Filed by PepsiCo, Inc. pursuant
to
Rule 425 of the Securities Act of 1933
and
deemed filed pursuant to Rule 14a-12 of
the
Securities Exchange Act of
1934
Subject Companies: The Pepsi Bottling
Group, Inc.
Commission File No.:
001-14893
and
PepsiAmericas, Inc.
Commission File No.:
001-15019
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
To Section 13 or 15(d) of the
Securities
Exchange Act of 1934
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Date
of report (Date of earliest event reported): August 3,
2009
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PepsiCo,
Inc.
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(Exact
Name of Registrant as Specified in Charter)
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North
Carolina
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1-1183
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13-1584302
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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700
Anderson Hill Road
Purchase,
New York 10577
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(Address
of Principal Executive Offices)
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Registrant’s
telephone number, including area code: (914)
253-2000
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N/A
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(Former
Name or Former Address, if Changed Since Last Report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
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þ
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry into a Material Definitive
Agreement.
On August
3, 2009, (i) PepsiCo, Inc., a North Carolina corporation (the “Company”), The Pepsi Bottling
Group, Inc., a Delaware corporation (“PBG”), and Pepsi-Cola
Metropolitan Bottling Company, Inc., a New Jersey corporation wholly-owned by
the Company (“Metro”),
entered into an Agreement and Plan of Merger (the “PBG Merger Agreement”) and
(ii) the Company, PepsiAmericas, Inc., a Delaware corporation (“PAS”), and Metro entered into an Agreement
and Plan of Merger (the “PAS
Merger Agreement” and, together with the PBG Merger Agreement, the “Merger
Agreements”).
The PBG
Merger Agreement provides that, upon the terms and subject to the conditions set
forth in the PBG Merger Agreement, PBG will be merged with and into Metro (the
“PBG Merger”), with
Metro continuing as the surviving corporation (the “Surviving Corporation”) and a
wholly owned subsidiary of the Company. As of the effective time of
the PBG Merger, each outstanding share of common stock of PBG (each, a “PBG Share”) that is not owned
by Metro, PepsiCo or a subsidiary of PepsiCo or held by PBG as treasury stock
will be cancelled and converted into the right to receive, at the holder’s
election, either 0.6432 shares of common stock of the Company or $36.50 in cash,
without interest, subject to proration provisions which provide that an
aggregate 50% of the outstanding PBG Shares will be converted into the right to
receive common stock of the Company and an aggregate 50% of the outstanding PBG
Shares will be converted into the right to receive cash.
The PAS
Merger Agreement provides that, upon the terms and subject to the conditions set
forth in the PAS Merger Agreement, PAS will merge with and into Metro (the
“PAS Merger”), with
Metro continuing as the surviving corporation and a wholly owned subsidiary of
the Company. As of the effective time of the PAS Merger, each
outstanding share of common stock of PAS (each, a “PAS Share”) that is not owned
by Metro, PepsiCo or a subsidiary of PepsiCo or held by PAS as treasury stock
will be cancelled and converted into the right to receive, at the holder’s
election, either 0.5022 shares of common stock of the Company or $28.50 in cash,
without interest, subject to proration provisions which provide that an
aggregate 50% of the outstanding PAS Shares will be converted into the right to
receive common stock of the Company and an aggregate 50% of the outstanding PAS
Shares will be converted into the right to receive cash.
Consummation
of each of the Mergers is subject to various conditions, including, in the case
of the PBG Merger, the adoption of the PBG Merger Agreement by PBG’s
stockholders, the absence of legal prohibitions and the receipt of requisite
regulatory approvals, and, in the case of the PAS Merger, the adoption of the
PAS Merger Agreement by PAS’s stockholders, the absence of legal prohibitions
and the receipt of requisite regulatory approvals. In addition, the
Company’s obligation to consummate the PAS Merger is subject to the satisfaction
of certain conditions to the consummation of the PBG Merger to the extent they
relate to competition laws. Consummation of the Mergers is not
subject to a financing condition.
Each of
the Merger Agreements contains certain termination rights for both the Company,
on the one hand, and PBG or PAS, as the case may be, on the other
hand. The PBG Merger Agreement provides that, upon termination under
specified circumstances, PBG would be required
to pay
the Company a termination fee of $165.3 million. The PAS Merger
Agreement provides that, upon termination under specified circumstances, PAS
would be required to pay the Company a termination fee of $71.6
million.
The
foregoing summary of the Merger Agreements, and the transactions contemplated
thereby, does not purport to be complete and is subject to, and qualified in its
entirety by, the full text of the Merger Agreements, which are attached as
Exhibit 2.1 (PBG Merger Agreement) and Exhibit 2.2 (PAS Merger Agreement) and
incorporated herein by reference.
The
Merger Agreements have been included to provide security holders with
information regarding their terms. They are not intended to provide
any other factual information about the Company, PBG or PAS. The
representations, warranties and covenants contained in each Merger Agreement
were made solely for purposes of such agreement and as of specific dates, were
solely for the benefit of the parties to such Merger Agreement, may be subject
to limitations agreed upon by the contracting parties, including being qualified
by confidential disclosures made for the purposes of allocating contractual risk
between the parties to such Merger Agreement instead of establishing these
matters as facts, and may be subject to standards of materiality applicable to
the contracting parties that differ from those applicable to security
holders. Security holders are not third-party beneficiaries under the
Merger Agreements and should not rely on the representations, warranties and
covenants or any descriptions thereof as characterizations of the actual state
of facts or condition of the Company, PBG, PAS or Metro. Moreover,
information concerning the subject matter of the representations and warranties
may change after the date of the Merger Agreements, which subsequent information
may or may not be fully reflected in the Company’s public
disclosures.
Item
8.01. Other Events.
On August
3, 2009, the Company entered into a commitment letter (the “Commitment Letter”) pursuant
to which Bank of America, N.A., Banc of America Securities LLC and affiliates of
Citigroup Global Markets Inc. have committed to provide up to $4 billion under a
364-day senior unsecured revolving credit facility to finance the Mergers,
including to backstop commercial paper issued in connection therewith. The
commitment is subject to various conditions. The foregoing summary of the
Commitment Letter, and the transactions contemplated thereby, does not purport
to be complete and is subject to, and qualified in its entirety by, the full
text of the Commitment Letter, which is attached as Exhibit 99.2 and
incorporated herein by reference.
On
August 4, 2009, the
Company, PBG and PAS issued a joint press release announcing that they had
entered into the PBG Merger Agreement and the PAS Merger Agreement. A copy of
the press release is attached hereto as Exhibit 99.1 and is incorporated herein
by reference into this Item 8.01.
Item 9.01. Financial Statements and
Exhibits.
(c)
Exhibits
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2.1
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Agreement and Plan of Merger dated as of August 3, 2009 among PepsiCo, Inc., The Pepsi Bottling
Group, Inc. and
Pepsi-Cola
Metropolitan Bottling Company, Inc. (the schedules have been omitted
pursuant to Item 601(b)(2) of Regulation S-K).
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2.2
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Agreement and Plan of
Merger dated as of August 3 2009, among PepsiCo, Inc., PepsiAmericas, Inc. and Pepsi-Cola Metropolitan Bottling
Company, Inc. (the schedules have been omitted
pursuant to Item 601(b)(2) of Regulation S-K).
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99.1
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Joint Press Release issued
by PepsiCo, Inc.,
The Pepsi Bottling Group,
Inc. and
PepsiAmericas,
Inc., dated August
4, 2009, announcing entry into
the PBG Merger Agreement and the PAS Merger
Agreement.
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99.2
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Commitment Letter among Bank of America, N.A.,
Banc of America
Securities LLC, affiliates of Citigroup Global Markets
Inc. and PepsiCo, Inc., dated
August 3, 2009.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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PEPSICO,
INC.
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Date:
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August
4,
2009
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By:
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/s/
Thomas H. Tamoney, Jr.
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Name:
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Thomas
H. Tamoney, Jr.
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Title:
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Senior
Vice President, Deputy General Counsel and Assistant
Secretary
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INDEX
TO EXHIBITS
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Exhibit
Number
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Description
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2.1
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Agreement and Plan of Merger dated as of August 3, 2009 among PepsiCo, Inc., The Pepsi Bottling
Group, Inc. and
Pepsi-Cola
Metropolitan Bottling Company, Inc.
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2.2
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Agreement and Plan of
Merger dated as of
August 3, 2009 among PepsiCo, Inc., PepsiAmericas, Inc. and Pepsi-Cola Metropolitan Bottling
Company, Inc.
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99.1
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Joint Press Release issued
by PepsiCo, Inc., The
Pepsi Bottling Group, Inc. and PepsiAmericas, Inc., dated August 4, 2009, announcing entry into
the PBG Merger Agreement and the PAS Merger Agreement.
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99.2
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Commitment Letter among Bank
of America, N.A.,
Banc of America
Securities LLC, affiliates of Citigroup Global
Markets Inc. and PepsiCo, Inc., dated August
3, 2009.
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Exhibit
2.1
AGREEMENT
AND PLAN OF MERGER
dated
as of
August
3, 2009
among
THE
PEPSI BOTTLING GROUP, INC.,
PEPSICO,
INC.
and
PEPSI-COLA
METROPOLITAN BOTTLING COMPANY, INC.
PAGE
ARTICLE
1
DEFINITIONS
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Section
1.01. Definitions
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1
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Section
1.02. Other
Definitional and Interpretative Provisions
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8
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ARTICLE
2
THE MERGER
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Section
2.01. The
Merger
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9
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Section
2.02. Conversion of
Shares
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9
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Section
2.03. Elections
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10
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Section
2.04. Proration of Cash
Election Price
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11
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Section
2.05. Election
Procedures; Exchange Agent; Surrender and Payment..
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12
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Section
2.06. Equity-Based
Awards
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16
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Section
2.07. Adjustments
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18
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Section
2.08. Fractional
Shares
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18
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Section
2.09. Withholding
Rights
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19
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Section
2.10. Lost
Certificates
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19
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Section
2.11. Dissenting
Shares
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19
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ARTICLE
3
THE SURVIVING ENTITY
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Section
3.01. Certificate of
Incorporation
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19
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Section
3.02. Bylaws
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20
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Section
3.03. Directors and
Officers
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20
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ARTICLE
4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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Section
4.01. Existence and
Power
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20
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Section
4.02. Authorization
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20
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Section
4.03. Governmental
Authorization
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21
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Section
4.04. Non-contravention
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21
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Section
4.05. Capitalization
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22
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Section
4.06. Subsidiaries
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23
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Section
4.07. SEC
Filings and the Sarbanes-Oxley Act
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24
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Section
4.08. Financial
Statements
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25
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Section
4.09. Disclosure
Documents
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25
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Section
4.10. Absence
of Certain Changes
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26
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Section
4.11. No
Undisclosed Material Liabilities
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27
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i
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Section
4.12. Compliance with Laws and Court
Orders
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27
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Section
4.13. Litigation.
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27
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Section
4.14. Intellectual
Property
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27
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Section
4.15. Taxes
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27
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Section
4.16. Employees and Employee Benefit
Plans; ERISA
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29
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Section
4.17. Labor
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33
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Section
4.18. Environmental
Matters
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33
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Section
4.19. Material
Contracts
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34
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Section
4.20. Tax
Treatment
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35
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Section
4.21. Finders’
Fees
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35
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Section
4.22. Opinion
of Financial Advisor
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35
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Section
4.23. Antitakeover Statutes and
Related Matters
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35
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Section
4.24. Foreign
Practices
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35
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Section
4.25. No
Other Representations or Warranties
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36
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ARTICLE
5
REPRESENTATIONS AND WARRANTIES OF PARENT
|
Section
5.01. Existence and
Power
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36
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Section
5.02. Authorization
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37
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Section
5.03. Governmental
Authorization
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37
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Section
5.04. Non-contravention
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37
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Section
5.05. Capitalization
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38
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Section
5.06. Subsidiaries
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39
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Section
5.07. SEC
Filings and the Sarbanes-Oxley Act
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39
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Section
5.08. Financial
Statements
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41
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Section
5.09. Disclosure
Documents
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41
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Section
5.10. Absence
of Certain Changes
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42
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Section
5.11. No
Undisclosed Material Liabilities
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42
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Section
5.12. Compliance with Laws and Court
Orders
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42
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Section
5.13. Litigation
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42
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Section
5.14. Finders’
Fees
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43
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Section
5.15. Financing
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43
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Section
5.16. No
Planned Liquidations or Mergers
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43
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Section
5.17. Tax
Treatment
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43
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Section
5.18. No
Other Representations or Warranties
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43
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ARTICLE
6
COVENANTS OF THE COMPANY
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Section
6.01. Conduct
of the Company
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43
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Section
6.02. Company
Stockholder Meeting
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46
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Section
6.03. No
Solicitation; Other Offers
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47
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Section
6.04. Tax
Matters
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50
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ii
COVENANTS OF PARENT
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Section
7.01. Conduct
of Parent
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50
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Section
7.02. Obligations of Merger
Subsidiary
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51
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Section
7.03. Voting
of Company Stock
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51
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Section
7.04. Director and Officer
Liability
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51
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Section
7.05. Stock
Exchange Listing
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52
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Section
7.06. Employee
Matters
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52
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Section
7.07. Limitation on
Acquisitions
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54
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Section
7.08. Certain
Litigation
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54
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Section
7.09. Company
Indebtedness
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54
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ARTICLE
8
COVENANTS OF PARENT AND THE COMPANY
|
Section
8.01. Reasonable Best
Efforts
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55
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Section
8.02. SEC
Matters
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56
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Section
8.03. Public
Announcements
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57
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Section
8.04. Further
Assurances
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57
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Section
8.05. Access
to Information
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57
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Section
8.06. Notices
of Certain Events
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58
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Section
8.07. Tax-free
Reorganization
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58
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Section
8.08. Section
16 Matters
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59
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Section
8.09. Stock
Exchange De-listing
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59
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Section
8.10. Merger
Subsidiary Reincorporation
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59
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ARTICLE
9
CONDITIONS TO THE MERGER
|
Section
9.01. Conditions to the Obligations
of Each Party
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59
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Section
9.02. Conditions to the Obligations
of Parent and Merger Subsidiary..
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60
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Section
9.03. Conditions to the Obligations
of the Company
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61
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ARTICLE
10
TERMINATION
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Section
10.01. Termination
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62
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Section
10.02. Effect
of Termination
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63
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ARTICLE
11
MISCELLANEOUS
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Section
11.01. Notices
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64
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Section
11.02. Survival of Representations
and Warranties
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65
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Section
11.03. Amendments and
Waivers
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65
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Section
11.04. Expenses
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65
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Section
11.05. Disclosure Schedule and SEC
Document References
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66
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iii
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Section
11.06. Binding Effect; Benefit;
Assignment
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66
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Section
11.07. Governing
Law
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67
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Section
11.08. Jurisdiction
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67
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Section
11.09. WAIVER
OF JURY TRIAL
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67
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Section
11.10. Counterparts;
Effectiveness
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67
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Section
11.11. Entire
Agreement
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68
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Section
11.12. Severability
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68
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SCHEDULES:
Company
Disclosure Schedule
Parent
Disclosure Schedule
iv
AGREEMENT
AND PLAN OF MERGER (this “Agreement”) dated as of August
3, 2009 among The Pepsi Bottling Group, Inc., a Delaware corporation (the “Company”), PepsiCo, Inc., a
North Carolina corporation (“Parent”), and Pepsi-Cola
Metropolitan Bottling Company, Inc., a New Jersey corporation wholly-owned by
Parent (“Merger
Subsidiary”).
W
I T N E S S E T H :
WHEREAS,
the Board of Directors of the Company, acting upon the unanimous recommendation
of the Special Committee, has approved and deemed it advisable that the
stockholders of the Company adopt this Agreement pursuant to which, among other
things, Parent would acquire the Company by means of a merger of the Company
with and into Merger Subsidiary on the terms and subject to the conditions set
forth in this Agreement;
WHEREAS,
the respective Boards of Directors of Parent and Merger Subsidiary have approved
this Agreement;
WHEREAS,
concurrently with the execution of this Agreement, Parent, Merger Subsidiary and
PepsiAmericas, Inc., a Delaware corporation (“PAS”), have entered into an
Agreement and Plan of Merger (the “Concurrent Merger Agreement”) providing for,
among other things, the acquisition of PAS by Parent by means of a merger of
PAS with and into Merger Subsidiary on the terms and subject to the conditions
set forth in the Concurrent Merger Agreement; and
WHEREAS,
for U.S. federal income tax purposes, it is intended that the Merger shall
qualify as a “reorganization” within the meaning of Section 368(a) of the Code,
and that this Agreement shall constitute a “plan of reorganization” within the
meaning of Section 1.368-2(g) of the Treasury regulations promulgated under the
Code.
NOW,
THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, the parties hereto agree
as follows:
ARTICLE
1
DEFINITIONS
Section
1.01. Definitions. (a)
As used herein, the following terms have the following meanings:
“Acquisition Proposal” means,
other than the transactions contemplated by this Agreement, any offer, proposal
or inquiry relating to, or any Third Party indication of interest in, (i) any
acquisition or purchase, direct or indirect, of 15%
“Affiliate” means, with respect
to any Person, any other Person directly or indirectly controlling, controlled
by, or under common control with such Person; provided that for purposes of
this Agreement, the Company and its Subsidiaries shall not be considered
Affiliates of Parent and Parent and its Subsidiaries shall not be considered
Affiliates of the Company unless otherwise expressly stated herein.
“Applicable Law” means, with
respect to any Person, any foreign, federal, state or local law (statutory,
common or otherwise), constitution, treaty, convention, ordinance, code, rule,
regulation, order, injunction, judgment, decree, ruling or other similar
requirement enacted, adopted, promulgated or applied by a Governmental Authority
that is binding upon or applicable to such Person, as amended unless expressly
specified otherwise.
“Business Day” means a day,
other than Saturday, Sunday or other day on which commercial banks in New York,
New York are authorized or required by Applicable Law to close.
“Code” means the Internal
Revenue Code of 1986.
“Company Balance Sheet” means
the consolidated balance sheet of the Company as of December 27, 2008 and the
footnotes thereto set forth in the Company 10-K.
“Company Balance Sheet Date”
means December 27, 2008.
“Company Class B Stock” means
the Class B common stock, $0.01 par value, of the Company, together with the
associated Company Rights.
“Company Disclosure Schedule”
means the disclosure schedule dated the date hereof regarding this Agreement
that has been provided by the Company to Parent and Merger
Subsidiary.
2
“Company Rights Agreement”
means the Rights Agreement dated as of May 18, 2009 between the Company and
Mellon Investor Services LLC.
“Company Stock” means the
common stock, $0.01 par value, of the Company, but not including the Company
Class B Stock, together with the associated Company Rights.
“Company Stock Plan” means any
equity compensation plan or arrangement of the Company or any of its
Subsidiaries.
“Company 10-K” means the
Company’s annual report on Form 10-K for the fiscal year ended December 27,
2008.
“Competition Laws” means
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization, lessening of
competition or restraint of trade.
“Delaware Law” means the
General Corporation Law of the State of Delaware.
“Environmental Law” means any
Applicable Law or any legally binding agreement with any Governmental Authority
relating to the environment, any pollutant or contaminant, any toxic,
radioactive, ignitable, corrosive or otherwise hazardous substance, chemical,
waste or material, or, as it relates to exposure to hazardous materials, human
health and safety.
“Environmental Permits” means
all permits, licenses, consents, franchises, certificates, approvals and other
similar authorizations of Governmental Authorities required by Environmental
Laws for the ownership or the operation of the business of the Company or any of
its Subsidiaries, as currently conducted.
“ERISA” means the Employee
Retirement Income Security Act of 1974.
“ERISA Affiliate” of any entity
means any other entity that, together with such entity, would be treated as a
single employer under Section 414 of the Code.
“GAAP” means generally accepted
accounting principles in the United
States.
“Governmental Authority” means
any transnational, domestic or foreign federal, state or local governmental,
regulatory or administrative authority, department, court, agency or official,
including any political subdivision thereof.
3
“HSR Act” means the
Hart-Scott-Rodino Antitrust Improvements Act of 1976.
“Intellectual Property” means
(i) trademarks, service marks, brand names, certification marks, trade dress,
domain names and other indications of origin, the goodwill associated with the
foregoing and registrations in any jurisdiction of, and applications in any
jurisdiction to register, the foregoing, including any extension, modification
or renewal of any such registration or application; (ii) inventions and
discoveries, whether patentable or not, in any jurisdiction; (iii) patents,
applications for patents (including divisions, continuations, continuations in
part and renewal applications), and any renewals, extensions or reissues
thereof, in any jurisdiction; (iv) Trade Secrets; (v) writings and other works,
whether copyrightable or not, in any jurisdiction, and any and all copyright
rights, whether registered or not; and registrations or applications for
registration of copyrights in any jurisdiction, and any renewals or extensions
thereof; (vi) moral rights, database rights, design rights, industrial property
rights, publicity rights and privacy rights; and (vii) any similar intellectual
property or proprietary rights.
“knowledge” means (i) in
respect of Parent, the actual knowledge of the persons listed in Section 1.01(a)
of the Parent Disclosure Schedule and (ii) in respect of the Company, the actual
knowledge of persons listed in Section 1.01(a) of the Company Disclosure
Schedule.
“Lien” means, with respect to
any property or asset, any mortgage, lien, pledge, charge, security interest,
lease, sublease, license, easement, covenant, encumbrance or other adverse claim
of any kind in respect of such property or asset. For purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any property or
asset that it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such property or asset.
“Material Adverse Effect”
means, with respect to any Person, a material adverse effect on the condition
(financial or otherwise), business, assets or results of operations of such
Person and its Subsidiaries, taken as a whole, excluding any effect resulting
from (A) changes in the financial or securities markets or general economic or
political conditions, to the extent that such changes do not have a materially
disproportionate effect on such Person and its Subsidiaries, taken as a whole,
relative to others in the industry in which such Person and its Subsidiaries
operate, (B) changes (including changes of Applicable Law) or
conditions
4
“Multiemployer Plan” means any
“multiemployer plan,” as defined in Section 3(37) of ERISA.
“New Jersey Law” means the New
Jersey Business Corporation Act.
“1933 Act” means the Securities
Act of 1933.
“1934 Act” means the Securities
Exchange Act of 1934.
“Parent Balance Sheet” means
the consolidated balance sheet of Parent as of December 27, 2008 and the
footnotes therein set forth in the Parent 10-K.
“Parent Balance Sheet Date”
means December 27, 2008.
“Parent Disclosure Schedule”
means the disclosure schedule dated the date hereof regarding this Agreement
that has been provided by Parent to the Company.
“Parent Stock” means the common
stock, par value one and two-thirds cents, of Parent.
“Parent 10-K” means Parent’s
annual report on Form 10-K for the fiscal year ended December 27,
2008.
5
“Permitted Lien” means, with
respect to any property or asset, (i) any Lien disclosed on the Company Balance
Sheet, (ii) any Lien for taxes not yet due or being contested in good faith (and
for which adequate accruals or reserves have been established on the Company
Balance Sheet), (iii) mechanics’, carriers’, workmen’s, warehousemen’s,
repairmen’s or other like Liens arising or incurred in the ordinary course of
business, or (iv) any Lien which does not materially detract from the value of
such property or asset, or materially interfere with any present or intended use
of such property or asset.
“Person” means an 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.
“Sarbanes-Oxley Act” means the
Sarbanes-Oxley Act of 2002. “SEC” means the Securities and
Exchange Commission.
“Special Committee” means a
committee of the Company’s Board of Directors the members of which are not
affiliated with Parent.
“Subsidiary” means, with
respect to any Person, any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at any time directly
or indirectly owned by such Person.
“Third Party” means any Person,
including as defined in Section 13(d) of the 1934 Act, other than Parent or any
of its Affiliates.
“Title IV Plan” means any
Employee Plan subject to Title IV of ERISA, other than a Multiemployer
Plan.
“Trade Secrets” means any
confidential information and rights in any jurisdiction to limit the use or
disclosure thereof by any Person.
(b) Each
of the following terms is defined in the Section set forth opposite such
term:
|
Term
|
Section
|
|
Adjusted
Option
|
2.06
|
|
Adjusted
SAR
|
2.06
|
|
Adjusted
SAR Exercise Price
|
2.06
|
|
Agreement
|
Preamble
|
|
Cash
Electing Share
|
2.02
|
|
Cash
Election
|
2.03
|
|
Cash
Election Number
|
2.04
|
|
Cash
Election Price
|
2.02
|
6
|
Section
|
|
|
Cash
Proration Factor
|
2.04
|
|
Certificates
|
2.05
|
|
Closing
|
2.01
|
|
Company
|
Preamble
|
|
Company
Adverse Recommendation Change
|
6.02
|
|
Company
Board Recommendation
|
4.02
|
|
Company
Preferred Stock
|
4.05
|
|
Company
Rights Agreement Amendment
|
4.23
|
|
Company
RSU
|
2.06
|
|
Company
SAR
|
2.06
|
|
Company
SEC Documents
|
4.07
|
|
Company
Securities
|
4.05
|
|
Company
Stock Option
|
2.06
|
|
Company
Stockholder Approval
|
4.02
|
|
Company
Stockholder Meeting
|
6.02
|
|
Company
Subsidiary Securities
|
4.06
|
|
Company
Termination Fee
|
11.04
|
|
Concurrent
Merger Agreement
|
Preamble
|
|
Confidentiality
Agreement
|
8.05
|
|
Continuing
Employees
|
7.06
|
|
D&O
Insurance
|
7.04
|
|
DOJ
|
8.01
|
|
Dissenters’
Shares
|
2.11
|
|
Effective
Time
|
2.01
|
|
Election
Deadline
|
2.05
|
|
Election
Form
|
2.05
|
|
Election
Record Date
|
2.05
|
|
Employee
Plan
|
4.16
|
|
End
Date
|
10.01
|
|
Exchange
Agent
|
2.05
|
|
Exchange
Fund
|
2.05
|
|
FTC
|
8.01
|
|
Government
Officials
|
4.24
|
|
Indemnified
Person
|
7.04
|
|
International
Plan
|
4.16
|
|
Mailing
Date
|
2.05
|
|
Material
Contract
|
4.19
|
|
Merger
|
2.01
|
|
Merger
Consideration
|
2.02
|
|
Merger
Subsidiary
|
Preamble
|
|
Non-Electing
Shares
|
2.04
|
|
Parent
|
Preamble
|
|
Parent
Class B Approval
|
7.03
|
|
Parent
SEC Documents
|
5.07
|
|
Parent
Securities
|
5.05
|
7
|
Section
|
|
|
Parent
Subsidiary Securities
|
5.06
|
|
PAS
|
Preamble
|
|
Per
Share Stock Consideration
|
2.02
|
|
Phantom
Stock Unit
|
2.06
|
|
Proxy
Statement
|
4.09
|
|
Registration
Statement
|
4.09
|
|
Representatives
|
6.03
|
|
Schedule
13E-3
|
4.09
|
|
Second
Request
|
8.01
|
|
Stock
Proration Factor
|
2.04
|
|
Superior
Proposal
|
6.03
|
|
Surviving
Entity
|
2.01
|
|
Tax
|
4.15
|
|
Taxing
Authority
|
4.15
|
|
Tax
Return
|
4.15
|
|
Tax
Sharing Agreements
|
4.15
|
|
2009
Indenture
|
7.09
|
|
368
Reorganization
|
4.20
|
|
Uncertificated
Shares
|
2.05
|
Section
1.02. Other Definitional and
Interpretative Provisions. The words “hereof”, “herein” and “hereunder”
and words of like import used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement. The captions
herein are included for convenience of reference only and shall be ignored in
the construction or interpretation hereof. References to Articles, Sections,
Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this
Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto
or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any capitalized terms used in any
Exhibit or Schedule but not otherwise defined therein, shall have the meaning as
defined in this Agreement. Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the singular. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation”, whether or not they are
in fact followed by those words or words of like import. “Writing”, “written”
and comparable terms refer to printing, typing and other means of reproducing
words (including electronic media) in a visible form. References to any statute
shall be deemed to refer to such statute as amended from time to time and to any
rules or regulations promulgated thereunder. References to any agreement or
contract are to that agreement or contract as amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof; provided that with respect to
any agreement or contract listed on any schedules hereto, all such amendments,
modifications or supplements must also be listed in the appropriate schedule.
References to any Person include the successors and permitted assigns of that
Person. References
8
ARTICLE
2
THE MERGER
Section
2.01. The Merger. (a)
At the Effective Time, the Company shall be merged with and into Merger
Subsidiary in accordance with Delaware Law and, to the extent applicable, New
Jersey Law (the “Merger”), whereupon the
separate existence of the Company shall cease, and Merger Subsidiary shall be
the surviving entity (the “Surviving
Entity”).
(b) Subject
to the provisions of Article 9, the closing of the Merger (the “Closing”) shall take place in
New York City at the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New
York, New York, 10017 as soon as possible, but in any event no later than five
Business Days after the date the conditions set forth in Article 9 (other than
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or, to the extent permissible, waiver of those conditions at
the Closing) have been satisfied or, to the extent permissible, waived by the
party or parties entitled to the benefit of such conditions, or at such other
place, at such other time or on such other date as Parent and the Company may
mutually agree.
(c) At the
Closing, the Company and Merger Subsidiary shall file a certificate of merger
with the Delaware Secretary of State and, to the extent applicable, the New
Jersey Department of Treasury, Division of Revenue and make all other filings or
recordings required by Delaware Law or New Jersey Law in connection with the
Merger. The Merger shall become effective at such time (the “Effective Time”) as the
certificate of merger is duly filed with the Delaware Secretary of State and, to
the extent applicable, the New Jersey Department of Treasury, Division of
Revenue (or at such later time as may be agreed by Parent and the Company and
specified in the certificate of merger).
(d) From and
after the Effective Time, the Surviving Entity shall possess all the rights,
powers, privileges and franchises and be subject to all of the obligations,
liabilities, restrictions and disabilities of the Company and Merger Subsidiary,
all as provided under New Jersey Law or, if applicable, Delaware
Law.
Section
2.02. Conversion of
Shares. At the Effective Time by virtue of the Merger and without any
action on the part of any holder of shares of Company Stock or Company Class B
Stock or any holder of shares of common stock of Merger Subsidiary:
9
(b) Each
share of Company Stock held by the Company as treasury stock immediately prior
to the Effective Time shall be canceled, and no payment shall be made with
respect thereto. Each share of Company Stock held by Parent or Merger Subsidiary
immediately prior to the Effective Time shall be canceled, and no payment shall
be made with respect thereto.
(c) Each
share of Company Stock outstanding immediately prior to the Effective Time
shall, except as otherwise provided in Section 2.02(b), Section 2.02(d), Section
2.08 or Section 2.11, be converted into the following (collectively, the “Merger
Consideration”):
(i) for each
such share of Company Stock with respect to which an election to receive cash
has been effectively made and not revoked and that is not deemed converted into
the right to receive the Per Share Stock Consideration pursuant to Section 2.04
(each, a “Cash Electing Share”), the right to
receive an amount equal to $36.50 in cash without interest (the
“Cash Election Price”);
and
(ii) for each
other such share of Company Stock, the right to receive 0.6432 shares (the
“Per Share Stock
Consideration”) of Parent Stock.
(d) Each
share of Company Class B Stock outstanding immediately prior to the Effective
Time owned by Parent or Merger Subsidiary shall be canceled, and no payment
shall be made with respect thereto, and each other share of Company Class B
Stock outstanding immediately prior to the Effective Time shall be converted
into the right to receive the Per Share Stock Consideration. As of the Effective
Time, all such shares of Company Class B Stock shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
shall thereafter represent only the right to receive the Per Share Stock
Consideration and the right to receive any dividends or other distributions
pursuant to Section 2.05(i) and any cash in lieu of any fractional share of
Parent Stock pursuant to Section 2.08, in each case to be issued or paid in
accordance with Section 2.05, without interest. Each share of Company Stock
owned by any Subsidiary of Parent (other than Merger Subsidiary) outstanding
immediately prior to the Effective Time shall be converted into the right to
receive the Per Share Stock Consideration.
Section
2.03. Elections. Each
Person who, at the close of business on the Election Record Date is a record
holder of shares of Company Stock referred to in Section 2.02(c) will be
entitled, with respect to any or all of such shares of Company Stock, to make an
election (a “Cash
Election”) to receive the Cash Election Price on the basis hereinafter
set forth. No such Person shall be entitled
10
Section
2.04. Proration of Cash
Election Price. (a) The number of shares of Company Stock to be converted
into the right to receive the Cash Election Price at the Effective Time shall
equal the number of shares of Company Stock which is 50% of the number of shares
of Company Stock outstanding immediately prior to the Effective Time (excluding
any shares of Company Stock to be canceled pursuant to Section 2.02(b) and any
shares of Company Stock held by Parent or any of its Subsidiaries) (as may be
adjusted pursuant to Section 2.04(e), the “Cash Election
Number”).
(b) If the
number of Cash Electing Shares exceeds the Cash Election Number, then the Cash
Electing Shares shall be treated in the following manner:
(i) A cash
proration factor (the “Cash
Proration Factor”) shall be determined by dividing the Cash Election
Number by the total number of Cash Electing Shares.
(ii) A number
of Cash Electing Shares covered by each stockholder’s Cash Election equal to the
product of (x) the Cash Proration Factor and (y) the total number of Cash
Electing Shares covered by such Cash Election, such product to be rounded down
to the nearest whole number, shall be converted into the right to receive the
Cash Election Price.
(iii) Each Cash
Electing Share, other than those shares of Company Stock converted into the
right to receive the Cash Election Price in accordance with Section 2.04(b)(ii),
shall be converted into the right to receive the Per Share Stock Consideration
as if such shares of Company Stock were not Cash Electing Shares.
(c) If the
number of Cash Electing Shares is equal to the Cash Election Number, then each
Cash Electing Share shall be converted into the right to receive the Cash
Election Price and each other share of Company Stock (other than shares of
Company Stock to be canceled pursuant to Section 2.02(b)) shall be converted
into the right to receive the Per Share Stock Consideration.
(d) If the
number of Cash Electing Shares is less than the Cash Election Number,
then:
(i) Each Cash
Electing Share shall be converted into the right to receive the Cash Election
Price.
11
(A) A stock
proration factor (the “Stock
Proration Factor”) shall be determined
by dividing (x) the difference between the Cash
Election Number and the number of Cash Electing Shares, by (y) the total number
of Non-Electing Shares.
(B) A number
of Non-Electing Shares of each stockholder equal to the product of (x) the Stock
Proration Factor and (y) the total number of Non-Electing Shares of such
shareholder, such product to be rounded down to the nearest whole number, shall
be converted into the right to receive the Cash Election Price (and a Cash
Election shall be deemed to have been made with respect to such
shares).
(C) Each
Non-Electing Share of each stockholder as to which a Cash Election is not deemed
made pursuant to Section 2.04(d)(ii)(B) shall be converted into the right to
receive the Per Share Stock Consideration.
(e) If either
the tax opinion of Parent’s counsel referred to in Section 9.02(d) or the
opinion of the Company’s counsel referred to in Section 9.03(b) cannot be
rendered (as reasonably determined by such counsel) as a result of the Merger
potentially failing to satisfy continuity of interest requirements under
applicable federal income tax principles relating to reorganizations under
Section 368(a) of the Code, then the Cash Election Number shall be decreased to
the minimum extent necessary to enable the relevant tax opinion or opinions, as
the case may be, to be rendered.
Section
2.05. Election Procedures;
Exchange Agent; Surrender and Payment. (a) Prior to the
date of the Company Stockholder Meeting, Parent and the Company shall
prepare a form (an “Election
Form”) pursuant to which a holder of record of shares of Company Stock
may make a Cash Election with respect to each share of Company Stock owned by
such holder. The Company shall cause an Election Form and a letter of
transmittal and instructions (which shall specify that the delivery shall be
effected, and risk of loss and title shall pass, only upon proper delivery of
the certificates representing shares of Company Stock (the “Certificates”) to the Exchange
Agent, or other proper evidence of ownership acceptable to the Exchange Agent in
the case of Uncertificated Shares) for use in exchanging Certificates for the
Merger Consideration to be mailed no more than 40 Business Days and no fewer
than fifteen Business Days before the anticipated Effective Time or on such
other date as Parent and the Company may agree (the “Mailing Date”) to each holder
of record of shares of Company Stock
12
(b) Prior to
the date of the Company Stockholder Meeting, Parent shall appoint an agent
reasonably acceptable to the Company (the “Exchange Agent”) for the
purpose of (i) receiving Election Forms and determining, in accordance with this
Article 2, the form of Merger Consideration to be received by each holder of
shares of Company Stock and (ii) exchanging for the Merger Consideration (A)
Certificates or (B) uncertificated shares of Company Stock (the “Uncertificated Shares”).
Parent shall deposit, or shall cause to be deposited with the Exchange Agent, as
needed, for the benefit of the holders of the Certificates and the
Uncertificated Shares, for exchange in accordance with this Article 2, (i)
subject to Section 2.05(e), certificates representing the shares of Parent Stock
that constitute the stock portion of the Merger Consideration and (ii) an amount
of cash necessary to satisfy the cash portion of the Merger Consideration
(collectively, the “Exchange
Fund”). Promptly after the Effective Time, but no later than five
Business Days, Parent shall send, or shall cause the Exchange Agent to send, to
each holder of record of shares of Company Stock which have not previously been
delivered to the Exchange Agent pursuant to Section 2.05(a), a letter of
transmittal and instructions (which shall specify that the delivery shall be
effected, and risk of loss and title shall pass, only upon proper delivery of
the Certificates or transfer of the Uncertificated Shares to the Exchange Agent
and which shall otherwise be in customary form and shall include customary
provisions with respect to delivery of an “agent’s message” regarding the
book-entry transfer of Uncertificated Shares) for use in such
exchange.
(c) A Cash
Election shall be effective only if the Exchange Agent shall have received no
later than 5:00 p.m. New York, NY time on the third Business Day prior to the
Effective Time or such other date as Parent and the Company may agree (the
“Election Deadline”)
(which Election Deadline shall be publicly announced by Parent as soon as
practicable, but in no event less than eight Business Days prior to the
Effective Time, and to the extent the Effective Time is later than the date so
publicly announced, the Election Deadline may be adjusted accordingly by Parent
and the Company) (i) an Election Form covering the shares of Company Stock to
which such Cash Election applies, executed and completed in accordance with the
instructions set forth in such Election Form, and (ii) Certificates, in such
form and with such endorsements, stock powers and signature guarantees as may be
required by such Election Form or the letter of transmittal or an “agent’s
message” with respect to Uncertificated Shares. A Cash Election may be revoked
or changed only by delivering to the Exchange Agent,
13
(d) The
Company and Parent shall have the right to make rules, not inconsistent with the
terms of this Agreement, governing the validity and effectiveness of Election
Forms and letters of transmittal, the manner and extent to which Cash Elections
are to be taken into account in making the determinations required by this
Section 2.05 and the payment of the Merger Consideration.
(e) Each
holder of shares of Company Stock that have been converted into the right to
receive the Merger Consideration shall be entitled to receive, upon (i)
surrender to the Exchange Agent of a Certificate, together with a properly
completed letter of transmittal, or (ii) receipt of an “agent’s message” by the
Exchange Agent (or such other evidence, if any, of transfer as the Exchange
Agent may reasonably request) in the case of a book-entry transfer of
Uncertificated Shares, the Merger Consideration in respect of the Company Stock
represented by a Certificate or Uncertificated Share. The shares of Parent Stock
constituting part of such Merger Consideration, at Parent’s option, shall be in
uncertificated book-entry form, unless a physical certificate is requested by a
holder of shares of Company Stock or is otherwise required under Applicable Law.
Until so surrendered or transferred, as the case may be, each such Certificate
or Uncertificated Share shall represent after the Effective Time for all
purposes only the right to receive such Merger Consideration and the right to
receive any dividends or other distributions pursuant to Section 2.05(i) and any
cash in lieu of fractional shares pursuant to Section 2.08.
(f) If any
portion of the Merger Consideration is to be paid to a Person other than the
Person in whose name the surrendered Certificate or the transferred
Uncertificated Share is registered, it shall be a condition to such payment that
(i) either
such Certificate shall be properly endorsed or shall otherwise be in proper form
for transfer or such Uncertificated Share shall be properly transferred and (ii)
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Certificate or Uncertificated Share or establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(g) After
the Effective Time, there shall be no further registration of transfers of
shares of Company Stock. If, after the Effective Time, Certificates or
Uncertificated Shares are presented to the Surviving Entity or the
Exchange
14
(h) Any
portion of the Merger Consideration made available to the Exchange Agent
pursuant to Section 2.05 that remains unclaimed by the holders of shares of
Company Stock six months after the Effective Time shall be returned to Parent,
upon demand, and any such holder who has not exchanged shares of Company Stock
for the Merger Consideration in accordance with this Section 2.5 prior to
that time shall thereafter look only to Parent for payment of the Merger
Consideration, and any dividends and distributions with respect thereto pursuant
to Section 2.05(i) and any cash in lieu of fractional shares pursuant to Section
2.08, in respect of such shares without any interest thereon. Notwithstanding
the foregoing, Parent shall not be liable to any holder of shares of Company
Stock for any amounts properly paid to a public official pursuant to applicable
abandoned property, escheat or similar laws. Any amounts remaining unclaimed by
holders of shares of Company Stock immediately prior to such time when the
amounts would otherwise escheat to or become property of any Governmental
Authority shall become, to the extent permitted by Applicable Law, the property
of Parent free and clear of any claims or interest of any Person previously
entitled thereto.
