<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENT FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13d-2(a)
(Amendment No. 3 )*
----------
PepsiAmericas, Inc. (f/k/a Pepsi-Cola Puerto Rico Bottling Company)
- -------------------------------------------------------------------------------
(Name of Issuer)
Class B Common Stock, Par Value $0.01 Per Share
- -------------------------------------------------------------------------------
(Title of Class of Securities)
71343P 10 1
- -------------------------------------------------------------------------------
(CUSIP Number)
John F. Bierbaum
60 South Sixth Street
Suite 3800
Minneapolis, MN 55402
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 15, 1999
- -------------------------------------------------------------------------------
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_].
*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).
(Continued on following pages)
(Page 1 of 11 Pages)
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 71343P 10 1 PAGE 2 OF 11 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dakota Holdings, LLC
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
AF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 58,438,274**
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
58,438,274**
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
58,438,274**
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
70.3%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
00
- ------------------------------------------------------------------------------
**Includes a warrant to purchase 1,360,000 shares.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 71343P 10 1 PAGE 3 OF 11 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Pohlad Companies
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
00
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Minnesota
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
500
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 58,438,274**
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
500
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
58,438,274**
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
58,438,774**
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
70.3%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
**Includes a warrant to purchase 1,360,000 shares.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 71343P 10 1 PAGE 4 OF 11 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PepsiCo, Inc.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
00
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
North Carolina
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 58,438,274**
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
58,438,274**
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
58,438,274**
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
70.3%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
**Includes a warrant to purchase 1,360,000 shares.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 71343P 10 1 PAGE 5 OF 11 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
V. Suarez & Co, Inc.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [X]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Puerto Rico
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
1,631,685**
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 0
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
1,631,685**
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
1,631,685**
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
2.0%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
**Includes a warrant to purchase 340,000 shares.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Preliminary Statement
- ---------------------
Dakota Holdings, LLC, Pohlad Companies, PepsiCo, Inc. and V. Suarez & Co.,
Inc. (the "Reporting Persons") hereby amend their statement on Schedule 13D,
originally filed on July 28, 1998 and amended on June 29, 1999 and July 14, 1999
(the "Schedule 13D"), with respect to their beneficial ownership of shares of
Class B Common Stock, par value $0.01 per share, of PepsiAmericas, Inc. (f/k/a
Pepsi-Cola Puerto Rico Bottling Company) ("PAS"). This statement also includes
information with respect to the beneficial ownership of PAS Class A Common
Stock, par value $0.01 per share, although such class of shares is not
registered under Section 12 of the Securities Exchange Act of 1934, as amended.
Each shares of PAS Class A Common Stock has six votes and each share of PAS
Class B Common Stock has one vote.
This amendment is filed to reflect changes in beneficial ownership of PAS
Class B Common Stock resulting from the completion of the transactions described
in the Dakota Exchange Agreement and the Delta Exchange Agreement, each dated as
of June 28, 1999. The exchange agreements were filed as exhibits to Amendment
No. 2 to the Schedule 13D. PAS entered into the exchange agreements for the
purpose of acquiring Dakota Beverage Company, Inc. ("Dakota") and Delta Beverage
Group, Inc. ("Delta").
P-PR Transfer, LLP, which had previously been included as a reporting
person in the Schedule 13D, no longer beneficially owns shares of PAS common
stock.
Item 1. Security and Issuer.
-------------------
No change, except that Pepsi-Cola Puerto Rico Bottling Company changed its
name to PepsiAmericas, Inc., effective October 15, 1999.
Item 2. Identity and Background.
-----------------------
(a) and (b) This statement is filed on behalf of the following persons:
(1) Dakota Holdings, LLC, a Delaware limited liability company formed
on October 15, 1999 (the "LLC"). The LLC's members are Pohlad Companies, a
Minnesota corporation ("Pohlad"), Beverages, Foods & Service Industries,
Inc., a Delaware corporation ("BFSI"), which is a wholly owned subsidiary
of PepsiCo, Inc. a North Carolina corporation ("PepsiCo"), and Pepsi-Cola
Metropolitan Bottling Co., Inc., a New Jersey corporation ("Metro"), which
is also a wholly owned subsidiary of PepsiCo. The LLC is governed by the
Limited Liability Company Agreement, dated October 15, 1999, by and among
Pohlad, BFSI, Metro and PepsiCo (the "LLC Agreement"). A copy of the LLC
Agreement is attached hereto as Exhibit A. The LLC, which holds a
controlling interest in PAS, was formed (a) to accomplish the transactions
contemplated by the exchange agreements and (b) to manage its members'
investment in, and to hold and exercise voting control over, PAS and its
affiliates. The LLC's principal business and office address is 60 South
Sixth Street, Suite 3800, Minneapolis, MN 55402.
(2) V. Suarez & Co., Inc., a Puerto Rico corporation ("Suarez").
Suarez distributes and markets consumer products throughout Puerto Rico in
the beverage, food, household goods and toy segments. Its principal
business and office address is P.O. Box 364588, San Juan, Puerto Rico
00936-4588. Suarez is a member of the group of Reporting Persons by virtue
of its initial investment in PAS on July 17, 1998, as reported in the
initial filing of the Schedule 13D.
Page 6 of 11 Pages
<PAGE>
(c) The name, residence or business address, present principal occupation
or employment, and the name, principal business and address of the corporation
or other organization in which such employment is conducted, of each executive
officer and director of the Reporting Persons, are set forth on Appendix I
attached hereto and incorporated herein by reference.
(d) and (e) No change.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The LLC acquired a total of 52,109,930 shares of PAS Class B Common Stock
pursuant to the exchange agreements. The transactions are described more fully
below.
Dakota Exchange Agreement
- -------------------------
Under the Dakota Exchange Agreement, the LLC transferred all of its
membership interests in DakBev, LLC to PAS in exchange for 46,760,000 shares of
PAS Class B Common Stock. Prior to this transfer, Dakota, then a wholly owned
subsidiary of Pohlad, was merged with and into DakBev, LLC. Pohlad then
contributed all of its membership interests in DakBev, LLC to the LLC in
exchange for a membership interest in the LLC.
Delta Exchange Agreement
- ------------------------
Under the Delta Exchange Agreement, the LLC transferred 15,559.44 shares of
capital stock of Delta to PAS in exchange for 5,349,930 shares of PAS Class B
Common Stock. The shares of capital stock of Delta were contributed to the LLC
by its members.
Item 4. Purpose of Transaction.
----------------------
The LLC acquired the PAS common stock reported herein in connection with
the acquisition by PAS of Delta and Dakota pursuant to the exchange agreements.
See Item 3. The Reporting Persons have no present plans or intentions which
would result in or relate to any of the events described in subparagraphs (a)
through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) As to shares of PAS Class B Common Stock, the responses of each
Reporting Person to Items (11) and (13) on the cover pages of this Schedule 13D
are incorporated herein by reference. As to shares of PAS Class A Common Stock,
the LLC beneficially owned 4,000,000 shares (80.0% of the class) and Suarez
beneficially owned 1,000,000 shares (20.0% of the class). By virtue of their
interest in the LLC, Pohlad and PepsiCo may be deemed to beneficially own the
PAS common stock held by the LLC. As a group, the Reporting Persons
beneficially owned an aggregate of 5,000,000 shares of PAS Class A Common Stock
(100.0% of the class) and 60,070,459 shares of PAS Class B Common Stock (72.0%
of the class), including 1,700,000 shares of PAS Class B Common Stock which the
group members have a right to acquire pursuant to warrants issued by PAS. The
LLC and Suarez each disclaim any beneficial ownership of the PAS common stock
held by the other.
(b) The responses of each Reporting Person to Items (7) through (10) on the
cover pages of this Schedule 13D are incorporated herein by reference.
Page 7 of 11 Pages
<PAGE>
(c) See Item 3.
(d) See Item 6.
(e) P-PR Transfer, LLP ceased to be the beneficial owner of more than five
percent of PAS common stock on October 15, 1999.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
---------------------------------------------------------------------
to Securities of the Issuer.
- ---------------------------
The LLC was formed and is governed by the LLC Agreement, a copy of which is
attached as Exhibit A hereto and incorporated herein by reference. The
following summary of certain terms of the LLC Agreement is qualified in its
entirety by reference to the LLC Agreement.
The LLC was formed by Metro, BFSI and Pohlad (each a "Member" and
collectively, the "Members") and PepsiCo. The LLC has been formed to manage the
Members' investment in, and to hold and exercise voting control over, PAS and
its affiliates. It is the intention of the Members that the LLC operate
exclusively as a holding company, and shall not conduct any business operations
except with respect to the management of those investments. The LLC shall have
the power to undertake and carry on all activities necessary or advisable in
connection with such activities. The LLC may not engage in any other business
without the consent of all Members.
The LLC Agreement provides that, for so long as the LLC owns PAS common
stock entitling it to cast a majority of the votes at a shareholders' meeting,
the PAS common stock owned by the LLC shall at all times be voted so that one
member of the Boards of Directors of PAS and each of its direct subsidiaries and
any material indirect subsidiary designated from time to time by PepsiCo shall
be that person designated by PepsiCo on behalf of Metro and BFSI (the "PepsiCo
Director"). Pohlad shall have the right to designate and vote the LLC's shares
of PAS for all other members of the Boards of Directors of PAS and its
subsidiaries (the "Pohlad Directors"), subject, however, to the rules of the New
York Stock Exchange requiring the election of two independent directors (the
"Independent Directors"). In order of priority, the LLC's voting power shall
be exercised first to elect the PepsiCo Director, second to elect the
Independent Director and third to elect the Pohlad Directors.
The LLC Agreement also provides that for each franchised bottler in which a
controlling interest is held directly or indirectly by the LLC or PAS, PepsiCo
shall have the right to designate one member of the board of directors of the
franchised bottler and Pohlad shall have the right to designate all other
members of such board of directors. The LLC and each of the Members shall take
all actions within their respective powers to cause all such nominees to be
elected.
The LLC Agreement requires the LLC and each Member to take all steps within
their power to prevent the taking of any of the following actions by PAS or any
subsidiary unless such action is either expressly contemplated by the then
current multi-year business plan or is expressly approved by BFSI or Metro:
(1) Any material change in the business or purpose of PAS or any of its
subsidiaries from its then current business.
(2) Any merger or consolidation involving PAS or any of its subsidiaries.
Page 8 of 11 Pages
<PAGE>
(3) Making any investment or capital expenditure or the sale, lease,
transfer or other disposition of any assets of PAS or any subsidiary in excess
of $5 million individually or together with a series of related transactions in
a 12 month period outside the ordinary course of business.
(4) Any voluntary liquidation, dissolution or termination.
(5) Issuing of any shares of capital stock or any debt securities
convertible into or exchangeable for shares of capital stock, or issuing, or
granting any warrant, option or other right to acquire shares of capital stock
or securities convertible into or exchangeable for shares of capital stock,
other than: (i) the grant of options and issuance of shares pursuant to the
exercise thereof under any employee stock option plan in existence as of the
date hereof; or (ii) the issuance of shares of capital stock pursuant to the
exercise of any warrant outstanding as of the date hereof.
(6) The establishment by PAS or any subsidiary of any joint venture with a
third party or the acquisition of all or part of any other business person or
entity.
(7) The appointment of any replacement Chief Executive Officer and/or Chief
Financial Officer.
(8) The approval of a multi-year business plan, or any material amendments
thereto or deviations therefrom.
(9) The making of any take-or-pay arrangement or significant operating
arrangement in excess of $5 million individually or together with a series of
related transactions during any year.
(10) The entry of PAS or any subsidiary into any contract, agreement or
arrangement providing for the lending of funds or the provision of a guaranty,
except in the ordinary course of business.
(11) The addition of any new beverage product or package to the beverage
products and packages currently manufactured and/or distributed by PAS or such
subsidiary or the discontinuance and/or disposition of any beverage product or
package currently manufactured and/or distributed by PAS or such subsidiary.
(12) Any new borrowing of money, assumption or guarantee of any
indebtedness or other obligations, or issuing any debt securities which, based
on a reasonable forecast for the 12 months following the anticipated closing of
such borrowing made available to the board of directors, would have the effect
of causing PAS's interest coverage ratio (as defined in the LLC Agreement) to
fall below 2.5 to 1.
(13) The selection of a replacement accounting firm to represent PAS or any
subsidiary in lieu of Arthur Andersen LLP, provided, however, that such approval
shall not be required where the replacement accountants are a "Big five"
accounting firm with no existing conflict issue with any Member, the LLC or PAS.
(14) The entry into any contract, agreement or arrangement with or for the
benefit of a Member or any affiliate of any Member or any officer or employee
thereof and any amendment or modification of any of the foregoing.
(15) The payment of any dividends.
No Member may in any way transfer or encumber or contract to transfer or
encumber any of its interest in the LLC, without the prior written consent of
the other Members, which consent may be withheld
Page 9 of 11 Pages
<PAGE>
or conditioned in such other Member's sole discretion. The LLC Agreement also
contains limitations on each Member's ability to transfer, both directly and
indirectly, its interest in the LLC and to assign or transfer voting control
over itself except to certain affiliates, and not without first obtaining
certain written consents. In the event that the Members become deadlocked with
respect to certain matters, the LLC Agreement gives PepsiCo the right to
purchase Pohlad's interest in the LLC.
Item 7. Material to be Filed as Exhibits.
--------------------------------
Exhibit A - Limited Liability Company Agreement, dated October 15, 1999.
Exhibit B - Agreement to File Joint Statement on Schedule 13D, dated
October 18, 1999.
Page 10 of 11 Pages
<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: October 19, 1999
Dakota Holdings, LLC
By Its Members
Pohlad Companies
By: /s/ John F. Bierbaum
--------------------------------
John F. Bierbaum, Vice President
and Chief Financial Officer
Beverages, Foods & Service
Industries, Inc.
By: /s/ W. Timothy Heaviside
---------------------------------
W. Timothy Heaviside, Vice President
Pepsi-Cola Metropolitan Bottling Co.,
Inc.
By: /s/ W. Timothy Heaviside
---------------------------------
W. Timothy Heaviside, Vice
President
Pohlad Companies
By: /s/ John F. Bierbaum
---------------------------------
John F. Bierbaum, Vice President
and Chief Financial Officer
PepsiCo, Inc.
By: /s/ W. Timothy Heaviside
---------------------------------
W. Timothy Heaviside, Vice
President V. Suarez & Co., Inc.
By: /s/ Francisco Marrero
---------------------------------
Francisco Marrero, Chief Financial
Officer
Page 11 of 11 Pages
<PAGE>
APPENDIX I
POHLAD COMPANIES
Directors
The business address of each director of Pohlad Companies is 60 South
Sixth Street, Suite 3800, Minneapolis, MN 55402.
Name Principal Occupation
- ---- --------------------
Robert C. Pohlad President of Pohlad Companies and Chief
Executive Officer of PepsiAmericas, Inc.
