Exhibit 7.15
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of May
16, 1998, by and between Xxxxxxx'x, Inc., a company organized under the laws of
Delaware ("Purchaser"), and each of the parties listed on the signature page
hereto (individually a "Seller" and collectively, the "Sellers").
RECITALS
Concurrently herewith, Purchaser, MSC Acquisitions, Inc., a
Delaware corporation and a wholly-owned subsidiary of Purchaser, and Mercantile
Stores Company (the "Company"), a Delaware corporation, are entering into an
Agreement and Plan of Merger of even date herewith attached hereto (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), pursuant to which Sub agrees to
make a tender offer (the "Offer") for all outstanding shares of common stock,
$.14 2/3 par value per share (the "Common Stock"), of the Company, at $80 per
share (the "Offer Price"), net to the seller in cash, to be followed by a merger
(the "Merger") of Sub with and into the Company.
As a condition to their willingness to enter into the Merger
Agreement and make the Offer, Purchaser and Sub have required that each of the
Sellers agree, and each Seller has agreed, among other things, to grant to
Purchaser the Option and irrevocable proxy with respect to the number of shares
of Common Stock of such Seller set forth opposite such Seller's name on the
signature page hereto, together with any additional shares when and if they are
acquired (such shares, and any additional shares when and if they are acquired,
being referred to herein as the "Shares") on the terms and conditions provided
for herein.
The Board of Directors of the Company has approved the
Purchaser becoming an "interested shareholder" for purposes of Section 203 of
the Delaware General Corporation Law and for all purposed under Article Eighth
of the Company's Certificate of Incorporation.
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. Option to Purchase Shares.
1.1 Grant of Option. Each Seller hereby grants to Purchaser an
irrevocable option (the "Option") to purchase all of the Shares set forth below
such Seller's name on the signature page hereto at a purchase price of $80 per
share (the "Exercise
2
Price") in cash (subject to adjustment pursuant to Section 7 below) for each
Share purchased.
1.2 Exercise of Option.
(a) Subject to applicable law (including Rule 10b-
13 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
the Option may be exercised by Purchaser, in whole or in part, at any time, or
from time to time, commencing upon the Exercise Date and prior to the Expiration
Date (as hereinafter defined). As used herein, the term "Exercise Date" means
the first to occur of any of the following dates:
(i) Seller fails to perform any agreement or covenant
of Seller contained herein in any material respect; or
(ii) the Merger Agreement is terminated and Purchaser
is entitled to the payment of a termination fee pursuant to any of the
provisions set forth in Section 8.3(a)(ii) of the Merger Agreement.
As used herein, the term "Expiration Date" means the first to
occur of any of the following dates:
(1) the Effective Time (as defined in the Merger
Agreement);
(2) 12 months after the date of the termination
of the Merger Agreement; or
(3) written notice of termination of this Agreement
by Purchaser to the Seller.
(b) In the event Purchaser wishes to exercise the Option,
Purchaser shall send a written notice to Seller of its intention to so exercise
the Option (a "Notice"), specifying the place, time and date of the closing of
such purchase (the "Closing"), which date shall not be less than two business
days nor more than five business days from the date on which a Notice is
delivered; provided, that the Closing shall be held only if such purchase would
not otherwise then violate or cause the violation of, any applicable law or
regulations (including, without limitation, the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx")) or any decree, order or injunction of
any governmental agency, authority or court, whether temporary, preliminary or
permanent. If the Closing shall be violative of any such laws or rules or any
such decree, order or injunction, then such Notice shall be deemed rescinded and
of no effect and Purchaser shall send a new Notice at such time as the Closing
is not violative of such laws, rules, decrees, orders or injunctions.
Notwithstanding the occurrence of such rescission, this Agreement shall remain
in full force and effect.
3
(c) At the Closing, Seller shall deliver to Purchaser all of
the Shares to be purchased by delivery of a certificate or certificates
evidencing such Shares so purchased by Purchaser duly endorsed or with executed
blank stock power attached, in either event with signature guaranteed such that
registered ownership of the Shares may be registered for transfer on the books
of the Company and Purchaser will make payment to Seller of the aggregate
Exercise Price for the Shares being purchased upon exercise of the Option in
immediately available funds in the amount equal to the Exercise Price multiplied
by the number of Shares purchased pursuant to this Section 1.
(d) Notwithstanding any of the foregoing, with respect to the
Shares held by Minot Mercantile Corporation and Woodbank Xxxxx, Inc.
(collectively, the "C Corps"), Purchaser shall form an acquisition subsidiary to
acquire such Shares in the form of a merger pursuant to a form of merger
agreement reasonably acceptable to the parties, and each party will use its best
efforts to consummate the acquisition of such Shares pursuant to the Option by
merger.
