EXHIBIT 1
SHAREHOLDER OPTION AGREEMENT
SHAREHOLDER OPTION AGREEMENT, dated as of December 9, 1999 (the
"Agreement"), among Xxxxx Corporation ("Parent"), a Wisconsin corporation , and
the persons listed on Schedule I hereto (each a "Shareholder" and, collectively,
the "Shareholders").
R E C I T A L S:
WHEREAS, Parent has indicated its willingness to enter into an
agreement for the acquisition of Imtec, Inc., a Delaware corporation ("Company")
through an Agreement and Plan of Merger (the "Merger Agreement") which would
provide, among other things, for the acquisition of the Company by Parent by
means of a cash tender offer (the "Offer") by Parent or a subsidiary (in either
event, the "Purchaser") for all outstanding shares of Common Stock, par value
$0.01 per share, of the Company (the "Common Stock") and for the subsequent
merger of Purchaser with the Company (the "Merger"), all on the terms and
subject to the conditions to be set forth in the Merger Agreement;
WHEREAS, as an inducement and a condition to entering into negotiation
of the Merger Agreement, Purchaser has required that the Shareholders agree, and
each Shareholder has agreed, to enter into this Agreement; and
WHEREAS, the Board of Directors of the Company has approved this
Agreement and the transactions contemplated hereby prior to the date hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. Definitions. Capitalized terms have the meanings provided herein.
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2. Tender of Shares; Agreement to Sell.
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(a) In order to induce Parent to enter into negotiation of the Merger
Agreement, each Shareholder hereby agrees to validly tender (or cause the record
owner of such shares to validly tender), and not to withdraw, pursuant to and in
accordance with the terms of the Offer, not later than the tenth business day
after commencement of the Offer, the number of shares of Common Stock set forth
opposite such Shareholder's name on Schedule I hereto (the "Existing Shares")
and, together with any shares of Common Stock acquired by such Shareholder in
any capacity after the date hereof and prior to the termination of this
Agreement by means of purchase, dividend, distribution, exercise of options,
warrants or other rights to acquire Common Stock or in any other way (together,
the "Shares"), all of which are beneficially
owned by Shareholder. If a Shareholder acquires beneficial ownership of Shares
after the date hereof, such Shareholder shall tender such Shares on such tenth
business day or, if later, on the second business day after such acquisition.
Each Shareholder hereby acknowledges and agrees that Purchaser's obligation to
accept for payment, purchase and pay for the Shares in the Offer, including the
Shares beneficially owned by the Shareholders, is subject to the terms and
conditions of the Offer. Purchaser, by written notice delivered to a
Shareholder, will have the right to direct such Shareholder not to tender to, or
to withdraw from, the Offer any Shares beneficially owned by such Shareholder
and, upon receipt of any such notice, such Shareholder shall comply with the
direction included in such notice.
(b) As promptly as practicable following the expiration of the Offer
(but in no event later than 10:00 a.m., Milwaukee time, on the first trading day
immediately after such expiration), each Shareholder hereby severally and not
jointly agrees to sell to Purchaser, and Purchaser agrees to purchase, all
Shares owned by such Shareholder not tendered or validly withdrawn from the
Offer pursuant to Section 2(a) at a price equal to $12.00 per Share or, if less,
the price provided in the Merger Agreement. The obligations of each Shareholder
and Purchaser in this Section 2(b) is conditioned upon Purchaser purchasing
shares of Common Stock pursuant to the Offer.
(c) Purchaser shall be entitled to deduct and withhold from the
consideration otherwise payable hereunder to a holder of Shares any stock
transfer taxes and such amounts as are required to be withheld under the
Internal Revenue Code of 1986, as amended (the "Code"), or any applicable
provision of state, local or foreign tax law, as specified in the Offer
Documents. To the extent that amounts are so withheld by Purchaser, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Shares in respect of which such deduction and
withholding was made by Purchaser.
(d) Each Shareholder hereby permits Purchaser to publish and disclose
in the Offer Documents and, if approval of the Company's shareholders is
required under applicable law, any proxy statement (including all documents and
schedules filed with the SEC), such Shareholder's identity and ownership of the
Shares and the nature of such Shareholder's commitments, arrangements and
understandings under this Agreement; provided that such Shareholder shall have
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the right to review and comment on such disclosure a reasonable time before it
is publicly disclosed.
