EXHIBIT 2
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT ("Agreement") is made and entered into as
of October 21, 1997 by and between Berkshire Hathaway, Inc., a Delaware
corporation ("Parent"), and each of the other persons whose signature appears on
the signature page hereto (each a "Shareholder" and collectively the
"Shareholders").
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent and International Dairy Queen Inc., a Delaware corporation
(the "Company"), are executing and delivering to each other that certain
Agreement and Plan of Merger (the "Merger Agreement"), dated as of the date
hereof, a copy of which each of the Shareholders has received and reviewed,
pursuant to which the Company will be merged with and into a direct, wholly
owned subsidiary of Parent (the "Merger") and each share of Class A Common
Stock, par value $.01 per share, of the Company ("Company Class A Stock") and
Class B Common Stock, par value $.01 per share, of the Company ("Company Class B
Stock" and together with the Company Class A Stock, the "Company Common Stock")
will be converted into the right to receive, at the election of the holder
thereof and subject to certain limitations stated in the Merger Agreement, a
portion of a share of Class A Common Stock, par value $5.00 per share, of Parent
("Parent Class A Stock"), a portion of a share of Class B Common Stock, par
value $1667 per share, of Parent ("Parent Class B Stock" and together with the
Parent Class A Stock, the "Parent Stock"), or cash; and
WHEREAS, after considering the best interests of the Company and its
shareholders, reviewing the Merger Agreement, and weighing the possibilities of
acquisition proposals from parties other than Parent, each of the Shareholders
has determined that an acquisition of the Company by Parent is uniquely
advantageous to the Company and its shareholders, providing benefits not
available in an acquisition of the Company by any other reasonably foreseeable
acquiror of the Company; and
WHEREAS, each of the Shareholders, after considering his own financial
interests. has determined that he wants to acquire Parent Stock through the
Merger in exchange for his Company Common Stock, and does not want to acquire
either cash or the stock of any other reasonably foreseeable acquiror of the
Company in exchange for his Company Common Stock; and
WHEREAS, Parent is willing to execute and deliver the Merger Agreement
only if each of the Shareholders executes and delivers this Agreement and only
in reliance upon the agreements, representations, and warranties of each of the
Shareholders herein, and each of the Shareholders is willing to execute and
deliver this Agreement in order to induce Parent to execute and deliver the
Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Shareholders hereby severally agree with Parent as follows:
1. Representations and Warranties of the Shareholders. Each Shareholder
hereby severally represents and warrants to Parent as follows:
(a) AUTHORITY; NO VIOLATION. Such Shareholder has all
necessary power and authority to enter into and perform all of such
Shareholder's obligations hereunder. The execution and delivery of this
Agreement by such Shareholder and consummation by such Shareholder of
the transactions contemplated hereby will not violate, conflict with,
or constitute a default under any contract, commitment, restriction,
arrangement, or other agreement to which such Shareholder is a party or
by which such Shareholder is bound, including any proxy, proxy
agreement, voting agreement, voting trust, shareholders' agreement, or
trust agreement. There is no other person, including any beneficiary of
or other holder of an interest under any trust of which such
Shareholder is a trustee, whose consent is required for the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed
and delivered by such Shareholder (and such Shareholder's spouse if
such spouse's signature is required under applicable law in order to
convey to Parent the full benefit of this Agreement), and constitutes a
valid and binding agreement of such Shareholder (and such spouse if
applicable), enforceable against such Shareholder (and such spouse) in
accordance with its terms.
(b) OWNERSHIP OF SHARES. Such Shareholder is the beneficial
owner or record holder of the number of each class of shares of Company
Common Stock indicated under such Shareholder's name on the signature
page hereto (the "Existing Shares", and together with any shares of the
Company Common Stock acquired by Shareholder after the date hereof, the
"Shares") and, as of the date hereof, the Existing Shares constitute
all of the shares of Company Common Stock owned beneficially or of
record by such Shareholder. With respect to the Existing Shares, such
Shareholder has sole voting power, sole power to issue instructions
with respect to the matters set forth in Section 2 hereof, sole power
to dispose, sole power to demand a dissenting shareholder's appraisal
rights and sole power to engage in the actions set forth in Section 2
hereof, with no restriction on the voting rights, rights of disposition
or otherwise, subject to applicable federal or state securities laws
restricting "affiliates" of the Company.
