Price means the cash
price at which a willing seller would sell and a willing buyer would buy such
securities in an arm's-length negotiated transaction without undue time
restraints, as determined in good faith by, an investment banking firm
selected by agreement between IBC and Ralston
Section 1.19 IBC Stock. "IBC Stock" means the $.01 par value common
stock of IBC.
Section 1.20 IBC Securities. "IBC Securities" means any voting
securities of IBC or its affiliates, including any securities convertible into
or exercisable or exchangeable for any voting securities of IBC.
Section 1.21 Incidental Notice. "Incidental Notice" has the meaning
set forth in Section 5.3(a) of this Agreement.
Section 1.22 Loss. "Loss" has the meaning set forth in Section
8.1(a)(i) of this Agreement.
Section 1.23 Marketable Number. "Marketable Number" has the meaning
set forth in Section 5.3(b) of this Agreement.
Section 1.24 Notice of Exercise. "Notice of Exercise" has the
meaning set forth in Section 4.1(c) of this Agreement.
Section 1.25 Notice of Intention. "Notice of Intention" has the
meaning set forth in Section 4.1(b) of this Agreement.
Section 1.26 Offered Shares. "Offered Shares" has the meaning set
forth in Section 4.1(b) of this Agreement.
Section 1.27 Person. "Person" means an individual, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company, government (or an agency or
political subdivision thereof) or other entity of any kind.
Section 1.28 Purchase Agreement. "Purchase Agreement" has the
meaning set forth above in the recitals to this Agreement.
Section 1.29 RAL Stock. "RAL Stock" means RPC's Ralston-Ralston
Purina Group Common Stock, $.10 par value per share, or any such other class
of common stock of RPC at any time outstanding.
Section 1.30 Ralston. "Ralston" has the meaning set forth above in
the recitals to this Agreement.
Section 1.31 Ralston Indemnified Party. "Ralston Indemnified Party"
has the meaning set forth in Section 8.1(b) of this Agreement.
Section 1.32 Registration Statement. "Registration Statement" means
any registration statement or comparable document under Section 5 of the
Securities Act through which a public sale or disposition of IBC Securities
may be registered other than a registration statement (a) relating to an
Employee Benefit Plan or similar plan, or a business combination; or (b) on
any form that is not available for a secondary offering.
Section 1.33 RPC. "RPC" has the meaning set forth above in the
recitals to this Agreement.
Section 1.34 SEC. "SEC" means the Securities and Exchange Commission
or other federal agency at the time administering the Securities Act, the
Exchange Act or any successor acts thereto.
Section 1.35 Securities Act. "Securities Act" means the Securities Act
of 1933, as amended, and the rules and regulations thereunder.
Section 1.36 Securities Exchange Act. "Securities Exchange Act"
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
Section 1.37 Transfer. "Transfer" with respect to all or any part of
the IBC Equity means to directly or indirectly (whether or not through an
underwriter) offer, sell, convey, distribute, transfer (by merger or
otherwise), assign, devise, exchange, encumber, gift, pledge, hypothecate or
otherwise dispose of such IBC Equity.
Section 1.38 VCS. "VCS" has the meaning set forth above in the
recitals to this Agreement.
ARTICLE II STANDSTILL AND VOTING PROVISIONS
Section 2.1 Standstill Covenants. Unless specifically requested or
permitted in writing in advance by the Chairman of the Board of IBC or unless
otherwise permitted in this Agreement, Ralston agrees that until the sixth
anniversary date of this Agreement, it will not, directly or indirectly:
(a) acquire, offer to acquire, or agree to acquire by purchase or
otherwise, any IBC Securities except as a result of a stock split, stock
dividend or similar recapitalization by IBC;
(b) except in the ordinary course of business, acquire, offer to acquire,
or agree to acquire by purchase or otherwise, any assets of IBC;
(c) initiate, solicit, propose, seek to effect or negotiate, alone or with
any other Person, (i) any form of business combination transaction involving
IBC or any Affiliate thereof, or (ii) any restructuring, recapitalization or
similar transaction with respect to IBC or any Affiliate thereof;
(d) initiate, solicit, propose, seek to effect, negotiate, or announce an
intent to make, alone or with any other Person, any tender offer, exchange
offer, merger, consolidation or share exchange for any IBC Securities, or
disclose an intent, purpose, plan or proposal with respect to IBC, any of its
Affiliates or any IBC Securities inconsistent with the provisions of this
Agreement;
(e) make, or in any way participate in, any "solicitation" of "proxies"
(as such terms are defined or used in Regulation 14A under the Exchange Act)
with respect to IBC or any of its Affiliates or become a "participant" in any
"election contest" (as such terms are defined or used in Rule 14a-11 under the
Exchange Act) involving IBC or any of its Affiliates;
(f) initiate, solicit, or propose the approval of one or more shareholder
proposals with respect to IBC or any of its Affiliates or induce or attempt to
induce any other Person to initiate any such shareholder proposal;
(g) form, join or in any way participate in a Group with respect to the
IBC Securities;
(h) except as expressly provided herein, seek election to or seek to place
a representative on the board of directors of IBC or any of its affiliates or
seek the removal of any member of the board of directors of IBC or any of its
Affiliates;
(i) except for participation on the board of directors of IBC, act in
concert with any other Person to seek to affect the management or board of
directors of IBC or any of its Affiliates or the business, operations or
affairs of IBC or any of its Affiliates;
(j) call or seek to have called any meeting of the shareholders of IBC or
any of its Affiliates;
(k) disclose to any third party or in any filing with any governmental
authority any intention, plan or arrangement inconsistent with any of the
foregoing or with the restrictions on transfer set forth in this Agreement; or
(l) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the foregoing, or
advise, assist, encourage or influence any other Person to take any action
with respect to any of the foregoing.
Section 2.2 Issuance of IBC Securities. Notwithstanding anything in
Section 2.1 herein, during the term of this Agreement, if IBC issues any IBC
Securities in a public offering (other than a public offering of Ralston's IBC
Equity) or as consideration in an acquisition, Ralston may purchase in one or
more open market transactions or otherwise that number of shares necessary to
bring its percentage of ownership in IBC to the same level as immediately
prior to such offering or acquisition; provided, however, that Ralston must
still comply with the provisions of Section 10.6.
Section 2.3 Voting of IBC Equity. Ralston agrees that during the
term of this Agreement, with respect to the election of directors of IBC, each
class of IBC Equity owned by Ralston shall be voted (i) "for" the nominees
recommended by the Board of Directors of IBC, provided IBC is in compliance
with the terms of Section 10.2 of this Agreement, (ii) in accordance with the
recommendation of the Board of Directors of IBC on each proposal of a security
holder pursuant to Rule 14a-8 under the Securities Exchange Act, so long as
the subject matter of such proposal does not fall within the proviso hereto,
and, (iii) with respect to all other matters requiring a vote of the IBC
Equity, "for" any proposal in the same proportion as the votes cast "for" such
proposal by the holders of the IBC Securities of the same class (excluding the
IBC Equity owned by Ralston), and "against" any proposal in the same
proportion as the votes cast "against" such proposal by the holders of each
such class of IBC Securities (excluding the IBC Equity owned by Ralston) and
that with respect to broker non-votes and abstentions, each class of IBC
Equity owned by Ralston will be voted in the same proportion as votes deemed
"for," "against" or "abstain," giving the effect to broker non-votes and
abstentions as required under the laws and rules then applicable; provided,
however, that Ralston shall retain the right to vote its IBC Equity in any
manner it sees fit with respect to any proposals for (1) the merger of IBC or
any subsidiary of IBC with or into any other corporation, (2) the sale, lease,
exchange, transfer or other disposition of all or substantially all of the
assets of IBC and all of its subsidiaries taken together as a single business,
or (3) the creation of any other class of stock with voting rights. The
provisions of this Section 2.3 shall apply to both the casting of votes at
meetings of shareholders and execution of actions by written consent.