3. Option. (a) In order to induce Parent to enter into negotiation
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of the Merger Agreement, each Shareholder hereby grants to Purchaser an
irrevocable option (each, an "Option") to purchase the Shares beneficially owned
by such Shareholder (the "Option Shares") at a price equal to $12.00 per Share,
subject to adjustment in the event of a stock-split, stock dividend or
additional share issuance by the Company. Each Option granted by a Shareholder
may be exercised in whole or in part at any time after (i) sixty days from the
date hereof if the Merger Agreement has not been signed by the Company and
Purchaser; (ii) the occurrence of any event as a result of which Parent is
entitled to receive a termination fee under the Merger
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Agreement or (iii) such time as such Shareholder shall have breached any of its
agreements in the Merger Agreement.
(b) Each Option that becomes exercisable under Section 3(a) shall
remain exercisable until the later of (i) the date that is 120 days after the
date such Option becomes exercisable and (ii) the date that is 60 days after the
date that all waiting periods under the Xxxx-Xxxxx-Xxxxxx Anti-Trust
Improvements Act (the "HSR Act") required for the purchase of the Shares upon
such exercise shall have expired or been terminated; provided that if at the
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expiration of such period there shall be in effect any injunction or other order
issued by any federal, state, local or foreign governmental unit or agency (a
"Governmental Entity") prohibiting the exercise of such Option, the exercise
period shall be extended until 60 days after the date that no such injunction or
order is in effect. In the event that Purchaser wishes to exercise an Option,
Purchaser shall send a written notice to the applicable Shareholder identifying
the place and date (not less than two nor more than ten business days from the
date of the notice) for the closing of such purchase.
4. Additional Agreements.
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(a) Subject to Section 8 of this Agreement, each Shareholder shall,
at any meeting of the shareholders of the Company, however called, or in
connection with any written consent of the shareholders of the Company, vote (or
cause to be voted) all Shares then held of record or beneficially owned by such
Shareholder, (i) in favor of the Merger, the execution and delivery by the
Company of the Merger Agreement and the approval of the terms thereof and each
of the other actions contemplated by the Merger Agreement and this Agreement and
any actions required in furtherance thereof and hereof and (ii) against any
proposal relating to an acquisition proposal by any person or entity other than
Purchaser (an"Acquisition Proposal") and against any action or agreement that
would impede, frustrate, prevent or nullify this Agreement, or result in a
breach in any respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement or which would
result in any of the conditions set forth in the Merger Agreement not being
fulfilled.
(b) Each Shareholder hereby covenants and agrees that, except as
contemplated by this Agreement and the Merger Agreement, it shall not (i) offer
to transfer (which term shall include, without limitation, any sale, tender,
gift, pledge, assignment or other disposition), transfer or consent to any
transfer of, any or all of the Shares beneficially owned by such Shareholder or
any interest therein, (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of such Shares or any
interest therein, (iii) grant any proxy, power-of-attorney or other
authorization or consent in or with respect to such Shares, (iv) deposit such
Shares into a voting trust or enter into a voting agreement or arrangement with
respect to such Shares or (v) take any other action that would make any
representation or warranty of such Shareholder contained herein untrue or
incorrect or in any way restrict, limit or interfere with the performance of its
obligations hereunder or the transactions contemplated hereby or by the Merger
Agreement.
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(c) Each Shareholder hereby irrevocably grants to, and appoints,
Purchaser and any designee of Purchaser, and each of them individually, such
Shareholder's proxy and attorney-in-fact (with full power of substitution), for
and in the name, place and stead of such Shareholder, to vote the Shares
beneficially owned by such Shareholder, or grant a consent or approval in
respect of such Shares, in the manner specified in Section 4(a). Each
Shareholder represents that any proxies heretofore given in respect of Shares
beneficially owned by such Shareholder are not irrevocable and that any such
proxies are hereby revoked. Each Shareholder hereby affirms that the
irrevocable proxy set forth in this Section 4(c) is given in connection with the
Purchaser's agreement to undertake negotiation of the Merger Agreement and that
such irrevocable proxy is given to secure the performance of the duties of such
Shareholder under this Agreement. Each Shareholder hereby further affirms that
the irrevocable proxy is coupled with an interest and may under no circumstances
be revoked. Each Shareholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. Without
limiting the generality of the foregoing, such irrevocable proxy is executed and
intended to be irrevocable in accordance with the provisions of Section 212 of
the Delaware Corporation Law.
