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EXHIBIT 10.31.2
FORM OF
AMENDMENT NO. 1 TO THE
MANAGEMENT STOCKHOLDER'S AGREEMENT
(EXECUTIVES OTHER THAN ▇'▇▇▇▇▇, ▇▇▇▇▇ AND ▇▇▇▇▇)
This Amendment No. 1 to the Management Stockholder's Agreement (this
"Agreement") is entered into as of ________________________ between KEEBLER
FOODS COMPANY, a Delaware corporation (the "Company"), and
_____________________ (the "Investor") (the Company and the Investor being
hereinafter collectively referred to as the "Parties").
RECITALS
Certain stockholders of the Company ("Selling Stockholders") propose to
sell a portion of their shares of the Company's common stock (the "Common
Stock") in an initial public offering under a Registration Statement on Form
S-1 (File No. 333-42075) filed with the Securities and Exchange Commission (the
"IPO"). In such connection the Company (formerly INFLO Holdings Corporation)
and the Investor, who are parties to the Management Stockholders' Agreement
("Original Agreement"), dated [___________, 1996], agree to amend the Original
Agreement as follows:
AGREEMENT
1. Upon the occurrence of the event described in Section 3 of
this Agreement:
(a) Sections 3, 5, 6, 7, 8, 11, 12, 15, 18, 21, 23, and 25
of the Original Agreement are hereby deleted in their
entirety and are of no further force or effect.
(b) Section 10 of the Original Agreement is hereby amended
by deleting said section in its entirety and in lieu
thereof, the Investor shall be entitled to the
"incidental registration rights" set forth on Annex A
hereto.
(c) The Investor's rights under the Sales Participation
Agreement dated as of May 10, 1996 are hereby
terminated and such termination is affirmed and
acknowledged by the signatures of Flowers Industries,
Inc. and Artal Luxembourg S.A. on this Amendment No. 1.
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(d) Section 2(e) of the Original Agreement is hereby
amended by deleting said Section in its entirety and
substituting in lieu thereof a new Section 2(e),
reading as set forth on Annex B hereto.
(e) Section 4 of the Original Agreement is hereby amended
by deleting said Section in its entirety and
substituting in lieu thereof a new Section 4, reading
as set forth on Annex C hereto.
(f) Section 22 of the Original Agreement is hereby amended
by deleting said Section in its entirety and
substituting in lieu thereof a new Section 22, reading
as set forth in Annex D hereto.
(g) Section 25 of the Original Agreement is hereby amended
by deleting said section in its entirety and
substituting in lieu thereof a new Section 25, reading
as set forth in Annex E hereto.
(h) Section 26(a) of the Original Agreement is hereby
amended by deleting said Section in its entirety and
substituting in lieu thereof a new Section 26(a),
reading as set forth on Annex F hereto.
2. The Investor hereby acknowledges that the managing
underwriters of the IPO have advised the Company that in their view no shares of
the Investor may be registered in the IPO without an adverse effect on the
offering and, thus, pursuant to Section 10(c)(ii) of the Original Agreement
(prior to the effectiveness of the amendment contained in Section 1(b) above),
the Investor may not register any shares in the IPO. Accordingly, the Investor
has no "piggyback registration rights" (including, not by way of limitation, any
rights to notice) in connection with the IPO, including, not by way of
limitation, any rights which are pursuant to Section 10 of the Original
Agreement. The Investor further acknowledges that pursuant to Section 2(e) of
the Original Agreement (prior to the effectiveness of the amendment contained in
Section 1(d) above) that he is bound by the holdback period required by the
managing underwriters of the IPO.
3. The terms and provisions of Section 1 of this Agreement will
not be effective until the sale of Common Stock pursuant to an IPO.
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IN WITNESS WHEREOF, the Parties have executed this
Agreement as of the date first above written.
KEEBLER FOODS COMPANY
By:__________________________________
Name:
Title:
_____________________________________
[Investor]
Address
As to Paragraph 1(c) and 1(d) only
Affirmed and Acknowledged
___________________________________
Flowers Industries, Inc.
___________________________________
Artal Luxembourg S.A.
As to Paragraph 1(e) only
Affirmed and Acknowledged
___________________________________
Flowers Industries, Inc.