ARTICLE III TRANSFERS OF IBC EQUITY
Section 3.1 Restrictions on Transfer. During the term of this
Agreement, Ralston agrees that it will not, and it will cause each of its
Affiliates who acquire IBC Equity pursuant to Sections 3.2(c) or 3.3(c) of
this Agreement not to, Transfer any IBC Equity, except as permitted by or in
accordance with this Agreement.
Section 3.2 Exceptions to Restrictions. Subject to all applicable
laws, the restrictions on Transfer set forth in Section 3.1 hereof shall not
apply to any of the following:
(a) a Transfer of some or all of the IBC Equity pro rata to all of the
holders of the RAL Stock as a dividend or distribution or similar transaction;
(b) a Transfer of some or all of the IBC Equity to an Affiliate of
Ralston, provided that such Affiliate shall agree to the provisions of this
Agreement and Ralston will remain liable for the performance by such Affiliate
of its obligations under this Agreement;
(c) a Transfer of some or all of the IBC Equity in accordance with Section
5.3 of this Agreement;
(d) a Transfer of some or all of the IBC Equity in any tender offer,
self-tender, exchange offer, going private transaction or other transaction
involving a Transfer which is recommended to shareholders of IBC by the board
of directors of IBC;
(e) a Transfer of some or all of the IBC Equity in accordance with Section
5.1 of this Agreement; and
(f) a Transfer of some or all of the IBC Equity allowed under Rule 144 of
the Securities Act.
Section 3.3 Other Transfers. In the event Ralston desires to
Transfer the IBC Equity in a manner not specifically permitted under Sections
3.2 of this Agreement, Ralston may submit a written Notice of Intention (as
defined in Section 4.1 hereof) to IBC. In the event IBC declines to purchase
the IBC Equity described in the Notice of Intention, and if, in the sole and
absolute discretion of IBC, the Chairman of the Board of IBC notifies Ralston
in writing that such Transfer may occur, the Transfer may proceed strictly in
accordance with Ralston's Notice of Intention and with any terms and
conditions imposed by IBC on such Transfer and the transferee.
Section 3.4 Improper Transfer. Any attempt to Transfer any shares of
IBC Equity during the term of this Agreement not in accordance with this
Agreement will be null and void and IBC will not give nor permit the transfer
agent of IBC to give any effect to such attempted Transfer in its stock
records.
Section 3.5 Restrictive Legend.
(a) A copy of this Agreement will be filed with the Secretary of IBC and
kept with the records of IBC. All certificates representing shares of IBC
Equity hereafter issued to or acquired by Ralston, if applicable, (or, if
applicable, its successors in a Transfer pursuant to Section 3.3) will bear
the following legend noted conspicuously on such certificates:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
ONLY, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED (BY MERGER OR OTHERWISE)
ASSIGNED, DEVISED, EXCHANGED, GIFTED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH
TRANSFER IS EXEMPT FROM REGISTRATION, AND AN ACCEPTABLE OPINION OF COUNSEL IS
DELIVERED TO IBC WITH REGARD TO SUCH EXEMPTION, OR IS OTHERWISE IN COMPLIANCE
WITH THE ACT AND SUCH STATE SECURITIES LAWS.
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE SHAREHOLDER AGREEMENT, DATED JULY 22, 1995. NO
TRANSFER OF THESE SHARES WILL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND
CONDITIONS OF SUCH SHAREHOLDER AGREEMENT HAVE BEEN COMPLIED WITH IN FULL AND
NO PERSON MAY REQUEST INTERSTATE BAKERIES CORPORATION TO RECORD THE TRANSFER
OF ANY SHARES IF SUCH TRANSFER IS IN VIOLATION OF SUCH SHAREHOLDER AGREEMENT.
A COPY OF THE SHAREHOLDER AGREEMENT IS ON FILE AT THE EXECUTIVE OFFICES OF
INTERSTATE BAKERIES CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE
HOLDER OF SUCH SHARES UPON WRITTEN REQUEST. THE SHARES EVIDENCED BY THIS
CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON VOTING PROVIDED FOR IN THE
SHAREHOLDER AGREEMENT AND NO VOTE OF SUCH SHARES THAT CONTRAVENES THE
SHAREHOLDER AGREEMENT SHALL BE EFFECTIVE.
(b) Until such time as the IBC Equity has been registered pursuant to a
registration statement under the Securities Act or sold pursuant to Rule 144
of the Securities Act, the certificates representing IBC Equity (including,
without limitation, all certificates issued upon Transfer or in exchange
thereof or substitution therefor) will also bear any legend required under
any other applicable laws, including state securities or blue sky laws.
(c) IBC may make a notation on its records or give stop-transfer instructions
to any transfer agents or registrars for the IBC Equity in order to implement
the restrictions set forth in this Article III hereof.
(d) In the event Ralston acquires any other or additional IBC Securities,
Ralston will submit all certificates representing such IBC Securities to IBC
so that the legend or legends required by this Section 3.5 may be placed
thereon.
ARTICLE IV RIGHT OF FIRST OFFER
Section 4.1 Sales by Ralston.
(a) Except for Transfers permitted by Section 3.2 (a), (b) or (e), during
the term of this Agreement, Ralston shall not sell any shares of IBC Equity to
any Person unless it has first made an offer (the "First Offer") to sell such
shares to IBC in accordance with this Article IV and such First Offer shall
have been rejected or not accepted within the Applicable Acceptance Period (as
hereinafter defined).
(b) First Offer to IBC s hall be set forth in the form of a notice made in
writing (the "Notice of Intention") to IBC setting forth (i) Ralston's desire
to make a sale; and (ii) the number of shares of IBC Equity proposed to be
sold (the "Offered Shares").
(c) Upon receipt of the Notice of Intention, IBC will have the right to
purchase the Offered Shares at the IBC Market Price, exercisable by the
delivery of an acceptance in the form of a notice in writing to Ralston by IBC
(the "Notice of Exercise") at any time within twenty (20) calendar days from
the date of receipt of the Notice of Intention (the "Applicable Acceptance
Period"). The right of IBC to purchase IBC Equity will terminate if such
Notice of Exercise is not delivered within Applicable Acceptance Period. IBC
may assign its right to purchase the Offered Shares pursuant to a specific
Notice of Intention, once received by IBC, to any Person, but may not
otherwise assign its rights under this Article IV.
(d) In the event that IBC exercises its right to purchase the Offered
Shares in accordance with Section 4.1(c) hereof, then Ralston must sell the
Offered Shares to IBC at the IBC Market Price within twenty (20) days from the
date of receipt of the Notice of Exercise delivered by IBC, subject to receipt
of any required material third-party or governmental approvals, compliance
with applicable laws and the absence of any injunction or similar legal order
preventing such transaction.
