STOCKHOLDER AGREEMENT
AGREEMENT dated as of February 6, 1997 between CVS Corporation,
a Delaware corporation ("CVS"), and Xxxx/Chilmark Fund, L.P., a Delaware
limited partnership (the "Stockholder").
W I T N E S S E T H:
WHEREAS, immediately prior to the execution of this Agreement,
CVS, Revco D.S., Inc., a Delaware corporation (the "Company"), and North
Acquisition Corp., a Delaware corporation ("Merger Subsidiary"), have entered
into an Agreement and Plan of Merger (as such agreement may hereafter be
amended from time to time, the "Merger Agreement"), pursuant to which Merger
Subsidiary will be merged with and into the Company (the "Merger"); and
WHEREAS, as an inducement and a condition to entering into the
Merger Agreement, CVS has requested that the Stockholder agree, and the
Stockholder has agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound hereby, agree as
follows:
Section 1. Certain Definitions. Capitalized terms used and not
defined herein have the respective meanings ascribed to them in the Merger
Agreement. For purposes of this Agreement:
(a) "Affiliate" shall mean, when used with respect to any Person,
any other Person directly or indirectly controlling, controlled by or under
common control with such Person. As used in this definition, the term
"control" means possession, directly or indirectly, of the power to direct or
control the direction of management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, "Affiliate" when used with respect to the Stockholder shall
exclude any entity that would otherwise be an Affiliate hereunder but that is
not 100% Beneficially Owned by Xxxxxx Xxxx.
(b) "Beneficially Own" or "Beneficial Ownership" with respect to
any securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), including pursuant to any agreement,
arrangement or understanding, whether or not in writing. Without duplicative
counting of the same securities by the same holder, securities Beneficially
Owned by a Person shall include securities Beneficially Owned by all other
Persons with whom such Person would constitute a "group" within the meaning of
Section 13(d) of the Exchange Act with respect to securities of the same
issuer.
(c) "Company Common Stock" shall mean at any time the common
stock, $.01 par value, of the Company.
(d) "Existing Shares" shall mean the shares of Company Common
Stock Beneficially Owned by the Stockholder on the date hereof.
(e) "Shares" shall mean the Existing Shares and any shares of
Company Common Stock and/or other equity securities of the Company acquired by
the Stockholder in any capacity after the date hereof and prior to the
termination of this Agreement, whether upon the exercise of options, warrants
or rights, the conversion or exchange of convertible or exchangeable
securities, or by means of purchase, dividend, distribution, split-up,
recapitalization, combination, exchange of shares or the like, gift, bequest,
inheritance or as a successor in interest in any capacity or otherwise
Beneficially Owned by the Stockholder.
Section 2. Voting of Company Common Stock. The Stockholder
hereby agrees that at any meeting (whether annual or special and whether or
not an adjourned or postponed meeting) of the holders of Company Common Stock,
however called, or in connection with any written consent of the holders of
Company Common Stock, the Stockholder will appear at the meeting or otherwise
cause the Shares to be counted as present thereat for purposes of establishing
a quorum and the Stockholder shall vote or consent (or cause to be voted or
consented) the Shares held of record or Beneficially Owned by the Stockholder
in favor of the Merger, the execution and delivery by the Company of the
Merger Agreement and the approval and adoption of the terms thereof and each
of the other actions contemplated by the Merger Agreement and this Agreement
and any actions required in furtherance thereof and hereof.
Section 3. Covenants, Representations and Warranties of the
Stockholder. The Stockholder hereby represents and warrants to, and agrees
with, CVS as follows:
(a) Ownership of Shares. The Stockholder is the record and
Beneficial Owner of Existing Shares consisting of 13,102,288 shares of Company
Common Stock. On the date hereof, the Existing Shares constitute all of the
Shares owned of record or Beneficially Owned by the Stockholder. The
Stockholder has sole voting power (except as provided in the Stockholder's
Agreement dated as of June 1, 1992, by and between Revco and the Stockholder
(the "Revco Stockholder Agreement")) and sole power to issue instructions with
respect to the matters set forth in Section 2 hereof, sole power of
disposition (except as provided in the Agreement of Limited Partnership of
Xxxx/Chilmark Fund, L.P. (the "Xxxx Fund Agreement")), sole power of
conversion, sole power to demand appraisal rights and sole power to agree to
all of the matters set forth in this Agreement, in each case with respect to
all of the Existing Shares with no limitations, qualifications or restrictions
on such rights, subject to applicable securities laws and the terms of this
Agreement. Upon consummation of the Merger, the Stockholder will have sole
voting power (except as provided in the Revco Stockholder Agreement) and sole
power to issue instructions with respect to the matters set forth in Section 4
hereof, sole power of disposition (except as provided in the Xxxx Fund
Agreement), sole power of conversion, sole power to demand appraisal rights
and sole power to agree to all of the matters set forth in this Agreement, in
each case with respect to all of the shares of CVS Common Stock it holds of
record or Beneficially Owns with no limitations, qualifications or
restrictions on such rights, subject to applicable securities laws and the
terms of this Agreement.
(b) Corporate Authorization. This Agreement has been duly and
validly executed and delivered by the Stockholder and constitutes a valid and
binding agreement enforceable against the Stockholder in accordance with its
terms except to the extent (i) such enforcement may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors rights and (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(c) No Conflicts. Except for filings, authorizations, consents and
approvals as may be required under the XXX Xxx, xxx 0000 Xxx xxx xxx 0000 Xxx,
(x) no filing with, and no permit, authorization, consent or approval of, any
state or federal governmental body or authority is necessary for the execution
and delivery of this Agreement by the Stockholder and the consummation by the
Stockholder of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by the Stockholder, the consummation
by the Stockholder of the transactions contemplated hereby or compliance by
the Stockholder with any of the provisions hereof shall (A) conflict with or
result in any breach of the organizational documents of the Stockholder, (B)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind to
which the Stockholder is a party or by which the Stockholder or any of its
properties or assets may be bound, or (C) violate any order, writ, injunction,
decree, judgment, statute, law, rule or regulation applicable to the
Stockholder or any of its properties or assets.
(d) No Encumbrances. Other than as provided in the Revco
Stockholder Agreement as to voting of the Shares and in the Xxxx Fund
Agreement as to provisions relating to timing of disposition of the Shares by
the Stockholder, and except as applicable in connection with the transactions
contemplated hereby, the Shares and the certificates representing such Shares
are now, and at all times during the term hereof, will be, held by the
Stockholder, or by a nominee or custodian for the benefit of the Stockholder,
free and clear of all liens, claims, security interests, proxies, voting
trusts or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder.
(e) No Finder's Fees. Other than as contemplated by the Merger
Agreement with respect to fees payable by the Company, no broker, investment
banker, financial advisor or other Person is entitled to any broker's,
finder's, financial adviser's or other similar fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or
on behalf of the Stockholder.
(f) No Solicitation. The Stockholder shall not, and shall cause
its Affiliates and officers, directors, employees, investment bankers,
consultants and other agents of the Stockholder and such Affiliates (such
Affiliates, officers, directors, employees, investment bankers, consultants
and other agents of any Person are hereinafter collectively referred to as the
"Representatives" of such Person) not to, directly or indirectly, take any
action to initiate, solicit, encourage or facilitate the making of any
Acquisition Proposal or any inquiry with respect thereto, or engage in
discussions or negotiations with any Person (other than CVS or any of its
Affiliates or Representatives) relating to any Acquisition Proposal or
disclose any non-public information relating to Revco or any Subsidiary of
Revco or afford access to the properties, books or records of Revco or any
Subsidiary of Revco, to any Person that has made any Acquisition Proposal. The
Stockholder shall notify CVS orally and in writing of any offers, proposals or
inquiries received by the Stockholder relating to the purchase or acquisition
by any Person of the Shares and of any Acquisition Proposal actually known to
the Stockholder (including in each case the material terms and conditions
thereof and the identity of the Person making it), within 24 hours of the
receipt thereof. The Stockholder shall, and shall cause its Representatives
to, immediately cease and cause to be terminated any and all existing
activities, discussions or negotiations, if any, with any parties conducted
heretofore with respect to any Acquisition Proposal, other than discussions or
negotiations with CVS and its Affiliates. For purposes of the foregoing,
Representatives of the Stockholder will not include investment bankers or
consultants that approach or contact the Stockholder, the Company or any other
Person, without having been solicited by the Stockholder, regarding such an
offer, proposal or inquiry so long as the Stockholder does not thereafter
encourage or retain such investment bankers or consultants to pursue such
offer, proposal or inquiry. Notwithstanding the restrictions set forth in
this Section 3(f), each of the Company and any Person who is an officer or
director of the Company may take any action consistent with the terms of the
Merger Agreement.
(g) Restriction on Transfer, Proxies; Non-Interference. The
Stockholder shall not, directly or indirectly: (i) offer for sale, sell,
transfer, tender, pledge, encumber (other than by operation of law), assign or
otherwise dispose of, or enter into any contract, option or other arrangement
or understanding with respect to or consent to the offer for sale, sale,
transfer, tender, pledge, encumbrance, assignment or other disposition of, any
or all of the Shares or any interest therein; (ii) except as contemplated by
this Agreement, grant any proxies or powers of attorney, deposit the Shares
into a voting trust or enter into a voting agreement with respect to the
Shares; or (iii) take any action that would make any representation or
warranty of the Stockholder contained herein untrue or incorrect or would
result in a breach by the Stockholder of its obligations under this Agreement
or a breach by the Company of its obligations under the Merger Agreement or
the effect of which would be inconsistent or violative of any provision or
agreement contained in this Agreement.
(h) Reliance by CVS. The Stockholder understands and acknowledges
that CVS is entering into the Merger Agreement in reliance upon the
Stockholder's execution and delivery of this Agreement.
Section 4. Representations and Warranties of CVS. CVS hereby
represents and warrants to the Stockholder as follows:
(a) Organization. CVS is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, has all
requisite corporate power and authority to execute and deliver this Agreement
and perform its obligations hereunder. The execution and delivery by CVS of
this Agreement and the performance by CVS of its obligations hereunder have
been duly and validly authorized by the Board of Directors of CVS and no other
corporate proceedings on the part of CVS are necessary to authorize the
execution, delivery or performance of this Agreement or the consummation of
the transactions contemplated hereby.
(b) Corporate Authorization. This Agreement has been duly and
validly executed and delivered by CVS and constitutes a valid and binding
agreement of CVS enforceable against CVS in accordance with its terms except
to the extent (i) such enforcement may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors rights and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(c) No Conflicts. Except for filings, authorizations, consents and
approvals as may be required under the XXX Xxx, xxx 0000 Xxx xxx xxx 0000 Xxx,
(x) no filing with, and no permit, authorization, consent or approval of, any
state or federal governmental body or authority is necessary for the execution
and delivery of this Agreement by CVS and the consummation by CVS of the
transactions contemplated hereby and (ii) none of the execution and delivery
of this Agreement by CVS, the consummation by CVS of the transactions
contemplated hereby or compliance by CVS with any of the provisions hereof
shall (A) conflict with or result in any breach of the certificate of
incorporation or by-laws of CVS, (B) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which CVS is a party or its properties or assets may
be bound, or (C) violate any order, writ, injunction, decree, judgment,
statute, law, rule or regulation applicable to CVS or any of its properties or
assets.
(d) No Finder's Fee. Except for Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation and CS First Boston Corporation whose fees will be paid
by CVS, no broker, investment banker, financial adviser or other Person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of CVS.
Section 5. Stop Transfer; Legend. (a) The Stockholder agrees
with, and covenants to, CVS that the Stockholder shall not request that the
Company register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares unless such transfer is
made in compliance with this Agreement.
(b) In the event of a stock dividend or distribution, or any
change in the Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like other than
pursuant to the Merger, the term "Shares" shall be deemed to refer to and
include the shares of Company Common Stock as well as all such stock dividends
and distributions and any shares into which or for which any or all of the
Shares may be changed or exchanged and appropriate adjustments shall be made
to the terms and provisions of this Agreement.
(c) The Stockholder will, prior to the Effective Time, duly execute
and deliver to CVS the Affiliate's letter contemplated in Section 5.11 of the
Merger Agreement substantially in the form of Exhibit C-3 to the Merger
Agreement.
(d) The Stockholder shall promptly after the date hereof surrender
to the Company all certificates representing the Shares, and the Company shall
place the following legend on such certificates:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO A STOCKHOLDER AGREEMENT DATED AS OF FEBRUARY 6, 1997 BY
AND BETWEEN CVS CORPORATION AND XXXX/CHILMARK FUND, L.P.
WHICH AMONG OTHER THINGS RESTRICTS THE TRANSFER AND VOTING
THEREOF."
Section 6. Termination. The provisions of this Agreement shall
terminate upon the earlier to occur of (i) the Effective Time and (ii) the
termination of the Merger Agreement in accordance with its terms.
Section 7. Confidentiality. The Stockholder recognizes that
successful consummation of the transactions contemplated by this Agreement may
be dependent upon confidentiality with respect to the matters referred to
herein. In this connection, pending public disclosure thereof, the Stockholder
hereby agrees not to disclose or discuss such matters with anyone not a party
to this Agreement (other than to the Company and to its and the Company's
counsel and advisors) without the prior written consent of CVS, except for
filings required pursuant to the Exchange Act and the rules and regulations
thereunder or disclosures its counsel advises are necessary in order to
fulfill its obligations imposed by law, in which event the Stockholder shall
give prior notice of such disclosure to CVS as promptly as practicable so as
to enable CVS to seek a protective order from a court of competent
jurisdiction with respect thereto.
Section 8. Disclosure. (a) The Stockholder hereby agrees to
permit CVS to publish and disclose in the Form S-4 and the CVS Proxy Statement
(including all documents, exhibits and schedules filed with the SEC), and any
press release or other disclosure document which CVS's counsel advises are
necessary or desirable in connection with the Merger and any transactions
related thereto, the Stockholder's identity and ownership of Company Common
Stock or shares of CVS Common Stock, as the case may be, and the nature of its
commitments, arrangements and understandings under this Agreement.
(b) The Stockholder hereby agrees to permit Revco to publish and
disclose in the Revco Proxy Statement (including all documents, exhibits and
schedules filed with the SEC), and any press release or other disclosure
document which Revco, in its sole discretion, determines to be necessary or
desirable in connection with the Merger and any transactions related thereto,
the Stockholder's identity and ownership of Company Common Stock or shares of
CVS Common Stock, as the case may be, and the nature of its commitments,
arrangements and understandings under this Agreement.
Section 9. Miscellaneous. (a) Entire Agreement. This
Agreement, the Merger Agreement and the Registration Rights Agreement referred
to therein constitute the entire agreement between the parties with respect to
the subject matter hereof and thereof and supersedes all other prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof and thereof.
(b) Binding Agreement. The Stockholder agrees that this Agreement
and the obligations hereunder shall attach to the Shares and shall be binding
upon any Person to which legal or Beneficial Ownership of such Shares shall
pass, whether by operation of law or otherwise, including, without limitation,
the Stockholder's heirs, distributees, guardians, administrators, executors,
legal representatives, or successors, partners or other transferees (for value
or otherwise) and any other successors in interest. Notwithstanding any
transfer of Shares, the transferor shall remain liable for the performance of
all obligations under this Agreement of the transferor. Nothing in this
clause (b) shall permit any transfer of Shares otherwise prohibited by the
provisions of this Agreement.
(c) Assignment. No party may assign any of its rights or
obligations hereunder, by operation of law or otherwise, without the prior
written consent of the other party; provided that CVS may assign, in its sole
discretion, its rights and obligations hereunder to any direct or indirect
wholly owned subsidiary of CVS, but no such assignment shall relieve CVS of
its obligations hereunder if such assignee does not perform such obligations.
(d) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto.
(e) 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 received if given) by hand delivery or telecopy (with
a confirmation copy sent for next day delivery via courier service, such as
Federal Express), or by any courier service, such as Federal Express,
providing proof of delivery. All communications hereunder shall be delivered
to the respective parties at the following addresses:
If to Stockholder: Xxxx/Chilmark Fund, L.P.
Two CVS Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxxxx & Xxxxxxxxxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to CVS: CVS Corporation
Xxx XXX Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Telephone: 000-000-0000
Telecopy No.: 000-000-0000
with a copy to: Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
or to such other address as the Person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had near been
contained herein.
(g) Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach by it of any covenants or agreements contained
in this Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereto agrees that in the event of any such breach the
aggrieved party shall be entitled to the remedy of specific performance of such
covenants and agreements and injunctive and other equitable relief in addition
to any other remedy to which it may be entitled, at law or in equity.
(h) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by
such party of its right to exercise any such or other right, power or remedy
or to demand such compliance.
(j) No Third Party Beneficiaries. Except for Section 8(b) hereof,
this Agreement is not intended to be for the benefit of, and shall not be
enforceable by, any Person who or which is not a party hereto.
(k) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware, without giving effect to
the principles of conflicts of law thereof.
(l) Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the Court of Chancery in the State of Delaware in any
action, suit or proceeding arising in connection with this Agreement, and
agrees that any such action, suit or proceeding shall be brought only in such
court (and waives any objection based on forum non conveniens or any other
objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this Section 9(l) and
shall not be deemed to be a general submission to the jurisdiction of said
Court or in the State of Delaware other than for such purposes. Each party
hereto hereby waives any right to a trial by jury in connection with any such
action, suit or proceeding.
(m) Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further lawful action as
may be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this
Agreement.
(n) Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement.
(o) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement.
IN WITNESS WHEREOF, CVS and the Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
CVS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chairman and Chief Executive
Officer
XXXX/CHILMARK FUND, L.P.
By: ZC Limited Partnership, general
partner
By: ZC Partnerships, general partner
By: ZC Inc., a partner
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