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ANNEX B
REVISED SECTION 2(e)
(e) The parties acknowledge that pursuant to the provisions of Annex A
of that certain Stock Purchase Agreement among Flowers Industries, Inc., Artal
Luxembourg A.A. ("Artal") and the Company, Artal has certain demand registration
rights (the "Registration Rights"). The Purchaser agrees that subsequent to the
closing of the initial public offering under Registration Statement on Form S-1
(File No. 333-42075) filed with the Securities and Exchange Commission (the
"IPO"), if any shares of the capital stock of the Company are offered to the
public pursuant to Artal's exercise of the Registration Rights in an
underwritten public offering under an effective registration statement under the
Act (a "Subsequent Public Offering"), the Purchaser will not effect any public
sale or distribution of any shares of the Stock not covered by such registration
statement (a "Holdback") within 10 days prior to, or within such time period
after, the effective date of such registration statement as the managing
underwriter of such Subsequent Public Offering shall advise the Company is
necessary to complete such Subsequent Public Offering in an effective manner,
unless otherwise agreed to in writing by the Company; provided, however, that if
Purchaser is not selling any shares of Stock in the IPO or in such Subsequent
Public Offering the following shall apply:
(i) If Purchaser is not a member on the Executive Committee of
the management of the Company at the time of such Subsequent
Public Offering, Purchaser shall not be subject to a
Holdback.
(ii) Subject to the Company not being otherwise restricted as a
matter of law, for a period of six months after the initial
180 day holdback period of the IPO, if Purchaser is subject
to such initial holdback, Purchaser may require the Company
to repurchase his stock at the Market Price (as defined in
subsection (vi) below) during any Holdback period to which he
is subject in a Subsequent Public Offering during such six
months, subject to the limitations set forth in subsection
(vii) below. Furthermore, if the initial holdback period of
the IPO is ultimately less than 180 days then the Company
shall not be required to repurchase shares during the
Holdback period of the Subsequent Public Offering until all
such Holdback periods exceed an aggregate total of 180 days
during the twelve-month period.
(iii) If Purchaser is subject to this Section 2(e), Purchaser will
only be required to be subject to a Holdback in a Subsequent
Public Offering in excess of 90 days upon written advice of
the managing underwriter that a Holdback of 90 days or less
would be materially detrimental to the Subsequent Public
Offering.
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(iv) After the twelve-month period referred to in subsection (ii)
above and upon the written advice per subsection (iii) above,
if there is more than one Subsequent Public Offering in a
twelve-month period and the managing underwriter requires a
Holdback from Purchaser subject to this Section 2(e) in
excess of 90 days, subject to the Company not being otherwise
restricted as a matter of law, Purchaser may require the
Company to repurchase his shares at the Market Price during
the post- 90 day period of the Holdback period, subject to
the limitation set forth in subsection (vii) below.
(v) Notwithstanding the foregoing, Purchaser may not require the
repurchase of his shares, if Purchaser is selling shares in
the Subsequent Public Offering in which he is subject to a
Holdback.
(vi) For purposes of this Section 2(e), "Market Price" shall mean
the closing trading price of the Company's Common Stock on
the New York Stock Exchange (or if such shares are not traded
on the New York Stock Exchange, the closing trading price for
a share of such security on the principal national securities
exchange or on the Nasdaq Stock Market on which such
securities are listed) on the day that the Company receives
notice from the Purchaser (or the next succeeding trading day
if such day is not a trading day) that he is exercising his
rights to require the Company to repurchase his shares
pursuant to subsections (ii) or (iv) above.
(vii) (A) The maximum aggregate buyback by the Company during all
Holdback periods caused by Artal's exercise of the
Registration Rights for all repurchases from Purchaser and
all Other Purchasers shall be the greater of (1) one percent
(1%) of the outstanding shares of the Company immediately
after the closing of the IPO or (2) an aggregate purchase
obligation by the Company of $25 million, and (ii) a maximum
buyback from the Purchaser during all such Holdback periods
shall be no more than 20% of (1) the shares of the Company
owned by the Purchaser as of the closing of the IPO, plus (2)
the shares for which Purchaser has Options under the
Non-Qualified Stock Option Agreement (specifically excluding
any options granted under any other option plans that the
Company has or may adopt.)