(i) No
dividends or other distributions with respect to securities of Parent
constituting part of the Merger Consideration, and no cash payment in lieu of
fractional shares as provided in Section 2.08, shall be paid to the holder of
any Certificates not surrendered or of any Uncertificated Shares not transferred
until such Certificates or Uncertificated Shares are surrendered or transferred,
as the case may be, as provided in this Section. Following such surrender or
transfer, there shall be paid, without interest, to the Person in whose name the
securities of Parent have been registered, (i) at the time of such surrender or
transfer, the amount of any cash payable in lieu of fractional shares to which
such Person is entitled pursuant to Section 2.08, and the amount of all
dividends or other distributions with a record date after the Effective Time
previously paid or payable on the date of such surrender with respect to such
securities and (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time and prior to
surrender or transfer and with a payment date subsequent to surrender or
transfer payable with respect to such securities.
(j) The
payment of any transfer, documentary, sales, use, stamp, registration, value
added and other such Taxes and fees (including any penalties and interest)
incurred by a holder of Company Stock in connection with the Merger, and the
filing of any related Tax returns and other documentation with respect to such
Taxes and fees, shall be the sole responsibility of such holder.
(k) At the
Effective Time or promptly thereafter, Parent shall surrender or cause to be
surrendered to the Exchange Agent (i) all certificates for Company Stock and
Company Class B Stock owned by any Subsidiary of Parent (other than
15
Section
2.06. Equity-Based
Awards. (a) The terms of each outstanding option to purchase shares of
Company Stock under any Company Stock Plan (a “Company Stock Option”),
whether or not exercisable or vested, shall be adjusted as necessary to provide
that, at the Effective Time, each Company Stock Option outstanding immediately
prior to the Effective Time shall be converted into an option (each, an “Adjusted Option”) to acquire,
on the same terms and conditions as were applicable under such Company Stock
Option immediately prior to the Effective Time, the number of shares of Parent
Stock equal to the product of (i) the number of shares of Company Stock subject
to such Company Stock Option immediately prior to the Effective Time multiplied by (ii) the Per
Share Stock Consideration. The exercise price per share of Parent Stock subject
to any such Adjusted Option will be an amount (rounded up to the nearest whole
cent) equal to the quotient of (A) the exercise price per share of Company Stock
subject to such Company Stock Option immediately prior to the Effective Time
divided by (B) the Per
Share Stock Consideration. For the avoidance of doubt (i) the exercise price of,
and number of shares subject to, each Adjusted Option shall be determined as
necessary to comply with Section 409A of the Code, (ii) any fractional share of
Parent Stock resulting from an aggregation of all the shares subject to any
Company Stock Option of a holder granted under a particular award agreement with
the same exercise price shall be rounded down to the nearest whole share and
(iii) for any Company Stock Option to which Section 421 of the Code applies as
of the Effective Time (after taking into account the effect of any accelerated
vesting thereof, if applicable) by reason of its qualification under any of
Sections 422 through 424 of the Code, the exercise price, the number of shares
purchasable pursuant to such option and the terms and conditions of exercise of
such option shall be determined in order to comply with Section 424 of the
Code.
(b) The
terms of each outstanding cash-settled stock appreciation right valued with
respect to Company Stock under any Company Stock Plan (a “Company SAR”), whether or not
exercisable or vested, shall be adjusted as necessary to provide that, at the
Effective Time, each Company SAR outstanding immediately prior to the Effective
Time shall be converted into a cash-settled stock appreciation right (each, an
“Adjusted SAR”), on the
same terms and conditions as were applicable under such Company SAR immediately
prior to the Effective Time, with respect to the number of shares of Parent
Stock equal to the product of (l) the number of shares of Company Stock relating
to such Company SAR immediately prior to the Effective Time multiplied by the Per Share
Stock Consideration. The exercise price per share of Parent Stock relating to
any such Adjusted SAR (the “Adjusted SAR Exercise Price”)
will be an amount (rounded
16
(c) Parent
shall take such actions as are necessary for the assumption of the Company Stock
Options, Company SARs, Company RSUs and Phantom Stock Units pursuant to this
Section 2.06, including the reservation, issuance and listing of Parent Stock as
is necessary to effectuate the transactions contemplated by this Section 2.06.
Parent shall prepare and file with the SEC a registration statement on an
appropriate form, or a post-effective amendment to a registration statement
previously filed under the 1933 Act, with respect to the shares of Parent Stock
subject to the Company Stock Options, Company SARs, Company RSUs and Phantom
Stock Units and, where applicable, shall have such registration statement
declared effective as soon as practicable following the Effective Time and
maintain the effectiveness of such registration statement covering such Company
Stock Options, Company SARs, Company RSUs and Phantom Stock Units (and to
maintain the current status of the prospectus contained therein) for so long as
such Company Stock Option, Company SARs, Company RSU or Phantom Stock Unit
remains outstanding. With respect to those individuals, if any, who, subsequent
to the Effective Time, will be subject to the reporting requirements under
Section 16(a) of the 1934 Act, where applicable, Parent shall administer any
Company Stock Plan assumed pursuant to this Section 2.06 in a manner that
complies with Rule 16b-3 promulgated under the 1934 Act to the extent such
Company Stock Plan complied with such rule prior to the Merger.
(d) As of the
Effective Time, each then-outstanding right, held by an employee or by a
non-employee director, whether vested or unvested, which may be settled in
shares of Company Stock issued under the Executive Income Deferral Program or
any other Company Stock Plan (a “Phantom Stock Unit”) and any
associated dividend equivalent units and each then-outstanding restricted stock
unit right, held by an employee, representing an unfunded contractual right to
receive shares of Company Stock issued under any Company Stock Plan (a “Company RSU”) and any
associated dividend equivalent units will be adjusted so that its holder will be
entitled to receive, upon settlement thereof, a number of shares of Parent Stock
(or cash in an amount equal to the aggregate value of such shares) (i) equal to
the product of (A) the number of shares of Company Stock subject to such Phantom
Stock Unit or Company RSU (and, in each case, any associated dividend equivalent
units), as applicable, immediately prior to the
17
(e) Prior
to the Effective Time, the Company shall take any actions with respect to stock
option or compensation plans or arrangements that are necessary to give effect
to the transactions contemplated by this Section 2.06.
Section
2.07. Adjustments. If,
during the period between the date of this Agreement and the Effective Time, any
change in the outstanding shares of capital stock of the Company or Parent shall
occur, including by reason of any reclassification, recapitalization, stock
split or combination, exchange or readjustment of shares, or any stock dividend
thereon with a record date during such period, but excluding any change that
results from any exercise of options outstanding as of the date hereof to
purchase shares of Company Stock granted under the Company’s stock option or
compensation plans or arrangements, the Merger Consideration and, if applicable,
the Per Share Stock Consideration and its determination shall be appropriately
adjusted.
Section
2.08. Fractional
Shares. No fractional shares of Parent Stock shall be issued in the
Merger. All fractional shares of Parent Stock that a holder of shares of Company
Stock or Company Class B Stock would otherwise be entitled to receive as a
result of the Merger shall be aggregated and if a fractional share results from
such aggregation, such holder shall be entitled to receive, in lieu thereof, an
amount in cash without interest determined by multiplying the closing price of a
share of Parent Stock on the New York Stock Exchange on the trading day
immediately preceding the day on which the Effective Time occurs by
18
Section
2.09. Withholding
Rights. Notwithstanding any provision contained herein to the contrary,
each of the Exchange Agent, Surviving Entity and Parent shall be entitled to
deduct and withhold from the consideration otherwise payable to any Person
pursuant to this Article 2 such amounts as it is required to deduct and withhold
with respect to the making of such payment under any provision of federal,
state, local or foreign tax law. If the Exchange Agent, Surviving Entity or
Parent, as the case may be, so withholds amounts, such amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
shares of Company Stock in respect of which the Exchange Agent, Surviving Entity
or Parent, as the case may be, made such deduction and withholding.
Section
2.10. Lost
Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Entity, the posting by such Person of a bond, in such reasonable
amount as the Surviving Entity may direct, as indemnity against any claim that
may be made against it with respect to such Certificate, the Exchange Agent will
issue, in exchange for such lost, stolen or destroyed Certificate, the Merger
Consideration to be paid in respect of the shares of Company Stock represented
by such Certificate, as contemplated by this Article 2.
Section
2.11. Dissenting
Shares. Notwithstanding Section 2.02, shares of Company Stock outstanding
immediately prior to the Effective Time and held by a holder who has not voted
in favor of the Merger or consented thereto in writing and who has demanded
appraisal for such shares in accordance with Delaware Law (“Dissenters’ Shares”) shall not
be converted into the right to receive the Merger Consideration, unless such
holder fails to perfect, withdraws or otherwise loses the right to appraisal.
If, after the Effective Time, such holder fails to perfect, withdraws or
otherwise loses the right to appraisal, such shares shall be treated as if they
had been converted as of the Effective Time into the right to receive the Merger
Consideration. The Company shall give Parent prompt notice of any demands
received by the Company for appraisal of shares, and Parent shall have the right
to participate in all negotiations and proceedings with respect to such demands.
Except with the prior written consent of Parent, the Company shall not make any
payment with respect to, or offer to settle or settle, any such
demands.
ARTICLE
3
THE SURVIVING ENTITY
Section
3.01. Certificate of
Incorporation. Subject to Section 7.04(b), the certificate of
incorporation of Merger Subsidiary in effect at the Effective Time
19
Section
3.02. Bylaws. Subject
to Section 7.04(b), the bylaws of Merger Subsidiary in effect at the Effective
Time shall be the bylaws of the Surviving Entity until amended in accordance
with the bylaws and Applicable Law.
Section
3.03. Directors and
Officers. From and after the Effective Time, until successors are duly
elected or appointed and qualified in accordance with the bylaws and Applicable
Law, (i) the directors of Merger Subsidiary at the Effective Time shall be the
directors of the Surviving Entity and (ii) the officers of Merger Subsidiary at
the Effective Time shall be the officers of the Surviving Entity.
ARTICLE
4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject
to Section 11.05, except as disclosed in any Company SEC Document filed after
December 27, 2008 and before the date of this Agreement or as set forth in the
Company Disclosure Schedule, the Company represents and warrants to Parent
that:
Section
4.01. Existence and
Power. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. The Company is duly
qualified to do business as a foreign corporation and is in good standing (with
respect to jurisdictions that recognize that concept) in each jurisdiction where
such qualification is necessary, except for those jurisdictions where failure to
be so qualified or in good standing would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company. The
Company has heretofore made available to Parent true and complete copies of the
certificate of incorporation and bylaws of the Company in effect on the date of
this Agreement.
Section
4.02. Authorization.
(a) The execution, delivery and performance by the Company of this Agreement and
the consummation by the Company of the transactions contemplated hereby are
within the Company’s corporate powers and, except for the required approval of
the Company’s stockholders in connection with the consummation of the Merger,
have been duly authorized by all necessary corporate action on the part of the
Company. Assuming the Parent Class B Approval is obtained in accordance with
Section 7.03, the affirmative vote of the holders of (i) a majority of the
outstanding shares of Company Stock
20
(b) At
meetings duly called and held, (i) the Special Committee has recommended to the
Company’s Board of Directors that it accept the transactions contemplated hereby
as being advisable and in the best interests of the Company and its
stockholders, (ii) the Company’s Audit and Affiliated Transactions Committee
reviewed and approved the transactions contemplated hereby and (iii) the
Company’s Board of Directors has (x) determined that this Agreement and the
transactions contemplated hereby are in the best interests of the Company and
its stockholders, (y) approved and deemed advisable this Agreement and the
transactions contemplated hereby and (z) resolved, subject to Section 6.03(b),
to recommend approval and adoption of this Agreement by its stockholders (all
such actions by the Special Committee, the Company’s Audit and Affiliated
Transactions Committee and the Company’s Board of Directors, the “Company Board
Recommendation”).
Section
4.03. Governmental
Authorization. The execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby require no action by or in respect of, or filing with, any
Governmental Authority other than (a) the filing of a certificate of merger with
respect to the Merger with the Delaware Secretary of State and, if applicable,
the New Jersey Department of Treasury, Division of Revenue, and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, (b) compliance with any applicable requirements of the
HSR Act or any other Competition Law, (c) filings with the NYSE and compliance
with any applicable requirements of the 1933 Act, the 1934 Act and any other
applicable state or federal securities laws and (d) any actions or filings the
absence of which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company or prevent or materially
impede, interfere with, hinder or delay the consummation of the
Merger.
Section
4.04. Non-contravention. The
execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (a)
contravene, conflict with, or result in any violation or breach of any provision
of the certificate of incorporation or bylaws of the Company, (b) assuming
compliance with the matters referred to in Section 4.03, contravene, conflict
with or result in a
21
Section
4.05. Capitalization.
(a) The authorized capital stock of the Company consists of (i) 900,000,000
shares of Company Stock, (ii) 100,000 shares of Company Class B Stock and (iii)
20,000,000 shares of Preferred Stock, par value $0.01 (“Company Preferred Stock”). As
of July 24, 2009, there were outstanding (i) 215,516,466 shares of Company
Stock, (ii) Company Stock Options to purchase an aggregate of 29,550,326 shares
of Company Stock (of which Company Stock Options to purchase an aggregate of
20,365,773 shares of Company Stock were exercisable), (iii) 4,109,834 shares of
Company Stock subject to Company RSUs, (iv) 53,844 shares of Company Stock
subject to Phantom Stock Units, (v) 138,543 accrued dividend equivalent units
associated with Company RSUs and Phantom Stock Units, (vi) 100,000 shares of
Company Class B Stock and (vii) no shares of Company Preferred
Stock.
(b) All
outstanding shares of capital stock of the Company have been, and all shares
that may be issued pursuant to any Company Stock Option or other equity
compensation award or equity compensation plan or arrangement will be, when
issued in accordance with the respective terms thereof, duly authorized and
validly issued, fully paid and nonassessable and free of preemptive rights. The
Company has provided to Parent a complete and correct list, as of June 13, 2009,
of each outstanding employee stock option to purchase shares of Company Stock,
each share of Company Stock subject to restricted stock awards and each Company
restricted stock unit award, in each case including, as applicable, the holder,
date of grant, exercise price, vesting schedule and number of shares of Company
Stock subject thereto.
(c) There are
no outstanding bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of the Company
may vote. Except as set forth in this Section 4.05, for the Company SARs
referred to in Section 2.06(b) and for changes since July 24, 2009 resulting
from the exercise of Company Stock Options and settlement of
22
(d) None
of (i) the shares of capital stock of the Company or (ii) Company Securities are
owned by any Subsidiary of the Company.
Section
4.06. Subsidiaries. (a)
Except in each case as would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Company, (i) each Subsidiary
of the Company has been duly organized, is validly existing and (where
applicable) in good standing under the laws of its jurisdiction of organization,
has all organizational powers and all governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted and (ii) each such Subsidiary is duly qualified to do business as a
foreign entity and is in good standing in each jurisdiction where such
qualification is necessary. As of the date of this Agreement, all material
Subsidiaries of the Company and their respective jurisdictions of organization
are identified in the Company 10-K.
(b) All
of the outstanding capital stock of or other voting securities of, or ownership
interests in, each Subsidiary of the Company, is owned by the Company, directly
or indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other voting securities or ownership
interests). Other than as owned by the Company or any wholly owned Subsidiary of
the Company, there are no outstanding (i) shares of capital stock or other
voting securities or ownership interests in any Subsidiary of the Company, (ii)
options or other rights to acquire from the Company or any of its Subsidiaries,
or other obligation of the Company or any of its Subsidiaries to issue, any
capital stock or other voting securities or ownership interests in, or any
securities convertible into or exchangeable or exercisable for any capital stock
or other voting securities or ownership interests in, any Subsidiary of the
Company or (iii) stock appreciation rights, performance shares, performance
units, contingent value rights, “phantom” stock or similar securities or rights
that are derivative of,
23
Section
4.07. SEC Filings and the
Sarbanes-Oxley Act. (a) The Company has filed with or furnished to the
SEC all reports, schedules, forms, statements, prospectuses, registration
statements and other documents required to be filed or furnished by the Company
since December 31, 2006 (collectively, together with any exhibits and schedules
thereto and other information incorporated therein, the “Company SEC
Documents”).
(b) As of its
filing date (and as of the date of any amendment), each Company SEC Document
complied, and each Company SEC Document filed subsequent to the date hereof will
comply, as to form in all material respects with the applicable requirements of
the 1933 Act and the 1934 Act, as the case may be.
(c) As of its
filing date (or, if amended or superseded by a filing prior to the date hereof,
on the date of such filing with respect to the disclosures that are amended or
superseded), each Company SEC Document filed pursuant to the 1934 Act did not,
and each Company SEC Document filed subsequent to the date hereof will not,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(d) Each
Company SEC Document that is a registration statement, as amended or
supplemented, if applicable, filed pursuant to the 1933 Act, as of the date such
registration statement or amendment became effective, did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(e) The
Company has established and maintains disclosure controls and procedures (as
defined in Rule 13a-15 under the 1934 Act). Such disclosure controls and
procedures are designed to ensure that material information relating to the
Company, including its consolidated Subsidiaries, is made known to the Company’s
principal executive officer and its principal financial officer by others within
those entities, particularly during the periods in which the periodic reports
required under the 1934 Act are being prepared. Such disclosure controls and
procedures are effective in timely alerting the Company’s principal executive
officer and principal financial officer to material information required to be
included in the Company’s periodic and current reports required under the 1934
Act.
24
(g) There are
no outstanding loans or other extensions of credit made by the Company or any of
its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the
1934 Act) or director of the Company. The Company has not, since the enactment
of the Sarbanes-Oxley Act, taken any action prohibited by Section 402 of the
Sarbanes-Oxley Act.
(h) Since
January 1, 2007, the Company has complied in all material respects with the
applicable listing and corporate governance rules and regulations of the New
York Stock Exchange.
(i) Each of
the principal executive officer and principal financial officer of the Company
(or each former principal executive officer and principal financial officer of
the Company, as applicable) have made all certifications required by Rule 13a-14
and 15d-14 under the 1934 Act and Sections 302 and 906 of the Sarbanes-Oxley Act
and any related rules and regulations promulgated by the SEC and the NYSE, and
the statements contained in any such certifications are complete and correct in
all material respects as of the date made. For purposes of this Agreement,
“principal executive officer” and “principal financial officer” shall have the
meanings given to such terms in the Sarbanes-Oxley Act.
Section
4.08. Financial
Statements. The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company included or
incorporated by reference in the Company SEC Documents fairly present in all
material respects, in conformity with GAAP (except in the case of unaudited
interim financial statements as permitted by Form 10-Q and Regulation S-X of the
SEC) applied on a consistent basis (except as may be indicated in the notes
thereto), the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and their consolidated results
of operations and cash flows for the periods then ended (subject to normal
year-end audit adjustments in the case of any unaudited interim financial
statements).
Section
4.09. Disclosure
Documents. (a) The proxy or information statement of the Company to be
filed as part of the Registration Statement with
25
(b) The
information supplied by the Company for inclusion or incorporation by reference
in the registration statement of Parent on Form S-4 or any amendment or
supplement thereto to be filed with the SEC with respect to the offering of
Parent Stock in connection with the Merger (the “Registration Statement”) shall not at the
time the Registration Statement is declared effective by the SEC (or, with
respect to any post-effective amendment or supplement, at the time such
post-effective amendment or supplement becomes effective) 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 light of
the circumstances under which they were made, not misleading.
(c) The
information supplied by the Company for inclusion or incorporation by reference
in the Schedule 13E-3 or any amendment or supplement thereto shall not at the
time the Schedule 13E-3 or any amendment or supplement thereto is filed with the
SEC 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 light of the circumstances under which they were made,
not misleading. As used herein, “Schedule 13E-3” means the Rule
13E-3 Transaction Statement on Schedule 13E-3 to be filed with the SEC in
connection with this Agreement concurrently with the filing of the Registration
Statement.
(d) The
representations and warranties contained in this Section 4.09 will not apply to
statements or omissions included or incorporated by reference in the Proxy
Statement or any amendment or supplement thereto based upon information
furnished by Parent or any of its representatives or advisors specifically for
use or incorporation by reference therein.
Section
4.10. Absence of Certain
Changes. From the Company Balance Sheet Date to the date of this
Agreement, the business of the Company and its Subsidiaries has been conducted
in the ordinary course consistent with past practice and there has not been any
event, occurrence, development or state of circumstances or facts that has had
or would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company. From June 13, 2009 to the date of this
Agreement, there has not been any action taken by the Company or any of its
Subsidiaries that, if taken during the period
26
Section
4.11. No Undisclosed Material
Liabilities. There are no liabilities or obligations of the Company or
any of its Subsidiaries of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no existing fact,
condition, situation or set of circumstances that would reasonably be expected
to result in such a liability or obligation, other than: (a) liabilities or
obligations disclosed and provided for in the Company Balance Sheet or in the
notes thereto; (b) liabilities or obligations incurred in the ordinary course of
business consistent with past practice since the Company Balance Sheet Date; and
(c) liabilities or obligations that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the
Company.
Section
4.12. Compliance with Laws and
Court Orders. Each of the Company and its Subsidiaries is and has been in
compliance with, and to the knowledge of the Company is not under investigation
with respect to and has not been threatened to be charged with or given notice
of any violation of, any Applicable Law, except for failures to comply or
violations that would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company. There is no judgment,
decree, injunction, rule or order of any arbitrator or Governmental Authority
outstanding against the Company or any of its Subsidiaries that has had or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
Section
4.13. Litigation. There
is no action, suit, investigation or proceeding pending against, or, to the
knowledge of the Company, threatened against or affecting, the Company, any of
its Subsidiaries, any present or former officer, director or employee of the
Company or any of its Subsidiaries or any other Person for whom the Company or
any of its Subsidiaries may be liable or any of their respective properties
before (or, in the case of threatened actions, suits, investigations or
proceedings, would be before) or by any Governmental Authority or arbitrator,
that would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company.
Section
4.14. Intellectual
Property. Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company, the
Company and its Subsidiaries own, or otherwise have sufficient rights to use,
all Intellectual Property used in, held for use in or necessary for the conduct
of their respective businesses as currently conducted.
Section
4.15. Taxes. (a) All
material Tax Returns required by Applicable Law to be filed with any Taxing
Authority by, or on behalf of, the Company or any of its Subsidiaries have been
filed when due in accordance with all
27
(b) (i) The
material income and franchise Tax Returns of the Company and its Subsidiaries
through the Tax year ended December 31, 2002 have been examined and closed or
are Returns with respect to which the applicable period for assessment under
Applicable Law, after giving effect to extensions or waivers, has expired; (ii)
neither the Company nor any of its Subsidiaries has granted an extension or
waiver of the limitation period for the assessment or collection of any Tax that
remains in effect; and (iii) there are no material claims, audits, actions,
suits, proceedings or investigations now pending or, to the Company’s knowledge,
threatened against or with respect to the Company or its Subsidiaries in respect
of any Tax or Tax asset.
(c) There are
no material Liens for Taxes (other than statutory liens for taxes not yet due
and payable or being contested in good faith, for which adequate accruals or
reserves have been established on the Company Balance Sheet) upon any of the
assets of the Company or any of its Subsidiaries.
(d) (i)
Neither the Company nor any of its Subsidiaries is a party to or is bound by any
Tax Sharing Agreement (other than such an agreement or arrangement between or
among (A) the Company (or its Subsidiaries) and Parent (or its Subsidiaries) or
(B) the Company and its Subsidiaries exclusively), (ii) neither the Company nor
any of its Subsidiaries has liability for the payment of any amount as a result
of being party to any Tax Sharing Agreement (other than such agreement or
arrangement between or among (X) the Company (or its Subsidiaries) and Parent
(or its Subsidiaries) or (Y) the Company and its Subsidiaries exclusively) or
with respect to the payment of any amount imposed on any person described in
clauses, (i) or (ii) in the definition of Tax in Section 4.15(j) as a result of
any express or implied agreement or arrangement (including an indemnification
agreement or arrangement); and (iii) neither the Company nor any of its
Subsidiaries has been a member of an affiliated group filing a consolidated
federal income Tax Return (other than a group the common parent of which was the
Company or Parent).
(e) Neither
the Company nor any of its Subsidiaries has been a party to any “reportable
transaction” within the meaning of Treasury Regulations Section
1.6011-4.
(f) None of
the Subsidiaries of the Company owns any Company Stock.
28
(h) Section
4.15(h) of the Company Disclosure Schedule contains a list, as of the date of
this Agreement, of all jurisdictions (whether foreign or domestic) in which the
Company or any of its Subsidiaries owns or leases any material interest in real
property.
(i) Section
4.15(i) of the Company Disclosure Schedule contains a list, as of the date of
this Agreement, of all jurisdictions (whether foreign or domestic) in which the
Company or any of its Subsidiaries files any material Tax Returns.
(j) “Tax” means (i) any tax,
governmental fee or other like assessment or charge of any kind whatsoever
(including withholding on amounts paid to or by any Person), together with any
interest, penalty, addition to tax or additional amount imposed by any
Governmental Authority (a “Taxing Authority”) responsible
for the imposition of any such tax (domestic or foreign), and any liability for
any of the foregoing as transferee, and (ii) in the case of the Company or any
of its Subsidiaries, liability for the payment of any amount of the type
described in clause (i) as a result of being or having been before the Effective
Time a member of an affiliated, consolidated, combined or unitary group, or a
party to any agreement or arrangement, as a result of which liability of the
Company or any of its Subsidiaries to a Taxing Authority is determined or taken
into account with reference to the activities of any other Person. “Tax Return” means any report,
return, document, declaration or other information or filing required to be
supplied to any Taxing Authority with respect to Taxes, including information
returns, any documents with respect to or accompanying payments of estimated
Taxes, or with respect to or accompanying requests for the extension of time in
which to file any such report, return, document, declaration or other
information. “Tax Sharing
Agreements” means all existing agreements or arrangements (whether or not
written) binding the Company or any of its Subsidiaries that provide for the
allocation, apportionment, sharing or assignment of any Tax liability or
benefit, or the transfer or assignment of income, revenues, receipts, or gains
for the purpose of determining any Person’s Tax liability excluding any
indemnification agreement or arrangement pertaining to the sale or lease of
assets or subsidiaries).
Section
4.16. Employees and Employee
Benefit Plans; ERISA. (a) Section 4.16(a) of the Company Disclosure
Schedule contains a correct and complete list of each material Employee
Plan.
(b) With
respect to each material Employee Plan, the Company has made available to Parent
true, complete and correct copies of the following (as applicable) (i) the
written document evidencing the Employee Plan, (ii) all amendments thereto,
(iii) the most recent annual report (Form 5500 including, if
29
(c) No
transaction prohibited by Section 406 of ERISA or Section 4975 of the Code has
occurred with respect to any employee benefit plan or arrangement which is
covered by Title I of ERISA, which transaction has or will cause the Company or
any of its Subsidiaries to incur any liability under ERISA, the Code or
otherwise, excluding transactions effected pursuant to and in compliance with a
statutory or administrative exemption, except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
(d) No
“reportable event,” within the meaning of Section 4043 of ERISA, other than a
“reportable event” which would not reasonably be expected to give rise to any
material liability for the Company or any of its Subsidiaries, and no event
described in Section 4062 or 4063 of ERISA, has occurred in connection with any
Employee Plan. Neither the Company nor any ERISA Affiliate of the Company has
(i) engaged in, or is a successor or parent corporation to an entity that has
engaged in, a transaction described in Sections 4069 or 4212(c) of ERISA, except
as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company or (ii) incurred, or reasonably expects
to incur, prior to the Effective Time (A) any material liability under Title IV
of ERISA arising in connection with the termination of any plan covered or
previously covered by Title IV of ERISA or (B) any
material liability under Section 4971 of the Code that in either case could
become a liability of the Company or any of its Subsidiaries or Parent or any of
its ERISA Affiliates after the Effective Time. With respect to each Employee
Plan subject to Section 412 of the Code, except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company: (i) there has been no material change in the funded status of such
plan as reflected in the most recent actuarial report completed prior to the
date hereof, (ii) no such plan is in “at risk” status within the meaning of
Section 303 of ERISA, (iii) the level of annual minimum funding contributions
required for each such plan for the plan year of each such plan beginning in
2009 is not reasonably expected to materially increase above the level of annual
minimum funding contributions required for such plan for the plan year of such
plan beginning in 2008, (iv) neither Parent, the Company nor any of their
respective Subsidiaries are reasonably expected to be required to post security
with respect to the funding any such plan and (v) no condition exists which
could constitute grounds for termination by PBGC of any such plan.
(e) The
assets of the Company and all of its Subsidiaries are not now, nor will they
after the passage of time be, subject to any lien imposed under Section 430(k)
of the Code by reason of a failure of the Company or any of its Subsidiaries to
make timely installments or other payments required under Section 412 of the
Code, except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company.
30
(g) Each
material Employee Plan which is intended to be qualified under Section 401(a) of
the Code has received a favorable determination letter, or has pending or has
time remaining in which to file an application for such determination, from the
Internal Revenue Service, and there is no reason why any such determination
letter should be revoked or not be reissued. Not later than 30 days after the
date of this Agreement the Company shall furnish to Parent copies of the most
recent Internal Revenue Service determination letters with respect to each such
Employee Plan. Each Employee Plan was established and has been maintained in all
respects in compliance with its terms and with the requirements of all
Applicable Law, including ERISA and the Code, and there is no action, suit,
investigation, audit or proceeding pending against or involving, or to the
knowledge of the Company, threatened against or involving any Employee Plan
before any court or arbitrator or any state, federal or local governmental body,
agency or official, except in each case as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company.
(h) With
respect to each Employee Plan maintained outside of the United States (an “International Plan”), as of
June 30, 2009, according to the actuarial assumptions and valuations applicable
to such International Plan, the total amount or value of the funds available
under such International Plan to pay benefits accrued thereunder or segregated
in respect of such accrued benefits, together with any reserve or accrual with
respect thereto, exceeded the present value of all benefits (actual or
contingent) accrued as of such date of all participants and past participants
therein in respect of which the Company or any of its Subsidiaries has or would
have after the Effective Time any obligation,
31
(i) Neither
the execution of this Agreement nor the consummation of the transactions
contemplated by this Agreement will (either alone or together with any other
event) (i) entitle any current or former employee, director or independent
contractor of the Company or any of its Subsidiaries to severance pay, (ii)
accelerate the time of payment or vesting of any compensation or benefits
otherwise payable, (iii) trigger any payment or funding (through a grantor trust
or otherwise) of compensation or benefits under any Employee Plan or (iv)
increase the amount payable or trigger any other material obligation,
requirement or restriction pursuant to any Employee Plan. Except as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company, there is no contract, plan or arrangement
(written or otherwise) covering any employee or former employee of the Company
or any of its Subsidiaries that, individually or collectively, would entitle any
employee or former employee to any payment or benefit that would not be
deductible pursuant to the terms of Section 280G or Section 162(m) of the
Code.
(j) Except as
would not reasonably be expected to have individually or in the aggregate, a
Material Adverse Effect on the Company, there has been no amendment to, written
interpretation of or announcement (whether or not written) by the Company or any
of its Affiliates relating to, or change in employee participation or coverage
under, any Employee Plan which would increase the expense of maintaining such
Employee Plan above the level of the expense incurred in respect thereof for the
most recently completed fiscal year.
(k) For
purposes of this Agreement, “Employee Plan” means each (i)
“employee benefit plan,” as defined in Section 3(3) of ERISA, whether or not
subject
to ERISA, (ii) employment, consultancy, severance, retention or similar
agreement, plan, arrangement or policy, (iii) other plan or arrangement (written
or oral) providing for compensation, bonuses, profit-sharing, stock option or
other stock related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance (including any self-insured arrangements), medical,
dental, vision or prescription benefits, life insurance, employee assistance
program, relocation or expatriate benefits, disability or sick leave benefits,
workers’ compensation, supplemental unemployment benefits and post-employment or
retirement benefits (including compensation, pension or life insurance benefits
but excluding any Multiemployer Plan) or (iv) any loan; in each case which is
maintained, administered or contributed to by the Company or any Affiliate and
covers any current or former employee, director or independent contractor of the
Company or any of its Subsidiaries, or with respect to which the Company or any
of its controlled Affiliates has any liability contingent or otherwise, in each
case which is maintained, administered or contributed to by the Company or any
Affiliate and covers any current or former employee, director or independent
contractor of the Company or any of its Subsidiaries, or with respect to which
the
32
Section
4.17. Labor. (a) Except
for failures to comply that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company, the
Company and its Subsidiaries have complied with all applicable laws relating to
labor and employment, including those relating to wages, hours, collective
bargaining, unemployment compensation, worker’s compensation, equal employment
opportunity, age and disability discrimination, immigration control, employee
classification, information privacy and security, payment and withholding of
taxes and continuation coverage with respect to group health plans. Since
January 1, 2008, there has not been, and as of the date of this Agreement there
is not pending or, to the knowledge of the Company, threatened, any work
stoppage or labor strike against the Company or any of its Subsidiaries by
employees.
(b) Not
later than 30 days after the date of this Agreement the Company shall furnish to
Parent true and complete copies of each effective or pending collective
bargaining agreement or similar labor agreement (including any being currently
negotiated) covering employees or former employees of the Company or any of its
Subsidiaries (including any being currently negotiated). To the Company’s
knowledge, there has not been any activity or proceeding of any labor
organization or employee group to organize any such employees of the Company or
any of its Subsidiaries. Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company,
there are no (i) unfair labor practice charges or complaints against the Company
or any of its Subsidiaries pending before the National Labor Relations Board or
any foreign equivalent, (ii) representation claims or petitions pending before
the National Labor Relations Board or any foreign equivalent and there are no
questions concerning representation with respect to the employees of the Company
or any of its Subsidiaries or (iii) grievances or pending arbitration
proceedings against the Company or any of its Subsidiaries that arose out of or
under any collective bargaining agreement.
Section
4.18. Environmental
Matters. (a) Except as to matters that would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company: (i) no written notice, notification, demand, request for information,
citation, summons or order has been received, no complaint, investigation,
action, claim, suit, or proceeding is pending or, to the knowledge of the
Company, is threatened by any Person against or affecting the Company, any of
its Subsidiaries or any of their respective properties under or pursuant to any
Environmental Law; (ii) each of the Company and its Subsidiaries is and has been
in compliance with all Environmental Laws and has been and is in compliance with
all Environmental Permits; and (iii) there are no liabilities or obligations of
the Company or any of its Subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, arising under or
pursuant to any Environmental Law, and there is no existing fact,
33
(b)
Notwithstanding any provision to the contrary, other than the representations
and warranties contained in Sections 4.03, 4.07, 4.08, 4.09 and 4.10, this
Section 4.18 shall be deemed to contain the sole representations and warranties
by the Company with respect to environmental matters.
Section
4.19. Material
Contracts. (a) As of the date hereof, neither the Company nor any of its
Subsidiaries is party to or bound by, whether in writing or not, any contract,
arrangement, commitment or understanding (i) made or entered into outside the
ordinary course of business and that limits or otherwise restricts in any
material respect the Company or any of its Subsidiaries (or, after the Effective
Time, the Surviving Entity, Parent or any of their respective Subsidiaries) from
engaging or competing in any material line of business in any location or with
any Person, (ii) made or entered into outside the ordinary course of business
and that includes any material exclusive dealing arrangement or any other
material arrangement that grants any material right of first refusal or material
right of first offer or similar material right or that limits or purports to
limit in any material respect the ability of the Company or its Subsidiaries to
own, operate, sell, transfer, pledge or otherwise dispose of any material assets
or business, (iii) that is a material joint venture, alliance or partnership
agreement, (iv) that is a “material contract” (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC) or (v) described in clauses (i) or (ii)
of this sentence that, disregarding any materiality qualifiers contained
therein, would apply to Parent or any of its Subsidiaries (other than the
Surviving Entity and its Subsidiaries) after the Effective Time (each, together
with the contracts listed on Section 4.19 of the Company Disclosure Schedule, a
“Material
Contract”).
(b) Each
Material Contract is valid and binding and in full force and effect and, to the
Company’s knowledge, enforceable against the other party or parties thereto in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors’ rights
or by general equity principles). Except for breaches, violations or defaults
which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company, neither the Company nor any
of its Subsidiaries, nor to the Company’s knowledge any other party to a
Material Contract, has violated any provision of, or taken or failed to take any
act which, with or without notice, lapse of time, or both, would constitute a
default under the provisions of such Material Contract, and neither the Company
nor any of its Subsidiaries has received written notice that it has breached,
violated or defaulted under any Material Contract.
34
Section
4.21. Finders’ Fees.
Except for Morgan Stanley & Co. Incorporated and Perella Weinberg Partners
LP, each of whose fees has been disclosed to Parent and whose engagement
agreement does not impose any limitations, restrictions or obligations binding
on the Company, Parent or any of their respective Affiliates following the
Effective Time (other than customary indemnification obligations and the
obligation to pay such disclosed fees), there is no investment banker, broker,
finder or other intermediary that has been retained by or is authorized to act
on behalf of the Company or any of its Subsidiaries who might be entitled to any
fee or commission from Parent, the Company or any of their respective Affiliates
in connection with the transactions contemplated by this Agreement.
Section
4.22. Opinion of Financial
Advisor. The Company has received the opinions of Morgan Stanley &
Co. Incorporated, financial advisor to the Board of Directors of the Company,
the Special Committee and the Company, and Perella Weinberg Partners LP,
financial advisor to the Special Committee to the effect that, as of the date of
this Agreement, the Merger Consideration is fair to the Company’s stockholders
(other than Parent and its Affiliates) from a financial point of
view.
Section
4.23. Antitakeover Statutes
and Related Matters. (a) The Company has taken all action necessary to
exempt the Merger, this Agreement and the transactions contemplated hereby from
the supermajority voting provisions of Section 203 of Delaware Law, and,
accordingly, neither such Section nor any other antitakeover or similar statute
or regulation applies or purports to apply to any such transactions. To the
Company’s knowledge, no other “control share acquisition,” “fair price,”
“moratorium” or other antitakeover laws enacted under U.S. state or federal laws
apply to the Merger, this Agreement or any of the transactions contemplated
hereby.
(b) The
Company has taken all action necessary to render the Company Rights issued
pursuant to the terms of the Company Rights Agreement inapplicable to the
Merger, this Agreement and the transactions contemplated hereby (the “Company Rights Agreement
Amendment”). A true and complete copy of the Company Rights Agreement
Amendment (including all modifications and amendments thereto) has previously
been made available to Parent.
Section
4.24. Foreign
Practices. Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company, to
the knowledge of the Company, none of the Company, any of its Subsidiaries or
any of their respective representatives on behalf of the Company or any of its
Subsidiaries has offered, promised or given, and no Person has
35
Section
4.25. No Other Representations
or Warranties. Except for the representations and warranties contained in
Article 5, the Company acknowledges that none of Parent, Merger Subsidiary or
any other Subsidiary of Parent, or any other Person on behalf of Parent makes
any other express or implied representation or warranty in connection with the
transactions contemplated by this Agreement.
ARTICLE
5
REPRESENTATIONS AND WARRANTIES OF PARENT
Subject
to Section 11.05, except as disclosed in any Parent SEC Document filed after
December 27, 2008 and before the date of this Agreement or as set forth in the
Parent Disclosure Schedule, Parent represents and warrants to the Company
that:
Section
5.01. Existence and
Power. Each of Parent and Merger Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of organization and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted, except for those licenses, authorizations,
permits, consents and approvals the absence of which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Parent. Each of Parent and Merger Subsidiary is duly qualified to do business as
a foreign corporation and is in good standing (with respect to jurisdictions
that recognize that concept) in each jurisdiction where such qualification is
necessary, except for those jurisdictions where the failure to be so qualified
or in good standing would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent. Parent has
36
Section
5.02. Authorization.
The execution, delivery and performance by Parent and Merger Subsidiary of this
Agreement and the consummation by Parent and Merger Subsidiary of the
transactions contemplated hereby are within the corporate powers of Parent and
Merger Subsidiary and have been duly authorized by all necessary corporate
action. No vote of the holders of shares of Parent Stock is necessary in
connection with the consummation of the transactions contemplated hereby.