(d) Each Shareholder hereby agrees that neither such Shareholder nor
any of its affiliates, representatives or agents shall (and, if such Shareholder
is a corporation, partnership, trust or other entity, such Shareholder shall
cause its officers, directors, partners, and employees, representatives and
agents, including its investment bankers, attorneys and accountants, not to),
directly or indirectly, encourage, solicit, initiate or participate in any way
in any discussions or negotiations with, or provide any information to, or
afford any access to the properties, books or records of the Company or any of
its Subsidiaries to, or otherwise take any other action to assist or facilitate,
any person or group (other than Parent or Purchaser or any affiliate or
associate of Parent or Purchaser) concerning any Acquisition Proposal. Each
Shareholder will immediately cease any existing activities, discussions or
negotiations conducted heretofore with respect to any Acquisition Proposal.
Each Shareholder will immediately communicate to Purchaser the terms of any
Acquisition Proposal (or any discussion, negotiation or inquiry with respect
thereto) and the identity of the person making such Proposal or inquiry which it
may receive.
(e) Subject to the terms and conditions of this Agreement, each of
the parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws to consummate and make effective the
transactions contemplated by this Agreement. Each party shall promptly consult
with the other and provide any necessary information and material with respect
to all filings made by such party with any Governmental Entity in connection
with this Agreement and the transactions contemplated hereby.
(f) Each Shareholder hereby waives any rights of appraisal or rights
to dissent from the Merger that it may have.
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5. Representations and Warranties of each Shareholder. Each
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Shareholder hereby represents and warrants, severally and not jointly, to
Purchaser as follows:
(a) Such Shareholder is the record and beneficial owner of the
Existing Shares set forth opposite its name on Schedule I. Such Existing Shares
constitute all of the Shares owned of record or beneficially owned by such
Shareholder on the date hereof. Such Shareholder has sole voting power and sole
power to issue instructions with respect to the matters set forth in Sections 2,
3 and 4 hereof, sole power of disposition, sole power to demand and waive
appraisal rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of such Existing Shares with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement.
(b) Such Shareholder has the power and authority to enter into and
perform all of such Shareholder's obligations under this Agreement. This
Agreement has been duly and validly executed and delivered by such Shareholder
and constitutes a legal, valid and binding agreement of such Shareholder,
enforceable against such Shareholder in accordance with its terms. There is no
beneficiary or holder of a voting trust certificate or other interest of any
trust of which such Shareholder is a trustee, or any party to any other
agreement or arrangement, whose consent is required for the execution and
delivery of this Agreement or the consummation by such Shareholder of the
transactions contemplated hereby.
(c) Except for filings under the HSR Act and the Securities Exchange
Act of 1934 (the "Exchange Act") (i) no filing with, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution and delivery of this Agreement by such Shareholder, the
consummation by such Shareholder of the transactions contemplated hereby and the
compliance by such Shareholder with the provisions hereof and (ii) none of the
execution and delivery of this Agreement by such Shareholder, the consummation
by such Shareholder of the transactions contemplated hereby or compliance by
such Shareholder with any of the provisions hereof, except in cases in which any
conflict, breach, default or violation described below would not interfere with
the ability of such Shareholder to perform such Shareholder's obligations
hereunder, shall (A) conflict with or result in any 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, modification or acceleration)
under, any of the terms, conditions or provisions of any note, loan agreement,
bond, mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind,
including, without limitation, any voting agreement, proxy arrangement, pledge
agreement, shareholders agreement or voting trust, to which such Shareholder is
a party or by which it or any of its properties or assets may be bound or (C)
violate any order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to such Shareholder or any of its properties or assets.
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(d) Except as permitted by this Agreement, the Existing Shares
beneficially owned by such Shareholder and the certificates representing such
shares are now, and at all times during the term hereof will be, held by such
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, proxies, voting trusts or agreements,
understandings or arrangements or any other rights whatsoever, except for any
such liens or proxies arising hereunder. The transfer by such Shareholder of
the Shares to Purchaser in the Offer or hereunder shall pass to and
unconditionally vest in Purchaser good and valid title to all Shares, free and
clear of all liens, proxies, voting trusts or agreements, understandings or
arrangements or any other rights whatsoever.
(e) No broker, investment banker, financial advisor or other person
is entitled to any broker's, finder's, financial advisor's or other similar fee
or commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of such Shareholder.
6. Stop Transfer. Each Shareholder shall request that the Company
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not register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares beneficially owned by
such Shareholder, unless such transfer is made in compliance with this
Agreement.
7. Termination. This Agreement shall terminate with respect to any
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Shareholder upon the earliest of (a) the effective time of the Merger Agreement,
(b) the first anniversary of the date hereof or (c) the termination of the
Merger Agreement (unless, in the case of this clause (c), Purchaser is or may be
entitled to receive a termination fee under the Merger Agreement following such
termination or prior to such termination such Shareholder has breached Section
2(a), 4(a), 4(b) or 4(d)).
8. No Limitation. Nothing in this Agreement shall be construed to
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prohibit Shareholder, or any officer or affiliate of a Shareholder who is or has
designated a member of the Board of Directors of the Company, from taking any
action solely in his or her capacity as a member of the Board of Directors of
the Company or from exercising his or her fiduciary duties as a member of such
Board of Directors to the extent specifically permitted by the Delaware General
Corporation Law, as may be modified by the terms of the Merger Agreement.
9. Miscellaneous. (a) This Agreement constitutes the entire
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agreement between 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.
(b) This Agreement shall not be assigned by operation of law or
otherwise without the prior written consent of each Shareholder (in the case of
any assignment by Purchaser ) or Purchaser (in the case of an assignment by a
Shareholder), provided that Purchaser
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may assign its rights and obligations hereunder to any direct or indirect
subsidiary of Parent, but no such assignment shall relieve Purchaser of its
obligations hereunder.
(c) Without limiting any other rights Purchaser may have hereunder in
respect of any transfer of Shares, each Shareholder agrees that this Agreement
and the obligations hereunder shall attach to the Shares beneficially owned by
such Shareholder and shall be binding upon any person to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or
otherwise, including, without limitation, such Shareholder's heirs, guardians,
administrators or successors.
(d) This Agreement may not be amended, changed, supplemented or
otherwise modified with respect to a Shareholder except by an instrument in
writing signed on behalf of such Shareholder and Purchaser.
(e) 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 given) by hand delivery or by facsimile transmission with
confirmation of receipt, as follows:
If to a Shareholder:
At the addresses and facsimile numbers set forth on Schedule I
hereto.
If to Parent or Purchaser:
Xxxxx Corporation
0000 X. Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.
(f) 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,
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but if any provision or portion 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.
(g) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
(h) The failure of any party hereto to exercise any rights, power or
remedy provided under this Agreement or otherwise available in respect hereof at
law or in equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.
(i) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
(j) This Agreement shall be governed and construed in accordance with
the laws of the State of Delaware.
(k) The parties agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Delaware state court, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (A) consents to submit itself to
the personal jurisdiction of any Delaware state court or any Federal court
located in Delaware in the event any dispute arises out of this Agreement or by
any transaction contemplated by this Agreement, (B) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, (C) agrees that it will not bring any action
relating to this Agreement or any transaction contemplated by this Agreement in
any court other than any such court and (D) waives any right to trial by jury
with respect to any action related to or arising out of this Agreement or any
transaction contemplated by this Agreement. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of Delaware or in any Federal
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court located in Delaware, and hereby further irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum.
(l) 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.
(m) This Agreement may be executed in counterparts, each of which
(including facsimile copies) shall be deemed to be an original, but all of
which, taken together, shall constitute one and the same agreement.
(n) Except as otherwise provided herein, each party shall pay its, his
or her own expenses incurred in connection with this Agreement
IN WITNESS WHEREOF, Purchaser and the Shareholders have caused this
Agreement to be duly executed as of the day and year first above written.
XXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Group Vice President
SHAREHOLDERS:
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
/s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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/s/ Xxxxxx Xxxxxx
----------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxxxxxxx
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Xxxxx Xxxxxxxxxx
/s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
TRIGRAN INVESTMENTS, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President
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/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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SCHEDULE I
NAME OF SHARES
NAME, FACSIMILE NUMBER AND ADDRESS OF COMMON STOCK
OF SHAREHOLDER BENEFICIALLY
OWNED
Xxxxx X. Xxxxx 151,466
00 Xxxxxxx Xxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
Xxxxxxxx X. Xxxxx 147,965
00 Xxxxxxx Xxx Xxxxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
Xxxxxxx X. Xxxxxx 109,900
00 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
Xxxxxx Xxxxxx 28,700
00 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Fax: 000-000-0000
TRIGRAN INVESTMENTS, L.P. 273,120
Xxxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Fax: 000-000-0000
Xxxxx Xxxxxxxxxx 81,875
0000 Xxxxxxxx Xxx.
Xxxxxxxx Xxxx, XX 00000
Fax: 000-000-0000
Xxxxxx X. Xxx 27,300
000 Xxxxx 0x Xxxxxx
Xxxxxxx, XX 00000
Fax: 000-000-0000
Xxxxxx X. Xxxxx 55,000
I-1
NUMBER OF SHARES
NAME, FACSIMILE NUMBER AND ADDRESS OF COMMON STOCK
OF SHAREHOLDER BENEFICIALLY
OWNED
00 Xxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxxxxx 00000
Fax: 000-000-0000
I-2