(c) NO INTENTION TO SELL. Such Shareholder has no plan or
intention to, directly or indirectly, sell, exchange or otherwise
dispose of, reduce the risk of loss by short sale or otherwise, enter
into any contract or other arrangement with respect to, or consent to
the sale, exchange or other disposition of any interest in, the Parent
Stock which such Shareholder receives in the Merger. Such Shareholder
gives this representation to enable Faegre & Xxxxxx, tax counsel to the
Company, and Xxxxxx, Xxxxxx & Xxxxx, tax counsel to Parent, to render
their respective legal opinions at the Closing (as defined in the
Merger Agreement) that the Merger qualifies as a reorganization within
the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended. Such Shareholder understands that significant adverse tax
consequences may result to Parent, the Company, and the Company's
shareholders including such Shareholder, if such representation is not
true and complete as of the Effective Time (as defined in the Merger
Agreement)
of the Merger and agrees to restate the foregoing representation on or
about the Effective Time of the Merger.
2. Voting Agreement, Proxy, and Agreement Not to Transfer or Convert.
(a) AGREEMENT TO VOTE FOR MERGER. Each Shareholder hereby
severally and irrevocably agrees to vote all of the Shares as follows:
(i) in favor of the Merger Agreement, the Merger, and the other
transactions contemplated by the Merger Agreement; (ii) in favor of any
other matter necessary to the consummation of the Merger and the other
transactions contemplated by the Merger Agreement, (iii) against any
Alternative Transaction Proposal (as defined in the Merger Agreement),
and (iv) against any other action or agreement that would result in a
breach in any material respect of any covenant, representation or
warranty or any other obligation or agreement of the Company under the
Merger Agreement or that is intended, or could reasonably be expected,
to impede, interfere with, delay, postpone, discourage or adversely
affect the consummation of the Merger or the other transactions
contemplated by the Merger Agreement. Such Shareholder will not enter
into any agreement or understanding prior to the Termination Date (as
defined below) to vote after the Termination Date in any manner
inconsistent with clauses (i), (ii), (iii), or (iv) of the preceding
sentence.
(b) IRREVOCABLE PROXY. Each Shareholder hereby severally
grants to, and appoints, Parent and Xxxxxx X. Xxxxxxx, Chairman of
Parent, Xxxxxxx X. Xxxxxx, Vice-Chairman of Parent, and Xxxx X.
Hamburg, Chief Financial Officer of Parent, in their respective
capacities as officers of Parent, and any individual who shall succeed
to either such office of Parent, and any other designee of Parent, and
each of them, such Shareholder's proxy and attorney-in-fact (with full
power of substitution and resubstitution), to vote the Shares as stated
in clauses (i), (ii), (iii), and (iv) of Section 2(a). This proxy is,
and such Shareholder intends this proxy to be, irrevocable and coupled
with an interest. This proxy will expire at the close of business on
the Termination Date. Such Shareholder will take any and all further
actions and will execute and deliver any and all further instruments
(including a proxy separate from this Agreement) as may be necessary or
desirable, in Parent's sole determination, to effectuate the intent of
this proxy. Such Shareholder hereby revokes any and all proxies, voting
agreements, voting trusts, or other arrangements of any kind previously
granted by such Shareholder with respect to the voting of the Shares.
(c) NO TRANSFER OF SHARES. Each Shareholder hereby severally
agrees not to (i) sell, transfer, assign, or otherwise dispose, by gift
or otherwise, of any of the Shares or any interest therein, (ii)
pledge, mortgage, hypothecate, or otherwise encumber any of the Shares
or any interest therein, (iii) deposit the Shares or any interest
therein into any voting trust, voting agreement, proxy, or other
arrangement of any kind with respect to the voting of the Shares, or
(iv) enter into any contract, option, or other arrangement with
respect, directly or indirectly, to the foregoing, provided that
nothing herein shall be deemed to prohibit (i) the
pledge of any of the Shares pursuant to the terms of any bank credit
agreement. or (ii) any Shareholder from making bona fide gifts of any
of the Shares, if the donee of such Shares agrees in writing with
Parent to be bound by the terms of this Agreement. Except as expressly
set forth above, without the prior written consent of Parent, any
purported sale, transfer, assignment, disposition, pledge, mortgage,
hypothecation, encumbrance, or deposit of the Shares or any interest
therein, or contract, option, or other arrangement with respect,
directly or indirectly, thereto will be null, void, and unenforceable
and will have no effect on the agreements, including the proxy,
contained in this Agreement.