Assuming the due authorization, execution and delivery of this Agreement by the
Company, this Agreement constitutes a valid and binding agreement of each of
Parent and Merger Subsidiary, enforceable against Parent and Merger Subsidiary
in accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws affecting
creditors’ rights generally and general principles of equity).
Section
5.03. Governmental
Authorization. The execution, delivery and performance by Parent and
Merger Subsidiary of this Agreement and the consummation by Parent and Merger
Subsidiary of the transactions contemplated hereby require no action by or in
respect of, or filing with, any Governmental Authority other than (a) the filing
of a certificate of merger with respect to the Merger with the Delaware
Secretary of State and, if applicable, the New Jersey Department of Treasury,
Division of Revenue, and appropriate documents with the relevant authorities of
other states in which Parent is qualified to do business, (b) compliance with
any applicable requirements of the HSR Act or any other Competition Law, (c)
filings with the NYSE and compliance with any applicable requirements of the
1933 Act, the 1934 Act and any other applicable state or federal securities laws
and (d) any actions or filings the absence of which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Parent or prevent or materially impede, interfere with, hinder or delay the
consummation of the Merger.
Section
5.04. Non-contravention. The
execution, delivery and performance by Parent and Merger Subsidiary of this
Agreement and the consummation by Parent and Merger Subsidiary of the
transactions contemplated hereby do not and will not (a) contravene, conflict
with, or result in any violation or breach of any provision of the certificate
of incorporation or bylaws of Parent or Merger Subsidiary, (b) assuming
compliance with the matters referred to in Section 5.03, contravene, conflict
with or result in a violation or breach of any provision of any Applicable Law,
(c) assuming compliance with the matters referred to in Section 5.03, require
any consent or other action by any Person under, constitute a default, or an
event that, with or without notice or lapse of time or both, would constitute a
default, under, or cause or permit the termination, cancellation, acceleration
or other change of any right or obligation or the loss of any benefit to which
Parent or any of its Subsidiaries is entitled under any provision of any
agreement or other instrument binding upon Parent or any of its
37
Section
5.05. Capitalization.
(a) The authorized capital stock of Parent consists of 3,600,000,000 shares of
Parent Stock and 3,000,000 shares of Convertible Preferred Stock of no par
value. As of July 31, 2009, there were outstanding (i) 1,557,999,492 shares of
Parent Stock, (ii) employee stock options to purchase an aggregate of
113,744,777 shares of Parent Stock (of which options to purchase an aggregate of
77,571,306 shares of Parent Stock were exercisable), (iii) 6,350,007
shares of Parent Stock subject to restricted stock unit awards and (iv) 254,253
shares of Convertible Preferred Stock. All outstanding shares of capital stock
of Parent have been duly authorized and validly issued and are fully paid and
nonassessable and free of preemptive rights.
(b) Except as
set forth in this Section 5.05 and for changes since July 31, 2009 resulting
from the exercise of stock options or the grant of stock- based compensation to
directors or employees or from the issuance of stock in connection with a merger
or other acquisition or business combination determined by Parent’s Board of
Directors to be in the best interests of Parent and its stockholders (including
any issuance of stock in connection with the transactions contemplated by the
Concurrent Merger Agreement), there are no outstanding (i) shares of capital
stock or other voting securities or ownership interests in Parent, (ii) options
or other rights to acquire from Parent, or other obligation of Parent to issue,
any capital stock or other voting securities or ownership interests in, or any
securities convertible into or exchangeable or exercisable for capital stock or
other voting securities or ownership interests in, Parent or (iii) stock
appreciation rights, performance shares, performance units, contingent value
rights, “phantom” stock or similar securities or rights that are derivative of,
or provide economic benefits based, directly or indirectly, on the value or
price of, any capital stock or other voting securities or ownership interests in
Parent (the items in clauses (i) through (iii) being referred to collectively as
the “Parent
Securities”). There are no outstanding obligations of Parent or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any of the Parent
Securities.
(c) The
shares of Parent Stock to be issued as part of the Merger Consideration have
been duly authorized and, when issued and delivered in accordance with the terms
of this Agreement, will have been validly issued and will be fully paid and
nonassessable and the issuance thereof is not subject to any preemptive or other
similar right.
38
(b) All
of the outstanding capital stock or other voting securities of, or ownership
interests in, each Subsidiary of Parent, is owned by Parent, directly or
indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other voting securities or ownership
interests). Other than as owned by Parent or any wholly owned Subsidiary of
Parent, there are no outstanding (i) shares of capital stock or other voting
securities or ownership interests in any Subsidiary of Parent, (ii) options or
other rights to acquire from Parent or any of its Subsidiaries, or other
obligation of Parent or any of its Subsidiaries to issue, any capital stock or
other voting securities or ownership interests in, or any securities convertible
into or exchangeable or exercisable for any capital stock or other voting
securities or ownership interests in, any Subsidiary of Parent or (iii) stock
appreciation rights, performance shares, performance units, contingent value
rights, “phantom” stock or similar securities or rights that are derivative of,
or provide economic benefits based, directly or indirectly, on the value or
price of, any capital stock or other voting securities or ownership interests
in, any Subsidiary of Parent (the items in clauses (i) through (iii) being
referred to collectively as the “Parent Subsidiary
Securities”). There are no outstanding obligations of Parent or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any of the Parent
Subsidiary Securities.
Section
5.07. SEC Filings and the
Sarbanes-Oxley Act. (a) Parent has filed with or furnished to the SEC all
reports, schedules, forms, statements, prospectuses, registration statements and
other documents required to be filed or furnished by Parent since December 31,
2006 (collectively, together with any exhibits and schedules thereto and other
information incorporated therein, the “Parent SEC
Documents”).
(b) As of its
filing date (and as of the date of any amendment), each Parent SEC Document
complied, and each Parent SEC Document filed subsequent to the date hereof will
comply, as to form in all material respects with the applicable requirements of
the 1933 Act and 1934 Act, as the case may be.
(c) As of its
filing date (or, if amended or superseded by a filing prior to the date hereof,
on the date of such filing with respect to the disclosures that are amended or
superseded), each Parent SEC Document filed pursuant to the 1934
39
(d) Each
Parent SEC Document that is a registration statement, as amended or
supplemented, if applicable, filed pursuant to the 1933 Act, as of the date such
registration statement or amendment became effective, did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(e) Parent
has established and maintains disclosure controls and procedures (as defined in
Rule 13a-15 under the 1934 Act). Such disclosure controls and procedures are
designed to ensure that material information relating to Parent, including its
consolidated Subsidiaries, is made known to Parent’s principal executive officer
and its principal financial officer by others within those entities,
particularly during the periods in which the periodic reports required under the
1934 Act are being prepared. Such disclosure controls and procedures are
effective in timely alerting Parent’s principal executive officer and principal
financial officer to material information required to be included in Parent’s
periodic and current reports required under the 1934 Act.
(f) Since
January 1, 2007, Parent and its Subsidiaries have established and maintained a
system of internal controls over financial reporting (as defined in Rule 13a-15
under the 1934 Act) sufficient to provide reasonable assurance regarding the
reliability of Parent’s financial reporting and the preparation of Parent
financial statements for external purposes in accordance with GAAP. Parent has
disclosed, based on its most recent evaluation of internal controls prior to the
date hereof, to Parent’s auditors and audit committee (i) any significant
deficiencies and material weaknesses in the design or operation of internal
controls which are reasonably likely to adversely affect Parent’s ability to
record, process, summarize and report financial information and (ii) any fraud,
whether or not material, that involves management or other employees who have a
significant role in internal controls.
(g) There are
no outstanding loans or other extensions of credit made by Parent or any of its
Subsidiaries to any executive officer (as defined in Rule 3b-7 under the 1934
Act) or director of Parent. Parent has not, since the enactment of the
Sarbanes-Oxley Act, taken any action prohibited by Section 402 of the
Sarbanes-Oxley Act.
(h) Since
January 1, 2007, Parent has complied in all material respects with the
applicable listing and corporate governance rules and regulations of the New
York Stock Exchange.
(i) Each of
the principal executive officer and principal financial officer of Parent (or
each former principal executive officer and principal financial
40
Section
5.08. Financial
Statements. The audited consolidated financial statements and unaudited
consolidated interim financial statements of Parent included or incorporated by
reference in the Parent SEC Filings fairly present in all material respects, in
conformity with GAAP (except in the case of unaudited interim financial
statements, as permitted by Form 10-Q and Regulation S-X of the SEC) applied on
a consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of Parent and its consolidated Subsidiaries as
of the dates thereof and their consolidated results of operations and cash flows
for the periods then ended (subject to normal year-end audit adjustments in the
case of any unaudited interim financial statements).
Section
5.09. Disclosure
Documents. (a) The information provided by Parent for inclusion in the
Proxy Statement or any amendment or supplement thereto shall not, at the time
the Proxy Statement or any amendment or supplement thereto is first mailed to
stockholders of the Company and at the time of the Company Stockholder Approval,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(b) The
Registration Statement and any amendments or supplements thereto, when filed,
will comply as to form in all material respects with the requirements of the
1933 Act. At the time the Registration Statement or any amendment or supplement
thereto becomes effective, the Registration Statement, as amended or
supplemented, will not 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 not misleading.
(c) The
information supplied by Parent for inclusion or incorporation by reference in
the Schedule 13E-3 or any amendment or supplement thereto shall not at the time
the Schedule 13E-3 or any amendment or supplement thereto is filed with the SEC
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 light of the circumstances under which they were made, not
misleading.
(d) The
representations and warranties contained in this Section 5.09 will not apply to
statements or omissions included or incorporated by reference in the
Registration Statement or any amendment or supplement thereto based
upon
41
Section
5.10. Absence of Certain
Changes. From the Parent Balance Sheet Date to the date of this
Agreement, the business of Parent and its Subsidiaries has been conducted in the
ordinary course consistent with past practice, and there has not been any event,
occurrence, development or state of circumstances or facts that has had or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Parent. From June 13, 2009 to the date of this Agreement,
there has not been any action taken by Parent or any of its Subsidiaries that,
if taken during the period from the date of this Agreement through the Effective
Time without the Company’s consent, would constitute a breach of Section
7.01.
Section
5.11. No Undisclosed Material
Liabilities. There are no liabilities or obligations of Parent or any of
its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances that would reasonably be expected to result in
such a liability or obligation other than: (a) liabilities or obligations
disclosed and provided for in the Parent Balance Sheet or in the notes thereto;
(b) liabilities or obligations incurred in the ordinary course of business
consistent with past practice since the Parent Balance Sheet Date; and (c)
liabilities and obligations that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on
Parent.
Section
5.12. Compliance with Laws and
Court Orders. Each of Parent and its Subsidiaries is and has been in
compliance with, and to the knowledge of Parent is not under investigation with
respect to and has not been threatened to be charged with or given notice of any
violation of, any Applicable Law, except for failures to comply or violations
that would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on Parent. There is no judgment, decree, injunction,
rule or order of any arbitrator or Governmental Authority outstanding against
Parent or any of its Subsidiaries that has had or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on
Parent.
Section
5.13. Litigation. There
is no action, suit, investigation or proceeding pending against, or, to the
knowledge of Parent, threatened against or affecting, Parent, any of its
Subsidiaries, any present or former officer, director or employee of Parent or
any of its Subsidiaries or any other Person for whom Parent or any of its
Subsidiaries may be liable or any of their respective properties before (or, in
the case of threatened actions, suits, investigations or proceedings, would be
before) or by any Governmental Authority or arbitrator that would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Parent.
42
Section
5.15. Financing. At the
Effective Time Parent will have sufficient immediately available funds to pay,
in cash, the total amount of the cash portion of the Merger Consideration that
holders of Company Stock are entitled to receive pursuant to Section 2.02 as
well as any cash dividends or distributions payable pursuant to Section 2.05(i)
and any cash in lieu of any fractional share of Parent Stock pursuant to Section
2.08.
Section
5.16. No Planned Liquidations
or Mergers. Parent has no plan or intention to (i) liquidate the
Surviving Entity or (ii) merge the Surviving Entity with and into any of its
Subsidiaries or Affiliates.
Section
5.17. Tax Treatment.
Neither Parent nor any of its Affiliates has taken or agreed to take any action,
or is aware of any fact or circumstance, that would prevent the Merger from
qualifying as a 368 Reorganization.
Section
5.18. No Other Representations
or Warranties. Except for the representations and warranties contained in
Article 4, each of Parent and Merger Subsidiary acknowledges that none of the
Company or any of its Subsidiaries, or any other Person on behalf of the Company
makes any other express or implied representation or warranty in connection with
the transactions contemplated by this Agreement.
ARTICLE
6
COVENANTS OF THE COMPANY
The
Company agrees that:
Section
6.01. Conduct of the
Company. From the date hereof until the Effective Time, (i) except as
expressly contemplated by this Agreement or set forth in Section 6.01 of the
Company Disclosure Schedule, (ii) unless Parent shall otherwise approve in
writing (such approval not to be unreasonably withheld, delayed or conditioned)
and (iii) except as required by Applicable Law, the Company shall, and shall
cause each of its Subsidiaries to, conduct its business in the ordinary course
consistent with past practice and use its reasonable best efforts to (A)
preserve intact its present business organization, (B) maintain in effect all of
its foreign, federal, state and local licenses, permits, consents, franchises,
approvals and authorizations, (C) keep available the services of its directors,
officers and key employees and (D) maintain satisfactory relationships with its
customers, lenders, suppliers and others having material business
relationships
43
(a) amend its
articles of incorporation, bylaws or other similar organizational documents
(whether by merger, consolidation or otherwise);
(b) (i)
split, combine or reclassify any shares of its capital stock, (ii) declare, set
aside or pay any dividend or other distribution (whether in cash,
stock
or
property or any combination thereof) in respect of its capital stock, except for
(A) dividends by any of its wholly-owned Subsidiaries to the Company or to other
wholly-owned Subsidiaries and (B) regular quarterly cash dividends by the
Company with customary record and payment dates on the shares of Company Stock
and Company Class B Stock not in excess of $0.18 per share per quarter or (iii)
redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or
otherwise acquire any Company Securities or any Company Subsidiary Securities,
except pursuant to any Company Stock Plan or any Company Stock Option, Company
RSU award (and any associated dividend equivalent units), Company SAR award or
Phantom Stock Unit award (and, in each case, any associated dividend equivalent
units) (including for purposes of satisfying applicable tax withholding
requirements and payment of the exercise price in respect of any Company Stock
Option);
(c) (i)
issue, deliver or sell, or authorize the issuance, delivery or sale of, any
Company Securities or Company Subsidiary Securities, other than the issuance of
(A) any shares of the Company Stock upon the exercise of Company Stock Options,
or the settlement of Company RSUs or Phantom Stock Units (in each case including
any associated dividend equivalent units), that, in each case, are outstanding
on the date of this Agreement (or granted hereafter in accordance with this
Agreement) in accordance with the terms of those awards and (B) any Company
Subsidiary Securities to the Company or any other wholly owned Subsidiary of the
Company or (ii) amend any term of any Company Security or any Company Subsidiary
Security (in each case, whether by merger, consolidation or
otherwise);
(d) incur any
capital expenditures or any obligations or liabilities in respect thereof,
except for (i) those contemplated by the capital expenditure budget that has
been made available to Parent prior to the date of this Agreement and (ii) any
unbudgeted capital expenditures not to exceed $10,000,000 individually or
$20,000,000 in the aggregate;
(e) acquire
(by merger, consolidation, acquisition of stock or assets or otherwise),
directly or indirectly, any assets, securities, properties, interests or
businesses, other than (i) supplies in the ordinary course of business
consistent
44
(f) (i) sell,
lease or otherwise transfer, or create or incur any Lien on, any of the
Company’s or its Subsidiaries’ assets, securities, properties, interests or
businesses, other than (A) sales of inventory or obsolete equipment in the
ordinary course of business consistent with past practice, (B) sales of assets,
securities, properties, interests or businesses with a sale price (including any
related assumed indebtedness) that do not exceed $10,000,000 individually or
$20,000,000 in the aggregate and (C) Permitted Liens or (ii) sell, lease,
license or otherwise dispose of or permit to lapse any material Intellectual
Property right, other than grants of non-exclusive licenses with respect to any
Intellectual Property of the Company or any of its Subsidiaries in the ordinary
course of business consistent with past practice;
(g) other
than in connection with actions permitted by Section 6.01(e), or with
wholly-owned Subsidiaries, make any loans, advances or capital contributions to,
or investments in, any other Person;
(h) (i)
create, incur, assume, suffer to exist or prepay any indebtedness for borrowed
money or guarantees thereof other than in the ordinary course of business
consistent with past practice, and in an amount that does not exceed
$250,000,000 in the aggregate or (ii) enter into, modify in any material respect
or terminate any material interest rate swaps or hedging arrangements except, in
the case of hedging arrangements, in the ordinary course of business consistent
with past practice;
(i) (i) enter
into any contract, agreement, arrangement or understanding that would constitute
a Material Contract if it had been entered into as of the date hereof or (ii)
amend, modify in any material respect or terminate any Material Contract or any
contract, agreement or understanding referred to in clause (i) or otherwise
waive, release or assign any material rights, claims or benefits of the Company
or any of its Subsidiaries thereunder;
(j) except as
required to comply with Applicable Law or any Employee Plan in accordance with
its terms on the date of this Agreement, (i) increase compensation, bonuses or
other benefits payable to any director or employee of the Company or any of its
Subsidiaries at the executive officer level; (ii) increase compensation, bonuses
or other benefits payable to any employee or independent contractor of the
Company or any of its Subsidiaries, except in the ordinary course of business
consistent with past practice and to the extent not material; (iii) enter into,
adopt or amend in any material respect any severance or retention plan,
arrangement or policy applicable to any director, executive officer, employee or
independent contractor, except in the case of non-officer individuals who are
newly hired or promoted after the date of this Agreement in the ordinary course
of business consistent with past practice; (iv) enter into, adopt or amend in
any
45
(k) change
the Company’s methods of accounting, except as required by concurrent changes in
GAAP or in Regulation S-X of the 1934 Act, as agreed to by its independent
public accountants;
(l) settle,
or offer or propose to settle, (i) any material litigation, investigation,
arbitration, proceeding or other claim involving or against the Company or any
of its Subsidiaries, (ii) any stockholder litigation or dispute against the
Company or any of its officers or directors or (iii) any litigation,
arbitration, proceeding or dispute that relates to the transactions contemplated
hereby;
(m) enter
into any material new line of business;
(n) enter
into any bottling appointment, license agreement to distribute product, bottler
funding support agreement, or any ancillary agreement or amendment to any of the
foregoing, in each case, other than in the ordinary course of business
consistent with past practice; or
(o) agree,
resolve or commit to do any of the foregoing.
Section
6.02. Company Stockholder
Meeting. (a) The Company shall cause a meeting of its stockholders (the
“Company Stockholder
Meeting”) to be duly called and held as soon as reasonably practicable
for the purpose of voting on the adoption of this Agreement. In connection with
such meeting, the Company shall promptly prepare and file with the SEC, use
reasonable best efforts to have cleared by the SEC and thereafter mail to its
stockholders as promptly as practicable the Proxy Statement (which shall be
filed as part of the Registration Statement) and all other proxy materials for
such meeting.
46
(b) Subject to Section 6.03, the Board of Directors of the Company
shall (i) recommend
adoption of this Agreement by the Company’s stockholders, (ii) use its
reasonable best efforts to obtain the Company Stockholder Approval, (iii) not
withdraw, modify or qualify the Company Board Recommendation in any manner
adverse to Parent, recommend an Acquisition Proposal (nor shall the Special
Committee recommend any of the foregoing actions in this clause (iii) to the
Board of Directors of the Company) (any of the foregoing in this clause (iii), a
“Company Adverse Recommendation
Change”) and (iv) otherwise comply with all legal requirements applicable
to such meeting.
Section
6.03. No Solicitation; Other
Offers. (a) General Prohibitions.
Neither the Company nor any of its Subsidiaries shall, nor shall the officers or
directors of the Company or any of its Subsidiaries, and the Company shall use
reasonable best efforts to instruct and cause its and its Subsidiaries’
employees, independent contractors, investment bankers, attorneys, accountants,
consultants or other agents or advisors (“Representatives”) not to,
directly or indirectly, (i) solicit, initiate or otherwise facilitate or
knowingly encourage the submission of any Acquisition Proposal, (ii) enter into
or participate in any discussions or negotiations with, furnish any information
relating to the Company or any of its Subsidiaries or afford access to the
business, properties, assets, books or records of the Company or any of its
Subsidiaries to, otherwise cooperate in any way with, or knowingly assist,
participate in, facilitate or encourage any effort by any Third Party that is
seeking to make, or has made, an Acquisition Proposal, (iii) effect a Company
Adverse Recommendation Change, (iv) grant any waiver or release under any
standstill or similar agreement with respect to any class of equity securities
of the Company or any of its Subsidiaries or under the Company Rights Agreement,
(v) approve any transaction under, or any Person becoming an “interested
stockholder” under, Section 203 of the Delaware Law or (vi) enter into any
agreement in principle, letter of intent, term sheet, merger agreement,
acquisition agreement, option agreement or other similar instrument relating to
an Acquisition Proposal. It is agreed that any violation of the restrictions on
the Company set forth in this Section by any Representative of the Company or
any of its Subsidiaries shall be a breach of this Section by the
Company.
(b) Exceptions.
Notwithstanding Section 6.02(b) or Section 6.03(a), at any time prior to the
adoption of this Agreement by the Company’s stockholders:
(i) the
Company, directly or indirectly through advisors, agents or other
intermediaries, may (A) engage in negotiations or discussions with any Third
Party and its Representatives that, subject to the Company’s compliance with
Section 6.03(a), has made after the date of this Agreement a bona fide written
Acquisition Proposal that the Board of Directors of the Company believes
constitutes or is reasonably likely to lead to a Superior Proposal and (B)
furnish to such Third Party or its Representatives nonpublic information
relating to the Company or any of its Subsidiaries pursuant to a customary
confidentiality agreement (a copy of which shall be provided for informational
purposes only to Parent) with
47
(ii) the
Board of Directors of the Company may make a Company Adverse Recommendation
Change;
in each
case referred to in the foregoing clauses (i) and (ii) only if the Board of
Directors of the Company determines in good faith, after consultation with
outside legal counsel, that the failure to take such action would be
inconsistent with its fiduciary duties under Delaware Law.
In
addition, nothing contained herein shall prevent the Board of Directors of the
Company from (i) complying with Rule 14e-2(a) under the 1934 Act with regard to
an Acquisition Proposal so long as any position taken or statement made to so
comply is consistent with this Section 6.03; provided that any such
position taken or statement made that addresses or relates to the approval,
recommendation or declaration of advisability by the Company’s Board of
Directors with respect to this Agreement or an Acquisition Proposal shall be
deemed to be a Company Adverse Recommendation Change unless the Board of
Directors of the Company reaffirms the Company Board Recommendation in such
statement or in connection with such action or (ii) issuing a “stop, look and
listen” disclosure or similar communication of the type contemplated by Rule
14d-9(f) under the 1934 Act.
(c) Required Notices. The
Board of Directors of the Company shall not take any of the actions referred to
in Section 6.03(b) unless the Company shall have delivered to Parent a prior
written notice advising Parent that it intends to take such action, and after
taking such action the Company shall continue to advise Parent on a prompt basis
of the status and terms of any discussions and negotiations with the Third
Party. In addition, the Company shall, if such action is in connection with an
Acquisition Proposal, notify Parent promptly (but in no event later than 48
hours) after receipt by the Company (or any of its Representatives) of any
Acquisition Proposal, any indication that a Third Party is considering making an
Acquisition Proposal or any request for information relating to the Company or
any of its Subsidiaries or for access to the business, properties, assets, books
or records of the Company or any of its Subsidiaries by any Third Party that may
be considering making, or has made, an Acquisition Proposal. The Company shall
provide such notice orally and in writing and shall identify the Third Party
making, and the terms and conditions of, any such Acquisition Proposal,
indication or request. The Company shall keep Parent informed, on a prompt
basis, of the status and details of any such Acquisition Proposal, indication or
request, and shall promptly (but in no event later than 48 hours after receipt)
provide to Parent copies of all correspondence and written materials sent or
provided to the Company or any of its Subsidiaries that describes
48
(d) “Last Look”. Further,
the Board of Directors of the Company shall not make a Company Adverse
Recommendation Change in response to an Acquisition Proposal, unless (i) such
Acquisition Proposal constitutes a Superior Proposal, (ii) the Company promptly
notifies Parent, in writing at least five Business Days before taking that
action, of its intention to do so, attaching the most current version of the
proposed agreement under which such Superior Proposal is proposed to be
consummated and the identity of the third party making the Acquisition Proposal,
and (iii) Parent does not make, within two Business Days after its receipt of
that written notification, an offer that is at least as favorable to the
stockholders of the Company as such Superior Proposal (it being understood and
agreed that any amendment to the financial terms or other material terms of such
Superior Proposal shall require a new written notification from the Company and
a new two Business Day period under this Section 6.03(d)).
(e) Definition of Superior
Proposal. For purposes of this Agreement, “Superior Proposal” means a
bona fide, unsolicited
written Acquisition Proposal for at least a majority of the total number of
outstanding shares of Company Stock and Company Class B Stock (considered as a
single class for this purpose) or all or substantially all of the consolidated
assets of the Company and its Subsidiaries on terms that the Board of Directors
of the Company determines in good faith by a majority vote, after considering
the advice of a financial advisor of nationally recognized reputation and
outside legal counsel and taking into account all the terms and conditions of
the Acquisition Proposal, including any break-up fees, expense reimbursement
provisions, conditions to consummation and availability of any necessary
financing, provide greater value to the Company’s stockholders (in their
capacity as stockholders of the Company) than as provided hereunder (taking into
account any proposal by Parent to amend the terms of this Agreement pursuant to
Section 6.03(d)), which the Board of Directors of the Company determines is
reasonably likely to be consummated.
(f) Obligation to Terminate
Existing Discussions. The Company shall, and shall cause
its Subsidiaries and its and their Representatives to, cease immediately and
cause to be terminated any and all existing activities, discussions or
negotiations, if any, with any Third Party and its Representatives and its
financing sources conducted prior to the date hereof with respect to any
Acquisition Proposal.
(g) Board Actions. Any
determination made or action taken by the Board of
Directors of the Company in accordance with Sections 6.03(b) and 6.03(d) shall
be made or taken only after receipt of the affirmative recommendation of the
Special Committee with respect to such determination or
49
Section
6.04. Tax Matters. (a)
From the date hereof until the Effective Time, neither the Company nor any of
its Subsidiaries shall make or change any material Tax election, change any
annual tax accounting period, adopt or change any method of tax accounting, file
any material amended Tax Returns or claims for material Tax refunds, enter into
any material closing agreement, surrender any material Tax claim, audit or
assessment, surrender any right to claim a material Tax refund, offset or other
reduction in Tax liability, consent to any extension or waiver of the
limitations period applicable to any Tax claim or assessment or take or omit to
take any other action, if any such action or omission would have the effect of
increasing the Tax liability or reducing any Tax asset of the Company or any of
its Subsidiaries.
(b) The
Company and each of its Subsidiaries shall establish or cause to be established
in accordance with GAAP on or before the Effective Time an adequate accrual for
all Taxes due with respect to any period or portion thereof ending prior to or
as of the Effective Time.
ARTICLE
7
COVENANTS OF PARENT
Parent
agrees that:
Section
7.01. Conduct of
Parent. From the date hereof until the Effective Time, except as
otherwise contemplated herein or in the Concurrent Merger Agreement, Parent
shall, and shall cause each of its Subsidiaries to conduct its business in the
ordinary course consistent with past practice and use its reasonable best
efforts to preserve intact its business organizations and relationships with
Third Parties and to keep available the services of its present officers and
employees. Without limiting the generality of the foregoing, from the date
hereof until the Effective Time Parent shall not, nor shall it permit any of its
Subsidiaries to:
(a) amend the
articles of incorporation or bylaws of Parent in a manner that would have a
material and adverse impact on the value of Parent Stock;
(b) adopt or
implement a plan of complete or partial liquidation or resolution providing for
or authorizing such liquidation or a dissolution, merger, consolidation or
recapitalization of Parent;
(c) agree,
resolve or commit to do any of the foregoing; or
(d) enter
into, modify, amend or terminate any contract, arrangement, commitment or
understanding or waive, release or assign any rights or claims
50
Section
7.02. Obligations of Merger
Subsidiary. Parent shall take all action necessary to cause Merger
Subsidiary to perform its obligations under this Agreement and to consummate the
Merger on the terms and conditions set forth in this Agreement.
Section
7.03. Voting of Company
Stock. Parent shall vote or cause to be voted all shares of Company Stock
and Company Class B Stock beneficially owned by it or any of its Subsidiaries in
favor of adoption of this Agreement at the Company Stockholder Meeting. At or
prior to the Company Stockholder Meeting, Parent shall vote or cause to be voted
separately as a class (at the Company Stockholder Meeting or by written consent)
all shares of Company Class B stock beneficially owned by it or any of its
Subsidiaries in favor of adoption of this Agreement at the Company Stockholder
Meeting (the “Parent
Class B
Approval”).
Section
7.04. Director and Officer
Liability. Parent shall cause the Surviving Entity, and the Surviving
Entity hereby agrees, to do the following:
(a) From and
after the Effective Time, each of Parent and the Surviving Entity shall
indemnify and hold harmless the present and former directors and officers of the
Company (each, an “Indemnified
Person”) in respect of acts or omissions occurring at or prior to the
Effective Time to the fullest extent permitted by Delaware Law or any other
Applicable Law or provided under the Company’s certificate of incorporation and
bylaws in effect on the date hereof.
(b) Parent
shall cause to be maintained in effect (i) provisions in the Surviving Entity’s
certificate of incorporation and bylaws (or in such documents of any successor
to the business of the Surviving Entity) regarding elimination of liability of
directors, indemnification of directors, officers and employees and advancement
of expenses that are no less advantageous to the intended beneficiaries than the
corresponding provisions in existence on the date of this Agreement and (ii) in
accordance with its terms each indemnification agreement between the Company and
any officer or director of the Company in effect as of the date of this
Agreement.
(c) Prior to
the Effective Time, the Company shall or, if the Company is unable to, Parent
shall cause the Surviving Entity as of the Effective Time, to obtain and fully
pay the premium for the extension of (i) the directors’ and officers’ liability
coverage of the Company’s existing directors’ and officers’ insurance policies
and (ii) the Company’s existing fiduciary liability insurance policies
(collectively, “D&O
Insurance”), in each case for a claims reporting or
51
(d) If
Parent, the Surviving Entity or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers or conveys all or substantially all of its properties and
assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Parent or
the Surviving Entity, as the case may be, shall assume the obligations set forth
in this Section 7.04.
(e) The
rights of each Indemnified Person under this Section 7.04 shall be in addition
to any rights such Person may have under the certificate of incorporation or
bylaws of the Company or any of its Subsidiaries, or under Delaware Law or any
other Applicable Law or under any agreement of any Indemnified Person with the
Company or any of its Subsidiaries. These rights shall survive consummation of
the Merger and are intended to benefit, and shall be enforceable by, each
Indemnified Person.
Section
7.05. Stock Exchange
Listing. Parent shall use its reasonable best efforts to cause the shares
of Parent Stock to be issued as part of the Merger Consideration to be listed on
the New York Stock Exchange, subject to official notice of
issuance.
Section
7.06. Employee Matters.
(a) For a period of one year following the Effective Time, Parent shall provide
to all employees of the Company or any of its Subsidiaries as of the Effective
Time who continue employment with the Surviving Entity or any of its Affiliates
(“Continuing Employees”)
compensation and benefits (other than equity based compensation) that are in the
aggregate substantially comparable to the compensation and benefits provided
by
52
(b) With
respect to any “employee benefit plan,” as defined in Section 3(3) of ERISA,
maintained by Parent or any of its Subsidiaries, including the Surviving Entity,
in which any Continuing Employee becomes a participant, such Continuing Employee
shall receive full credit for purposes of eligibility to participate and vesting
thereunder (but not for purposes of benefit accruals) for service with the
Company or any of its Subsidiaries (or predecessor employers to the extent the
Company provides such past service credit) to the same extent that such service
was recognized as of the Effective Time under a comparable plan of the Company
and its Subsidiaries in which the Continuing Employee participated.
(c) With
respect to any welfare plan maintained by Parent or any of its Subsidiaries,
including the Surviving Entity, in which any Continuing Employee is eligible to
participate after the Effective Time, Parent shall, or shall cause its
Subsidiaries to, (i) waive all limitations as to preexisting conditions and
exclusions with respect to participation and coverage requirements applicable to
such employees to the extent such conditions and exclusions were satisfied or
did not apply to such employees under the welfare plans of the Company or its
Subsidiaries prior to the Effective Time and (ii) provide each Continuing
Employee with credit for any co-payments and deductibles paid and for out-of-
pocket maximums incurred prior to the Effective Time in satisfying any analogous
deductible or out-of-pocket requirements to the extent applicable under any such
plan.
(d) Parent
shall, and shall cause its Subsidiaries, including the Surviving Entity, to
honor, in accordance with its terms, each Employee Plan including the retention
arrangements specified on Section 7.06(d) of the Company Disclosure Schedule and
all obligations thereunder, including any rights or benefits arising as a result
of the transactions contemplated hereby (either alone or in combination with any
other event, including termination of employment). Parent hereby agrees and
acknowledges that the consummation of the Merger constitutes a change of control
or a change in control, as the case may be, for all purposes under any plan or
agreement set forth on Section 7.06(d) of the Company Disclosure
Schedule.
(e) With
respect to the annual bonus for which any employee of the Company or any of its
Subsidiaries is eligible under any of the Company’s annual incentive plans with
respect to the year in which the Effective Time occurs, Parent shall administer
each such plan (including the payment of all amounts owed thereunder at the
ordinary time) in accordance with its terms; provided that the amount
payable to such employee under such plan shall be determined in accordance with
the terms of such plan and based on the attainment of applicable performance
goals as mutually determined in the reasonable, good faith judgment of Parent
and the Company. With respect to the annual bonus for which any employee of the
Company or any of its Subsidiaries is eligible under any of the
53
(f)
Nothing in this Section 7.06 shall (i) be treated as an amendment of, or
undertaking to amend, any benefit plan, (ii) prohibit Parent or any of its
Subsidiaries, including the Surviving Entity, from amending any employee benefit
plan subject to Section 7.06(e), (iii) obligate Parent, the Company, the
Surviving Entity or any of their respective Affiliates to retain the employment
of any particular employee or (iv) confer any rights or benefits on any person
other than the parties to this Agreement.
Section
7.07. Limitation on
Acquisitions. Prior to the Effective Time Parent shall not, and shall
cause its Subsidiaries not to, acquire or agree to acquire any Person (other
than PAS) if such acquisition would reasonably be expected to prevent, hinder or
delay the consummation of the transactions contemplated by this Agreement or to
make it more difficult, or to increase the time required, to obtain the
expiration or termination of the waiting period under the HSR Act or any other
applicable Competition Laws applicable to the transactions contemplated by this
Agreement.
Section
7.08. Certain
Litigation. On or as soon as practicable after the date of this Agreement
and no later than two Business Days after the date of this Agreement, Parent
shall take all steps necessary to cause the plaintiffs in the action captioned
PepsiCo, Inc., et al.
v. Pepsi Bottling Group, Inc., et al., C.A. No. 4575, pending in the
Court of Chancery of the State of Delaware, to file a Notice of Voluntary
Dismissal pursuant to Rule 41(a)(1) of the Rules of the Court of Chancery of the
State of Delaware, which Notice shall be reasonably acceptable to the Company,
such that the action is dismissed with prejudice so as not to be brought in any
court of the States or the United States.
Section
7.09. Company
Indebtedness. At or prior to the Effective Time, Merger Subsidiary shall,
and Parent shall cause Merger Subsidiary to, expressly assume the due and
punctual payment of the principal of and premium, if any, and interest on the
7.00% Senior Notes due March 1, 2029 outstanding pursuant to an indenture dated
as of March 8, 1999, among the Company, as obligor, Bottling Group, LLC, as
guarantor, and The Chase Manhattan Bank, as trustee (such indenture, the “2009 Indenture”) and the
performance of every covenant of the 2029 Indenture to be performed or observed
by the Company, such assumption to take effect as of the Effective Time and by a
supplemental indenture executed and delivered to the trustee in a form
satisfactory to such trustee.
54
COVENANTS OF PARENT AND THE COMPANY
The
parties hereto agree that:
Section
8.01. Reasonable Best
Efforts. (a) Subject to the terms and conditions of this Agreement, the
Company and Parent shall use their reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under Applicable Law to consummate the transactions
contemplated by this Agreement, including (i) preparing and filing as promptly
as practicable with any Governmental Authority or other third party all
documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents;
(ii) obtaining and maintaining all approvals, consents, registrations, permits,
authorizations and other confirmations required to be obtained from any
Governmental Authority or other third party that are necessary, or desirable to
consummate the transactions contemplated by this Agreement; (iii) to the extent
proper and advisable, participating and actively defending against or otherwise
pursuing any litigation that may be commenced by a Governmental Authority
relating to this Agreement or the transactions contemplated hereby; (iv) in the
event that the United States Federal Trade Commission (the “FTC”) or the United States
Department of Justice (the “DOJ”) issues a Request for
Additional Information and Documentary Material (a “Second Request”) under the HSR
Act in relation to the Merger and the other transactions contemplated by this
Agreement, taking such measures as may be reasonably necessary to limit the
scope of such Second Request, certifying substantial compliance with such Second
Request and otherwise responding to and seeking to resolve any requests for
information, documents, data or testimony made by the FTC or the DOJ under the
HSR Act; (v) securing clearance under all applicable Competition Laws (including
the expiration or termination of any applicable waiting period thereunder) of
the Merger and the other transactions contemplated by this Agreement by the
Termination Date; and (vi) preventing the entry of, and having vacated, lifted,
reversed or overturned, any decree, judgment, injunction or other order relating
to any applicable Competition Law that would prevent, prohibit, restrict or
delay the consummation of the Merger and the other transactions contemplated by
this Agreement; provided that the parties
hereto understand and agree that in no event shall the Company, Parent or Merger
Subsidiary be required by this Section 8.01 or any other provision of this
Agreement (A) to enter into any settlement, undertaking, consent decree,
stipulation or agreement with any Governmental Authority in connection with the
transactions contemplated hereby or (B) to divest or otherwise hold separate
(including by establishing a trust or otherwise), or take any other action (or
otherwise agree to do any of the foregoing) in the case of either of the
foregoing clauses (A) or (B) with respect to any of the material businesses,
assets or properties of Parent or the Company or any of their respective
material Subsidiaries.
55
Section
8.02. SEC Matters. (a)
As promptly as practicable after the date hereof, Parent and the Company shall
prepare and file the Registration Statement (in which the Proxy Statement will
be included) and the Schedule 13E-3 with the SEC. Parent and the Company shall
use their reasonable best efforts to cause the Schedule 13E-3 to be cleared by
the SEC and the Registration Statement to become effective under the 1933 Act as
soon after each such filing as practicable and to keep the Registration
Statement effective as long as is necessary to consummate the Merger. Subject to
Section 6.03, the Proxy Statement shall include the recommendation of the Board
of Directors of the Company (including the Special Committee) in favor of
adoption of this Agreement. The Company shall use its reasonable best efforts to
cause the Proxy Statement to be mailed to its stockholders as promptly as
practicable after the Registration Statement becomes effective. Each of the
Company and Parent shall promptly provide copies, consult with each other and
prepare written responses with respect to any written comments received from the
SEC with respect to the Schedule 13E-3, the Proxy Statement and the Registration
Statement and advise one another of any oral comments received from the SEC.
Each of the Company and Parent shall use its reasonable best efforts to ensure
that the Registration Statement, the Proxy Statement and the Schedule 13E-3
comply in all material respects with the rules and regulations promulgated by
the SEC under the 1933 Act and the 1934 Act, as the case may be.
(b) The
Company and Parent shall make all necessary filings with respect to the Merger
and the transactions contemplated hereby under the 1933 Act and the 1934 Act and
applicable state “blue sky” laws and the rules and regulations thereunder. Each
of the Company and Parent will advise the other party, promptly after it
receives notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, the issuance of any
stop order, the suspension of the qualification of the Parent Stock issuable in
connection with the Merger for offering or sale in any
56
Section
8.03. Public
Announcements. Parent and the Company shall consult with each other
before issuing any press release (including by providing the other party a
reasonable opportunity to comment thereon), having any communication with the
press (whether or not for attribution), making any other public statement or
scheduling any press conference or conference call with investors or analysts
with respect to this Agreement or the transactions contemplated hereby and,
except in respect of any public statement or press release as may be required by
Applicable Law or any listing agreement with or rule of any national securities
exchange or association, shall not issue any such press release, make any such
other public statement or schedule any such press conference or conference call
before such consultation. This Section 8.03 shall not apply to matters referred
to in Section 6.03.
