UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
RJR Nabisco Holdings Corp.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
74960K876
(CUSIP Number)
Marc Weitzen, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street, 20th Floor
New York, New York 10036
(212) 626-0800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 1, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the
statement. (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting
beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five
percent or less of such class.) (See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent
amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 74960K876 Page __ of __ Pages
1 NAME OF REPORTING PERSON
Thomas Rattigan
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
7 SOLE VOTING POWER
1,000
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
1,000
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than one-tenth (1/10) of one percent
14 TYPE OF REPORTING PERSON*
IN
<PAGE>
SCHEDULE 13D
Item 1. Security and Issuer
The Schedule 13D filed with the U.S. Securities and
Exchange Commission ("SEC") on August 22, 1996, by High River
Limited Partnership, a Delaware Limited Partnership ("High
River"), Riverdale LLC, a New York limited liability company
("Riverdale"), Barberry Corp., a Delaware corporation
("Barberry"), American Real Estate Holdings, L.P., a Delaware
limited partnership ("AREH"), American Real Estate Partners,
L.P., a Delaware limited partnership ("AREP"), American
Property Investors, Inc., a Delaware corporation ("API") and
Carl C. Icahn ("Icahn"), a citizen of the United States of
America, and amended on October 25, 1996, to, among other
things, add Meadow Walk Limited Partnership, a Delaware
limited partnership ("Meadow Walk") as an additional
registrant (collectively, the "Icahn Registrants"), is amended
to furnish the additional information set forth herein. All
capitalized terms contained herein but not otherwise defined
shall have the meaning ascribed to such terms in the
previously filed statements on Schedule 13D.
Item 2. Identity and Background
Item 2 is amended to add the following:
In addition to High River, Riverdale, Barberry,
AREH, AREP, API, Icahn and Meadow Walk, this statement is
being filed on behalf of Thomas Rattigan ("Rattigan"), an
individual who is a citizen of the United States of America.
Rattigan's principal business address is P.O. Box 9346,
Longboat Key, Florida, 34228-9346.
High River, Riverdale, Barberry, AREH, AREP, API,
Icahn, Meadow Walk and Rattigan (collectively, the
"Registrants") may be deemed to be a "group" within the
meaning of Section 13(d)(3) promulgated under the Securities
Exchange Act of 1934, as amended (the "Act").
Rattigan is primarily engaged as a consultant to
High River.
Rattigan has not, during the past five years, (a)
been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (b) been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or a finding of
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
Item 3 is amended to add the following:
The aggregate purchase price of the 1,000 Shares
purchased by the Registrants not previously reported on a
Schedule 13D by the Registrants was $28,875 (excluding
commissions). The source of funding for the purchase of these
Shares was personal funds of Rattigan.
On November 1, 1996, Rattigan purchased 1,000 Shares
for an aggregate purchase price of $28,875 (excluding
commissions). Such Shares were purchased with Rattigan's
personal funds.
Item 4. Purpose of Transaction
Item 4 is hereby amended to add the following:
The Registrants have determined to support a slate of
candidates for election as directors of Issuer at Issuer's
1997 Annual Meeting of Stockholders (the "1997 Annual
Meeting").
On the morning of November 4, 1996, Mr. Icahn delivered
the following letter, a copy of which is attached hereto as
Exhibit 2 and incorporated in its entirety herein by
reference, to Steven Goldstone, Chairman, Chief Executive
Officer and President of Issuer:
Dear Steven:
You stated on October 9th to USA TODAY, "We still don't
believe the timing is right for a Nabisco spin off."
When will the timing be right? You argued in the recent
proxy fight that the tobacco industry would win a solid
string of victories after which a spin-off would take
place. You also stated that you were going to make many
needed changes at the company which would enhance
shareholder value. Since these promises, the industry
lost the Carter case in Florida, RJR has constantly lost
market share to Philip Morris and RJR stock has decreased
by over 20 percent.
Something must be done! For starters, Nabisco must be
spun off immediately. The company insists on delaying
the spin-off, stating that a spin-off done at this time
will be enjoined. However, this excuse is completely
without merit. It is doubtful the plaintiffs will even
move for an injunction; and, if they do, there is very
little chance that they should win.<F1> As you have
stated in your public filings, even you believe "that the
ultimate outcome of all pending litigation matters should
not have a material adverse effect on the financial
position of either RJRN Holdings or RJRN." The public
filings do not even say that it would have a material
adverse affect on RJR Tobacco. Therefore, plaintiffs
should not be able to prove an essential element of an
injunction claim, i.e., irreparable harm.
You stated recently in the NEW YORK TIMES "With or
without Mr. Icahn, I still believe a spin-off is the
right thing for the company at the right time." I submit
to you that the right time is now. The shareholders have
told you in a precatory resolution that they want a spin-
off immediately.
You have stated in your disclosure that shareholders are
aware of all pertinent information concerning the spin-
off and any risks inherent in effectuating one. Aware of
the "so-called" risks, over 50% of the shareholders
instructed you to spin-off Nabisco immediately. You have
treated shareholders as kindergarten children incapable
of making decisions for ourselves. It is incumbent upon
your board to remember that they are employed by the
shareholders and must respect their wishes on a matter of
this magnitude. If they do not, it is not only insulting
to the concept of corporate democracy but is also
irresponsible, since it is so patently obvious that a
spin-off should be done now.
I can think of no reason for the board not doing the
spin-off immediately, other than its concern for some
distant chance of personal liability. If this is the
reason, which I believe it is, the board is not only
acting improperly, but in an unconscionable manner and in
violation of its fiduciary duty. The board members
should not put their personal interests ahead of the
company. If your board members will not, because of
their own self-interest, do what your shareholders wish
and what is in the best interests of the company, then
they should step aside for a slate willing to do so.
Additionally, as your largest single shareholder, I am
very concerned about the way the company is being
managed. Not only has Reynolds Tobacco recently lost its
most competent top executive, but, more importantly, it
continues to lose market share to Phillip Morris. Phillip
Morris' tobacco profit operating margins are an astounding
30% higher than RJR's.
To rectify the problems discussed above, I contacted Tom
Rattigan several weeks ago. Tom Rattigan was the Chief
Executive Officer of PepsiCo Bottling International,
with a distinguished track record for turning around
consumer products companies. "As President, he
stopped losses and 'got the company back on track
within a year,'said D. Wayne Calloway, chief
executive officer of PepsiCo." "He's smart, he's a good
strategist, he's a workaholic and he can make the
decisions that need to be made" said Calloway.<F2> After
leaving PepsiCo, he went to Commodore International, a failing
computer company which he turned around as CEO. At Commodore, he
"went to work with his characteristic drive and
thoroughness, tackling simultaneously the triple problems
of high costs, low sales and poor management
controls."<F3> After his success at Commodore, Rattigan
became CEO of bankrupt G. Heileman Brewing Company, which
he turned around in several years, making hundreds of
millions of dollars for its previously defunct equity
holders. Marshall Smith, whom Rattigan succeeded as
Chief executive of Commodore, said of Tom Rattigan that
"he's widely regarded as one of the ablest top executives
to have arisen in the consumer product sector since the
mid-70's." Former PepsiCo, Inc. president Andrall
Pearson said, "he's a man of action who gets things done,
one of the best combinations of a thinker and a
doer."<F4> As your largest single shareholder, I believe
that RJR needs a chief executive officer of the caliber
and with the experience and ability of Tom Rattigan. To
this end, Tom Rattigan has agreed to head a slate of
nominees whose platform will advocate:
a) a prompt Nabisco spin-off;
b) working toward a global settlement of tobacco
litigation claims. I believe we all would like to
have a global settlement. This slate will be much
better able to negotiate a global settlement than
the current board which has targeted and promoted
teenage smoking even more than the competition.
These actions and the ire they have caused will
make it very difficult for the current board to
negotiate a global settlement in the future;
c) raising the annual dividend to $2.00 and
maintaining it even after Nabisco is spun off.
In addition to the above, Tom Rattigan as Chief Executive
Officer, would use his considerable talents to "clean up"
Reynolds Tobacco and thereby narrow the profit margin gap
between it and Phillip Morris, as well as improve its
lagging revenues, operating income and market share. Tom
will also determine if 25% of shareholders wish to call a special
meeting. If this is the case, shareholders will not
have to wait until April to elect a new board which
will effectuate the spin-off.
It is important to note that, although I will pay the
expense of the proxy fight, I will receive no benefit
from it other than the one accruing to every other
shareholder, namely seeing the value of my shareholdings
increase. In order to prevent you from obfuscating the
real issues with ad hominem attacks (as you did in the
last proxy fight), I will not be on the board and I
pledge not to enter into any agreements, mergers, or
understandings of any kind with RJRN Holdings when and if
the new slate takes control. Additionally, I want you to
know that I have no contracts, agreements or
understandings with any members of the slate
of any kind whatsoever.<F5> None of these members are in
my employ or get fees from me.<F6> The individuals on
the slate are all highly respected and highly successful
individuals and will all contribute to the success of
Reynolds. They include an ex-deputy mayor of the City
of New York, the former Chief Investment Officer of CALPERS,
the current Executive Director of the National Conference of
Public Employee Retirement Systems, an international business
consultant who was a former senior executive and director of
CPC International, a prominent educator who is a senior fellow
at the Manhattan Institute Center for Educational Innovations,
a general partner of Conistan Global Partners, the former
president of Crane Co. and two prominent attorneys. They are
all completely independent.
Steve, to avoid a proxy fight, which I know we should all
like to avoid, I respectfully ask that you and the Board
act swiftly to do what shareholders wish and spin-off
Nabisco immediately. Additionally, I would ask that you
bring in someone of Tom Rattigan's caliber as Chief Executive
Officer. I am certain such an undertaking would bring back
RJR's market share, as well as narrow the significant tobacco
profit margin gap with Phillip Morris. In the alternative,
I ask that you not stand in the way of a special meeting being
called immediately if 25% of shareholders wish to call it.
Sincerely,
/s/ Carl C. Icahn
Carl C. Icahn
____________
[FN]
<F1> As you know, we have done a great deal of research on
this point which had led us to this conclusion. We thank
you for your letter accepting our offer to share it with
you. We intend to do so in the next two weeks and hope it
will convince you to do the spin off now.
<F2> Philadelphia Inquirer dated August 25, 1987.
<F3> Philadelphia Inquirer dated August 25, 1987.
<F4> Press Release dated April 8, 1995 from Geltzer &
Company.
<F5> (except for the agreements with the nominees to
serve on the slate, which agreements are being filed with
our 13D)
<F6> Jack Wasserman does serve as an independent director
of two companies which I control.
As required by Issuer's by-laws, Icahn & Co., Inc., the
record owner of Shares beneficially owned by High River,
notified Issuer on November 4, 1996, that it intended to
propose nominations of persons for election as directors at
the 1997 Annual Meeting. A copy of the notification letter
(the "Notification Letter") is attached hereto as Exhibit 3
and incorporated in its entirety herein by reference. The
Notification Letter names 10 intended nominees and also names
2 alternate nominees who would be nominees if any of the
intended nominees later became unable or unwilling to become
a nominee, and the order in which such alternates would be
chosen to be nominees. Finally, the notification letter
provides Issuer with certain information required by Issuer's
by-laws concerning the Registrants and their affiliates and
concerning the nominees. The intended nominees were selected
by Thomas Rattigan ("Rattigan"), himself an intended nominee,
after consultation with the Icahn Registrants.
On November 1, 1996, High River and Carl C. Icahn ("Icahn")
entered into a consulting agreement with Rattigan (the
"Consulting Agreement"), pursuant to which, among other
things, Rattigan agreed to provide consulting services to High
River and Icahn in respect of, and to direct, the proposed
proxy contest, including the selection of the nominees for
election to Issuer's Board of Directors (the "Rattigan
Slate"). High River and Icahn agreed that they will (i) pay
for the cost of conducting the proxy contest, and the
Consulting Agreement contemplates that they would request
reimbursement of such costs from Issuer if the Rattigan Slate
is elected, (ii) vote, and cause their affiliates to vote, all
Shares owned by them for the election of the Rattigan Slate,
and (iii) not, through the date of the Annual Meeting, sell
(or permit their affiliates to sell) any Shares owned by them,
so long as Rattigan's services are not terminated prior to
such date in accordance with the terms of the Consulting
Agreement. In addition, pursuant to the Consulting Agreement,
Rattigan agreed not to sell any Shares of Issuer which he
owns, prior to the 1997 Annual Meeting. Pursuant to the
Consulting Agreement, Rattigan will be paid by High River
and/or Icahn the sum of $2 million, plus expenses, and will be
entitled to receive approximately 5% of the profits or deemed
profits of the Icahn Registrants from the sale or deemed sale
of their Shares, including sales in violation of their
agreement with Rattigan not to dispose of any Shares prior to
the 1997 Annual Meeting (AREP, a public company controlled by
Mr. Icahn, will not be required to pay any amount to
Rattigan). The Consulting Agreement contains Rattigan's
agreement that in the event that the Rattigan Slate
constitutes a majority of the Board of Directors of Issuer
immediately following the 1997 Annual Meeting, Rattigan will
not seek to have Issuer issue to him, during the period from
the date of the 1997 Annual Meeting through the second
anniversary thereof, a compensation package which exceeds a
base salary, with no bonuses permitted, of $2 million per
annum, the right to obtain no more than 300,000 performance
stock units on the same basis as those available to the
current Chief Executive Officer and President of RJR, Steven
Goldstone, on the date hereof and options to purchase not in
excess of 500,000 Shares at a price of not less than $30 per
share, 50% of which would be exercisable after one year from
the Meeting date and 50% of which options would be exercisable
after two years from the Meeting Date and which vest in
Rattigan coextensively with their exercisability. The
Consulting Agreement also contains certain provisions pursuant
to which Rattigan is indemnified by High River and Icahn. The
Consulting Agreement describes certain corporate actions which
are intended by Rattigan to be taken by Issuer's Board of
Directors in the event the Rattigan Slate is successfully
elected. These intended actions, which are supported by the
Icahn Registrants, which have agreed to vote all of the
19,929,800 Shares controlled by them in favor of the election
of the members of the Rattigan Slate as directors of Issuer at
the 1997 Annual Meeting, are (a) the replacement of the
current Chief Executive Officer and Chairman of the Board of
Issuer with Rattigan, (b) to seek to spinoff Nabisco Holdings
Corp. ("Nabisco") to Issuer's stockholders, (c) to raise the
current cash dividend paid to Issuer's stockholders to $2 per
share and maintain it at that amount even after the spinoff,
(d) to work with members of the national administration,
members of Congress, representatives of other tobacco
companies and with attorneys representing plaintiffs in suits
against tobacco companies, with a view toward achieving a
overall legislative settlement of current and future tobacco
litigation. In addition, it is intended that Issuer's new
Board of Directors not adopt a shareholders' rights plan
(commonly known as a poison pill) for either Issuer or
Nabisco. A copy of the Consulting Agreement is attached
hereto as Exhibit 4 and incorporated in its entirety herein by
reference.
In furtherance of the proxy contest, High River has entered
into agreements with intended nominees of the Rattigan Slate
(the "Nominee Agreement") and with the alternate nominees (the
"Alternate Agreement") named in the Notification Letter.
Forms of both the Nominee Agreement and the Alternate
Agreement are attached hereto as Exhibits 5 and 6,
respectively, and incorporated in their entirety herein by
reference. Pursuant to the Nominee and Alternate Agreements,
High River has agreed to pay nominees the sum of $25,000 upon
execution thereof and an additional $25,000 in the event that
they are not elected to the Board of Issuer. Pursuant to the
Alternate Agreement, those persons who are designated as
alternate nominees will receive $10,000 and, if they are
nominated, they will have the same arrangement as the
nominees. The Nominee Agreement and Alternate Agreement
further contemplate that, if the Rattigan Slate is
successfully elected, the non-employee directors who are
members of the Rattigan Slate would seek to adopt a
compensation package similar to that of the current directors
of Issuer, except that the members of the Rattigan Slate would
each receive no more than two year options to purchase 50,000
Shares at a price per share of no less than $30 and that for
a period of two years they would not receive any annual grants
of options.
Item 5. Interest in Securities of the Issuer
Item 5 is amended and restated as follows:
(a) As of the close of business on November 1, 1996,
the Registrants may be deemed to beneficially own in the
aggregate 19,930,800 Shares representing approximately 7.4% of
the Issuer's outstanding Shares (based upon the 269,922,924
Shares stated to be outstanding as of September 30, 1996, by
the Issuer in the Issuer's 10-Q filing filed with the
Securities and Exchange Commission.
High River has sole voting power and sole dispositive
power with regard to 13,964,300 Shares. Riverdale has shared
voting power and shared dispositive power with regard to
13,964,300 Shares. Barberry has sole voting power and sole
dispositive power with regard to 140,000 Shares and shared
voting and dispositive power with regard to 2,703,800 Shares.
Meadow Walk has sole voting power and sole dispositive power
with regard to 2,703,800 Shares. AREH has sole voting power
and sole dispositive power with regard to 3,121,700 Shares.
Both AREP and API have shared voting power and shared
dispositive power with regard to 3,121,700 Shares. Carl C.
Icahn has shared voting power and shared dispositive power
with regard to 19,929,800 Shares. Rattigan has sole voting and
dispositive power with regard to 1,000 shares.
The only transactions in the Shares by any of the
Registrants effected since the last filing on Schedule 13D was
a purchase by Rattigan of 1,000 Shares effected on November 1,
1996. The per Share price (excluding commissions) was 28.875.
Item 6. Contracts, Arrangements, Understandings or
Relationship with Respect to Securities of the Issuer
Item 6 is amended to add the following:
On November 1, 1996, High River retained Georgeson &
Company Inc. ("Georgeson") to solicit proxies on behalf of the
Rattigan Slate. The agreement between High River and
Georgeson (the "Georgeson Agreement") provides for a fixed fee
and a success fee in the event that the Rattigan Slate is
successful in electing its directors or withdraws its nominees
because Issuer agrees to a spinoff of Nabisco and the spinoff
is successfully completed within 9 months thereafter. In
addition, the Georgeson Agreement provides for a per phone
call charge and for reimbursement for expenses and
indemnification of Georgeson. A copy of the Georgeson
Agreement is attached hereto as Exhibit 7 hereof and
incorporated in its entirety herein by reference.
In addition, pursuant to the Consulting Agreement and
as described more fully in Item 4 herein, High River, Icahn
and Rattigan have agreed not to sell any Shares prior to the
1997 Annual Meeting. High River and Icahn also agree in the
Consulting Agreement to vote all Shares of Icahn and
affiliates toward the election of the Rattigan Slate.
As described in Item 4 herein, High River entered into
the Nominee Agreements with the following persons who are
members of the Rattigan Slate: DeWitt Bowman, Ivan Burns,
Seymour Fliegel, Paul Gibson, Keith Gollust, Robert Lawler,
Carlos Resendez, Robert Slater and Jack Wasserman and entered
into the Alternate Agreements with Harold First and Miles
Bender who are designated as alternate members of the Rattigan
Slate. Information concerning each of the nominees and the
alternates is contained in Exhibit 3 hereto and the Annexes
thereto.
Item 7. Material to be Filed as Exhibits
. Joint Filing Agreement of the Registrants
. Icahn-Goldstone letter, dated as of November 4, 1996
. Notification Letter from Icahn and Co., Inc. to RJR, dated as of
November 4, 1996
.
Consulting Agreement between High River and Rattigan, dated as of November
1, 1996
. Form of Nominee Agreement
. Form of Alternate Agreement
. Agreement between High River and Georgeson, dated as of November 1, 1996
<PAGE>
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: November 4, 1996
RIVERDALE LLC
By: /s/Carl C. Icahn
Carl C. Icahn
Its: Member
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE LLC
Its: General Partner
By: /s/Carl C. Icahn
Carl C. Icahn
Its: Member
BARBERRY CORP.
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
MEADOW WALK LIMITED PARTNERSHIP
By: BARBERRY CORP.
