EXHIBIT 3
Execution Copy
SHAREHOLDERS' AGREEMENT
SHAREHOLDERS' AGREEMENT dated as of February 23, 1999 among
Buenos Aires Embotelladora S.A., a corporation organized under the laws of the
Republic of Argentina (the "Company"), PepsiCo, Inc., a North Carolina
corporation ("PepsiCo"), Citibank, N.A. ("Citibank"), BankBoston, N.A.
("BankBoston"), Bayerische Hypo-und Vereinsbank AG ("HypoVereinsbank"), and each
other Shareholder party hereto from time to time.
RECITALS
A. The Company and the Shareholders (as hereinafter defined)
are parties to a Third Amended and Restated Restructuring and Exchange Agreement
dated as of February 24, 1998 (the "Restructuring Agreement") pursuant to which,
among other things, the Shareholders will receive an aggregate of 1,846,344,828
Class B Ordinary Shares, par value P0.01 per share ("Class B Shares"), of the
Company.
B. PepsiCo currently owns 16,372,973 Class A Ordinary Shares,
par value P0.01 per share ("Class A Shares"), of the Company and 843,243 Class B
Shares.
C. Upon consummation of the transactions contemplated by the
Restructuring Agreement, the Shareholders will own together an aggregate of
60.66% of the voting power of the Company.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties agree as follows:
Article I
DEFINITIONS
1.1 Defined Terms. The following terms are defined as follows:
(a) "Business Day" means any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which commercial
banks are open for business in New York and Buenos Aires.
(b) "Class A Shares" has the meaning set forth in the Recitals
hereto.
(c) "Class B Shares" has the meaning set forth in the Recitals
hereto.
(d) "Effective Date" means the day on which the Closing (as
such term is defined in the Restructuring Agreement) occurs under the
Restructuring Agreement.
NY2:\223727\02\4SMN02!.DOC\35886.0396
(e) "Exchange Act" means the United States Securities Exchange
Act of 1934, as amended, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the relevant time.
(f) "Joinder Agreement" has the meaning set forth in Section
3.2 hereof.
(g) "Lien" means any lien, pledge, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
(h) "Majority Holders" means, as of any date, a majority of
the Shareholders subject to this Agreement as of such date.
(i) "Ordinary Shares" means any shares of capital stock of the
Company, including the Class A Shares and the Class B Shares, now or hereafter
issued.
(j) "Permitted Transferee" has the meaning set forth in
Section 3.2 hereof.
(k) "Person" means any individual, corporation, limited
liability company, part nership, firm, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental body or other entity.
(l) "Pro Rata Share" means the percentage of Transfer Shares
(as defined in Section 3.3) being offered by a Transferring Shareholder (as
defined in Section 3.3) that each Shareholder Offeree (as defined in Section
3.3) shall be entitled to purchase, if any. Such percentage shall be determined
by dividing the number of Ordinary Shares of such Shareholder Offeree by the
aggregate number of all Ordinary Shares of all Shareholders entitled to
participate in the purchase of such Transfer Shares.
(m) "SEC" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(n) "Securities Act" means the United States Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the relevant time.
(o) "Shareholders" shall mean, collectively, PepsiCo,
Citibank, BankBoston, HypoVereinsbank and any other Person who, after the date
hereof, acquires any Ordinary Shares and executes a Joinder Agreement, in
accordance with and subject to the terms and conditions of this Agreement. A
Person shall cease to be a Shareholder when such Person no longer holds any
Ordinary Shares as a result of a Transfer permitted under this Agreement.
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Article II
VOTING; BOARD MATTERS
2.1 Nomination and Election of Directors.
(a) Selection of Nominees. At the annual meeting of
shareholders of the Company or any special meeting called for the purpose of
electing directors of the Company (or by consent of shareholders in lieu of any
such meeting) or at such other time or times as the Shareholders may agree,
until the first anniversary of the Effective Date, each Shareholder will vote
its Ordinary Shares (i) so that the Board of Directors of the Company is
comprised of seven directors and (ii) for the following persons to be members
thereof:
1. Two (2) directors designated by Citibank, with one of
such directors being the Chairman of the Board of
Directors.
