EXHIBIT 2.3
FORM OF
GOVERNANCE AGREEMENT
Dated as of
-------------
Among
Nestle Holdings, Inc.,
Nestle S.A.
and
Xxxxxx'x Grand Ice Cream, Inc.
TABLE OF CONTENTS
PAGE
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ARTICLE I REDEMPTION AND REPURCHASE OF CLASS A COMMON STOCK........... 2
Section 1.01. Redemption and Repurchase of Class A Common Stock........... 2
Section 1.02. Options..................................................... 2
ARTICLE II NESTLE STANDSTILL AND PAYMENT PROVISIONS.................... 3
Section 2.01. Standstill; Substantial Adverse Change Determination........ 3
Section 2.02. Additional Limitation....................................... 3
Section 2.03. Payments.................................................... 3
ARTICLE III GOVERNANCE.................................................. 5
Section 3.01. Composition of Board of Directors at the Effective Time..... 5
Section 3.02. Additional Board Matters.................................... 6
Section 3.03. Public Company; Listing; Dividends.......................... 7
Section 3.04. Director Approval Required for Certain Actions.............. 8
Section 3.05. Voting of Shares............................................ 8
ARTICLE IV RESTRICTIONS ON TRANSFER OF COMMON STOCK.................... 8
Section 4.01. Restrictions on Transfer of Stock........................... 8
ARTICLE V REGISTRATION RIGHTS......................................... 9
Section 5.01. Registration................................................ 9
Section 5.02. Registration Procedures..................................... 9
Section 5.03. Conditions to Offerings..................................... 13
Section 5.04. Additional Conditions....................................... 14
Section 5.05. Registration Expenses....................................... 14
Section 5.06. Indemnification; Contribution............................... 14
Section 5.07. Rule 144.................................................... 17
Section 5.08. No Inconsistent Agreements, etc............................. 17
Section 5.09. Assignment of Registration Rights........................... 17
ARTICLE VI REPRESENTATIONS AND WARRANTIES.............................. 17
Section 6.01. Representations of the Company.............................. 17
Section 6.02. Representations of NSA and Nestle........................... 18
ARTICLE VII ADDITIONAL COVENANTS........................................ 18
Section 7.01. Confidentiality............................................. 18
Section 7.02. Annual Business Plan and Budget............................. 20
Section 7.03. Company Information......................................... 20
Section 7.04. Inspection of Property...................................... 21
Section 7.05. Quality Standards........................................... 21
ARTICLE VIII MISCELLANEOUS............................................... 22
Section 8.01. Notices..................................................... 22
Section 8.02. Amendments; No Waivers...................................... 23
Section 8.03. Successors and Assigns...................................... 23
Section 8.04. Governing Law Jurisdiction and Forum; Waiver of Jury Trial.. 23
Section 8.05. Counterparts; Effectiveness................................. 24
Section 8.06. Specific Performance........................................ 24
Section 8.07. Termination................................................. 24
Section 8.08. Entire Agreement; Beneficiaries............................. 24
Section 8.09. Headings; Definitions....................................... 25
Section 8.10. Enforcement................................................. 25
Section 8.11. Further Understandings...................................... 25
Section 8.12. D & O Insurance; Indemnification of Officers and Directors.. 25
Section 8.13. Definitions................................................. 26
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GOVERNANCE AGREEMENT
THIS GOVERNANCE AGREEMENT, dated as of _____________ between Nestle
Holdings, Inc., a Delaware corporation ("Nestle"), Xxxxxx'x Grand Ice Cream,
Inc. (formerly known as New December, Inc.), a Delaware corporation (the
"Company"), and solely with respect to Articles I, II and VIII hereof, Nestle
S.A., a corporation organized under the laws of Switzerland and parent of Nestle
("NSA").
WHEREAS, the Company, [ ], a Delaware corporation (prior to the
Effective Time, known as Xxxxxx'x Grand Ice Cream, Inc.) ("Old Dreyer's") and
wholly owned subsidiary of the Company, December Merger Sub, Inc., a Delaware
corporation ("Merger Sub"), Nestle, and NICC Holdings, Inc., a Delaware
corporation and wholly owned indirect subsidiary of Nestle ("Contributing Sub"),
have entered into an Agreement and Plan of Merger and Contribution, dated as of
June 16, 2002 (the "Merger Agreement") pursuant to which, among other things,
(i) Merger Sub is merged (the "Merger") with and into Old Dreyer's on the date
hereof, (ii) Nestle contributed its shares of the Company's Common Stock, par
value $1.00 per share, to the Company (the "Exchange") and (iii) Nestle caused
Contributing Sub to contribute (the "Contribution" and collectively with the
Merger and the Exchange, the "Transactions") the equity interests of Nestle Ice
Cream Company, LLC, a Delaware limited liability corporation and wholly owned
indirect subsidiary of Nestle, to the Company;
WHEREAS, in connection with the Transactions, among other things, all
shares of the Dreyer's Common Stock, par value $1.00 per share, were converted
into shares of Class A Callable Puttable Common Stock, par value $0.01 per share
(the "Class A Common Stock"), of the Company, all upon the terms and subject to
the conditions set forth in the Merger Agreement;
WHEREAS, in return for certain contributions to the Company, Nestle and
its Affiliates received shares of Class B Common Stock, par value $0.01 per
share (the "Class B Common Stock"), of the Company, all upon the terms and
subject to the conditions set forth in the Merger Agreement;
WHEREAS, Nestle, NSA and the Company have agreed to set forth in this
Agreement the terms and conditions upon which the Company shall redeem the Class
A Common Stock;
WHEREAS, Nestle, NSA and the Company have agreed to establish in this
Agreement certain terms and conditions concerning the corporate governance of
the Company; and
WHEREAS, Nestle, NSA and the Company also have agreed to establish in this
Agreement certain terms and conditions concerning the acquisition and
disposition of securities of the Company by Nestle and its Affiliates.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and agreements contained herein, the parties hereby agree as follows:
ARTICLE I.
REDEMPTION AND REPURCHASE OF
CLASS A COMMON STOCK
Section 1.01 Redemption and Repurchase of Class A Common Stock. (a) The
Company shall, promptly upon receipt of a written request from Nestle for the
redemption of the Class A Common Stock, designate a depositary (the
"Depositary") for such redemption in accordance with the Company's certificate
of incorporation (the "Certificate of Incorporation") and notify Nestle of such
designation. The Company shall give, or cause to be given, the Call Notification
(as defined in the Certificate of Incorporation) in accordance with the
Certificate of Incorporation and the Company shall set as the date of redemption
(the "Redemption Date") the date set forth in Nestle's written request for
redemption; provided that such date shall be consistent with the notice
requirements provided in the Certificate of Incorporation and the Redemption
Date shall in no event be later than June 30, 2007.
(b) On the first day of each Put Period (as defined in the Certificate
of Incorporation), the Company shall (i) designate the Depositary for making
payments to, and receiving shares from, holders of Class A Common Stock in
connection with exercises of the Put (as defined in the Certificate of
Incorporation) in accordance with the Certificate of Incorporation and notify
Nestle of such designation and (ii) give, or cause to be given, the Put
Notification (as defined in the Certificate of Incorporation) in accordance with
Article FIFTH, Section (c)(ii)(B) of the Certificate of Incorporation.
(c) In the event that, at any time, Nestle and its Affiliates
beneficially own at least 90% of the Company's issued and outstanding voting
stock and all outstanding shares of Class A Common Stock are converted into
shares of Class B Common Stock in accordance with Article FIFTH of the
Certificate of Incorporation ("Short-Form Merger Trigger"), NSA will promptly
cause a short-form merger ("Short-Form Merger") of the Company with Nestle or
another Affiliate of NSA in which the remaining shares of Class B Common Stock
(resulting from the conversion of the Class A Common Stock into Class B Common
Stock pursuant to the Certificate of Incorporation), other than those owned by
Nestle and its Affiliates, shall be converted into cash consideration per share
equal to the Put Price or in the event the Short Form Merger follows a
Triggering Event, the Triggering Event Price (each as defined in the Certificate
of Incorporation).
Section 1.02 Options. Nestle and the Company will make appropriate
arrangements to make available to holders of any valid and fully vested options
(or, in the case of a Triggering Event, to holders of all options, whether or
not fully vested) issued by the Company and convertible into or exercisable or
exchangeable for shares of Class A Common Stock outstanding on the Redemption
Date or on the effective date of the Short-Form Merger (whether or not
convertible, exercisable or exchangeable on such date) for consideration of the
same amounts (less the amount of any exercise price) as the holders thereof
would have received had they converted, exercised or exchanged such options
prior to the Redemption Date or the effective time of the Short-Form Merger.
Until surrendered and cancelled by the holders thereof, such options shall
represent only the right to receive the consideration described above, which
shall be paid to the holders thereof only upon surrender of such options.