James O. Pohlad Executive Vice President of Pohlad Companies
William M. Pohlad Executive Vice President of Pohlad Companies
Officers
The business address of each officer of Pohlad Companies is 60 South
Sixth Street, Suite 3800, Minneapolis, MN 55402.
Name Principal Occupation
- ---- --------------------
Robert C. Pohlad President
John F. Bierbaum Executive Vice President and Chief Financial
Officer
James O. Pohlad Executive Vice President
William M. Pohlad Executive Vice President
Raymond W. Zehr, Jr. Executive Vice President
Carl R. Pohlad Vice President
John F. Bierbaum Secretary
Raymond W. Zehr, Jr. Treasurer
I-1
<PAGE>
PEPSICO, INC.
Directors
Name Principal Occupation and Address
- ---- --------------------------------
John F. Akers Former Chairman and CEO
International Business Machines Corporation
290 Harbor Drive
Stamford, CT 06902-7441
Robert E. Allen Former Chairman and CEO AT&T Corp.
101 JFK Parkway, 1D403
Short Hills, NJ 07078
Roger A. Enrico Chairman & CEO PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Peter Foy Retired Chairman
Baring Brothers International Limited
5 Belvedere Dr.
Wimbledon SW19 7BX England
Ray L. Hunt Chairman and CEO
Hunt Oil Company
1445 Ross at Field
Dallas, TX 75202-2785
Arthur C. Martinez Chairman and CEO
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, IL 60179
John J. Murphy Managing Director
SMG Management, LLC
5956 Sherry Lane, Suite 710
Dallas, TX 75225
Franklin W. Raines Chairman and CEO
Fannie Mae 3900 Wisconsin Avenue, N.W.
Washington, DC 20016
Steven S Reinemund President and Chief Operating Officer,
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
I-2
<PAGE>
Sharon Percy Rockefeller President and CEO
WETA
2775 South Quincy Street
Arlington, VA 22206
Franklin A. Thomas TFF Study Group
595 Madison Avenue, 33rd Floor
New York, NY 10022
Karl M. von der Heyden Vice Chairman
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
P. Roy Vagelos Former Chairman & CEO
Merck & Co., Inc.
1 Crossroads Drive
Building A - 3rd Floor
Bedminster, NJ 07921
Arnold R. Weber President Emeritus
Northwestern University
55 Clark St. # 209
Evanston, IL 60208
Officers
The business address of each executive officer of PepsiCo is 700
Anderson Hill Road, Purchase, New York 10577.
Name Principal Occupation
- ---- --------------------
Roger A. Enrico Chairman of the Board and Chief Executive
Officer
Karl M. von der Heyden Vice Chairman of the Board
Matthew M. McKenna Senior Vice President and Treasurer
Indra K. Nooyi Senior Vice President, Corporate Strategy and
Development
Steven S Reinemund President and Chief Operating Officer, PepsiCo,
Inc.
Robert F. Sharpe, Jr. Senior Vice President, General Counsel and
Secretary
Michael D. White Senior Vice President, Chief Financial and Chief
Accounting Officer
I-3
<PAGE>
V. SUAREZ & CO., INC.
Directors
The business address of each director of V. Suarez & Co., Inc. is P.O.
Box 364588, San Juan, Puerto Rico 00936-4588, unless otherwise indicated.
Name Principal Occupation
- ---- --------------------
Diego Suarez Sanchez Chairman of V. Suarez & Co., Inc.
Vicente Suarez Sanchez Vice Chairman and Treasurer of V. Suarez & Co.,
Inc.
Diego Suarez Matienzo President, CEO and Assistant Secretary of V.
Suarez & Co., Inc.
Alberto Toro Lawyer
Fiddler, Gonzalez & Rodriguez
Banco Bilbao Vizcaya, 5th Floor
254 Munoz Rivera Avenue
Hato Rey, PR 00918
Enrique Vila del Corral Certified Public Accountant
P.O. Box 10528
San Juan, PR 00922-0528
Jose E. Jimenez President and Owner of Cafe Yaucono
Cafe Yaucono
1103 Fernandez Juncos
Santurce, PR 00908
Jorge Farinacci Consultant
P.O. Box 1615
Bayamon, PR 00960-1615
Ramon Cantero President
The Capital Markets Corp.
Banco Bilbao Vizcaya, Suite 800
254 Munoz Rivera Avenue
Hato Rey, PR 00918
Agustin Cabrer Startlight Development Group
Suite 1002
San Juan, PR 00901-2414
I-4
<PAGE>
Ricardo Gonzalez Consultant
Toledo 12-2
Torrimar
Guaynabo, PR 00966
Jose Jose Alvarez Vice President and Secretary of V. Suarez & Co.,
Inc.
Officers
Name Principal Occupation
- ---- --------------------
Diego Suarez Sanchez Chairman
Vicente Suarez Sanchez Vice Chairman and Treasurer
Diego Suarez Matienzo President and CEO Assistant Secretary
Francisco Marrero Chief Financial Officer
Jose Jose Alvarez Vice President and Secretary
I-5
<PAGE>
EXHIBIT A
- --------------------------------------------------------------------------------
LIMITED LIABILITY COMPANY AGREEMENT
OF
DAKOTA HOLDINGS, LLC
DATED AS OF OCTOBER 15, 1999
- --------------------------------------------------------------------------------
A-1
<PAGE>
LIMITED LIABILITY COMPANY AGREEMENT
of
DAKOTA HOLDINGS, LLC
This Limited Liability Company Agreement (the "Agreement") is dated as
of October 15, 1999 by and among Pepsi-Cola Metropolitan Bottling Company, a
corporation formed under the laws of the State of New Jersey (hereinafter
referred to as "Metro"), Beverages, Food & Service Industries, Inc., a
corporation formed under the laws of the State of Delaware (hereinafter referred
to as "BFSI") and Pohlad Companies, a corporation formed under the laws of the
State of Minnesota (hereinafter referred to as "Pohlad Companies") (each a
"Member" and collectively, the "Members") and PepsiCo, Inc., a corporation
formed under the laws of the State of North Carolina ("PepsiCo").
PRELIMINARY STATEMENT
WHEREAS, PepsiCo and Pohlad Companies have enjoyed a successful
business relationship over the course of several years;
WHEREAS, as a result of such long established and successful
relationship, the Members desire to establish this joint venture for the purpose
of managing their respective investments in PepsiAmericas, Inc. (formerly
Pepsi-Cola Puerto Rico Bottling Company), a Delaware corporation ("PPR"), which
joint venture shall be a continuation of the joint venture conducted by BFSI and
Pohlad Companies since 1998 through P-PR Transfer LLP, a Delaware limited
liability partnership ("P-PR Transfer");
WHEREAS, the parties hereto have formed and established Dakota
Holdings, LLC, a Delaware limited liability company (the "Company") in
accordance with the principles of Internal Revenue Service Revenue Ruling 95-37;
and
WHEREAS, the parties intend that in exchange for membership interests
in the Company (i) Pohlad Companies will contribute the sole membership interest
in DakBev LLC, a Delaware limited liability company ("DakBev"), all of its stock
in Delta Beverage Group, Inc., a Delaware Corporation ("Delta") and its
partnership interest in P-PR Transfer, (ii) Metro will contribute the PepsiCo
Stock (as hereinafter defined), and all of its stock in Delta and (iii) BFSI
will contribute its partnership interest in P-PR Transfer as capital
contributions to the Company; and
WHEREAS, the Company will issue two classes of Interests to the
Members, Class A Membership Interests and Class B Membership Interests, with the
rights to profits, losses and the value of the Class B Membership Interests
being determined solely by reference to the PepsiCo Stock held by the Company;
and
WHEREAS, the respective Boards of Directors of the Members have
determined that it is in the best interests of the Members for the Company to
exchange the sole membership interest in DakBev and the stock of Delta
contributed by the Members for additional shares of PPR Class B Stock in a
nontaxable transaction under Section 351(a) of the Code pursuant to that certain
Exchange Agreement of June 28, 1999, by and among Pohlad Companies, Dakota
Beverage Company ("Dakota") and PPR (the "Dakota
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Exchange Agreement") and that certain Exchange Agreement dated of June 28, 1999
by and among PPR, Delta and the stockholders of Delta (the "Delta Exchange
Agreement").
WHEREAS, to further effect their mutual goals, the parties desire to
enter into this joint venture agreement and, contemporaneously with the
execution of this Agreement and the Contribution Agreement (defined below),
PepsiCo and PPR shall enter into the Bottle and Fountain Agreements (defined
below).
WHEREAS, the Members have caused a certificate of formation of the
Company, to be filed with the Office of the Secretary of State of Delaware, and
intend thereby and hereby, to form a limited liability company in accordance
with the Delaware Limited Liability Company Act (6 Del. C. 18-101 et seq.)
(hereinafter referred to as the "Act"), and all Members intend by the execution
hereof to be Members thereof; and
WHEREAS, the Members desire to provide for the operation and management
of the Company for the purposes stated herein;
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements contained herein, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Defined Terms.
As used in this Agreement and unless the context otherwise requires,
the following terms shall have the respective meanings set forth below:
"Additional Capital Contributions" has the meaning set forth in Section
3.5.
"Adjusted Capital Account Deficit" means with respect to any Member,
the deficit balance, if any, in such Member's Capital Account as of the end of
the relevant Fiscal Year, after:
(i) crediting to such Capital Account any amounts that such Member is
obligated to restore to the Company pursuant to Treasury Regulations Section
1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to the
penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5); and
(ii) debiting from such Capital Account the items described in Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), and (6).
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through
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one or more intermediaries, Controls, is Controlled by, or is under common
Control with, such Person.
"Agreement" means this Limited Liability Company Agreement.
"Annual Operating Plan" means, with respect to any Year, the operating
plan for the businesses of PPR and all of its direct and indirect subsidiaries
for such Year. Such plan shall set forth in reasonable detail satisfactory to
each Member, the strategic and financial objectives of the Company, including
the marketing plans (including key marketing initiatives, brand/package
strategies, channel strategies, pricing and CDA strategies), management plans
(including management selection limited to the Chief Executive Officer and the
Chief Financial Officer of PPR and each of its direct and indirect
subsidiaries), training programs, and operational and human resources
initiatives and advertising plans of PPR and each of its direct and indirect
subsidiaries with respect to the beverage products manufactured and/or sold and
distributed by PPR and such subsidiaries and any plan for the introduction of
any new beverage products for such Year. The Annual Operating Plan shall also
include a financial plan showing that PPR and each of its direct and indirect
subsidiaries has the consolidated financial capacity to perform its duties and
obligations under the Bottle and Fountain Agreements, specifically setting forth
the projected cash flows and balance sheet items (including capitalization
plans, capital expenditures, debt levels and methods of financing the operations
of PPR and each of its direct and indirect subsidiaries) of PPR and such
subsidiaries for such Year.
"Appraiser" means a firm of nationally recognized, independent business
appraisers.
"Bankruptcy" or "Bankrupt" means, with respect to any Member, such
Member's making an assignment for the benefit of creditors, becoming a party to
any liquidation or dissolution action or proceeding with respect to such Member
or any bankruptcy, reorganization, insolvency or other proceeding for the relief
of financially distressed debtors with respect to such Member, or a receiver,
liquidator, custodian or trustee being appointed for such Member or for a
substantial part of such Member's assets and, if any of the same occur
involuntarily, the same not being dismissed, stayed or discharged within ninety
(90) days or the entry of an order for relief against such Member under Title 11
of the United States Code. A Member shall be deemed Bankrupt if the Bankruptcy
of such Member shall have occurred.
"Bottle and Fountain Agreements" means the agreements listed on
Schedule 1 hereto in the forms previously agreed to by the parties.
"Capital Account" means an account to be maintained for each Member in
accordance with the Code and Treasury Regulations, which, subject to any
contrary requirements of the Code and Treasury Regulations,
shall be increased by the amount of money contributed by such Member to
the Company, if any; the Gross Asset Value of property, if any, contributed by
such Member to the Company (net of liabilities that are secured by such
contributed property, or that the Company is considered to assume or take
subject to under Code Section 752); the amount of any Company liabilities that
are assumed by such Member pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(c); allocations to such Member of Profits pursuant to Section
4.1 of this Agreement; and any items in the nature of income or gain which are
specially allocated to such Member pursuant to Sections 4.3, 4.4, 4.5 and 4.6;
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and decreased by (i) the amount of money distributed to such Member by
the Company; (ii) the Gross Asset Value of property distributed to such Member
by the Company (net of liabilities that are secured by such distributed property
or that such Member is considered to assume or take subject to under Code
Section 752); (iii) the amount of such Member's individual liabilities that are
assumed by the Company pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(c); (iv) allocations to the Member of Losses pursuant to
Section 4.1 and 4.2; and (v) any items in the nature of loss or deduction which
are specially allocated to such Member pursuant to Sections 4.3, 4.4, 4.5 and
4.6 of the Agreement.
The Members' respective Capital Accounts shall be determined and
maintained at all times in accordance with all the provisions of Treasury
Regulations Section 1.704-1(b) and this definition and other provisions of this
Agreement relating to the maintenance of Capital Accounts and/or the
determination and allocation of Profits, Losses, items thereof and items
allocated pursuant to Sections 4.3 and 4.4 shall be interpreted and applied in a
manner consistent with such Treasury Regulations.
"Capital Contribution" means contributions of cash or property made by
the Members to the Company pursuant to Article 3 hereof.
"Caribbean Region" shall mean the islands within the region known as
the Caribbean, including the islands listed in Exhibit 1 attached hereto.
"Cash Flow" means the gross cash proceeds from Company operations less
the portion thereof used to pay or establish reserves for all Company expenses,
debt payments, capital improvements, replacements and contingencies, plus the
net cash proceeds from all sales, other dispositions and refinancing of Company
property, less any portion thereof used to establish reserves.
"Class A Member" shall mean a Member that owns a Class A Membership
Interest.
"Class B Member" shall mean a Member that owns a Class B Membership
Interest.
"Class A Membership Interest" shall mean an Interest in the Company
with respect to which the rights to income, deductions, profits, losses and
distributions of any kind is determined by excluding the income, profits, losses
and value of the Company attributable to the PepsiCo Stock owned by the Company.
"Class B Membership Interest" shall mean an Interest in the Company
with respect to which all rights to income, profits, deductions, losses and
distribution of any kind are determined solely by reference to the PepsiCo
Stock, if any, owned by the Company. Class B Members have no voting or approval
rights with respect to Company matters, except as specifically stated herein
with respect to the PepsiCo Stock.
"Class A Percentage Interest" means, with respect to any Member as of
any date, the Class A Percentage Interest as set forth in Schedule 2 attached
hereto, as it may be amended from time to time.
"Class B Percentage Interest" means, with respect to any Member as of
any date, the Class B Percentage Interest as set forth on Schedule 2 attached
hereto, as it may be amended from time to time.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Dakota Holdings, LLC.
