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EXHIBIT 10.31.3
FORM OF
AMENDMENT NO. 1 TO THE
MANAGEMENT STOCKHOLDER'S AGREEMENT
(▇'▇▇▇▇▇, ▇▇▇▇▇ AND ▇▇▇▇▇)
This Amendment No. 1 to the Management Stockholder's Agreement (this
"Agreement") is entered into as of ________________________ between KEEBLER
FOODS COMPANY, a Delaware corporation (the "Company"), and
_____________________ (the "Investor") (the Company and the Investor being
hereinafter collectively referred to as the "Parties").
RECITALS
Certain stockholders of the Company ("Selling Stockholders") propose to
sell a portion of their shares of the Company's common stock (the "Common
Stock") in an initial public offering under a Registration Statement on Form
S-1 (File No. 333-42075) filed with the Securities and Exchange Commission (the
"IPO"). In such connection the Company (formerly INFLO Holdings Corporation)
and the Investor, who are parties to the Management Stockholders' Agreement
("Original Agreement"), dated [___________, 1996], agree to amend the Original
Agreement as follows:
AGREEMENT
1. Upon the occurrence of the event described in Section 3 of this
Agreement:
(a) Sections 3, 5, 6, 7, 8, 11, 12, 15, 18, 21, 23, and 25 of the
Original Agreement are hereby deleted in their entirety and are
of no further force or effect.
(b) Section 10 of the Original Agreement is hereby amended by
deleting said section in its entirety and in lieu thereof, the
Investor shall be entitled to the "incidental registration
rights" set forth on Annex A hereto.
(c) The Investor's rights under the Sales Participation
Agreement dated as of May 10, 1996 are hereby terminated and
such termination is affirmed and acknowledged by the signatures
of Flowers Industries, Inc. and Artal Luxembourg S.A. on this
Amendment No. 1.
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(d) Section 2(e) of the Original Agreement is hereby amended by
deleting said Section in its entirety and substituting in lieu
thereof a new Section 2(e), reading as set forth on Annex B
hereto.
(e) Section 4 of the Original Agreement is hereby amended by
deleting said Section in its entirety and substituting in lieu
thereof a new Section 4, reading as set forth on Annex C
hereto.
(f) Section 22 of the Original Agreement is hereby amended by
deleting said Section in its entirety and substituting in lieu
thereof a new Section 22, reading as set forth in Annex D
hereto.
(g) Section 25 of the Original Agreement is hereby amended by
deleting said section in its entirety and substituting in lieu
thereof a new Section 25, reading as set forth in Annex E
hereto.
(h) Section 26(a) of the Original Agreement is hereby amended
by deleting said Section in its entirety and substituting in
lieu thereof a new Section 26(a), reading as set forth on
Annex F hereto.
2. The Investor hereby acknowledges that the managing underwriters of
the IPO have advised the Company that in their view no shares of the Investor
may be registered in the IPO without an adverse effect on the offering and,
thus, pursuant to Section 10(c)(ii) of the Original Agreement (prior to the
effectiveness of the amendment contained in Section 1(b) above), the Investor
may not register any shares in the IPO. Accordingly, the Investor has no
"piggyback registration rights" (including, not by way of limitation, any
rights to notice) in connection with the IPO, including, not by way of
limitation, any rights which are pursuant to Section 10 of the Original
Agreement. The Investor further acknowledges that pursuant to Section 2(e) of
the Original Agreement (prior to the effectiveness of the amendment contained
in Section 1(d) above) that he is bound by the holdback period required by the
managing underwriters of the IPO.
3. The terms and provisions of Section 1 of this Agreement will not be
effective until the sale of Common Stock pursuant to an IPO.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
KEEBLER FOODS COMPANY
By:__________________________________
Name:
Title:
_____________________________________
[Investor]
Address
As to Paragraph 1(c) and 1(d) only
Affirmed and Acknowledged
_______________________________
Flowers Industries, Inc.
_______________________________
Artal Luxembourg S.A.
As to Paragraph 1(e) only
Affirmed and Acknowledged
______________________________
Flowers Industries, Inc.
