EXHIBIT 99.2
EXECUTION COPY
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of October 29, 2001 (this "Agreement"),
is entered into among Odwalla, Inc., a California corporation (the "Company"),
The Coca-Cola Company, a Delaware corporation ("Parent"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇
Corp., a California corporation and wholly owned subsidiary of Parent ("Sub").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this Agreement,
the parties hereto are entering into an Agreement and Plan of Merger (the
"Merger Agreement") which provides, upon the terms and subject to the conditions
set forth therein, for (i) the commencement by Sub of a tender offer (the
"Offer") to purchase any and all of the outstanding shares of the common stock,
no par value (the "Shares"), of the Company at a price of $15.25 per Share in
cash, net to the seller (such price, or such greater amount which may be paid
pursuant to the Offer, the "Offer Price") and (ii) the subsequent merger of Sub
with and into the Company (the "Merger"), whereby each Share issued and
outstanding (other than Shares owned by Parent, Sub or any other subsidiary of
Parent and other than Shares which are held by shareholders exercising
dissenters' rights pursuant to Chapter 13 of the California General Corporation
Law (the "CGCL")) shall be converted into the right to receive the Offer Price;
WHEREAS, as a condition to the willingness of Parent and Sub to enter
into the Merger Agreement, Parent and Sub have required that the Company agree,
and in order to induce Parent and Sub to enter into the Merger Agreement, the
Company has agreed, to grant to Sub an option to purchase Shares upon the terms
and subject to the conditions of this Agreement; and
WHEREAS, capitalized terms used but not defined in this Agreement shall
have the meanings ascribed to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
The Top-Up Option
.1. Grant of Top-Up Stock Option. Subject to the terms and conditions
set forth herein, the Company hereby grants to Sub an irrevocable option (the
"Top-Up Stock Option") to purchase that number of Shares (the "Top-Up Option
Shares") equal to the number of Shares that, when added to the number of Shares
owned by Sub, Parent and any other subsidiary of Parent immediately following
consummation of the Offer, shall constitute 90.1% of the Shares outstanding on a
fully diluted basis (assuming the issuance of the Top-Up Option Shares) and
shall permit Sub to effect the Merger pursuant to Section 1110 of the CGCL
(assuming the issuance of the Top-Up Option Shares) at a purchase price per
Top-Up Option Share equal to the Offer Price; provided, however, that the Top-Up
Stock Option shall not be exercisable if the
number of Shares subject thereto exceeds the number of authorized shares of
common stock of the Company available for issuance. The Company agrees to
provide Parent and Sub with information regarding the number of Shares available
for issuance on an ongoing basis.
.2. Exercise of Top-Up Stock Option.
(a) Subject to the conditions set forth in Section 2.1, Sub may, at
its election, exercise the Top-Up Stock Option in whole, but not in
part, at any one time after the occurrence of a Top-Up Exercise Event
(as defined below) and prior to the Top-Up Termination Date (as defined
below).
(b) A "Top-Up Exercise Event" shall occur for purposes of this
Agreement upon Sub's acceptance for payment pursuant to the Offer of
Shares constituting, together with Shares owned directly or indirectly
by Sub, Parent and any other subsidiary of Parent, more than 50% of the
Shares then outstanding but less than 90% of the Shares then
outstanding on a fully diluted basis.
(c) Except as provided in the last sentence of this Section 1.2(c),
the "Top-Up Termination Date" shall occur for purposes of this
Agreement upon the earliest to occur of: (i) the Effective Time; (ii)
the date which is 20 business days after the occurrence of a Top-Up
Exercise Event; (iii) the termination of the Merger Agreement; and (iv)
the date on which Sub reduces the Minimum Condition to the Revised
Minimum Number and accepts for payment a number of Shares equal to the
Revised Minimum Number.
(d) Notwithstanding the occurrence of the Top-Up Termination Date,
Sub shall be entitled to purchase the Top-Up Option Shares if it has
exercised the Top-Up Stock Option in accordance with the terms hereof
prior to such occurrence, and the occurrence of the Top-Up Termination
Date shall not affect any rights hereunder which by their terms do not
terminate or expire prior to or as of such date.