"Contribution Agreement" means the agreement among Pohlad Companies,
Metro, BFSI, PepsiCo and the Company reflecting Pohlad Companies', Metro's and
BFSI's Capital Contribution to the Company, dated October 15, 1999 and attached
hereto as Exhibit 2.
"Controls," "is Controlled by" or "under common Control with" means (i)
the direct or indirect ownership of more than fifty percent (50%) of the equity
interests (or interests convertible into or otherwise exchangeable for equity
interests) in a Person, or (ii) possession of the direct or indirect right to
vote in excess of fifty percent (50%) of the voting securities or elect in
excess of fifty percent (50%) of the Board of Directors or other governing body
of a Person (whether by securities, ownership, contract or otherwise) or (iii)
possession of the direct or indirect right to cast more than 50% of the votes
eligible to be cast by holders of voting securities of a Person.
"Current Multi-Year Business Plan" means, at any point in time, a
Multi-Year Business Plan that: (i) includes an Annual Operating Plan for the
then current year and (ii) has been duly approved by the Members and PPR's Board
of Directors.
"Delta Stock" means the issued and outstanding shares of Delta voting
common stock and non-voting common stock.
"Depreciation" means, for each Fiscal Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for each Fiscal Year,
except that if the Gross Asset Value of an asset differs from its adjusted basis
for federal income tax purposes at the beginning of such Fiscal Year,
Depreciation shall be an amount that bears the same ratio to such beginning
Gross Asset Value as the federal income tax depreciation, amortization, or other
cost recovery deduction for such Fiscal Year bears to such beginning adjusted
tax basis; provided, however, that if the federal income tax depreciation,
amortization, or other cost recovery deduction for such year is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the Members.
"Fiscal Year" means the Company's taxable year for federal income tax
purposes, which shall be the calendar year unless otherwise required by Section
706(b) of the Code.
"Franchised Bottler" means any person who is authorized by PepsiCo or
any Affiliate of PepsiCo to manufacture, bottle and sell PepsiCo proprietary
carbonated soft drink products pursuant to an Exclusive Bottling Appointment or
other agreement with PepsiCo or any Affiliate of PepsiCo.
"Gross Asset Value" means, with respect to any asset, the following:
(i) The initial Gross Asset Value of any asset contributed by a Member
to the Company shall be the gross fair market value of such asset, as determined
in accordance with paragraph (vi) of this definition;
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(ii) The Gross Asset Values of all assets of the Company shall be
adjusted to equal their respective gross fair market values, as of the following
times: (a) the acquisition of an additional interest in the Company by any new
or existing Member in exchange for more than a de minimis Capital Contribution;
(b) the distribution by the Company to a Member of more than a de minimis amount
of Company property as consideration for an interest in the Company; (c)
December 31, 1999; and (d) the liquidation of the Company within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(ii)(g). Notwithstanding the
foregoing, the adjustments pursuant to clauses (a) and (b) above shall be made
only if the Members determine unanimously that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Members in the
Company;
(iii) The Gross Asset Value of any Company asset distributed to any
Member shall be determined unanimously by the Members as of the date of
distribution in accordance with paragraph (vi);
(iv) The Gross Asset Value of the assets of the Company shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m),
subsection (vi) of the definition of Profits and Losses and Section 4.3(f) of
this Agreement; provided, however, that Gross Asset Value shall not be adjusted
pursuant to this paragraph (iv) to the extent that an adjustment was made
pursuant to paragraph (ii) of this definition in connection with any transaction
that would otherwise have resulted in an adjustment pursuant to this paragraph
(iv);
(v) In all other cases, the Gross Asset Value of an asset shall be its
adjusted basis for federal income tax purposes; and
(vi) For purposes of determining the Gross Asset Value of any asset,
the gross fair market value shall be as determined by the unanimous consent of
the Members provided, however, that if the Members cannot so agree on such fair
market value, the fair market value of Company Property shall be determined by
an independent third party appraisal firm with experience in the soft drink
business and agreed upon by the Members, with the costs of such appraisal to be
borne by the Company. Notwithstanding the above sentence, the Members agree for
purposes of the December 31, 1999 revaluation pursuant to paragraph (ii) of this
definition, the Gross Asset Value of PPR Class B Stock shall be its Closing
Price (as such term is defined in Section 1.5 of the Contribution Agreement).
If the Gross Asset Value of an asset has been determined or adjusted
pursuant to paragraph (i), (ii), or (iv) of this definition, the Gross Asset
Value of such asset shall thereafter be adjusted by the Depreciation taken into
account with respect to such asset for purposes of computing Profits and Losses.
"Member Nonrecourse Debt" means any "partner non-recourse debt" or
"partner non-recourse liability" as defined in Treasury Regulations Section
1.704-2(b)(4).
"Member Nonrecourse Debt Minimum Gain" means a Member's share of
"partner nonrecourse debt minimum gain" as determined pursuant to Treasury
Regulation Section 1.704-2(i)(5).
"Member Nonrecourse Deductions" means "partner nonrecourse deductions"
as defined in
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Treasury Regulation Sections 1.704-2(i)(1) and 1.704-2(i)(2).
"Membership Interest" or "Interest" as defined under the Act, means the
Class A Membership Interests and Class B Membership Interests and the
appurtenant rights thereunder to a share of the Profits and Losses of the
Company, to receive distributions of the assets and Cash Flow of the Company
and, with respect only to the Class A Membership Interests, to approve certain
actions relating to the management of the Company in accordance with the terms
of this Agreement or as otherwise provided by the Act.
"Minimum Gain" means "partnership minimum gain" as determined pursuant
to Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d).
"Multi Year Business Plan" means (i) the Annual Operating Plan and (ii)
a business plan for the two years immediately following the Year detailed in the
Annual Operating Plan. The business plan for such additional Years shall reflect
the strategic and financial objectives for PPR and its subsidiaries including
projections of sales, marketing and advertising plans and capital expenditures
relating thereto for such Years. The Multi Year Business Plan shall be updated,
revised and agreed upon each Year such that at all times it contains a detailed
Annual Operating Plan for the then current Year and such projections and plans
for the following two Years.
"Nonrecourse Deductions" shall have the meaning set forth in Treasury
Regulation Section 1.704-2(b)(1).
"Nonrecourse Liability" means any liability that is, or is treated as,
a nonrecourse liability of the Company for which no Member bears (or is treated
as bearing) the economic risk of loss, as determined pursuant to Treasury
Regulations Section 1.752-2.
"PepsiCo Stock" means that number of shares of capital stock of
PepsiCo, required to be contributed to the Company by Metro in exchange for
Membership Interests pursuant to the Contribution Agreement.
"Person" as defined in the Act, means a natural person, partnership
(whether general or limited), limited liability company, trust, estate,
association, corporation, custodian, nominee or any other individual or entity
in its own or any representative capacity.
"PPR Class A Stock" means the Class A Common Stock of PPR held by the
Company.
"PPR Class B Stock" means the Class B Common Stock of PPR held by the
Company.
"Profits and Losses" means for each Fiscal Year or other period, an
amount equal to the Company's taxable income or loss determined in accordance
with Code Section 703(a) (for this purpose, all items of income, gain, loss, or
deduction, whether or not required to be stated separately pursuant to Code
Section 703(a)(1), shall be included in taxable income or loss), with the
following adjustments:
(i) Any income of the Company that is exempt from federal income tax
and not otherwise taken into account in computing Profits or Losses shall be
added to such taxable income or loss;
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(ii) Any Code Section 705(a)(2)(B) expenditures of the Company (or
expenditures treated as such pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(i)) that are not otherwise taken into account in computing
Profits or Losses shall be subtracted from such taxable income or loss;
(iii) If the Gross Asset Value of any Company asset is adjusted
pursuant to paragraph (ii) or (iii) of the definition of Gross Asset Value, the
amount of such adjustment shall be taken into account in the year of such
adjustment as gain or loss from the disposition of such asset, for purposes of
computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of Company
property with respect to which gain or loss is recognized for federal income tax
purposes (or is deemed realized pursuant to paragraph (iii) above) shall be
computed by reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such Fiscal Year or other period;
(vi) To the extent that a Code Section 734(b) or Code Section 743(b)
adjustment is required to be taken into account in determining Capital Accounts,
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), the amount of
such adjustment shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases the basis of the
asset) from the disposition of the asset and shall be taken into account for
purposes of computing Profits or Losses;
(vii) Notwithstanding anything to the contrary in the
definition of the terms "Profits" and "Losses," any items that are specially
allocated pursuant to Sections 4.3 and 4.4 shall be excluded in computing
Profits or Losses; and
(viii) For purposes of this Agreement, any deduction for a loss on a
sale or exchange of Company property that is disallowed to the Company under
Code Section 267(a)(1) or Code Section 707(b) shall be treated as a Code Section
705(a)(2)(B) expenditure.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Treasury Regulations" means permanent and temporary regulations
promulgated by the United States Department of the Treasury, as such regulations
may be lawfully changed from time to time.
"Year" means each calendar year, or part thereof, occurring during the
existence of the Company.
Section 1.2 Interpretation
Each definition in this Agreement includes the singular and the plural,
and reference to the neuter gender includes the masculine and feminine where
appropriate. References to (i) any statute or Treasury Regulation means such
statute or regulation as amended at the time and include any successor
legislation or regulations and (ii) any agreement means such agreement as
amended at the time. The words "include"
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or "including" shall mean including without limitation based on the item or
items listed. The headings to the Articles and Sections are for convenience of
reference and shall not affect the meaning or interpretation of this Agreement.
Except as otherwise stated, reference to Articles, Sections, Schedules,
Appendices and Exhibits mean the Articles, Sections, Schedules, Appendices and
Exhibits of this Agreement. The Schedules, Appendices and Exhibits are hereby
incorporated by reference into and shall be deemed a part of this Agreement.
ARTICLE 2
FORMATION OF THE COMPANY
Section 2.1 Formation.
The Members acknowledge that the certificate of formation for Dakota,
LLC has been filed, on their behalf, with the Office of the Secretary of State
of Delaware on September 17, 1999. Each Member agrees to be bound by and to
comply with the provisions thereof and hereof.
Section 2.2 Consent to Dakota/PPR Exchange
In furtherance of the parties mutual goals, by execution of this
Agreement, each of PepsiCo, Metro and BFSI consents to the exchange by the
Company of the DakBev sole membership interest and the stock in Delta for PPR
Class B Common Stock (the "Exchanges") in accordance with the terms of the
Dakota Exchange Agreement, a copy of which is attached hereto as Exhibit 3, and
the Delta Exchange Agreement, a copy of which is attached hereto as Exhibit 4.
PepsiCo further agrees to provide such additional consents or agreements
necessary or appropriate to consummate the Exchanges including, but not limited
to, executing or otherwise providing the consents necessary under any Bottle and
Fountain Agreements or other contracts between or among the Company, PepsiCo and
DakBev, PPR or Delta (or the subsidiaries of any of the foregoing); and PepsiCo
hereby authorizes Pohlad Companies to cause P-PR Transfer to vote all shares of
PPR owned by P-PR Transfer in favor of the Exchanges.
Section 2.3 Liquidation of P-PR Transfer
The Company and the Members shall cause P-PR Transfer to be liquidated
and all of its rights, properties and assets to be distributed to the Company as
soon as possible and, in any event by no later than October 30, 1999. PepsiCo,
BSFI and Pohlad Companies agree that the Partnership Agreement of P-PR Transfer
LLP, including without limitation, Section 14.4 thereof, shall terminate and be
of no further force or effect upon such liquidation.
Section 2.4 Assignment of Rights to Acquire Delta Preferred Stock
(Series AA).
Pohlad Companies shall assign to PPR or Delta its rights pursuant to
the Amended and Restated Shareholders' Agreement dated as of September 23, 1993,
to purchase or acquire all of the issued and outstanding shares of Delta's
Preferred Stock (Series AA).
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Section 2.5 Registered Office.
The registered office in the State of Delaware shall be:
Corporation Trust Center
1209 Orange Street
Wilmington, DE 19801
Section 2.6 Registered Agent.
The registered agent in the State of Delaware for service of process
shall be CT Corporation.
Section 2.7 Purpose and Character of Business.
The Company has been formed to manage the Members' investment in, and
to hold and exercise voting control over, PPR and its Affiliates. It is the
intention of the Members that the Company operate exclusively as a holding
company, and shall not conduct any business operations except with respect to
the management of those investments. In furtherance of the foregoing, the
Company shall have the power to undertake and carry on all activities necessary
or advisable in connection with such activity. The Company may not engage in any
other business without consent of all Members.
Section 2.8 Duration.
The Company shall continue in perpetuity, unless it is sooner dissolved
pursuant to Section 11.2.
Section 2.9 Filings, Reports and Formalities.
The Company shall make all filings and submit all reports required to
be filed or submitted under the Act with respect to the Company, and shall make
such filings and take such other actions as may be required under the laws of
any jurisdiction where the Company conducts business. Throughout the term of the
Company, the Company shall comply with all requirements necessary to maintain
the limited liability status of the Company and the limited liability of the
Members under the laws of the State of Delaware and of each other jurisdiction
in which the Company does business.
ARTICLE 3
CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS
Section 3.1 Capital Accounts.
A Capital Account shall be established and maintained for each Member.
The provisions of this Agreement dealing with the maintenance of the Capital
Accounts and/or the determination and allocation of Profits, Losses, items
thereof and items allocated pursuant to Section 4.3 and 4.4 are intended to
comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and
applied in a manner consistent with such Treasury Regulations. Notwithstanding
that a particular adjustment is not set forth in this Agreement, the Capital
Accounts of the Members shall be adjusted and maintained as required by,
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and in accordance with, the capital account maintenance rules of Treasury
Regulations Section 1.704-1(b).
Section 3.2 Initial Capital Contribution by Pohlad Companies.
Pohlad Companies' acquisition of its Class A Membership Interest and
its Class B Membership Interest in the Company shall be effective upon the
contribution of the sole interest in DakBev, all of its Delta Stock and its
partnership interest in P-PR Transfer pursuant to the Contribution Agreement.
Section 3.3 Initial Contribution by Metro.
Metro's acquisition of its Class A Membership Interest and Class B
Membership Interest in the Company shall be effective upon its contribution of
the PepsiCo Stock and all of its Delta Stock pursuant to the Contribution
Agreement.
Section 3.4 Initial Contribution by BFSI.
BFSI's acquisition of its Class A Membership Interest in the Company
shall be effective upon the contribution of its partnership interest in P-PR
Transfer pursuant to the Contribution Agreement.
Section 3.5 Additional Capital Contribution.
Except as provided herein, no Member shall be obligated to make any
contribution of capital or assets to the Company other than its initial Capital
Contribution or to guarantee any loan to the Company. If the Members unanimously
approve an additional capital contribution (an "Additional Capital
Contribution") each Member shall contribute in cash or property, an amount (the
"Proportional Amount") equal to the total Additional Capital Contribution amount
so approved multiplied by that Member's Class A Percentage Interest. The Members
shall make such Additional Capital Contributions to the Company within ten (10)
business days following the approval by the Members of the Additional Capital
Contribution. No changes shall be made to the Percentage Interests of any Member
in connection with any Additional Capital Contribution made pursuant to this
Section 3.5.