(d) CONVERSION; ELECTION OF MERGER CONSIDERATION; WAIVER OF
APPRAISAL RIGHTS. With respect to any Shares that are Company Class B
Stock, each Shareholder hereby severally agrees not to, directly or
indirectly, convert any such Company Class B Stock into Company Class A
Stock, pursuant to the Company's certificate of incorporation or
otherwise, without the prior written consent of Parent. Any Company
Class B Stock converted with Parent's consent into Company Class A
Stock will continue to be subject to the terms and provisions of this
Agreement to the same extent and manner as other Shares. Such
Shareholder agrees that, to the extent that an election is available to
such Shareholder with respect to the consideration available in the
Merger, such Shareholder will elect to obtain the maximum number of
shares of Parent Stock available in the Merger. Such Shareholder waives
any rights of appraisal or rights to dissent from the Merger that such
Shareholder may have.
(e) STOP TRANSFER. Each Shareholder hereby severally agrees
that such Shareholder (i) will not request that the Company register
the transfer (by book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Shareholder's Shares,
unless such transfer is made with Parent's prior written consent, (ii)
will tender to the Company, within fifteen business days of the date of
this Agreement, all certificates representing such Shareholder's Shares
for the Company to inscribe thereupon the following legend: "The shares
of Class [A or B] Common Stock, $.0 1 par value per share, of [name of
Company] (the "Company") represented by this certificate are subject to
a Shareholders' Agreement dated as of [date], and may not be sold or
otherwise transferred, except in accordance therewith. A copy of such
Agreement is available for inspection at the principal executive office
of the Company", and (iii) will, within fifteen business days of the
date of this Agreement, no longer hold any Shares, whether certificated
or uncertificated, in "street name" or in the name of any nominee.
3. Affiliate Status.
(a) Each Shareholder hereby severally acknowledges that such
Shareholder may be deemed an "affiliate" of the Company within the
meaning of Rule 145 ("Rule 145") promulgated under the Securities Act
of 1993, as amended (the "Act"), although nothing contained herein
should be construed as an admission of such fact. Shareholder
represents to and covenants with Parent that
such Shareholder will not sell, assign, transfer or otherwise dispose
of, or offer to sell, transfer or otherwise dispose of, the Parent
Shares, if any, that such Shareholder receives in the Merger except (i)
in conformity with Rule 145, (ii) pursuant to an effective registration
statement under the Act, or (iii) in a transaction that, in the opinion
of independent counsel reasonably satisfactory to Parent, is exempt
from registration under the Act.
(b) Shareholder severally acknowledges and agrees that,
shortly before the Effective Time, such Shareholder will deliver to
Parent a letter, in the form of Exhibit B to the Merger Agreement, that
makes the representations set forth in Section 3(a) of this Agreement.
4. No Solicitation. In such Shareholder's capacity as a record or
beneficial owner of Company Common Stock, each Shareholder severally agrees that
such Shareholder will not, and will not authorize or permit any of such
Shareholder's agents or advisers to, directly or indirectly solicit, initiate or
encourage (including by way of furnishing information) any Alternative
Transaction Proposal or take any other action to facilitate the submission from
any person of any Alternative Transaction Proposal.
5. Stockholder Capacity. Each Shareholder is entering this Agreement in
his capacity as the record and beneficial owner of such Shareholder's Shares,
and not in his capacity as a director of the Company.
6. Termination. The obligations of the Shareholders, other than those
set forth in the last sentence of Section 2(a) and those set forth in Section 3,
shall terminate upon the earlier to occur of (i) termination of the Merger
Agreement in accordance with Article 7 thereof, or (ii) consummation of the
Merger. The date of such termination is referred to herein as the "Termination
Date".
7. Specific Performance. The Shareholders each acknowledge and agree
with Parent that irreparable damages would occur in the event that any provision
of this Agreement is not performed in accordance with the terms hereof, that
monetary damages would be an inadequate remedy to Parent, and that Parent shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
8. Indemnification. Parent shall indemnify, defend and hold harmless
each Shareholder against all losses, claims, damages, costs, expenses (including
reasonable attorneys' fees), liabilities or judgments or amounts that are paid
in settlement with the approval of Parent (which approval shall not be
unreasonably withheld) of or in connection with any third-party claim, action,
suit, proceeding or investigation arising out of such Shareholder's execution,
delivery or performance of this Agreement. Any Shareholder wishing to claim
indemnification under this Section 8, upon learning of any such claim, action,
suit, proceeding or investigation, shall notify Parent in writing as soon as
reasonably practicable (but the failure so to notify Parent shall not relieve
Parent from any liability which it may have under this Section 8 except to the
extent such failure prejudices Parent). The Shareholders as a group may retain
only one law firm to represent them with respect to each such matter unless
there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Shareholders.
9. Miscellaneous.
(a) DEFINITIONAL MATTERS.
