Tender-Offer Solicitation/Recommendation Statement — Schedule 14D-9
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 14D9 Tender-Offer Solicitation/Recommendation Statement 17 96K
2: EX-99.1 Agreement and Plan of Merger 57 186K
11: EX-99.10 Letter to Stockholders 1 9K
12: EX-99.11 Option of Houlihan, Lokey, Howard & Zukin 3 15K
3: EX-99.2 Second Amended & Restated Mgmt. Agreement 15 55K
4: EX-99.3 Management Agreement - Rick Ferguson 8 33K
5: EX-99.4 Management Agreement - Roy Breneman 6 26K
6: EX-99.5 Form of Option Agreement Dated February 3, 1997 8 34K
7: EX-99.6 1996-97 Stock Option 8 36K
8: EX-99.7 Form of Option Agreement Dated February 4, 1997 8 32K
9: EX-99.8 Confidentiality Agreement Dated February 26, 1997 4 17K
10: EX-99.9 Press Release 2± 9K
EX-99.5 — Form of Option Agreement Dated February 3, 1997
| EX-99.5 | 1st Page of 8 | TOC | ↑Top | Previous | Next | ↓Bottom | Just 1st |
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EXHIBIT 5
SEVEN-UP/RC BOTTLING COMPANY OF SOUTHERN CALIFORNIA, INC.
February 3, 1997
[NAME AND ADDRESS OF OPTIONEE]
Re: Seven-Up/RC Bottling Company of Southern
California, Inc. (the "Company")
Grant of Nonqualified Stock Option
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Dear [NAME OF OPTIONEE]:
The Company is pleased to advise you that its Board of Directors has
granted to you a stock option (an "Option"), as provided below.
1. Definitions. For the purposes of this Option, the following terms
shall have the meanings set forth below:
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean (i) your theft or embezzlement, or attempted theft
or embezzlement, of money or property of the Company, your perpetration or
attempted perpetration of fraud, or your participation in a fraud or attempted
fraud, on the Company or your unauthorized appropriation of, or your attempt to
misappropriate, any tangible or intangible assets or property of the Company,
(ii) any act or acts of disloyalty, misconduct or moral turpitude by you
injurious to the interest, property, operations, business or reputation of the
Company or your conviction of a crime the commission of which results in injury
to the Company or (iii) your failure or inability (other than by reason of your
Disability) to carry out effectively your duties and obligations to the Company
or to participate effectively and actively in the management of the Company, as
determined in the reasonable judgment of the Board.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor statute.
"Common Stock" shall mean the Common Stock, par value $0.01 per share,
of the Company outstanding on the date hereof, or, in the event that the
outstanding Common Stock is hereafter changed into or exchanged for different
stock or securities of the Company, such other stock or securities.
"Company" shall mean Seven-Up/RC Bottling Company of Southern
California, Inc., a Delaware corporation, and (except to the extent the context
requires otherwise) any subsidiary corporation of Seven-Up/RC Bottling Company
of Southern California, Inc. as such term is defined in Section 425(f) of the
Code.
"Disability" shall mean your inability, due to illness, accident,
injury, physical or mental incapacity or other disability, to carry out
effectively your duties and obligations to the Company or to participate
effectively and actively in the management of the Company for a period of at
least 90 consecutive days or for shorter periods aggregating at least 120 days
(whether or not consecutive) during any twelve-month period, as determined in
the reasonable judgment of the Board.
"Option Shares" shall mean (i) all shares of Common Stock issued or
issuable upon the exercise of the Option and (ii) all shares of Common Stock
issued with respect to the Common Stock referred to in clause (i) above by way
of stock dividend or stock split or in connection with any conversion, merger,
consolidation or recapitalization or other reorganization affecting the Common
Stock. Option Shares shall continue to be Option Shares in the hands of
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any holder other than you (except for the Company), and each such transferee
thereof shall succeed to the rights and obligations of a holder of Option Shares
hereunder.
"Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
"Public Sale" means any sale of Option Shares to the public pursuant
to an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 adopted
under the Securities Act.
"Sale of the Company" shall mean a merger or consolidation with and
into another person pursuant to which the Company is not the surviving Person of
such merger or consolidation, a sale of all or substantially all of the
Company's assets or a sale of a majority of the Company's outstanding voting
securities.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and any successor statute.
2. Option.
(a) Terms. Your Option is for the purchase of up to a number of
shares of Common Stock determined pursuant to Section 2(b) below (the "Option
Shares"), at a price per share of equal to the quotient of the following
fraction (the "Exercise Price"): the numerator of which equals the sum of $70
million plus the amount of cash on hand at the Company as of Consummation minus
the aggregate principal amount of all interest-bearing liabilities (specifically
including capitalized leases) of the Company as of Consummation (as defined in
the First Amended Joint Plan of Reorganization, dated as of June 19, 1996, of
the Company and Beverage Group Acquisition Corp.) and the denominator of which
equals 5,000,000, payable upon exercise as set forth in paragraph 2(b) below.
Your Option shall expire at the close of business on December 31, 2001 (the
"Expiration Date"), subject to earlier expiration as provided in paragraph 3(c)
below or upon termination of your employment as provided in paragraph 4(b)
below. Your Option is not intended to be an "incentive stock option" within the
meaning of Section 422A of the Code.
(b) Number of Shares. The number of shares into which this Option
is exercisable shall be equal to (i) the sum of the Option Base Shares as
determined pursuant to Section 2(b)(i), the Option Initial Catch-Up Shares as
determined pursuant to Section 2(b)(ii) and the Option Final Catch-Up Shares as
determined pursuant to Section 2(b)(iii), less (ii) the number of shares of
Common Stock already issued in connection with partial exercises of this Option.
(i) Option Base Shares. The number of Option Base Shares of Common
Stock into which this Option is initially exercisable shall be equal to [_____]
(the "Option Base Shares").
(ii) Option Initial Catch-Up Shares. If (i) all the Option Base
Shares under this Option have been issued and (ii) any shares of Common Stock
are issued by the Company pursuant to the exercise of the stock purchase warrant
to be entered into between the Company and WB Bottling Corporation and to be
dated the Date of Issuance hereof (the "WB Warrant") and such shares constitute
"Warrant Base Shares" under Section 1A(i) of the WB Warrant (such Warrant Base
Shares issued upon the exercise or partial exercise of the WB Warrant being
referred to as "Issued Warrant Base Shares"), then the number of shares of
Common Stock into which this Option is exercisable as of any time shall be
increased by an amount which is equal to the product of (x) [___] and (y) the
quotient obtained by dividing the number of Issued Warrant Base Shares as of
such time by [____] (such additional number of shares of Common Stock being
referred to as "Option Initial Catch-Up Shares"). Any shares of Common Stock
issued pursuant to Sections 1A(ii) (the shares issuable pursuant to such section
being referred to as "Warrant Initial Catch-Up Shares") or 1A(iii) (the shares
issuable pursuant to such section being referred to as "Warrant Final Catch-Up
Shares") of the WB Warrant shall not cause an increase in the number of shares
into which this Option is exercisable pursuant to this Section 2(b)(ii).
(iii) Option Final Catch-Up Shares. If (i)
all the Option Base Shares and Option Initial Catch-Up Shares under this Option
have been issued and (ii) and all the Warrant Base Shares and Warrant Initial
Catch-Up Shares have been issued under the WB Warrant, then the number of shares
of Common Stock into which this Option
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is exercisable shall be increased by 49 ("Option Final Catch-Up Shares");
provided that this Option shall be exercised with respect to such additional
shares pursuant to this Section 1A(iii) in full only and no partial exercise for
such shares will be permitted.
(c) Payment of Option Price. Subject to paragraph 2(b)(iii) above
and paragraph 3 below, your Option may be exercised in whole or in part upon
payment of an amount (the "Option Price") equal to the product of (i) the
Exercise Price multiplied by (ii) the number of Option Shares to be acquired.
Payment shall be made in cash (including check, bank draft or money order) or,
in the discretion of the Board, by delivery of a promissory note.
3. Exercisability/Vesting.
(a) Normal Vesting. Your Option may be exercised only to the extent
it has become vested. Your Option shall vest and become exercisable with respect
to 33.33% of the Option Base Shares portion of your Option Shares (rounded to
the nearest whole share) upon the issuance of the Company's audited financial
statements for each of the Company's fiscal years ending on December 31, 1996,
December 31, 1997, and December 31, 1998, if and only if you are, and have been,
continuously employed by the Company from the date of this Option through the
date on which such financial statements are issued. Your Option shall vest and
become exercisable with respect to any Option Initial Catch-Up Shares and Option
Final Catch-Up Shares at the time that the number of Option Shares is increased
pursuant to Section 2(b)(ii) or 2(b)(iii), as applicable, hereof.
(b) Effect on Vesting in Case of Employment Termination.
Notwithstanding paragraph 3(a) above, the following special vesting rules shall
apply if your employment with the Company terminates prior to the Expiration
Date:
(i) Death or Disability. If you die or become subject to any
Disability while an employee of the Company, your Option shall be vested and
become fully exercisable with respect to a number of Option Shares equal to the
sum of (x) the Option Shares with respect to which this Option was exercisable
on the date of your death or Disability, plus (y) 25% of the Option Shares,
excluding Option Initial Catch-Up Shares and Option Final Catch-Up Shares, with
respect to which this Option was not exercisable on the date of your death or
Disability. Your Option with respect to the remaining Option Shares with respect
to which this Option was not exercisable on the date of your death or Disability
shall expire and be forfeited.
(ii) Retirement. If you retire (with the approval of the Board)
from employment with the Company, your Option shall be vested and fully
exercisable with respect to that portion of your Option that was exercisable on
the date of your retirement. Any portion of your Option that was not exercisable
on the date of your retirement shall expire and be forfeited.
(iii) Other Termination of Employment.
Unless otherwise determined by the Board, if your employment terminates other
than for death, Disability, retirement (with the approval of the Board),
resignation or discharge for Cause, your Option shall be vested and fully
exercisable with respect to that portion of your Option that was vested and
exercisable on the date your employment with the Company ceased and any portion
of your Option that was not vested and exercisable on such date shall expire and
be forfeited. If you resign or are discharged for Cause, all of your Option not
previously exercised shall expire and be forfeited whether exercisable or not.
Except as provided in this paragraph 3(b), the number of Option Shares with
respect to which your Option may be exercised shall not increase once you cease
to be employed by the Company.
(c) Acceleration of Vesting on Sale of the Company. If you have
been continuously employed by the Company from the date of this Option until a
Sale of the Company, the portion of your outstanding Option which has not become
vested at the effective date of such event shall immediately vest and become
exercisable with respect to 100% of the Option Shares that have not been
purchased pursuant to this Option prior to the effective date of such event
simultaneously with the consummation of the Sale of the Company. In any event,
any portion of your Option which has not been exercised prior to the effective
date of or in connection with the Sale of the Company as provided in this
Section 3(c) shall be forfeited, unless otherwise determined by the Board.
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4. Expiration of Option.
(a) Normal Expiration. In no event shall any part of your Option be
exercisable after the Expiration Date set forth in paragraph 2(a) above.
(b) Early Expiration Upon Termination of Employment. Any portion of
your Option that was not vested and exercisable on the date your employment with
the Company terminated shall expire and be forfeited on such date, and any
portion of your Option that was vested and exercisable on the date your
employment with the Company terminated shall also expire and be forfeited;
provided that: (i) if you die or become subject to any Disability, the portion
of your Option that is vested and exercisable shall expire 180 days from the
date of your death or Disability, but in no event after the Expiration Date,
(ii) if you retire (with the approval of the Board), the portion of your Option
that is vested and exercisable shall expire 90 days from the date of your
retirement, but in no event after the Expiration Date, and (iii) if you are
discharged other than for Cause, the portion of your Option that is vested and
exercisable shall expire 30 days from the date of your discharge, but in no
event after the Expiration Date.
5. Procedure for Exercise. You may exercise all or any portion of your
Option, to the extent it has vested and is outstanding, at any time and from
time to time prior to the Expiration Date, by delivering written notice to the
Company (to the attention of the Company's Secretary) and your written
acknowledgment that you have read and have been afforded an opportunity to ask
questions of management of the Company regarding all financial and other
information provided to you regarding the Company, together with payment of the
Option Price in accordance with the provisions of paragraph 2(c) above. As a
condition to any exercise of your Option, you shall permit the Company to
deliver to you all financial and other information regarding the Company it
believes necessary to enable you to make an informed investment decision, and
you shall make all customary investment representations which the Company
requires.
6. Securities Laws Restrictions and Other Restrictions on Transfer of
Option Shares. You represent that when you exercise your Option you shall be
purchasing Option Shares for your own account and not on behalf of others. You
understand and acknowledge that federal and state securities laws govern and
restrict your right to offer, sell or otherwise dispose of any Option Shares
unless your offer, sale or other disposition thereof is registered under the
Securities Act and state securities laws, or in the opinion of the Company's
counsel, such offer, sale or other disposition is exempt from registration or
qualification thereunder. You agree that you shall not offer, sell or otherwise
dispose of any Option Shares in any manner which would: (i) require the Company
to file any registration statement with the Securities and Exchange Commission
(or any similar filing under state law) or to amend or supplement any such
filing or (ii) violate or cause the Company to violate the Securities Act, the
rules and regulations promulgated thereunder or any other state or federal law.
You further understand that the certificates for any Option Shares you purchase
shall bear such legends as the Company deems necessary or desirable in
connection with the Securities Act or other rules, regulations or laws.
7. Non-Transferability of Option. Your Option is personal to you and is
not transferable by you other than by will or the laws of descent and
distribution. During your lifetime only you (or your guardian or legal
representative) may exercise your Option. In the event of your death, your
Option may be exercised only (i) by the executor or administrator of your estate
or the person or persons to whom your rights under the Option shall pass by will
or the laws of descent and distribution and (ii) to the extent that you were
entitled hereunder at the date of your death.
8. Rights of Grantee. Nothing in this Option shall interfere with or
limit in any way the right of the Company to terminate your employment at any
time (with or without Cause), nor confer upon you any right to continue in the
employ of the Company for any period of time or to continue your present (or any
other) rate of compensation, and in the event of your termination of employment
(including, but not limited to, termination by the Company without Cause) any
portion of your Option that was not previously vested and exercisable shall be
forfeited. Nothing in this Option shall confer upon you any right to further
option grants.
9. Withholding of Taxes. The Company shall be entitled, if necessary or
desirable, to withhold from you any amounts due and payable by the Company to
you (or secure payment from you in lieu of withholding) the amount
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of any withholding or other tax due with respect to any Option Shares issuable
under this Option, and the Company may defer such issuance unless indemnified by
you to its satisfaction.
10. Adjustments. In the event of a reorganization, recapitalization,
stock dividend or stock split, or combination or other change in the shares of
Common Stock, the Board may, in order to prevent the dilution or enlargement of
rights under your Option, make such adjustments in the number and type of shares
covered by your Option and the Exercise Price specified herein as may be
determined to be appropriate and equitable.
11. Restrictions on Transfer.
(a) Restrictive Legend. The certificates representing the Option
Shares shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
_____________________, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION
THEREUNDER."
(b) Opinion of Counsel. You may not sell, transfer or dispose of any
Option Shares (except pursuant to an effective registration statement under the
Securities Act) without first delivering to the Company an opinion of counsel
reasonably acceptable in form and substance to the Company that registration
under the Securities Act or any applicable state securities law is not required
in connection with such transfer.
12. Remedies. The parties hereto shall be entitled to enforce their
rights under this Option specifically, to recover damages by reason of any
breach of any provision of this Option and to exercise all other rights existing
in their favor. The parties hereto acknowledge and agree that money damages
would not be an adequate remedy for any breach of the provisions of this Option
and that any party hereto may, in its sole discretion, apply to any court of law
or equity of competent jurisdiction for specific performance and/or injunctive
relief (without posting bond or other security) in order to enforce or prevent
any violation of the provisions of this Option.
13. Amendment. Except as otherwise provided herein, any provision of
this Option may be amended or waived only with the prior written consent of you
and the Company.
14. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Option by or on behalf of
any of the parties hereto shall bind and inure to the benefit of the respective
successors and permitted assigns of the parties hereto whether so expressed or
not.
15. Severability. Whenever possible, each provision of this Option shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Option is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Option.
16. Counterparts. This Option may be executed simultaneously in two or
more counterparts, each of which shall constitute an original, but all of which
taken together shall constitute one and the same Option.
17. Descriptive Headings. The descriptive headings of this Option are
inserted for convenience only and do not constitute a part of this Option.
18. Governing Law. The corporate law of Delaware shall govern all
questions concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity and interpretation of
this Option shall be governed by the internal law, and not the law of conflicts,
of New York.
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19. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Option shall be in
writing and shall be deemed to have been given when delivered personally or
mailed by certified or registered mail, return receipt requested and postage
prepaid, to the recipient. Such notices, demands and other communications shall
be sent to you and to the Company at the addresses indicated below:
(a) If to the Optionee:
[NAME AND ADDRESS OF OPTIONEE]
(b) If to the Company:
Seven-Up/RC Bottling Company of Southern California, Inc.
3220 East 26th Street
Vernon, CA 90023
Attention: Lou Janicich
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
20. Entire Option. This Option constitutes the entire understanding
between you and the Company, and supersedes all other agreements, whether
written or oral, with respect to the acquisition by you of Common Stock of the
Company.
* * * *
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Please execute the extra copy of this Option in the space below and return
it to the Company's Secretary at its executive offices to confirm your
understanding and acceptance of the agreements contained in this Option.
Very truly yours,
SEVEN-UP/RC BOTTLING COMPANY OF SOUTHERN
CALIFORNIA, INC.
By: ___________________________________
Name
Title
Enclosures: Extra copy of this Option
The undersigned hereby acknowledges having read this Option and hereby
agrees to be bound by all provisions set forth herein.
Dated as of _____________________, 1997
OPTIONEE____________________________
Name _______________________________
[Provision for Community Property Jurisdiction]
CONSENT
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The undersigned spouse of _____________________ hereby acknowledges that I
have read the foregoing Stock Option and that I understand its contents. I am
aware that the Option provides for the repurchase of my spouse's shares of
Common Stock under certain circumstances and imposes other restrictions on the
transfer of such Common Stock. I agree that my spouse's interest in the Common
Stock is subject to this Option and any interest I may have in such Common Stock
shall be irrevocably bound by this Option and further that my community property
interest, if any, shall be similarly bound by this Option.
I am aware that the legal, financial and other matters contained in this
Option are complex and I am free to seek advice with respect thereto from
independent counsel. I have either sought such advice or determined after
carefully reviewing this Option that I will waive such right.
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[Spouse]
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Witness
Dates Referenced Herein and Documents Incorporated by Reference
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