Section 3.6 Return of Contributions.
No interest shall accrue on any contributions to the capital of the
Company. No Member shall have the right to withdraw or to be repaid any Capital
Contribution made by such Member except as otherwise provided herein or by the
Act.
Section 3.7 Additional Issuance of Interests; Additional Classes of
Interests.
(a) In order to raise additional capital, acquire assets, redeem or
retire debt of the Company or for any other purpose, the Company may issue
Interests in addition to those initially issued pursuant to Sections 3.2, 3.3
and 3.4 to any Member, or any other Person, and may admit such other Persons to
the Company as Members, for consideration, and on terms and conditions, all as
approved by unanimous consent of the Members in accordance with Section 6.3.
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(b) In accordance with Section 6.3, the Members may unanimously
determine to issue Interests in the Company from time to time in one or more
classes of Interests, or one or more series of such classes of Interests, which
classes or series shall have, subject to the provisions of applicable law, such
designations, preferences and relative, participating, optional or other special
rights as shall be approved by the unanimous consent of the Members, including,
without limitation, with respect to: (i) the allocation of items of Profits or
Losses to each such class or series; (ii) the right of each such class or series
to share in distributions; (iii) the rights of each such class or series upon
dissolution and liquidation of the Company; (iv) the price at which, and the
terms and conditions upon which, each such class or series may be redeemed by
the Company, if any such class or series is so redeemable; (v) the rate at
which, and the terms and conditions upon which, each such class or series may be
converted into another class or series of Interests; and (vi) the right of each
such class or series to vote on Company matters, including matters relating to
the relative rights, preferences and privileges of such class or series, if any
such class or series is granted any voting rights.
(c) If the Company issues new Interests in accordance with this Section
3.7, the Members shall amend Schedule 2 hereto to adjust each Member's
Percentage Interest as they may unanimously agree.
Section 3.8 Liability of Members; Ability to Bind the Company.
(a) No Member shall be personally liable for the debts, obligations or
liabilities of the Company solely by reason of being a Member of the Company.
Notwithstanding any provision herein to the contrary, in no event shall the
liability of any Member for the debts, obligations or liabilities of the Company
exceed such Member's Capital Contribution.
(b) A Member's Interest in the Company shall be personal property for
all purposes. All property owned by the Company shall be deemed to be owned by
the Company as an entity, and no Member shall be deemed to own any such property
or any portion thereof.
(c) Unless otherwise provided herein, no Member in its capacity as
such, shall have the right to act for or on behalf of or otherwise bind the
Company.
ARTICLE 4
ALLOCATIONS OF PROFITS AND LOSSES; SPECIAL ALLOCATIONS;
DISTRIBUTIONS; TAX ALLOCATIONS
Section 4.1 Allocations of Profits and Losses.
(a) Class A Membership Interests. After giving effect to the
allocations set forth in Section 4.1(b) for the Class B Membership Interests and
special allocations set forth in Sections 4.2, 4.3 and 4.4, all Profits and
Losses of the Company shall be allocated to the Members in proportion to their
Class A Membership Interests. Notwithstanding the previous sentence, any
reduction in the Gross Asset Value of PPR Class B Stock resulting from the
revaluation on December 31, 1999, pursuant to paragraph (ii) of the definition
of Gross Asset Value, shall be allocated entirely to Pohlad Companies in an
amount not to exceed the amount by which the reduction in the Gross Asset Value
of PPR Class B Stock would be if the Closing Price (as such term is defined in
Section 1.5 of the Contribution Agreement) of PPR Class B
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Stock were $2.92 per share. Any reduction in the Gross Asset Value of PPR Class
B Stock not allocated to Pohlad Companies pursuant to the preceding sentence
shall be allocated to the Members in proportion to their revised Class A
Membership Interests as calculated pursuant to Section 1.5 of the Contribution
Agreement.
(b) Class B Membership Interests. After giving effect to the special
allocations set forth in Sections 4.2, 4.3 and 4.4, all Profits and Losses of
the Company arising from or attributable to its investment in, or, ownership or
disposition of, PepsiCo Stock shall be allocated solely to the Class B Members
in proportion to their Class B Membership Interests.
Section 4.2 Limitation on Allocation of Losses.
Losses shall not be allocated to a Member to the extent an allocation
of such loss would cause or increase an Adjusted Capital Account Deficit of such
Member. If each Member would have an Adjusted Capital Account Deficit as a
consequence of such allocation of Losses, Losses shall be allocated to the
Members as set forth in Section 4.1. Prior to any subsequent allocation of
Profits under Section 4.1, Profits will first be allocated to the Members who
were allocated Losses as a result of this Section 4.2 until such prior
allocations of Losses are fully offset.
Section 4.3 Special Provisions Regarding Allocations of Profits and
Losses.
(a) Member Minimum Gain Chargeback. Notwithstanding any other provision
of this Article 4, if during any Fiscal Year there is a net decrease in Member
Nonrecourse Debt Minimum Gain, any Member with a share of that Member
Nonrecourse Debt Minimum Gain (determined in accordance with Treasury
Regulations Section 1.704-2(i)(5)) as of the beginning of such Fiscal Year must
be allocated items of Company income and gain for the Fiscal Year (and, if
necessary, for succeeding Fiscal Years) equal to that Member's share of the net
decrease in the Member Nonrecourse Debt Minimum Gain (determined in accordance
with Treasury Regulations Section 1.704-2(i)(4)); provided, however, that this
Section 4.3(a) shall not apply to the extent the circumstances described in the
third and fifth sentences of Treasury Regulations Section 1.704-2(i)(4) exist.
The items of Company income and gain to be allocated pursuant to this Section
4.3(a) shall be determined in accordance with Treasury Regulations Section
1.704-2(i)(4) and (j). This Section 4.3(a) is intended to comply with the
partner nonrecourse debt minimum gain chargeback requirement in Treasury
Regulations Section 1.704-2(i) and shall be interpreted consistently therewith.
(b) Minimum Gain Chargeback. Notwithstanding any other provision of
this Article 4 (except paragraph (a) of this Section 4.3), if there is a net
decrease in Minimum Gain for any Fiscal Year, each Member shall, in the manner
provided in Treasury Regulations Section 1.704-2(f), be allocated items of
Company income and gain for such year (and, if necessary, for subsequent Fiscal
Years) in an amount equal to such Member's share of the net decrease in Minimum
Gain, in accordance with Treasury Regulations Sections 1.704-2(f),(g) and (j);
provided, however, that this Section 4.3(b) shall not apply to the extent the
circumstances described in Treasury Regulations Sections 1.704-2(f)(2),
1.704-2(f)(3), 1.704-2(f)(4), or 1.704-2(f)(5) exist. The items of Company
income and gain to be allocated pursuant to this Section 4.3(b) shall be
determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and
(j). This Section 4.3(b) is intended to comply with the minimum gain chargeback
requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted
consistently therewith.
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(c) Qualified Income Offset. If any Member unexpectedly receives any
adjustments, allocations, or distributions described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that create or increase an Adjusted
Capital Account Deficit for such Member, items of Company income and gain
(consisting of a pro rata portion of each item of Company income, including
gross income, and gain for such year) shall be specially allocated to such
Member in an amount and manner sufficient to eliminate, to the extent required
by Treasury Regulations Section 1.704-1(b)(2)(ii)(d), the Adjusted Capital
Account Deficit for such Member as quickly as possible; provided, however, that
an allocation pursuant to this Section 4.3(c) shall be made if and only to the
extent that such Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Article 4 have been tentatively made as
if this Section 4.3(c) were not in this Agreement.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year
or other period shall be specially allocated as Losses as follows: (i)
Nonrecourse Deductions attributable to liabilities assumed by the Company from
Pohlad Companies (including all liabilities treated as being assumed by the
Company from Pohlad Companies for U.S. federal income tax purposes under Code
Section 752) shall be allocated entirely to Pohlad Companies, and (ii) all other
Nonrecourse Deductions shall be allocated among the Members in accordance with
their Class A Membership Interests.
(e) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions
for any Fiscal Year or other period shall be specially allocated in accordance
with Treasury Regulations Section 1.704-2(i)(1).
(f) Section 754 Adjustment. To the extent that any adjustment to the
adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such gain or loss shall be specially allocated to the
Members in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such section of the Treasury
Regulations. If deemed necessary, by the unanimous consent of the Managers, the
Tax Matters Member shall make the election permitted under Code Section 754.
Section 4.4 Curative Allocations.
The Members shall determine, by unanimous consent, if any special
allocations of items of income, gain, loss or deduction pursuant to Section 4.3
shall be taken into account in computing allocations in a subsequent Fiscal Year
(or portion thereof) pursuant to the other provisions of Article 4 so that the
net amount of any items so allocated and all other items allocated to each
Member pursuant to Article 4 shall, to the extent possible, be equal to the net
amount that would have been allocated to each Member pursuant to Article 4 if
the special allocations in Section 4.3 had not been made. In determining the
allocations under this Section 4.4, consideration must be given to future
allocations under Sections 4.3(a) and 4.3(b) that, although not yet required,
are likely to offset allocations under Sections 4.3(d) and 4.3(e).
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Section 4.5 Other Allocation Rules.
(a) For purposes of determining Profits, Losses or any other items
allocable to any period, Profits, Losses and any such other items shall be
determined on a daily, monthly or other basis, using any method that is
permissible under Code Section 706. If an Interest in the Company is Transferred
in accordance with and as defined in Article 9 of this Agreement, then except as
otherwise provided by Code Section 706, the Profits and Losses of the Company
and any other items of the Company shall be allocated between the periods before
and after the Transfer by the closing-of-the-books method. As of the date of
such Transfer, the transferee shall succeed to the Capital Account of the
transferor Member with respect to the Transferred Interest. This Section 4.5(a)
shall apply for purposes of computing a Member's Capital Account and for federal
income tax purposes.
(b) If any fees or other payments deducted for federal income tax
purposes by the Company are recharacterized by a final determination of the
Internal Revenue Service or a court in a determination or ruling with respect to
which no appeal or other relief is available (or the time within which the
applicable party or parties are required to initiate action to obtain such
relief has elapsed without the applicable party or parties having initiated such
action) as nondeductible distributions to any Class A Member or any Class B
Member, then, notwithstanding all other allocation provisions (other than the
special allocations pursuant to Section 4.3 hereof), gross income attributed to
the Class A Membership Interests or the Class B Membership Interests, as the
case maybe, shall be allocated to such Class A Member or such Class B Member, as
the case may be, (for each Fiscal Year in which such recharacterization occurs)
in an amount equal to the fees or payments recharacterized.
(c) Each "excess nonrecourse liability" of the Company within the
meaning of Treasury Regulation Section 1.752-3(a)(3) shall be allocated among
the Members in accordance with the manner in which the Nonrecourse Deductions
attributable to such liability will be allocated pursuant to Section 4.3(d).
Section 4.6 Tax Allocations Unless otherwise agreed by the Members, the
following elections will be made by the Company:
(a) In accordance with Code Section 704(c), the traditional method as
set forth in Treasury Regulations Section 1.704-3(b), shall, solely for tax
purposes, direct the allocation of income, gain, loss, and deduction with
respect to any Company property among the Members so as to take account of any
variation between the adjusted basis of such property to the Company for Federal
income tax purposes and its initial Gross Asset Value.
(b) In the event that the Gross Asset Value of any Company asset is
adjusted pursuant to paragraph (ii) or (iv) of the definition of Gross Asset
Value contained herein, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take into account any variation
between the Gross Asset Value of such asset immediately before such adjustment
and its Gross Asset Value immediately after such adjustment in the same manner
as under Code Section 704(c) using the traditional method as set forth in
Treasury Regulations Section 1.704-3(b).
(c) Except as provided in Section 4.6(a), for federal income tax
purposes, under the Code and Treasury Regulations, each Company item of income,
gain, loss and deduction shall be allocated among
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the Members in the same manner as its correlative item of "book" income, gain,
loss or deduction is allocated pursuant to this Article 4. Any elections or
other decisions relating to such allocations shall be made by the Members (or,
to the extent provided in Section 8.3, the Tax Matters Member) in any manner
that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section 4.6 are solely for purposes of federal,
state, and local taxes and shall not affect, or in any way be taken into account
in computing, any Member's Capital Account or share of Profits or Losses, other
items, or distributions pursuant to any provision of this Agreement.
ARTICLE 5
DISTRIBUTIONS; WITHHOLDING
Section 5.1 Distributions to the Members.
Other than liquidating distributions, which shall be made in accordance
with Section 11.4, or distributions made in accordance with Section 9.4, all
other distributions shall be made as follows:
(a) Distributions of cash to the Members shall be made from available
Cash Flow as follows:
(i) All Cash Flow remaining after distributions under Section
5.1(a)(ii) shall be distributed annually to the Class A Members in accordance
with their Class A Percentage Interests in effect at the time the distribution
is made.
(ii) Cash dividends paid to the Company and any Cash Flow with respect
to the PepsiCo Stock shall be distributed to the Class B Members annually in
proportion to the Class B Percentage Interests.
(b) Distributions in Kind. No distribution of Company property shall be
made without the unanimous consent of all Members. Notwithstanding the preceding
sentence, the Company may, at any time, distribute to the Class B Members all or
any portion of the PepsiCo Stock held by the Company and the Company can make
pro rata distributions of property to Pohlad Companies in accordance with
Section 9.4 hereof.
Section 5.2 Withholding.
All amounts withheld pursuant to the Code or any provision of any state
or local tax law with respect to any payment or distribution to a Member shall
be treated as amounts distributed to such Member pursuant to Section 5.1(a) and
shall be offset against other amounts otherwise distributable to such Member.
ARTICLE 6
MANAGEMENT OF THE COMPANY
Section 6.1 Management of the Company.
The responsibility for the day to day management of the Company shall
be vested in Pohlad
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Companies or one of its Affiliates. The Members agree that Pohlad Companies
shall have the authority to act on behalf of the Company in connection
therewith, subject in all cases, however, to the provisions of Section 6.3. The
Members intend, and Pohlad Companies specifically recognize and agree, that the
Company's affairs will at all times be conducted in furtherance of the Current
Multi Year Business Plan [or, if none, the Multi Year Business Plan most
recently approved by the Members].
Section 6.2 Authority of Pohlad Companies.