Its: General Partner
<PAGE>
<PAGE>
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN PROPERTY INVESTORS, INC.
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN REAL ESTATE PARTNERS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
By: /s/ Carl C. Icahn
Carl C. Icahn
By: /s/ Thomas Rattigan
Thomas Rattigan
(Signature Page of Schedule 13D Amendment No. 2 with respect to RJR Nabisco
Holdings Corp.)
EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange
Act of 1934, as amended, the persons named below agree to the joint
filing on behalf of each of them of a statement on Schedule 13D
(including amendments thereto) with respect to the Common Stock,
par value $.01 per share of RJR Nabisco Holdings Corp. and further
agree that this Joint Filing Agreement be included as an Exhibit to
such joint filings. In evidence thereof, the undersigned, being
duly authorized, have executed this Joint Filing Agreement this 4
day of November, 1996.
Dated: November 4, 1996
RIVERDALE LLC
By: /s/Carl C. Icahn
Carl C. Icahn
Its: Member
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE LLC
Its: General Partner
By: /S/Carl C. Icahn
Carl C. Icahn
Its: Member
BARBERRY CORP.
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the board
MEADOW WALK LIMITED PARTNERSHIP
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN PROPERTY INVESTORS, INC.
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN REAL ESTATE PARTNERS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
By: /s/ Carl C. Icahn
Carl C. Icahn
By: /s/ Thomas Rattigan
Thomas Rattigan
November 4, 1996
Mr. Steven F. Goldstone
Chairman, Chief Executive Officer and President
RJR NABISCO HOLDINGS CORP.
1301 Avenue of the Americas
New York, NY.
Dear Steven:
You stated on October 9th to USA TODAY, "We still don't
believe the timing is right for a Nabisco spin off." When
will the timing be right? You argued in the recent proxy
fight that the tobacco industry would win a solid string of
victories after which a spin-off would take place. You also
stated that you were going to make many needed changes at
the company which would enhance shareholder value. Since
these promises, the industry lost the Carter case in
Florida, RJR has constantly lost market share to Philip
Morris and RJR stock has decreased by over 20 percent.
Something must be done! For starters, Nabisco must be spun
off immediately. The company insists on delaying the spin-
off, stating that a spin-off done at this time will be
enjoined. However, this excuse is completely without merit.
It is doubtful the plaintiffs will even move for an
injunction; and, if they do, there is very little chance
that they should win.<F1> As you have stated in your public
filings, even you believe "that the ultimate outcome of all
pending litigation matters should not have a material
adverse effect on the financial position of either RJRN
Holdings or RJRN." The public filings do not even say that
it would have a material adverse affect on RJR Tobacco.
Therefore, plaintiffs should not be able to prove an
essential element of an injunction claim, i.e., irreparable
harm.
You stated recently in the NEW YORK TIMES "With or without
Mr. Icahn, I still believe a spin-off is the right thing for
____________
[FN]
<F1> As you know, we have done a great deal of research on
this point which had led us to this conclusion. We thank
you for your letter accepting our offer to share it with
you. We intend to do so in the next two weeks and hope it
will convince you to do the spin off now.
<PAGE>
the company at the right time." I submit to you that the
right time is now. The shareholders have told you in a
precatory resolution that they want a spin-off immediately.
You have stated in your disclosure that shareholders are
aware of all pertinent information concerning the spin-off
and any risks inherent in effectuating one. Aware of the
"so-called" risks, over 50% of the shareholders instructed
you to spin-off Nabisco immediately. You have treated
shareholders as kindergarten children incapable of making
decisions for ourselves. It is incumbent upon your board to
remember that they are employed by the shareholders and must
respect their wishes on a matter of this magnitude. If they
do not, it is not only insulting to the concept of corporate
democracy but is also irresponsible, since it is so patently
obvious that a spin-off should be done now.
I can think of no reason for the board not doing the spin-
off immediately, other than its concern for some distant
chance of personal liability. If this is the reason, which
I believe it is, the board is not only acting improperly,
but in an unconscionable manner and in violation of its
fiduciary duty. The board members should not put their
personal interests ahead of the company. If your board
members will not, because of their own self-interest, do
what your shareholders wish and what is in the best
interests of the company, then they should step aside for a
slate willing to do so.
Additionally, as your largest single shareholder, I am very
concerned about the way the company is being managed. Not
only has Reynolds Tobacco recently lost its most competent
top executive, but, more importantly, it continues to lose
market share to Phillip Morris. Phillip Morris' tobacco profit
operating margins are an astounding 30% higher than RJR's.
To rectify the problems discussed above, I contacted Tom
Rattigan several weeks ago. Tom Rattigan was the Chief
Executive Officer of PepsiCo Bottling International,
with a distinguished track record for turning
around consumer products companies. "As President, he
stopped losses and 'got the company back on track within a
year,'said D. Wayne Calloway, chief executive officer of
PepsiCo." "He's smart, he's a good strategist, he's a
workaholic and he can make the decisions that need to be
made" said Calloway.<F2> After leaving PepsiCo, he went to
Commodore International, a failing computer company which he
turned around as CEO. At Commodore, he "went to work with his
characteristic drive and thoroughness, tackling
simultaneously the triple problems of high costs, low sales
and poor management controls."<F3> After his success at
Commodore, Rattigan became CEO of bankrupt G. Heileman
____________
[FN]
<F2> Philadelphia Inquirer dated August 25, 1987.
<F3> Philadelphia Inquirer dated August 25, 1987.
<PAGE>
Brewing Company, which he turned around in several years,
making hundreds of millions of dollars for its previously
defunct equity holders. Marshall Smith, whom Rattigan
succeeded as Chief executive of Commodore, said of Tom
Rattigan that "he's widely regarded as one of the ablest top
executives to have arisen in the consumer product sector
since the mid-70's." Former PepsiCo, Inc. president Andrall
Pearson said, "he's a man of action who gets things done,
one of the best combinations of a thinker and a doer."<F4>
As your largest single shareholder, I believe that RJR needs
a chief executive officer of the caliber and with the
experience and ability of Tom Rattigan. To this end, Tom
Rattigan has agreed to head a slate of nominees whose
platform will advocate:
a) a prompt Nabisco spin-off;
b) working toward a global settlement of tobacco
litigation claims. I believe we all would like to have
a global settlement. This slate will be much better
able to negotiate a global settlement than the current
board which has targeted and promoted teenage smoking
even more than the competition. These actions and the
ire they have caused will make it very difficult for
the current board to negotiate a global settlement in
the future;
c) raising the annual dividend to $2.00 and maintaining
it even after Nabisco is spun off.
In addition to the above, Tom Rattigan as Chief Executive
Officer, would use his considerable talents to "clean up"
Reynolds Tobacco and thereby narrow the profit margin gap
between it and Phillip Morris, as well as improve its
lagging revenues, operating income and market share. Tom will
also determine if 25% of shareholders wish to call a
special meeting. If this is the case, shareholders will
not have to wait until April to elect a new board which will
effectuate the spin-off.
It is important to note that, although I will pay the
expense of the proxy fight, I will receive no benefit from
it other than the one accruing to every other shareholder,
namely seeing the value of my shareholdings increase. In
order to prevent you from obfuscating the real issues with
ad hominem attacks (as you did in the last proxy fight), I
will not be on the board and I pledge not to enter into any
agreements, mergers, or understandings of any kind with RJRN
Holdings when and if the new slate takes control.
Additionally, I want you to know that I have no contracts,
____________
[FN]
<F4> Press Release dated April 8, 1995 from Geltzer &
Company.
agreements or understandings with any members of the slate
of any kind whatsoever.<F5> None of these members are in my
employ or get fees from me.<F6> The individuals on the
slate are all highly respected and highly successful
individuals and will all contribute to the success of
Reynolds. They include an ex-deputy mayor of the City of New
York, the former Chief Investment Officer of CALPERS, the
current Executive Director of the National Conference of Public
Employee Retirement Systems, an international business consultant
who was a former senior executive and director of CPC International,
a prominent educator who is a senior fellow at the Manhattan Institute
Center for Educational Innovations, a general partner of Conistan Global
Partners, the former president of Crane Co. and two prominent attorneys.
They are all completely independent.
Steve, to avoid a proxy fight, which I know we should all
like to avoid, I respectfully ask that you and the Board act
swiftly to do what shareholders wish and spin-off Nabisco
immediately. Additionally, I would ask that you bring in
someone of Tom Rattigan's caliber as Chief Executive
Officer. I am certain such an undertaking would bring back
RJR's market share, as well as narrow the significant tobacco
profit margin gap with Phillip Morris. In the alternative,
I ask that you not stand in the way of a special meeting being
called immediately if 25% of shareholders wish to call it.
Sincerely,
/s/ Carl C. Icahn
Carl C. Icahn
____________
[FN]
<F5> (except for the agreements with the nominees to serve
on the slate, which agreements are being filed with our 13D)
<F6> Jack Wasserman does serve as an independent director of
two companies which I control.
Icahn & Co., Inc.
1 Wall Street Court
New York, NY 10005
November 4, 1996
Via Hand Delivery
RJR Nabisco Holding Corp.
1301 Avenue of the Americas
New York, New York 10019
Attention: Corporate Secretary
Re: Stockholder Notice to Submit Business
Ladies and Gentlemen:
Icahn & Co., Inc. ("Icahn & Co.") is hereby submitting this
notice on the date hereof in order to comply with the requirements (the
"Bylaw Requirements") set forth in Article I, Section 6 of the By-Laws of RJR
Nabisco Holding Corp. (the "Corporation"). Icahn & Co.'s address is 1 Wall
Street Court, New York, New York 10005. Icahn & Co. is the record owner,
directly, of 500 shares of common stock, par value $.01 per share, of the
Corporation ("Common Stock"), which constitutes less than 1 percent (1%) of
such class of securities. These shares were countersigned and registered on
the stock transfer books of the Corporation in the name "Icahn & Co., Inc."
on October 31, 1996. These shares are beneficially owned by High River
Limited Partnership ("High River"), an affiliate of Icahn & Co., which has
approved the giving of this notice by Icahn & Co. For further information on
the beneficial ownership of the Corporation's securities by Icahn & Co. and
its affiliates, including, without limitation, High River and Carl C. Icahn,
reference should be made to Annex A to this notice.
Icahn & Co. hereby represents that it intends to appear at the
1997 annual meeting of the Corporation's stockholders (the "Annual Meeting")
in person or by proxy to submit the business specified in this notice.
Icahn & Co. is seeking at the Annual Meeting to elect the
following persons as members of the Board of Directors of the Corporation
and, in that regard, proposes to nominate the following persons (each a
"Nominee" and, collectively, the "Rattigan Slate") as nominees for election
as directors of the Corporation at the Annual Meeting:
Thomas Rattigan
Dewitt Bowman
Ivan Burns
Seymour Fliegel
Paul Gibson
Keith Gollust
Robert Lawler
Carlos Resendez
Robert Slater
Jack Wasserman
In addition, Icahn & Co. designates each of the following persons (each an
"Alternate") as an alternate nominee for election as director of the
Corporation at the Annual Meeting to stand for election in the event that any
of the Nominees are, for any reason, unable or unwilling to stand for, or
otherwise withdraws as a nominee for, election as a director of the
Corporation. In the event that any Nominee is unable or unwilling to stand
for, or otherwise withdraws from, election as a director of the Corporation,
Alternates will be designated to replace such Nominee in the order in which
their names appear below:
Harold First
Miles Bender
The reason for conducting such business at the Annual Meeting is to nominate
a slate of directors of the Corporation whose current intention is to effect
the prompt spinoff of the remaining 80.5% of Nabisco Holdings Corp.
("Nabisco") held by the Corporation to its stockholders, as well as undertake
the other actions referred to below. Icahn & Co. believes, and believes that
the Nominees also believe, that the full value of the Corporation's stock can
best be realized and reflected in the market by such a spinoff.
As required by the Bylaw Requirements, Icahn & Co. hereby advises
you that certain information relating to each of the Nominees and each of the
Alternates as required by the Bylaw Requirements is set forth in Annexes E
through P of this notice. Except as set forth herein or in any of such
Annexes (or any attachments thereto), to the best knowledge of Icahn & Co.
(i) no Nominee or Alternate owns any securities of the Corporation or any
parent or subsidiary of the Corporation, directly or indirectly, beneficially
or of record, or has purchased or sold any securities of the Corporation
within the past two years, and none of their associates beneficially owns,
directly or indirectly, any securities of the Corporation, (ii) no Nominee or
Alternate, his associates or any member of his immediate family, or Icahn &
Co. or their associates has any arrangement or understanding with any person
(a) with respect to any future employment by the Corporation or its
affiliates or (b) with respect to future transactions to which the
Corporation or any of its affiliates will or may be a party, nor any material
interest, direct or indirect, in any transaction, or series of similar
transactions, that has occurred since January 1, 1995 or any currently
proposed transaction, or series of similar transactions, to which the
Corporation or any of its subsidiaries was or is to be a party and in which
the amount involved exceeds $60,000, (iii) no Nominee or Alternate is, or was
within the past year, a party to any contract, arrangement or understanding
with any person with respect to any securities of the Corporation, including,
but not limited to, joint ventures, loan or option arrangements, puts or
calls, guarantees against loss or guarantees of profit, division of losses or
profits or the giving or withholding of proxies, (iv) no Nominee or Alternate
or any of his associates has any arrangement or understanding with any person
pursuant to which he was or is to be selected as a director, nominee or
officer of the Corporation and (v) there is no other information with respect
to any Nominee or Alternate that is required to be disclosed in solicitations
of proxies for election of directors or is otherwise required by the rules
and regulations of the Securities and Exchange Commission promulgated under
the Securities Exchange Act of 1934, as amended. Matters disclosed in any
part of this notice, including the Annexes and any attachments thereto,
should be deemed disclosed for all purposes of this notice. The written
consent of each of the Nominees as required by the Bylaw Requirements is
attached as Annex Q.
The following is a general description of all arrangements or
understandings between certain affiliates of Icahn & Co., including, without
limitation, High River and Carl C. Icahn, and each Nominee and any other
person, pursuant to which the nomination or nominations set forth above are
being made, which, to the extent the same is memorialized in an agreement and
annexed to this notice, is qualified in its entirety by reference to the more
complete and detailed information contained in such agreements:
(1) Consulting Agreement with Thomas Rattigan
Mr. Thomas Rattigan ("Rattigan"), High River and Mr. Icahn have
entered into a consulting agreement (the "Rattigan Agreement"), dated
November 1, 1996, a copy of which is attached hereto as Annex B. The
Rattigan Agreement provides, among other things, for the following:
* Mr. Rattigan has agreed to provide consulting services to High River
and its affiliates in connection with a proxy fight to be brought by
High River and its affiliates (including Icahn & Co.) and conducted
by Mr. Rattigan in support of the efforts of High River and its
affiliates to cause the Rattigan Slate to be elected to the Board of
Directors of the Corporation at the Annual Meeting. In connection with
providing such consulting services, the members of the Rattigan Slate
are to be selected by Rattigan, and have been so selected by him in
consultation with Mr. Icahn.
* Mr. Rattigan acknowledges that the Rattigan Slate will run for election
on a platform which advocates the prompt spinoff of Nabisco to
stockholders of the Corporation and that the proxy statement and other
proxy material to be provided to shareholders of the Corporation
regarding the election of the Rattigan Slate (collectively, the "Proxy
Statement") will disclose, among other things, that, if the Rattigan
Slate is elected as the Board of Directors of the Corporation, Mr.
Rattigan will seek to (a) be elected as the new Chief Executive Officer
of the Corporation, (b) over-see the proposed spinoff of Nabisco, if
approved by the new Board of Directors of the Corporation and (c)
participate in attempting to effect an overall industry-wide
legislative settlement of current and future tobacco litigation claims.
In addition, Mr. Rattigan acknowledged that the Proxy Statement will
also disclose that, if elected, the members of the Rattigan Slate
intend to (a) increase the dividend paid to the Corporation's
stockholders to $2.00 per share and maintain such dividend following
the spinoff, (b) not adopt a shareholder rights plan (commonly known
as a poison pill) for either the Corporation or Nabisco and (c) during
the first year following their election, adopt compensation
arrangements which would give non-employee directors of the Corporation
compensation similar to the compensation currently provided by the
Corporation to its non-employee directors, except that it is
contemplated that each non-employee director would receive two-year
options to purchase no more than 50,000 shares of the Corporation at
a price of no less than $30 per share and that such recipients would
not be entitled to any annual grants of options for at least two years
after the date such 50,000 options are granted.
* In the event that the Rattigan Slate constitutes a majority of the
Board of Directors of the Corporation immediately following the Annual
Meeting, Rattigan will not seek to have the Corporation issue to him
during the period from the date of the Annual Meeting through the
second anniversary thereof, a compensation package which exceeds a base
salary, with no bonuses permitted, of $2 million per annum, the right
to obtain no more than 300,000 performance stock units on the same
basis as those currently available to Steven Goldstone, chief executive
officer of the Corporation, and options to purchase not in excess of
500,000 shares of Common Stock at a price of not less than $30 per
share, 50% of which would be exercisable after one year from the date
of the Annual Meeting and the other 50% of which options would be
vested and exercisable after two years from the date of the Annual
Meeting.
* High River and Mr. Icahn have agreed to bear all of the costs and
expenses of the proxy contest and will vote, and cause their affiliates
to vote, all shares of Common Stock owned by them for the election of
the Rattigan Slate.
* High River and Mr. Icahn agreed that, through the date of the Annual
Meeting, none of High River, Mr. Icahn or their respective affiliates
will sell any shares of Common Stock owned by them so long as
Rattigan's services are not terminated prior to such date in accordance
with the terms of the Rattigan Agreement.
* Mr. Rattigan agrees that, should he own or acquire any shares of Common
Stock or options to acquire any Common Stock, he will not dispose of
any such shares or options prior to the date of the Annual Meeting.
* High River and Mr. Icahn have agreed, among other things, to pay Mr.
Rattigan a monthly base consulting fee of $333,333.33 per month until
the date upon which the Annual Meeting is held (the "Termination
Date"); provided, however, that, under certain circumstances, in the
event that the Rattigan Agreement is terminated prior to Mr. Rattigan
having received payments of base consulting fees aggregating $2
million, then Mr. Rattigan shall receive an additional payment in an
amount such that Mr. Rattigan will have received an aggregate of $2
million of base consulting fees under the Rattigan Agreement; provided,
further, however, that if Mr. Rattigan shall have received consulting
fees for a period of 6 months, he shall, assuming that the agreement
or the provision of his services has not been terminated as provided
in the Rattigan Agreement, not be compensated for the seventh month and
shall, thereafter, until the earlier of the Termination Date or April
30, 1998, receive a base consulting fee of $285,714.29 per month. In
addition, High River and Mr. Icahn will, under certain circumstances
described in the Rattigan Agreement, pay Mr. Rattigan an amount equal
to 5% of the profits or deemed profits, if any, realized by Mr. Icahn
and his affiliates upon the sale or deemed sale of Common Stock,
including, without limitation, sales in violation of their agreement
with Rattigan not to dispose of shares of Common Stock prior to the
date of the Annual Meeting. High River and Mr. Icahn have also agreed
to reimburse Mr. Rattigan for all ordinary, necessary and reasonable
business and legal expenses incurred by him in connection with the
performance of consulting services.
* High River and Mr. Icahn have agreed to indemnify Mr. Rattigan with
respect to matters arising out of or relating to the performance of the
above-mentioned consulting services.
(2) Agreements with other Nominees
High River has entered into a letter agreement (the "Nominee
Agreement") with each of the Nominees other than Mr. Rattigan: Messrs.
Bowman, Burns, Fliegel, Gibson, Gollust, Lawler, Resendez, Slater and
Wasserman. A copy of the form of the Nominee Agreement is attached hereto as
Annex C, and provides, among other things, as follows:
* The Nominee acknowledges that he has agreed with Mr. Rattigan to
become a member of the Rattigan Slate to stand for election as
directors of the Corporation in connection with a proxy contest with
management of the Corporation in respect of the election of directors
of the Corporation at the Annual Meeting. The Nominee further
acknowledges that High River has entered into an agreement with
Rattigan pursuant to which High River has agreed to pay the costs of
the proxy contest.