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ARTICLE II.
NESTLE STANDSTILL AND PAYMENT PROVISIONS
Section 2.01 Standstill; Substantial Adverse Change Determination. Except
in connection with the Put, the Call (including in connection with a Triggering
Event), the Short-Form Merger and any purchase of Class A Common Stock that
Nestle or NSA may elect to make pursuant to Section 2.03 of this Agreement,
prior to July 1, 2007, Nestle and its Affiliates shall not engage in any
material transaction with the Company in which they have a material interest
without the approval of a majority of the Noninvestor Directors. Nestle or its
Affiliates may from time to time reasonably request that the Independent
Directors consider making a Substantial Adverse Change Determination, and any
such request shall not be deemed to violate the provisions of this Agreement.
The Company shall provide NSA and Nestle with ten business days written notice
of a proposal to consider the making of a Substantial Adverse Change
Determination; provided that NSA and Nestle in their sole discretion may waive
such notice requirement.
Section 2.02 Additional Limitation. Except under the Put, the Call
(including in connection with a Triggering Event), the Short-Form Merger and any
purchase of Class A Common Stock that Nestle or NSA may elect to make pursuant
to Section 2.03 of this Agreement,, Nestle and its Affiliates shall not, prior
to July 1, 2008, directly or indirectly, purchase or otherwise acquire, or
propose or offer to purchase or acquire, or propose or offer to purchase or
acquire, an amount of Equity Securities (as defined below), whether by tender
offer, exchange offer, market purchase, privately negotiated purchase, merger or
otherwise , that would cause Nestle's Voting Interest (as defined below)
immediately after such acquisition to exceed 67%, provided that Nestle and its
Affiliates shall be permitted to take such actions on or after July 1, 2007 at a
price per share for the Class B Common Stock not less than the Redemption Price.
For purposes of this Agreement, (i) "Equity Security" means any (A) voting stock
of the Company (other than shares of voting stock not having the right to vote
generally in any election of directors of the Company), (B) securities of the
Company convertible into or exchangeable for such voting stock, and (C) options,
rights and warrants issued by the Company to acquire such voting stock; and (ii)
"Nestle's Voting Interest" means the percentage of votes for elections of
directors of the Company generally controlled directly or indirectly by Nestle
and its Affiliates, assuming the conversion, exchange or exercise into or for
voting stock of all Equity Securities (whether or not then convertible or
exercisable and whether or not they constitute Options Out of the Money) and not
taking into account any voting agreements or arrangements granting to a third
party control over the voting of voting stock (including those contained herein)
beneficially owned (as defined in Rule 13d-3 promulgated under the 1934 Act).
Section 2.03 Payments. (a) (i) Subject to Section 2.03 (a) (ii) below, NSA
or Nestle shall contribute to the Depositary, on behalf of the Company,
immediately prior to the time that any amounts are required to be deposited with
the Depositary for payment to the holders of Class A Common Stock pursuant to
Article FIFTH, Section (c)(iii)(A)(2) of the Certificate of Incorporation, funds
in an amount equal to the product of the number of shares of Class A Common
Stock with respect to which the Put has been properly exercised multiplied by
the Put Price (as defined in the Certificate of Incorporation) (the "Put
Amount"). In exchange for such payment, the Company will issue to NSA or Nestle
a number of duly authorized and validly
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issued shares of Class B Common Stock equal to the number of shares of Class A
Common Stock acquired thereby by the Company.
(i) Section 2.03(a)(i) shall be void and of no further force and
effect if, in lieu thereof, NSA or Nestle shall elect, at their sole discretion,
to offer to purchase, and make all arrangements necessary (including compliance
by NSA or Nestle with federal securities laws) to purchase, and shall consummate
the purchase of, at the relevant periods during the Put Period, directly from
the holders of the Class A Common Stock at the Put Price all shares of Class A
Common Stock which such holders elect to have purchased; provided, however, that
in no event shall NSA or Nestle be required to expend any amounts in excess of
the Put Amount to purchase such shares, other than its transaction-related
costs.
(b) If a Triggering Event occurs, NSA or Nestle shall, within 10 days
after the occurrence of such Triggering Event, make the election in its sole
discretion to either (x) make immediately the written request to the Company
pursuant to Section 1.01 hereof to redeem the Class A Common Stock and make the
contributions to the Depositary, as contemplated by Section 2.03(c)(i) or (y)
offer to purchase shares directly from the holders of the Class A Common Stock
pursuant to the procedures contemplated by Section 2.03(c)(ii), in each case at
the Triggering Event Price.
(c) (i) If Nestle has delivered the request contemplated by Section
1.01(a), NSA or Nestle shall contribute to the Depositary, on behalf of the
Company, no less than one Business Day prior to the Redemption Date, the
aggregate Redemption Price (or, if following a Triggering Event, the aggregate
Triggering Event Price) in respect of all outstanding shares of Class A Common
Stock. In exchange for such payment, the Company will issue to NSA or Nestle a
number of duly authorized and validly issued shares of Class B Common Stock
equal to the number of shares of Class A Common Stock acquired thereby by the
Company.
(ii) Section 2.03(c)(i) shall be void and of no further force and
effect if, in lieu thereof, NSA or Nestle shall elect, at their sole discretion,
to offer to purchase, and make all arrangements necessary (including compliance
by NSA or Nestle with federal securities laws) to purchase, and shall consummate
the purchase of, on the earliest reasonably practicable date permitted by law,
directly from the holders of the Class A Common Stock at the Redemption Price
(or, if following a Triggering Event, at the Triggering Event Price) all shares
of Class A Common Stock which such holders elect to have purchased; provided,
however, that in no event shall NSA or Nestle be required to expend any amount
in excess of the aggregate Redemption Price (or, if following a Triggering
Event, the aggregate Triggering Event Price) to purchase such shares, other than
transaction related costs.
(iii) Notwithstanding the foregoing, in the event the Company is
released of its obligations in respect of any Put pursuant to Article FIFTH,
Section (c)(ii) of the Certificate of Incorporation, the Company shall or shall
cause the Depositary to refund promptly to NSA or Nestle any amounts held by the
Depositary that have not been paid to holders of shares of Class A Common Stock,
in connection with the Put. To the extent any such amount is not refunded, any
payments required to be made by Nestle or NSA in connection with the Triggering
Event pursuant to Section 2.03(b) shall be correspondingly reduced.
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(d) The Company shall instruct the Depositary to cause any and all funds
delivered by Nestle or NSA to the Depositary hereunder to (i) always be held in
a segregated account by the Depositary and not be subject to any lien or
attachment of any creditor of any Person (including, without limitation, the
Depositary), (ii) never, whether in whole or in part, be transferred directly to
the Company or become subject to the Company's control or dominion, (iii) not be
commingled with any other funds of the Company or any other Person and (iv) be
used solely by the Depositary for the purposes set forth herein. Nestle or NSA
shall be entitled to receive any interest or income on funds held by the
Depositary and such interest or income shall be returned to Nestle or NSA
promptly after the end of an Put Period or Redemption Date. In furtherance of
the foregoing, any and all funds held by the Depositary (other than any interest
or investment returns thereon) shall only be paid to, or, in the case of any
withholdings, on behalf of, the holders of Class A Common Stock, and no other
Person or Persons shall be paid any portion of such funds (other than any
interest or investment returns thereon) or have any interest therein or right
thereto. Any agreements between the Company and any Depositary shall expressly
include provisions effectuating the limitations set forth in this Section
2.03(d).
(e) NSA or Nestle shall be entitled to deduct and withhold from the
consideration payable to any holder of shares of Class A Common Stock, such
amounts as NSA or Nestle shall determine in good faith they are required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code") or any provision of
applicable state, local or foreign tax law.
(f) The agreements of NSA and Nestle to perform under Articles I and II
hereof are non-contingent and are not conditioned in any way on the performance
of the Company or any other party under this Agreement, the Merger Agreement or
any agreement related to the transactions contemplated hereby and thereby;
provided, however, that NSA and Nestle's performance may be delayed for such
period caused by the Company's failure to perform its obligations. Neither NSA
nor Nestle shall take any action or engage in any transactions or series of
actions with the intention of causing any benefits created under Articles I or
II hereof not to be realized.
ARTICLE III.
GOVERNANCE
Section 3.01 Composition of Board of Directors at the Effective Time. (a)
At and after the effective time of the Merger and the Contribution ("Effective
Time"), the number of directors comprising the Board of Directors of the Company
("Board") shall be ten unless changed in accordance with the provisions of the
By-Laws of the Company (the "By-Laws"). Subject to Section 3.03(a), the Board
shall include five nominees of Nestle, including Xxxxx Xxxxxxx-Xxxxxxxx, who
will serve as Vice Chairman of the Board at the Effective Time. At each
stockholders meeting at which directors will be elected or in connection with
any solicitation of written consents for the election of directors, Nestle shall
be entitled, any time prior to the mailing of the applicable proxy statement or
information statement of the Company, to propose and nominate five persons as
members of the Board. The Company and the Board will include the persons
nominated by Nestle in each slate of directors proposed, recommended or
nominated for election by the Company or the Board and will recommend and use
the same efforts to cause
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the election of, such persons as used with respect to all other Board nominees.