2. One (1) director designated by PepsiCo.
3. One (1) director designated by BankBoston.
4. One (1) director designated by HypoVereinsbank.
5. One (1) director designated by the Majority Holders.
6. One (1) director designated jointly by Franklin Mutual
Advisors, Inc. and TCW Shared Opportunity Fund II,
L.P., as long as such entities continue to own
collectively at least *% of the issued and outstanding
Ordinary Shares, and at such time as such entities
cease to own collectively such percentage of the issued
and outstanding Ordinary Shares, such director shall be
selected by the Majority Holders.
In the event any Shareholder transfers all of its Shares to another Person
(other than a Permitted Transferee), the right to designate a director by the
holder of such Ordinary Shares shall terminate, and such director shall be
selected by the Majority Holders.
(b) Election of Nominees. The Shareholders shall vote all of
their respective Ordinary Shares entitled to vote in favor of the election of
all of the nominees specified in Section 2.1(a) and no other Person.
-------------------------
* To be specified.
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2.2 Removal of Directors. No Shareholder shall vote any
Ordinary Shares in favor of the removal of a director selected in accordance
with Section 2.1(a) hereof; provided, however, that upon the request of any
Shareholder to remove a director previously designated for nomination by such
Shareholder, the Shareholders shall vote all of their Ordinary Shares in favor
of (i) the removal of such director and (ii) the election of any replacement
director as may be designated by such Shareholder, subject to the provisions of
Section 2.1(a).
2.3 Vacancies. If any vacancy occurs on the Board because of
death, incapacity, resignation, retirement or removal of a director in
accordance with this Agreement, the Shareholder entitled to designate such
director in accordance with Section 2.1(a) shall designate a successor, and all
Shareholders shall vote their Shares in favor of the election of such successor
to the Board of Directors, subject to the provisions of Section 2.1(a).
Notwithstanding the foregoing, in the event of any vacancy on the Board of
Directors following the termination of the right of any such Shareholder to
nominate one or more directors to the Board of Directors, such vacancy shall be
filled by a candidate approved by a majority vote of the remaining directors.
2.4 Proxies. Any Person given a proxy or power of attorney by
the Company or any Shareholder shall be deemed to be subject to and shall
exercise such proxy or power of attorney in conformity with the provisions of
this Agreement.
Article III
TRANSFER OF ORDINARY SHARES
3.1 Restrictions on Transfer. As long as this Agreement is in
effect, no Shareholder shall effect any transfer, sale, assignment, mortgage,
pledge, hypothecation, gift, placement in trust (voting or otherwise) or
transfer by operation of law (other than by way of a merger or consolidation of
the Company or by way of a merger or consolidation or sale of all or
substantially all of the assets of such Shareholder) of, creation of a security
interest in or Lien on, or any other encumbering or disposal (directly or
indirectly and whether or not voluntary) of, any Ordinary Shares (any of which
being a "Transfer," and the recipient thereof being a "Transferee"), except as
provided in this Agreement. No Transfer in violation of this Agreement shall be
made or recorded on the books of the Company and any such Transfer shall be void
and of no force or effect. Subject to the terms of this Agreement, the
Shareholders shall be entitled to exercise all rights of ownership of their
Ordinary Shares.
3.2 Certain Permitted Transfers. None of the restrictions
contained in this Agreement with respect to Transfers of Ordinary Shares (other
than those set forth in this Section 3.2) shall apply to any Transfer (each a
"Permitted Transfer" and collectively the "Permitted Transfers") by any
Shareholder (a) to a wholly-owned direct or indirect subsidiary of such
Shareholder or (b) to another Shareholder (each a "Permitted Transferee");
provided, however, that in the case of any Transfer described in clause (a)
above, each Permitted Transferee shall have executed and delivered to each
Shareholder, as a condition precedent to any Transfer of Ordinary Shares, an
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executed consent to be bound by the provisions of, and to become a party to,
this Agreement, in the form of Exhibit A hereto (a "Joinder Agreement"), and
shall have submitted to the Company such evidence as the Company may reasonably
request to demonstrate that such Transferee is a Permitted Transferee. For
purposes of determining any matter hereunder which is subject to the vote of
Shareholders, all Shareholders under common control shall be deemed to
constitute one Shareholder.