* High River agrees to pay to the Nominee the sum of $25,000 upon signing
the Nomine Agreement and agreed to pay the Nominee an additional
$25,000 promptly after it is determined that the Nominee has not been
elected to the Board of Directors of the Corporation.
* The Nominee acknowledges that the Rattigan Slate will run for election
on a platform which advocates the prompt spinoff of Nabisco to
stockholders of the Corporation and that the Proxy Statement regarding
the election of the Rattigan Slate will disclose, among other things,
that, if they are elected as directors, the members of the Rattigan
Slate intend to (a) appoint Rattigan as the new Chief Executive Officer
of the Corporation, (b) increase the dividend paid to the Corporation's
stockholders to $2.00 per share and maintain such dividend following
the spinoff, (c) in consultation with representatives of the executive
branch of the government, plaintiffs' attorneys groups, members of
Congress and representatives of other tobacco companies, seek to
develop and implement an industry-wide legislative settlement of
current and future tobacco litigation claims and (d) not adopt a
shareholder rights plan (commonly known as a poison pill) for either
the Corporation or Nabisco. The Nominee acknowledged that he is in
agreement with the specific platform items and presently intends to
take such action, acknowledging that he is not, and cannot be, bound
to do so.
* The Nominee further acknowledges that the Proxy Statement will disclose
that, if elected, the members of the Rattigan Slate intend to, during
the first year following their election, adopt compensation
arrangements which would give non-employee directors of Corporation,
including the Nominee, compensation similar to the compensation
currently provided by the Corporation to its non-employee directors,
except that it is contemplated that each non-employee director would
receive two-year options to purchase no more than 50,000 shares of
Common Stock at a price of no less than $30 per share and that such
recipients would not be entitled to any annual grants of options for
at least two years after the date such 50,000 options are granted.
* High River has agreed to indemnify each Nominee from and against any
losses incurred by the Nominee arising from any action relating to such
Nominee's role as a nominee on the Rattigan Slate, absent gross
negligence or willful misconduct.
(3) Agreements with Alternates
High River has entered into a letter agreement (the "Alternate
Agreement") with each of the Alternates, Messrs. First and Bender, a copy of
the form of which is attached hereto as Annex D. The Alternate Agreements
are substantially similar to the Nominee Agreements between High River and
each Nominee described above, except that each Alternate Agreement provides,
among other things, as follows:
* The Alternate acknowledges that he has agreed with Mr. Rattigan to
serve as an alternate designee to become a member of the Rattigan Slate
to stand for election as directors of the Corporation in connection
with a proxy contest with management of the Corporation in respect of
the election of directors of the Corporation at the Annual Meeting.
The Alternate further acknowledges that, in his capacity as an
Alternate, if requested by Rattigan, he will become a member of the
Rattigan Slate and that the Alternate may be requested to do so at any
time prior to the date of the Annual Meeting in the event that any one
or more of the persons previously designated to serve as a member of
the Rattigan Slate is unwilling or unable to do so. The Alternate also
acknowledges that High River has entered into an agreement with
Rattigan pursuant to which High River has agreed to pay the costs of
the proxy contest.
* High River agrees to pay to the Alternate: (i) the sum of $10,000 upon
signing the Alternate Agreement; (ii) an additional $15,000 in the
event that the Alternate is requested by Rattigan to become a member
of the Rattigan Slate and, in fact, does so; and (iii) if the Alternate
serves on the Rattigan Slate, an additional $25,000 promptly after it
is determined that the Alternate has not been elected to the Board of
Directors of the Corporation.
Icahn & Co. will promptly provide any other information
reasonably requested by the Corporation pursuant to the Bylaw Requirements.
Please be advised, however, that, notwithstanding the compliance by Icahn &
Co. with the Bylaw Requirements, neither the delivery of this notice in
accordance with the terms of the Bylaws Requirements nor the delivery of any
additional information, if any, provided by Icahn & Co. or any of its
affiliates to the Corporation from and after the date hereof shall be deemed
to constitute an admission by Icahn & Co. or any of its affiliates of the
legality or enforceability of the Bylaw Requirements or a waiver by any such
person or entity of its right to, in any way, contest or challenge the
enforceability thereof.
Very truly yours,
/s/ Carl C. Icahn
Carl C. Icahn
Chairman of the Board
and President
[signature page to RJR stockholder proposal notice]<PAGE>
ANNEX A
As of the close of business on November 1, 1996, Registrants,
may be deemed to beneficially own in the aggregate 19,930,800 shares of
common stock ("Shares") representing approximately 7.4% of the Issuer's
outstanding Shares (based upon the 269,922,924 Shares stated to be
outstanding as of September 30, 1996, by the Issuer in the Issuer's 10-Q
filing filed with the Securities and Exchange Commission.
High River Limited Partnership, a Delaware limited partnership,
("High River"), has sole voting power and sole dispositive power with regard
to 13,964,300 Shares. Riverdale LLC, a New York limited liability company
("Riverdale"), has shared voting power and shared dispositive power with
regard to 13,964,300 Shares. Barberry Corp., a Delaware corporation
("Barberry"), has sole voting power and sole dispositive power with regard to
140,000 Shares and shared voting and dispositive power with regard to
2,703,800 Shares. Meadow Walk Limited Partnership, a Delaware limited
partnership, has sole voting power and sole dispositive power with regard to
2,703,800 Shares. American Real Estate Holdings, L.P., a Delaware limited
partnership ("AREH"), has sole voting power and sole dispositive power with
regard to 3,121,700 Shares. Both American Real Estate Partners L.P., a
Delaware limited partnership ("AREP") and American Property Investors, Inc.,
a Delaware corporation ("API") have shared voting power and shared
dispositive power with regard to 3,121,700 Shares. Thomas Rattigan has sole
voting power and sole disposition power with regard to 1,000 Shares.
Riverdale LLC, the general partner of High River, is over 99
percent owned by Carl C. Icahn ("Icahn"). Barberry, the sole general partner
of Meadow Walk, is wholly owned by Icahn. American Property Investors, the
general partner of both AREH and AREP, is wholly owned by Icahn. As such,
Icahn may be deemed to have shared voting and dispositive power over
19,929,800 shares.<PAGE>
ANNEX B
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement"), is made and
entered into as of this 1st day of November, 1996 (the
"Effective Date"), by and between High River Limited
Partnership, a Delaware limited partnership with an address at
c/o Icahn Associates Corp., 100 South Bedford Rd., Mount
Kisco, NY 10549 ("Company"), Carl C. Icahn ("Icahn") and
Thomas Rattigan, with an address at 1485 Gulf of Mexico Drive,
Longboat Key, Florida 34228 ("Rattigan").
W I T N E S S E T H :
WHEREAS, The Company and Icahn wish to retain Rattigan to
provide consulting services to them and their affiliates
("Icahn Shareholders") who beneficially own shares of common
stock ("Shares") of RJR Nabisco Holdings Corp. ("RJR") and
Rattigan desires to render such services to the Company and
Icahn Shareholders upon the terms and subject to the
conditions set forth herein.
NOW THEREFORE, in consideration of the mutual premises
and covenants herein contained, Company, Icahn and Rattigan
hereby agree as follows:
1. INDEPENDENT CONTRACTOR CONSULTING ARRANGEMENT
The Company and Icahn will retain Rattigan and Rattigan
will provide services to the Company and the Icahn
Shareholders as an independent contractor, and not as an
employee, on the terms and conditions hereinafter set forth.
2. TERM
This Agreement shall commence on the Effective Date and
shall expire immediately at the close of business on the
Meeting Date, as such term is defined below.
3. CONSULTING SERVICES
a. Rattigan will provide consulting services to
the Company and the Icahn Shareholders in
connection with a proxy fight to be brought by the
Icahn Shareholders and conducted by Rattigan
against the management of RJR in connection with
the 1997 RJR Annual Meeting of Stockholders ("1997
Annual Meeting") or, if requested by the Company at
a special meeting of stockholders of RJR called
prior to the 1997 Annual Meeting, for a purpose
which includes the election of directors in order
to elect at least a majority of the Board of
Directors of RJR.
b. Prior to the 1997 Annual Meeting, Rattigan
shall be engaged in providing consulting services ,
including conducting the proxy fight in support of
the efforts of the Icahn Shareholders to nominate
Rattigan and others to be elected to the Board of
Directors of RJR at the 1997 Annual Meeting (the
"Rattigan Slate"), with the understanding that the
Icahn Shareholders will vote all of their Shares of
RJR for the election of the Rattigan Slate, and, if
the Rattigan Slate is successful, Rattigan will
seek to (i) be elected as the new Chief Executive
Officer of RJR, (ii) over-see the proposed spin-off
of Nabisco Holdings Corp.("Nabisco") if approved by
the new Board of Directors of RJR and (iii)
participate in attempting to effect an overall
legislative settlement of tobacco litigation on an
industry-wide basis. Members of the Rattigan Slate
will be selected by Rattigan. The number of the
nominees on the Rattigan Slate will equal or exceed
the number of directors of RJR. Should the Company
desire, the Rattigan Slate may be put forward for
election at a special meeting of stockholders of
RJR, if called, in which case the references in
this document to the 1997 Annual Meeting will
relate to the special meeting in lieu of or in
addition to the 1997 Annual Meeting. All costs and
expenses of the proxy contest shall be borne by the
Company or, failing that, by Icahn and Rattigan
shall have no liability or obligation with respect
to such expenses. In connection with the provision
of services hereunder, Rattigan shall have no
authority, either implied or explicit, to bind
Icahn or the Company or any of his or its
affiliates in any way to any arrangement,
understanding or otherwise without Icahn's prior
written approval. Rattigan agrees that, in the
event that the Rattigan Slate constitutes a
majority of the Board of Directors immediately
following the 1997 Annual Meeting, Rattigan will
not seek to have RJR issue to him during the period
from the date of the 1997 Annual Meeting through
the second anniversary thereof, a compensation
package which exceeds a base salary, with no
bonuses permitted, of $2 million per annum, the
right to obtain no more than 300,000 performance
stock units on the same basis as those available to
Steven Goldstone, chief executive officer of RJR,
on the date hereof and options to purchase not in
excess of 500,000 Shares at a price of not less
than $30 per share, 50% of which would be
exercisable after one year from the Meeting Date,
as defined herein, and the other 50% of which
options would be exercisable after two years from
the Meeting Date and which vest in Rattigan
coextensively with their exercisability. Rattigan
further agrees that the agreement contained in the
immediately previous sentence shall be disclosed in
the proxy material sent to RJR stockholders in
connection with the proxy contest for the 1997
Annual Meeting. The proxy material will also
disclose that the members of the Rattigan Slate
will be seeking, if they are elected as directors,
the same salary and benefit package presently
available to non-employee directors of RJR, except
that, with respect to options, each successful
nominee will (i) seek to be awarded a one time
option to purchase 50,000 Shares at not less than
$30 per Share, which option will lapse at the end
of two years and (ii) not be eligible for annual
grants of options prior to the second anniversary
of the grant of the 50,000 options. Such proxy
material shall also disclose that the Company and
its affiliates will seek reimbursement for costs
and expenses of conducting the proxy fight in the
event that the Rattigan Slate is successful.
Rattigan intends that the proxy material in support
of the Rattigan Slate shall indicate that it is the
intention of the Rattigan Slate, if elected as
directors, to (A) appoint Rattigan the new Chief
Executive Officer for RJR,(B) seek to spin off
Nabisco to stockholders of RJR (C) raise the RJR
dividend to $2.00 and maintain it even after the
spin-off, (D) seek to develop with representatives
of the executive branch of the government,
plaintiffs attorneys, members of Congress and
representatives of other tobacco companies, among
others, an industry-wide legislative settlement of
current and future tobacco litigation claims and
(E) not adopt a shareholder rights plan, commonly
known as a poison pill, in RJR or any of its
component companies, including Nabisco.
(c) No Sale Agreement. The Company and Icahn agree that,
from and after the date hereof and through the date on which
the 1997 Annual Meeting of RJR is held (on which the ballots
for the election of directors are cast) ("Meeting Date"),
neither the Icahn Shareholders nor the Company nor any of
their or its affiliates shall sell any Shares owned by them
("No Sale Agreement"). The No Sale Agreement shall terminate
and be of no further force and effect in the event that
Rattigan abandons his direction of the proxy contest or his
services are terminated as set forth in Section 5 of this
Agreement. Rattigan agrees that, should he own or acquire any
shares of RJR stock or options to acquire such Shares, he will
not dispose of any such Shares or options prior to the Meeting
Date.
(d) Provision of Consulting Services. Rattigan agrees
that he will devote his full time and attention to the
consulting services to be rendered by Rattigan hereunder
during normal working days and on weekends and evenings when
reasonably required by the proxy contest. Rattigan's services
shall be rendered in a manner consistent with the manner in
which such services are customarily rendered by similarly
situated consultants. It is recognized and agreed that
Rattigan shall provide such consulting services principally
from his residence in Florida, but he recognizes that he may
be required, in order to effect the goals of the proxy
contest, to travel frequently outside the State of Florida in
connection with providing the services hereunder.
(e) Other Activities. It shall not be a violation of
this Agreement for Rattigan to (a) serve on corporate, civic
or charitable boards or committees of not-for-profit
organizations, provided, however, that the time devoted to
such service and to attention to his personal commitments
shall not require more than an average of 2 business days per
month or (b) manage his personal investments, so long as such
investment activities do not significantly interfere with the
performance of Rattigan's duties in accordance with this
Agreement.
4. COMPENSATION AND RELATED MATTERS
a. Base Consulting Fee. During the term hereof,
Rattigan shall receive a base consulting fee of
$333,333.33 per calendar month (or any portion of a
calendar month), payable in advance, with the first
such payment to be made on the Effective Date and
each subsequent month commencing with the first day
of the calendar month next following the Effective
Date; provided, however, that if, for any reason,
this Agreement shall be terminated (other than as
stated in Section 5(d) hereof) prior to Rattigan
having received payments of base consulting fees
aggregating less than $2,000,000, Rattigan shall
receive, upon termination of this Agreement, an
additional payment equal to the positive difference
obtained by subtracting from $2,000,000,the
aggregate amount of base consulting fees received
by Rattigan under the Agreement prior to its
termination; provided further, however, that if
Rattigan shall have received base consulting fees
in respect of the first six months from and after
the Effective Date, he shall, if this Agreement or
his provision of services hereunder shall not have
been terminated, continue to render his consulting
services until the 1997 Annual Meeting and shall
not be compensated for the seventh month after the
Effective Date but shall, commencing with the first
day of the eighth month after the Effective Date
and until the date of the 1997 Annual Meeting,
receive a base consulting fee of $285,714.29 per
calendar month or pro rata for any portion thereof
if the Annual Meeting is scheduled to be finally
held other than at the end of a calendar month. In
no event shall Rattigan be required to render
services hereunder nor shall the Company and Icahn
be required to continue to retain Rattigan to
render such services, in each case, beyond April
30, 1998.
b. Other Payments. In the event that the
Company or any of Icahn Shareholders or any of its
or their affiliates violates the No Sale Agreement,
then Rattigan shall be paid by the Company, or ,if
not paid on demand when due, by Icahn, in lieu of
any other damages as a result of such violation and
as the sole remedy therefor, promptly after such
violation, (i) the excess, if any, of $2,000,000
over the aggregate amount of base consulting fees
received by Rattigan pursuant to subsection 4(a)
hereof prior to such violation, and (ii) the
Rattigan Profits, as such term is hereinafter
defined, with respect to the Shares which are sold
in violation of the No Sale Agreement. In addition
to the foregoing, whether or not there occurs a
violation of the No Sale Agreement, Rattigan shall
be entitled to be paid by the Company, or ,if not
paid on demand when due, by Icahn, the Rattigan
Profits with respect to any Shares which are sold
by the Company, any of the Icahn Shareholders or
any of its or their affiliates during the period
commencing on the day following the Meeting Date
through the date which is same day of the month as
the Meeting Date but is (A) if the Rattigan Slate
is not elected to be the majority of the Board of
Directors of RJR, in the sixth month following the
month of the Meeting Date or (B) if the Rattigan
Slate is elected to be the majority of the Board of
Directors of RJR, in the twelfth month following
the month of the Meeting Date ("Final Date"). Such
payment shall be made promptly after such Shares
are sold. In addition, Rattigan shall be entitled
to be paid, promptly after the Final Date, Rattigan
Profits with respect to Shares held by the Company
and the Icahn Shareholders and any of its or their
affiliates on the Final Date. The Rattigan Profits
shall be determined by subtracting from the actual
aggregate sales proceeds ("Proceeds Realized")
(after deducting commissions and other selling
charges, if any) of the Shares sold or deemed to be
sold, the product of (i) the Average Per Share
Cost, as hereinafter defined, and (ii)the number of
Shares sold or deemed to be sold and dividing the
remainder by twenty (20). The Average Per Share
Cost shall be determined by taking the aggregate
purchase price, including commissions, of all
Shares owned by the Company and the Icahn
Shareholders on the date hereof, which the Company
and Icahn represent and warrant for the purposes of
making the determination of the Rattigan Profits,
is 19,929,800 ("Held Shares") and adding thereto
the aggregate purchase price, including
commissions, of any Shares purchased between the
date hereof and the Meeting Date ("Purchased
Shares") dividing the sum by the sum of the number
of Held Shares plus the number of Purchased Shares
and to the quotient adding an amount (computed on
the date of any sale of Shares which requires the
computation of Rattigan Profits) equal to the
quotient obtained by dividing the costs theretofore
incurred by the Company and any of its affiliates,
including Rattigan's base consulting fees, in
conducting the proxy contest, whether or not such
costs have been paid for, by the sum of the number
of Held Shares plus the number of Purchased Shares
theretofore purchased. The Company and Icahn
hereby represent and warrant that, for purposes of
determining Rattigan Profits, as of the date hereof
the average purchase price of each Held Share,
including commissions, is $30.04. Any Shares held
on the Final Date shall be deemed to be sold on the
Final Date and the per share Proceeds Realized with
respect to Shares deemed to be sold on the Final
Date shall be deemed to be the average closing
price on the consolidated tape as reported for the
last 20 business days prior to the Final Date (less
commissions which would have been paid had the
shares been sold assuming commissions at the same
average rate as the commissions paid with respect
to the purchase of the Held Shares).
Notwithstanding the foregoing, no compensation
shall be paid to or due to Rattigan under this
Subsection 4(b), whether or not the Company or any
of its affiliates breaches the No Sale Agreement,
if Rattigan abandoned his direction of the proxy
contest or if his services have been terminated
under the circumstances set forth in Section 5(c)
hereof, or if his services have been terminated as
a result of his death or disability (as defined in
Section 5 hereof) prior to three months from the
Effective Date, in the case of death, and if the
Disability Commencement Date, as defined in Section
5(b), occurs prior to the expiration of three
months from the Effective Date, in the case of
disability. If Rattigan's services are terminated
as a result of his death or disability (as defined
in Section 5 hereof) on or after the date which is
three months after the Effective Date, in the event
of death, or, in the event of termination for
disability, the Disability Commencement Date occurs
after three months from the Effective Date, then
Rattigan shall be entitled to Rattigan Profits as
determined under this subsection 4(b), provided,
however, that if Rattigan's termination as a result
of death or disability occurs such that he is
entitled to Rattigan Profits but occurs prior to
the Meeting Date, then all Held Shares and
Purchased Shares not previously sold and then held
by the Company, the Icahn Shareholders and their
respective affiliates shall be deemed to be sold on
the date of Rattigan's death or the date of his
termination for disability and the aggregate
Proceeds Realized with respect to Shares sold or
deemed sold by the Company or the Icahn
Shareholders or their affiliates as of the date of
Rattigan's termination as a result of death or
disability shall be the lesser of (i) the Price
Realized as determined under this subsection 4(b)
without regard to this sentence, or (ii) the
average closing price of such shares on the
consolidated tape as reported for the last 15
business days prior to the date of Rattigan's death
or the date on which his termination for disability
is first publicly announced and the first 15
business days following the date of Rattigan's
death or the date on which his termination for
disability is first publicly announced.
c. Expenses. Rattigan shall be entitled to
receive from Company or ,if not paid on demand when
due, from Icahn prompt reimbursement following
Rattigan's written accounting to the Company
therefor of all reasonable expenses incurred by
Rattigan in performing his services hereunder,
provided, however, that incurrence of expenses that
exceed an aggregate of $20,000 in any calendar
month shall require the prior written consent of
Icahn.
d. Legal Expenses. Rattigan shall be entitled to
receive prompt reimbursement from the Company or,
if not paid on demand when due, Icahn for all
reasonable expenses, including reasonable
attorney's fees at their usual hourly rates,
incurred in connection with the negotiation,
preparation, interpretation, and enforcement of
this Agreement, including any expenses reasonably
incurred in enforcing the obligations of the
Company or Icahn hereunder whether through
litigation or otherwise.