Subject to Section 6.3, Pohlad Companies shall have all necessary
powers to carry out the purposes and business of the Company in furtherance of
the Current Multi Year Business Plan or, if none, the Multi Year Business Plan
most recently approved by the Members. Without limiting the foregoing, except as
otherwise expressly provided in this Agreement, the Pohlad Companies shall have
the following specific rights and powers:
(a) To the extent of Company assets, to prosecute, defend, settle or
compromise actions or claims at law or in equity at the Company's expense as may
be necessary or proper to enforce or protect the Company's interests provided
that, approval of any settlement to be entered into by an Indemnified Party (as
hereinafter defined) pursuant to Section 6.7(c) shall require unanimous consent
of those Members who are not Indemnified Parties; and to satisfy any judgment,
decree, decision or settlement of any such suit or claim, first, out of any
insurance proceeds available therefor, and next, out of the Company's assets and
income.
(b) To authorize the entry into and performance of contracts and
agreements and to do and perform all such other things as may be in furtherance
of Company purposes; and to authorize a Member to execute, acknowledge and
deliver on behalf of the Company any and all instruments which may be deemed
necessary or convenient to effect the foregoing.
(c) To acquire and enter into any contract of insurance which the
Pohlad Companies deems necessary and proper for the protection of the Company or
for any purpose beneficial to the Company.
Section 6.3 Unanimous Vote Required.
Unanimous approval of the Members shall be required in the following
circumstances unless the matter is specifically contemplated in the then
effective Multi Year Business Plan:
(a) Any material change in the business or purpose of the Company from
the business described in Section 2.7 hereof and any material deviation from the
Multi Year Business Plan;
(b) The sale, lease, transfer or other disposition of any assets of the
Company outside the ordinary course of business, other than distributions made
pursuant to and in accordance with Articles 5 or 9 hereof;
(c) Any voluntary liquidation, dissolution or termination of the
Company;
(d) The issuance by the Company of any additional Interests or other
equity interests (including any interests convertible into or exchangeable for
equity interests) of the Company, or the
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admission of a new Member to the Company pursuant to Section 3.7;
(e) Any amendment to this Agreement or to the certificate of formation
of the Company;
(f) The necessity for, amount and timing of, Additional Capital
Contributions;
(g) Any split, combination or reclassification of any Interests;
(h) Any registered public offering of any equity interests of the
Company;
(i) The establishment by the Company of any joint venture with a third
party or the acquisition of all or part of any other business person or entity;
(j) The approval of the making of any investment (except as otherwise
addressed in Section 6.3(i) above) or capital expenditures, take-or-pay
arrangements or significant operating arrangements;
(k) The entry by the Company into any contract, agreement or
arrangement providing for the lending of funds by the Company or the provision
by the Company of a guaranty;
(l) The entry by the Company into any contract, agreement or
arrangement with, making any loan to or guarantee of any indebtedness of, a
Member or any Affiliate of any Member or any officer or employee thereof and any
amendment or modification of any of the foregoing;
(m) The initiation or settlement of any litigation material to the
business of the Company;
(n) The selection of a replacement accounting firm to represent the
Company in lieu of the accounting firm named in Section 13.1, as necessary;
provided, however, that such approval shall not be required where the
replacement accountants are a "Big 5" accounting firm without an existing
conflict issue with any Member or the Company;
(o) Any borrowing of money, assumption or guarantee of any indebtedness
or other obligations, or issuing any debt securities.
(p) Any agreement with any other person or entity restricting or
constraining the Company's right to vote its shares of PPR.
Any action taken by the Company in connection with matters requiring
unanimous approval of the Members as set forth above or elsewhere in this
Agreement without unanimous approval of the Members shall be null and void and
of no legal effect and shall constitute a Deadlock Event in accordance with
Section 9.4 hereof.
The Members acknowledge and agree that each Member shall be free to
exercise its own judgment in connection with any provision contained herein
requiring a unanimous vote of the Members, which judgment may be in accordance
with its own best interest. At no time shall the use of a reasonableness
standard in this Agreement impose a duty on a Member to act or vote in the best
interests of the Company.
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Section 6.4 Meetings of the Members.
The Members shall meet quarterly for the proper conduct of the business
of the Company. The Members may unanimously determine to cancel any quarterly
meeting. Special Meetings of the Members may be called by any Member. In no
event shall any meeting of the Members be held upon less than ten (10) days
prior written notice to all Members. All discussion, presentation and
distribution materials to be discussed, presented or distributed at any Meeting
of the Members shall be provided to the Members at least one (1) week in advance
of such meeting.
Section 6.5 Joint Representative
For purposes of this Agreement, each of BFSI and Metro hereby appoint
PepsiCo as their joint representative (the "Joint Representative"). BFSI and
Metro may change their Joint Representative at any time and from time to time by
written notice to Pohlad Companies. The written approval of the Joint
Representative shall constitute the written approval of each of BFSI and Metro
for all purposes of this Agreement.
Section 6.6 Quorum.
The presence, in person or by proxy, of representatives of Pohlad
Companies and one other Member, shall constitute a quorum for the transaction of
business at any meeting of the Members.
Section 6.7 Compensation.
Pohlad Companies shall not receive any compensation for services
rendered in its capacity as day-to-day manager of the Company's business.
Section 6.8 Action Without a Meeting.
Any action required or permitted to be taken only by unanimous vote of
the Members may be taken without a meeting if (i) an advance notice, which shall
describe the nature of such proposed action in sufficient detail to allow each
Member to adequately evaluate such action, is sent to each Member prior to such
action being consented to, and (ii) all Members consent in writing to the taking
of the action and (iii) the writing or writings are filed with the minutes of
proceedings of the Members. No meeting shall be required for the taking of any
action which does not require the unanimous consent of the Members.
Section 6.9 Liability for Certain Acts.
(a) Pohlad Companies shall perform its duties as manager of the
Company's day-to-day operations in good faith, in a manner reasonably believed
to be in the best interests of the Company, with such care as an ordinarily
prudent person in a like position would use under similar circumstances, and in
accordance with the terms of this Agreement. If Pohlad Companies so performs its
duties, it shall not have any liability by reason of its actions in that
capacity. Pohlad Companies do not, in any way, guarantee the return of the
Members' Capital Contributions or a profit for the Members from the operations
of the Company. Pohlad Companies shall not be liable to the Company or to any
Member by reason of any act, omission, or alleged act or omission arising out of
any of its activities or alleged
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activities on behalf of the Company or in furtherance of the interests of the
Company; provided, however, that this Section 6.9 shall be of no force or effect
if the act, omission, or alleged act or omission upon which such actual or
threatened action, proceeding or claim is based was performed or omitted as a
result of gross negligence or willful misconduct or a knowing and material
breach by Pohlad Companies of this Agreement or the Multi-Year Business Plan.
(b) The Company shall indemnify and hold Pohlad Companies harmless from
and against any claim, loss, expense, damage or injury suffered or sustained by
it (including, but not limited to, any judgment, award, settlement, reasonable
attorney's fees, and other costs or expenses incurred in connection with the
investigation and defense of any actual or threatened action, proceeding, or
claim) (i) related to, or arising out of, any claim that Pohlad Companies is
liable for any debt, obligation or liability of the Company or is directly or
indirectly required to make any payments in respect thereof or in connection
therewith, and (ii) by reason of any act, omission, or alleged act or omission,
arising out of Pohlad Companies activities or alleged activities on behalf of
the Company or in furtherance of the interests of the Company; provided,
however, that this Section 6.9(b) shall be of no force or effect if the act,
omission, or alleged act or omission upon which such actual or threatened
action, proceeding or claim is based was performed or omitted as a result of
gross negligence or willful misconduct or a knowing and material breach by
Pohlad Companies of this Agreement or the Multi-Year Business Plan.
(c) Each party to be indemnified (an "Indemnified Party") under
paragraph (b) or (d) of this Section 6.9 shall give the Company notice of any
losses, claims, damages, and liabilities subject to the indemnity within thirty
(30) days after the Indemnified Party has received actual notice thereof. The
Company shall be entitled to participate in or direct the defense of any action
in connection with the reported losses, claims, damages, and liabilities,
provided that counsel, reasonably satisfactory to the Indemnified Party, is
employed. The Company shall not be liable to an Indemnified Party in respect of
settlements effected by the Indemnified Party without the written consent of the
Company.
(d) The Company shall pay in advance any legal or other expenses
incurred in investigating or defending against any loss, claim, damage or
liability which may be subject to indemnification under this Section 6.9, upon
receipt of an undertaking from the Indemnified Party on whose behalf such
expenses are paid to repay such amount if it shall ultimately be determined that
such Indemnified Party is not entitled to be indemnified by the Company. The
Company shall purchase insurance, to the extent available at reasonable cost, to
cover losses, claims, damages or liabilities subject to indemnification under
Section 6.9.
Section 6.10 Board Representation for Franchised Bottlers.
For each Franchised Bottler in which a controlling interest is held
directly or indirectly by the Company or PPR, PepsiCo shall have the right to
designate one member of the Board of Directors of the Franchised Bottler and
Pohlad Companies shall have the right to designate all other members of such
Board. The Company and each of the Members shall take all actions within their
respective powers to cause all such nominees to be elected.
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ARTICLE 7
PROVISIONS RELATING TO PEPSI-COLA
PUERTO RICO BOTTLING COMPANY
Section 7.1 General.
With respect to the Company's investment in PPR and PPR's investments
in its subsidiaries, the Members hereby agree that each of them and the Company
shall comply with the provisions of this Article 7 for so long as the Company,
directly or indirectly, owns or controls shares of the capital stock of PPR
which entitles the Company to cast a majority of the votes at a shareholders
meeting of PPR.
Section 7.2 Voting of PPR Shares.
The Company shall vote its shares of PPR at all times such that one (1)
member of the Board of Directors of PPR and each of its direct subsidiaries and
any material indirect subsidiary designated from time to time by PepsiCo shall
be that person designated by PepsiCo on behalf of Metro and BFSI (the "PepsiCo
Director"). Pohlad Companies shall have the right to designate and vote the
Company's shares of PPR for all other members of the Boards of Directors of PPR
and its subsidiaries, subject, however, to the rules of the New York Stock
Exchange requiring the election of two (2) independent directors (the
"Independent Directors"). All directors that may be designated by Pohlad
Companies in its sole and absolute discretion, other than the Independent
Directors, are referred to as the "Pohlad Directors". In order of priority, the
Company's voting power shall be exercised first to elect the PepsiCo Director,
second to elect the Independent Directors and, third to elect the Pohlad
Directors.
Section 7.3 Management.
The Company and each Member shall take all the steps within its power
to cause:
(a) PPR and each subsidiary that requires a separate audit to establish
and maintain an Audit Committee of its board of directors and the appointment of
the PepsiCo Director to such Audit Committees.
(b) PPR to deliver to PepsiCo consolidated monthly financial statements
of PPR (consisting of a balance sheet, income statement and statement of cash
flows) no later than forty-five (45) days after the end of each month.
(c) The appointment of one of the "big five" international accounting
firms to serve as the independent auditors of PPR and each subsidiary.
Section 7.4 Approval Rights of PepsiCo Director.
The Company and each Member shall take all steps within their
respective power to cause PPR's board of directors and the boards of directors
of each direct and indirect subsidiary of PPR to implement control mechanisms
requiring all the actions listed below to be submitted to PPR's or such
subsidiary's
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board of directors. The Company and each Member shall take all steps within
their power to prevent the taking of any of the following actions by PPR or any
subsidiary unless such action is either expressly contemplated by the then
current Multi Year Business Plan or is expressly approved by BFSI or Metro:
(a) Any material change in the business or purpose of PPR or any of its
subsidiaries from its then current business or purpose;
(b) Any merger or consolidation involving PPR or any of its
subsidiaries;
(c) Making any investment or capital expenditure or the sale, lease,
transfer or other disposition of any assets of PPR or any subsidiary in excess
of $5 million individually or together with a series of related transactions in
a 12 month period outside the ordinary course of business;
(d) Any voluntary liquidation, dissolution or termination;
(e) The issuance of any shares of capital stock or any debt securities
convertible into or exchangeable for shares of capital stock, or issuing or
granting any warrant, option or other right to acquire shares of capital stock
or securities convertible into or exchangeable for shares of capital stock,
other than; (i) the grant of options and issuance of shares pursuant to the
exercise thereof under any employee stock option plan in existence as of the
date hereof; or (ii) the issuance of shares of capital stock pursuant to the
exercise of any warrant outstanding as of the date hereof;
(f) The establishment by PPR or any subsidiary of any joint venture
with a third party or the acquisition of all or part of any other business
person or entity;
(g) The appointment of any replacement Chief Executive Officer and/or
Chief Financial Officer;
(h) The approval of a Multi Year Business Plan, or any material
amendments thereto or deviations therefrom;
(i) The making of any take-or-pay arrangement or significant operating
arrangement in excess of $5 million individually or together with a series of
related transactions during any Year.
(j) The entry by PPR or any subsidiary into any contract, agreement or
arrangement providing for the lending of funds or the provision of a guaranty,
except in the ordinary course of business;
(k) The addition of any new beverage product or package to the beverage
products and packages currently manufactured and/or distributed by PPR or such
subsidiary or the discontinuance and/or disposition of any beverage product or
package currently manufactured and/or distributed by PPR or such subsidiary;
provided, however, that consent to the discontinuance of any beverage product or
package shall be viewed by Metro and BFSI in a manner which is consistent with
their historical practice on such matters.
(l) Any new borrowing of money, assumption or guarantee of any
indebtedness or other obligations, or issuing any debt securities which, based
on a reasonable forecast for the 12 months
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following the anticipated closing of such borrowing made available to the Board
of Directors, would have the effect of causing PPR's "Interest Coverage Ratio"
to fall below 2.5 to 1. For purposes of this subsection 7.4(l), the term
"Interest Coverage Ratio" shall mean the ratio of: (i) PPR's and it's
subsidiaries' annual net income before deduction for interest expense, income
tax expense, depreciation expense and amortization expense; to (ii) PPR's and
such subsidiaries' annual interest expense (including any anticipated payments
of dividends on preferred stock and the interest component of payments on
capitalized leases), in all cases, on a consolidated basis.
(m) The selection of a replacement accounting firm to represent PPR or
any subsidiary in lieu of Arthur Andersen, provided, however, that such approval
shall not be required where the replacement accountants are a "Big 5" accounting
firm with no existing conflict issue with any Member, the Company or PPR.
(n) The entry into any contract, agreement or arrangement with or for
the benefit of a Member or any Affiliate of any Member or any officer or
employee thereof and any amendment or modification of any of the foregoing.
(o) The payment of any dividends.
The foregoing is not intended, nor shall it be construed to constitute,
any limitation or restriction on any director of PPR or a subsidiary thereof to
act in compliance with his or her fiduciary obligation to PPR or such
subsidiary. However, the taking of any of the foregoing actions by PPR or any of
its subsidiaries without the approval of BFSI or Metro shall be treated as a
Deadlock Event in accordance with Section 9.4 hereof.
Section 7.5 Annual Operating Plan.