3.3 Rights of First Refusal.
(a) Each Shareholder agrees that, subject to the restrictions
on Transfers contained in Section 3.4 hereof, if any Shareholder (for purposes
of this Section 3.3, a "Transferring Shareholder") wishes to Transfer any or all
of the Ordinary Shares then owned by such Transferring Shareholder, other than
as provided in Section 3.2, then such Transferring Shareholder shall first give
a written notice (the "Transfer Notice") to each other Shareholder (the
"Shareholder Offerees") specifying the number of Ordinary Shares such
Transferring Shareholder wishes to Transfer (the "Transfer Shares"), and
containing an irrevocable offer (open to acceptance for a period of twenty (20)
Business Days after the date such Transfer Notice is received) to sell the
Transfer Shares to the Shareholder Offerees at the price per share stated in the
Transfer Notice (the "Transfer Price"), which price shall be equal to the price
offered to such Transferring Shareholder by a bona fide third party offeror or
in a letter of intent and which notice shall identify the offeror. No Transfer
to which this Section 3.3 is applicable shall be permitted unless the third
party offer is for cash.
(b) A Shareholder Offeree who wishes to purchase any Transfer
Shares shall deliver to the Transferring Shareholder with a written notice (a
"Notice of Acceptance") specifying the number of Transfer Shares (up to such
Shareholder Offeree's Pro Rata Share) which such Shareholder Offeree desires to
accept within twenty (20) Business Days of the delivery of the Transfer Notice
by the Transferring Shareholder and may, at the Shareholder Offeree's option,
indicate the maximum number of Remaining Transfer Shares (as defined below) such
Shareholder Offeree irrevocably commits to purchase in excess of such
Shareholder Offeree's Pro Rata Share (the "Excess Amount"). If one or more
Shareholder Offerees declines to participate in such purchase or elects to
purchase less than such Shareholder Offeree's Pro Rata Share, then the number of
Transfer Shares such Shareholder Offerees have elected not to purchase (the
"Remaining Transfer Shares") shall automatically be deemed to be accepted by
Shareholder Offerees who specified an Excess Amount in their Notice of
Acceptance, allocated among such Shareholder Offerees (with rounding to avoid
fractional shares) in proportion to their respective Pro Rata Shares but in no
event shall an amount greater than a Shareholder Offeree's Excess Amount be
allocated to such Shareholder Offeree. Any excess Remaining Transfer Shares
shall be allocated among the remaining Shareholder Offerees whose specified
Excess Amount has not been satisfied (with rounding to avoid fractional shares)
in proportion to their respective Pro Rata Shares, and such procedure shall be
employed until the entire Excess Amount of each Shareholder Offeree has been
satisfied or all Remaining Transfer Shares have been allocated.
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(c) If, at the end of the twentieth (20th) Business Day after
the Transfer Notice is received, an effective Notice of Acceptance of the offer
contained in such Transfer Notice has not been delivered, or if a Notice of
Acceptance has been delivered covering less than all of the Transfer Shares,
then the Transferring Shareholder shall have twenty (20) Business Days in which
to Transfer all of the Transfer Shares at a price not lower than the Transfer
Price and on terms no more favorable to the transferee than those contained in
the Transfer Notice, provided that such Transfer shall be made to the third
party offeror (or its wholly-owned subsidiary) referred to in Section 3.3(a)
hereof; provided, however, that no Transfer may be made unless and until the
transferee delivers to the Company an executed Joinder Agreement. Promptly after
any Transfer pursuant to this Section 3.3, the Transferring Shareholder shall
notify the Company of the consummation thereof and shall furnish such evidence
of the completion and time of completion of such Transfer and of the terms
thereof as the Company may request. If, at the end of such twenty-Business Day
period, the Transferring Shareholder has not completed the Transfer of all of
the Transfer Shares, the Transferring Shareholder shall no longer be permitted
to Transfer such Securities pursuant to this Section 3.3(c) without again
complying with this Section 3.3 in its entirety. If the Transferring Shareholder
determines at any time within such twenty-Business Day period that the Transfer
of all or any part of such Transfer Shares at a price not lower than the
Transfer Price and on terms no more favorable to the transferee than those
contained in the Transfer Notice is impractical, such Transferring Shareholder
may terminate all attempts to Transfer such Transfer Shares and recommence the
procedures of this Section 3.3 in their entirety without waiting for the
expiration of such twenty-Business Day period by delivering written notice of
such decision to the Company.
