1
EXHIBIT (c)(2)
FIRST AMENDMENT
TO
MANAGEMENT AGREEMENT
First Amendment, dated as of February 28, 1997 (the "First
Amendment"), to the Second Amended and Restated Management Agreement, dated as
of January 22, 1997 (the "Second Amended and Restated Agreement"), by and
between Seven-Up/RC Bottling Company of Southern California, Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxxx (the "Executive").
WHEREAS, Xx Xxxxxx Bottling Company of Texas, a Texas
corporation ("Parent"), and DPB Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of Parent ("Subsidiary"), and the Company propose to
enter into an Agreement and Plan of Merger, to be dated as of February 28, 1997
(as the same may be amended from time to time, the "Merger Agreement"),
pursuant to which Parent will acquire the Company pursuant to a tender offer
(the "Tender Offer") followed by a merger of Subsidiary with and into the
Company, resulting in the Company becoming a wholly-owned subsidiary of Parent;
WHEREAS, Parent and Subsidiary will not enter into the Merger
Agreement unless the Company and the Executive enter into this First Amendment;
and
WHEREAS, the Executive and the Company wish to induce Parent
and Subsidiary to enter into the Merger Agreement and, accordingly, desire to
amend the Second Amended and Restated Agreement as provided herein;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Amendment of Section 2(a)(i). Section 2(a)(i) of the
Second Amended and Restated Agreement is hereby amended by deleting the last
sentence in that section in its entirety and replacing such sentence with the
following sentence:
Executive shall also be entitled to receive (y) an allowance
equal in amount to $2,000 per month for automobile and club
expenses and (z) such other benefits, payments, allowances as
the Board (or an appropriate committee of the Board) may from
time to time make available to Executive.
2
2. Amendment of Section 2(b)(i). Section 2(b)(i) of the
Second Amended and Restated Agreement is hereby amended by deleting the last
sentence of the section in its entirety and replacing such sentence with the
following sentence:
Executive will devote his best efforts and all of his business
time to the business of the Company and its Affiliates (except
for reasonable periods of illness or other incapacity).
3. Amendment of Section 2(b)(ii). Section 2(b)(ii) of
the Second Amended and Restated Agreement is hereby deleted in its entirety and
replaced with the following new Section 2(b)(ii):
(ii) The Executive's principal office and place of
employment shall be at a location not greater than 50 miles
from its location as of the consummation of the Tender Offer.
4. Amendment of Section 2(d). Section 2(d) of the
Second Amended and Restated Agreement is hereby deleted in its entirety and is
replaced with the following new Section 2(d):
(d) Termination. The Employment Period will be from the
date hereof until December 31, 1999; provided, however, that
the Employment Period will automatically renew on the last day
of the Employment Period for a period of one year unless the
Company or the Executive notify the other in writing at least
90 days prior to the expiration of the Employment Period of
the Company's or Executive's intention not to renew the
Employment Period and thereby terminate this Agreement. In
addition, this Agreement will terminate upon the (i) the
Executive's death or Disability (as defined below), (ii) the
date on which the Executive is terminated for Cause (as
defined below) or (iii) the Executive's normal retirement at
age 65 or older, whichever occurs first.
5. Amendment of Section 2(e)(i)(B). Section 2(e)(i)(B)
of the Second Amended and Restated Agreement is hereby deleted in its entirety
and replaced with the following new Section 2(e)(i)(B):
(B), until the earlier of the expiration of the Remaining Term
or the Executive's 65th birthday,
2
3
the Executive shall continue to be eligible to participate in
all life, medical and dental insurance plans on the same basis
as senior management employees of the Company who are eligible
to participate from time to time (it being agreed that in the
event Executive shall elect to so participate in any such plan
pursuant to this clause (B), the Company will provide benefits
at its expense under such plan to the Executive to the same
extent that it provides benefits at its expense under such
plan to senior management employees).
6. Amendment to Section 2(e)(i). Section 2(e)(i) of the
Second Amended and Restated Agreement is hereby amended by adding the following
sentence to the end of Section 2(e)(i):
Notwithstanding an election by Executive to receive the
amounts payable pursuant to this Section 2(e)(i) in respect of
Base Salary in a lump sum payment, the Company's obligation to
make such lump sum payment shall be suspended to the extent,
and for only so long as, such payment is prohibited by, or
otherwise would constitute or could reasonably be expected to
result in a default or an event of default under, any of the
debt financing agreements to which Parent or any of its
subsidiaries may be a party from time to time.