(a) The Multi Year Business Plan as agreed upon by the Members for the
three Years immediately following the execution of this Agreement is annexed
hereto as Exhibit 5. The Company and the Members shall take all steps within
their power to; (i) cause the Boards of Directors of PPR and its subsidiaries to
adopt the Multi Year Business Plan; (ii) cause PPR to develop and prepare Multi
Year Business Plans for presentation to the Board of Directors for each
subsequent Year and present the Multi Year Business Plan to the Board of
Directors at least ninety (90) days prior to the commencement of each such Year.
(b) If a Multi Year Business Plan is not approved by the Board of
Directors for any subsequent year, PPR and its subsidiaries will continue to
operate in accordance with the most recently approved Multi Year Business Plan.
ARTICLE 8
RECORDS, ACCOUNTING MATTERS, TAX MATTERS MEMBER
Section 8.1 Maintenance and Review of Records.
The Company shall maintain, at the office of the Company or of its
accountant, books, records,
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and accounts showing separately, in accordance with generally accepted
accounting principles, all items that in any way affect the financial and tax
computations called for by this Agreement, and shall make the records, and
accounts available for inspection and copying by any Member or its authorized
representative at all reasonable times. Each Member shall have the right to (i)
review all financial books, records, reports and statements of the Company, (ii)
review all financial controls and processes of the Company, (iii) ensure that
all such books, reports, statements, controls and processes are in accordance
with generally accepted accounting principles applied on a consistent basis, and
(iv) authorize, supervise and direct any audit of the Company by the Company's
accountants. The Company shall be responsible for any fees and expenses from the
accountants associated with such audit.
Section 8.2 Accounting Method.
The Company shall prepare its financial statements and tax returns
using the accrual method of accounting and generally accepted United States
financial and tax accounting principles, respectively.
Section 8.3 Tax Matters Member.
Pohlad Companies or an Affiliate shall be the tax matters partner ("Tax
Matters Member") of the Company for purposes of Code Section 6231. The Tax
Matters Member shall perform the following:
(a) Prepare and file or supervise the preparation and filing of the
Company's federal, state and local or other partnership tax returns.
(b) Furnish or cause to be furnished to the Members all necessary or
appropriate tax information within ninety (90) days after the close of the
Fiscal Year of the Company.
(c) Prepare or cause to be prepared, within five (5) days after
completion of the monthly financial statement of PPR, a financial report for
such month, and shall cause a copy of the report to be furnished to the other
Members. Such copy shall include a balance sheet as of the last day of the
calendar month and a statement of income or profit and loss for the calendar
month and the year-to-date period including that calendar month. The statement
of income or profit and loss shall disclose the amount of and any changes in
profit or loss, and shall show in particular the amounts of depreciation,
amortization, interest, and extraordinary income or charges, whether or not
included in the operating income.
(d) Cause to be prepared and furnished to the Members, within ninety
(90) days after the close of the Fiscal Year, audited financial statements of
the Company.
(e) Furnish the name, address, profits interest and taxpayer
identification number of each Member to the Internal Revenue Service and take
such action as may be reasonably necessary to constitute every Member as a
"notice partner" as that term is defined in Code Section 6231.
(f) Refuse to extend the statute of limitations with respect to tax
items of the Company without the unanimous written consent of the Members.
(g) Elect the accrual method of accounting for the Company and make any
other tax elections on behalf of the Company as the Tax Matters Member, subject
to Section 4.6(c), deems necessary and
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advisable; provided, however, that the election under Code Section 754 or any
election to be classified for federal tax purposes as other than a partnership
shall be made only with the unanimous consent of the Members.
Nothing in this Section shall limit the ability of any Member to take
any action in its individual capacity relating to administrative proceedings of
Company matters that is left to the determination of any individual Member under
the Code or under any similar state or local provision.
The Tax Matters Member will be entitled to reimbursement from the
Company for all reasonable costs and expenses incurred by it in complying with
and carrying out its responsibilities as Tax Matters Member.
ARTICLE 9
RESTRICTIONS ON TRANSFER; DEADLOCK; APPRAISAL PROCEDURE
Section 9.1 Restrictions on Transfers.
(a) Except as otherwise provided in Section 9.2 or 9.4, no Member may
sell, assign, convey, transfer, give, donate or otherwise dispose of
(collectively, "Transfer") or mortgage, pledge, hypothecate, assign as security
or otherwise encumber (collectively, "Encumber"), or contract to Transfer or
Encumber, any of its Interest, without the prior written consent of the other
Members, which consent may be withheld or conditioned in such other Member's
sole discretion. No noncomplying Transfer or Encumbrance or purported Transfer
or Encumbrance (an "Ineffective Transfer") pursuant to which any Person shall
attempt to acquire any Interest other than in accordance with the provisions of
this Agreement, shall be recognized by the Company. An Ineffective Transfer
shall be null and void and shall not be recorded as a transfer on the transfer
records of the Company.
(b) Indirect Assignments of Metro's and BFSI's Interest. PepsiCo shall
not permit the assignment or transfer of voting control of Metro or BFSI, or of
any transferee of either of them under Section 9.2, to any Person other than an
Affiliate of PepsiCo without the prior written consent of Pohlad Companies,
which consent may be withheld or conditioned in Pohlad Companies' sole
discretion.
(c) Indirect Assignments by Pohlad Companies. Pohlad Companies shall
not permit the assignment or transfer of voting control of Pohlad Companies, or
of any transferee of Pohlad Companies under Section 9.2, to any Person other
than an Affiliate of any of Robert C. Pohlad, James O. Pohlad or William M.
Pohlad or their immediate family members, without the prior written consent of
PepsiCo, which consent may be withheld or conditioned in PepsiCo's sole
discretion.
Section 9.2 Transfers to Affiliates.
Metro and BFSI may at their sole discretion transfer their respective
Interests to any wholly-owned subsidiaries of PepsiCo, provided that PepsiCo
shall notify Pohlad Companies, in writing, of such transfer and any such
transferee shall agree prior to such transfer to be bound by the terms of this
Agreement and shall, to the extent requested by Pohlad Companies, comply with
the provisions of Section 9.3. Pohlad
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Companies may at its sole discretion transfer its Interest to any Affiliate of
Pohlad Companies, Robert C. Pohlad, James O. Pohlad or William M. Pohlad or
their immediate family members, provided that Pohlad Companies shall notify
PepsiCo, in writing, of such transfer and any such transferee shall agree prior
to such transfer to be bound by the terms of this Agreement and shall, to the
extent requested by PepsiCo, comply with the provisions of Section 9.3.
Section 9.3 Opinions of Counsel.
As a condition to granting the consent described in Section 9.1 or
pursuant to a transfer described in Section 9.2, the non-transferring Member
may, but is not required to, request that the transferring Member provide an
opinion of counsel, acceptable to the remaining Member, that such transfer or
disposition (i) does not require registration or other qualification under the
Securities Act, (ii) does not require registration or other qualification under
applicable state securities or "Blue Sky" laws, (iii) does not violate any state
securities or "Blue Sky" laws (including any investment suitability standards)
applicable to the Company or to the Interest to be transferred, (iv) does not
result in the Company being treated as an association taxable as a corporation,
or otherwise as an entity not taxable as a partnership for federal income tax
purposes, and (v) does not result in the Company being treated as a "publicly
traded partnership" as such term is defined in Code Section 7704 and the
Treasury Regulations promulgated thereunder.
Section 9.4 Deadlock Event.
(a) It is the essence of the parties agreement that, at all times, PPR
and all of its subsidiaries shall be operated and shall perform, in all material
respects, as contemplated in a Current Multi-Year Business Plan. As the
operating company, PPR and its employees will take the lead in preparing the
Multi-Year Business Plan and the assumptions and models upon which it is based.
The Members will give input in the planning process and will approve or
disapprove of the final product.
(b) Each of the following shall constitute a "Dead Lock Event".
(i) the absence of a Current Multi-Year Business Plan;
(ii) PPR's failure to present a Multi-Year Business Plan as
required under Section 7.5 hereof;
(iii) a Deadlock Event under Section 6.3 or 7.4 hereof;
(iv) PPR and its subsidiaries, taken as a whole, fail in any
material respect to operate and perform in accordance with the then
current Multi-Year Business Plan (including without limitation
maintaining an Interest Coverage Ratio of at least 2.5 to 1 or such
other ratio as may be included in the Current Multi-Year Business Plan)
and such failure continues for a period of six (6) months.
(c) Each party hereto agrees to give notice to each other party upon it
becoming aware of the existence of a Deadlock Event (such notice constituting a
"Deadlock Event Notice"). Once such Deadlock Event Notice has been given,
PepsiCo, on behalf of BFSI and Metro, and Pohlad Companies shall consult with
each other in good faith on a regular basis during the one hundred and twenty
(120) day
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period following the giving of such Deadlock Event Notice in an effort to
resolve such Deadlock Event (the "First Resolution Period"). Within thirty (30)
days after the end of the First Resolution Period, such thirty (30) day period
being subject to extension by mutual agreement of Pohlad Companies and PepsiCo,
PepsiCo and Pohlad Companies shall cause their respective Chief Executive
Officers, or their delegates, to meet and consult with each other in good faith
at a mutually agreeable place to resolve such Deadlock Event (the "Second
Resolution Period"). The Second Resolution Period shall end thirty (30) days
after such meeting. In the event such officers are unable to resolve the
Deadlock Event before the end of the Second Resolution Period, the Members may
mutually agree to submit such matter to non-binding mediation on such terms as
they may agree or either Member may give written notice to the other Members of
a continuing Deadlock Event (a "Continuing Deadlock Event Notice"). In the event
such Continuing Deadlock Notice is given, PepsiCo shall have a period of thirty
(30) days within which to elect to purchase Pohlad Companies Class A Membership
Interest at the value determined in accordance with the appraisal procedure set
forth in Section 9.5. If PepsiCo takes no such action thirty (30) days after
receipt of the Continuing Deadlock Event Notice, such Deadlock Event shall be
deemed immediately to terminate, without prejudice to any party's right to issue
additional Deadlock Event Notices to the other parties in respect of the same
Deadlock Event or any other Deadlock Event in accordance with the procedures set
forth above. The Continuing Deadlock Event Notice shall be deemed to have been
given when delivered in person or by courier or transmitted by facsimile,
receipt confirmed by telephone or electronic means, or three (3) days after
being deposited in the United States mail, postage prepaid, and addressed as set
forth in Section 13.3. Any Deadlock Event arising solely under clauses 9.4(b)(i)
or (ii) above shall be deemed to be resolved upon the subsequent adoption of a
Current Multi-Year Business Plan.
(d) In the event of a Deadlock Event arising solely under clause
9.4(b)(iv), if, prior to the giving of a Continuing Deadlock Event Notice in
respect of such Deadlock Event, Pohlad Companies demonstrates to PepsiCo's
reasonable satisfaction that it and PPR have taken all commercially reasonable
steps within their control to operate PPR and its subsidiaries and to cause PPR
and its subsidiaries to perform in accordance with the then current Multi-Year
Business Plan, PepsiCo's right to elect to purchase Pohlad Companies Class A
Membership Interest shall be stayed until the earlier to occur of : (i) PepsiCo
determining, in its reasonable judgement, that Pohlad Companies and PPR and its
subsidiaries are not taking all commercially reasonable steps within their
control to operate PPR and its subsidiaries and to cause PPR to perform in
accordance with the then current Multi-Year Business Plan or (ii) (subject to
possible extension as provided below) the second anniversary of the giving of
the Deadlock Event Notice. If, during the pendency of any such stay, PPR's
operations and performance are brought back into compliance in all material
respects with the then current Multi Year Business Plan, and such compliance is
maintained for a period of at least twelve (12) consecutive months, PepsiCo's
right to elect to purchase Pohlad Companies Class A Membership Interest in
respect of the original Deadlock Event in question shall terminate. In the event
the second anniversary of the giving of the original Deadlock Event Notice falls
within a period of compliance, the stay of PepsiCo's right to elect to Purchase
Pohlad Companies Class A Membership Interest shall be further stayed beyond such
second anniversary until the earlier to occur of (i) the end of such period of
compliance or (ii) the termination of that right to purchase under the
immediately preceding sentence.
(e) If at any time PepsiCo acquires the right under this Section 9.4 to
elect to purchase Pohlad Companies' Class A Membership Interest and PepsiCo does
not elect to so purchase Pohlad Companies' Class A Membership Interest and,
within thirty (30) days after PepsiCo's failure or refusal to purchase
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Pohlad Companies' Class A Membership Interest, Pohlad Companies notifies PepsiCo
that Pohlad Companies has determined that it can no longer continue in the
relationship and wishes to end its participation in the Company, PepsiCo and the
Members shall meet to discuss potential exit options for Pohlad Companies. As
part of those discussions, if requested to do so by Pohlad Companies, PepsiCo
shall use its best efforts to designate one or more Franchised Bottlers that it
would be willing to pre-approve as an acquirer of Pohlad Companies' Class A
Membership Interest (an "Approved Acquirer"). Pohlad Companies' recognizes that
any such bottler would need to be in good standing as a Franchised Bottler and
have, in PepsiCo's reasonable judgement, adequate capital to effect the
transaction. In the event that, within 90 days (subject to extension of such
period by agreement of PepsiCo and the Members) of PepsiCo's designation of an
Approved Acquiror, Pohlad Companies successfully negotiates with any such
Approved Acquirer a transfer of Pohlad Companies' Class A Membership Interest to
such Approved Acquirer, each of Metro, BFSI and PepsiCo agree to consent to and
approve such transfer. Notwithstanding the foregoing, each of PepsiCo, Metro and
BFSI shall have the right to condition such consent and approval upon the
Approved Acquirer agreeing to also acquire Metro and BFSI's respective Class A
Membership Interests on the same terms and conditions and at the same time as it
acquires Pohlad Companies' Class A Membership Interest. Although neither
PepsiCo, Metro nor BFSI shall be under any obligation to approve a transfer of
Pohlad Companies' Class A Membership Interest to anyone who has not been
specifically designated by PepsiCo as an Approved Acquiror, Pohlad Companies
shall be free, during the period while it is negotiating a transfer of its Class
A Interest to an Approved Acquiror, to discuss the possibility of a transfer
with any other Franchised Bottler. Participation by any such Franchised Bottler
in any such discussions shall not constitute a breach of such Franchised
Bottler's bottling appointments.