3.4 Sale of Controlling Interest. Neither Citibank, BankBoston
nor HypoVereinsbank (each a "Bank" and collectively, the "Banks") shall become a
party to any proposed transaction (a "Sale Transaction") pursuant to which any
Person or group shall become the "beneficial owner" (as defined in the Exchange
Act) directly or indirectly of more than fifty percent (50%) of the combined
voting power of the then outstanding securities of the Company (excluding any
reincorporation, reorganization or recapitalization transaction in which the
shareholders of the Company continue to possess at least eighty percent (80%) of
the outstanding voting securities of the successor or surviving entity in the
same relative proportions), unless two Banks shall be a party to such
transaction. If, subject to the foregoing, a Sale Transaction is entered into,
the Banks party to the Sale Transaction (the "Selling Banks") shall give notice
(the "Sale Notice") to the other Bank. The Sale Notice shall specify the
purchaser, the consideration and the proposed closing date and will give such
other Bank the opportunity either to (i) agree to the sale of its Ordinary
Shares in accordance with the terms of the Sale Transaction, or (ii) purchase
for cash all, but not less than all, of the Ordinary Shares held by the Selling
Banks upon substantially the same terms (including as to price and closing date)
as contained in the Sale Notice.
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Article IV
TERMINATION
4.1 The provisions hereof (other than the provisions of
Article II, which shall terminate on the first anniversary of the Effective
Date) shall terminate automatically upon the fourth anniversary of the Effective
Date, unless the Shareholders shall mutually agree otherwise.
Article V
MISCELLANEOUS
5.1 Negotiable Form. Whenever any Ordinary Shares are to be
delivered or sold pursuant to this Agreement, the Person selling such Ordinary
Shares shall deliver such certificates or other instruments duly endorsed or
accompanied by appropriate stock powers or assignments separate from the
instrument.
5.2 Enforcement. No Ordinary Shares shall be transferred on
the books of the Company and no sale, assignment, transfer, pledge or other
disposition thereof shall be effective unless and until the terms and provisions
of this Agreement are complied with, and in cases of violation of this Agreement
by the attempted transfer of the Ordinary Shares without compliance with the
terms and provisions thereof, such sale, assignment, transfer, pledge or other
disposition shall be invalid and of no effect, and the Company and/or any of the
Shareholders who are not attempting to transfer the Ordinary Shares shall have
the right to compel the Shareholder who is attempting to transfer the Ordinary
Shares, and/or the purported transferee, to transfer and deliver the same in
accordance with the applicable provisions of this Agreement.
5.3 Specific Performance. The parties hereto recognize that it
is to the benefit of the Company and the Shareholders that this Agreement be
carried out; and for those and other reasons, the parties hereto would be
irreparably damaged if this Agreement is not specifically enforced in the event
of a breach hereof. If any controversy concerning the rights or obligations to
purchase or sell any Ordinary Shares arises, or if this Agreement is breached,
the parties hereto hereby agree that remedies at law might be inadequate and
that, therefore, such rights and obligations, and this Agreement, shall be
enforceable by specific performance. The remedy of specific performance shall
not be an exclusive remedy, but shall be cumulative of all other rights and
remedies of the parties hereto at law, in equity or under this Agreement.
5.4 Transferees and Future Shareholders. The Company and the
Shareholders shall cause any transferee of any Ordinary Shares that is not
already a party to this Agreement to execute a Joinder Agreement and upon
execution thereof, provided such transfer shall not have been made in
contravention of this Agreement, such Shareholder shall, except as provided in
Section 2.1(a) hereof, be entitled to the rights of an owner of the Ordinary
Shares held by such Shareholder hereunder.
