Exhibit 99.2
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT TO AGREEMENT AND PLAN OF MERGER ("AMENDMENT") made this
July 13, 2001, by and among Xxxxx Karan International Inc., a Delaware
corporation (the "COMPANY"), LVMH Moet Xxxxxxxx Xxxxx Vuitton Inc., a Delaware
corporation ("LVMH"), and DKI Acquisition, Inc., a Delaware corporation and a
direct wholly-owned subsidiary of LVMH ("ACQUISITION SUB"),
W I T N E S S E T H: T H A T
WHEREAS, the Company, LVMH and Acquisition Sub have entered into that
certain Agreement and Plan of Merger dated as of March 31, 2001 (the "MERGER
AGREEMENT"), pursuant to which the Company will be merged with and into
Acquisition Sub (the "MERGER"), and
WHEREAS, the parties hereto desire to amend the Merger Agreement in
accordance with the terms and provisions set forth herein,
NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. RESIGNATION AND APPOINTMENT. Subject to the conditions set forth in
this Amendment, the Board of Directors of the Company has resolved to accept the
resignation of Xxxx Idol from all offices that he holds in the Company and its
subsidiaries (the "RESIGNATION"), including (without limitation) as Chief
Executive Officer and Director (except as provided by the letter agreement
between Mr. Idol and the Company of even date herewith with respect to such
resignation and his continued employment with the Company as an advisor to the
Company's Board of Directors in connection with certain transition matters). The
Company's Board of Directors has further resolved to appoint Xxxxxxxx Xxxxxxx to
assume the role of President and Chief Executive Officer of the Company (the
"APPOINTMENT"), all effective as of July 13, 2001. LVMH and Acquisition Sub
hereby consent to the Resignation and the Appointment.
2. WAIVER. LVMH and Acquisition Sub hereby agree to waive (i) any breaches
of any representation and warranty made by the Company and contained in the
Merger Agreement of which LVMH and/or Acquisition Sub has actual knowledge on
the date hereof, which waiver is effective as of the date of execution of the
Merger Agreement and the Closing Date and all times in between, but all only to
the extent of the facts relating to such breach actually known at the date
hereof, (ii) any breaches of any covenant or agreement made by the Company and
contained in the Merger Agreement of which LVMH or Acquisition Sub has actual
knowledge on the date hereof, but all only to the extent of the facts relating
to such breach actually known at
the date hereof, (iii) all rights and remedies that LVMH and Acquisition Sub may
have pursuant to the Merger Agreement as a result of any Material Adverse Effect
with respect to the Company, the facts with respect thereto LVMH and/or
Acquisition Sub has actual knowledge of on the date hereof, but only to the
extent of the facts relating to such Material Adverse Effect actually known at
the date hereof and (iv) any breaches by the Company of any covenant or
agreement made by the Company and contained in the Merger Agreement, occurring
after the date hereof, other than breaches resulting from, giving effect to,
arising out of or in connection with resolutions, actions or decisions of the
Company's Board of Directors or the Special Committee agreed to or undertaken at
any meeting (or by written consent) of the Company's Board of Directors or the
Special Committee. As used in this Section 2 of the Amendment, the words "actual
knowledge" shall, with respect to LVMH and Acquisition Sub, mean the actual
knowledge of any of the following individuals: Xxxx Xxxxxxxx, Xxxxxxxx Xxxxxxx,
Xxxx Xxxxxx and Xxxxxxxx Xxxxxx-Bourdillon.
3. PAYMENTS. LVMH acknowledges and agrees that the Company will pay, and
LVMH will not object to the payment by the Company of, (i) when due (after the
Closing), fees owed to Xxxx X. Xxxxx, Xxx XxXxxxxxxx Xxxxxxxxx and Xxxxx X. Xxxx
for their services as members of the Special Committee, totaling $150,000 in the
aggregate, (ii) when due (after the Closing), $250,000 to Xxxxxxx Xxxxxxxxx,
representing the remainder of his fee for serving as chairman of the Special
Committee and (iii) upon consummation of the Merger, a success fee of $275,000
to Xxxxx Xxxxx & Xxxxx (in addition to its customary hourly fees) and a success
fee of $400,000 to Proskauer Rose LLP (in addition to its customary hourly
fees), all provided, however, that (x) the total fees (including, without
limitation, the above success fees and all customary hourly fees) paid or
payable to the Company's and the Special Committee's outside legal counsel,
including, without limitation, the firms named herein, in connection with the
negotiation and consummation of the Merger (including, without limitation, all
fees paid in connection with any litigation relating to the Merger, any New York
Stock Exchange, Securities and Exchange Commission or other investigation
regarding trading in the Company's stock, and certain arrangements regarding the
terms of and benefits for certain of the Company's employees) for the period
commencing December 16, 2000 shall not exceed $2,500,000 in total, including
(without limitation) all such payments that have been made prior to the date
hereof to the Company's outside legal counsel, and (y) in this regard all such
fees (except for the above referenced success fees) shall be at the customary
hourly rates of such outside legal counsel.
4. TERMS OF EMPLOYMENT. Upon the Appointment, Xx. Xxxxxxx shall be
entitled to receive from the Company the salary and benefits summarized on
SCHEDULE 1 attached hereto. The Company and the Surviving Corporation in the
Merger shall indemnify and hold harmless, and provide advancement of expenses
to, Xx. Xxxxxxx at least to the same extent that the Company's other executive
officers are indemnified or have the right of advancement of expenses or to
conduct the defense of any claims, and
to the fullest extent permitted by applicable law.
5. EFFECT. All of the terms and conditions set forth in the Merger
Agreement shall remain in full force and effect, except to the extent otherwise
expressly set forth in this Amendment. This Amendment shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Amendment,
express or implied, is intended to or shall confer upon any other Person any
other right, benefit or remedy of any nature whatsoever under or by reason of
this Amendment, other than SECTIONS 3 and 4, which are intended to be for the
benefit of the Persons covered thereby and may be enforced by such Persons.
6. MISCELLANEOUS. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without reference to its
conflict of laws rules. This Amendment may be executed in any number of
identical counterparts, any of which may contain the signatures of less than all
parties, and all of which together shall constitute a single agreement. Except
as otherwise expressly defined herein, all capitalized terms used herein shall
have those meanings as set forth in the Merger Agreement.
7. OBLIGATIONS OF LVMH. LVMH S.A. shall cause each of LVMH, Acquisition
Sub and the Surviving Corporation to comply with all of its respective
obligations under this Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
XXXXX KARAN INTERNATIONAL INC.
By: /s/ M. Xxxxxxx Xxxxxxxxx
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Name: M. Xxxxxxx Xxxxxxxxx
Title: Director
LVMH MOET XXXXXXXX XXXXX VUITTON INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
DKI ACQUISITION, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President
LVMH S.A. hereby accepts and agrees to SECTION 7 of this Amendment and
acknowledges that the Company (and, if any breach of SECTION 7 relates to
SECTION 3 or SECTION 4 of this Amendment, any Person who may enforce SECTION 3
or SECTION 4, as the case may be, pursuant to SECTION 5 of this Amendment) may
proceed directly against LVMH S.A. in the event of any breach of SECTION 7.
LVMH MOET XXXXXXXX XXXXX VUITTON S.A.
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: Operations EVP
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