EXHIBIT 10.30
STOCKHOLDERS AGREEMENT
▇▇▇▇ SPECIALITY FOODS HOLDINGS, INC.
Dated as of January 27, 2005
Table of Contents
Page
1. Stock Acquisitions............................................................................. 1
2. Board of Directors; Management Structure....................................................... 1
2.1 Board of Directors.................................................................... 1
2.2 Management Structure.................................................................. 2
3. Assets and Liabilities of the Company.......................................................... 3
4. Spin-Off from ▇▇▇▇............................................................................. 4
4.1 In General............................................................................ 4
4.2 Conditions Precedent.................................................................. 5
4.3 Certain Covenants and Acknowledgements Relating to the Spin Off....................... 6
4.4 Alternative Proposals................................................................. 7
5. Fees and Expenses.............................................................................. 8
6. Restrictions on Transfer of Common Stock....................................................... 9
6.1 In General............................................................................ 9
6.2 Estate Planning Transfers............................................................. 9
7. Purchase by ▇▇▇▇ from the TreeHouse Investors ("▇▇▇▇ Call Right").............................. 10
7.1 Right to Purchase..................................................................... 10
7.2 Notice................................................................................ 10
7.3 Payment............................................................................... 11
8. Sale by TreeHouse Investors to ▇▇▇▇ ("TreeHouse Investors Put Right").......................... 11
8.1 Right to Sell......................................................................... 11
8.2 Notice................................................................................ 11
8.3 Payment............................................................................... 11
8.4 Right to Sell in the Event of Death or Disability..................................... 11
9. Sales to Third Parties......................................................................... 12
9.1 Sales by TreeHouse Investors.......................................................... 12
9.2 Involuntary Transfers................................................................. 12
10. Stock Certificate Legend....................................................................... 13
11. Covenants; Representations and Warranties...................................................... 14
11.1 New TreeHouse Investors............................................................... 14
11.2 No Other Arrangements or Agreements................................................... 14
11.3 Additional Representations and Warranties............................................. 14
12. Amendment and Modification..................................................................... 15
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Table of Contents
-----------------
(continued)
Page
13. Parties........................................................................................ 15
13.1 Assignment Generally.................................................................. 15
13.2 Termination........................................................................... 15
13.3 Agreements to Be Bound................................................................ 16
14. Recapitalizations, Exchanges, etc.............................................................. 16
15. No Third Party Beneficiaries................................................................... 16
16. Further Assurances............................................................................. 17
17. Governing Law.................................................................................. 17
18. Invalidity of Provision........................................................................ 17
19. Waiver......................................................................................... 17
20. Notices........................................................................................ 17
21. Headings....................................................................................... 18
22. Counterparts................................................................................... 18
23. Entire Agreement............................................................................... 18
24. Injunctive Relief.............................................................................. 19
25. Defined Terms.................................................................................. 19
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of January 27, 2005 (this
"AGREEMENT"), among ▇▇▇▇ Specialty Foods Holdings, Inc., a Delaware corporation
(the "COMPANY"), ▇▇▇▇ Foods Company, a Delaware corporation ("▇▇▇▇"), ▇▇▇ ▇.
▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, and ▇▇▇▇▇ ▇.
▇▇▇▇▇ (collectively, the "INITIAL TREEHOUSE MANAGEMENT"), and each other person
or entity who becomes a party to this Agreement (together with the Initial
TreeHouse Management, the "TREEHOUSE INVESTORS" and the TreeHouse Investors,
together with ▇▇▇▇, the "STOCKHOLDERS"). Capitalized terms used herein without
definition are defined in Section 25.
The parties hereto agree as follows:
1. Stock Acquisitions. Simultaneously with the execution of this
Agreement, each of the TreeHouse Investors is entering into a stock subscription
agreement with the Company (collectively, the "SUBSCRIPTION AGREEMENTS") to
purchase shares of common stock, par value $.01 per share, of the Company
("COMMON STOCK") having a value of $10.0 million in the aggregate for all
TreeHouse Investors. The purchase price per share for such Common Stock shall be
set forth in the Subscription Agreements. Such purchase price has been
determined based on the value of the Company taking into account the
contributions of assets to be made by ▇▇▇▇ as set forth in Section 3 below (but
such purchase price and value are subject to adjustment as provided in Section
4.3(b)). As a condition to the closing of the purchase contemplated by the
Subscription Agreements, each such TreeHouse Investor must become a party to
this Agreement. Except as provided for in the Subscription Agreements, and as
may occur pursuant to a stock dividend, stock split, recapitalization or other
similar corporate transaction affected on a pro-rata basis so that the
percentage of the Common Stock held by each stockholder immediately prior
thereto is not affected, the Company shall issue no additional shares of Common
Stock prior to the earlier to occur of (i) the date the registration statement
or statements relating to the Spin-Off shall have become effective and trading
of Common Stock on a registered national securities exchange or automated
quotation system (including, but not limited to, NASDAQ) shall have commenced
(such date, the "REGISTRATION DATE") and (ii) the date that no TreeHouse
Investor holds any shares of Common Stock by reason of the exercise of the
rights set forth in either Section 7 or Section 8.
2. Board of Directors; Management Structure.
2.1 Board of Directors. Each Stockholder shall vote all of his, her
or its shares of Common Stock and any other voting securities of the Company
over which such Stockholder has voting control, and shall take all other
necessary or desirable
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actions within such Stockholder's control (whether in such Stockholder's
capacity as a stockholder, director, member of a board committee or officer of
the Company or otherwise, and including, without limitation, attendance at
meetings in person or by proxy for purposes of obtaining a quorum, execution of
written consents in lieu of meetings and approval of amendments and/or
restatements of the Company's certificate of incorporation or by-laws), and the
Company shall take all necessary and desirable actions within its control
(including, without limitation, calling special board, committee, stockholder
meetings and approval of amendments and/or restatements of the Company's
certificate of incorporation or by-laws), so that, at the date of distribution
of the Common Stock to the stockholders of ▇▇▇▇ in connection with the Spin-Off
(the "DISTRIBUTION DATE"):
(a) the Board of Directors of the Company (the "BOARD") shall
consist of 7 members;
(b) ▇▇▇ ▇. ▇▇▇▇ shall be a member of the Board and shall serve as
the Board's Chairman;
(c) ▇▇▇▇'▇ Chief Executive Officer in office at such date shall be a
member of the Board;
(d) five individuals mutually recommended and nominated by the ▇▇▇▇
Representative and the TreeHouse Representative shall be elected to the Board,
subject to the approval of the Board of Directors of ▇▇▇▇ (the "▇▇▇▇ BOARD"), in
its sole discretion, provided that three of the five individuals shall not be
affiliated in any way with ▇▇▇▇ or any of the TreeHouse Investors or any of
their affiliates, shall have experience and expertise that qualifies such person
to serve on the Board and shall satisfy any and all applicable independence
requirements for persons who would serve as members of the Company's audit or
compensation committees of the Board;
(e) the composition of the board of directors of each of the
Company's subsidiaries (a "SUBSIDIARY BOARD") shall be determined by the Board;
and
(f) any committees of the Board or a Subsidiary Board shall be
established by (or, in the case of a Subsidiary Board, with the approval of the
Board) the Board, provided that (i) the initial membership of any such
committees shall be proposed by the TreeHouse Representative after consulting
with the ▇▇▇▇ Representative and (ii) such committees shall be operated in
accordance with the by-laws of the applicable company and applicable law.