Section 4.2 Purchase of the Offered Shares. In the event IBC rejects
the First Offer or fails to deliver a Notice of Exercise within the Applicable
Acceptance Period, then Ralston may (a) proceed with the Transfer pursuant to
Articles V, VI, VII and VIII hereof, if applicable, or (b) otherwise sell such
Offered Shares to transferees who agree to be bound by the terms and
conditions of this Agreement, in the case of a rejection, within ninety (90)
days after the delivery of such rejection or, in the case of a failure to
deliver a Notice of Exercise, within ninety (90) days after the expiration of
the Applicable Acceptance Period, subject to the other terms and conditions of
this Agreement.
Section 4.3 Waiting Period with Respect to Subsequent Transfers. In
the event that IBC does not deliver a Notice of Exercise within the Applicable
Acceptance Period and Ralston does not sell the Offered Shares, then Ralston
may not offer to sell any additional IBC Equity (other than the Offered
Shares) for a period of ninety (90) days from the expiration of the Applicable
Acceptance Period.
ARTICLE V REGISTRATION
Section 5.1 Demand Registration.
(a) During the term of this Agreement, upon Ralston's written request
specifying the intended manner of disposition (a "Demand Notice"), IBC will
use its best efforts to prepare and file with the SEC, as expeditiously as
possible, a Registration Statement on an available form for which IBC then
qualifies and which legal counsel for IBC deems appropriate and which form is
available for the sale of IBC Equity in accordance with the intended method of
distribution thereof to permit an offering of some or all of the shares of IBC
Equity then held by Ralston and use its best efforts to cause such
registration statement to become effective (a "Demand Registration");
provided, however, that with respect to proposed dispositions of IBC Equity to
shareholders of Ralston, Ralston and IBC will cooperate and use their
respective reasonable best efforts to obtain a "no- action letter" from the
SEC allowing such dispositions without registration.
(b) A Demand Registration will not be deemed to have occurred until it has
become effective under the Securities Act (unless Ralston delivers a Demand
Notice and subsequently withdraws the Demand Notice, in which case such a
Demand Registration will be deemed to have occurred unless Ralston agrees to
pay all reasonable out-of-pocket expenses associated with such registration
actually incurred by IBC); provided, however, that if, after a Demand
Registration has become effective, the offering of IBC Equity pursuant to such
Demand Registration is prohibited by any stop-order, injunction or other order
or requirement of the SEC or other governmental agency or court, such Demand
Registration will be deemed not to have occurred (unless such prohibition on
the sale of the IBC Equity is based on actions or omissions of Ralston, in
which case such a Demand Registration will be deemed to have occurred unless
Ralston agrees to pay all reasonable out-of-pocket expenses associated with
such registration actually incurred by IBC).
(c) IBC will only be obligated to effect a total of five (5) Demand
Registrations under Section 5.1 hereof and shall not be obligated under
Section 5.1 hereof to effect more than one (1) Demand Registration in any
twelve- month period (except that during each of the twelve-month periods
commencing on the date hereof and on the fourth anniversary of this Agreement,
Ralston shall be entitled to request up to two (2) Demand Registrations);
provided, however, that IBC will not be required to register the IBC Equity
pursuant to a Demand Notice under Section 5.1 hereof if at such time (i) the
shares of IBC Equity which Ralston is requesting to be registered pursuant to
Section 5.1 hereof constitute less than five percent (5%) of such class or
series of the outstanding IBC Securities so requested to be registered or (ii)
such Demand Notice is given within six (6) months after the effective date of
any other registration of any IBC Securities under the Securities Act.
(d) If any Demand Registration involves an underwritten offering, the
first lead underwriter, and, subject to the last sentence of this Section
5.1(d), any other underwriter that will administer the offering will be
selected by Ralston; provided, however, that such underwriter(s) shall be
subject to the approval of IBC which approval shall not be unreasonably
withheld. In the event there is one or more co-managers, the first such
co-manager shall be selected by IBC, provided that such co-manager shall be
subject to the approval of Ralston, which approval shall not be unreasonably
withheld.
(e) If any Demand Registration involves an underwritten offering, then as
many shares of IBC Securities that IBC elects may be included in such offering
on the same terms and conditions as the IBC Equity; provided, however, that if
the managing underwriter(s) advises Ralston and IBC that, in its judgment, the
number of shares proposed to be included in such offering should be limited,
then the total number of shares to be included in such offering will be
determined by the managing underwriter(s) and IBC shall include in such
offering (i) first, all the shares of IBC Equity that Ralston proposes to sell
and (ii) second all the shares of IBC Securities that IBC proposes to sell.
Except as otherwise provided for in this Agreement or the First Registration
Rights Agreement (as hereinafter defined), no person other than Ralston shall
be permitted to offer any IBC Securities under any Demand Registration
pursuant to this Section 5.1 without the prior written consent of Ralston.
Section 5.2 Delay of Demand Registration.
(a) Notwithstanding anything to the contrary in Article V hereof, in the
event that IBC determines in its reasonable judgment that it may be advisable
to delay filing a Registration Statement described in Section 5.1 hereof or,
to withdraw such Registration Statement if such Registration Statement has
already been filed, IBC may delay filing such, or withdraw such previously
filed, Registration Statement for a period of not more than ninety (90) days
from the date of receipt of the request for the Demand Registration if IBC
furnishes to Ralston a certificate signed by the Chairman of the Board of IBC
stating that IBC has reasonably determined that (i) such a filing would
adversely affect any proposed financing or acquisition by IBC or (ii) such a
filing would otherwise represent an undue hardship for IBC; provided, however,
that IBC will be responsible for any reasonable out of pocket costs (excluding
any decline in the IBC Market Price) which arise out of such delay and IBC
will, at the request of Ralston, file or refile, as the case may be, such
Registration Statement promptly after IBC, in its judgment, determines that it
is no longer advisable to delay filing or to continue the withdrawal of such
Registration Statement.
(b) IBC may not delay filing or refiling, as the case may be, a
Registration Statement pursuant to Section 5.2(a) hereof, if following the
delay IBC would be required to file audited financial statements other than
audited financial statements included in IBC's annual report on Form 10-K,
unless IBC agrees to provide such audited financial statements
Section 5.3 Incidental Registration.
(a) Right To Include IBC Equity.
(i) If IBC or any other Person at any time proposes to register any IBC
Securities under the Securities Act (other than a registration of securities
in connection with a merger, an acquisition, an exchange offer, or an Employee
Benefit Plan maintained by IBC or its Affiliates or on Form S-4 or S-8 or any
successor or similar form), whether or not for sale for its own account, in a
manner which would permit registration of the IBC Equity for sale to the
public under the Securities Act, it will give written notice to Ralston (to
the extent permitted by such other Person's current contractual registration
rights, if any) of its intention to do so and of Ralston's rights under this
Section 5.3(a)(i), at least thirty (30) calendar days prior to the anticipated
filing date of a Registration Statement relating to such registration (an
"Incidental Notice"). Such Incidental Notice will offer Ralston the
opportunity to include in such Registration Statement that number of shares of
IBC Equity as Ralston may request. Upon the written request (which request
will specify the number of shares of IBC Equity intended to be disposed of by
Ralston pursuant to such Registration Statement) of Ralston made within ten
(10) calendar days after the receipt of the Incidental Notice, IBC will use
its best efforts to effect the registration under the Securities Act of all
shares of IBC Equity which IBC has been so requested to register; provided,
however, that (A) if such registration involves an underwritten offering,
Ralston must sell its IBC Equity requested to be included in such registration
to the underwriter(s) selected by IBC on the same terms and conditions as
apply to other Persons, including IBC, and (B) if, at any time after receiving
a reply from Ralston to an Incidental Notice, and prior to the effective date
of the Registration Statement filed in connection with such registration, IBC
decides for any reason not to register any shares of IBC Securities, IBC will
notify Ralston and thereupon be relieved of its obligation to register any IBC
Equity in connection with such registration.
