EXECUTION COPY
AGREEMENT AND PLAN OF MERGER AND CONTRIBUTION
Dated as of June 16, 2002
BY AND AMONG
Xxxxxx'x Grand Ice Cream, Inc.,
New December, Inc.,
December Merger Sub, Inc.,
Nestle Holdings, Inc.,
and
NICC Holdings, Inc.
TABLE OF CONTENTS
Page
ARTICLE I
Certain Definitions............................................................2
ARTICLE II
The Merger and Contribution; Closing...........................................9
Section 2.1. Time and Place of Closing.......................................9
Section 2.2. The Merger......................................................9
Section 2.3. Effective Time..................................................9
Section 2.4. Effects of the Merger...........................................9
Section 2.5. The Contribution; Exchange......................................9
Section 2.6. Certificate of Incorporation and Bylaws of
Surviving Corporation........................................10
Section 2.7. Name Change; Certificate of Incorporation and Bylaws
of New Dreyer's..............................................10
Section 2.8. Officers and Directors.........................................10
Section 2.9. Deliveries by Nestle...........................................10
Section 2.10. Deliveries by New Dreyer's.....................................10
Section 2.11. Effect on Capital Stock........................................11
Section 2.12. Exchange of Shares in the Merger...............................12
ARTICLE III
Representations and Warranties of Nestle......................................14
Section 3.1. Incorporation; Authorization; etc..............................14
Section 3.2. Capitalization; Structure......................................15
Section 3.3. Financial Statements...........................................15
Section 3.4. No Undisclosed Liabilities.....................................16
Section 3.5. Sufficiency....................................................16
Section 3.6. Absence of Certain Changes.....................................16
Section 3.7. Litigation; Orders.............................................16
Section 3.8. Intellectual Property..........................................16
Section 3.9. Licenses, Approvals, Other Authorizations, Consents,
Reports, etc.................................................17
Section 3.10. Labor Matters..................................................17
Section 3.11. Compliance with Laws...........................................18
Section 3.12. Insurance......................................................18
Section 3.13. Material Contracts.............................................18
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Section 3.14. Brokers, Finders, etc..........................................19
Section 3.15. Affiliated Transactions........................................19
Section 3.16. Board Approval.................................................19
Section 3.17. No Required Vote...............................................19
Section 3.18. Environmental Compliance.......................................19
Section 3.19. Employee Benefit Plans.........................................20
Section 3.20. Acquisition of Shares for Investment...........................22
Section 3.21 Taxes..........................................................22
ARTICLE IV
Representations and Warranties of Dreyer's....................................24
Section 4.1. Incorporation; Authorization; etc..............................24
Section 4.2. Capitalization; Structure......................................25
Section 4.3. SEC Filings; Financial Statements..............................26
Section 4.4. No Undisclosed Liabilities.....................................26
Section 4.5. Antitakeover Statute and Provisions............................27
Section 4.6. Absence of Certain Changes.....................................27
Section 4.7. Litigation; Orders.............................................27
Section 4.8. Intellectual Property..........................................27
Section 4.9. Licenses, Approvals, Other Authorizations, Consents,
Reports, etc.................................................28
Section 4.10. Labor Matters..................................................28
Section 4.11. Compliance with Laws...........................................28
Section 4.12. Insurance......................................................29
Section 4.13. Material Contracts.............................................29
Section 4.14. Brokers, Finders, etc..........................................29
Section 4.15. Opinions of Dreyer's Financial Advisor.........................29
Section 4.16. Board Approval; Rights Plan....................................29
Section 4.17. Required Vote..................................................30
Section 4.18. Environmental Compliance.......................................30
Section 4.19. Employee Benefit Plans.........................................31
Section 4.20. Taxes..........................................................33
ARTICLE V
Covenants of the Parties......................................................34
Section 5.1. Investigation of Business; Access to Properties and
Records......................................................34
Section 5.2. Filings; Other Actions; Notification...........................34
Section 5.3. Further Assurances; Assets and Liabilities.....................36
Section 5.4. Conduct of Business............................................37
Section 5.5. Public Announcements...........................................42
Section 5.6. Intercompany Accounts..........................................42
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Section 5.7. Voting of Shares...............................................42
Section 5.8. Insurance......................................................42
Section 5.9. No Solicitation................................................42
Section 5.10. Proxy Statement; Registration Statement; Blue Sky..............45
Section 5.11. Stockholders' Meeting; Board Recommendation....................46
Section 5.12. Certain Notices................................................47
Section 5.13. Governance Agreement...........................................47
Section 5.14. Nasdaq Listing.................................................47
Section 5.15. Dreyer's Rights Agreement......................................48
Section 5.16 The Nestle Stock Purchase Agreement............................48
ARTICLE VI
Employee Benefits Matters.....................................................48
Section 6.1 Nestle Severance and Retention Plans...........................48
Section 6.2 Nestle Bonus Plans.............................................48
Section 6.3 Dreyer's Employment Arrangements...............................49
Section 6.4 Dreyer's Employee Stock Purchase Plans.........................49
Section 6.5 Long Term Incentive Plan.......................................49
Section 6.6 Continuation of Benefits.......................................49
Section 6.7 Service Credits................................................49
Section 6.8 Controlled Group Liability.....................................50
Section 6.9 Reservation of Rights..........................................50
ARTICLE VII
Tax Matters...................................................................50
Section 7.1. Tax-free Qualification.........................................50
Section 7.2. FIRPTA Certificate.............................................50
Section 7.3. Indemnification................................................50
Section 7.4. Cooperation....................................................51
ARTICLE VIII
Conditions Precedent..........................................................52
Section 8.1. Conditions to Each Party's Obligation..........................52
Section 8.2. Additional Conditions to Dreyer's Obligations..................52
Section 8.3. Additional Conditions to Nestle's Obligation...................53
ARTICLE IX
Survival......................................................................54
Section 9.1. Survival.......................................................54
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ARTICLE X
Termination...................................................................55
Section 10.1. Termination....................................................55
Section 10.2. Procedure and Effect of Termination............................56
Section 10.3. Termination Fees...............................................56
Section 10.4. All Payments...................................................57
ARTICLE XI
Miscellaneous.................................................................57
Section 11.1. Counterparts...................................................57
Section 11.2. Governing Law; Jurisdiction and Forum; Waiver of Jury
Trial........................................................57
Section 11.3. Entire Agreement; Beneficiaries................................58
Section 11.4. Expenses.......................................................58
Section 11.5. Notices........................................................58
Section 11.6. Successors and Assigns.........................................59
Section 11.7. Headings; Definitions..........................................59
Section 11.8. Amendments and Waivers.........................................60
Section 11.9. Specific Performance...........................................60
Section 11.10. Severability...................................................60
Section 11.11. Mutual Drafting................................................60
List of Exhibits
Exhibit A Form of Voting Agreement
Exhibit B Form of New December, Inc. Certificate of Incorporation
Exhibit C Form of New December, Inc. Bylaws
Exhibit D Form of Governance Agreement
Exhibit E Form of CEO Employment Agreement
Exhibit F Form of Employment Agreement
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AGREEMENT AND PLAN OF MERGER AND CONTRIBUTION
THIS AGREEMENT AND PLAN OF MERGER AND CONTRIBUTION (the "AGREEMENT"),
dated as of June 16, 2002, is entered into by and among Xxxxxx'x Grand Ice
Cream, Inc., a Delaware corporation ("DREYER'S"), New December, Inc., a Delaware
corporation and wholly owned subsidiary of Dreyer's ("NEW DREYER'S"), December
Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of New
Dreyer's ("MERGER SUB"), Nestle Holdings, Inc., a Delaware corporation
("NESTLE"), and NICC Holdings, Inc., a Delaware corporation and wholly owned
indirect subsidiary of Nestle ("CONTRIBUTING SUB"). Unless otherwise specified,
capitalized terms herein shall have the meaning ascribed to them in Article I.
WHEREAS, New Dreyer's is a newly formed corporation that has issued
and outstanding 100 shares of capital stock, all of which are owned by Dreyer's;
WHEREAS, Dreyer's has caused New Dreyer's to form Merger Sub, all of
the outstanding capital stock of which is owned by New Dreyer's;
WHEREAS, the respective Boards of Directors of Dreyer's and Merger Sub
have approved this Agreement and the merger of Merger Sub with and into Dreyer's
with Dreyer's continuing as the surviving corporation (the "MERGER"), upon the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, the respective Boards of Directors of Nestle, Contributing
Sub and New Dreyer's have approved this Agreement and the contribution by
Contributing Sub of all the equity interests of Nestle Ice Cream Company, LLC, a
Delaware limited liability company which is wholly owned by Contributing Sub
("NICC"), to New Dreyer's in exchange for shares of Common Stock of New
Dreyer's, with NICC becoming a wholly owned subsidiary of New Dreyer's (the
"CONTRIBUTION"), upon the terms and subject to the conditions set forth in this
Agreement;
WHEREAS, the respective Boards of Directors of New Dreyer's, Nestle
and Contributing Sub have approved this Agreement and the contribution by
Nestle, of the Nestle Shares (as defined herein) to New Dreyer's in exchange for
shares of Class B Common Stock of New Dreyer's (the "EXCHANGE" and collectively
with the Contribution and the Merger, the "TRANSACTIONS");
WHEREAS, for U.S. federal income tax purposes, it is intended that the
Merger will qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "CODE"), and that the Merger,
Exchange and the Contribution, taken together, will qualify as a transaction
described in Section 351 of the Code;
WHEREAS, each outstanding share of Dreyer's Common Stock (other than
shares of Dreyer's Common Stock held in the treasury of Dreyer's or shares
contributed to New December immediately prior to the Merger) shall cease to
exist and shall be converted into the right to receive one share of Class A
Callable Puttable Common Stock of New Dreyer's;
WHEREAS, as a condition to and inducement to Nestle's willingness to
enter into this Agreement, simultaneously with the execution of
this Agreement, Nestle is entering into a Voting Agreement in the form of
Exhibit A hereto (the "Voting Agreement") with certain stockholders of Dreyer's.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained in this Agreement, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. (a) As used in this Agreement the following terms shall
have the following respective meanings:
"ACTION" shall mean any action, suit, arbitration, inquiry, proceeding
or investigation by or before any court, governmental or other regulatory or
administrative agency or commission.
"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. 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).
"ANCILLARY AGREEMENTS" shall mean the Governance Agreement and the
Voting Agreement.
"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.
"BUSINESS INTELLECTUAL PROPERTY RIGHTS" shall mean all Intellectual
Property Rights (i) owned by the NICC Entities or (ii) owned by an Affiliate of
NICC and licensed to NICC.
"BUSINESS LICENSED INTELLECTUAL PROPERTY RIGHTS" shall mean the
Intellectual Property Rights sublicensed to NICC pursuant to the agreements
described in Items 1 and 2 of Section 5.3(e) of the Nestle Disclosure Schedule.
"CONTINUING AFFILIATE" shall mean any Affiliate of Nestle, other than
an NICC Entity and, after the Effective Time, other than New Dreyer's and its
Subsidiaries.
"CONTROLLED GROUP LIABILITY" shall mean any and all liabilities (i)
under Title IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections
412 and 4971 of the Code, (iv)
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as a result of a failure to comply with the continuation coverage requirements
of Section 601 et seq. of ERISA and Section 4980B of the Code and (v) under
corresponding or similar provisions of foreign laws or regulations, other than
such liabilities that arise solely out of, or relate solely to, the Nestle
Employee Arrangements or Dreyer's Employee Arrangements (as applicable).
"COVERED LOSSES" shall mean any and all losses, liabilities, claims,
fines, deficiencies, damages, obligations, payments (including, without
limitation, those arising out of any settlement, judgment or compromise relating
to any Action), reasonable costs and expenses (including, without limitation,
interest and penalties due and payable with respect thereto and reasonable
attorneys' and accountants' fees and any other reasonable out-of-pocket expenses
incurred in investigating, preparing, defending, avoiding or settling any
Action), including, without limitation, any of the foregoing arising under, out
of or in connection with any Action, order or consent decree of any Governmental
Authority or award of any arbitrator of any kind, or any law, rule, regulation,
contract, commitment or undertaking.
"DREYER'S BENEFIT ARRANGEMENT" shall mean any employment, severance or
similar contract, plan, policy, fund or arrangement (whether or not written)
providing for compensation, bonus, profit-sharing, stock option, or other
stock-related rights or other forms of incentive or deferred compensation,
perquisites, vacation benefits, insurance coverage (including any self-insured
arrangements), health or medical benefits, disability benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension, health,
medical or life insurance or other benefits) that (i) is not a Dreyer's Employee
Plan, (ii) is entered into, participated in, maintained, administered or
contributed to, as the case may be, by Dreyer's or any of its Subsidiaries and
(iii) covers any U.S. employee or former U.S. employee of Dreyer's or any of its
Subsidiaries employed in the U.S.
"DREYER'S COMMON STOCK" shall mean the Common Stock, par value $1.00
per share, of Dreyer's, and the associated Rights issued pursuant to the
Dreyer's Rights Agreement.
"DREYER'S EMPLOYEE ARRANGEMENT" shall mean any Dreyer's Benefit
Arrangement, Dreyer's Employee Plan or Dreyer's International Plan.
"DREYER'S EMPLOYEE PLAN" shall mean any "employee benefit plan," as
defined in Section 3(3) of ERISA (other than a Multiemployer Plan), that (i) is
subject to any provision of ERISA, (ii) is entered into, participated in,
maintained, administered or contributed to by Dreyer's or any of its
Subsidiaries and (iii) covers any employee or former employee of Dreyer's or any
of its Subsidiaries.
"DREYER'S ENTITIES" shall mean Dreyer's and its Subsidiaries.
"DREYER'S FINANCIAL ADVISOR" shall mean Xxxxxxx Xxxxx & Co.
"DREYER'S INTELLECTUAL PROPERTY RIGHTS" shall mean all Intellectual
Property Rights owned by or registered in the name of Dreyer's or its
Subsidiaries.
"DREYER'S INTERNATIONAL PLAN" shall mean any employment, severance or
similar contract, plan, policy, fund or arrangement (whether or not written)
providing for compensation,
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bonus, profit-sharing, stock option, or other stock-related rights or other
forms of incentive or deferred compensation, perquisites, vacation benefits,
insurance coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance or other
benefits) that (i) is not an Dreyer's Employee Plan or a Dreyer's Benefit
Arrangement, (ii) is entered into, participated in, maintained, administered or
contributed to by Dreyer's or any of its Subsidiaries and (iii) covers any
employee or former employee of Dreyer's or any of its Subsidiaries.
"DREYER'S MULTIEMPLOYER PLAN" shall mean any Multiemployer Plan that
(i) is entered into, participated in, maintained, administered or contributed to
by Dreyer's or any of its Subsidiaries and (ii) covers any employee or former
employee of Dreyer's or any of its Subsidiaries.
"DREYER'S RIGHTS AGREEMENT" shall mean the Amended and Restated Rights
Agreement, dated as of March 4, 1991, as amended as of June 14, 1994, March 19,
1997 and May 15, 1997, between Dreyer's and ChaseMellon Shareholder Services,
L.L.C.
"DREYER'S STOCKHOLDERS APPROVAL" shall mean the approval and adoption
of this Agreement and the Merger by the stockholders of Dreyer's by the Required
Dreyer's Vote.
"DGCL" shall mean the General Corporation Law of the State of
Delaware.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" of any entity shall mean any other entity that,
together with such entity, would be treated as a single employer under Section
414 of the Code or Section 4001(b)(1) or 4001(a)(14) of ERISA.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"EXPENSES" includes all reasonable out-of-pocket expenses (including,
without limitation, all reasonable fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and its
Affiliates) incurred by a party or on its behalf in connection with or related
to the authorization, preparation, negotiation, execution and performance of
this Agreement and the transactions contemplated hereby, including the
preparation, printing, filing and mailing of the Registration Statement and
Dreyer's Proxy Statement, as applicable, and the solicitation of stockholder
approval and all other matters related to the transactions contemplated hereby.
"GAAP" shall mean U.S. generally accepted accounting principles,
consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean any U.S. federal, state or local,
or any foreign, government, governmental, regulatory or administrative
authority, agency or commission or any court, tribunal, or judicial or arbitral
body.
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"XXX XXX" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the regulations promulgated thereunder.
"INCOME TAXES" shall mean Taxes based on, or measured by, net income.
"INTELLECTUAL PROPERTY RIGHT" shall mean any trademark, service xxxx,
trade name, Internet domain name, trade dress and general intangibles of like
nature (together with goodwill), mask work, invention, trade secret, copyright,
patent, know-how, proprietary or confidential information, process, formula,
technology, discovery, method, research and development, drawing, artwork,
customer list, software, database and compilation (including any and all
collections of data and all documentation thereof), or any other similar type of
proprietary or intellectual property right, including any registrations or
applications for registration of any of the foregoing and renewals and
extensions of registrations or patents.
"LAW" shall mean any U.S. federal, state or local, or any foreign,
order, writ, injunction, judgment, award, decree, common law, statute, code,
ruling, law, rule or regulation.
"LIEN" shall mean any imperfection of title, easement, encroachment,
security interest, pledge, mortgage, lien (including, without limitation,
environmental and Tax liens), charge, encumbrance, proxy, voting trust or voting
agreement.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan, as defined in
Section 3(37) of 4001 ERISA.
"NESTLE BENEFIT ARRANGEMENT" shall mean any employment, severance or
similar contract, plan, policy, fund or arrangement (whether or not written)
providing for compensation, bonus, profit-sharing, stock option, or other
stock-related rights or other forms of incentive or deferred compensation,
perquisites, vacation benefits, insurance coverage (including any self-insured
arrangements), health or medical benefits, disability benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension, health,
medical or life insurance or other benefits) that (i) is not an Nestle Employee
Plan, (ii) is entered into, participated in, maintained, administered or
contributed to, as the case may be, by any NICC Entity and (iii) covers any U.S.
employee or former U.S. employee of any NICC Entity employed in the U.S.
"NESTLE EMPLOYEE ARRANGEMENT" shall mean any Nestle Benefit
Arrangement, Nestle Employee Plan or Nestle International Plan.
"NESTLE EMPLOYEE PLAN" shall mean any "employee benefit plan," as
defined in Section 3(3) of ERISA (other than a Nestle Multiemployer Plan), that
(i) is subject to any provision of ERISA, (ii) is entered into, participated in,
maintained, administered or contributed to by any NICC Entity and (iii) covers
any employee or former employee of any NICC Entity.
"NESTLE FINANCIAL ADVISOR" shall mean Rhone Group LLC.
"NESTLE INTERNATIONAL PLAN" shall mean any employment, severance or
similar contract, plan, policy, fund or arrangement (whether or not written)
providing for compensation, bonus, profit-sharing, stock option, or other
stock-related rights or other forms of incentive or
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deferred compensation, perquisites, vacation benefits, insurance coverage
(including any self-insured arrangements), health or medical benefits,
disability benefits, workers' compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance or other benefits) that
(i) is not an Nestle Employee Plan or a Nestle Benefit Arrangement, (ii) is
entered into, participated in, maintained, administered or contributed to by any
NICC Entity and (iii) covers any employee or former employee of any NICC Entity.
"NESTLE MULTIEMPLOYER PLAN" shall mean any Multiemployer Plan that (i)
is entered into, participated in, maintained, administered or contributed to by
any NICC Entity and (iii) covers any employee or former employee of any NICC
Entity.
"NESTLE SHARES" shall mean the shares of Dreyer's Common Stock held by
Nestle or any Affiliate thereof immediately prior to the Effective Time.
"NESTLE STOCK PURCHASE AGREEMENT" shall mean that certain Stock and
Warrant Purchase Agreement, dated as of June 14, 1994, by and between Dreyer's
and Nestle, as amended.
"NICC ENTITIES" shall mean NICC and its Subsidiaries.
"NICC Membership Interest" shall mean the membership interest of NICC.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PERMITTED LIENS" shall mean all Liens (i) which are reflected or
reserved against in the Business Balance Sheet (up to the amounts so reflected
or reserved against), (ii) which arise out of Taxes or general or special
assessments not in default and payable without penalty or interest or the
validity of which is being contested in good faith by appropriate proceedings,
(iii) of carriers, warehousemen, mechanics, materialmen and other similar
persons or otherwise imposed by Law incurred in the ordinary course of business
for sums not yet delinquent or being contested in good faith, (iv) which relate
to deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security, and (v)
incurred in the ordinary course of business consistent with past practice and
which do not materially impair the use of the asset subject thereof for the
purposes for which currently used.
"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.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the regulations promulgated thereunder.
"SUBSIDIARY" shall mean, with respect to any Person, any other entity
of which securities or other ownership interests having ordinary power to elect
a majority of the board of
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directors or other persons performing similar functions are at any time directly
or indirectly owned by such Person.