(e) In the event Sub wishes to exercise the Top-Up Stock Option,
Sub shall send to the Company a written notice (a "Top-Up Exercise
Notice," the date of which notice is referred to herein as the "Top-Up
Notice Date") specifying the denominations of the certificate or
certificates evidencing the Top-Up Option Shares which Sub wishes to
receive, the place for the closing of the purchase and sale pursuant to
the Top-Up Stock Option (the "Top-Up Closing") and a date not earlier
than one day nor later than ten business days after the Top-Up Notice
Date for the Top-Up Closing; provided, however, that (i) if the Top-Up
Closing cannot be consummated by reason of any applicable Laws or
orders, the period of time that otherwise would run pursuant to this
sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated and (ii) without limiting
the foregoing, if prior notification to or approval of any Governmental
Entity is required in connection with such purchase, Sub and the
Company shall promptly file the required notice or application for
approval and shall cooperate in the expeditious filing of such notice
or application, and the period of time
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that otherwise would run pursuant to this sentence shall run instead
from the date on which, as the case may be, (A) any required
notification period has expired or been terminated or (B) any required
approval has been obtained, and in either event, any requisite waiting
period has expired or been terminated. The Company shall, promptly
after receipt of the Top-Up Exercise Notice, deliver a written notice
to Sub confirming the number of Top-Up Option Shares and the aggregate
purchase price therefor.
ARTICLE II
Closing
.1. Conditions to Closing. The obligation of the Company to deliver
Top-Up Option Shares upon the exercise of the Top-Up Stock Option is subject to
the following conditions:
(a) any applicable waiting period under the HSR Act and any
applicable non-United States Laws regulating competition, antitrust,
investment or exchange controls relating to the issuance of the Top-Up
Option Shares hereunder shall have expired or been terminated;
(b) no provision of any applicable Law or regulation and no
judgment, injunction, order or decree shall prohibit the exercise of
the Top-Up Stock Option or the delivery of the Top-Up Option Shares in
respect of any such exercise; and
(c) delivery of the Top-Up Option Shares would not violate, or
otherwise cause a violation of the rule of the Nasdaq Stock Market set
forth in Section 4350(i)1(D) of the NASD Manual.
.2. Closing.
(a) At the Top-Up Closing (i) the Company shall deliver to Sub a
certificate or certificates evidencing the applicable number of Top-Up
Option Shares (in the denominations designated by Sub in the Top-Up
Exercise Notice) and (ii) Sub shall purchase each Top-Up Option Share
from the Company at the Offer Price. Payment by Sub of the purchase
price for the Top-Up Option Shares shall be made by delivery of
immediately available funds by wire transfer to an account designated
by the Company.
(b) The Company shall pay all expenses, and any and all federal,
state and local taxes and other charges, that may be payable in
connection with the preparation, issuance and delivery of stock
certificates under this Section 2.2.
.3. Securities Law Compliance. Sub understands that the Shares which
Sub may acquire hereunder will not be registered under the Securities Act of
1933, as amended (the "Securities Act") in reliance upon an exemption thereunder
for transactions not involving a public transaction. Sub is, or will be upon the
purchase of the Top-Up Option Shares, an accredited
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investor for purposes of the federal securities laws. The Top-Up Stock Option
and the Top-Up Option Shares to be acquired upon exercise of the Top-Up Stock
Option are being and will be acquired by Sub without a view to public
distribution thereof otherwise than in compliance with the Securities Act and
applicable state securities laws and will not be transferred or otherwise
disposed of except in a transaction registered or exempt from registration under
the Securities Act and in compliance with applicable state securities laws. Sub
will not effect any offer or sale of Top-Up Option Shares which would cause the
Company to violate the registration requirements of the Securities Act or the
registration or qualification requirements of the securities laws of any
jurisdiction. Sub will comply with all obligations under applicable securities
law in connection with the receipt of the Top-Up Stock Option or the purchase of
the Top-Up Option Shares or otherwise with respect to the consummation of the
transactions contemplated by this Agreement.
ARTICLE III
Additional Agreements
.1. Restrictive Legends. Certificates evidencing the Shares to be
delivered hereunder may include legends legally required including the legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES OR BLUE SKY LAWS, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK OPTION
AGREEMENT, DATED AS OF OCTOBER 29, 2001, A COPY OF WHICH MAY BE
OBTAINED FROM THE ISSUER UPON REQUEST.
It is understood and agreed that (i) the reference to the resale restrictions of
the Securities Act and state securities or blue sky laws in the foregoing legend
shall be removed by delivery of substitute certificate(s) without such reference
if the Company or Sub, as the case may be, shall have delivered to the other
party a copy of a letter from the staff of the Securities and Exchange
Commission, or an opinion of counsel, in form and substance reasonably
satisfactory to the other party, to the effect that such legend is not required
for purposes of the Securities Act or such laws; (ii) the reference to the
provisions of this Agreement in the foregoing legend shall be removed by
delivery of substitute Certificate(s) without such reference if the Shares have
been sold or transferred in compliance with the provisions of this Agreement and
under circumstances that do not require the retention of such reference; and
(iii) the legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by law.
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.2. Reasonable Best Efforts. Subject to the terms and conditions of
this Agreement, Parent, Sub and the Company will 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 laws and
regulations to consummate the transactions contemplated by this Agreement.
.3. Further Assurances. Each party shall perform such further acts and
execute such further documents and instruments as may reasonably be required to
vest in Sub and Parent the power to consummate the transactions contemplated by
this Agreement. If Sub shall exercise the Top-Up Stock Option granted hereunder
in accordance with the terms of this Agreement, each party shall, without
additional consideration, execute and deliver all such further documents and
instruments and take all such further actions as any other party may reasonably
request to consummate the transactions contemplated by this Agreement.
ARTICLE IV
Miscellaneous
.1. Waiver of Conditions. The conditions to each of the parties'
obligations to consummate this Agreement are for the sole benefit of such party
and may be waived by such party in whole or in part to the extent permitted by
applicable law.
.2. Expenses. Each of the parties hereto shall pay its own expenses
incurred in connection with this Agreement. Each of the parties hereto warrants
and covenants to the others that it will bear all claims for brokerage fees
attributable to action taken by it.
.3. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
representatives and permitted successors and assigns.
.4. Entire Agreement. This Agreement contains the entire understanding
of the parties and supersedes all prior agreements and understandings between
the parties with respect to its subject matter. This Agreement may be amended
only by a written instrument duly executed by the parties hereto.
.5. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Time is of the essence with respect to all
provisions of this Agreement.
.6. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties named herein and their respective successors and
permitted assigns. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties; provided, however, that each of Parent and Sub may freely
assign its rights to another direct or indirect wholly owned subsidiary of
Parent or Sub without
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such prior written approval but no such assignment shall relieve Parent or Sub
of any of its obligations hereunder. Any purported assignment without such
consent shall be void.
.7. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original, but each of which together
shall constitute one and the same Agreement.
.8. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if so given) by delivery, telegram or telecopy,
or by mail (registered or certified mail, postage prepaid, return receipt
requested) or by any national courier service, provided that any notice
delivered as herein provided shall also be delivered by telecopy at the time of
such delivery. All communications hereunder shall be delivered to the respective
parties at the following addresses (or at such other address for a party as
shall be specified by like notice, provided that notices of a change of address
shall be effective only upon receipt thereof):
(a) If to Parent The Coca-Cola Company
or Sub: ▇▇▇ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy
(which does
not constitute
notice) to: The Coca-Cola Company
▇▇▇ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and with a King & Spalding
copy to: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) If to
the Company: Odwalla, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
.9. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
regard to its principles of conflicts of laws.
.10. Enforceability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
.11. Remedies Not Exclusive. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity will be cumulative and not alternative, and the exercise of any thereof
by either party will not preclude the simultaneous or later exercise of any
other such right, power or remedy by such party.
.12. Waiver of Jury Trial. EACH PARTY HERETO 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.
.13. Specific Performance. The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions hereof, in addition to
any other remedy to which they are entitled at law or in equity.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto on the date first
hereinabove written.
ODWALLA, INC.
By:/s/ D. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: D. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
THE COCA-COLA COMPANY
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇ ▇▇▇▇▇▇▇ CORP.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
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