7. Amendment of Section 2(e)(ii). Section 2(e)(ii) of
the Second Amended and Restated Agreement is hereby deleted in its entirety and
replaced with the following text:
(ii) If Executive's employment is terminated by
reason of his death, the Company will pay to Executive's
estate or representative a severance payment in the amount of
one year's Base Salary as in effect at such time. In such
event, the Company shall have no further obligations to
Executive under this Agreement.
8. Amendment of Section 2(f). Section 2(f) of the
Second Amended and Restated Agreement is hereby deleted in its entirety and
replaced with the following text:
(f) Reserved.
3
4
9. Amendments to Section 6.
a. Amendment of Definition of "Cause". The definition
of "Cause" under Section 6 ("Definitions") of the Second Amended and
Restated Agreement is hereby amended by deleting the phrase "clauses
(ii), (iii), (iv), (v) or (vi) above" in each place where it occurs
and replacing it with the phrase "clauses (v) or (vi)."
b. Amendment of Definition of "Good Reason". The
definition of "Good Reason" under Section 6 ("Definitions") of the
Second Amended and Restated Agreement is hereby amended as follows:
(i) Subparagraph (c) is deleted and restated in
its entirety to read as follows:
(c) a requirement that the Executive relocate
to a location more than 50 miles away from the
present location of the Company's principal executive
offices as of the consummation of the Change of
Control or the imposition on the Executive of
business travel obligations substantially greater
than his business travel obligations during the year
prior to the consummation of the Change of Control;
(ii) Subparagraph (d) is deleted in its entirety and
is restated to read as follows:
(d) reserved;
(iii) Subparagraph (e) is deleted and restated in
its entirety to read as follows:
(e) a substantial reduction in the level of
retirement, life, health, accident or disability
benefits provided under Company Plans in the
aggregate from the level of such benefits that
existed prior to the consummation of the Change of
Control;
(iv) Subparagraph (f) is deleted in its entirety and
is restated to read as follows:
(f) reserved.
c. Inclusion of Definition of "Disability". The
following definition for "Disability" is added to
4
5
Section 6 ("Definitions") of the Second Amended and Restated Agreement
to read as follows:
"Disability" shall have the same meaning as the term
"Total Disability" has under the Company's Employee Long-Term
Disability Coverage program.
10. Effectiveness. This First Amendment shall become
effective immediately prior to the purchase of shares of common stock in the
Tender Offer by Subsidiary and shall be of no further force or effect if the
Merger Agreement is terminated.
11. Continuing Effect. Except as expressly amended
hereby, the Second Amended and Restated Agreement, and all rights and
obligations of the Executive and the Company thereunder, shall remain in full
force and effect. This First Amendment shall not, except as expressly provided
herein, be deemed to be a consent to any waiver or modification of any terms or
provisions of the Second Amended and Restated Agreement.
12. Governing Law. This First Amendment shall be
governed by the construed in accordance with the laws of the State of
California, without giving effect to the principles of conflicts of law
thereof.
13. Counterparts. This First Amendment may be executed
in two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
14. Amendment, Supplement and Waiver. This First
Amendment may not be amended or supplemented, nor may any rights or obligations
hereunder be waived, except in writing and then only with the prior written
consent of Parent, who shall be a third party beneficiary of this First
Amendment.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
5
6
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this First Amendment as of the date first above written.
EXECUTIVE:
/s/ XXXX X. XXXXXXX
----------------------------------------
Xxxx X. Xxxxxxx
COMPANY:
SEVEN-UP/RC BOTTLING CO. OF
SOUTHERN CALIFORNIA, INC.
By: /s/ XXXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
-----------------------------------
Title: Chairman, President and CEO
----------------------------------
Joined in as of the 28th day
of February, 1997, for the purposes
set forth in Section 14 above:
XX XXXXXX BOTTLING OF TEXAS
By: /s/ XXX X. XXXXXX
----------------------------------
Name: Xxx X. Xxxxxx
--------------------------------
Title: President
-------------------------------
6