The Company agrees to use all reasonable efforts to solicit proxies for such
nominees for director from all holders of voting stock entitled to vote thereon.
Such nominees shall serve in a manner consistent with the terms of the
Certificate of Incorporation and By-Laws. At the Effective Time, the Board shall
include T. Xxxx Xxxxxx, who will serve as Chairman of the Board for so long as
he is the Chief Executive Officer and Xxxxxxx X. Xxxxx III ("Executive
Directors"), and the other three directors shall be independent directors
nominated by the Company (together with their successors elected in accordance
with Section 3.02(a), the "Independent Directors"), who comply with the
Independence Standards, who shall serve in a manner consistent with the terms of
the Certificate of Incorporation and By-Laws. The directors nominated by Nestle,
including those nominated by Nestle pursuant to Section 3.03(a) (together with
their successors elected in accordance with Section 3.02(a)) hereunder, are
referred to herein as "Investor Directors" For purposes of this Agreement, the
Certificate of Incorporation and the By-Laws, the "Continuing Investor
Directors" shall include any Investor Directors nominated by Nestle other than
any independent directors that were required to be nominated pursuant to Section
3.03(a). The Independent Directors, together with the Executive Directors are
referred to herein as "Noninvestor Directors"; it being understood, that only
the initial Noninvestor Directors as of the Effective Time, as well as any
successors to the Independent Directors nominated by the Independent Directors
pursuant to Section 3.02(a), shall be Noninvestor Directors for purposes of this
Agreement.
(b) Notwithstanding any other provision of this Agreement, the
Certificate of Incorporation or By-Laws or applicable law, until July 1, 2007,
at all times 50% of the then-serving members of the Board shall be individuals
nominated by Nestle, and Nestle shall use its reasonable best efforts to make
sure that Investor Directors do not comprise more than 50% of the then-serving
members of the Board.
(c) From July 1, 2007 to July 1, 2008, Nestle agrees that at least three
directors of the Company shall be independent directors who meet the
Independence Standards and Nestle shall use its reasonable best efforts to cause
such condition to be complied with.
Section 3.02 Additional Board Matters. (a) Nestle shall have the right to
nominate any replacement for an Investor Director at the termination of such
director's term or upon death, resignation, retirement, disqualification,
removal from office or other cause. The Independent Directors shall have the
right to nominate any replacement for an Independent Director at the termination
of such director's term or upon death, resignation, retirement,
disqualification, removal from office or other cause, and such successor
director shall be an Independent Director for purpose of this Agreement. In each
case, to the extent permitted by the Certificate of Incorporation or By-Laws,
the Board shall elect each such person so nominated as soon as possible, and
either one of the Noninvestor Directors or one of the Investor Directors, as
applicable, will not vote in connection with the Board until such replacement
director is elected in order to ensure that with respect to any matter submitted
for action by the Board, neither the Noninvestor Directors nor the Investor
Directors constitute more than 50% of the then-serving members of the Board
entitled to participate therein.
(b) In the event an Executive Director terminates such director's term
as director due to death, resignation, retirement, disqualification, removal
from office or other cause, (i) in the
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event such director is not the Chairman and Chief Executive Officer of the
Company, the Noninvestor Directors shall not replace such director and in lieu
thereof, Nestle will cause one of its Investor Directors to resign from the
Board and the parties shall cause the size of the Board to be reduced by both
directorships and (ii) in the event such director is the Chairman and Chief
Executive Officer of the Company, the Vice Chairman of the Board shall be
elected the interim Chairman until a new chairman is selected; provided that
Nestle shall cause one of the Investor Directors to not vote in connection with
the actions of the Board until such replacement Chairman and Chief Executive
Officer is elected. Such replacement Chairman or CEO shall not be considered a
Noninvestor Director.
(c) The audit committee shall consist of the Independent Directors;
provided that any independent director meeting the Independence Standards
nominated by Nestle pursuant to Section 3.03(a) may be added to the audit
committee if such director is appointed by the affirmative vote of a majority of
the then authorized number of directors. At the Effective Time, the entire
Board, excluding directors who are or who have been in the last five years
officers of the Company, shall serve the function of a compensation committee.
Any committee except the audit committee maintained after the Effective Time
shall contain at least one Continuing Investor Director.
(d) The Company shall permit and make arrangements to allow all
directors to fully participate in Board meetings (and applicable Board committee
meetings) through the use of a conference telephone or other communications
equipment. No director shall be excluded from any Board or committee meeting or
any portion of a Board or committee meeting because he or she elects to
participate through the use of a conference telephone or other communications
equipment.
Section 3.03 Public Company; Listing; Dividends. (a) If at the Effective
Time, the Class A Common Stock is listed on the Nasdaq National Market System,
then prior to July 1, 2007, Nestle will cooperate with the Company in keeping
its Class A Common Stock quoted on the Nasdaq National Market System and shall
not take any action (including voting its shares or through the Investor
Directors) to the contrary. Notwithstanding anything to the contrary in Section
3.01, if prior to July 1, 2007, the rules and listing standards of the National
Association of Securities Dealers are amended such that the Company, in order
for the Class A Common Stock to remain quoted on the Nasdaq National Market
System, is required to increase the number or percentage of independent
directors on its Board that meet the Independence Standards, Nestle shall use
its reasonable best efforts to cause the resignation of one, or if necessary,
two Investor Directors with the directors filling such vacancies being nominated
(both initially and in connection with each election or appointment thereafter)
by Nestle if permissible under the rules and listing standards (in which case,
they shall become Investor Directors for purposes of this Agreement), and if it
is not permissible thereunder for Nestle to nominate such directors, by the
affirmative vote of a majority of the then-authorized directors. Notwithstanding
the foregoing provisions of this Section 3.03, in no event shall Nestle be
entitled to nominate less than three Continuing Investor Directors. If after
Nestle has caused the resignation of two Investor Directors, an additional
independent director is required in order for the Class A Common Stock to remain
quoted on the Nasdaq National Market System, the Company and the Noninvestor
Directors shall each use their reasonable best efforts to cause the resignation
of the Noninvestor Director who is not an Independent Director and is not then
serving as Chief
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Executive Officer of the Company, with the director filling such vacancy being
nominated (both initially and in connection with each election or appointment
thereafter) by the Noninvestor Directors.
(b) The dividend policy of the Company shall be to pay a dividend not
less than the greater of (i) $0.24 per share on an annualized basis or (ii) 30%
of the Company's net income per share for the preceding calendar year (net
income, calculated for this purpose by excluding from net income the ongoing
non-cash impact of accounting entries arising from the accounting for the
Transactions, including increases in amortization or depreciation expenses
resulting from required write-ups, and entries related to recording of the Put
or Call) unless the Board, in discharging its fiduciary duties, determines not
to declare a dividend.
Section 3.04 Director Approval Required for Certain Actions. In addition
to any other vote required by law, notwithstanding anything to the contrary
herein, until July 1, 2007, the affirmative vote of a majority of the
then-authorized number of directors shall be required to approve or authorize
the Company to take any of the actions listed in Section (b) of Article FIFTH of
the Certificate of Incorporation. Until July 1, 2007, the Company and its
officers, directors, employees and agents, shall not, and each shall have no
power or authority to, take, cause to be taken or agree or commit to take,
whether by written or oral contract or otherwise, any actions listed in Section
(b) of Article FIFTH of the Certificate of Incorporation prior to such action
having been specifically approved by the majority of the then-authorized number
of directors.
Section 3.05 Voting of Shares. In any election of directors, Nestle and
its Affiliates will vote their shares of voting stock for all nominees in
proportion to the votes cast by the holders of Class A Common Stock; provided
that Nestle and its Affiliates may cast all of their votes in favor of any
nominee nominated or proposed for nomination by Nestle pursuant to the
provisions of this Agreement. Notwithstanding the immediately preceding
sentence, if any "person" or "group" (each as defined in Rule 13d-3 promulgated
under the 0000 Xxx) other than any person or group who had a Schedule 13D or
Schedule 13G on file with the SEC on June 14, 2002, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 promulgated under the 0000 Xxx) of
15% or more of the then-outstanding shares of Class A Common Stock, then Nestle
and its Affiliates will vote their shares of voting stock for the nominees for
director that are nominated by Nestle and the nominees for director that are
nominated by the Noninvestor Directors.
ARTICLE IV.