(i) "Person" means a corporation, association,
partnership, joint venture, organization, business,
individual, trust, estate or any other entity or group (within
the meaning of Section 1 3(d)(3) of the Securities Exchange
Act of 1934, as amended). In the event of a stock dividend or
distribution, or any change in the Company Common Stock, by
reasons of any stock dividend, split-up, recapitalization,
combination, exchange of shares, or the like, "Shares" shall
be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into
which or for which any or all of the Shares may be changed or
exchanged. "Vote" (including "voting") means to vote in person
or by proxy at a meeting of shareholders, to grant a written
consent to any action to be taken by the written consent of
shareholders, or to give instructions to a proxyholder or any
other person with authority to vote shares.
(ii) Any capitalized terms used but not defined in
this Agreement shall have the respective meanings that the
Merger Agreement ascribes to such terms.
(iii) The descriptive headings herein are inserted
for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this
Agreement.
(iv) The phrase "including" shall be deemed to mean
"including without limitation".
(b) ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes any and all prior
agreements and understandings, written and oral, among the
parties, or any of them, with respect to the subject matter
hereof.
(c) PARTIES IN INTEREST. This Agreement shall be
binding upon and inure solely to the benefit of each party
hereto and their respective successors, assigns, heirs,
executors, administrators and other legal representatives.
Nothing in this Agreement, express or implied, is intended to
confer upon any
other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement.
(d) ASSIGNMENT. This Agreement shall not be assigned
without the prior written consent of the other party hereto,
except that Parent may assign, in its sole discretion, all or
any of its rights, interests and obligations hereunder to any
direct or indirect wholly owned subsidiary of Parent, provided
that no such assignment shall relieve Parent of its
obligations under this Agreement.
(e) AMENDMENT. This Agreement shall not be amended,
altered or modified in any manner whatsoever, except by a
written instrument executed by the parties hereto.
(f) GOVERNING LAW. This Agreement shall be governed
in all respects, including validity, interpretation and
effect, by the laws of the State of Delaware (without giving
effect to the provisions thereof relating to conflicts of
law).
(g) SEVERABILITY. If any terms or other provision of
this Agreement is invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other terms
and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal
substance of the transaction contemplated hereby is not
affected in any manner materially adverse to any party. Upon a
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in
an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
(h) COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be
an original, but all of which shall constitute one and the
same agreement.
(i) NOTICES. Any notices or other communications
required or permitted hereunder shall be in writing and shall
be deemed duly given upon (i) transmitter's confirmation of a
receipt of a facsimile transmission, (ii) confirmed delivery
by Fed Ex or another standard overnight carrier or (iii) the
expiration of five business days after the day when mailed by
certified or registered mail, postage prepaid, addressed at
the following addresses (or at
such other address as the parties hereto shall specify by like
notice):
If to Parent, to:
Berkshire Hathaway, Inc.
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Mr. Xxxx Xxxxxxx
If to any of the Shareholders, to the respective address noted
on the signature page hereto.
10. FURTHER ASSURANCES. Each Shareholder will execute and deliver all
such further documents and instruments and take all such further actions as may
be necessary in order to consummate the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BERKSHIRE HATHAWAY INC. SHAREHOLDERS:
By:__________________________________ _____________________________
XXXX X. XXXXX
Its: ________________________________
Number of Shares of Company
Class A Stock: ______________
Number of Shares of Company
Class B Stock: ______________
Address: ____________________
_____________________________
Spouse: _____________________
Xxxx X. Xxxxx
_____________________________
XXXX X. XXXXX
Number of Shares of Company
Class A Stock: ______________
Number of Shares of Company
Class B Stock: ______________
Address: ____________________
_____________________________
Spouse: _____________________
Xxxx X. Xxxxx
XXXXXX FAMILY LIMITED
PARTNERSHIP
By
Its
Number of Shares of Company
Class A Stock:
Number of Shares of Company
Class B Stock: 550,000
Address: ___________________
____________________________
____________________________
XXXXX X. XXXXX
Number of Shares of Company
Class A Stock: 19,540
Number of Shares of Company
Class B Stock: 142,502
Address: ___________________
____________________________
Spouse: ____________________
Xxxxxxx X. Xxxxx
____________________________
XXXXX X. XXXXX
Number of Shares of Company
Class A Stock: 25,418
Number of Shares of Company
Class B Stock: 219,153
Address: ___________________
____________________________
Spouse: ____________________
____________________________
XXXXXXX X. XXXXX
Number of Shares of Company
Class A Stock: 47,089
Number of Shares of Company
Class B Stock: 195,701
Address: ___________________
____________________________
Spouse: ____________________