(viii) In order to exercise his rights to require the Company to
purchase shares pursuant to subsection (ii) or (iv) above,
Purchaser shall deliver, by hand or facsimile, to the General
Counsel of the Company, at the address set forth in Section
25(a), the following notice:
"Pursuant to Section 2(e) of that certain Management
Stockholder's Agreement, between Keebler Foods Company
(the "Company") and the
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undersigned,the undersigned requests that the Company
purchase from the undersigned ____ shares of stock of
the Company.
By:_______________________
Date:_____________________"
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ANNEX C
REVISED SECTION 4
4. Right of First Refusal.
Except for transfers permitted by clauses (x), (y) and (z) of
Section 2(a), if at any time after the IPO the Purchaser desires to transfer any
or all of his shares of Stock, the Purchaser shall notify the Company and
Flowers Industries, Inc. ("Flowers") in writing of his wish to make such
transfer (the "Offer"). The Purchaser's notice shall contain an irrevocable
offer to sell such shares of Stock to the Company and Flowers (in the manner set
forth below) at a purchase price equal to the average of the closing trading
prices of the Company's Common Stock on the New York Stock Exchange (or if such
shares are not traded on the New York Stock Exchange, the closing trading prices
of such security on the principal national securities exchange or the Nasdaq
Stock Market on which such securities are listed) on the day that the Company
and Flowers receives the Offer and on the day that the Company or Flowers
accepts the Offer (or the next succeeding trading day if either such day is not
a trading day) (the "Average Market Price"). At any time within the next
succeeding business day after the date of the receipt by the Company and Flowers
of the Purchaser's notice, the Company and Flowers shall have the right and
option to purchase, or to arrange for a third party to purchase, any or all of
the shares of Stock covered by the Offer, by notifying the Purchaser. The
purchase of the shares shall be effectuated within 3 business days by delivering
a certified bank check or checks in the appropriate amount to the Purchaser at
the principal office of the Company against (i) delivery of certificates or
other instruments representing the shares of the Stock so purchased,
appropriately endorsed by the Purchaser or (ii) such other instructions to
transfer such shares from an account held by Purchaser to accounts designated by
Flowers or the Company, as appropriate. If by 11:59 p.m. of the end of such next
succeeding business day, neither the Company nor Flowers has accepted the Offer
in the manner set forth above, the Purchaser may, during the succeeding 30 day
period, transfer any or all of the shares of Stock covered by the Offer. If, at
the end of the 30 day period, the Purchaser has not completed the transfer of
such shares of the Stock as aforesaid, all the restrictions on sale, transfer or
assignment contained in this Agreement shall again be in effect with respect to
such shares of the Stock. If the Offer is accepted, Flowers shall have the first
right to purchase the shares covered by the Offer, and then the Company shall
have the right to purchase any shares not purchased by Flowers. Notwithstanding
the foregoing, the Purchaser shall not be required to sell shares pursuant to
this Section 4 if such sale would have the result of not being treated as a
distribution in part or full payment in exchange for stock pursuant to Section
302 of the Internal Revenue Code of 1986, as amended; provided, however, the
parties also acknowledge that Flowers would still have the right to purchase the
shares if such favorable tax treatment would result from its purchase in lieu of
a purchase by the Company. No transfer of any shares in violation of this
Section 4 shall be made or recorded on the books of the Company and any such
transfer shall be void and of no effect. In order to notify Flowers and the
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Company of the Offer, Purchaser shall give the following notice to each of
them, by hand delivery or facsimile, to the General Counsels of each of them
at the addresses set forth in Section 25(a):
"Pursuant to Section 4 of that certain Management
Stockholder's Agreement, between Keebler Foods Company (the
"Company") and the undersigned, the undersigned hereby
notifies you of its irrevocable Offer (as defined in said
Section) to sell to either the Company or Flowers
Industries, Inc. ___ shares of stock of the Company.
By:______________________
Date:____________________"
In order to accept the Offer, either Flowers or the Company shall either orally
notify the Purchaser of its acceptance (and shall deliver the following notice
as soon as practicable thereafter) or shall deliver the following notice to the
Purchaser at the address set forth in Section 25(b):
"Pursuant to Section 4 of that certain Management
Stockholder's Agreement, between Keebler Foods Company (the
"Company") and you, the undersigned has accepted your Offer
to purchase ____ shares of stock of the Company.
