EXHIBIT 10.2
AMENDMENT #2 TO THE SHAREHOLDER AGREEMENT AND
AMENDMENT TO THE SUPPLEMENT TO SHAREHOLDER
AGREEMENT
This Amendment #2 to the Shareholder Agreement and Amendment to the Supplement
to Shareholder Agreement, dated as of July 24, 2000, ("July 2000 Amendment "),
is made by and among Interstate Bakeries Corporation, a Delaware corporation
("IBC"), Ralston Purina Company, a Missouri corporation ("Ralston"), and Tower
Holding Company, Inc., a Delaware corporation ("Tower Holding"), a wholly owned
subsidiary of Ralston and the transferee of all shares of IBC common stock
formerly held by VCS Holding Company ("VCS").
This July 2000 Amendment amends and supplements the Shareholder Agreement by and
among IBC, Ralston and VCS, dated July 22, 1995 (the "Shareholder Agreement"),
as supplemented and amended by the Supplement to Shareholder Agreement by and
among IBC, Ralston and VCS, dated July 25, 1995 (the "Supplemental Agreement"),
which Supplemental Agreement is itself amended by this July 2000 Amendment; and
as further supplemented and amended by a Letter Agreement by and among IBC and
Ralston, dated July 3, 1997 (the "Letter Agreement"), and as further
supplemented and amended by the Amendment to Shareholder Agreement by and among
IBC, Ralston and Tower Holding, dated March 30, 2000 (the "March 2000
Amendment").
Defined terms used herein without definition shall have the meanings ascribed to
them in the Shareholder Agreement or the March 2000 Amendment.
WITNESSETH
WHEREAS, IBC, Ralston and VCS entered into the Shareholder Agreement to provide
certain rights and restrictions with respect to the IBC Equity owned by Ralston;
and
WHEREAS, the parties have agreed to enter this July 2000 Amendment to make
certain amendments to the Shareholder Agreement, the Supplemental Agreement and
the March 2000 Amendment; and
WHEREAS, the parties agree that by entering this July 2000 Amendment, they
acknowledge and confirm that they will continue to be bound by the terms of the
Shareholder Agreement, as previously supplemented and amended by the
Supplemental Agreement, the Letter Agreement and the March 2000 Amendment, all
as amended by this July 2000 Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and obligations set
forth herein, the parties agree as follows:
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1. Section 4.1(a) of the Shareholder Agreement, as amended by Section 9 of
the March 2000 Amendment, is hereby deleted in its entirety and replaced
with the following:
"(a) Except for Transfers permitted by Section 3.2(a) and (b) and Section
10.6(a), and Transfers to a Person making a tender offer for outstanding
IBC Equity which is recommended to shareholders of IBC by the board of
directors of IBC, during the term of this Agreement, Ralston and its
Affiliates 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); provided, however, that if Ralston or any of its
Affiliates propose to sell a specified number of shares of IBC Equity
pursuant to a Transfer permitted by Section 3.2(f) and the First Offer
shall have been rejected by IBC, the proposed Transfer by Ralston or its
Affiliates may proceed at any time thereafter under Rule 144 without
regard to the 20 day period referenced in Section 4.1(d)."
2. Section 10.6 of the Shareholder Agreement, as amended by Section 15 of the
March 2000 Amendment, is hereby deleted in its entirety and replaced with
the following:
"Section 10.6 - Maximum Allowed Ownership of IBC Securities.
"(a) Ralston and Tower Holding agree to sell, and IBC agrees to purchase,
15,498,000 shares of IBC Stock on such date or dates, and in accordance
with such terms and conditions, as are set forth in a Share Purchase
Agreement entered into by Ralston, Tower Holding and IBC contemporaneously
with the execution of this July 2000 Amendment.
"(b) Ralston covenants and agrees that by August 1, 2004, the ownership of
IBC Securities by Ralston and its Affiliates shall be not more than 15% of
the then total outstanding IBC Securities.
"(c) Ralston covenants and agrees that by August 1, 2005, the ownership of
IBC Securities by Ralston and its Affiliates shall be not more than 10% of
the then total outstanding IBC Securities.
"(d) In the event that Ralston and its Affiliates do not attain the levels
of ownership of IBC Equity provided for in paragraphs (b) and (c) above by
the prescribed dates, IBC shall thereafter be entitled to purchase at one
time or from time to time, all or any portion of the IBC Equity then owned
by Ralston and its Affiliates which would have otherwise been required to
have been sold, at a purchase price equal to the IBC Market Price of the
IBC Equity."
3. Paragraph 4 of the Supplemental Agreement is deleted in its entirety and
a new Paragraph 4 inserted as follows:
"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
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be Affiliates of Ralston exceeds the greater of the 2% threshold or the
aggregate number of shares (adjusted for any stock split, reverse stock
split, stock dividend or any similar event) owned by such officers,
directors and employees as of August 1, 2000 (collectively, the "Permitted
Affiliate Holdings"), 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 number of
shares owned by such officers, directors and employees in excess of the
Permitted Affiliate Holdings; provided, that neither (a) options to
purchase IBC Securities held by James R. Elsesser as of August 1, 2000 or
granted to him on any succeeding date by IBC, nor (b) James R. Elsesser's
beneficial ownership of IBC Securities acquired upon the exercise of such
IBC stock options shall be included for purposes of calculating the
Permitted Affiliate Holdings, but shares issued by IBC in connection with
the exercise of any such options shall be included in any calculation of
outstanding shares of the IBC Securities."
4. In all respects, the parties hereby agree that the Shareholder Agreement,
the Supplemental Agreement, the Letter Agreement and the March 2000
Amendment, as amended by this July 2000 Amendment, remain in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment #2 to the
Shareholder Agreement and Amendment to the Supplement to Shareholder Agreement
as of the 24th day of July, 2000.
INTERSTATE BAKERIES CORPORATION
By /S/ RAY SANDY SUTTON
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Ray Sandy Sutton
Vice President
RALSTON PURINA COMPANY TOWER HOLDING COMPANY, INC.
By /S/ JAMES M. NEVILLE By /S/ NANCY E. HAMILTON
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James M. Neville Nancy E. Hamilton
Vice President & Senior Counsel, Law Vice President & Secretary
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