(f) In the event PepsiCo is unable to designate one or more Approved
Acquirers within thirty (30) days after having been asked to do so in accordance
with Section 9.4(e) or, having endeavored in good faith and with reasonable
diligence for a period of sixty (60) days, Pohlad Companies is unable to
negotiate a transfer of its Class A Membership Interest to an Approved Acquirer,
Pohlad Companies shall have the right, exercisable within thirty (30) days of
either PepsiCo's failure to designate an Approved Acquirer or the end of the
sixty (60) day negotiation period, to direct the Company to liquidate its Class
A Membership Interest. In such event, the Company shall distribute to Pohlad
Companies in liquidation of Pohlad Companies' Class A Membership Interest a pro
rata portion (based on Pohlad Companies' Class A Percentage Interest) of each
class of PPR securities (and of any other assets (other than the PepsiCo Stock))
then held by the Company; provided that (i) prior to such distribution, the
Company shall specifically identify, through such methodology as shall be
acceptable both to PepsiCo and to Pohlad Companies, the securities of each class
( and other assets) that it owns (including determining and recording the date
and transaction in which acquired by the Company, the lot, certificate or other
identifying numbers for the securities (or other assets) in question and the tax
basis of such securities (or other assets) in the Company's hands) and (ii) the
Company shall distribute to Pohlad Companies such specifically identified
securities of each class (or other assets) as are selected and approved both by
PepsiCo and by Pohlad Companies. Notwithstanding the foregoing, at the election
of BFSI and Metro, the Company may retain any and all shares of PPR Class A
Stock then held by the Company that otherwise would be distributed to Pohlad
Companies pursuant to the immediately preceding sentence and, instead distribute
to Pohlad Companies shares of PPR Class B Stock that otherwise would not be
distributed to Pohlad Companies pursuant to the immediately preceding sentence
in accordance with the following ratio: five (5) shares of PPR Class B stock in
substitution for every four (4) shares of PPR Class A Stock retained. Any such
liquidation and distribution shall be made within thirty (30) days of the
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Company's receipt of Pohlad Companies direction to do so. It shall be a
condition precedent to any such distribution that documentation reasonably
acceptable to PepsiCo, Metro and BFSI is executed ensuring that: (i) subject to
PepsiCo's right to purchase outlined in paragraph (g) below, all PPR securities
distributed to Pohlad Companies will be sold by Pohlad Companies to the public
in a widely distributed underwritten public offering as soon as possible
following the distribution and, in any event, within no more than nine (9)
months of the distribution and (ii) pending such public sale, all such
securities shall be voted and exercised in accordance with the terms of Article
7 of this Agreement as if they were still held by the Company. All costs and
expenses of the public offering, including the costs of registration and the
costs of any experts required by PPR to accommodate the offering shall be paid
by Pohlad Companies.
(g) In connection with any distribution of assets to Pohlad Companies
pursuant to paragraph (f) above, PepsiCo shall have the right to purchase from
Pohlad Companies shares of the PPR securities so distributed to Pohlad
Companies, in such number and in such combination of classes or series of shares
as designated by PepsiCo, up to that number of shares which, when added to the
shares to be held by the Company after giving effect to the distribution,
represent, in the aggregate, 51% of the votes eligible to be cast by the holders
of all securities of PPR. In order to exercise this right, PepsiCo must purchase
from Pohlad Companies any and all shares of PPR Class A Stock actually
distributed to Pohlad Companies by the Company. The price per share to be paid
to Pohlad Companies by PepsiCo for any such shares of PPR Class B Stock shall be
equal to the Adjusted Public Offering Price and the price to be paid to Pohlad
Companies by PepsiCo for each share of PPR Class A Stock shall be 125% of the
Adjusted Public Offering Price. The "Adjusted Public Offering Price" shall be
the public offering price, reduced to reflect one half of the costs of the
offering as calculated in accordance with the following formula:
(P x S) - Z/2
-----------------
P
where P equals the number of shares of PPR Class B Stock actually sold to the
public by Pohlad Companies, S equals the per share offering price at which such
shares were sold to the public, and z equals the total costs of the offering,
including, without limitation, underwriters fees, discounts and costs,
registration and qualification fees and expenses and all costs, fees and
expenses of experts retained in support or furtherance of the offering.
Notwithstanding any of the foregoing, the transactions contemplated by
paragraphs (f), (g) and (h) of this Section 9.4 shall be effected in a manner
that, as determined by each Member in its reasonable discretion, will eliminate,
to the extent possible, or will minimize, to the extent that elimination is
impossible, the recognition of gain for tax purposes as a result of such
transactions that would be allocable or taxable to PepsiCo or any of its
Affiliates. All purchasers made by PepsiCo pursuant to this paragraph (g) shall
be from Pohlad Companies directly and not through the underwritten public
offering.
(h) In the event of any transfer by Pohlad Companies of its Class A
Membership Interest to an Approved Acquirer or any distribution of assets to
Pohlad Companies under clause (f) above in liquidation of its Class A Membership
Interest, a pro rata portion (based on Pohlad Companies Class B Percentage
Interest) of any PepsiCo Stock then held by the Company shall be distributed to
Pohlad Companies in liquidation of Pohlad Companies' Class B Membership
Interest.
(i) In the event that a Continuing Deadlock Event Notice is issued and
PepsiCo elects not to purchase the Class A Membership Interest of Pohlad
Companies, PepsiCo agrees that it will not, for the
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duration of the period committed to, reduce any financial support it had
previously committed in writing to provide to PPR, including, but not by way of
limitation, marketing support consistent with specified levels of sales, volume,
equipment placement and other criteria upon which such financial support is
determined. Notwithstanding the generality of the foregoing, in the event of a
Deadlock, the levels of concentrate pricing and marketing support which have
been agreed upon in respect of the Caribbean Region for future years shall be
continued to be followed with respect to PPR's operations in the Caribbean
Region and if there is no agreement as to the levels of concentrate pricing or
marketing spending as to any of the five years immediately following the
commencement of the Deadlock, PepsiCo agrees to maintain, during the remaining
years of such five year period, the concentrate pricing and marketing level for
the last year which was agreed upon; provided that the marketing level for such
remaining years shall not exceed 40% of concentrate sales.
Section 9.5 Appraisal Procedure.
If PepsiCo gave timely notice of its intention to purchase Pohlad
Companies' Class A Membership Interest in accordance with Section 9.4, the
Members shall appoint, within twenty (20) days of PepsiCo's election to
purchase, a mutually satisfactory Appraiser to determine the fair market value
of Pohlad Companies Class A Membership Interest in the Company. All appraisals
determined under this Section 9.5 shall comply with the appraisal instructions
set forth in Exhibit 6. If the Members fail to agree upon a satisfactory
Appraiser then each of Pohlad Companies and PepsiCo shall promptly appoint a
separate Appraiser and such Appraisers shall jointly determine such amount. If
either Pohlad Companies or PepsiCo fails to so appoint an Appraiser, the
determination of the single Appraiser appointed shall be final. If two
Appraisers are appointed and within sixty (60) days after the appointment of the
latter of such two Appraisers, they cannot agree upon such amount, such two
Appraisers shall, within five (5) days after the expiration of the sixty (60)
day period, appoint a third Appraiser and such amount shall be determined by
such three Appraisers, who shall make their separate appraisals within thirty
(30) days following the appointment of the third Appraiser, and any
determination so made shall be conclusive and binding upon the Members. If no
such third Appraiser is appointed within such five (5)-day period, either Member
may apply to the American Arbitration Association to make such appointment, and
both parties shall be bound by such appointment. If three Appraisers are
appointed and the difference between (x) the determination which is farther from
the middle determination and (y) the middle determination is more than 125% of
the difference between the middle determination and the third determination,
then such farther determination shall be excluded, the remaining two
determinations shall be averaged and such average shall be final and binding
upon the parties. Otherwise, the average of all three determinations shall be
final and binding upon the parties. The fees and expenses of all such Appraisers
and such appraisal procedure shall be borne by the Company.
Section 9.6 PepsiCo's Purchase of Pohlad's Interest.
PepsiCo's purchase of Pohlad Companies' Class A Membership Interest in
the Company shall occur on a date and time (the "Closing Date") mutually
convenient to PepsiCo and Pohlad Companies; provided that such Closing Date
shall occur no later than the thirtieth (30) day following the day that the
value of Pohlad Companies Class A Membership Interest is determined in
accordance with Section 9.5. On the Closing Date: (i) the Company shall deliver
to Pohlad Companies a proportionate share of the PepsiCo Stock equal to Pohlad
Companies' Class B Percentage Interest in complete liquidation of Pohlad
Companies' Class B Membership Interest and (ii) PepsiCo shall pay to Pohlad
Companies cash equal to
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the appraised value of Pohlad Companies Class A Membership Interest determined
in accordance with Section 9.5, plus a premium of 5.0 %. The Parties shall
execute such documents and instruments of conveyance as may be necessary or
appropriate to convey all right title and interest in Pohlad Companies Class A
Membership Interest to PepsiCo.
In any situation in which Pohlad Companies' Class A Membership Interest
is either transferred or liquidated, the parties shall execute and deliver all
such documents and instruments as may be necessary and appropriate to remove
Pohlad Companies from its role as day to day manager of the Company's affairs
and the parties shall amend this Agreement as appropriate.
ARTICLE 10
BUSINESS OPPORTUNITIES
Section 10.1 Company Opportunity.
Subject to the provisions of Section 10.2 hereof, participation in the
Company shall not in any way restrain any Member or their Affiliates in their
present or future business activities (regardless of whether such activities are
competitive with the Company) and neither the Company nor any Member shall have
any claim or entitlement to the benefits derived by a Member or a Member's
Affiliates from such activities.
Section 10.2 Expansion Opportunities.
(a) Notwithstanding the foregoing, Pohlad Companies agrees that it and
its Affiliates shall pursue investment, acquisition and expansion opportunities
with respect to Franchised Bottlers in the Caribbean Region (an "Expansion
Opportunity") only through PPR and will not independently pursue any Expansion
Opportunity within the Caribbean Region without the approval of the other
Members. PepsiCo agrees that neither it nor any of its Affiliates shall
independently pursue any Expansion Opportunity without the consent of all
Members.
(b) PepsiCo hereby agrees that PPR has been preapproved by PepsiCo, as
a Franchised Bottler in the Caribbean Region for a period of four (4) years from
the date of this Agreement if PPR is able to reach agreement with the then
current Franchised Bottlers in the Caribbean Region to acquire their bottling
business or any territory in the Caribbean Region otherwise becomes available
for the bottling of PepsiCo proprietary beverage products. After the expiration
of such four (4) year period, PPR may apply for approval as a Franchised Bottler
in the Caribbean Region
(c) In the event that during the 4 year period after the date of this
Agreement the United States boycott laws relating to Cuba are lifted and PepsiCo
is free, without any legal exposure, to appoint a new bottler for Cuba, PepsiCo
and Pohlad Companies will negotiate in good faith to appoint PPR as the
exclusive bottler for PepsiCo products in Cuba. PepsiCo and Pohlad Companies or
PPR, as the case may be, will use their respective best efforts to reach an
agreement on such franchise rights for a period of three (3) months from the
date on which notice of the lifting of such boycott laws is issued and PepsiCo
will not be entitled to negotiate with any other potential bottler for Cuba
during such three (3) month period.
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ARTICLE 11
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 11.1 Negation of Right to Dissolve by Will of Member.
No Member shall have the right to terminate this Agreement or dissolve
the Company by its express will or by withdrawal without the express written
consent of the other Members. Without limiting any other rights or remedies (in
equity or at law) available to a Member, upon any dissolution occurring in
contravention of this Agreement caused by the express will or withdrawal of
Pohlad Companies, Metro shall be the liquidating Member (the "Liquidating
Member"), and upon any dissolution occurring in contravention of this Agreement
caused by the express will or withdrawal of BFSI or Metro, Pohlad Companies
shall be the Liquidating Member.
Section 11.2 Events of Dissolution.
The Company shall be dissolved, and its affairs shall be wound up upon,
and only upon, the first to occur of the following:
(a) the date that the Members consent to its dissolution;
(b) the date that the Bottle and Fountain Agreements are terminated;
(c) the sale, exchange, involuntary conversion, or other disposition or
transfer of all or substantially all of the assets of the Company;
(d) the dissolution, Bankruptcy or resignation of any Member, unless,
within sixty (60) days of receipt of the notice described in Section 11.3, the
remaining Member elects to continue the business of the Company; and
(e) the entry of a decree of judicial dissolution of the Company under
the Act.
Section 11.3 Notice of Dissolution and Bankruptcy.
Within thirty (30) days following the dissolution or Bankruptcy of a
Member, such Member shall send written notice to the other Member.
Section 11.4 Procedures Upon Dissolution.
Subject to Section 11.1, upon dissolution of the Company, Pohlad
Companies shall wind up the affairs of the Company, sell the Company's assets to
the extent necessary to pay its liabilities, establish necessary reserves and
after payment of all liabilities of the Company (including liabilities to a
Member or affiliate of a Member, if it is a creditor), shall distribute the
remaining assets of the Company to the Members (after giving effect to all
contributions, distributions, allocations, and other Capital Account adjustments
for all fiscal years, including the period during which such liquidation occurs)
in proportion
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to the positive balances in their Capital Accounts. Any distribution made
pursuant to this Section 11.4 shall be made by the end of such taxable year, or,
if later, within ninety (90) days after the date of such liquidation.
Section 11.5 No Deficit Makeup Obligation.
Upon dissolution of the Company, no Member has any obligation to
restore to the capital of the Company any deficit balance in such Member's
Capital Account.
Section 11.6 Termination.
Upon the dissolution and the completion of winding up of the Company,
Pohlad Companies shall file a certificate of cancellation with the Office of the
Secretary of State of Delaware in accordance with the Act to accomplish the
cancellation of the certificate of formation.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES
Section 12.1 Representations and Warranties of Members.
Each Member hereby represents, warrants and covenants as follows:
(a) Such Member is duly organized or formed, validly existing and, if
applicable, in good standing under the laws of its state of formation.
(b) Such Member has the right, power and authority to enter into this
Agreement, to become a Member and to perform its obligations under this
Agreement, and this Agreement is a legal, valid and binding obligation of such
Member.
(c) The execution and delivery of this Agreement does not violate or
conflict with the charter, bylaws or formation documents of such Member or any
agreement, judgment, license, permit, order or other document applicable to or
binding upon such Member or any of its properties; and no consent, approval,
authorization or order of any court or government authority or third party is
required with respect to such Member in connection with the execution and
delivery of this Agreement.
(d) Neither Member nor any of its Affiliates has employed or retained
any broker, agent or finder in connection with this Agreement, or paid or agreed
to pay any brokerage fee, finder's fee, commission or similar payment to any
Person on account of this Agreement. However, Dakota has entered into an
agreement with Nationsbanc Montgomery Securities to provide investment banking
and advisory services in connection with transactions contemplated by the Dakota
Exchange Agreement.
(e) Such Member and its affiliates and Persons acting on their behalf
have not taken any action, or failed to take any action, which has caused the
organization of the Company and the issuance of the interests in the Company to
come within the registration requirements of the Securities Act, or any
applicable state blue sky laws.
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(f) The undersigned Members understand (i) that the Interests have not
been registered under the Securities Act or any state securities laws because
the Company is issuing these Interests in reliance upon the exemptions from the
registration requirements of the Securities Act or applicable state securities
laws providing for issuance of securities not involving a public offering, (ii)
that the Company has relied upon the fact that the Interests are to be held by
each Member for investment, and (iii) that exemption from registration under the
Securities Act or applicable state securities laws would not be available if the
Interests were acquired by a Member with a view to distribution.