(ii) No registration, whether or not effected under Section 5.3(a) hereof
will relieve IBC of its obligations to effect Demand Registrations under
Section 5.1 hereof.
(b) Priority in Incidental Registrations. If a registration pursuant to
Section 5.3(a) hereof involves an underwritten offering and the managing
underwriter advises IBC in writing, that, in its opinion, the number of IBC
Securities intended to be included in such Registration Statement exceeds the
largest number of IBC Securities which can be sold without having an adverse
effect on such offering, including the price at which such securities can be
sold or, if in a non-underwritten offering, IBC determines, in its reasonable
discretion, to limit the number of securities to be sold, (in either case, the
"Marketable Number"), IBC will include in such Registration Statement (i)
first, all of the IBC Securities IBC or the Person referred to in the first
sentence of Section 5.3(a)(i) proposes to sell for its own account, (ii)
second, all of the IBC Securities requested to be included by holders of IBC
Securities pursuant to Section 3 of the First Registration Rights Agreement,
(iii) third, the IBC Securities requested to be included by Ralston pursuant
to Section 5.3(a) hereof and (iv) fourth, the securities requested to be
included by other Persons (but if the number of securities to be registered
pursuant to clause (iv) together with the number of securities to be included
in such registration pursuant to clauses (i), (ii) and (iii) of this Section
5.3(b) exceeds the Marketable Number, the number of securities of Persons to
be registered pursuant to clause (iv) shall be allocated pro rata among such
Persons on the basis of the relative number of IBC Securities each such Person
has requested to be included in such registration).
Section 5.4 Delay of Incidental Registration. Notwithstanding
anything to the contrary in this Article V, in the event that IBC determines
in its reasonable judgment that it may be advisable to delay filing a
Registration Statement described in Section 5.3 hereof or, to withdraw such
Registration Statement if such Registration Statement has already been filed,
IBC may delay filing such, or withdraw such previously filed, Registration
Statement in accordance with the provisions of Section 5.3(a)(i) hereof.
Section 5.5 Third Party Registration Rights. The provisions of this
Article V are in all cases subject to the contractual registration rights
granted by that certain Registration Rights Agreement dated July 23, 1991 (the
"First Registration Rights Agreement") by and among IBC, Mezzanine Investment
Limited Partnership-8, 1987 Merchant Investment Partnership, Merchant LBO Inc.
and GKB IX, L.P. IBC hereby represents and warrants that the First
Registration Rights Agreement is the only agreement entered into by IBC or any
of its Associates or Affiliates governing the registration of shares of IBC
Securities. IBC will not extend, amend or waive any provisions of the First
Registration Rights Agreement and will not grant any additional registration
rights to any other Person which could limit or restrict the registration
rights granted Ralston pursuant to this Agreement.
ARTICLE VI REGISTRATION EXPENSES
Section 6.1 Registration Expenses.
(a) Subject to Section 5.1(b) of this Agreement, all expenses incident to
IBC's performance of or compliance with Articles V and VII of this Agreement
to effect five (5) Demand Registrations will be borne by IBC, including,
without limitation:
(i) all federal registration and filing fees;
(ii) subject to Section 7.4, fees and expenses of compliance with securities
or blue sky laws; provided, however, that IBC will in no event be obligated to
pay the fees and disbursements of counsel for the underwriters or Ralston in
connection with blue sky qualifications of the IBC Equity under the laws of
such jurisdictions as the managing underwriter(s) may designate;
(iii) printing, messenger, telephone and delivery expenses;
(iv) fees and disbursements of legal counsel for IBC;
(v) fees and disbursements of all independent certified public accountants
of IBC;
(vi) NASD fees and disbursements of the underwriters; provided, however, that
in all cases Ralston will pay all costs of discounts, commissions, spreads or
fees of underwriters, selling brokers, dealer managers or similar securities
industry professionals relating to the distribution of the IBC Equity being
sold by Ralston;
(vii) fees and expenses of other Persons retained by IBC; and
(viii) listing or quotation fees and expenses required to be made
pursuant to Section 7.6 hereof in connection with the Registration Statement.
(b) Each of IBC and Ralston will pay its own internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of its annual audit,
rating agency fees and fees and expenses of any Person, including special
experts retained by IBC or Ralston, respectively.
ARTICLE VII REGISTRATION PROCEDURE
Section 7.1 Ralston Information. Ralston will provide IBC with such
information about Ralston and the intended manner of distribution of IBC
Equity and otherwise cooperate with IBC and the underwriter(s) as may be
necessary in the reasonable opinion of IBC to satisfy any obligation of IBC
under this Agreement to register the IBC Equity under federal or state
securities laws and otherwise take actions related thereto. In the event of
the failure of Ralston to comply with the requirements of the preceding
sentence IBC may delay filing such, and withdraw such previously filed,
Registration Statement. IBC will file or refile, as the case may be, such
Registration Statement promptly following compliance with such requirements by
Ralston; provided, however, that Ralston will be responsible for any
reasonable out of pocket costs which arise out of such non- compliance.
Ralston will immediately notify IBC upon discovery that any information
provided by Ralston which is included in the prospectus that is included in a
Registration Statement, as then in effect, is untrue in any material respect,
or omits to state any material fact required to be stated therein or to make
the information stated therein not misleading in the light of the
circumstances under which it is presented.
Section 7.2 Compliance. Each of Ralston and IBC will comply with all
rules and regulations of the SEC and applicable state securities or blue sky
laws governing the manner of sale of securities in connection with its
Transfer of any of the IBC Equity pursuant to any Registration Statement.
Section 7.3 Provision of Prospectuses.
(a) IBC will furnish to Ralston such number of copies of a summary
prospectus or other prospectus, including a prospectus subject to completion
in conformity with the requirements of the Securities Act, and such other
documents as Ralston may reasonably request in writing, in order to facilitate
the public sale or other disposition of the IBC Equity included in a
Registration Statement.
(b) At any time when a sale or other disposition of IBC Equity pursuant to a
Registration Statement is subject to a prospectus delivery requirement, IBC
will notify Ralston of the occurrence of any event that causes the prospectus
included in such Registration Statement, as then in effect, to include an
untrue statement of a material fact or to omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing and IBC will use
its best efforts, as expeditiously as possible, to either amend the prospectus
or otherwise take any actions so that use of the previous prospectus may be
legally resumed. Upon receipt of such a notice, Ralston will immediately
discontinue all sales or other dispositions of IBC Equity pursuant to the
Registration Statement. Ralston may resume such sales or dispositions only
upon receipt of an amended prospectus or after Ralston is advised by IBC that
the use of the previous prospectus may be legally resumed.