RESTRICTIONS ON TRANSFER
OF COMMON STOCK
Section 4.01 Restrictions on Transfer of Stock. Nestle agrees that it and
its Affiliates will not, directly or indirectly, sell or otherwise transfer any
shares of Class B Common Stock prior to July 1, 2007 except to any Subsidiary
that is directly or indirectly majority owned by NSA; provided that any such
Subsidiary, prior to or concurrently with such transfer, shall agree in writing
to be bound by this Agreement as if it were a signatory hereto; provided,
further, that no such transfer shall relieve Nestle of any of its obligations
hereunder. Notwithstanding the
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restrictions in the immediately preceding sentence, Nestle and its Affiliates
shall have the right to transfer any shares of Class B Common Stock to the
extent necessary to comply with law.
ARTICLE V.
REGISTRATION RIGHTS
Section 5.01 Registration. (a) The Company agrees that, at any time from
and after July 1, 2007 or such earlier date as it shall have become illegal for
Nestle, NSA or any of their respective Affiliates to continue to own
(beneficially or otherwise) any or all of the shares of Class B Common Stock (in
which case, the rights hereunder shall only be exercisable to the extent
necessary to comply with law), upon the request of Nestle, it will file a
Registration Statement as to the kind and number of shares of Registrable
Securities specified in such request; provided that, subject to Section 5.04,
the Company shall not be required to file more than three Registration
Statements that become effective and remain effective for the period referred to
in Section 5.01(b) below. Any such registration requested shall hereinafter be
referred to as a "Demand Registration."
(b) The Company agrees to use its best efforts to have any registration
of the Registrable Securities declared effective as promptly as practicable
after the filing thereof. The Company shall be deemed to have effected a Demand
Registration if the Registration Statement relating to such Demand Registration
is declared effective by the Securities and Exchange Commission (the "SEC") and
remains effective until the earlier of such time as all the Registrable
Securities covered by such Registration Statement have been sold or withdrawn,
or ninety days; provided, however, that no Demand Registration shall be deemed
to have been effected if (i) such Demand Registration, after it has become
effective, is interfered with by any stop order, inspection or other order of
the SEC or other governmental agency or court, or (ii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such Demand Registration are not satisfied.
(c) The Company shall effect any registration requested by Nestle under
this Section 5.01 by the filing of a Registration Statement on such form as
Nestle may determine in its sole discretion.
Section 5.02 Registration Procedures. Subject to the provisions of Section
5.01 hereof, in connection with the registration of shares of Registrable
Securities hereunder, the Company will as expeditiously as possible:
(a) prior to the filing of a Registration Statement, (1) furnish to
Nestle and the underwriters copies of such Registration Statement as is proposed
to be filed, and thereafter such number of copies of such Registration
Statement, each amendment and supplement thereto (in each case including all
exhibits thereto), the prospectus included in such Registration Statement
(including each preliminary prospectus) and such other documents in such
quantities as Nestle may reasonably request from time to time (each a "Public
Document"), (2) allow Nestle and underwriters a reasonable opportunity to review
and comment upon each such Public Document, (3) make the Company's
representatives available for discussion and consultation regarding the contents
of each such Public Document and (4) consider in good faith all comments
proposed by Nestle on each such Public Document;
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(b) prepare and file with the SEC a Registration Statement relating to
the applicable Demand Right, including all exhibits and financial statements
required by the SEC to be filed therewith, and use its best efforts to cause
such Registration Statement to become effective under the 1933 Act; and prepare
and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration Statement
continuously effective for the applicable periods specified in the foregoing
section; cause the related prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the 1933 Act; and comply with
the provisions of the 1933 Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended methods of disposition set forth in such
Registration Statement as so amended or in such prospectus as so supplemented;
(c) use its best efforts to register or qualify the Registrable
Securities under such other securities or blue sky laws of such jurisdiction as
Nestle reasonably requests and do any and all other acts and things as may be
reasonably necessary or advisable to enable Nestle to consummate the disposition
in such jurisdictions of the Registrable Securities; provided that the Company
will not be required to (1) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this subsection (c),
or (2) subject itself to taxation in any such jurisdiction;
(d) use its best efforts to cause the Registrable Securities to be
registered with or approved by such other federal or state governmental agencies
or authorities as may be necessary to enable Nestle to consummate the
disposition of the Registrable Securities;
(e) notify Nestle and the managing underwriters promptly: (1) when the
prospectus or any prospectus supplement or post-effective amendment has been
filed, and with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (2) of any request by the SEC for
amendments or supplements to a Registration Statement or the prospectus or for
additional information, (3) of the issuance of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings
for that purpose, (4) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such propose, (5) if at any time the representations and warranties of the
Company contained in any agreement contemplated by Section 5.02(n) (including
any underwriting agreement) cease to be true and correct in any material
respect, or (6) of the existence of any fact which results in the Registration
Statement or the prospectus containing an untrue statement of material fact or
omitting to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances in
which they were made;
(f) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment;
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(g) enter into customary agreements (including an underwriting agreement
in customary form) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of the Registrable Securities;
(h) if requested by Nestle or the managing underwriters immediately
incorporate in a prospectus supplement or post-effective amendment such
information as Nestle and the managing underwriters agree should be included
therein relating to the plan of distribution with respect to such Registrable
Securities, including, without limitation, information with respect to the
amount of Registrable Securities being sold to such underwriters, the purchase
price being paid thereof by such underwriters and with respect to any other
terms of the underwritten (or best efforts underwritten) offering of the
Registrable Securities to be sold in such offering and make all required filings
of such prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
(i) furnish to Nestle and each managing underwriter without charge, at
least one signed copy of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those incorporated
by reference);
(j) deliver to Nestle and the underwriters without charge, as many
copies of the prospectus or prospectuses relating to such Registrable Securities
(including each preliminary prospectus) and any amendment or supplement thereto
as such persons may reasonably request (it being understood that the Company
hereby consents to the use of such prospectus or each amendment or supplement
thereto by Nestle and the underwriters in connection with the offering and sale
of the Registrable Securities covered by such prospectus or any amendment or
supplement thereto) and such other documents as Nestle may reasonably request in
order to facilitate the disposition of the Registrable Securities by Nestle and
the underwriters;
(k) cooperate with Nestle and the managing underwriters to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters, shall
request at least two business days prior to any sale of Registrable Securities
to the underwriters;
(l) if any fact contemplated by paragraph (e)(6) above shall exist,
prepare a supplement or post-effective amendment to the Registration Statement
or the related prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading;
(m) not later than the effective date of the applicable Registration
Statement, (i) engage in an appropriate transfer and, provide the applicable
transfer agent with printed certificates for the Registerable Securities which
are in a form eligible for deposit with Depositary Trust Company, and (ii)
provide a CUSIP number for the Registrable Securities, if needed;
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(n) enter into agreements (including underwriting agreements) and take
all other appropriate actions in order to expedite or facilitate the disposition
of such Registrable Securities and in such connection, whether or not an
underwriting agreement is entered into and whether or not the registration is an
underwritten registration: (1) make such representations and warranties to
Nestle and the underwriters, in form, substance and scope as are customarily
made by issuers to underwriters in primary underwritten offerings; (2) obtain
opinions of counsel to the Company (which counsel shall have relevant expertise
in the matters opined upon) and updates thereof addressed to Nestle and the
underwriters, covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
Nestle and underwriters; (3) obtain "cold comfort" letters and updates thereof
from the Company's independent certified public accountants addressed to Nestle
and the underwriters, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters by underwriters in
connection with primary underwritten offerings; (4) if an underwriting agreement
is entered into, cause the same to set forth in full the indemnification
provisions and procedures of Section 5.06 hereof with respect to all parties to
be indemnified pursuant to said Section; and (5) deliver such documents and
certificates as may be requested by Nestle and the managing underwriters to
evidence compliance with paragraph (l) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company;
The above shall be done at the effectiveness of such Registration Statement,
each closing under any underwriting or similar agreement as and to the extent
required thereunder and from time to time as may be requested by Nestle in
connection with the disposition of Registrable Securities pursuant to such
Registration Statement.
(o) make available for inspection by a representative of Nestle, any
underwriter participating in any disposition pursuant to such Registration
Statement, and any attorney, accountant or other agent retained by Nestle or any
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company to the extent necessary to conduct a reasonable
investigation within the meaning of the 1933 Act, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such representative, underwriter, attorney or accountant in connection
with the registration; provided that any records, information or documents that
are designated by the Company in writing as confidential shall be kept
confidential by such Persons unless (x) the disclosure of such Records or
information is necessary to avoid or correct a misstatement or omission in the
Registration Statement or (y) the release of such Records or information is
ordered pursuant to a subpoena or other order from a court or governmental
authority of competent jurisdiction. Nestle shall use reasonable efforts, prior
to any such disclosure to inform the Company that such disclosure is necessary
to avoid or correct a misstatement or omission in the Registration Statement.