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5.5 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing and delivered in
person, transmitted by telecopier or sent by registered or certified mail
(return receipt requested) or recognized overnight delivery service, postage
pre-paid, addressed as follows, or to such other address as any such party may
notify to the other parties in writing:
(a) if to the Company:
Xxxxx Xxxxx Xxxx 000
0xx Xxxxx
0000 Xxx Xxxxxx
Xxxxxxxxx
Attention: Xxxxxxx Xxxxxx
Facsimile No.: 011-54-1-747-6216
(b) if to Citibank:
Citibank, N.A.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile No.: (000) 000-0000
(c) if to BankBoston:
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Mail Stop 10-19-04
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxx, Esq.
Facsimile No.: (000) 000-0000
(d) if to Hypo-und Vereinsbank:
Bayerische Hypo-und Vereinsbank XX
Xxx Xxxxxx 000 x.00
0000 Xxxxxx Xxxxx, Xxxxxxxxx
Attention: N. Xxxxx Xxxxxx
Facsimile No.: 011-54-1-331-3711
(e) if to PepsiCo:
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
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(f) if to any other Shareholder:
such address specified in the
Joinder Agreement to be executed in the
form of Exhibit A hereto
A notice or communication that is addressed as provided in this Section 5.5 will
be deemed received (i) if delivered in person or by overnight courier, on the
Business Day it is delivered, (ii) if transmitted by telecopier, on the Business
Day of actual confirmed receipt by the addressee thereof, and (iii) if sent by
registered or certified mail, three Business Days after it is deposited in a
regular depository of the United States or Argentine mail.
5.6 Binding Effect; Assignment. This Agreement, including the
rights and conditions contained herein in connection with disposition of
Ordinary Shares, shall, subject to the provisions of Section 5.4 hereof, be
binding upon the parties hereto, together with their respective executors,
administrators, successors, personal representatives, heirs and assigns
permitted under this Agreement.
5.7 Governing Law; Jurisdiction and Venue. The Agreement shall
be governed by, and construed in accordance with, the law of the State of New
York. Any legal action or proceeding with respect this Agreement shall be
brought in the courts of the United States for the Southern District of New
York, and, by execution and delivery of this Agreement, each party hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the exclusive jurisdiction of such courts. Each party
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of the aforesaid actions or proceedings arising out of or in
connection with this Agreement in the courts referred to in this paragraph and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
5.8 Severability. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provisions shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement, a
provision as similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
5.9 Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to the subject matter hereof.
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5.10 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
5.11 Amendments. This Agreement may be amended, modified or
supplemented only with the consent of the Majority Shareholders and by a written
instrument executed by the Company in advance; provided, however, that the
rights of a Shareholder under any provision of this Agreement shall not be
modified in any material adverse respect to such party without its prior written
consent.
5.12 Captions. The captions of this Agreement are for
convenience of reference only and shall not limit or otherwise affect any of the
terms or provisions hereof.
5.13 Pronouns. Any masculine personal pronoun shall be
considered to mean the corresponding feminine or neuter personal pronoun, and
vice versa, as the context requires.
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SHAREHOLDERS' AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
BUENOS AIRES EMBOTELLADORA S.A.
By:
-------------------------------------
Name:
Title:
PEPSICO, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Secretary
CITIBANK, N.A.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
BANKBOSTON, N.A.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Director
BAYERISCHE HYPO-UND VEREINSBANK AG
By: /s/ X.X. Xxxxxx
-------------------------------------
Name: X.X. Xxxxxx
Title: Representative
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EXHIBIT A
FORM OF JOINDER AGREEMENT
The undersigned, having purchased Ordinary Shares of Buenos
Aires Embotelladora S.A., hereby agrees to be bound by the terms and conditions
of, and to become a party to, the Shareholders' Agreement of the Company as a
"Shareholder" thereunder, a copy of which is attached hereto, as if the
undersigned had been a party to such agreement as of the date thereof.
Name: ________________________________________________
Signature: ___________________________________________
Address: _____________________________________________
Telecopy No.: ________________________________________
No. of Shares: _______________________________________
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