5. TERMINATION
a. Death. Rattigan's services hereunder shall
terminate upon his death. If Rattigan's services
are terminated as a result of his death on or after
the date which is three months from the Effective
Date, then Rattigan shall be entitled to Rattigan
Profits as determined under subsection 4(b).
b. Disability. If Rattigan becomes physically or
mentally disabled or incapacitated during his
employment hereunder to such an extent that he
shall be unable to perform any and all of his
duties reasonably expected to be performed
hereunder (the date of the commencement of the
disability or incapacity being the "Disability
Commencement Date") and such disability or
incapacity shall have continued for a period of at
least four (4) consecutive weeks, then,
notwithstanding the provisions of Section 2 of this
Agreement, Company may, at any time after the end
of such period of four (4) consecutive weeks, and
during the continuance of such disability or
incapacity terminate Rattigan's services hereunder.
During the period of disability and prior to
termination for disability Rattigan shall continue
to be paid his consulting fee in accordance with
this Agreement. If Rattigan's services are
terminated as a result of his disability and the
Disability Commencement Date is more than three
months from the Effective Date hereof, then
Rattigan shall be entitled to Rattigan Profits as
determined under subsection 4(b). If there is any
dispute between the parties as to Rattigan's
ability to perform his duties hereunder due to
physical or mental impairment, the date of the
determination of disability hereunder shall not be
earlier than the date on which Rattigan is
certified as having a disability (within the
meaning of this subsection 5(b)) by an independent
physician selected by Rattigan (or, if Rattigan is
unable to make such selection, by any adult member
of Rattigan's immediate family) with the agreement
of the Company but if they cannot agree, then by an
independent physician selected by the physician
selected by Rattigan and by the physician selected
by the Company.
c. Cause. Company may terminate Rattigan's
services hereunder at any time for cause ("Cause").
For purposes of this agreement, the sole Causes
upon which Rattigan's services may be terminated
shall be his habitual neglect (neglect to be
determined based on the failure of Rattigan to meet
the standards of performance set forth in Section
3(d) and 3(e) hereof) in connection with his
consulting duties hereunder, including the conduct
of the proxy contest, the termination of the No
Sale Agreement by reason of Rattigan's abandonment
of his direction of the proxy contest or any
indictment by a governmental authority charging
that Rattigan has committed a felony or other act
involving moral turpitude.
(d) Effect of Termination. If Rattigan's services are
terminated by the Company as a result of Death, Disability or
for Cause, in accordance with the provisions of this Section
5, then Rattigan shall thereafter receive no further
compensation pursuant to Section 4(a) or any Other Payments of
any kind pursuant to Section 4(b) hereof, except with respect
to the specific payments pursuant to Section 4(b) hereof in
the event of termination as a result of death or disability
which termination takes place following the expiration of in
excess of three months from the Effective Date in the case of
death or, in the case of termination for disability in the
event the Disability Commencement Date occurs after the
expiration of three months from the Effective Date.
(e) Termination for Good Reason. Rattigan may at any
time cease providing services hereunder for good reason ("Good
Reason"). For purposes hereof, Good Reason shall mean (i) any
failure by the Company or Icahn to comply with any of their
material obligations to Rattigan under this Agreement, other
than any failures not occurring in bad faith which are
remedied reasonably promptly after receipt of written notice
thereof from Rattigan, (ii) any termination by the Company of
Rattigan's services hereunder, other than as permitted
pursuant to Section 4 hereof, prior to the expiration of the
term of this Agreement, or (iii) any action taken or the
failure to take action required by the Agreement to be taken,
by the Company or Icahn which substantially impairs Rattigan's
ability to perform the services contemplated by this Agreement
which action taken or failed to be taken is not cured by the
Company or Icahn reasonably promptly after receipt of written
notice thereof from Rattigan. Any written notice given by
Rattigan intended to comply with the provisions of this
Section 5(e) shall be required to contain a statement by
Rattigan that the failure to act reasonably promptly to cure
the deficiency cited therein will be a basis for Rattigan to
exercise his right under this Section 5(e) to cease providing
service hereunder for Good Reason. If Rattigan ceases to
provide services hereunder for Good Reason, then Rattigan
shall receive (i) the excess, if any, of $2,000,000 over the
aggregate amount of base consulting fees theretofore received
by Rattigan pursuant to subsection 4(a) hereof, and (ii)
Rattigan Profits with respect to all Purchased Shares as
determined pursuant to subsection 4(b) hereof. Rattigan shall
have no liability hereunder upon ceasing to provide services
for Good Reason.
6. CONFIDENTIALITY, ETC
(a) Restrictions. Unless otherwise required by law or
judicial process, and except as may be relevant to the subject
matter of and reasonably necessary to disclose in connection
with litigation brought by Rattigan to enforce the obligations
of the Company or Icahn under this Agreement, Rattigan shall
retain in confidence during the Term of this Agreement and
after termination of Rattigan's services hereunder or after he
determines to cease providing service hereunder, whether or
not permitted pursuant to this Agreement, all information
known to Rattigan concerning Company, Icahn and its and his
affiliates, and its and his and their respective affiliates'
respective businesses unless he reasonably believes that such
information is not confidential or until such information is
publicly disclosed by Company or Icahn or otherwise becomes
publicly disclosed other than through Rattigan's actions.
Prior to any intended disclosure by Rattigan of such
information, whether or not in the event that Rattigan is
required by judicial process to disclose any such information,
Rattigan shall promptly give the Company notice thereof in
order to afford the Company the opportunity to contest the
validity of such intended disclosure.
(b) No Adequate Remedy at Law. The parties acknowledge
that: (i) the provisions of this Section 6 are essential to
protect the business and goodwill of the Company and Icahn;
and (ii) the foregoing restrictions are under all of the
circumstances reasonable and necessary for the protection of
the Company and its business and Icahn and his businesses. In
the event that Rattigan shall commit a breach of any of the
provisions of this Section 6, or in the event that any such
breach is threatened by Rattigan, and such breach does, or
such threatened breach would, cause irreparable harm to the
Company or Icahn, in addition to and without limiting or
waiving any other remedies available to the Company and Icahn
at law or in equity, the Company and Icahn shall be entitled
to immediate injunctive relief in any court, domestic or
foreign, having the capacity to grant such relief, to restrain
such breach or threatened breach and to enforce the provisions
of this Section 6. Rattigan acknowledges that it is
impossible to measure in money the damages that will accrue to
the Company and Icahn in the event that Rattigan breaches or
threatens to breach any of the provisions of this Section 6
and thereby causes irreparable harm to the Company or Icahn,
and in the event that the Company or Icahn shall institute any
action or proceeding to enforce those provisions by seeking
injunctive relief, Rattigan hereby waives and agrees not to
assert and shall not use as a defense thereto the claim or
defense that the Company or Icahn has an adequate remedy at
law. The foregoing shall not prejudice the Company's right to
require Rattigan to account for and pay over to the Company
and Icahn the amount of any actual damages incurred by the
Company as a result of any such breach.
7. ASSIGNMENT
This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interest of
Rattigan herein may not be sold, transferred, assigned,
pledged or hypothecated, provided however that Rattigan may
assign his rights to payment hereunder. The rights and
obligations of the Company and Icahn hereunder will be binding
upon and run in favor of the successors and assigns of the
Company and Icahn.
8. NOTICE
For further purpose of this Agreement, notices, demands
and all other communications provided in the Agreement shall
be in writing and shall be deemed to have been duly given when
received by the recipient thereof whether hand delivered, by
telecopy, sent by overnight mail of the United States Post
Office or overnight courier, if mailed by United States
registered mail, return receipt requested, postage prepaid or
otherwise, and shall be addressed as follows:
If to Rattigan:
Thomas Rattigan
P.O. Box 9346
Longboat Key, Florida 34228
FAX:
(Or if by overnight courier)
Apt. A108, Players Club
1485 Gulf of Mexico Drive
Longboat Key, Florida 34228
with a copy to:
J. Ross Docksey, Esquire
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
FAX: 312-878-7934
If to Company:
c/o Icahn Associates Corp.
114 West 47th Street, 19th floor
New York, New York 10036
FAX 212-921-3379
If to Carl C. Icahn :
c/o Icahn Associates Corp.
114 West 47th Street-19th Floor
New York, N.Y. 10036
FAX 212-921-3359
in each case with a copy to:
Marc Weitzen, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, NY 10036
FAX 212-626-0799
or to such other address as any party may have furnished to
the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon
receipt.
9. SURVIVORSHIP
The respective rights and obligations of the parties
hereunder, including without limitation the rights and
obligations set forth in Section 12 hereof, shall survive any
termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations.
10. REPRESENTATIONS AND WARRANTIES
(a) Rattigan represents and warrants that (i) his
execution of this Agreement and his performance of his duties
and responsibilities under this Agreement shall not violate or
result in a breach of the terms of any material agreement to
which he is a party or by which he is bound, (ii) he has not
entered into any other agreement or understanding which would
in any way affect the optimal performance of his duties
hereunder and (iii)he in good faith believes himself to be in
excellent health as of the date hereof and knows of nothing
which would tend to indicate otherwise.
(b) The Company and Icahn represent and warrant that the
Company (i) is a limited partnership duly organized, validly
existing and in good standing under the laws of its state of
formation; (ii) is duly qualified to do business and is in
good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business
requires such qualification (except for jurisdictions in which
such failure to so qualify would not have a material adverse
effect on the business, assets, operations, prospects or
financial or other condition of the corporation or on the
corporation's ability to perform its obligations under this
Agreement ("Material Adverse Effect")); (iii) has the
requisite corporate power and authority to conduct its
business as now, heretofore and proposed to be conducted; (iv)
is in compliance with its agreement of limited partnership.
(c) The Company and Icahn represent and warrant that the
performance of this Agreement is within the powers of the
Company, has been duly authorized by all necessary partnership
action is not in conflict with the terms of any partnership
agreement, certificate of partnership of the Company, and does
not result in a breach of or constitute a default under any
material contract, obligation, indenture or other instrument
to which the Company is party or by which the Company is bound
and when this Agreement is executed and delivered by the
parties hereto it will constitute a binding obligation of the
Company enforceable against the Company in accordance with its
terms.
11. REMEDIES
(a) Costs of Litigation. The losing party will pay
all expenses incurred by the winning party, including but not
limited to reasonable attorneys' fees and court costs, arising
from litigation between the parties over this Agreement.
(b) Prejudgment Interest. If the Company or, failing
same, Icahn shall fail to pay Rattigan the consulting fees or
any other amounts to which Rattigan is entitled under this
Agreement at the time when such amounts are due, in addition
to any other remedies available to Rattigan with respect to
such failure to pay such amounts, the Company and Icahn shall
be obligated to pay Rattigan interest on such unpaid amounts
until paid at the rate of 10% per annum or, if lower, the
maximum rate permitted by applicable law.
(d) Joint and Several Liability. The obligations under
this Agreement ("Obligations") of the Company and Icahn (the
Company and Icahn referred to as a "Liable Person" for
purposes of this subsection) shall be the joint and several
obligations of each Liable Person. Rattigan may bring a
separate action or actions on each, any, or all of the
Obligations against any Liable Person, whether action is
brought against the other Liable Persons or whether the other
Liable Persons are joined in such action. In the event that
the Company fails to make any payment of any Obligations on or
before the due date thereof, Icahn immediately shall cause
such payment to be made or each of such Obligations to be
performed, kept, observed, or fulfilled.
12. INDEMNIFICATION OF RATTIGAN
(a) Right to Indemnification. If Rattigan is made
a party or is threatened to made a party to or is involved in
or called as a witness in any Proceeding (as hereinafter
defined) he shall be indemnified and held harmless by the
Company or if not paid on demand when due, by Icahn for all
expenses incurred by Rattigan (including, but not limited to,
judgments, fines, excise taxes or penalties and amounts paid
or to be paid in settlement) incurred by Rattigan in
connection therewith. For purposes of this Section 12, a
"Proceeding" is an action, suit or proceeding, whether civil,
criminal, administrative or investigative, and any appeal
therefrom which relates to or results from the provision of
services hereunder by Rattigan or relates to the conduct of
the proxy contest by the Company, Icahn, or its or his
affiliates, or by Rattigan with respect to the nomination of
the Rattigan Slate at the 1997 Annual Meeting.
(b) Expenses. Expenses, including reasonable
attorneys' fees, incurred by Rattigan in defending or
otherwise being involved in a Proceeding shall be paid by the
Company or, if not paid on demand when due, by Icahn in
advance of the final disposition provided that Rattigan shall
undertake in writing to the Company (the "Undertaking") to
repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the Company or Icahn.
Rattigan shall not be obligated to repay pursuant to the
Undertaking until the final determination of any pending
Proceedings in a court of competent jurisdiction concerning
the right of Rattigan to be indemnified or the obligation of
Rattigan to repay pursuant to the Undertaking.
(c) Protection of Rights. If a claim by Rattigan
under subsection 12(a) is not promptly paid in full by the
Company or by Icahn after a written claim has been received by
the Company or Icahn, or if expenses pursuant to subsection
12(b) have not been promptly advanced after a written request
by Rattigan for such advancement accompanied by the
Undertaking has been received by the Company or Icahn,
Rattigan may at any time thereafter bring suit against the
Company or Icahn to recover the unpaid amount of the claim or
the advancement of expenses. If successful, in whole or in
part, in such suit, Rattigan shall also be entitled to be paid
the reasonable expense thereof (including without limitation
attorneys' fees).
(d) General Provisions. The provisions of this
Section 12 shall be applicable to all Proceedings commenced or
continuing after the date hereof, provided such Proceedings
arise out of events, acts or omissions which occurred after
the date hereof and prior to the close of business at the 1997
Annual Meeting (or if the term of this Rattigan's consultancy
is extended in writing to a date subsequent to the Meeting
Date, then to such subsequent date) and shall inure to the
benefit of the heirs, executors and administrators of
Rattigan. The defense of Rattigan in any Proceeding shall be
by counsel chosen by the Company. Rattigan shall not be
entitled to indemnification for any settlement of any
Proceeding unless such settlement shall have been approved in
writing by the Company. The indemnifying parties shall not be
entitled to settle any Proceeding for which indemnification is
sought hereunder unless such settlement provides for a full
and complete release of Rattigan for any claim which is the
subject of such proceeding. Rattigan shall give the Company
written notice of the commencement or threatened commencement
of any proceeding for which he intends to seek indemnification
hereunder promptly after he knows or reasonably should know of
such commencement or threatened commencement. Nothing herein
shall be construed to provide Rattigan with the right to be
indemnified in respect of any Proceeding in the event he is
found in such proceeding to have engaged in a violation of any
provision of state or federal law in connection with his
duties hereunder unless he can demonstrate that his action was
taken in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company in
regard to seeking to cause the election of the Rattigan Slate
to the Board of Directors of RJR. In addition, nothing herein
shall be construed to provide Rattigan with the right to be
indemnified in respect of any Proceeding in the event his
participation in the Proceeding results from his gross
negligence or willful misconduct or from acts by him which
have or would given the Company grounds to terminate his
services for Cause, as provided in Section 5(c).
(e) Waiver of Jury Trial. THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
AND CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY THE COURT.
13. MISCELLANEOUS
(a) Entire Agreement. The parties hereto agree that this
Agreement contains the entire understanding and agreement
between them, and that the provisions of this Agreement may
not be modified, waived, or discharged unless such waiver,
modification or discharge is agreed to in writing, signed by
the parties hereto. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject
matter hereof, have been made by either party that are not set
forth expressly in this Agreement.
(b) Prior Agreements. Upon effectiveness of this
Agreement, this Agreement shall supersede any other agreements
pursuant to which Rattigan was or might have been entitled to
receive payments or benefits from Company.
(c) Waiver. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.
(d) Choice of Law. THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. IN
ADDITION, THE FEDERAL COURTS IN THE STATE OF NEW YORK AND THE
COURTS OF THE STATE OF NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO RESOLVE ALL MATTERS ARISING OUT OF THIS
AGREEMENT, AND NO ACTION SEEKING TO DO SO SHALL BE BROUGHT IN
ANY OTHER FORUM. EACH PARTY HERETO SHALL NOT OBJECT TO THE
VENUE OF ANY SUCH COURTS RESIDING IN THE CITY OF NEW YORK.
14. VALIDITY
The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability
of any other provision or provisions of this Agreement, which
shall remain in full force and effect provided that the
material benefits of this agreement remain in effect to each
party notwithstanding the invalidity or unenforceability of
any provision of this Agreement.
15. COUNTERPARTS
This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original
but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, Company and each Icahn Shareholder
that is a corporation or partnership has caused its name to be
ascribed to this Agreement by its duly authorized
representative, and Icahn and Rattigan has each executed this
Agreement as of the date and the year first above written.
High River Limited Partnership
By Riverdale LLC, General Partner
By: /s/ Carl C. Icahn
Authorized Signatory
/s/ Carl C. Icahn
Carl C. Icahn
/s/ Thomas Rattigan
Thomas Rattigan
[signature page of Consulting Agreement between Rattigan, High
River Limited Partnership and Carl C. Icahn]
<PAGE>
ANNEX C
High River Limited Partnership
c/o Icahn Associates Corp.
114 W. 47th Street
New York, NY 10036
November 2, 1996
Dear :
This will confirm our understanding as follows:
1. You have agreed with Thomas Rattigan ("Rattigan") to
become a member of a slate of nominees which is being
assembled by Rattigan ("Rattigan Slate") to stand for election
as directors of RJR Nabisco Holdings Corp.("RJR") in
connection with a proxy contest with management of RJR in
respect of the election of directors of RJR at the 1997 Annual
Meeting of Stockholders of RJR (the "1997 Annual Meeting"),
expected to be held in April 1997, or a special meeting of
stockholders of RJR called for a similar purpose (the "Proxy
Contest").
2. You are aware that the undersigned has entered into an
agreement with Rattigan pursuant to which the undersigned has
agreed to pay the costs of the Proxy Contest.
3. You and the undersigned have agreed that you will be
paid the sum of $25,000 by the undersigned upon signing this
agreement and the undersigned will pay you an additional
$25,000 promptly after it is determined that you have not been
elected to the RJR board of directors.
4. You understand that the Rattigan Slate will run for
election on a platform which advocates the prompt spinoff of
Nabisco Holdings Corp. ("Nabisico") to stockholders of RJR and
that that the proxy statement and other proxy material to be
provided to shareholders of RJR regarding the election of the
Rattigan Slate (collectively, the "Proxy Statement") will
disclose, among other things, that, if they are elected as
directors, the members of the Rattigan Slate intend to (a)
appoint Rattigan as the new Chief Executive Officer of RJR,(b)
increase the dividend paid to RJR stockholders to $2.00 per
share and maintain such dividend following the spinoff, (c) in
consultation with representatives of the executive branch of
the government, plaintiffs' attorneys groups, members of
Congress and representatives of other tobacco companies, seek
to develop and implement an industry-wide legislative
settlement of current and future tobacco litigation claims and
(d) not to adopt a shareholder rights plan (commonly known as
a poison pill) for either RJR or Nabisco. Given that
understanding, you have informed the undersigned that you are
in agreement with the specific platform items and presently
intend to take such action, acknowledging that you are not,
and cannot be, bound to do so.