Accordingly, each Member hereby confirms to the Company that such
Member is acquiring its Interest for such own Member's account, for investment
and not with a view to the resale or distribution thereof. Each Member agrees
not to transfer, sell or offer for sale all or any portion of the Interests
unless there is an effective registration or other qualification relating
thereto under the Securities Act and under any applicable state securities laws
or unless the holder of Interests delivers to the Company an opinion of counsel,
satisfactory to the Company, that such registration or other qualification under
the Act and applicable state securities laws is not required in connection with
such transfer, offer or sale. Each Member understands that the Company is under
no obligation to register the Interests or to assist such Member in complying
with any exemption from registration under the Securities Act or any state
securities laws if such Member should, at a later date, wish to dispose of the
Interest.
Prior to acquiring the Interests, each Member has made an investigation
of the Company and its business and the Company has made available to each such
Member all information with respect thereto that such Member needs to make an
informed decision to acquire the Interest. Each Member considers itself to be a
Person possessing such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of such Member's
investment in the Interests.
ARTICLE 13
MISCELLANEOUS
Section 13.1 Accountants.
The Company accountants shall be [Arthur Andersen] unless otherwise
agreed by unanimous vote of the Members.
Section 13.2 Partial Invalidity.
In case any one or more of the covenants, agreements, or provisions
hereof shall be invalid, illegal, or unenforceable in any respect, the validity
of the remaining covenants, agreements, or provisions hereof shall be in no way
affected, prejudiced, or disturbed thereby.
Section 13.3 Notices.
Except as otherwise provided herein, all notices or other
communications required or permitted to be given hereunder shall be in writing,
shall be given by mail, return receipt requested, postage prepaid, prepaid
telegram with confirmation of delivery obtained, telecopy with evidence of
transmission, or
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personally delivered with confirmation of delivery obtained, and shall be deemed
to have been duly given when received at the address specified below:
If to PepsiCo, BFSI or Metro: 700 Anderson Hill Road
Purchase, NY 10557-1444
Attn: Tim Heaviside
Fax - (914) 253-2752
If to Pohlad Companies: Pohlad Companies
Attn: Robert C. Pohlad
Suite 3800
60 South Sixth Street
Minneapolis, MN 55402
Fax - 612-661-3825
Copy to: Briggs and Morgan
Attn: Brian D. Wenger
2400 IDS Center
80 South 8th Street
Minneapolis, MN 55402
Fax - 612-334-8650
Any party shall have the right to change its address for notice
hereunder from time to time to such other address as may hereafter be furnished
in writing by such party to the other parties.
Section 13.4 Amendment.
This Agreement may be modified or amended at any time only upon the
unanimous consent of the parties, which shall be evidenced by the parties
executing a writing effecting such amendment.
Section 13.5 Consents; Waivers.
No consent or waiver, express or implied, by any party to or of any
breach or default by any party in the performance by such party of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance by such party hereunder.
Failure on the part of a party to complain of any act or failure to act of any
other party or to declare the other party in default, irrespective of how long
such failure continues, shall not constitute a waiver by the party of their
rights hereunder.
Section 13.6 Choice of Law.
This Agreement and all rights and liabilities of the parties hereunder
shall be subject to and governed by the substantive laws (and not the choice of
law rules) of the State of Delaware.
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Section 13.7 Multiple Counterparts.
This Agreement may be executed and acknowledged in multiple
counterparts, each of which shall be an original, but all of which shall be and
constitute one instrument.
Section 13.8 Entire Agreement.
This Agreement, including all Exhibits, Schedules and Appendices,
constitutes the entire agreement between the parties with respect to the subject
matter hereof. This Agreement supersedes any prior agreement or understanding
among the parties, written or oral, and may not be modified or amended in any
manner other than as set forth herein.
Section 13.9 Binding Effect; Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties. No assignment of rights or delegation of duties arising under this
Agreement may be made by any party hereto without the prior written consent of
the other parties; provided, however, that the rights and obligations of PepsiCo
may be assigned and/or delegated to any of its subsidiaries.
Section 13.10 No Third-Party Beneficiaries.
This Agreement is for the sole benefit of the parties and their
permitted assigns, and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the parties and such assigns, any
legal or equitable rights hereunder.
Section 13.11 Expenses.
(a) Each of the parties hereto shall pay the fees and expenses of its
respective counsel, accountants and other experts (including any broker, finder,
advisor or intermediary) and shall pay all other expenses incurred by it in
connection with the negotiation, preparation and execution of this Agreement and
the consummation of the transactions contemplated hereby.
(b) The provisions of this Section 13.11 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
invalidity or unenforceability of any term or provision of this Agreement.
Section 13.12 Press Releases.
Each of the parties hereby agree that, except as otherwise required by
law or stock exchange regulations, any press release or other public
announcement regarding the transactions contemplated by this Agreement or the
business and/or operations of the Company shall be made only with the mutual
consent of the Members.
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Section 13.13 Confidentiality.
The Members shall take or cause to be taken such reasonable precautions
as may be necessary to prevent the disclosure of Confidential Information to any
Person other than a Member or an Affiliate thereof for a period commencing on
the date of this Agreement and ending ten (10) years following the termination
of the Company; provided however that the Members may disclose such information
as required to comply with any applicable law or order of a court or authorized
agency of government, provided that ten (10) days notice must first be given to
the other Members so a protective order, if appropriate, may be sought by such
other Members.
"Confidential Information" shall mean all trade secrets and all
information (financial or otherwise) concerning the Members or their Affiliates,
including, but not limited to, information concerning the Member's or their
Affiliates, assets, liabilities, sales and expenses; data and statistics;
methods or operation; strategic business plans; reports, analyses, compilations,
notes, studies and interpretations; forecasts; planned and existing and/or
revised product proprietary or know-how; merchandising and marketing strategy,
plans and materials; warehouse and distribution plans and practices; employees;
and any other information relating to the Members, provided to the Company or
other Members in connection with this Agreement, whether oral or written,
regardless of the manner in which it is furnished, which information would
otherwise not be generally available to the Company, the Members or the public,
and which information constitutes insider, proprietary and strictly confidential
information of the Members.
Notwithstanding the foregoing, the following will not constitute
Confidential Information for purposes of this Agreement:
(a) Information which was already in the possession of or known to the
Company or the Members prior to June, 1999, and which was not acquired or
obtained from a Member, its Affiliates or representatives;
(b) Information which is obtained or was previously obtained by the
Company or the Members from a third person who, insofar as is known to the
Company or the Members after reasonable inquiry, is not prohibited from
transmitting the information to the Company or the Members by a contractual,
legal or fiduciary obligation to a Member, its Affiliates or representatives;
and
(c) Information which is or becomes generally available to the public
(including any publicly filed document) other than as a result of a disclosure
by the Members or their representatives.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date and year first above written.
By: PEPSICO, INC.
By /s/ N. Timothy Heaviside
------------------------------
Name: N. Timothy Heaviside
Title: Vice President and Assistant General Counsel
By: POHLAD COMPANIES
By /s/ John F. Bierbaum
------------------------------
Name: John F. Bierbaum
Title: Chief Financial Officer
By: PEPSI-COLA METROPOLITAN BOTTLING COMPANY, INC.
By /s/ N. Timothy Heaviside
------------------------------
Name: N. Timothy Heaviside
Title: Vice President and Assistant General Counsel
By: BEVERAGES, FOOD & SERVICE INDUSTRIES, INC.
By /s/ Robert K. Biggart
------------------------------
Name: Robert K. Biggart
Title: Vice President
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS ........................................................3
Section 1.1 Defined Terms ...............................................3
Section 1.2 Interpretation ..............................................9
ARTICLE 2 FORMATION OF THE COMPANY ..........................................10
Section 2.1 Formation ..................................................10
Section 2.2 Consent to Dakota/PPR Exchange .............................10
Section 2.3 Liquidation of P-PR Transfer ...............................10
Section 2.4 Assignment of Rights of Acquire P-PR Class AA Preferred
Stock.......................................................10
Section 2.5 Registered Office ..........................................11
Section 2.6 Registered Agent ...........................................11
Section 2.7 Purpose and Character of Business ..........................11
Section 2.8 Duration ...................................................11
Section 2.9 Filings, Reports and Formalities ...........................11
ARTICLE 3 CAPITAL ACCOUNTS; CAPITAL CONTRIBUTIONS ...........................11
Section 3.1 Capital Accounts ...........................................11
Section 3.2 Initial Capital Contribution by Pohlad Companies ...........12
Section 3.3 Initial Contribution by PepsiCo ............................12
Section 3.4 Initial Contribution by BFSI ...............................12
Section 3.5 Additional Capital Contribution ............................12
Section 3.6 Return of Contributions ....................................12
Section 3.7 Additional Issuance of Interests; Additional Classes of
Interests ..................................................12
Section 3.8 Liability of Members; Ability to Bind the Company ..........13
ARTICLE 4 ALLOCATIONS OF PROFITS AND LOSSES; SPECIAL ALLOCATIONS;
DISTRIBUTIONS; TAX ALLOCATIONS ....................................13
Section 4.1 Allocations of Profits and Losses ..........................13
Section 4.2 Limitation on Allocations of Losses ........................14
Section 4.3 Special Provisions Regarding Allocations of Profits and
Losses .....................................................14
Section 4.4 Curative Allocation ........................................15
Section 4.5 Other Allocation Rules .....................................16
Section 4.6 Tax Allocations ............................................16
ARTICLE 5 DISTRIBUTIONS; WITHHOLDING ........................................17
Section 5.1 Distributions to the Members ...............................17
Section 5.2 Withholding ................................................17
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ARTICLE 6 MANAGEMENT OF THE COMPANY .........................................17
Section 6.1 Management of the Company ..................................17
Section 6.2 Authority of Pohlad Companies ..............................18
Section 6.3 Unanimous Vote Required ....................................18
Section 6.4 Meetings of the Members ....................................20
Section 6.5 Joint Representative .......................................20
Section 6.6 Quorum .....................................................20
Section 6.7 Compensation ...............................................20
Section 6.8 Action Without a Meeting ...................................20
Section 6.9 Liability for Certain Acts .................................20
Section 6.10 Board Representation for Franchised Bottlers ...............21
ARTICLE 7 PROVISIONS RELATING TO PEPSI-COLA PUERTO RICO
BOTTLING COMPANY ..................................................22
Section 7.1 General ....................................................22
Section 7.2 Voting of PPR Shares .......................................22
Section 7.3 Management .................................................22
Section 7.4 Approval Rights of PepsiCo Director ........................22
Section 7.5 Annual Operating Plan Matters ..............................24
ARTICLE 8 RECORDS, FISCAL YEAR, ACCOUNTING MATTERS,
TAX MATTERS MEMBER ................................................24
Section 8.1 Maintenance and Review of Records ..........................24
Section 8.2 Accounting Method ..........................................25
Section 8.3 Tax Matters Member .........................................25
ARTICLE 9 RESTRICTIONS ON TRANSFER; DEADLOCK;
APPRAISAL PROCEDURE ...............................................26
Section 9.1 Restrictions on Transfers ..................................26
Section 9.2 Transfers to Affiliates ....................................26
Section 9.3 Opinions of Counsel ........................................27
Section 9.4 Deadlock Event .............................................27
Section 9.5 Appraisal Procedure ........................................31
Section 9.6 PepsiCo's Purchase of Pohlad's Interest ....................31
ARTICLE 10 BUSINESS OPPORTUNITIES ............................................32
Section 10.1 Company Opportunity ........................................32
Section 10.2 Expansion Opportunities ....................................32
ARTICLE 11 DISSOLUTION, LIQUIDATION AND TERMINATION ..........................33
Section 11.1 Negation of Right to Dissolve by Will of Member ............33
Section 11.2 Events of Dissolution ......................................33
Section 11.3 Notice of Dissolution and Bankruptcy .......................33
Section 11.4 Procedures Upon Dissolution ................................33
Section 11.5 No Deficit Makeup Obligation ...............................34
Section 11.6 Termination ................................................34
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ARTICLE 12 REPRESENTATIONS AND WARRANTIES ....................................34
Section 12.1 Representations and Warranties of Members ..................34
ARTICLE 13 MISCELLANEOUS .....................................................35
Section 13.1 Accountants ................................................35
Section 13.2 Partial Invalidity .........................................35
Section 13.3 Notices ....................................................35
Section 13.4 Amendment ..................................................36
Section 13.5 Consents; Waivers ..........................................36
Section 13.6 Choice of Law ..............................................36
Section 13.7 Multiple Counterparts ......................................37
Section 13.8 Entire Agreement ...........................................37
Section 13.9 Binding Effect; Assignment .................................37
Section 13.10 No Third-Party Beneficiaries ...............................37
Section 13.11 Expenses ...................................................37
Section 13.12 Press Release ..............................................37
Section 13.13 Confidentiality ............................................38
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Exhibits
Exhibit 1 Caribbean Islands
Exhibit 2 Contribution Agreement
Exhibit 3 Dakota Exchange Agreement
Exhibit 4 Delta Exchange Agreement
Exhibit 5 Multi Year Business Plan
Exhibit 6 Appraisal Procedures
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Schedules
Schedule 1 Bottling and Fountain Agreements
Schedule 2 Membership Percentages
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Schedule 2
Class A Membership Interests
Pepsi-Cola Metropolitan Bottling Company, Inc. 30.1%
Beverages, Food & Service Industries, Inc. 3.4%
Pohlad Companies 66.5%
Class B Membership Interests
Pepsi-Cola Metropolitan Bottling Company, Inc. 5.0%
Pohlad Companies 95.0%
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<PAGE>
EXHIBIT B
AGREEMENT TO FILE
JOINT STATEMENT ON SCHEDULE 13D
The undersigned hereby agree to file a joint statement on Schedule 13D on
behalf of each of the undersigned pursuant to Rule 13d-1(f) under the Securities
Exchange Act of 1934.
Dated: October 19, 1999 Dakota Holdings, LLC
By Its Members
Pohlad Companies
By: /s/ John F. Bierbaum
-----------------------------
John F. Bierbaum, Vice
President and Chief Financial
Officer
Beverages, Foods & Service
Industries, Inc.
By: /s/ W. Timothy Heaviside
-----------------------------
W. Timothy Heaviside, Vice
President
Pepsi-Cola Metropolitan Bottling
Co., Inc.
By: /s/ W. Timothy Heaviside
-----------------------------
W. Timothy Heaviside, Vice
President
Dated: October 19, 1999 Pohlad Companies
By: /s/ John F. Bierbaum
-----------------------------
John F. Bierbaum, Vice President
and Chief Financial Officer
Dated: October 19, 1999 PepsiCo, Inc.
By: /s/ W. Timothy Heaviside
-----------------------------
W. Timothy Heaviside, Vice President
Dated: October 19, 1999 V. Suarez & Co., Inc.
By: /s/ Francisco Marrero
-----------------------------
Francisco Marrero, Chief Financial
Officer
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