"TAX" or "TAXES" shall mean all federal, state, local or foreign net
or gross income, gross receipts, net proceeds, sales, use, ad valorem, value
added, franchise, bank shares, withholding, payroll, employment, excise,
property, alternative minimum, environmental or other taxes, assessments,
duties, fees, levies or other governmental charges of any nature whatsoever,
whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto, whether disputed or not, in each
case including such taxes for which a Person is or may be liable (i) as a result
of Treasury Regulation Section 1.1502-6 (or a similar provision of state, local
or foreign law) and (ii) as a result of being party to any agreement or any
expressed or implied obligation to indemnify any Person.
"TAX AUTHORITY" shall mean any Governmental Authority responsible for
the collection or administration of any Tax.
"TAX RETURNS" shall mean any returns, reports, claims for refund,
information returns or statements (including any amended returns or information
returns) required to be filed for purposes of a particular Tax.
"TITLE IV PLAN" shall mean a plan subject to Title IV of ERISA other
than any Multiemployer Plan.
"U.S." shall mean the United States of America.
"WITHDRAWAL LIABILITY" shall mean liability to or with respect to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title
IV or ERISA.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
2000 Financial Statements.......................................... 3.3
2001 Financial Statements ......................................... 3.3
Additional Nestle Shares........................................... 2.5
Agreement.......................................................... Preamble
Book Entry Shares.................................................. 2.12(b)
Business........................................................... 3.5
Business Balance Sheet............................................. 3.3
Business Combination Proposal ..................................... 5.9(b)
Business Financial Statements...................................... 3.3
Certificate of Merger.............................................. 2.3
Certificates....................................................... 2.12(b)
Class A Common Stock............................................... 2.11(a)
Class B Common Stock............................................... 2.5
Closing............................................................ 2.1
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TERM SECTION
Closing Date....................................................... 2.1(b)
Code............................................................... Recitals
Confidentiality Agreement.......................................... 5.1(c)
Contributing Sub................................................... Preamble
Contribution....................................................... Recitals
Converted Dreyer's Option.......................................... 2.11(e)
Dreyer's........................................................... Preamble
Dreyer's Disclosure Schedule....................................... Article IV
Dreyer's ESPP...................................................... 5.4(b)(iv)
Dreyer's Material Adverse Effect................................... 8.3(a)
Dreyer's Material Contracts........................................ 4.13
Dreyer's Merger Consideration...................................... 2.11(a)
Dreyer's Option.................................................... 2.11(e)
Dreyer's Option Plans.............................................. 2.11(e)
Dreyer's Proxy Statement........................................... 5.10(a)
Dreyer's Representatives........................................... 5.9(a)
Dreyer's SEC Reports............................................... 4.3(a)
Dreyer's Stockholders Meeting...................................... 5.11
Delaware Secretary of State........................................ 2.3(u)
Disinterested Directors............................................ Recitals
Effective Time..................................................... 2.3
Employees.......................................................... 6.6
Environmental Laws................................................. 3.18(a)
Exchange .......................................................... Recitals
Exchange Agent..................................................... 2.12(a)
Exchange Fund...................................................... 2.12(a)
Governance Agreement............................................... 5.13
Last Offering Period............................................... 6.4
LTIP............................................................... 6.5
Licenses........................................................... 3.9(a)
Merger............................................................. Recitals
Merger Sub......................................................... Preamble
New Dreyer's....................................................... Preamble
Nestle............................................................. Preamble
Nestle Disclosure Schedule......................................... Article III
NICC............................................................... Recitals
NICC Interests..................................................... 2.5
NICC Material Adverse Effect....................................... 8.2(a)
NICC Material Contracts............................................ 3.13
NICC Subsidiary.................................................... 7.3
Registration Statement............................................. 5.10(a)
Required Dreyer's Vote............................................. 4.17
Rights............................................................. 4.2(a)
Superior Proposal.................................................. 5.9(b)
Superior Proposal Notice........................................... 5.9(d)
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TERM SECTION
Surviving Corporation.............................................. 2.2
Termination Date................................................... 10.1(b)
Transactions....................................................... Recitals
Voting Agreement................................................... Recitals
ARTICLE II
THE MERGER AND CONTRIBUTION; CLOSING
Section 2.1. TIME AND PLACE OF CLOSING. The closing of the
Transactions (the "CLOSING") shall take place (a) at 10:00 a.m., New York City
time, at the offices of Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as promptly as practicable (but no later than the fifth
Business Day) following the date on which the last to be satisfied or waived of
the conditions set forth in Article VIII (other than those conditions that by
their nature cannot be satisfied until the Closing Date, but subject to the
satisfaction or, where permitted, waiver of those conditions) shall be satisfied
or waived in accordance with this Agreement or (b) at such other place, time
and/or date as Dreyer's and Nestle shall agree (the date of the Closing, the
"CLOSING DATE").
Section 2.2. THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the DGCL, Merger Sub shall
be merged with and into Dreyer's at the Effective Time (as defined below).
Following the Merger, the separate corporate existence of Merger Sub shall cease
and Dreyer's shall continue as the surviving corporation (the "SURVIVING
CORPORATION").
Section 2.3. EFFECTIVE TIME. Upon the Closing, Merger Sub and Dreyer's
shall (a) file with the Secretary of State of the State of Delaware (the
"DELAWARE SECRETARY OF STATE") a certificate of merger (the "CERTIFICATE OF
MERGER") in such form as is required by and executed in accordance with the
relevant provisions of the DGCL and (b) make all other filings or recordings
required under the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Delaware Secretary of State or at
such subsequent time as Dreyer's and Nestle shall agree and as shall be
specified in the Certificate of Merger (the date and time the Merger becomes
effective being the "EFFECTIVE TIME").
Section 2.4. EFFECTS OF THE MERGER. At and after the Effective Time,
the Merger will have the effects set forth in the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property, rights, privileges, powers and franchises of Dreyer's and Merger Sub
shall be vested in the Surviving Corporation, and all debts, liabilities and
duties of Dreyer's and Merger Sub shall become the debts, liabilities and duties
of the Surviving Corporation.
Section 2.5. THE CONTRIBUTION; EXCHANGE.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, immediately prior to the Effective Time, Nestle shall cause the
Contributing Sub to, and
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Contributing Sub shall make the Contribution of all the membership interests of
NICC (the "NICC INTERESTS"), representing the entire equity interest in NICC, to
New Dreyer's in return for 55,001,299 shares ("ADDITIONAL NESTLE SHARES") of
Class B Common Stock, par value $0.01 per share, of New Dreyer's ("CLASS B
COMMON STOCK").
(b) Upon the terms and subject to the conditions set forth in this
Agreement, immediately prior to the Effective Time, Nestle shall, in the
Exchange, contribute all of the Nestle Shares to New Dreyer's in exchange for
the issuance of one share of Class B Common Stock for each share of Dreyer's
Common Stock that is a Nestle Share.
Section 2.6. CERTIFICATE OF INCORPORATION AND BYLAWS OF SURVIVING
CORPORATION. The certificate of incorporation of Dreyer's shall be amended to
read in its entirety as the certificate of incorporation of Merger Sub, in
effect immediately prior to the Effective Time. The bylaws of Dreyer's shall be
amended to read in its entirety as the bylaws of Merger Sub in effect
immediately prior to the Effective Time, until thereafter changed or amended as
provided therein or by applicable Law.
Section 2.7. NAME CHANGE; CERTIFICATE OF INCORPORATION AND BYLAWS OF
NEW DREYER'S. At the Effective Time, Dreyer's shall cause New Dreyer's name to
be changed to "Xxxxxx'x Grand Ice Cream, Inc." Dreyer's shall cause New Dreyer's
certificate of incorporation and bylaws to be amended as of immediately prior to
the Effective Time to read in the form set forth on Exhibit B and C hereto,
respectively, until thereafter changed or amended as provided therein or by
applicable Law.
Section 2.8. OFFICERS AND DIRECTORS. (a) The officers of Dreyer's at
the Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or otherwise ceasing to be an officer or
until their respective successors are duly elected and qualified, as the case
may be. The Board of Directors of Merger Sub at the Effective Time shall be the
Board of Directors of the Surviving Corporation until the earlier of their
resignation or removal or otherwise ceasing to be a member of the Board of
Directors or until their respective successors are duly elected and qualified.
(b) Dreyer's shall take, and shall cause New Dreyer's to take, all
action necessary to cause the Board of Directors of New Dreyer's to be comprised
of ten members and to elect five designees of Nestle (who shall be designated in
writing to Dreyer's by Nestle prior to the Effective Time) to the Board of
Directors of New Dreyer's effective as of the Effective Time (as contemplated by
Section 3.01 of the Governance Agreement).
Section 2.9. DELIVERIES BY CONTRIBUTING SUB. At the Closing, Nestle
shall cause the Contributing Sub to, and Contributing Sub shall deliver to New
Dreyer's certificates or notarial assignment deed for, or such other instruments
evidencing ownership under applicable law of, the NICC Interests, which
constitute and will constitute as of the Closing, 100% of the issued and
outstanding equity interests of NICC, and the Nestle Shares, in each case with
appropriate instruments of transfer.
Section 2.10. DELIVERIES BY NEW DREYER'S. At the Closing, Dreyer's
shall cause New Dreyer's to deliver to (i) the Contributing Sub a certificate
for the Additional Nestle Shares,
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in definitive form, registered in the name of the Contributing Sub, bearing a
legend or legends referencing restrictions under the Securities Act and under
the Governance Agreement on transfer of the Additional Nestle Shares and (ii)
Nestle a certificate for the shares of Class B Common Stock as provided for in
Section 2.5(b).
Section 2.11. EFFECT ON CAPITAL STOCK.
(a) At the Effective Time, by virtue of the Merger, each share of
Dreyer's Common Stock issued and outstanding immediately prior to the Effective
Time (other than shares held in the treasury of Dreyer's, and not including the
Nestle Shares, which will be exchanged immediately prior to such time pursuant
to Section 2.5(b) and canceled at the Effective Time pursuant to Section
2.11(c)) shall cease to exist and be converted into the right to receive one
share of Class A Callable Puttable Common Stock, par value $0.01 per share, of
New Dreyer's ("CLASS A COMMON STOCK") (collectively, the "DREYER'S MERGER
CONSIDERATION").
(b) At the Effective Time, by virtue of the Merger, each share of the
common stock, par value $0.01 per share of Merger Sub issued and outstanding
immediately prior to the Effective Time shall cease to exist and be converted
into the right to receive one share of common stock, par value $0.01, of the
Surviving Corporation.
(c) At the Effective Time, by virtue of the Merger, each Nestle Share
owned by New Dreyer's issued and outstanding immediately prior to the Effective
Time (after the Exchange) shall cease to exist.
(d) At the Effective Time, by virtue of the Merger, each share of
Dreyer's Common Stock held in the treasury of Dreyer's immediately prior to the
Effective Time shall automatically be canceled and retired and shall cease to
exist, and no consideration shall be delivered in exchange thereof.
(e) Each outstanding option to purchase Dreyer's Common Stock (each, a
"DREYER'S OPTION"), issued pursuant to Dreyer's stock option plans
(collectively, the "DREYER'S OPTION PLANS") shall, without any action by the
holder thereof and pursuant to the terms of the Dreyer's Option Plans, vest and
become fully exercisable upon approval and adoption of the Merger by the Board
of Directors of Dreyer's, and shall be converted as of the Effective Time into
an option (a "CONVERTED DREYER'S OPTION") to acquire (i) prior to the Redemption
Date (as defined in the Governance Agreement) that number of shares of Class A
Common Stock equal to the number of shares of Dreyer's Common Stock subject to
such Dreyer's Option immediately prior to the Effective Time, at the price or
prices per share in effect pursuant to the terms of such Dreyer's Option
immediately prior to the Effective Time and (ii) at and after the Redemption
Date or the effective time of the Short-Form Merger (as defined in the
Governance Agreement), consideration of the same type and amount the holder
thereof would have received had he or she exercised such Converted Dreyer's
Option prior to the Redemption Date and received consideration pursuant to the
Redemption (as defined in the Governance Agreement) at the price or prices per
share in effect pursuant to the terms of such Dreyer's Option immediately prior
to the Effective Time. Each Converted Dreyer's Option shall otherwise be subject
to the same terms and conditions applicable to the original Dreyer's Option
immediately prior to the Effective Time including any provision relating to
acceleration by reason of any of the
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transactions contemplated by this Agreement. Notwithstanding the foregoing
provisions of this Section 2.11(e), Dreyer's Options held by individuals who,
pursuant to Section 6.3 hereof, have entered into or enter into employment
agreements in the forms set forth in Exhibit F hereto shall be subject to the
terms of such agreements. Prior to the Effective Time, Dreyer's and Nestle shall
use their reasonable best efforts to effectuate this Section 2.11(e).
Section 2.12. EXCHANGE OF SHARES IN THE MERGER. (a) At the Effective
Time, New Dreyer's shall make available to an exchange agent selected by New
Dreyer's (the "EXCHANGE AGENT"), for the benefit of those Persons who
immediately prior to the Effective Time were the holders of shares of Dreyer's
Common Stock (other than the Nestle Shares), a sufficient number of certificates
representing shares of Class A Common Stock required to effect the delivery of
the aggregate Dreyer's Merger Consideration required to be issued pursuant to
Section 2.11(a) (the certificates representing shares of Class A Common Stock
comprising such aggregate Dreyer's Merger Consideration being hereinafter
referred to as the "EXCHANGE FUND").
(b) Promptly after the Effective Time, the Exchange Agent shall mail
to each holder of record (other than Nestle or its Affiliates) of a certificate
or certificates which immediately prior to the Effective Time represented
outstanding shares of Dreyer's Common Stock (the "CERTIFICATES") (i) a form of
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Certificates for exchange therefor or for
effecting the exchange of Certificates for shares of Class A Common Stock to be
held in book entry form. Promptly after the Effective Time, the Exchange Agent
shall also mail to each holder of record of shares of Dreyer's Common Stock held
in book entry form ("BOOK ENTRY SHARES") instructions for use in effecting the
exchange of said Book Entry Shares for shares of Class A Common Stock. Upon
surrender of Certificates to the Exchange Agent, together with such letter of
transmittal duly executed and any other required documents, or, in the case of
Book Entry Shares, compliance with the instructions for the exchange thereof,
the holder of such Certificates or Book Entry Shares shall be entitled to
receive for the Common Shares represented by such Certificates the Dreyer's
Merger Consideration, and the Certificates so surrendered or Book Entry Shares
so exchanged shall forthwith be canceled. Until so surrendered, Certificates,
and until exchanged as contemplated by this Section 2.12(b), Book Entry Shares,
shall represent solely the right to receive the Dreyer's Merger Consideration.
No dividends or other distributions that are declared after the Effective Time
on shares of Class A Common Stock and payable to the holders of record thereof
after the Effective Time will be paid to Persons entitled by reason of the
Merger to receive shares of Class A Common Stock until such Persons surrender
their Certificates or comply with the procedures for exchanging Book Entry
Shares. After such surrender or compliance, as the case may be, there shall be
paid to the Person in whose name the shares of Class A Common Stock are issued
any dividends or other distributions on such shares of Class A Common Stock
which shall have a record date after the Effective Time and prior to such
surrender and a payment date after such surrender, such payment shall be made on
such payment date. In no event shall the Persons entitled to receive such
dividends or other distributions be entitled to receive interest on such
dividends or other distributions. If any Certificate representing shares of
Class A Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the Certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and that the Person
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requesting such exchange shall pay to the Exchange Agent any transfer or other
Taxes required by reason of the issuance of certificates for such shares of
Class A Common Stock in a name other than that of the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of the Exchange
Agent that such Tax has been paid or is not applicable. The Exchange Agent shall
not be entitled to vote or exercise any rights of ownership with respect to the
shares of Class A Common Stock held by it from time to time hereunder, except
that it shall receive and hold all dividends or other distributions paid or
distributed with respect to such shares of Class A Common Stock for the account
of the Persons entitled thereto.
(c) Any portion of the Exchange Fund which remains unclaimed by the
former holders of Dreyer's Common Stock for six months after the Effective Time
shall be delivered to New Dreyer's, upon demand of New Dreyer's, and any former
holders of Dreyer's Common Stock shall thereafter look only to New Dreyer's for
payment of their claim for the Dreyer's Merger Consideration for the shares of
Dreyer's Common Stock. If, after the Effective Time, Certificates or unexchanged
Book Entry Shares representing shares of Dreyer's Common Stock outstanding prior
to the Effective Time are presented to New Dreyer's, they shall be cancelled and
exchanged for the consideration provided for, and in accordance with the
procedures set forth, in this Article II.
(d) Notwithstanding anything to the contrary in this Agreement to the
fullest extent permitted by Law, none of the Exchange Agent, New Dreyer's or the
Surviving Corporation shall be liable to a holder of shares of Dreyer's Common
Stock for any amount properly paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(e) Either New Dreyer's or the Exchange Agent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of shares of Dreyer's Common Stock such amounts as New
Dreyer's (or any Affiliate thereof) or the Exchange Agent are required to deduct
and withhold with respect to the making of such payment under the Code or any
provision of any applicable state, local or foreign Tax Law. To the extent that
amounts are so withheld by New Dreyer's or the Exchange Agent, such withheld
amounts will be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Dreyer's Common Stock in respect of whom such
deduction and withholding were made by New Dreyer's.
(f) TAX-FREE TREATMENT. The Parties intend that the Merger will meet
the requirements of Section 368(a) of the Code and rules and regulations
promulgated thereunder, that the Merger, the Exchange and the Contribution,
taken together, will meet the requirements described in Section 351 of the Code
and the rules and regulations promulgated thereunder, and that this Agreement
shall constitute the plan of reorganization.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NESTLE
Except as set forth in the disclosure schedule delivered to Dreyer's
by Nestle on the date hereof (the "NESTLE DISCLOSURE SCHEDULE"), Nestle hereby
represents and warrants to Dreyer's and Merger Sub as follows:
Section 3.1. INCORPORATION; AUTHORIZATION; ETC. (a) Nestle is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and each NICC Entity is duly organized and validly
existing and in good standing under the laws of the jurisdiction of its
organization. Except as set forth in Section 3.1(a) of the Nestle Disclosure
Schedule, each of the NICC Entities (i) has the requisite corporate or similar
power and authority to own its properties and assets and to carry on its
business as it is now being conducted and (ii) is in good standing and is duly
qualified to transact business in each jurisdiction in which the nature of
property owned or leased by it or the conduct of its business requires it to be
so qualified, except where the failure to be so organized or in good standing or
to be duly qualified to transact business, or to have such power and authority,
would not, individually or in the aggregate, have or reasonably be expected to
have a material adverse effect on the NICC Entities. For purposes of this
Article III, a "material adverse effect on the NICC Entities" shall mean a
material adverse effect on the assets, liabilities, business, financial
condition, results of operations and prospects of the NICC Entities, taken as a
whole.
(b) Nestle has the requisite corporate or similar power to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery by
Nestle of this Agreement, the performance by Nestle of its obligations hereunder
and the consummation by Nestle of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of Nestle and no other
corporate proceedings on the part of Nestle, its Board of Directors or
stockholders are necessary therefor.
(c) Except as set forth in Section 3.1(c) of the Nestle Disclosure
Schedule, the execution, delivery and performance of this Agreement will not (i)
violate any provision of Nestle's certificate of incorporation or by-laws, (ii)
violate any provision of, or be an event that is (or with the passage of time
will result in) a violation of, or result in the acceleration of or entitle any
party to accelerate or exercise (whether after the giving of notice or lapse of
time or both) any obligation or right under, or result in the imposition of any
Lien upon or the creation of a security interest in any shares of capital stock
or similar interest of any NICC Entity, or any of NICC Entity's assets or
properties pursuant to, any Lien, agreement, instrument, order, arbitration
award, judgment or decree to which Nestle or any NICC Entity is a party or by
which any of them is bound, or (iii) violate or conflict with any other
restriction of any kind or character to which Nestle, any Continuing Affiliate
or any NICC Entity is subject, that, in the case of clauses (ii) or (iii) would,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on the NICC Entities or prevent the Transactions from
occurring prior to the Termination Date or result in any material delay in the
consummation of the Transactions. This Agreement has been duly executed and
delivered by Nestle, and, assuming the due execution hereof by Dreyer's, New
Dreyer's and Merger Sub, this Agreement
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constitutes the legal, valid and binding obligation of Nestle, enforceable
against 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). Nestle has delivered
to Dreyer's a true and correct copy of the certificate of formation and the
operating agreement, each as amended to date, of NICC.
Section 3.2. CAPITALIZATION; STRUCTURE. (a) Nestle owns indirectly
100% of the outstanding capital stock of Contributing Sub and Contributing Sub
owns 100% of the authorized equity interests of NICC. The membership interests
are validly issued, fully paid and non-assessable, and free of preemptive rights
and free and clear of all Liens. The Nestle Shares constitute 9,563,016 shares
of December Common Stock.
(b) Section 3.2(b) of the Nestle Disclosure Schedule sets forth the
name of each Subsidiary of NICC, its jurisdiction of incorporation or
organization, the number of outstanding shares of its capital stock or other
equity interests of each class and the name and number of shares owned by each
holder of any such shares of capital stock or other equity interests. Except as
set forth in Section 3.2 of the Nestle Disclosure Schedule, all of the
outstanding shares of capital stock or other equity interests of the
Subsidiaries of NICC have been validly issued, and are fully paid and
non-assessable, are free of preemptive rights, and are owned directly by NICC as
set forth in Section 3.2(b) of the Nestle Disclosure Schedule, free and clear of
all Liens.