Section 7.4 Blue Sky Compliance. IBC will use its best efforts to
(a) register or qualify the IBC Equity included in a Registration Statement
under the securities or blue sky laws of such jurisdictions within the United
States as Ralston reasonably requests and (b) do any and all other acts that
may be reasonably necessary or advisable to enable Ralston to consummate the
public sale or disposition of such securities in such jurisdictions; provided,
however, that IBC is not required to consent to, or take any action that would
subject it to, general service of process or taxation in any jurisdiction
where it is not then so subject, nor qualify to do business in any
jurisdiction where it is not then so qualified.
Section 7.5 Maintenance of Effectiveness. IBC will use its best
efforts to prepare and file promptly with the SEC such amendments and
supplements to any Registration Statement, and the prospectus used in
connection therewith, as may be necessary to keep such Registration Statement
continuously effective and in compliance with the Securities Act until the one
hundred twentieth (120th) day following the date on which such Registration
Statement becomes effective, or until all IBC Equity included in such
Registration Statement has been sold, whichever is earlier; provided, however,
that IBC will have no obligation under this Section 7.5 to keep effective any
Registration Statement during the period following any date on which IBC would
be required to file audited financial statements other than the date by which
IBC is required to file its next annual report on Form 10-K containing such
required audited financial statements.
Section 7.6 Listing of IBC Equity. IBC will use its best efforts to
cause the IBC Equity when issued to be listed on all securities exchanges on
which any securities issued by IBC are then listed, or quoted on all automated
quotation systems on which any such securities of IBC are then quoted,
including, without limitation, entering into appropriate customary agreements
(including a listing application and indemnification agreement in customary
form).
Section 7.7 Stop-Orders. IBC will promptly notify Ralston of (a) the
receipt by IBC of any notification with respect to the issuance by the SEC of
any stop-order or order suspending the effectiveness of any Registration
Statement covering any IBC Equity or the initiation of any proceedings for
that purpose, or (b) the receipt by IBC of any notification with respect to
the limitation, restriction or suspension of the offer or sale of IBC Equity
in any jurisdiction in which the IBC Equity was qualified to be sold, or the
initiation of any proceedings for such purpose. In the event that IBC
notifies Ralston of any such event, Ralston will immediately discontinue all
sales or other dispositions of IBC Equity pursuant to the Registration
Statement until such time that IBC notifies Ralston of the lifting of such
stop-order or similar order; provided, however, that such a stop-order or
similar order issued by a state securities or blue sky administrator will
apply only to offers and sales in such state, unless Ralston is advised
otherwise by IBC. IBC, with the cooperation of Ralston, will use its best
efforts to contest any such proceedings and to obtain the withdrawal of any
such order at the earliest possible date.
ARTICLE VIII INDEMNIFICATION AND CONTRIBUTION
Section 8.1 Indemnification.
(a) Indemnification by Ralston.
(i) Ralston agrees to indemnify and hold harmless IBC, its Affiliates and
Associates (each such Person being hereinafter referred to as an "IBC
Indemnified Party") from and against all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation and legal expenses)
(each a "Loss") arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement or
preliminary, final or summary prospectus covering any IBC Equity, or in any
amendment or supplement thereto, or in any document incorporated by reference
into any of the foregoing or arising out of or 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, but only
if, and only to the extent, such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to IBC or its representatives by or on behalf of Ralston
for use in the preparation of such Registration Statement, preliminary, final
or summary prospectus or such amendment or supplement thereto, or such
document incorporated by reference. This indemnity will be in addition to any
liability which Ralston may otherwise have. Ralston will also indemnify the
underwriter(s), selling broker(s), dealer manager(s) and similar securities
industry professionals participating in the distribution, their officers and
directors and each Person who Controls such Persons, to the same extent as
provided above with respect to the indemnification of the IBC Indemnified
Party.
(ii) Ralston also agrees to indemnify and hold harmless any IBC Indemnified
Party from and against all Losses arising out of any action or proceeding
brought against any IBC Indemnified Party in connection with the distribution
or proposed distribution of IBC Equity to the holders of RAL Stock; provided,
however, that this Section 8.1(a)(ii) shall not apply to any Losses for which
IBC is responsible as provided in Section 8.1(b) of this Agreement.
(iii) If any action or proceeding (including any governmental
investigation or inquiry) is brought or asserted against an IBC Indemnified
Party in respect of which indemnity may be sought from Ralston, such IBC
Indemnified Party will promptly notify Ralston in writing of the commencement
of such action and Ralston shall assume the defense thereof and have primary
control over any related suit or proceeding, including the employment of legal
counsel and the payment of all expenses in connection therewith; provided,
however, that the failure of any IBC Indemnified Party to give notice as
provided herein shall not relieve Ralston of its obligations under this
Section 8.1(a) except to the extent that Ralston is actually materially
prejudiced by such failure to give notice. An IBC Indemnified Party shall
have the right to participate in and jointly with Ralston, to the extent that
it may wish, and employ separate counsel reasonably satisfactory to such IBC
Indemnified Party, provided, however, that Ralston will not be liable to such
IBC Indemnified Party for any legal or other expenses subsequently incurred by
such IBC Indemnified Party in connection therewith, unless such IBC
Indemnified Party shall have been advised by counsel that a conflict of
interest between such IBC Indemnified Party and Ralston is likely to exist in
respect of such claim.
(b) Indemnification by IBC.
(I) IBC agrees to indemnify and hold harmless Ralston and its Affiliates
and Associates (each such person being hereinafter referred to as a "Ralston
Indemnified Party") from and against all Losses arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement, preliminary, final or summary prospectus
covering any IBC Equity, or in any amendment or supplement thereto, or in any
document incorporated by reference into any of the foregoing or arising out of
or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statement therein
not misleading, except insofar as such Losses arise out of or are based solely
upon any such untrue statement or omission or allegation thereof based upon
written information provided by or on behalf of Ralston for inclusion in such
Registration Statement, preliminary, final or summary prospectus, or such
amendment or supplement thereto, or such document incorporated by reference;
provided, however, that IBC will not be liable in any such case to the extent
that any such Loss arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
preliminary prospectus if (A) Ralston failed to send or deliver a copy of the
final prospectus with or prior to the delivery of written confirmation of the
sale of the IBC Equity covered by the Registration Statement to the Person
asserting such Loss, and (B) the final prospectus would have corrected such
untrue statement or omission and provided, further, that IBC will not be
liable in any such case to the extent that any such Loss arises out of or is
based upon an untrue statement or omission in the final prospectus, if such
untrue statement or omission is corrected in an amendment or supplement to the
final prospectus and if, having previously been furnished by or on behalf of
IBC with copies of the final prospectus as so amended or supplemented, Ralston
thereafter fails to deliver such prospectus as so amended or supplemented,
prior to or concurrently with the sale of the IBC Equity to the Person
asserting such Loss who purchased such IBC Equity which is the subject
thereof. This indemnity will be in addition to any liability which IBC may
otherwise have. IBC will also indemnify the underwriter(s), selling
broker(s), dealer manager(s) and similar securities industry professionals
participating in the distribution, their officers and directors and each
Person who Controls such Persons, to the same extent as provided above with
respect to the indemnification of the Ralston Indemnified Party.