2.2 Management Structure. The Company shall have the following
officers: Chief Executive Officer, President & Chief Operating Officer, Chief
Financial Officer, General Counsel & Chief Administrative Officer, and Senior
Vice President of
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Operations. Each of these offices shall be filled by the Board, provided that
the person to whom such position is assigned in his or her employment agreement
with the Company, dated as of the date hereof (each, an "EMPLOYMENT AGREEMENT"),
shall serve in such office in accordance with the terms of such Employment
Agreement.
3. Assets and Liabilities of the Company.
(a) Transfer of Specialty Businesses. Immediately prior to the
Distribution Date, the assets of the Company shall consist, directly or
indirectly, of ▇▇▇▇'▇ right, title and interest in and to all properties, assets
and rights of every nature, kind and description, tangible and intangible
(including goodwill), whether real, personal or mixed, whether accrued,
contingent or otherwise that primarily relate to, or are primarily held for use
in connection with, the Specialty, Mocha Mix, food service dressings, and Second
Nature businesses of ▇▇▇▇ (collectively, the "SPECIALTY BUSINESSES"), including,
but not limited to, working capital assets (but excluding cash), fixed assets,
intangible assets, capital leases, and other long-term assets, but excluding the
trade names ▇▇▇▇, Carb Conquest, and Fieldcrest (and any derivatives of any such
trade name) and associated logos. The liabilities of the Company shall consist
of those liabilities and obligations incurred in connection with the Specialty
Businesses, including, but not limited to, the fees and expenses specified in
Section 5, any tax liability referenced in Section 4.2(a) or in the tax matters
agreement to be entered into by ▇▇▇▇, the Company and their affiliates, working
capital liabilities, pension and other post-retirement benefit obligations, and
other employee benefit liabilities, long-term liabilities, and off balance sheet
commitments and contingencies, provided that any such liabilities and
obligations shall not consist of any indebtedness for borrowed money (other than
capital leases) to, or any guarantees for any such indebtedness of, ▇▇▇▇, any of
its affiliates (other than the Company) or any third party. ▇▇▇▇ covenants that
it shall take all actions reasonably necessary so that the assets of the Company
immediately prior to the Distribution Date shall comprise all assets, properties
and rights required for the Company to conduct the Specialty Businesses on and
after the Distribution Date in all material respects in the manner in which such
Specialty Businesses had been conducted immediately prior to the Distribution
Date.
(b) Employment Agreements. Notwithstanding anything herein or
therein to the contrary, ▇▇▇▇ guarantees the performance of the Company's
obligations arising prior to the Registration Date with respect to each
Employment Agreement between the Company and any member of the Initial TreeHouse
Management, including, without limitation, payment of any compensation or
severance or other termination benefits payable thereunder, provided, however,
that the Company shall not amend any such employment agreement to increase the
amounts payable thereunder in any material respect without ▇▇▇▇'▇ consent.
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4. Spin-Off from ▇▇▇▇.
4.1 In General. Subject to Section 4.2, from and after the date
hereof, the Company and the Stockholders shall use their reasonable commercial
effects to consummate the Spin-Off. Such efforts shall include, but not be
limited to:
(a) IRS Ruling. ▇▇▇▇ shall use its commercially reasonable efforts
to obtain a private letter ruling (the "PRIVATE LETTER RULING") from the
Internal Revenue Service to the effect that (i) the transfer by ▇▇▇▇ to the
Company of the assets of the Specialty Businesses, and the Company's assumption
of the liabilities held by ▇▇▇▇ related to the Specialty Businesses, followed by
the distribution of Common Stock in connection with the Spin-Off to the
stockholders of ▇▇▇▇, ▇▇▇▇ qualify as a reorganization under Sections
368(a)(1)(D) and 355 of the Internal Revenue Code of 1986, as amended (the
"CODE"); (ii) no gain or loss will be recognized for U.S. federal income tax
purposes by ▇▇▇▇ on its transfer of the assets relating to the Specialty
Businesses to the Company; (iii) no gain or loss will be recognized for U.S.
federal income tax purposes by the Company on its receipt of the assets relating
to the Specialty Businesses from ▇▇▇▇, and (iv) no gain or loss will be
recognized for U.S. federal income tax purposes by (and no amount will otherwise
be included in the income of) the stockholders of ▇▇▇▇ upon their receipt of
Common Stock pursuant to the Spin-Off;
(b) Registration Statement. The Company and the Stockholders shall
use their commercially reasonable efforts to file a registration statement on
Form 10 or on such other forms as may be required or appropriate under the
applicable Federal securities laws to register the Common Stock to be
distributed in connection with the Spin-Off pursuant to the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), and/or to register the
distribution of the Common Stock pursuant to the Securities Act of 1933, as
amended (the "SECURITIES ACT"), as applicable (any such registration statements
or forms, collectively, the "REGISTRATION STATEMENTS"), and such amendments or
supplements thereto as may be necessary in order to cause the Registration
Statements to become and remain effective as required by law or the Securities
and Exchange Commission (the "COMMISSION"). The Company and the Stockholders
shall also cooperate in preparing, filing with the Commission and causing to
become effective registration statements or amendments thereof under either the
Securities Act or the Exchange Act that are required to reflect the
establishment of, amendments to, any employee benefit and other plans necessary
or appropriate in connection with the Spin-Off;
(c) Blue Sky. The Company and the Stockholders shall use their
commercially reasonable efforts to take all such actions as may be necessary or
appropriate to register or qualify the Common Stock or other securities of the
Company under the state securities or blue sky laws of the United States (and
any comparable laws under any foreign jurisdiction) in connection with the
Spin-Off; and
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(d) Stock Exchange/NASDAQ Listing. The Company and the Stockholders
shall use their commercially reasonable efforts to prepare, file and to make
effective, an application for listing of the Common Stock that will be
distributed in connection with the Spin-Off on a registered national securities
exchange or automated quotation system (including, but not limited to, NASDAQ),
subject to official notice of issuance.