Nestle further agrees that it will, upon learning that disclosure of such
Records or information is sought in a court or governmental authority, give
notice to the Company and allow the Company, at the expense of the Company, to
undertake appropriate action to prevent disclosure of the Records or information
deemed confidential;
(p) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC, and make generally available to its security
holders, as soon as reasonably practicable, an earnings statement no later than
45 days after the end of any twelve month period (or 90 days,
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if such period is a fiscal year) covering a period of twelve months, beginning
within three months after the effective date of the registration, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule
158 thereunder;
(q) cooperate and assist in any filings required to be made with NASD
and in the performance of any due diligence investigation by any underwriter
(including any "qualified independent underwriter" that is required to be
retained in accordance with the rules and regulations of the NASD);
(r) use all reasonable efforts to cause all Registrable Securities to be
listed on each securities exchange on which similar securities issued by the
Company are listed; and
(s) in connection with any underwritten offering, cause appropriate
members of management to cooperate and participate on a reasonable basis in the
underwriters, "road show" conferences related to such offering.
Section 5.03 Conditions to Offerings. The obligations of the Company to
take the actions contemplated by Sections 5.01 and 5.02 with respect to an
offering of Registrable Securities shall be subject to the following conditions:
(a) With respect to each Demand Registration, the Registrable Securities
specified in such request must constitute either 2% of the outstanding
Registrable Securities or have a market value of not less than $25.0 million
(based on the final sale price of the Class A Common Stock, or if not then
listed or quoted, the Class B Common Stock, on the date the request for a Demand
Registration is received by the Company) and shall be distributed in an
underwritten firm commitment public offering. Nestle shall have the right to
select the investment banker or bankers and lead manager or managers to
administer the offering and its or their counsel; provided that the Company
shall have the right to make a reasonable objection to such selection if such
objection is based upon the Company's prior experience or relationship with such
banker or manager;
(b) There shall not have been an offering registered pursuant to Section
5.01 within the immediately preceding six months;
(c) Nestle shall conform to all applicable requirements of the 1933 Act
and the 1934 Act with respect to the offering and sale of securities and advise
each underwriter, broker or dealer through which any of the Registrable
Securities are offered that the Registrable Securities are part of a
distribution that is subject to the prospectus delivery requirements of the 1933
Act;
(d) The Company may require Nestle to furnish to the Company such
information regarding Nestle or the distribution of the Registrable Securities
as the Company may from time to time reasonably request in writing, in each case
only as required by the 1933 Act or the rules and regulations thereunder or
under state securities or blue sky laws; and
(e) Nestle agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 5.02(e)(6) hereof,
Nestle will forthwith discontinue disposition of Registrable Securities pursuant
to the registration covering such shares of
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Registrable Securities until Nestle's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 5.02(e)(6) hereof.
Section 5.04 Additional Conditions. The Company's obligations pursuant to
Section 5.01 shall be suspended for a reasonable period of time not in excess of
three months if the Company is advised in writing by an investment banker of
national standing that the sale of all shares of Registrable Securities
requested to be registered by Nestle would materially and adversely affect the
market price of the Company's equity securities; provided, however that the
Company shall be entitled to exercise its rights under this Section 5.04 only
once in every twelve month period.
Section 5.05 Registration Expenses. (a) All expenses incident to the
performance of or compliance with this Article by the Company, including,
without limitation, (i) all registration and filing fees (including with respect
to filings required to be made with the SEC and the NASD) and fees and expenses
of compliance with federal or state securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (ii) rating agency fees and
printing expenses (including expenses of printing certificates for the
Registrable Securities in a form eligible with the Depositary Trust Company and
of printing prospectuses), (iii) messenger, telephone and delivery expenses,
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), (iv) the fees
and expenses incurred in connection with the listing of the securities to be
registered on each securities exchange on which similar securities issued by the
Company are then listed, (v) fees and disbursements of counsel for each of the
Company, the underwriters and Nestle (subject to the provisions of Section
5.05(b) hereof), (vi) fees and disbursements of the Company's independent
certified public accountants (including the expenses of any special audit and
"cold comfort" letters required by or incident to such performance), (vii)
securities acts liability insurance (if the Company elects to obtain such
insurance), (viii) fees and expenses associated with any NASD filing required to
be made in connection with the Registration Statement, including, if applicable,
the fees and expenses of any "qualified independent underwriter" (and its
counsel) that is required to be retained in accordance with the rules and
regulations of the NASD, (ix) fees and disbursements of underwriters (excluding
discounts, commissions or fees of underwriters, selling brokers, dealer managers
or similar securities industry professionals relating to the distribution of the
Registrable Securities or legal expenses of any Person other than the Company,
the underwriters and Nestle) customarily paid by issuers, and (ix) the
reasonable fees and expenses of any special experts retained by the Company in
connection with such registration and the fees and expenses of other Persons
retained by the Company will be borne by the Company.
(b) In connection with each Registration Statement required hereunder,
the Company will reimburse Nestle pursuant to such Registration Statement for
the fees and disbursements of not more than one counsel chosen by Nestle.
Section 5.06 Indemnification; Contribution. (a) Indemnification by the
Company. The Company agrees to indemnify, to the fullest extent permitted by
law, Nestle, its directors, officers employees and agents and each Person who
controls Nestle (within the meaning of either the 1933 Act or the 0000 Xxx)
(each such Person referred to herein as a "Nestle Indemnitee") against any and
all losses, claims, damages, liabilities and expenses (including costs of
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investigation and attorneys' fees) arising out of or based upon any untrue or
alleged untrue statement of material fact contained in any Registration
Statement, prospectus or preliminary prospectus (each as amended and or
supplemented, if the Company shall have furnished any amendments or supplements
thereto), or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that the Company shall not be
required to indemnify any Nestle Indemnitee for any losses, claims, damages,
liabilities or expenses arising out of or based upon any such untrue statement
or omission if such untrue statement or omission is made in reliance on and
conformity with any information furnished by Nestle to the Company expressly for
use therein. This indemnity will be in addition to any liability which the
Company may otherwise have. In connection with an underwritten offering, the
Company will indemnify each underwriter thereof, the officers and directors of
such underwriter, and each Person who controls such underwriter (within the
meaning of either the 1933 Act or 1934 Act) to the same extent as provided above
with respect to the indemnification of Nestle Indemnitee; provided that such
underwriter agrees to indemnify the Company to the same extent as provided below
with respect to the indemnification of the Company by Nestle.
(b) Indemnification by Nestle. In connection with any registration in
which Nestle is participating, Nestle will furnish to the Company in writing
such information and affidavits with respect to Nestle as the Company reasonably
requests for use in connection with any such registration, prospectus, or
preliminary prospectus and agrees to indemnify the Company, its directors, its
officers who sign the Registration Statement and each Person, if any, who
controls the Company (within the meaning of either the 1933 Act or of the 0000
Xxx) to the same extent as the foregoing indemnity from the Company to the
Nestle Indemnitees, but only with respect to information relating to Nestle
furnished to the Company in writing by Nestle expressly for use in the
Registration Statement, the prospectus, any amendment or supplement thereto, or
any preliminary prospectus.
(c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation or inquiry) shall be instituted
involving any person or entity in respect of which indemnity may be sought
pursuant to Section 5.06(a) or Section 5.06(b), such person or entity
(hereinafter called the indemnified party) shall promptly notify the entity
against whom such indemnity may be sought (hereinafter called the indemnifying
party) in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (i) the indemnifying party shall have failed to
assume the defense of such action or proceeding or has failed to employ counsel
reasonably satisfactory to the indemnified party, or (iii) there may be one or
more legal defenses available to the indemnified party that are different from
or additional to those available to the indemnifying party (in which case, if
such indemnified party notifies the indemnifying party that it elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action or
proceeding on behalf of such indemnified party, it being understood, however,
that the indemnifying party shall not, in
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connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties, and that all such fees
and expenses shall be reimbursed as they are incurred). In the case of any such
separate firm for the indemnified parties, such firm shall be designated in
writing by the indemnified parties. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes (i) an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding, (ii) is
accompanied or preceded by reimbursement of expenses of each such indemnified
party and (iii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) Contribution. If the indemnification provided for in this Section
5.06 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to in this Section 5.06, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 5.06(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with any investigation or proceeding. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 5.06(d) were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
5.06(d), no Nestle Indemnitee shall not be required to contribute any amount in
excess of the net proceeds from the offering received by such Nestle Indemnitee.
No person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentation. If
indemnification is available under this Section 5.06, the indemnifying parties
shall indemnify each indemnified party to the full extent provided in Sections
5.06(a) and (b) without regard to the relative fault of said indemnifying party
or indemnified party or any other equitable consideration provided for in this
Section 5.06(d).