(ii) f any action or proceeding is brought against a Ralston Indemnified
Party in respect of which indemnity may be sought against such Ralston
Indemnified Party, Ralston will promptly notify IBC in writing of the
commencement of such action and IBC will assume the defense thereof and have
primary control over any related suit or proceeding, including the employment
of legal counsel and the payment of all expenses in connection therewith;
provided, however, that the failure of any Ralston Indemnified Party to give
notice as provided herein shall not relieve IBC of its obligations under this
Section 8.1(b) except to the extent that IBC is actually materially prejudiced
by such failure to give notice. A Ralston Indemnified Party shall have the
right to participate in and jointly with IBC, to the extent that it may wish,
and employ separate counsel reasonably satisfactory to such Ralston
Indemnified Party, provided, however, that IBC will not be liable to such
Ralston Indemnified Party for any legal or other expenses subsequently
incurred by such Ralston Indemnified Party in connection therewith, unless
such Ralston Indemnified Party shall have been advised by counsel that a
conflict of interest between such Ralston Indemnified and IBC is likely to
exist in respect of such claim.
Section 8.2 Contribution.
(a) If the indemnification provided for in Section 8.1 hereof is
unavailable to an IBC Indemnified Party or Ralston Indemnified Party under
Section 8.1(a) or Section 8.1(b) hereof (other than by reason of the
exceptions provided in Sections 8.1(a) and 8.1(b)) in respect of any Losses
referred to therein, then such indemnifying party, in lieu of indemnifying
such indemnified party, will contribute to the amount paid or payable by such
indemnified party as a result of such Losses 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, in connection with the
statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. The relative fault of the indemnifying
party, on the one hand, and the indemnified party, on the other hand, shall be
determined by reference to, among other things, whether the untrue statement
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
indemnified party and each parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by each party as a result of the Losses referred to
above will be deemed to include, subject to the limitations set forth in
Section 8.1(b) hereof, any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or
claim.
(b) Notwithstanding the provisions of Section 8.2(a) hereof, no Person
found to be guilty of fraudulent misrepresentation shall be entitled to
contribution from any Person who is not found to be guilty of such fraudulent
misrepresentation.
ARTICLE IX CALL RIGHTS
Section 9.1 IBC Call.
(a) At any time during the one-year period commencing on the fifth
anniversary date of this Agreement, IBC shall have the right to acquire all,
but not less than all of the IBC Equity then owned by Ralston at a purchase
price equal to one-hundred and ten percent (110%) of the IBC Market Price of
the IBC Equity then owned by Ralston (such right to acquire the IBC Equity is
referred to as the "IBC Call"). IBC will notify Ralston of its election to
exercise the IBC Call (a "Call Notice"), which Call Notice will contain IBC's
notice of election to purchase such shares subject to the IBC Call, the
purchase price of the shares subject to the IBC Call calculated in accordance
with this Section 9.1(a), and the date estimated for consummation of the
purchase and sale (not more than thirty (30) days after the date of the Call
Notice). The consummation of the purchase and sale pursuant to this Section
9.1(a) will take place no later than thirty (30) days after the date specified
in the Call Notice, subject to the provisions of Section 9.1(b) hereof and
subject to any and all waiting periods required under any applicable laws or
regulations. IBC may assign the right to purchase such shares subject to the
IBC Call to any Person. Any rights to IBC Equity arising pursuant to an IBC
Call shall continue in effect during the term hereof unless extinguished by
IBC pursuant to a written notice to Ralston affirmatively relinquishing such
rights. IBC shall be permitted to relinquish rights to acquire all of the IBC
Equity subject to an IBC Call.
(b) Upon the consummation of a purchase and sale pursuant to Section
9.1(a) hereof:
(i) Ralston will transfer and deliver to IBC, all of its right, title and
interest in and to the IBC Equity then owned by Ralston, free and clear of all
liens and encumbrances and will deliver to IBC a certificate(s) evidencing the
shares sold duly endorsed, or accompanied by written instruments of transfer
in form satisfactory to IBC, duly executed, with evidence of payment of any
applicable stock transfer taxes.
(ii) IBC or its assignee will deliver to Ralston an amount in cash equal to
the purchase price of the IBC Equity then owned by Ralston as set forth in the
IBC Call.
(c) The IBC Call shall be exercised within one (1) year following the
expiration of the fifth anniversary date of this Agreement, and shall expire
if not exercised by such date.
ARTICLE X ADDITIONAL COVENANTS
Section 10.1 Maintain Listing or Quotation. IBC hereby covenants and
agrees that it shall use its best efforts to maintain its listing of IBC
Securities on any securities exchanges on which its IBC Securities are
currently listed or on which they are listed in the future pursuant to Section
7.6 hereof and to maintain its quotation of IBC Securities on an any automated
quotation systems on which its IBC Securities are currently quoted or on which
they are quoted in the future pursuant to Section 7.6 hereto.
Section 10.2 Board of Directors. IBC hereby covenants and agrees
that (a) effective as of the Closing, IBC shall nominate and appoint William
P. Stiritz and Mr. James R. Elsesser to the board of directors of IBC, one to
hold office until the 1996 annual meeting of IBC shareholders and one to hold
office until the 1997 annual meeting of IBC shareholders, and (b) the nominee
chosen by Ralston to serve in the 1996 class shall be nominated and elected to
an additional term of not less than two years at the 1996 annual meeting of
IBC shareholders. There will be no obligation of IBC under the terms of this
Agreement to nominate any Ralston representatives after such terms expire.
Section 10.3 No Inconsistent Agreements. IBC hereby covenants and
agrees that it shall not enter into any agreements governing the transfer or
registration of shares of IBC Securities which would adversely effect
Ralston's rights under this Agreement, without Ralston's prior written
consent.
Section 10.4 Preferred Stock. IBC hereby covenants and agrees that
during the term of this Agreement, so long as Ralston owns at least 15% of the
IBC Securities, IBC shall not issue to any Person any shares of preferred
stock of IBC which possess voting rights which are greater than the equity
interest represented by such shares of preferred stock of IBC.
Section 10.5 Rule 144 and 144A. IBC hereby covenants and agrees that
it will use its reasonable best efforts to file any reports required to be
filed by it under the Securities Act and Exchange Act and that it will take
such further action as Ralston may reasonably request, all to the extent
required from time to time to enable Ralston to sell its IBC Equity (subject
to the terms hereof) without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 or 144A under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission.
Section 10.6 Maximum Allowed Ownership of IBC Securities. Ralston
hereby covenants and agrees that on the fifth anniversary of the date of this
Agreement its ownership of IBC Securities shall be no more than 14.9% of the
total outstanding IBC Securities.
ARTICLE XI MISCELLANEOUS
Section 11.1 Entire Agreement. This Agreement, constitutes the
entire agreement between the parties hereto relative to the subject matter
hereof, and supersedes all prior written or oral understandings, agreements,
conditions or representations.
Section 11.2 Headings and Captions. All headings and captions used
in this Agreement are for convenience only, and will not be construed to
either limit or broaden the language of this Agreement or any particular
section.
Section 11.3 Choice of Law. This Agreement will be governed by and
construed under and in accordance with the laws of the State of Missouri,
without giving effect to the conflict of laws provisions thereof, except that
all matters relating to the internal affairs of IBC shall be governed by and
construed under and in accordance with the General Corporation Law of
Delaware.