5. You understand that the Proxy Statement will disclose
that, if elected, the members of the Rattigan Slate intend to,
during the first year following their election, adopt
Compensation arrangements which would give non-employee
directors of RJR, including yourself, compensation similar to
the compensation currently provided by RJR to its non-employee
directors, except that it is contemplated that each non-
employee director would receive two-year options to purchase
no more than 50,000 shares of RJR at a price of no less than
$30 per share and that such recipients would not be entitled
to any annual grants of options for at least two years after
the date such 50,000 options are granted.
6. You understand that, pursuant to the By-Laws of RJR,
it will be difficult, if not impossible, for Rattigan to
replace nominees who, such as yourself, have agreed to serve
on the Rattigan Slate and later change their minds and
determine not to seek election. Accordingly, the Rattigan
Slate is relying upon your agreement to seek nomination. In
that connection, you are being supplied with questionnaires in
which you will provide Rattigan and the undersigned with
information necessary for Rattigan and/or the undersigned to
make appropriate disclosure both to RJR and for use in
creating the proxy material to be sent to stockholders of RJR
and to be filed with the Securities and Exchange Commission.
You have agreed that (i) you will immediately complete and
sign the questionnaire and return it to Rattigan and (ii) your
responses to the questions contained therein will be true and
correct in all respects. In addition, you have agreed that,
concurrently with your execution of this letter, you will
execute a letter or other instrument directed to RJR informing
RJR that you consent to being a nominee of the undersigned for
the election as a director of RJR and, if elected, consent to
serving as a director of RJR.
7. The undersigned hereby agrees that, so long as you
actually serve on the Rattigan Slate, the undersigned will
defend, indemnify and hold you harmless from and against any
and all losses, claims, damages, penalties, judgments, awards,
liabilities, costs, expenses and disbursements (including,
without limitation, reasonable attorneys' fees, costs,
expenses and disbursements) incurred by you in the event that
you become a party, or are threatened to be made a party, to
any civil, criminal, administrative or arbitrative action,
suit or proceeding, and any appeal thereof relating to your
role as a nominee for director of RJR on the Rattigan Slate.
Your right of indemnification hereunder shall continue after
the election has taken place but only for events which
occurred during the period from the date hereof until the date
of the 1997 Annual Meeting or special meeting of stockholders
regarding the election of Rattigan Slate in the event that you
are a candidate for election at such special meeting.
Anything to the contrary herein notwithstanding, the
undersigned is not indemnifying you for any action taken by
you or on your behalf which occurs prior to the date hereof or
subsequent to the 1997 Annual Meeting or such earlier time as
you are no longer a nominee of the Rattigan Slate for
election to RJR's Board of Directors. Nothing herein shall,
be construed to provide you an indemnity in the event you are
found to have engaged in a violation of any provision of state
or federal law in connection with the Proxy Contest unless you
demonstrate that your action taken in good faith and in a
manner you reasonably believed to be in or not opposed to the
best interests of electing the Rattigan Slate or if you acted
in a manner which constitutes gross negligence or willful
misconduct. In the event that you shall make any claim for
indemnification hereunder, you shall promptly notify the
undersigned in the event of any third-party claims actually
made against you or known by you to be threatened. In
addition, with respect to any such claim, the undersigned
shall be entitled to defend you with counsel of its choice.
The undersigned shall not be responsible for any settlement of
any claim against you covered by this indemnity without its
prior written consent. However, the undersigned may not enter
into any settlement of any such claim without your consent
unless such settlement includes a release of you from any and
all liability in respect of such claim.
8. Each of us recognizes that should you be elected to
the Board of Directors of RJR all of your activities and
decisions as a director will be governed by applicable law and
subject to your fiduciary duty to the stockholders of RJR and,
as a result, that there is, and can be, no agreement between
you and the undersigned which governs the decisions which you
will make as a director of RJR, including, without limitation,
the matters described in paragraph 4 above.
Should the foregoing agree with your understanding, please so
indicate in the space provided below, whereupon this letter
will become a binding agreement between us.
Very truly yours,
High River Limited
Partnership
By Riverdale LLP, General
Partner
By_______________________
Authorized Signatory
Agreed to and Accepted
as of the date first
above written
<PAGE>
High River Limited Partnership
c/o Icahn Associates Corp.
114 W. 47th Street
New York, NY 10036
November 2, 1996
Dear :
Reference is made to the letter agreement (the
"Agreement"), of even date herewith, between High River
Limited Partnership ("High River") and you regarding your
nomination (or potential nomination) to stand for election
as a director of RJR Nabisco Holding Corp. ("RJR") on a
slate of nominees which is being assembled by Thomas
Rattigan. Except as otherwise defined herein, all
capitalized terms used herein shall have the meanings
ascribed to them in the Agreement.
This letter will clarify our understanding
contained in Paragraph 7 of the Agreement that your right of
indemnification from High River contained in said Paragraph
7 shall apply to any civil, criminal, administrative or
arbitrative action, suit or proceeding, any appeal thereof
(collectively, an "Action"), relating solely to your role as
a nominee (or an alternate nominee, as the case may be) for
director of RJR on the Rattigan Slate, whether such Action
is commenced, or the events giving rise to such Action
occurred, on, before or after the date of the 1997 Annual
Meeting; provided, however, that such indemnification
obligation by High River shall not arise or apply with
respect or to the extent relating to any actions taken by
you as a director of RJR, if you are elected.
Except as specifically provided above, nothing
contained in the letter shall be deemed to have amended or
modified any of the terms or provisions of the Agreement in
any way, including, without limitation, Paragraph 7 thereof.
Very truly yours,
High River Limited
Partnership
By Riverdale LLP, General
Partner
By_______________________
Authorized Signatory
<PAGE>
ANNEX D
High River Limited Partnership
c/o Icahn Associates Corp.
114 W. 47th Street
New York, NY 10036
November 2, 1996
Dear :
This will confirm our understanding as follows:
1. You have agreed with Thomas Rattigan ("Rattigan") that
you will serve as an alternate designee (an "Alternate") to
become a member of a slate of nominees which is being
assembled by Rattigan ("Rattigan Slate") to stand for election
as directors of RJR Nabisco Holdings Corp.("RJR") in
connection with a proxy contest with management of RJR in
respect of the election of directors of RJR at the 1997 Annual
Meeting of Stockholders of RJR (the "1997 Annual Meeting"),
expected to be held in April 1997, or a special meeting of
stockholders of RJR (a "Special Meeting") called for a similar
purpose (the "Proxy Contest"). In your capacity as an
Alternate, you have further agreed with Rattigan that, if
requested by Rattigan, you will become a member of the
Rattigan Slate. You acknowledge that such request by Rattigan
may be made by Rattigan at any time prior to the date of the
1997 Annual Meeting or the Special Meeting, as the case may
be, in the event that any one or more of the persons then
designated to serve as a member of the Rattigan Slate is
unwilling or unable to do so.
2. You are aware that the undersigned has entered into an
agreement with Rattigan pursuant to which the undersigned has
agreed to pay the costs of the Proxy Contest.
3. You and the undersigned have agreed that: (i) you will
be paid the sum of $10,000 by the undersigned upon signing
this agreement; (ii) you will be paid an additional $15,000 in
the event you are requested by Rattigan to become a member of
the Rattigan Slate and you, in fact, do so; and (iii) if you
serve on the Rattigan Slate, the undersigned will pay you an
additional $25,000 promptly after it is determined that you
have not been elected to the RJR board of directors.
4. You understand that the Rattigan Slate will run for
election on a platform which advocates the prompt spinoff of
Nabisco Holdings Corp. ("Nabisco") to stockholders of RJR and
that the proxy statement and other proxy material to be
provided to shareholders of RJR regarding the election of the
Rattigan Slate (collectively, the "Proxy Statement") will
disclose, among other things, that, if they are elected as
directors, the members of the Rattigan Slate intend to (a)
appoint Rattigan as the new Chief Executive Officer of RJR,(b)
increase the dividend paid to RJR stockholders to $2.00 per
share and maintain such dividend following the spinoff, (c) in
consultation with representatives of the executive branch of
the government, plaintiffs' attorneys groups, members of
Congress and representatives of other tobacco companies, seek
to develop and implement an industry-wide legislative
settlement of current and future tobacco litigation claims and
(d) not to adopt a shareholder rights plan (commonly known as
a poison pill) for either RJR or Nabisco. Given that
understanding, you have informed the undersigned that you are
in agreement with the specific platform items and, if you
serve on the Rattigan Slate and are elected to the board of
directors of RJR, presently intend to take such action,
acknowledging that you are not, and cannot be, bound to do so.
5. You understand that the Proxy Statement will disclose
that, if elected, the members of the Rattigan Slate intend to,
during the first year following their election, adopt
Compensation arrangements which would give non-employee
directors of RJR, including yourself (if you serve on the
Rattigan Slate and are elected), compensation similar to the
compensation currently provided by RJR to its non-employee
directors, except that it is contemplated that each non-
employee director would receive two-year options to purchase
no more than 50,000 shares of RJR at a price of no less than
$30 per share and that such recipients would not be entitled
to any annual grants of options for at least two years after
the date such 50,000 options are granted.
6. You understand that, pursuant to the By-Laws of RJR,
it will be difficult, if not impossible, for Rattigan to
replace nominees or Alternates who, such as yourself, have
agreed to serve on the Rattigan Slate and later change their
minds and determine not to serve on the Rattigan Slate or seek
election. Accordingly, the Rattigan Slate is relying upon
your agreement to seek nomination if requested to do so. In
that connection, you are being supplied with questionnaires in
which you will provide Rattigan and the undersigned with
information necessary for Rattigan and/or the undersigned to
make appropriate disclosure both to RJR and for use in
creating the proxy material to be sent to stockholders of RJR
and to be filed with the Securities and Exchange Commission.
You have agreed that (i) you will immediately complete and
sign the questionnaire and return it to Rattigan and (ii) your
responses to the questions contained therein will be true and
correct in all respects. In addition, you have agreed that,
concurrently with your execution of this letter, you will
execute a letter or other instrument directed to RJR informing
RJR that you consent to being a nominee of the undersigned for
the election as a director of RJR and, if elected, consent to
serving as a director of RJR.
7. The undersigned hereby agrees that, so long as you
actually serve as an Alternate or on the Rattigan Slate, the
undersigned will defend, indemnify and hold you harmless from
and against any and all losses, claims, damages, penalties,
judgments, awards, liabilities, costs, expenses and
disbursements (including, without limitation, reasonable
attorneys' fees, costs, expenses and disbursements) incurred
by you in the event that you become a party, or are threatened
to be made a party, to any civil, criminal, administrative or
arbitrative action, suit or proceeding, and any appeal thereof
relating to your role as an Alternate and/or as a nominee for
director of RJR on the Rattigan Slate. Your right of
indemnification hereunder shall continue after the election
has taken place but only for events which occurred during the
period from the date hereof until the date of the 1997 Annual
Meeting or special meeting of stockholders regarding the
election of Rattigan Slate in the event that you are a
candidate for election at such special meeting or remain an
Alternate through such date. Anything to the contrary herein
notwithstanding, the undersigned is not indemnifying you for
any action taken by you or on your behalf which occurs prior
to the date hereof or subsequent to the 1997 Annual Meeting or
such earlier time as you are no longer an Alternate or a
nominee of the Rattigan Slate for election to RJR's Board of
Directors. Nothing herein shall, be construed to provide you
an indemnity in the event you are found to have engaged in a
violation of any provision of state or federal law in
connection with the Proxy Contest unless you demonstrate that
your action taken in good faith and in a manner you reasonably
believed to be in or not opposed to the best interests of
electing the Rattigan Slate or if you acted in a manner which
constitutes gross negligence or willful misconduct. In the
event that you shall make any claim for indemnification
hereunder, you shall promptly notify the undersigned in the
event of any third-party claims actually made against you or
known by you to be threatened. In addition, with respect to
any such claim, the undersigned shall be entitled to defend
you with counsel of its choice. The undersigned shall not be
responsible for any settlement of any claim against you
covered by this indemnity without its prior written consent.
However, the undersigned may not enter into any settlement of
any such claim without your consent unless such settlement
includes a release of you from any and all liability in
respect of such claim.
8. Each of us recognizes that should you be elected to
the Board of Directors of RJR all of your activities and
decisions as a director will be governed by applicable law and
subject to your fiduciary duty to the stockholders of RJR and,
as a result, that there is, and can be, no agreement between
you and the undersigned which governs the decisions which you
will make as a director of RJR, including, without limitation,
the matters described in paragraph 4 above.
<PAGE>
Should the foregoing agree with your understanding, please so
indicate in the space provided below, whereupon this letter
will become a binding agreement between us.
Very truly yours,
High River Limited
Partnership
By Riverdale LLP, General
Partner
By_______________________
Authorized Signatory
Agreed to and Accepted
as of the date first
above written
________________________<PAGE>
High River Limited Partnership
c/o Icahn Associates Corp.
114 W. 47th Street
New York, NY 10036
November 2, 1996
Dear :
Reference is made to the letter agreement (the
"Agreement"), of even date herewith, between High River
Limited Partnership ("High River") and you regarding your
nomination (or potential nomination) to stand for election
as a director of RJR Nabisco Holding Corp. ("RJR") on a
slate of nominees which is being assembled by Thomas
Rattigan. Except as otherwise defined herein, all
capitalized terms used herein shall have the meanings
ascribed to them in the Agreement.
This letter will clarify our understanding
contained in Paragraph 7 of the Agreement that your right of
indemnification from High River contained in said Paragraph
7 shall apply to any civil, criminal, administrative or
arbitrative action, suit or proceeding, any appeal thereof
(collectively, an "Action"), relating solely to your role as
a nominee (or an alternate nominee, as the case may be) for
director of RJR on the Rattigan Slate, whether such Action
is commenced, or the events giving rise to such Action
occurred, on, before or after the date of the 1997 Annual
Meeting; provided, however, that such indemnification
obligation by High River shall not arise or apply with
respect or to the extent relating to any actions taken by
you as a director of RJR, if you are elected.
Except as specifically provided above, nothing
contained in the letter shall be deemed to have amended or
modified any of the terms or provisions of the Agreement in
any way, including, without limitation, Paragraph 7 thereof.
Very truly yours,
High River Limited
Partnership
By Riverdale LLP, General
Partner
By_______________________
Authorized Signatory<PAGE>
ANNEX E
THOMAS J. RATTIGAN
Name: Thomas J. Rattigan (the "Nominee")
Age: 59
Business Address:P.O. Box 9346
Long Boat Key, FL 34228-9346
Residence Address: Same as above.
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
Consultant to High River Limited Partnership
P.O. Box 9346
Long Boat Key, FL 34228
November 1, 1996 - Present
Private Investor
P.O. Box 9346
Long Boat Key, FL 34228
January 1994 - November 1, 1996
G. Heileman Brewing Co., Inc.
100 Harbor View Plaza
LaCrosse, WI
January 1991 - January 1994
Chairman, President and Chief Executive Officer
The entities listed above are not a parent, subsidiary or other affiliate
of RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold
any positions or offices with RJR Nabisco.
The Nominee beneficially owns, directly, with sole voting and
investment power, 1,000 shares of common stock, par value $.01 per share,
of RJR Nabisco, which constitutes less than one percent (1%) of such class
of securities. These shares were purchased on November 1, 1996.
<PAGE>
ANNEX F
DEWITT F. BOWMAN
Name: Dewitt F. Bowman (the "Nominee")
Age: 65
Business Address:79 Eucalyptus Knoll
Mill Valley, CA 94941
Residence Address: Same as above.
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
Pension Investment Consultant
79 Eucalyptus Knoll
Mill Valley, CA 94941
February 1994 - Present
California Public Employees Retirement System
400 P Street
Sacremento, CA
February 1989 - January 1994
Chief Investment Officer
The entities listed above are not a parent, subsidiary or other affiliate
of RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold
any positions or offices with RJR Nabisco.
The Nominee currently is a director of the following companies
that have a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") or that
are subject to the requirements of Section 15(d) of the Exchange Act or
that are registered as an investment company under the Investment Company
Act of 1940:
RREEF America REIT
RCM Equity Funds, Inc.
Wilshire Target Funds
Brandes International Fund<PAGE>
ANNEX G
IVAN A. BURNS
Name: Ivan A. Burns (the "Nominee")
Age: 61
Business Address:None
Residence Address: 57 Deer Park Road
New Canaan, CT 06840
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
International Consultant
57 Deer Park Road
New Canaan, CT 06840
Self-employed
The entity listed above is not a parent, subsidiary or other affiliate of
RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold any
positions or offices with RJR Nabisco.
The Nominee beneficially owns, directly, with sole voting and
investment power, 1,000 shares of common stock, par value $.01 per share,
of RJR Nabisco, which constitutes less than one percent (1%) of such class
of securities. These shares were purchased on September 22, 1995.<PAGE>
ANNEX H
SEYMOUR FLIEGEL
Name: Seymour Fliegel (the "Nominee")
Age: 65
Business Address:52 Vanderbilt Avenue
New York, NY 10017
Residence Address: 166-40 Powells Cove Blvd.
Whitestone, NY 11357
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
Manhattan Institute,
Center for Educational Innovation
52 Vanderbilt Avenue
New York, NY 10017
March 1996 - Present
Senior Fellow
Sy Fliegel Association
(Educational consulting business)
July 1989 - March 1996
President
The entities listed above are not a parent, subsidiary or other affiliate
of RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold
any positions or offices with RJR Nabisco.
The Nominee beneficially owns 80 shares of common stock, par
value $.01 per share, of RJR Nabisco, which constitutes less than one
percent (1%) of such class of securities. These shares represent 400
shares purchased by the Nominee on November 27, 1991 (prior to the one-for-
five reverse stock split that was approved by the shareholders of RJR
Nabisco on April 12, 1995).
<PAGE>
ANNEX I
PAUL GIBSON, JR.
Name: Paul Gibson, Jr. (the "Nominee")
Age: 69
Business Address:175-40 Grand Central Parkway
Jamaica, New York 11432
Residence Address: Same as above.
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
Attorney at Law
175-40 Grand Central Parkway
Jamaica, New York 11432
January 1985 - Present
Self-employed
The entity listed above is not a parent, subsidiary or other affiliate of
RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold any
positions or offices with RJR Nabisco.
<PAGE>
ANNEX J
KEITH R. GOLLUST
Name: Keith R. Gollust (the "Nominee")
Age: 51
Business Address:500 Park Avenue
New York, NY 10022
Residence Address: 927 Fifth Avenue
New York, NY 10021
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
Private Investor
Gollust Tierney & Oliver
500 Park Avenue
New York, NY 10022
January 1991 - Present
General Partner
Coniston Global Partners
500 Park Avenue
New York, NY 10022
January 1991 - Present
General Partner
The entities listed above are not a parent, subsidiary or other affiliate
of RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold
any positions or offices with RJR Nabisco.
On February 16, 1995, the Nominee purchased 150,000 shares of
common stock, par value $.01 per share, of RJR Nabisco. These shares were
sold on February 28, 1995.
<PAGE>
ANNEX K
ROBERT B. LAWLER
Name: Robert B. Lawler (the "Nominee")
Age: 57
Business Address:601 Walnut Street
Curtis Center, Suite 450
Philidelphia, PA 19106
Residence Address: 212 West Valley Road
Stratford, PA 19087
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
Wilbraham, Lawler and Buba
(law firm)
601 Walnut Street
Curtis Center, Suite 450
Philidelphia, PA 19106
March 1993 - Present
Lawyer and principal
Pennsylvania and New Jersey Center
for Claims Resolution
601 Walnut Street
Curtis Center, Suite 450
Philidelphia, PA 19106
October 1991 - February 1993
In-house counsel
The entities listed above are not a parent, subsidiary or other affiliate
of RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold
any positions or offices with RJR Nabisco.