4.2 Conditions Precedent. The obligations of the Company and the
Stockholders to use their commercially reasonable efforts to consummate any
Spin-Off shall be conditioned on the satisfaction of the following conditions
(such conditions are for the sole benefit of ▇▇▇▇ and shall not give rise to or
create any duty on the part of ▇▇▇▇ or the ▇▇▇▇ Board to waive or not to waive
such conditions):
(a) IRS Ruling. ▇▇▇▇ shall have obtained the Private Letter Ruling
from the Internal Revenue Service in form and substance reasonably satisfactory
to ▇▇▇▇, and such ruling shall remain in effect as of the effective date of the
Spin-Off, and neither ▇▇▇▇ nor any of its affiliates shall be required to
recognize gain or income by reason of any transactions (including, without
limitation, any intercompany transactions) effectuated in connection with the
Spin-Off; provided, however, if the Private Letter Ruling is obtained, but ▇▇▇▇
or any of its affiliates is required to recognize gain or income by reason of
any transactions effectuated in connection with the Spin-Off, ▇▇▇▇ (i) shall
waive this condition if such recognition of gain or income is less than or equal
to $20 million, and (ii) may waive this condition if such recognition of gain or
income is greater than $20 million, and, in each such case, the Company shall
reimburse ▇▇▇▇ for any taxes incurred (subject to a maximum reimbursement of $20
million) as a result of the recognition of such gain or income, in which case,
the adjustment provisions of Section 4.3(b) shall apply.
(b) Governmental Approvals. Any material governmental approvals and
consents necessary to consummate the Spin-Off shall have been obtained and be in
full force and effect;
(c) Stock Exchange/NASDAQ Listing. The Common Stock to be
distributed in connection with the Spin-Off shall have been accepted for listing
on a registered national securities exchange or automated quotation system
(including, but not limited to, NASDAQ), on official notice of issuance;
(d) No Legal Restraints. No order, injunction or decree issued by
any court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Spin-Off shall be in effect and
no other event outside the control of ▇▇▇▇ shall have occurred or failed to
occur that prevents the consummation of the Spin-Off;
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(e) No Material Adverse Effect. No other event or developments shall
have occurred that, in the judgment of the ▇▇▇▇ Board, would result in the
Spin-Off having a material adverse effect on ▇▇▇▇ or on the stockholders of
▇▇▇▇;
(f) Opinions. ▇▇▇▇ or the Company, as the case may be, shall have
received any and all legal opinions, in a form reasonably satisfactory to the
Board of Directors of the applicable entity, as such Board of Directors shall
determine in good faith to be reasonably necessary for it to authorize the
consummation of the Spin-Off; and
(g) Other Actions. Such other reasonable and customary actions as
▇▇▇▇ shall determine to be reasonably necessary in order to assure the
successful completion of the Spin-Off shall have been taken.
4.3 Certain Covenants and Acknowledgements Relating to the Spin Off.
(a) In General. From and after the date hereof, ▇▇▇▇ and the
TreeHouse Investors agree to act in good faith and diligently to pursue the
Spin-Off. Notwithstanding anything to the contrary contained in this Agreement,
the Company and the Stockholders acknowledge and agree that ▇▇▇▇ shall, in
consultation with the Tree House Representative, determine the date of the
Spin-Off and all terms of the Spin-Off, including, but not limited to, the form,
structure and terms of any transaction or transactions and/or distribution or
distributions to effect the Spin-Off, and the time of and conditions to the
consummation of the Spin-Off. In addition, ▇▇▇▇ may, in consultation with the
TreeHouse Investors, at any time and from time to time before the Spin-Off
modify or change the terms of the Spin-Off, including, but not limited to, by
accelerating or delaying the timing of all or part of the Spin-Off. ▇▇▇▇ shall
select any investment banker or bankers and manager or managers whose services
may be required or advantageous in connection with the Spin-Off, as well as any
financial printer, solicitation and/or exchange agent and outside counsel for
▇▇▇▇ and the Company.
(b) Adjustment Provisions. In the event that the Company is required
to reimburse ▇▇▇▇ for any taxes incurred by ▇▇▇▇ as contemplated by Section
4.2(a) (the amount so reimbursed hereafter called the "TAX REIMBURSEMENT
AMOUNT"), the Company will issue the TreeHouse Investors that number of
additional shares of Common Stock equal to the excess of (i) the Required Common
Stock Outstanding over (ii) the Current Common Stock Outstanding. "REQUIRED
COMMON STOCK OUTSTANDING" shall mean the number of shares of Common Stock equal
to the quotient of (i) the ▇▇▇▇ Owned Shares divided by (ii) the excess of (A)
one over (B) the quotient of (x) $10 million divided by (y) the Revised
Valuation. "▇▇▇▇ OWNED SHARES" shall mean the number of shares of Common Stock
owned by ▇▇▇▇ immediately prior to any adjustment pursuant to this Section
4.3(b). "REVISED VALUATION" shall mean the excess of (i) $600 million over (ii)
the product of (A) .4464 and (B) the Tax Reimbursement Amount.
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"CURRENT COMMON STOCK OUTSTANDING" shall mean the total number of shares of the
Company's Common Stock outstanding immediately prior to any adjustment pursuant
to this Section 4.3(b).