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Section 5.07 Rule 144. The Company covenants that it will file the reports
required to be filed by it under the 1933 Act and the 1934 Act and the rules and
regulations adopted by the SEC thereunder, and it will take such further action
as Nestle may reasonably request, all to the extent required from time to time
to enable Nestle on or after July 1, 2007 to sell shares of Class A Common Stock
and Class B Common Stock without registration under the 1933 Act within the
limitation of the exemptions provided by (a) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of Nestle, the Company
will deliver to Nestle a written statement as to whether it has complied with
such information requirements.
Section 5.08 No Inconsistent Agreements, etc. (a) The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to Nestle in this Agreement or otherwise
conflicts with the provisions hereof. The Company represents and warrants that
the rights granted to Nestle in this Agreement do not in any way conflict with
and are not inconsistent with the rights granted to the holders of the Company's
securities under any agreement in effect on the date hereof.
(b) Any determination required to be made by the Company under this
Article V shall be made by the Independent Directors.
Section 5.09 Assignment of Registration Rights. All or a portion of the
rights to cause the Company to register Registrable Securities pursuant to this
Article V may be assigned (but only with all related obligations in this Article
V) by Nestle to a transferee or assignee of such securities that (i) is an
Affiliate of Nestle, or (ii) acquires Registrable Securities with a market value
of at least $10 million (based on the final sale price of the Class A Common
Stock, or if not then listed or quoted, the Class B Common Stock, as of the date
of the transfer), provided that the Company is, prior to the exercise of any
rights by the transferee or assignee, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned and, if less than three, the
number of Demand Registrations being assigned or transferred.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations of the Company. (a) The execution, delivery
and performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby are within the Company's
corporate powers and have been duly authorized by all necessary corporate
action. This Agreement constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, liquidation, dissolution,
moratorium or other similar laws relating to or affecting the rights of
creditors generally and to the effect of the application of general principles
of equity (regardless of whether considered in proceedings at law or in equity).
(b) The execution, delivery and performance by the Company of this
Agreement require no action by or in respect of, or filing with, any
governmental body, agency, official or
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authority, other than (i) compliance with any applicable requirements of the
federal securities laws; and (ii) compliance with any applicable foreign or
state securities or blue sky laws.
(c) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
hereby do not and will not (i) contravene or conflict with the Certificate of
Incorporation or By-Laws, and (ii) assuming compliance with the matters referred
to in Section 6.01(b), contravene or conflict with or constitute a violation of,
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to the Company.
Section 6.02 Representations of NSA and Nestle. (a) The execution,
delivery and performance by NSA and Nestle of this Agreement and the
consummation by NSA and Nestle of the transactions contemplated hereby are
within NSA's and Nestle's corporate powers and have been duly authorized by all
necessary corporate action. This Agreement constitutes a valid and binding
agreement of NSA and Nestle, enforceable against NSA and Nestle in accordance
with its terms, subject to the effect of bankruptcy, insolvency, reorganization,
liquidation, dissolution, moratorium or other similar laws relating to or
affecting the rights of creditors generally and to the effect of the application
of general principles of equity (regardless of whether considered in proceedings
at law or in equity).
(b) The execution, delivery and performance by NSA and Nestle of this
Agreement require no action by or in respect of, or filing with, any
governmental body, agency, official or authority, other than (i) compliance with
any applicable requirements of the federal securities laws; and (ii) compliance
with any applicable foreign or state securities or blue sky laws.
(c) The execution, delivery and performance by NSA and Nestle of this
Agreement and the consummation by Nestle of the transactions contemplated hereby
do not and will not (i) contravene or conflict with the certificate of
incorporation or by-laws of NSA or Nestle, and (ii) assuming compliance with the
matters referred to in Section 6.01(b), contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to NSA or Nestle.
ARTICLE VII.
ADDITIONAL COVENANTS
Section 7.01 Confidentiality.
(a) Nestle and the Company (each, a "Disclosing Party") understand and
acknowledge that it will, throughout the term of this Agreement, provide and
have provided, prior to the date of this Agreement and pursuant to a
Confidentiality Agreement, dated June 6, 2002, by and between Dreyers and
Nestle, certain information of a confidential nature to the other party (the
"Receiving Party"). Each Receiving Party agrees that, without the prior written
consent of the Disclosing Party, any information relating to the Disclosing
Party or any of its Affiliates provided to the Receiving Party or persons
nominated by a Receiving Party to the Board, in connection with or in
furtherance of this Agreement or under the above-mentioned confidentiality
agreement, which is either confidential, proprietary, or otherwise not generally
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available to the public (in each party's case, the "Confidential Information")
will be used (A) by Nestle and its Affiliates, (i) for the purposes of
evaluating their investment in the Company, facilitating the operation and
oversight of the Company's business and ensuring compliance with the approval
rights set forth in Section 3.1(b) of the By-Laws of the Company, (ii) for
assurances of quality control by the Company, (iii) in connection with Nestle
and its Affiliates tax, stock exchange, financial and other reporting
obligations, and (iv) for Nestle and its Affiliates strategic considerations and
other long-term planning goals pertaining to the Company and (B) by the Company,
solely for the purposes consented to by Nestle, and will be kept confidential by
the Receiving Party, its Affiliates and their respective directors, officers,
employees, agents and other representatives ("Representatives"), using the same
standard of care in safeguarding the Confidential Information as the Receiving
Party employs in protecting its own proprietary information which the Receiving
Party desires not to disseminate or publish, and will not be disclosed to any
Person, except as otherwise set forth above and except to the extent required by
any legal or governmental process or otherwise by foreign or domestic law,
including any regulatory agency having authority to examine such Confidential
Information or any portion thereof. The term Confidential Information does not
include information which (i) is or becomes generally available to the public
other than as a result of a breach of this Agreement by the Receiving Party or
its Representatives, (ii) was within the Receiving Party's possession prior to
its being furnished to it by or on behalf of the Disclosing Party, or (iii) is
or becomes available to the Receiving Party on a non-confidential basis from a
source other than the Disclosing Party or any of its Representatives; in either
case (ii) or (iii) above, provided that such source was not known by the
Receiving Party to be bound by a confidentiality agreement with, or other
contractual, legal or fiduciary obligation of confidentiality to, the Disclosing
Party or any other party with respect to such information. It is understood (i)
that such Affiliates and Representatives shall be informed by the Receiving
Party of the confidential nature of the Confidential Information, (ii) that such
Affiliates and Representatives shall be bound by the provisions of this Section
7.01 as a condition of receiving the Confidential Information and (iii) that, in
any event, the Receiving Party shall be responsible for any breach of this
Agreement by any of its Affiliates or Representatives.
(b) If a Receiving Party or any of its Representatives are requested or
required (by oral question, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
the Disclosing Party's Confidential Information, the Receiving Party will, as
soon as practicable, notify the Disclosing Party of such request or requirement
so that the Disclosing Party may seek an appropriate protective order. If, in
the absence of a protective order, the Receiving Party, its Affiliates or any of
their respective Representatives are, in the opinion of the Receiving Party's
counsel, compelled to disclose the Disclosing Party's Confidential Information
or else stand liable for contempt or suffer other censure or significant
penalty, the Receiving Party or its Affiliates may disclose only such of the
Disclosing Party's Confidential Information to the party compelling disclosure
as is required by law. The Receiving Party and its Affiliates shall not be
liable for the disclosure of the Disclosing Party's Confidential Information
pursuant to the preceding sentence. The Receiving Party and its Affiliates will,
at the Disclosing Party's expense, cooperate with the Disclosing Party's
reasonable efforts to obtain a protective order or other reliable assurance that
confidential treatment will be accorded the Disclosing Party's Confidential
Information.
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Section 7.02 Annual Business Plan and Budget. Before the end of each
calendar year, the Company shall cause management to present to the Board an
operating plan, including a budget (an "Annual Plan") for the following fiscal
year. In addition, each year, before such an Annual Plan is presented,
management shall present to the Board for the Board's review and approval, as
required by Section 3.4(a) of this Agreement and Section 3.1(b) of the By-Laws,
a three year business plan (each, a "Business Plan"). Each such Business Plan
shall include at least three years of financial statement projections, capital
and financing requirements, and strategic marketing and product development
plans. In the even that the Board does not approve the Annual Plan prior to
commencement of a fiscal year, the Company shall not in any case exceed the
capital spending levels specified in the prior year's Annual Plan.