(c) There are no outstanding options, warrants or other rights of any
kind to acquire, or obligations to issue, shares, membership interests, capital
stock of any class of, or other equity interests in, any NICC Entity. None of
the NICC Entities owns any equity interest, directly or indirectly, in any
Person other than the NICC Entities. There are no outstanding obligations of any
NICC Entity (i) to repurchase, redeem or otherwise acquire any shares of capital
stock or other equity interests in any NICC Entity or (ii) to grant preemptive
or antidilutive rights with respect to any such shares or interests.
Section 3.3. FINANCIAL STATEMENTS. Attached hereto as Section 3.3 of
the November Disclosure Schedule hereto are true and complete copies of the
audited consolidated statements of income, balance sheets and statements of cash
flows, including all related notes and schedules thereto, of NICC as of and for
the twelve months ended December 31, 2000 including all related notes and
schedules thereto (the "2000 FINANCIAL STATEMENTS") and unaudited consolidated
statements of income, balance sheets and statements of cash flows of the NICC
Entities as of and for the twelve months ended December 31, 2001 (the "2001
FINANCIAL STATEMENTS" and together with the 2000 Financial Statements, the
"BUSINESS FINANCIAL STATEMENTS"). The 2001 Financial Statements present fairly
in all material respects the consolidated financial position and results of
operations and cash flows of NICC for the period and as of the date set forth
therein, in accordance with International Accounting Standards applied on a
consistent basis throughout the period without notes (and except for changes
resulting from normal and recurring year-end adjustments and except that such
financial statements do not reflect any adjustments to reflect Nestle's purchase
of the 50% membership interest in NICC from an Affiliate of The Pillsbury
Company). The 2000 Financial Statements
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present fairly in all material respects the consolidated financial position and
results of operations and cash flows of NICC for the period and as of the date
set forth therein, in each case in accordance with GAAP applied on a consistent
basis throughout the period. The Business Financial Statements have been
prepared from and in all material respects in accordance with the books and
records of the NICC Entities. The balance sheet as of December 31, 2001 included
in the 2001 Financial Statements is referred to herein as the "BUSINESS BALANCE
SHEET."
Section 3.4. NO UNDISCLOSED LIABILITIES. Except for liabilities which
are reflected or reserved against in the Business Balance Sheet or as set forth
in Section 3.4 of the Nestle Disclosure Schedule, none of the NICC Entities has
any liabilities or obligations that would be required to be reflected on a
balance sheet prepared in accordance with GAAP, except for liabilities or
obligations arising in the ordinary course of business consistent with past
practice since December 31, 2001, which would not, individually or in the
aggregate, have or reasonably be expected to have a material adverse effect on
the NICC Entities.
Section 3.5. SUFFICIENCY. Except as set forth in Section 3.5 of the
Nestle Disclosure Schedule, the assets and rights of the NICC Entities
constitute all of the material assets and rights necessary in all material
respects to own and operate the existing ice cream and frozen dessert products
manufacturing and distribution business of Nestle and its subsidiaries in the
United States (collectively, the "BUSINESS"), as reflected in the Business
Financial Statements, in the manner currently being conducted. The NICC Entities
collectively own or lease, or otherwise have good and valid rights to, all
material assets, properties and other rights related to the Business, except as
would not, individually or in the aggregate, have or reasonably be expected to
have an material adverse effect on the NICC Entities.
Section 3.6. ABSENCE OF CERTAIN CHANGES. Except as set forth in
Section 3.6 of the Nestle Disclosure Schedule, since December 31, 2001, there
has been no (a) change or development in or effect on the business or businesses
of the NICC Entities that has had, or would reasonably be expected to have, a
material adverse effect on the NICC Entities or (b) action taken by any NICC
Entity prior to the date hereof which, if taken from the date hereof through the
Closing, would violate any of Clauses (i)-(xxi) of Section 5.4(a).
Section 3.7. LITIGATION; ORDERS. Except as set forth in Section 3.7 of
the Nestle Disclosure Schedule, there are no lawsuits, actions, administrative
or arbitration or other proceedings or governmental investigations pending or,
to Nestle's or NICC's knowledge, threatened, against any NICC Entity that would,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on the NICC Entities. There are no judgments or
outstanding orders, injunctions, decrees, stipulations or awards (whether
rendered by a court or administrative agency, or by arbitration) against any
NICC Entity or any of their respective properties or businesses that would,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on the NICC Entities.
Section 3.8. INTELLECTUAL PROPERTY. (a) Section 3.8(a) of the Nestle
Disclosure Schedule sets forth an accurate and complete list of all material
registered Business Intellectual Property Rights and material registered
trademarks included in Business Licensed Intellectual Property Rights, including
without limitation a list of all U.S. and foreign patents and patent
applications, trademark registrations and applications, and copyright
registrations of any of the
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NICC Entities. Except as set forth in Section 3.8(a) of the Nestle Disclosure
Schedule, the NICC Entities or their Affiliates own exclusively all material
Business Intellectual Property Rights free and clear of all Liens and
restrictions. Except as set forth in Section 3.8(a) of the Nestle Disclosure
Schedule, no material Business Intellectual Property Right or, to Nestle's
knowledge, material Business Licensed Intellectual Property Rights, is subject
to any outstanding judgment, injunction, order, decree or agreement restricting
the use thereof by the NICC Entities or restricting the licensing of any
Business Intellectual Property Rights by Nestle or the NICC Entities to any
Person. Except as set forth in Section 3.8 of the Nestle Disclosure Schedule, no
use of the Business Intellectual Property Rights or, to Nestle's knowledge,
material Business Licensed Intellectual Property Rights by any NICC Entity is
infringing on any other Person's Intellectual Property Rights and, to the
knowledge of Nestle and NICC, no Person is infringing on any Business
Intellectual Property Rights or Business Licensed Intellectual Property Rights,
except, in either case, as would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on the NICC Entities.
Except as set forth in Section 3.8 of the Nestle Disclosure Schedule, no NICC
Entity is a defendant in any action, suit, investigation or proceeding relating
to, or otherwise was notified in writing of, any alleged claim of infringement
of any Intellectual Property Right and the NICC Entities have no outstanding
claim or suit for any continuing infringement by any other Person of any
Business Intellectual Property Rights.
(b) Section 3.8(b) of the Nestle Disclosure Schedule sets forth an
accurate and complete list of all material license, sublicense and royalty
agreements entered into by any of the NICC Entities relating to Intellectual
Property. Except as set forth in Section 3.8(b) of the Nestle Disclosure
Schedule, no party to any such material agreement is in material breach or
default under such agreement or has given notice of termination or repudiated
any provision thereof.
Section 3.9. LICENSES, APPROVALS, OTHER AUTHORIZATIONS, CONSENTS,
REPORTS, ETC. (a) Except as set forth in Section 3.9(a) of the Nestle Disclosure
Schedule, all governmental licenses, permits, franchises and other
authorizations of any Governmental Authority ("LICENSES") possessed by or
granted to any of the NICC Entities are in full force and effect, except for
those whose failure to be in full force and effect would not, individually or in
the aggregate, have or reasonably be expected to have a material adverse effect
on the NICC Entities. No proceeding is pending or, to Nestle's or NICC's
knowledge, threatened seeking the revocation or limitation of any such License
which revocation or limitation would, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on the NICC Entities.
(b) Section 3.9(b) of the Nestle Disclosure Schedule contains a list
of all registrations, filings, applications, notices, consents, approvals,
orders, qualifications and waivers required to be made, filed, given or obtained
by Nestle or any NICC Entity with, to or from any Persons or Governmental
Authorities in connection with the consummation of the Transactions, except for
those with respect to which the failure to make, file, give or obtain would not,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on the NICC Entities.
Section 3.10. LABOR MATTERS. Section 3.10 of the Nestle Disclosure
Schedule sets forth a list of all agreements with labor unions or associations
representing employees of any
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of the NICC Entities that are material to the Business. Except as set forth in
Section 3.10 of the Nestle Disclosure Schedule, none of the NICC Entities is
involved in or, to Nestle's or NICC's knowledge, threatened with any work
stoppage, labor dispute, arbitration, lawsuit or administrative proceeding
relating to labor matters involving the employees of any NICC Entity (excluding
workers' compensation claims) that would, individually or in the aggregate, have
or reasonably be expected to have a material adverse effect on the NICC
Entities.
Section 3.11. COMPLIANCE WITH LAWS. Except as set forth in Section
3.11 of the Nestle Disclosure Schedule, the conduct of the business or
businesses of each of the NICC Entities complies with all Laws applicable
thereto, except for those violations of Law which would not, individually or in
the aggregate, have or reasonably be expected to have a material adverse effect
on the NICC Entities; it being understood that nothing set forth in this Section
3.11 is intended to address any compliance issue that is the subject of any
other representation or warranty set forth in Section 3.9, 3.18, or 3.19.
Section 3.12. INSURANCE. Section 3.12 of the Nestle Disclosure
Schedule lists material policies of liability, property, casualty and other
forms of insurance owned or held by the NICC Entities. All such policies are in
full force and effect, all premiums due and payable have been paid, and no
written notice of cancellation or termination has been received with respect to
any such policy.
Section 3.13. MATERIAL CONTRACTS. As of the date hereof, except as set
forth in Section 3.13 of the Nestle Disclosure Schedule, none of the NICC
Entities is a party to or bound by any (a) agreement with a distributor which is
not terminable on one year's (or less) notice; (b) material joint venture or
similar contract or agreement; (c) contract which is terminable by the other
party or parties thereto upon a change of control of any of the NICC Entities,
other than such contracts the termination of which would not, individually or in
the aggregate, have or reasonably be expected to have a material adverse effect
on the NICC Entities; (d) contract or agreement not terminable upon one year's
(or less) notice that limits or purports to limit the ability of any of the NICC
Entities or any Affiliates of an NICC Entity to compete in any material line of
business or in any material geographic area; (e) any material contract or
agreement between or among one or more NICC Entities on the one hand and Nestle
or any Continuing Affiliate or any officer or director of any of the NICC
Entities on the other hand; or (f) other contract, agreement or arrangement,
entered into other than in the ordinary course of business, involving estimated
future commitments in excess of $15 million. The contracts required to be so
listed are referred to herein as "NICC MATERIAL CONTRACTS." With respect to all
NICC Material Contracts, (i) none of the NICC Entities, Nestle or any Continuing
Affiliate, nor, to Nestle's or NICC's knowledge, any other party to any such
Business Material Contract is in breach thereof or default thereunder, and (ii)
there does not exist under any provision thereof, any event that, with the
giving of notice or the lapse of time or both, would constitute such a breach or
default, except for such breaches, defaults and events which in the case of
clauses (i) and (ii) would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on the NICC Entities.
Section 3.13 of the Nestle Disclosure Schedule lists, as of the date hereof,
each note, mortgage, indenture and other obligation and agreement and other
instrument for or relating to any lending or borrowing (including assumed or
guaranteed debt) of $10 million or more effected by any NICC Entity or to which
any properties or assets of any of the NICC Entities are subject.
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Section 3.14. BROKERS, FINDERS, ETC. Except for the services of the
Nestle Financial Advisors, neither Nestle nor any of its Subsidiaries has
employed, or is subject to any valid claim of, any broker, finder, consultant or
other intermediary in connection with the transactions contemplated by this
Agreement who might be entitled to a fee or commission in connection with such
transactions.
Section 3.15. AFFILIATED TRANSACTIONS. Except as described in Section
3.15 of the Nestle Disclosure Schedule, and except for agreements or
transactions entered into in the ordinary course of business on terms not
materially less favorable than those available from non-Affiliated parties, the
NICC Entities have not been a party over the past 12 months to any transaction
or agreement with Nestle or any Continuing Affiliate.
Section 3.16. BOARD APPROVAL. The Board of Directors of Nestle, by
resolutions duly adopted by unanimous vote at a meeting duly called and held or
by unanimous written consent in lieu of a meeting and not subsequently rescinded
or modified in any way, has duly approved this Agreement and the transactions
contemplated hereby. Contributing Sub, as sole member of NICC prior to the
Contribution, has approved and adopted this Agreement and the transactions
contemplated hereby.
Section 3.17. NO REQUIRED VOTE. No vote of the holders of any class of
capital stock of Nestle or its Affiliates is necessary to approve the
transactions contemplated by this Agreement, other than the approval of
Contributing Sub, an indirect wholly owned subsidiary of Nestle, in its capacity
as sole member of NICC, which approval has been obtained.
Section 3.18. ENVIRONMENTAL COMPLIANCE. (a) Each NICC Entity has
obtained all permits, licenses and other authorizations which are required with
respect to the operation of the NICC Entities as presently conducted under any
Law relating to pollution or protection of human health or the environment,
including Laws relating to emissions, discharges, releases or threatened
releases or discharges of Air Pollutants, Hazardous Substances, Oils, Pollutants
or Contaminants (as such terms are currently defined at 42 U.S.C. ss. 7602 and
in the National Oil and Hazardous Substances Pollution Contingency Plan, 40
C.F.R. ss. 300.5) into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Air Pollutants, Hazardous
Substances, Oils, Pollutants or Contaminants (the "ENVIRONMENTAL LAWS"), except
failures to have obtained such permits, licenses and other authorizations as
would not, individually or in the aggregate, have or reasonably be expected to
have a material adverse effect on the NICC Entities.
(b) The Business as presently conducted is in compliance with all
terms and conditions of the permits, licenses and authorizations required by the
Environmental Laws, and is now and has always been in compliance with all
Environmental Laws, except for such noncompliance which would not, individually
or in the aggregate, have or reasonably be expected to have a material adverse
effect on the NICC Entities. There is no civil, criminal or administrative
action, suit, demand, notice of violation, investigation known to Nestle or
NICC, proceeding, notice or demand letter pending relating to the property or
business of any NICC Entity or, to the knowledge of Nestle and NICC, threatened
against the business or property of
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any NICC Entity under Environmental Laws that would, individually or in the
aggregate, have or reasonably be expected to have a material adverse effect on
the NICC Entities.
(c) Except as would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on the NICC Entities,
to the knowledge of Nestle and NICC none of the NICC Entities nor any other
Person has buried, released, dumped or disposed of any Hazardous Substances,
Oils, Pollutants or Contaminants in quantities requiring investigation or
cleanup, or incurring responsibility or liability, under Environmental Laws in
each case which have been produced by, or resulting from, any business,
commercial or industrial activities, operations, or processes, on, from, to or
beneath, the property of any NICC Entity, including, to the knowledge of Nestle
and NICC, properties formerly owned by any NICC Entity for which any NICC Entity
has retained any material actual or potential liability or responsibility.
(d) Except as would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on the NICC Entities,
no cleanup has occurred or is occurring at any property currently owned or
operated by any NICC Entity, which would result or reasonably be expected to
result in the assertion or creation of a material Lien on such property by any
Governmental Authority with respect thereto, nor has any such assertion of a
material Lien been made by any Governmental Authority with respect thereto.
(e) Except as would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on the NICC Entities,
none of the NICC Entities has received any notice from any Governmental
Authority or private or public entity or individual requesting information
pursuant to Environmental Laws in connection with or advising it that it is in
non-compliance with applicable Environmental Laws, or responsible for, or
potentially responsible for, costs with respect to a release, a threatened
release or clean-up of Air Pollutants, Hazardous Substances, Oils, Pollutants,
or Contaminants generated, used, stored, treated, disposed of or transported by
any NICC Entity, and no NICC Entity has entered into any agreement regarding the
investigation or clean-up of any Hazardous Substances, Oils, Pollutants or
Contaminants or responsibility or liability related thereto.
(f) Notwithstanding any other representation and warranty in this
Article III, the representations and warranties contained in this Section 3.18
constitute the sole representations and warranties of Nestle with respect to any
Environmental Law, environmental permit or any Air Pollutants, Hazardous
Substances, Oils, Pollutants or Contaminants.
Section 3.19. EMPLOYEE BENEFIT PLANS. (a) Nestle has made available or
will make available to Dreyer's prior to the Closing Date with respect to each
material Nestle Employee Plan and each material Nestle Benefit Arrangement (i)
copies (or if there is no written plan document, any existing written
descriptions) (and, if applicable, related trust agreements, and all amendments
thereto together with the most recent annual report (Form 5500) including, if
applicable, Schedule B thereto, (ii) each summary plan description and any
material modifications thereto, (iii) each annual financial report and actuarial
valuation report prepared in connection with any such Nestle Employee Plan, if
applicable and (iv) all trust agreements, insurance contracts and other funding
vehicles relating thereto. Section 3.19(a) of the Nestle Disclosure Schedule
contains a complete list of all material Nestle Employee Plans, all material
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Nestle Benefit Arrangements and all Nestle Multiemployer Plans, and identifies
each Nestle Employee Plan that is a Title IV Plan, maintained in connection with
any trust described in Section 501(c)(9) of the Code or is funded through a
welfare benefit fund within the meaning of Section 419 of the Code.
(b) Each Nestle Employee Plan and Nestle Benefit Arrangement has been
maintained in compliance with its terms and with the requirements prescribed by
any and all applicable statutes, orders, rules and regulations, including ERISA
and the Code, except where the failure to be in compliance would not,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on the NICC Entities.
(c) Each Nestle International Plan has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations (including any special
provisions relating to registration or qualification where such Nestle
International Plan was intended so to be registered or qualified) and has been
maintained in good standing with applicable regulatory authorities, except where
the failure to be in compliance or to maintain good standing would not,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on the NICC Entities. Each such Nestle International
Plan that is intended to be funded and/or book-reserved is fully funded and/or
book-reserved, as appropriate, based upon reasonable actuarial assumptions.
(d) Each Nestle Employee Plan that is intended to be qualified under
Section 401(a) of the Code and each trust created under any such Nestle Employee
Plan that is intended to be exempt from tax under Section 501(a) of the Code has
received a favorable determination letter from the Internal Revenue Service.
Nestle has made available or will make available to Dreyer's prior to the
Closing Date the most recent determination letter of the Internal Revenue
Service relating to each such Nestle Employee Plan.
(e) With respect to each Nestle Employee Plan that is a Title IV Plan,
except as would not, individually or in the aggregate, have or reasonably be
expected to have a material adverse effect on the NICC Entities: (i) there does
not exist any accumulated funding deficiency within the meaning of Code Section
412 or Section 302 of ERISA, whether or not waived; (ii) no reportable event
within the meaning of Section 4043(c) of ERISA for which the 30-day notice
requirement has not been waived has occurred, and the consummation of the
transactions contemplated by this Agreement will not result in the occurrence of
any such reportable event; (iii) all premiums to the PBGC have been timely paid
in full; (iv) no material liability (other than for premiums to the PBGC) under
Title IV of ERISA has been or is expected to be incurred by any of the NICC
Entities; (v) the actuarial present value of the accumulated plan benefits under
such Title IV Plan (whether or not vested) as of the close of its most recent
plan year did not exceed the fair market value of the assets allocable thereto,
and, to Nestle's knowledge, there are no facts or circumstances that would
materially change the funded status of any such Title IV Plan since the close of
such plan year; and (vi) the PBGC has not instituted proceedings to terminate
any such Title IV Plan and, to Nestle's knowledge, no condition exists that
presents a risk that such proceedings will be instituted or which would
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any such Title IV Plan.
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(f) None of the NICC Entities nor any of their respective ERISA
Affiliates has incurred any material Withdrawal Liability that has not been
satisfied in full. With respect to each Nestle Employee Plan that is a
Multiemployer Plan and except as would not, individually or in the aggregate,
have or reasonably be expected to have a material adverse effect on the NICC
Entities: (i) if any of the NICC Entities or any of their respective ERISA
Affiliates were to experience a withdrawal or partial withdrawal from such plan,
no material Withdrawal Liability would be incurred; and (ii) none of the NICC
Entities, nor any of their respective ERISA Affiliates has received any
notification, nor does any of them have knowledge, that any such Nestle Employee
Plan that is a Multiemployer Plan is in reorganization, has been terminated, is
insolvent, or may reasonably be expected to be in reorganization, to be
insolvent, or to be terminated.
(g) Section 3.19(g) of the Nestle's Disclosure Schedule sets forth:
(i) each Nestle Employee Arrangement under which the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby could
(either alone or in conjunction with any other event such as termination of
employment) result in, cause the accelerated vesting, funding or delivery of, or
increase the amount or value of, any payment or benefit to any employee, officer
or director of any NICC Entity.
(h) There are no pending or, to NICC's knowledge, threatened claims
(other than claims for benefits in the ordinary course), investigations,
lawsuits or arbitrations which have been asserted or instituted against the
Nestle Employee Arrangements, any fiduciaries thereof with respect to their
duties to such Nestle Employee Arrangements or the assets of any of the trusts
under any of such Nestle Employee Arrangements which would reasonably be
expected to result in any liability of any NICC Entity to the PBGC, the
Department of the Treasury, the Department of Labor, or any other U.S. or
foreign Governmental Authority, or to any of such Nestle Employee Arrangements,
any participant in any such Nestle Employee Arrangement, or any other party,
except as would not, individually or in the aggregate, have or reasonably be
expected to have a material adverse effect on the NICC Entities.