(c) Certain ▇▇▇▇ Options. If the current Chief Executive Officer of
▇▇▇▇ is a director of the Company at the time specified in Section 2.1, then, in
connection with the Spin-Off, ▇▇▇▇ shall adjust such officer's vested options to
purchase shares of ▇▇▇▇ common stock (the "▇▇▇▇ OPTIONS"), such that, following
the Spin-Off, the ▇▇▇▇ Options shall be converted into the right to purchase
shares of ▇▇▇▇ common stock and Common Stock in the same proportions as would
have applied had such officer held the shares of common stock of ▇▇▇▇ issuable
upon exercise of the ▇▇▇▇ Options on the relevant record date with respect to
the Spin-Off. The exercise price of the options to purchase shares of ▇▇▇▇
common stock and Common Stock following such adjustment shall be determined
using the principles set forth in section 424 of the Code, subject to adjustment
as is necessary to avoid accruing any compensation expense to the Company or
▇▇▇▇ under U.S. Generally Accepted Accounting Principles. The adjustment to the
▇▇▇▇ Options shall take place as soon as reasonably practicable following the
Registration Date, but in no event more than 30 days after such Registration
Date.
4.4 Alternative Proposals.
(a) In General. In the event that, prior to the Registration Date,
the ▇▇▇▇ Board determines not to proceed with the Spin-Off due to its receipt of
an alternative proposal from an unrelated third party for (i) the acquisition by
such party through one transaction or a series of transactions of (A) more than
50% of the combined voting power of the then outstanding voting securities of
the Company, or (B) all or substantially all of the assets of the Company, (ii)
the merger or consolidation of the Company (including, but not limited to, by
means of a "reverse ▇▇▇▇▇▇ trust transaction") as a result of which ▇▇▇▇ does
not, immediately thereafter, own, directly or indirectly, more than 50% of the
combined voting power entitled to vote generally in the election of directors of
the merged or consolidated company, or (iii) the acquisition by such party
through one transaction or a series of transactions of (A) more than 50% of the
combined voting power of the then outstanding voting securities of ▇▇▇▇, or (B)
all or substantially all of the assets of ▇▇▇▇ (each, an "ALTERNATIVE
PROPOSAL"), then, upon and subject to consummation of the transaction described
in the Alternative Proposal, ▇▇▇▇ shall pay the TreeHouse Investors, in the
aggregate, a cash fee equal to 1% of the Total Enterprise Value (as determined
pursuant to Section 4.4(c) below). In the event that such fee becomes payable,
the TreeHouse Representative shall inform ▇▇▇▇ to whom such fee shall be paid,
and in what amounts, at least 5 business days before the consummation of the
transaction described in the Alternative Proposal.
(b) Conditions to Payment. Notwithstanding Section 4.4(a), no fee
shall become payable (or be paid) to the TreeHouse Investors unless the
TreeHouse
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Management (i) continue to manage the Company until the earlier of (A) the
consummation of the transaction described in the Alternative Proposal and (B) 9
months from the publication of the press release announcing such transaction,
and (ii) shall have assisted, to the extent reasonably requested by ▇▇▇▇, in
▇▇▇▇'▇ efforts to consummate such transaction.
(c) Determination of Enterprise Value. If the Alternative Proposal
relates to a sale of the stock of the Company or substantially all the assets of
the Company, the Total Enterprise Value will be determined based on the value of
the consideration received (including any debt assumed, other than trade debt
incurred in the ordinary course of business, which shall be net of any cash and
cash equivalents) in connection with such sale. If the Alternative Proposal
relates to the acquisition of ▇▇▇▇ stock or assets, the determination of the
Total Enterprise Value shall be $600 million (or, if any adjustment is made
pursuant to Section 4.3(b), the amount of the Revised Valuation).
(d) Certain Covenants Relating to Alternative Proposals. Each of the
Stockholder Representatives agree to give the other Stockholders Representative
written initial notice within 3 business days after becoming aware of any
written or oral expression of interest or offer for all or any portion of the
stock or assets of the Company or the Specialty Businesses. Such notice shall
specify in reasonable detail such expression of interest or offer. In addition,
following the delivery of any such notice by either Stockholder Representative,
▇▇▇▇ and the TreeHouse Investors shall communicate with the other (through their
respective Stockholder Representative) as to the status and progress with
respect to such possible transaction regarding the sale of the Common Stock or
the assets of the Company, such that each such Stockholder Representative is
kept promptly and continuously informed of all relevant developments in this
regard. ▇▇▇▇ agrees that it shall also notify such unrelated third party,
promptly following delivery of the initial notice by either Stockholder
Representative, that the TreeHouse Management shall not be available to manage
the Company after the consummation of any transaction with such unrelated third
party. ▇▇▇▇ further agrees that it shall not pursue any transaction or enter
into any agreement that involves any form of contingency or otherwise directly
or indirectly contemplates that any member of TreeHouse Management will
negotiate with or be employed by such unrelated third party after the
consummation of any transaction with such unrelated third party.
5. Fees and Expenses. The Company shall reimburse the TreeHouse
Management for their reasonable professional costs and out-of-pocket travel
costs associated with drafting, negotiating and implementing this Agreement and
the Employment Agreements, and any other arrangements between the Company and
the TreeHouse Investors referenced therein, within 30 days following the
submission of evidence, reasonably satisfactory to the Company, of the
incurrence and purpose of each such expense, provided that, unless and until the
Registration Date occurs, the amount of
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expenses subject to reimbursement shall not exceed $200,000. If the Registration
Date occurs, up to $12.5 million of the fees and expenses incurred by ▇▇▇▇ and
the Company in connection with (i) drafting, negotiating and implementing this
Agreement and the Employment Agreements, and any other arrangements between the
Company and the TreeHouse Investors referenced therein, and (ii) planning,
analysis and execution of the Spin-Off shall be borne by the Company.
6. Restrictions on Transfer of Common Stock.
6.1 In General.
(a) TreeHouse Investors. Until the third anniversary of the date of
this Agreement, no shares of Common Stock acquired pursuant to Subscription
Agreements or any shares of Common Stock or other securities of the Company
received in respect of such shares of Common Stock (the "RESTRICTED SHARES") may
be, directly or indirectly, sold, assigned, mortgaged, transferred, pledged,
hypothecated or otherwise disposed of (each, a "TRANSFER"), provided that shares
of Common Stock may be Transferred before the expiration of such period (i)
pursuant to Section 6.2 ("ESTATE PLANNING TRANSFERS") or, in the case of such
TreeHouse Investor's death, by will or by the laws of intestate succession, to
executors, administrators, testamentary trustees, legatees or beneficiaries,
provided that the transferee becomes a party to this Agreement in accordance
with Section 13.3, (ii) pursuant to Section 7 ("▇▇▇▇ CALL RIGHT"), (iii)
pursuant to Section 8 ("TREEHOUSE INVESTORS PUT RIGHT"), (iv) in accordance with
Section 9.2 or (v) to the Company in consideration of the payment of the
exercise price of any stock options held by such TreeHouse Investor related to
the Common Stock or of the taxes required to be withheld upon the exercise of
any such stock options, so long as such TreeHouse Investor agrees that the
restrictions contained in this Section 6.1(a) shall thereafter continue to apply
to that number of shares of Common Stock received upon exercise of such stock
options as is equal to the number of shares so surrendered.