Section 7.03 Company Information. The Company shall cause to be prepared
and sent to Nestle and any Affiliates of Nestle designated by Nestle, the
following information so that, among other things, Nestle may effectively
participate in the corporate governance of the Company:
(a) within 30 days following the end of each fiscal year of the Company
or as soon thereafter as reasonably practicable, a report that shall include all
necessary information reasonably requested by Nestle and its Affiliates for the
preparation of their federal, state and local income or franchise tax or
information returns or for preparation of any foreign tax filings, returns or
requirements;
(b) a copy of the Company's and any of its Subsidiaries' federal, state
and local income tax or information returns for each fiscal year, concurrent
with the filing of such returns;
(c) within 90 days after the end of each fiscal year, the Company shall
provide Nestle and its Affiliates with an audited consolidated balance sheet,
income statement and statement of cash flow for the year then ended (including,
in each case, the notes thereto) prepared in accordance with generally accepted
accounting principles as applied in the United States ("GAAP") applied (except
as may be indicated in the notes thereto) on a consistent basis through the
periods indicated (except as may be indicated in the notes thereto) which have
been examined and reported on by independent public accountant of recognized
national standing;
(d) within 90 days after the end of each fiscal year, the Company shall
provide Nestle and its Affiliates with an audited consolidated balance sheet,
income statement and statement of cash flow for the year then ended (including,
in each case, the notes thereto) prepared in accordance with International
Accounting Standards ("IAS") applied (except as may be indicated in the notes
thereto) on a consistent basis through the periods indicated (except as may be
indicated in the notes thereto) which have been examined and reported on by
independent public accountant of recognized national standing;
(e) within (i) 20 days after the end of each fiscal year, and (ii) 20
days after the end of each fiscal quarter, the Company shall provide Nestle and
its Affiliates with an unaudited balance sheet, income statement and statement
of cash flow for the year or quarter (as appropriate) then ended, prepared in
accordance with GAAP, which have been certified as to their accuracy by the
chief financial officer of the Company, as well as such other financial
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information as Nestle and its Affiliates may reasonably request to enable Nestle
and its Affiliates to prepare their quarterly and annual financial statements;
(f) within (i) 20 days after the end of each fiscal year, and (ii) 20
days after the end of each fiscal quarter, the Company shall provide Nestle and
its Affiliates with an unaudited balance sheet, income statement and statement
of cash flow for the year or quarter (as appropriate) then ended, prepared in
accordance with IAS, which have been certified as to their accuracy by the chief
financial officer of the Company, as well as such other financial information as
Nestle and its Affiliates may reasonably request to enable Nestle and its
Affiliates to prepare their consolidated quarterly and annual financial
statements;
(g) within 20 days after the end of each month, the Company shall
provide Nestle and its Affiliates with unaudited balance sheet, statements of
income and cash flows for the previous month, prepared in accordance with GAAP,
which have been certified as to their accuracy by the chief financial officer of
the Company;
(h) within 20 days after the end of each month, the Company shall
provide Nestle and its Affiliates with unaudited balance sheet, statements of
income and cash flows for the previous month, prepared in accordance with IAS,
which have been certified as to their accuracy by the chief financial officer of
the Company;
(i) within 5 days after such package becomes available, provide to
Nestle and its Affiliates a copy of the Company's monthly management executive
summary or any substantially similar replacement therefor for the third month of
each fiscal quarter; and
(j) promptly after the delivery of any compliance certificate provided
to lenders in respect of indebtedness of the Company and its Subsidiaries and,
with reasonable promptness, provide to Nestle and its Affiliates such other
financial information and other data of the Company and its Subsidiaries as
Nestle and its Affiliates may reasonably request, including, but not limited to,
operating financial information for each facility owned or operated by the
Company or any of its Subsidiaries.
Section 7.04 Inspection of Property. Subject to applicable law, the
Company shall permit representatives of Nestle and its Affiliates to visit and
inspect, at Nestle's or such Affiliate's expense, any of the properties of the
Company and its Subsidiaries, to examine the corporate books and make copies or
extracts therefrom and to discuss the affairs, finances and accounts of the
Company and its Subsidiaries with the principal officers of the Company, all at
such reasonable times, upon reasonable notice and as Nestle or its Affiliates
may reasonably request.
Section 7.05 Quality Standards. Within 30 days following the date of this
Agreement, the Company shall submit its written standards of quality regarding
the production, manufacturing, packaging, transfer, storage and supply of its
products (collectively, the "Quality Standards") to representatives of Nestle
and its Affiliates. The Company shall cooperate with such representatives to
review and revise the Quality Standards and shall consider in good faith any
amendments, modifications or revisions to the Quality Standards requested by
such representatives. The Company shall thereafter produce, package,
manufacture, transport, store
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and/or supply its products in strict accordance with the Quality Standards. By
no later than 120 days prior to the end of each fiscal year of the Company, the
Company shall, in consultation with representatives of Nestle, review the
Quality Standards from the prior year and consider in good faith any amendments,
modifications or revisions requested by such representatives for the following
fiscal year. The Company will be responsible for ensuring that its products
strictly comply with the Quality Standards, regardless of whether its products
are produced or packaged at a facility owned or operated by the Company or a
third party. Nestle and its Affiliates and their respective representatives
shall have the right to request production line samples and quality records or
other documentation relating to the production of the Company's products at any
time for purposes of quality evaluation. If such samples are located at a
facility owned or operated by a third party, the Company shall provide the
requested quality records and existing documentation to Nestle to the fullest
extent available to it. The Company shall notify Nestle as soon as practicable
if it or any of its officers, or to its knowledge, employees or agents become
aware of any improper ingredients in its products which would cause such
products to be adulterated or become aware of any hazardous or adulterated
ingredients in products which are either works-in-process or finished that
present a known or potential threat to consumer safety. The Company shall notify
Nestle as soon as practicable if it or any of its officers, or to its knowledge,
employees or agents becomes aware of, receives notice of, or incurs any penalty
or citation in connection with, any material violation of any law, regulation,
rule or standard regarding the production, packaging, storage, transport or
supply of its products.
ARTICLE VIII.
MISCELLANEOUS
Section 8.01 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy or similar writing)
and shall be given,
If to the Company:
Xxxxxx'x Grand Ice Cream, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
Telecopy: 000-000-0000
With a copy to:
Xxxx X. Xxxxxx, Esq.
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
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If to Nestle:
c/o Nestle USA, Inc.
000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn.: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn.: Xxxx Xxxxx Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
or to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices shall be
deemed to have been received on the date of personal delivery, upon the
transmission and confirmation of the facsimile, on the third Business Day after
the mailing thereof or on the first day after delivery by overnight courier.
Section 8.02 Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by all parties to this Agreement, or in
the case of a waiver, by the party against whom the waiver is to be effective;
provided that no such amendment or waiver by the Company shall be effective
without the approval of a majority of the Noninvestor Directors.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 8.03 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that, except as provided in Section
5.09, no party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other party hereto.
Section 8.04 Governing Law Jurisdiction and Forum; Waiver of Jury Trial.
(a) This Agreement shall be construed in accordance with and governed by
the law of the State of Delaware, without giving effect to principles of
conflict of laws.
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(b) Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of any Delaware state or federal court of appropriate jurisdiction
in any action arising out of or relating to this Agreement, and hereby
irrevocably agrees that all claims in respect of such action may be heard and
determined in such Delaware state or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action. The parties
further agree, to the extent permitted by applicable Law, that any final and
unappealable judgment against any of them in any action contemplated above shall
be conclusive and may be enforced in any other jurisdiction within or outside
the United States by suit on the judgment, a certified copy of which shall be
conclusive evidence of the fact and amount of such judgment.
(c) To the extent that any party hereto has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, such
party hereby irrevocably waives such immunity in respect of its obligations with
respect to this Agreement.
(d) Each party waives, to the fullest extent permitted by applicable
Law, any right it may have to a trial by jury in respect of any action arising
out of or relating to this Agreement. Each party certifies that it has been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications set forth above in this Section 8.04.
Section 8.05 Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by the other party hereto.
Section 8.06 Specific Performance. Each party to this Agreement
acknowledges and agrees that each other party's respective remedies at law for a
breach or threatened breach of any of the provisions of this Agreement would be
inadequate and, in recognition of that fact, agrees that, in the event of a
breach or threatened breach by any party of the provisions of this Agreement, in
addition to any remedies at law, any party, without posting any bond shall be
entitled to obtain equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction or any other
equitable remedy which may then be available.
Section 8.07 Termination. This Agreement (other than Sections 1.03 and
1.04 hereof) shall terminate in its entirety at such time as Nestle and its
Affiliates beneficially own 100% of the voting stock of the Company. Articles
III and IV of this Agreement (other than Section 3.01(c)) shall terminate on
July 1, 2007, unless earlier terminated pursuant to the preceding sentence.
Section 8.08 Entire Agreement; Beneficiaries. This Agreement and the
Merger Agreement contain the entire agreement between the Company, Nestle and
NSA with respect to the subject matter hereof and there are no agreements,
understandings, representations or warranties between the parties other than
those set forth or referred to herein. Other than as set forth in Section 8.12,
nothing expressed, referred to, or implied directly or indirectly by or in this
-24-
Agreement will be construed to give any Person other than the Company, Nestle
and NSA to this Agreement any legal or equitable right, remedy, or claim under
or with respect to this Agreement or any provision of this Agreement. This
Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and
assigns permitted by Section 8.03.
