THIS AGREEMENT ("Agreement"), effective as of the date of the last
signing below, is between Garan, Incorporated ("Garan") and Private Capital
Management, L.P. ("PCM") (collectively, "Parties") and establishes the
understanding between the Parties as to certain aspects of PCM's
discretionary money management activities as they relate directly to Garan's
publicly traded Common Stock ("Stock").
WITNESSETH:
RECITALS:
A. PCM is a non-custodial, discretionary money manager that has
invested in Garan Stock on behalf of its clients whom maintain ownership of
their respective shares.
B. Certain of PCM's clients, but not all, have granted to PCM a
revocable Proxy Voting Authorization providing PCM with the power to vote
proxies relating to Garan Stock.
NOW, THEREFORE, in consideration of the mutual promises this Agreement
contains and other good and valuable consideration, the receipt and adequacy
of which the Parties acknowledge, the Parties, intending to be bound legally,
agree as follows:
1. PCM, until July 12, 2003, without the prior written consent of
Garan, will not, on behalf of itself, its clients, or its Affiliates
(which term, for all purposes in this Agreement, shall include any
partnership or like fund for which PCM provides investment
management, provided that such term shall not include any entity
that might be construed to be an affiliate solely by virtue of
common ownership):
(a) Acquire, offer to acquire or agree to acquire, directly or
indirectly, by purchase or otherwise, or initiate contact with
any person with the intent to advise, encourage or assist such or
any other person to purchase or acquire in any manner any shares
of Stock, or participate with or provide assistance to any person
in the purchase or other acquisition of Stock;
(b) Form, join or in any way participate in a "group" within
the meaning of Section 13(d)(3) of the Federal Securities
Exchange Act of 1934 ("Exchange Act") with respect to the Stock;
(c) "Solicit" proxies with respect to the Stock under any
circumstances or become a "participant" by taking a position
contrary to that of the Board of Directors of Garan in any
contest relating to the election of directors of Garan or any
other matters submitted to shareholders at an annual meeting or
any special meeting; PCM shall be deemed to "solicit" or to be
such a "participant" if it counsels or advises or otherwise
provides assistance to any person who undertakes or makes such a
"solicitation" or is such a "participant," but shall not, in any
event, be deemed to "solicit" or to be such a "participant" by
reason of the exercise, in compliance with this Agreement, of its
voting rights with respect to the Stock; or
(d) Initiate, commence or propose, or induce or attempt to
induce, or give encouragement to any other person to initiate,
commence or propose, any tender or exchange offer for the Stock
or any "affiliated transaction" (as that term is defined in
Section 13.1-725 of the Code of Virginia, as in effect on the
date of this Agreement, but with the phrase "any other Person"
substituted for the phrase "any interested shareholder").
2. PCM agrees that until July 12, 2003 and so long as it collectively
with its Affiliates beneficially owns, as defined in Rule 13d-3 of
the Securities and Exchange Act of 1934, as amended, 5% or more of
the issued and outstanding shares of the Stock, and where authorized
by a client granted Proxy Voting Authorization to PCM, it shall vote
all applicable underlying shares of Stock with respect to each
matter to be voted upon by the holders of such shares, as
recommended by the Board of Directors of Garan.
3. The Parties agree that this Agreement will be automatically
terminated upon:
(a) Any attempt by Garan to initiate a course of action that
would result in the material dilution of PCM's holdings in the
Stock on behalf of its clients, including but not limited to, any
effectiveness of Garan's Amended and Restated Rights Agreement
dated April 21, 1993, or similar instrument;
(b) Any attempt by Garan to materially deviate from its prior
course of conduct relative to all forms of compensation to its
directors and management.
4. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration by
one Arbitrator in New York, New York, in accordance with the Rules
of the American Arbitration Association, and judgment upon the award
rendered by the Arbitrator may be entered in any court having
jurisdiction thereof.
5. Each of the undersigned agrees that this Agreement (a) shall be
governed by and construed in accordance with the laws of the
Commonwealth of Virginia as if it was an agreement made and to be
performed entirely within such State, (b) may not be modified or
amended except by a writing signed by each of the undersigned, (c)
may not be assigned by the undersigned, (d) shall be binding upon
each of PCM and Garan and its successors, and (e) contains the
entire agreement and understanding between the undersigned with
respect to the subject matter of this Agreement and supersedes all
prior agreements, arrangements, and understandings, written or oral,
between the undersigned with respect to the subject matter of this
Agreement.
IN WITNESS WHEREOF, each Party has signed or caused its representative to
sign this Agreement on the dates indicated below.
GARAN, INCORPORATED
Date: July 19, 2001 By: __/S/_______________________________
Xxxxxxx Xxxxxxxxxxxx, Chairman
PRIVATE CAPITAL MANAGEMENT, L.P.
Date: July 27, 2001 By: __/S/__________________________________
Xxxxx X. Xxxxxxx, Chairman