(b) ▇▇▇▇. Except for any transfer (i) to one or more of its direct
or indirect wholly-owned subsidiaries, (ii) to its stockholders in connection
with the Spin-Off or (iii) pursuant to an Alternative Proposal, ▇▇▇▇ agrees that
during the pendency of this Agreement, it shall not Transfer any of the shares
of Common Stock it holds.
6.2 Estate Planning Transfers. Shares of Common Stock held by a
TreeHouse Investor who is an individual may be Transferred for estate-planning
purposes to (a) a trust under which the distribution of the shares of Common
Stock may be made only to beneficiaries who are such TreeHouse Investor, his or
her spouse, his or her parents, members of his or her immediate family or his or
her lineal descendants, (b) a charitable remainder trust, the income from which
will be paid to such TreeHouse Investor during his or her life, (c) a
corporation, the stockholders of which are only such TreeHouse Investor, his or
her spouse, his or her parents, members of his or her
9
immediate family or his or her lineal descendants or (d) a partnership or
limited liability company, the partners or members of which are only such
TreeHouse Investor, his or her spouse, his or her parents, members of his or her
immediate family or his or her lineal descendants.
7. Purchase by ▇▇▇▇ from the TreeHouse Investors ("▇▇▇▇ Call
Right").
7.1 Right to Purchase. Subject to this Section 7, if the
Registration Date does not occur by (a) October 31, 2005 (or such later date as
the TreeHouse Representative and ▇▇▇▇ Representative may agree to in writing),
or (b) if earlier, the earlier of the date (such earlier date hereafter called
the "EARLY TERMINATION DATE") (i) the Company or ▇▇▇▇ receives notice from the
Internal Revenue Service that it does not intend to issue the Private Letter
Ruling or (ii) ▇▇▇▇ decides not to proceed with the Spin-Off because (x) the
Private Letter Ruling is unsatisfactory, (y) the issuance of such Private Letter
Ruling would be subject to conditions that ▇▇▇▇ determines to be unacceptable or
(z) any of the other conditions to effecting the Spin-Off set forth in Section
4.2 hereof will not or cannot be satisfied on commercially reasonable terms,
then ▇▇▇▇ shall have the right to purchase from the TreeHouse Investors, and the
TreeHouse Investors shall have the obligation to sell to ▇▇▇▇, all, but not less
than all, of the TreeHouse Investors' shares of Common Stock. ▇▇▇▇ shall give
the TreeHouse Representative notice promptly, but not later than 3 business
days, after receiving any notice from the Internal Revenue Service or making any
determination referenced in subclauses (i) or (ii) of subclause (b) of the
immediately preceding sentence. If the reason that the Spin-Off is not effected
is other than due to a TreeHouse Default, the aggregate purchase price for all
such shares of Common Stock shall be $11.0 million. If the reason that the
Spin-Off is not effected is due to a TreeHouse Default, the aggregate purchase
price for all such shares of Common Stock shall equal the lesser of (I) $10.0
million, and (II) an amount equal to the product of (a) the quotient of (x) the
fair market value of the entire Common Stock equity interest of the Company
taken as a whole, without additional premiums for control or discounts for
minority interests or restrictions on transfer as established by an investment
bank agreed to by the ▇▇▇▇ Representative and the TreeHouse Representative using
the same methodology that was used to determine the purchase price per share for
the Common Stock specified in the Subscription Agreements, divided by (y) the
number of outstanding shares of Common Stock, calculated on a fully-diluted
basis, multiplied by (b) the number of outstanding shares of Common Stock held
by the TreeHouse Investors.
7.2 Notice. If ▇▇▇▇ desires to purchase shares of Common Stock
pursuant to Section 7.1, it shall notify each of the TreeHouse Investors not
more than 30 days after October 31, 2005 (or such earlier or later date as
determined pursuant to Section 7.1).
10
7.3 Payment. Payment for any shares of Common Stock to be purchased
from the TreeHouse Investors pursuant to Section 7.1 shall be made on the date
specified by the ▇▇▇▇ Representative (but in no event more than 10 business days
following the date of the receipt by the TreeHouse Investors of ▇▇▇▇'▇ notice
delivered pursuant to Section 7.2), and the aggregate purchase price paid by
▇▇▇▇ shall be allocated among the TreeHouse Investors based on the number of
shares of Common Stock then held by each such TreeHouse Investor.
8. Sale by TreeHouse Investors to ▇▇▇▇ ("TreeHouse Investors Put
Right").
8.1 Right to Sell. Subject to this Section 8, if the Registration
Date does not occur for any reason other than a TreeHouse Default by (a) October
31, 2005 (or such later date as the TreeHouse Representative and the ▇▇▇▇
Representative may agree to in writing), or (b) if earlier, the Early
Termination Date, then the TreeHouse Investors shall have the right to sell to
▇▇▇▇, and ▇▇▇▇ shall have the obligation to purchase from the TreeHouse
Investors, all, but not less than all, of the TreeHouse Investors' shares of
Common Stock, at an aggregate purchase price equal to $11.0 million.
8.2 Notice. If the TreeHouse Investors desire to sell shares of
Common Stock pursuant to Section 8.1, the TreeHouse Representative shall notify
▇▇▇▇ not more than 60 days after October 31, 2005 (or such earlier or later date
as determined pursuant to Section 8.1). Such notice shall specify the number of
shares of Common Stock held by each TreeHouse Investor at the time notice is
given.
8.3 Payment. Payment for any shares of Common Stock sold by the
TreeHouse Investors pursuant to Section 8.1 shall be made on the date that is 10
business days following the date of the receipt by ▇▇▇▇ of the TreeHouse
Representative's notice with respect to such shares pursuant to Section 8.2, and
the aggregate purchase price paid by ▇▇▇▇ shall be allocated among the TreeHouse
Investors based on the number of shares of Common Stock then held by each such
TreeHouse Investor.