Section 11.4 Venue. Any action or legal proceedings to enforce this
Agreement or any of its terms, or for indemnification and the recovery of
losses as provided for in this Agreement by a party, may be brought and
prosecuted in such court or courts located in the Eastern or Western District
of Missouri as provided by law, and the parties to this Agreement consent to
the jurisdiction of said court or courts and to service of process by
registered mail, return receipt requested, or by any other manner provided by
Missouri law.
Section 11.5 Notices. Any notice or other communication required or
permitted hereunder is deemed delivered when delivered in person, when
transmitted by telecopier (which will also be sent concurrently by certified
or registered mail), on the next Business Day when sent by Federal Express or
a similar overnight delivery service, or on the third Business Day when sent
by registered or certified U.S. mail service as follows:
If to Ralston or VCS: Office of the Chief Executive Officer
Ralston Purina Company
Checkerboard Square
St. Louis, MO 63164
With a Copy to: Office of the General Counsel
Ralston Purina Company
Checkerboard Square
St. Louis, MO 63164
Attn: James M. Neville, Esq.
If to IBC Office of the Chief Executive Officer
Interstate Bakeries Company
12 East Armour Boulevard
Kansas City, MO 64111
With Copies to: Office of the General Counsel
Interstate Bakeries Company
12 East Armour Boulevard
Kansas City, MO 64111
Attn: Ray Sandy Sutton, Esq.
Shook, Hardy & Bacon P.C.
One Kansas City Place
1200 Main Street, Suite 3100
Kansas City, MO 64105
Attn: Jennings J. Newcom, Esq.
The parties to this Agreement will promptly notify each other in the
manner provided in this Section 11.5 of any change in their respective
addresses. A notice of change of address will not be deemed to have been
given until received by the addressee.
Section 11.6 Amendments. No changes, modifications, amendments or
additions will be valid unless such be made in writing and signed by or on
behalf of each party.
Section 11.7 Extended Meanings. Words importing the singular number
include the plural and vice versa, and words importing the masculine gender
include the feminine and neuter genders.
Section 11.8 Assignments. In addition to the specific assignment
rights set forth herein, IBC has the right to assign any and all of its rights
or obligations under this Agreement to the surviving entity in a merger,
consolidation, combination or other corporate transaction involving IBC which
agrees in writing with Ralston to be bound by the terms hereof. Except as
otherwise provided herein, Ralston may not assign any of its rights or
obligations hereunder to any Person.
Section 11.9 Severability. The invalidity or unenforceability of any
provision hereof in any jurisdiction will not affect the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction. To the extent permitted by applicable law, each party waives
any provision of law that renders any provision hereof prohibited or
unenforceable in any respect. If any term, provision, covenant or restriction
in this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the parties hereto will use their best efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction
and the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect, in order to achieve the
intent of the parties to the extent possible.
Section 11.10 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which is deemed an
original, but all of which together constitutes a single agreement, and it is
not necessary in making proof of this Agreement to produce or account for more
than one such counterpart.
Section 11.11 Remedies Cumulative. Except as otherwise expressly
limited herein, the remedies given to any party by this Agreement are in
addition to all remedies under any statute or rule of law. Any forbearance or
failure or delay in exercising any remedy hereunder is not deemed to be a
waiver of any other remedy a party may have under this Agreement.
Section 11.12 Binding Agreement. This Agreement will be deemed
effective and legally binding upon the parties when it has been executed and
delivered by all parties hereto. This Agreement will inure to the benefit of
the parties hereto and their permitted successors and assignees.
Section 11.13 Recapitalizations, Exchanges, Etc., Affecting IBC
Securities. The provisions of this Agreement apply to the full extent set
forth herein with respect to the IBC Equity, to any and all shares of capital
stock of IBC or any successor or assign of IBC (whether by merger,
consolidation, sale of assets, or otherwise) which may be issued in respect
of, in exchange for, or in substitution of, IBC Equity and will be
appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date hereof.
Section 11.14 Other Agreements. Nothing contained in this Agreement
will be deemed to be a waiver of, or release from, any obligations any party
hereto may have under any other agreement, including, without limitation, the
Purchase Agreement.
Section 11.15 Term; Effectiveness. The term of this Agreement will
begin (and this Agreement will become effective) upon the date hereof and will
continue until the date which is five (5) years from the date hereof;
provided, however, that Article IX and Section 2.1 shall survive until the
date which is six (6) years from the date hereof. The provisions of Articles
VI and VIII hereof shall survive the termination of this Agreement.
Section 11.16 Enforcement. Each of IBC and Ralston agrees that any
breach of the provisions contained in this Agreement by IBC and/or Ralston
would cause irreparable harm to the other and its Affiliates and, therefore,
notwithstanding any right of IBC and/or Ralston to recover monetary damages
with respect to any such breach as set forth in (a) this Agreement or (b) at
law, IBC and Ralston will each be entitled to equitable relief to enjoin any
threatened or continuing breach of the other hereof and, in the event of any
action for specific performance, each party shall waive the defense that a
remedy at law would be adequate. If the scope of any restriction contained in
this Agreement is too broad to permit enforcement to its full extent, then
such restriction will be enforced to the maximum extent permitted by law in
the manner provided in Section 11.9 hereof. Nothing herein stated will be
construed as prohibiting any party from pursuing any other remedies available
to that party for a breach hereunder, including recovery of damages.
Section 11.17 Confidentiality. Each of Ralston and IBC acknowledges
that the other would be irreparably damaged if confidential knowledge of its
business and affairs were disclosed or utilized on behalf of any Person. Each
of IBC and Ralston covenants and agrees not to disclose or use any such
confidential information of the other unless such information has been made
available to the public generally (other than in violation of this Section
11.17) or IBC and/or Ralston is required to disclose such information by a
governmental body or regulatory agency or by law in connection with a
transaction that is not otherwise prohibited hereby. Performance by IBC and
Ralston of their respective obligations under this Section 11.17 shall be in
accordance with the provisions set forth on Exhibit A attached hereto, which
Exhibit is incorporated herein and made a part hereof.
Section 11.18 Fiduciary Accounts. IBC and Ralston each acknowledge
and agree that this Agreement shall apply only to the IBC Securities owned by
Ralston for its own account and does not apply to any IBC Securities which may
be deemed to be beneficially owned or controlled by Ralston or its Affiliates
and which shares are held in fiduciary accounts in connection with any pension
plans, profit sharing plans or other employee benefit plans or held in any
other fiduciary accounts.
IN WITNESS WHEREOF, the parties have executed this Agreement by an officer
thereunto duly authorized, all as of the day and year first above written.