Section 3.20. ACQUISITION OF SHARES FOR INVESTMENT. Nestle has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of its acquisition of the Additional Nestle
Shares, and has been provided access to personnel and books of Dreyer's and its
Subsidiaries for purposes of making its evaluation. Nestle is acquiring the
Additional Nestle Shares for investment and not with a view toward any
distribution thereof, or with any present intention of distributing such shares.
Nestle agrees that the Additional Nestle Shares, if any, may not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of
without registration under the Securities Act, except pursuant to an exemption
from such registration available under the Securities Act.
Section 3.21. TAXES. (a) Each of the NICC Entities has duly filed all
Tax Returns required to be filed by it, and all such Tax Returns are true,
complete and accurate in all material respects. Each of the NICC Entities has
paid all Taxes required to be paid by it. The unpaid Taxes of the NICC Entities
do not exceed the reserve for Tax liability (excluding any reserve for deferred
Taxes established to reflect timing differences between book and tax income) set
forth on the Business Financial Statements, as adjusted for results of
operations and cash flows through the date hereof. There are no pending or, to
the knowledge of NICC,
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threatened audits, examinations, investigations, deficiencies, claims or other
proceedings in respect of Taxes relating to any of the NICC Entities, except for
those that individually or in the aggregate would not reasonably be expected to
have a material adverse effect on the NICC Entities. There are no Liens for
Taxes on any asset of any of the NICC Entities except for Taxes not yet due and
payable, Liens for Taxes that are being contested in good faith by appropriate
proceedings, and Liens for Taxes that individually or in the aggregate would not
reasonably be expected to have a material adverse effect on the NICC Entities.
The assets of NICC do not include (A) any entity, contract or agreement that is
classified as a corporation or partnership for federal income tax purposes or
(B) any entity that is treated as a disregarded entity for federal income tax
purposed within the meaning of Treasury Regulation Section 301.7701-3. None of
the NICC Entities has been a member of any group that has filed a combined,
consolidated or unitary Tax Return other than with one or more corporations
which are members of the affiliated group of corporations of which Nestle is the
common parent and as would not individually or in the aggregate reasonably be
expected to have a material adverse effect on the NICC Entities. None of the
NICC Entities has liability for Taxes of any person under Treasury Regulation
Section 1.1502-6 (or any comparable provision of U.S. state or local or foreign
law) or other law or by contract or otherwise, except as a result of the
application of Treasury Regulation Section 1.1502-6 (and any comparable
provision of U.S. state or local or foreign law) to corporations which are
members of the affiliated group of corporations of which Nestle is the common
parent and as would not individually or in the aggregate reasonably be expected
to have a material adverse effect on the NICC Entities. None of the NICC
Entities has made any election, or is required, to treat any of the assets owned
by such NICC Entity as owned by another person for tax purposes. None of the
NICC Entities has received or been subject to any written ruling of any Tax
Authority related to Taxes or entered into any written and legally binding
agreement with any Tax Authority relating to Taxes (and none of the assets owned
by any NICC Entity is subject to or has been the topic of any such agreement).
None of the NICC Entities is a party to or otherwise subject to any Tax
allocation or sharing agreement. Since December 26, 2001, NICC has been
organized as a limited liability company that is indirectly wholly owned by
Nestle, and since such time has been disregarded as an entity separate from its
owner pursuant to Treasury Regulation Section 301.7701-3(b)(1)(ii). None of
NICC, any of the NICC Entities or any other transferor of an interest in United
States real property (within the meaning of Section 897(c) of the Code)
hereunder is a foreign Person within the meaning of Section 1445(b)(2) of the
Code.
(b) None of Nestle, NICC or their respective Subsidiaries has taken
any action or knows of any fact that is reasonably likely to prevent (i) the
Merger from qualifying as a "reorganization" within the meaning of Section
368(a) of the Code or (ii) the Merger, Exchange and the Contribution, taken
together, from qualifying as a transaction described in Section 351 of the Code.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DREYER'S
Except as set forth in the disclosure schedule delivered to Nestle by
Dreyer's on the date hereof (the "DREYER'S DISCLOSURE SCHEDULE"), Dreyer's
hereby represents and warrants to Nestle as follows:
Section 4.1. INCORPORATION; AUTHORIZATION; ETC. (a) Each of Dreyer's
and each of its Subsidiaries is duly organized and validly existing and, with
respect to each U.S. corporation, in good standing, under the laws of the
jurisdiction of its organization. Except as set forth in Section 4.1(a) of the
Dreyer's Schedule, each of Dreyer's and each of its Subsidiaries (i) has the
requisite corporate or similar power and authority to own its properties and
assets and to carry on its business as it is now being conducted and (ii) is in
good standing and is duly qualified to transact business in each jurisdiction in
which the nature of property owned or leased by it or the conduct of its
business requires it to be so qualified, except where the failure to be so
organized or in good standing or to be duly qualified to transact business, or
to have such power and authority, would not, individually or in the aggregate,
have or reasonably be expected to have a material adverse effect on Dreyer's.
For purposes of this Article IV, a "material adverse effect on Dreyer's" shall
mean a material adverse effect on the assets, liabilities, business, financial
condition, results of operations and prospects of Dreyer's and its Subsidiaries,
taken as a whole.
(b) Dreyer's, New Dreyer's and Merger Sub have the requisite corporate
power to execute and deliver this Agreement and to perform their obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery by Dreyer's, New Dreyer's and Merger Sub of this Agreement, the
performance by Dreyer's, New Dreyer's and Merger Sub of their obligations
hereunder and the consummation by Dreyer's, New Dreyer's and Merger Sub of the
transactions contemplated hereby have been duly and validly authorized by the
Disinterested Directors of Dreyer's and the Boards of Directors of New Dreyer's
and Merger Sub and, except for the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, and except for obtaining the
approval by the stockholders of Dreyer's of the Merger by the Required Dreyer's
Vote and by the sole stockholder of Merger Sub, no other corporate proceedings
on the part of Dreyer's, New Dreyer's or Merger Sub, their respective Boards of
Directors or stockholders are necessary therefor.
(c) Except as set forth in Section 4.1(c) of the Dreyer's Disclosure
Schedule, the execution, delivery and performance of this Agreement will not (i)
violate any provision of Dreyer's or any of its Subsidiaries' respective
certificate of incorporation or by-laws (or equivalent organizational documents
or instruments), (ii) except as set forth in Section 4.1(c) of the Dreyer's
Disclosure Schedule, violate any provision of, or be an event that is (or with
the passage of time will result in) a violation of, or result in the
acceleration of or entitle any party to accelerate or exercise (whether after
the giving of notice or lapse of time or both) any obligation or right under, or
result in the imposition of any Lien upon or the creation of a security interest
in any shares of capital stock of Dreyer's or its Subsidiaries or any of
Dreyer's or any of its Subsidiaries' assets or properties pursuant to, any Lien,
agreement, instrument, order, arbitration award, judgment or decree to which
Dreyer's or any of its Subsidiaries is a party or by which any
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of them is bound, or (iii) violate or conflict with any other restriction of any
kind or character to which Dreyer's or any of its Subsidiaries is subject, that,
in the case of clause (ii) or (iii) would, individually or in the aggregate,
have or reasonably be expected to have a material adverse effect on Dreyer's or
prevent the Transactions from occurring prior to the Termination Date or result
in any material delay in the consummation of the Transactions. This Agreement
has been duly executed and delivered by Dreyer's, New Dreyer's and Merger Sub,
and, assuming the due execution hereof by Nestle, this Agreement constitutes the
legal, valid and binding obligations of Dreyer's, New Dreyer's and Merger Sub,
enforceable against Dreyer's, New Dreyer's and Merger Sub 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). Dreyer's has delivered to Nestle true and correct copies
of the certificate of incorporation and by-laws, as amended to date, of
Dreyer's.
Section 4.2. CAPITALIZATION; STRUCTURE. (a) As of June 12, 2002, the
authorized capital stock of Dreyer's consisted of (i) 60 million shares of
Dreyer's Common Stock, of which 34,731,902 were issued and outstanding and no
shares were held in the treasury of Dreyer's, (ii) 6,559,441 shares of Dreyer's
Common Stock were issuable (and such number was reserved for issuance) upon
exercise of options, warrants or similar instruments outstanding and 72,005
shares of Dreyer's Common Stock under the Dreyer's ESPP were issuable, and (iii)
10 million shares of Preferred Stock, par value $1.00 per share, of which none
were outstanding, 150,000 of which have been designated Series A Participating
Preferred and reserved for issuance upon exercise of the rights (the "RIGHTS")
distributed to the holders of shares of Dreyer's Common Stock pursuant to the
Dreyer's Rights Agreement. Since June 12, 2002 to the date of this Agreement,
there have been no issuances of shares of the capital stock of Dreyer's, or
securities convertible into or exchangeable for such Dreyer's Common Stock,
other than issuances of shares (and the related Rights) issued pursuant to
options or rights to acquire 6,631,446 shares of Dreyer's Common Stock
outstanding as of the date hereof. All of the issued and outstanding shares of
Dreyer's Common Stock are duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights.
(b) The authorized capital stock of New Dreyer's, as of the date
hereof, consists of 100 shares of common stock, par value $0.01 per share, of
which 100 shares are issued and outstanding. The authorized capital stock of
Merger Sub consists of 100 shares of common stock, par value $0.01 per share, of
which 100 shares are issued and outstanding. Dreyer's is the sole stockholder of
New Dreyer's and is the legal and beneficial owner of all 100 issued and
outstanding shares of New Dreyer's. New Dreyer's is the sole stockholder of
Merger Sub and is the legal and beneficial owner of all 100 issued and
outstanding shares of Merger Sub.
(c) Section 4.2(c) of the Dreyer's Disclosure Schedule sets forth the
name of each Subsidiary of Dreyer's, its jurisdiction of incorporation or
organization, the number of outstanding shares of its capital stock or other
equity interests of each class and the name and number of shares owned by each
holder of any such shares of capital stock or other equity interests. All of the
outstanding shares of capital stock or other equity interests of each of the
Subsidiaries of Dreyer's have been validly issued, and are fully paid and
non-assessable and free of preemptive rights, and are owned directly or
indirectly by Dreyer's, free and clear of all Liens.
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Except as set forth in the Dreyer's SEC Reports, neither Dreyer's nor any of its
Subsidiaries directly or indirectly owns any equity interest in any Person,
other than the Subsidiaries of Dreyer's, that is or would be expected to be
material to Dreyer's and its Subsidiaries taken as a whole. Except for (i) the
Rights and (ii) options and other stock-based awards covering up to 6,631,446
shares of Dreyer's Common Stock outstanding on June 12, 2002, as of the date
hereof there are no outstanding options, warrants or other rights of any kind to
acquire from Dreyer's or any of its Subsidiaries, or obligations of Dreyer's or
its Subsidiaries to issue, shares of capital stock of any class of, or other
equity interests in, Dreyer's or any of its Subsidiaries.
(d) All of the Additional Nestle Shares, when issued in connection
with the Contribution will be duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights.
Section 4.3. SEC FILINGS; FINANCIAL STATEMENTS. (a) Except as set
forth in Section 4.3(a) of the Dreyer's Disclosure Schedule, Dreyer's has timely
filed all forms, reports, definitive proxy statements, schedules and documents
(including all Exhibits, Schedules and Annexes thereto) required to be filed by
it under the Securities Act or the Exchange Act, as the case may be, since
December 31, 2001, including any amendments or supplements thereto
(collectively, the "DREYER'S SEC REPORTS"). As of their respective dates, each
of the Dreyer's SEC Reports (and, if amended or superseded by a filing prior to
the date of this Agreement or the Closing Date, then on the date of such filing)
(i) complied in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations of
the SEC thereunder applicable to such Dreyer's SEC Report, and (ii) did not at
the time they were filed (or if amended or superseded by a filing, then on the
date of such filing) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Dreyer's SEC Reports was prepared in
accordance with GAAP applied (except as may be indicated in the notes thereto
and, in the case of unaudited quarterly financial statements, as permitted by
Form 10-Q under the Exchange Act) on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto), and each presented
fairly the financial position, results of operations and cash flows of Dreyer's
and its consolidated Subsidiaries as of the respective dates thereof and for the
respective periods indicated therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments).
(c) As of the date hereof, no "material contract" (as such term is
defined in Item 601(b)(10) of Regulation S-K of the SEC) filed as an exhibit to
the Form 10-K has been amended or modified, except for such amendments or
modifications which have been filed as an exhibit to a subsequently dated
Dreyer's SEC Report or are not required to be filed with the SEC.
Section 4.4. NO UNDISCLOSED LIABILITIES. Except as disclosed in the
Dreyer's SEC Reports filed since December 31, 2001 and prior to the date hereof,
and except for liabilities which are reflected or reserved against in the
unaudited consolidated balance sheet of Dreyer's and its Subsidiaries as of
March 31, 2002 included in the Dreyer's SEC Reports, none of
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Dreyer's and its Subsidiaries has any liabilities or obligations that would be
required to be reflected on a consolidated balance sheet of Dreyer's and its
Subsidiaries or in the notes thereto prepared in accordance with GAAP, except
for liabilities or obligations arising in the ordinary course of business
consistent with past practice since March 31, 2002, which would not,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on Dreyer's.
Section 4.5. ANTITAKEOVER STATUTE AND PROVISIONS. Dreyer's has taken
all action necessary to exempt this Agreement and the Ancillary Agreements and
the transactions contemplated hereby and thereby, including the Merger, from (i)
the restrictions on business combinations contained in Section 203 of the DGCL
and (ii) Article TENTH of the Dreyer's certificate of incorporation. True and
complete copies of all of the Board of Directors of Dreyer's resolutions
reflecting such actions have been provided to Nestle. No other state takeover
statute or similar statute or regulation is applicable to or purports to be
applicable to the Merger or any other transaction contemplated by this Agreement
or any Ancillary Agreement.
Section 4.6. ABSENCE OF CERTAIN CHANGES. Except as set forth in the
Dreyer's SEC Reports filed prior to the date hereof, since December 31, 2001,
there has been no (a) change or development in or effect on the business or
businesses of Dreyer's and its Subsidiaries that has had, or would reasonably be
expected to have, a material adverse effect on Dreyer's, or (b) action taken by
Dreyer's or any of its Subsidiaries prior to the date hereof which, if taken
from the date hereof through the Closing, would violate any of clauses
(i)-(xxii) of Section 5.4(b).
Section 4.7. LITIGATION; ORDERS. Except as set forth in the Dreyer's
SEC Reports filed prior to the date hereof or in Section 4.7 of the Dreyer's
Disclosure Schedule, there are no lawsuits, actions, administrative or
arbitration or other proceedings or governmental investigations pending or, to
Dreyer's knowledge, threatened against Dreyer's or any of its Subsidiaries that
would, individually or in the aggregate, have or reasonably be expected to have
a material adverse effect on Dreyer's. There are no judgments or outstanding
orders, injunctions, decrees, stipulations or awards (whether rendered by a
court or administrative agency, or by arbitration) against Dreyer's or any of
its Subsidiaries or any of their respective properties or businesses that would,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on Dreyer's.
Section 4.8. INTELLECTUAL PROPERTY. (a) Section 4.8(a) of the Dreyer's
Disclosure Schedule sets forth an accurate and complete list of all material
registered Dreyer's Intellectual Property Rights, including without limitation a
list of all U.S. and foreign patents and patent applications, trademark
registrations and applications, and copyright registrations of Dreyer's or any
of its Subsidiaries. Except as set forth in Section 4.8(a) of the Dreyer's
Disclosure Schedule, Dreyer's and its Subsidiaries own exclusively the Dreyer's
Intellectual Property Rights free and clear of all Liens and restrictions. No
material Dreyer's Intellectual Property Right is subject to any outstanding
judgment, injunction, order, decree or agreement restricting the use thereof by
Dreyer's or any of its Subsidiaries or restricting the licensing thereof by
Dreyer's or any of its Subsidiaries to any Person. No use of the Dreyer's
Intellectual Property Rights by Dreyer's or any of its Subsidiaries is
infringing on any other Person's Intellectual Property Rights and, to the
knowledge of Dreyer's and each of its Subsidiaries, no Person is infringing on
any Dreyer's
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Intellectual Property Rights, except, in either case, as would not, individually
or in the aggregate, have or reasonably be expected to have a material adverse
effect on the Dreyer's Entities. Neither Dreyer's nor any of its Subsidiaries is
a defendant in any action, suit, investigation or proceeding relating to, or
otherwise was notified in writing of, any alleged claim of infringement of any
Intellectual Property Right, and Dreyer's and its Subsidiaries have no
outstanding claim or suit for any continuing infringement by any other Person of
any Dreyer's Intellectual Property Rights.
(b) Section 4.8(b) of the Dreyer's Disclosure Schedule sets forth an
accurate and complete list of all material license, sublicense and royalty
agreements entered into by Dreyer's or any of its Subsidiaries relating to
Intellectual Property. Except as set forth in Schedule 4.8(b) of the Dreyer's
Disclosure Schedule, no party to any such material agreement is in material
breach or default under such agreement or has given notice of termination or
repudiated any provision thereof.
Section 4.9. LICENSES, APPROVALS, OTHER AUTHORIZATIONS, CONSENTS,
REPORTS, ETC. (a) Except as set forth in the Dreyer's SEC Reports filed prior to
the date of this Agreement, all Licenses possessed by or granted to Dreyer's or
any of its Subsidiaries are in full force and effect except for those whose
failure to be in full force and effect would not, individually or in the
aggregate, have or reasonably be expected to have a material adverse effect on
Dreyer's. No proceeding is pending or, to Dreyer's knowledge, threatened seeking
the revocation or limitation of any such License which revocation or limitation
would, individually or in the aggregate, have or reasonably be expected to have
a material adverse effect on Dreyer's.
(b) Section 4.9(b) of the Dreyer's Disclosure Schedule contains a list
of all registrations, filings, applications, notices, consents, approvals,
orders, qualifications and waivers required to be made, filed, given or obtained
by Dreyer's or any of its Subsidiaries with, to or from any Persons or
Governmental Authorities in connection with the consummation of the
Transactions, except for those with respect to which the failure to make, file,
give or obtain would not, individually or in the aggregate, have or reasonably
be expected to have a material adverse effect on Dreyer's.
Section 4.10. LABOR MATTERS. Section 4.10 of the Dreyer's Disclosure
Schedule sets forth a list of all material agreements with labor unions or
associations representing employees of Dreyer's or any of its Subsidiaries.
Except as set forth in Section 4.10 of the Dreyer's Disclosure Schedule, neither
Dreyer's nor any of its Subsidiaries is involved in or, to Dreyer's knowledge,
threatened with any work stoppage, labor dispute, arbitration, lawsuit or
administrative proceeding relating to labor matters involving the employees of
Dreyer's or any of its Subsidiaries (excluding workers' compensation claims)
that would, individually or in the aggregate, have or reasonably be expected to
have a material adverse effect on Dreyer's.
Section 4.11. COMPLIANCE WITH LAWS. Except as set forth in Section
4.11 of the Dreyer's Disclosure Schedule and the Dreyer's SEC Reports filed
prior to the date hereof, the conduct of the businesses of Dreyer's and its
Subsidiaries complies with all Laws applicable thereto, except for those
violations of Law which would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on Dreyer's; it being
understood that nothing set forth in this Section 4.11 is intended to address
any compliance issue
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that is the subject of any other representation or warranty set forth in Section
4.9, 4.18 or 4.19 or in Article VII.
Section 4.12. INSURANCE. Section 4.12 of the Dreyer's Disclosure
Schedule lists material policies of liability, property, casualty and other
forms of insurance owned or held by Dreyer's or its Subsidiaries. All such
policies are in full force and effect, all premiums due and payable have been
paid and no written notice of cancellation or termination has been received with
respect to any such policy.
Section 4.13. MATERIAL CONTRACTS. As of the date hereof, except as set
forth in the Dreyer's SEC Reports filed prior to the date hereof or as set forth
on Section 4.13 of the Dreyer's Disclosure Schedule (such exceptions, the
"DREYER'S MATERIAL CONTRACTS"), neither Dreyer's nor any of its Subsidiaries is
a party to or bound by any (a) "material contract" (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC), (b) contract or agreement not
terminable upon one year's (or less) notice that materially limits or purports
to materially limit the ability of any of Dreyer's or any of its Affiliates to
compete in any material line of business or in any material geographic area, (c)
agreement with a distributor which is not terminable on one year's (or less)
notice, (d) material joint venture or similar contract or agreement, or (e)
contract which is terminable by the other party or parties thereto upon a change
of control of Dreyer's or any of its Subsidiaries other than such contracts the
termination of which would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on Dreyer's. With
respect to all Dreyer's Material Contracts, (i) neither Dreyer's nor any of its
Subsidiaries nor, to Dreyer's knowledge, any other party to any such Dreyer's
Material Contract is in breach thereof or default thereunder, and (ii) there
does not exist under any provision thereof, any event that, with the giving of
notice or the lapse of time or both, would constitute such a breach or default,
except for such breaches, defaults and events which in the case of clauses (i)
and (ii) would not, individually or in the aggregate, have or reasonably be
expected to have a material adverse effect on Dreyer's.