8.4 Right to Sell in the Event of Death or Disability.
(a) In General. Subject to this Section 8.4, if the employment of
member of TreeHouse Management terminates due to his death or pursuant to a
Termination due to Disability (as defined in the applicable Employment
Agreement) prior to the Registration Date, then such member and any other
TreeHouse Investor who is affiliated with such member shall have the right to
sell to ▇▇▇▇, and ▇▇▇▇ shall have the obligation to purchase from such TreeHouse
Investors (or such TreeHouse Investor's estate), all, but not less than all, of
such TreeHouse Investor's shares of Common Stock, at an aggregate purchase price
equal to the aggregate purchase price paid by such TreeHouse Investors for such
shares of Common Stock.
11
(b) Notice. If the TreeHouse Investor (or such TreeHouse Investor's
estate) desires to sell shares of Common Stock pursuant to Section 8.4(a), the
TreeHouse Investor (or such TreeHouse Investor's estate) shall notify ▇▇▇▇ not
more than 90 days after date of termination of such TreeHouse Investor's
employment. Such notice shall specify the number of shares of Common Stock held
by such TreeHouse Investor at the time notice is given.
(c) Payment. Payment for any shares of Common Stock sold by the
TreeHouse Investor (or termination estate) pursuant to Section 8.4(a) shall be
made on the date that is 10 business days (or the first business day thereafter
if the 10th business day is not a business day) following the date of the
receipt by ▇▇▇▇ of the TreeHouse Investor's (or the TreeHouse Investors
estate's) notice with respect to such shares pursuant to Section 8.4(b).
9. Sales to Third Parties.
9.1 Sales by TreeHouse Investors. At any time after the third
anniversary of the date hereof, any TreeHouse Investor may sell his, her or its
Restricted Shares to a third party. Except as provided in Section 6, at any time
after the Registration Date, any TreeHouse Investor may sell any shares of the
Company's Common Stock without restriction by reason of the terms of this
Agreement. Nothing in this Section 9.1 shall be construed to excuse any
TreeHouse Investor from compliance with any applicable rules on resales as may
be imposed at law, including under the Federal securities laws, or from
complying with the terms of any other agreement that Executive is now, or may
hereafter become a party to.
9.2 Involuntary Transfers. Prior to the Registration Date, any
transfer of title or beneficial ownership of shares of Common Stock (including
any of the Restricted Shares) upon default, foreclosure, forfeit, divorce, court
order or otherwise than by a voluntary decision on the part of a TreeHouse
Investor (each, an "INVOLUNTARY TRANSFER") shall be void unless the TreeHouse
Investor complies with this Section 9.2 and enables the Company to exercise in
full its rights hereunder. Upon any Involuntary Transfer, the Company shall have
the right to purchase such shares pursuant to this Section 9.2 and the person or
entity to whom such shares have been Transferred (the "INVOLUNTARY TRANSFEREE")
shall have the obligation to sell such shares in accordance with this Section
9.2. Upon the Involuntary Transfer of any shares of Common Stock, such TreeHouse
Investor shall promptly (but in no event later than two days after such
Involuntary Transfer) furnish written notice to the Company indicating that the
Involuntary Transfer has occurred, specifying the name of the Involuntary
Transferee, giving a detailed description of the circumstances giving rise to,
and stating the legal basis for, the Involuntary Transfer. Upon the receipt of
such notice, and for 60 days thereafter, the Company shall have the right to
purchase, and the Involuntary Transferee shall have the obligation to sell, all
(but not less than all) of the shares of Common Stock
12
acquired by the Involuntary Transferee for a purchase price equal to the lesser
of (i) the then fair market value of such shares of Common Stock as determined
in accordance with Section 4.4(c), and (ii) the cost of such shares of Common
Stock to the TreeHouse Investor who originally acquired such shares, provided
that the excess, if any, of the purchase price so determined over the amount of
such indebtedness or other liability that gave rise to the Involuntary Transfer
shall be paid directly to the TreeHouse Investor and not to the Involuntary
Transferee.
10. Stock Certificate Legend. A copy of this Agreement shall be
filed with the Secretary of the Company and kept with the records of the
Company. Each certificate representing shares of Common Stock owned by the
Stockholders shall bear upon its face the following (or similar) legends, as
appropriate:
(a) "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS, IN THE
OPINION OF COUNSEL TO THE STOCKHOLDER, WHICH COUNSEL MUST BE,
AND THE FORM AND SUBSTANCE OF WHICH OPINION ARE, SATISFACTORY
TO THE ISSUER, SUCH OFFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM
REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE ACT, SUCH
LAWS AND THE STOCKHOLDERS AGREEMENT OF THE ISSUER, DATED AS OF
JANUARY 27, 2005 (THE "STOCKHOLDERS AGREEMENT")."
(b) "THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER CONDITIONS, AS
SPECIFIED IN THE STOCKHOLDERS AGREEMENT, COPIES OF WHICH ARE
ON FILE AT THE OFFICE OF THE ISSUER AND WILL BE FURNISHED
WITHOUT CHARGE TO THE HOLDER OF SUCH SHARES UPON WRITTEN
REQUEST."
In addition, certificates representing shares of Common Stock owned by residents
of certain states shall bear any legends required by the laws of such states.
13
All Stockholders shall be bound by the requirements of all such legends. On the
Registration Date, the certificate representing the distributed shares shall be
replaced, at the expense of the Company, with certificates not bearing the
legends required by clauses (a) and (b) of this Section 10.
11. Covenants; Representations and Warranties.
11.1 New TreeHouse Investors. Each of the Stockholders hereby agrees
that any person who is designated as a member of TreeHouse Management after the
date of this Agreement and who is offered shares of any class of Common Stock or
holds stock options exercisable into shares of Common Stock shall, as a
condition precedent to the acquisition of such shares of Common Stock or the
exercise of such stock options, as the case may be, (a) become a party to this
Agreement by executing a signature page to the same and (b) if such person is a
resident of a state with a community or marital property system, cause his or
her spouse to execute a Spousal Waiver in the form of Exhibit A attached hereto,
and deliver such executed signature page to this Agreement and Spousal Waiver,
if applicable, to the Company at its address specified in Section 20 hereof.