ATTEST: INTERSTATE BAKERIES CORPORATION
By: R. S. Sutton By: P. E. Yarick
Its Secretary Its Vice President
ATTEST: RALSTON PURINA COMPANY, on its behalf and on behalf of its
Affiliates
By: N. E. Hamilton By: J. M. Neville
Its Assistant Secretary Its Vice President
ATTEST: VCS HOLDING COMPANY
By: N. E. Hamilton By: T. L. Grosch
Its Assistant Secretary Its Secretary
<PAGE>
ATTACHMENT A
For purposes of Section 11.17 of the Shareholder Agreement by and
among Interstate Bakeries Corporation, Ralston Purina Company and VCS
Holding Company, the following provisions shall apply:
1. "Confidential Information" shall include all information
provided heretofore or hereafter by either Ralston or IBC (individually, a
"Company" and collectively, the "Companies") or their representatives,
Affiliates, advisors, officers, directors, employees or agents
("Representatives"), to the other. The term "Confidential Information"
also will include any analyses, studies or other documents prepared by
Representatives of a Company containing or based in whole or in part on
any information furnished to the other. Confidential Information shall
not include information which (i) becomes generally available to the
public other than as a result of a disclosure in violation hereof by a Company
or its Representatives, (ii) was in the possession of a Company on a
non-confidential basis prior to its disclosure or (iii) becomes available to
a Company on a non-confidential basis from a source other than the other
Company, which source is entitled to make the disclosure without violation of
any obligation of confidentiality to a Company or other party.
2. Each Company recognizes and acknowledges the competitive value
and the confidential and proprietary nature of the Confidential Information
and the damage that could result to the other Company if information
contained therein is disclosed to any third party. Each Company agrees that
it will not use the Confidential Information in any manner that is
competitive with or detrimental to the business or operations of the
other Company. Each Company further agrees that it will not disclose any
of the Confidential Information to any person or entity without the prior
written consent of the other Company; provided, however, that there may be a
disclosure of such information to such of its Representatives that need to
know such information in connection with any transactions between the
Companies or for valid business reasons which do not otherwise
violate the provisions of this agreement. Each Company acknowledges that its
Representatives are bound hereto to the same extent as each Company as
if there were parties hereto, and each Company shall be responsible for
any breach hereof by any of its Representatives.
3. Company agrees that a breach of the provisions hereof may give
rise to irreparable injury to the other Company that cannot be compensated
for adequately by monetary damages. Consequently, each Company shall be
entitled from the other Company, in addition to all other remedies
available, to injunctive and other equitable relief to prevent a breach
hereof and to secure the enforcement hereof in any court of competent
jurisdiction in the United States or any state thereof.
4. Each Company hereby acknowledges that it is aware, and will
advise its Representatives and financing sources who are informed as to the
matters which are the subject hereof, that the federal and state securities
law prohibit any person who has received material, non-public Information
concerning the matters that are related hereto from purchasing or selling
securities of the Companies or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities.
5. If either Company is requested or becomes legally compelled
to disclose any of the Confidential Information, such Company agrees that it
will provide the other Company with prompt written notice of such request so
that the other Company may seek a protective order. In the event that such
protective order or other remedy is not obtained, the Company agrees to
furnish only that portion of the Confidential Information and
other information that it is legally obligated to disclose.
6. At either Company's request, the other agrees to promptly
return or, at such Company's option, to destroy the Confidential
Information and all copies thereof. All copies, extracts or other
reproductions in whole or in part thereof shall be destroyed and not
retained by the other Company or its representatives in any form or
for any reason, and such destruction shall be certified in writing to
the requesting Company by an authorized officer supervising such
destruction.
All documents, pleadings, court filings, memoranda, notes and other
writings whatsoever prepared by the other Company or its representatives
based on the Confidential Information (except, in the case of pleadings and
court filings, to the extent reasonably required for proper record keeping
purposes) shall be destroyed, and such destruction shall be certified in
writing to the requesting Company by an authorized officer supervising
such destruction.
7. If any provision hereof or the application of any such provision
to any person or circumstance is held invalid, illegal or unenforceable
for any reason whatsoever, the remaining provisions and the application
of such provision to other persons or circumstances shall not be affected
thereby. To the fullest extent possible the court finding such provision
invalid, illegal or unenforceable shall modify and construe the provisions as
to render it valid and enforceable as against all persons or entities
and to give the maximum possible protection to each of the Companies and
their Representatives within the bounds of validity, legality and
enforceability.
8. The provisions hereof shall continue in effect throughout
the term of the Shareholder Agreement.
Exhibit 10 (xxi)
SUPPLEMENT TO SHAREHOLDER AGREEMENT
-----------------------------------
July 25, 1995
In conjunction with the execution of the Shareholder Agreement by and
among Interstate Bakeries Corporation ("IBC''), Ralston Purina Company and VCS
Holding Company of even date herewith (the `Shareholder Agreement''), subject
to the restriction in the following paragraphs, it is agreed by the parties
hereto that officers, directors and employees of Ralston who are or would be
deemed to be Affiliates of Ralston under the Shareholder Agreement will be
allowed to acquire IBC Securities during the term of the Shareholder Agreement
without Ralston violating Sections 2.1(a) or 2.1(b) of the Shareholder
Agreement.
The preceding paragraph is subject to the restriction that under no
circumstances during the term of the Shareholder Agreement shall IBC
Securities acquired in reliance hereof by such officers, directors or
employees who are or would be deemed to be Affiliates result in such
individuals owning in the aggregate, at any time during the term of the
Shareholder Agreement, more than 2% of the total outstanding shares of the IBC
Securities. In addition, any acquisitions of IBC Securities by such officers,
directors and employees in reliance hereof shall not be made at the discretion
of or in concert with Ralston.
Ralston shall be under no obligation to attempt to prevent such individuals
from independently acquiring IBC Securities unless Ralston becomes aware by
any means, including notification by IBC, that a proposed purchase would
result in the 2% threshold being exceeded. In the event that Ralston becomes
aware or is notified by IBC that the 2% threshold has been exceeded at any
time during the term of the Shareholder Agreement, then Ralston will use its
reasonable best efforts to cause the individual or individuals who last
purchased IBC Securities which resulted in the 2% threshold being exceeded to
divest a sufficient number of shares of IBC Securities so as to decrease the
aggregate ownership of all of such officers, directors and employees below the
2% threshold. Ralston shall further request such officers, directors and
employees to refrain from purchasing such IBC Securities until such time that
IBC has notified Ralston that the risk of exceeding the 2% threshold has
sufficiently diminished.
If the Chief Executive Officer of IBC notifies RPC that the number of
shares of IBC Securities owned by such officers, directors and employees who
are or would be deemed to be Affiliates of Ralston continues to exceed the 2%
threshold, whether on a continuous or recurrent basis, then Ralston shall
immediately take such action necessary (including the delivery of one of its
Demand Notices) to divest at least that number of shares of IBC Securities
equal to the greatest number of shares owned by such officers, directors and
employees who would be deemed to be Affiliates in excess of the 2% threshold
in the prior 60 days.
Nothing herein shall be deemed a modification or amendment of any of the
definitions of the Shareholder Agreement. Except for the consent of IBC to
the purchase of IBC Securities by Persons who are or would be deemed to be
Affiliates of Ralston, none of the other terms or provisions of the
Shareholder Agreement are amended or modified hereby. Nothing herein shall be
deemed to be a pre-approval by IBC or its Board of Directors of any purchases
of IBC Securities by such officers, directors or employees for purposes of
Section 203 of the Delaware General Corporation Law or Article NINTH of the
Certificate of Incorporation of IBC, as amended.
By: P. E. Yarick
---------------------------------------------
Its Vice President
RALSTON PURINA COMPANY
By: J. M. Neville
---------------------------------------------
Its General Counsel, Vice President
and Secretary
VCS HOLDING COMPANY
By: T. L. Grosch
---------------------------------------------
Its Secretary