<PAGE>
ANNEX L
CARLOS RESENDEZ
Name: Carlos Resendez (the "Nominee")
Age: 52
Business Address:4414 Centerview Drive
Suite 226
San Antonio, TX 78228
Residence Address: 4835 E. Beverly Mae
San Antonio, TX 78229
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
National Conference on Public Employee Retirement
Systems
4414 Centerview Drive
Suite 226
San Antonio, TX 78228
October 1996 - Present
Executive Director
National Conference on Public Employee Retirement
Systems
4414 Centerview Drive
Suite 226
San Antonio, TX 78228
October 1991 - September 1996
Executive Secretary
The Texas Permanent School Fund
1701 North Congress Avenue
Austin, TX 78701
December 1993 - September 1996
Executive Director
Fire and Police Pension Fund
311 Roosevelt Avenue
San Antonio, TX 78210
October 1991 - November 1993
Executive Director
The entities listed above are not a parent, subsidiary or other affiliate
of RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold
any positions or offices with RJR Nabisco.
<PAGE>
ANNEX M
ROBERT J. SLATER
Name: Robert J. Slater (the "Nominee")
Age: 59
Business Address:27 Wahackme Road
New Canaan, CT 06840
Residence Address: Same as above.
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
Jackson Consulting, Inc.
(private investment and consulting company to
industry)
27 Wahackme Road
New Canaan, CT 06840
January 1985 - Present
President
The entity listed above is not a parent, subsidiary or other affiliate of
RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold any
positions or offices with RJR Nabisco.
The Nominee currently is a director of the following companies
that have a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") or that
are subject to the requirements of Section 15(d) of the Exchange Act or
that are registered as an investment company under the Investment Company
Act of 1940:
National Steel Corporation
Southdown, Inc.
First Industrial Realty Trust, Inc.
<PAGE>
ANNEX N
JACK G. WASSERMAN
Name: Jack G. Wasserman (the "Nominee")
Age: 59
Business Address:90 John Street
New York, NY 10038
Residence Address: 510 East 86th Street
New York, NY 10028
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
Wasserman Schneider and Babb
(law firm)
90 John Street
New York, NY 10038
January 1966 - Present
Senior Partner
The entity listed above is not a parent, subsidiary or other affiliate of
RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold any
positions or offices with RJR Nabisco.
The Nominee currently is a director of the following companies
that have a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") or that
are subject to the requirements of Section 15(d) of the Exchange Act or
that are registered as an investment company under the Investment Company
Act of 1940:
Cadus Pharmaceutical Corp.
American Property Investors, Inc.,
the general partner of American Real Estate
Partners
Currently, the Nominee beneficially owns 600 shares of common
stock, par value $.01 per share, of RJR Nabisco ("Common Stock"), which
constitutes less than one percent (1%) of such class of securities. The
Nominee purchased 300 of these shares on September 13, 1995 and the other
300 shares on October 26, 1996. Previously, the Nominee purchased 1000
shares of Common Stock on September 13, 1995 and 700 shares of Common Stock
on October 10, 1995. The Nominee sold these 1,700 shares of Common Stock
on December 22, 1995.
<PAGE>
ANNEX O
HAROLD FIRST
Name: Harold First (the "Nominee")
Age: 60
Business Address:345 Park Avenue
New York, New York 10154
Residence Address: 13-55 Wilkens Court
Fairlawn, NJ 07410
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
Financial Consultant
345 Park Avenue
New York, New York 10154
January 1993 - Present
Self-employed
Icahn Holding Corp.
100 South Bedford Road
Mount Kisco, New York 10549
December 1990 - January 1993
Chief Financial Officer
Trans World Airlines, Inc.
One City Centre
515 North Sixth Street
St. Louis, Missouri 63101
Spring 1992 - January 3, 1993
Senior Vice President
American Property Investors, Inc.,
the general partner of American Real Estate
Partners, L.P.
100 South Bedford Road
Mount Kisco, NY 10549
March 1991 - December 1992
Vice Chairman of the Board of Directors
The entities listed above are not a parent, subsidiary or other affiliate
of RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold
any positions or offices with RJR Nabisco.
<PAGE>
The Nominee currently is a director of the following companies
that have a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") or that
are subject to the requirements of Section 15(d) of the Exchange Act or
that are registered as an investment company under the Investment Company
Act of 1940:
Trump Taj Mahal Realty Corp.
Memorex Telex, N.V.
Cadus Pharmaceutical Corp.
Telesave Holdings, Inc.<PAGE>
ANNEX P
MILES D. BENDER
Name: Miles D. Bender (the "Nominee")
Age: 59
Business Address:4925 Greenville Avenue
Suite 1400
Dallas, TX 75206
Residence Address: 2809 Milton
Dallas, TX 75205
Set forth below is a brief description of the Nominee's
business experience during the past five years, including the Nominee's
principal occupations and employment during the past five years; the name
and principal business of any corporation or other organization in which
such occupations and employment were carried on and the Nominee's current
principal occupation or employment.
National Energy Group, Inc.
4925 Greenville Avenue
Suite 1400
Dallas, TX 75206
December 1990 - Present
President, Chief Executive Officer, Treasurer and
Director
The entity listed above is not a parent, subsidiary or other affiliate of
RJR Nabisco Holdings Corp. ("RJR Nabisco"). The Nominee does not hold any
positions or offices with RJR Nabisco.
The Nominee currently is a director of the following companies
that have a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") or that
are subject to the requirements of Section 15(d) of the Exchange Act or
that are registered as an investment company under the Investment Company
Act of 1940:
Big Piney Oil and Gas Company
VP Oil, Inc.
Tierra Energy, Inc.
The Nominee purchased 2,000 shares of RJR Nabisco Depository Shares
representing 1/10th Preferred C-PRECS 9.25% on April 15, 1996. These
shares were sold on June 18, 1996.<PAGE>
ANNEX Q
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Thomas Rattigan
Dated: November 1, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Dewitt F. Bowman
Dated: November 1, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Ivan A. Burns
Dated: November 2, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Seymour Fliegel
Dated: November 2, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Paul Gibson, Jr.
Dated: November 1, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Keith R. Gollust
Dated: November 2, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Robert B. Lawler
Dated: November 2, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Carlos Resendez
Dated: November 2, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Robert J. Slater
Dated: November 2, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Jack G. Wasserman
Dated: November 2, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Harold First
Dated: November 1, 1996<PAGE>
CONSENT OF NOMINEE
The undersigned hereby consents to being named as a
nominee for election as a director of RJR Nabisco Holdings
Corp. (the "Company"), in the proxy statement and other
materials concerning the undersigned's nomination in
connection with the solicitation of proxies from stockholders
of the Company to be voted at the 1997 annual meeting of
stockholders of the Company and any adjournment thereof, and
further consents to serve as a director of the Company, if
elected.
/s/ Miles D. Bender
Dated: November 1, 1996
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement"), is made and
entered into as of this 1st day of November, 1996 (the
"Effective Date"), by and between High River Limited
Partnership, a Delaware limited partnership with an address at
c/o Icahn Associates Corp., 100 South Bedford Rd., Mount Kisco,
NY 10549 ("Company"), Carl C. Icahn ("Icahn") and Thomas
Rattigan, with an address at 1485 Gulf of Mexico Drive,
Longboat Key, Florida 34228 ("Rattigan").
W I T N E S S E T H :
WHEREAS, The Company and Icahn wish to retain Rattigan to
provide consulting services to them and their affiliates
("Icahn Shareholders") who beneficially own shares of common
stock ("Shares") of RJR Nabisco Holdings Corp. ("RJR") and
Rattigan desires to render such services to the Company and
Icahn Shareholders upon the terms and subject to the conditions
set forth herein.
NOW THEREFORE, in consideration of the mutual premises and
covenants herein contained, Company, Icahn and Rattigan hereby
agree as follows:
1. INDEPENDENT CONTRACTOR CONSULTING ARRANGEMENT
The Company and Icahn will retain Rattigan and Rattigan
will provide services to the Company and the Icahn Shareholders
as an independent contractor, and not as an employee, on the
terms and conditions hereinafter set forth.
2. TERM
This Agreement shall commence on the Effective Date and
shall expire immediately at the close of business on the
Meeting Date, as such term is defined below.
3. CONSULTING SERVICES
(a) Rattigan will provide consulting services to the
Company and the Icahn Shareholders in connection with a proxy
fight to be brought by the Icahn Shareholders and conducted by
Rattigan against the management of RJR in connection with the
1997 RJR Annual Meeting of Stockholders ("1997 Annual Meeting")
or, if requested by the Company at a special meeting of
stockholders of RJR called prior to the 1997 Annual Meeting,
for a purpose which includes the election of directors in order
to elect at least a majority of the Board of Directors of RJR.
(b) Prior to the 1997 Annual Meeting, Rattigan shall be
engaged in providing consulting services , including conducting
the proxy fight in support of the efforts of the Icahn
Shareholders to nominate Rattigan and others to be elected to
the Board of Directors of RJR at the 1997 Annual Meeting (the
"Rattigan Slate"), with the understanding that the Icahn
Shareholders will vote all of their Shares of RJR for the
election of the Rattigan Slate, and, if the Rattigan Slate is
successful, Rattigan will seek to (i) be elected as the new
Chief Executive Officer of RJR, (ii) over-see the proposed
spin-off of Nabisco Holdings Corp.("Nabisco") if approved by
the new Board of Directors of RJR and (iii) participate in
attempting to effect an overall legislative settlement of
tobacco litigation on an industry-wide basis. Members of the
Rattigan Slate will be selected by Rattigan. The number of the
nominees on the Rattigan Slate will equal or exceed the number
of directors of RJR. Should the Company desire, the Rattigan
Slate may be put forward for election at a special meeting of
stockholders of RJR, if called, in which case the references in
this document to the 1997 Annual Meeting will relate to the
special meeting in lieu of or in addition to the 1997 Annual
Meeting. All costs and expenses of the proxy contest shall be
borne by the Company or, failing that, by Icahn and Rattigan
shall have no liability or obligation with respect to such
expenses. In connection with the provision of services
hereunder, Rattigan shall have no authority, either implied or
explicit, to bind Icahn or the Company or any of his or its
affiliates in any way to any arrangement, understanding or
otherwise without Icahn's prior written approval. Rattigan
agrees that, in the event that the Rattigan Slate constitutes
a majority of the Board of Directors immediately following the
1997 Annual Meeting, Rattigan will not seek to have RJR issue
to him during the period from the date of the 1997 Annual
Meeting through the second anniversary thereof, a compensation
package which exceeds a base salary, with no bonuses permitted,
of $2 million per annum, the right to obtain no more than
300,000 performance stock units on the same basis as those
available to Steven Goldstone, chief executive officer of RJR,
on the date hereof and options to purchase not in excess of
500,000 Shares at a price of not less than $30 per share, 50%
of which would be exercisable after one year from the Meeting
Date, as defined herein, and the other 50% of which options
would be exercisable after two years from the Meeting Date and
which vest in Rattigan coextensively with their exercisability.
Rattigan further agrees that the agreement contained in the
immediately previous sentence shall be disclosed in the proxy
material sent to RJR stockholders in connection with the proxy
contest for the 1997 Annual Meeting. The proxy material will
also disclose that the members of the Rattigan Slate will be
seeking, if they are elected as directors, the same salary and
benefit package presently available to non-employee directors
of RJR, except that, with respect to options, each successful
nominee will (i) seek to be awarded a one time option to
purchase 50,000 Shares at not less than $30 per Share, which
option will lapse at the end of two years and (ii) not be
eligible for annual grants of options prior to the second
anniversary of the grant of the 50,000 options. Such proxy
material shall also disclose that the Company and its
affiliates will seek reimbursement for costs and expenses of
conducting the proxy fight in the event that the Rattigan Slate
is successful. Rattigan intends that the proxy material in
support of the Rattigan Slate shall indicate that it is the
intention of the Rattigan Slate, if elected as directors, to
(A) appoint Rattigan the new Chief Executive Officer for
RJR,(B) seek to spin off Nabisco to stockholders of RJR (C)
raise the RJR dividend to $2.00 and maintain it even after the
spin-off, (D) seek to develop with representatives of the
executive branch of the government, plaintiffs attorneys,
members of Congress and representatives of other tobacco
companies, among others, an industry-wide legislative
settlement of current and future tobacco litigation claims and
(E) not adopt a shareholder rights plan, commonly known as a
poison pill, in RJR or any of its component companies,
including Nabisco.
(c) No Sale Agreement. The Company and Icahn agree that, from
and after the date hereof and through the date on which the
1997 Annual Meeting of RJR is held (on which the ballots for
the election of directors are cast) ("Meeting Date"), neither
the Icahn Shareholders nor the Company nor any of their or its
affiliates shall sell any Shares owned by them ("No Sale
Agreement"). The No Sale Agreement shall terminate and be of
no further force and effect in the event that Rattigan abandons
his direction of the proxy contest or his services are
terminated as set forth in Section 5 of this Agreement.
Rattigan agrees that, should he own or acquire any shares of
RJR stock or options to acquire such Shares, he will not
dispose of any such Shares or options prior to the Meeting
Date.
(d) Provision of Consulting Services. Rattigan agrees
that he will devote his full time and attention to the
consulting services to be rendered by Rattigan hereunder during
normal working days and on weekends and evenings when
reasonably required by the proxy contest. Rattigan's services
shall be rendered in a manner consistent with the manner in
which such services are customarily rendered by similarly
situated consultants. It is recognized and agreed that
Rattigan shall provide such consulting services principally
from his residence in Florida, but he recognizes that he may be
required, in order to effect the goals of the proxy contest, to
travel frequently outside the State of Florida in connection
with providing the services hereunder.
(e) Other Activities. It shall not be a violation of
this Agreement for Rattigan to (a) serve on corporate, civic or
charitable boards or committees of not-for-profit
organizations, provided, however, that the time devoted to such
service and to attention to his personal commitments shall not
require more than an average of 2 business days per month or
(b) manage his personal investments, so long as such investment
activities do not significantly interfere with the performance
of Rattigan's duties in accordance with this Agreement.
4. COMPENSATION AND RELATED MATTERS
(a) Base Consulting Fee. During the term hereof,
Rattigan shall receive a base consulting fee of $333,333.33 per
calendar month (or any portion of a calendar month), payable in
advance, with the first such payment to be made on the
Effective Date and each subsequent month commencing with the
first day of the calendar month next following the Effective
Date; provided, however, that if, for any reason, this
Agreement shall be terminated (other than as stated in Section
5(d) hereof) prior to Rattigan having received payments of base
consulting fees aggregating less than $2,000,000, Rattigan
shall receive, upon termination of this Agreement, an
additional payment equal to the positive difference obtained by
subtracting from $2,000,000,the aggregate amount of base
consulting fees received by Rattigan under the Agreement prior
to its termination; provided further, however, that if Rattigan
shall have received base consulting fees in respect of the
first six months from and after the Effective Date, he shall,
if this Agreement or his provision of services hereunder shall
not have been terminated, continue to render his consulting
services until the 1997 Annual Meeting and shall not be
compensated for the seventh month after the Effective Date but
shall, commencing with the first day of the eighth month after
the Effective Date and until the date of the 1997 Annual
Meeting, receive a base consulting fee of $285,714.29 per
calendar month or pro rata for any portion thereof if the
Annual Meeting is scheduled to be finally held other than at
the end of a calendar month. In no event shall Rattigan be
required to render services hereunder nor shall the Company and
Icahn be required to continue to retain Rattigan to render such
services, in each case, beyond April 30, 1998.
(b) Other Payments. In the event that the Company or
any of Icahn Shareholders or any of its or their affiliates
violates the No Sale Agreement, then Rattigan shall be paid by
the Company, or ,if not paid on demand when due, by Icahn, in
lieu of any other damages as a result of such violation and as
the sole remedy therefor, promptly after such violation, (i)
the excess, if any, of $2,000,000 over the aggregate amount of
base consulting fees received by Rattigan pursuant to
subsection 4(a) hereof prior to such violation, and (ii) the
Rattigan Profits, as such term is hereinafter defined, with
respect to the Shares which are sold in violation of the No
Sale Agreement. In addition to the foregoing, whether or not
there occurs a violation of the No Sale Agreement, Rattigan
shall be entitled to be paid by the Company, or ,if not paid on
demand when due, by Icahn, the Rattigan Profits with respect to
any Shares which are sold by the Company, any of the Icahn
Shareholders or any of its or their affiliates during the
period commencing on the day following the Meeting Date through
the date which is same day of the month as the Meeting Date but
is (A) if the Rattigan Slate is not elected to be the majority
of the Board of Directors of RJR, in the sixth month following
the month of the Meeting Date or (B) if the Rattigan Slate is
elected to be the majority of the Board of Directors of RJR, in
the twelfth month following the month of the Meeting Date
("Final Date"). Such payment shall be made promptly after such
Shares are sold. In addition, Rattigan shall be entitled to be
paid, promptly after the Final Date, Rattigan Profits with
respect to Shares held by the Company and the Icahn
Shareholders and any of its or their affiliates on the Final
Date. The Rattigan Profits shall be determined by subtracting
from the actual aggregate sales proceeds ("Proceeds Realized")
(after deducting commissions and other selling charges, if any)
of the Shares sold or deemed to be sold, the product of (i) the
Average Per Share Cost, as hereinafter defined, and (ii)the
number of Shares sold or deemed to be sold and dividing the
remainder by twenty (20). The Average Per Share Cost shall be
determined by taking the aggregate purchase price, including
commissions, of all Shares owned by the Company and the Icahn
Shareholders on the date hereof, which the Company and Icahn
represent and warrant for the purposes of making the
determination of the Rattigan Profits, is 19,929,800 ("Held
Shares") and adding thereto the aggregate purchase price,
including commissions, of any Shares purchased between the date
hereof and the Meeting Date ("Purchased Shares") dividing the
sum by the sum of the number of Held Shares plus the number of
Purchased Shares and to the quotient adding an amount (computed
on the date of any sale of Shares which requires the
computation of Rattigan Profits) equal to the quotient obtained
by dividing the costs theretofore incurred by the Company and
any of its affiliates, including Rattigan's base consulting
fees, in conducting the proxy contest, whether or not such
costs have been paid for, by the sum of the number of Held
Shares plus the number of Purchased Shares theretofore
purchased. The Company and Icahn hereby represent and warrant
that, for purposes of determining Rattigan Profits, as of the
date hereof the average purchase price of each Held Share,
including commissions, is $30.04. Any Shares held on the Final
Date shall be deemed to be sold on the Final Date and the per
share Proceeds Realized with respect to Shares deemed to be
sold on the Final Date shall be deemed to be the average
closing price on the consolidated tape as reported for the last
20 business days prior to the Final Date (less commissions
which would have been paid had the shares been sold assuming
commissions at the same average rate as the commissions paid
with respect to the purchase of the Held Shares).
Notwithstanding the foregoing, no compensation shall be paid to
or due to Rattigan under this Subsection 4(b), whether or not
the Company or any of its affiliates breaches the No Sale
Agreement, if Rattigan abandoned his direction of the proxy
contest or if his services have been terminated under the
circumstances set forth in Section 5(c) hereof, or if his
services have been terminated as a result of his death or
disability (as defined in Section 5 hereof) prior to three
months from the Effective Date, in the case of death, and if
the Disability Commencement Date, as defined in Section 5(b),
occurs prior to the expiration of three months from the
Effective Date, in the case of disability. If Rattigan's
services are terminated as a result of his death or disability
(as defined in Section 5 hereof) on or after the date which is
three months after the Effective Date, in the event of death,
or, in the event of termination for disability, the Disability
Commencement Date occurs after three months from the Effective
Date, then Rattigan shall be entitled to Rattigan Profits as
determined under this subsection 4(b), provided, however, that
if Rattigan's termination as a result of death or disability
occurs such that he is entitled to Rattigan Profits but occurs
prior to the Meeting Date, then all Held Shares and Purchased
Shares not previously sold and then held by the Company, the
Icahn Shareholders and their respective affiliates shall be
deemed to be sold on the date of Rattigan's death or the date
of his termination for disability and the aggregate Proceeds
Realized with respect to Shares sold or deemed sold by the
Company or the Icahn Shareholders or their affiliates as of the
date of Rattigan's termination as a result of death or
disability shall be the lesser of (i) the Price Realized as
determined under this subsection 4(b) without regard to this
sentence, or (ii) the average closing price of such shares on
the consolidated tape as reported for the last 15 business days
prior to the date of Rattigan's death or the date on which his
termination for disability is first publicly announced and the
first 15 business days following the date of Rattigan's death
or the date on which his termination for disability is first
publicly announced.