Upon such execution and delivery, such employee shall be a TreeHouse Investor
for all purposes of this Agreement.
11.2 No Other Arrangements or Agreements. Each Stockholder hereby
represents and warrants to the Company and to each other Stockholder that,
except for this Agreement, the Subscription Agreements, the Employment
Agreements and any management stock option agreement of the Company applicable
to a member of TreeHouse Management, he, she or it has not entered into or
agreed to be bound by any other arrangements or agreements of any kind with any
other party with respect to the shares of Common Stock, including, but not
limited to, arrangements or agreements with respect to the acquisition or
disposition of Common Stock or any interest therein or the voting of shares of
Common Stock (whether or not such agreements and arrangements are with the
Company or any of its subsidiaries, or other Stockholders) and each TreeHouse
Investor agrees that, except as expressly permitted under this Agreement, he,
she or it will not enter into any such other arrangements or agreements.
11.3 Additional Representations and Warranties. Each Stockholder
represents and warrants to the Company and each other Stockholder that:
(a) such Stockholder has the power, authority and capacity (or, in
the case of any Stockholder that is a corporation, trust, limited liability
company or limited partnership, all corporate, trust, limited liability company
or limited partnership power and authority, as the case may be) to execute,
deliver and perform this Agreement;
(b) in the case of a Stockholder that is a corporation, trust,
limited liability company or limited partnership, the execution, delivery and
performance of this
14
Agreement by such Stockholder have been duly and validly authorized and approved
by all necessary corporate, trust, limited liability company or limited
partnership action, as the case may be;
(c) this Agreement has been duly and validly executed and delivered
by such Stockholder and constitutes a valid and legally binding obligation of
such Stockholder, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to creditors' rights generally and general principles of
equity; and
(d) the execution, delivery and performance of this Agreement by
such Stockholder does not and will not violate the terms of, or result in the
acceleration of, any obligation under (i) any material contract, commitment or
other material instrument to which such Stockholder is a party or by which such
Stockholder is bound or (ii) in the case of a Stockholder that is a corporation,
trust, limited liability company or limited partnership, the certificate of
incorporation and the by-laws, trust agreement, the certificate of formation and
the limited liability company agreement, or the certificate of limited
partnership and the limited partnership agreement, as the case may be.
12. Amendment and Modification. This Agreement may not be amended,
modified or supplemented except by a written instrument signed by the Company,
▇▇▇▇ and the TreeHouse Representative. The Company shall notify all Stockholders
promptly after any such amendment, modification or supplement shall have taken
effect.
13. Parties.
13.1 Assignment Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and assigns, provided that neither the
Company nor any TreeHouse Investor may assign any of its rights or obligations
hereunder without the consent of ▇▇▇▇ unless, in the case of a TreeHouse
Investor, such assignment is in connection with a Transfer explicitly permitted
by this Agreement and, prior to such assignment, such assignee complies with the
requirements of Section 13.3.
13.2 Termination. Any Stockholder who ceases to own shares of Common
Stock or any interest therein, shall cease to be a party to, or Person who is
subject to, this Agreement and thereafter shall have no rights or obligations
hereunder, provided, however, that (a) a Transfer of shares of Common Stock not
explicitly permitted under this Agreement shall not relieve a TreeHouse Investor
of any of his, her or its obligations hereunder, and (b) a Transfer of shares of
Common Stock permitted under Section 6.2 shall not relieve any TreeHouse
Investor of any of his, her or its obligations hereunder. This Agreement shall
automatically terminate without any action
15
by any of the Company or any of the Stockholders, and shall be of no further
force and effect, upon the earlier of (i) the consummation of the Spin-Off, (ii)
the closing of the sale of Common Stock pursuant to Sections 7 and 8, and (iii)
the closing of the transaction described in any Alternative Proposal.
Notwithstanding the foregoing, (i) the provisions of Section 6.1(a) pertaining
to the Restricted Shares shall survive the termination of this Agreement due to
the consummation of the Spin-Off and, at or prior to the Registration Date, each
TreeHouse Investor agrees to execute any document that the Board may reasonably
request to confirm the continued effect of such Section 6.1(a) as to the
Restricted Shares and (ii) the termination of this Agreement shall not relieve
the parties from fulfilling their obligations under either Section 7 or 8.
13.3 Agreements to Be Bound. Notwithstanding anything to the
contrary contained in this Agreement, any Transfer of shares by a TreeHouse
Investor (the "TRANSFEROR") (other than pursuant to the Spin-Off or to Sections
7 or 8) shall be permitted under the terms of this Agreement only if the
transferee of such Transferor (the "TRANSFEREE") shall agree in writing to be
bound by the terms and conditions of this Agreement pursuant to an instrument of
assumption satisfactory in substance and form to the Company, and in the case of
a Transferee of a Stockholder who resides in a state with a community property
system, such Transferee causes his or her spouse, if any, to execute a Spousal
Waiver in the form of Exhibit A attached hereto. Upon the execution of the
instrument of assumption by such Transferee and, if applicable, the Spousal
Waiver by the spouse of such Transferee, such Transferee shall enjoy all of the
rights and shall be subject to all of the restrictions and obligations of the
Transferor of such Transferee, including, without limitation, if such Transferor
was a Stockholder, the provisions of Sections 7 and 8 (which shall continue to
apply as though such Transferor were still the holder of such shares).
14. Recapitalizations, Exchanges, etc. Except as otherwise provided
herein, the provisions of this Agreement shall apply to the full extent set
forth herein with respect to (a) the shares of Common Stock and (b) any and all
shares of capital stock of the Company or any successor or assign of the Company
(whether by merger, consolidation, sale of assets or otherwise) which may be
issued in respect of, in exchange for, or in substitution for the shares of
Common Stock, by reason of any stock dividend, split, reverse split,
combination, recapitalization, reclassification, merger, consolidation or
otherwise. All share numbers and percentages shall be proportionately adjusted
to reflect any stock split, stock dividend or other subdivision or combination
effected after the date hereof.
15. No Third Party Beneficiaries. Except as otherwise provided
herein, this Agreement is not intended to confer upon any Person, except for the
parties hereto or their permitted transferees, any rights or remedies hereunder.