2. Agreement to Tender. Each Seller hereby agrees to validly
tender pursuant to the Offer and not withdraw all Shares; provided, however, the
C Corps shall not be obligated to tender the Shares held by each of them because
such Shares will be acquired by Merger as contemplated by the Merger Agreement.
3. Irrevocable Proxy. Each Seller hereby irrevocably appoints
Purchaser or any designee of Purchaser the lawful agent, attorney and proxy of
such shareholder, during the term of this Agreement, to (a) vote the Shares in
favor adoption of the Merger Agreement; (b) vote the Shares against any action
or agreement that would result in a breach in any material respect of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement; and (c) vote the Shares against any action
or agreement (other than the Merger Agreement or the transactions contemplated
thereby) that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer, including, but not limited to: (i) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company and its subsidiaries; (ii) a sale or
transfer of a material amount of assets of the Company and its subsidiaries or a
reorganization, recapitalization or liquidation of the Company and its
subsidiaries; (iii) any change in the management or board of directors of the
Company, except as otherwise agreed to in writing by Purchaser; (iv) any
material change in the present capitalization or dividend policy of the Company;
or (v) any other material change in the Company's corporate structure or
business. Each Seller intends this proxy to be irrevocable and coupled with an
interest and will take such further action or execute such other instruments as
may be necessary to effectuate the intent of this proxy and hereby revokes any
proxy previously
4
granted by it with respect to the Shares. Each Seller shall not hereafter,
unless and until this Agreement terminates pursuant to Section 8.6 hereof,
purport to vote (or execute a consent with respect to) such Shares (other than
through this irrevocable proxy) or grant any other proxy or power of attorney
with respect to any Shares, deposit any Shares into a voting trust or enter into
any agreement (other than this Agreement), arrangement or understanding with any
person, directly or indirectly, to vote, grant any proxy or give instructions
with respect to the voting of such Shares. Notwithstanding anything herein to
the contrary, the Sellers may transfer as charitable gifts up to an aggregate of
300,000 Shares.
4. Representations and Warranties.
4.1 Representations and Warranties of Purchaser.
Purchaser hereby represents and warrants to each Seller as follows:
(a) Due Authorization. The execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the Board of Directors
of Purchaser, and no other corporate proceedings on the part of
Purchaser are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by Purchaser and constitutes a valid and
binding agreement of Purchaser, enforceable against Purchaser in
accordance with its terms, except that such enforceability (i) may be
limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally and
(ii) is subject to general principles of equity.
(b) No Conflicts. Except for (i) filings under the
HSR Act, if applicable, (ii) the applicable requirements of the
Exchange Act and the Securities Act of 1933, as amended (the
"Securities Act"), (iii) the applicable requirements of state
securities, takeover or Blue Sky laws and (iv) such notifications,
filings, authorizing actions, orders and approvals as may be required
under other laws, (A) no filing with, and no permit, authorization,
consent or approval of, any state, federal or foreign public body or
authority is necessary for the execution of this Agreement by Purchaser
and the consummation by Purchaser of the transactions contemplated
hereby and (B) neither the execution and delivery of this Agreement by
Purchaser nor the consummation by Purchaser of the transactions
contemplated hereby nor compliance by Purchaser with any of the
provisions hereof shall (1) conflict with or result in any breach of
any provision of the certificate of incorporation or by-laws (or
similar documents) of
5
Purchaser, (2) 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, bond, mortgage, indenture, license, contract,
agreement or other instrument or obligation to which Purchaser is a
party or by which it or any of its properties or assets may be bound or
(3) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Purchaser or any of its properties or assets,
except in the case of (2) or (3) for violations, breaches or defaults
which would not in the aggregate materially impair the ability of
Purchaser to perform its obligations hereunder.
(c) Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of
Delaware and has all requisite corporate power and authority to execute
and deliver this Agreement.
4.2 Representations and Warranties of Sellers. Each Seller
hereby severally and not jointly represents and warrants to Purchaser as
follows:
(a) Ownership of Shares. Subject to Section 5.3, such Seller
is the owner of the Shares set forth below its name and has the power
to vote and dispose of such Shares. To Seller's knowledge, such Shares
are validly issued, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof. Such Seller has good
title to the Shares, free and clear of any agreements, liens, adverse
claims or encumbrances whatsoever with respect to the ownership of or
the right to vote such Shares.
(b) Power; Binding Agreement. Such Seller has the legal
capacity, power and authority to enter into and perform all of its
obligations under this Agreement, except for the approval of the
holders of a majority of the stockholders of Minot Mercantile
Corporation is required with respect to their obligations under Section
1. The execution, delivery and performance of this Agreement by such
Seller will not violate any other agreement to which such Seller is a
party including, without limitation, any voting agreement, stockholders
agreement or voting trust. This Agreement has been duly and validly
authorized, executed and delivered by such Seller and constitutes a
valid and binding agreement of such Seller, enforceable against such
Seller in accordance with its terms, except that such enforceability
(i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or
6
relating to enforcement of creditors' rights generally and (ii) is
subject to general principles of equity.
(c) No Conflicts. Except for (i) filings under the HSR Act,
if applicable, (ii) the applicable requirements of the Exchange Act
and the Securities Act, (iii) the applicable requirements of state
securities, takeover or Blue Sky laws, (iv) such notifications,
filings, authorizing actions, orders and approvals as may be required
under other laws, (A) no filing with, and no permit, authorization,
consent or approval of, any state, federal or foreign public body or
authority is necessary for the execution of this Agreement by such
Seller and the consummation by such Seller of the transactions
contemplated hereby and (B) neither the execution and delivery of this
Agreement by such Seller nor the consummation by such Seller of the
transactions contemplated hereby nor compliance by such Seller with any
of the provisions hereof shall (1) conflict with or result in any
breach of any provision of the certificate of incorporation, by-laws,
trust or charitable instruments (or similar documents) of such Seller,
(2) 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, bond, mortgage, indenture, license, contract, agreement or other
instrument or obligation to which such Seller is a party or by which he
or any of his properties or assets may be bound or (3) violate any
order, writ, injunction, decree, statute, rule or regulation applicable
to such Seller or any of his properties or assets, except in the case
of (2) or (3) for violations, breaches or defaults which would not in
the aggregate materially impair the ability of such Seller to perform
his obligations hereunder.
5. Certain Covenants of Sellers. Each Seller hereby covenants
and agrees as follows:
5.1 No Solicitation. Such Seller shall not, directly or
indirectly, solicit, encourage, participate in or initiate any inquiries or the
making of any proposal by any person or entity (other than Purchaser or any
affiliate of Purchaser) which constitutes, or may reasonably be expected to lead
to, (a) any sale of the Shares or (b) any acquisition or purchase of a material
portion of the Company's assets or any equity interest in, or any merger,
consolidation or business combination with, the Company or any of its
subsidiaries. If such Seller receives an inquiry or proposal with respect to the
sale of Shares, then such Seller shall promptly inform Purchaser of the terms
and conditions, if any, of such inquiry or proposal and the identity of the
person making it. Each Seller will immediately cease and cause to be terminated
any existing activities, discussions or
7
negotiations with any parties conducted heretofore with respect
to any of the foregoing.
5.2 Restriction on Transfer, Proxies and NonInterference.
Each Seller hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to (a) sell, transfer, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares or (b) grant any proxies,
deposit any Shares into a voting trust or enter into a voting agreement with
respect to any Shares or (c) take any action that would make any representation
or warranty of such Seller contained herein untrue or incorrect or have the
effect of preventing or disabling such Seller from performing his obligations
under this Agreement.
5.3 Legending of Certificates; Nominees Shares. If requested
by Purchaser, each Seller agrees to submit to Purchaser contemporaneously with
or promptly following execution of this Agreement all certificates representing
the Shares so that Purchaser may note thereon a legend referring to the option,
proxy and other rights granted to it by this Agreement. If any of the Shares
beneficially owned by such Seller are held of record by a brokerage firm in
"street name" or in the name of any other nominee (a "Nominee," and, as to such
Shares, "Nominee Shares"), each Seller agrees that, upon written notice by
Purchaser requesting it, such Seller will within five days of the giving of such
notice execute and deliver to Purchaser a limited power of attorney in such form
as shall be reasonably satisfactory to Purchaser enabling Purchaser to require
the Nominee to (i) grant to Purchaser an option and irrevocable proxy to the
same effect as Sections 1 and 3 hereof with respect to the Nominee Shares held
by such Nominee, (ii) tender such Nominee Shares in the Offer pursuant to
Section 2 hereof and (iii) submit to Purchaser the certificates representing
such Nominee Shares for notation of the above-referenced legend thereon.
5.4 Stop Transfer Order. In furtherance of this Agreement,
concurrently herewith, each Seller shall and hereby does authorize the Company's
counsel to notify the Company's transfer agent that there is a stop transfer
order with respect to all of the Shares (and that this Agreement places limits
on the voting and transfer of such shares).
6. 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
action as may be necessary or desirable to consummate the transactions
contemplated by this Agreement, including, without limitation, to vest in
Purchaser good title to any Shares purchased hereunder.
8
7. Adjustments to Prevent Dilution, Etc. In the event of a
stock dividend or distribution, or any change in the Company's Common Stock by
reason of any stock dividend, split-up, reclassification, recapitalization,
combination or the exchange of shares, the term "Shares" shall be deemed to
refer to and include the Shares 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. In such event, the amount to be paid per share by
Purchaser shall be proportionately adjusted.
8. Miscellaneous.
8.1 Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
Purchaser may assign its rights and obligations hereunder to any direct or
indirect wholly owned parent company or subsidiary of Purchaser, but no such
assignment shall relieve Purchaser of its obligations hereunder if such assignee
does not perform such obligations.
8.2 Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
8.3 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 so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) 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 the
Sellers: c/o Ivins Xxxxxxxx & Xxxxxx
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
If to Purchaser:
Xxxxxxx'x, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
copy to: Xxxxxxx Xxxxxxx & Xxxxxxxx
9
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
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.
8.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
8.5 Cooperation as to Regulatory Matters. If so requested by
Purchaser, promptly after the date hereof, the Seller will use its reasonable
best efforts to cause it and the Company (if required) to make all filings which
are required under the HSR Act and applicable requirements and to seek all
regulatory approvals required in connection with the transactions contemplated
hereby. The parties shall furnish to each other such necessary information and
reasonable assistance as may be requested in connection with the preparation of
filings and submissions to any governmental agency, including, without
limitation, filings under the provisions of the HSR Act. The Seller shall also
use its reasonable best efforts to cause the Company to supply Purchaser with
copies of all correspondence, filings or communications (or memoranda setting
forth the substance thereof) between the Company and its representatives and the
Federal Trade Commission, the Department of Justice and any other governmental
agency or authority and members of their respective staffs with respect to this
Agreement and the transactions contemplated hereby.
8.6 Termination. Except for the provisions of Sections 1 and
5.2 which shall expire on the Expiration Date, this Agreement shall terminate on
the earlier of (i) the Effective Time or (ii) the termination of the Merger
Agreement in accordance with its terms.
8.7 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.
8.8 Counterparts. This Agreement may be executed in
two counterparts, each of which shall be deemed to be an
10
original, but both of which shall constitute one and the same
Agreement.
8.9 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.
8.10 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
never been contained herein.
11
IN WITNESS WHEREOF, the Sellers and Purchaser have caused this
Agreement to be duly executed as of the day and year first above written.
XXXXXXX'X, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
[The Sellers listed on the attached signature pages]
/s/ Xxxxx Xxxxxxxx
-------------------------------
Xxxxx Xxxxxxxx
Wilmington Trust Company
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
as the trustees of trusts
holding 2,120,485
shares of the common stock,
par value $.14 2/3 per share,
of Mercantile Stores Company, Inc.
Wilmington Trust Company
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
as the trustee of trusts holding
1,654,311 shares of the common stock,
par value $.14 2/3 per share,
of Mercantile Stores Company, Inc.
/s/ Justine VR. Xxxxxxxx
-------------------------------
Justine VR. Xxxxxxxx
/s/ Minot X. Xxxxxxxx
-------------------------------
Minot X. Xxxxxxxx
as a majority of the trustees of trusts
holding 27,645 shares of the common stock,
par value of $.14 2/3 per share,
of Mercantile Stores Company, Inc.
/s/ Justine VR. Xxxxxxxx
-------------------------------
Justine VR. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
-------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
/s/ Minot X. Xxxxxxxx
-------------------------------
Minot X. Xxxxxxxx
as a majority of the trustees of trusts
holding 25,065 shares of the common stock,
par value $.14 2/3 per share,
of Mercantile Stores Company, Inc.
Woodbank Xxxxx, Inc.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chairman
as the holder of 27,413 shares of the common stock,
par value $.14 2/3 per share,
of Mercantile Stores Company, Inc.
Minot Mercantile Corporation
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxx
Title: Chairman
as the holder of 10,484,875 shares of the common stock,
par value $.14 2/3 per share,
of Mercantile Stores Company, Inc.
/s/ Xxxxx Xxxxxxxx
-------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
-------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
as a majority of the trustees of trusts holding
56,848 shares of the common stock,
par value $.14 2/3 per share,
of Mercantile Stores Company, Inc.
/s/ Xxxxx Xxxxxxxx
-------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
-------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
/s/ Minot X. Xxxxxxxx
-------------------------------
Minot X. Xxxxxxxx
as a majority of the trustees of trusts holding
258,178 shares of the common stock,
par value $.14 2/3 per share,
of Mercantile Stores Company, Inc.
/s/ Xxxxx Xxxxxxxx
-------------------------------
Xxxxx Xxxxxxxx
/s/ Minot X. Xxxxxxxx
-------------------------------
Minot X. Xxxxxxxx
as a majority of the trustees of trusts holding
22,104 shares of the common stock,
par value $.14 2/3 per share,
of Mercantile Stores Company, Inc.
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
-------------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
/s/ Minot X. Xxxxxxxx
-------------------------------
Minot X. Xxxxxxxx
as a majority of the trustees of trusts
holding 32,419 shares of the common stock,
par value $.14 2/3 per share,
of Mercantile Stores Company, Inc.