(c) Expenses. Rattigan shall be entitled to receive from
Company or ,if not paid on demand when due, from Icahn prompt
reimbursement following Rattigan's written accounting to the
Company therefor of all reasonable expenses incurred by
Rattigan in performing his services hereunder, provided,
however, that incurrence of expenses that exceed an aggregate
of $20,000 in any calendar month shall require the prior
written consent of Icahn.
(d) Legal Expenses. Rattigan shall be entitled to
receive prompt reimbursement from the Company or, if not paid
on demand when due, Icahn for all reasonable expenses,
including reasonable attorney's fees at their usual hourly
rates, incurred in connection with the negotiation,
preparation, interpretation, and enforcement of this Agreement,
including any expenses reasonably incurred in enforcing the
obligations of the Company or Icahn hereunder whether through
litigation or otherwise.
5. TERMINATION
(a) Death. Rattigan's services hereunder shall terminate
upon his death. If Rattigan's services are terminated as a
result of his death on or after the date which is three months
from the Effective Date, then Rattigan shall be entitled to
Rattigan Profits as determined under subsection 4(b).
(b) Disability. If Rattigan becomes physically or
mentally disabled or incapacitated during his employment
hereunder to such an extent that he shall be unable to perform
any and all of his duties reasonably expected to be performed
hereunder (the date of the commencement of the disability or
incapacity being the "Disability Commencement Date") and such
disability or incapacity shall have continued for a period of
at least four (4) consecutive weeks, then, notwithstanding the
provisions of Section 2 of this Agreement, Company may, at any
time after the end of such period of four (4) consecutive
weeks, and during the continuance of such disability or
incapacity terminate Rattigan's services hereunder. During the
period of disability and prior to termination for disability
Rattigan shall continue to be paid his consulting fee in
accordance with this Agreement. If Rattigan's services are
terminated as a result of his disability and the Disability
Commencement Date is more than three months from the Effective
Date hereof, then Rattigan shall be entitled to Rattigan
Profits as determined under subsection 4(b). If there is any
dispute between the parties as to Rattigan's ability to perform
his duties hereunder due to physical or mental impairment, the
date of the determination of disability hereunder shall not be
earlier than the date on which Rattigan is certified as having
a disability (within the meaning of this subsection 5(b)) by an
independent physician selected by Rattigan (or, if Rattigan is
unable to make such selection, by any adult member of
Rattigan's immediate family) with the agreement of the Company
but if they cannot agree, then by an independent physician
selected by the physician selected by Rattigan and by the
physician selected by the Company.
(c) Cause. Company may terminate Rattigan's services
hereunder at any time for cause ("Cause"). For purposes of
this agreement, the sole Causes upon which Rattigan's services
may be terminated shall be his habitual neglect (neglect to be
determined based on the failure of Rattigan to meet the
standards of performance set forth in Section 3(d) and 3(e)
hereof) in connection with his consulting duties hereunder,
including the conduct of the proxy contest, the termination of
the No Sale Agreement by reason of Rattigan's abandonment of
his direction of the proxy contest or any indictment by a
governmental authority charging that Rattigan has committed a
felony or other act involving moral turpitude.
(d) Effect of Termination. If Rattigan's services are
terminated by the Company as a result of Death, Disability or
for Cause, in accordance with the provisions of this Section 5,
then Rattigan shall thereafter receive no further compensation
pursuant to Section 4(a) or any Other Payments of any kind
pursuant to Section 4(b) hereof, except with respect to the
specific payments pursuant to Section 4(b) hereof in the event
of termination as a result of death or disability which
termination takes place following the expiration of in excess
of three months from the Effective Date in the case of death
or, in the case of termination for disability in the event the
Disability Commencement Date occurs after the expiration of
three months from the Effective Date.
(e) Termination for Good Reason. Rattigan may at any
time cease providing services hereunder for good reason ("Good
Reason"). For purposes hereof, Good Reason shall mean (i) any
failure by the Company or Icahn to comply with any of their
material obligations to Rattigan under this Agreement, other
than any failures not occurring in bad faith which are remedied
reasonably promptly after receipt of written notice thereof
from Rattigan, (ii) any termination by the Company of
Rattigan's services hereunder, other than as permitted pursuant
to Section 4 hereof, prior to the expiration of the term of
this Agreement, or (iii) any action taken or the failure to
take action required by the Agreement to be taken, by the
Company or Icahn which substantially impairs Rattigan's ability
to perform the services contemplated by this Agreement which
action taken or failed to be taken is not cured by the Company
or Icahn reasonably promptly after receipt of written notice
thereof from Rattigan. Any written notice given by Rattigan
intended to comply with the provisions of this Section 5(e)
shall be required to contain a statement by Rattigan that the
failure to act reasonably promptly to cure the deficiency cited
therein will be a basis for Rattigan to exercise his right
under this Section 5(e) to cease providing service hereunder
for Good Reason. If Rattigan ceases to provide services
hereunder for Good Reason, then Rattigan shall receive (i) the
excess, if any, of $2,000,000 over the aggregate amount of base
consulting fees theretofore received by Rattigan pursuant to
subsection 4(a) hereof, and (ii) Rattigan Profits with respect
to all Purchased Shares as determined pursuant to subsection
4(b) hereof. Rattigan shall have no liability hereunder upon
ceasing to provide services for Good Reason.
6. CONFIDENTIALITY, ETC
(a) Restrictions. Unless otherwise required by law or
judicial process, and except as may be relevant to the subject
matter of and reasonably necessary to disclose in connection
with litigation brought by Rattigan to enforce the obligations
of the Company or Icahn under this Agreement, Rattigan shall
retain in confidence during the Term of this Agreement and
after termination of Rattigan's services hereunder or after he
determines to cease providing service hereunder, whether or not
permitted pursuant to this Agreement, all information known to
Rattigan concerning Company, Icahn and its and his affiliates,
and its and his and their respective affiliates' respective
businesses unless he reasonably believes that such information
is not confidential or until such information is publicly
disclosed by Company or Icahn or otherwise becomes publicly
disclosed other than through Rattigan's actions. Prior to any
intended disclosure by Rattigan of such information, whether or
not in the event that Rattigan is required by judicial process
to disclose any such information, Rattigan shall promptly give
the Company notice thereof in order to afford the Company the
opportunity to contest the validity of such intended
disclosure.
(b) No Adequate Remedy at Law. The parties acknowledge
that: (i) the provisions of this Section 6 are essential to
protect the business and goodwill of the Company and Icahn; and
(ii) the foregoing restrictions are under all of the
circumstances reasonable and necessary for the protection of
the Company and its business and Icahn and his businesses. In
the event that Rattigan shall commit a breach of any of the
provisions of this Section 6, or in the event that any such
breach is threatened by Rattigan, and such breach does, or such
threatened breach would, cause irreparable harm to the Company
or Icahn, in addition to and without limiting or waiving any
other remedies available to the Company and Icahn at law or in
equity, the Company and Icahn shall be entitled to immediate
injunctive relief in any court, domestic or foreign, having the
capacity to grant such relief, to restrain such breach or
threatened breach and to enforce the provisions of this Section
6. Rattigan acknowledges that it is impossible to measure in
money the damages that will accrue to the Company and Icahn in
the event that Rattigan breaches or threatens to breach any of
the provisions of this Section 6 and thereby causes irreparable
harm to the Company or Icahn, and in the event that the Company
or Icahn shall institute any action or proceeding to enforce
those provisions by seeking injunctive relief, Rattigan hereby
waives and agrees not to assert and shall not use as a defense
thereto the claim or defense that the Company or Icahn has an
adequate remedy at law. The foregoing shall not prejudice the
Company's right to require Rattigan to account for and pay
over to the Company and Icahn the amount of any actual damages
incurred by the Company as a result of any such breach.
7. ASSIGNMENT
This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interest of
Rattigan herein may not be sold, transferred, assigned, pledged
or hypothecated, provided however that Rattigan may assign his
rights to payment hereunder. The rights and obligations of the
Company and Icahn hereunder will be binding upon and run in
favor of the successors and assigns of the Company and Icahn.
8. NOTICE
For further purpose of this Agreement, notices, demands
and all other communications provided in the Agreement shall be
in writing and shall be deemed to have been duly given when
received by the recipient thereof whether hand delivered, by
telecopy, sent by overnight mail of the United States Post
Office or overnight courier, if mailed by United States
registered mail, return receipt requested, postage prepaid or
otherwise, and shall be addressed as follows:
If to Rattigan:
Thomas Rattigan
P.O. Box 9346
Longboat Key, Florida 34228
FAX:
(Or if by overnight courier)
Apt. A108, Players Club
1485 Gulf of Mexico Drive
Longboat Key, Florida 34228
with a copy to:
J. Ross Docksey, Esquire
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
FAX: 312-878-7934
If to Company:
c/o Icahn Associates Corp.
114 West 47th Street, 19th floor
New York, New York 10036
FAX 212-921-3379
If to Carl C. Icahn :
c/o Icahn Associates Corp.
114 West 47th Street-19th Floor
New York, N.Y. 10036
FAX 212-921-3359
in each case with a copy to:
Marc Weitzen, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, NY 10036
FAX 212-626-0799
or to such other address as any party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
9. SURVIVORSHIP
The respective rights and obligations of the parties
hereunder, including without limitation the rights and
obligations set forth in Section 12 hereof, shall survive any
termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations.
10. REPRESENTATIONS AND WARRANTIES
(a) Rattigan represents and warrants that (i) his
execution of this Agreement and his performance of his duties
and responsibilities under this Agreement shall not violate or
result in a breach of the terms of any material agreement to
which he is a party or by which he is bound, (ii) he has not
entered into any other agreement or understanding which would
in any way affect the optimal performance of his duties
hereunder and (iii)he in good faith believes himself to be in
excellent health as of the date hereof and knows of nothing
which would tend to indicate otherwise.
(b) The Company and Icahn represent and warrant that the
Company (i) is a limited partnership duly organized, validly
existing and in good standing under the laws of its state of
formation; (ii) is duly qualified to do business and is in good
standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business
requires such qualification (except for jurisdictions in which
such failure to so qualify would not have a material adverse
effect on the business, assets, operations, prospects or
financial or other condition of the corporation or on the
corporation's ability to perform its obligations under this
Agreement ("Material Adverse Effect")); (iii) has the requisite
corporate power and authority to conduct its business as now,
heretofore and proposed to be conducted; (iv) is in compliance
with its agreement of limited partnership.
(c) The Company and Icahn represent and warrant that the
performance of this Agreement is within the powers of the
Company, has been duly authorized by all necessary partnership
action is not in conflict with the terms of any partnership
agreement, certificate of partnership of the Company, and does
not result in a breach of or constitute a default under any
material contract, obligation, indenture or other instrument to
which the Company is party or by which the Company is bound and
when this Agreement is executed and delivered by the parties
hereto it will constitute a binding obligation of the Company
enforceable against the Company in accordance with its terms.
11. REMEDIES
(a) Costs of Litigation. The losing party will pay
all expenses incurred by the winning party, including but not
limited to reasonable attorneys' fees and court costs, arising
from litigation between the parties over this Agreement.
(b) Prejudgment Interest. If the Company or, failing
same, Icahn shall fail to pay Rattigan the consulting fees or
any other amounts to which Rattigan is entitled under this
Agreement at the time when such amounts are due, in addition to
any other remedies available to Rattigan with respect to such
failure to pay such amounts, the Company and Icahn shall be
obligated to pay Rattigan interest on such unpaid amounts until
paid at the rate of 10% per annum or, if lower, the maximum
rate permitted by applicable law.
(d) Joint and Several Liability. The obligations under
this Agreement ("Obligations") of the Company and Icahn (the
Company and Icahn referred to as a "Liable Person" for purposes
of this subsection) shall be the joint and several obligations
of each Liable Person. Rattigan may bring a separate action or
actions on each, any, or all of the Obligations against any
Liable Person, whether action is brought against the other
Liable Persons or whether the other Liable Persons are joined
in such action. In the event that the Company fails to make
any payment of any Obligations on or before the due date
thereof, Icahn immediately shall cause such payment to be made
or each of such Obligations to be performed, kept, observed, or
fulfilled.
12. INDEMNIFICATION OF RATTIGAN
(a) Right to Indemnification. If Rattigan is made a
party or is threatened to made a party to or is involved in or
called as a witness in any Proceeding (as hereinafter defined)
he shall be indemnified and held harmless by the Company or if
not paid on demand when due, by Icahn for all expenses incurred
by Rattigan (including, but not limited to, judgments, fines,
excise taxes or penalties and amounts paid or to be paid in
settlement) incurred by Rattigan in connection therewith. For
purposes of this Section 12, a "Proceeding" is an action, suit
or proceeding, whether civil, criminal, administrative or
investigative, and any appeal therefrom which relates to or
results from the provision of services hereunder by Rattigan or
relates to the conduct of the proxy contest by the Company,
Icahn, or its or his affiliates, or by Rattigan with respect to
the nomination of the Rattigan Slate at the 1997 Annual
Meeting.
(b) Expenses. Expenses, including reasonable
attorneys' fees, incurred by Rattigan in defending or otherwise
being involved in a Proceeding shall be paid by the Company or,
if not paid on demand when due, by Icahn in advance of the
final disposition provided that Rattigan shall undertake in
writing to the Company (the "Undertaking") to repay such amount
if it shall ultimately be determined that he is not entitled to
be indemnified by the Company or Icahn. Rattigan shall not be
obligated to repay pursuant to the Undertaking until the final
determination of any pending Proceedings in a court of
competent jurisdiction concerning the right of Rattigan to be
indemnified or the obligation of Rattigan to repay pursuant to
the Undertaking.
(c) Protection of Rights. If a claim by Rattigan
under subsection 12(a) is not promptly paid in full by the
Company or by Icahn after a written claim has been received by
the Company or Icahn, or if expenses pursuant to subsection
12(b) have not been promptly advanced after a written request
by Rattigan for such advancement accompanied by the Undertaking
has been received by the Company or Icahn, Rattigan may at any
time thereafter bring suit against the Company or Icahn to
recover the unpaid amount of the claim or the advancement of
expenses. If successful, in whole or in part, in such suit,
Rattigan shall also be entitled to be paid the reasonable
expense thereof (including without limitation attorneys' fees).
(d) General Provisions. The provisions of this
Section 12 shall be applicable to all Proceedings commenced or
continuing after the date hereof, provided such Proceedings
arise out of events, acts or omissions which occurred after the
date hereof and prior to the close of business at the 1997
Annual Meeting (or if the term of this Rattigan's consultancy
is extended in writing to a date subsequent to the Meeting
Date, then to such subsequent date) and shall inure to the
benefit of the heirs, executors and administrators of Rattigan.
The defense of Rattigan in any Proceeding shall be by counsel
chosen by the Company. Rattigan shall not be entitled to
indemnification for any settlement of any Proceeding unless
such settlement shall have been approved in writing by the
Company. The indemnifying parties shall not be entitled to
settle any Proceeding for which indemnification is sought
hereunder unless such settlement provides for a full and
complete release of Rattigan for any claim which is the subject
of such proceeding. Rattigan shall give the Company written
notice of the commencement or threatened commencement of any
proceeding for which he intends to seek indemnification
hereunder promptly after he knows or reasonably should know of
such commencement or threatened commencement. Nothing herein
shall be construed to provide Rattigan with the right to be
indemnified in respect of any Proceeding in the event he is
found in such proceeding to have engaged in a violation of any
provision of state or federal law in connection with his duties
hereunder unless he can demonstrate that his action was taken
in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Company in regard
to seeking to cause the election of the Rattigan Slate to the
Board of Directors of RJR. In addition, nothing herein shall
be construed to provide Rattigan with the right to be
indemnified in respect of any Proceeding in the event his
participation in the Proceeding results from his gross
negligence or willful misconduct or from acts by him which have
or would given the Company grounds to terminate his services
for Cause, as provided in Section 5(c).
(e) Waiver of Jury Trial. THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
AND CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY THE COURT.
13. MISCELLANEOUS
(a) Entire Agreement. The parties hereto agree that this
Agreement contains the entire understanding and agreement
between them, and that the provisions of this Agreement may not
be modified, waived, or discharged unless such waiver,
modification or discharge is agreed to in writing, signed by
the parties hereto. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject
matter hereof, have been made by either party that are not set
forth expressly in this Agreement.
(b) Prior Agreements. Upon effectiveness of this
Agreement, this Agreement shall supersede any other agreements
pursuant to which Rattigan was or might have been entitled to
receive payments or benefits from Company.
(c) Waiver. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with,
any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior
or subsequent time.
(d) Choice of Law. THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. IN
ADDITION, THE FEDERAL COURTS IN THE STATE OF NEW YORK AND THE
COURTS OF THE STATE OF NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO RESOLVE ALL MATTERS ARISING OUT OF THIS
AGREEMENT, AND NO ACTION SEEKING TO DO SO SHALL BE BROUGHT IN
ANY OTHER FORUM. EACH PARTY HERETO SHALL NOT OBJECT TO THE
VENUE OF ANY SUCH COURTS RESIDING IN THE CITY OF NEW YORK.
14. VALIDITY
The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability
of any other provision or provisions of this Agreement, which
shall remain in full force and effect provided that the
material benefits of this agreement remain in effect to each
party notwithstanding the invalidity or unenforceability of any
provision of this Agreement.
15. COUNTERPARTS
This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original
but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, Company and each Icahn Shareholder
that is a corporation or partnership has caused its name to be
ascribed to this Agreement by its duly authorized
representative, and Icahn and Rattigan has each executed this
Agreement as of the date and the year first above written.
High River Limited Partnership
By Riverdale LLC, General Partner
By: _________________________
Authorized Signatory
________________________
Carl C. Icahn
________________________
Thomas Rattigan
[signature page of Consulting Agreement between Rattigan, High
River Limited Partnership and Carl C. Icahn]
High River Limited Partnership
c/o Icahn Associates Corp.
114 W. 47th Street
New York, NY 10036
November 2, 1996
Dear :
This will confirm our understanding as follows:
1. You have agreed with Thomas Rattigan ("Rattigan") to
become a member of a slate of nominees which is being
assembled by Rattigan ("Rattigan Slate") to stand for
election as directors of RJR Nabisco Holdings Corp.("RJR")
in connection with a proxy contest with management of RJR in
respect of the election of directors of RJR at the 1997
Annual Meeting of Stockholders of RJR (the "1997 Annual
Meeting"), expected to be held in April 1997, or a special
meeting of stockholders of RJR called for a similar purpose
(the "Proxy Contest").
2. You are aware that the undersigned has entered into
an agreement with Rattigan pursuant to which the undersigned
has agreed to pay the costs of the Proxy Contest.
3. You and the undersigned have agreed that you will be
paid the sum of $25,000 by the undersigned upon signing this
agreement and the undersigned will pay you an additional
$25,000 promptly after it is determined that you have not
been elected to the RJR board of directors.
4. You understand that the Rattigan Slate will run for
election on a platform which advocates the prompt spinoff of
Nabisco Holdings Corp. ("Nabisico") to stockholders of RJR
and that that the proxy statement and other proxy material
to be provided to shareholders of RJR regarding the election
of the Rattigan Slate (collectively, the "Proxy Statement")
will disclose, among other things, that, if they are elected
as directors, the members of the Rattigan Slate intend to
(a) appoint Rattigan as the new Chief Executive Officer of
RJR,(b) increase the dividend paid to RJR stockholders to
$2.00 per share and maintain such dividend following the
spinoff, (c) in consultation with representatives of the
executive branch of the government, plaintiffs' attorneys
groups, members of Congress and representatives of other
tobacco companies, seek to develop and implement an
industry-wide legislative settlement of current and future
tobacco litigation claims and (d) not to adopt a shareholder
rights plan (commonly known as a poison pill) for either RJR
or Nabisco. Given that understanding, you have informed the
undersigned that you are in agreement with the specific
platform items and presently intend to take such action,
acknowledging that you are not, and cannot be, bound to do
so.
5. You understand that the Proxy Statement will
disclose that, if elected, the members of the Rattigan Slate
intend to, during the first year following their election,
adopt Compensation arrangements which would give non-
employee directors of RJR, including yourself, compensation
similar to the compensation currently provided by RJR to its
non-employee directors, except that it is contemplated that
each non-employee director would receive two-year options to
purchase no more than 50,000 shares of RJR at a price of no
less than $30 per share and that such recipients would not
be entitled to any annual grants of options for at least two
years after the date such 50,000 options are granted.
6. You understand that, pursuant to the By-Laws of RJR,
it will be difficult, if not impossible, for Rattigan to
replace nominees who, such as yourself, have agreed to serve
on the Rattigan Slate and later change their minds and
determine not to seek election. Accordingly, the Rattigan
Slate is relying upon your agreement to seek nomination. In
that connection, you are being supplied with questionnaires
in which you will provide Rattigan and the undersigned with
information necessary for Rattigan and/or the undersigned to
make appropriate disclosure both to RJR and for use in
creating the proxy material to be sent to stockholders of
RJR and to be filed with the Securities and Exchange
Commission. You have agreed that (i) you will immediately
complete and sign the questionnaire and return it to
Rattigan and (ii) your responses to the questions contained
therein will be true and correct in all respects. In
addition, you have agreed that, concurrently with your
execution of this letter, you will execute a letter or other
instrument directed to RJR informing RJR that you consent to
being a nominee of the undersigned for the election as a
director of RJR and, if elected, consent to serving as a
director of RJR.
7. The undersigned hereby agrees that, so long as you
actually serve on the Rattigan Slate, the undersigned will
defend, indemnify and hold you harmless from and against any
and all losses, claims, damages, penalties, judgments,
awards, liabilities, costs, expenses and disbursements
(including, without limitation, reasonable attorneys' fees,
costs, expenses and disbursements) incurred by you in the
event that you become a party, or are threatened to be made
a party, to any civil, criminal, administrative or
arbitrative action, suit or proceeding, and any appeal
thereof relating to your role as a nominee for director of
RJR on the Rattigan Slate. Your right of indemnification
hereunder shall continue after the election has taken place
but only for events which occurred during the period from
the date hereof until the date of the 1997 Annual Meeting or
special meeting of stockholders regarding the election of
Rattigan Slate in the event that you are a candidate for
election at such special meeting. Anything to the contrary
herein notwithstanding, the undersigned is not indemnifying
you for any action taken by you or on your behalf which
occurs prior to the date hereof or subsequent to the 1997
Annual Meeting or such earlier time as you are no longer a
nominee of the Rattigan Slate for election to RJR's Board
of Directors. Nothing herein shall, be construed to provide
you an indemnity in the event you are found to have engaged
in a violation of any provision of state or federal law in
connection with the Proxy Contest unless you demonstrate
that your action taken in good faith and in a manner you
reasonably believed to be in or not opposed to the best
interests of electing the Rattigan Slate or if you acted in
a manner which constitutes gross negligence or willful
misconduct. In the event that you shall make any claim for
indemnification hereunder, you shall promptly notify the
undersigned in the event of any third-party claims actually
made against you or known by you to be threatened. In
addition, with respect to any such claim, the undersigned
shall be entitled to defend you with counsel of its choice.
The undersigned shall not be responsible for any settlement
of any claim against you covered by this indemnity without
its prior written consent. However, the undersigned may not
enter into any settlement of any such claim without your
consent unless such settlement includes a release of you
from any and all liability in respect of such claim.
8. Each of us recognizes that should you be elected to
the Board of Directors of RJR all of your activities and
decisions as a director will be governed by applicable law
and subject to your fiduciary duty to the stockholders of
RJR and, as a result, that there is, and can be, no
agreement between you and the undersigned which governs the
decisions which you will make as a director of RJR,
including, without limitation, the matters described in
paragraph 4 above.
Should the foregoing agree with your understanding, please
so indicate in the space provided below, whereupon this
letter will become a binding agreement between us.
Very truly yours,
High River Limited Partnership
By Riverdale LLP, General Partner
By_______________________________
Authorized Signatory
Agreed to and Accepted
as of the date first
above written
________________________<PAGE>
High River Limited Partnership
c/o Icahn Associates Corp.
114 W. 47th Street
New York, NY 10036
November 2, 1996
Dear :
Reference is made to the letter agreement (the
"Agreement"), of even date herewith, between High River
Limited Partnership ("High River") and you regarding your
nomination (or potential nomination) to stand for election
as a director of RJR Nabisco Holding Corp. ("RJR") on a
slate of nominees which is being assembled by Thomas
Rattigan. Except as otherwise defined herein, all
capitalized terms used herein shall have the meanings
ascribed to them in the Agreement.
This letter will clarify our understanding
contained in Paragraph 7 of the Agreement that your right of
indemnification from High River contained in said Paragraph
7 shall apply to any civil, criminal, administrative or
arbitrative action, suit or proceeding, any appeal thereof
(collectively, an "Action"), relating solely to your role as
a nominee (or an alternate nominee, as the case may be) for
director of RJR on the Rattigan Slate, whether such Action
is commenced, or the events giving rise to such Action
occurred, on, before or after the date of the 1997 Annual
Meeting; provided, however, that such indemnification
obligation by High River shall not arise or apply with
respect or to the extent relating to any actions taken by
you as a director of RJR, if you are elected.
Except as specifically provided above, nothing
contained in the letter shall be deemed to have amended or
modified any of the terms or provisions of the Agreement in
any way, including, without limitation, Paragraph 7 thereof.
Very truly yours,
High River Limited Partnership
By Riverdale LLP, General
Partner
By_______________________
Authorized Signatory
High River Limited Partnership
c/o Icahn Associates Corp.
114 W. 47th Street
New York, NY 10036
November 2, 1996
Dear :
This will confirm our understanding as follows:
1. You have agreed with Thomas Rattigan ("Rattigan") that
you will serve as an alternate designee (an "Alternate") to
become a member of a slate of nominees which is being
assembled by Rattigan ("Rattigan Slate") to stand for election
as directors of RJR Nabisco Holdings Corp.("RJR") in
connection with a proxy contest with management of RJR in
respect of the election of directors of RJR at the 1997 Annual
Meeting of Stockholders of RJR (the "1997 Annual Meeting"),
expected to be held in April 1997, or a special meeting of
stockholders of RJR (a "Special Meeting") called for a similar
purpose (the "Proxy Contest"). In your capacity as an
Alternate, you have further agreed with Rattigan that, if
requested by Rattigan, you will become a member of the
Rattigan Slate. You acknowledge that such request by Rattigan
may be made by Rattigan at any time prior to the date of the
1997 Annual Meeting or the Special Meeting, as the case may
be, in the event that any one or more of the persons then
designated to serve as a member of the Rattigan Slate is
unwilling or unable to do so.
2. You are aware that the undersigned has entered into an
agreement with Rattigan pursuant to which the undersigned has
agreed to pay the costs of the Proxy Contest.
3. You and the undersigned have agreed that: (i) you will
be paid the sum of $10,000 by the undersigned upon signing
this agreement; (ii) you will be paid an additional $15,000 in
the event you are requested by Rattigan to become a member of
the Rattigan Slate and you, in fact, do so; and (iii) if you
serve on the Rattigan Slate, the undersigned will pay you an
additional $25,000 promptly after it is determined that you
have not been elected to the RJR board of directors.
4. You understand that the Rattigan Slate will run for
election on a platform which advocates the prompt spinoff of
Nabisco Holdings Corp. ("Nabisco") to stockholders of RJR and
that the proxy statement and other proxy material to be
provided to shareholders of RJR regarding the election of the
Rattigan Slate (collectively, the "Proxy Statement") will
disclose, among other things, that, if they are elected as
directors, the members of the Rattigan Slate intend to (a)
appoint Rattigan as the new Chief Executive Officer of RJR,(b)
increase the dividend paid to RJR stockholders to $2.00 per
share and maintain such dividend following the spinoff, (c) in
consultation with representatives of the executive branch of
the government, plaintiffs' attorneys groups, members of
Congress and representatives of other tobacco companies, seek
to develop and implement an industry-wide legislative
settlement of current and future tobacco litigation claims and
(d) not to adopt a shareholder rights plan (commonly known as
a poison pill) for either RJR or Nabisco. Given that
understanding, you have informed the undersigned that you are
in agreement with the specific platform items and, if you
serve on the Rattigan Slate and are elected to the board of
directors of RJR, presently intend to take such action,
acknowledging that you are not, and cannot be, bound to do so.
5. You understand that the Proxy Statement will disclose
that, if elected, the members of the Rattigan Slate intend to,
during the first year following their election, adopt
Compensation arrangements which would give non-employee
directors of RJR, including yourself (if you serve on the
Rattigan Slate and are elected), compensation similar to the
compensation currently provided by RJR to its non-employee
directors, except that it is contemplated that each non-
employee director would receive two-year options to purchase
no more than 50,000 shares of RJR at a price of no less than
$30 per share and that such recipients would not be entitled
to any annual grants of options for at least two years after
the date such 50,000 options are granted.
6. You understand that, pursuant to the By-Laws of RJR,
it will be difficult, if not impossible, for Rattigan to
replace nominees or Alternates who, such as yourself, have
agreed to serve on the Rattigan Slate and later change their
minds and determine not to serve on the Rattigan Slate or seek
election. Accordingly, the Rattigan Slate is relying upon
your agreement to seek nomination if requested to do so. In
that connection, you are being supplied with questionnaires in
which you will provide Rattigan and the undersigned with
information necessary for Rattigan and/or the undersigned to
make appropriate disclosure both to RJR and for use in
creating the proxy material to be sent to stockholders of RJR
and to be filed with the Securities and Exchange Commission.
You have agreed that (i) you will immediately complete and
sign the questionnaire and return it to Rattigan and (ii) your
responses to the questions contained therein will be true and
correct in all respects. In addition, you have agreed that,
concurrently with your execution of this letter, you will
execute a letter or other instrument directed to RJR informing
RJR that you consent to being a nominee of the undersigned for
the election as a director of RJR and, if elected, consent to
serving as a director of RJR.
7. The undersigned hereby agrees that, so long as you
actually serve as an Alternate or on the Rattigan Slate, the
undersigned will defend, indemnify and hold you harmless from
and against any and all losses, claims, damages, penalties,
judgments, awards, liabilities, costs, expenses and
disbursements (including, without limitation, reasonable
attorneys' fees, costs, expenses and disbursements) incurred
by you in the event that you become a party, or are threatened
to be made a party, to any civil, criminal, administrative or
arbitrative action, suit or proceeding, and any appeal thereof
relating to your role as an Alternate and/or as a nominee for
director of RJR on the Rattigan Slate. Your right of
indemnification hereunder shall continue after the election
has taken place but only for events which occurred during the
period from the date hereof until the date of the 1997 Annual
Meeting or special meeting of stockholders regarding the
election of Rattigan Slate in the event that you are a
candidate for election at such special meeting or remain an
Alternate through such date. Anything to the contrary herein
notwithstanding, the undersigned is not indemnifying you for
any action taken by you or on your behalf which occurs prior
to the date hereof or subsequent to the 1997 Annual Meeting or
such earlier time as you are no longer an Alternate or a
nominee of the Rattigan Slate for election to RJR's Board of
Directors. Nothing herein shall, be construed to provide you
an indemnity in the event you are found to have engaged in a
violation of any provision of state or federal law in
connection with the Proxy Contest unless you demonstrate that
your action taken in good faith and in a manner you reasonably
believed to be in or not opposed to the best interests of
electing the Rattigan Slate or if you acted in a manner which
constitutes gross negligence or willful misconduct. In the
event that you shall make any claim for indemnification
hereunder, you shall promptly notify the undersigned in the
event of any third-party claims actually made against you or
known by you to be threatened. In addition, with respect to
any such claim, the undersigned shall be entitled to defend
you with counsel of its choice. The undersigned shall not be
responsible for any settlement of any claim against you
covered by this indemnity without its prior written consent.
However, the undersigned may not enter into any settlement of
any such claim without your consent unless such settlement
includes a release of you from any and all liability in
respect of such claim.
8. Each of us recognizes that should you be elected to
the Board of Directors of RJR all of your activities and
decisions as a director will be governed by applicable law and
subject to your fiduciary duty to the stockholders of RJR and,
as a result, that there is, and can be, no agreement between
you and the undersigned which governs the decisions which you
will make as a director of RJR, including, without limitation,
the matters described in paragraph 4 above.
Should the foregoing agree with your understanding, please so
indicate in the space provided below, whereupon this letter
will become a binding agreement between us.
Very truly yours,
High River Limited
Partnership
By Riverdale LLP, General
Partner
By_______________________
Authorized Signatory
Agreed to and Accepted
as of the date first
above written
________________________<PAGE>
High River Limited Partnership
c/o Icahn Associates Corp.
114 W. 47th Street
New York, NY 10036
November 2, 1996
Dear :
Reference is made to the letter agreement (the
"Agreement"), of even date herewith, between High River
Limited Partnership ("High River") and you regarding your
nomination (or potential nomination) to stand for election
as a director of RJR Nabisco Holding Corp. ("RJR") on a
slate of nominees which is being assembled by Thomas
Rattigan. Except as otherwise defined herein, all
capitalized terms used herein shall have the meanings
ascribed to them in the Agreement.
This letter will clarify our understanding
contained in Paragraph 7 of the Agreement that your right of
indemnification from High River contained in said Paragraph
7 shall apply to any civil, criminal, administrative or
arbitrative action, suit or proceeding, any appeal thereof
(collectively, an "Action"), relating solely to your role as
a nominee (or an alternate nominee, as the case may be) for
director of RJR on the Rattigan Slate, whether such Action
is commenced, or the events giving rise to such Action
occurred, on, before or after the date of the 1997 Annual
Meeting; provided, however, that such indemnification
obligation by High River shall not arise or apply with
respect or to the extent relating to any actions taken by
you as a director of RJR, if you are elected.
Except as specifically provided above, nothing
contained in the letter shall be deemed to have amended or
modified any of the terms or provisions of the Agreement in
any way, including, without limitation, Paragraph 7 thereof.
Very truly yours,
High River Limited
Partnership
By Riverdale LLP, General
Partner
By_______________________
Authorized Signatory
GEORGESON & COMPANY, INC.
November 1, 1996
High River
100 South Bedford Road
Mount Kisco, New York 10549
__________________
Wall Street Plaza
__________________
New York, NY 10005 LETTER OF AGREEMENT
__________________
212.440.9800 This Letter of Agreement sets forth the terms and
__________________ conditions of our employment to solicit proxies on
behalf of nominees selected by Thomas Rattigan for
Fax 212.440.9955 the 1997 Annual Meeting of Stockholders of RJR
Nabisco Holdings Corp.:
(a) The services we will perform on your behalf
will include the solicitation of proxies from
brokers and banks (including non-objecting
beneficial owners behind such positions,
"NOBO's"), institutional holders, registered
holders and consultation with respect to such
solicitation.
(b) For our services, you will pay us a fee of
$300,000 as follows: $50,000 upon execution of
the agreement, which covers our commitment and
__________________ is non-refundable, $50,000 on January 15,
1997, $100,000 upon mailing of Rattigan's
New York definitive proxy materials and $100,000 upon
__________________ the Annual Meeting date. You will also pay us
a fee of $5.00 per call to individual
London shareholders and NOBO's, which fee will
__________________ include all telephone charges. In addition,
if the Rattigan slate is successful in
Los Angeles electing its nominees or withdraws its
__________________ nominees because RJR Nabisco Holdings Corp.
agrees to a spinoff of Nabisco and the spinoff
Pittsburgh is successfully completed within nine months
thereafter, Georgeson & Company Inc. will be
paid an additional fee and $200,000.
(C) In connection with our services under this
agreement, you agree to reimburse us, or pay
directly, or, where requested by us in special
situations, advance sufficient funds to us for
payment of the following cost and expenses:
--expenses incidental to the solicitation,
including preparation and mailing of the
notice and inquiry under Rule 14a-13 of the
Securities Exchange Act of 1934 and postage
and freight charges we incur in delivering
material;
--expenses we incur in working with our agents
or other parties involved in the solicitation,
including bank threshold lists, data
processing charges, charges for facsimile
transmissions or other forms of electronic
communication, charges for couriers and
tabulation of proxies;
--expenses we incur at your request or for
your convenience, including printing
additional and/or supplemental material,
copying, and travel expenses of our
executives;
--fees and expenses authorized by you
resulting from extraordinary contingencies
during the solicitation, including mailgrams
and datagrams.
(d) If requested, we will check, itemize, and pay,
on your behalf, from funds provided by you,
the charges of brokers and banks, with the
exception of ADP Proxy Services which will
bill you directly, for forwarding proxy
solicitation material to beneficial owners and
requesting voting instructions, including the
cost of cables, telegrams and telephone calls
when necessary. To ensure that we have
sufficient funds in your account to pay these
bills promptly, prior to the commencement of
the delivery of proxy soliciting material to
brokers and banks, with a preliminary payment
equal to the anticipated broker and bank
charges for two distributions of such
material. For this service, you will pay us
five dollars and fifty cents ($5.50) for each
broker and bank invoice paid by us.
(e) You represent to us that you will comply with,
and we represent to you that we will comply
with, applicable requirements of law relating
to the solicitation of proxies for such
meeting.
(f) High River Limited Partnership ("High River")
agrees to indemnify and hold harmless
Georgeson & Company Inc. (for purposes of this
paragraph the terms "Georgeson" shall include
Georgeson & Company Inc. and all stockholders,
officers, directors, employees and agents of
Georgeson & Company Inc.) against any and all
claims, costs, damages, liabilities,
judgements or expenses of any nature of
Georgeson, including the reasonable costs and
expenses of counsel retained by Georgeson,
unless High River assumes the defense of the
action, which results from claims, actions,
suits, subpoenas, demands or other proceedings
brought against or involving Georgeson by any
party, including without limitation, any suit
by or on behalf of RJR Nabisco Holdings Corp.
or its officers, directors, employees or
stockholders, any proceeding of the Securities
and Exchange Commission, or any other cause of
action arising out of, relating to, or in
connection with, the services or duties
performed or exercised or advice or
information furnished by Georgeson under or in
connection with this letter of Agreement,
(except for any loss, damage, expense,
liability or claim arising out of Georgeson's
own negligence or misconduct). At its
election, High River may assume the defense of
any such action. Georgeson hereby agrees to
advise High River in writing of any such
liability or claim promptly after receipt of
any notice thereof. The indemnification
contained in this paragraph will survive the
term of the Agreement.
(g) Georgeson agrees to preserve the
confidentiality of all non-public information
provided by High River, its affiliates,
officers, directors, representatives and/or
agents for our use in providing services under
this Agreement, or information developed by
Georgeson based upon such non-public
information.
If the above is agreed to by you, please sign and return the
enclosed duplicate of this Agreement to Georgeson & Company
Inc., Wall Street Plaza, New York, New York 10005, Attention:
Marcy Roth, Contract Administrator.
ACCEPTED: Sincerely,
HIGH RIVER LIMITED PARTNERSHIP GEORGESON & COMPANY INC.
By: __________________________ By:_____________________
Kay DeAngelis
Title:_______________________ Title:_______________________
Senior Managing Director
Date:_________________________