Section 4.14. BROKERS, FINDERS, ETC. Except for the services of the
Dreyer's Financial Advisors, neither Dreyer's nor any of its Subsidiaries has
employed, or is subject to any valid claim of, any broker, finder, consultant or
other intermediary in connection with the transactions contemplated by this
Agreement who might be entitled to a fee or commission in connection with such
transactions.
Section 4.15. OPINIONS OF DREYER'S FINANCIAL ADVISOR. The Board of
Directors of Dreyer's has received the opinion of the Dreyer's Financial
Advisor, dated the date of this Agreement, to the effect that the exchange of
the Dreyer's Common Stock for Class A Common Stock in the Merger is fair, from a
financial point of view, to the holders of Dreyer's Common Stock (other than
Nestle and its Affiliates).
Section 4.16. BOARD APPROVAL; RIGHTS PLAN. (a) The Board of Directors
of Dreyer's, by a unanimous vote of all those present at a meeting duly called
and held at which all directors other than Messrs. Xxxxxx Xxxxxx and M. Xxxxxx
Xxxxxxx were in attendance by resolutions not subsequently rescinded or modified
in any way, have duly (i) determined that the transactions contemplated by this
Agreement are advisable, fair to and in the best interests of Dreyer's and its
stockholders, (ii) approved this Agreement and (iii) determined to recommend to
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the stockholders of Dreyer's that such stockholders approve the Merger and adopt
this Agreement and the transactions contemplated thereby.
(b) The Board of Directors of Dreyer's has taken the requisite action
such that neither Nestle nor any of its Affiliates shall become an "Acquiring
Person," and no "Share Acquisition Date" or "Distribution Date" (as such terms
are defined in the Dreyer's Rights Agreement) will occur, by reason of the
approval, execution or delivery of this Agreement, the Ancillary Agreements or
the consummation of the transactions contemplated hereby and thereby.
Section 4.17. REQUIRED VOTE. The affirmative vote of a majority of the
votes of the outstanding shares of Dreyer's Common Stock at a stockholders'
meeting is the only vote of the holders of any class of capital stock of
Dreyer's necessary to approve and adopt this Agreement and the Merger (the
"REQUIRED DREYER'S VOTE").
Section 4.18. ENVIRONMENTAL COMPLIANCE. (a) Dreyer's and each of its
Subsidiaries has obtained all permits, Licenses and other authorizations which
are required with respect to the operation of Dreyer's and each of its
Subsidiaries as presently conducted under Environmental Laws, except failures to
have obtained such permits, licenses and other authorizations as would not,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on Dreyer's.
(b) The business of Dreyer's and each of its Subsidiaries as presently
conducted is in compliance with all terms and conditions of the permits,
licenses and authorizations required by the Environmental Laws, and is now and
has always been in compliance with all Environmental Laws, except for such
non-compliance which would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on Dreyer's. There is
no civil, criminal or administrative action, suit, demand, notice of violation,
investigation known to Dreyer's or any of its Subsidiaries, proceeding, notice
or demand letter pending relating to the property or business of Dreyer's or any
of its Subsidiaries or, to the knowledge of Dreyer's and its Subsidiaries,
threatened against the business or property of Dreyer's or any of its
Subsidiaries under Environmental Laws, that would, individually or in the
aggregate, have or reasonably be expected to have a material adverse effect on
Dreyer's.
(c) Except as would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on Dreyer's, to the
knowledge of Dreyer's and its Subsidiaries, neither Dreyer's nor any of its
Subsidiaries nor any other Person has buried, released, dumped or disposed of
any Hazardous Substances, Oils, Pollutants or Contaminants in quantities
requiring investigation or cleanup, or incurring responsibility or liability,
under Environmental Laws, in each case which have been produced by, or resulting
from, any business, commercial or industrial activities, operations, or
processes, on, from, to or beneath, the property of Dreyer's or any of its
Subsidiaries, including, to the knowledge of Dreyer's and its Subsidiaries,
properties formerly owned by Dreyer's or any of its Subsidiaries for which
Dreyer's or any of its Subsidiaries has retained any material actual or
potential liability or responsibility.
(d) Except as would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on Dreyer's, no cleanup
has occurred or is
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occurring at any property currently owned or operated by Dreyer's or any of its
Subsidiaries which would result or reasonably be expected to result in the
assertion or creation of a material Lien on such property by any Governmental
Authority with respect thereto, nor has any such assertion of a material Lien
been made by any Governmental Authority with respect thereto.
(e) Except as would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on Dreyer's, neither
Dreyer's nor any of its Subsidiaries has received any notice from any
Governmental Authority or private or public entity or individual requesting
information pursuant to Environmental Laws in connection with or advising it
that it is in non-compliance with applicable Environmental Laws, or responsible
for, or potentially responsible for, costs with respect to a release, a
threatened release or cleanup of Air Pollutants, Hazardous Substances, Oils,
Pollutants, or Contaminants generated, used, stored, treated, disposed of or
transported by Dreyer's or any of its Subsidiaries, and neither Dreyer's nor any
of its Subsidiaries has entered into any agreement regarding the investigation
or cleanup of any Hazardous Substances, Oils, Pollutants or Contaminants or
responsibility or liability related thereto.
(f) Notwithstanding any other representation and warranty in this
Article III, the representations and warranties contained in this Section 4.18
constitute the sole representations and warranties of Dreyer's and its
Subsidiaries with respect to any Environmental Law, environmental permit or any
Air Pollutants, Hazardous Substances, Oils, Pollutants or Contaminants.
Section 4.19. EMPLOYEE BENEFIT PLANS. (a) Dreyer's has made available
or will make available to Nestle prior to the Closing Date with respect to each
material Dreyer's Employee Plan and each material Dreyer's Benefit Arrangement
(i) copies (or if there is no written plan document, any existing written
descriptions) and, if applicable, related trust agreements, and all amendments
thereto together with the most recent annual report, if applicable (Form 5500)
including, if applicable, Schedule B thereto); (ii) summary plan description, if
applicable, and any material modifications thereto; (iii) annual financial
report and actuarial valuation report prepared in connection with any such
Dreyer's Employee Plan, if applicable; and (iv) all trust agreements, insurance
contracts and other funding vehicles relating thereto. Section 4.19(a) of the
Dreyer's Disclosure Schedule contains a complete list of all material Dreyer's
Employee Plans, material Dreyer's Benefit Arrangements and all Dreyer's
Multiemployer Plans, and identifies each Dreyer's Employee Plan that is a Title
IV Plan, maintained in connection with any trust described in Section 501(c)(9)
of the Code or is funded through a welfare benefit fund within the meaning of
Section 419 of the Code.
(b) Each Dreyer's Employee Plan and each Dreyer's Benefit Arrangement
has been maintained in compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and regulations,
including ERISA and the Code, except where the failure to be in compliance would
not, individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on Dreyer's.
(c) There are no Dreyer's International Plans.
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(d) Each Dreyer's Employee Plan that is intended to be qualified under
Section 401(a) of the Code and each trust created under any such Dreyer's
Employee Plan that is intended to be exempt from tax under Section 501(a) of the
Code has received a favorable determination letter from the Internal Revenue
Service. December has made available or will make available to Nestle prior to
the Closing Date the most recent determination letter of the Internal Revenue
Service relating to each such Dreyer's Employee Plan.
(e) With respect to each Dreyer's Employee Plan that is a Title IV
Plan, except as would not, individually or in the aggregate, have or reasonably
be expected to have a material adverse effect on Dreyer's: (i) there does not
exist any accumulated funding deficiency within the meaning of Code Section 412
or Section 302 of ERISA, whether or not waived; (ii) no reportable event within
the meaning of Section 4043(c) of ERISA for which the 30-day notice requirement
has not been waived has occurred, and the consummation of the transactions
contemplated by this Agreement will not result in the occurrence of any such
reportable event; (iii) all premiums to the PBGC have been timely paid in full;
(iv) no material liability (other than for premiums to the PBGC) under Title IV
of ERISA has been or is expected to be incurred by any of the NICC Entities; (v)
the actuarial present value of the accumulated plan benefits under such Title IV
Plan (whether or not vested) as of the close of its most recent plan year did
not exceed the fair market value of the assets allocable thereto, and, to
Dreyer's knowledge, there are no facts or circumstances that would materially
change the funded status of any such Title IV Plan since the close of such plan
year; and (vi) the PBGC has not instituted proceedings to terminate any such
Title IV Plan and, to Dreyer's knowledge, no condition exists that presents a
risk that such proceedings will be instituted or which would constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any such Title IV Plan.
(f) None of Dreyer's, its Subsidiaries, nor any of their respective
ERISA Affiliates has incurred any material Withdrawal Liability that has not
been satisfied in full. With respect to each Dreyer's Employee Plan that is a
Multiemployer Plan and except as would not, individually or in the aggregate,
have or reasonably be expected to have a material adverse effect on Dreyer's:
(i) if any of Dreyer's, its Subsidiaries or any of their respective ERISA
Affiliates were to experience a withdrawal or partial withdrawal from such plan,
no material Withdrawal Liability would be incurred; and (ii) none of Dreyer's,
its Subsidiaries, nor any of their respective ERISA Affiliates has received any
notification, nor does any of them have knowledge, that any such Dreyer's
Employee Plan that is a Multiemployer Plan is in reorganization, has been
terminated, is insolvent or may reasonably be expected to be in reorganization,
to be insolvent or to be terminated.
(g) Section 4.19 of the Dreyer's Disclosure Schedule sets forth each
Dreyer's Employee Arrangement under which the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby could
(either alone or in conjunction with any other event such as termination of
employment) result in, cause the accelerated vesting, funding or delivery of, or
increase the amount or value of, any payment or benefit to any employee, officer
or director of Dreyer's or any of its Subsidiaries.
(h) There are no pending or, to Dreyer's knowledge, threatened claims
(other than claims for benefits in the ordinary course), investigations,
lawsuits or arbitrations which
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have been asserted or instituted against the Dreyer's Employee Arrangements, any
fiduciaries thereof with respect to their duties to such Dreyer's Employee
Arrangements or the assets of any of the trusts under any of such Dreyer's
Employee Arrangements which would reasonably be expected to result in any
liability of Dreyer's or any of its Subsidiaries to the PBGC, the Department of
the Treasury, the Department of Labor, or any other U.S. or foreign Governmental
Authority, or to any of such Dreyer's Employee Arrangements, any participant in
any such Dreyer's Employee Arrangement, or any other party, except as would not,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect on Dreyer's.
Section 4.20. TAXES. (a) Each of the Dreyer's Entities has duly filed
all Tax Returns required to be filed by it, and all such Tax Returns are true,
complete and accurate in all material respects. Each of the Dreyer's Entities
has paid all Taxes required to be paid by it. The unpaid Taxes of the Dreyer's
Entities do not exceed the reserve for Tax liability (excluding any reserve for
deferred Taxes established to reflect timing differences between book and tax
income) set forth on the Dreyer's Financial Statements, as adjusted for results
of operations and cash flows through the date hereof. There are no pending or,
to the knowledge of Dreyer's, threatened audits, examinations, investigations,
deficiencies, claims or other proceedings in respect of Taxes relating to any of
the Dreyer's Entities, except for those that individually or in the aggregate
would not reasonably be expected to have a material adverse effect on the
Dreyer's Entities. There are no Liens for Taxes on any asset of any of the
Dreyer's Entities except for Taxes not yet due and payable, Liens for Taxes that
are being contested in good faith by appropriate proceedings, and Liens for
Taxes that individually or in the aggregate would not reasonably be expected to
have a material adverse effect on the Dreyer's Entities. None of the Dreyer's
Entities has been a member of any group that has filed a combined, consolidated
or unitary Tax Return other than the affiliated group of corporations of which
Dreyer's is the common parent and as would not individually and in the aggregate
reasonably be expected to have a material adverse effect on the Dreyer's
Entities. None of the Dreyer's Entities has liability for Taxes of any person
under Treasury Regulation Section 1.1502-6 (or any comparable provision of U.S.
state or local or foreign law) or other law or by contract or otherwise, except
as a result of the application of Treasury Regulation Section 1.1502-6 (and any
comparable provision of U.S. state or local or foreign law) to the affiliated
group of corporations of which Dreyer's is the common parent and as would not
individually and in the aggregate reasonably be expected to have a material
adverse effect on the Dreyer's Entities. None of the Dreyer's Entities has made
any election, or are required, to treat any of the assets owned by such Dreyer's
Entity as owned by another person for tax purposes. None of the Dreyer's
Entities has received or been subject to any written ruling of any Tax Authority
relating to Taxes or entered into any written and legally binding agreement with
any Tax Authority relating to Taxes (and none of the assets owned by any
Dreyer's Entity is subject to or has been the topic of any such agreement).
Dreyer's is not, and has not been, a U.S. real property holding corporation (as
defined in Section 897(c)(2) of the Code) during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code.
(b) None of the Dreyer's Entities has taken any action or knows of any
fact that is reasonably likely to prevent (A) the Merger from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code or (B) the
Merger, the Exchange and the Contribution, taken together, from qualifying as a
transaction described in Section 351 of the Code.
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ARTICLE V
COVENANTS OF THE PARTIES
Section 5.1. INVESTIGATION OF BUSINESS; ACCESS TO PROPERTIES AND
RECORDS. (a) Subject to Section 5.2(b), from the date hereof through the
Closing, Nestle shall, and shall cause NICC and its other Subsidiaries to,
afford to Dreyer's and Dreyer's accountants, counsel and other representatives
reasonable access during regular business hours, upon reasonable advance notice,
to the offices, plants, properties, books and records and to employees of the
NICC Entities and, to the extent related to the Business, Nestle and its other
Subsidiaries, and their agents and consultants, subject to any applicable Laws
and compliance with any policies of the NICC Entities with respect to plant
visits, in order that Dreyer's may make reasonable investigations of the affairs
of the Business and the NICC Entities.
(b) Subject to Section 5.2(b), from the date hereof through the
Closing, Dreyer's shall, and shall cause its Subsidiaries to, afford to Nestle
and Nestle's accountants, counsel and other representatives reasonable access
during regular business hours, upon reasonable advance notice, to the offices,
plants, properties, books and records and to employees of Dreyer's and its
Subsidiaries, and their agents and consultants, subject to any applicable Laws
and compliance with any policies of Dreyer's and its Subsidiaries with respect
to plant visits, in order that Nestle may make reasonable investigations of the
affairs of Dreyer's and its Subsidiaries.
(c) Any information provided to Dreyer's or Nestle or their respective
representatives pursuant to this Agreement shall be subject to the terms of the
Confidentiality Agreement dated June 6, 2002 between Nestle and Dreyer's (the
"CONFIDENTIALITY AGREEMENT"). If the Effective Time occurs, Nestle and Dreyer's
agree that the Confidentiality Agreement shall terminate and be of no further
force and effect and that information provided under the Confidentiality
Agreement shall be covered by Section 7.01 of the Governance Agreement.
Section 5.2. FILINGS; OTHER ACTIONS; NOTIFICATION. (a) Each of the
parties hereto shall use (and shall cause their respective Subsidiaries,
officers and directors, and shall use reasonable best efforts to cause their
Affiliates, employees, agents, attorneys, accountants and representatives, to
use) their respective reasonable best efforts as soon as practicable to take or
cause to be taken all action, and to do or cause to be done all things,
necessary, proper or advisable on its part under this Agreement, the Governance
Agreement and any applicable Law to consummate and make effective the
Transactions and any other transaction contemplated by this Agreement or the
Governance Agreement, including (i) preparing and filing with the SEC the
Registration Statement and the Dreyer's Proxy Statement and all necessary
amendments or supplements to those filings; (ii) preparing, providing and filing
all documentation and other information to effect all necessary notices,
reports, applications, filings and other submissions, and to obtain as promptly
as is practicable all consents, approvals, waivers, licenses, permits,
authorizations, registrations, qualifications, decisions, determinations or
other permissions or actions necessary or advisable to be obtained from any
Governmental Authority or any other Person in order to consummate the
Transactions or any other transaction contemplated by this Agreement or the
Governance Agreement (it being understood with respect to (i) and (ii) above and
(iii) below that no party shall be obligated to prepare or present (or cause its
Affiliates to
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prepare or present) financial statements or reconciliations other than in
accordance with the accounting principles currently followed in preparing or
presenting such financial statements); (iii) providing all such information
concerning such party, its Subsidiaries and its officers, directors, employees,
members, partners and Affiliates as may be necessary or reasonably requested in
connection with any of the foregoing; and (iv) avoiding the issuance or entry
of, or have vacated or terminated, any decree, order, injunction, judgment,
decision or determination that would, in whole or in part, restrain, prevent or
delay the consummation of the Transactions or any other transaction contemplated
by this Agreement or the Governance Agreement.
(b) Subject to applicable Laws relating to the exchange of
information, the parties hereto shall have the right to review in advance, and
to the extent practicable to consult the other parties on, all the information
relating to the NICC Entities or Dreyer's, as the case may be, and any of their
respective Subsidiaries, that appear in any filing made with, or written
materials submitted to, any Governmental Authority or any other Person in
connection with the Transactions and any other transaction contemplated by this
Agreement or the Ancillary Agreements; PROVIDED, HOWEVER, that either Dreyer's
or Nestle may restrict access to any documents or information to the extent that
it reasonably concludes, after consultation with outside counsel, that (i) any
legal provision of any Governmental Authority applicable to such party requires
such party or its Subsidiaries to restrict access to any properties or
information, (ii) providing such access would result in the loss of the
attorney-client privilege, (iii) such document discusses the pricing or dollar
value of the transactions contemplated by this Agreement or (iv) the documents
contain competitively sensitive information, the sharing of which could
constitute a violation of any applicable Laws, and PROVIDED, FURTHER, that the
parties may restrict access to those contracts which by their terms require the
consent of third parties to permit disclosure, if such consent has not been
obtained. In exercising the foregoing right, each of the parties hereto shall
act reasonably and as promptly as is practicable.
(c) The parties hereto shall keep the other parties reasonably
apprised of the status of matters relating to completion of the transactions
contemplated hereby, including promptly furnishing the other with copies of
notices or other communications received by such parties or any of their
respective Subsidiaries from any third party and/or any Governmental Authority
with respect to the transactions contemplated by this Agreement.
(d) Without limiting the generality of the undertakings provided in
this Section 5.2, the parties hereto agree to take or cause to be taken the
following actions: (i) the prompt provision to any Person with standing to
enforce any applicable Laws of information and documents reasonably requested by
any such Person or necessary, proper or advisable to permit consummation of the
Transactions or any other transaction contemplated by this Agreement or the
Governance Agreement; and (ii) commit to take all necessary steps if such action
should be reasonably necessary or advisable to avoid the entry or issuance of
any decree, injunction, or judgment that could delay the closing of the
Transaction beyond the Termination Date; and (iii) use reasonable best efforts
to defend through litigation and to take promptly, in the event that any
permanent or preliminary injunction or other decree, order, judgment, decision
or determination is entered or issued, or becomes reasonably foreseeable to be
entered or issued, in any lawsuit, investigation, inquiry, action or proceeding
that would make consummation, in whole or in part, of the Transactions or any
other transaction contemplated by this Agreement or the Governance Agreement
unlawful or that would prevent or delay, in whole or in part, consummation of
the
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Transactions or any other transaction contemplated by this Agreement or the
Governance Agreement, any and all steps (including the taking of any appeal, the
posting of any bond or the taking of the steps contemplated by clause (ii) of
this paragraph) necessary to vacate, modify or suspend such injunction, decree,
order, judgment, decision or determination so as to permit such consummation on
a schedule as close as possible to that contemplated by this Agreement and the
Governance Agreement. The parties agree that none of the steps or actions
required to be taken pursuant to this Section 5.2 shall be considered an NICC
Material Adverse Effect or Dreyer's Material Adverse Effect. Notwithstanding the
foregoing or any other provision of this Agreement, neither party nor any of
their parents, subsidiaries or affiliates shall be required to agree to any
sale, transfer, license, separate holding, divestiture or other disposition of,
or to any prohibition of, or any limitation on, the acquisition, ownership,
operation, effective control or exercise of full rights of ownership of any
asset or assets of Nestle, Dreyer's or any of their respective subsidiaries or
affiliates that individually or in the aggregate would be material (from the
perspective of the parties hereto as to the date hereof) in relation to the
continuing operations of the combined businesses of Dreyer's and NICC and their
consolidated subsidiaries.
Section 5.3. FURTHER ASSURANCES; ASSETS AND LIABILITIES. (a) The
parties hereto agree that, from time to time, whether before, at or after the
Closing Date, each of them will execute and deliver such further instruments of
conveyance and transfer and take such other actions as may be necessary to carry
out the purposes and intents of this Agreement.