By:_________________________
[Flowers Industries, Inc.]
[Keebler Foods Company]
Date:_______________________"
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ANNEX D
REVISED SECTION 22
22. Applicable Law.
The laws of the state of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under principles of conflicts of
law. Any suit, action or proceeding against the Company, with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any court of competent jurisdiction in the States of Delaware or
Illinois, as the Company may elect in its sole discretion, and the Purchaser
hereby submits to the non-exclusive jurisdiction of such courts for the purpose
of any such suit, action, proceeding or judgment. By the execution and delivery
of this Agreement, the Purchaser appoints The Corporation Trust Company, at its
office in Chicago, Illinois or Wilmington, Delaware, as the case may be, as his
agent upon which process may be served in any such suit, action or proceeding.
Service of process upon such agent, together with notice of such service given
to the Purchaser in the manner provided in Section 25 hereof, shall be deemed in
every respect effective service of process upon him in any suit, action or
proceeding. Nothing herein shall in any way be deemed to limit the ability of
the Company to serve any such writs, process or summonses in any other manner
permitted by applicable law or to obtain jurisdiction over the Purchaser, in
such other jurisdictions and in such manner, as may be permitted by applicable
law. The Purchaser hereby irrevocably waives any objections which he may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement brought in any court of competent
jurisdiction in the States of Delaware or Illinois, and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum. No suit, action or
proceeding against the Company with respect to this Agreement may be brought in
any court, domestic or foreign, or before any similar domestic or foreign
authority other than in a court of competent jurisdiction in the States of
Delaware or Illinois, and the Purchaser hereby irrevocably waives any right
which he may otherwise have had to bring such an action in any other court,
domestic or foreign, or before any similar domestic or foreign authority. The
Company hereby submits to the jurisdiction of such court for the purpose of any
such suit, action or proceeding.
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ANNEX E
REVISED SECTION 25
25. Notices.
All notices and other communications provided for herein
(except for the notices set forth in Sections 2(e) and 4, in which case the
terms of such Sections shall govern), shall be in writing and shall be deemed to
have been duly given if delivered by hand (or by overnight courier or
facsimile), to the Party to whom it is directed:
(a) If to the Company, to it at the following address:
Keebler Foods Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Fax No.:_____________________
with copies to:
The General Counsel of the Company
at the above address.
and to:
Flowers Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax No.:_____________________
(b) If to the Purchaser, to him at the address set forth below
under his signature;
or at such other address as either party shall have
specified by notice in writing to the other.
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ANNEX F
REVISED SECTION 26(a)
(a) In consideration of the Company entering into this Agreement with the
Purchaser, the Purchaser hereby agrees effective as of the Purchase Date, for so
long as the Purchaser is employed by the Company or one of its subsidiaries (the
"Noncompete Period"), the Purchaser shall not, directly or indirectly, engage in
the production, sale or distribution of any food product produced, sold or
distributed by the Company or its subsidiaries on the date hereof or during the
Noncompete Period (except for a food product that the Company only packages
under a copacking arrangement) anywhere in North America where the Company or
its subsidiaries is doing business other than through the Purchaser's employment
with the Company or any of its subsidiaries. The Noncompete Period shall be
extended beyond the termination of the Purchaser's employment with the Company
or its subsidiaries for up to the earlier of (i) the third anniversary of the
IPO or (ii) an additional one year period from the date of termination of
employment, so long as the Company continues to make payments to which Purchaser
is entitled subsequent to his termination under his Employment and Severance
Agreement with the Company, dated _____________, 1998, at the times and in the
amounts set forth therein; provided, however, that if Purchaser is not entitled
to payments under such Employment and Severance Agreement because (i)
Purchaser's employment is terminated by the Company for Cause (as defined in
such agreement) or (ii) Purchaser voluntarily terminates his employment with the
Company for other than Good Reason (as defined in such agreement), then the
non-compete provisions of this Section 26(a) shall still apply. For purposes of
this Agreement, the phrase "directly or indirectly engage in" shall include any
direct or indirect ownership or profit participation interest in such
enterprise, whether as an owner, stockholder, partner, joint venturer or
otherwise, and shall include any direct or indirect participation in such
enterprise as a consultant, licensor of technology or otherwise.
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