Section
8.04. Further
Assurances. At and after the Effective Time, the officers of the
Surviving Entity shall be authorized to execute and deliver, in the name and on
behalf of the Company or Merger Subsidiary, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of the
Company or Merger Subsidiary, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Entity any and all right, title
and interest in, to and under any of the rights, properties or assets of the
Company acquired or to be acquired by the Surviving Entity as a result of, or in
connection with, the Merger.
Section
8.05. Access to
Information. From the date hereof until the Effective Time and subject to
Applicable Law and the Confidentiality Agreement dated August 1, 2009 between
the Company and Parent (the “Confidentiality Agreement”) the Company and
Parent shall and shall cause each of its respective Subsidiaries to (a) give
to the other party, its counsel, financial advisors, auditors and other
authorized representatives reasonable access to the offices, properties, books
and records of such party, (b) furnish to the other party, its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information as such Persons may reasonably
request
57
Section
8.06. Notices of Certain
Events. Each of the Company and Parent shall promptly notify and provide
copies to the other of:
(a) any
notice or other communication from any Person alleging that the consent of such
Person is or may be required in connection with the transactions contemplated by
this Agreement;
(b) any
notice or other communication from any Governmental Authority in connection with
the transactions contemplated by this Agreement;
(c) any
actions, suits, claims, investigations or proceedings commenced or, to its
knowledge, threatened against, relating to or involving or otherwise affecting
the Company or any of its Subsidiaries or Parent and any of its Subsidiaries, as
the case may be, that, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to any Section of this Agreement or
that relate to the consummation of the transactions contemplated by this
Agreement;
(d) any
inaccuracy of such party’s representation or warranty contained in this
Agreement at any time during the term hereof that would reasonably be expected
to cause any condition set forth in Article 9 not to be satisfied;
and
(e) any
failure of such party to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder;
provided, that the delivery
of any notice pursuant to this Section 8.06 shall not limit or otherwise
affect the remedies available hereunder to the party receiving that
notice.
Section
8.07. Tax-free
Reorganization. (a) Prior to the Effective Time, each of Parent and the
Company shall use its reasonable best efforts to cause the Merger to qualify as
a 368 Reorganization, and shall not take any action reasonably likely to cause
the Merger not so to qualify. Parent shall not take, or cause the Surviving
Entity to take, any action after the Effective Time reasonably likely to cause
the Merger not to qualify as a 368 Reorganization.
58
Section
8.08. Section 16
Matters. Prior to the Effective Time, each party shall take all such
steps as may be required to cause any dispositions of Company Stock (including
derivative securities with respect to Company Stock) or acquisitions of Parent
Stock (including derivative securities with respect to Parent Stock) resulting
from the transactions contemplated by Article 2 of this Agreement by each
individual who is subject to the reporting requirements of Section 16(a) of the
1934 Act with respect to the Company and will become subject to such reporting
requirements with respect to Parent to be exempt under Rule 16b-3 promulgated
under the 1934 Act.
Section
8.09. Stock Exchange
De-listing. Prior to the Effective Time, the Company shall cooperate with
Parent and use its reasonable best efforts to take, or cause to be taken, all
actions, and do or cause to be done all things, reasonably necessary, proper or
advisable on its part under Applicable Laws and rules and policies of the NYSE
to enable the de-listing by the Surviving Entity of the Company Stock from the
NYSE and the deregistration of the Company Stock under the 1934 Act as promptly
as practicable after the Effective Time, and in any event no more than ten days
after the Effective Time.
Section
8.10. Merger Subsidiary
Reincorporation. Prior to Closing, Parent may cause Merger Subsidiary to
be reincorporated as a Delaware corporation (by merger, reincorporation or
otherwise).
ARTICLE
9
CONDITIONS TO THE MERGER
Section
9.01. Conditions to the
Obligations of Each Party. The obligations of the Company, Parent and
Merger Subsidiary to consummate the Merger are subject to the satisfaction of
the following conditions:
(a) the
Company Stockholder Approval shall have been obtained in accordance with
Delaware Law;
(b) no
Applicable Law shall prohibit the consummation of the Merger;
(c) any
applicable waiting period under the HSR Act relating to the Merger and any
agreement between Parent, the Company and any Governmental Authority not to
consummate the Merger prior to a specific date shall have expired or been
terminated;
(d) the
Registration Statement shall have been declared effective and no stop order
suspending the effectiveness of the Registration Statement shall be
in
59
(e) the
shares of Parent Stock to be issued in the Merger shall have been approved for
listing on the New York Stock Exchange, subject to official notice of issuance;
and
(f) other
than the actions and filings referenced in Section 9.01(c), all material actions
by or in respect of, or material filings with, any Governmental Authority,
required to permit the consummation of the Merger shall have been taken, made or
obtained.
Section
9.02. Conditions to the
Obligations of Parent and Merger Subsidiary. The obligations
of Parent and Merger Subsidiary to consummate the Merger are subject to
the satisfaction of the following further conditions:
(a) (i) the
Company shall have performed in all material respects all of its obligations
hereunder required to be performed by it at or prior to the Effective Time, (ii)
(A) the representations and warranties of the Company contained in Section 4.05
shall be true in all respects (except for such inaccuracies as are de minimis relative to Section
4.05 taken as a whole) at and as of the Effective Time as if made at and as of
such time (other than such representations and warranties that by their terms
address matters only as of another specified time, which shall be true in all
respects only as of such time), (B) the representations and warranties of the
Company contained in Sections 4.01, 4.02, 4.21, 4.22 and 4.23 shall be true in
all material respects at and as of the Effective Time as if made at and as of
such time (other than such representations and warranties that by their terms
address matters only as of another specified time, which shall be true in all
material respects only as of such time) and (C) the other representations and
warranties of the Company contained in this Agreement or in any certificate or
other writing delivered by the Company pursuant hereto (disregarding all
materiality and Material Adverse Effect qualifications contained therein) shall
be true at and as of the Effective Time as if made at and as of such time (other
than representations and warranties that by their terms address matters only as
of another specified time, which shall be true only as of such time), with, in
the case of this clause (C) only, only such exceptions as have not had and would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company; and (iii) Parent shall have received a
certificate signed by an executive officer of the Company to the foregoing
effect;
(b) there
shall not be pending any action or proceeding by any Governmental Authority, (i)
challenging or seeking to make illegal, to delay materially or otherwise
directly or indirectly to restrain or prohibit the consummation of the Merger,
seeking to obtain material damages or otherwise directly or indirectly relating
to the transactions contemplated by the Merger, (ii) seeking to restrain or
prohibit Parent’s, Merger Subsidiary’s or any of Parent’s other Affiliates’ (A)
ability effectively to exercise full rights of ownership of the
60
(c) there
shall not have been any action taken, or any Applicable Law enacted, enforced,
promulgated, issued or deemed applicable to the Merger, by any Governmental
Authority, other than the application of the waiting period provisions of the
HSR Act to the Merger, that would reasonably be expected to, individually or in
the aggregate, result in any of the consequences referred to in clauses (i)
through (iv) of Section 9.02(b);
(d) Parent
shall have received an opinion of Davis Polk & Wardwell LLP in form and substance
reasonably satisfactory to Parent, on the basis of certain facts,
representations and assumptions set forth in such opinion, dated the Effective
Time, to the effect that the Merger will be treated for federal income tax
purposes as a reorganization qualifying under the provision of Section 368(a) of
the Code and that each of Parent, Merger Subsidiary and the Company will be a
party to the reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, Davis Polk & Wardwell LLP shall be entitled to rely
upon representations of officers of Parent and the Company substantially in the
form of Exhibits A and B hereto; and
(e) from the
date of this Agreement to the Effective Time, there shall not have occurred and
be continuing any event, occurrence, development or state of circumstances or
facts which, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect on the Company.
Section
9.03. Conditions to the
Obligations of the Company. The obligations of the Company to consummate
the Merger are subject to the satisfaction of the following further
conditions:
(a) (i)
each of Parent and Merger Subsidiary shall have performed in all material
respects all of its obligations hereunder required to be performed by it at or
prior to the Effective Time, (ii) (A) the representations and warranties of
Parent contained in Section 5.01, 5.02, 5.05 and 5.16 shall be true in all
material respects at and as of the Effective Time as if made at and as of such
time (other than such representations and warranties that by their terms address
matters only as of another specified time, which shall be true in all material
respects only as of such
61
(b) the
Company shall have received an opinion of Cravath, Swaine & Moore LLP in
form and substance reasonably satisfactory to the Company, on the basis of
certain facts, representations and assumptions set forth in such opinion, dated
the Effective Time, to the effect that the Merger will be treated for federal
income tax purposes as a reorganization qualifying under the provisions of
Section 368(a) of the Code and that each of Parent, Merger Subsidiary and the
Company will be a party to the reorganization within the meaning of Section
368(b) of the Code. In rendering such opinion, Cravath, Swaine & Moore LLP
shall be entitled to rely upon representations of officers of Parent and the
Company substantially in the form of Exhibit A and B hereto; and
(c) from the
date of this Agreement to the Effective Time, there shall not have occurred and
be continuing any event, occurrence, development or state of circumstances or
facts which, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect on Parent.
ARTICLE
10
TERMINATION
Section
10.01. Termination.
This Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time (notwithstanding any approval of this Agreement by
the stockholders of the Company):
(a) by mutual
written agreement of the Company and Parent;
(b) by either
the Company or Parent, if:
(i) the
Merger has not been consummated on or before August 3, 2010 (the “End Date”); provided that the right to
terminate this Agreement pursuant to this Section 10.01(b)(i) shall not be
available to any party whose breach of any provision of this Agreement results
in the failure of the Merger to be consummated by such time;
62
(iii) at the
Company Stockholder Meeting (including any adjournment or postponement thereof),
the Company Stockholder Approval shall not have been obtained; or
(c) by
Parent:
(i) (A) prior
to the Company Stockholder Meeting, if a Company Adverse Recommendation Change
shall have occurred or (B) if the Company materially breaches its obligations
under this Agreement by reason of a failure to call the Company Stockholders
Meeting in accordance with Section 6.02; or
(ii) if a
breach of any representation or warranty or failure to perform any covenant or
agreement on the part of the Company set forth in this Agreement shall have
occurred that would cause the condition set forth in Section 9.02(a) not to be
satisfied, and such condition is incapable of being satisfied by the End Date;
or
(d) by the
Company, if a breach of any representation or warranty or failure to perform any
covenant or agreement on the part of the Parent or Merger Subsidiary set forth
in this Agreement shall have occurred that would cause the condition set forth
in Section 9.03(a) not to be satisfied, and such condition is incapable of being
satisfied by the End Date.
The party
desiring to terminate this Agreement pursuant to this Section 10.01 (other than
pursuant to Section 10.01(a)) shall give notice of such termination to the other
party.
Section
10.02. Effect of
Termination. If this Agreement is terminated pursuant to Section 10.01,
this Agreement shall become void and of no effect without liability of any party
(or any stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other party hereto; provided that, if such
termination shall result from the knowing and intentional (i) failure of either party
to fulfill a condition to the performance of the obligations of the other party
or (ii) failure of either party to perform a covenant hereof, such party shall
be fully liable for any and all liabilities and damages incurred or suffered by
the other party as a result of such failure. The provisions of this Section
10.02 and Sections 11.04, 11.07, 11.08 and 11.09, and the Confidentiality
Agreement, shall survive any termination hereof pursuant to Section
10.01.
63
MISCELLANEOUS
Section
11.01. Notices. All
notices, requests and other communications to any party hereunder shall be in
writing (including facsimile transmission) and shall be given,
if to
Parent or Merger Subsidiary, to:
PepsiCo,
Inc.
700
Anderson Hill Road
Purchase,
New York 10577
Attention:
Larry D. Thompson
Facsimile
No.: (914) 253-2070
with a
copy to:
Davis
Polk & Wardwell LLP
450
Lexington Avenue
New York,
New York 10017
Attention:
George R. Bason, Jr.
Marc O.
Williams
Facsimile
No.: (212) 450-3800
if to the
Company, to:
The Pepsi
Bottling Group, Inc.
1 Pepsi
Way
Somers,
New York 10589
Attention:
Steven M. Rapp
Facsimile
No.: (914) 767-7944
with a
copy to:
Cravath,
Swaine & Moore LLP
Worldwide
Plaza
825
Eighth Avenue
New York,
New York 10019
Attention:
Robert I. Townsend, III
George F.
Schoen
Facsimile
No.: (212) 474-3700
or to
such other address or facsimile number as such party may hereafter specify for
the purpose by notice to the other parties hereto. All such notices, requests
and other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5:00 p.m. on a business day in the place
of
64
Section
11.02. Survival of
Representations and Warranties. The representations and warranties
contained herein and in any certificate or other writing delivered pursuant
hereto shall not survive the Effective Time.
Section
11.03. Amendments and
Waivers. (a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, but only if, such amendment or waiver is in
writing and is signed, in the case of an amendment, by each party to this
Agreement or, in the case of a waiver, by each party against whom the waiver is
to be effective; provided that after the
Company Stockholder Approval has been obtained there shall be no amendment or
waiver that would require the further approval of the stockholders of the
Company under Delaware Law without such approval having first been
obtained.
(b) No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
Applicable Law.
Section
11.04. Expenses. (a)
General. Except
as otherwise provided herein, all costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or
expense.
(b) Termination
Fee.
(i) If this
Agreement is terminated by Parent pursuant to Section 10.01(c)(i), then the
Company shall pay to Parent in immediately available funds $165,300,000 (the
“Company Termination
Fee”) within one Business Day after such termination.
(ii) If (A)
this Agreement is terminated by Parent or the Company pursuant to Section
10.01(b)(i) and the Company Stockholder Meeting has not been held or Section
10.01(b)(iii), (B) after the date of this Agreement and prior to such
termination, an Acquisition Proposal shall have been publicly announced and (C)
within 12 months following the date of such termination, the Company shall have
entered into a definitive agreement with respect to or recommended to its
stockholders an Acquisition Proposal or an Acquisition Proposal shall have been
consummated (provided
that for purposes of this clause (C), each reference to “15%” in the definition
of Acquisition Proposal shall be deemed to be a reference to “50%”), then the
Company shall pay to Parent in immediately available funds, concurrently with
the occurrence of the applicable event described in clause (C), the Company
Termination Fee.
65
Section
11.05. Disclosure Schedule and
SEC Document References. (a) The parties hereto agree that any reference
in a particular Section of either the Company Disclosure Schedule or the Parent
Disclosure Schedule shall only be deemed to be an exception to (or, as
applicable, a disclosure for purposes of) (i) the
representations and warranties (or covenants, as applicable) of the relevant
party that are contained in the corresponding Section of this Agreement and
(ii) any other
representations and warranties of such party that is contained in this
Agreement, but only if the relevance of that reference as an exception to (or a
disclosure for purposes of) such representations and warranties would be readily
apparent to a reasonable person who has read that reference and such
representations and warranties, without any independent knowledge on the part of
the reader regarding the matter(s) so disclosed.
(b) The
parties hereto agree that any information contained in any part of any Company
SEC Document or Parent SEC Document shall only be deemed to be an exception to
(or a disclosure for purposes of) the applicable party’s representations and
warranties if the relevance of that information as an exception to (or a
disclosure for purposes of) such representations and warranties would be
reasonably apparent to a person who has read that information concurrently with
such representations and warranties, without any independent knowledge on the
part of the reader regarding the matter(s) so disclosed; provided that in no event
shall any information contained in any part of any Company SEC Document or
Parent SEC Document entitled “Risk Factors”, “Cautionary Statement”, “Cautionary
Statements” or containing a description or explanation of “Forward- Looking
Statements” be deemed to be an exception to (or a disclosure for purposes of)
any representations and warranties of any party contained in this
Agreement.
Section
11.06. Binding Effect;
Benefit; Assignment. (a) The provisions of this Agreement shall be
binding upon and, except as provided in Section 7.04, shall inure to the benefit
of the parties hereto and their respective successors and assigns. Except as
provided in Section 7.04, no provision of this Agreement is intended to confer
any rights, benefits, remedies, obligations or liabilities hereunder upon any
Person other than the parties hereto and their respective successors and
assigns.
(b) No
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of each other
party
66
Section
11.07. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware, without regard to the conflicts of law rules of such
state, except to the extent the laws of the State of New Jersey are mandatorily
applicable to the Merger.
Section
11.08. Jurisdiction.
The parties hereto agree that any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby (whether brought by any
party or any of its Affiliates or against any party or any of its Affiliates)
shall be brought in the Delaware Chancery Court or, if such court shall not have
jurisdiction, any federal court located in the State of Delaware or other
Delaware state court, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or proceeding
may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 11.01 shall
be deemed effective service of process on such party. Merger Subsidiary agrees
that it may be served with process in Delaware in any proceeding for enforcement
of any obligation of the Company, as well as for enforcement of any of its
obligations arising from the Merger, including any suit or other proceeding to
enforce the right of any stockholder as determined in an appraisal proceeding
under Section 262 of Delaware Law and irrevocably appoints the Secretary of
State of the State of Delaware as its agent to accept service of process in any
such suit or other proceeding.
Section
11.09. WAIVER OF JURY
TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section
11.10. Counterparts;
Effectiveness. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
67
Section
11.11. Entire
Agreement. This Agreement and the Confidentiality Agreement constitute
the entire agreement between the parties with respect to the subject matter of
this Agreement and supersede all prior agreements and understandings, both oral
and written, between the parties with respect to the subject matter of this
Agreement.
Section
11.12. Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other Governmental Authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated 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 a determination, the parties 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 in order
that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
[The
remainder of this page has been intentionally left blank; the next page is the
signature page.]
68
|
THE
PEPSI BOTTLING GROUP, INC.
|
|||
|
By:
|
/s/ Eric J. Foss | ||
|
Name:
|
Eric J. Foss | ||
|
Title:
|
Chief Executive Officer | ||
|
PEPSICO,
INC.
|
|||
|
By:
|
/s/ Larry D. Thompson | ||
|
Name:
|
Larry D. Thompson | ||
|
Title:
|
Senior Vice President, Government Affairs, General Counsel and Secretary | ||
|
PEPSI-COLA
METROPOLITAN BOTTLING COMPANY, INC.
|
|||
|
By:
|
/s/ Thomas H. Tamoney, Jr. | ||
|
Name:
|
Thomas H. Tamoney, Jr. | ||
|
Title:
|
Secretary | ||
Exhibit
2.2
EXECUTION
VERSION
AGREEMENT
AND PLAN OF MERGER
dated
as of
August
3, 2009
among
PEPSIAMERICAS,
INC.,
PEPSICO,
INC.
and
PEPSI-COLA
METROPOLITAN BOTTLING COMPANY, INC.
TABLE OF
CONTENTS1
Page
|
ARTICLE
1
|
|
|
DEFINITIONS
|
|
|
Section
1.01. Definitions
|
1
|
|
Section
1.02. Other
Definitional and Interpretative Provisions
|
8
|
|
ARTICLE
2
|
|
|
THE MERGER
|
|
|
Section
2.01. The
Merger
|
9
|
|
Section
2.02. Conversion of
Shares
|
9
|
|
Section
2.03. Elections
|
11
|
|
Section
2.04. Proration of Cash
Election Price
|
11
|
|
Section
2.05. Election Procedures; Exchange
Agent; Surrender and Payment
|
12
|
|
Section
2.06. Equity-Based
Awards
|
16
|
|
Section
2.07. Adjustments
|
17
|
|
Section
2.08. Fractional
Shares
|
17
|
|
Section
2.09. Withholding
Rights
|
17
|
|
Section
2.10. Lost
Certificates
|
17
|
|
Section
2.11. Dissenting
Shares
|
18
|
|
ARTICLE
3
|
|
|
THE SURVIVING ENTITY
|
|
|
Section
3.01. Certificate of
Incorporation
|
18
|
|
Section
3.02. Bylaws
|
18
|
|
Section
3.03. Directors and
Officers
|
18
|
|
ARTICLE
4
|
|
|
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
|
|
Section
4.01. Existence and
Power
|
19
|
|
Section
4.02. Authorization
|
19
|
|
Section
4.03. Governmental
Authorization
|
20
|
|
Section
4.04. Non-contravention
|
20
|
|
Section
4.05. Capitalization
|
20
|
|
Section
4.06. Subsidiaries
|
21
|
|
Section
4.07. SEC
Filings and the Sarbanes-Oxley Act
|
22
|
|
Section
4.08. Financial
Statements
|
24
|
|
Section
4.09. Disclosure
Documents
|
24
|
1 The Table of Contents is not a part of
this Agreement.
i
|
Section
4.10. Absence
of Certain Changes
|
25
|
|
Section
4.11. No
Undisclosed Material Liabilities
|
25
|
|
Section
4.12. Compliance with Laws and Court
Orders
|
26
|
|
Section
4.13. Litigation
|
26
|
|
Section
4.14. Intellectual
Property
|
26
|
|
Section
4.15. Taxes
|
26
|
|
Section
4.16. Employees and Employee Benefit
Plans; ERISA
|
28
|
|
Section
4.17. Labor
|
31
|
|
Section
4.18. Environmental
Matters
|
32
|
|
Section
4.19. Material
Contracts
|
32
|
|
Section
4.20. Tax
Treatment
|
33
|
|
Section
4.21. Finders’
Fees
|
33
|
|
Section
4.22. Opinion
of Financial Advisor
|
34
|
|
Section
4.23. Antitakeover Statutes and
Related Matters
|
34
|
|
Section
4.24. Foreign
Practices
|
34
|
|
Section
4.25. No
Other Representations or Warranties
|
35
|
|
ARTICLE
5
|
|
|
REPRESENTATIONS AND WARRANTIES OF PARENT
|
|
|
Section
5.01. Existence and
Power
|
35
|
|
Section
5.02. Authorization
|
35
|
|
Section
5.03. Governmental
Authorization
|
36
|
|
Section
5.04. Non-contravention
|
36
|
|
Section
5.05. Capitalization
|
37
|
|
Section
5.06. Subsidiaries
|
37
|
|
Section
5.07. SEC
Filings and the Sarbanes-Oxley Act
|
38
|
|
Section
5.08. Financial
Statements
|
39
|
|
Section
5.09. Disclosure
Documents
|
40
|
|
Section
5.10. Absence
of Certain Changes
|
40
|
|
Section
5.11. No
Undisclosed Material Liabilities
|
41
|
|
Section
5.12. Compliance with Laws and Court
Orders
|
41
|
|
Section
5.13. Litigation
|
41
|
|
Section
5.14. Finders’
Fees
|
41
|
|
Section
5.15. Financing
|
41
|
|
Section
5.16. Tax
Treatment
|
42
|
|
Section
5.17. No
Planned Liquidations or Mergers
|
42
|
|
Section
5.18. Concurrent Merger
Documents
|
42
|
|
Section
5.19. No
Other Representations or Warranties
|
42
|
|
ARTICLE
6
|
|
|
COVENANTS OF THE COMPANY
|
|
|
Section
6.01. Conduct
of the Company
|
42
|
|
Section
6.02. Company
Stockholder Meeting
|
45
|
|
Section
6.03. No
Solicitation; Other Offers
|
46
|
|
Section
6.04. Tax
Matters
|
49
|
ii
|
COVENANTS OF PARENT
|
|
|
Section
7.01. Conduct
of Parent
|
49
|
|
Section
7.02. Obligations of Merger
Subsidiary
|
50
|
|
Section
7.03. Voting
of Company Stock
|
50
|
|
Section
7.04. Director and Officer
Liability
|
50
|
|
Section
7.05. Stock
Exchange Listing
|
52
|
|
Section
7.06. Employee
Matters
|
52
|
|
Section
7.07. Limitation on
Acquisitions
|
53
|
|
ARTICLE
8
|
|
|
COVENANTS OF PARENT AND THE COMPANY
|
|
|
Section
8.01. Reasonable Best
Efforts
|
54
|
|
Section
8.02. SEC
Matters
|
55
|
|
Section
8.03. Public
Announcements
|
56
|
|
Section
8.04. Further
Assurances
|
56
|
|
Section
8.05. Access
to Information
|
56
|
|
Section
8.06. Notices
of Certain Events
|
57
|
|
Section
8.07. Tax-free
Reorganization
|
58
|
|
Section
8.08. Section
16 Matters
|
58
|
|
Section
8.09. Stock
Exchange De-listing
|
58
|
|
Section
8.10. Merger
Subsidiary Reincorporation
|
58
|
|
ARTICLE
9
|
|
|
CONDITIONS TO THE MERGER
|
|
|
Section
9.01. Conditions to the Obligations
of Each Party
|
58
|
|
Section
9.02. Conditions to the Obligations
of Parent and Merger Subsidiary.. 59
|
|
|
Section
9.03. Conditions to the Obligations
of the Company
|
61
|
|
ARTICLE
10
|
|
|
TERMINATION
|
|
|
Section
10.01. Termination
|
62
|
|
Section
10.02. Effect
of Termination
|
63
|
|
|
|
|
ARTICLE
11
|
|
|
MISCELLANEOUS
|
|
|
Section
11.01. Notices
|
63
|
|
Section
11.02. Survival of Representations
and Warranties
|
65
|
|
Section
11.03. Amendments and
Waivers
|
65
|
|
Section
11.04. Expenses
|
65
|
|
Section
11.05. Disclosure Schedule and SEC
Document References
|
66
|
|
Section
11.06. Binding Effect; Benefit;
Assignment
|
66
|
|
Section
11.07. Governing
Law
|
67
|
iii
|
67
|
|
|
Section
11.09. WAIVER
OF JURY TRIAL
|
68
|
|
Section
11.10. Counterparts;
Effectiveness
|
68
|
|
Section
11.11. Entire
Agreement
|
68
|
|
Section
11.12. Severability
|
68
|
|
|
|
|
SCHEDULES:
|
|
|
Company
Disclosure Schedule
|
|
|
Parent
Disclosure Schedule
|
iv
AGREEMENT AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER (this “Agreement”) dated as of August
3, 2009 among PepsiAmericas, Inc., a Delaware corporation (the “Company”), PepsiCo, Inc., a
North Carolina corporation (“Parent”), and Pepsi- Cola
Metropolitan Bottling Company, Inc., a New Jersey corporation wholly- owned by
Parent (“Merger
Subsidiary”).
W
I T N E S S E T H :
WHEREAS,
the Board of Directors of the Company, acting upon the unanimous recommendation
of the Transactions Committee, has unanimously approved and deemed it advisable
that the stockholders of the Company approve and adopt this Agreement pursuant
to which, among other things, Parent would acquire the Company by means of a
merger of the Company with and into Merger Subsidiary on the terms and subject
to the conditions set forth in this Agreement;
WHEREAS,
the respective Boards of Directors of Parent and Merger Subsidiary have approved
this Agreement;
WHEREAS,
concurrently with the execution of this Agreement, Parent, Merger Subsidiary and
The Pepsi Bottling Group, Inc., a Delaware corporation (“PBG”), have entered into an
Agreement and Plan of Merger (the “Concurrent Merger Agreement”) providing
for, among other things, the acquisition of PBG by Parent by means of a
merger of PBG with and into Merger Subsidiary (the “Concurrent Merger”) on the
terms and subject to the conditions set forth in the Concurrent Merger
Agreement; and
WHEREAS,
for U.S. federal income tax purposes, it is intended that the Merger shall
qualify as a “reorganization” within the meaning of Section 368(a) of the Code,
and that this Agreement shall constitute a “plan of reorganization” within the
meaning of Section 1.368-2(g) of the Treasury regulations promulgated under the
Code.
NOW,
THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, the parties hereto agree
as follows:
ARTICLE
1
DEFINITIONS
Section
1.01. Definitions. (a)
As used herein, the following terms have the following meanings:
“Acquisition Proposal” means,
other than the transactions contemplated by this Agreement, any offer, proposal
or inquiry relating to, or any Third Party
“Affiliate” means, with respect
to any Person, any other Person directly or indirectly controlling, controlled
by, or under common control with such Person; provided, however, that for
purposes of this Agreement, the Company and its Subsidiaries shall not be
considered Affiliates of Parent and Parent and its Subsidiaries shall not be
considered Affiliates of the Company unless otherwise expressly stated
herein.
“Applicable Law” means, with
respect to any Person, any foreign, federal, state or local law (statutory,
common or otherwise), constitution, treaty, convention, ordinance, code, rule,
regulation, order, injunction, judgment, decree, ruling or other similar
requirement enacted, adopted, promulgated or applied by a Governmental Authority
that is binding upon or applicable to such Person, as amended unless expressly
specified otherwise.
“Business Day” means a day,
other than Saturday, Sunday or other day on which commercial banks in New York,
New York are authorized or required by Applicable Law to close.
“Closing Parent Stock Price”
means the closing price of a share of Parent Stock on the New York Stock
Exchange on the trading day immediately preceding the day on which the Effective
Time occurs.
“Code” means the Internal
Revenue Code of 1986.
“Company Balance Sheet” means
the consolidated balance sheet of the Company as of January 3, 2009 and the
footnotes thereto set forth in the Company 10-K.
“Company Balance Sheet Date”
means January 3, 2009.
2
“Company Rights” means the
preferred share purchase rights issued pursuant to the Company Rights
Agreement.
“Company Rights Agreement”
means the Rights Agreement dated as of May 20, 1999, as amended, between the
Company (formerly known as Whitman Corporation, a Delaware corporation) and
Wells Fargo Bank Minnesota N.A. (as successor rights agent to First Chicago
Trust Company of New York).
“Company Stock” means the
common stock, $0.01 par value, of the Company, together with the associated
Company Rights.
“Company Stock Plan” means any
equity compensation plan or arrangement of the Company and its
Subsidiaries.
“Company 10-K” means the
Company’s annual report on Form 10-K for the fiscal year ended January 3,
2009.
“Competition Laws” means
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization, lessening of
competition or restraint of trade.
“Delaware Law” means the
General Corporation Law of the State of Delaware.
“Environmental Law” means any
Applicable Law or any legally binding agreement with any Governmental Authority
relating to the environment, any pollutant or contaminant, any toxic,
radioactive, ignitable, corrosive or otherwise hazardous substance, chemical,
waste or material, or, as it relates to exposure to hazardous materials, human
health and safety.
“Environmental Permits” means
all permits, licenses, consents, franchises, certificates, approvals and other
similar authorizations of Governmental Authorities required by Environmental
Laws for the ownership or the operation of the business of the Company or any of
its Subsidiaries, as currently conducted.
“ERISA” means the Employee
Retirement Income Security Act of 1974.
“ERISA Affiliate” of any entity
means any other entity that, together with such entity, would be treated as a
single employer under Section 414 of the Code.
“GAAP” means generally accepted
accounting principles in the United States.
3
“Governmental Authority” means
any transnational, domestic or foreign federal, state or local governmental,
regulatory or administrative authority, department, court, agency or official,
including any political subdivision thereof.
“Hazardous Substance” means any
pollutant, contaminant or any toxic, radioactive, ignitable, corrosive, or
otherwise hazardous substance, chemical, waste or material, including petroleum,
its derivatives, by-products, other hydrocarbons, asbestos and
asbestos-containing materials, and any other substance, waste or material that
in relevant concentration is regulated under any Environmental Law.
“HSR Act” means the
Hart-Scott-Rodino Antitrust Improvements Act of 1976.
“Intellectual Property” means
(i) trademarks, service marks, brand names, certification marks, trade dress,
domain names and other indications of origin, the goodwill associated with the
foregoing and registrations in any jurisdiction of, and applications in any
jurisdiction to register, the foregoing, including any extension, modification
or renewal of any such registration or application; (ii) inventions and
discoveries, whether patentable or not, in any jurisdiction; (iii) patents,
applications for patents (including divisions, continuations, continuations in
part and renewal applications), and any renewals, extensions or reissues
thereof, in any jurisdiction; (iv) Trade Secrets; (v) writings and other works,
whether copyrightable or not, in any jurisdiction, and any and all copyright
rights, whether registered or not; and registrations or applications for
registration of copyrights in any jurisdiction, and any renewals or extensions
thereof; (vi) moral rights, database rights, design rights, industrial property
rights, publicity rights and privacy rights; and (vii) any similar intellectual
property or proprietary rights.
“knowledge” means (i) in
respect of Parent, the actual knowledge of the persons listed in Section 1.01(a)
of the Parent Disclosure Schedule and (ii) in respect of the Company, the actual
knowledge of persons listed in Section 1.01(a) of the Company Disclosure
Schedule.
“Lien” means, with respect to
any property or asset, any mortgage, lien, pledge, charge, security interest,
lease, sublease, license, easement, covenant, encumbrance or other adverse claim
of any kind in respect of such property or asset. For purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any property or
asset that it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such property or asset.
“Material Adverse Effect”
means, with respect to any Person, a material adverse effect on the condition
(financial or otherwise), business, assets or results of operations of such
Person and its Subsidiaries, taken as a whole, excluding any effect resulting
from (A) changes in the financial or securities markets or general
“Multiemployer Plan” means any
“multiemployer plan,” as defined in Section 3(37) of ERISA.
“New Jersey Law” means the New
Jersey Business Corporation Act.
“1933 Act” means the Securities
Act of 1933.
“1934 Act” means the Securities
Exchange Act of 1934.
“Parent Balance Sheet” means
the consolidated balance sheet of Parent as of December 27, 2008 and the
footnotes therein set forth in the Parent 10-K.
“Parent Balance Sheet Date”
means December 27, 2008.
“Parent Disclosure Schedule”
means the disclosure schedule dated the date hereof regarding this Agreement
that has been provided by Parent to the Company.
“Parent Stock” means the common
stock, par value one and two-thirds cents, of Parent.
5
“Parent
10-K” means Parent’s annual report on Form 10-K for the fiscal year ended
December 27, 2008.
“PBGC” means the Pension
Benefit Guaranty Corporation.
“Permitted Lien” means, with
respect to any property or asset, (i) any Lien disclosed on the Company Balance
Sheet, (ii) any Lien for taxes not yet due or being contested in good faith (and
for which adequate accruals or reserves have been established on the Company
Balance Sheet to the extent required by GAAP), (iii) mechanics’, carriers’,
workmen’s, warehousemen’s, repairmen’s or other like Liens arising or incurred
in the ordinary course of business, or (iv) any Lien which does not materially
detract from the value of such property or asset, or materially interfere with
any present use of such property or asset.
“Person” means an 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.
“Sarbanes-Oxley Act” means the
Sarbanes-Oxley Act of 2002.
“Shareholder Agreement” means
the Second Amended and Restated Shareholder Agreement, dated as of September 6,
2005, between the Company and Parent.
“SEC” means the Securities and
Exchange Commission.
“Subsidiary” means, with
respect to any Person, any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at any time directly
or indirectly owned by such Person.
“Third Party” means any Person,
including as defined in Section 13(d) of the 1934 Act, other than Parent or any
of its Affiliates.
“Title IV Plan” means any
Employee Plan subject to Title IV of ERISA, other than a Multiemployer
Plan.
“Trade Secrets” means any
confidential information and rights in any jurisdiction to limit the use or
disclosure thereof by any Person.
“Transactions Committee” means
a committee of the Company’s Board of Directors consisting of at least a
majority of the Independent Directors (as such term is defined in the
Shareholder Agreement) of the Company, formed for the purpose of evaluating, and
making a recommendation to the full Board of Directors of the Company with
respect to, this Agreement and the transactions contemplated hereby, including
the Merger.
6
(b) Each
of the following terms is defined in the Section set forth opposite such
term:
|
Term
|
Section
|
|
Adjusted
Option
|
2.06
|
|
Agreement
|
Preamble
|
|
Cash
Electing Share
|
2.02
|
|
Cash
Election
|
2.03
|
|
Cash
Election Price
|
2.02
|
|
Cash
Election Number
|
2.04
|
|
Cash
Proration Factor
|
2.04
|
|
Certificates
|
2.05
|
|
Closing
|
2.01
|
|
Company
|
Preamble
|
|
Company
Adverse Recommendation Change
|
6.02
|
|
Company
Board Recommendation
|
4.02
|
|
Company
Preferred Stock
|
4.05
|
|
Company
SEC Documents
|
4.07
|
|
Company
Securities
|
4.05
|
|
Company
Stock Option
|
2.06
|
|
Company
Stockholder Approval
|
4.02
|
|
Company
Stockholder Meeting
|
6.02
|
|
Company
Subsidiary Securities
|
4.06
|
|
Company
Termination Fee
|
11.04
|
|
Concurrent
Merger
|
Preamble
|
|
Concurrent
Merger Agreement
|
Preamble
|
|
Confidentiality
Agreement
|
8.05
|
|
Continuing
Employees
|
7.06
|
|
Costs
|
7.04
|
|
D&O
Insurance
|
7.04
|
|
Dissenters’
Shares
|
2.11
|
|
Effective
Time
|
2.01
|
|
Election
Deadline
|
2.05
|
|
Election
Form
|
2.05
|
|
Election
Record Date
|
2.03
|
|
Employee
Plan
|
4.16
|
|
End
Date
|
10.01
|
|
Exchange
Agent
|
2.05
|
|
Exchange
Fund
|
2.05
|
|
Government
Officials
|
4.24
|
|
Indemnified
Persons
|
7.04
|
|
International
Plans
|
4.16
|
|
Mailing
Date
|
2.05
|
|
Material
Contract
|
4.19
|
|
Merger
|
2.01
|
|
Merger
Consideration
|
2.02
|
|
Merger
Subsidiary
|
Preamble
|
7
|
Section
|
|
|
Non-Electing
Shares
|
2.04
|
|
Parent
|
Preamble
|
|
Parent
SEC Documents
|
5.07
|
|
Parent
Securities
|
5.05
|
|
Parent
Subsidiary Securities
|
5.06
|
|
PBG
|
Preamble
|
|
Per
Share Stock Consideration
|
2.02
|
|
Proxy
Statement
|
4.09
|
|
Registration
Statement
|
4.09
|
|
Representatives
|
6.03
|
|
Schedule
13E-3
|
4.09
|
|
Stock
Option Exchange Ratio
|
2.06
|
|
Stock
Proration Factor
|
2.04
|
|
Superior
Proposal
|
6.03
|
|
Surviving
Entity
|
2.01
|
|
Tax
|
4.15
|
|
Taxing
Authority
|
4.15
|
|
Tax
Return
|
4.15
|
|
Tax
Sharing Agreements
|
4.15
|
|
368
Reorganization
|
4.20
|
|
Uncertificated
Shares
|
2.05
|
Section
1.02. Other Definitional and
Interpretative Provisions. The words “hereof”, “herein” and “hereunder”
and words of like import used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement. The captions
herein are included for convenience of reference only and shall be ignored in
the construction or interpretation hereof. References to Articles, Sections,
Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this
Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto
or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any capitalized terms used in any
Exhibit or Schedule but not otherwise defined therein, shall have the meaning as
defined in this Agreement. Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the singular. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation”, whether or not they are
in fact followed by those words or words of like import. “Writing”, “written”
and comparable terms refer to printing, typing and other means of reproducing
words (including electronic media) in a visible form. References to any statute
shall be deemed to refer to such statute as amended from time to time and to any
rules or regulations promulgated thereunder. References to any agreement or
contract are to that agreement or contract as amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof; provided that with respect to
any agreement or contract listed on any schedules hereto, all such amendments,
modifications or
ARTICLE
2
THE MERGER
Section
2.01. The Merger. (a)
At the Effective Time, the Company shall be merged with and into Merger
Subsidiary in accordance with Delaware Law and, to the extent applicable, New
Jersey Law (the “Merger”), whereupon the
separate existence of the Company shall cease, and Merger Subsidiary shall be
the surviving entity (the “Surviving
Entity”).
(b) Subject
to the provisions of Article 9, the closing of the Merger (the “Closing”) shall take place in
New York City at the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New
York, New York, 10017 as soon as possible, but in any event no later than five
Business Days after the date the conditions set forth in Article 9 (other than
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or, to the extent permissible, waiver of those conditions at
the Closing) have been satisfied or, to the extent permissible, waived by the
party or parties entitled to the benefit of such conditions, or at such other
place, at such other time or on such other date as Parent and the Company may
mutually agree.
(c) At
the Closing, the Company and Merger Subsidiary shall file a certificate of
merger with the Delaware Secretary of State and, to the extent applicable, the
New Jersey Department of Treasury, Division of Revenue and make all other
filings or recordings required by Delaware Law or New Jersey Law in connection
with the Merger. The Merger shall become effective at such time (the “Effective Time”) as the
certificate of merger is duly filed with the Delaware Secretary of State and, if
applicable, the New Jersey Department of Treasury, Division of Revenue (or at
such later time as may be agreed by Parent and the Company and specified in the
certificate of merger).
(d) From
and after the Effective Time, the Surviving Entity shall possess all the rights,
powers, privileges and franchises and be subject to all of the obligations,
liabilities, restrictions and disabilities of the Company and Merger Subsidiary,
all as provided under New Jersey Law or, if applicable, Delaware
Law.
Section
2.02. Conversion of
Shares. At the Effective Time by virtue of the Merger and without any
action on the part of any holder of shares of Company Stock or any holder of
shares of common stock of Merger Subsidiary:
9
(b) Each
share of Company Stock held by the Company as treasury stock immediately prior
to the Effective Time shall be canceled, and no payment shall be made with
respect thereto. Each share of Company Stock held by Parent or Merger Subsidiary
immediately prior to the Effective Time shall be canceled, and no payment shall
be made with respect thereto.
(c) Each
share of Company Stock outstanding and each restricted stock award which
represents an outstanding share of Company Stock subject to vesting and
forfeiture, in each case, immediately prior to the Effective Time shall, except
as otherwise provided in Section 2.02(b),Section 2.02(e), Section 2.03, Section
2.8 or
Section 2.11, be converted into the following (collectively, the “Merger Consideration”):
(i) for
each such share of Company Stock with respect to which an election to receive
cash has been effectively made and not revoked and that is not deemed converted
into the right to receive the Per Share Stock Consideration pursuant to Section
2.04 (each, a “Cash
Electing Share”), the
right to receive an amount equal to $28.50 in cash without interest (the
“Cash Election Price”);
and
(ii) for
each other such share of Company Stock, the right to receive 0.5022 shares (the
“Per Share Stock
Consideration”) of Parent Stock.
(d) As
of the Effective Time, all shares of Company Stock to be converted into the
Merger Consideration shall no longer be outstanding and shall automatically be
canceled and shall cease to exist, and shall thereafter represent only the right
to receive the Merger Consideration and the right to receive any dividends or
other distributions pursuant to Section 2.05(i) and any cash in lieu of any
fractional share of Parent Stock pursuant to Section 2.08, in each case to be
issued or paid in accordance with Section 2.05, without interest.
(e) Each
share of Company Stock owned by any Subsidiary of Parent (other than Merger
Subsidiary) outstanding immediately prior to the Effective Time shall be
converted into the right to receive the Per Share Stock
Consideration.
(f) Each
restricted stock unit representing an unfunded contractual right to receive the
value of a share of Company Stock in cash issued under any Company Stock Plan
shall receive the Cash Election Price for each unit; provided that if the Cash
Election Price cannot be provided under the terms of the applicable plans and
agreements, Parent and the Company agree to work together in good faith to
provide appropriate consideration to the holder of each such unit.
10
Section
2.03. Elections. Each
Person (other than the Company or any of its Subsidiaries, Parent, Merger
Subsidiary or any of Parent’s other Subsidiaries) who, at the close of business
on the Election Record Date is a record holder of shares of Company Stock will
be entitled, with respect to any or all of such shares of Company Stock, to make
an election (a “Cash
Election”) to receive the Cash Election Price on the basis hereinafter
set forth. No such person shall be entitled to make a Cash Election with respect
to Dissenters’ Shares. Dissenters’ Shares held by stockholders who shall have
failed to perfect or who effectively shall have withdrawn or otherwise lost
their rights to appraisal of such shares under Delaware Law shall thereupon be
deemed to have made a Cash Election with respect to such Dissenters’ Shares, to
the extent permitted by Delaware Law.
Section
2.04. Proration of
Cash Election Price.
(a) The
number of shares of Company Stock to be converted into the right to receive the
Cash Election Price at the Effective Time shall equal the number of shares of
Company Stock which is 50% of the number of shares of Company Stock outstanding
immediately prior to the Effective Time (excluding any shares of Company Stock
to be canceled pursuant to Section 2.02(b) and any shares of Company Stock held
by Parent and its Subsidiaries) (as may be adjusted pursuant to Section 2.04(e),
the “Cash Election
Number”).
(b) If
the number of Cash Electing Shares exceeds the Cash Election Number, then the
Cash Electing Shares shall be treated in the following manner:
(i) A
cash proration factor (the “Cash Proration Factor”) shall
be determined by dividing the Cash Election Number by the total number of Cash
Electing Shares.
(ii) A
number of Cash Electing Shares covered by each stockholder’s Cash Election equal
to the product of (x) the Cash Proration Factor and (y) the total number of Cash
Electing Shares covered by such Cash Election, such product to be rounded down
to the nearest whole number, shall be converted into the right to receive the
Cash Election Price.
(iii) Each
Cash Electing Share, other than those shares of Company Stock converted into the
right to receive the Cash Election Price in accordance with Section 2.04(b)(ii),
shall be converted into the right to receive the Per Share Stock Consideration
as if such shares of Company Stock were not Cash Electing Shares.
11
(c) If
the number of Cash Electing Shares is equal to the Cash Election Number, then
each Cash Electing Share shall be converted into the right to receive the Cash
Election Price and each other share of Company Stock (other than shares of
Company Stock to be canceled pursuant to Section 2.02(b)) shall be converted
into the right to receive the Per Share Stock Consideration.
(d) If
the number of Cash Electing Shares is less than the Cash Election Number,
then:
(i) Each
Cash Electing Share shall be converted into the right to receive the Cash
Election Price.
(ii) The
shares of Company Stock as to which a Cash Election is not in effect (excluding
shares of Company Stock to be canceled pursuant to Section 2.02(b) and shares of
Company Stock held by Parent and its Subsidiaries) (the “Non-Electing Shares”) shall be
treated in the following manner:
(A) A
stock proration factor (the “Stock Proration Factor”) shall be determined
by dividing (x) the difference between the Cash
Election Number and the number of Cash Electing Shares, by (y) the total number
of Non-Electing Shares.
(B) A
number of Non-Electing Shares of each shareholder equal to the product of (x)
the Stock Proration Factor and (y) the total number of Non-Electing Shares of
such shareholder, such product to be rounded down to the nearest whole number,
shall be converted into the right to receive the Cash Election Price (and a Cash
Election shall be deemed to have been made with respect to such
shares).
(C) Each
Non-Electing Share of each shareholder as to which a Cash Election is not deemed
made pursuant to Section 2.04(d)(ii)(B) shall be converted into the right to
receive the Per Share Stock Consideration.
(e) If
either the tax opinion of Parent’s counsel referred to in Section 9.02(d) or the
opinion of the Company’s counsel referred to in Section 9.03(b) cannot be
rendered (as reasonably determined by such counsel) as a result of the Merger
potentially failing to satisfy continuity of interest requirements under
applicable federal income tax principles relating to reorganizations under
Section 368(a) of the Code, then the Cash Election Number shall be decreased to
the minimum extent necessary to enable the relevant tax opinion or opinions, as
the case may be, to be rendered.
Section
2.05. Election Procedures;
Exchange Agent; Surrender and Payment. (a) Prior to the
date of the Company Stockholder Meeting, Parent and
12
the
Company shall prepare a form (an “Election Form”) pursuant to
which a holder of record of shares of Company Stock may make a Cash Election
with respect to each share of Company Stock owned by such holder. The Company
shall cause an Election Form and a letter of transmittal and instructions (which
shall specify that the delivery shall be effected, and risk of loss and title
shall pass, only upon proper delivery of the certificates representing shares of
Company Stock (the “Certificates”) to the Exchange
Agent, or other proper evidence of ownership acceptable to the Exchange Agent in
the case of Uncertificated Shares) for use in exchanging Certificates for the
Merger Consideration to be mailed no more than 40 Business Days and no fewer
than 15 Business Days before the anticipated Effective Time or on such other
date as Parent and the Company may agree (the “Mailing Date”) to each holder
of record of shares of Company Stock as of two Business Days before the Mailing
Date (the “Election Record
Date”). Parent and the Company shall use reasonable efforts to make an
Election Form available to all persons who become holders of record of Company
Stock between the Election Record Date and the Election Deadline. The Election
Form shall be used by each record holder of shares of Company Stock (or, in the
case of nominee record holders, the beneficial owner through proper instructions
and documentation) to make a Cash Election.
(b) Prior
to the date of the Company Stockholder Meeting, Parent shall appoint an agent
reasonably acceptable to the Company (the “Exchange Agent”) for the
purpose of (i) receiving Election Forms and determining, in accordance with this
Article 2, the form of Merger Consideration to be received by each holder of
shares of Company Stock and (ii)exchanging for the Merger Consideration (A)
Certificates or (B) uncertificated shares of Company Stock (the “Uncertificated Shares”).
Parent shall deposit, or shall cause to be deposited with the Exchange Agent, as
needed, for the benefit of the holders of the Certificates and the
Uncertificated Shares, for exchange in accordance with this Article 2, (i)
subject to Section 2.05(e), certificates representing the shares of Parent Stock
that constitute the stock portion of the Merger Consideration and (ii) an amount
of cash necessary to satisfy the cash portion of the Merger Consideration
(collectively, the “Exchange
Fund”). Promptly after the Effective Time, but no later than five
Business Days, Parent shall send, or shall cause the Exchange Agent to send, to
each holder of record of shares of Company Stock which have not previously been
delivered to the Exchange Agent pursuant to Section 2.05(a), a letter of
transmittal and instructions (which shall specify that the delivery shall be
effected, and risk of loss and title shall pass, only upon proper delivery of
the Certificates or transfer of the Uncertificated Shares to the Exchange Agent
and which shall otherwise be in customary form and shall include customary
provisions with respect to delivery of an “agent’s message” regarding the
book-entry transfer of Uncertificated Shares) for use in such
exchange.
(c) A
Cash Election shall be effective only if the Exchange Agent shall have received
no later than 5:00 p.m. New York, NY time on the third Business Day prior to the
Effective Time or such other date as Parent and the Company
13
may agree (the “Election Deadline”) (which Election Deadline shall be publicly announced by Parent as soon as practicable, but in no event less than eight Business Days prior to the Effective Time, and to the extent the Effective Time is later than the date so publicly announced, the Election Deadline may be adjusted accordingly by Parent and the Company) (i) an Election Form covering the shares of Company Stock to which such Cash Election applies, executed and completed in accordance with the instructions set forth in such Election Form, and (ii) Certificates, in such form and with such endorsements, stock powers and signature guarantees as may be required by such Election Form or the letter of transmittal or an “agent’s message” with respect to Uncertificated Shares. A Cash Election may be revoked or changed only by delivering to the Exchange Agent, prior to the Election Deadline, a written notice of revocation or, in the case of a change, a properly completed revised Election Form that identifies the shares of Company Stock to which such revised Election Form applies. Delivery to the Exchange Agent prior to the Election Deadline of a revised Election Form with respect to any shares of Company Stock shall result in the revocation of all prior Election Forms with respect to all such shares of Company Stock. Any termination of this Agreement in accordance with Article 10 shall result in the revocation of all Election Forms delivered to the Exchange Agent on or prior to the date of such termination.
(d) The
Company and Parent shall have the right to make rules, not inconsistent with the
terms of this Agreement, governing the validity and effectiveness of Election
Forms and letters of transmittal, the manner and extent to which Cash Elections
are to be taken into account in making the determinations required by this
Section 2.05 and the payment of the Merger Consideration.
(e) Each
holder of shares of Company Stock that have been converted into the right to
receive the Merger Consideration shall be entitled to receive, upon (i)
surrender to the Exchange Agent of a Certificate, together with a properly
completed letter of transmittal, or (ii) receipt of an “agent’s message” by the
Exchange Agent (or such other evidence, if any, of transfer as the Exchange
Agent may reasonably request) in the case of a book-entry transfer of
Uncertificated Shares, the Merger Consideration in respect of the Company Stock
represented by a Certificate or Uncertificated Share. The shares of Parent Stock
constituting part of such Merger Consideration, at Parent’s option, shall be in
uncertificated book-entry form, unless a physical certificate is requested by a
holder of shares of Company Stock or is otherwise required under Applicable Law.
Until so surrendered or transferred, as the case may be, each such Certificate
or Uncertificated Share shall represent after the Effective Time for all
purposes only the right to receive such Merger Consideration and the right to
receive any dividends or other distributions pursuant to Section 2.05(i) and any
cash in lieu of fractional shares pursuant to Section 2.08.
(f) If
any portion of the Merger Consideration is to be paid to a Person other than the
Person in whose name the surrendered Certificate or the transferred
Uncertificated Share is registered, it shall be a condition to such payment that
(i)
(g) After
the Effective Time, there shall be no further registration of transfers of
shares of Company Stock. If, after the Effective Time, Certificates or
Uncertificated Shares are presented to the Surviving Entity or the Exchange
Agent, they shall be canceled and exchanged for the Merger Consideration
provided for, and in accordance with the procedures set forth, in this Article
2.
(h) Any
portion of the Merger Consideration made available to the Exchange Agent
pursuant to Section 2.05 that remains unclaimed by the holders of shares of
Company Stock nine months after the Effective Time shall be returned to Parent,
upon demand, and any such holder who has not exchanged shares of Company Stock
for the Merger Consideration in accordance with this Section 2.05 prior to that
time shall thereafter look only to Parent for payment of the Merger
Consideration, and any dividends and distributions with respect thereto pursuant
to Section 2.05(i) and any cash in lieu of fractional shares pursuant to Section
2.08, in respect of such shares without any interest thereon. Notwithstanding
the foregoing, Parent shall not be liable to any holder of shares of Company
Stock for any amounts properly paid to a public official pursuant to applicable
abandoned property, escheat or similar laws. Any amounts remaining unclaimed by
holders of shares of Company Stock immediately prior to such time when the
amounts would otherwise escheat to or become property of any Governmental
Authority shall become, to the extent permitted by Applicable Law, the property
of Parent free and clear of any claims or interest of any Person previously
entitled thereto.
(i) No
dividends or other distributions with respect to securities of Parent
constituting part of the Merger Consideration, and no cash payment in lieu of
fractional shares as provided in Section 2.08, shall be paid to the holder of
any Certificates not surrendered or of any Uncertificated Shares not transferred
until such Certificates or Uncertificated Shares are surrendered or transferred,
as the case may be, as provided in this Section. Following such surrender or
transfer, there shall be paid, without interest, to the Person in whose name the
securities of Parent have been registered, (i) at the time of such surrender or
transfer, the amount of any cash payable in lieu of fractional shares to which
such Person is entitled pursuant to Section 2.08 and the amount of all dividends
or other distributions with a record date after the Effective Time previously
paid or payable on the date of such surrender with respect to such securities
and (ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time and prior to surrender
or transfer and with a payment date subsequent to surrender or transfer payable
with respect to such securities.
15
(j)
The payment of any transfer, documentary, sales, use, stamp, registration,
value added and other such Taxes and fees (including any penalties and interest)
incurred by a holder of Company Stock in connection with the Merger, and the
filing of any related Tax returns and other documentation with respect to such
Taxes and fees, shall be the sole responsibility of such holder.
Section
2.06. Equity-Based
Awards. (a) The terms of each outstanding option to purchase shares of
Company Stock under any Company Stock Plan (a “Company Stock Option”),
whether or not exercisable or vested, shall be adjusted as necessary to provide
that, at the Effective Time, each Company Stock Option outstanding immediately
prior to the Effective Time shall be converted into an option (each, an “Adjusted Option”) to acquire,
on the same terms and conditions as were applicable under such Company Stock
Option immediately prior to the Effective Time, the number of shares of Parent
Stock equal to the product of (i) the number of shares of Company Stock subject
to such Company Stock Option immediately prior to the Effective Time multiplied by (ii) the Per
Share Stock Consideration. The exercise price per share of Parent Stock subject
to any such Adjusted Option will be an amount (rounded up to the nearest whole
cent) equal to the quotient of (A) the exercise price per share of Company Stock
subject to such Company Stock Option immediately prior to the Effective Time
divided by (B) the Per
Share Stock Consideration. For the avoidance of doubt (i) the exercise price of,
and number of shares subject to, each Adjusted Option shall be determined as
necessary to comply with Section 409A of the Code, (ii) any fractional share of
Parent Stock resulting from an aggregation of all the shares subject to any
Company Stock Option of a holder granted under a particular award agreement with
the same exercise price shall be rounded down to the nearest whole share and
(iii) for any Company Stock Option to which Section 421 of the Code applies as
of the Effective Time (after taking into account the effect of any accelerated
vesting thereof, if applicable) by reason of its qualification under any of
Sections 422 through 424 of the Code, the exercise price, the number of shares
purchasable pursuant to such option and the terms and conditions of exercise of
such option shall be determined in order to comply with Section 424 of the
Code.
(b)
Parent shall take such actions as are necessary for the assumption of the
Company Stock Options pursuant to this Section 2.06, including the reservation,
issuance and listing of Parent Stock as is necessary to effectuate the
transactions contemplated by this Section 2.06. Parent shall prepare and file
with the SEC a registration statement on an appropriate form, or a
post-effective amendment to a registration statement previously filed under the
1933 Act, with respect to the shares of Parent Stock subject to the Company
Stock Options and, where applicable, shall have such registration statement
declared effective as soon as practicable following the Effective Time and to
maintain the effectiveness of such registration statement covering such Company
Stock Options (and to maintain the current status of the prospectus contained
therein) for so long as such Company Stock Option remains outstanding. With
respect to those individuals, if any, who, subsequent to the Effective Time,
will be subject to the reporting
16
requirements
under Section 16(a) of the 1934 Act, where applicable, Parent shall administer
any Company Stock Plan assumed pursuant to this Section 2.06 in a manner that
complies with Rule 16b-3 promulgated under the 1934 Act to the extent such
Company Stock Plan complied with such rule prior to the Merger.
(c)
Prior to the Effective Time, the Company shall take any actions with
respect to stock option or compensation plans or arrangements that are necessary
to give effect to the transactions contemplated by this Section
2.06.
Section
2.07. Adjustments. If,
during the period between the date of this Agreement and the Effective Time, the
outstanding shares of capital stock of the Company or Parent shall have been
changed into a different number of shares or a different class by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any stock dividend thereon with a record date during
such period, or any other similar event, but excluding any change that results
from any exercise of options outstanding as of the date hereof to purchase
shares of Company Stock granted under the Company’s stock option or compensation
plans or arrangements in effect on the date hereof, the Merger Consideration
including, if applicable, the Per Share Stock Consideration and its
determination shall be appropriately adjusted.
Section
2.08. Fractional
Shares. No fractional shares of Parent Stock shall be issued in the
Merger. All fractional shares of Parent Stock that a holder of shares of Company
Stock would otherwise be entitled to receive as a result of the Merger shall be
aggregated and if a fractional share results from such aggregation, such holder
shall be entitled to receive, in lieu thereof, an amount in cash without
interest determined by multiplying the Closing Parent Stock Price by the
fraction of a share of Parent Stock to which such holder would otherwise have
been entitled.
Section
2.09. Withholding
Rights. Notwithstanding any provision contained herein to the contrary,
each of the Exchange Agent, Surviving Entity and Parent shall be entitled to
deduct and withhold from the consideration otherwise payable to any Person
pursuant to this Article 2 such amounts as it is required to deduct and withhold
with respect to the making of such payment under any provision of federal,
state, local or foreign tax law. If the Exchange Agent, Surviving Entity or
Parent, as the case may be, so withholds amounts, such amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
shares of Company Stock in respect of which the Exchange Agent, Surviving Entity
or Parent, as the case may be, made such deduction and withholding.
Section
2.10. Lost
Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Entity, the posting by such Person of a bond, in such reasonable
amount as the Surviving Entity may direct, as indemnity against any claim
that
17
may be made against it with respect to such Certificate, the Exchange Agent will issue, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration to be paid in respect of the shares of Company Stock represented by such Certificate, as contemplated by this Article 2.
Section
2.11. Dissenting
Shares. Notwithstanding Section 2.02, shares of Company Stock outstanding
immediately prior to the Effective Time and held by a holder who has not voted
in favor of the Merger or consented thereto in writing and who has demanded
appraisal for such shares in accordance with Delaware Law (“Dissenters’ Shares”) shall not
be converted into the right to receive the Merger Consideration, unless such
holder fails to perfect, withdraws or otherwise loses the right to appraisal.
If, after the Effective Time, such holder fails to perfect, withdraws or
otherwise loses the right to appraisal, such shares shall be treated as if they
had been converted as of the Effective Time into the right to receive the Merger
Consideration and treated in accordance with Section 2.03. The Company shall
give Parent prompt notice of any demands received by the Company for appraisal
of shares, and Parent shall have the right to participate in all negotiations
and proceedings with respect to such demands. Except with the prior written
consent of Parent, the Company shall not make any payment with respect to, or
offer to settle or settle, any such demands.
ARTICLE
3
THE SURVIVING ENTITY
Section
3.01. Certificate of
Incorporation. Subject to Section 7.04(b), the certificate of
incorporation of Merger Subsidiary in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Entity until amended in accordance
with Applicable Law.
Section
3.02. Bylaws. Subject
to Section 7.04(b), the bylaws of Merger Subsidiary in effect at the Effective
Time shall be the bylaws of the Surviving Entity until amended in accordance
with the bylaws and Applicable Law.
Section
3.03. Directors and
Officers. From and after the Effective Time, until successors are duly
elected or appointed and qualified in accordance with the bylaws and Applicable
Law, (i) the directors of Merger Subsidiary at the Effective Time shall be the
directors of the Surviving Entity and (ii) the officers of Merger Subsidiary at
the Effective Time shall be the officers of the Surviving Entity.
18
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject
to Section 11.05, except as disclosed in any Company SEC Document filed before
the date of this Agreement or as set forth in the Company Disclosure Schedule,
the Company represents and warrants to Parent that:
Section
4.01. Existence and
Power. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where such qualification is necessary, except for those
jurisdictions where failure to be so qualified or in good standing would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company. The Company has heretofore made available to
Parent true and complete copies of the certificate of incorporation and bylaws
of the Company in effect on the date of this Agreement.
Section
4.02. Authorization.
(a) The execution, delivery and performance by the Company of this Agreement and
the consummation by the Company of the transactions contemplated hereby are
within the Company’s corporate powers and, except for the required approval of
the Company’s stockholders in connection with the consummation of the Merger,
have been duly authorized by all necessary corporate action on the part of the
Company. Subject to Section 9.01(a), the affirmative vote of the holders of a
majority of the outstanding shares of Company Stock is the only vote of the
holders of any of the Company’s capital stock necessary in connection with the
consummation of the Merger (the “Company Stockholder
Approval”). Assuming the due authorization, execution and delivery of
this Agreement by Parent and Merger Subsidiary, this Agreement constitutes a
valid and binding agreement of the Company enforceable against the Company in
accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws affecting
creditors’ rights generally and general principles of equity).
(b)
Each of the Transactions Committee and the Company’s Board of Directors
has unanimously (i) determined that this Agreement and the transactions
contemplated hereby are fair to and in the best interests of the Company’s
stockholders (other than Parent, Merger Subsidiary and the other Affiliates of
Parent), and (ii) approved and declared advisable this Agreement and the
transactions contemplated hereby, and the Company’s Board of Directors has
resolved, subject to Section 6.03(b), to recommend approval and adoption of this
Agreement by its stockholders (such recommendation, including the
19
recommendation
of the Transactions Committee, the “Company Board Recommendation”).
Section
4.03. Governmental
Authorization. The execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby require no action by or in respect of, or filing with, any
Governmental Authority other than (a) the filing of a certificate of merger with
respect to the Merger with the Delaware Secretary of State and, if applicable,
the New Jersey Department of Treasury, Division of Revenue, and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, (b) compliance with any applicable requirements of the
HSR Act, or any other Competition Law (including any governmental approvals
required by relevant authorities in Ukraine, Romania, Poland and the European
Union), (c) filings with the NYSE and compliance with any applicable
requirements of the 1933 Act, the 1934 Act and any other applicable state or
federal securities laws and (d) any actions or filings the absence of which
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company or prevent or materially impede,
interfere with, hinder or delay the consummation of the Merger.
Section
4.04. Non-contravention. The
execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (a)
contravene, conflict with, or result in any violation or breach of any provision
of the certificate of incorporation or bylaws of the Company, (b) assuming
compliance with the matters referred to in Section 4.03, contravene, conflict
with or result in a violation or breach of any provision of any Applicable Law,
(c) assuming compliance with the matters referred to in Section 4.03, require
any consent or other action by any Person under, constitute a default, or an
event that, with or without notice or lapse of time or both, would constitute a
default, under, or cause or permit the termination, cancellation, acceleration
or other change of any right or obligation or the loss of any benefit to which
the Company or any of its Subsidiaries is entitled under any provision of any
agreement or other instrument not otherwise terminable by the other party
thereto on 120 days’ or less notice without any penalty or payment binding upon
the Company or any of its Subsidiaries or any license, franchise, permit,
certificate, approval or other similar authorization affecting, or relating in
any way to, the assets or business of the Company and its Subsidiaries or (d)
result in the creation or imposition of any Lien on any asset of the Company or
any of its Subsidiaries, with only such exceptions, in the case of each of
clauses (b) through (d), as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company or
prevent or materially impede, interfere with, hinder or delay the consummation
of the Merger.
Section
4.05. Capitalization.
(a) The authorized capital stock of the Company consists of (i) 350,000,000
shares of Company Stock and (ii) 12,500,000 shares of Preferred Stock, par value
$0.01 (“Company
Preferred
20
(b) All
outstanding shares of capital stock of the Company have been, and all shares
that may be issued pursuant to any Company Stock Option or other equity
compensation award or equity compensation plan or arrangement will be, when
issued in accordance with the respective terms thereof, duly authorized and
validly issued, fully paid and nonassessable and free of preemptive rights. The
Company has provided to Parent a complete and correct list of each outstanding
employee stock option to purchase shares of Company Stock, each share of Company
Stock subject to restricted stock awards and each Company restricted stock unit
award, in each case including, as applicable, the holder, date of grant,
exercise price, vesting schedule and number of shares of Company Stock subject
thereto.
(c) There
are no outstanding bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of the Company
may vote. Except as set forth in this Section 4.05 and for changes since July
31, 2009 resulting from the exercise of Company Stock Options outstanding on
such date, there are no outstanding (i) shares of capital stock or other voting
securities or ownership interests in the Company, (ii) options or other rights
to acquire from the Company, or other obligation of the Company to issue, any
capital stock or other voting securities or ownership interests in, or any
securities convertible into or exchangeable or exercisable for capital stock or
other voting securities or ownership interests in, the Company or (iii) stock
appreciation rights, performance shares, performance units, contingent value
rights, “phantom” stock or similar securities or rights that are derivative of,
or provide economic benefits based, directly or indirectly, on the value or
price of, any capital stock or other voting securities or ownership interests in
the Company (the items in clauses (i) through (iii) being referred to
collectively as the “Company
Securities”). There are no outstanding obligations of the Company or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any of the
Company Securities. Neither the Company nor any of its Subsidiaries is a party
to any voting agreement with respect to the voting of any Company
Securities.
(d) None
of (i) the shares of capital stock of the Company or (ii) Company Securities are
owned by any Subsidiary of the Company.
Section
4.06. Subsidiaries. (a)
Except in each case as would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Company, (i) each Subsidiary
of the Company has been
21
duly
organized, is validly existing and (where applicable) in good standing under the
laws of its jurisdiction of organization, has all organizational powers and all
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted and (ii) each such Subsidiary is duly
qualified to do business as a foreign entity and is in good standing in each
jurisdiction where such qualification is necessary. As of the date of this
Agreement, all material Subsidiaries of the Company and their respective
jurisdictions of organization are identified in the Company 10-K.
(b)
Except for restrictions set forth in the Shareholder Agreement (Joint
Venture Agreement) between PAS Luxembourg s.a.r.1. (PAS LuxCo) and Linkbay
Limited (PepsiCo Cyprus) and Sandora Holdings, B.V. dated as of August 14, 2007,
all of the outstanding capital stock of or other voting securities of, or
ownership interests in, each Subsidiary of the Company, is owned by the Company,
directly or indirectly, free and clear of any Lien and free of any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of such capital stock or other voting securities or
ownership interests). Other than as owned by the Company or any wholly owned
Subsidiary of the Company, there are no outstanding (i) shares of capital stock
or other voting securities or ownership interests in any Subsidiary of the
Company, (ii) options or other rights to acquire from the Company or any of its
Subsidiaries, or other obligation of the Company or any of its Subsidiaries to
issue, any capital stock or other voting securities or ownership interests in,
or any securities convertible into or exchangeable or exercisable for any
capital stock or other voting securities or ownership interests in, any
Subsidiary of the Company or (iii) stock appreciation rights, performance
shares, performance units, contingent value rights, “phantom” stock or similar
securities or rights that are derivative of, or provide economic benefits based,
directly or indirectly, on the value or price of, any capital stock or other
voting securities or ownership interests in, any Subsidiary of the Company (the
items in clauses (i) through (iii) being referred to collectively as the “Company Subsidiary
Securities”). There are no outstanding obligations of the Company or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any of the
Company Subsidiary Securities. Except for the capital stock or other voting
securities of, or ownership interests in, its Subsidiaries, the Company does not
own, directly or indirectly, any capital stock or other voting securities of, or
ownership interests in, any Person.
Section
4.07. SEC Filings and the
Sarbanes-Oxley Act. (a) The Company has filed with or furnished to the
SEC all reports, schedules, forms, statements, prospectuses, registration
statements and other documents required to be filed or furnished by the Company
since December 30, 2006 (collectively, together with any exhibits and schedules
thereto and other information incorporated therein, the “Company SEC
Documents”).
(b)
As of its filing date (and as of the date of any amendment), each Company
SEC Document complied, and each Company SEC Document filed
22
(c) As
of its filing date (or, if amended or superseded by a filing prior to the date
hereof, on the date of such filing with respect to the disclosures that are
amended or superseded), each Company SEC Document filed pursuant to the 1934 Act
did not, and each Company SEC Document filed subsequent to the date hereof will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.
(d) Each
Company SEC Document that is a registration statement, as amended or
supplemented, if applicable, filed pursuant to the 1933 Act, as of the date such
registration statement or amendment became effective, did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(e) The
Company has established and maintains disclosure controls and procedures (as
defined in Rule 13a-15 under the 1934 Act). Such disclosure controls and
procedures are designed to ensure that material information relating to the
Company, including its consolidated Subsidiaries, that is required to be
disclosed by the Company is recorded and reported on a timely basis to the
individuals responsible for the preparation of the Company’s filings with the
SEC and other public disclosure documents.
(f) Since
January 1, 2007, the Company and its Subsidiaries have established and
maintained a system of internal controls over financial reporting (as defined in
Rule 13a-15 under the 1934 Act) sufficient to provide reasonable assurance
regarding the reliability of the Company’s financial reporting and the
preparation of Company financial statements for external purposes in accordance
with GAAP. The Company has disclosed, based on its most recent evaluation of
internal controls prior to the date hereof, to the Company’s auditors and audit
committee (i) any significant deficiencies and material weaknesses in the design
or operation of internal controls which are reasonably likely to adversely
affect the Company’s ability to record, process, summarize and report financial
information and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in internal
controls.
(g) There
are no outstanding loans or other extensions of credit made by the Company or
any of its Subsidiaries to any executive officer (as defined in Rule 3b-7 under
the 1934 Act) or director of the Company. The Company has not, since the
enactment of the Sarbanes-Oxley Act, taken any action prohibited by Section 402
of the Sarbanes-Oxley Act.
(h) Since
January 1, 2007, the Company has complied in all material respects with the
applicable listing and corporate governance rules and regulations of the New
York Stock Exchange.
23
Section
4.08. Financial
Statements. The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company included or
incorporated by reference in the Company SEC Documents fairly present in all
material respects, in conformity with GAAP (except in the case of unaudited
interim financial statements as permitted by Form 10-Q and Regulation S-X of the
SEC) applied on a consistent basis (except as may be indicated in the notes
thereto), the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and their consolidated results
of operations and cash flows for the periods then ended (subject to normal
year-end audit adjustments in the case of any unaudited interim financial
statements).
Section
4.09. Disclosure
Documents. (a) The proxy or information statement of the Company to be
filed as part of the Registration Statement with the SEC in connection with the
Merger (the “Proxy
Statement”) and any amendments or supplements thereto will, when filed,
comply as to form in all material respects with the applicable requirements of
the 1934 Act. The Proxy
Statement, or any amendment or supplement thereto, shall not, on the date the
Proxy Statement or any amendment or supplement thereto is first mailed to the
stockholders of the Company and at the time of the Company Stockholder Approval,
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 light of the circumstances under which they were made, not
misleading.
(b)
The information supplied by the Company in writing for inclusion or
incorporation by reference in the registration statement of Parent on Form S-4
or any amendment or supplement thereto to be filed with the SEC with respect to
the offering of Parent Stock in connection with the Merger (the “Registration Statement”) shall not at the
time the Registration Statement is declared effective by the SEC (or, with
respect to any post-effective amendment or supplement, at the time such
post-effective amendment or supplement becomes effective) 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 light of
the circumstances under which they were made, not misleading.
24
(c) The
information supplied by the Company for inclusion or incorporation by reference
in the Schedule 13E-3 or any amendment or supplement thereto shall not at the
time the Schedule 13E-3 or any amendment or supplement thereto is filed with the
SEC 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 light of the circumstances under which they were made,
not misleading. As used herein, “Schedule 13E-3” means the Rule
13E-3 Transaction Statement on Schedule 13E-3 to be filed, if applicable, with
the SEC in connection with this Agreement concurrently with the filing of the
Registration Statement.
(d) The
representations and warranties contained in this Section 4.09 will not apply to
statements or omissions included or incorporated by reference in the Proxy
Statement or any amendment or supplement thereto based upon information
furnished by Parent or any of its representatives or advisors specifically for
use or incorporation by reference therein.
Section
4.10. Absence of Certain
Changes. From the Company Balance Sheet Date to the date of this
Agreement, except for the transactions contemplated by this Agreement, the
business of the Company and its Subsidiaries has been conducted in the ordinary
course consistent with past practice and there has not been (a) any event,
occurrence, development or state of circumstances or facts that has had or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company; (b) any material damage, destruction or other
casualty loss with respect to any material asset or property owned, leased or
otherwise used by the Company or any of its Subsidiaries, whether or not covered
by insurance; (c) other than regular quarterly dividends on Company Stock of
$0.14 per share, any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company or
any of its Subsidiaries (except for dividends or other distributions by any
direct or indirect wholly-owned Subsidiary to the Company or to any wholly-
owned Subsidiary of the Company) or any repurchase, redemption or other
acquisition by the Company or any of its Subsidiaries of any outstanding shares
of capital stock or other securities of the Company or any of its Subsidiaries;
(d) any material change in any method of accounting or accounting practices by
the Company or any of its Subsidiaries; (e) any increase in the compensation
payable or to become payable to its officers or employees (except for increases
in the ordinary course of business and consistent with past practice); or (f)
any establishment, adoption, entry into or amendment of any collective
bargaining, bonus, profit sharing, thrift, compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee, except to the
extent required by Applicable Law or as set forth on Section 4.16(j) of the
Company Disclosure Schedule.
Section
4.11. No Undisclosed Material
Liabilities. There are no liabilities or obligations of the Company or
any of its Subsidiaries of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise,
Section
4.12. Compliance with Laws and
Court Orders. Each of the Company and its Subsidiaries is and has been in
compliance with, and to the knowledge of the Company is not under investigation
with respect to and has not been threatened to be charged with or given notice
of any violation of, any Applicable Law, except for failures to comply or
violations that would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company. There is no judgment,
decree, injunction, rule or order of any arbitrator or Governmental Authority
outstanding against the Company or any of its Subsidiaries that has had or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
Section
4.13. Litigation. There
is no action, suit, investigation or proceeding pending against, or, to the
knowledge of the Company, threatened against or affecting, the Company, any of
its Subsidiaries, any present executive officer or director of the Company or
any of its Subsidiaries or any of their respective properties before (or, in the
case of threatened actions, suits, investigations or proceedings, would be
before) or by any Governmental Authority or arbitrator, that would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
Section
4.14. Intellectual
Property. Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company, the
Company and its Subsidiaries own, or otherwise have sufficient rights to use,
all Intellectual Property used in, held for use in or necessary for the conduct
of their respective businesses as currently conducted.
Section
4.15. Taxes. (a) All
material Tax Returns required by Applicable Law to be filed with any Taxing
Authority by, or on behalf of, the Company or any of its Subsidiaries have been
filed when due in accordance with all Applicable Law, and all such material Tax
Returns are true and complete in all material respects. The Company and each of
its Subsidiaries has paid or has withheld and remitted to the appropriate Taxing
Authority all Taxes shown on such Tax Returns as due and payable. Where payment
is not yet due or is being contested in good faith, the Company has established
in accordance with GAAP an adequate accrual for all Taxes through the end of the
last period for which the Company and its Subsidiaries ordinarily record items
on their respective books.
26
(b) (i)
The income and franchise Tax Returns of the Company and its Subsidiaries through
the Tax year ended December 31, 2002 have been examined and closed or are
Returns with respect to which the applicable period for assessment under
Applicable Law, after giving effect to extensions or waivers, has expired; (ii)
neither the Company nor any of its Subsidiaries has granted an extension or
waiver of the limitation period for the assessment or collection of any material
Tax that remains in effect; and (iii) there is no claim, audit, action, suit,
proceeding or investigation now pending or, to the Company’s knowledge,
threatened against or with respect to the Company or its Subsidiaries in respect
of any material Tax or Tax asset.
(c) There
are no Liens for material Taxes (other than statutory liens for taxes not yet
due and payable or being contested in good faith, for which adequate accruals or
reserves have been established on the Company Balance Sheet) upon any of the
assets of the Company or any of its Subsidiaries.
(d) (i)
Neither the Company nor any of its Subsidiaries is a party to or is bound by any
Tax Sharing Agreement (other than such an agreement or arrangement exclusively
between or among the Company and its Subsidiaries) or any other agreement
described in clause (iii) of the definition of Tax; and (ii) since January 1,
2004, neither the Company nor any of its Subsidiaries has been a member of an
affiliated group filing a consolidated U.S. federal income Tax Return (other
than a group the common parent of which was the Company).
(e) To
the knowledge of the Company, neither the Company nor any of its Subsidiaries
has been a party to a transaction that constitutes a “reportable transaction”
within the meaning of Treasury Regulations Section 1.6011-4.
(f)
None of
the Subsidiaries of the Company owns any Company Stock.
(g) During
the five-year period ending on the date hereof, neither the Company nor any
Subsidiary (during the time the Subsidiary was owned by the Company) was a
distributing corporation or a controlled corporation in a transaction intended
to be governed by Section 355 of the Code.
(h) To
the knowledge of the Company, neither the Company nor any of its Subsidiaries
owns an interest in real property in any jurisdiction in which a Tax is imposed,
or the value of the interest is reassessed, on the transfer of any interest in
real property and which treats the transfer of an interest in an entity that
owns an interest in real property as a transfer of the interest in real
property.
(i) Section
4.15(i) of the Company Disclosure Schedule contains a list of all jurisdictions
(whether foreign or domestic) in which the Company or any of its Subsidiaries
currently files any material Tax Returns.
(j) “Tax” means (i) any tax,
governmental fee or other like assessment or charge of any kind whatsoever
(including withholding on amounts paid to or
Section
4.16. Employees and Employee
Benefit Plans; ERISA. (a) Section 4.16(a) of the Company Disclosure
Schedule contains a correct and complete list of each material Employee
Plan.
(b) With
respect to each material Employee Plan, the Company has made available to Parent
true, complete and correct copies of the following (as applicable) (i) the
written document evidencing the Employee Plan, (ii) all amendments thereto,
(iii) the most recent annual report (Form 5500 including, if applicable, all
schedules) and (iv) actuarial report prepared in connection with any such plan
or trust.
(c) No
transaction prohibited by Section 406 of ERISA or Section 4975 of the Code has
occurred with respect to any employee benefit plan or arrangement which is
covered by Title I of ERISA, which transaction has or will cause the Company or
any of its Subsidiaries to incur any liability under ERISA, the Code or
otherwise, excluding transactions effected pursuant to and in compliance with a
statutory or administrative exemption, except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
28
(d) No
“reportable event,” within the meaning of Section 4043 of ERISA, other than a
“reportable event” which would not reasonably be expected to give rise to any
material liability for the Company or any of its Subsidiaries, and no event
described in Section 4062 or 4063 of ERISA, has occurred in connection with any
Employee Plan. Neither the Company nor any ERISA Affiliate of the Company has
(i) engaged in, or is a successor or parent corporation to an entity that has
engaged in, a transaction described in Sections 4069 or 4212(c) of ERISA, except
as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company or (ii) incurred, or reasonably expects
to incur, prior to the Effective Time (A) any material liability under Title IV
of ERISA arising in connection with the termination of any plan covered or
previously covered by Title IV of ERISA or (B) any
material liability under Section 4971 of the Code that in either case could
become a liability of the Company or any of its Subsidiaries or Parent or any of
its ERISA Affiliates after the Effective Time. With respect to each Employee
Plan subject to Section 412 of the Code, except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company: (i) there has been no material change in the funded status of such
plan as reflected in the most recent actuarial report completed prior to the
date hereof, (ii) no such plan is in “at risk” status within the meaning of
Section 303 of ERISA, (iii) the level of annual minimum funding contributions
required for each such plan for the plan year of each such plan beginning in
2009 is not reasonably expected to materially increase above the level of annual
minimum funding contributions required for such plan for the plan year of such
plan beginning in 2008, (iv) neither Parent, the Company nor any of their
respective Subsidiaries are reasonably expected to be required to post security
with respect to the funding any such plan and (v) no condition exists which
could constitute grounds for termination by PBGC of any such plan.
(e) The
assets of the Company and all of its Subsidiaries are not now, nor will they
after the passage of time be, subject to any lien imposed under Section 430(k)
of the Code by reason of a failure of any of the Company or any of its
Subsidiaries to make timely installments or other payments required under
Section 412 of the Code, except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the
Company.
(f) Section
4.16(f) of the Company Disclosure Schedule sets forth a complete list of all
Multiemployer Plans to which the Company contributes as of the date hereof.
Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company: (i) the level of the annual
contributions by the Company and its Subsidiaries to all Multiemployer Plans to
which the Company and its Subsidiaries contribute as of the date hereof is not
reasonably expected to increase beginning in 2009 above the level of
contributions by the Company and its Subsidiaries to all such Multiemployer
Plans during 2008, (ii) none of the Company, any of its Subsidiaries or their
ERISA Affiliates has any obligation to fund any current withdrawal liability
with respect to any Multiemployer Plan to which the Company or any of
its
29
Subsidiaries contribute or contributed in the past, (iii) no condition exists that could present a risk of complete or partial withdrawal from any Multiemployer Plan to which the Company and its Subsidiaries contribute as of the date hereof which could result in the Company, any of its Subsidiaries or any ERISA Affiliates incurring a withdrawal liability within the meaning of Section 4201 of ERISA and (iv) no Multiemployer Plan to which the Company and its Subsidiaries contribute as of the date hereof is in “endangered status” or “critical status” within the meaning of Section 432(b) of the Code.
(g) Each
material Employee Plan which is intended to be qualified under Section 401(a) of
the Code has received a favorable determination letter, or has pending or has
time remaining in which to file an application for such determination, from the
Internal Revenue Service, and there is no reason why any such determination
letter should be revoked or not be reissued. Not later than 30 days after the
date hereof the Company shall furnish to Parent copies of the most recent
Internal Revenue Service determination letters with respect to each such
Employee Plan. Each Employee Plan was established and has been maintained in all
material respects in compliance with its terms and with the requirements of all
Applicable Law, including ERISA and the Code, and there is no action, suit,
investigation, audit or proceeding pending against or involving, or to the
knowledge of the Company, threatened against or involving any Employee Plan
before any court or arbitrator or any state, federal or local governmental body,
agency or official, except, in each case as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company.
(h) With
respect to each Employee Plan maintained outside of the United States (an “International Plan”), as of
June 30, 2009, according to the actuarial assumptions and valuations applicable
to such International Plan, the total amount or value of the funds available
under such International Plan to pay benefits accrued thereunder or segregated
in respect of such accrued benefits, together with any reserve or accrual with
respect thereto, exceeded the present value of all benefits (actual or
contingent) accrued as of such date of all participants and past participants
therein in respect of which the Company or any of its Subsidiaries has or would
have after the Effective Time any obligation, except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
(i) Neither
the execution of this Agreement nor the consummation of the transactions
contemplated by this Agreement will (either alone or together with any other
event) (i) entitle any current or former employee, director or independent
contractor of the Company or any of its Subsidiaries to severance pay, (ii)
accelerate the time of payment or vesting of any compensation or benefits
otherwise payable, (iii) trigger any payment or funding (through a grantor trust
or otherwise) of compensation or benefits under any Employee Plan or (iv)
increase the amount payable or trigger any other material obligation,
requirement or restriction pursuant to any Employee Plan. Except as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on
(j) There
has been no amendment to, written interpretation of or announcement (whether or
not written) by the Company or any of its Affiliates relating to, or change in
employee participation or coverage under, any Employee Plan which would increase
the expense of maintaining such Employee Plan above the level of the expense
incurred in respect thereof for the most recently completed fiscal
year.
(k) For
purposes of this Agreement, “Employee Plan” means each (i)
“employee benefit plan,” as defined in Section 3(3) of ERISA, whether or not
subject
to ERISA, (ii) employment, consultancy, severance, retention or similar
agreement, plan, arrangement or policy, (iii) other plan or arrangement (written
or oral) providing for compensation, bonuses, profit-sharing, stock option or
other stock related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance (including any self-insured arrangements), medical,
dental, vision or prescription benefits, life insurance, employee assistance
program, relocation or expatriate benefits, disability or sick leave benefits,
workers’ compensation, supplemental unemployment benefits and post-employment or
retirement benefits (including compensation, pension or life insurance benefits
but excluding any Multiemployer Plan) or (iv) any loan; in each case which is
maintained, administered or contributed to by the Company or any Affiliate and
covers any current or former employee, director or independent contractor of the
Company or any of its Subsidiaries, or with respect to which the Company or any
of its controlled Affiliates has any liability contingent or otherwise, in each
case which is maintained, administered or contributed to by the Company or any
Affiliate and covers any current or former employee, director or independent
contractor of the Company or any of its Subsidiaries, or with respect to which
the Company or any of its controlled Affiliates has any liability contingent or
otherwise.
Section
4.17. Labor. (a) Except
for failures to comply that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company, the
Company and its Subsidiaries have complied with all Applicable Law relating to
labor and employment, including those relating to wages, hours, collective
bargaining, unemployment compensation, worker’s compensation, equal employment
opportunity, age and disability discrimination, immigration control, employee
classification, information privacy and security, payment and withholding of
taxes and continuation coverage with respect to group health plans. Since
January 1, 2008, there has not been, and as of the date of this Agreement there
is not pending or, to the knowledge of the Company, threatened, any work
stoppage or labor strike against the Company or any of its Subsidiaries by
employees.
31
(b)
The Company has provided to Parent true and complete copies of each
effective or pending collective bargaining agreement or similar labor agreement
covering employees or former employees of the Company or any of its
Subsidiaries. To the knowledge of the Company, there has not been any activity
on behalf of any labor organization or employee group to organize any such
employees other than as has been disclosed by the Company to Parent. Except as
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company, there are no (i) unfair labor practice
charges or complaints against the Company or any of its Subsidiaries pending
before the National Labor Relations Board or any foreign equivalent, (ii)
representation claims or petitions pending before the National Labor Relations
Board or any foreign equivalent and there are no questions concerning
representation with respect to the employees of the Company or any of its
Subsidiaries or (iii) grievances or pending arbitration proceedings against the
Company or any of its Subsidiaries that arose out of or under any collective
bargaining agreement.
Section
4.18. Environmental
Matters. (a) Except as to matters that would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company: (i) no written notice, notification, demand, request for information,
citation, summons or order has been received, no complaint, investigation,
action, claim, suit, or proceeding is pending or, to the knowledge of the
Company, is threatened by any Person against or affecting the Company, any of
its Subsidiaries or any of their respective properties under or pursuant to any
Environmental Law; (ii) each of the Company and its Subsidiaries is and has been
in compliance with all Environmental Laws and has been and is in compliance with
all Environmental Permits; and (iii) there are no liabilities or obligations of
or relating to the Company or any of its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
arising under or pursuant to any Environmental Law, and there is no existing
fact, condition, situation or set of circumstances that would reasonably be
expected to result in any such liability or obligation, other than in the case
of Section 4.18(a)(iii) only: (A) liabilities or obligations disclosed and
provided for in the Company Balance Sheet or in the notes thereto, and (B)
liabilities or obligations incurred in the ordinary course of business
consistent with past practice since the Company Balance Sheet Date.
(b)
Notwithstanding any provision to the contrary, other than the
representations and warranties contained in Sections 4.03, 4.07, 4.08, 4.09 and
4.10, this Section 4.18 shall be deemed to contain the sole representations and
warranties by the Company with respect to environmental matters.
Section
4.19. Material
Contracts. (a) Except for customary limitations and restrictions in
bottling appointment agreements and restrictions described in the joint venture
agreements set forth in Section 4.19(a) of the Company Disclosure Schedule, as
of the date hereof, neither the Company nor any of its Subsidiaries is party to
or bound by, whether in writing or not, any contract,
32
(b)
Each Material Contract is valid and binding and in full force and effect
and, to the Company’s knowledge, enforceable against the other party or parties
thereto in accordance with its terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors’ rights or by general equity principles). Except for breaches,
violations or defaults which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company,
neither the Company nor any of its Subsidiaries, nor to the Company’s knowledge
any other party to a Material Contract, has violated any provision of, or taken
or failed to take any act which, with or without notice, lapse of time, or both,
would constitute a default under the provisions of such Material Contract, and
neither the Company nor any of its Subsidiaries has received written notice that
it has breached, violated or defaulted under any Material Contract.
Section
4.20. Tax Treatment.
Neither the Company nor any of its Affiliates has taken or agreed to take any
action, or is aware of any fact or circumstance, that would prevent the Merger
from qualifying as a reorganization within the meaning of Section 368 of the
Code (a “368
Reorganization”).
Section
4.21. Finders’ Fees.
Except for Goldman, Sachs & Co., Inc., whose fees have been disclosed to
Parent and whose engagement agreement with the Company or any of its
Subsidiaries does not impose any obligations binding on the Company, Parent or
any of their respective Subsidiaries following the Effective Time (other than
customary indemnification obligations and the obligation to pay such disclosed
fees), there is no investment banker, broker, finder or other intermediary that
has been retained by or is authorized to act on
33
Section
4.22. Opinion of Financial
Advisor. The Board of Directors of the Company and the Transactions
Committee have received the opinion of Goldman, Sachs & Co., Inc., financial
advisor to the Board of Directors of the Company and the Transactions Committee,
to the effect that, as of the date of this Agreement, and based upon and subject
to the factors and assumptions set forth therein, the Per Share Stock
Consideration and the Cash Election Price to be paid to the holders (other than
Parent and its Affiliates) of shares of Company Stock, taken in the aggregate,
pursuant to this Agreement was fair from a financial point of view to such
holders.
Section
4.23. Antitakeover Statutes
and Related Matters. (a) The Company has taken all action necessary to
exempt the Merger, this Agreement and the transactions contemplated hereby from
the supermajority voting provisions of Section 203 of Delaware Law, and,
accordingly, neither such Section nor any other antitakeover or similar statute
or regulation applies or purports to apply to any such transactions. To the
Company’s knowledge, no other “control share acquisition,” “fair price,”
“moratorium” or other antitakeover laws enacted under U.S. state or federal laws
apply to the Merger, this Agreement or any of the transactions contemplated
hereby.
(b)
The Merger, this Agreement and the transactions contemplated hereby
represent a “Permitted Acquisition” pursuant to clause (4) of such term as such
term is defined in the Shareholder Agreement. Neither Parent nor Merger
Subsidiary is an “Acquiring Person” (as defined in the Company Rights Agreement)
in accordance with clause (ii) of the fourth sentence of such definition, and no
action is required on the part of the Company to render the Company Rights
inapplicable to the Merger, this Agreement and the transactions contemplated
hereby.
Section
4.24. Foreign
Practices. Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company, to
the knowledge of the Company, none of the Company, any of its Subsidiaries or
any of their respective representatives on behalf of the Company or any of its
Subsidiaries has offered, promised or given, and no Person has otherwise
offered, promised or given on behalf of the Company or any of its Subsidiaries,
anything of value to any officer or employee of: (i) any Governmental Authority,
(ii) any entity controlled by a Governmental Authority or (iii) any public
international organization, or to any person acting in an official capacity for
or on behalf of any of the foregoing or to any political party or official
thereof, or to any candidate for political office (all of the foregoing being
collectively referred to as “Government Officials”) or to
any other Person while knowing, or having reason to know, that all or a portion
of such money or thing of value may be offered, given or promised, directly or
indirectly, to any
34
Section
4.25. No Other Representations
or Warranties. Except for the representations and warranties contained in
Article 4, Parent and Merger Subsidiary each acknowledge that none of the
Company or any of its Subsidiaries, or any other Person on behalf of the Company
or any of its Subsidiaries, makes any other express or implied representation or
warranty in connection with the transactions contemplated by this
Agreement.
ARTICLE
5
REPRESENTATIONS AND WARRANTIES OF PARENT
Subject
to Section 11.05, except as disclosed in any Parent SEC Document filed before
the date of this Agreement or as set forth in the Parent Disclosure Schedule,
Parent represents and warrants to the Company that:
Section
5.01. Existence and
Power. Each of Parent and Merger Subsidiary is a corporation duly
incorporated, validly existing and (to the extent applicable) in good standing
under the laws of its jurisdiction of organization and has all corporate powers
and all governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Parent. Each of Parent and Merger Subsidiary is duly qualified
to do business as a foreign corporation and, to the extent applicable, is in
good standing in each jurisdiction where such qualification is necessary, except
for those jurisdictions where the failure to be so qualified or in good standing
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent. Parent has heretofore made available to the
Company true and complete copies of the certificate of incorporation and bylaws
of Parent and Merger Subsidiary, in each case, as in effect as of the date of
this Agreement.
Section
5.02. Authorization.
The execution, delivery and performance by Parent and Merger Subsidiary of this
Agreement and the consummation by Parent and Merger Subsidiary of the
transactions contemplated hereby are within the corporate powers of Parent and
Merger Subsidiary and have been duly authorized by all necessary corporate
action. No vote of the holders of shares of Parent Stock is necessary in
connection with the consummation of the transactions contemplated hereby.
Assuming the due authorization, execution and delivery of
35
Section
5.03. Governmental
Authorization. The execution, delivery and performance by Parent and
Merger Subsidiary of this Agreement and the consummation by Parent and Merger
Subsidiary of the transactions contemplated hereby require no action by or in
respect of, or filing with, any Governmental Authority other than (a) the filing
of a certificate of merger with respect to the Merger with the Delaware
Secretary of State and, if applicable, the New Jersey Department of Treasury,
Division of Revenue, and appropriate documents with the relevant authorities of
other states in which Parent is qualified to do business, (b) compliance with
any applicable requirements of the HSR Act or any other Competition Law, (c)
filings with the NYSE and compliance with any applicable requirements of the
1933 Act, the 1934 Act and any other applicable state or federal securities laws
and (d) any actions or filings the absence of which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Parent or prevent or materially impede, interfere with, hinder or delay the
consummation of the Merger.
Section
5.04. Non-contravention. The
execution, delivery and performance by Parent and Merger Subsidiary of this
Agreement and the consummation by Parent and Merger Subsidiary of the
transactions contemplated hereby do not and will not (a) contravene, conflict
with, or result in any violation or breach of any provision of the certificate
of incorporation or bylaws of Parent or Merger Subsidiary, (b) assuming
compliance with the matters referred to in Section 5.03, contravene, conflict
with or result in a violation or breach of any provision of any Applicable Law,
(c) assuming compliance with the matters referred to in Section 5.03, require
any consent or other action by any Person under, constitute a default, or an
event that, with or without notice or lapse of time or both, would constitute a
default, under, or cause or permit the termination, cancellation, acceleration
or other change of any right or obligation or the loss of any benefit to which
Parent or any of its Subsidiaries is entitled under any provision of any
agreement or other instrument not otherwise terminable by the other party
thereto on 120 days’ or less notice without any penalty or payment binding upon
Parent or any of its Subsidiaries or any license, franchise, permit,
certificate, approval or other similar authorization affecting, or relating in
any way to, the assets or business of the Parent and its Subsidiaries or (d)
result in the creation or imposition of any Lien on any asset of the Parent or
any of its Subsidiaries, with only such exceptions, in the case of each of
clauses (b) through (d), as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent or prevent
or materially impede, interfere with, hinder or delay the consummation of the
Merger.
36
(b) Except
as set forth in this Section 5.05 and for changes since July 31, 2009 resulting
from the exercise of stock options or the grant of stock-based compensation to
directors or employees or from the issuance of stock in connection with a merger
or other acquisition or business combination determined by Parent’s Board of
Directors to be in the best interests of Parent and its stockholders (including
any issuance of stock in connection with the transactions contemplated by the
Concurrent Merger Agreement), there are no outstanding (i) shares of capital
stock or other voting securities or ownership interests in Parent, (ii) options
or other rights to acquire from Parent, or other obligation of Parent to issue,
any capital stock or other voting securities or ownership interests in, or any
securities convertible into or exchangeable or exercisable for capital stock or
other voting securities or ownership interests in, Parent or (iii) stock
appreciation rights, performance shares, performance units, contingent value
rights, “phantom” stock or similar securities or rights that are derivative of,
or provide economic benefits based, directly or indirectly, on the value or
price of, any capital stock or other voting securities or ownership interests in
Parent (the items in clauses (i) through (iii) being referred to collectively as
the “Parent
Securities”). There are no outstanding obligations of Parent or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any of the Parent
Securities.
(c) The
shares of Parent Stock to be issued as part of the Merger Consideration have
been duly authorized and, when issued and delivered in accordance with the terms
of this Agreement, will have been validly issued and will be fully paid and
nonassessable and the issuance thereof is not subject to any preemptive or other
similar right.
Section
5.06. Subsidiaries. (a)
Except in each case as would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on Parent, (i) each Subsidiary of
Parent has been duly organized, is validly existing and (where applicable) in
good standing under the laws of its jurisdiction of organization, has all
organizational powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted and
(ii) each such Subsidiary is duly qualified to do business as a foreign entity
and is in good standing in each jurisdiction where
37
(b)
All of the outstanding capital stock or other voting securities of, or
ownership interests in, each Subsidiary of Parent, is owned by Parent, directly
or indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other voting securities or ownership
interests). Other than as owned by Parent or any wholly owned Subsidiary of
Parent, there are no outstanding (i) shares of capital stock or other voting
securities or ownership interests in any Subsidiary of Parent, (ii) options or
other rights to acquire from Parent or any of its Subsidiaries, or other
obligation of Parent or any of its Subsidiaries to issue, any capital stock or
other voting securities or ownership interests in, or any securities convertible
into or exchangeable or exercisable for any capital stock or other voting
securities or ownership interests in, any Subsidiary of Parent or (iii) stock
appreciation rights, performance shares, performance units, contingent value
rights, “phantom” stock or similar securities or rights that are derivative of,
or provide economic benefits based, directly or indirectly, on the value or
price of, any capital stock or other voting securities or ownership interests
in, any Subsidiary of Parent (the items in clauses (i) through (iii) being
referred to collectively as the “Parent Subsidiary
Securities”). There are no outstanding obligations of Parent or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any of the Parent
Subsidiary Securities.
Section
5.07. SEC Filings and the
Sarbanes-Oxley Act. (a) Parent has filed with or furnished to the SEC all
reports, schedules, forms, statements, prospectuses, registration statements and
other documents required to be filed or furnished by Parent since December 31,
2006 (collectively, together with any exhibits and schedules thereto and other
information incorporated therein, the “Parent SEC
Documents”).
(b) As
of its filing date (and as of the date of any amendment), each Parent SEC
Document complied, and each Parent SEC Document filed subsequent to the date
hereof will comply, as to form in all material respects with the applicable
requirements of the 1933 Act and 1934 Act, as the case may be.
(c) As
of its filing date (or, if amended or superseded by a filing prior to the date
hereof, on the date of such filing with respect to the disclosures that are
amended or superseded), each Parent SEC Document filed pursuant to the 1934 Act
did not, and each Parent SEC Document filed subsequent to the date hereof will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading.
(d) Each
Parent SEC Document that is a registration statement, as amended or
supplemented, if applicable, filed pursuant to the 1933 Act, as of the date such
registration statement or amendment became effective, did not
contain
38
(e) Parent
has established and maintains disclosure controls and procedures (as defined in
Rule 13a-15 under the 1934 Act). Such disclosure controls and procedures are
designed to ensure that material information relating to Parent, including its
consolidated Subsidiaries, that is required to be disclosed by Parent is
recorded and reported on a timely basis to the individuals responsible for the
preparation of Parent’s filings with the SEC and other public disclosure
documents.
(f) Since
January 1, 2007, Parent and its Subsidiaries have established and maintained a
system of internal controls over financial reporting (as defined in Rule 13a-15
under the 1934 Act) sufficient to provide reasonable assurance regarding the
reliability of Parent’s financial reporting and the preparation of Parent
financial statements for external purposes in accordance with GAAP. Parent has
disclosed, based on its most recent evaluation of internal controls prior to the
date hereof, to Parent’s auditors and audit committee (i) any significant
deficiencies and material weaknesses in the design or operation of internal
controls which are reasonably likely to adversely affect Parent’s ability to
record, process, summarize and report financial information and (ii) any fraud,
whether or not material, that involves management or other employees who have a
significant role in internal controls.
(g) There
are no outstanding loans or other extensions of credit made by Parent or any of
its Subsidiaries to any executive officer (as defined in Rule 3b-7 under the
1934 Act) or director of Parent. Parent has not, since the enactment of the
Sarbanes-Oxley Act, taken any action prohibited by Section 402 of the
Sarbanes-Oxley Act.
(h) Since
January 1, 2007, Parent has complied in all material respects with the
applicable listing and corporate governance rules and regulations of the New
York Stock Exchange.
(i) Each
of the principal executive officer and principal financial officer of Parent (or
each former principal executive officer and principal financial officer of
Parent, as applicable) have made all certifications required by Rule
13a-14 and
15d-14 under the 1934 Act and Sections 302 and 906 of the Sarbanes- Oxley Act
and any related rules and regulations promulgated by the SEC and the NYSE, and
the statements contained in any such certifications are complete and correct in
all material respects as of the date made. For purposes of this Agreement,
“principal executive officer” and “principal financial officer” shall have the
meanings given to such terms in the Sarbanes-Oxley Act.
Section
5.08. Financial
Statements. The audited consolidated financial statements and unaudited
consolidated interim financial statements of Parent included or incorporated by
reference in the Parent SEC Filings fairly present in
39
Section
5.09. Disclosure
Documents. (a) The information provided by Parent in writing for
inclusion in the Proxy Statement or any amendment or supplement thereto shall
not, at the time the Proxy Statement or any amendment or supplement thereto is
first mailed to stockholders of the Company and at the time of the Company
Stockholder Approval, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not
misleading.
(b) The
Registration Statement and any amendments or supplements thereto, when filed,
will comply as to form in all material respects with the requirements of the
1933 Act. At the time the Registration Statement or any amendment or supplement
thereto becomes effective, the Registration Statement, as amended or
supplemented, will not 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 not misleading.
(c) The
information supplied by Parent for inclusion or incorporation by reference in
the Schedule 13E-3 or any amendment or supplement thereto shall not at the time
the Schedule 13E-3 or any amendment or supplement thereto is filed with the SEC
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 light of the circumstances under which they were made, not
misleading.
(d) The
representations and warranties contained in this Section 5.09 will not apply to
statements or omissions included or incorporated by reference in the
Registration Statement or any amendment or supplement thereto based upon
information furnished by the Company or any of its representatives or advisors
specifically for use or incorporation by reference therein.
Section
5.10. Absence of Certain
Changes. From the Parent Balance Sheet Date to the date of this
Agreement, except for the transactions contemplated by this Agreement or the
Concurrent Merger Agreement, the business of Parent and its Subsidiaries has
been conducted in the ordinary course consistent with past practice, and there
has not been any event, occurrence, development or state of circumstances or
facts that has had or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent. From April 4, 2009 to the
date of this Agreement, there has not been any action taken by
40
Section
5.11. No Undisclosed Material
Liabilities. There are no liabilities or obligations of Parent or any of
its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances that would reasonably be expected to result in
such a liability or obligation other than: (a) liabilities or obligations
reflected and provided for in the Parent Balance Sheet or in the notes thereto;
(b) liabilities or obligations incurred in the ordinary course of business
consistent with past practice since the Parent Balance Sheet Date; and (c)
liabilities and obligations that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on
Parent.
Section
5.12. Compliance with Laws and
Court Orders. Each of Parent and its Subsidiaries is and has been in
compliance with, and to the knowledge of Parent is not under investigation with
respect to and has not been threatened to be charged with or given notice of any
violation of, any Applicable Law, except for failures to comply or violations
that would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on Parent. There is no judgment, decree, injunction,
rule or order of any arbitrator or Governmental Authority outstanding against
Parent or any of its Subsidiaries that has had or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on
Parent.
Section
5.13. Litigation. There
is no action, suit, investigation or proceeding pending against, or, to the
knowledge of Parent, threatened against or affecting, Parent, any of its
Subsidiaries, any present executive officer or director of Parent or any of its
Subsidiaries or any of their respective properties before (or, in the case of
threatened actions, suits, investigations or proceedings, would be before) or by
any Governmental Authority or arbitrator that would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on
Parent.
Section
5.14. Finders’ Fees.
Except for Centerview Partners LLC and Banc of America Securities and Merrill
Lynch, each of whose fees will be paid by Parent, there is no investment banker,
broker, finder or other intermediary that has been retained by or is authorized
to act on behalf of Parent who might be entitled to any fee or commission from
the Company or any of its Affiliates upon consummation of the transactions
contemplated by this Agreement.
Section
5.15. Financing. At the
Effective Time Parent will have sufficient immediately available funds to pay,
in cash, the total amount of the cash consideration that holders of Company
Stock are entitled to receive pursuant to Section 2.02 as well as any cash
dividends or distributions payable pursuant to
41
Section
5.16. Tax Treatment.
Neither the Parent nor any of its Affiliates has taken or agreed to take any
action, or is aware of any fact or circumstance, that would prevent the Merger
from qualifying as a 368 Reorganization.
Section
5.17. No Planned Liquidations
or Mergers. Parent has no plan or intention to (i) liquidate the
Surviving Entity or (ii) merge the Surviving Entity with and into any of its
Subsidiaries or Affiliates.
Section
5.18. Concurrent Merger
Documents. Parent has delivered to the Company on or prior to the date
hereof a true and complete copy of the Concurrent Merger Agreement.
Section
5.19. No Other Representations
or Warranties. Except for the representations and warranties contained in
Article 5, each of Company and its Subsidiaries acknowledges that none of the
Parent or Merger Subsidiary, or any other Person on behalf of Parent or Merger
Subsidiary makes any other express or implied representation or warranty in
connection with the transactions contemplated by this Agreement.
ARTICLE
6
COVENANTS OF THE COMPANY
The
Company agrees that:
Section
6.01. Conduct of the
Company. From the date hereof until the Effective Time, (i) except as
expressly contemplated by this Agreement, (ii) unless Parent shall otherwise
approve in writing (such approval not to be unreasonably withheld, delayed or
conditioned) and (iii) except as required by Applicable Law, the Company shall,
and shall cause each of its Subsidiaries to, conduct its business in the
ordinary course consistent with past practice and to the extent consistent
therewith, use its reasonable best efforts to (A) preserve intact its present
business organization, (B) maintain in effect all of its foreign, federal, state
and local licenses, permits, consents, franchises, approvals and authorizations,
(C) keep available the services of its directors, officers and key employees and
(D) maintain satisfactory relationships with its customers, lenders, suppliers
and others having material business relationships with it. Without limiting the
generality of the foregoing, (i) except as expressly contemplated by this
Agreement, (ii) unless Parent shall otherwise approve in writing (such approval
not to be unreasonably withheld, delayed or conditioned) and (iii) except as
required by Applicable Law, the Company shall not, nor shall it permit any of
its Subsidiaries to:
42
(b) (i)
split, combine or reclassify any shares of its capital stock, (ii) declare, set
aside or pay any dividend or other distribution (whether in cash,
stock
or
property or any combination thereof) in respect of its capital stock, except for
(A) dividends by any of its wholly-owned Subsidiaries to the Company or to other
wholly-owned Subsidiaries and (B) regular quarterly cash dividends by the
Company with customary record and payment dates on the shares of Company Stock
not in excess of $0.14 per share per quarter or (iii) redeem, repurchase or
otherwise acquire or offer to redeem, repurchase, or otherwise acquire any
Company Securities or any Company Subsidiary Securities, except pursuant to any
Company Stock Plan or any Company Stock Option (including for purposes of
satisfying applicable tax withholding requirements and payment of the exercise
price in respect of any Company Stock Option);
(c) except
as provided in Section 6.01(j), (i) issue, deliver or sell, or authorize the
issuance, delivery or sale of, any Company Securities or Company Subsidiary
Securities, other than the issuance of (A) any shares of the Company Stock upon
the exercise of Company Stock Options that are outstanding on the date of this
Agreement in accordance with the terms of those options on the date of this
Agreement and (B) any Company Subsidiary Securities to the Company or any other
wholly owned Subsidiary of the Company or (ii) amend any term of any Company
Security or any Company Subsidiary Security (in each case, whether by merger,
consolidation or otherwise);
(d) incur
any capital expenditures or any obligations or liabilities in respect thereof,
except for (i) those contemplated by the capital expenditure budget that has
been made available to Parent prior to the date of this Agreement and (ii) any
unbudgeted capital expenditures not to exceed $10,000,000 individually or
$20,000,000 in the aggregate;
(e) acquire
(by merger, consolidation, acquisition of stock or assets or otherwise),
directly or indirectly, any assets, securities, properties, interests or
businesses, other than (i) supplies in the ordinary course of business
consistent with past practice and (ii) acquisitions with a purchase price
(including related assumed indebtedness) that do not exceed $25,000,000
individually or $50,000,000 in the aggregate;
(f) (i)
sell, lease or otherwise transfer, or create or incur any Lien on, any of the
Company’s or its Subsidiaries’ assets, securities, properties, interests or
businesses, other than (A) sales of inventory or obsolete equipment in the
ordinary course of business consistent with past practice, (B) sales of assets,
securities, properties, interests or businesses with a sale price (including any
related assumed indebtedness) that do not exceed $10,000,000 individually or
$20,000,000 in the aggregate and (C) Permitted Liens or (ii) sell, lease,
license or otherwise dispose of or permit to lapse any material Intellectual
Property right,
43
(g) other
than in connection with actions permitted by Section 6.01(e) or with
wholly-owned Subsidiaries, make any loans, advances or capital contributions to,
or investments in, any other Person;
(h) (i)
create, incur, assume, suffer to exist or prepay any indebtedness for borrowed
money or guarantees thereof other than in the ordinary course of business
consistent with past practice, and in an amount that does not exceed $50,000,000
in the aggregate or (ii) enter into, modify in any material respect or terminate
any material interest rate swaps or hedging arrangements except, in the case of
hedging arrangements, in the ordinary course of business consistent with past
practice;
(i) (i)
enter into any contract, agreement, arrangement or understanding that would
constitute a Material Contract if it had been entered into as of the date hereof
or (ii) amend, modify in any material respect or terminate any Material Contract
or any contract, agreement or understanding referred to in clause (i) or
otherwise waive, release or assign any material rights, claims or benefits of
the Company or any of its Subsidiaries thereunder;
(j) except
as required to comply with Applicable Law or any Employee Plan in accordance
with its terms on the date of this Agreement, (i) increase compensation, bonuses
or other benefits payable to any director or employee of the Company or any of
its Subsidiaries at the executive officer level; (ii) increase compensation,
bonuses or other benefits payable to any employee or independent contractor of
the Company or any of its Subsidiaries, except in the ordinary course of
business consistent with past practice and to the extent not material; (iii)
enter into, adopt or amend in any material respect any severance or retention
plan, arrangement or policy applicable to any director, executive officer,
employee or independent contractor, except in the case of non-officer
individuals who are newly hired or promoted after the date of this Agreement in
the ordinary course of business consistent with past practice; (iv) enter into,
adopt or amend in any material respect, including anything that would be covered
in whole or in part by the foregoing clause (iii), any employment, change of
control, compensation, bonus, profit-sharing, stock option or other stock
related rights or other forms of incentive or deferred compensation, retirement
benefits or other benefit agreement, plan, arrangement or policy applicable to
any director or executive officer or, except in the ordinary course of business
consistent with past practice, any other employee or independent contractor of
the Company or any of its Subsidiaries and except in the case of non-officer
individuals who are newly hired or promoted in the ordinary course of business
consistent with past practice; (v) pay based on, accrue or certify performance
level achievements for employees participating in a plan, program or arrangement
at levels in excess of actually achieved performance in respect of any component
of an incentive-based award
44
(k) change
the Company’s methods of accounting, except as required by concurrent changes in
GAAP or in Regulation S-X of the 1934 Act, as agreed to by its independent
public accountants;
(l)
settle, or offer or propose to settle, (i) any material litigation,
investigation, arbitration, proceeding or other claim involving or against the
Company or any of its Subsidiaries, (ii) any stockholder litigation or dispute
against the Company or any of its officers or directors or (iii) any litigation,
arbitration, proceeding or dispute that relates to the transactions contemplated
hereby;
(m)
enter
into any material new line of business;
(n) enter
into any bottling appointment, license agreement to distribute product, bottler
funding support agreement, or any ancillary agreement or amendment to any of the
foregoing, in each case, other than in the ordinary course of business
consistent with past practice; or
(o)
agree,
resolve or commit to do any of the foregoing.
Section
6.02. Company Stockholder
Meeting. (a) Subject to the terms of this Agreement, the Company shall
cause a meeting of its stockholders (the “Company Stockholder Meeting”)
to be duly called and held as soon as reasonably practicable for the purpose of
voting on the approval and adoption of this Agreement and the Merger. In
connection with such meeting, the Company shall promptly prepare and file with
the SEC, use reasonable best efforts to have cleared by the SEC and thereafter
mail to its stockholders as promptly as practicable the Proxy Statement (which
shall be filed as part of the Registration Statement) and all other proxy
materials for such meeting.
(b)
Subject to Section 6.03, the Board of Directors of the Company and the
Transactions Committee shall (i) recommend approval and adoption of this
Agreement by the Company’s stockholders, (ii) use its reasonable best efforts to
obtain the Company Stockholder Approval, (iii) not withdraw, modify or qualify
the Company Board Recommendation in any manner adverse to Parent, recommend an
Acquisition Proposal (nor shall the Transactions Committee recommend any of the
foregoing actions in this clause (iii) to the Board of Directors of the Company)
(any of the foregoing in this clause (iii), a “Company Adverse Recommendation
Change”) and (iv) otherwise comply with all legal requirements applicable
to such meeting.
45
(b)
Exceptions.
Notwithstanding Section 6.02(b) or Section 6.03(a), at any time prior to the
Company Stockholder Approval:
(i) the
Company, directly or indirectly through advisors, agents or other
intermediaries, may (A) engage or participate in negotiations or discussions
with any Third Party and its Representatives that has made after the date of
this Agreement an unsolicited bona fide written Acquisition Proposal that the
Board of Directors of the Company believes constitutes or is reasonably likely
to lead to a Superior Proposal; (B) furnish to such Third Party or its
Representatives nonpublic information relating to the Company or any of its
Subsidiaries pursuant to a customary confidentiality agreement (a copy of which
shall be provided for informational purposes only to Parent) with such Third
Party (it being understood that such confidentiality agreement need not prohibit
the making, or amendment, of an Acquisition Proposal); provided that all such
information (to the extent that such information has not been previously
provided or made available to Parent) is provided or made available to Parent,
as the case may be, prior to or substantially concurrently with the time it is
provided or made available to such Third Party; and (C) subject to giving notice
pursuant to Section 6.03(d) below, approve, recommend, or otherwise declare
advisable or propose to approve, recommend or
46
(ii) the
Board of Directors of the Company may make a Company Adverse Recommendation
Change;
in each
case referred to in the foregoing clauses (i) and (ii) only if the Board of
Directors of the Company determines in good faith, after consultation with
outside legal counsel, that the failure to take such action would be
inconsistent with its fiduciary duties under Delaware Law.
In
addition, nothing contained herein shall prevent the Board of Directors of the
Company from (i) complying with Rule 14e-2(a) under the 1934 Act with regard to
an Acquisition Proposal so long as any position taken or statement made to so
comply is consistent with this Section 6.03; provided that any such
position taken or statement made that addresses or relates to the approval,
recommendation or declaration of advisability by the Company’s Board of
Directors with respect to this Agreement or an Acquisition Proposal shall be
deemed to be a Company Adverse Recommendation Change unless the Board of
Directors of the Company reaffirms the Company Board Recommendation in such
statement or in connection with such action or (ii) issuing a “stop, look and
listen” disclosure or similar communication of the type contemplated by Rule
14d-9(f) under the 1934 Act.
(c)
Required
Notices. The Board of Directors of the Company shall not take any of the
actions referred to in Section 6.03(b) unless the Company shall have delivered
to Parent a prior written notice advising Parent that it intends to take such
action, and after taking such action the Company shall, if such action is in
connection with an Acquisition Proposal, continue to advise Parent on a
reasonably current basis of the status and material terms of any discussions and
negotiations with the Third Party. In addition, the Company shall notify Parent
promptly (but in no event later than 48 hours) after receipt by the Company (or
any of its Representatives) of any Acquisition Proposal, any indication by a
Third Party that it is considering making an Acquisition Proposal or any request
for information relating to the Company or any of its Subsidiaries or for access
to the business, properties, assets, books or records of the Company or any of
its Subsidiaries by any Third Party that has indicated that it may be
considering making, or has made, an Acquisition Proposal. The Company shall
provide such notice orally and in writing and shall identify the Third Party
making, and the material terms and conditions of, any such Acquisition Proposal,
indication or request. The Company shall keep Parent reasonably informed of the
status and details of any such Acquisition Proposal, indication or request, and
shall promptly (but in no event later than 48 hours after receipt) provide to
Parent copies of all correspondence and written materials sent or provided to
the Company or any of its Subsidiaries that describes any terms or conditions of
any Acquisition
47
(d) “Last Look”. Further,
the Board of Directors of the Company shall not make a Company Adverse
Recommendation Change in response to an Acquisition Proposal, unless (i) the
Company promptly notifies Parent, in writing at least three Business Days before
taking that action, of its intention to do so, attaching the most current
version of the proposed agreement under which such Acquisition Proposal is
proposed to be consummated and the identity of the third party making the
Acquisition Proposal, and (ii) Parent does not make, within 48 hours after its
receipt of that written notification, a binding offer that is at least as
favorable to the stockholders of the Company (other than Parent, Merger
Subsidiary and any other Affiliates of Parent) as such Acquisition Proposal (it
being understood and agreed that any amendment to the financial terms or other
material terms of such Acquisition Proposal that is less favorable to the
Company shall require a new written notification from the Company and commence a
new 48-hour period under clause (ii) of this Section 6.03(d)).
(e) Definition of Superior
Proposal. For purposes of this Agreement, “Superior Proposal” means a
bona fide, unsolicited
written Acquisition Proposal for at least a majority of the total number of
outstanding shares of Company Stock or all or substantially all of the
consolidated assets of the Company and its Subsidiaries on terms that the Board
of Directors of the Company determines in good faith by a majority vote, after
considering the advice of a financial advisor of nationally recognized
reputation and outside legal counsel and taking into account all the terms and
conditions of the Acquisition Proposal, including any break-up fees, expense
reimbursement provisions, conditions to consummation and availability of any
necessary financing, provide greater value to the Company’s stockholders (in
their capacity as stockholders of the Company) than as provided hereunder
(taking into account any binding proposal by Parent to amend the terms of this
Agreement pursuant to Section 6.03(d)), which the Board of Directors of the
Company determines is reasonably likely to be consummated, assuming the Company
Stockholder Approval was obtained.
(f) Obligation to Terminate
Existing Discussions. The Company shall, and shall cause
its Subsidiaries and its and their Representatives to, cease immediately and
cause to be terminated any and all existing activities, discussions or
negotiations, if any, with any Third Party and its Representatives and its
financing sources conducted prior to the date hereof with respect to any
Acquisition Proposal.
(g) Board Actions. Any
determination made or action taken by the Board of
Directors of the Company in accordance with Section 6.03(b) and Section 6.03(d)
shall be made or taken only after receipt of the affirmative recommendation of
the Transactions Committee with respect to such determination or
action.
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(b)
The Company and each of its Subsidiaries shall establish or cause to be
established in accordance with GAAP on or before the Effective Time an adequate
accrual for all Taxes due with respect to any period or portion thereof ending
prior to or as of the Effective Time.
ARTICLE
7
COVENANTS OF PARENT
Parent
agrees that:
Section
7.01. Conduct of
Parent. From the date hereof until the Effective Time, except as
otherwise contemplated herein or in the Concurrent Merger Agreement, Parent
shall, and shall cause each of its Subsidiaries to conduct its business in the
ordinary course consistent with past practice and use its reasonable best
efforts to preserve intact its business organizations and relationships with
Third Parties and to keep available the services of its present officers and
employees. Without limiting the generality of the foregoing, from the date
hereof until the Effective Time Parent shall not, nor shall it permit any of its
Subsidiaries to:
(a) amend
the articles of incorporation or bylaws of Parent in a manner that would have a
material and adverse impact on the value of Parent Stock;
(b) adopt
or implement a plan of complete or partial liquidation or resolution providing
for or authorizing such liquidation or a dissolution, merger, consolidation or
recapitalization of Parent;
(c)
agree,
resolve or commit to do any of the foregoing; or
(d) enter
into, modify, amend or terminate any contract, arrangement, commitment or
understanding or waive, release or assign any rights or claims
49
Section
7.02. Obligations of Merger
Subsidiary. Parent shall take all action necessary to cause Merger
Subsidiary to perform its obligations under this Agreement and to consummate the
Merger on the terms and conditions set forth in this Agreement. Parent will take
all steps necessary to cause the stockholders of Merger Subsidiary to approve
the Merger.
Section
7.03. Voting of Company
Stock. Parent shall vote or cause to be voted all shares of Company Stock
beneficially owned by it or any of its Subsidiaries in favor of adoption of this
Agreement at the Company Stockholder Meeting. From and after the date hereof and
prior to the Company Stockholder Approval having been obtained, neither Parent
nor any of its Affiliates will acquire beneficial ownership of any additional
shares of Company Stock; provided that, for the
avoidance of doubt, nothing in this sentence shall limit or restrict transfers of
Company Stock among Parent and its Subsidiaries.
Section
7.04. Director and
Officer Liability.
(a) From
and after the Effective Time, each of Parent and the Surviving Entity agrees
that it will indemnify and hold harmless each present and former director and
officer of the Company or any of its Subsidiaries (in each case, when acting in
such capacity), determined as of the Effective Time (the “Indemnified Persons”), against any costs
or expenses (including reasonable attorneys’ fees), judgments, fines,
losses, claims, damages or liabilities (collectively, “Costs”) incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of matters existing or
occurring at or prior to the Effective Time (including in connection with this
Agreement or the transactions contemplated hereby), whether asserted or claimed
prior to, at or after the Effective Time, to the fullest extent permitted under
Delaware Law or any other Applicable Law or provided under the Company’s
certificate of incorporation or by-laws in effect on the date hereof of this
Agreement (and Parent or the Surviving Entity shall also advance expenses as
incurred to the fullest extent permitted under Delaware Law; provided that, if required by
Delaware Law, the Person to whom expenses are advanced provides an undertaking
to repay such advances if it is ultimately determined that such Person is not
entitled to indemnification); provided, further that any
determination required to be made with respect to whether an officer’s or
director’s conduct complies with the standards set forth under Delaware Law and
the Company’s certificate of incorporation and by-laws shall, to the extent
permitted by Applicable Law, be made by independent counsel selected by the
Surviving Entity.
50
(c) Prior
to the Effective Time, the Company shall or, if the Company is unable to, Parent
shall cause the Surviving Entity as of the Effective Time, to obtain and fully
pay the premium for the extension of (i) the directors’ and officers’ liability
coverage of the Company’s existing directors’ and officers’ insurance policies
and (ii) the Company’s existing fiduciary liability insurance policies, in each
case with a claims reporting or discovery period of at least six years from and
after the Effective Time from an insurance carrier with the same or better
credit rating as the Company’s current insurance carrier with respect to
directors’ and officers’ liability insurance and fiduciary liability insurance
(collectively, “D&O
Insurance”) with benefits and levels of coverage at least as favorable as
the Company’s existing policies with respect to matters existing or occurring at
or prior to the Effective Time (including in connection with this Agreement or
the transactions or actions contemplated hereby). If the Company and the
Surviving Entity for any reason fail to obtain such “tail” insurance policies as
of the Effective Time, the Surviving Entity shall, and Parent shall cause the
Surviving Entity to, continue to maintain in effect for a period of at least six
years from and after the Effective Time the D&O Insurance in place as of the
date of this Agreement with benefits and levels of coverage at least as
favorable as provided in the Company’s existing policies as of the date of this
Agreement, or the Surviving Entity shall, and Parent shall cause the Surviving
Entity to, use reasonable best efforts to purchase comparable D&O Insurance
for such six-year period with benefits and levels of coverage at least as
favorable as provided in the Company’s existing policies as of the date of this
Agreement; provided
that, in satisfying its obligation under this Section 7.04(c), the Surviving
Entity shall not be obligated to pay in the aggregate in excess of 250% of the
amount per annum the Company paid in its last full fiscal year, which amount is
set forth in Section 7.04(c) of the Company Disclosure Schedule; provided, further, that if
the annual premiums of such insurance coverage exceed such amount, the Surviving
Entity shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
(d) If
Parent, the Surviving Entity or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving entity of such consolidation or merger, or (ii)
transfers or conveys all or substantially all of its properties and assets to
any Person, then, and in each such case, to the extent necessary, proper
provision shall be made so that the successors and assigns of Parent or the
Surviving Entity, as the case may be, shall assume the obligations set forth in
this Section 7.04.
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Section
7.05. Stock Exchange
Listing. Parent shall use its reasonable best efforts to cause the shares
of Parent Stock to be issued as part of the Merger Consideration to be listed on
the New York Stock Exchange, subject to official notice of
issuance.
Section
7.06. Employee Matters.
(a) For a period of one year following the Effective Time, Parent shall provide
to all employees of the Company or any of its Subsidiaries as of the Effective
Time who continue employment with the Surviving Entity or any of its Affiliates
(“Continuing Employees”)
compensation and benefits (other than equity-based compensation) that are in the
aggregate substantially comparable to the compensation and benefits provided by
the Company and its Subsidiaries to the Continuing Employees as in effect
immediately prior to the Effective Time.
(b)
With respect to any “employee benefit plan,” as defined in Section 3(3) of
ERISA, maintained by Parent or any of its Subsidiaries, including the Surviving
Entity, in which any Continuing Employee becomes a participant, such Continuing
Employee shall receive full credit for purposes of eligibility to participate
and vesting thereunder (but not for purposes of benefit accruals) for service
with the Company or any of its Subsidiaries (or predecessor employers to the
extent the Company provides such past service credit) to the same extent that
such service was recognized as of the Effective Time under a comparable plan of
the Company and its Subsidiaries in which the Continuing Employee
participated.
(c) With
respect to any welfare plan maintained by Parent or any of its Subsidiaries,
including the Surviving Entity, in which any Continuing Employee is eligible to
participate after the Effective Time, Parent shall, or shall cause its
Subsidiaries to, (i) waive all limitations as to preexisting conditions and
exclusions with respect to participation and coverage requirements applicable to
such employees to the extent such conditions and exclusions were satisfied or
did not apply to such employees under the welfare plans of the Company or its
Subsidiaries prior to the Effective Time and (ii) provide each Continuing
Employee with credit for any co-payments and deductibles paid and for out-of-
pocket maximums incurred prior to the Effective Time in satisfying any analogous
deductible or out-of-pocket requirements to the extent applicable under any such
plan.
(d) Parent
shall, and shall cause its Subsidiaries, including the Surviving Entity, to
honor, in accordance with its terms, each Employee Plan and all
52
(e) With
respect to the annual bonus for which any employee of the Company or any of its
Subsidiaries is eligible under any of the Company’s annual incentive plans with
respect to the year in which the Effective Time occurs, Parent shall administer
each such plan (including the payment of all amounts owed thereunder at the
ordinary time) in accordance with its terms; provided that the amount payable to
such employee under such plan shall be determined in accordance with the terms
of such plan and based on the attainment of applicable performance goals as
mutually determined in the reasonable, good faith judgment of Parent and the
Company. With respect to the annual bonus for which any employee of the Company
or any of its Subsidiaries is eligible under any of the Company’s annual
incentive plans with respect to any year, if any, prior to the Effective Time,
the Company shall administer each such plan (including the payment of all
amounts owed thereunder at the ordinary time) in accordance with its terms
consistent with past practices in the ordinary course.
(f) Nothing
in this Section 7.06 shall (i) be treated as an amendment of, or undertaking to
amend, any benefit plan, (ii) prohibit Parent or any of its Subsidiaries,
including the Surviving Entity, from amending any employee benefit plan, (iii)
obligate Parent, the Company, the Surviving Entity or any of their respective
Affiliates to retain the employment of any particular employee or (iv) confer
any rights or benefits on any person other than the parties to this
Agreement.
Section
7.07. Limitation on
Acquisitions. Prior to the Effective Time Parent shall not, and shall
cause its Subsidiaries not to, acquire or agree to acquire any Person (other
than PBG) if such acquisition would reasonably be expected to prevent, hinder or
delay the consummation of the transactions contemplated by this Agreement or to
make it more difficult, or to increase the time required, to obtain the
expiration or termination of the waiting period under the HSR Act or any other
applicable Competition Laws applicable to the transactions contemplated by this
Agreement.
ARTICLE
8
COVENANTS OF PARENT AND THE COMPANY
The
parties hereto agree that:
53
(b)
In furtherance and not in limitation of the foregoing, each of Parent and
the Company shall make appropriate filings pursuant to applicable Competition
Laws, including an appropriate filing of a Notification and Report Form pursuant
to the HSR Act, with respect to the transactions contemplated hereby as promptly
as practicable. Each of Parent and the Company shall supply as promptly as
practicable any additional information and documentary material
54
(c)
In furtherance of the foregoing, Parent shall use its reasonable best
efforts to cause the consummation of the Concurrent Merger on the terms and
subject to the conditions of the Concurrent Merger Agreement, including Section
8.01 thereof, and Parent agrees that it shall not enter into any settlement,
undertaking, consent decree, stipulation or agreement with any Governmental
Authority in connection with the Concurrent Merger, or otherwise, that would
involve Parent agreeing to not consummate the Merger.
Section
8.02. SEC Matters. (a)
As promptly as practicable after the date hereof, Parent and the Company shall
prepare and file the Proxy Statement, the Registration Statement (in which the
Proxy Statement will be included) and, if applicable, the Schedule 13E-3 with
the SEC. Parent and the Company shall use their reasonable best efforts to cause
the Proxy Statement, the Registration Statement (in which the Proxy Statement
will be included) and, if applicable, the Schedule 13E-3 to be cleared by the
SEC and the Registration Statement to become effective under the 1933 Act as
soon after each such filing as practicable and to keep the Registration
Statement effective as long as is necessary to consummate the Merger. Subject to
Section 6.03, the Proxy Statement shall include the recommendation of the Board
of Directors of the Company (including the Transactions Committee) in favor of
adoption of this Agreement. The Company shall use its reasonable best efforts to
cause the Proxy Statement to be mailed to its stockholders as promptly as
practicable after the Registration Statement becomes effective. Each of the
Company and Parent shall promptly provide copies, consult with each other and
prepare written responses with respect to any written comments received from the
SEC with respect to the Schedule 13E-3, the Proxy Statement and the Registration
Statement and advise one another of any oral comments received from the SEC.
Each of the Company and Parent shall use its reasonable best efforts to ensure
that the Registration Statement, the Proxy Statement and the Schedule 13E-3
comply in all material respects with the rules and regulations promulgated by
the SEC under the 1933 Act and the 1934 Act, as the case may be.
(b)
The Company and Parent shall make all necessary filings with respect to
the Merger and the transactions contemplated hereby under the 1933 Act and the
1934 Act and applicable state “blue sky” laws and the rules and regulations
thereunder. Each of the Company and Parent will advise the other party, promptly
after it receives notice thereof, of the time when the Registration
55
Section
8.03. Public
Announcements. Parent and the Company shall consult with each other
before issuing any press release (including by providing the other party a
reasonable opportunity to comment thereon), having any communication with the
press (whether or not for attribution), making any other public statement or
scheduling any press conference or conference call with investors or analysts
with respect to this Agreement or the transactions contemplated hereby and,
except in respect of any public statement or press release as may be required by
Applicable Law or any listing agreement with or rule of any national securities
exchange or association, shall not issue any such press release, make any such
other public statement or schedule any such press conference or conference call
before such consultation. This Section 8.03 shall not apply to matters referred
to in Section 6.03.
Section
8.04. Further
Assurances. At and after the Effective Time, the officers of the
Surviving Entity shall be authorized to execute and deliver, in the name and on
behalf of the Company or Merger Subsidiary, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of the
Company or Merger Subsidiary, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Entity any and all right, title
and interest in, to and under any of the rights, properties or assets of the
Company acquired or to be acquired by the Surviving Entity as a result of, or in
connection with, the Merger.
Section
8.05. Access to
Information. Subject to Applicable Law, from the date hereof until the
Effective Time and subject to the Confidentiality Agreement dated June 24, 2009
between the Company and Parent (as supplemented on August 2, 2009, the “Confidentiality Agreement”),
the Company and Parent shall and shall cause each of its respective Subsidiaries
to , upon reasonable notice, (a) give to the other party, its counsel, financial
advisors, auditors and
56
Section
8.06. Notices of Certain
Events. Each of the Company and Parent shall promptly notify and provide
copies to the other of:
(a) any
notice or other communication from any Person alleging that the consent of such
Person is or may be required in connection with the transactions contemplated by
this Agreement;
(b) any
notice or other communication from any Governmental Authority in connection with
the transactions contemplated by this Agreement; and
(c) any
actions, suits, claims, investigations or proceedings commenced or, to its
knowledge, threatened against, relating to or involving or otherwise affecting
the Company or any of its Subsidiaries or Parent and any of its Subsidiaries, as
the case may be, that, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to any Section of this Agreement or
that relate to the consummation of the transactions contemplated by this
Agreement;
provided, that the delivery
of any notice pursuant to this Section 8.06 shall not limit or otherwise
affect the remedies available hereunder to the party receiving that
notice.
57
(b)
Each of Parent and the Company shall use its reasonable best efforts to
obtain the opinions referred to in Sections 9.02(d) and 9.03(b).
Section
8.08. Section 16
Matters. Prior to the Effective Time, the Board of Directors of Parent
and the Company shall take all such steps as may be required to cause any
dispositions of Company Stock (including derivative securities with respect to
Company Stock) or acquisitions of Parent Stock (including derivative securities
with respect to Parent Stock) resulting from the transactions contemplated by
Article 2 of this Agreement by each individual who is subject to the reporting
requirements of Section 16(a) of the 1934 Act with respect to the Company and/or
will become subject to such reporting requirements with respect to Parent to be
exempt under Rule 16b-3 promulgated under the 1934 Act.
Section
8.09. Stock Exchange
De-listing. Prior to the Effective Time, the Company shall cooperate with
Parent and use its reasonable best efforts to take, or cause to be taken, all
actions, and do or cause to be done all things, reasonably necessary, proper or
advisable on its part under Applicable Laws and rules and policies of the NYSE
to enable the de-listing by the Surviving Entity of the Company Stock from the
NYSE and the deregistration of the Company Stock under the 1934 Act as promptly
as practicable after the Effective Time, and in any event no more than ten days
after the Effective Time.
Section
8.10. Merger Subsidiary
Reincorporation. Prior to Closing, Parent may cause Merger Subsidiary to
be reincorporated as a Delaware corporation (by merger, reincorporation or
otherwise).
ARTICLE
9
CONDITIONS TO THE MERGER
Section
9.01. Conditions to the
Obligations of Each Party. The obligations of the Company, Parent and
Merger Subsidiary to consummate the Merger are subject to the satisfaction of
the following conditions:
(a)
the Company Stockholder Approval shall have been obtained in accordance
with Delaware Law; provided, that in the event the Board of Directors of the
Company makes a Company Adverse Recommendation Change in accordance with Section
6.03(b)(ii) in response to, or as a result of, an event, development,
occurrence, or change in circumstances or facts, occurring or
58
(b)
no
Applicable Law shall prohibit the consummation of the Merger;
(c) any
applicable waiting period under the HSR Act relating to the Merger and any
agreement between Parent, the Company and any Governmental Authority not to
consummate the Merger prior to a specific date shall have expired or been
terminated;
(d) the
Registration Statement shall have been declared effective and no stop order
suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the
SEC;
(e) the
shares of Parent Stock to be issued in the Merger shall have been approved for
listing on the New York Stock Exchange, subject to official notice of issuance;
and
(f) other
than the actions and filings referenced in Section 9.01(c), all material actions
by or in respect of, or material filings with, any Governmental Authority,
required to permit the consummation of the Merger shall have been taken, made or
obtained.
Section
9.02. Conditions to the
Obligations of Parent and Merger Subsidiary. The obligations
of Parent and Merger Subsidiary to consummate the Merger are subject to
the satisfaction of the following further conditions:
(a)
(i) the Company shall have performed in all
material respects all of its obligations hereunder required to be performed by
it at or prior to the Effective Time, (ii) (A) the representations and
warranties of the Company contained in Section 4.05 shall be true in all
respects (except for such inaccuracies as are de minimis relative to Section
4.05 taken as a whole) at and as of the Effective Time as if made at and as of
such time (other than such representations and warranties that by their terms
address matters only as of another specified time, which shall be true in all
respects only as of such time), (B) the representations and
warranties
59
(b) there
shall not be pending any action or proceeding by any Governmental Authority, (i)
challenging or seeking to make illegal, to delay materially or otherwise
directly or indirectly to restrain or prohibit the consummation of the Merger,
seeking to obtain material damages or otherwise directly or indirectly relating
to the transactions contemplated by the Merger, (ii) seeking to restrain or
prohibit Parent’s, Merger Subsidiary’s or any of Parent’s other Affiliates’ (A)
ability effectively to exercise full rights of ownership of the Company’s
capital stock, including the right to vote any shares of the Company’s capital
stock acquired or owned by Parent, Merger Subsidiary or any of Parent’s other
Affiliates following the Effective Time on all matters properly presented to the
Company’s stockholders, or (B) ability to effectively exercise full rights of
ownership or operation (or that of its respective Subsidiaries or Affiliates) of
any material business or assets of the Company and its Subsidiaries or of Parent
and its Subsidiaries or (iii) seeking to compel Parent or any of its
Subsidiaries or Affiliates to dispose of or hold separate all or any of any
material business or assets of the Company and its Subsidiaries or of Parent and
its Subsidiaries or (iv) that would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Company (or, following the
Effective Time, the Surviving Entity) or Parent;
(c) there
shall not have been any action taken, or any Applicable Law enacted, enforced,
promulgated, issued or deemed applicable to the Merger, by any Governmental
Authority, other than the application of the waiting period provisions of the
HSR Act to the Merger, that would reasonably be expected to, individually or in
the aggregate, result in any of the consequences referred to in clauses (i)
through (iv) of Section 9.02(b);
(d) Parent
shall have received an opinion of Davis Polk & Wardwell LLP in form and substance
reasonably satisfactory to Parent, on the basis of certain facts,
representations and assumptions set forth in such opinion, dated the Effective
Time, to the effect that the Merger will be treated for federal income tax
purposes as a reorganization qualifying under the provision of Section 368(a)
of
60
(e) except
as disclosed in a Company SEC Document filed prior to the date hereof or in the
Company Disclosure Schedule, from the date of this Agreement to the Effective
Time, there shall not have occurred and be continuing any event, occurrence,
development or state of circumstances or facts which, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect on the Company; and
(f) the
conditions set forth in Sections 9.01(b), 9.01(c), 9.01(f), 9.02(b) and 9.02(c)
of the Concurrent Merger Agreement, to the extent they relate to Competition
Laws, shall have been satisfied.
Section
9.03. Conditions to the
Obligations of the Company. The obligations of the Company to consummate
the Merger are subject to the satisfaction of the following further
conditions:
(a) (i)
each of Parent and Merger Subsidiary shall have performed in all material
respects all of its obligations hereunder required to be performed by it at or
prior to the Effective Time, (ii) (A) the representations and warranties of
Parent contained in Section 5.01, 5.02 and 5.05 shall be true in all material
respects at and as of the Effective Time as if made at and as of such time
(other than such representations and warranties that by their terms address
matters only as of another specified time, which shall be true in all material
respects only as of such time) and (B) the other representations and warranties
of Parent and Merger Subsidiary contained in this Agreement (disregarding all
materiality and Material Adverse Effect qualifications contained therein) shall
be true at and as of the Effective Time as if made at and as of such time (other
than representations and warranties that by their terms address matters only as
of another specified time, which shall be true only as of such time), with, in
the case of this clause (B) only, only such exceptions as have not had and would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Parent; and (iii) the
Company shall have received a certificate signed by an executive officer of
Parent to the foregoing effect;
(b) the
Company shall have received an opinion of Briggs and Morgan, P.A. in form and
substance reasonably satisfactory to the Company, on the basis of certain facts,
representations and assumptions set forth in such opinion, dated the Effective
Time, to the effect that the Merger will be treated for federal income tax
purposes as a reorganization qualifying under the provisions of Section 368(a)
of the Code and that each of Parent, Merger Subsidiary and the Company will be a
party to the reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, Briggs and Morgan, P.A. shall be entitled to rely
upon
61
(c)
except as disclosed in a Parent SEC Document filed prior to the date
hereof or in the Parent Disclosure Schedule, from the date of this Agreement to
the Effective Time, there shall not have occurred and be continuing any event,
occurrence, development or state of circumstances or facts which, individually
or in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect on Parent.
ARTICLE
10
TERMINATION
Section
10.01. Termination.
This Agreement may be terminated and the Merger may be abandoned at any time
prior to the Effective Time (notwithstanding any approval of this Agreement by
the stockholders of the Company):
|
|
(a)
|
by
mutual written agreement of the Company and
Parent;
|
|
|
(b)
|
by
either the Company or Parent, if:
|
(i) the
Merger has not been consummated on or before August 3, 2010 (the “End Date”); provided that the right to
terminate this Agreement pursuant to this Section 10.01(b)(i) shall not be
available to any party whose breach of any provision of this Agreement results
in the failure of the Merger to be consummated by such time;
(ii) there
shall be any Applicable Law in effect that (A) makes consummation of the Merger
illegal or otherwise prohibited or (B) enjoins the Company or Parent from
consummating the Merger and, in the case of clauses (A) and (B) any such
Applicable Law, including an injunction, shall have become final and
nonappealable; or
(iii) at
the Company Stockholder Meeting (including any adjournment or postponement
thereof), the Company Stockholder Approval shall not have been obtained;
or
|
|
(c)
|
by
Parent, if:
|
(i) a
Company Adverse Recommendation Change shall have occurred or the Company
materially breaches its obligations under this Agreement by reason of a failure
to call the Company Stockholders Meeting in accordance with Section 6.02;
or
(ii) a
breach of any representation or warranty or failure to perform any covenant or
agreement on the part of the Company set forth
62
(d)
by the Company, if a breach of any representation or warranty or failure
to perform any covenant or agreement on the part of the Parent or Merger
Subsidiary set forth in this Agreement shall have occurred that would cause the
condition set forth in Section 9.03(a) not to be satisfied, and such condition
is incapable of being satisfied by the End Date.
The party
desiring to terminate this Agreement pursuant to this Section 10.01 (other than
pursuant to Section 10.01(a)) shall give notice of such termination to the other
party.
Section
10.02. Effect of
Termination. If this Agreement is terminated pursuant to Section 10.01,
this Agreement shall become void and of no effect without liability of any party
(or any stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other party hereto; provided that, if such
termination shall result from the knowing and intentional (i) failure of either party
to fulfill a condition to the performance of the obligations of the other party
or (ii) failure of either party to perform a covenant hereof, such party shall
be fully liable for any and all liabilities and damages incurred or suffered by
the other party as a result of such failure. None of Parent, Merger Subsidiary
or the Company shall be relieved or released from any liabilities or damages
(which the parties acknowledge and agree shall not be limited to reimbursement
of expenses or out-of-pocket costs, and may include to the extent proven the
benefit of the bargain lost by a party’s shareholders (taking into consideration
relevant matters, including other combination opportunities and the time value
of money), which shall be deemed in such event to be damages of such party)
arising out of its knowing and intentional breach of any provision of this
Agreement. The provisions of this Section 10.02 and Sections 11.01, 11.04,
11.07, 11.08 and 11.09, and the Confidentiality Agreement, shall survive any
termination hereof pursuant to Section 10.01.
ARTICLE
11
MISCELLANEOUS
Section
11.01. Notices. All
notices, requests and other communications to any party hereunder shall be in
writing (including facsimile transmission) and shall be given,
63
PepsiCo,
Inc.
700
Anderson Hill Road
Purchase,
New York 10577
Attention:
Larry D. Thompson
Facsimile
No.: (914) 253-2070
with a
copy to:
Davis
Polk & Wardwell LLP
450
Lexington Avenue
New York,
New York 10017
|
|
Attention:
|
George
R. Bason, Jr.
|
| John H. Butler |
Facsimile
No.: (212) 450-3800
if to the
Company, to:
PepsiAmericas,
Inc.
4000 RBC
Plaza
60 South
Sixth Street
Minneapolis,
Minnesota 55402
Attention:
Robert C. Pohlad
Facsimile
No.: (612) 661-3821
with a
copy to:
Sullivan
& Cromwell LLP
125 Broad
Street
New York,
New York 10004
|
|
Attention:
|
James
Morphy
|
| Audra D. Cohen |
Facsimile
No.: (212) 558-3588
Briggs
and Morgan, P.A.
2200 IDS
Center
80 South
Eighth Street
Minneapolis,
Minnesota 55402
Attention:
Brian D. Wenger
Facsimile
No.: (612) 977-8650
or to
such other address or facsimile number as such party may hereafter specify for
the purpose by notice to the other parties hereto. All such notices, requests
and other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5:00 p.m. on a business day in the place
of
64
Section
11.02. Survival of
Representations and Warranties. The representations and warranties
contained herein and in any certificate or other writing delivered pursuant
hereto shall not survive the Effective Time.
Section
11.03. Amendments and
Waivers. (a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, but only if, such amendment or waiver is in
writing and is signed, in the case of an amendment, by each party to this
Agreement or, in the case of a waiver, by each party against whom the waiver is
to be effective; provided that after the
Company Stockholder Approval has been obtained there shall be no amendment or
waiver that would require the further approval of the stockholders of the
Company under Delaware Law without such approval having first been
obtained.
(b)
No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by Applicable Law.
Section
11.04. Expenses. (a)
General. Except
as otherwise provided herein, all costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or
expense.
|
|
(b)
|
Termination
Fee.
|
(i) If
this Agreement is terminated by Parent pursuant to Section 10.01(c)(i), then the
Company shall pay to Parent in immediately available funds $71,600,000 (the
“Company Termination
Fee”) within one Business Day after such termination; provided that if such
termination resulted from a Company Adverse Recommendation arising from a
Material Adverse Effect on Parent, and it is finally adjudicated that such
Material Adverse Effect on Parent occurred, Parent shall promptly refund such
Company Termination Fee together with interest thereon from the date of payment
at the prevailing prime rate as reported in the Wall Street Journal, Eastern
Edition.
(ii) If
(A) this Agreement is terminated by Parent or the Company pursuant to Section
10.01(b)(i) and the Company Stockholder Meeting has not been held or Section
10.01(b)(iii), (B) after the date of this Agreement and prior to such
termination, an Acquisition Proposal shall have been publicly announced and (C)
within 12 months following the date of such termination, the Company shall have
entered into a definitive agreement with respect to or recommended to its
stockholders
65
(iii)
Upon a
termination by Parent described in paragraph (i) or (ii) above,
the Parent’s sole remedy is payment of the Company Termination
Fee.
(c) Other Costs and
Expenses. The Company acknowledges that the agreements
contained in this Section 11.04 are an integral part of the transactions
contemplated by this Agreement and that, without these agreements, Parent and
Merger Subsidiary would not enter into this Agreement. Accordingly, if the
Company fails promptly to pay any amount due to Parent pursuant to this Section
11.04, it shall also pay any costs and expenses incurred by Parent or Merger
Subsidiary in connection with a legal action to enforce this Agreement that
results in a judgment against the Company for such amount.
Section
11.05. Disclosure Schedule and
SEC Document References. (a) The parties hereto agree that any reference
in a particular Section of either the Company Disclosure Schedule or the Parent
Disclosure Schedule shall only be deemed to be an exception to (or, as
applicable, a disclosure for purposes of) (i) the
representations and warranties (or covenants, as applicable) of the relevant
party that are contained in the corresponding Section of this Agreement and
(ii) any
other representations and warranties of such party that is contained in this
Agreement, but only if the relevance of that reference as an exception to (or a
disclosure for purposes of) such representations and warranties would be
reasonably apparent.
(b) The
parties hereto agree that any information contained in any part of any Company
SEC Document or Parent SEC Document shall only be deemed to be an exception to
(or a disclosure for purposes of) the applicable party’s representations and
warranties if the relevance of that information as an exception to (or a
disclosure for purposes of) such representations and warranties would be
reasonably apparent to a person who has read that information concurrently with
such representations and warranties, without any independent knowledge on the
part of the reader regarding the matter(s) so disclosed; provided that in no event
shall any information contained in any part of any Company SEC Document or
Parent SEC Document entitled “Risk Factors”, “Cautionary Statement” or
containing a description or explanation of “Forward-Looking Statements” be
deemed to be an exception to (or a disclosure for purposes of) any
representations and warranties of any party contained in this
Agreement.
Section
11.06. Binding Effect;
Benefit; Assignment. (a) The provisions of this Agreement shall be
binding upon and shall inure to the benefit of the parties
66
(b) No
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of each other party hereto,
except that Parent or Merger Subsidiary may transfer or assign its rights and
obligations under this Agreement, in whole or from time to time in part, to (i)
one or more of their Affiliates at any time prior to the mailing of the Proxy
Statement and (ii) after the Effective Time, to any Person; provided that such transfer
or assignment shall not relieve Parent or Merger Subsidiary of its obligations
hereunder or enlarge, alter or change any obligation of any other party hereto
or due to Parent or Merger Subsidiary.
Section
11.07. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware, without regard to the conflicts of law rules of such
state, except to the extent the laws of the State of New Jersey are mandatorily
applicable to the Merger.
Section
11.08. Jurisdiction.
The parties hereto agree that any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby (whether brought by any
party or any of its Affiliates or against any party or any of its Affiliates)
shall be brought exclusively in the Delaware Chancery Court or, if such court
shall not have jurisdiction, any federal court located in the State of Delaware
or other Delaware state court, and each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such party as provided
in Section 11.01 shall be deemed effective service of process on such party.
Merger Subsidiary agrees that it may be served with process in Delaware in any
proceeding for enforcement of any obligation of the Company, as well as for
enforcement of any of its obligations arising from the Merger, including any
suit or other proceeding to enforce the right of any stockholder as determined
in an appraisal proceeding under Section 262 of Delaware Law and irrevocably
appoints the Secretary of State of the State of Delaware as its agent to accept
service of process in any such suit or other proceeding.
67
Section
11.10. Counterparts;
Effectiveness. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by all of the other parties hereto. Until and unless each party
has received a counterpart hereof signed by the other party hereto, this
Agreement shall have no effect and no party shall have any right or obligation
hereunder (whether by virtue of any other oral or written agreement or other
communication).
Section
11.11. Entire
Agreement. This Agreement and the Confidentiality Agreement constitute
the entire agreement between the parties with respect to the subject matter of
this Agreement and supersede all prior agreements and understandings, both oral
and written, between the parties with respect to the subject matter of this
Agreement.
Section
11.12. Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other Governmental Authority to be invalid,
void or unenforceable, (i) the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party and (ii) such term, provision, covenant, or
restriction shall be deemed reformed to the extent necessary to conform to
Applicable Law and to give the maximum effect to the intent of the parties
hereto. Upon such a determination, the parties 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 in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
[The
remainder of this page has been intentionally left blank;
the
next page is the signature page.]
68
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the date set forth on the
cover page of this Agreement.
|
PEPSIAMERICAS,
INC.
|
||||
|
By:
|
/s/ Robert Pohlad | |||
|
Name:
|
Robert Pohlad | |||
|
Title:
|
Chairman and Chief Executive Officer | |||
|
PEPSICO,
INC.
|
||||
|
By:
|
/s/ Larry D. Thompson | |||
|
Name:
|
Larry D. Thompson | |||
|
Title:
|
Senior Vice President, Government Affairs, General Counsel and Secretary | |||
|
PEPSI-COLA
METROPOLITAN BOTTLING COMPANY, INC.
|
||||
|
By:
|
/s/ Thomas H. Tamoney Jr. | |||
|
Name:
|
Thomas H. Tamoney Jr. | |||
|
Title:
|
Secretary | |||
Exhibit 99.1
PepsiCo Reaches Merger
Agreements with
Pepsi Bottling Group and
PepsiAmericas
Fully-Integrated
System Will Strategically Transform
North
American Beverage Business
|
·
|
PepsiCo
to acquire PBG and PAS for $36.50 per share and $28.50 per share,
respectively
|
|
·
|
Fully-integrated
supply chain and go-to-market system will position PepsiCo to accelerate
growth
|
|
·
|
PepsiCo
will directly manage approximately 80 percent of its total North American
beverage volume distribution, including both its direct-store-delivery and
warehouse systems
|
|
·
|
Transaction
is expected to be accretive to PepsiCo’s earnings by 15 cents per share
when synergies are fully realized
|
PURCHASE,
N.Y, SOMERS, N.Y. and MINNEAPOLIS, Minn. (August 4, 2009) -- PepsiCo (NYSE: PEP) today
announced that it has entered into definitive merger agreements with The Pepsi
Bottling Group, Inc. (NYSE: PBG) and PepsiAmericas, Inc. (NYSE: PAS) under which
PepsiCo will acquire all of the outstanding shares of common stock it does not
already own in its two largest anchor bottlers.
Under the
agreements, PBG shareholders will have the option to elect either $36.50 in cash
or 0.6432 shares of PepsiCo common stock (which had a value of $36.50 based on
PepsiCo closing share price of $56.75 on July 31, 2009) for each share of PBG,
subject to proration such that the aggregate consideration to be paid to PBG
shareholders shall be 50 percent cash and 50 percent PepsiCo common stock.
Similarly, PAS shareholders will have the option to elect either $28.50 in cash
or
0.5022
shares of PepsiCo common stock for each share of PAS (which had a value of
$28.50 based on PepsiCo closing share price of $56.75 on July 31, 2009), subject
to proration such that the aggregate consideration to be paid to PAS
shareholders shall be 50 percent cash and 50 percent PepsiCo common
stock.
The total
value of the shares that PepsiCo will be acquiring is about $7.8 billion, and
the acquisitions will create one of the largest food and beverage companies
globally. Based on the recommendations of the Special Committee of PBG and the
Transaction Committee of PAS, the boards of directors of PBG and PAS,
respectively, have approved the transactions.
This
transaction is expected to create annual pre-tax synergies of $300 million by
2012 largely due to greater cost efficiency and also improved revenue
opportunities. The acquisitions are expected to be accretive to
PepsiCo’s earnings by about 15 cents per share when synergies are fully realized
in 2012.
PepsiCo
Chairman and Chief Executive Officer Indra Nooyi said “PepsiCo has had a
constructive partnership with PBG and PAS over the past 10
years. While the existing model has served the system very well, it
is clear that the changing dynamics of the North American liquid refreshment
beverage business demand that we create a more flexible, efficient and
competitive system that can drive growth across the full range of PepsiCo
beverage brands. Our shared culture, strong operational leadership
and ability to successfully integrate operations – in this case operations we
know very well – should allow us to bring the businesses together quickly and
seamlessly.
“The
fully integrated beverage business will enable us to bring innovative products
and packages to market faster, streamline our manufacturing and distribution
systems and react more quickly to changes in the marketplace, much like we do
with our food business,” Nooyi said. “It will also make it easier to
leverage ‘Power of One’ opportunities that involve both our beverage and food
offerings, and for PepsiCo to present one face to retail
customers. Ultimately it will put us in a much better position to
compete and to grow both now and in the years ahead.”
“This
transaction provides outstanding value for PBG shareholders, offers new and
expanded opportunities for PBG employees and positions the combined company to
accelerate growth going forward,” said Eric Foss, Chairman and CEO of
PBG. “PBG has a proven track record of success driven by
best-in-class execution, consistently exceeding customer expectations and
creating superior shareholder value. After a thorough evaluation
process, the PBG Board concluded that this transaction represents full and fair
value and is the best outcome for PBG shareholders, employees and
customers. Ultimately, the transaction positions the entire Pepsi
system to continue to win in the marketplace.”
PepsiAmericas Chairman and Chief
Executive Officer Robert C. Pohlad said: “Over the past nine years,
PepsiAmericas and each of our employees have helped build a remarkable
organization. The success we have achieved is reflected in the agreement
reached with PepsiCo. This agreement provides great value to our
shareholders and an opportunity for them to participate in the unique potential
of this combination. Bringing together these great companies is bold and
strategically innovative, and will create a system unmatched in our
industry.”
Combination
will drive future growth
PepsiCo
expects the transaction to directly complement the transformation efforts
already underway in its North American beverage business. Those
efforts have included refreshing such brands as Pepsi and Gatorade and
introducing an array of new products, ranging from the naturally sweetened
zero-calorie SoBe LifeWater to low-calorie Trop50. At the same time PepsiCo
has taken steps to fundamentally improve its cost structure.
PepsiCo
cited a number of specific benefits it expects to realize by consolidating its
two largest bottlers:
|
§
|
Consolidation
of 80 percent of the North American beverage volume will speed the
decision-making process and eliminate friction
points
|
|
§
|
Offering
more compelling bundles across food and beverage and providing enhanced
customer service nationally, taking the “Power of One” to the next
level
|
|
§
|
Consolidation
of manufacturing networks will provide cost benefits and also optimize our
investments in growth and
innovation
|
|
§
|
Greater
flexibility in deploying multiple go-to-market systems to tailor
distribution by channel
|
|
§
|
Elimination
of redundant costs to leverage scale
efficiencies
|
Additional
Information
The
acquisitions are not subject to financing contingencies, but they are subject to
customary approvals, including regulatory approvals and approval of the
transaction by stockholders of PBG and PAS. The parties expect the
transactions to close in late 2009 or early 2010. Debt financing
commitments were provided by BofA Merrill Lynch and Citi.
Centerview Partners and BofA Merrill
Lynch are acting as lead financial advisors to PepsiCo, and Citi is also
acting as financial advisor to PepsiCo. Davis Polk & Wardwell LLP is acting
as legal counsel to PepsiCo. Morgan Stanley is acting as financial advisor to
PBG, Perella Weinberg Partners provided a fairness opinion and Cravath, Swaine
& Moore is acting as legal counsel to PBG. Goldman Sachs is
acting as financial advisor to PAS, and Sullivan & Cromwell and Briggs and
Morgan are acting as legal counsel.
For more
information please access our website at: www.transactioninfo.com/pepsico.
Conference
Call/Webcast
PepsiCo
will host a webcast on August 4, 2009 at 8:30 am Eastern Time to discuss the
transaction. The webcast can be accessed on the investor relations section of
PepsiCo’s website, www.pepsico.com.
About PepsiCo
PepsiCo offers the world’s largest
portfolio of billion-dollar food and beverage brands, including 18 different
product lines that each generate more than $1 billion in annual retail
sales. Our main businesses – Frito-Lay, Quaker, Pepsi-Cola, Tropicana
and Gatorade – also make hundreds of
other nourishing, tasty foods and drinks that bring joy to our consumers in over
200 countries. With more than $43 billion in 2008 revenues, PepsiCo
employs 198,000 people who are united by our unique commitment to sustainable
growth, called Performance with Purpose. By dedicating ourselves to
offering a broad array of choices for healthy, convenient and fun nourishment,
reducing our environmental impact, and fostering a diverse and inclusive
workplace culture, PepsiCo balances strong financial returns with giving back to
our communities worldwide. For more information, please
visit www.pepsico.com
About PBG
The Pepsi
Bottling Group, Inc. (www.pbg.com) is the world’s largest manufacturer, seller
and distributor of Pepsi-Cola beverages. With approximately 67,000 employees and
annual sales of nearly $14 billion, PBG has operations in the U.S., Canada,
Greece, Mexico, Russia, Spain and Turkey. For more information, please visit
www.pbg.com.
PBG
Contact:
Jeff
Dahncke
PBG
Public Relations
914-767-7690
jeff.dahncke@pepsi.com
About PepsiAmericas
PepsiAmericas
is the world's second-largest manufacturer, seller and distributor of PepsiCo
beverages. With annual sales of $4.9 billion in 2008, PepsiAmericas serves
territories with a population of more than 200 million in a significant portion
of a 19-state region in the U.S.; Central and Eastern Europe, including Ukraine,
Poland, Romania, Hungary, the Czech Republic and Slovakia; and through the
company’s new joint venture, the Caribbean and Central America. For more
information, please visit www.pepsiamericas.com.