(b) Between the date hereof and the Closing, the parties will use
their reasonable best efforts to ensure that the NICC Entities hold only assets
of the Business and liabilities of the Business and no other assets or
liabilities.
(c) Following the Closing, (A) to the extent any material tangible
assets primarily related to the Business (specifically excluding Business
Intellectual Property Rights and Business Licensed Intellectual Property Rights
and excluding assets used in the international business of Nestle or its
Affiliates) have been retained by Nestle and the Continuing Affiliates, Nestle
shall and shall cause the Continuing Affiliates to use their respective
reasonable best efforts to convey such assets to the NICC Entities as promptly
as practicable (and pending such conveyance to provide the NICC Entities with
the benefit of such assets) and (B) to the extent any material tangible assets
related to, but not primarily related to, the Business (specifically excluding
Business Intellectual Property Rights and excluding assets described in or
related to the services described in Section 3.8 of the Nestle Disclosure
Schedule, have been retained by Nestle and the Continuing Affiliates, Nestle
shall and shall cause the Continuing Affiliates to use their respective
reasonable best efforts to make such assets available to the NICC Entities on
commercially reasonable terms.
(d) Nestle covenants that the NICC Entities will not at the Effective
Time include any obligations or liabilities to the extent they relate to any
business of Nestle or its Affiliates other than the Business (or any past ice
cream or frozen novelty products business of Nestle or its Affiliates). All such
obligations or liabilities shall remain the obligations and liabilities of
Nestle and its Affiliates after the Effective Time, and Nestle shall indemnify
Dreyer's to the extent thereof.
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(e) At and immediately after the Effective Time, the NICC Entities
shall have a valid and enforceable license or sublicense with respect to the
Business Intellectual Property Rights and Business Licensed Intellectual
Property Rights set forth in Section 5.3(e) of the Nestle Disclosure Schedule,
on financial terms that are substantially the same as the financial terms under
which the NICC Entities use such Business Intellectual Property Rights and
Business Licensed Intellectual Property Rights currently (including a term of no
less than five years in each case).
Section 5.4. CONDUCT OF BUSINESS. (a) CONDUCT OF THE NICC ENTITIES.
Nestle agrees, as to the NICC Entities, that, from the date hereof until the
Effective Time, except as set forth in Section 5.4 of the Nestle Disclosure
Schedule, as expressly contemplated by this Agreement (including (i) actions
taken pursuant to Section 5.2, or (ii) as required by applicable Law), or as
otherwise agreed to in writing by Dreyer's, the business of the NICC Entities
shall be conducted in the ordinary and usual course and, to the extent
consistent therewith (and subject to the restrictions set forth in this Section
5.4(a)), the NICC Entities will use all reasonable best efforts to preserve and
maintain existing relations and goodwill with employees, customers, brokers,
suppliers, distributors and other Persons with which the NICC Entities as a
group have significant business relations. Without limiting the foregoing,
Nestle agrees that, from the date hereof until the Effective Time, except as set
forth in Section 5.4 of the Nestle Disclosure Schedule, as expressly
contemplated by this Agreement (including (i) actions taken pursuant to Section
5.2 or (ii) as required by applicable Law), or as otherwise agreed to in writing
by Dreyer's and Nestle shall not and shall cause its Subsidiaries not to,
directly or indirectly do, or commit to do, any of the following with respect to
the NICC Entities:
(i) declare or pay any dividend or other distribution with
respect to any of its membership interests or shares of capital stock other
than dividends and other distributions of cash consistent with past
practices;
(ii) repurchase, redeem or otherwise acquire any membership
interests or shares of capital stock or other securities of, or other
ownership interests in, any of the NICC Entities;
(iii) issue, deliver, pledge, encumber or sell any membership
interests or shares of capital stock of or other equity interests in any
NICC Entity, or any securities convertible into any such shares of capital
stock or other equity interests, or any rights, warrants or options to
acquire any such shares of capital stock or other equity interests;
(iv) amend its certificate of formation, operating agreement,
certificate of incorporation or by-laws or other comparable organizational
documents or amend any terms of the outstanding membership interests or
securities of any NICC Entity;
(v) consummate or enter into an agreement with respect to a
merger, consolidation, or other business combination;
(vi) sell, lease, license or otherwise dispose of any NICC Entity
or any assets, securities, rights or property of any NICC Entity, directly
or indirectly, other than (A) sales or leases of inventory and equipment in
the ordinary course of business
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consistent with past practice or (B) transactions that are in the ordinary
course and not individually in excess of $5 million or in the aggregate in
excess of $10 million;
(vii) incur any indebtedness for borrowed money, guarantee any
such indebtedness, enter into any new or amend existing facilities relating
to indebtedness, issue or sell any debt securities or warrants or other
rights to acquire any debt securities or guarantee any debt securities,
other than indebtedness incurred to fund working capital and capital
expenditures;
(viii) enter into, modify or amend any employment agreement or
arrangement with, or grant any bonuses, salary increases, or retention pay
to, any officer, director, consultant or employee, other than (A) in the
ordinary course of business consistent with past practice with respect to
non-officer employees, (B) as set forth in Article VI, (C) in connection
with promotions or other changes in positions or responsibilities of
employees that do not involve an increase in compensation, severance or
benefits, (D) 2002 salary increases consistent with past practices for
executives who report directly to NICC's Chief Executive Officer and (E) as
may be required by applicable Laws; PROVIDED, HOWEVER, that if the Closing
has not occurred on or prior to April 1, 2003, NICC may make base salary
increases for its employees consistent with past practice.
(ix) enter into, adopt or amend any Nestle Benefit Arrangement,
except (A) as set forth in Article VI, (B) as shall be required by
applicable Laws or (C) as does not materially increase the aggregate
expenses of providing benefits under the Nestle Benefits Arrangements;
(x) notwithstanding the foregoing provisions Sections
5.4(a)(viii)-(ix), enter into, modify or amend any plan, agreement or
arrangement so as to provide for new or increased severance pay or benefits
to any officer, director, consultant or employee, except as set forth in
Article VI;
(xi) (A) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization or (B) enter into any agreement or exercise any right
to provide for acceleration of payment or performance as a result of a
change of control of any NICC Entity if the transactions contemplated
hereby would constitute a change of control under such agreement;
(xii) renew or enter into any non-compete, exclusivity or similar
agreement, excluding distribution agreements, that would restrict or limit
the operations of the NICC Entities or, after the Effective Time, of New
Dreyer's or its Subsidiaries;
(xiii) except in the ordinary course of business, modify in any
material respect, amend in any material respect or terminate any Business
Material Contract (other than distributor agreements);
(xiv) renew, enter into, amend in any material respect or waive
any material right under any distributor agreement which is not terminable
on one year's (or
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less) notice, other than distributor agreements with small regional
distributors entered into the ordinary course of business;
(xv) settle or compromise any litigation, or waive, release or
assign any material uninsured claims, liabilities or obligations, in any
such case with a value (in Nestle's reasonable judgment) in excess of $7.5
millionindividually;
(xvi) enter into any new collective bargaining agreement except
for renewals in the ordinary course of business;
(xvii) adopt any material change, other than as required by GAAP,
in its accounting policies, procedures or practices;
(xviii) sell, license, lease or otherwise dispose of any material
license agreement;
(xix) incur or commit to incur any capital expenditures in excess
of $55 million in the aggregate in fiscal year 2002 and $55 million in
fiscal year 2003;
(xx) make any change in any method of accounting for Tax
purposes, make any Tax election, settle or compromise any Tax liability or
waive or extend the period for assessment or collection of any Taxes, or
file any Tax Return, in each case, other than in a manner consistent with
past practice as would individually or in the aggregate reasonably be
expected to have a material adverse effect on the NICC Entities; or
(xxi) agree or commit to do any of the foregoing.
(b) CONDUCT BY DREYER'S. Dreyer's agrees that from the date hereof
until the Effective Time, except as set forth in Section 5.4 of the Dreyer's
Disclosure Schedule, as expressly contemplated by this Agreement (including
actions taken pursuant to Section 5.2 or as required by applicable Law), or as
otherwise agreed to in writing by Nestle, the business of Dreyer's and its
Subsidiaries shall be conducted in the ordinary and usual course and, to the
extent consistent therewith (and subject to the restrictions set forth in this
Section 5.4(b)), Dreyer's and its Subsidiaries will use all reasonable best
efforts to preserve and maintain existing relations and goodwill with employees,
customers, brokers, suppliers and other Persons with which Dreyer's and its
Subsidiaries as a group have significant business relations. Without limiting
the foregoing, Dreyer's agrees, as to itself and its Subsidiaries, that, from
the date hereof until the Effective Time, except as set forth in Section 5.4 of
the Dreyer's Disclosure Schedule, as expressly contemplated by this Agreement
(including actions taken pursuant to Section 5.2 or as required by applicable
Law), or as otherwise agreed to in writing by Nestle, Dreyer's shall not and
shall cause its Subsidiaries not to, directly or indirectly do, or commit to do,
any of the following:
(i) in the case of Dreyer's only, amend or otherwise change its
certificate of incorporation or by-laws, or amend, modify or terminate the
Dreyer's Rights Agreement except as provided in Sections 4.16 and 5.9(g);
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(ii) in the case of Dreyer's only, (A) declare, set aside, make
or pay any dividend or other distribution, payable in cash, stock, property
or otherwise, with respect to any of its capital stock (other than regular
quarterly dividends consistent with past practices, including any increases
consistent with past practice), (B) split, combine or reclassify its
outstanding shares of capital stock, or (C) repurchase, redeem or otherwise
acquire, except in connection with any employee benefit plans or
arrangements, or permit any of its Subsidiaries to purchase or otherwise
acquire, any shares of Dreyer's capital stock or any securities convertible
into or exchangeable or exercisable for any shares of Dreyer's capital
stock;
(iii) (A) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization or (B) enter into any agreement or exercise any right
to provide for acceleration of payment or performance as a result of a
change of control of Dreyer's;
(iv) issue, sell, pledge, dispose of or encumber any shares of,
or securities convertible into or exchangeable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any shares of its
capital stock of any class or other equity interests, other than issuances
of shares of Dreyer's Common Stock upon the exercise of any Dreyer's Option
outstanding as of the date hereof, including for this purpose, options
outstanding as of the date hereof to purchase Dreyer's Common Stock under
the Dreyer's Section 423 Employee Stock Purchase Plan (the "DREYER'S
ESPP");
(v) consummate or enter into an agreement with respect to a
merger, consolidation, or other business combination;
(vi) sell, lease, license or otherwise dispose of Dreyer's or any
of its Subsidiaries or any assets, securities, rights or property of
Dreyer's or any of its Subsidiaries, directly or indirectly, other than (A)
sales or leases of inventory and equipment in the ordinary course of
business consistent with past practice or (B) transactions that are in the
ordinary course and not individually in excess of $5 million or in the
aggregate in excess of $10 million;
(vii) renew or enter into any non-compete, exclusivity or similar
agreement, excluding distribution agreements, that would restrict or limit
the operations of Dreyer's or any of its Subsidiaries or, after the
Effective Time, of New Dreyer's or its Subsidiaries;
(viii) except in the ordinary course of business, modify in any
material respect, amend in any material respect or terminate any Dreyer's
Material Contract (other than distributor agreements);
(ix) enter into any new collective bargaining agreement, except
for renewals in the ordinary course of business;
(x) sell, license, lease or otherwise dispose of any material
license agreement;
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(xi) enter into, modify or amend any employment agreement or
arrangement with, or grant any bonuses, salary increases, or retention pay
to, any officer, director, consultant or employee, other than (A) in the
ordinary course of business consistent with past practice with respect to
non-officer employees, (B) as set forth in Article VI, (C) in connection
with promotions or other changes in positions or responsibilities of
employees that do not involve an increase in compensation, severance or
benefits provided to any officer, director, consultant or employee, except
as contemplated by Section 6.3, and (D) as may be required by applicable
Laws; PROVIDED, HOWEVER, that if the Closing has not occurred on or prior
to February 1, 2003, Dreyer's may make base salary increases for its
employees consistent with past practices;
(xii) renew, enter into, amend in any material respect or waive
any material right under any distributor agreement which is not terminable
on one year's (or less) notice, other than distributor agreements with
small regional distributors in the ordinary course of business;
(xiii) settle or compromise any litigation, or waive, release or
assign any material uninsured claims, liabilities or obligations, in any
such case with a value (in Dreyer's reasonable judgment) in excess of $7.5
million individually;
(xiv) adopt any material change, other than as required by GAAP,
in its accounting policies, procedures or practices;
(xv) incur or commit to incur any capital expenditures in excess
of $55 million in the aggregate in fiscal year 2002 and $55 million in
fiscal year 2003;
(xvi) engage in butter trading activities involving amounts in
excess of current limits approved by the Dreyer's Board of Directors;
(xvii) subject to Section 5.9(i), modify, amend or terminate, or
waive, release or assign any material rights or claims with respect to any
confidentiality or standstill agreement to which Dreyer's is a party and
which relates to a business combination involving Dreyer's;
(xviii) subject to Section 5.9(i), take any action to render
inapplicable, or to exempt any third party from, the provisions of Section
203 of the DGCL or any other state takeover Law or state Law that purports
to limit or restrict business combinations or the ability to acquire or
vote shares;
(xix) enter into, adopt or amend any Dreyer's Benefit
Arrangement, except (A) as set forth in Article VI, (B) as shall be
required by applicable Laws or (C) as does not materially increase the
aggregate expenses of providing benefits under the Dreyer's Benefits
Arrangements;
(xx) notwithstanding the foregoing provisions of Section
5.4(b)(vi) and (xix), enter into, modify or amend any plan, agreement or
arrangement so as to provide for new or increased severance pay or benefits
to any officer, director, consultant or
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employee, except as set forth in Article VI or in the ordinary course of
business consistent with past practice;
(xxi) modify or amend the existing joint venture licenses or
partner brand agreements set forth in Section 5.4(b)(xxi) or enter into any
new material joint venture or partner brand license agreements; or
(xxii) agree or commit to do any of the foregoing.
Section 5.5. PUBLIC ANNOUNCEMENTS. Subject to their respective legal
obligations (including requirements of stock exchanges and other similar
regulatory bodies), Dreyer's and Nestle will consult with each other before
issuing, or permitting any agent or Affiliate to issue, and provide each other
the opportunity to review and make reasonable comment upon, any press releases
or otherwise making or permitting any agent or Affiliate to make, any public
statements with respect to this Agreement and the transactions contemplated
hereby and, except as may be required by applicable Law or any listing agreement
with the Nasdaq National Market System, will not issue any such press release or
make any such public statement prior to such consultation; PROVIDED, HOWEVER,
that each of Dreyer's and Nestle may make any public statement in response to
specific questions by the press, analysts, investors or those attending industry
conferences or financial analyst conference calls, so long as any such
statements are not inconsistent with previous press releases, public disclosures
or public statements made by Dreyer's or Nestle and do not reveal non-public
information regarding the other party or its respective Subsidiaries.
Section 5.6. INTERCOMPANY ACCOUNTS. At the Effective Time, all
intercompany receivables, payables and loans then existing between Nestle or any
Continuing Affiliate, on the one hand, and the NICC Entities, on the other hand,
shall be settled in accordance with their terms, other than the indebtedness of
the Business (representing indebtedness of NICC Entities to Nestle and its
Continuing Affiliates), in the amount of $135,000,000 as of May 31, 2002 (as
such amount may increase or decrease in the ordinary course of business
consistent with the Company's working capital and capital expenditure needs so
long as such increases are not in breach of Section 5.4) which subject to
Section 5.3(d), shall remain in place.
Section 5.7. VOTING OF SHARES. Nestle agrees to vote the Nestle Shares
in favor of adoption of this Agreement and the Merger at the Dreyer's
Stockholders Meeting.
Section 5.8. INSURANCE. From the date hereof to the Effective Time,
Nestle and Dreyer's will cooperate reasonably to develop and implement a
transition plan with respect to insurance coverage for the NICC Entities, with
the goal of ensuring continuing insurance coverage and transfer at the Effective
Time of the responsibility for risk management relating to the NICC Entities
from Nestle to Dreyer's.
Section 5.9. NO SOLICITATION. (a) Neither Dreyer's nor any of its
Subsidiaries nor any of the officers and directors of any of them shall, and
Dreyer's shall direct and use its reasonable best efforts to cause its and its
Subsidiaries' employees, agents and representatives, including any investment
banker, attorney or accountant retained by it or any of its Subsidiaries
(Dreyer's, its Subsidiaries and their respective officers, directors, employees,
agents and
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representatives being the "DREYER'S REPRESENTATIVES") not to, directly or
indirectly through another Person, (i) solicit, initiate or encourage or
otherwise facilitate any inquiries (including by way of furnishing any
non-public information or otherwise) or the making of any inquiry, proposal or
offer from any Person which constitutes a Business Combination Proposal with
respect to Dreyer's (or would reasonably be expected to lead to such a Business
Combination Proposal) or (ii) participate or engage in any discussions or
negotiations regarding a Business Combination Proposal with respect to Dreyer's,
except to notify such person as to the existence of these provisions, PROVIDED,
HOWEVER, that nothing contained in this Agreement shall prevent Dreyer's or its
Board of Directors from (A) furnishing non-public information to, or entering
into discussions with, any person or entity in connection with an unsolicited
bona fide written Business Combination Proposal by such Person if and only to
the extent that (1) Dreyer's is not then in breach of its obligations under this
Section 5.9(a), (2) the Board of Directors of Dreyer's believes in good faith
(after consultation with its financial advisors and outside legal counsel) that
such Business Combination Proposal constitutes or would reasonably be expected
to result in a Superior Proposal and (3) prior to furnishing such nonpublic
information to, or entering into discussions or negotiations with, such Person,
such Board of Directors receives from such Person an executed confidentiality
agreement with terms no less restrictive than those contained in the
Confidentiality Agreement or (B) complying with Rules 14d-9 and 14e-2(a)
promulgated under the Exchange Act with regard to a Business Combination
Proposal.
(b) For purposes of this Agreement, "BUSINESS COMBINATION PROPOSAL"
means any direct or indirect inquiry, proposal or offer relating to any (i)
direct or indirect acquisition or purchase of a business or asset of Dreyer's or
any of its Subsidiaries that constitutes 20% or more of the net revenues, net
income or assets of Dreyer's and its Subsidiaries, taken as a whole; (ii) direct
or indirect acquisition or purchase of 20% or more of any class of equity
securities, or 20% of the voting power, of Dreyer's or any of its Subsidiaries
whose business constitutes 20% or more of the net revenues, net income or assets
of Dreyer's and its Subsidiaries, taken as a whole; (iii) tender offer or
exchange offer that, if consummated, would result in any Person beneficially
owning 20% or more of any class of equity securities, or 20% of the voting
power, of Dreyer's or any of its Subsidiaries whose business constitutes 20% or
more of the net revenues, net income or assets of Dreyer's and its Subsidiaries,
taken as a whole; or (iv) merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Dreyer's or any of its Subsidiaries whose business constitutes 20% or more of
the net revenue, net income or assets of Dreyer's and its Subsidiaries, taken as
a whole, other than the transactions contemplated by this Agreement. For
purposes of this Agreement, "SUPERIOR PROPOSAL" means any bona fide written
proposal (A) for a merger, reorganization, consolidation, share exchange,
business combination, recapitalization or similar transaction involving Dreyer's
as a result of which the other party thereto or its shareholders shall own 50%
or more of the combined voting power of the entity surviving or resulting from
such transaction (or the ultimate parent entity thereof), and (B) that is (i)
obtained not in breach of this Section 5.9 and (ii) on terms that the Board of
Directors of Dreyer's, or a committee thereof, determines in good faith to be
superior from a financial point of view to its stockholders (other than Nestle
and its Affiliates) to the Transactions (after consultation with its financial
advisors and outside legal counsel and taking into account all the terms and
conditions of such Business Combination Proposal including without limitation,
legal and regulatory terms, any break up fees, expense reimbursement provisions,
conditions to and expected timing and risks of consummation and the
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ability of the party making such a proposal to obtain financing for such
Business Combination Proposal and such other factors as the Board deems
relevant.
(c) Promptly after receipt of any Business Combination Proposal or any
request for non-public information or inquiry which it reasonably believes could
lead to a Business Combination Proposal, Dreyer's shall promptly (but in any
event within one Business Day) notify Nestle orally and in writing of any
Business Combination Proposal or any inquiry regarding the making of any
Business Combination Proposal, indicating, in connection with such notice, the
name of the Person making such Business Combination Proposal or inquiry, the
terms and conditions of any such Business Combination Proposal, request or
inquiry, and a copy of all written materials provided in connection with such
Business Combination Proposal, request or inquiry. After receipt of the Business
Combination Proposal, request or inquiry, Dreyer's shall promptly keep Nestle
informed in all material respects of the status and details (including material
amendments or proposed material amendments thereto) of any such Business
Combination Proposal, request or inquiry and shall promptly provide to Nestle
(to the extent permitted by law) a copy of all written materials subsequently
provided in connection with such Business Combination Proposal, request or
inquiry.
