DISTRIBUTION AGREEMENT, DATED AS OF MARCH 15, 2005

Exhibit 2.2

 

 

DISTRIBUTION AGREEMENT

 

by and between

 

FORTUNE BRANDS, INC.

 

and

 

ACCO WORLD CORPORATION

 

March 15, 2005

 

 

 

TABLE OF CONTENTS

 

 

i

 

ii

SCHEDULES

 

 

iii

DISTRIBUTION AGREEMENT

 

DISTRIBUTION AGREEMENT (this “ Agreement ”), dated as of March 15, 2005, by and between FORTUNE BRANDS, INC., a Delaware corporation (“ Fortune ”), and ACCO WORLD CORPORATION, a Delaware corporation (“ ACCO ”).

 

W I T N E S S E T H

 

WHEREAS, Fortune, ACCO, Gemini Acquisition Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of ACCO (“ Acquisition Sub ”), and General Binding Corporation, a Delaware corporation (“ GBC ”), have entered into an Agreement and Plan of Merger, dated as of the date hereof (the “ Merger Agreement ”), providing for, among other things, the merger of Acquisition Sub with and into GBC, with GBC being the surviving corporation (the “ Merger ”);

 

WHEREAS, it is a condition to the Merger that, prior to the Effective Time (as defined in the Merger Agreement), the Distribution (as defined herein) be completed;

 

WHEREAS, subject to the terms and conditions contained herein, immediately prior to the Effective Time, Fortune shall distribute to the holders of shares of Common Stock, par value $3.125 per share, of Fortune (“ Fortune Common Stock ”), other than shares held in the treasury of Fortune, on a pro rata basis as provided for herein, all of the shares of ACCO Common Stock (as defined herein) owned by Fortune (the “ Distribution ”);

 

WHEREAS, Fortune and ACCO have determined that it is appropriate and desirable to set forth the principal corporate transactions required to effect the Distribution and certain other agreements that will govern certain matters relating to the Distribution and the relationship of Fortune, ACCO and the respective members of the Fortune Group and the ACCO Group (each as defined herein) following the Distribution; and

 

WHEREAS, the parties to this Agreement intend that the Distribution qualify under Section 355 of the Code (as defined herein) as a spin-off and that the Merger qualify under Section 368 of the Code as a reorganization.

NOW, THEREFORE, in consideration of the premises and of the respective agreements and covenants contained in this Agreement, the parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01 General . As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“ ACCO ” shall have the meaning set forth in the preamble.

 

“ ACCO Board ” means the Board of Directors of ACCO.

 

“ ACCO Business ” means (a) the businesses engaged in immediately prior to the Time of Distribution by ACCO and its Subsidiaries, (b) Former Businesses of ACCO and its Subsidiaries, including the Former Businesses set forth on Schedule 1.01(a), and (c) activities related to the foregoing.

 

“ ACCO Cash ” means the value of all cash, cash on hand, cash equivalents, funds, certificates of deposit, similar instruments and travelers checks held by ACCO and its Subsidiaries (including non-US Subsidiaries) as of the close of business on the day immediately preceding the date hereof, determined without reference to whether or not amounts represented as held by ACCO and its Subsidiaries as balances in bank accounts have cleared, have been presented for payment and/or are available for withdrawal.

 

“ ACCO Common Stock ” means the Common Stock, par value $1.00 per share, of ACCO, which following the consummation of the actions contemplated by Section 2.05 will have a par value of $.01 per share.

 

“ ACCO Financial Instruments ” means all credit facilities, guaranties, foreign currency forward exchange contracts, comfort letters, letters of credit and similar instruments related to the ACCO Business set forth on Schedule 1.01(b) under which any member of the Fortune Group has any primary, secondary, contingent, joint, several or other Liability after the Time of Distribution.

 

“ ACCO Group ” means ACCO and its Subsidiaries.

 

“ ACCO Indemnitees ” means each member of the ACCO Group and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.

 

“ ACCO Liabilities ” means (a) all Liabilities of any member of the ACCO Group under, or for which any member of the ACCO Group is expressly made responsible pursuant to, any Transaction Agreement to which it is or becomes a party,

 

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including the breach by any member of the ACCO Group of any agreement or covenant contained therein that does not by its express terms expire at the Time of Distribution, and (b) all Liabilities of Fortune or any of its Subsidiaries (including members of the ACCO Group) to the extent based upon, arising out of or relating to the ACCO Business (other than Liabilities for which Fortune has an obligation to indemnify ACCO pursuant to the Environmental Indemnification Agreement, dated as of March 15, 2005, between Fortune and ACCO).

 

“ ACCO Option Dilution Amount ” means the amount of dilution of ACCO Common Stock that would be attributed to Fortune Converted Options, calculated according to the treasury method and using an implied price for ACCO Common Stock equal to the GBC/ACCO Implied Market Price and assuming the conversion of all Fortune Options into Fortune Converted Options in accordance with Section 2.7 of the Merger Agreement, it being understood that, in accordance with the treasury method, no dilution shall be attributable to Fortune Converted Options that, based on the foregoing assumptions, will have an exercise price that is less than the GBC/ACCO Implied Market Price.

 

“ Acquisition Sub ” shall have the meaning set forth in the recitals.

 

“ Action ” means, with respect to any Person, any actual or threatened action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Entity or any claims or other legal matters that have been asserted by or against such Person.

 

“ Affiliate ” means, as to any Person, any other Person which, directly or indirectly, controls, or is controlled by, or is under common control with, such Person; provided , however , that for purposes of the Transaction Agreements, following the Time of Distribution, no member of either Group shall be deemed to be an Affiliate of any member of the other Group. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

 

“ Agreement ” shall have the meaning set forth in the preamble.

 

“ Ancillary Agreements ” means, collectively, the Employee Matters Agreement, the Fortune/ACCO Tax Allocation Agreement and the Transition Services Agreement.

 

“ Applicable Laws ” shall have the meaning set forth in the Merger Agreement.

 

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“ By-Laws ” means ACCO’s amended by-laws substantially in the form attached hereto as Schedule 1.01(c).

 

“ Certificate of Incorporation ” means ACCO’s restated certificate of incorporation substantially in the form attached hereto as Schedule 1.01(d).

 

“ Claims Administration ” means the processing of claims made under Policies, including the reporting of claims to the insurance carrier, management and defense of claims, and providing for appropriate releases upon settlement of claims.

 

“ Claims Made Policies ” shall have the meaning set forth in Section 5.01(b).

 

“ Code ” means the Internal Revenue Code of 1986, as amended, or any successor legislation.

 

“ Contracts ” means all agreements, real estate and other leases, contracts (including employee contracts), licenses, memoranda of understanding, letters of intent, sales orders, purchase orders, open bids and other commitments, including in each case, all amendments, modifications and supplements thereto and waivers and consents thereunder.

 

“ Data and Records ” means financial, accounting, corporate, operating, design, manufacturing, test and other data and records (in each case, in whatever form or medium, including electronic media), including books, records, notes, sales and sales promotional material and data, advertising materials, credit information, cost and pricing information, customer, supplier and agent lists, other records pertaining to customers, business plans, reference catalogs, payroll and personnel records and procedures, research and development files, sales order files, litigation files, minute books, stock ledgers, stock transfer records and other similar data and records.

 

“ Distribution ” shall have the meaning set forth in the recitals.

 

“ Distribution Agent ” means the distribution agent selected by Fortune to distribute ACCO Common Stock in connection with the Distribution.

 

“ Distribution Date ” means the date determined by the Fortune Board in accordance with Section 3.01 as the date as of which the Distribution will be effected.

 

“ Distribution Date Intercompany Loan Balance ” means the aggregate amounts outstanding and owed by the Fortune Group to the ACCO Group under intercompany cash management loan accounts between Fortune and its Subsidiaries, on one hand, and ACCO and its Subsidiaries, on the other hand, immediately prior to cancellation thereof pursuant to Section 2.04(b)(i).

 

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“ Distribution Ratio ” means the quotient of (a) the aggregate number of Distribution Shares divided by (b) the Fortune Shares Outstanding.

 

“ Distribution Shares ” means the ACCO Common Stock owned by Fortune immediately following consummation of the actions contemplated by Section 2.01.

 

“ Effective Time ” shall have the meaning set forth in the Merger Agreement.

 

“ Employee Matters Agreement ” means the Employee Matters Agreement substantially in the form attached to the Merger Agreement as Exhibit G.

 

“ Former Business ” means any corporation, partnership, entity, division, business unit, business, assets, plants, product line, operations or contract (including any assets and liabilities comprising the same) that has been sold, conveyed, assigned, transferred or otherwise disposed of or divested (in whole or in part) or the operations, activities or production of which has been discontinued, abandoned, completed or otherwise terminated (in whole or in part).

 

“ Fortune ” shall have the meaning set forth in the preamble.

 

“ Fortune Board ” means the Board of Directors of Fortune or a duly authorized committee thereof.

 

“ Fortune Business ” means (a) the businesses (other than the ACCO Business) engaged in immediately prior to the Time of Distribution by Fortune and the Fortune Subsidiaries (other than ACCO and its Subsidiaries), (b) Former Businesses of Fortune and the Fortune Subsidiaries (other than ACCO and its Subsidiaries), including Former Businesses set forth on Schedule 1.01(e), and (c) activities related to the foregoing.

 

“ Fortune Common Stock ” shall have the meaning set forth in the recitals.

 

“ Fortune Converted Option ” shall have the meaning set forth in the Merger Agreement.

 

“ Fortune Credited Cash ” means the remainder of (a) the sum of (i) the Signing Date Intercompany Loan Balance plus (ii) the ACCO Cash, minus (b) the sum of (i) $10,000,000 plus (ii) the Incentive Payments Amount.

 

“ Fortune Financial Instruments ” means all credit facilities, guaranties, foreign currency forward exchange contracts, comfort letters, letters of credit and similar instruments related to the Fortune Business under which any member of the ACCO Group has any primary, secondary, contingent, joint, several or other Liability after the Time of Distribution, including those set forth on Schedule 1.01(f).

 

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“ Fortune Group ” means Fortune and the Fortune Subsidiaries.

 

“ Fortune Indemnitees ” means each member of the Fortune Group and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.

 

“ Fortune Liabilities ” means (a) all Liabilities of any member of the Fortune Group under, or for which any member of the Fortune Group is expressly made responsible pursuant to, any Transaction Agreement to which it is or becomes a party, including the breach by any member of the Fortune Group of any agreement or covenant contained therein that does not by its express terms expire at the Time of Distribution, and (b) all Liabilities of Fortune or any of its Subsidiaries (including members of the ACCO Group) to the extent based upon, arising out of or relating to the Fortune Business.

 

“ Fortune Option ” shall have the meaning set forth in the Merger Agreement.

 

“ Fortune Shares Outstanding ” means the aggregate number of shares of Fortune Common Stock outstanding as of the Record Date (excluding treasury shares held by Fortune).

 

“ Fortune Subsidiary ” means each Subsidiary of Fortune other than ACCO and its Subsidiaries.

 

“ Fortune/ACCO Tax Allocation Agreement ” means the Fortune/ACCO Tax Allocation Agreement substantially in the form attached to the Merger Agreement as Exhibit E.

 

“ Fortune Trademarks ” shall have the meaning set forth in Section 5.02(c).

 

“ GBC ” shall have the meaning set forth in the recitals.

 

“ GBC/ACCO Implied Market Price ” means the volume weighted average of the trading price per share of the GBC Common Stock as reported on Nasdaq on the fifth full Nasdaq trading day preceding the Distribution Date.

 

“ GBC Common Stock ” means the Common Stock, par value $0.125 per share, of GBC.

 

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“ GBC Fully Diluted Shares ” means the number of fully diluted shares of GBC Common Stock outstanding at the Effective Time (including in respect of GBC Class B Common Stock, options to purchase GBC Common Stock and GBC Restricted Stock Units (each as defined in the Merger Agreement)), calculated according to the treasury method and using an implied price for GBC Common Stock equal to the GBC/ACCO Implied Market Price, it being understood that, in accordance with the treasury method, no dilution shall be attributable to options to purchase GBC Common Stock that have an exercise price that is less than the GBC/ACCO Implied Market Price.

 

“ Governmental Entity ” shall have the meaning set forth in the Merger Agreement.

 

“ Group ” means the Fortune Group or the ACCO Group, as applicable.

 

“ Incentive Payments Amount ” means the aggregate amount paid after the date hereof and prior to the Time of Distribution to employees of the ACCO Group under and in accordance with the Day-Timers Special Incentive Plan and the ACCO Senior Management Incentive Plan and any Taxes incurred in respect of such payments.

 

“ Indemnifiable Losses ” means any and all losses, Liabilities, claims, damages, deficiencies, obligations, fines, payments, Taxes, Liens, costs and expenses, matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown, whenever arising and whether or not resulting from Third Party Claims (including the costs and expenses of any and all Actions; all amounts paid in connection with any demands, assessments, judgments, settlements and compromises relating thereto; interest and penalties with respect thereto; out-of-pocket expenses and reasonable attorneys’, accountants’ and other experts’ fees and expenses reasonably incurred in investigating, preparing for or defending against any such Actions or in asserting, preserving or enforcing an Indemnitee’s rights hereunder; and any losses that may result from the granting of injunctive relief as a result of any such Actions).

 

“ Indemnifying Party ” shall have the meaning set forth in Section 4.04(a).

 

“ Indemnitee ” means any of the Fortune Indemnitees or the ACCO Indemnitees who or which is entitled to seek indemnification under this Agreement.

 

“ Indemnity Reduction Amounts ” shall have the meaning set forth in Section 4.04(a).

 

“ Information ” means all records, books, contracts, instruments, computer data and other data and information (in each case, in whatever form or medium, including electronic media).

 

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“ Information Statement ” means the information statement with respect to ACCO and the Distribution sent to holders of Fortune Common Stock in connection with the Distribution.

 

“ Injunction ” shall have the meaning set forth in the Merger Agreement.

 

“ Insurance Proceeds ” means monies (a) received by an insured from an insurance carrier, (b) paid by an insurance carrier on behalf of an insured or (c) received from any third party in the nature of insurance, contribution or indemnification in respect of any Liability.

 

“ Liabilities ” means any and all claims, debts, liabilities, commitments and obligations of whatever nature, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due, whenever or however arising (including those arising out of any Contract or tort, whether based on negligence, strict liability or otherwise) and whether or not the same would be required by generally accepted accounting principles to be reflected as a liability in financial statements or disclosed in the notes thereto, including all costs and expenses relating thereto.

 

“ Lien ” means any pledge, claim, lien, charge, encumbrance or security interest of any kind or nature whatsoever.

 

“ Merger ” shall have the meaning set forth in the recitals.

 

“ Merger Agreement ” shall have the meaning set forth in the recitals.

 

“ Nasdaq ” means The Nasdaq Stock Market, Inc.

 

“ Occurrence Basis Policies ” shall have the meaning set forth in Section 5.01(b).

 

“ Person ” shall have the meaning set forth in the Merger Agreement.

 

“ Policies ” means all insurance policies, insurance contracts and claim administration contracts of any kind of the Fortune Group and their predecessors which were or are in effect at any time at or prior to the Time of Distribution (other than insurance policies, insurance contracts and claim administration contracts established in contemplation of the Distribution and the Merger to cover only ACCO and its Subsidiaries after the Time of Distribution), including primary, excess and umbrella, commercial general liability, fiduciary liability, product liability, automobile, aircraft, property and casualty, business interruption, directors and officers liability, employment practices liability, workers’ compensation, crime, errors and omissions, special accident, cargo and employee dishonesty insurance policies and captive insurance company arrangements, together with all rights, benefits and privileges thereunder.

 

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“ Post-Closing ACCO Shares Outstanding ” means the quotient of (i) the GBC Fully Diluted Shares divided by (ii) 0.34.

 

“ Pre-Distribution ACCO Shares Outstanding ” means the remainder of (a) the product of (i) 0.66, multiplied by (ii) the Post-Closing ACCO Shares Outstanding, minus (b) the ACCO Option Dilution Amount.

 

“ Privileged Information ” means, with respect to either Group, Information regarding a member of such Group, or any of its operations, employees, assets or Liabilities (whether in documents or stored in any other form or known to its employees or agents) that is or may be protected from disclosure pursuant to the attorney-client privilege, the work product doctrine or other applicable privileges, that a member of the other Group has or may come into possession of or has obtained or may obtain access to pursuant to this Agreement or otherwise.

 

“ Record Date ” means 11:57 p.m. Eastern Time on the Distribution Date.

 

“ Related Party Agreements ” means any Contract between the ACCO Group, on the one hand, and the Fortune Group, on the other hand, other than the Merger Agreement and the Transaction Agreements, any Contract contemplated thereby and any Contracts set forth on Schedule 1.01(g) hereto.

 

“ Representative ” means, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.

 

“ Sell-off Period ” shall have the meaning set forth in Section 5.02(c).

 

“ Shared Policies ” means all Policies which include any member of the ACCO Group and/or the ACCO Business within the definition of the named insured.

 

“ Signing Date Intercompany Loan Balance ” means the aggregate amounts outstanding and owed by the Fortune Group to the ACCO Group as of the close of business on the day immediately preceding the date hereof under intercompany cash management loan accounts between Fortune and its Subsidiaries, on one hand, and ACCO and its Subsidiaries, on the other hand.

 

“ Special Dividend ” means a dividend to be paid by ACCO in an aggregate amount equal to $625,000,000, payable in one or more promissory notes of ACCO.

 

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“ Special Dividend Record Date ” shall have the meaning set forth in Section 2.02.

 

“ Subsidiary ” shall have the meaning set forth in the Merger Agreement; provided , however , that (except as specifically noted herein) for purposes of this Agreement, none of ACCO or any of its Subsidiaries shall be deemed to be a Subsidiary of Fortune.

 

“ Tax ” and “ Taxes ” shall have the meaning set forth in the Fortune/ACCO Tax Allocation Agreement.

 

“ Third Party Claim ” shall have the meaning set forth in Section 4.05(a).

 

“ Time of Distribution ” means 11:58 p.m. Eastern Time on the Distribution Date.

 

“ Transaction Agreements ” means, collectively, this Agreement and each Ancillary Agreement.

 

“ Transition Agreement ” means the Transition Services Agreement to be entered into between Fortune and ACCO with respect to the services set forth on Exhibit F to the Merger Agreement.

 

ARTICLE II

 

ACTIONS PRIOR TO THE DISTRIBUTION

 

Section 2.01 ACCO Recapitalization . Prior to the Time of Distribution, Fortune and ACCO will take all actions necessary to increase the outstanding shares of ACCO Common Stock so that, immediately prior to the Time of Distribution, ACCO will have an aggregate number of shares of ACCO Common Stock outstanding equal to the Pre-Distribution ACCO Shares Outstanding.

 

Section 2.02 Special Dividend . The ACCO Board will establish a special dividend record date (the “ Special Dividend Record Date ”) that precedes the consummation of the actions contemplated by Section 2.01 and will authorize ACCO to pay the Special Dividend immediately prior to the Time of Distribution to holders of record of ACCO Common Stock as of the Special Dividend Record Date. Fortune and ACCO each represents that ACCO will lawfully declare and pay the Special Dividend in accordance with the Delaware General Corporation Law. Declaration and payment of the Special Dividend is intended to be independent of the transactions contemplated by Section 2.04 and shall have no effect on and shall not be affected by such transactions.

 

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Section 2.03 Financial Instruments .

 

(a) ACCO will, at its expense, take or cause to be taken all actions, and enter into (or cause its Subsidiaries to enter into) such agreements and arrangements, as shall be necessary to effect the release of and substitution for each member of the Fortune Group, as of the Time of Distribution, from all primary, secondary, contingent, joint, several and other Liabilities in respect of ACCO Financial Instruments to the extent related to the ACCO Group or the ACCO Business (it being understood that all such Liabilities in respect of ACCO Financial Instruments are ACCO Liabilities).

 

(b) Fortune will, at its expense, take or cause to be taken all actions, and enter into (or cause its Subsidiaries to enter into) such agreements and arrangements, as shall be necessary to effect the release of and substitution for each member of the ACCO Group, as of the Time of Distribution, from all primary, secondary, contingent, joint, several and other Liabilities, if any, in respect of Fortune Financial Instruments to the extent related to the Fortune Group or the Fortune Business (it being understood that all such Liabilities in respect of Fortune Financial Instruments are Fortune Liabilities).

 

(c) The parties’ obligations under this Section 2.03 will continue to be applicable to all ACCO Financial Instruments and Fortune Financial Instruments identified at any time by Fortune or ACCO, whether before, at or after the Time of Distribution.

 

Section 2.04 Related Party Agreements; Intercompany Accounts .

 

(a) Prior to the Time of Distribution, Fortune and ACCO shall terminate any Related Party Agreements.

 

(b) (i) Effective immediately prior to the Time of Distribution, all intercompany cash management loan balances between Fortune and its Subsidiaries, on one hand, and ACCO and its Subsidiaries, on the other hand, shall be canceled, subject to any payments that may be required pursuant to this Section 2.04(b).

 

(ii) If the Distribution Date Intercompany Loan Balance exceeds the Fortune Credited Cash, then Fortune will pay to ACCO the amount by which the Distribution Date Intercompany Loan Balance exceeds the Fortune Credited Cash. If the Fortune Credited Cash exceeds the Distribution Date Intercompany Loan Balance, then ACCO will pay to Fortune the amount by which the Fortune Credited Cash exceeds the Distribution Date Intercompany Loan Balance.

 

(iii) Any payment required under Section 2.04(b)(ii) above will bear interest from the Distribution Date to the date of payment (calculated based on actual days elapsed in a 365-day year) at a rate per annum equal to the six month LIBOR rate published in the Wall Street Journal, Eastern Edition, on the Distribution Date. Any such

 

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payment will be made (together with such interest) within ten Business Days after the Distribution Date by wire transfer of immediately available funds to a bank account designated in writing by Fortune or ACCO, as the case may be.

 

(iv) ACCO and Fortune acknowledge that the provisions of this Section 2.04(b) are intended to implement the agreement of the parties that (A) cash generated by the ACCO Group prior to the date hereof is for the benefit of ACCO’s stockholders as of the date hereof and (B) cash generated by the ACCO Group from the date hereof through the Time of Distribution is for the benefit of ACCO and ACCO’s stockholders following the Distribution. Liability for taxes in respect of cash and earnings of ACCO during each such period is addressed in the Fortune/ACCO Tax Allocation Agreement. ACCO and Fortune further acknowledge that prior to the Time of Distribution they may cause ACCO Cash (including ACCO Cash held by non-US Subsidiaries of ACCO) to be transferred to Fortune provided that applicable intercompany cash management loan accounts between Fortune and its Subsidiaries, on one hand, and ACCO and its Subsidiaries, on the other hand, are adjusted accordingly.

 

Section 2.05 ACCO Certificate of Incorporation and By-Laws . Prior to the Time of Distribution and prior to the consummation of the transactions contemplated by Section 2.01, (a) the ACCO Board will (i) approve the Certificate of Incorporation and will cause the same to be filed with the Secretary of State of the State of Delaware and (ii) adopt the By-Laws and (b) Fortune and ACCO will take such action as is necessary to cause to be approved the Certificate of Incorporation in accordance with the Delaware General Corporation Law.

 

Section 2.06 Resignations; Transfer of Stock Held as Nominee .

 

(a) Fortune will cause all of its employees and directors and all of the employees and directors of each other member of the Fortune Group to resign, effective not later than the Time of Distribution, from all boards of directors or similar governing bodies of ACCO or any other member of the ACCO Group on which they serve, and from all positions as officers of ACCO or any other member of the ACCO Group in which they serve, except as otherwise specified on Schedule 2.06(a). ACCO will cause all of its employees and directors and all of the employees and directors of each other member of the ACCO Group to resign, effective not later than the Time of Distribution, from all boards of directors or similar governing bodies of Fortune or any other member of the Fortune Group on which they serve, and from all positions as officers of Fortune or any other member of the Fortune Group in which they serve, except as otherwise specified on Schedule 2.06(a).

 

(b) Fortune will cause each of its employees, and each of the employees of the other members of the Fortune Group, who holds stock or similar evidence of ownership of any ACCO Group entity as nominee for such entity pursuant to

 

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the laws of the country in which such entity is located to transfer such stock or similar evidence of ownership to the Person so designated by ACCO to be such nominee as of and after the Time of Distribution. ACCO will cause each of its employees, and each of the employees of the other members of the ACCO Group, who holds stock or similar evidence of ownership of any Fortune Group entity as nominee for such entity pursuant to the laws of the country in which such entity is located to transfer such stock or similar evidence of ownership to the Person so designated by Fortune to be such nominee as of and after the Time of Distribution.

 

(c) Fortune will cause each of its employees and each of the employees of the other members of the Fortune Group to revoke or withdraw their express written authority, if any, to act on behalf of any ACCO Group entity as an agent or representative therefor after the Time of Distribution. ACCO will cause each of its employees and each of the employees of the other members of the ACCO Group to revoke or withdraw their express written authority, if any, to act on behalf of any Fortune Group entity as an agent or representative therefor after the Time of Distribution.

 

Section 2.07 Third Party Indebtedness . Fortune will reimburse or otherwise satisfy all indebtedness for borrowed money, if any, owed by the ACCO Group to third parties (other than the Fortune Group) and outstanding as of the close of business on the day immediately preceding the date hereof.

 

ARTICLE III

 

THE DISTRIBUTION

 

Section 3.01 The Distribution .

 

(a) Subject to Section 3.03, the Fortune Board will establish the Record Date and the Distribution Date and any appropriate procedures in connection with the Distribution, including authorizing Fortune to pay the Distribution immediately prior to the Effective Time by delivery to the Distribution Agent, for the benefit of holders of record of Fortune Common Stock (excluding treasury shares held by Fortune) as of the Record Date, of all of the Distribution Shares, and Fortune will instruct the Distribution Agent to make book-entry credits on the Distribution Date or as soon thereafter as practicable in the name of each holder of record of Fortune Common Stock (excluding treasury shares held by Fortune) as of the Record Date for a number of shares of ACCO Common Stock equal to the product of (i) the aggregate number of shares of Fortune Common Stock so held by such holder of record as of the Record Date (excluding treasury shares held by Fortune), multiplied by (ii) the Distribution Ratio. Immediately after the Time of Distribution and prior to the Effective Time, the shares of ACCO Common Stock shall not be transferable and the transfer agent for the ACCO Common Stock shall not transfer any shares of ACCO Common Stock. The Distribution will be deemed to be effective as