PAS
Contacts:
Investor
Relations
Sara
Zawoyski
612.661.3830
sara.zawoyski@pepsiamericas.com
Media
Relations
Mary
Viola
847.598.2870
mary.viola@pepsiamericas.com
###
Cautionary
Statement
This
communication does not constitute an offer to sell or the solicitation of an
offer to buy any securities or a solicitation of any vote or approval. PepsiCo,
Inc. (“PepsiCo”) and The
Pepsi Bottling Group, Inc. (“PBG”) plan to file with the
Securities and Exchange Commission (“SEC”) a registration statement
on Form S-4 containing a proxy statement/prospectus and other documents with
respect to the proposed acquisition of PBG and a definitive proxy
statement/prospectus will be mailed to shareholders of PBG. PepsiCo and
PepsiAmericas, Inc. (“PAS”) plan to file with the
SEC a registration statement on Form S-4 containing a proxy statement/prospectus
and other documents with respect to the proposed acquisition of PAS and a
definitive proxy statement/prospectus will be mailed to shareholders of PAS.
INVESTORS AND SECURITY HOLDERS
OF PBG AND PAS ARE URGED TO READ THE APPLICABLE PROXY STATEMENT/PROSPECTUS AND
OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.
Investors
and security holders will be able to obtain free copies of the registration
statements and the proxy statements/prospectuses (when available) and other
documents filed with the SEC by PepsiCo, PBG or PAS through the website
maintained by the SEC at http://www.sec.gov. Copies of the documents filed with
the SEC by PepsiCo will be available free of charge on PepsiCo’s internet
website at www.pepsico.com
or by contacting PepsiCo’s Investor Relations Department at 914-253-3035. Copies
of the documents filed with the SEC by PBG will be available free of charge on
PBG’s internet website at www.pbg.com
or by contacting PBG’s Investor Relations Department at 914-767-7216. Copies of
the documents filed with the SEC by PAS will also be available free of charge on
PAS’s internet website at www.pepsiamericas.com
or by contacting PAS’s Investor Relations Department at
612-661-3883.
PBG and
its directors, executive officers and certain other employees may be deemed to
be participants in the solicitation of proxies in respect of the proposed
acquisitions of PBG. Information regarding PBG’s directors and executive
officers is available in its Annual Report on Form 10-K for the year ended
December 27, 2008, which was filed with the SEC on February 20, 2009,
and its proxy statement for its 2009 annual meeting of shareholders, which was
filed with the SEC on April 7, 2009. PAS and its directors, executive officers
and certain other employees may be deemed to be participants in the solicitation
of proxies in respect of the proposed acquisitions of PAS. Information regarding
PAS’s directors and executive officers is available in its Annual Report on Form
10-K for the year ended January 3, 2009, which was filed with the SEC on March
4, 2009, and its proxy statement for its 2009 annual meeting of shareholders,
which was filed with the SEC on March 18, 2009. Other information regarding the
participants in the proxy solicitations and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained in the
proxy statements/prospectuses and other relevant materials to be filed with the
SEC when they become available.
Statements in this release that are
“forward-looking statements” are based on currently available information,
operating plans and projections about future events
and
trends. They inherently involve risks and uncertainties that could cause actual
results to differ materially from those predicted in such forward-looking
statements. Such risks and uncertainties include, but are not limited to:
PepsiCo’s ability to consummate the acquisitions of PBG and PAS and to achieve
the synergies and value creation contemplated by the proposed acquisitions;
PepsiCo’s ability to promptly and effectively integrate the businesses of PBG,
PAS and PepsiCo; the timing to consummate the proposed acquisitions and any
necessary actions to obtain required regulatory approvals; the diversion of
management time on transaction-related issues; changes in demand for PepsiCo’s
products, as a result of shifts in consumer preferences or otherwise; increased
costs, disruption of supply or shortages of raw materials and other supplies;
unfavorable economic conditions and increased volatility in foreign exchange
rates; PepsiCo’s ability to build and sustain proper information technology
infrastructure, successfully implement its ongoing business process
transformation initiative or outsource certain functions effectively; damage to
PepsiCo’s reputation; trade consolidation, the loss of any key customer, or
failure to maintain good relationships with PepsiCo’s bottling partners,
including as a result of the proposed acquisitions; PepsiCo’s ability to hire or
retain key employees or a highly skilled and diverse workforce; changes in the
legal and regulatory environment; disruption of PepsiCo’s supply chain; unstable
political conditions, civil unrest or other developments and risks in the
countries where PepsiCo operates; and risks that benefits from PepsiCo’s
Productivity for Growth initiative may not be achieved, may take longer to
achieve than expected or may cost more than currently anticipated.
For
additional information on these and other factors that could cause PepsiCo’s
actual results to materially differ from those set forth herein, please see
PepsiCo’s filings with the SEC, including its most recent annual report on Form
10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not
to place undue reliance on any such forward-looking statements, which speak only
as of the date they are made. All information in this communication is as of
August 4, 2009. PepsiCo undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events or
otherwise.
Exhibit 99.2
|
BANC
OF AMERICA SECURITIES LLC
One
Bryant Park
New
York, New York 10036
BANK
OF AMERICA, N.A.
214
North Tryon Street
Charlotte,
North Carolina 28255
|
CITIGROUP
GLOBAL MARKETS INC.
390
Greenwich Street
New
York, New York 10013
|
August 3,
2009
PepsiCo,
Inc.
700
Anderson Hill Road
Purchase,
NY 10577
|
Attention
|
Maria
Teresa Hilado
|
|
Senior
Vice President, Finance and
Treasurer
|
Project
Alchemy
Ladies
and Gentlemen:
Bank of
America, N.A. (“Bank of
America”) is pleased to offer to be the sole administrative agent (in
such capacity, the “Administrative
Agent”) for a $4,000,000,000 364-day senior unsecured revolving credit
facility (the “Senior Credit
Facility”) to PepsiCo, Inc. (“you” or
the “Company”)
the proceeds of which will be used to do one or more of the following: fund your
acquisition of PepsiAmericas, Inc., a Delaware corporation (“PAS”)
pursuant to an Agreement and Plan of Merger dated as of August 3, 2009 and/or
fund your acquisition of The Pepsi Bottling Group, Inc., a Delaware corporation
(“PBG” and
together with PAS, the “Acquired
Companies”) pursuant to an Agreement and Plan of Merger dated as of
August 3, 2009 (the “Acquisition”)
including to backstop commercial paper issued in connection with the
Acquisition, and each of Bank of America
Citigroup Global Markets Inc. (“CGMI”) on
behalf of Citi (as defined below) (Citi together with Bank of America, in such
capacities, the “Initial
Lenders”) is pleased to offer its several (and not joint) commitment to
lend 50% of the Senior Credit Facility, upon and subject to the terms and
conditions set forth in this letter (this “Commitment
Letter”) and in the Summary of Terms and Conditions attached as Exhibit A
hereto and incorporated herein by this reference (the “Summary of
Terms”). Each of Banc of America Securities LLC (“BAS”) and
CGMI is pleased to advise you of its willingness in connection with the
foregoing commitment, as joint lead arranger and joint book manager (in such
capacities, the “Lead
Arrangers”; the Lead Arrangers together with the Initial Lenders, the
“Commitment
Parties”) for the Senior Credit Facility, to form a syndicate of
financial institutions (including the Initial Lenders) (collectively, the “Lenders”)
reasonably acceptable to you for the Senior Credit Facility. The
Acquisition, the arrangement and funding of the Senior Credit Facility, the
payment of fees and expenses in connection therewith and all related
transactions including those contemplated by this Commitment Letter and the
Summary of Terms are referred to as the “Transactions.” For
the purposes of this Commitment Letter “Citi”
means CGMI, Citibank, N.A., Citicorp USA, Inc. and/or any of their affiliates as
may be appropriate to consummate the transaction contemplated
hereby.
You have
further advised us that one or both of the Target Existing Facilities (as
defined below) may need to be amended to (i) permit the Acquisition, (ii) remove
the financial covenants therein and
(iii) conform
the other covenants and events of default to the Company’s Existing 364-Day
Facility (as defined in the Summary of Terms). In connection
therewith, each of the Initial Lenders agrees to work with you to achieve the
necessary amendments on terms and conditions to be mutually agreed.
Section
1. Conditions
Precedent. The several commitment of each Initial Lender
hereunder and the several undertaking of each Lead Arranger to provide the
services described herein are subject to the satisfaction of each of the
following conditions precedent in a manner acceptable to the Commitment
Parties: (a) the preparation, execution and delivery of mutually
acceptable loan documentation incorporating substantially the terms and
conditions outlined in this Commitment Letter (the “Operative
Documents”); (b) the absence of any material adverse
change in the financial condition, operations or properties of the Company and
its subsidiaries taken as a whole (after giving pro forma effect to the
Acquisition), since December 27, 2008, that has not been publicly disclosed
prior to the date hereof; (c) the accuracy and completeness of all
representations that the Company makes to the Commitment Parties in Section 8 of
this Commitment Letter and all information that the Company furnishes to the
Commitment Parties in accordance with Section 8 of this Commitment Letter; (d)
the Company’s compliance in all material respects with the terms of this
Commitment Letter and the Fee Letter referred to below, including, without
limitation, the payment in full of all fees, expenses and other amounts payable
under this Commitment Letter and (e) prior to and during the syndication of the
Senior Credit Facility there shall be no competing offering, placement or
arrangement of any competing senior credit facility by or on behalf of the
Company or any of its subsidiaries (other than for foreign subsidiaries, provided that no more than
$300,000,000 in aggregate principal amount of indebtedness of foreign
subsidiaries shall be the subject of an offering, placement or arrangement of a
senior credit facility during the first three weeks following the date
hereof).
Section
2. Commitment
Termination. The commitments of the Commitment Parties
hereunder will expire at 8:00 a.m. (New York time) on August 4, 2009
unless you execute this Commitment Letter and the Fee Letter and return them to
us prior to that time (which may be by facsimile or e-mail transmission),
whereupon this Commitment Letter (including the Summary of Terms) and the Fee
Letter (each of which may be signed in one or more counterparts) shall become
binding agreements. Thereafter, all commitments and undertakings of
the Commitment Parties hereunder will expire on the earlier of (a) the date
the Operative Documents are executed and delivered, and (b) March 31,
2010. In consideration of the time and resources that the Commitment
Parties will devote to the Senior Credit Facility, you agree that, until such
expiration, you will not solicit, initiate, entertain or permit, or enter into
any discussions in respect of, any offering, placement or arrangement of any
competing senior credit facility for the Company and its subsidiaries (other
than as permitted under clause (e) of section 1).
Section
3. Syndication. The
Lead Arrangers will manage all aspects of the syndication of the Facility in
consultation with the Company, including the timing of all offers to potential
Lenders, the determination of the amounts offered to potential Lenders and any
titles offered to proposed Lenders, the acceptance of commitments of the Lenders
and the compensation to be provided to the Lenders (it being understood and
agreed that the Company shall have consent rights with respect to the aggregate
amount of compensation to be provided to the Lenders and any titles offered to
the Lenders).
The Lead
Arrangers intend to commence syndication of the Senior Credit Facility promptly
upon your
acceptance of this Commitment Letter and the Fee Letter, and the several
commitments of the Initial Lenders hereunder shall be reduced, pro rata,
dollar-for-dollar as and when such commitments are received from other Lenders
to the extent such other Lender enters into a new commitment letter on
substantially identical terms to this Commitment Letter or becomes a party to
this Commitment Letter. You agree to actively assist the Lead
Arrangers in achieving a syndication of the Senior Credit Facility that is
reasonably satisfactory to the Lead Arrangers in consultation with
you. Such assistance shall include your (a) providing and
causing your advisors to provide the Commitment Parties and the other
2
Lenders
upon request with all information reasonably deemed necessary by the Commitment
Parties to complete a successful syndication, including, but not limited to,
information and evaluations prepared by you and your advisors, or on your
behalf, relating to the transactions contemplated hereby (the “Transaction
Information”, and together with the Projections (as hereinafter defined), the
“Information”),
(b) assisting in the preparation of an Information Memorandum and other
materials to be used in connection with the syndication of the Senior Credit
Facility (collectively with the Summary of Terms, the “Information
Materials”), (c) endeavoring to ensure that the syndication efforts
benefit materially from the Company’s existing lending relationships and
(d) otherwise assisting Bank of America and BAS in their syndication
efforts, including by making senior management and representatives of the
Company available to participate in information meetings with potential Lenders
at such times and places as the Lead Arrangers may reasonably
request.
Bank of
America will act as sole Administrative Agent for the Senior Credit Facility and
the Lead Arrangers will act as joint lead arrangers and joint book managers for
the Senior Credit Facility. BAS shall have “lead left” placement in
all marketing materials with respect to the Senior Credit
Facility. It is understood that no lender participating in the Senior
Credit Facility will receive compensation from you in order to obtain its
commitment, except on the terms contained herein and in the Summary of
Terms. No
additional agents, co-agents or arrangers will be appointed and no other titles
will be awarded without the consent of the Commitment Parties and the
Company.
In
connection with the syndication of the Senior Credit Facility, unless the
parties hereto otherwise agree in writing, you shall be under no obligation to
provide Information Materials suitable for distribution to any prospective
Lender (each, a “Public
Lender”) that has personnel who do not wish to receive material
non-public information (within the meaning of the United States federal
securities laws, “MNPI”)
with respect to the Company or its affiliates, or the respective securities of
any of the foregoing. You agree, however, that the definitive credit
documentation will contain provisions concerning Information Materials to be
provided to Public Lenders and the absence of MNPI therefrom on substantially
identical terms to those in the Existing 364-Day Facility (as defined in the
Summary of Terms). Prior to distribution of Information Materials to
prospective Lenders, you shall provide us at our request with a customary letter
authorizing the dissemination thereof.
Section
4. Fees. In
addition to the fees described in Annex I, the Company shall pay the
non-refundable fees set forth in the letter agreement dated the date hereof (the
“Fee
Letter”) among the Company and the Commitment Parties. The
terms of the Fee Letter are an integral part of the commitments of the
Commitment Parties hereunder and constitute part of this Commitment Letter for
all purposes hereof (other than for purposes of permitted disclosure under
Section 7).
Section
5. Indemnification. You
agree to indemnify and hold harmless each Commitment Party,
each Lender and each of their affiliates and their respective officers,
directors, employees, agents, advisors and other representatives (each, an
“Indemnified
Party”) from and against (and will reimburse each Indemnified Party as
the same are incurred for) any and all claims, damages, losses, liabilities and
expenses (including, without limitation, the reasonable fees, disbursements and
other charges of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
(a) the Transactions or any matters or transactions contemplated by this
Commitment Letter or (b) the Senior Credit Facility or any use made or
proposed to be made with the proceeds thereof, except to the extent such claim,
damage, loss, liability or expense is found in a final, nonappealable judgment
by a court of competent jurisdiction to have resulted from such Indemnified
Party’s gross negligence, willful misconduct or material breach in bad faith of
its obligations hereunder. In the case of an investigation,
litigation or proceeding to which the indemnity in this paragraph applies, such
indemnity shall be effective whether or not such investigation,
3
litigation
or proceeding is brought by you, your directors, equity holders or creditors or
an Indemnified Party, whether or not an Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are
consummated.
You also
agree that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to you or your subsidiaries or to
your or their respective equity holders or creditors arising out of, related to
or in connection with any aspect of the transactions contemplated hereby, except
to the extent such liability is determined in a final, nonappealable judgment by
a court of competent jurisdiction to have resulted from such Indemnified Party’s
gross negligence, willful misconduct or material breach in bad faith of its
obligations hereunder. In no event, however, shall any Indemnified
Party or the Company be liable on any theory of liability for any special,
indirect, consequential or punitive damages (including, without limitation, any
loss of profits, business or anticipated savings). Notwithstanding
any other provision of this Commitment Letter, no Indemnified Party shall be
liable for any damages arising from the use by others of information or other
materials obtained through electronic telecommunications or other information
transmission systems, other than for direct or actual damages resulting from the
gross negligence or willful misconduct of such Indemnified Party as determined
by a final and nonappealable judgment of a court of competent
jurisdiction.
Section
6. Costs
and Expenses. By executing this Commitment Letter, you agree
to reimburse the Commitment Parties from time to time on demand for all
reasonable out-of-pocket fees and expenses (including, but not limited to, the
reasonable fees, disbursements and other charges of one counsel to the
Administrative Agent, Shearman & Sterling LLP) incurred in connection with
the Senior Credit Facility, the syndication thereof, the preparation of the
definitive documentation therefor and the other transactions contemplated
hereby. The Company shall also pay all costs and expenses of each
Commitment Party (including, without limitation, the reasonable fees and
disbursements of counsel) incurred in connection with the enforcement of any of
its rights and remedies hereunder.
Section
7. Confidentiality. By
accepting delivery of this Commitment Letter, the Company agrees that this
Commitment Letter is for the Company’s confidential use only and that neither
its existence nor the terms hereof will be disclosed by the Company to any
person other than the Company’s officers, directors, employees, accountants,
attorneys and other advisors, agents and representatives and to insurers and
rating agencies (the “Company
Representatives”), and then only on a confidential and “need to know”
basis in connection with the transactions contemplated hereby; provided, however, that the
Company may (i) make such other public disclosures of the terms and conditions
of the Commitment Letter as the Company is required by law, regulation or stock
exchange rule, in the opinion of the Company’s counsel, to make and (ii)
disclose the Commitment Letter (but not the Fee Letter) to the Acquired
Companies and their respective officers, directors, employees, accountants,
attorneys and other professional advisors. Notwithstanding any other
provisions of this Commitment Letter, each Commitment Party hereby confirms that
the Company and the Company Representatives shall not be limited from disclosing
the Senior Credit Facility and/or the terms thereof (other than the terms of the
Fee Letter) in its filings and submissions with the Securities and Exchange
Commission or the New York Stock Exchange.
Each
Commitment Party will treat as confidential all confidential information
provided to it by or on behalf of the Company hereunder; provided, however, that
nothing herein shall prevent any Commitment Party from disclosing any such
information (a) to such Commitment Party’s affiliates and their officers,
directors, employees, agents and advisors and to actual or prospective assignees
and participants, and then only on a confidential basis, (b) as required by any
law, rule or regulation or judicial process, (c) to any rating agency when
required by it, provided that, prior to any
such disclosure, such rating agency shall undertake to preserve the
confidentiality of any such Information relating to the Company received by it
from such Commitment Party, (d) as requested or required by any state, federal
or foreign authority or examiner regulating banks or banking, (e) in connection
with the exercise of any
4
remedies
hereunder or any suit, action or proceeding relating to this Commitment Letter
or the enforcement of rights hereunder and (f) to the extent such
confidential information (i) becomes publicly available other than as a
result of a breach of this Section 7 or (ii) becomes available to any
Commitment Party from a source other than the Company which such Commitment
Party has no reason to believe has any confidentiality or fiduciary obligation
to the Company with respect to such information.
The
Company acknowledges that the Commitment Parties and/or one or more of their
affiliates may be providing financing, equity capital, financial advisory and/or
other services to parties whose interests may conflict with the Company’s
interests. Consistent with such Commitment Party’s policy to hold in
confidence the affairs of its customers, neither any Commitment Party nor any of
their affiliates will furnish confidential information obtained from the Company
to any of such Commitment Party’s other customers. Furthermore,
neither any Commitment Party nor any of their affiliates will make available to
the Company confidential information that such Commitment Party obtained or may
obtain from any other person. In connection with the services and
transactions contemplated hereby, you agree that each Commitment Party is
permitted to access, use and share with any of its bank or non-bank affiliates,
agents, advisors (legal or otherwise) or representatives any information
concerning you or any of your affiliates that is or may come into the possession
of such Commitment Party or any of such affiliates.
Section
8. Representations and
Warranties of the Company. The Company represents and warrants
that (x) all written Information, other than Projections (as defined below),
that has been or will hereafter be made available to any Commitment Party, any
Lender or any potential Lender by or on behalf of the Company or any of its
representatives in connection with the transactions contemplated hereby, taken
as a whole, and to the best of your knowledge to the extent that the Information
relates to the Acquired Companies and their subsidiaries, is and will be
complete and correct in all material respects and does not and will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances under which such statements were or are made and (y)
all financial projections concerning the Company and its subsidiaries that have
been or will hereafter be made available to any Commitment Party, any Lender or
any potential Lender by the Company or any of its representatives in connection
with the transactions contemplated hereby (the “Projections”)
have been or will be prepared in good faith based upon assumptions believed to
be reasonable at the time made. You agree to furnish us with further
and supplemental information from time to time until the Closing Date (as
defined in the Summary of Terms) and, if requested by us, for such period
thereafter as is necessary to complete the syndication of the Senior Credit
Facility so that the representation, warranty and covenant in the immediately
preceding sentence are correct on the Closing Date and such later date on which
the syndication is completed as if the Information were being furnished, and
such representation, warranty and covenant were being made, on such
date. In issuing this commitment and in arranging and syndicating the
Senior Credit Facility, the Commitment Parties are and will be using and relying
on the Information without independent verification thereof.
In
providing this Commitment Letter, the Commitment Parties are relying on the
accuracy of the information furnished to it by or on behalf of the Company and
its affiliates without independent verification thereof.
Section
9. No Third
Party Reliance, Etc. The agreements of the Commitment Parties
hereunder and of any Lender that issues a commitment to provide financing under
the Facility are made solely for the benefit of the Company and may not be
relied upon or enforced by any other person. This Commitment Letter
(including the Summary of Terms) and the Fee Letter embody the entire agreement
and understanding among Bank of America, BAS, Citi, you and your affiliates with
respect to the Senior Credit Facility and supersedes all prior agreements and
understandings relating to the specific matters hereof. Those matters
that are not covered or made clear herein are subject to mutual agreement of the
5
parties. The
Company may not assign or delegate any of its rights or obligations hereunder
without each Commitment Party’s prior written consent. This
Commitment Letter may not be amended or modified, or any provisions hereof
waived, except by a written agreement signed by all parties
hereto. No party has been authorized by any Commitment Party to make
any oral or written statements that are inconsistent with this Commitment
Letter. This Commitment Letter is intended to be solely for the
benefit of the parties hereto and the Indemnified Parties.
In
connection with all aspects of each transaction contemplated by this Commitment
Letter, you acknowledge and agree that: (a) (i) the
arranging and other services described herein regarding the Senior Credit
Facility are arm’s-length commercial transactions between you and your
affiliates, on the one hand, and Bank of America and BAS and each other Lead
Arranger, on the other hand, (ii) you have consulted your own legal,
accounting, regulatory and tax advisors to the extent you have deemed
appropriate, and (iii) you are capable of evaluating, and understand and
accept, the terms, risks and conditions of the transactions contemplated hereby;
(b) (i) Bank of America and BAS and each other Lead Arranger each has
been, is, and will be acting solely as a principal and, except as otherwise
expressly agreed in writing by the relevant parties, has not been, is not, and
will not be acting as an advisor, agent or fiduciary for you, any of your
affiliates or any other person or entity and (ii) neither Bank of America
nor BAS nor any other Lead Arranger has any obligation to you or your affiliates
with respect to the transactions contemplated hereby except those obligations
expressly set forth herein; and (c) Bank of America and BAS and each other
Lead Arranger, and their respective affiliates may be engaged in a broad range
of transactions that involve interests that differ from yours and those of your
affiliates, and Bank of America and BAS and any other Lead Arranger have no
obligation to disclose any of such interests to you or your
affiliates. To the fullest extent permitted by law, you hereby waive
and release any claims that you may have against Bank of America and BAS and any
other Lead Arranger with respect to any breach or alleged breach of agency or
fiduciary duty in connection with any aspect of any transaction contemplated by
this Commitment Letter.
The
Company acknowledges that one or more Commitment Parties or their affiliates
currently are acting as lenders under (i) that certain Credit Agreement of the
Company dated as of May 22, 2006 (the “PEP 2006
CA”), (ii) that certain Credit Agreement of the Company dated as of June
25, 2009 (the “PEP 2009
CA”), (iii) that certain Credit Agreement of PBG dated as of October 19,
2007 (the “PBG CA”)
and (iv) that certain Credit Agreement of PAS dated as of June 6, 2006 (the
“PAS
CA”, and together with the PBG CA, the “Target Existing
Facilities”; the PEP 2006 CA, the PEP 2009 CA and the Target Existing
Facilities are collectively, the “Existing Senior
Credit Agreements”). The Company’s and its affiliates’ rights
and obligations under any other agreement with any Commitment Party or any of
its affiliates (including the Existing Senior Credit Agreements) that currently or
hereafter may exist are, and shall be, separate and distinct from the rights and
obligations of the parties pursuant to this letter agreement, and none of such
rights and obligations under such other agreements shall be affected by such
Commitment Party’s performance or lack of performance of services
hereunder. The Company further acknowledges that any Commitment Party
or its affiliates may currently or in the future participate in other debt or
equity transactions on behalf of or render financial advisory services to the
Company or other companies that may be involved in a competing
transaction. The Company hereby agrees that each Commitment Party may
render its services under this letter agreement notwithstanding any actual or
potential conflict of interest presented by the foregoing, and the Company
hereby waives any conflict of interest claims relating to the relationship
between such Commitment Party and the Company and its affiliates in connection
with the engagement contemplated hereby, on the one hand, and the exercise by
such Commitment Party or any of its affiliates of any of their rights and duties
under any credit or other agreement (including the Existing Senior Credit
Agreements), on the other hand.
Section
10. Governing Law, Submission to
Jurisdiction, Etc. This Commitment Letter shall be governed
by, and construed in accordance with, the law of the State of New
York. This Commitment Letter
6
sets
forth the entire agreement between the parties with respect to the matters
addressed herein and supersedes all prior communications, written or oral, with
respect hereto. This Commitment Letter may be executed in any number
of counterparts, each of which, when so executed, shall be deemed to be an
original and all of which, taken together, shall constitute one and the same
Commitment Letter. Delivery of an executed counterpart of a signature
page to this Commitment Letter by telecopier shall be as effective as delivery
of an original executed counterpart of this Commitment
Letter. Sections 4 through 11 hereof shall survive the termination of
the commitments of the Commitment Parties hereunder. The Company
acknowledges that Information Materials and documents relating to the Facility
may be transmitted through Intralinks or similar electronic transmission
systems. Each of the Commitment Parties reserves the right to employ
the services of its affiliates in providing services contemplated by this
Commitment Letter and to allocate, in whole or in part, to its affiliates
certain fees payable to such Commitment Party in such manner as it and its
affiliates may agree in its sole discretion.
Each of the parties hereto hereby
irrevocably and unconditionally (a) submits, for itself and its property, to the
non-exclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Commitment Letter or the transactions contemplated hereby, and agrees that all
claims in respect of any such action or proceeding may be heard and determined
only in such New York State court or, to the extent permitted by law, in such
Federal court, (b) waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Commitment
Letter or the transactions contemplated hereby in any New York State court or in
any such Federal court, (c) waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court, and (d) agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Service
of any process, summons, notice or document by registered mail addressed to you
at the address above shall be effective service of process against you for any
suit, action or proceeding brought in any such court.
Section
11. Waiver
of Jury Trial. Each party hereto irrevocably waives all right
to trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Commitment
Letter or the transactions contemplated hereby or the actions of the parties
hereto in the negotiation, performance or enforcement hereof.
Section
12. Patriot
Act Compliance. Each Commitment Party hereby
notifies you that pursuant to the requirements of the USA PATRIOT ACT (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), each of them is required to obtain, verify and record information
that identifies the Company, which information includes the name and address of
the Company and other information that will allow such Commitment Party to
identify the Company in accordance with the Patriot Act. In that
connection, each Commitment Party may also request corporate formation
documents, or other forms of identification, to verify information
provided.
7
We are pleased to have the
opportunity to work with you in connection with this important financing.
|
Very
truly yours,
|
|||
|
BANK
OF AMERICA, N.A.
|
|||
|
By:
|
/s/ David L.
Catherall
|
||
|
Name:
|
David
L. Catherall
|
||
|
Title:
|
Senior
Vice President
|
||
|
BANC
OF AMERICA SECURITIES LLC
|
|||
|
By:
|
/s/ Shaun Dreyer
|
||
|
Name:
|
Shaun
Dreyer
|
||
|
Title:
|
Managing
Director
|
||
|
CITIGROUP
GLOBAL MARKETS INC.
|
|||
|
By:
|
/s/ Carolyn A. Kee
|
||
|
Name:
|
Carolyn
A. Kee
|
||
|
Title:
|
Managing
Director
|
||
ACCEPTED AND AGREED
on August
4, 2009:
PEPSICO,
INC.
| By: |
/s/ Maria Teresa Hilado
|
|
|
Name:
|
Maria
Teresa Hilado
|
|
|
Title:
|
Senior
Vice President, Finance
|
|
|
and
Treasurer
|
||
8
EXHIBIT
A
SUMMARY
OF INDICATIVE TERMS AND CONDITIONS
PROJECT
ALCHEMY
$4,000,000,000
SENIOR CREDIT FACILITY1
|
BORROWER:
|
PepsiCo,
Inc., a North Carolina corporation (the “Company”) and certain wholly-owned
subsidiaries of the Company to be designated as co-borrowers pursuant to
the definitive documentation (the “Designated
Borrowers”) on terms
substantially identical to those set forth in the 364-Day Credit Agreement
dated as of June 25, 2009 among the Company, as borrower, the lenders
named therein and Citibank, N.A. as administrative agent (the
“Existing
364-Day Facility”).
|
|
ADMINISTRATIVE
AGENT:
|
Bank
of America, N.A. (“Bank of
America”) will act as sole administrative agent (the “Administrative
Agent”).
|
|
SYNDICATION
AGENT:
|
Citigroup
Global Markets Inc. (“CGMI”)
will act as sole syndication agent.
|
|
JOINT LEAD
ARRANGERS AND
JOINT
BOOK
MANAGERS:
|
Banc
of America Securities LLC and CGMI will act as joint lead arrangers and
joint book managers (the “Lead
Arrangers”).
|
|
LENDERS:
|
A
syndicate of financial institutions (including Bank of America
and an affiliate of CGMI) arranged by the Lead Arrangers in consultation
with the Company, which institutions shall be acceptable to the
Administrative Agent (collectively, the “Lenders”).
|
|
SENIOR
CREDIT
FACILITY:
|
An
aggregate principal amount of up to $4,000,000,000 will be available on a
revolving basis for 364 days from the Closing
Date.
|
|
PURPOSE:
|
The
proceeds of the Senior Credit Facility shall be used to finance the
Acquisition and related fees and expenses, including to backstop
commercial paper issued in connection
therewith.
|
|
CLOSING
DATE:
|
The
date, on or before March 31, 2010, on which the Operative Documents shall
have been executed and delivered and the Acquisition shall be consummated
(the “Closing
Date”).
|
|
MATURITY:
|
The
Senior Credit Facility shall terminate and all amounts outstanding
thereunder shall be due and payable 364 days from the Closing
Date. There shall not be an extension option with respect to
the maturity of the Senior Credit
Facility.
|
|
OPTIONAL
PREPAYMENTS
AND COMMITMENT
REDUCTIONS:
|
Substantially
identical to the Existing 364-Day
Facility.
|
|
MANDATORY
PREPAYMENTS AND COMMITMENT
|
|
|
REDUCTIONS:
|
(a)
100% of all net cash proceeds from sales and casualty or condemnation
losses of domestic property and assets of the Company and its subsidiaries
(excluding sales of inventory in the ordinary course of business,
individual sales that generate net cash proceeds of less than $250,000,000
up to an aggregate of $750,000,000, all sales that generate less than
$10,000,000 of net cash proceeds individually and other exceptions to be
agreed upon in the loan documentation), (b) 100% of all net cash proceeds
from the issuance of additional equity interests in the Company or any of its
subsidiaries otherwise permitted under the loan documentation (subject to
exceptions to be agreed in the loan documentation) and (c) 100% of all net
cash proceeds from the issuance or incurrence after the Closing Date of
additional debt of the Company or any of its subsidiaries (subject to
exceptions to be agreed in the loan documentation including but not
limited to any issuances of commercial paper, intercompany debt or
borrowings by foreign subsidiaries) shall be applied to the prepayment of
(and permanent reduction of the commitments under) the Senior Credit
Facility.
|
|
CONDITIONS
PRECEDENT TO
CLOSING:
|
The
closing and the initial extension of credit under the Senior Credit
Facility will be subject to satisfaction of only the following conditions
precedent:
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(i)
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The
negotiation, execution and delivery of definitive documentation
(including, without limitation, satisfactory legal opinions and other
customary closing documents) for the Senior Credit Facility satisfactory
to the Company, the Lead Arrangers, the Administrative Agent and the
Lenders. It is understood and agreed that except as expressly
contemplated in this Summary of Terms and Conditions, the provisions
of the Senior Credit Facility shall be substantially identical
to those of the Existing 364-Day
Facility.
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(ii)
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There
shall not have occurred since December 27, 2008 a material adverse
change in the financial condition, operations or properties of the Company
and its subsidiaries taken as a whole (after giving pro forma effect to
the Acquisition) that has not been publicly disclosed prior to the date of
the Commitment Letter,.
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2
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(iii)
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The
Company shall have as of the Closing Date a rating on its long-term
indebtedness of A- or higher from Standard & Poor’s Ratings Group and
A3 or higher from Moody’s Investors Service, Inc., in each case with a
stable or better outlook.
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(iv)
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The
merger agreements or similar agreements (including all schedules and
exhibits thereto) (collectively, the “Merger
Agreements”) related to the Acquisition shall not have been amended
or modified or any condition therein waived, in each case in a manner that
is materially adverse to the interests of the Lenders, without the prior
written consent of the Lead Arrangers. The Acquisition shall
have been consummated in accordance with the terms of the Merger
Agreements and in compliance with applicable law and regulatory approvals
and the Lead Arranger and the Initial Lenders shall have received evidence
reasonably satisfactory to it that any mergers to effect the Transaction
shall have been consummated.
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(v)
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Other
conditions precedent substantially identical to those in the Existing
364-Day Facility.
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CONDITIONS
PRECEDENT
TO ALL EXTENSIONS
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OF
CREDIT
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Substantially
identical to the Existing 364-Day
Facility.
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REPRESENTATIONS
AND
WARRANTIES:
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Substantially
identical to the Existing 364-Day
Facility.
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COVENANTS:
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Substantially
identical to the Existing 364-Day Facility, and a covenant that in the
event that PepsiCola Metropolitan Bottling Company, a New Jersey
corporation, or such other company or companies as shall be the legal
successors of each Acquired Company after consummation of the mergers
giving effect to the Acquisition shall provide a guarantee of the
Company's indebtedness under any credit facility or indenture of the
Company, such person or persons shall provide a guarantee of the Company's
indebtedness under the Senior Credit Facility on substantially the same
terms as such guarantee.
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EVENTS
OF DEFAULT:
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Substantially
identical to the Existing 364-Day
Facility.
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ASSIGNMENTS AND
PARTICIPATIONS:
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Substantially
identical to the Existing 364-Day
Facility.
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WAIVERS AND
AMENDMENTS:
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Substantially
identical to the Existing 364-Day
Facility.
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INDEMNIFICATION:
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The
Company will indemnify and hold harmless the Administrative Agent, each
Lead Arranger, each Lender and their respective affiliates and their
partners, directors, officers, employees, agents and advisors from and
against all losses, claims, damages, liabilities and expenses arising out
of or relating to the Senior Credit Facility, the Company’s use
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3
| of loan proceeds or the commitments, including, but not limited to, the reasonable fees of one counsel (subject to customary provisions regarding special and local counsel and conflicts of interest) and settlement costs, except to the extent such losses, claims, damages, liabilities or expenses arise from such indemnified person’s gross negligence, willful misconduct or material breach in bad faith of its obligations under the Senior Credit Facility. This indemnification shall survive and continue for the benefit of all such persons or entities. |
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GOVERNING
LAW:
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State of New
York.
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OTHER:
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Each
of the parties shall, to the fullest extent permitted under applicable
law, (i) waive its right to a trial by jury and (ii) submit to
New York jurisdiction. The loan documentation will contain
increased cost, withholding tax, capital adequacy and yield protection
provisions, in each case, substantially identical to the Existing 364-Day
Facility.
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4
Cautionary
Statement
This
communication does not constitute an offer to sell or the solicitation of an
offer to buy any securities or a solicitation of any vote or approval. PepsiCo,
Inc. (“PepsiCo”) and The
Pepsi Bottling Group, Inc. (“PBG”) plan to file with the
Securities and Exchange Commission (“SEC”) a registration statement
on Form S-4 containing a proxy statement/prospectus and other documents with
respect to the proposed acquisition of PBG and a definitive proxy
statement/prospectus will be mailed to shareholders of PBG. PepsiCo and
PepsiAmericas, Inc. (“PAS”) plan to file with the
SEC a registration statement on Form S-4 containing a proxy statement/prospectus
and other documents with respect to the proposed acquisition of PAS and a
definitive proxy statement/prospectus will be mailed to shareholders of PAS.
INVESTORS AND SECURITY HOLDERS
OF PBG AND PAS ARE URGED TO READ THE APPLICABLE PROXY STATEMENT/PROSPECTUS AND
OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.
Investors
and security holders will be able to obtain free copies of the registration
statements and the proxy statements/prospectuses (when available) and other
documents filed with the SEC by PepsiCo, PBG or PAS through the website
maintained by the SEC at http://www.sec.gov. Copies of the documents filed with
the SEC by PepsiCo will be available free of charge on PepsiCo’s internet
website at www.pepsico.com
or by contacting PepsiCo’s Investor Relations Department at 914-253-3035. Copies
of the documents filed with the SEC by PBG will be available free of charge on
PBG’s internet website at www.pbg.com
or by contacting PBG’s Investor Relations Department at 914-767-7216. Copies of
the documents filed with the SEC by PAS will also be available free of charge on
PAS’s internet website at www.pepsiamericas.com
or by contacting PAS’s Investor Relations Department at
612-661-3883.
PBG and
its directors, executive officers and certain other employees may be deemed to
be participants in the solicitation of proxies in respect of the proposed
acquisitions of PBG. Information regarding PBG’s directors and executive
officers is available in its Annual Report on Form 10-K for the year ended
December 27, 2008, which was filed with the SEC on February 20, 2009,
and its proxy statement for its 2009 annual meeting of shareholders, which was
filed with the SEC on April 7, 2009. PAS and its directors, executive officers
and certain other employees may be deemed to be participants in the solicitation
of proxies in respect of the proposed acquisitions of PAS. Information regarding
PAS’s directors and executive officers is available in its Annual Report on Form
10-K for the year ended January 3, 2009, which was filed with the SEC on March
4, 2009, and its proxy statement for its 2009 annual meeting of shareholders,
which was filed with the SEC on March 18, 2009. Other information regarding the
participants in the proxy solicitations and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained in the
proxy statements/prospectuses and other relevant materials to be filed with the
SEC when they become available.
Statements in this release that are
“forward-looking statements” are based on currently available information,
operating plans and projections about future events and trends. They inherently
involve risks and uncertainties that could cause actual results to differ
materially from those predicted in such forward-looking statements. Such risks
and uncertainties include, but are not limited to: PepsiCo’s ability to
consummate the acquisitions of PBG and PAS and to achieve the synergies and
value creation contemplated by the proposed acquisitions; PepsiCo’s ability to
promptly and effectively integrate the businesses of PBG, PAS and PepsiCo; the
timing to consummate the proposed acquisitions and any necessary actions to
obtain required regulatory approvals; the diversion of management time on
transaction-related issues; changes in demand for PepsiCo’s products, as a
result of shifts in consumer preferences or otherwise; increased costs,
disruption of supply or shortages of raw materials and other supplies;
unfavorable economic conditions and increased volatility in foreign exchange
rates; PepsiCo’s ability to build and sustain proper information technology
infrastructure, successfully implement its ongoing business process
transformation initiative or outsource certain functions effectively; damage to
PepsiCo’s reputation; trade consolidation, the loss of any key customer, or
failure to maintain good relationships with PepsiCo’s bottling partners,
including as a result of the proposed acquisitions; PepsiCo’s ability to hire or
retain key employees or a highly skilled and diverse workforce; changes in the
legal and regulatory environment; disruption of PepsiCo’s supply chain; unstable
political conditions, civil unrest or other developments and risks in the
countries where PepsiCo operates; and risks that benefits from PepsiCo’s
Productivity for Growth initiative may not be achieved, may take longer to
achieve than expected or may cost more than currently anticipated.
For
additional information on these and other factors that could cause PepsiCo’s
actual results to materially differ from those set forth herein, please see
PepsiCo’s filings with the SEC, including its most recent annual report on Form
10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not
to place undue reliance on any such forward-looking statements, which speak only
as of the date they are made. All information in this communication is as of
August 4, 2009. PepsiCo undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events or
otherwise.