EXHIBIT 10.4
STOCKHOLDERS AGREEMENT
Dated , 1996
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The parties to this agreement are xXXxX*s Inc., a Delaware corporation (the
"Company"), Xxxxxxx X. Xxxx ("SIK") and the other parties listed on exhibit A
(such other parties, the "Family Holders"). The Family Holders and SIK are
referred to collectively as the "Existing Stockholders." Each Family Holder
owns the number of shares of common stock of the Company set forth beside the
Family Holder's name on exhibit A.
The parties agree as follows:
1. Restrictions on Transfer Generally.
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1.1 Transfers to be Made Only as Permitted or Required by This Agreement.
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No Family Holder may, directly or indirectly, sell, assign, transfer, pledge or
otherwise encumber or dispose of (each, a "transfer") any shares of the
Company's common stock, except as specifically permitted by this agreement. The
Company shall not record on its books and records any purported transfer of
shares not permitted by this agreement, and any such purported transfer shall
have no force or effect. Prior to the expiration
of the 180-day period commencing on the date of the final prospectus of the
Company's underwritten initial public offering (the "Lock-Up Period"), no Family
Holder may transfer any shares except as permitted under Section 1.2 or with the
prior written consent of the Company.
1.2 Permitted Transfers. Each Family Holder, other than a Family Holder
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who owns shares of common stock as an executor, guardian, committee, trustee or
other fiduciary, may transfer any shares of common stock that Family Holder owns
to that Family Holder's spouse, heirs or descendants or any executor, guardian,
committee, trustee or other fiduciary acting as such on behalf or for the
benefit of that Family Holder or any such spouse, heir or descendant with
respect to such transfer. Any Family Holder who owns shares of common stock as
an executor, guardian, committee, trustee or other fiduciary may transfer shares
to: (a) the person or persons on whose behalf or for whose benefit these shares
are held; (b) any other executor, guardian, committee, trustee or other
fiduciary acting as such on behalf or for the benefit of the person or persons
on whose behalf or for whose benefit that shares are held; or (c) any spouse or
descendant of the person or persons on whose behalf or for whose benefit that
shares are held. No transfer otherwise permitted by
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this section 1.2 or by section 1.3 may be effected, unless, at or prior to the
transfer, the transferee executes and delivers to the Company and to SIK, for
the Company's benefit and for the benefit of each other Existing Stockholder, a
written agreement by the transferee (in form and substance reasonably
satisfactory to the Company and SIK) to be bound by this agreement, including
without limitation section 4, as if the transferee were the transferring Family
Holder. In addition, any Family Holder may transfer any shares of common stock
to any other Existing Stockholder or any other person permitted under this
section 1.2 (any such other person being referred to as a "Permitted
Transferees").
1.3 Piggyback Sales. After the 180-day period commencing on the date of
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the final prospectus of the Company's underwritten initial public offering (the
"Lock-Up Period"), Each Family Holder may sell the number of shares of common
stock that Family Holder includes in a registration pursuant to section 2.
1.4 Rule 144 Transfers. After the second anniversary of this agreement,
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each Family Holder may transfer shares of common stock, in the same amounts and
in the same manner as that Family Holder would be permitted to transfer shares,
if the Family Holder was an affiliate (as defined in Rule 144 of the
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Securities Act of 1933 (the "Securities Act") of the Company. Prior to the
second anniversary of this agreement, each of Xxxxxx X. Xxxx and Xxxxxxxxx
Xxxxxxxx (each, a "Director") may, at any time, transfer shares of common stock,
in the same amounts and in the same manner as would be permitted to transfer
shares, if such Director was an affiliate (as defined in Rule 144 of the
Securities Act of 1933 (the "Securities Act") of the Company.
1.5 Approved Transfers. After the Lock-Up Period, any Family Holder may
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transfer any shares of common stock to any other person, firm or entity with the
prior written consent of SIK (which SIK may withhold for any reason or for no
reason in his sole discretion).
2. Registration Rights
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2.1 Piggyback Registration. If at any time SIK proposes to include shares
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of common stock he owns in a registration statement being filed under the
Securities Act on any form (other than on Form S-8 or any successor form), the
Company or SIK shall give written notice to each Family Holder at least 10 days
before the initial filing of that registration statement, which notice (a
"Notice of Registration") shall set forth the intended method of disposition of
the securities
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proposed to be registered by SIK. Each Notice of Registration shall offer to
include in the registration statement up to a number of shares of common stock
owned by each Family Holder equal to the product of (a) the number of shares
owned by the Family Holder and/or the Family Holder's Permitted Transferees as
of the date of the agreement and (b) a fraction, the numerator of which is the
number of shares SIK proposes to include in the registration statement and the
denominator of which is the total number of shares SIK owns as of the date of
the agreement. If any Family Holder or Permitted Transferee wishes to have up
to that number of shares of common stock so included, that Family Holder or
Permitted Transferee shall so notify SIK and the Company, within 10 days after
the date of delivery of the Notice of Registration, of the number of shares for
which registration is requested. The Company shall thereupon include in the
registration the number of shares of common stock for which registration is so
requested, subject to the next sentence. If the managing underwriter of a
proposed public offering that is the subject of any such registration statement
advises the Company or SIK in writing that, in its opinion, the distribution of
the shares requested to be included in the registration by all Family Holders,
their Permitted Transferees and all other selling
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stockholders (including SIK) would adversely affect a distribution by the
Company covered by such registration statement, the number of shares Transferees
requested to be registered by Family Holders and Permitted Transferees shall be
reduced in the same proportion as the number of shares of all other selling
stockholders (including SIK) is reduced.
2.2 Expenses. All expenses incurred in complying with this section 2,
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including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, expenses of any
special audits incident to or required by any such registration and expenses of
complying with the securities or blue sky laws of any jurisdictions, shall be
paid by the Company, except that the Company shall not (without its consent) be
liable for (a) any fees, discounts or commissions to any underwriter or broker
and (b) the fees or expenses of more than counsel to SIK, the Family Holders and
Permitted Transferees (which counsel may, in SIK's discretion, be selected by
SIK and may also be the Company's counsel).
2.3 Each Family Holder undertakes to execute and deliver all agreements,
certificates and other documents in connection with the registration of the
Family Holder's shares of
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common stock pursuant to this section 2 requested by SIK or the Company in his
or its discretion.
3. "Market Stand-off" Agreement. SIK may request that any Family Holder
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refrain from transferring any shares of common stock for a period of up to 90
days following the filing of a registration statement of the Company under the
Securities Act (a "90-Day Moratorium Request"); however, SIK may not make more
than one such request of each Family Holder in any 365-day period; and, in
addition, SIK may, on one occasion, request that each Family Holder refrain from
transferring any shares of common stock for a period of up to 180 days following
the filing of a registration statement under the Securities Act, which right may
not be exercised during any 365-day period in which SIK has made a 90-Day
Moratorium Request. If SIK makes such a request, each Family Holder shall
refrain from transferring any shares of common stock during the period specified
in the request.
4. Voting. Each Family Holder shall be present in person or by proxy at
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all meetings of the stockholders of the Company to enable all shares owned by
the Family Holder (and the Family Holder's Permitted Transferees) to be counted
for quorum purposes. Concurrently with the execution of this agreement,
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each Family Holder is executing the form of irrevocable proxy annexed as exhibit
B and delivering it to SIK.
5. Term. Sections 1, 2, 3 and 4 of this agreement shall terminate and be
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of no force or effect after the tenth anniversary of this agreement.
6. Representation and Warranty. Each Family Holder represents and
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warrants to the Company and SIK that, except for this agreement and lock-up
agreements entered into with the underwriters of the Company's initial public
offering, that Family Holder is not a party to any voting agreement, voting
trust, proxy or any other agreement, instrument or understanding with respect to
the voting of any capital stock of the Company, or any agreement with respect to
the transfer, purchase or redemption of any capital stock of the Company.
7. Miscellaneous
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7.1 Legend. As long as any of Sections 1, 2, 3 or 4 hereof remains in
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effect, each certificate representing shares of Common Stock owned by any Family
Holder shall bear a legend substantially as follows:
"The rights or shares represented by this certificate are subject to a
stockholders agreement dated ___________, 1996, which,
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among other things, restricts the transfer thereof; a copy of that
agreement is on file at the principal office of the Company."
7.2 Governing Law. This agreement shall be governed by and construed
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in accordance with the law of the State of New York applicable to agreements
made and to be performed wholly in New York (except to the extent this agreement
is ineffective under the corporation law of the state of incorporation of the
Company; to that extent, the law of the state of incorporation of the Company
shall apply).
7.3 Consent to Jurisdiction. Each party irrevocably submits to the
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exclusive jurisdiction of the state courts of the State of New York and the
federal district courts for the Southern District of the State of New York for
the purposes of any suit, action or other proceeding arising out of this
agreement or any transaction contemplated by this agreement (and agrees not to
commence any action, suit or proceeding relating to this agreement or any such
transaction, except in those courts). Each party further agrees that service of
any process, summons, notice or document in accordance with section 7.4 of this
agreement shall be effective service of process for any action, suit or
proceeding in New York with respect to any matters to which it has submitted to
jurisdiction as set forth in the
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immediately preceding sentence. Each party irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this agreement or the transactions contemplated by this agreement
in the state courts of the State of New York and the federal district courts for
the Southern District of the State of New York and further irrevocably and
unconditionally waives and agrees not to plead or claim in any such action, suit
or proceeding brought in any such court that such action, suit or proceeding has
been brought in an inconvenient forum.
7.4 Notices. All notices and other communications under this
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agreement shall be in writing and may be given by any of the following methods:
(a) personal delivery; (b) facsimile transmission; (c) registered or certified
mail, postage prepaid, return receipt requested; or (d) overnight commercial
delivery service. Notices shall be sent to the appropriate party at its, his or
her address or facsimile number given below (or at such other address or
facsimile number as specified by notice given under this section 7.4):
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if to the Company, to it at:
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Fax: (000) 000-0000
with a copy to:
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
if to SIK at:
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
if to any Family Holder or that Family Holder's Permitted Transferees,
to that Family Holder at the address set forth below that
Stockholder's name on exhibit A.
All such notices and communications shall be deemed received upon (a) actual
receipt by the addressee, (b) actual delivery to the appropriate address or (c)
in the case of a facsimile transmission, upon transmission by the sender and
issuance by the transmitting machine of a confirmation slip confirming the
number of pages constituting the notice have been transmitted without error. In
the case of notices sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee at the address
provided above; however, that
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mailing shall not alter the time at which the facsimile notice is deemed
received.
7.5 Counterparts. This agreement may be executed in counterparts,
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each of which shall be considered an original, but all of which together shall
constitute the same instrument.
7.6 Equitable Relief. The parties acknowledge that the remedy at law
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for breach of this agreement may be inadequate and that, in addition to any
other remedy a party may have for a breach of this agreement, that party may be
entitled to an injunction restraining any such breach or threatened breach, or a
decree of specific performance, without posting any bond or security. The
remedy in this Section 7.6 is in addition to, and not in lieu of, any other
rights or remedies a party may have.
7.7 Separability. If any provision of this agreement is invalid or
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unenforceable, the balance of this agreement shall remain in effect, and, if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
7.8 Entire Agreement. This agreement contains a complete statement
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of all the arrangements among the parties with
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respect to its subject matter, supersedes all existing agreements among them
with respect to that subject matter, may not be changed or terminated orally and
any amendment or modification must be in writing and signed by the party to be
charged.
* * *
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[First Signature Page to xXXxX*s Stockholders Agreement]
xXXxX*s INC.
By:__________________________________
Name:
Title:
__________________________________
XXXXXXX X. XXXX
FAMILY HOLDERS:
_____________________________________
XXXXXX X. XXXX, individually and as trustee for The
Xxxx Xxxx Trust f/b/o Xxxxxx X. Xxxx
_____________________________________
XXXXXX XXXXXXXX
_____________________________________
XXXXXXXXX XXXXXXXX, individually and as trustee for the
Xxxx Xxxx Trust f/b/o Xxxxxx X. Xxxx
_____________________________________
XXXXX XXXX
_____________________________________
XXXXXXX XXXX
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_____________________________________
XXXX XXXX
_____________________________________
XXXXXX XXXXXXXX
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[Second Signature Page to xXXxX*s Stockholders Agreement]
_____________________________________
XXXXXXXX XXXXXXXX
_____________________________________
XXXXXX XXXX
_____________________________________
XXXXXX XXXXXXX
_____________________________________
XXXXXX XXXXX
_____________________________________
XXXXXX XXXXX
_____________________________________
XXXXXXXXX XXX
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EXHIBIT A
Name and Address of Family Holder Number of Shares Owned
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Xxxxxx X. Xxxx 1,019,644
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxxx 663,157
c/x Xxxxx
000 Xxxx Xxxxxx, #00X
Xxx Xxxx, XX 00000
Xxxxxxxxx Xxxxxxxx 1,276,481
c/x Xxxxx
000 Xxxx Xxxxxx, #00X
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxx and Xxxxxxxxx 147,474
Karetsky, as trustees, for The Xxxx
Xxxx Trust f/b/o Xxxxxx X. Xxxx
c/o Xxxxxx X. Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Xxxx 168,664
000 Xxxxxx Xxxxxx, #0
Xxx Xxxx, XX 00000
Xxxxxxx Xxxx 168,664
0000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Xxxx Xxxx 168,664]
000 Xxxxx Xxxxxx, #0
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 168,664
c/o Waverly Reds Baseball Club
00 Xxxxx Xxxxxx, Xxxxxxxx
Xxxxxxxx, Xxxxxxxxx 0000
Xxxxxxxx Xxxxxxxx 168,664
0000 Xxxxxxx Xxxxx
00
Xxxxxxxxx, XX 00000
Xxxxxx Xxxx 68,999
0000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx 9,200
00 Xxxx Xxxx Xxxx
Xxxxx Xxxxxx Xxxxx, XX 00000
Xxxxxx Xxxxx 9,200
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxx 9,200
X.X. Xxx 000
Xxx Xxxxxx, XX 00000
Xxxxxxxxx Xxx 23,000
c/x Xxxx
0000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
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EXHIBIT B
FORM OF PROXY
The undersigned hereby irrevocably appoints Xxxxxxx X. Xxxx ("SIK"),
the attorney and proxy of the undersigned, with full power of substitution, to
represent and vote in such manner as XXX xxxxx proper, with respect to all of
the shares of common stock, of xXXxX*s Inc., a Delaware corporation (the
"Company"), the undersigned owns as of the date hereof as set forth on Exhibit A
to the Stockholders Agreement dated ___________, 1996 (the "Agreement"), and is
entitled to vote. This proxy revokes any other proxy granted by the undersigned
at any time with respect to such shares. This proxy is issued for good and
valuable consideration, is coupled with an interest and shall be irrevocable to
the full extent permitted by law. In the event that this proxy is invalid, the
undersigned agrees to vote its shares of common stock as directed by SIK. This
proxy shall terminate on the tenth anniversary of the Agreement.
If the undersigned sells or otherwise disposes of shares of the
Company, then the undersigned agrees to send written notice of such sale or
disposal to SIK immediately upon such sale or disposal.
Date: Signature:________________________
Print or
type name:________________________
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