(d) If the Board of Directors of Dreyer's or a committee thereof
determines that a Business Combination Proposal constitutes a Superior Proposal,
Dreyer's shall promptly provide written notice to Nestle which notice shall
include a description of all the material terms and conditions of the Superior
Proposal (the "SUPERIOR PROPOSAL NOTICE").
(e) Neither the Board of Directors nor any committee thereof shall (i)
approve any letter of intent, agreement in principle, acquisition agreement or
similar agreement (other than a confidentiality agreement) providing for any
Business Combination Proposal or (ii) approve or recommend, or publicly propose
to approve or recommend any Business Combination Proposal, in each case unless
this Agreement shall have been terminated in accordance with its terms.
(f) This Agreement may be terminated and the Transactions abandoned by
Dreyer's at any time prior to the Dreyer's Stockholder Meeting if each of the
following conditions is met:
(i) Dreyer's is not in breach of Section 5.9 of this Agreement;
(ii) Dreyer's shall have received a Superior Proposal prior to
the date of the Dreyer's Stockholders Meeting, delivered a Superior
Proposal Notice to Nestle and notified Nestle of its intent to terminate
this Agreement;
(iii) During the five Business Day period following Nestle's
receipt from Dreyer's of a Superior Proposal Notice, (x) if requested by
Nestle, Dreyer's shall have provided Nestle with a reasonable opportunity
to revise this Agreement and the Ancillary Agreements so that the Business
Combination Proposal that constituted a Superior Proposal no longer
constitutes a Superior Proposal and (y) Nestle shall have failed to make an
offer to Dreyer's that the Board of Directors of Dreyer's shall have
reasonably concluded, in good faith (after consultation with its financial
advisors and
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outside legal counsel), would cause the Business Combination that is the
subject of the Superior Proposal Notice, in light of such offer, to no
longer be a Superior Proposal; and
(iv) Dreyer's shall have made the payment of the termination fee
required by Section 10.3(a).
(g) Dreyer's shall immediately as of the date hereof, terminate, and
shall cause each of its Subsidiaries and the Dreyer's Representatives to
immediately terminate, all discussions or negotiations, if any, with any third
party with respect to, or any that could reasonably be expected to lead to, a
Business Combination Proposal. Dreyer's shall immediately demand that each
person which has heretofore executed a confidentiality agreement with Dreyer's
or any of its Affiliates or Subsidiaries or any of the Dreyer's Representatives
with respect to such Person's consideration of a possible Business Combination
Proposal to immediately return or destroy all confidential information
heretofore furnished by Dreyer's or any of its Affiliates or Subsidiaries or any
of the Dreyer's Representatives to such Person or any of its Affiliates or
Subsidiaries or any of the Dreyer's Representatives.
(h) Dreyer's hereby waives the provisions of Section 6.1 of the Nestle
Stock Purchase Agreement with respect to any proposal made by Nestle pursuant to
Section 5.9(f)(iii).
(i) Notwithstanding anything to the contrary contained in this
Agreement, the prohibitions contained in Sections 5.4(b) (i), (xvii) or (xviii)
shall not be applicable with respect to a Person who has submitted a Superior
Proposal to Dreyer's.
Section 5.10. PROXY STATEMENT; REGISTRATION STATEMENT; BLUE SKY. (a)
Each of New Dreyer's, Dreyer's and Nestle shall cooperate and promptly prepare
and New Dreyer's shall file as promptly as practicable the Registration
Statement (together with all amendments thereto, the "REGISTRATION STATEMENT"),
which shall include the proxy statement to be sent to Dreyer's stockholders in
connection with the Dreyer's Stockholders Meeting (the "DREYER'S PROXY
STATEMENT"). New Dreyer's, Dreyer's and Nestle (with respect to information
supplied by it or its Affiliates) will cause the Registration Statement to
comply as to form in all material respects with the applicable provisions of the
Exchange Act and the rules and regulations thereunder. Each of New Dreyer's,
Dreyer's and Nestle shall use its respective reasonable best efforts to have the
Registration Statement cleared by the SEC as promptly as practicable after such
filing. No filing of, or amendment or supplement to, the Registration Statement
shall be made by Dreyer's, and no filing of, or amendment or supplement to, the
Dreyer's Proxy Statement shall be made by Dreyer's, in each case, without
providing Nestle a reasonable opportunity to review and comment thereon, which
comments shall be considered in good faith. Each of Dreyer's and Nestle will
advise the other, promptly after it receives notice thereof, of the time when
the Dreyer's Registration Statement has become effective or any supplement or
amendment has been filed, of the issuance of any stop order, the suspension of
the qualification of the Dreyer's Common Stock issuable in connection with the
Merger for offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Registration Statement or the Dreyer's Proxy Statement or
comments thereon and responses thereto or requests by the SEC for additional
information.
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(b) New Dreyer's, Dreyer's and Nestle each agrees, as to itself and
its Affiliates, that none of the information supplied or to be supplied by it or
its Affiliates for inclusion or incorporation by reference in the Registration
Statement or the Dreyer's Proxy Statement, and any amendment or supplement
thereto will, at the time the Registration Statement becomes effective and on
the date of mailing of the Dreyer's Proxy Statement to stockholders and at the
time or times of the Dreyer's Stockholders Meeting, as applicable, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. If at
any time prior to the date of the Dreyer's Stockholders Meeting any information
relating to New Dreyer's, Dreyer's or Nestle, or any of their respective
Affiliates, officers or directors, should be discovered by New Dreyer's,
Dreyer's or Nestle which should be set forth in an amendment or supplement to
the Registration Statement or the Dreyer's Proxy Statement, so that such
document would not include any misstatement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, the party which discovers such information shall promptly
notify the other party and, to the extent required by applicable law, an
appropriate amendment or supplement describing such information shall be filed
promptly with the SEC and, to the extent required by law, disseminated to the
Dreyer's stockholders.
(c) Each of New Dreyer's, Dreyer's and Nestle will use its reasonable
best efforts to cause the Dreyer's Proxy Statement, respectively, to be mailed
to the Dreyer's stockholders as promptly as practicable after the date hereof.
(d) As promptly as practicable following the execution of this
Agreement, Nestle shall complete the preparation of and deliver to Dreyer's and
New Dreyer's complete copies of the audited consolidated statements of income,
balance sheets and statements of cash flows, including all related notes and
schedules thereto, of NICC as of and for the twelve months ended December 31,
2001, prepared in accordance with GAAP. Nestle shall use reasonable best efforts
to also deliver to Dreyer's as promptly as practicable such other financial
statements or information relating to the NICC Entities as Dreyer's or New
Dreyer's may reasonably request in connection with the preparation of the
Registration Statement and the clearance of the Registration Statement by the
SEC.
(e) Each of New Dreyer's, Dreyer's and Nestle will use its respective
reasonable best efforts to obtain prior to the Effective Time all necessary
state securities or "blue sky" permits and approvals required to permit the
distribution of the shares of Class A Common Stock to be issued in accordance
with the provisions of this Agreement.
Section 5.11. STOCKHOLDERS' MEETING; BOARD RECOMMENDATION. Dreyer's
will take all action necessary to convene a meeting of the stockholders of
Dreyer's at which the stockholders of Dreyer's shall consider approval and
adoption of this Agreement and the Merger (the "DREYER'S STOCKHOLDERS MEETING")
as promptly as practicable after the Dreyer's Proxy Statement has been cleared
by the SEC; PROVIDED that the meeting shall be scheduled for not later than 45
days from the date the Dreyer's Proxy Statement is mailed to stockholders of
Dreyer's (or, subject to applicable Law, earlier if such scheduled date would
otherwise be within five Business Days prior to the TERMINATION DATE) unless
Nestle agrees to or specifies a longer period
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of time. In connection with the Dreyer's Stockholders Meeting and the
transactions contemplated hereby, Dreyer's will (i) subject to applicable Law,
use its reasonable best efforts (including postponing or adjourning the Dreyer's
Stockholders Meeting for up to 30 days (or until such earlier time as the
previously established record date for such meeting would no longer be valid) to
obtain a quorum or to solicit additional proxies) to obtain the necessary
approvals by its stockholders of this Agreement and the Merger and (ii)
otherwise comply with all legal requirements applicable to the Dreyer's
Stockholders Meeting. The Board of Directors of Dreyer's shall recommend to its
stockholders the approval of the matters to be submitted to its stockholders at
the Dreyer's Stockholders Meeting, which recommendation shall be set forth in
the Dreyer's Proxy Statement and shall use reasonable best efforts to solicit
approval, except that the Dreyer's Board of Directors may, to the extent
required, withdraw or modify in a manner adverse to Nestle such recommendation
if the Dreyer's Board of Directors determines, in good faith, after consultation
with, outside legal counsel, that such action is required in order for the
Dreyer's directors to comply with their fiduciary duties to Dreyer's
stockholders under applicable law; it being understood that the obligation of
Dreyer's and its Board of Directors' to use reasonable best efforts to solicit
and obtain such approval and to otherwise comply with their other obligations
under this Agreement shall not be affected by the Dreyer's Board of Directors'
decision to withdraw or modify in a manner adverse to Nestle such recommendation
(except for the act of such withdrawal or modification). The Dreyer's
Stockholders Meeting will be held regardless of any failure to make such
recommendation or any change in such recommendation.
Section 5.12. CERTAIN NOTICES. From and after the date of this
Agreement until the Effective Time, each party hereto shall promptly notify the
other party hereto of (a) the occurrence, or non-occurrence, of any event that
would be likely to cause any condition to the obligations of any party to effect
the Merger and the other transactions contemplated by this Agreement not to be
satisfied or (b) the failure of Dreyer's or Nestle, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it pursuant to this Agreement which would reasonably be expected
to result in any condition to the obligations of any party to effect the Merger
and the other transactions contemplated by this Agreement not be satisfied;
PROVIDED, HOWEVER, that the delivery of any notice pursuant to this Section 5.12
shall not cure any breach of any representation or warranty, the failure to
comply with any covenant, the failure to meet any condition or otherwise limit
or affect the remedies available hereunder to the party receiving such notice.
Section 5.13. GOVERNANCE AGREEMENT. Nestle and New Dreyer's each agree
to execute the Governance Agreement, in the form set forth in Exhibit D hereto
("GOVERNANCE AGREEMENT"), at or immediately prior to the Effective Time.
Section 5.14. NASDAQ LISTING. Dreyer's, New Dreyer's and Nestle shall
cooperate with each other and shall use their reasonable best efforts to cause
the shares of Class A Common Stock to be issued in the Merger to be approved for
listing on the Nasdaq National Market System, subject to official notice of
issuance, prior to the Closing Date; PROVIDED, that such reasonable best efforts
shall not require either party to forego any financial benefit or other benefit
of the transactions contemplated by this Agreement or the Governance Agreement,
other than agreeing to the modifications contemplated by Section 3.03(a) of the
Governance Agreement to the extent such action would be required thereunder).
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Section 5.15. DREYER'S RIGHTS AGREEMENT. Prior to the Effective Time,
the Board of Directors of Dreyer's will take the requisite action such that (i)
neither Nestle nor any of its Affiliates shall become an "Acquiring Person," and
no "Share Acquisition Date" or "Distribution Date" (as such terms are defined in
the Dreyer's Rights Agreement) will occur, solely by reason of the approval,
execution or delivery of this Agreement, the Ancillary Agreements or the
consummation of the transactions contemplated hereby and thereby and (ii) the
Dreyer's Rights Agreement will terminate and the Rights will expire concurrently
with the Effective Time.
Section 5.16. THE NESTLE STOCK PURCHASE AGREEMENT. Dreyer's hereby
acknowledges and agrees that the negotiation and execution of this Agreement and
the transactions contemplated hereunder has not breached or violated the
standstill and/or transfer restrictions contained in Section 6.1 of the Nestle
Stock Purchase Agreement, and that the execution of this Agreement, the
performance by Nestle and/or its Affiliates of their obligations hereunder and
the enforcement by Nestle and/or its Affiliates of their rights hereunder does
not and will not breach or violate the standstill and/or transfer restrictions
contained in Section 6.1 of the Nestle Stock Purchase Agreement. Nestle and
Dreyer's agree that at the Effective Time, the Nestle Stock Purchase Agreement
shall terminate and be of no further force and effect effective as of the
Effective Date.
ARTICLE VI
EMPLOYEE BENEFITS MATTERS
Section 6.1. NICC SEVERANCE AND RETENTION PLANS. At any time prior to
the Effective Time, Nestle and its Subsidiaries may adopt a severance plan and a
retention plan for NICC employees consistent with the terms and conditions set
forth in the term sheets set forth in Section 6.1 of the Nestle Disclosure
Schedule; PROVIDED, that Dreyer's shall have the right to review and comment
upon all plan documents, plan summaries, participant communications and other
writings setting forth the terms and conditions of such plans, and no such
documents, communications or writings shall be adopted or disseminated to NICC
employees without the prior approval of Dreyer's, which approval shall not be
unreasonably withheld. After the Effective Time, New Dreyer's shall cause NICC
to continue such plans according to their terms without any change adverse to
the employees covered thereunder, until all payments required to be made
thereunder have been made.
Section 6.2. NICC BONUS PLANS. If the Effective Time occurs prior to
December 31, 2002, Nestle may either (i) at any time prior to the Effective
Time, terminate NICC annual bonus and long-term incentive plans and pay pro-rata
bonuses to the plans' participants with respect to the truncated performance
period ending on the date of the termination of such plans based on actual
performance during the truncated period or (ii) maintain such plans as in effect
immediately prior to the date hereof until December 31, 2002. In any event, if
the Effective Time occurs on or prior to December 31, 2002, Nestle shall ensure
that NICC does not establish any new performance periods thereunder. If the
Effective Time occurs after December 31, 2002, NICC may establish new
performance periods under its annual bonus and long term incentive plans
commencing on January 1, 2003, on terms and conditions consistent with its past
practice; PROVIDED, HOWEVER, that if NICC chooses to establish such new
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performance periods, Nestle shall in any event cause NICC to terminate such
plans no later than the Effective Date and pay pro-rata bonuses to the plans'
participants with respect to the truncated performance period ending on the date
of the termination of such plans based on actual performance during the
truncated period.
Section 6.3. DREYER'S EMPLOYMENT ARRANGEMENTS. Dreyer's has entered
into employment agreements as of the date hereof with the individuals listed as
such on Section 6.3(a) of the Dreyer's Disclosure Schedule in the forms attached
as Exhibits E and F hereto. From and after the date hereof, Dreyer's may enter
into employment agreements with the individuals listed as such on Section 6.3(b)
of the Dreyer's Disclosure Schedule, in forms providing terms and conditions of
employment and severance pay and benefits that are no more favorable to such
individuals than Exhibit F hereto.
Section 6.4. DREYER'S EMPLOYEE STOCK PURCHASE PLANS AND STOCK OPTION
PLANS. Dreyer's shall take all actions reasonably necessary to ensure, with
respect to the Dreyer's ESPP, that (i) the open offering period ending August
14, 2002 shall be completed in accordance with the terms thereof, (ii) the
rights of participants to purchase shares of Dreyer's Common Stock under the
open offering period ending February 25, 2003 (the "LAST OFFERING PERIOD") shall
be converted into rights to acquire shares of Class A Common Stock at the price
at which such participants could have purchased Dreyer's Common Stock under the
Dreyer's ESPP, (iii) from and after the date hereof, no new enrollment period
will be offered to participants under the Dreyer's ESPP and (iv) the Dreyer's
ESPP will be terminated effective as of the completion of the Last Offering
Period. Dreyer's shall also take all actions reasonably necessary to ensure that
as of the Effective Time (i) the Dreyer's Secured Employee Stock Purchase Plan
is terminated without offering any additional opportunities to purchase Dreyer's
Common Stock to participants thereunder and (ii) no additional options or awards
with respect to Dreyer's Common Stock are granted under the Dreyer's Option
Plans.
Section 6.5. LONG TERM INCENTIVE PLAN. As soon as reasonably
practicable after the Effective Time, New Dreyer's shall implement a long term
incentive plan (the "LTIP") as provided in Section 6.5 of the Dreyer's
Disclosure Schedule.
Section 6.6. CONTINUATION OF BENEFITS. From the Effective Time through
December 31, 2005, New Dreyer's shall provide, or shall cause Dreyer's or NICC
to provide, to those individuals who are employees of Dreyer's and NICC and
their respective Subsidiaries as of the Effective Time, other than those subject
to collective bargaining obligations or agreements, who remain employed by New
Dreyer's or any of its Subsidiaries following the Effective Time (the
"EMPLOYEES"), compensation and employee benefits that are, in the aggregate,
substantially comparable to those provided to the employees of Dreyer's and its
Subsidiaries immediately before the Effective Time, excluding any stock option,
stock purchase or other equity compensation plans maintained by Dreyer's and its
Subsidiaries prior to the Effective Time and not taking into account the LTIP,
subject to such changes to benefits and compensation as New Dreyer's determines
necessary to provide benefits and compensation that are competitive with changes
in market practice.
Section 6.7. SERVICE CREDITS. For purposes of determining eligibility
to participate, vesting, entitlement to benefits and in all other respects where
length of service is
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relevant under any employee benefit plan or arrangement of New Dreyer's,
Dreyer's, NICC or their respective Subsidiaries, including for severance
benefits but not for pension accruals, the Employees shall receive service
credit for service with Dreyer's, NICC and their respective Subsidiaries and
predecessors, as the case may be, to the same extent such service was credited
under their respective benefit plans or arrangements immediately prior to the
Effective Time.
Section 6.8. CONTROLLED GROUP LIABILITY. Nestle shall indemnify and
hold Dreyer's, its Subsidiaries and the NICC Entities harmless from any and all
Controlled Group Liability.
Section 6.9. RESERVATION OF RIGHTS. Nothing contained in this
Agreement shall confer upon any Employee any right with respect to continuation
of employment by New Dreyer's, Dreyer's, NICC or their respective Subsidiaries
nor shall anything herein interfere with their right to terminate the employment
of any of the Employees at any time, with or without cause, or restrict them in
the exercise of their independent business judgment in modifying any of the
terms and conditions of the employment of the Employees, except to the extent
provided otherwise by any written employment agreement with the Employee. No
provision of this Agreement shall create any third party beneficiary rights in
any Employee, any beneficiary or dependents thereof, or any collective
bargaining representative thereof, with respect to the compensation, terms and
conditions of employment and benefits that may be provided to any Employee or
under any benefit plan or arrangement.
ARTICLE VII
TAX MATTERS
Section 7.1. TAX-FREE QUALIFICATION. Dreyer's and Nestle shall each
use its reasonable best efforts to (i) cause the Merger to qualify as a
"reorganization" within the meaning of Section 368(a) of the Code and the
Merger, the Exchange and the Contribution taken together, to qualify as a
transaction described in Section 351 of the Code and (ii) obtain the opinions of
counsel referred to in Sections 8.2(e) and 8.3(d). Dreyer's and Nestle shall
each use its reasonable best efforts not to take any action that would prevent
or impede the Merger from qualifying as a "reorganization" within the meaning of
Section 368(a) of the Code or the Merger, the Exchange and the Contribution,
taken together, from qualifying as an exchange described in Section 351 of the
Code.
Section 7.2. FIRPTA CERTIFICATE. On or prior to the Closing, Nestle
shall furnish to New Dreyer's a certificate in form and substance reasonably
satisfactory to Dreyer's duly executed and acknowledged certifying facts that
would exempt the transfer of NICC and its assets hereunder from the provisions
of the Foreign Investment in Real Property Tax Act.
Section 7.3. INDEMNIFICATION. Nestle shall be liable for, and shall
indemnify, defend and hold the Dreyer's Entities harmless from and against any
and all obligations or liabilities (a) arising out of fraud or gross or
intentional misconduct by Nestle or its Affiliates (during the time such
entities were Affiliates of Nestle) with respect to Taxes imposed on the NICC
Entities with respect to any period (or part thereof) ending on or prior to the
Closing
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(treating for this purpose the Closing Date as the end of a Tax period whether
or not the Tax period so ends), (b) for U.S. federal Income Taxes of another
Person with respect to periods beginning prior to the Closing which are imposed
on the NICC Entities pursuant to Treasury Regulations Section 1.1502-6, (c) for
U.S. federal Income Taxes of Rock Island Foods, Inc. ("NICC SUBSIDIARY") with
respect to any period beginning after October 26, 2001 and ending on or prior to
the Closing (treating for this purpose the Closing Date as the end of a Tax
period whether or not the Tax period so ends), (d) for U.S. state Income Taxes
of the NICC Entities with respect to any period ending on or prior to the
Closing (treating for this purpose the Closing Date as the end of a Tax period
whether or not the Tax period so ends) that are includable in Nestle's or its
Affiliates' Taxable income as a result of Contributing Sub's ownership of the
NICC Membership Interest, provided however that for purposes of this Section 7.3
such state Income Taxes shall not exceed 5% of the aggregate amount of all
distributions paid by NICC to Nestle or its Affiliates pursuant to Section
5.4(a)(i), and (e) to the extent such obligations or liabilities are in excess
of $5,000,000 and to the extent that such obligations or liabilities are not
indemnified by the preceding clauses (a) through (d), for (x) Taxes of NICC with
respect to any period (or any part thereof) ending on or prior to the Closing
(treating for this purpose the Closing Date as the end of a Tax period whether
or not the Tax period so ends) and (y) Taxes of NICC Subsidiary with respect to
any period (or part thereof) beginning after October 26, 2001 (treating for this
purpose October 26, 2001 as the end of a Tax period whether or not the Tax
period so ends) and ending on or prior to the Closing (treating for this purpose
the Closing Date as the end of a Tax period whether or not the Tax period so
ends).