16
16. Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto or Person subject hereto may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
17. Governing Law. This Agreement and the rights and obligations of
the parties hereunder and the Persons subject hereto shall be governed by, and
construed and interpreted in accordance with, the laws of the State of Delaware,
without giving effect to the choice of law principles thereof.
18. Invalidity of Provision. The invalidity or unenforceability of
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
19. Waiver. Waiver by any party hereto of any breach or default by
the other party of any of the terms of this Agreement shall not operate as a
waiver of any other breach or default, whether similar to or different from the
breach or default waived. No waiver of any provision of this Agreement shall be
implied from any course of dealing between the parties hereto or from any
failure by either party to assert its or his or her rights hereunder on any
occasion or series of occasions.
20. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by fax, as follows
(or to such other address as the party entitled to notice shall hereafter
designate in accordance with the terms hereof):
(i) If to the Company:
857-897 School Place
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with, prior to the Registration Date, a copy to ▇▇▇▇ at its
address set forth below.
(ii) If to the TreeHouse Investors, to his or her attention at:
17
the address identified in the Subscription Agreement executed
by such TreeHouse Investor
With a copy to:
Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, P.C.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ccAttention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(iii) If to ▇▇▇▇, to it at:
▇▇▇▇ Foods Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (w) if by personal delivery, on the day delivered,
(x) if by certified or registered mail, on the fifth business day after the
mailing thereof, (y) if by next-day or overnight mail or delivery, on the day
delivered, or (z) if by fax, on the day delivered, provided that such delivery
is confirmed.
21. Headings. The headings to sections in this Agreement are for the
convenience of the parties only and shall not control or affect the meaning or
construction of any provision hereof.
22. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
23. Entire Agreement. This Agreement, the Subscription Agreements
and the Employment Agreements constitute the entire agreement and understanding
of the parties hereto with respect to the matters referred to herein. This
Agreement and the agreements referred to in the preceding sentence supersede all
prior agreements and understandings among the parties with respect to such
matters. There are no representations, warranties, promises, inducements,
covenants or undertakings relating to
18
the shares of Common Stock, other than those expressly set forth or referred to
herein, in the Subscription Agreements or the Employment Agreements.
24. Injunctive Relief. The shares of Common Stock cannot readily be
purchased or sold in the open market, and for that reason, among others, the
Company and the Stockholders will be irreparably damaged in the event this
Agreement is not specifically enforced. Each of the parties therefore agrees
that in the event of a breach of any provision of this Agreement, the aggrieved
party may elect to institute and prosecute proceedings in any court of competent
jurisdiction to enforce specific performance or to enjoin the continuing breach
of this Agreement. Such remedies shall, however, be cumulative and not
exclusive, and shall be in addition to any other remedy which the Company or any
Stockholder may have. Each Stockholder hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts in Illinois for the
purposes of any suit, action or other proceeding arising out of or based upon
this Agreement or the subject matter hereof. Each Stockholder hereby consents to
service of process made in accordance with Section 20.
25. Defined Terms. As used in this Agreement, the following terms
shall have the meanings ascribed to them below:
Affiliate: Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
▇▇▇▇ Representative: the Chief Executive Officer of ▇▇▇▇, as in
office at any time, or such other officer of ▇▇▇▇ as designated by the Chief
Executive Officer of ▇▇▇▇.
Person: an individual, corporation, partnership, limited liability
company, joint venture, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
Spin-Off: the distribution by ▇▇▇▇ to the holders of shares of ▇▇▇▇
common stock on the date to be determined by the ▇▇▇▇ Board in its sole and
absolute discretion as the record date for the Spin-Off of all of the shares of
Common Stock held by ▇▇▇▇.
Stockholder Representatives: the ▇▇▇▇ Representative and the
TreeHouse Representative.
TreeHouse Default: upon any cessation of services to the Company by
(a) ▇▇▇ ▇. ▇▇▇▇ for any reason other than due to any material breach of the
applicable Employment Agreement by ▇▇▇▇ or the Company, unless ▇▇▇▇ shall, it is
sole discretion, have consented to such cessation of services, or (b) any member
of the Initial TreeHouse
19
Management for any reason other than due to any material breach of the
applicable Employment Agreement by ▇▇▇▇ or the Company, unless (i) within 30
days of any such cessation, a suitable replacement member is hired by the
Company, the job responsibilities of the remaining members of the Initial
TreeHouse Management are adjusted in an manner that is appropriate under the
circumstances and that makes it unnecessary to hire a suitable replacement
member, and/or such other suitable cure is implemented, and (ii) ▇▇▇▇ shall, in
its sole discretion, have consented to the actions described in clause (i),
which consent shall not be unreasonably withheld. Such consent by ▇▇▇▇ shall be
given in writing, and may be given on, before or after the date of any such
cessation of services (including, without limitation, following the death of any
member of TreeHouse Management).
TreeHouse Management: the Initial TreeHouse Management and any other
person hereafter designated as a member of TreeHouse Management by the mutual
agreement of the TreeHouse Representative and the ▇▇▇▇ Representative.
TreeHouse Representative: ▇▇▇ ▇. ▇▇▇▇ or, if ▇▇▇▇'▇ employment with
the Company terminates for any reason, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or, if Vermylen's
employment with the Company terminates for any reason, any remaining member of
TreeHouse Management selected by the majority in interests of the TreeHouse
Investors.
-- Signature page follows --
20
IN WITNESS WHEREOF this Agreement has been signed by each of the
parties hereto, and shall be effective as of the date first above written.
▇▇▇▇ SPECIALITY FOODS HOLDINGS, INC.
By:
_________________________________________
Name:
Title:
▇▇▇▇ FOODS COMPANY
By: ________________________________________
Name:
Title:
INITIAL TREEHOUSE MANAGEMENT
_________________________________________
▇▇▇ ▇. ▇▇▇▇
Address: ▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
_________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
_________________________________________
E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,▇▇
▇▇▇▇▇
________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
21
Exhibit A
SPOUSAL WAIVER
[INSERT NAME] hereby waives and releases any and all equitable or
legal claims and rights, actual, inchoate or contingent, which she may acquire
with respect to the disposition, voting or control of the shares of Common Stock
subject to the Stockholders Agreement of ▇▇▇▇ Specialty Foods Holdings, Inc.,
dated as of January 27, 2005, as the same shall be amended from time to time,
except for rights in respect of the proceeds of any disposition of such Common
Stock.
____________________________________
Name: