Exhibit 10.1
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SECOND AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
THIS SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this
"AMENDMENT") is made as of October 31, 2001 by and among General Mills, Inc., a
Delaware corporation ("GENERAL MILLS"), General Mills North American Businesses,
Inc., a Delaware corporation and wholly owned subsidiary of General Mills
("MERGER SUB"), Diageo plc, a public limited company incorporated under the laws
of England and Wales ("DIAGEO"), and The Pillsbury Company, a Delaware
corporation and indirect wholly owned subsidiary of Diageo ("PILLSBURY"). Unless
otherwise specified, capitalized terms used herein shall have the meaning
ascribed to them in the Merger Agreement (as herein defined).
RECITALS
WHEREAS, General Mills, Merger Sub, Diageo and Pillsbury are the
parties to that certain Agreement and Plan of Merger, dated as of July 16, 2000,
as amended by the First Amendment to Agreement and Plan of Merger, dated as of
April 12, 2001 (the "MERGER AGREEMENT"); and
WHEREAS, the parties to the Merger Agreement desire to further amend
the Merger Agreement as set forth in this Amendment and to provide for such
other agreements among the parties as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained in this Amendment, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. EXHIBITS.
(a) Exhibit C to the Merger Agreement is hereby replaced in its entirety
with Exhibit C hereto.
(b) The Merger Agreement (including the list of Exhibits contained
therein) is hereby amended by adding new Exhibit F (Subsidiary Purchase Price
Allocation), new Exhibit G (Form of Purchase Agreement), new Exhibit H (Form of
Lease) and new Exhibit I (2001 Business Financial Statements) to the Merger
Agreement, such new Exhibits to the Merger Agreement attached as Exhibits F, G,
H and I, respectively, hereto.
2. RECITALS.
(a) The fifth recital following the preamble in the Merger Agreement is
hereby replaced in its entirety with the following:
"WHEREAS, in connection with the closing of the transactions
contemplated by this Agreement, it is contemplated that General
Mills, Diageo and the Pillsbury Stockholder will enter into a
Stockholders Agreement (the "STOCKHOLDERS AGREEMENT" and collectively
with the Subsidiary Purchase Agreements, the "ANCILLARY AGREEMENTS")
in the form set forth as EXHIBIT C to this Agreement."
(b) The third recital following the preamble in the Merger Agreement is
hereby deleted.
3. ARTICLE I. Article I of the Merger Agreement is hereby amended as
follows:
(a) The definition of "Additional Shares" is hereby deleted.
(b) The definition of "Anniversary Date" is hereby deleted.
(c) The following definitions are hereby inserted following the definition
of "Business Intellectual Property Rights":
' "CVR MEASUREMENT DATE" means the eighteen-month anniversary of the
Effective Time (or if such date is not a Business Day, the next
Business Day).'
' "CLOSING DATE THIRD PARTY DEBT" shall mean the amount of aggregate
outstanding indebtedness (excluding off balance sheet financing and
operating and capitalized finance leases that are reflected in the
profits and losses statement of the Business Entities in the ordinary
course consistent with past practice) of the Business Entities as of
the Closing Date (other than intercompany indebtedness owing to
Diageo or one or more Continuing Affiliates, all of which
intercompany indebtedness will be contributed to capital pursuant to
Section 5.6(a)).'
(d) The words "Anniversary Date" in the definition of "Contingent Share
Value" are hereby replaced with the words "CVR Measurement Date".
(e) The definition of "General Mills Shares Held" is replaced in its
entirety with the following:
' "GENERAL MILLS SHARES HELD" means the number of shares of General
Mills Common Stock issued to the Pillsbury Stockholder pursuant to
Section 2.8(a) of this Agreement and continued to be held by the
Pillsbury Stockholder or its Permitted Transferees as of the CVR
Measurement Date or the Disposition, as the case may be.'
(f) The definition of "Maximum Contingent Share Value" is replaced in its
entirety with the following:
' "MAXIMUM CONTINGENT SHARE VALUE" means $5.00.'
(g) The following definition is hereby inserted following the definition
of "Pillsbury Common Stock":
' "PILLSBURY PURCHASE PRICE CASH AMOUNT" shall mean (i)
$3,019,672,996.00 less (ii) the Closing Date Third Party Debt.'
(h) The definition of "Pillsbury Purchase Price Shares" is replaced in its
entirety with the following:
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'"PILLSBURY PURCHASE PRICE SHARES" shall mean 134 million shares of
General Mills Common Stock.'
(i) The definition of "Purchase Price Shares" is hereby deleted.
(j) The definition of "Subsidiary Purchase Price Shares" is replaced in
its entirety with the following:
' "SUBSIDIARY PURCHASE PRICE CASH AMOUNT" shall mean
$810,327,004.00.'
(k) The definition of "Target Price" is replaced in its entirety with
the following:
' "TARGET PRICE" means $49.00.'
(l) The following terms are hereby deleted from the chart contained in
Article I paragraph (b):
Adjustment Payment Date
Escrow Agent
Escrow Agreement
Escrow Fund
Joint Instruction
(m) The following terms are hereby inserted into the chart contained in
Article I paragraph (b):
2001 Business Financial Statements . . . . . . . . . . . . 3.3(c)
2001 Business Balance Sheet. . . . . . . . . . . . . . . . 3.3(c)
Closing Date Cash. . . . . . . . . . . . . . . . . . . . . 5.4(d)
Estimated Closing Date Third Party Debt. . . . . . . . . . 5.15
4. ARTICLE II. Article II of the Merger Agreement is hereby amended as
follows:
(a) Section 2.8(a) is hereby replaced in its entirety with the
following:
"(a) At the Effective Time, by virtue of the Merger and without any
action on the part of Diageo or the Pillsbury Stockholder, all of the
shares of Pillsbury Common Stock issued and outstanding immediately
prior to the Effective Time, and all rights in respect thereof, shall
forthwith cease to exist and shall collectively be converted into the
right to receive the Pillsbury Purchase Price Shares and the
Pillsbury Purchase Price Cash Amount."
(b) Sections 2.10, 2.11, 2.12 and 2.13 are hereby replaced in their
entirety with the following:
"Section 2.10. AGGREGATE CONSIDERATION. The aggregate
consideration paid to the Pillsbury Stockholder pursuant to this
Agreement in connection with the Merger and to the Selling Affiliates
for the Subsidiary Purchases shall consist
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of (a) the Pillsbury Purchase Price Shares, (b) the Pillsbury
Purchase Price Cash Amount and (c) the Subsidiary Purchase Price
Cash Amount (collectively, the "PURCHASE PRICE"), subject to any
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adjustment to the Purchase Price pursuant to Section 2.13, 2.14
or 9.4(d).
Section 2.11. DELIVERIES BY DIAGEO AND THE SELLING AFFILIATES.
At the Closing, Diageo shall, or shall cause the Pillsbury
Stockholder or one or more of the Selling Affiliates to, as the case
may be, deliver the following to General Mills or, in the case of
paragraph (a) below, the applicable Buying Affiliate:
(a) certificates or notarial assignment deed for, or such other
instruments evidencing ownership under applicable law of, the
Purchased Interests, which constitute and will constitute as of the
Closing, 100% of the issued and outstanding shares of capital stock
or other equity interests of the Purchased Entities owned by the
Selling Affiliates, in each case with appropriate stock powers or
other instruments of transfer and requisite tax stamps attached and
properly signed (or in the event any of the Subsidiary Purchases is
in the form of an acquisition of assets and liabilities, such
documentation as may be necessary to reflect the transfer of such
assets and liabilities to the applicable Buying Affiliate);
(b) all Books and Records in the possession of Diageo or any
Continuing Affiliate, except as otherwise provided by Law;
(c) the certificate required to be delivered by Diageo and
Pillsbury pursuant to Section 8.2(d);
(d) counterparts of the Stockholders Agreement duly executed by
Diageo and the Pillsbury Stockholder;
(e) certificates of the Secretary or an Assistant Secretary (or
a person holding an equivalent position, in the case of the Selling
Affiliates) of Diageo, Pillsbury, the Pillsbury Stockholder and the
Selling Affiliates, dated the Closing Date, (i) as to the incumbency
and signatures of the officers or representatives of Diageo and
Pillsbury executing this Agreement and of Diageo and the Pillsbury
Stockholder executing the Stockholders Agreement and of the Selling
Affiliates executing the Subsidiary Purchase Agreements, together
with evidence of incumbency of such Secretary or Assistant Secretary
(or a person holding an equivalent position, in the case of the
Selling Affiliates), and (ii) certifying attached resolutions of the
respective Board of Directors of Diageo, Pillsbury, the Pillsbury
Stockholder and the Selling Affiliates that authorize the execution,
delivery and performance of this Agreement and the Ancillary
Agreements, as the case may be;
(f) resignations, effective as of the Effective Time, of those
directors of the Food Subsidiaries as General Mills may request; and
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(g) such other documents, instruments and certificates as
General Mills may reasonably request in connection with the
transactions contemplated by this Agreement.
Section 2.12. DELIVERIES BY GENERAL MILLS AND THE BUYING
AFFILIATES. At the Closing, General Mills shall deliver to Diageo,
and, in the case of paragraph (b) below, shall cause the Buying
Affiliates to deliver to the Selling Affiliates:
(a) (i) a certificate or certificates for the Pillsbury Purchase
Price Shares (which shares, when delivered, will be duly authorized,
validly issued, fully paid and non-assessable), in definitive form,
registered in the name of the Pillsbury Stockholder, bearing a legend
or legends referencing restrictions under the Securities Act on
transfer of the Pillsbury Purchase Price Shares and any legends
required by the Stockholders Agreement and (ii) the Pillsbury
Purchase Price Cash Amount (the amount of which, for purposes of such
delivery at the Closing, shall be calculated based upon the Estimated
Closing Date Third Party Debt), by wire transfer in immediately
available funds, to the account specified in writing by Diageo at
least one Business Day prior to the Closing Date;
(b) the Subsidiary Purchase Price Cash Amount, by wire transfer
in immediately available funds, to the account specified in writing
by Diageo at least one Business Day prior to the Closing Date;
(c) the certificate required to be delivered by General Mills
pursuant to Section 8.3(c);
(d) a duly executed counterpart of the Stockholders Agreement
executed by General Mills;
(e) certificates of the Secretary or an Assistant Secretary (or
a person holding an equivalent position, in the case of the Buying
Affiliates) of General Mills, Merger Sub and the Buying Affiliates,
dated the Closing Date, (i) as to the incumbency and signatures of
the officers or representatives of General Mills and Merger Sub
executing this Agreement and of General Mills executing the
Stockholders Agreement and of the officers or representatives of
General Mills and the Buying Affiliates executing the Subsidiary
Purchase Agreements, together with evidence of the incumbency of such
Secretary or Assistant Secretary (or a person holding an equivalent
position, in the case of the Buying Affiliates), and (ii) certifying
attached resolutions of the respective Boards of Directors of General
Mills, Merger Sub and the Buying Affiliates, which authorize and
approve the execution, delivery and performance of this Agreement and
the Ancillary Agreements, as the case may be; and
(f) such other documents, instruments and certificates as
Diageo may reasonably request in connection with the transactions
contemplated by this Agreement.
Section 2.13. CONTINGENT PURCHASE PRICE ADJUSTMENT.
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(a) Unless the stockholders of General Mills have approved a
Disposition prior to the CVR Measurement Date, General Mills shall
pay to the Pillsbury Stockholder, on or as promptly as practicable
following the CVR Measurement Date, an amount, if any, equal to the
product of (i) the number of General Mills Shares Held multiplied by
(ii) the Contingent Share Value, such payment to be made by wire
transfer in immediately available funds to the account specified in
writing by the Pillsbury Stockholder..
(b) In the event the stockholders of General Mills approve a
Disposition prior to the CVR Measurement Date, General Mills shall
pay to the Pillsbury Stockholder, on or as promptly as practicable
following the date of the Disposition, an amount, if any, equal to
the product of (i) the number of General Mills Shares Held multiplied
by (ii) the Disposition Value, such payment to be made by wire
transfer in immediately available funds to the account specified in
writing by the Pillsbury Stockholder.
(c) The number of shares of General Mills Common Stock or type
of property or securities issuable in connection with the
transactions contemplated by this Agreement, the Contingent Share
Value, the Maximum Contingent Share Value, the Disposition Value, the
Target Price, the General Mills Shares Held and the calculation of
Market Value shall be appropriately and equitably adjusted to reflect
(i) the payment of any extraordinary distribution or dividend on
shares of General Mills Common Stock (other than regular quarterly
cash dividends), (ii) any stock split, stock dividend or combination
of such shares or (iii) any consolidation, merger or other event
which results in the conversion or exchange of such shares.
(d) All calculations and determinations pursuant to this Section
2.13 shall be mutually agreed upon by Diageo and General Mills in
good faith, and shall be final and binding upon all of the parties to
this Agreement and on the Pillsbury Stockholder.
(c) Section 2.14(d) is hereby replaced in its entirety with the
following:
"(d) The Purchase Price shall be reduced dollar for dollar by
the amount, if any, by which Operating Working Capital shown on the
Adjusted Closing Date Operating Working Capital Calculation is less
than $100 million or increased dollar for dollar by the amount, if
any, by which Operating Working Capital shown on the Adjusted Closing
Date Operating Working Capital Calculation is greater than $320
million, PROVIDED, HOWEVER, that if the Closing Date is between
October 15 and November 15, inclusive, the $320 million threshold
shall be increased to $420 million, and if the Closing Date is
between March 15 and April 15, inclusive, the $100 million threshold
shall be reduced to zero; PROVIDED, FURTHER, that if there is a sale,
divestiture or disposition of any plants, assets or businesses
consummated prior to the Closing pursuant to Section 5.2, Diageo and
General Mills shall mutually agree on an appropriate adjustment of
the aforementioned thresholds to reflect such sale, divestiture or
disposition. For the
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avoidance of doubt, in the event that the Operating Working Capital
shown on the Adjusted Closing Date Operating Working Capital
Calculation is not greater or less than the applicable threshold, no
adjustment to the Purchase Price shall be made pursuant to this
Section 2.14."
(d) Section 2.14(e) is hereby replaced in its entirety with the
following:
"(e) Any adjustment to the Purchase Price made pursuant to Section
2.14(d) shall be paid by Diageo or General Mills, as applicable, by
wire transfer in immediately available funds, to an account or
accounts specified by General Mills or Diageo, as applicable, within
five Business Days after the Adjusted Closing Date Operating Working
Capital Calculation is agreed upon or deemed to have been agreed upon
by General Mills and Diageo or the written statement of the Neutral
Auditors setting forth their determination regarding any remaining
disputed items is delivered to General Mills and Diageo, and shall
bear interest from (and including) the Closing Date through (and
including) the date of payment at the publicly announced prime
interest rate of Citibank, N.A. in effect from time to time for
unsecured short-term commercial loans."
5. ARTICLE III. Article III of the Merger Agreement is hereby amended
as follows:
(a) The second sentence of Section 3.1(b) is hereby replaced in its
entirety with the following:
"Each of Diageo and the Pillsbury Stockholder has the requisite
corporate or similar power and authority to execute the Stockholders
Agreement and to perform its obligations thereunder and to consummate
the transactions contemplated thereby."
(b) A new Section 3.3(c) is hereby inserted to read as follows:
"(c) Attached hereto as EXHIBIT I are true and complete copies of the
unaudited consolidated financial statements of income, balance sheets
and statements of cash flows of the Business Entities as of and for
the twelve months ended June 30, 2001 (collectively, the "2001
BUSINESS FINANCIAL STATEMENTS"). The 2001 Business Financial
Statements present fairly in all material respects the consolidated
financial position and results of operations and cash flows of the
Business Entities for the respective period or as of the respective
date set forth therein, in each case in accordance with U.K. GAAP
applied on a consistent basis throughout the periods involved (except
as otherwise indicated therein and except for changes resulting from
normal and recurring year-end adjustments). The 2001 Business
Financial Statements have been prepared from and in all material
respects in accordance with the books and records of the Business
Entities. The balance sheet as of June 30, 2001 included in the 2001
Business Financial Statements is referred to herein as the "2001
BUSINESS BALANCE SHEET."
(c) Section 3.4 is hereby replaced in its entirety with the following:
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"Section 3.4. NO UNDISCLOSED LIABILITIES. Except for liabilities
which are reflected or reserved against in the 2001 Business Balance
Sheet or as set forth in Section 3.4 of the Diageo Disclosure
Schedule, none of the Business Entities has any liabilities or
obligations that would be required to be reflected on a balance sheet
prepared in accordance with U.K. GAAP or U.S. GAAP, except for (a)
liabilities or obligations arising in the ordinary course of business
consistent with past practice since June 30, 2001, which would not,
individually or in the aggregate, have or reasonably be expected to
have a Pillsbury Material Adverse Effect and (b) with respect to
liabilities or obligations that would be required to be reflected on
a balance sheet prepared in accordance with U.S. GAAP, deferred
income taxes, pension, and postretirement/employment liabilities."
(d) Section 3.6 is hereby replaced in its entirety with the following:
"Section 3.6. ABSENCE OF CERTAIN CHANGES. Since June 30, 2001,
there has been no change or development in or effect on the business
or businesses of the Business Entities that has had, or would
reasonably be expected to have, a Pillsbury Material Adverse Effect.
From December 31, 1999 through July 16, 2000, there was no action
taken by any Business Entity which, if taken from July 16, 2000
through the Closing, would violate any of the provisions of
subsections (i), (ii), (iii), (iv), (v), (xii)(A) and (xvii) of
Section 5.4(a), provided that for the purposes of this
representation, the reference in Section 5.4(a)(v)(A) to "a
commitment period of one year or less" shall be deemed to be of no
consequence for purposes of this Section 3.6 and the reference in
Section 5.4(a)(v)(B) to "Pillsbury's 2001 Capital Expenditure Plan"
shall be deemed to refer to "Pillsbury's 2000 Capital Expenditure
Plan."
(e) Section 3.20 is hereby replaced in its entirety with the following:
"Section 3.20. ACQUISITION OF SHARES FOR INVESTMENT. Diageo and
the Pillsbury Stockholder have such knowledge and experience in
financial and business matters that they are capable of evaluating
the merits and risks of their acquisition of the Pillsbury Purchase
Price Shares and have been provided access to personnel and books of
General Mills and its Subsidiaries for purposes of making their
evaluation. Diageo and the Pillsbury Stockholder are acquiring the
Pillsbury Purchase Price Shares for investment and not with a view
toward any distribution thereof, or with any present intention of
distributing such shares. Diageo and the Pillsbury Stockholder agree
that the Pillsbury Purchase Price Shares may not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise
disposed of without registration under the Securities Act, except
pursuant to an exemption from such registration available under the
Securities Act."
6. ARTICLE IV. Article IV of the Merger Agreement is hereby amended as
follows:
(a) Clause (ii) of the last sentence of Section 4.1(b) is hereby replaced
in its entirety with the following:
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"(ii) the issuance of the Pillsbury Purchase Price Shares
pursuant to this Agreement (the "GENERAL MILLS SHARE ISSUANCE") by
the Required General Mills Votes, no other corporate proceedings on
the part of General Mills or Merger Sub, their respective Boards of
Directors or stockholders are necessary therefor."
(b) Section 4.2(c) is hereby replaced in its entirety with the
following:
"(c) All of the Pillsbury Purchase Price Shares, when issued in
the Merger pursuant to this Agreement, will be duly authorized,
validly issued, fully paid and non-assessable and free of preemptive
rights."
7. ARTICLE V. Article V of the Merger Agreement is hereby amended as
follows:
(a) Section 5.2(d) is hereby replaced in its entirety with the
following:
"(d) Intentionally omitted."
(b) The words "and except as otherwise provided in Section 5.15," in
clause (i) of Section 5.4(a) are hereby deleted.
(c) The words "except as set forth in Section 5.15," in clause (vii) of
Section 5.4(a) are hereby deleted.
(d) A new Section 5.4(d) is hereby inserted to read as follows:
"(d) PILLSBURY CASH MANAGEMENT. Notwithstanding anything in this
Agreement to the contrary, prior to the Closing Date Pillsbury and
Diageo shall be permitted to engage in cash management activities
commonly referred to as a "cash sweep", but only in the ordinary
course of business consistent with past practice, except to the
extent necessary to comply with Section 5.6(a)(ii); provided that,
notwithstanding the foregoing, as of the Closing, the Business
Entities shall have not less than $42 million cash on hand (in excess
of cash, if any, reflected on the consolidated balance sheet of the
Business Entities as of the Closing Date in respect of amounts held
in escrow relating to Pillsbury's Indian joint venture) ("CLOSING
DATE CASH"). In the event that the amount of Closing Date Cash
exceeds $42 million, General Mills shall pay to the Pillsbury
Stockholder an amount in cash equal to such difference. In the event
that the amount of Closing Date Cash is less than $42 million, Diageo
shall cause the Pillsbury Stockholder to pay to General Mills an
amount in cash equal to such difference."
(e) Section 5.6(a) is hereby replaced in its entirety with the
following:
"(a) (i) Prior to the Effective Time, no Business Entity shall
repay (A) any indebtedness or other payable owing to Diageo or any
Continuing Affiliate or (B) any other indebtedness except as required
by the terms thereof and (ii) effective as of the Effective Time, all
intercompany receivables, payables, loans and investments then
existing between Diageo or any Continuing Affiliate, on the one
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hand, and the Business Entities, on the other hand, shall be settled
by way of capital contribution (with respect to intercompany payables
or loans due to Diageo or any Continuing Affiliate) or by way of
dividend in kind (with respect to receivables of any Business Entity
owed by Diageo or any Continuing Affiliate)."
(f) Section 5.8(a) is hereby replaced in its entirety with the
following:
"(a) The Subsidiary Purchase Price Cash Amount shall be
allocated as set forth on EXHIBIT F hereto."
(g) The words "and delivered pursuant to the Subsidiary Purchase
Agreements" in Section 5.13 are hereby deleted.
(h) A new Section 5.14(c) is hereby inserted to read as follows:
"(c) As promptly as practical following the Closing (but in any
event no later than November 15, 2001, Pillsbury shall deliver to
General Mills true and complete copies of the audited consolidated
financial statement of income, balance sheet and statement of cash
flows of the Business Entities as of and for the twelve months ended
June 30, 2001, in each case prepared in accordance with U.S. GAAP.
Such audited financial statements shall not differ in any material
respect from the 2001 Business Financial Statements, except for those
adjustments relating to differences between U.K. GAAP and U.S. GAAP.
(i) Section 5.15 is hereby replaced in its entirety with the following:
"Section 5.15. CLOSING DATE INDEBTEDNESS. Prior to the Closing,
Diageo shall deliver to General Mills a certificate, signed by the
Chief Financial Officer of Diageo, setting forth Diageo's good faith
estimate of the amount of Closing Date Third Party Debt (the
"ESTIMATED CLOSING DATE THIRD PARTY DEBT"). Promptly following the
Closing Date, but in no event later than the date on which General
Mills delivers the Closing Date Operating Working Capital Calculation
to Diageo pursuant to Section 2.14(b), General Mills shall deliver to
Diageo a certificate, signed by the Chief Financial Officer of
General Mills, setting forth the amount of Closing Date Third Party
Debt. In the event that Diageo disputes the amount of Closing Date
Third Party Debt set forth in such certificate, Diageo shall provide
General Mills written notice of such dispute within 60 days of
Diageo's receipt of such certificate, specifying in reasonable detail
the basis for such dispute, and such dispute shall be resolved in the
manner for resolving disputes set forth in Section 2.14. If the
Closing Date Third Party Debt as set forth in such certificate of
General Mills (or as resolved as set forth above) exceeds the
Estimated Third Party Closing Date Debt, Diageo shall cause the
Pillsbury Stockholder to pay to General Mills an amount equal to such
difference. If the Estimated Third Party Closing Date Debt exceeds
the Closing Date Third Party Debt as set forth in such certificate of
General Mills (or as resolved as set forth above), General Mills
shall pay to the Pillsbury Stockholder an amount equal to such
difference. Any payment made pursuant to this Section 5.15 shall
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be paid by wire transfer in immediately available funds to the
account specified by the party entitled to receive such payment,
within three Business Days after delivery by General Mills of the
certificate contemplated by this Section 5.15 (or if there is a
dispute with respect to such certificate, three Business Days after
such dispute is resolved), and shall bear interest from (and
including) the Closing Date through (and including) the date of
payment at the publicly announced prime interest rate of Citibank,
N.A. in effect from time to time for unsecured short term commercial
loans."
8. ARTICLE VI. Article VI of the Merger Agreement is hereby amended as
follows:
(a) A new Section 6.1(n) is hereby added to read as follows:
"(n) With respect to the July 2000 Completion and Performance
Plan referred to in Section 6.1(b)(iii), Diageo and Pillsbury
covenant and agree that the aggregate amount of costs, liabilities
and expenses of the Business Entities in respect thereof shall not
exceed $60 million. In the event that such costs, liabilities and
expenses in the aggregate are greater than $60 million, Diageo shall
pay to General Mills an amount in cash equal to such difference. In
the event that such costs, liabilities and expenses in the aggregate
are less than $60 million, General Mills shall pay to Diageo an
amount in cash equal to such difference.
9. ARTICLE VII. Article VII of the Merger Agreement is hereby amended
as follows:
(a) Section 7.2 is hereby replaced in its entirety with the following:
"Section 7.2. Intentionally omitted."
(b) The words "(except, in each case, to the extent set forth in Section
7.3(b)(ii) below)" in clause (iii) of Section 7.3(a) are hereby deleted.
(c) Clause (ii) of Section 7.3(b) is hereby replaced in its entirety
with the following:
"(ii) Intentionally omitted."
(d) Section 7.8(b) is hereby replaced in its entirety with the
following:
"(b) PRE-CLOSING TAX PERIODS. Diageo shall have the right to
control, at its own expense, any audit, examination, contest,
litigation or other proceeding by or against any Taxing Authority (a
"TAX PROCEEDING") in respect of a Business Entity for any taxable
period that ends on or before the Closing Date; PROVIDED, HOWEVER,
that insofar as any such Tax Proceeding relates to the matters set
forth above in this Section 7.8(b), Diageo shall provide General
Mills with a timely and reasonably detailed account of each stage of
such Tax Proceeding."
(e) The second sentence of Section 7.14 is hereby deleted.
(10) ARTICLE VIII. Article VIII of the Merger Agreement is hereby
amended as follows:
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(a) The words "and delivered pursuant to the Subsidiary Purchases" in
Section 8.1(e) are hereby deleted.
(b) Section 8.2(c) is hereby replaced in its entirety with the
following:
"(c) INDEBTEDNESS. There shall be no outstanding indebtedness of
the Business Entities as of the Closing Date (excluding off balance
sheet financing and operating and capitalized finance leases that are
reflected in the profits and losses statement of the Business
Entities in the ordinary course consistent with past practice) other
than the Closing Date Third Party Debt."