Section 7.4. COOPERATION. After the Closing Date, each of Nestle and
Dreyer's shall (and shall cause their respective Affiliates to), at the
reasonable request of the other party, (a) assist the other party in preparing
and filing any Tax Returns, and (b) cooperate fully with the other party in
connection with any Tax matters relating to the Business. Such assistance and
cooperation shall include providing the other party and, at the direction of the
other party, any Tax Authority, with copies (at the other party's expense) of
relevant Tax Returns or portions thereof, together with accompanying schedules,
related work papers and documents relating to rulings or other determinations by
Tax Authorities. Each of Nestle and Dreyer's shall make its employees available
on a basis mutually convenient to both parties to provide explanations of any
documents or information provided hereunder to the other party and, at the
direction of the other party, any Tax Authority. In connection therewith, Nestle
and Dreyer's shall not dispose of any Tax work papers, books or records relating
to any of the NICC Entities or the Business until the later of the expiration of
the six-year period following the Closing Date or expiration of the statute of
limitations of the Tax period to which such Tax Returns and other documents
relate, without regard to extensions, except to the extent notified by the other
party in writing of such extensions of the respective Tax periods. Any
information obtained under this Section 7.4 shall be kept confidential except as
may be otherwise necessary in connection with the applicable Tax matter.
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ARTICLE VIII
CONDITIONS PRECEDENT
Section 8.1. CONDITIONS TO EACH PARTY'S OBLIGATION. The respective
obligations of Nestle, New Dreyer's, Merger Sub and Dreyer's to consummate the
Transactions shall be subject to the satisfaction on or prior to the Closing
Date of all of the following conditions, any or all of which may be waived, in
whole or in part, to the extent permitted by applicable Law:
(a) RECEIPT OF STOCKHOLDER APPROVAL. Dreyer's shall have obtained the
Required Dreyer's Vote in connection with the approval and adoption of this
Agreement and the Merger by the stockholders of Dreyer's.
(b) NO INJUNCTIONS OR RESTRAINTS, ILLEGALITY. No Laws shall have been
adopted or promulgated, and no temporary restraining order, preliminary or
permanent injunction or other order issued by a court or other Governmental
Authority of competent jurisdiction shall be in effect having the effect of
making the Transactions illegal or otherwise prohibiting consummation of the
Transactions.
(c) HSR ACT. The waiting period (and any extension thereof) applicable
to the Transactions under the HSR Act shall have been terminated or shall have
expired.
(d) GOVERNMENTAL AND REGULATORY APPROVALS. Other than the filings
pursuant to the HSR Act, all consents, approvals and actions of, filings with
and notices to any Governmental Authority required of Dreyer's, Nestle or any of
their respective Subsidiaries to consummate the Transactions and the other
transactions contemplated hereby, the failure of which to be obtained or made
would have or would reasonably be expected to have an NICC Material Adverse
Effect as defined in Section 8.2(a) or a Dreyer's Material Adverse Effect as
defined in Section 8.3(a) shall have been obtained or made.
(e) REGISTRATION STATEMENT. The Registration Statement shall have been
declared effective by the SEC under the Securities Act, and no stop order
suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose, and no similar proceeding with respect to
the Dreyer's Proxy Statement, shall be initiated by, pending before or
threatened by the SEC.
(f) GOVERNANCE AGREEMENT. Nestle and Dreyer's shall have executed the
Governance Agreement.
Section 8.2. ADDITIONAL CONDITIONS TO DREYER'S OBLIGATIONS. The
obligations of Dreyer's to consummate the Transactions shall be subject to the
satisfaction on or prior to the Closing Date of all of the following additional
conditions:
(a) REPRESENTATIONS AND WARRANTIES OF NESTLE. Each of the
representations and warranties of Nestle set forth in this Agreement shall have
been true and correct as of the date of this Agreement and as of the Closing
(except for those representations and warranties which expressly address matters
only as of the date of this Agreement or any other particular date, which need
only be true and correct in all respects as of such date), except to the extent
that any
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failures of such representations and warranties to be true and correct,
individually or when aggregated with any other such failures, does not
constitute an NICC Material Adverse Effect (it being understood that, for
purposes of determining the truth and correctness of such representations and
warranties, all qualifications based on the word "material" or "material adverse
effect" or similar phrases contained in such representations and warranties
shall be disregarded). For purposes of this Section 8.2(a), an "NICC MATERIAL
ADVERSE EFFECT" shall mean a material adverse effect on the value of the
business of the NICC Entities from the perspective of a long term strategic
acquiror taken as a whole, or on the ability of Nestle and NICC to consummate
the transactions contemplated hereby; PROVIDED, that none of the following shall
be considered in determining whether an NICC Material Adverse Effect has
occurred: (A) changes in general economic conditions in the U.S. or in
conditions affecting the ice cream and frozen dessert manufacturing and
distribution industry generally and (B) changes resulting from the announcement
of the transactions contemplated hereby. Changes (to the extent not resulting
from (A) or (B) above) in the assets, liabilities, business, financial
condition, results of operations and prospects of the NICC Entities may be taken
into account solely for purposes of determining whether an NICC Material Adverse
Effect has occurred.
(b) PERFORMANCE OF OBLIGATIONS OF NESTLE. Nestle shall have performed
or complied in all material respects with all agreements and covenants required
to be performed by it under this Agreement at or prior to the Closing Date.
(c) CERTIFICATE. Dreyer's shall have received at the Closing a
certificate dated the Closing Date and validly executed by an executive officer
of Nestle to the effect that the conditions specified in paragraphs (a) and (b)
of this Section 8.2 have been satisfied.
(d) TAX OPINION OF DREYER'S COUNSEL. Dreyer's shall have received an
opinion of Wachtell, Lipton, Xxxxx & Xxxx, in form and substance reasonably
satisfactory to Dreyer's, dated the date of the Effective Time, substantially to
the effect that, on the basis of facts, representations and assumptions set
forth in such opinion, for U.S. federal income tax purposes the stockholders of
Dreyer's should not recognize gain or loss on the exchange of Dreyer's Common
Stock for Class A Common Stock in the Merger. In rendering such opinion,
Wachtell, Lipton, Xxxxx & Xxxx may receive and rely upon representations
contained in certificates of New Dreyer's, Dreyer's and others, and the parties
hereto agree to provide Wachtell, Lipton, Xxxxx & Xxxx with such certificates as
it may reasonably request in connection with rendering its opinion.
Section 8.3. ADDITIONAL CONDITIONS TO NESTLE'S OBLIGATION. Nestle's
obligation to consummate the Transactions shall be subject to the satisfaction
on or prior to the Closing Date of all of the following additional conditions:
(a) REPRESENTATIONS AND WARRANTIES OF DREYER'S. Each of the
representations and warranties of Dreyer's set forth in this Agreement shall
have been true and correct as of the date of this Agreement and as of the
Closing (except for those representations and warranties which expressly address
matters only as of the date of this Agreement or any other particular date,
which shall be true and correct in all respects only as of such date), except to
the extent that any failures of such representations and warranties to be true
and correct, individually or when aggregated with any other such failures, does
not constitute a Dreyer's Material Adverse Effect
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(it being understood that, for purposes of determining the truth and correctness
of such representations and warranties, all qualifications based on the word
"material" or "material adverse effect" or similar phrases contained in such
representations and warranties shall be disregarded). For purposes of this
Section 8.3(a), a "DREYER'S MATERIAL ADVERSE EFFECT" shall mean a material
adverse effect on the value of the business of the Dreyer's Entities from the
perspective of a long term strategic acquiror taken as a whole; PROVIDED, that
none of the following shall be considered in determining whether a Dreyer's
Material Adverse Effect has occurred: (A) changes in general economic conditions
in the U.S. or in conditions affecting the ice cream and frozen dessert
manufacturing and distribution industry generally and (B) changes resulting from
the announcement of the transactions contemplated hereby. Changes (to the extent
not resulting from (A) or (B) above) in the assets, liabilities, business,
financial condition, results of operations and prospects of Dreyer's may be
taken into account solely for purposes of determining whether a Dreyer's
Material Adverse Effect has occurred.
(b) PERFORMANCE OF OBLIGATIONS OF DREYER'S. Dreyer's, New Dreyer's and
Merger Sub shall have performed or complied in all material respects with all
agreements and covenants required to be performed by it under this Agreement at
or prior to the Closing
(c) DATE CERTIFICATE. Nestle shall have received at the Closing a
certificate dated the Closing Date and validly executed by an executive officer
of Dreyer's to the effect that the conditions specified in paragraphs (a) and
(b) of this Section 8.3 have been satisfied.
(d) Nestle shall have received an opinion of Xxxxxx & Xxxxxxx, in form
and substance reasonably satisfactory to Nestle, dated the date of the
Contribution, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, for U.S. federal
income tax purposes the Merger, the Exchange and the Contribution, taken
together, will be treated as a transfer of property to New Dreyer's qualifying
under Section 351 of the Code. In rendering such opinion, Xxxxxx & Xxxxxxx may
receive and rely upon representations contained in certificates of New Dreyer's,
Contributing Sub and others, and the parties hereto agree to provide Xxxxxx &
Xxxxxxx with such certificates as it may reasonably request in connection with
rendering its opinion.
(e) As of the Closing, there shall be no more than 41,393,348 shares
of Dreyer's Common Stock outstanding (calculated on a fully diluted basis and
including all shares of Dreyer's Common Stock issuable upon exercise of options
(whether vested or unvested), warrants or similar instruments outstanding and
all other equity interests convertible into or exchangeable for Dreyer's Common
Stock) and there shall be no shares of or rights to acquire Dreyer's preferred
stock outstanding.
ARTICLE IX
SURVIVAL
Section 9.1. SURVIVAL. (a) None of the representations and warranties
of Nestle contained in this Agreement or in any instrument delivered pursuant to
this Agreement (other than the Ancillary Agreements) shall survive the Effective
Time.
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(b) The covenants and agreements of the parties hereto contained in
this Agreement which by their terms apply or are to be performed in whole or in
part after the Effective Time and this Article IX shall survive the Effective
Time.
ARTICLE X
TERMINATION
Section 10.1. TERMINATION. This Agreement may be terminated at any
time prior to the Closing, in writing:
(a) by Dreyer's and Nestle by mutual written consent, by action of
their respective Boards of Directors;
(b) by either Dreyer's or Nestle, if the Effective Time shall not have
occurred prior to the close of business on the anniversary of the date hereof
("TERMINATION DATE"); PROVIDED, FURTHER, pursuant to this Section 10.1(b) shall
not be available to (i) Dreyer's, if its failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before the Termination Date or (ii) Nestle, if its
failure to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before the
Termination Date;
(c) by either Dreyer's or Nestle, if any Governmental Authority shall
have issued an order, decree or ruling or taken any other action (which such
party shall have used its reasonable best efforts to resist, resolve or lift, as
applicable, in accordance with Section 5.2) permanently restraining, enjoining
or otherwise prohibiting the Transactions, and such order, decree, ruling or
other action shall have become final and nonappealable;
(d) by either Dreyer's or Nestle, if the Dreyer's Stockholders
Approval shall not have been obtained in connection with the approval and
adoption of this Agreement and the Merger upon the taking of such vote at a duly
held meeting of stockholders of Dreyer's or at any adjournment thereof;
(e) by Nestle, if Dreyer's shall have breached in any material respect
any of its representations or warranties or failed to perform in any material
respect any of its covenants or other agreements contained in this Agreement,
which breach or failure to perform (1) is incapable of being cured by Dreyer's
prior to the Termination Date and (2) renders any condition under Sections
8.3(a) or (b) incapable of being satisfied prior to the Termination Date;
(f) by Dreyer's, if Nestle shall have breached in any material respect
any of its representations or warranties or failed to perform in any material
respect any of its covenants or other agreements contained in this Agreement,
which breach or failure to perform (1) is incapable of being cured by Nestle
prior to the Termination Date and (2) renders any condition under Sections
8.2(a) or (b) incapable of being satisfied prior to the Termination Date;
(g) by Nestle, if the Board of Directors of Dreyer's shall have (i)
withdrawn or modified in any manner adverse to Nestle its recommendation that
the stockholders of
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Dreyer's approve and adopt this Agreement and the Merger or shall have resolved
to take any such action or (ii) approved or recommended, or shall have resolved
to approve or recommend, to the stockholders of Dreyer's, a Business Combination
Proposal or (iii) has failed to hold the Dreyer's Stockholders Meeting by the
fifth Business Day prior to the Termination Date (unless Dreyer's has not
materially breached its obligation to call the Dreyer's Stockholders Meeting in
accordance with Section 5.11); or
(h) by Dreyer's, in accordance with Section 5.9(f).
Section 10.2. PROCEDURE AND EFFECT OF TERMINATION. In the event of
termination of this Agreement by either or both of Nestle and Dreyer's pursuant
to Section 10.1, written notice thereof shall forthwith be given by the
terminating party to the other, and this Agreement shall thereupon terminate and
become void and have no effect, and the transactions contemplated hereby shall
be abandoned without further action by the parties hereto, except that the
provisions of Section 5.1(c), Section 10.3 and Article XI shall survive the
termination of this Agreement; PROVIDED, HOWEVER, that such termination shall
not relieve any party hereto of any liability for any willful breach of this
Agreement.
(a) NESTLE EXPENSES. Nestle and Dreyer's agree that if this Agreement
is terminated pursuant to Section 10.1(e), then Dreyer's shall pay Nestle an
amount equal to the sum of Nestle's Expenses not to exceed $25 million.
(b) DREYER'S EXPENSES. Nestle and Dreyer's agree that if this
Agreement is terminated pursuant to Section 10.1(f), then Nestle shall pay
Dreyer's an amount equal to the sum of Dreyer's Expenses not to exceed $25
million.
(c) PAYMENT OF EXPENSES. Payment of Expenses pursuant to Sections
10.2(b) and 10.2(c) shall be made not later than two Business Days after
delivery to the other part of notice of demand for payment and a documented
itemization setting forth in reasonable detail all Expenses of the party
entitled to receive payment (which itemization may be supplemented and updated
from time to time by such party until the ninetieth day after such party
delivers such notice of demand for payment).
Section 10.3. TERMINATION FEES. (a) In the event that this Agreement
is terminated by Dreyer's pursuant to Section 10.1(h), Dreyer's shall pay to
Nestle a termination fee of Seventy-Five Million Dollars ($75,000,000) prior to
and as a condition to such termination.
(b) In the event this Agreement is terminated pursuant to Section
10.1(g), Dreyer's shall pay to Nestle, within two Business Days following
written notice of such termination, a termination fee in an amount equal to
Seventy-Five Million Dollars ($75,000,000) in immediately available funds.
(c) In the event that this Agreement is terminated pursuant to Section
10.1(d) and, at any time after the date of this Agreement and before the
Dreyer's Stockholders Meeting, any offer or proposal that would be a Business
Combination Proposal shall have been publicly announced or otherwise become
known to the stockholders of Dreyer's generally and not withdrawn or rejected by
Dreyer's, and Dreyer's enters into a definitive agreement with respect
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to, or consummates, such Business Combination Proposal within six months of such
termination, Dreyer's shall pay to Nestle, within two Business Days after the
earlier of the consummation of such Business Combination Proposal or execution
of a definitive agreement with respect to such Business Combination Proposal, a
fee of Seventy-Five Million Dollars ($75,000,000). For purposes of this Section
10.3(c), the endorsement by the Board of Directors of Dreyer's, of a tender
offer within six months of a termination contemplated by this Section 10.3(c)
shall be treated as if Dreyer's had entered into a definitive agreement with
respect to such tender offer. For purposes of this Section 10.3(c), the
percentages in the definition of Business Combination Proposal shall be 50% in
lieu of 20%.
Section 10.4. ALL PAYMENTS. All payments under Sections 10.2 and 10.3
shall be made by wire transfer of immediately available funds to an account
designated by the party entitled to receive payment. Dreyer's and Nestle
acknowledge that the agreements contained in Sections 10.2 and 10.3 are an
integral part of the transactions contemplated by this Agreement and that,
without these agreements, neither Dreyer's nor Nestle would enter into this
Agreement. Accordingly, if either party fails promptly to pay any amount due
pursuant to Sections 10.2 and 10.3 and, in order to obtain such payment,
Dreyer's or Nestle, as applicable, commences a suit which results in a judgment
against the other party for the fee set forth in Sections 10.2 and 10.3, such
defaulting party shall pay to the prevailing party its costs and expenses
(including reasonable attorneys' fees and expenses) in connection with such
suit, together with interest on the amount of the fee at the prime rate of
Citibank, N.A. in effect on the date such payment was required to be made.
ARTICLE XI
MISCELLANEOUS
Section 11.1. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
Section 11.2. GOVERNING LAW; JURISDICTION AND FORUM; WAIVER OF JURY
TRIAL. (a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without reference to the choice of law
principles thereof.
(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 U.S. by suit on the judgment, a certified copy of which shall be conclusive
evidence of the fact and amount of such judgment.
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(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 11.2.
Section 11.3. ENTIRE AGREEMENT; BENEFICIARIES. This Agreement and the
Governance Agreement, the Schedules and Exhibits hereto and thereto, and the
Confidentiality Agreement contain the entire agreement between the parties 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. Nothing expressed, referred to or implied
by or in this Agreement will be construed to give any Person (other than the
parties 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 11.6.
Section 11.4. EXPENSES. (a) Except as set forth in this Agreement,
whether the Transactions are or are not consummated, all legal, investment
banking and other costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses. For the avoidance of doubt, any costs incurred in
connection with the Agreement and the transactions contemplated hereby by Nestle
and its Subsidiaries (including the NICC Entities) prior to the Closing,
including any arrangements referred to in Section 3.14 with respect to the
Nestle Financial Advisors (including any indemnity obligations to the Nestle
Financial Advisors), shall be deemed incurred by Nestle or one or more of the
Continuing Affiliates, and not by any of the NICC Entities.
(b) Nestle and Dreyer's shall share equally all costs associated with
filings pursuant to the HSR Act and any filings with and noticed to any
Governmental Authority.
Section 11.5. NOTICES. All notices hereunder shall be sufficiently
given for all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service or, to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as set forth below. Notices to Nestle shall be addressed to:
Nestle Holdings, Inc.
c/o Nestle USA, Inc.
000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
Telecopy: 000-000-0000
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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 at such other address and to the attention of such other person as Nestle may
designate by written notice to Dreyer's. Notices to Dreyer's, New Dreyer's or
Merger Sub shall be addressed to:
Xxxxxx'x Grand Ice Cream, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
Telecopy No. (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
or at such other address and to the attention of such other person as Dreyer's
may designate by written notice to Nestle.
Section 11.6. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that no party hereto will assign its
rights or delegate any or all of its obligations under this Agreement without
the express prior written consent of each other party hereto. Nothing in this
Agreement is intended to confer upon any Person that is not a party to this
Agreement any rights or remedies of any nature whatsoever under or by reason of
this Agreement.
Section 11.7. 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
(including all of the Exhibits hereto) and not to any particular provision of
this Agreement. The word "including" and words of similar import
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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 11.8. AMENDMENTS AND WAIVERS. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought; provided, that after the Effective Time, an amendment by Dreyer's shall
require action by a majority of the non-Nestle nominees of the Dreyer's Board of
Directors. Any party hereto may, only by an instrument in writing, waive
compliance by another party hereto with any term or provision of this Agreement
on the part of such other party hereto to be performed or complied with. The
waiver by any party hereto of a breach of any term or provision of this
Agreement shall not be construed as a waiver of any subsequent breach.
Section 11.9. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any party fails to consummate
the transactions contemplated by this Agreement in accordance with the terms of
this Agreement and that the parties shall be entitled to specific performance in
such event, in addition to any other remedy or law or in equity.
Section 11.10. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such 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 in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
Section 11.11. MUTUAL DRAFTING. Each party hereto has participated in
the drafting of this Agreement, which each party acknowledges is the result of
extensive negotiations between the parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first written above.
XXXXXX'X GRAND ICE CREAM, INC.
By: /s/ T. Xxxx Xxxxxx
-----------------------------------------
Name: T. Xxxx Xxxxxx
Title: Chairman of the Board and Chief
Executive Officer
NEW DECEMBER, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
DECEMBER MERGER SUB, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
NESTLE HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President, General
Counsel
NICC HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
