SHAREHOLDERS AGREEMENT
----------------------
AGREEMENT dated as of the 10th day of December, 1997 by and among
XXXXXX TECHNOLOGIES, INC., a North Carolina corporation with its principal
office at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Corporation"),
XXXXXX XXXXXX, residing at 000 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000
("Xxxxxx"), and XXXXXXX X. XXXXXX, residing at 00 Xxxxxxxx Xxxxxx, Xxx Xxxxx,
Xxx Xxxx 00000 ("Xxxx") (Xxxx and Xxxxxx are collectively referred to as the
"Shareholders").
RECITALS
--------
A. The Corporation's authorized capital stock consists of One Hundred
Thousand (100,000) shares of Common Stock, par value $1.00 per share (the
"Common Stock"); and
B. There are issued Five Hundred (500) shares of Common Stock, of
which Two Hundred Fifty (250) shares are owned by Xxxxxx (the "JF Shares,"
which term includes any other securities of the Corporation issued or
distributed in connection with the initial shares owned by Xxxxxx and any
other securities of the corporation hereinafter acquired by Xxxxxx) and Two
Hundred Fifty (250) shares are owned by Xxxx (the "GF Shares," which includes
any other securities of the Corporation issued or distributed in connection
with the initial shares owned by Xxxx and any other securities of the
Corporation hereinafter acquired by Xxxx). The term "Shares" shall mean the JF
Shares and/or the GF Shares, as the case may be.
C. The Shareholders desire to promote the interests of the
Corporation and their mutual interests by setting forth certain rights,
restrictions, and obligations in connection with the management of the
Corporation and the manner in which the Shares shall be held and disposed of,
all as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows:
1. Irrevocable Voting Agreement and Proxy re: Shareholder
Action.
(a) Xxxxxx, until the death of Xxxx, irrevocably agrees to
vote, in person or by proxy, and hereby grants to Xxxx an irrevocably proxy to
so vote, all of the JF Shares now or hereafter owned by him, at any meeting of
shareholders of the Corporation called for any purpose or by consensual action
of shareholders with respect to any purpose including election of directors,
in such manner as Xxxx shall designate. This irrevocable voting agreement and
proxy shall be binding upon any transferee (whether by purchase, gift,
assignment or operation of law, including the estate of Xxxxxx) of any of the
JF Shares now or hereafter owned by Xxxxxx and shall be in full force and
effect until the earlier of (i) the tenth anniversary of the date hereof (or
such other earlier date as may be required by law), (ii) the death of Xxxx, or
(iii) the date following an initial public offering of the Company's
securities ("IPO") upon which any contractual restriction on the transfer of
the JF Shares shall terminate.
(b) Xxxx, effective upon the death of Xxxx, hereby
irrevocably grants Xxxxxx an irrevocable proxy on all GF Shares then owned by
him, at any meeting of shareholders of the Corporation called for any purpose
or by consensual action of shareholders with respect to any purpose including
election of directors, in such manner as Xxxx shall designate. This
irrevocable voting agreement and proxy shall be binding upon any transferee
(whether by purchase, gift, assignment or operation of law, including the
estate of Xxxx) of any of the GF Shares then owned by Xxxx and shall be in
full force and effect until the earlier of (i) the tenth anniversary of the
date hereof (or such other earlier date as may be required by law), or (ii)
the date following the IPO upon which any contractual restriction upon the
transfer of the GF Shares shall terminate.
(c) Each Shareholder shall use his best efforts to cause the
Corporation to employ Xxxx as its President and Chief Executive Officer.
2. Restrictions on Transfer of Shares. The Shareholders agree that:
(a) No Shareholder shall pledge, assign, sell, gift, transfer,
hypothecate, or otherwise dispose of or encumber his Shares, or cause or
permit a change in the legal or beneficial ownership of Shares (any such
pledge, assignment, sale, gift, or transfer, whether by operation of law or
otherwise), hypothecation, disposition, encumbrance, or change is referred to
as a "Transfer"), except as expressly permitted in this Agreement. Any
Transfer requiring consent which is attempted without such consent shall be
null and void and without any force or effect.
(b) Every transferee of Shares shall be bound by the terms and conditions
of this Agreement and all amendments hereto without the requirement for the
execution of any further document or agreement. Nevertheless, each authorized
transferee of Shares shall execute and deliver to the Corporation, at the
transferee's own cost and expense, all documents, instruments, certificates,
or agreements required to bind the transferee to the terms of this Agreement.
If the transferee refuses or fails to deliver any such document, instrument,
certificate, or agreement within thirty (30) days after demand thereof by the
Corporation, the Transfer of Shares to such transferee shall be null and void;
(c) If any Shares are subject to attachment, lien, or charge by a
creditor or is assigned to or held for the benefit of any creditor, the
interest obtained by such creditor or assignee shall be only that of a
lienholder, and in no event shall any such creditor or assignee have any
rights as a shareholder.
(d) All Shares, whether or not hereafter acquired or transferred pursuant
to the provisions of this Agreement, shall remain in all respects subject to
this Agreement and every transferee thereof shall by his acceptance of such
Shares be deemed to have consented thereto.
(e) The Corporation shall not be required to recognize a Transfer of any
Shares on the books of the Corporation unless the Transfer shall comply, and
be made in accordance, with the terms of this Agreement.
2
3. Legends.
Each certificate evidencing the Shares and each certificate issued in
exchange for or upon Transfer of any of the Shares shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
CERTAIN SHAREHOLDERS AGREEMENT DATED AS OF DECEMBER 29, 1997
BY AND AMONG THE CORPORATION AND CERTAIN SHAREHOLDERS, AND
AS SUCH ARE SUBJECT TO CERTAIN VOTING PROVISIONS AND
RESTRICTIONS ON TRANSFER SET FORTH IN THE SHAREHOLDERS
AGREEMENT."
4. Sales of Shares.
The following provisions shall apply to all offers and sales of Shares:
(a) Upon receipt by any holder of either JF Shares or GF Shares (the
"Selling Shareholder") of a bona fide, arm's length offer in writing (a "Bona
Fide Offer") to purchase any, or any, and all, Shares held by such a holder,
which such holder intends to accept, the following provisions shall govern:
(i) All sales of Shares must be entirely for cash (whether
or not payable in installments).
(ii) Offer to Other Shareholder. The Selling Shareholder in
the case of JF Shares shall promptly offer in writing to sell such Shares to
the Xxxx, or in the case of GF Shares such offer shall be made to Xxxxxx, (the
offer is herein called the "First Reoffer" and the person to whom a First
Reoffer is made is called the Offeree), upon terms and conditions no less
favorable than contained in the Bona Fide Offer and shall attach a copy of the
Bona Fide Offer to the First Reoffer. Such First Reoffer may be accepted at
any time by the Offeree within twenty (20) days next following the receipt of
the First Reoffer (the "First Reoffer Period"). Such acceptance must be made
unconditionally and in full by the accepting Offeree by notice to the Selling
Shareholder prior to the expiration of the First Reoffer Period.
(iii) Offer to Corporation. If the First Reoffer is not
accepted within the First Reoffer Period, the Selling Shareholder shall
promptly offer in writing (the "Second Reoffer") to sell such Shares to the
Corporation upon terms and conditions no less favorable than contained in the
Bona Fide Offer and shall attach a copy of the Bona Fide Offer to the Second
Reoffer. The Second Reoffer may be accepted by the Corporation at any time
within twenty (20) days next following its receipt (the "Second Reoffer
Period."). Such acceptance must be made unconditionally and in full by the
Corporation prior to the expiration of the Second Reoffer Period.
3
(iv) Sales to Persons Other than Offeree or Corporation.
Upon the expiration of the First Reoffer Period and Second Reoffer Period
without either the First Reoffer or the Second Reoffer having been accepted in
accordance herewith, the Selling Shareholder shall be free to accept the Bona
Fide Offer; provided, however, that:
(a) the third person or persons so acquiring such
Shares shall, prior to such acquisition, agree in writing with the Corporation
and the other Shareholder to hold such Shares subject to and in accordance
with all of the terms, provisions, and considerations contained in this
Agreement to the same extent as if such person(s) originally executed this
Agreement;
(b) the conclusion of the transaction contemplated
by the Bona Fide Offer shall have been effected within sixty (60) days after
the expiration of the Second Reoffer Period, and if not so effected within
such sixty (60) day period, the Bona Fide Offer shall be deemed to have
terminated at the end of such period and may not thereafter be accepted; and
(c) if the amount of a Bona Fide Offer should be
reduced, or if any of its terms or provisions should otherwise be changed,
then such Bona Fide Offer shall be treated as being a new Bona Fide Offer and
may not be accepted by the Selling Shareholder unless there has been
compliance with the provisions of this Section 6 with respect to such new Bona
Fide Offer.
5. Purchase Upon Death.
(a) In the event that Xxxxxx and/or Xxxx dies, the Corporation, upon the
written request of the estate of such Shareholder, may purchase all of the
Shares (or such portion of such Shares as the estate of the Shareholder
requests) owned by such deceased Shareholder which shall also include (any
Shares owned by any spouse or child of such Shareholder, or pursuant to any
test or similar estate planning entity established by Xxxxxx or Xxxx, as the
case may be, for the benefit of their family) at the time of his death, and
the estate of the deceased Shareholder shall sell to the Corporation all (or
such portion) of such Shares owned by him which it agrees to sell.
(b) The purchase price per share of the Shares to be sold pursuant to
this Section 5 shall be determined by dividing the total number of Shares of
the Corporation issued and outstanding at the end of the month preceding the
date of death into the "Value" of the Corporation at the time. The term
"Value" shall mean an amount of Twenty Two Million Five Hundred Thousand
($22,500,000) dollars, or such greater amount as determined by the
Corporation's Board of Directors.
4
(c) If the Corporation elects to purchase all or a portion of the Shares
pursuant to Section 5(a) hereof, within thirty (30) days after the
qualification of a legal representative for the estate of the Shareholder the
Corporation shall give the estate of the deceased Shareholder a notice
specifying the date (which shall be a business day not more than thirty (30)
days thereafter) and the time at which a closing of the sale of the deceased
Shareholder's Shares shall be held. At the closing, the legal representative
of the estate of the deceased Shareholder shall deliver to the Corporation
certificates for the deceased Shareholder's Shares being sold, together with
stock powers therefor duly endorsed in blank and such other documents as may
reasonably be requested by the Corporation to effect transfer thereof, and the
Corporation shall deliver to the legal representative of the estate of the
deceased Shareholder a certified or bank cashier's check drawn on a New York
bank in the amount of the purchase price of the Shares sold by such estate to
the Corporation. At the closing, the Shares transferred to the Corporation
shall be free and clear of all pledges, liens, and encumbrances whatsoever and
the estate shall so represent in writing to the Corporation.
6. Miscellaneous.
(a) Notices. Notices or other communications required or permitted to be
given hereunder shall be in writing, and shall be deemed duly given upon
personal delivery or mailing by registered or certified mail, return receipt
requested, to the Corporation at its principal place of business, to the
attention of the President, and to the Shareholders at their last known
residence as reflected on the books of the Corporation or at such other
address as any party may designate to the others by notice hereunder. Such
notices shall be effective upon receipt in the case of personal or courier
service or telecopier delivery and on the third (3rd) day after posting in the
U.S. mail.
(b) Governing Law. This Agreement shall be governed in all respects in
accordance with the laws of the State of North Carolina without reference to
principles of conflicts of law, except that questions of corporate law shall
be governed by the laws of the State of North Carolina.
(c) Entire Agreement. This Agreement supersedes all prior agreements and
understandings, oral and written, among the parties with respect to the
subject matter hereof, and this Agreement constitutes the entire agreement of
the parties, provided, however, a Stockholders Agreement dated December 29,
1997 among the Company, the Shareholders and MUSI Investments S.A., shall be
effective and shall be operative.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(e) Severability. If any term, covenant, condition, or provision of this
Agreement or the application thereof to any circumstance shall be invalid or
unenforceable to any extent, the remaining terms, covenants, conditions, and
provisions of this Agreement shall not be affected and each remaining term,
covenant, condition, and provision of this Agreement shall be valid and shall
be enforceable to the fullest extent permitted by law. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as is enforceable.
5
(f) Amendments. This Agreement may not be amended, modified, or changed
except by an instrument or instruments in writing signed by all parties to
this Agreement.
(g) Lack of Independent Counsel. The parties all acknowledge that the
Corporation's counsel, Ruskin, Moscou, Xxxxx & Faltischek, P.C., prepared this
Agreement on behalf of and in the course of its representation of the
Corporation, and that:
(i) The parties have been advised by Ruskin, Moscou, Xxxxx &
Faltischek, P.C. that a conflict exists among their individual interests; and
(ii) The parties have been advised by Ruskin, Moscou, Xxxxx
& Faltischek, P.C. to seek the advice of independent counsel; and
(iii) The parties have had the opportunity to seek the
advice of independent counsel.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
XXXXXX TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
XXXXXXX XXXXXX, Chairman and CEO
/s/ Xxxxxx Xxxxxx
----------------------------------
XXXXXX XXXXXX
/s/ Xxxxxxx X. Xxxxxx
----------------------------------
XXXXXXX X. XXXXXX