(c) A new Section 8.2(f) is hereby added to read as follows:
"(f) DATA CENTER. Diageo and Pillsbury shall have delivered to
General Mills the Purchase Agreement in the form attached hereto as
EXHIBIT G and the Lease in the form attached hereto as EXHIBIT H,
respectively, in each case duly executed by all parties thereto other
than General Mills."
(d) Section 8.3(d) is hereby replaced in its entirety with the
following:
"(d) Intentionally omitted."
11. ARTICLE IX. Article IX of the Merger Agreement is hereby amended
as follows:
(a) The words ", except the representations and warranties set forth in
Article VII, whose survival shall be as set forth in Article VII" in Section
9.1(a) are hereby deleted.
(b) The words "(other than those set forth in Article VII hereof,
indemnity for which is addressed in Article VII)" in Section 9.3(a) are hereby
deleted.
(c) Section 9.4(d) is hereby replaced in its entirety with the
following:
"(d) Except for third party claims being defended in good faith,
Diageo and General Mills shall satisfy the General Mills Indemnifying
Parties' or the Diageo Indemnifying Parties', as applicable,
obligations under this Article IX in respect of a valid claim for
indemnification hereunder which is not contested by Diageo or General
Mills, as applicable, in good faith, in cash within 30 days after the
date on which Notice of Claim is given."
12. DISCLOSURE SCHEDULES. The Diageo Disclosure Schedule is hereby
amended as set forth in EXHIBIT J hereto.
13. ASSET TRANSFERS. The parties understand and agree that Section
6.1(k) of the Merger Agreement shall survive the Closing.
14. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in one or
more counterparts, all of which shall be considered one and the same agreement.
Except as expressly amended hereby, the terms and conditions of the Merger
Agreement shall remain in full force
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and effect. The Merger Agreement, as amended by this Amendment, shall be
binding upon the parties hereto and their successors and permitted assigns.
This Amendment shall be effective as of the date first written above.
15. GOVERNING LAW; JURISDICTION AND FORUM; WAIVER OF JURY TRIAL.
(a) This Amendment shall be governed by and construed in accordance with the
laws of the State of Delaware without reference to the choice of law
principles thereof.
(b) Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of any Delaware state or federal court of appropriate jurisdiction
in any Action arising out of or relating to this Amendment, and hereby
irrevocably agrees that all claims in respect of such Action may be heard and
determined in such Delaware state or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such Action. The parties
further agree, to the extent permitted by applicable Law, that any final and
unappealable judgment against any of them in any Action contemplated above shall
be conclusive and may be enforced in any other jurisdiction within or outside
the United States by suit on the judgment, a certified copy of which shall be
conclusive evidence of the fact and amount of such judgment.
(c) To the extent that any party hereto has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, such
party hereby irrevocably waives such immunity in respect of its obligations with
respect to this Amendment.
(d) Each party waives, to the fullest extent permitted by applicable Law,
any right it may have to a trial by jury in respect of any Action arising out
of or relating to this Amendment. Each party certifies that it has been induced
to enter into this Amendment by, among other things, the mutual waivers and
certifications set forth above in this Section 15.
16. HEADINGS; DEFINITIONS. The section and article headings contained
in this Amendment are inserted for convenience of reference only and will not
affect the meaning or interpretation of this Amendment. All capitalized terms
defined herein are equally applicable to both the singular and plural forms of
such terms.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the date first written above.
GENERAL MILLS, INC.
By: /S/ D. I. MALINA
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Name: D. I. Malina
Title: V.P. Corporate Development
GENERAL MILLS NORTH AMERICAN BUSINESSES, INC.
By: /S/ ERNEST M. HARPER, JR.
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Name: Ernest M. Harper, Jr.
Title: Vice President, Asst. Treasurer
DIAGEO plc
By: /S/ PAUL S. WALSH
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Name: Paul S. Walsh
Title: Group Chief Executive
THE PILLSBURY COMPANY
By: /S/ JOHN STEWART
--------------------------------------
Name: John Stewart
Title: Authorized Signatory
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