Section 8.09 Headings; Definitions. The section and article headings
contained in this Agreement are inserted for convenience of reference only and
will not affect the meaning or interpretation of this Agreement. All references
to Sections or Articles contained herein mean Sections or Articles of this
Agreement unless otherwise stated. All capitalized terms defined herein are
equally applicable to both the singular and plural forms of such terms. The
terms "hereof", "herein", and "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole and
not to any particular provision of this Agreement. The word "including" and
words of similar import when used in this Agreement shall mean "including
without limitation" unless the context otherwise requires or unless otherwise
specified. All references in this Agreement to any period of days shall be
deemed to be to the relevant number of calendar days unless otherwise specified.
Section 8.10 Enforcement. The Company shall take (and shall have no
corporate power or capacity to refuse to take) such actions as may be necessary
to enforce the obligations of Nestle and NSA under this Agreement directly
against Nestle and NSA, or in the event of assignment by Nestle or NSA, against
Nestle, NSA and any Affiliate of NSA to which any assignment is made, and all
determinations with respect to the manner of enforcement of such obligations on
behalf of the Company shall be made by a majority of the Noninvestor Directors,
provided that, if there are no Noninvestor Directors after July 1, 2007, such
determinations shall be made by the independent directors referred to in Section
3.01(c).
Section 8.11 Further Understandings. NSA, Nestle and the Company expressly
intend, acknowledge and agree that this agreement does not constitute a contract
of the type described in section 365(c)(2) of the United States Bankruptcy Code,
and NSA, Nestle and the their respective Affiliates shall not have rights under
such section or section 365(e)(2)(B) of the United States Bankruptcy Code. It is
the intention of NSA, Nestle and the Company that amounts required to be paid in
connection with the Put or Call shall be paid at the earliest possible time in
accordance with the terms of this Agreement and the Certificate of Incorporation
and as permitted by law.
Section 8.12 D & O Insurance; Indemnification of Officers and Directors.
The Company shall maintain in effect for the benefit of all of the Company's
directors and officers an insurance and indemnification policy that provides
coverage for acts or omissions with coverage limits and such other terms at
reasonable levels consistent with industry practice. The Certificate of
Incorporation shall, from and after the Effective Time, contain provisions no
less favorable with respect to limitation of liabilities of directors or
officers and indemnification than are set forth as of the date hereof in the
Certificate of Incorporation, which provisions shall not be amended, repealed or
otherwise modified in a manner that would adversely affect the rights thereunder
of individuals who at the Effective Time were directors or officers of the
Company. So long as the Company is using its reasonable best efforts to pursue
reimbursement from the Company's director and officer insurance policies, Nestle
shall indemnify the officers and
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directors of the Company against all losses, claims, damages, liabilities and
expenses (including reasonable attorneys' fees) ("Losses") arising out of the
redemption (pursuant to the Call or the Put) of the Class A Common Stock in
accordance with the provisions of this Agreement or the Short-Form Merger, other
than any such Losses that result primarily from actions taken or omitted in bad
faith by the indemnified person or from the indemnified person's gross
negligence or willful misconduct; provided, however, that the foregoing
indemnification obligation shall apply only to the extent the Losses incurred by
such officers and directors are not reimbursed or advanced by the Company or the
insurers under the Company's director and officer insurance policies, and
provided, further, that Nestle shall have any subrogation rights of the
indemnitee against the Company or the insurer.
Section 8.13 Definitions.
"1933 Act" shall mean the Securities Act of 1933, as amended, including
the rules and regulations promulgated there under.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended,
including the rules and regulations promulgated there under.
"Affiliate" shall mean, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person; it being
understood that NSA and its Subsidiaries shall be Affiliates of Nestle but that
the Company and its Subsidiaries shall not be considered to be Affiliates of NSA
or Nestle. As used in this definition, "control" (including, with correlative
meanings, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise).
"Business Day" shall mean any day that is not a Saturday, Sunday or other
day on which the commercial banks in New York City are authorized or required by
Law to remain closed.
"Independence Standard" shall mean the standard of independence necessary
for a director to qualify as an "Independent Director" as such term (or any
replacement term) is used under the rules and listing standards of the National
Association of Securities Dealers, as such rules and listing standards may be
amended from time to time.
"Insolvency Event" shall have the meaning assigned to such term in the
Certificate of Incorporation.
"Law" shall mean any United States federal, state or local, or any
foreign, order, writ, injunction, judgment, award, decree, statute, law, rule or
regulation.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Options Out of the Money" shall mean, as of any specified date, all
options, rights, warrants or other securities of the Company convertible into or
exchangeable for Class A Common Stock or Class B Common Stock for which the
exercise or conversion price exceeds the Quoted Price of such Class A Common
Stock or Class B Common Stock.
-26-
"Person" shall mean any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"Quoted Price" shall mean the last reported sale price of the outstanding
shares of Class A Common Stock as reported by the Nasdaq National Market System
on any trading day, or if the outstanding shares of Class A Common Stock are
listed on a national securities exchange, the last reported sales price of the
outstanding Class A Common Stock on such exchange (which shall be for
consolidated trading if applicable to such exchange), or if neither is so
reported or listed, the last reported bid price of the outstanding shares of
Class A Common Stock.
"Registrable Securities" shall mean all shares of Class A Common Stock and
Class B Common Stock. Registrable Securities shall also include any securities
which may be issued or distributed with respect to, or in exchange for, such
Registrable Securities pursuant to a stock dividend, stock split or other
distribution, merger, consolidation, recapitalization or reclassification or
similar transaction; provided, however, that, any such Registrable Securities
shall cease to be Registrable Securities to the extent (i) a Registration
Statement with respect to the sale of such Registrable Securities has been
declared effective under the 1933 Act and such Registrable Securities have been
disposed of in accordance with the plan of distribution set forth in such
Registration Statement, or (ii) such Registrable Securities are distributed
pursuant to Rule 144 (or any similar provision then in force) under the 1933
Act.
"Registration Statement" shall mean any registration statement of the
Company under the 1933 Act that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the related prospectus,
any preliminary prospectus, all amendments and supplements to such registration
statement (including post-effective amendments), all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
"Subsidiary" shall mean, with respect to any Person, any other Person of
which securities or other ownership interests having ordinary power to elect a
majority of the board of directors or other Persons performing similar functions
are at any time directly or indirectly owned by such Person.
"Substantial Adverse Change Determination" shall have the meaning assigned
to such term in the Certificate of Incorporation.
"Triggering Event" shall mean either a Substantial Adverse Change
Determination or an Insolvency Event.
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LIST OF OTHER DEFINED TERMS
Section
-------
1933 Act............................. 3.03
1934 Act............................. 2.02
Agreement............................ Preamble
Annual Plan.......................... 7.02
Board................................ 3.01(a)
Business Plan........................ 7.02
By-Laws.............................. 3.01(a)
Certificate of Incorporation......... 1.01(a)
Code ................................ 1.01(d)
Class A Common Stock................. Recitals
Class B Common Stock................. Recitals
Company.............................. Preamble
Code ................................ 1.01(a)
Confidential Information............. 7.01(a)
Confidentiality Agreement............ 4.01(d)
Continuing Investor Directors........ 3.01(a)
Contributing Sub..................... Recitals
Contribution ........................ Recitals
Demand Registration.................. 5.01(a)
Depositary........................... 1.01(a)
DGCL................................. 1.01(c)
Disclosing Party..................... 7.01(a)
Effective Time....................... 3.01(a)
Equity Security...................... 2.02
Executive Directors.................. 3.01(a)
GAAP ................................ 7.04(c)
IAS ................................. 7.04(d)
Independent Directors................ 3.01(a)
Investor Directors................... 3.01
Losses .............................. 7.06
Merger............................... Recitals
Merger Agreement..................... Recitals
Merger Sub........................... Recitals
Nestle............................... Preamble
Nestle's Voting Interest............. 2.02
Noninvestor Directors................ 3.01
November Indemnitee.................. 5.06(a)
NSA.................................. 2.03(b)
Put Amount .......................... 2.03(a)
Quality Standards.................... 7.05
Receiving Party...................... 7.01(a)
Registration Expenses................ 5.05
Registration Statement............... 5.01(a)
Representatives...................... 7.01(a)
SEC.................................. 5.01(b)
Short-Form Merger ................... 1.01(c)
Short-Form Merger Trigger............ 1.01(c)
Transactions......................... Recitals
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXXXXX'X GRAND ICE CREAM, INC.
By
-------------------------------------
Name:
Title:
NESTLE HOLDINGS, INC.
By
-------------------------------------
Name:
Title:
Nestle S.A., solely with respect to
Articles I, II and VIII hereof
By
-------------------------------------
Name:
Title:
