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EXHIBIT 9
SHAREHOLDERS AGREEMENT
THIS AGREEMENT made as of this 31st day of October, 1996 by and
between Riviera Holding Company ("Holding"), a Michigan corporation, with its
principal office at 0000 Xxxxxxxxx Xxxxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx,
00000, Motor Wheel Corporation ("Motor Wheel"), an Ohio corporation, with its
principal office at 00000 Xxxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, and
Riviera Tool Company ("Tool") f/k/a New 3, Inc., a Michigan corporation, with
its principal office at 0000 Xxxxxxxxx Xxxxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx
00000.
RECITALS
WHEREAS, Holding and Motor Wheel executed a Shareholders Agreement
dated April 15, 1988 as the record and beneficial shareholders of all of the
capital stock of Tool; and
WHEREAS, Tool has been merged or is in the process of merging with its
wholly-owned subsidiary, Riviera Die & Tool, Inc. with Tool as the survivor;
and
WHEREAS, Holding and Motor Wheel, subsequent to such merger, will each
own 50% of the common stock of Tool; and
WHEREAS, Tool may file a Registration Statement with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, (the
"Registration Statement); and
WHEREAS, the parties desire to provide for certain voting of their
shares of Tool stock in concert and certain other rights and restrictions.
NOW, THEREFORE, in consideration of the covenants and conditions
contained herein, the parties agree as follows:
1. Voting on Board of Directors. The parties agree
unconditionally and irrevocably as a right coupled with their ownership
interest in the Common Stock of Tool to at all times hereafter vote all of
their respective shares of the Tool in favor of structuring a board of
directors as follows:
1.1 To provide a board of directors of seven (7) persons
consisting of three (3) persons designated by Holding and two (2)
persons designated by Motor Wheel and two (2) persons as mutually
agreed upon. The parties agree unconditionally and irrevocably to
vote all of their respective shares of Tool stock in favor of persons
designated by each respective party or together, as the case may be,
as directors pursuant to this Agreement. The persons designated by
the parties to be voted upon by the other party pursuant to this
Agreement shall be specified in writing by each party to the other
party prior to the date set for the vote on directors. Failure to so
specify any designee not requiring agreement hereunder in writing
shall permit a party who has specified its designees hereunder to vote
on directors for the undesignated position as such party chooses. In
the event of a failure to agree on designees for the two directors as
required above, neither party shall be permitted to vote on directors
for such position. Failure to designate any person for a director
position which
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requires agreement hereunder prior to a vote properly scheduled on
such position is irrevocably presumed to be consent and agreement to
any person properly designated by the other party hereunder and the
other party may then vote for the properly designated person whether
or not the party whose consent is presumed votes on such person.
Notwithstanding the foregoing, the parties agree that until Tool or
its successor in interest is a public company the board of directors
shall remain at five (5), three (3) persons designated by Holding and
two (2) designated by Motor Wheel.
1.2 The seven-man board of directors shall be divided
into three classes, two classes of two directors, and one class of
three directors. Directors designated by a party may be assigned to
any class of directors; provided, however, that only the specified
number of designees for either party may be in office at any one time
hereafter. The initial classification of directors shall be as
follows:
Class 1 whose terms shall expire at the annual
meeting following the close of Tool's fiscal year in 1997,
Xxxx X. Xxxxxxx (or successor designated by Holding) and
director to be agreed upon by the parties;
Class 2 whose terms shall expire at the annual
meeting following the close of Tool's fiscal year in 1998,
Xxxxxxx X. Xxxx, (or successor designated by Holding), Xxxxxx
X. Xxxxxxx (or successor designated by Motor Wheel) and
director to be agreed upon by the parties;
Class 3 whose terms shall expire at the annual
meeting following the close of Tool's fiscal year in 1999,
Xxxxxxx X. Xxxxx (or successor to be designated by Holding)
and Xxxx X. Xxxxxxxx (or successor to be designated by Motor
Wheel).
1.3 When a vacancy occurs for any reason, including
death, removal, resignation or at the expiration of the term of the
director, in the office of a director of Tool who has been designated
by a party hereunder, the parties shall attempt to provide that the
vacancy shall be filled by the board of directors with a new director
designated by the party who has designated the director who has
vacated office. In the event that the parties are unable to
accomplish such action by the board of directors, a special meeting of
the shareholders of Tool shall be held without delay upon the request
of either party hereto for the purposes of electing a replacement with
voting at such election to be pursuant to this Agreement.
1.4 The parties shall vote from time to time to amend the
Articles of Incorporation and the Bylaws of Tool so as to be
consistent with and accomplish the intent of this Agreement.
1.5 Voting on all matters other than specified above
shall be in the sole unfettered discretion of the shareholders of
record.
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2. Option. Motor Wheel hereby grants to Holding an option to
purchase all the shares of Tool owned by Motor Wheel from time to time on the
terms and conditions of a Stock Option Agreement attached hereto as Exhibit A,
and Motor Wheel and Holding agree to execute such Option Agreement
simultaneously herewith.
3. Registration Rights.
3.1 Motor Wheel's Demand Registration Rights. At any
time after the expiration of the "lock up" period given to the
underwriter in connection with the first registration statement for
Tool under the Securities Act of 1933, if any, Tool shall promptly
prepare, file and use its best efforts to process to effectiveness one
new registration statement to cover a public offering of the shares of
common stock of Tool now and then still owned by Motor Wheel (the "MW
Shares"), if a written request for registration under the Securities
Act of 1933 by Motor Wheel is made. If subsequent to Tool's receipt
of Motor Wheel's written request or the receipt of Motor Wheel's
written request after passing of the Investigation Period (as defined
below) with no action by Tool, (i) the Board of Directors of Tool have
instructed management, or (ii) a director has formally requested, as
evidenced in the minutes of the Board, that Tool investigate the
issuance of additional securities through an offering under the
Securities Act of 1933 (collectively (i) and (ii) are a "Registration
Investigation"), and if such additional securities are so issued and
an offering commenced prior to the completion of Motor Wheel's Demand
Registration and the sale of all of the Motor Wheel Shares, then Motor
Wheel's Demand shall be treated as a request under Section 3.2 below.
In that case, however, all of the Motor Wheel Shares must be included
in the registration and subsequent offering and no reduction shall
occur by reason of the inclusion of any other securities in such
registration. If Motor Wheel's written request is made within six
(6) months of a Registration Investigation (the "Investigation
Period"), and if new shares of Tool are issued within the
Investigation Period, Motor Wheel's request shall be treated as a
request under Section 3.2, and shall, to the extent required, be
subject to the pro rata adjustment set forth therein.
3.2 Motor Wheel's Piggyback Registration Rights. Tool
shall include the MW Shares in any new registration statement filed by
Tool relating to the public sale of securities for cash, provided that
requests therefor shall have been received from Motor Wheel to be
included therein after the expiration of the "lock up" period given to
the underwriter in connection with the first registration statement
for Tool under the Securities Act of 1933. Anything herein to the
contrary notwithstanding, if in the reasonable opinion of the lead
underwriter who is expected to market the securities covered by such
new registration statement, the inclusion of all or part of the MW
Shares shall be impractical or inadvisable, to the extent the
inclusion of such MW Shares shall be so impractical and inadvisable,
the rights of Motor Wheel under this Section 3.2 to have the MW Shares
included in such registration statement shall be reduced pro-rata, but
only as to such registration statement. Tool agrees to give written
notice of any registration statement to
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Motor Wheel at least thirty (30) days prior to the filing of any such
registration statement. In connection with the reduction described
above, the term "pro-rata" shall mean a pro-rata reduction of all
shares of selling shareholders included in such registration
statement. Motor Wheel's pro-rata portion of such reduction shall be
the number of MW Shares requested to be included divided by the total
number of shares to be included (including the MW Shares) times the
aggregate number of shares to be reduced. Each other selling
shareholder's pro-rata reduction shall be calculated in the same
fashion using as the numerator that shareholder's number of shares
originally requested or planned to be included.
3.3 The following provisions shall be applicable to any
registration statement prepared pursuant to this Section:
3.3.1 All expenses incident to Tool's performance of
or compliance with its obligations with respect to the demand
registration or piggyback registration rights provided above,
including, without limitation, all registration and filing
fees, all fees and expenses of compliance with securities and
"Blue Sky" laws (including, without limitation, the fees and
expenses of counsel for the underwriters or placement of sales
agent in connection therewith), all printing and copying
expenses, all messenger and delivery expenses, all fees and
expenses of underwriters and sales of placement agents in
connection therewith, all fees and expenses of Tool's
independent certified public accountants and counsel,
including, without limitation, with respect to "comfort"
letters and opinions (collectively the "Registration
Expenses") shall be borne by Tool; provided, however, that
Tool shall not be responsible for fees and expenses of any
independent legal counsel engaged by Motor Wheel in connection
with such registration, and in the event of a demand
registration right, not including any other shares of Tool,
Tool shall be responsible only for the first $50,000 of such
Registration Expenses, the balance of which shall be borne by
Motor Wheel. In the event of inclusion of shares of Tool
other than MW Shares in connection with the demand
registration rights above, the Registration Expenses shall be
borne pro-rata among the holders of the shares to be sold
pursuant to such registration according to the number of
shares held by each, or in the event shares are to be issued
in connection therewith by Tool, for this purpose Tool shall
be treated as the holder of such shares to be issued.
3.3.2 Motor Wheel shall furnish Tool with such
appropriate information as Tool shall reasonably request in
writing concerning Motor Wheel as is necessary for Tool to
comply with the disclosure requirements of the Securities Act
of 1933, as amended (the "Act"), and the rules and regulations
promulgated thereunder. Following the effective date of such
registration statement, Tool shall, upon the reasonable
request of Motor Wheel, forthwith supply such number of
prospectuses meeting the requirements of the Act, as shall be
requested by Motor Wheel to permit Motor Wheel to make a
public offering of all MW Shares included therein.
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Tool shall exercise good faith efforts to qualify the MW
Shares for sale in such states as Motor Wheel shall reasonably
designate.
3.3.3 Tool shall indemnify, defend and hold harmless
Motor Wheel and each underwriter (within the meaning of the
Act) who may purchase from or sell for Motor Wheel any MW
Shares from and against all liabilities under the Securities
Act of 1933 or otherwise arising from such registration
statement, or contribute to payments of Motor Wheel or such
underwriter (except as provided by Paragraph 3.3.4 below )
from and against all liabilities under the Securities Act of
1933 or otherwise arising from such registration statement or,
to the extent such indemnification is prohibited by law,
contribute to payments of Motor Wheel.
3.3.4 Motor Wheel shall indemnify, defend and hold
harmless Tool from and against all liabilities under the
Securities Act of 1933 or otherwise arising from such
registration statement, or, to the extent such indemnification
is prohibited by law, contribute to payments of Tool, to the
extent such liability arises out of or is based on statements
or omissions made in reliance upon or in conformity with
written information furnished to Tool by Motor Wheel.
4. Proposed Sales. Subject to the restrictions on transfers by
Motor Wheel pursuant to Exhibit A, and other than as provided in Paragraphs 2
and 3 above, if at any time during this Agreement either of Motor Wheel or
Holding proposes to directly or indirectly transfer its shares in Tool to any
person (the "Sending Party"), it shall give the other party (the "Receiving
Party") notice of such proposed transfer, including all of the terms and
conditions of such proposed transfer and shall identify the proposed transferee
(the "Sale Notice"). Upon receipt of the Sale Notice the receiving party shall
have ten (10) business days to notify the sending party that it is exercising
its rights hereunder to participate in such transfer (the "Exercise Notice").
4.1 Right of Purchase. The Exercise Notice may specify
that the receiving party has elected to purchase the Tool shares
identified by the Sale Notice upon the prices, terms and conditions
identified in the Sale Notice.
4.2 Tag Along Sale. The Exercise Notice may specify that
the Receiving Party is electing to participate with the Sending Party
in the sale to the proposed purchaser and such notice shall specify
the number of shares of Tool held by the Receiving Party which the
Receiving Party wishes to sell. Upon receipt of the Exercise Notice,
the Sending Party shall arrange for the proposed purchaser to purchase
the shares that the Receiving Party wishes to sell upon the same terms
and conditions (including all direct and indirect compensation) as
that identified in the Sale Notice; provided, however, that the
Sending Party shall only be required to arrange for the sale of the
same percentage of shares of Tool held by the Receiving Party as the
percentage of shares in Tool held by the Sending party which are to be
sold to the proposed purchaser; further provided, however, that if the
proposed purchaser elects only to purchase a given amount of shares,
then the total number
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of shares to be sold in such transfer by each of Motor Wheel and
Holding shall be reduced pro rata (based upon the total shares that
each party wishes to sell as compared to the given number of shares
that the proposed purchaser wishes to purchase) so as to total such
given amount.
4.3 In the event that the sender of a Sale Notice does
not receive an Exercise Notice in a timely fashion, such sender shall
have 120 days from the expiration of the ten-day period to consummate
the proposed transfer. To the extent that such transfer is not made
within such period, all shares of stock in Tool shall again be subject
to the restrictions of this Agreement, including those with respect to
any proposed transfer or the same proposed transfer, for which a Sale
Notice, Exercise Notice and other compliance hereunder shall again be
required.
4.4 Each party agrees to execute a "lock-up" agreement as
may be reasonably requested by the underwriters in connection with the
Registration Statement filed within six (6) months of the date hereof
which will restrict sales of stock by the parties for a period of two
(2) years from the effective date of the Registration Statement, and,
with respect to any registration statement filed beyond such six (6)
month period, such lock-up agreement as may be reasonably requested by
the managing underwriter in connection with such registration
statement. Notwithstanding the foregoing, Motor Wheel shall be
permitted to transfer its shares in Tool to Xxxxx Wheels
International, Inc. and any subsidiary of Xxxxx Wheels International,
Inc. including a subsidiary of a subsidiary so long as one hundred
percent (100%) ownership of such subsidiary is maintained directly or
indirectly through intermediate subsidiaries at the time of transfer
and at all times thereafter during which the subsidiary owns such Tool
stock, and further provided that it is specifically understood that
neither Motor Wheel, Xxxxx Wheels International, Inc. nor any
subsidiary shall have the right to nor shall it encumber or pledge
such shares in any manner in connection with any financing or
otherwise.
4.5 Holding's Shares in Tool are now pledged to NBD Bank
to secure all existing and future obligations of Holding to NBD Bank.
It is specifically understood that Holding shall not have the right to
nor shall it otherwise encumber or pledge such Shares in any manner in
connection with any financing or otherwise in the future.
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5. Effective Date; Term of Agreement. This Agreement shall
become effective immediately and shall continue until one of the parties hereto
no longer holds Common Stock of Tool.
6. No Shareholder Guarantee Is Required. Neither the parties nor
any beneficial owner thereof shall be required to provide any guarantees for
the benefit of Tool, including guarantees of indebtedness incurred thereby.
7. Indemnifications of Directors. The parties agree to vote
their shares and direct their designated directors to vote so as to provide an
indemnification and hold harmless provision for directors of Tool to the
fullest extent permitted by law, holding such directors harmless from and
against any claim asserted against them by third parties for action taken by
them in good faith in their capacity as director of Tool. At such times as
Tool may be a company with stock having been issued pursuant to a registration
under the Securities Act of 1933, the parties agree to have Tool execute an
agreement with each director of Tool in the form attached hereto as Exhibit B,
or such other agreement as may unanimously be agreed upon between Holding and
Motor Wheel from time to time and Tool agrees to make a good faith effort to
purchase directors' and officers' liability insurance with limits of at least
ten million dollars to the extent such purchase is not unreasonably costly in
light of the benefits provided thereby.
8. Stock Covered by Agreement. This Agreement shall be
applicable to all shares of Tool's capital stock held by either party hereto,
whether now owned or hereafter acquired by whatever means.
9. Miscellaneous.
9.1 Specific Performance. The parties hereby recognize
and agree that the shares of Common Stock of Tool are unique and that
the benefits of this Agreement cannot be achieved by the payment of
money damages only and that the covenants and agreements herein set
forth are therefore specifically enforceable.
9.2 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Michigan,
including the conflicts of law provisions thereof.
9.3 Notices. All notices, requests, demands or other
communications required or permitted to be given hereunder shall be in
writing and shall be deemed to be duly given if personally delivered
or delivered by an independent contract courier, or mailed postage
prepaid, registered or certified to a party of this Agreement at its
or his address as set forth in the first paragraph of this Agreement
or at a changed address if proper notice has been given of such
change.
9.4 Entire Agreement. This Agreement sets forth the
entire agreement and
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understanding of the parties with respect to the transactions
contemplated hereby. No modification of this Agreement shall be
binding upon a party unless in writing and signed by the party to be
charged.
9.5 Assignments. The terms, covenants and agreements of
this Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties hereto and their respective successors,
heirs, and assigns.
9.6 Headings. Titles and headings are inserted for the
convenience of reference only and are not intended to be part of or to
effect the meaning or interpretation of this Agreement.
9.7 Restrictive Legend. Upon the execution of this
Agreement, Holding and Motor Wheel shall surrender to Tool all
certificates evidencing ownership of stock in Tool. Tool shall return
said certificates, after placing upon them the following endorsement:
The shares of Riviera Tool Company represented hereby and the
disposition, assignment or encumbrance thereof are restricted
and subject to the terms of the Agreement dated October, 1996
entered into among the Company, Riviera Holding Company and
Motor Wheel Corporation. A copy of such Agreement is on file
at the principal office of the Company in Grand Rapids,
Michigan. The securities evidenced hereby have not been
issued pursuant to registration under the Securities Act of
1933 or any state securities laws.
WHEREFORE, this Shareholders Agreement is executed as of the day,
month and year first above written.
MOTOR WHEEL CORPORATION
By
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Xxxxxx X. Xxxxxxxx
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RIVIERA HOLDING COMPANY
By
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Xxxxxxx X. Xxxxx, President
RIVIERA TOOL COMPANY
By
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Xxxxxxx X. Xxxxx, President
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