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ANNEX B
REVISED SECTION 2(e)
(e) The parties acknowledge that pursuant to the provisions of Annex A
of that certain Stock Purchase Agreement among Flowers Industries, Inc., Artal
Luxembourg A.A. ("Artal") and the Company, Artal has certain demand
registration rights (the "Registration Rights"). The Purchaser agrees that
subsequent to the closing of the initial public offering under Registration
Statement on Form S-1 (File No. 333-42075) filed with the Securities and
Exchange Commission (the "IPO"), if any shares of the capital stock of the
Company are offered to the public pursuant to Artal's exercise of the
Registration Rights in an underwritten public offering under an effective
registration statement under the Act (a "Subsequent Public Offering"), the
Purchaser will not effect any public sale or distribution of any shares of the
Stock not covered by such registration statement (a "Holdback") within 10 days
prior to, or within such time period after, the effective date of such
registration statement as the managing underwriter of such Subsequent Public
Offering shall advise the Company is necessary to complete such Subsequent
Public Offering in an effective manner, unless otherwise agreed to in writing
by the Company; provided, however, that if Purchaser is not selling any shares
of Stock in the IPO or in such Subsequent Public Offering the following shall
apply:
(i) If Purchaser is not a member on the Executive Committee of the
management of the Company at the time of such Subsequent Public
Offering, Purchaser shall not be subject to a Holdback.
(ii) Subject to the Company not being otherwise restricted as a
matter of law, for a period of six months after the initial 180
day holdback period of the IPO, if Purchaser is subject to such
initial holdback, Purchaser may require the Company to
repurchase his stock at the Market Price (as defined in
subsection (vi) below) during any Holdback period to which he is
subject in a Subsequent Public Offering during such six months,
subject to the limitations set forth in subsection (vii) below.
Furthermore, if the initial holdback period of the IPO is
ultimately less than 180 days then the Company shall not be
required to repurchase shares during the Holdback period of the
Subsequent Public Offering until all such Holdback periods
exceed an aggregate total of 180 days during the twelve-month
period.
(iii) If Purchaser is subject to this Section 2(e), Purchaser
will only be required to be subject to a Holdback in a
Subsequent Public Offering in excess of 90 days upon written
advice of the managing underwriter that a Holdback of 90 days or
less would be materially detrimental to the Subsequent Public
Public Offering.
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(iv) After the twelve-month period referred to in subsection (ii)
above and upon the written advice per subsection (iii) above, if
there is more than one Subsequent Public Offering in a
twelve-month period and the managing underwriter requires a
Holdback from Purchaser subject to this Section 2(e) in excess
of 90 days, subject to the Company not being otherwise
restricted as a matter of law, Purchaser may require the Company
to repurchase his shares at the Market Price during the post-90
day period of the Holdback period, subject to the limitation set
forth in subsection (vii) below.
(v) Notwithstanding the foregoing, Purchaser may not require the
repurchase of his shares, if Purchaser is selling shares in the
Subsequent Public Offering in which he is subject to a
Holdback.
(vi) For purposes of this Section 2(e), "Market Price" shall
mean the closing trading price of the Company's Common Stock on
the New York Stock Exchange (or if such shares are not traded on
the New York Stock Exchange, the closing trading price for a
share of such security on the principal national securities
exchange or on the Nasdaq Stock Market on which such securities
are listed) on the day that the Company receives notice from the
Purchaser (or the next succeeding trading day if such day is not
a trading day) that he is exercising his rights to require the
Company to repurchase his shares pursuant to subsections (ii) or
(iv) above.
(vii) (A) The maximum aggregate buyback by the Company during all
Holdback periods caused by Artal's exercise of the Registration
Rights for all repurchases from Purchaser and all Other
Purchasers shall be the greater of (1) one percent (1%) of
the outstanding shares of the Company immediately after the
closing of the IPO or (2) an aggregate purchase obligation by
the Company of $25 million, and (B) the maximum buyback from the
Purchaser during all such Holdback periods shall be no more than
the greater of (A) 20% of (1) the shares of the Company owned by
the Purchaser as of the closing of the IPO, plus (2) the shares
for which Purchaser has Options under the Non- Qualified Stock
Option Agreement (specifically excluding any options granted
under any other option plans that the Company has or may adopt)
or (B) $1,000,000.
(viii) In order to exercise his rights to require the Company
to purchase shares pursuant to subsection (ii) or (iv) above,
Purchaser shall deliver, by hand or facsimile, to the General
Counsel of the Company, at the address set forth in Section
25(a), the following notice:
"Pursuant to Section 2(e) of that certain Management
Stockholder's Agreement, between Keebler Foods Company
(the "Company") and the
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undersigned, the undersigned requests that the Company
purchase from the undersigned ____ shares of stock of the
Company.
By:_______________________
Date:______________________"
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ANNEX C
REVISED SECTION 4
4. Right of First Refusal.
Except for transfers permitted by clauses (x), (y) and
(z) of Section 2(a), if at any time after the IPO the Purchaser desires to
transfer any or all of his shares of Stock, the Purchaser shall notify the
Company and Flowers Industries, Inc. ("Flowers") in writing of his wish to make
such transfer (the "Offer"). The Purchaser's notice shall contain an
irrevocable offer to sell such shares of Stock to the Company and Flowers (in
the manner set forth below) at a purchase price equal to the average of the
closing trading prices of the Company's Common Stock on the New York Stock
Exchange (or if such shares are not traded on the New York Stock Exchange, the
closing trading prices of such security on the principal national securities
exchange or the Nasdaq Stock Market on which such securities are listed) on the
day that the Company and Flowers receives the Offer and on the day that the
Company or Flowers accepts the Offer (or the next succeeding trading day if
either such day is not a trading day) (the "Average Market Price"). At any
time within the next succeeding business day after the date of the receipt by
the Company and Flowers of the Purchaser's notice, the Company and Flowers
shall have the right and option to purchase, or to arrange for a third party to
purchase, any or all of the shares of Stock covered by the Offer, by notifying
the Purchaser. The purchase of the shares shall be effectuated within 3
business days by delivering a certified bank check or checks in the appropriate
amount to the Purchaser at the principal office of the Company against (i)
delivery of certificates or other instruments representing the shares of the
Stock so purchased, appropriately endorsed by the Purchaser or (ii) such other
instructions to transfer such shares from an account held by Purchaser to
accounts designated by Flowers or the Company, as appropriate. If by 11:59
p.m. of the end of such next succeeding business day, neither the Company nor
Flowers has accepted the Offer in the manner set forth above, the Purchaser
may, during the succeeding 30 day period, transfer any or all of the shares of
Stock covered by the Offer. If, at the end of the 30 day period, the Purchaser
has not completed the transfer of such shares of the Stock as aforesaid, all
the restrictions on sale, transfer or assignment contained in this Agreement
shall again be in effect with respect to such shares of the Stock. If the
Offer is accepted, Flowers shall have the first right to purchase the shares
covered by the Offer, and then the Company shall have the right to purchase any
shares not purchased by Flowers. Notwithstanding the foregoing, the Purchaser
shall not be required to sell shares pursuant to this Section 4 if such sale
would have the result of not being treated as a distribution in part or full
payment in exchange for stock pursuant to Section 302 of the Internal Revenue
Code of 1986, as amended; provided, however, the parties also acknowledge that
Flowers would still have the right to purchase the shares if such favorable tax
treatment would result from its purchase in lieu of a purchase by the Company.
No transfer of any shares in violation of this Section 4 shall be made or
recorded on the books of the Company and any such transfer shall be void and of
no effect. In order to notify Flowers and the
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Company of the Offer, Purchaser shall give the following notice to each of
them, by hand delivery or facsimile, to the General Counsels of each of them at
the addresses set forth in Section 25(a):
"Pursuant to Section 4 of that certain Management Stockholder's
Agreement, between Keebler Foods Company (the "Company") and the
undersigned, the undersigned hereby notifies you of its irrevocable
Offer (as defined in said Section) to sell to either the Company or
Flowers Industries, Inc. ___ shares of stock of the Company.
By:______________________
Date:_____________________"
In order to accept the Offer, either Flowers or the Company shall either orally
notify the Purchaser of its acceptance (and shall deliver the following notice
as soon as practicable thereafter) or shall deliver the following notice to the
Purchaser at the address set forth in Section 25(b):
"Pursuant to Section 4 of that certain Management Stockholder's
Agreement, between Keebler Foods Company (the "Company") and you, the
undersigned has accepted your Offer to purchase ____ shares of
stock of the Company.
By:____________________
[Flowers Industries, Inc.]
[Keebler Foods Company]
Date:___________________"
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ANNEX D
REVISED SECTION 22
22. Applicable Law.
The laws of the state of Delaware shall govern the interpretation,
validity and performance of the terms of this Agreement, regardless of the law
that might be applied under principles of conflicts of law. Any suit, action
or proceeding against the Company, with respect to this Agreement, or any
judgment entered by any court in respect of any thereof, may be brought in any
court of competent jurisdiction in the States of Delaware or Illinois, as the
Company may elect in its sole discretion, and the Purchaser hereby submits to
the non-exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. By the execution and delivery of this
Agreement, the Purchaser appoints The Corporation Trust Company, at its office
in Chicago, Illinois or Wilmington, Delaware, as the case may be, as his agent
upon which process may be served in any such suit, action or proceeding.
Service of process upon such agent, together with notice of such service given
to the Purchaser in the manner provided in Section 25 hereof, shall be deemed
in every respect effective service of process upon him in any suit, action or
proceeding. Nothing herein shall in any way be deemed to limit the ability of
the Company to serve any such writs, process or summonses in any other manner
permitted by applicable law or to obtain jurisdiction over the Purchaser, in
such other jurisdictions and in such manner, as may be permitted by applicable
law. The Purchaser hereby irrevocably waives any objections which he may now
or hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement brought in any court of competent
jurisdiction in the States of Delaware or Illinois, and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought
in any such court has been brought in any inconvenient forum. No suit, action
or proceeding against the Company with respect to this Agreement may be brought
in any court, domestic or foreign, or before any similar domestic or foreign
authority other than in a court of competent jurisdiction in the States of
Delaware or Illinois, and the Purchaser hereby irrevocably waives any right
which he may otherwise have had to bring such an action in any other court,
domestic or foreign, or before any similar domestic or foreign authority. The
Company hereby submits to the jurisdiction of such court for the purpose of any
such suit, action or proceeding.
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ANNEX E
REVISED SECTION 25
25. Notices.
All notices and other communications provided for herein (except
for the notices set forth in Sections 2(e) and 4, in which case the terms of
such Sections shall govern), shall be in writing and shall be deemed to have
been duly given if delivered by hand (or by overnight courier or facsimile),
to the Party to whom it is directed:
(a) If to the Company, to it at the following address:
Keebler Foods Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Fax No.: ____
with copies to:
The General Counsel of the Company
at the above address.
and to:
Flowers Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax No.: ____
(b) If to the Purchaser, to him at the address set forth below
under his signature;
or at such other address as either party shall have
specified by notice in writing to the other.
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ANNEX F
REVISED SECTION 26(a)
(a) In consideration of the Company entering into this Agreement with the
Purchaser, the Purchaser hereby agrees effective as of the Purchase Date, for
so long as the Purchaser is employed by the Company or one of its subsidiaries
(the "Noncompete Period"), the Purchaser shall not, directly or indirectly,
engage in the production, sale or distribution of any food product produced,
sold or distributed by the Company or its subsidiaries on the date hereof or
during the Noncompete Period (except for a food product that the Company only
packages under a co-packing arrangement) anywhere in North America where the
Company or its subsidiaries is doing business other than through the
Purchaser's employment with the Company or any of its subsidiaries. The
Noncompete Period shall be extended beyond the termination of the Purchaser's
employment with the Company or its subsidiaries for up to the earlier of (i)
the third anniversary of the IPO or (ii) an additional one year period from the
date of termination of employment, so long as the Company continues to make
payments to which Purchaser is entitled subsequent to his termination under his
Employment and Severance Agreement with the Company, dated _____________, 1998,
at the times and in the amounts set forth therein; provided, however, that if
Purchaser is not entitled to payments under such Employment and Severance
Agreement because (i) Purchaser's employment is terminated by the Company for
Cause (as defined in such agreement) or (ii) Purchaser voluntarily terminates
his employment with the Company for other than Good Reason (as defined in such
agreement), then the non-compete provisions of this Section 26(a) shall still
apply. For purposes of this Agreement, the phrase "directly or indirectly
engage in" shall include any direct or indirect ownership or profit
participation interest in such enterprise, whether as an owner, stockholder,
partner, joint venturer or otherwise, and shall include any direct or indirect
participation in such enterprise as a consultant, licensor of technology or
otherwise.
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